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CANADIAN ANNUAL REVIEW AND OUTLOOK ISSUE
JAN 311953
BUSIKSS AD'
mSTRATION
Reg. XT. S, Pat Office
Volume
Number 5712
187
EDITORIAL
There is
a
the
We See It
passage
The Bade Fence
in the President's Economic !
thoroughly what the economic philosophy of this
Administration is. These words are significant for
Fear of American control
,
they say, and perhaps even more note¬
worthy for what they do not say. They breathe
;
middle-of-the-road attitude of the President
same
ivete that
time that
are
we
they
sure
nomic advisers do not share,j
•'
to display a na¬
seem
is
critical questions
are
ship of business and
ernment.
•
Business
laborj
well
concerns,
as
:
—
to
'
•
vents
In
.
page
:
J
" ''"U
■
'
:
'
•
■
■
■
V
.
''
Si
;
1
The
J
•
1
,
;
scribe;
out in the
jof
Mr. Dulles,
States
United
the
at
.
.
country.
high enough level to avoid the
for any drastic readjustments.
mains
of
problem
to
labor
costs
♦An
from-the public opinion of the
that the l/njte4 States t$s
particularly since the end of the second World
before The Bond Club
by Mr. Smith
,
t
will likely improve
year.
in the pulp
41
D. W.
the economy in
Ambridge
the
Any such improvements will be promptly reflected
many areas
by the second half of
and paper industry.
Continued
on
page
20
of New York.
REGISTRATION—Underwriters, dealers and investors in
are
1
and in the
United States are beating a retreat
from their recent austerities and this
The other point is
address
Hi
•
Central Banks both here
-
37
m*
-
good common sense on the part of*
the Unions.
\
There
seems
no
doubt that the
.
mil
re¬
it is to-be
be solved and
*
,
>
hoped that out and out battles such
as the one presently in progress on
the West Coast can be avoided by
sub-
on page
a
The
In short, that foreign policy
international field of policies
j Continued
Canadian pulp
paper
need
principles deriving
and
outlook for the year 1958 in the
industry is reasonably good.
.Few companies, if any, will use
all their productive capacity, but it /
would seem that operations will be
and
corporate
with the SEC and poten¬
starting on page 5,4.
State, Municipal
and
in
i
The statements
of the nation's business life.
■
the
to
concern
.
,
afforded a complete picture of issues now registered
tial undertakings in our "Securities in Registration" Section,
dealers
money
President, Abitibi Power & Paper Company, Limited
said:/'Since
people
"
;
is the carrying
SECURITIES NOW IN
securities
•
recent article the Secretary of
a
prospective proon
probable
the
herewith:
■
.
Sidney Earle Smith
capital in¬
Continued
future
or
leadership of labor must recognize that
increases that go beyond
the
of
D. W. AMBRIDGE
1945 our Govern¬
ment has played a leading role in
the coalition of free nations dedi¬
cated to the principles of interna¬
tional order to which our people
have long subscribed." 11 emphasize
the two points so briefly and effec¬
tively made. One is that the prin ¬
ciples of international order to which
he refers are those to which the
has
assumed,
wage
appear
distorted or
a
discuss
course
developments in the oil, gas and mining industries, and
other aspects
taking
including
key. factors,
of
market, capital and consumer expenditures, housing, new
be made in improv-
State of the United States,
vestment.
"The
from
country.
output,Hunder-utilization of capacity,
narrowing of the return on
a
it
present:
policies: and practices; Price increases that
are unwarranted by costs or that attempt to re¬
capture investment outlays! too quickly not only
lower the purchasing power of the dollar but may
be self-defeating by causing a restriction of mar-,
and
'
commentaries
The
views.
trend
inadequate view of matters of past,
their
kets, lower
their
qualified to accurately interpret the
of Canada's economy in the instant year present
course
good
for gov¬
re-examine
must
Speak
In articles especially written for the "Chronicle," in¬
dividuals eminently
government in a democracy not
merely that public opinion must have its play and its
influence upon policies but that the opinion itself should
be based upon wide and soSQnd information which prevital
is
here for the leader¬
as
•
jingoist. Mr. Smith emphasizes areas of special
relationship between Canada-U. S. A. and-indicates
It
no
I
"There
our
nor as a
The passage, though
simple explanation of recent "
economic developments and no easy solution to
the problem of maintaining high employment,
vigorous economic growth, and reasonably stable prices. But it is clear that the combination of
policies and practices followed in the recent past
by the various participants in our economic life:
has given results that in certain important re¬
spects are unfavorable.
"There
'
ing neighborliness.
long, is reproduced in full as follows:
somewhat
Copy
a
After Turn of the Year
important sectors of Cana¬
distaste for
where he believes improvements can
at least, of his eco¬
some,
over
foreign trade restrictive practices are enunciated by Canadian Secretary of
State, in asking for continued "clear vision" between the
two countries, and states he speaks neither as a suppliant
dian economy and
what
at the
Financial Leaders
Secretary of State for External Affairs, Ottawa, Canada
who wishes to understand
man
Price 50 Cents
By HON. SIDNEY E. SMITH*
particularly worthy of careful attention by *
thoughtful
the
sj
Canada's Business and
Report to Congress this year which seems to us
to be
7, N. Y<, Thursday, January 30, 1958
V
As
:;
New York
:
»
?
;
i
U. S. Government,
State and
;
■Im
UNDERWRITERS
STATE INO MUNICIPAL
and
BROKERS
Municipal
DEALERS
.
Securities
Public Housing Agency
COPIES OF OUR
:
V
-
'
BONDS
INDUSTRIAL
telephone;
HAnover 2-3700
.
RAILROAD
PUBLIC
CHEMICAL
&
•
.
BOND
ON
30 BROAD
ST.,N.Y.
MCMBEBS NEW
IS BROAD
CAOLK,
~
COaURHHAM
Dl 4-1400
•
Teletype: NY 1-708
Bond Dept.
Distributor
To
Dealer
T. L.Watson &Co.
.
..
established 1832
,
Members
American
'■'-/"to*
"■
■
>
Stock Exchange
Stock Exchange
25 BROAD
'
STREET
NEW YORK 4,
FIRST
N. Y.
.
-t
'
\ bridgeport
•
34
Stock Exchange
BROADWAY, NEW YORK
offices
from coast
"
"
i
-perth amboy
*
DEPARTMENT
f
Chase Manhattan
BANK
5
to coast
for
CANADIAN
CANADIAN
SECURITIES
BONDS & STOCKS
Orders Executed On
'
CANADIAN
,*
•
,
.
Grporadon
Co.
EXCHANGE
1 NORTH LA SALLE ST
115 BROADWAY
NEW YORK
Department
Doxwto* Securities
MONTREAL AND TORONTO
Goodbody &
Municipals
Municipal Bond
DEPARTMENT
Teletype NY 1-2270
DIRECT WIRES .TO
California
All
Canadian Exchanges
MEMBERS NEW V0RK STOCK
<S<MdAu>€At COMPANY
DALLAS
,
THE
Markets Maintained
Banks and Brokers
Active
Dealers,
Commission
New York
'
T«.eTYR« NY «-22«2
Net
•
Members New York
120
"
Underwriter
'
4
'
.
■
•
.
Harris, Upham &
EXCHANGES
YO*K AHO AMERICAN STOCK
STREET, NEW YORK 5, N. Y.
BANK
OF NEW YORK
Burnham and Company
-
AVAILABLE
REQUEST
ARE NOW
FOREIGN
THE FIRST NATIONAL CITY
DEPARTMENT
>
REVIEW"
BANK
BOND
p
UTILITY
SECURITIES
CORN EXCHANGE
v
"ATOMIC ENERGY
!
Bonds and Notes
'
'CHICAGO
40
Exchange Place, New York 5, N.Y
teletype NY 1-702-3
WHitehall 4-81<l
The Commercial and Financial Chronicle
<506)W «kl
For Banks,
The
Brokers, Dealers only-
Specialists for
30 years
Security I Like Best
This
Forum
A continuous forum in which, each week,
over
a different group of experts
advisory field from all sections of the country
participate and give their reasons for favoring a particular security.
■
they to be regarded,
are
Bank Stocks
offer
as an
to
SALOMON J. HENNER
Quarterly
Pacific Telephone and
Common
United States
because
Telegraph Co
tional
Pacific
Co.
Established
Associate
American
|
tive accounts.
York 5
BOSTON
CHICAGO
•
SAN
•
Private Wires to
for
made
market
a
earnings
and
accumulating disillusionment
may
well force speculative stocks even
FRANCISCO
below
Principal Cities
their
levels.
"bargain"
present
.
.
..
At tms
this time
At
investments
time new investments,
when made at all, should be made
in
in
ceeurities
secunties
able
Thp
uncertainty,
sponritv
ine
nhoson
security
cnosen
should offer liberal
yield and the
promise of future growth.
Although several stocks may meet
SCRIP
&
hiehlv vnlnernigniy
vuiner
effects of the present
the
to
not
not
nnrprtaintv
Specialists in
RIGHTS
exPected .to continue
in
these
In service*
,The
Members
standards,
income
should
Members New York Stock Exchange
Members American Stock Exchange
in-
it
mat
appeals
member
BROADWAY, NEW YORK tf
of
.companies
the
f
"
-
Telenhone
tu
to
less
p o
the.
f
correspondingly. Added to
great inherent safety of an
investment in a Bell System af-
'
'
the longer-term.
over
cenJ^ This
HAnover 2-0700
Mobile,Ala.
Direct wires to
JAPANESE
STOCKS
For
due
seems
for
wages
wages
•
anticinated
population
age
states served
that
bonds
on-
op
the
increase
t'j
fn+P
in
The
the
high.
oe
yields
latp
Reserve
of
Telephone
at 122%
in the
Brokers
111
Broadway,N.Y.6COrUandtl-KM
-
share thaa it would
a
at
$132
on
Products, Inc.
Bank of Virginia
tion, together with financing and
assistance given by Amerim—i
Gas Company
First
Colony Life Insurance Co.
Scott, Horner & Co.
Lynchburg, Va.
Tele. LY 62
*
ji
Tel. to
.
..
;
,
atrfpt
v
r
——
v
NORTH and, SOUTH
CAROLIN
the N.Y.S.E.
wnrr
■p
..
;
;
CRAIGIE 8 CO
>
.
dividend.
•
Telephone
service
last litems
budget
for our Monthly Stock
Digest, and our other reports
that give you a pretty clear
picture of the Japanese
economy as a whole.
they
Nomura Securities Co., Ltd.
an
offer
any
or
solicitation
for
particular securities
WALL
STREET
previously
phone
service
Refined
—
rently
Many
daily
peo¬
thought
Exports—Imports—Futures
that
handi-
of
tele-
dispensable,
a
income
more
of
Pacific
have grown rapidly,
rapidly in fact than those of
sales and
,
^
are
that
fixed
are
when
asests
I
con-,
are
being
rate
of
$199,141 in 1957—or almost $1.00
share before taxes.
per
Atlas now has no bank loans,
f bonds, ; or preferred stock outJ
-
.
| standing. J Total liabilities consist
of
Advertising; is- drie^^df;
$732,730 in current liabilities;
1, surplus of $4,116,152;
the most useful tools in
and 206,626
shares of $1 par common stock. On
an
the
other
cash
of
con¬
Albert
dition; and its
G.
Woglom
side
the
of
$498,134;
■■
securing
ledger 'is;
receivables
$1,188,829; and inventories
of
of
~
So
$2,-'
-
'
\
rrment
is among the best inr ^
«*e business.
Atlas Press Company of KalaMich.,
mazoo,
keeping
with
,
the
etc.,
saws,
is
and
distributor
lawn
the
for
presses,
new
it's
' i
the
'-
-
se^s e(lual $15.57
years
higher
priced
per share,
dends of 60 cents. However,
smaH
Net income
same
rose
decade
per
increased fiom
an
estimated
1957.. During
share
$2.80 per
the
earnings
commoai
share
in
share
for
about
1956.
Net
income
per
with
losses
.
were
iow-profit
^ed
lawn
$1.52
the
per
UP
of
previous
fiscal
first quarter of the
(ended
Sept. 30)
and, in
+,J
CHRONICLE
15 Park Place, New Yerk
7
.
A-
N. Q. B-;
with
a
.
INDUSTRIAL STOCK INDEX r
every rea-
ments.; With ^ the excellent
;
19-Year Performance of
35 Industrial Stocks
start
-
on
.
ON REQUEST
FOLDER
this fiscal years business, and
income
that
has
been"
already
made, Atlas Press should make
l
OVER-THE-COUNTER
30 cent year-end dividend
,
year
^v'.
seasonally in the. lawn-
in August, and there is
share from 73 cents in
.T-«.♦»L
^i
as a rethe large
competitive,'{.son now.to expect an early reout
of
the turn to
regular quarterly pay-
way, net income in the fiscal year
ended June 30,
1957, increased to
^19o7 will probablj be the
$8.25.
business
r*
FINANCIAL
in
suit, - and because
highly
it
very
incurred
amounts of capital that had been
the
machinery field.
this
-i.'wi
THE COMMERCIAL AND
„
.
has
hi order to concentrate its efforts
j.be
.
'•
advertisement in
as-
mower for Sears. Roebuck, but mower business, dividends were
$282 million in 1947 to $791 million this
operation
was
sold
last suspended in 1955 and 1956. Payin 1956 and an estimated $865 July to Yardman for
$1,100,000, Hients: were resumed this year
1957.
place
t"1 '
and
from
$12.7 million in 1947 to $90.6
'«
w-
it
Atlas' Power-
reel-type
5
1954 and 1955, and,
For
made
to
—'
"
.y;.
many years Atlas paid divi-
English
Colchester.
•.
^
Thus,
bopk va.lue is $21 ^er shaie.
maker of precision metal-working
-
1
4
,*i*
$1,104,132.
be seen tba^ ne* current
a
lathes,
States
big
total
s
customers
smart
.
your
f-.J*^V
as
sprinklers,
United
.
rise King division also
year-to-year
in population and personal income
pany.'2 Gross revenue^rose
manufactures
quality line of drill
shapers,.
84'y'
Telephone Milton 3-286T,v:/*f;
even
we
annual
an
| Bell System Teletype: RH 83 &
1956
nearly 20%: $198,295 in 1956, and
beautiful
financial
figures
Mgure^.
impressive
depreciated at
uptrend; it is
in
These
\(r.
sider
cur-
m
a^tAr;^7^
.* ?
more
earn-
P°wer tools
continuing the last few
share in 1947 to $8.47
per common
DIgby 4-2727
•
book
Teflgraph'ca^This tafbSSS
million in .1956 and
Liquid
lives
severely
'
earnings. Its
ings
as
and
$95 million in
—
'
times
severe
Telephone
million in
Raw
am civvi
value;, and
five
family
During the past ten years, the
from
SUGAR
its
the
be
above-average
NEW YORK 5, N. X.
of
from
in the face of
the
the cutback to telephones to serv-
in
99
percent of
of
ice feared by those analysts who
and
LAMB0RN & CO., Inc.
40
one
their
in
revenues
Telephone: BOwling Green 9-0187
on
-
National Quotation Bureau
a,
Incwponrted1
new year
f'Mr> p^ition to most investment,
sales, increased-portfolios.
46 Froot Street
r,.
"
;
;
-
.«
,
-
/
-1
•
*
.
v„
New York 4. N.Y.
*
v
■
w
=
fi M
RICHMOND, k VIRGINIA'
at
91 Broadway, New York 6, N. Y.
for
cut
even
would
had
is not
"
is
cuts in family income.
phone
Write
orders
"
ple rely so heavily upon the tele¬
IN JAPAN
rhis
'
companies such as
Pacific Telephone derive stability
of income from the*great need
people feel for their telephones,
Opportunities Unlimited
.miiDvi
-
for the similar
a
Telephone
LD 33
company that offers the investment bargain hunter an attractive
•
•F. Wv-
Clayton Securities Corporation, Boston, Mass.
Members: Midwest Stock Exchange;
'
t
MUNICIPAL BONDS—
V
——
ALBERT^ WOGLOM ^
—
rrwi
Pacific Tel., is
%
Specialists in .T.
I
—
fea- opportunity,
ture of special strength to Pacific
jts - present
Telephone. American Telephone price of $7.75
depends in part upon dividend js about oneincome from Pacific Telephone to
half its net
pay its own famous $9.00 annual current
assets;
can
V;-
.
California, Nevada, Oregon, Wash- p:-;
ington and northern Idaho. The'
American
Telephone and Tele-
other
Alabama-Tennessee Natural
Investment Bankers !
Since 1932
share earlier this year;'
a
&
viReiNWtr^E^yii^WA
have been to have invested in it
company! The stock is listed
^v
b
1
strong
as
IZ as earlier
now
:
Tokyo,^^ Japan ^
;
tronri'
thi«
■/
-Cay
rediscount
Nnwmhpr
Company:
York, Iric.
Affiliate* of '. ,y;
Yamaichi Securities
itji-is betters toi invest yu
trend. of
of New
^
■;,'; Z'
■;i
ont
lowering 01
and Telegraph Co. is in
migration continues westward; the
birth rate of the West Coast remains
Td
Federal
^,
he
.would,
••
rising
^
Yamaichi
seems to have been arrested; In-;
asmuch as the Pacific Telephone
aver-
of
by the Pacific Tele-
generally.
u
would
Following the lowering
f?
the
a
greater thaQ that of fbe ■TJnited,
States
vields
Call br write
Securities
problem-rate m/atlf N™ember, this trendy
important operating
It
J
u
increasingly
teiepnone
erators and supervisors, hitherto
very
thpir
1
vuineraDie somewhat above
telenhone
ior
that
on
information
current
vAr:v".''v
;
Air Control
,
branch offices
our
.
graph Company,.the parent com- A1,as Press
Company
pany of the. Bell System,
a,
owns
owns.'
r
'
-v-.'-ji-.-, ■;
> -v v;.-< ^
^
over 90% of the common stock of
I would like to turn the forum's 35% while net earnings more than
Pacific Telephone.
This connecconnec-.spotlight
spotlight on
on-a
a
"medium-small" double those for thp%ii
"medium-small'^'double
{ ^ "~
••
NY 1-1557
New Orleans, La. - Birmingham, Ala.
^
yield
generous
vulnerable
•
of
pressure
higher
Bell
System. It serves the fast-growing area comprising the states of
TEL. REctor 2-7815
*
19 Rector St., New York S, N. Y.
crease
dialing systems makes
Telephone and TeleCompany is one of the
graph
Exchange
;?•
and
revenues
present
Pacific
The Pacific
-
New York Stock Exchange
Trading Markets
Steiner, Rouse & Co.
;
1■
t
ot every revenue dollar down to rather to high interest rates than
net operating profit 111 1956, com- i0 p00r operating results. The
Pared
; na£en,Ls, ?
quoted price of 115 is down from
eveiY dollar in 1947. The com- a 1957 high of* 132; it fell in
panys operations are now. 95% sympathywith the prices of other
dial-operated.
increasing use> utilities which were driven down
of automatic
conservative accounts at its present price of 122%.
IfcpONNELI&fO.
120
.
as
Pany was able to briPg 18,8
especially suitable invGstirnGiit for
Stock
Bought—Sold—Quoted
the filiate, this growth factor makes
a "plus value" which should
impiove- gjve favorable investment results
futufe. expansion and
graphaCo.C cpmmonnstock is* an
Since 1917
American
York
IfrS5Lne^HmS)mnrnupr for
This is because the
lower
of
pressures
Teletype NY 1-40
PHILADELPHIA
has
uncertain
New
.
.
thqp
.
Louisiana Securities
Telegraph
management has
pacific Telephone has paid a
f^wn "self to be very
ef$7.00 dividend since 1950. It apare far below their 1956-57
highs, ficiency-minaed. Through the in- pears safe. The dividend provides
many of the stocks in these groups production
of dial systems ■■aana; a liberal yield of 5.7% 011 the
may not be suitable for conserva- °ther economy measures, the com- ^nck at its recent price of
122%.
Exchange
120 Broadway, New
issued
1S
1958
and
volatile stock market groups (such
as
the metals, rails and airlines)
Member
WOrth 4-2300
been
recession in
weeks.
Even though the
prices of former favorites in many
1920
Stock
;
Henner, Se¬
addi-
Ppncy
tn® company has been to
valuable subscription rights;
*° lts stockholders. This practice
recent
New York Hanseatic
has
&
Solomon J.
Analyst,
(Page 2).
City
Whenever
1957.
•
Telephone
—
curities
increasingly frespeculation about the possibility of a deepening economic
nervous
Corporation
Alabama &
in 1957; Atias press Company—Albert G.
but per ' Woglom, of Clayton' Securities
slightly
Corp., Boston; Mass; (Page 2).
of
issuance
in
'
-
^
The recent and
request
the
of
stock
stock
new
quent
on
be, nor
sell the securities discussed.).
to
The company's earnings
Analyst
New York, N.Y.
Companies of the
intended
not
are
will exceed those of 1956,
share earnings will dip
Securities
Comparison of Leading Banks
Available
-
Participants and
Their Selections
.
(The articles contained in this forum
and Trust
-
Thursday, January 30, 1953
.
.
in the investment and
in
Our 102nd Consecutive
Week's
.
*■
t.t'.Arf'
Volume
Number 5712
187
.
I The Commercial and Financial Chronicle
(507) ' 3
INDEX
'
,
:
•,
.
'' 4
By JOHN F. SULLIVAN *
..
.
.
Partner, Merrill Lynch, Pierce, Fenner & Beane, N. Y. City v
of
held figure
'
—
six months for the
complete its
economy to
The Investment Era in
The Role in Monetary
callable provisions.
'"'44'--i4:<4
.
•.
i
.A.
-
'
'£
.—i.
«_—*
£ iti*.
.
^*\
.C
>-v
■« m 4
cut"
4»
jrv 11
'-
?
K«-v
X,
•
utr r
AjM-u'
Policy—E. M. Bernstein.—______
An Optimistic
12
'thelessy th e yw e r e
pretty well
right4 d.';,
year ago.
"of
said
them
that t i
'at
•
View—Morton D. May—
———_
ECONOMY DURING 1958
"won
' l*\
*
«-v
1'.
t'
usit i 1};
mid-year
that,"the
and
sec-.:v
period
retail
income
both
in
While
be clouded .by
simply
AN.- -J.
Jolin F. Sullivan
a
October- and
;V'4': "■ 4
most
'*
—Hon.
more
important
detail. •.
segments
i
-
The Past
.23
HAILE
■
4'.' A
analysts
a
had
■
been
'
;
GETCHELL MINING
:
•
downturn
seems
-
-
to
just
the cover page,,
on
J.F. Reilly & Co., Inc.
Members Salt Lake City Stack Exch.
the views of
we present
Spokane Stock Exchange
1
Private Credit Will Continue to Spark
DIgby 4-4970
39
than
men
4*—
15
16
H. W. Balgooyen_l—
A Matter of Heart and
Skating
^
^
17
Spirit—Benson Ford-———_-—-i
Thin Ice?—Roger W. Babson..
on
..
♦An address by Mr. Sullivan
before the
.
-
Organization
w
Requirements—.*——,
i
Tenn. Gas Transmission
And More!
(Boxed)—:
—*
&
49
*
.
George A. Heaney Predicts Good Year for Long Island Banks 49
■*
„
..
•
.
pect Of this picture IS the Outlook
m^ej^unaryani7?r?958.sociation' Chkag°'
Continued on page 44
sored
National
by
Direct Wires
INC.
PI., N. Y.
to
64
i———
Coming Events lii the Investment Field__—
8
.Dealer-Broker Investment Recommendations-—8
Los Angelas.
Philadelphia
17
—
Dallas
Chicago
4-'
,
4
Einzig: "Britain's Disinflationary Policy Strengthens Sterling" 14 ;
From Washington Ahead of the News—Carlisle Bargeron
7 '•
Indications of Current Business Activity.—
62
,
Mutual Funds
Lithium Corp.
60
—__—
News About Banks and Bankers.———
18 4
Observations—A. Wilfred May^
5
45
8
45
Governments—
Our Reporter's Report.—
Our Reporter on
——
Public Utility Securities.—
———
Railroad Securities——
—_
54
57
Security
Prospective
•
Offerings.——i___
,
Pan American
35
Salesman's Corner.—
Securities
The Market... and
for plant and equipment Spending
You—By Wallace Streete
1
The Security I Like Best
The State of Trade and
.
Industry.—
——_———
Waidiington and You
16
*
2
4
!
Sulphur
64
—
—
Sulphur
United Western Minerab
41
—
Gulf
„
a*~
Credit Conference sponCredit Policy Commission of
10th
40 Exchange
..—Cover
——-——
Business Man's Bookshelf
4;
Probably the most negative as-'
.
(Editorial)^
Bank and Insurance Stocks.—
•••4"
V"> '
Teletype NY 1-1825 & 1-4844
Regular Features
*444■ ■■ ■ •
As We See It
..
Mackie,
HA 2-0270
*
.
•.
Singer# Bean
36
43
—i——„—*
■"
33
Fund_^i——_—
Purchasing Agents Expect Business Upturn
,
;
{
.
_*
Edward M. Bernstein Resigns From Monetary
;
Common & Preferred*,
14
—
—
Seeurities Now in Registration^^*______
Spending
Plant-Equipment
v
Industries
Eastern
24
—
William H. Moore Urges Reduction in Bank Reserve
tlon year-
volume
sales
Teletype: SU 1S5
Advance Industries
'
-
State Banks Urged to Join State Bank Supervisors
traditional leluctance of Congiess
to cut appropriations in an elecr.
reported, plans
*
Pacific Uranium
13
Looking Backward and Forward—Edward T. McCormick
f
•
faster
Exchange PL, Salt Lake City
DAvis 8-8786 "
^
business
JCY 1160
Overcoming Points of Friction in Inter-American Ties
of
;
and
HEnderson 4-8504
;
13
Some Plus Factors in the Business Outlook—Harold H. Helm
ended
in his-r
A Corporate profit margins
.continued to drop as costs in-
.
Teletype:
Our Nation'^ Progress
—Joseph C. Welman
■
year. •
Exchange PI., Jersey City '
'
44'ment spending. In 1957 total GovYear
'.'C'eminent purchases of goods and
year
FINANCIAL
AND
_
the
cou,fe of ^ ecoTno^i1f p?4?rn"
determinant
important
BUSINESS
leading Canadian Government, Financial and Busi4 nessmen as to the probable course of Canada's econ¬
omy during 1958. These articles, of course, were ex¬
pressly written for the "Chronicle" and provide the
reader with official, up-to-the-minute information
;
regarding economic trends. "
A y - v-
4
leveling off or
proportions,
r
creased
MINES
T.
L.
Starting
4
No-
services—Federal, State and local
jwas the most prosperous
--accounted for $86 billion of the
Sory;r Gross National- Product—a $435 billion Gross National Prodtotal of all goods and services proreduced rate ui- the
duced—-was valued at about $435 fourth quarter, as the effects of
Jjillion, up $20 billion over the
Pre-Sputnik economy drive
-;1956 level.-:Personal income like- sh°we(lAU.P' contributed, in some^
wise set a new record, and more measure "to-1 the darkening .busipeople were at work during the ness picture.
"
.'4
year than ever before.
Industrial
1S 1?ow clear that defense costs
production averaged out at 'the are going to_ rise, not Tall, and.
same high level as
in 1956, consecurity expendi-r •struction hit a new peak for the tures in l958 Will be substantially
11th year in a row, and retail sales higher than they were last- year,,
"reached a $200 billion mark for Ther.e is little agreement as to the
the first time.
precise amount to be increased,
4And yet, so prosperous a year, but it is a fair assumption that
1957 was disappointing in several defense outlays this year will ex- >
Tespects. For one thing, the gain ceed Isst year s by $2 billion. This
in Gross National Product, in con- assumption is, if anything,- con- struction, and in retail sales, as servative. It is tl^ expressed inexpressed in dollar terms, were tention of the Administration to
due largely or entirely to higher offset rising
deiense outlays by
prices rather than to increased reduction in non-defense areas,
.physical quantities.
Manufactur- where possible. Just how success¬
ors'? backlogs of unfilled ,orders {ul these attempts will be is open
declined steadily throughout the 4to Question now because of. the •
V:Ov;er-ali -the
RADOROCK
RESOURCES
LEADERS SPEAK AFTER TURN OF TOE YEAR
...
n
'
4 The Prospects for Uranium Look Extremely Encouraging v
: •••-;;—R.
H. Winters—31
decline oLmoderate
the ' current
re—
"more
'
Review and Outlook—James Muir____.»_^____ 27 4
Behind the Headlines in Canadian-U. S. A. Relations
y
;
bitely upward by the second half, will last and how deep it will go
I hope they are right. Personally are, (iiiestions of immediate com-.
I'feel they are too optimistic. So cerh.;'^:
let's take a look,, first, a sort of
Pj44be vkey,^ .seictors ;pf th^
•kummary. and then discuss some Gross National Product, ^na >an
the
BIG HORN
1-
McKinnon_£__^_i_'_-_^__i.
f Canadian
versing periods—the first half of-havestei-tea^oner-and-proceedeii.,
1958 to see the end of the decline faster than many of them had an- .
with the-economy turning defi- tieipated.
.How much longer it
of
STREET, NEW YORK
POWDER RIVER
dipped downward as
expecting either
certainties.;
Currently they
are
WALL
99
Canada's Current Consolidation and Basic Growth Bias
CANADA'S
sales and .personal
September,
vember.
ond half would
.u n
t
s—O. Arnold Hart__i^.10
jump of 700,000 over the previ¬
ous 4. year;,: also
over
the same
ld:,con<4
tinue y
cash
4
4' Neighbors Over the Back Fence L.-'-jr
4-44r ■>L'Vv'".':'4
;4 4—Hon. Sidney E.. Smith__>_^^__^__fc__^___i___i__€over
unemployed,
reported
Why not
our
a
'
that the boom
werfe
sons
m e',
with
LITHIUM CORP.
its peak .11 months earlier; freight \
carloadings were 15% below No-;
vember *,of ;1956; 3.2 million per- -
Most4
obsolete*?
happy"
ARTICLES PERTAINING TO CANADA'S
ing that the economy had entered v
the declining phase of the busi¬
ness cycle. In November industrial v
production was eight points below 4
agree.) Never-
-
Telephone: WHitehall 4-6551
.
4 Short-Term and Long-Term View of Canadian Economy
necessarily
those
"be
instead ?
:
io
12
_
av.v.ujiiuwi
JTi.;cviuvntv.
just
9
What Is Happening to the Economy and What Mnst Be Done
—David J. McDonald—,.
back-new
plant
and equip-"f
jnk
4 "L%
Lvv~x
*
"
> '
.
4
4', ." U
.
: *
r
*—about
Security Market's Condition and Exemptions for
Foreign Firms—James C. Sargent—_i__
___j——i_4__ -11
1956's.4Claims %.■ 4
444' economic climate makes it feasible to Jengthen Federal debt,
•<%
4 4and notes that a really long-term bond issue could removev
:
V4.4; considerable buoyancy from the market action of outstanding
4'4;
4
long-term Treasury issues. Reviews new financing scbeduledfr 4
^
for Vfirst quarter and status of non-refundable and non- J"
i? 4 This year,there seems to be a to
Specialists
;.
& BEWILDERED
6
Our
*
4,4:'
Era of
an
—Howard F.Wortham
;>
-
j- -4 .4^ adjustments and without return tolew rates of
6
1958: Year of Opportunity—John H. Rowe
V>
mmmv|
BEWITCHED, BOTHERED
■
Inherently Safe—George C. Johnson—
relatively high plateau to continue with in^
4 creased consumer spending leading the upturn. Foresees cmr4'44' rent trend of lower money rates and higher bond prices continuing over the period just ahead with no more than minor
and company
5 '*
Private Liberal Mortgage Lending Is Sound and
'
expects present
^
mm
Including Common Stock Operations in O p em Market
Operations—Robert G. Wertheimer.
readjustment preparatory to start of expected recovery and ^
>
'
llCHIfM
U.S.
—
Warrants in Arrested Markets—Ira U.
Cobleigh
Mr. Sullivan holds it may take longer than—the popularly l
|
1
sa
Looking Ahead: 1958 and Beyond—John F. Sullivan.—
v44.
Quinta Corp.
Twice
Published
The
For many years we
have
DDECCDDm CTflPlfC
specialized in r IIL T L H H L il 01 UllflO
^Copyright 195S by William B. Dana /
Weekly
COMMERCIAL and
«
CHRONICLE
FINANCIAL
-
•
_
_
_
„
-
,
Re^. U. S. Patent Office
WILLIAM B.
: V
DANA COMPANY, Publishers
Spencer Trask & Co*
Members New York Stock Exchange
25 BROAD
v>;^-
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•
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•
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• •
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•
"
•
;
^
'
TELETYPE NY 1-5
•
Glens Falls
Worcester
Sabacriptlan Rat..
Publisher
WILLIAM DANA SEIBERT, President
:
Thursday, January 30, 1958
Ev.ry Tlmrsday
"
•*
-
-
(smcral news
and
Other
Chicago
issue)
and
Offices:
3,
111.
135
South
La
Salle
U.
S.
Members
of
in
States,
Pan-American
per
year,
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$68.00 per
Countries, $72.00 per year.
.
ad-
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United
year,
Other
Monday (conrplete statistical issue — market quotation
records, corporation news, bank clearings
state and city news, etc.).
'
vertising
in
Territories and
Union, $65.00
Possessions,
HERBERT B. SEIBERT, Editor &
■
ST., NEW YORK 4, N. Y.
TELEPHONE HAnover 24300
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Subscriptions
RBctor 2-9570 to 9576
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STate 2-0613L
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-
Reentered as seeorid-class matter Pebruary 25, 1942, at the post office at New
York, N. Y., under the Act of March 8, 1879.
other
Bank
540.00
and
per
Ptlbli,:atioa,
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(Foreign Postage extra.V
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year.
Note—On account of the fluctuations lb
the rate of exchange, remittances for forelgn Subscriptions nnd advertisements must
he made in New York funds.
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INCORPORATED
/
39 BROADWAY, NEW
"
YORK •
WHitehall 3-3960
t
Teletype NY 1-4040 & 4041
Direct
PHILADELPHIA
Wires to
,
SALT LAKE CITt
4
The Commercial and Financial Chronicle
(508)
golden.
Wariants in Arrested Markets
via
about certain warrants
;
really
quite
a
few
choose
from
if
may
warrant
you
Sheraton
Corp.
shares of this
very
the
>
them
yield-
say,-7/C,
£t
2g%
if
Tire
General
is
so
sells at 24%.
Yet for $9 you may
U.
.
a
Cobleiffh
_
,
thousand
J* ?rf in]""
medm ely at-
,
dreamboat.
speculative
imputed
of this
two shares
or
Now all this is not offered in indictment of the intelligence
of t e
average well heeled stock buye,
but merely to plead for a sharper
definition of objectivesrandl more
ngid adheience to same. Actua y
more people become market losers
from
misty
than
by
purchase
objectives
dedication to
blind
security
selected specifically
given
jith
i
?Lnl;'nVeS
sizable gain.
hope of
Now
stock and during an identical
period of time.
Such
entries
Atlantic
as
Coast Line, Philip Morris, Chesapeake & Ohio, Pullman Co., Pub-
lie Service Electric and Gas, Parke
Davis
&
Steel
Co.,
Jones
Loughlin
&
immediately come to mind.
But income is not our beat*
We want to look at
.lor
//<
t
-p.
capital
market
this
if
today.
unique
/"OTiitnl
maximizing
especially
gains;
i
quite
moviY^ivind1
•Tnt*
method
a
/itrrv\
-r
son
Yt 'than
this
From
clearly recognize that
we
quite
representative
win
voll
outlined.
we've
Just
bear
few
a
in
related common;
call
term
a
as
(2)
Buy
you
long
(3)
as
get;
can
Watch for
securities.
you may
may
you
By the same token that
glean a fortune in them,
also lose your shirt! >.
fhe warrant (1 Weauires less capiJoins Harris, Upham
Sf"^SSSlSv (2) maSmto Se
(Special lo The Financial
lay» in.Lniflf?nnf
S Ld (3Talwavs fells for BEVERLY HILLS, Calif.—Ha¬
£a1"' an<* <3) alYays sells *£■ rold A. Blue has been added to
'
Chronicle)
f.nni<n.
<1call
because
warrant
or
mar"y
.because a call 01 w. riant
has a built-in factor of
the staff of
Harris, Upham & Co.,
Wilshire
8960
Boulevard.
over-spin
.
ontimi«sm
fu^cami^on *f
for
Tf
Pvamrde
General Tire
|!?c^n™7^inn
vO SCll clt $l,00j, II16;
w_rrQnf
were
+v>o
Oi ,J116
^
A. C.
Equally
e
should
it
sold at $2() nine yearg (or legg)
And, not at all lllogically, the from now, the warrant would be
speculative
vehicle, selected to worthless!
realize
this
exciting
gain,
is
Allyn & Company
and
become
associated
*
with A.
industry
reports
on
output
and
sales
continued
ness trend, coupled with current business and
governmental re¬
ports showing the downward course of employment for the nation
as
whole.
a
"
,
/
-
Despite this unfavorable picture if the immediate prospects
for an upturn, a feeling does prevail in
many quarters, of optimism
and confidence that by the middle of the
year economic conditions
will change for the better.,
Y
Many
base
this
assumption
the
on
fact
that
manufacturers
have set about to reduce their inventories and when this
process
is completed, defense orders will take
up the slack and result in a
general improvement in business.
funds
available
for
highway
Taking
the
With
an
easier credit situation,
construction,
schools and hospitals and the like
a more stable
economy.
are
housing, building of
expected to aid in promoting
above
factors into consideration, the consumer
evaluating the future prospects for busi¬
depend upon his reaction to economic trends
must not be overlooked in
and
ness
much will
thus far and their effects
In
the
steel
on
the future
course
of business.
industry this week steel inventory cutbacks b»y
metalworking companies may be leveling off, "The Iron Age,"
national metalworking
weekly reported on Wednesday last.
A
many
survey by this trade paper indicates that steel stocks of
firms have dipped to dangerously low levels and some steel
users
are
trying to hold inventories
first quarter.
on
an
even
keel
during the
A growing minority of companies plan to buy
steel in the second quarter than in the current three-month
The
ment
more
period.
metalworking
companies
magazine adds, however, that important
the automotive, steel warehouse, farm equipment,
equipment, materials handling and transport equip¬
in
construction
industries
still
stocks through first
plan
to
whittle
down
their
in-plant
steel
quarter.
Steel buyers are cautious about second quarter
commitments,
but. there are rays of hope. About 54% of a random .sample of
United States industry expect to order as much steel from mill
and warehouse in the second quarter as
36%
they will in first. Another
buying. Less than 10% say they will con¬
inventory cuts during second quarter.
will boost
tinue their
their
"The Iron Age"
casts
will
are
adds that some second quarter buying fore¬
surprisingly good. A manufacturer of heavy equipment
double
ducer of
his first quarter steel intake.
Another major pro¬
heavy machinery will boost his steel buying by 10% in
the second quarter, while a stainless steel fabricator will
his second quarter intake over the first quarter.
double
Steel buyers are making no bones about their low inventory
position and lean heavily on fast mill delivery and frequent trips
to warehouses to keep from running short.
They are gambling
on a slow,
steady pickup in the economy rather than an overnight
reversal.
"The
Iron
plan to stock
CHICAGO, 111. —John Kasbeer
has
Industry
Index
Production
Business Failures
the past week to reflect depressed state of businsss in
general. The
steel and automotive industries are examples of the
present busi¬
(Specital to The Financial Chronicle)
be
Auto
Price
J
Trade
v~
waii.ait^you^ be everimoie
niarkable.
John H. Kasbeer With
V
Trade
Commodity Price Index
Food
mind:
(1)
Warrants
should seldom be bought for more
than one-third of the price of the
things
that
nprf.pivp
borne in mind that if the stock
400
ratner man suu.
off, you'd
be quite certain to find a long-run
bargain among these, and the ones
expiration date (if any)
Qut $2>g25 tQ make $2>975> wMle lest you be summarily wiped out;
.
second case you jajd out and (4) Remember warrants are
to make $3,500 in the very the
most volatile of marketable
same
'
today's markets afford some really
splendid,values for the income
minded:
share. How does our comparison work
out then?
Well> $2>825
rnoves
up
to $6,000, while our
$1^00 investment in the warrants
jjecomes theoretically $4,500 (origjna| pl
_j_ the difference be^
^nd $60 per share or
$35)
the firgt cage> the capital
-n .
105%; in the second case,
§
In lh
firgt case you laid
per
Carloadings
Retail
State of Trade
.worthy
an equity?
The answer is buy a Mack warrant to purchase
a mixture of logic, mathematics, 1% shares of this common at $30
'psychology and the time element, to 8/31/59, at $32.33 to 8/31/63
tracted; and, almost in the same jpor j£ you were to buy 100 shares and at
$37.59 from then till 9/1/66.
breath, if some enthralling specu- 0£ Genertil
There
are
dozens
of
warrant
Tire, it would cost
lation is whisperedI to them at
$2,825 (excluding brokerage). One issues ranging all the way from
1 k, which holds forth hope, howkundred warrants would cost but promotional Canadian coppers to
ever
illusory or meager, of an
Now let's assume a soaring major investment trusts such as
advance to 3, they will, without'
rnark;et in which GT sells at $60 Tri-Continental. Particularly if
reflection, go down the line for.
the market were to sell
Ira
,
and
Productlan
Electric Output
common
same
potential, and the It's an important factor in avionics
[T;Rnd .\(2) j tJ1 e drawbacks to warrants. We said and guided missiles. The common
Yd u e s t f o r the warrant sells at $10; it gives sells (N. Y. S. E.) around 19, yet
capitaY gains. y0ll the right to buy stock at $25, you can buy the warrant at 4%,
| ,Now it is true and the stock sells at 23V4. What's This lets you buy one share of
that many niso wonderful about this?
Clearly common at $25 to 9/15/63 and at
-j-dividuals sim- the warrant is
actually worth a $28 till 9/15/67. It doesn't take
;
jjply c am n o t -mere $3 (the difference between too much imagination to jsee
% compartment$25, where you can buy the stock, Sperry at $50 a snare within nine
?and 28%, where it sells).
Why, years; yet such a market price
market objectherefore, you ask, should anyone could rocket the warrant from
trves.
If a
jn his (or her) right mind pay a $4.75 to between $30 and $40!)
solid equity is
The big name in heavy duty
£7 premjum f0r such a purchase
presented
10
Mack common
privilege? Why not buy the stock trucks is Mack.
features,
Steel
The
is
Actually, all market operations last five years of its life, the war- at any time from now to Sept. 1,
are
encompassed
within
two rants privilege is $2.50 higher,
1966 at the rate of $20.83 a share.
major viewpoints: (1) the search
This General Tire warrant serves
Sperry Rand is a big name in
for solid, sustained and possibly as weu as any to illustrate the office
equipment and electronics.
income
/T
purchase for $2.25 the
enabling you to buy 1.2
'
rising
Thursday, January 30, 195
.
give hostages to fortune
warrants.
you
.
today
v-
;
-
lively hotel chain. Its common
sells (N. Y. S. E.) at liy4.
Yet
capital gain.
<
to
-
a
which, should the
market rise, might prove highly leveraged vehicles for unique
,
to
want
warrant sells
.;
are
industries
Enterprise Economist
field notes
$9.
There
By DR. IRA U. COBLEIGII
Some
This
around
.
in
Age" states that steel
up
inventory
on
as
a
indicate they do
users
hedge against
a
not
price boost
steel.
C.
^
,
neither
n
a common,
Ti'c
Vinn^
preferred
a
ihnf
o
nor
r.nvi
Which introduces another major
1
i
.
element
£ina"ice warrants.
oushybridof rarporaUoiv
which toils not, neither does it
spin; it never pays interest nor
.
declares
a
dividend
tangible equity
awts
or
has
and
no
sheet
balance
in
earning
Yet
nower
properly selected, and in the right
sort of market, warrants can ere-
a
the
n
the
remarkable
most
1
thereof, the entry
paid, and the timing.
,
In the
Chicago
wholesale representative for The
was
der, Peabody & Co.
111
wan ants
without having time run out on
+
Kasbeer
Mr.
•
2Aan?.
nemSrl/?U1f
stake. AS a matter of fact,
+v,
~
there
J^ku*5ipipW "perpetual" war*{^}i
90rp" Prav|^inS
prices
1J4U4
1
Lest you conclude that warrants
ii J7PC0^m0n ,S
JS AoX
5 .,a
$17.76 forever; and Atlas Col-p.
warrants, privileging
chase
one
share
you
^{las
of
to pur-
a
sure
at
$6.25
you
a° hare
can
compare
K(in given comcertainaLarioro£P«meanRefine!
period oi time.
Keiine
have the
Security
"ing "ut
of
Bunts
ceitam
reLted^ta
have
some
'While ^
"per-petuaf"
advantage of
warrants
never run-
^
P^tice, are
f^^or"midd^-te™1 wfr!
^Lto'purSatafunchang- Yu YyStoTeYyour"iye
The
a
securities
Columbian Fin. Devel.
Columbian
has
Develop¬
been formed
with offices at 350 Fifth Avenue,
York
securities
City,
to
business.
engage
in
Officers
a
are
Stephen Hartwell, Treasurer.
officers
are
of
Atomic
Securities
All
Develop¬
Co.,
Co.
nf
01
9/1/62
and
at
common
9/1/67.
'cise
eise
rjpnprnl
General
of
oi
and
$25
then
The total
fhic
this
Tirp
lire
at
one-half
per
years,
Rnhhpr
Kubber
share
$27.50
time
warrant
wauant
Rr
&
is
is
for
until
exer-
thus
thus
and for
to
ninp
nine
the
you
torm
are
excited about the long-
Drosoocts of this pouitv
von
pitibptJClb OI tills oquiiy, you
should certainly consider the warrant which
gives
buy
common
KMG
you
4/1/58 to 6/30/64.
may seem a lonS
the right to
at $80 from
Eighty dollars
way
off today,
been
f
5
that
Some also
was
the
current
decline
could
be
attributed
trade, apparel and construction in¬
attributed to the fact that the week
was
quarter and claims are always higher in the
first week of a quarter. All states except Louisiana and Michigan
reported fewer new claims.
/
new
Total insured unemployed for the week ended Jan. 11, was
2,863,800, the agency reported up by 54,500 from the week before.
The comparable year-ago figure was 1,725,000.
Turning to the automotive industry, "Ward's Automotive Re¬
ports" stated on Friday last that January passenger car produc¬
tion in the United States will fall 20% below the same month a
year ago,
the
first
marking the start of
a
trend expected to
carry
through
quarter of 1958.
500,000 cars will be manufactured this month,
the lowest January total since 1954 when 456,765 units were turned
out.
Opening-month volume the past three years was 642,090 in
tion.
1957; 612,078 in 1956 and 659,508 in 1955.
It declared that
A forecast that
A. C. Costello Opens
of about 80%
BRENTWOOD, Mo.—Arthur
business
thi Si In
rmtlin fl
kL I !
the option
to nbuy one
has
January.
except Mr.
Dranoff who was formerly with
North American Planning Corpora¬
C.
Costello is engaging in a securities
the holdei
of
seasonal cutbacks in
the second of the
Financial
Inc.
Co.,
Fall
of new claims, however, was still considered high
The record for 1957 was reached in the last week of
Officials noted
to fewer
dustries.
ment
week
total
523,000.
at 207 West
Prospect.
New
late
first
is engaging in
business from offices
ment
since
up, except for a slight
This new drop exceeded
in the week of Jan. 15, 1955, which the de¬
partment said had been the biggest decrease in years.
the
at
variations from this original con-
charp
snare
trend
in
the decline of 80,900
December at 550,995.
them with their
^'nmons on any reSular
a
The
decline
COLLINS, Colo.—Frank F.
fire, gold-plated ticket without time limit. All of
Merle Thorpe, Jr., Chairman
of
these
togaudy market profits, we must warrants are
the Board; Newton I. Steers, Jr.,
actively traded on
outline them m a little moie detail.
Herman
B.
Dranoff,
American
Stock
Exchange
and President;
Essentially a warrant gives the
Vice-President and Secretary; and
are
New claims for unemployment compensation dropped sharply
by 86,400 in the week ended Jan. 18, the United States Department
of Labor reported.
F. F. Buhts Opens
FT.
capital
tility
T
South La Salle Street.
of Wellington Company and was with'
long Graham, Parsons & Co. and Kid¬
°
on.e (t? .a.le. oi
gains, running on occasion from Allegheny common at $3.75 for;200% to 2000% or more depending ?ver; Tn-Continental Corp. waron
the issues selected, the voids' wheieby you may puichase
ate
122
past
consideration
Buy them for as
. y
,?
n
.1
in
Allyn and Company Incorporated, '
from
Brentwood
offices
Boulevard.
at
2929
He
was
formerly with Stix & Co.
F. M. Gossett Opens
HIGHLANDS, Tex. —Frank M.
Gossett is
engaging in
a
securities
business from offices at 114 North
but six yearg from ndw the privi_
Main
under
]ege of purchasing then might be
Frank
M.
the
firm
Gossett &
Co.
name
of
by "Ward's."
of
"operations will continue at their present
Thus indicated is production
during the first three months
1,792,015 in January-March, 1957.
Truck production this month will reach
pointed out, or 15% fewer than January,
automobiles
pace
1957 volume—at least through March" was made
of less than 1,500,000
of 1958 compared to
80,000 units, "Ward's"
1957 which produced
94,138.
Programs the past week called for 111,582 cars and 17,866
trucks compared to 109,761 and 18,627 in the preceding week. In
the corresponding week a year ago, totals were 145,191 and 23,138.
Several companies pared schedules last week, "Ward's" said.
Failing to work live days were Buick's Flint plant. Pontiac's
Continued
on
yage 52
Volume
187
Number 5712
..
7'he Commercial and Financial Chronicle
.
(509)
/
ally
Including Common Stocks in
Open Market Operations
of
Economics at Babson Institute
frequently than
where
assets
wise;
times
Business
THE LONG-TERM BOND RECORD-
Administration and at Northeastern University
and
;
Dr. Wertheimer would add to
the inclusion of
ket operations.
our
battery of economic
■With Implications for Stock Investing
weapons
stocks in Federal Reserve open mar¬
common
The economist, in furnishing precedents to
issued report
tends proposed stock buying and selling program would assist
the country's growth, stabilize the economy, and "become the
.
'
most
important step to prevent depression
without
;
reviews
m
of
a
by W.
Bra d dock
of
Hickman
imposing taxes or government control. Author, also,
condition of stocks and bonds, money market, and
the
National
of the economy.
IVJy
•
subject
with
deals
the
market, the price of mon¬
etary instruments such as bonds
stocks and the outlook.
and
power
of the
dollar
serves
as a
Nat-
V
rally, the
pur chasing
u
37%
holdings
Tight
This
measur¬
sized
whether
the
is
economy
sound
runs
at¬
in
borrowers
the
market
for
fi¬
*
Presently,
we
nancing of less profitable invest¬
to
assume
ment
from
suffer
inflation
continue
apply
elimination
kind
tight
of
ments.
neither
by public def¬
icit
spending nor by a break¬
down in our ability to produce.
over
We
these
caused
suffer
from
moderate
a
of income and credit
gree
tion.
A
capital
wages,
earning
credit.
To
for
investment
added
busincss
and
financed
of
bonds
and
by
up.
ful
sustaining
inflationary
wage-cost-price
spiral.
This is
true as long as hourly wage in¬
outrun
creases
tivity.
gap
an
gains
in
Over the last decade, this
to 3%
annually.
amounted
hourly earnings in indus¬
advanced by 5.5% annually,
productivity
gained
only
2.6%
try
benefits.
predominantly,
this
For
price
consumer
in
ket
*
Population arid 'civilian
what
or
only
wages,
supply,
money
rate
prices; or the
the stock mar¬
or
or
else.
To
compare
total
of
•
,
time
Rate
of
business
—
Rate
of
dividend
level
demand
Total
in
—,
supply
money
in
collections—.
long-term
Increase in total individual
dividual
gross
liquid
the
hand,
form
of
currency
an
last
decade.
prices
based
88
the U. S. Securities and
on
Exchange
Commission
the Dow-Jones average
trials,
insur¬
while
over-all
index
of
On
took
place
the
other
common
stocks
*An address by Prof. Wertheimer be¬
fore the Boston Junior Chamber of Com-
on
In-
MSt™e"tS "' .the Savings ican
and
Mortgage Division of the Amei
Bankers Association.
-
the absence of
subsequent default,
with bonds).
'
with realistic stock
policy, the technique oi
1
buying
zation
of
above
the
use
money
yield is validated.
iniurious
T1
factor
of
rhone-
■
•
.
■
»,?h!!taSiatinsAm
So again, as
lone-null digging-in with amorti-
:•$
*
*
,'
Digging-In With Amortization
^ditiona
ly ^staniratmg tbe
P/mcipm max Donas as wtui as
stocks
tirhnto^of LuoHizing
under the_technique of amortizing
over
to attempts at
thp poiir«3e of intermediate
tim\ng tV,e cA0U^?e ot. V
tne real value 01 tlie Donanoiaci a mark;e£ fluctuations. A contubustake though also relevant and tion toward furthering better in*v
,
i
±
depreciation on the course ot
^
;£/r£J
vnlll„
nf tl,„
without- recourse
hnndholdor'*
vestin™tice in both areas!
themselves
th
t, t
b
d
scientifically substan¬
With Walston & Co.
lmportant conclusion that
as stocks should be
(Special to The Financial
bought and h£]d under the tech_
njc]ue 0j. amortizing extra-yield
^
CHICAGO, 111.
Chronicle)
—
William C.
long_term, and without Kurylak is now with Walston &
recourse to attempts at timing the
Co., Inc., 201 South La Salle Street,
COUrse of market price fluctuatons.
Thus the way is indicated to good
,
were
In
studying
the
the
^
B*e™l
for indus¬
advanced | by
130—140%
the prices of bonds mod¬
analysis
seems
to
that
Continued
on
page
comparative
performance of a high-grade versus low-grade portfolio;
it devel¬
that while
ops
course
Con-
XXUL
anu
F
"•"
.
■
the low-grade of
yield, there is the off¬
Like
setting penalty that substantial de¬
and loss rates occur, along
Short-Term Forecasting:
■
Spring Street,
•/
has the attraction of prom¬
ised liberal
t
to
Difficulties
46
a
sell
of
intermediate
as
factors,
business
finds that "frequency
well
of default in
as
large
block?
larly the lower grade issues. The
study, significantly pointing to the
involvement
or
indicate
prices of stocks are rather
out of line with general economic
growth while bond prices appear
to correspond to the rise in the
interest rate and the 20% price
This
ex¬
Committee
Over the years there is shown average yield of 10% per year
have been close correlation (the element of monetary depre-;
the
number
Of
times ciation having borne ;only partial,
fixed
charges were earned and responsibility for this disparity j
between
high-grade and low-grade
bonds alike enjoyed freedom from
capital loss during the overall 44year period, there were many
shorter intervals of ups and downs
within that period when serious
losses did occur, affecting particu¬
erately declined.
basis,
*
Performance
While
and
-
in¬
saving.
this
pansion of about 50%
in
the
_
cor-
*The
by the
:
253
tax
debt equal to six years of
On
in
deposits
porate saving at present rate;
ance
.
_
and
15
44"
116
78
60
46
50
84
30
__
payments
retail
government
Increase
•
i
:
:
Productivity in- industry
Price
.
deposits)
saving
deDresacpres
severe
severe
and periods of recovery and
sion,
'• -*k Increase
•
up_
,
las
a
a
with price instability.
gross
saving
two
iwo maior
majoi wars
wais,
during the last decade:
private investment, spending
Gross- national- product and wages income
Consumer spending
Personal
.
.
! to
#
on new offerings, marexperience, default records,
End quality characteristics of 21,000 corporate bonds during this 44year period. They include i'ixedincome
single- maturity
bonds
issued by domestic business corporations and held by the investing
public.
During the long period
covered by the study, including
fault
Industrial output
Rate
does
but significant data,
increases took place
few
a
'
employment
:
ket
the following
....
I
discount
the
the
whether
the
to
;
,
study contains detailed in-
formation
doubt, that
wages has
quickly disclose whether or
economy
is beset with
tensions and what is out of line,
should
laid
*
,
Stocks' Great Long-Term
re-
Because of the
between
v
^
The
will
not
reason,
increases
be
of secondary
the staff
However,
industrial
wages amount to only a fraction
of total
personal income which
contains earnings of all other em¬
ployees and labor, non-corporate
and professional income, pensions,
old
age and
other aid and all
year.
other
,V
.
,
they
„
produc¬
While
per
validated
bond-
lament
that the rise in
rates is particularly power¬
in
s
vahre^^id
industrial
which
more compre- are high. Thus, as with the ma- with this rate rising to 15% per;
be published
jority of common stock buyers, year from 1938 to last July. Thus,!
the findings of the nostrum of timing is turned over the
p^t 85 years industrial*
study of straight to as the tempting way out.
common
stocks have returned ani
•
to be
in
their
to
_
;
wage
rise
on
to
fSno°r«Heio2?
a
issued
crease
expanding' demand for
prices
-
en-
were
seem
cost
During the 43-year period there
$71.5 billion par amount of
not really come to grips with the regular bonds of domestic corpof« s. Moseley Adds
problem which is: how to bring rations offered to and acquired investing practice in both areas;;by, the investing public. Of this
(Special to The Financial Chronicle)
More
wage increases in line with in¬
specifically, the
report
amount
13%<
were
paid in full at cjtes as a basic principle of bondcreases
in
productivity.
Only
BOSTON, Mass. — Thomas J.
better
technology and the best maturity; 40% were called; 19% holding the use of' amortization h '
added to the staff
defaulted;
and
28%
were
still
in
to
management couid make produc¬
undisturbed longt , T rn
Cnn
good
standing
on
Jan.
1,
1944.
This
term
holding.
It shows that the of F. S. Moseley & Co., 50
tivity catch up with rising wages
high proportion of issues promiSed return on bonds as evi- gress Street,
cost. A mere increase in the cost very
where the
bond contracts
were
of money in order to prevent its
denced by yield at the time of
terminated by the corporate boruse
for
better
technology and
offering is the sum of two basic
^
ix/'m.
A#L4c
rowers
through exercise of their elements, (l) Pure interest for the
JLJean Witter J\aas
management seems futile and ill
call privilege, equaling the total
advised.
use of the money, and (2) Amorti(special to the financial chronicle)
of the issues both paid and in good
zation in the form 0f an extra
LOS ANGELES, 'Calif.—Wayne
Changes Future Economy
standing, underlines the injury to gum ca]cuiated as an annual deF
gaidiett and William Hagerty
In the over-all picture of the the holder, via foisting a reduced duction to
compensate for risk,
f
return,
that
was
inflicted
by
such
and
for
the
defaults
as
they
actuhave
been added to
economy, a comparison of changes
Dean Witter &
Co., 632 South
in some basic factors since 1947 unilateral mid-way termination.
bank
and labor and push
It has been said
volume
Hickman
Dr.
II
chiefly responsible for the
type of our inflation, then an in¬
borrowing.
Both
personal
and
expenditures
create
a
goods
more¬
debt.
mortgage
or
default; with amortization out of
annual earnings "constituting
the
crucial
safety ^ device.
The
this spring, giving
been
business
steadily
or
Require¬
controls,
If it is assumed, as I
the
saving, the sale of equity
issuance
hensive
rate.
consumer
large amounts of business spend¬
ing
Reserve
earned
subsequent
were
of
the
(assets
the status
serves).
really threatening, inflation evervthin^ conceivable
superior ways to happened that can attect bond
bond financing,
stop an excessive expansion of
consumption and investment than National Bureau's report is comthe manipulation of the interest tiated on in an analysis currently
infla¬
be
must
.
could stop any expansion of
inflation
de¬
other income,
and
this
selling
Market
Selective
consumer
large personal income is
rising
fed by
reserves
excess
in
increase
an
present inflation
is
of
through Open
policy to stop it. Where our
is concerned, it
money
course,
quasi-stop on further,
growth of private debt simply by
to
moderate
a
of
Reserve,
could put a
R. G. Wertheimer
and
fever
projects, will be eliminated.
Federal
The
May
A. Wilfred
in recent
rate
In making the cost of bor¬
rowing more expensive, it is be¬
ing
assumed
that
marginal
or
fever.
a
discount
the
years.
charges
absence
persistently wide
with common stocks, long-term
porate Bonds: price fluctuations, the study holds
holding has paid off even better.
Quality and that the only way to make out The Cowles Commission study of
Investment
successfully in the long run in ;all listed industrial common stocks.
Performance, lower grade issues is to invest from 1371
through 1937 averaged*
is a preview
in them when they are low in aimost
9% per year in combined:
summary of a price, and sell them when they
yield and growth in market value;!
in
prices.
The Federal Reserve,among all other available tools to
make
money tight,
has empha¬
ing economic
trends, telling
us
all,
above
money,
investment
on
below
gave
titled Corpo-
the hope
that a reduction in this portion of.
effective demand will stop rising
ing
Re-
report
and gov¬
tempts to reduce business spend¬
thermom-
eter
doorstep of the high level of gen-;
eral consumer, business
ernment spending.
fixed
the
total offerings worked out at 5.6%.
Thus, as with:realistic stock-buy-ing policy, the bondholder's tech-..
New York State banks liquidated nique of long pull digging-in with
during
the - 1929-'32
depression amortization of the yield in excess
showed an average shrinkage of of the money's."rental value, is
Economic
search.
money
on,
through mortgage or other-that there has been close
;
.
*
An independent study made by
this writer* Of the portfolios of all
Bureau "of
"*
state
issues
lien
a
trends.
research,
study
and for all"
once
had
Significant implications regard- curred were due primarily to the room for such amortization is con¬
ing the investor's comparative ups and downs in the business firmed in the. findings that over
policy toward common stocks and cycle and to the difficulties en- the 43-year span the weighted
bonds are contained in a recently countered in
forecasting industry average on the realized yields on "
sup¬
port his proposal, claims open market operations now confined
to bonds is analogous to Federal farm support program. Con-
;
those
did
investors
correlation between the number of
By A. WILFRED MAY
of
The record .shows that?
issues defaulted less *
occur.
non-secured
By DR. ROBERT G. WERTHEIMER *
Professor
5
'
>
in longer
Call.
..
periods is closely associated with
the general condition of business
at
given time . . . there was
industry completely free
the dangers of default."
Marketing Department
any
no
one
from
In the record on agency
ratings
of
corporate bonds are the shortterm
forecasting difficulties also
manifested.
that*
the
For, the study shows
errors
which
thus
oc-
Merrill Lynch,
Pierce, Fenner
Beane
NEW YORK 5, N. Y.
70 PINE STREET
Offices in 112 Cities
I
C
The Commercial and Financial Chronicle
(310)
Pfivate Liberal
Mortgage Lending
Is Sound and Inherently Safe j
ilies
them safe and citing
,
;
-
i
they be made
basic to the
entire field of mortgage
tions
f
opera¬
today,
I
a
who
firmly
be¬
lieves
mort¬
with
gages
can
which
so
national economy.
I contend that mortgage lending
be
placed
and
upon
most liberal basis
upoa a
hnvine
a
not
tions
are
nec¬
from
essary
should
financial
throw
all
Every
mortgage
—
ginning
that
inherently
higher
the
institu¬
discretion
sound.
can
be
loan
combined
be
must
Nevertheless,
liberality
with
good
builders; and
'--
'
tlnkhen.
;
.
why I said at the beof this paper that I am
90%
a
basis
; conventional
kept
out the window.
Landpoint,
and
that
mean
Manager Rowe quickly sketches characteristics of
business cycle phases; expects inflation should displace defla¬
tion by mid-1958; and concludes 1958 is
year of opportunity.;
a
is
convinced
a
maturity, and lowest possible ini¬
tial equity.
By liberal lending policies, I do
lender's
of
to
necessary
prosperous
should
,
Resident
Deflation ' has temporarily dis- 70%. The 100-share purchase that
placed inflation. The abundance'cost $5,450 brings $1,200. The 1939
record
This
make their contribu¬
are
and
sirable from
standpoint
tions
longest possible term of mortgage
long terms of
maturity are
safe
arid de¬
the
;
American
of
down
payments
s
families
numbers
.
40 years experience with of raw
materials, finished/goods price range for Loew's was 54%many thousands of home owners
and man-power has temporarily 30
'•
prove
conclusively to me that outdistanced
theavailableSupply
When-the Republicans: captured
once a family is
given an oppor- of
credit Unde Sam ig pressing a the White House in 1952, Chrysler
tunity to awn its own home, that
$275 billion statutory debt ceilina hovered around 98. General Motors
family will consistently meet its Hig
gh position is critical' Con- was '62.
Statistical data favored
obligations.
•
>?'" sumer credit has soared to
prosperity, be¬
broadening the
it is only by
cause
'
Co., Inc., Tulsa, Okla.
.
-
by 'available
commercial banking
reserves, our
system is
near
department
capacity in,the loan
•
* ?
*■-Vv-
has
He
sincere.
and essential: Credit
tightens. Money is dear. Carried-
"are necessary
.
home purchaser
every
honest and
is
a
and
Measured
an
to
extremes, deflation can paralyze the economic body because
enterprise and expansion is disto provide this home when the couraged.
During 1958 evidence
family is young and needs it most." should support the premise that
That buyer's
one
purpose
is to another thrust at inflation is neai.
overwhelming
desire
buy
to
an
adequate home lor his family, and
his home—not to defraud the
own
Chrysler because here was
a con-
with only 8,707,000 shares,
There was then no debt. Board
room gossip pointed to General
cern
Motors with over 88,000,000 shares
that even :„ d
om. traditional
have proven,
iossr;system, deflationary period*
loans
e'
Virtually
on
heights.
and
safe,
ratio
loan
sound
is
,
low
George C. Johnson
its
•
Phildrpn
xr
base of home ownership that in¬
that
home
increase
Manager, Blair &
wait
11% fir fho?r
fact, such policies are essenif this country is to maintain
and
Resident
•
L DOssihle Chii- arr*ved! There is Plenty of oil,
tcferow ub until-steely:; food,?dumber, s automobiles
eadv
as
My
creasing
am
banker
In
tial
' t1
should
^
H. ROWE
<mms
lenders need them.
From
the
standpoint of home
builders, and the people who buy
homes, I believe my theories are
'V:"v
nrivorate
dn not
rirpr.
self-amortizing mortgages and does not advocate Federal
housing agencies go out of business since certain areas and
j'
' By JOHN
;
The. economy of abundance has linked to speculative favorites-like
General Electric, Eastman Kodak,
U. SM Steel and Standard Oil: of
mmrvthin^
i^ponlenient
If fam-' and
ciagrettes,
,including
Rents.
New
Jersey. Now look at Loew.!s!
everything is convenient. If fam-;
The/plant improvement and ex% For the first time since 1923 it is
ilies are forced to wait until they
h„,,„
a-.imnlafpH larpp
for pansioh.-b.oom of 1955-57'now ac-. without a dividend. The principal
down navments
verv
few would cents the sc»ueeze on Profits. Com- loss—depending on the price paid
hav fT the liomes
thev wanT^ and Petitidn is intense and- ruthless, -ranges
downward from 78 to
home
longest possible term and lowest possible initial equity. Praises
t
■
Opportunity
■
course, any family
down as much as it can and
pay off the mortgage as fast as
possible so as to save on the total
interest paid during the life of the
tirtW(,WP
the
e.,
1958: The Year of
moderate
Of
mortgage.
mortgage lending,
liberal basis; i.
on a
of
the road toward
on
.
his bank's experience, Brooklyn savings
stresses sound contributions to the economy
makes and asks that
to start
pay
banker contends long-term home mortgages of 90% without
government backing "are safe and desirable." Mr. Johnson
;
families
and
fi¬
of
home ownership.
■
Declaring government backing of housing loans does not make F
kind
that
which helps young;fam-
means
By GEORGE C. JOHNSON*
President, The Dime Savings Bank of Brooklyn
the
is
because
nancing
Thursday/January 30, 1938
.
.
Deflation is political anathema!
mortgage lender.
jus^
inflation
as
is
a
ap¬
Mmniwip
eral
to 143
and a
forMotors,
1 splitspared
followed.
Chrysler,
3
still
.
has
8,725,000
shares.
The
Chrysler of-1952 now
Their "For¬
debt-free
owes
$250,000,000.
ward
Look", automobile
too
long
or
ventional
^general
in<1 '
udder
„.jii
Because
is
either
too wide for the
con¬
'1
garage,
stocks
common
denote
Self-Amortizing Mortgage
praising and credit processing.
.11013 IS 3 .general priCG movement
ov™ership
they can
guarantee
inoycniem nottaincf
TTnHpr
nrnfif on/4 lrvcc
I
should not need to
Mortgage lending should not be
explain
nothing;
Under our profit and loss
system today's "blue chip" can be
regarded merely as an investment. what a boon to the home building
of..,deflation are pensioners,
loan, with a 30 year term on It is a
business, which, when car- industry the self-amortizing mort- salaried workers and sharp specu- involved in tomorrow's receiver¬
a conventional basis is sound and
vied on by experienced, skillful gage has been, since it was pership. Conversely, today's radical
lators, there is now rejoicing in
inherently safe.
be
tomorrow's
organizations, can be very profit¬ tected by the FHA and established some quarters. Owners of fixed speculation can
I
believe sincerely that home
"blue chip." In this rapidly chang¬
able to them, their customers, and throughout the nation.
But you anc|
guaranteed
incomes
(bonds,
mortgage lenders should not have the
might be interested to know how mortgages, annuities, savings ac- ing world the line of demarcation
economy as a whole.
to rely on government insurance
between investment and specula¬
During the last two decades I, as a banker, look upon this type: COUTits and preferred stocks) 'see
or guarantees of loans which
they
tion is fast disappearing. The dif¬
there has been great improvement of mortgage.
their buying power and bargainthemselves are capable of making
ference—if there is a differencein
the
skill
and
technique of r Most simply stated, it is the ing position improve. They have
without such guarantees.
is in the degree of risk. For those
This business greatest
help
ever
devised for foregone
the * exhilarating
01*
The Federal housing agencies mortgage lenders.
able
to assume the frustrations,
is now largely in the hands of or¬ both the mortgage lender and the exasperating
price • swings
and
have pointed the way, and I think
ganizations
skilled
in
appraising,
profit
home-buying
potentials
'
associated
with.
pa—€I\ce
aad app}j?d.
family.
the
time
has
now
arrived
for
processing,
,
■
cerned with multiplying dollar
lending
and
It might interest you to know equity securities.
lenders to stand on their own feet. credit
This
recent
servicing. The FHA and VA have that
inflationary out- wealth through speculation in
my bank developed and was
home buyers.
I
Uo^is^0 general price1
SSK3S
/
also convinced that
am
90%
a
.
created
Proposed New York Law
In
this
connection, the New
State Legislature, now in
York
cession, is scheduled to act
acceptance
standards and
the
value
of
sound
have demonstrated
of
the
budget-type
mortgage.
,
,
nnr
,
the
using
long-term,
self-amor¬
tizing mortgage several
years
fore
started.
the
FHA
We had
program
be¬
be attributed in part to
common stocks there is now no
the revised Revenue Code of 1954.
^fdlul^.morea^V.1?I\g
diC^cu
f n®twit^stapdl{}S- With
1958 an election
burst
can
It gave management the incentive
year,
families to sl)e"d upwards of $30
who dares
pillion espouse a continuance of defla¬
get into trouble with the old-style, am1ually for needed plant detion? We can earnestly hope that
graphs and charts which seem to, short-term mortgage which had centralization and modernization,
some authoritative
v oi tew ill
indicate
ance.
no
danger
points
;
during the
provision for amortization.
•
Enactment of? the Atomic Energy
' Act ot 1954 was a major milestone. .rightfully claim that to open-end
If that bill becomes
early
years
of
long-term,
highlaw, it will
Furtheimore, dcspito the iQW/ Tt Dut the fiovGrriniGiit snd Diivsts our Fcdcrsl, debt without support-%
mark a long step
forward, and' ratio mortgages. - However,, these ratio of. loan to value,
the/old-,
ing taxes is the primrose
ot
path to
I would
might Well serve as a pattern for charts are theoretical.
iasnioncd
mortgage was not as mjclear
physics. Peaceful aciapta- ruined credit, disordered finance
other states which restrict lend¬ rather rely on the actual records
safe as the modern, high ratio tion of nuclear fission for "
fuel, and prostrate commerce. How
ing to smaller loan ratios. Need¬ of performance of American homeless to say, the bill provides all buyers.
Tvi*
*
heat and electricity was com- many Americans know our debt
rnis is
why:
menced on a major scale. Of con- figure? Do others care what it is
\ :
necessary safeguards.
These old-style mortgages were siderable
What Constitutes Soundness?
moment
was
the
far or what it means to them as indi¬
The proposal by Housing Ad¬
usually made for 60 to 65% of sighted and astute monetary man- viduals? Are new taxes, a balanced
In spite of what some
ministrator Albert M. Cole for in¬
people
appraised value of the property, agement of| our Federal Reserve budget or reduced Federal spend-;
suring only the top 20% of mort¬ say from time to time, the true ran for
three to five years,, and System. It helped set the stage for ing a road to victory in a political
test of the soundness of a mort¬
gages also has many sound fea¬
the debt all became due at the our greatest boom. It set the stage year? We will be told that our,
gage loan is not the amount of the
tures and could provide a
very
end of that short term.
*
for this shakedown or adjustment present $275 billion statutory debt.
down payment, nor the
good vehicle for this type of lend-;.
length of
The low starting ratio did not period.
•
ceiling is now a wholly unrealistic•
term.
upon
I
bill which would permit lenders
to make 90 %. loans without insur¬
a
have
studied
the
too many
seen
various
■p.
..
..
-
SSis
.
,
3ng.
,
.
.
But
of
none
the
liberalizations would
proposed
be
very
ef¬
fective if they are shackled
by re¬
strictions on the interest rate.
Banks,
insurance
companies,
Instead,
mined
the
' soundness
is
deter¬
by the skill and ability of
lender
praisal
of
to make
the
a
proper
property
and
ap¬
the
credit of the borrower.
make
those
safe.
On
lenders made
gage
In proof of this, I can best
point
to the experience
of The Dime
sufficient
Savings Bank of Brooklyn, which
books.
originates and holds more home
to
for
care
the
mortgage
needs
of
the
nation.
These funds, however, belong to
mortgages than
their customers, and it is the lend¬
duty to obtain interest rates
bank in the world.
comparable with what can be had
other investments.
For these funds to flow
program in
Since the
ers'
other savings
any
beginning of the FHA
1934 and the VA pro¬
figure. It will be related to our
annual
national
income.
This
We know a dollar is anything figure now exceeds $300 billion.
payable our money managers determine. Who suffers from deflation? Cer-
search after the
had
time
found
to
As
a
that
tax
make
collector had
entries
result,
it
whole
a
annual tax
an
in
his
was
often
year's
taxes
Human nature
mortgages, it is essential that
mortgage
total face amount
to
interest
find
their
rates
Artificial restraint, such
by Congress on FHA
rates,
as
be
level.
own
placed
and
VA
discounts, only retard the
or
flow of mortgage
mo^ey.
gram
with
to
42/100ths
Economy
Liberal mortgage lending
poli¬
on
the part of the nation's
a
institutions
are
healthy and expanding
of
1%.
agree that
is
I
am
a
most
sure
you
impres¬
sive figure.
cies
financial
a
$636,761,923.
only 25.9 of these properties out of
the total of 61,158.
That is only
will
Vital
of
In all those
years, the bank has
found it necessary to take over
vital
to
economy.
Our
of
bank
loans
to
has
made
veterans
thousands
without
the
borrower
equity.
establishing any initial
We have made thousands
chasing
too bad
one
time,
and
or an
thev
entire
sometimes both.
many
On
gage
would
year s
This
taxes,
caused
third
*An
the
address
14th
by
annual
Mr.
Johnson
before
Convention-Exposition,
Association
Chicago,
III., Jan. 22,
of
Home
1958.
Builders.
rule, was extension
mortgage, with a fee usually
rpmiirpd
as a
for
tho
down" payment'
mortgage,
year
fully
learned
dollar
buy
now
better
or
automo-
cheaper
en-
tertainment via television than in
1939? A truly
deflation
that
can
_
Inflation>s Return
.
nuiauon s return
vances does not the fence-jumping
Continued
on
page
uninformed
,
Sometime after mid-year mfla-
tion
should
New
billions
deflation,
displace
for
domestic
and
faultless investment foreign welfare will be requested,
59
and
For the Where is the politician who will
uninitiated the espouse economy? Does the farmer
attainable maximum in security want his $5 billion farm budget
1S
pvtpneinn
Frequently, there was a second
with as little as 2%
equity.
mortgage as well. This may have
In fact, The Dime
Savings Bank
called for some installments to be
of Brooklyn likes the
long-term,
small
from
So far the pinch isn't feed on itself..
Due to technological ad-
oVfifthTear." The^est'that ha?n't b«en conceived
happened,
more
National
power can vary
to year.
biles, refrigerators
difficulties.
top of that, the entire mort¬
became due at the end of the
of the
•
.
savings account or in government duced profits? How about the
E bonds in September 1939 (start wage earner? As unemployment
he
suddenlv
;
Last October, one of America's tainly the government because of
leading financial authorities made falling tax receipts. What about
this point. It was asserted that the businessman? Does he welthe person who put money into a come falling stock prices and re-
faced wtih the necessity of paying
a
whole six months' interest at
Then
.
level during the intervening years, of those still employed? Won't the
This seems plausible. Yet the con- employed worker eliminate noncealed loss or gain in dollar pur- essential spending? We have pain-
into
allowed
_
Purchasing' Power
s
World War II) incurred an mounts, will not* the advertised
actual loss of principal of about figures cause apprehension, cau32% *n terms of our changed price tion and finally fear in the ranks
all
freely
•
„
Dollar
being what it is,
unpaid, and probably another
half-year's taxes were about due.
were
in 1944, The Dime of Brook¬ $ was quite a temptatfon for many
home owners to fail to put aside
lyn has made a total of 61,158 such
money
for
taxes
and
interest,
government-backed loans
from
_
contrary, their de-
Interest
usually
was
only at six-month intervals. Mort-
savings and loan associations, and
other prime lenders
usually have
funds
mortgages inherently
the
fects caused many losses.
the
government
bond
or
cut?
Is
the
publishing
industry
salinSs account
willing to forsake its mail subsidy
ln?nem®mber Loew s? Back. ^ 1° h,elP the P?st office attain a
i93?.
her?
4I"a!L a :blue AchlP kr®5k"5Ven P01"1? Is the mining
darling of the Dow-Jones Aver- lobby disbanded because govern.
ages.
Its
jiame
was
" rightfully
ment
stockpiling
of
aluminum,
187
Volume
*
Number 5712
.
The Commercial and Financial Chronicle
.
.
.
(511)
mostly supported by the National Grange, the next largest organ¬
ization, but which is largely a fraternal and insurance organ¬
uranium and
copper," lead,, zinc,
strategic metals is reduced
suspended? Are the 48 states
other
or
possessions
and- island
ready
.
From
to
relinquish the billions of matching
Federal funds earmarked for new
schools,
"A
;
other
and
expressways
public works?- Can the debt-ridden
■-j-ailrpads
;saved for defense
without- Federal
aid?
Like the
ization.
Washington
,
head
Republicans
been, holding
have
a
of
lot
dinners and while they have been quite successful
$100 a plate
in selling the
'
tickets there
meet.- Yet
ends
ton
4-match''"Soviet '-'Russia andjmove
into the- huclear age.'-Who pro-
dinner.
-
was
not, much enthusiasm, at least at the Washing¬
This ./could
haye
because
been
there
were
no
real
'
headliners
present, The President and VicePresident both being away /"at 1 Chicago and
New" York- respectively.; .t s; :,I yd.
-
'
t vides the fimds< for
4
jet planes and
improved airports? If we aspire to
Russia in its march
toward world domination, do we
dare reduce our defense or for-
1 contaiiv'Sbvidt
'
it
Isn't
budget?
aid
eign
:•
Just what
em-
V phasizes. satellites,
missiles
to
and
political
guished
.'."What
program
it
Js
back?
cut
r
-
;
a
1
it clouds ;:v
could
■
'
Just1
inflation
as
men!
-
There
market,
stock
gyrations
public > commission
date
..
Yet
ruptcies.
.
the
6
*
.
Well,
would
It could
scalp,
one
.
the
lot
Carlisle Bargeron
is
Off.
to
admission
defending his policies, they would be much better
V >7
/;/ ] 5.V\
is in.
•
He is carrying out a program which has the full endorse¬
ment' of
of
far
the
the
American Farm
farm
Federation, the largest by
Bureau
Furthermore,
organizations.
to
the
program
is
would.
be nonpartisan
Bureau
them.
the
as
for
have
ceased
reason
to
look
to
the
Indeed, the bureau never endorses
support.
It just goes along on its high
principles.
It
may
it is the biggest organization of them all
whatsoever.
persist
but, insofar
is concerned, it has ceased to have any
A
lot
of
Republican
politicians,
Insofar
loss if
Union,
as
and
This advertisement is neither
"...
.
The
•:
V■/:
NEW ISSUE
disloca¬
temporary
an
•
they went down to defeat.
offer to sell nor a solicitation of offers to buy any of these
offering is made only by the Prospectus.
\;':'/■
-
securities.
January 29, 1958
•/..,■
optimism. Our industrial frontiers
$50,000,000
(
1 combined
twith
in
research
* practical
the
those
fields
new
of
f electronics and nuclear energy. As
the
dominant
^ course
world
power,
our
>
is setl The road ahead will
t provide. plenty
of
<•
exhilaration,
challenge and promise. This is the
year
of opportunity!
;
SVi% Debentures, Series T
;
■^
„
With Frank Knowlton
...
Due February 1,1983
•
'f
Guaranteed unconditionally as to principal and interest by
ff-y:'
OAKLAND, Calif.—Virgil Breen
has become affiliated with Frank
Knowlton &
•
v*
/Special to The Financial Chronicle)
•
..
-
Dated?!Februaf^l, 1958
?
Buildihg.
PROVINCE OF
Co., Bank of America
He
was
formerly with
Shaw; Hooker & Co.
QUEBEC
(Canada)
-V
«'•-» ■'
\
I
McAndrew Adds to Staff
A.
(Special to The Financial Chronicle)
SAN
Calif.—
FRANCISCO,
William
Griffith
S.
affiliated
with
has
Price 98.75% and accrued interest
AS'-
become
McAndrew
&
Co.,
Incorporated, Russ Building.
Samuel H. Price Opens
.
(Special to The Financial Chronicle)
BEVERLY
Copies of the Prospectus may be obtained from any of the several underonly in States in which such underwriters are qualified to act as
dealers in securities and in which the Prospectus may legally be distributed.
writers
HILLS, Calif.—Sam¬
uel H. Price is
conducting
a secu¬
rities business from offices at 430
North Rodeo Drive.
The First Boston
S. S. Taub
S.
Taub
is
Spruce
With
Pa.—Sylvan
engaging in
ties business from
Street.
He
Harriman
Opens
; PHILADELPHIA,
securi¬
a
offices at
was
'
Incorporated
Smith, Barney & Co.
The Dominion Securities Corporation
McLeod, Young, Weir, Incorporated
1614
formerly
BIyth & Co., Inc.
Lehman Brothers
Salomon Bros. & Hutzler
White, Weld & Co.
Oppenheimer & Co.
A
BEVERLY
vid H. Gold is
Bache
Drive.
&
HILLS,
now
Burns Bros. 8c Denton,
affiliated with
was
formerly
with
Hentz & Co.
'
Nesbitt, Thomson and Company, Inc.
Inc.
Greenshields & Co (N.Y.) Inc
Harris & Partners, Inc.
Calif.—Da¬
Co., 445 North Roxbury
He
Mills, Spence & Co. Inc.
Incorporated
Bache Adds to Staff
(Special to The Financial Chronicle)
*
'
Ripley & Co.
Bell, Gouinlock & Company
f(
A. E. Ames & Co.
Corporation
Incorporated
Wood, Gundy & Co., Inc.
H.
W. C. Pitfield & Co., Inc.
the
concerned, it would not be
solid basis, for
now a
on
bitter critics of Benson.
thereby become
the country as a whole is
in
that
when
of
be that is
bargain
same
Farm
any
hand, looking for aggressive support have tied in with the
Farmers'
a
,
candidates
national farm policy
other
.
out its program.
Republican
influence
'
:h*t There is really something amazing about the position Benson
;:.'are endless when related to the
worl<|wide population explosion
*
If the
wringing their hands and saying that Ben¬
v
the Farm Bureau which supports Ben¬
a question whether the
with the Bureau — is a much bigger
say
although,
carry
•
on
agoing to parry themi down. to defeat were to use half of
>;'
would
wholeheartedly—and there is
in the Roosevelt Administration, the bureau
to its neck, it has come in recent
and out of politics. Therefore, it does
nothing except to tell about the resolutions passed at its national
convention, to tell about its program, without any serious advocacy
of either, and never saying a good word for Benson who is trying
Furthermore,
an
of the Administration that it had been wrong.
are
Benson's personal inclination has been to coun¬
advisors insist that he do nothing.
The facta
in New Deal politics up
years
Democrats
.
you
if it
But
do
was
as a
his
policies didn't originate
organization and can certainly offset the Farmers' Union attack.
There is, for
Secretary of Agri¬
The /Republicans
ear.
but
son's policies
Senators.
If he
Republicans who
widely
advertised
Republican 1
depression was reported ready to
capsize our great enterprise sys-
; tern.; Despite
tions there is
several
are
their energy in
promises, the. idle rumors. There
will be forced mergers and bank-
^opportunities; could
d 1958 as in 1953-54
party
breed, could correct.
Benson.
part
son,
liqui-
- From ^
the
same
old
will come the extravagant
that the
agree
deaf
a
even if Benson were to adopt the Farmers' Union
pro¬
in toto they would still dig up issues against him because
they are that kind of an organization.
Some of this the Republicans, .if they were
different
the
accounts;
sources
and
Having ' gotten
stale
and
National
gram
for him to be forced out of the cabinet would be
the
as
houses
over-extended
militant
that
are
"wouljl go after his successor with the same fervor.
future. "
exaggerate
separated from the
will
be
mercurial
•The 'boys are
out in the country I
doing, joining in the chorus that
were to resign tomorrow the
.Republicans would not pick up a single vote.
abilities,
deflation
spotlights'managerial deficiencies.
4T
election
of them
managerial
i
Republican to
he resign.
confusion
can
on
much'better to stick with him than,
;
rosy
our
a
culture
is it that can be
education, slum
general
and
obscure
going
example, the question of
clearance, health, social security?"
"During much
of
1958 storm
•
get*
next
it,
puts
leader
is
will lose at least 20. seats in .the House in the
distin¬
fftuclear "/fuels?■; 'As.' one
but
ucts, spends millions of dollars a year fighting Benson and the
Administration.
The. Administration, instead of fighting back,
terattack
prepared to say but in Washington the
Republican morale is at a low ebb. It is easy
more
which
advanced..chemistry
small
This organization, through the money it makes out of its
graineries, to which the farmers in several communities are com¬
pletely beholdened for the storage and disposition of their prod¬
turns
"am not
likely that politicians and pressure
groups will be clamoring for new
ji; billions to match Soviet strides in
;;
•
•
relatively
slightest, it does have
The
airlines are having
struggle to make
they must now
frightening
a
the
Not to suggest that its top leadership is communist in the
a communist infiltration.
perous.
By CARLISLE BARGERON
.
railroads, the
is
Union, an out and out New Deal organization in which
"Baldy" Brannan, Secretary of Agriculture in Truman's cabinet,
is a leading figure., It is mostly active in the Middle West where
it has come to own large graineries and
thereby is quite pros¬
'
-
v.
Opposing
Farmers'
Dawson, Hannaford Inc.
7
8
The Commercial and Financial Chronicle
(512)
dropped
the
rediscount
central banks in
on
Dealer-Broker Investment
top
-
grade
backed
off
week's
This
Recommendations & Literature
send interested parties the
building,
portfolio
to
versus
here extreme
even
could promote
taking cognizance
of the recent advance
6.6% Increase—Bulletin—Joseph Faroll
Co., 29 Broadway, New York 6, N. Y.
of the pace
in the seasoned bond
Energy—Review—Harris, Upham & Co., 120 Broadway,
N. Y.
the
New York 5,
in
missiles
and
53)—Discussing
on
additional companies
seven
rocket field whose
shares ai^e held by the
study of world supply and demand for
uranium for power and propulsion purposes—Atomic Devel¬
opment Securities Co., Inc., 1033 Thirtieth Street, N. W.,
Fund
and
citing
back
Presumably
Airlines and Proposed
Atomic Letter (No.
market and
feel
have
their
been
inclined
purchase
slow up
to
for
bit
a
of
low
in
quarterly comparison of leading banks and
companies of United States—New York Hanseatic Cor¬
poration, 120 Broadway, New York 5, N. Y.
least
is
that
observers
recent
tapering
Since
the
back
the
way
account
in
off
Federal
'•osb'
com¬
been
Scotia,
Department, Toronto 1, Ont., Canada.
Canadian Economy—Monthly Business Review—Bank of Mon¬
treal, Montreal, Que., Canada— New York office 64 Wall Street, New York-5, N. Y.
V v.;47''"#7'7; ;7
Canadian Natural Gas Securities—Report—Wisener and Com¬
pany, Limited, 73 King Street, West, Toronto 1, Ont., Canada.;
Canadian Review —; Including list of exchange members—:
Stock
Exchange, 453
St. Francois Xavier
V 7 V. •
Montreal, Que., Canada. V
-
Street,
first
is
Business in Canada
Booklet
.
Construction Outlook for 1958—In monthly news letter—First
Security Bank of Utah, Salt Lake City, Utah.
Electrical Machinery Manufacturing; Industry in
in
calendar
of
Nomura's
Investors
Japanese Stocks
—
Current information
—
Exchange—New York Stock Exchange,
Street, New York .5, N. Y. Also available is a
pamphlet on "Telling Your Shareownership Story to Employ¬
ees, Stockholders and tthe General Public," an information
guide for listed companies.
Uranium —1958
review
stocks
Paradise
comprising the Dow-Jones
Securities
Industrial
Canada.
Hut-
folios and
of
sources
income—for
13
New
King
bond
14 Wall
port¬
City Bank
Stocks—Laird Bissell & Meeds, 120
Broadway, New York 5,
N. Y.
Stocks—Comparison and analysis of 1957
earnings of 13 New York City bank
stocks—Laird, Bissell &
Meeds, 120 Broadway, New York 5, N. Y. .
*
*
Outlook—Analysis with list of suggestions—Halle
52 Wall
Street, New York 5, N. Y.
-
v.
&
Stieglitz/
*
-
West,
Street,
Chemical
New York
They
serve
5, N. Y.
Also in the
Toronto,
.
Witter
&
interest
would
this
that
feel
rate
be
Board,
reduction
Re¬
if the Federal
so
it is being urged
as
sides, were to order
in
require¬
reserve
,'
COMING
EVENTS
In
&
—
circular
same
are
data
on
.
(Minneapolis, Minn.)
Traders As¬
sociation Annual Winter Dinner
at the Calhoun Beach Hotel.
Jain. 30, 1958
'
Herzfeld
...
Field
Investment
Co., 52 Wall Street,
&
Twin City Security
Stern, 30 Broad
r
t.
-
Co., Inc., 1 Wall
Feb.
Company—Report—Thomson &
•
13, 1958
Bond
(Chicago, 111.)
Club
of
Chicago
annual
dinner at Univer¬
meeting and
review of business conditions in the south.
sity Club.
Sp«ncer Chemical Company—Analysis—Laird, Bissell &
Meeds,
120 Broadway, New York
5, N. Y. Also available is a review
of Stone Container Corp.
Tri-?Continental Corporation — 1957 annual report — Tri-Con-
Currently Popular:—
of¬
Co.,
-
i
!
is
well received.
Ont.,
McKinnon, 11 Wall Street, New York 5, N. Y. Also available
.
a
;
Ruberoid Co.—Memorandum—A. M. Kidder &
South Carolina Electric & Gas
.
3*4%
ments of member banks.
Street, New York 5, N. Y.
Banks, Brokers, Dealers
a
to do from all
Stone & Webster and Thatcher Glass.
a
has
'
especially
J;nc—Bulletin—Georgeson & Co.,
Philip.Morris, Inc. — Bulletin
: Street, New York 4, N. Y.
is
world
feel that there
people
carrying
Works—Pamphlet—Newhard, Cook &
52 Wall Street, New York 5, N. Y.
Otis Elevator—Data—Herbert E. Stern
-
\
*
Treasury
on
probably would be
a
Mining Company—Analysis—Dean
Street, New York 5, N. Y.
National Telefilm Associates
City Bank Stocks—Comparison—First Boston Cor¬
poration, 15 Broad Street, New York 5, N. Y.
New York City Bank
Atherton
Co., Fourth and Olive, St. Louis 2, Mo.
New York
once
-
';
Mallinckrodt
York
>
—
Iloincstake
Broadway, New York 6, N. Y.
Banks—Breakdowns—government
50
Commission
has acted.
good reason to expect that an
Street, Milwaukee 2, Wis.
Company,. Limited,
F.
7//' v"?
fering of $1 billion of such bonds
Company—Review—Loewi & Co. Incorporated, 225
East Mason
Commission
••
eye
Some
Consumers Gas Company—Analysis—McLeod, Young, Weir &
.
City
Case
an
bonds
new
glued on the Treas¬
ury these days in anticipation of
early announcement of plans for
a reported long-term
bond offer-
Co., 42 Broadway, New York 4, N. Y.
Analysis — C. M. Oliver &
Company Limited, 821 West Hastings Street, Vancouver 1,
B. C., Canada.
J. I.
1
investment
weather
Railroad—Bulletin—Peter P. McDermott &
Canadian Curtiss Wright Limited
]
^
ing..
Manufacturing Company—Analysis—Schirmer,
Ohio
.
it will5 be put iri
with the Securities
Waiting
The
Co., 50 Congress Street, Boston 3, Mass.
&
Service
Exchange
producers
Airlines—Analysis—du Pont, Homsey & Company, 31
Milk Street, Boston 9, Mass.. Also available are reviews of
&
.
the State agency
•
•
*
permission from the
Public
and
Limited, 217
Bay Street, Toronto 1, Ont., Canada.
Why Stocks Must Go Up—Ira U. Cobleigh and Robert A. Gil¬
Average-
y
Market Outlook and Selected
Securities—Bulletin—E.
ton & Company, 61
New York
Canadian
seek
to
registration
Burroughs and New York, Chicago & St. Louis Railroad.
Company, 9477 Brighton Way, Beverly
to
Presumably
and potential producers—John M. Easson & Co.
Baltimore
Hills, Calif.
information
and
out.
move
to offer the issue.
Wall
Avco
the Averages—Comparison of
leading "Stock" life companies and
priced
new
State
and functions of the
and
and
rate
The board voted to authorize
and
.
Street, Newark 2, N. J.
was
debentures, carrying a
new
interest
issue of $50 million of
America
Leading Banks and Trust Companies of Northern New Jersey—
Comparative figures—Parker and Wiessenborn, Incorporated,
proved
project
Co., will be in the market
capital this Spring if
plans approved by directors; this
week are not sidetracked.
7";;
;
Yamaichi Securities
the
and
Edison
Mo.
'
V
V. -.
' '
/ • ;•
" - V
Understanding the New York Stock Exchange—Guide to work
'''«•>
the market
but
Consolidated Edison Co. V
..
for
Taussig, Day & Company, Inc., 509 Olive Street, St. Louis 1,
Company of New York, Inc., Ill Broadway, New York 7,
Insurance Companies
date,
New York's giant Consolidation
.-
..
velopment—Booklet outlining features of these obligations—
Co., Inc., 20 Pine Street, New York 5, N. Y.
of Dividends Paid in 1957 by investment funds—
•
New York.
market performance of 20
■
,,
Beacon—No¬
Securities Co., Ltd., 61 Broadway, New York
6, N. Y.
Also in the same issue are discussions of the
Japanese Bond
issue market and the Shipping Trade.
30
com¬
bert—Intercontinental Research, 19 Rector Street, New York
6, N. Y.-—paper—50c.
'
1
■
;
mura
Oct.
until
non-callable
It aimed at refunding on
pected to
Folder showing an up-to-date
; Wm. E. Pollock &
,7
agreed to make
company
costly
The
Securities of the International Bank of Reconstruction and De¬
.
attracted
be
to
postponed.
enough
and still
prospect,
At the
5% bonds.
had
used in the National
—
Japan—Re¬
issue
bonds
that
Preferred Stock Offerings in 1957—Analysis-^Eastman Dillon,
77 Union Securities & Co., 15 Broad Street, New York 5, N. Y.
—
Lockheed Aircraft Corp. and Colgate-Palmolive.
current
the
to
say
of
Jones Averages and the 35
11
Royal Bank of
Canada, Montreal, Que., Canada (New York agency, 68 Wil- C
liam Street, New York 5, N. Y.).
' ,* ;
Chilean Copper Situation— Analysis — Bache &
Co., 36 Wall
Street, New York 5, N. Y. Also available are bulletins on >.
—
the
money
substantial
a
....
'
-
Company Limited, 335 Bay Street, Toronto 1, Ont., Canada.
Canadian Stock Prices Changes in 1957—Study—James Richardson & Sons, 173 Portage Avenue,
East, Winnipeg, and
Royal Bank Building, Toronto, Canada.
~
<
Life
vigorous
the
on
last Fall.
since
1925, the company sold
money
and
1, 1957.
Taxability
Canadian Securities—Financial facts and comment—Annett & [
24 Commerce
Deal
in
million
time
parison between the listed industrial stocks used in the Dowover-the-counter industrial stocks
Quotation Bureau Averages, both as to
yield and market performance over a 19-year period —
National Quotation Bureau, Inc., 46 Front Street, New York
4, N. Y.
: <.
:
Economics
in
$50
that the
in
cooking
stove
yield 3.65%, were a little on the
slow side, at the outset, according
to market reports, but were ex¬
Over-the-Counter Index
Canadian Business Conditions—Review—Bank of Nova
view
New
Back
,
are
—
able is current Foreign Letter.
on
of
appear
been
of the
3?4%
Monthly investment letter — Burnham and
Company, 15 Broad Street, New York 5, N. Y. Also avail¬
Carrying
we
too
trust
Montreal
back
31-vear debentures
new
have
they
abnormally
adjustment
has
There
demand.
Reserve
the
which
the least.
the
for
to
look
type
bit of
a
unless
rates
money
ago
for
reason
For
vintage, it would
re¬
buyers'
few months
a
they find
headed
appraisal.
At
of
downward
petent
when
hesitation.
corporate issues, investors
new
.
a
Bank Stocks—102nd
View
in money
ease
real new activity.
,
the rates, for similar
on
paper,
corresponding drop in yields
.
Washington 7, D. C.
Burnham
lee¬
of
3.65%
a
million of
Atomic
bit
a
4.90%
a
,
will he pleased r\
following literature:
Naturally
&
institutional
allow
managers
way.
True, the mortgage market
is not the outlet it once was, but
Telephone of
for example,
issue,
on
have
full 1%.
a
Bell
liens
,
yield :
Taking a Breather
>
I
basis, or
Bell Telephone of Pennsylvania
thereabouts,
for
an
American ;
made
a
bit
of history this week
Telephone issue just before the
when it brought to market $50
November bank rate cut.
basis,
It is understood that the firms mentioned
to
Thursday, January 30,1958
•
at
new
to market
came
•
November, yields
around
Pennsylvania
rates
•
Feb.
14,
1958
(Boston,
Mass.)
Traders
Securities
Boston
As¬
,
tinental
Reaction Motors
(Merging with Thiokol)
Corporation, 65 Broadway, New York 6, "N. Y.
sociation 34th annual dinner at
-
the Sheraton Plaza
'
Field
annual
Aerojet-General Corp.
»
Her. Is A Special
Safety Appliances
Opportunity for You:
•
York
Teletypes NY 1-376-377-378
Pa.)
Philadelphia
Dinner
annual
MidBellevue-
at
Available in New York City—Write
the Waldorf-Astoria.
April 11,
or
1958
Toronto
Edwin L. Beck
c/o Chronicle, 25 Park PL N. Y. 7
(Toronto, Canada)
Bond Traders Associa¬
tion annual
Phone REctor 2-9570
(New York City)
Security Dealers As¬
sociation 32nd annual dinner at
Security Dealers Association
Trinity Place, New York 6, N. Y.
HAnover 2-2400
(Philadelphia,
Traders Association
New York
"CHRONICLES" from 1938-1950
Members: New
of
March 7, 1958
Beautifully Bound Set of,
& CO.
1958
28,
Winter
Firm Markets
TROSTER, SINGER
Lakeside
Stratford Hotel.
(Controls Callery
Chemical)
74
Feb.
Investment
"FOR SALE"
Day at
Country Club.
(Controlled by General Tire)
Mine
Hotel.
(Houston, Tex.)
Stock & Bond Club of Houston
Feb. 21, 1958
dinner at the King
Edward Hotel.
.
April 23-25, 1958 (Houston, Tex.)
Texas Group Investment Bank¬
ers Association annual meeting
at the
Shamrock
Hotel.
Number 5712
187
Volume
h
.
.
The Commercial and Financial Chronicle
.
(513)
*1 ' Cma
more'than a choicethe"of the parties Pen cash
withdrawals^! particular
ot;specialists
t conversion privilege, ^had_-traded
py one bought. It
if the plan provides: for
sit
mmm tra '
ine mgnesx rating
®
•
By HOWARD F. WORTHAM*
es?
President. Trainer,
Wortham
Company, Die.
&
critically asks "what is
the
and
inflation trend will be with
assumes
New York
that not
which
which
funds is
nurrhase
a
than
V,
in
vested
full
is
It
is
fund
no
stronger than
are
its
foundation
In
which
Wortham
F.
of
funds
funds
Pensi0n funds
vested
this
diversified
question,
whichi are underwritten
ance
in
oioconc
classes
by insur-
»hos?
crease
in
which
written
pension fund
in other types
invested
-
such
permissible
should be
As-
extent,
be reaIlzed
the
to
subject to the influences of inter-
rela-
on.
the
At
those
under-
to
;
very
under
funds
trust
plan, the investment problem is handled by
the insurance company as part of
A trust agreement, or
its
recognized
over-all
investment
of
program,
investment
specialist, I shall confine my discussion to the problems of those
b ei
However,
self-insured
of
There
trusts.
an
represent
are
situations which
shall
invested
As
beginning, let
a
us
that, with the. advice of a
actuarial
.
consultant,
trustees
fund's
have
-
-
should
consider
now
so
new
for
a
the right time. Preferred stocks,
for , example, were
extremely
invested,
profitable right after the great
which there
the
to
money
However, there
Securities
be
comes
a
depression of
point at
particularly
demands for benefit pay- -
1929-32.
wCTe
t^Jo defer artiom on their
hl«h,
J;f
Ad--longed the period of non-payment,
dltionally a certain amount of li- «
v
portfolio
would
ments. In planning the purchase Preferred
bonds, it is
& Invested ^ hiTirade bSndl
These need not
ligations
United' States'
-
-
nan be
r»e little
nine doubt
nniinr that
inai both
nnin
there can
j
mere
their'
bonds will" be paid promptly when
due.
this
Despite
terest
States Government bonds do have
a
function
particular
high
of
degree
ever,
is
li¬
value of the stocks themselves.
make reinincome ex-
rates,. would
,,
ployee
cor-
in-
f a"2e Commission indicates that,
em-
based on book values, self-insured
withdraw in a lump
Continued on page 48
provide
variably
may
The third major class of ihvestments is common stocks, which
are receiving an increasing share
of pension fund money. A recent
survey by the Securities and Ex-
.
T„
Xtributorv U^w/n''almost''
yield which
obtainable from
usually
.
ceedingly difficult.
: r.
'
The whole question of the possible demands for cash on a pension fund is related to the fea-
should be weighed against
the somewhat greater
—
vestment for adequate
fulfill;
to
and .poor
Sri~f^"od SfS toSSS a^weuVb^increaseln
United
fact,
dividends
;
earnings for: several years pro-
to keep;
guidity has to be planned for. agam makmg
Spacing of maturities should be dividends, as well as current,
consistent
with the fund's aelxiar-f^ocks wkic°h we^cum^ative
ial reauirements. Also, it is wise siocks wnicn were -cumulative-.
ml requirements. Also, it is wise stocks which were -cumul mid-*
Pot to bu/ too mony bonds wlhiclh -Bu;a"™ s^KSda^flie
become due at one time, since a die 1930 s were bandannely re-
necessarily be ob-
the
of
necessary
these potential needs in mind.
nrdinarilv
that
an
\
are
$5,700,000
trusts or
may,
by
been
..
,
the
exempt
Great Northern
Lim¬
Railway
placed
on
Equipment Trust of 1958
the
;
,
3V2%
•
;
Equipment Trust Certificates
j
(Philadelphia Plan)
„
-
?.:
\ /
'
•'
.
-
the other hand, the trustees of a
•
pension fund can still observe the
assume
qualified
standards, of
highest
a
pension
decided to
investment'
tber
caution
.
their
of
-
To
mature
$190,(XK> semiannually August 1, 1958 to
February 1," 1973, inclusive
in
funds
To be
guaranteed unconditionally as to payment of par value and dividends by endorsement
by Great Kortbern Railway Company
' ' ]
*
*
*.;*
r
■
becoming entangled in the
without
.
on a self-insured basis, or
rigid limitations represented by
split-funding basis, and that state definitions of investments
they
are,
therefore, confronted legal for trustees.
*
with the problem of managing the
kas been my experience that
fund's investments. Success of the. trustees who may exercise freeinvestment program is of critical dorrl 0f
judgment can obtain betimportance for a pension iund. ter resujts than if they are sub-
proceed
on
.
a
This
is true with
respect
MATURITIES AND YIELDS
(Accrued dividends
to both
be added]
Feb.
I960
3.25%
Feb. & Aug.
1962
3.40%
Feb.
Aug.
I960
3.30
Feb. & Aug.
1963
3.45
Aug. 1961
3.35
Feb. 1964 to Feb. 1973
3.50
1959^ 3.10
Aug. 1959
jectecj to the limitation of legal
which may be obtained investments. This, of course, would
the security of the assets.
place greater emphasis on the semakes a considerable differ- \ecti0n of the trustees and their
to
Aug. 1958- 3.00%
Feb. &
3.20
the yield
,
and
It
i
ence to the financing, of a pension- a(jviserS to be certain that they
fund whether the yield which i
are sufficiently experienced in inrealizes over a penoa ol years is vestment
management. Naturally,
3%
•.
3/2%. The common actuar-
or
the
that a full percentage
point .difference in the y leld of a
pension fund is likely to make a
difference ultimately of as much
as 20% in its annual cost. A variaial figure is
trustees
can
if they
from
time
time
to
as
*
warrant
y<i, of 1% in the investment
can make a difference of
5fThe 'securitTof^the
ine
•An
5,eLurilJ'
Institute
•
the
-
p.Uti-s
sjty,
u
invested
by Mr. Wortham
rf Management and
address
.
before
labrr
s?o--ed by Rutgers Un.ver-
Atlantic City.
such
of these Certificates
r
;
DICK
a
Go0d Buy
ample of the problems posed by
"legais." In advising the trustees
Q£ a pension
fund which is re-.
-
fricted
&
t
New York
HALSEY, STUART & CO. INC.
.
R- W. PRESSPR1CH & CO.
MERLE-SMITH
BAXTER &
.
McMASTER
legais, Our
IRA HAUPT & CO.
FREEMAN &. COMPANY
COMPANY
WM. E. POLLOCK & CO., INC.
HUTCHINSON & CO.
.
like to give you an ex-
1
•
conditions
■'
*
pass
_
want to,
a
tion of
yield
'
self-imposed policy of
nmitation on any class of security,
which could be varied by them
a(jGpt
are subject to authorization by the Interstate Commerce Commission.
be obtained in any State in which this announcement is circulatedfrom only
of the undersigned and other dealers as may lawfully offer these securities in such State.
Issuance and sale
'r The Offering Circular may
•
4
those
In
may be
role, or function, of each of the
major classes of securities in a
list of the State's Banking
Department
through application
by that agency of certain pre-scribed standards of security. On
"split-funding" trusts.
ourselves only
.
be
Weighing Role of Each Class of
We
while there would
greater than its expend-.
itures,
legal
concern
that part which is
in securities. "
•
'
have
These
preferred stocks do not have their
equities,
legal investments means
that the largest part of the fund
must be invested in specific bonds..
pension
with
other
all
itation to
and direct investment, some-
times called
document
fund from such restrictions.
combination of insur-
a
which
legal for
as
provision,
specific
.
another,
legal
State law.
securities
basic
are
few years
£as been far from satisfactory.
The Standard & Poor's Index of
preferred stocks shows that in
:1956> prices reached a peak of
$176.4. The low so far in 1957 was
$144.2, a decline of 32 points, or
18%. I do not mean to imply that
declaration
limit the pension
may
to
that
faced with the manage¬
are
ment
n g
trust,
fund
tiiis
quidity. This characteristic, how-
a
those securities which
jor
insured
an
value
and
into bonds.
ceptionality
Non-Free Judgment
restrict their investment program
size
11%
.
-
to go
•
self-insured apparently
and
+he
increase
above
TOe Mperi«ice- that in-
the. bonds and the vestors have had in this type of
lntterest assumption used by the
rising
a
conscious of the
thi°ns be.tween the yield which will
namely, that of providing an ex¬
vs.
create
would
eoilifips
with
estate
real
as
-
Free
in-
to
by insurance carriers.-i
With
stocks. Some-
a
but those
continuing
are
scope
are
of
-
a pension fund's purchase bmd their yield isryuaily bet^ Particular bonds? To begin {er. B^preferred stock* are very
n®' lnvestment,
States' the prineioal and interest of
mortgages.
(the securities
$16,600,000,000,
Both types of pen-
rapidly than
more
We
stocks
common
.jo
outset those who
pension fund face tne
decision of whether they want to
plans
ance
Preferred and Common Stock
bear on
major" Government, since the credit of
ai
r
as
many corporations is so good that
mmh
such
United
as
common
part
a
securities
of
aggregated
more.
well
as
be
may
$12,275,000,000, while the assets of
35%
the
among
investments
stocks and
1950, the assets
insured pension plans totalled
type)
They
Government obligations,preferred
end of
self-insured trusts
balanced.
and
of
ration
directly invested in securities
the
generally inwhich are
are
uunus,
vviuui
uiav
uiciuuc
uuiuubonds,
which
may
include
corpo-
"'vuv
by the trustees themselves.times
At
safeguards
portfolios
divided■
are
those
between
v..
the
prudent investment.'
approaching
divided
divided hefween
between insured
insured
arc
are
self-insured;
observe
not
does
have to recognize that pension
•who
rontemnlated
is
be
which
program
,
question to which attention has to. Place..in an investment . program
?heve™ented MR /be given. Usually, a pension "plan i but.like any other tool, they must
^.'Jof-any
_years,
tributions
income,
could
community
investment
an
assets
the
entire
an
settle-
1
ad-
market
gpread of maturlties
affected. Security in old age may
be undermined by the failure of
pension
a
f
be destroyed. The welfare of
may
also axiomatic
that
of modest
lump-sum
J***' sort ; of ^ considerations '
the market value
on
K„
„
individuals
of
its foun-
dation.
'
menW.,'/,.* < ?'
into
a
suming the fund to have been in-
consideration of equal,
a
u
sion
ever-
and
money
em-
ployees
a
more
the total fund at the time that
of
How much more tragic would be
the consequences of mismanageaxiomatic that ment in a pension fund! What is
a
building is equivalent to years of savings of
no
stronger hundreds and perhaps thousands
or
jU8tments in the
rates
terminated,
secu-
worVto^he d1° which must be. constantly underThe next major class. of investne^sion fund In study *f a Penslon fund is to se- ments is preferred, stocks; Since
State,Ithe law provide"
^ "* tions toev"do 2S5& £1^**'
than 11% of
trust
inves?-ment program.
;
.Hons, they do not'offer the.same .;
35% is based
impact on our
economy. It is
of
interest
by
commuted
ascom-
actuary in establishing the plan.
An actuary may base his caiculathese days without finding if not greater, importance than
have the effeet nf free^in?
tion uP°n a long-term interest
article
on
pension funds the yield. If a personal trust is th" Ppolint
Tjnfjpr
SUPh
eondi
yield of 21^% to possibly 3y4%.
makes
one
realize
how mismanaged,
the
consequences, J.
53 .f
' pommon stopk were Certainly, investment can be made
vitally impor- though serious, would be limited ll°™> the nroST could noT be today in suitable bonds which
tant
is
their to tne few individuals involved, invested in other common stocks Provide at least these yields. : "
reinvested m other common stocks
some
are
invested
so
" is concerned with
changing
to legais may
be invested in common stocks. The
loss through lack of skill and experience
through improper acts in asset-management.
hardly pick up a news-
can
paper
and
2*5" the New York rities'
legais.
is restricted
market
You
we
be
pared with other classes of
can
Warns there is greater
H.
^not be bought be-
^ me^give- you a second ex-
future; and spells out what investment management involves.
than
ot
investment°
a^dvantaee of
in the foreseeable
us
should
could
issue
S
otate nst
conservative
a
policy" in managing a pension fund. Mr. Wortham answers his
question by explaining why, one, equities definitely belong in
a continuously supervised and well-managed balanced portfolio
and, two, trustees who follow their own expert judgment can
obtain better results than if they were to follow rigid limitations
inherent in a State legal list. Reviews various demands a fund
must meet; asserts funds must keep pace with cost of living,
a
question of
raises
^rfi ^
appraising, from time to time, the high degree of vesting, and par¬
py another, and there proportion .of. the fund - .which tieularly if the vested benefits are
question of its quality. Yet
taxing
was no
-
_
Investment Counsel, New York City
Investment Adviser
9
•
•
-
1
r
"
SHEARSON, HAMMILL & CO.
January 24. 1958.
.
•
-
-
•
'
,.
i
'
'
'
•
10
.
•
'
'
'
.
.
-
,
,
'
'
could have been made higher to
induce the public to hold bonds
instead of cash; and consumption
and investment could have been
held-down through heavier personal and corporate income taxes,
Actually, it was not feasible to
reduce private wealth and the
money supply to levels consistent
with normal demand at cbnstant
prices., It would, however, have
been / possible for ::the monetary
authorities to have imposed a
must be conpreventing inflation
impeding the adjustment
Monetary policy
without
production and prices which is
constantly going on in the economy.
To be effective, monetary
policy must be applied continuously to see that there is an appropriate quantity of money
enough, but not too much, to en-1
able the economy to maintain a
sustained rate of growth. It is not;
of
By E. M. BERNSTEIN*
Department of Research and Statistics,
International Monetary Fund
economist provides definitive insight into
Prominent monetary
efficacious
of monetary policy and into justified, as
scope
his many-sided ap¬
against functionless, price movements in
praisal of the role of monetary policy. Mr. Bernstein would
not reverse monetary policy at the first sign of a termination
of an expansion, but only after the danger has passed away;
finds untenable the view that the Employment Act of 1946
hampers
serve
careful contiguity between
supply and economy's need for money at all stages
policy which keeps
monetary
money
It
that the ob¬
stability of an
appropriate
has
jectives of monetary policy com¬
prise
some
combination of
a
proper
balance of payments,
of
index
*
prices, and a
high
and
growing level
of production,
employment
and
in¬
real
t h
If
come.
e -
monetary
authorities
are
in
successful
maintaining
approximate
stability of an
appropriate
Edward M. Bernstein
cycle.
policy, it may help to have some
quantitative idea of the limit of a
functional rise in prices during a
cyclical expansion in business. In
the United States, the experience
be assumed
can
production
a
of business
r
index
that
been
for
each
2
to
3%
in industrial production
likely to be a 1% rise in
wholesale
prices.
For
example,
between July 1924 and June 1925,
industrial production rose by 20%
while wholesale prices rose by
increase
there
is
9%.
Between
March, 1936 and
1937, industrial production
rose
by
28%
while
wholesale
prices rose by 12%. While similar
relationships may be seen in the
cyclical expansions after the war,
March
are
complicated somewhat
by the rising price trend of the
postwar period.2
they
of
So long as there are cycles of
prices, the task of achieving a investment and
consumption, ag¬
high level of economic activity, gregate demand will not
grow at
cmd a strong payments position
a steady pace and production will
,
,
will
be
facilitated.
fluctuate
The Behavior of Prices
In
free
*
a
economy,
and its constituent sectors will be
reflected
in
and
be
policy
it
operating
through the price system, the be¬
havior of the economy as a whole
affected
by
the movement of prices. So long
as these price movements serve to
is
with
demand.
will
Monetary
moderate these cycles;
may
difficult
believe
to
eliminate
them.
that
When
it
pro¬
duction
can be increased signifi¬
cantly, a moderate rise in prices is
functional, a means of acquiring
the additional
for
the
resources
increase
in
necessary
production.3
When
prices
rise
considerably
guide production, distribution, and without much increase in
produc¬
use
of the national output in a,:
tion, the price rise is inflationary,
manner consistent with the objec¬
a
reflection of the excess of ag¬
tives of monetary policy, they are
gregate
demand.
For
example,
functional changes in prices. On
between August 1954 and Decem¬
the other hand, when prices rise ber
1955,
industrial
production
or
fall
persistently, and
in
a
increased by 17% and wholesale
manner that defeats the objectives
prices of industrial products rose
of monetary
policy, such price by 5%—a functional rise in
prices.
movements are indicative of in¬
By contrast, industrial production
flation
rise
deflation—a functionless
fall in prices. While it is
or
or
clear
that
changes
in
relative
prices perform a function in shift¬
ing resources within the economy,
it
is
not
virtually unchanged between
was
January
while
1956
and
wholesale
January
prices
1957
.
indus¬
of
increase in production.*
In
_
economy,
there
in consumption,
every
fluctuations
vestment, and government
which
resources
real
changes in
demand—that
is
say, independent of the crea¬
tion of money. The
economy will
to
such
changes in de¬
changes in output.
Even if the supply of
money re¬
mand
with
mains the
will
rise
same,
aggregate output
fall
or
and
will
be
ac¬
companied by a similar rise or fall
in the price level. As it is assumed
there is
of
no
money,
increase in the supply
the production
and
of a larger output at
absorption
higher prices will be financed
through an increase in velocity.
Under these conditions, the rise
prices
will
will
to
come
be
an
limited
and
end
output
as
approaches the desired level
it
and
the economy finds
increasing dif-
ficulty in doing
larger volume
a:
of business with the
of money.
To
see
the
role
same
of
The
views
herein
monetary
the
are
personal
opinions of the author and d«
not
neces¬
sarily
the
Mone¬
represent
tary Fund, its
utive board.
the
views
of
management
or
its
Tooke
not
would
rise,
exec¬
of
believed
that
under
even
if
war,
finance
taxes
prices
the
the
extreme
government
its
expenditure
loans from the
out
of
through
public,
perfectly demonstrable," he wrote,
an
expenditure
by
government,
whether defrayed
by immediate taxes to
the
whole amount,
or
by loan on the
anticipation of taxes
to
be
levied, is
nothing but a change in the mode of
laying out the same sum of money; and
"h
or
>8
"that
that
what
is
expended
by
government
would
and must have been laid
out by
individuals upon objects of
consumption,
productive or unproductive." A
of
History
Prices
and
of
lation, Vol. I,
is
based
the
be
on
no
2 It
the
pp.
the
creation
State
ff.
92
of
the Circu¬
This argument
assumption that without
of
more
there
money,
can
increase in aggregate demand.
should
be noted that the
tendency
for consumer
prices to rise relative to
wholesale prices in recent
is
years
pri¬
marily due
to the fact that in almost all
countries the rise in consumer
prices has
lagged far behind the rise in wholesale
prices in the past 20 years.
Thus, in the
United States, in the last
quarter of 1957,
consumer
the
|the
about
were
level,
while
above the
110%
same experience is
United Kingdom,
Australia,
in
prices
1937
the
♦An address by Mr. Bernstein at the
meeting of the American Econ-mic As¬
sociation,
Philadelphia,
Pa.,
Dec.
28,
1957.
inflation.
were
supply
the
money
and
consumer
that
some
of
other
prices
these
98%
wholesale
same
prices
level.
found
Much
in
Canada,
Germany, France,
countries.
is
above
due
prices
to
are
The
the
lag
fact
controlled
(e.g., rents), regulated (utility services),
considerably affected by custom (per¬
or
sonal
services).
The
rise in consumer
prices toward the secular
relationship to
wholesale prices should not be
regarded
as
evidence of inflation if the wholesale
r-'"" f-vel »»f d^-'-sticaUv produced in¬
dustrial goods tends to be stable.
the
the velocity of the
but
same,
supply
money
cash balances will be transferred
from holders to spenders.^ f
4
authorities"; have
that enable them to deter- )
;
mine the volumeof
extent* its
credit/)tosome "J
allocation
and
purposes,
different
for
through the avail-
ability of credit, its cost to borrowers.
Banks
■%-:/<
:
The monetary
powers
curities and thus to restrain the
;
remains
created,
will have been increased, since the
expansion; of bank credit.
:
*
'
■
.
addi-
on
a
,
When the. Federal Reserve
purchase securities the
.
™
•
*
•„
Tvr
.
re-
and capital markets, ; Over, the years,."the : supply of serves of the banking system and
and changes in imports, exports, money has
been gradually ad- their power to create .credit are
and monetary reserves.
\
ousted to the needs of the econ- increased. Conversely when the
•
omy.'This has come about not Federal ■ Reserve Banks sell se—
Discipline^ through a reduction- of ; cash curities, the reserves of the bank-
~
Maintaining Monetary
.
Because
policy must .balances but through a steady rise
pragmatic way, in prices and output, interrupted
its
effectiveness
depends
upon for-short J periods by mild reces-.
keeping contiguity between the .sions. i* In 1946, the ratio, jof the
supply of money and the econ- gross
national
product
to
the
omy's need for money. A large money supply was 1.97. By 1956.
excess in the money supply should/this ratio
was 3.12. As the
value
not be allowed to develop, because, ot
the
gross
national, .product
be
monetary
in
made
this
,
,
,
•
under
conditions
such
authorities
tary
the
be unaware
may
ing
system
create
and .their
credit
to
power
decreased
are
The
initiative-^ providing the /banks
with
less reserves through
more*or
such
operations
Federal
incidence)of
taken
Svstem
the
by
the
and
the
id
re-
change
determined
is
serves
is
Reserve
.became
mone-
by the
mar-
larger, the ratio in 1957 kef 8 The effect on the yield and
to 3.26, well above the pre-!nnVf><? of qerhri tie* -will "-facilitate
rose
the
of
magnitude^ ^e irihatiop^ar figure. Unfortunately, this*
potential and unable to' cope with-,does
adjustments inV harikdloan rates
.not prove thatthe monev an(j other interest rates to balance
emerge.^supply is no longer excessive. A cUDDiv qnd demand
The difficulties
created
for the given ratio may be; excessive for
The loans mdMdVances^ ofthe
monetary authorities when- con- a period of full employment, risFederal Reserve Bartks are nart of
tiguity in the monetary system is ing prices and profits, and high,
it
if
the
danger
should
the
S L
fr
P
mi
United public held
re-
3.
in : such.
..'operations,
the
of cash balances without , stiinu-
.
•
.
of %diustine^ tne
m-ocess
A ™
an equivalent amount, ,h6ugh
iH\"rstK ^te^eVen ,tl?rgh
The
great depression was ac- lating
companied by a very considerable; ^npd
expansion
jnjfiative is always taken by the
an^ earlier. melnber banks.9 As the additional
lovv economic fcredit that fi bank extends to its
in
pf relatively
contraction
in
the money supply actmty.
customers yields more thah the
$26 billion in June 1929.to >^lt is : fashionable to speak of cost of the borrowed
reseryjes, the
$19 billion in June 1933. As part-? inflation as if" it * is now* largely
effectiveness of the discount rate
of the program to induce
recovery,, wage-iriduced and for this reason
im.restraining;member-'bank borthe money supply was expended
beyond the control of the rpone— rowing depends upon* the-tradition
on
a
large scale and at a rapid-tary authorities. When prices are
that the amount-of
—from
.
,
reserve-credit
inoo"~~I^r0m
to over
^
1933
TUlle rising * under 'A the
$45 billion in June
1941. Accepting the desirability of
an
policy in
easy money
of
pressure; of:; to a-member bank and its'period
investment, it is futile 0f use should be limited ^The
expect "labor Ho^conseht?' to a: nsvcholoeical effect of changes in
excessive
to
period ^evel. of
a
real -wages
^
protracted unemployment^ it is
below: the
thfX^t|rSe ,Say^ bl fS
tiV3lue' of * the* work on* PT£*nteiH than their -' economic sic—
nevertheless questionable whether the grounds that such
restraint- nificance
because-such
changes"
such a large increase in the money .will minimize ttmrate
at whichr
arc
made at infrequent intervals
supply
economic.*
be significantly more
can
effective
than'
rise; Almost certainly, the
in-prices in the United. States
prices
moderate, rise
more
a
Tunre)Sq4R^thpemnn)vnoiinotv
r^,
■'I*'16,: excess!ve
1946, the money supply wis
was liquidity ,which induced
June
'Ait
further increased from $45 billion
.excessive
investment, .- rising
prices'-- and
pfofits/ and provided at favorable
to
nearly $106 billion. Allowing
for the large increase in the na-
environment for labor to demand
tional
nnd
the War.5
At
end
of
the
much too
was
'
T1Kfr,|mpnf„
MAnptorr
^
in" the»discount
^ wasdue
tdVchange "n
exoeSonTthan to achanflto
SSSrions ^
ThInderal Reserve* Svstem
more
®
S)
v
•
Continued
•
on
the market had
8 When
justed
private
large in comwar,
rnaior
as
of the bond market to the
sponse
reeent' reducfibri
Consistent with monetary stabilitv.'
:
the
dramatized
he
ran
5*^?
product, it is clear that the wage increases and for employers
divergence between the money to. grantthem. Once
monetary-'
supply and the need for money. discipline-, is restored, wage exwas
considerably increased during pectations are more likely to 'ber
parison with current and
with the dis¬
agree
would
of1 conditions
to
respond
1 Some economists
in¬
by
employment, the
and
or
wealth
are
induced
are
rigorous restraint
more
fall in prices, the state of
rise
by 4%—an in¬
tinguished historian of prices, Thomas
Tooke, that any rise in prices constitutes
use
time
1
Thursday, January 30, 1958
.
..
"
trial products rose
always apparent that a
change in the price level is a flationary rise in prices.4
necessary concomitant of a rapid
in
.
with
excess . reserves ; are
the
buyers, the reserves .of the bank"irig system are ,unchanged, the
potential credit" creation remains
Jhe. same, but; the actual, credit
created will be increased because
of the transfer of reserv^!:"fromi.
non-lending vfo .lending banks.. If :
depositors are the buyers,r the re- : ^
serves of the banking system are "
unchanged,
the
actual
credit
precisely the appropriate amount ; tions to the. money supply'in the
of money. The actual problem is past decade and thus moderated
rather
one
of
making
small the postwar rise in prices.6,. The
adjustments to provide approxi-;,Accord
with the Treasury
in?.
mately the amount of money the March 1951 gave the' Federal:R6*:
economy needs. Whether there is serve greater flexibility in taking
too much or too little money can measures, to avoid the continued
best be seen from the level of accumulation
of government se-
gives full weight to the views of a governmental agency than,
as he advocates, the opposite of this.
Approves of pragmatic
1
to determine
what is
of course,
moment of
each
at
subordinates itself to the Government when it
more
no
possible,
effective monetary policy; and holds Federal Re¬
an
with
cerned
Policy
Former Director,
♦
.
(514)
The Role of Monetaiy
.
'
,
The Commercial and Financial Chronicle
'
the
to
Monetary
page
become
Accord, <
47
ad-
arter
1952, the open market operations of the
Federal
Reserve System were not very
p„Iinv
uments of Monetary Policj
?The most important means used' large, the substitution.of securities_of
by commercial banks to
^acquire Sf.netnd,yK*diwnl.f
»
having arisen from the financing resources for increasing business curities by the Federal Reserve Banks
of the war by borrowing. At the loans is through the sale of invest- rose from $23.8 billion at the end of
prospec-
five personal incomes—the
time
same
the
assets held
excess
allocation
of
ments,
the
particularly
government
p.«
rf" .Si
securities.7 If the>Federal-Reserve! being to meet seasonal, needs. Theremoney,
fixed ' Banks are the buyers, the reserves after, their holdings of government seincome assets, and real
assets/in- °f the; banking system,*as well as «««« deeHned to $22.9 biiHon at the
eluding equities. It is interesting the resources of the selling bank, en9The "^discounts and advances of the
balanced
by the public
was
un-
between
to consider what could have been
done after the war to restore con-
tiguity between the
and
the
yield
need
i
i*i*
A.cyclical
several
factors,
expansion
of
•
rise
•
in
all
related
output.
higher prices for
,
prices
First,
,k
to
rapid
reflects
it
to
costs
for
wage
resulting
increases
from
of industrial expansion.
it
higher
reflects
the
a
•t
i
in
increase
increase
in
Drofit
margins
lags
output
T.
„
,.
value
in
.
gross
fifths
,n
of
the
by
about
increase
5%.
reflects
Prices'
sion
sion
w»r
in
the
of
a*
reason
money
the
1
w
long-term
period
was
for
this
the
i)
c*s*.
than
was
rise
.
in
finance
Tue
.
i
expan-
vield
the
on
bonds during this
2.5%. The yield on
pegged at % %•
government
Treasury bills
was
to
a
no!
n,°
ca? or
'<
things
groLds
grounds ffr
for
6
^,U be soIved
from
Qf
.
business,
by
.
commercial
changes
19*57
in
$S8.2 billion
at
at
the end
the
end
loans
such
can
d^rlinp
bank
holdings
increased
of
of
or
be
holdings
With
securities
banks
funds
excess
for
commercikl
$70.2 billion
mercial
.
resources
the
government
the
.
of the purchase and
of investing
means
I. curities
end ■; of
the decichanges
excessive
supply
government
less
"
ef acquiring
Three- ,vWith
.
5 One
"All
the
between^l953 and
.
end
May
from
1953
October
to
1954.
of business, combank holdings of government sedecreased to $55.6 billion at the
September
1957.
These
large
indicate the importance of givFederal Reserve authorities the
expansion
to
move
in
of
commercial banks amounted to $1.6 bil-
,i6niLAt t5e,fnd
2?^
^een reduced to about $rOO
the
about
the rediscounts and advances
Federal
$1.0
The
1957.
funds,
Reserve
billion
at
practice of
that
banks
by
the subsequent expansion-of
In
business
of
an
at
the
a.
the
to
cost
not
to
above
the
diminished to
rediscounts
*Federal
rose
of reserves
banks with
excess
a
rediscount raie! has
he
Banks
the end of May
borrowing Federal
theilending
is,
with
a"d, bquldlty- Expediency ^/e^VencT
f importancei
seen
Between the fourth quarter 1955 and the
fourth quarter 1956 the gross national
increased
Daravraoh*
wlPin? out or_working off excess P""
pn-
,
as
same
the
,,
graduaH^acUvlurig
la^nt^inHatioA
ly activating the latent inflation
pp^.Jg51"® priCCS 311 wa?es-
'
-
of
:
r4eSar^. to latent inflation,
bel,eve *ha* all°r even
^
national
product
following
sa,e of securities
'
,.
•
million.
the
product is allocated between the
part which reflects a rise in output and
the part which reflects a rise in
prices.
r,
crfdjt h»d
by.
demand.
arh?
results.are,
essentially the
he increase
the
t
tend
government
securities. At the
November 1952, such "credit to
the'
»
behind
A
.
Banks
Reserve
of
The conclusions of the paper, first
issued on April 30, 1948, were stated hi
^
Third,?/6|{/
because
the period
;««t
•
*
Federal
ings
„M- Bernstein,„ '/Latent Inflation,"
Papers? Vol 'i " No 1 February
the Problem
higher
tendency
the
'
J* " S'lu"1*
induce
be concentrated in
to
Staff
•
increased production, larger releases from
stocks, or a greater
greater
national share
share of
of
world supply.
Second, it reflects
wage
proceeds of
securities.' If banks
of
considered
fhe^ea^e
,..rea'. there fre
the
materials
raw
,
isso-
,
due
is
to
sale
n
fOl':
securities
on
i
n
3
the
supply
money
economy s
The
money.
are increased by the
and
some
advances of
Reserve Banks. To maintain
i:
rediscount
Treasury bills,
-
rate
skhva
above
tkp
the
vipM
yield
that it remains
Federal Reserve
so
on
on
pen¬
a
alty
rate,., the
Banks
iocc
r*»sed the rate three times in 1955, twice
'n
an.
®nc®.m
,
*
,
.
10'.The4 innovation
..
introduced
by
tne
Bank of Canada °f a ^V^^^he
rate, adjusted weekly at '/4J above the
last preceding average tender rate for
three-month Treasury biUs,_
ance that the d^count rate, with rare
exceptions and only for the> >>™f«*t: intervals, will be a penalty rate This may
enable the monetary autn^oruies phasize that the*rise and a
m
_
ing the
rates are the result of change
right to, determine their purchases andmarket. It is doubtfuL whether
e
y
sales of government securities with priadjustments add 'to ,tne et ec
mary' reference
to
the effect
of
such
the discount rate as an ;instrumei)t^
.
transactions
on
the
monetary
situation,
monetary
policy.
,
Number 5712
Volume 187..
.
.
The Commercial and Financial Chronicle
.
(515)
their
Our Securities Market's Condition
m
:,£*•"
h
1
#
*|
■
underwritings in seeking out
interested
depicts
434A
the
continuing developdisclosure
philosophy
of
ment
ff|■
Rule
persons.
.
And Exemptions for Foreign Firms ggatfgg&a s
.
v
.
By JAMES C. SARGENT*
,
.
,
that the most important contribu¬
tion made by the Federal Securi-
_
Commissioner* Securities and Exchange Commission,
V
-
'
-
colleagues'
discriminatory proposal to exempt foreign corporations from
oar
disclosure and accounting standards. Mr. Sargent calls
attention to increased recourse ? to public financing, reviews
current law enforcement activities, comments on use of sum¬
'
-are:.-in
been
investor
here and in Canada, and . finds soundness
./of securities: markets best exemplified by ; institutional heavy
purchases at'the height of the sell off followingiPresident
sound
condition
because
/'investment analysis is now pos-:
:v
sible through* the availability of
vii
information,
the
disclosure
of■
,
which
has
been
under
the
Securities
made
mandatory
Act
of
1933
$ and the Securities and Exchange
f
Act of 1934. Many people
remem-
ber the objections raised by in¬
dustry to the requirements of
A^ ^
>,v>'' f:^'Eisenhower's.•litti81ie«>'.:'o-.>'^
disclosure
which
included
sales
post information, and.
salanes of corporate officers.,. The
being,"burned" each *Commission
took the , position.
'4 ~/;:,When '■ anyone ffvisfcsfdiscussing schemes ;to r<'milk"v the American
Vf current •iharkets/jhe^cettainiy sub- public. As long as £ individual
Ejects
investors are
day, by .schemes, which- seek;- to
wrench their moneys from them,
himself to possible^criticism
,'^for his inability to forecast.- cor••
;
^
,:j re ct 1 y
the
^
,
>*. trend
i
.t h
n
a<?™lnlftration of.the
,^4^ Securities Acts that these
jJP3^,6^.? were^ important invest factors because they relate
the more difficult will be the task
e
of spreading - the - capitalmarket
participation ■ to a largersegment
Gentlemen
if of/the = American"
pUblict/The'
I could ac'cu- figures. I- first
recited I to7 you:,
s
t
t ock
a n
d
F/bbnd markets,
•*
'
prog-^clearly indicate
rately
not
financial operations of the
cor^panies - upon which investors'
must" form 7 their own investing
-that;m'ore'public/^dgments,.
'
r
action
to
serve
in
ness
is
significant
point out
meet. This very group of Ameri¬
does
can Corporate Secretaries
opposed
disclosure of such information 23
weak¬
any
securities markets but
our
rather
years ago,
highlights the respect and
admiration
investor
the
American
holds
for
his
years
public
Chief
have
of
Let
also
me
that
the
kets
is
add,
soundness
as
of
helps to weaken
emphasized by the
fact that our study of the market
activity following immediately the
illness
tional
|
funds
the
of
established
-
Of Gov. Devel. Bank
and
mutual
heavy purchasers
the
height of the sell off.
action
of
these
is
the
rometer that
-
Noguera Gh. of Bd.
institu¬
at the
my
I
The
sophisticated
finest
can
to
of
in¬
market
use
Jose Ramon
of Puerto Rico, has been
elected Chairman of the Board of
Directors
*
-
ba¬
support
position.
of the
.
Last year
rule
would
lower
pro¬
Bank
that
amendment
disclosure
our
t'i
c a
t
r m
are
long-
-
prospectus has to date presented
problem. ; This indicates" that
industry and investment bankers
no
move-
accounting
standards
for
large
foreign
corporations.
I
voted
against it. • I'll .continue to vote
this
who
a
corporation
directors
officers
is
now
President of
the
domiciled in Europe from disclos¬
of
of
1
year,
succeeding Dr.
Rafael
Pico,
of Securities Act
thesalaries
Jan.
on
particylar .groups
which
runs
against the fundamental concepts
ing
to
becoming,.
Secretary of
the Treasury
against any advantage extended to
exemption accorded
or
Prior
e
- the > primary ^ ' source . from
which this money must come: This
ments I would
Commission;; therefore, c&nnot sit
.probably-re- idly by while schemes are daily
tire -with my concocted to take money by false
even
or
rte
"
i
,
Puerto Rico.
and
.
-
ov-
De-
velopment
the Commission
a
G
ernment
Foreign Corporate Disclosure
posed
Noguera, Secretary
Treasury of the Common¬
the
wealth
disclosure.. Only
financing is being:resorted[ to
£y/ I;
,.
shortterm' corporations 'and 1 certainly A the- ^
wnaonii. ■laul oneew .... - recently, I was in the minority
because I insisted on opposing an
market trends savings of fthe/American^- people// After a year in use, the summary
•v Kn o s
the very bulwark
sound securities market.
a
companies
were
vestors
of
President's
that
thinking.
our
for any
group makes no sense and
mar¬
best
announcement
around to
come
lessening of the dis¬
closure standards in any
way and
aside,
an
these
yet in these intervening
appear
somehow
to
you
I believe that
State.
con-
v
.
VI;
has
from disclosure. Today's securities markets:
prospectus
mary
Act"
/-fidence which follows
SEC Commissioner airs his minority views against
.
ties
t
;
Washington, D. C.
V
great President. The fact that the
market
II
G
o
ernment
and
v-
Jose "Ramon Noguera
De-
velopment
•
Bank,
».
*
Mr.
;
Noguera
required by Item 17 of
as
was Director of the Bureau of the
have availed themselves of this Form S-l. I
firmly believe that Budget for six years. He was
modus operandi and have closely we should
encourage* investment
formerly chief of the finance divi¬
ticker tape to pretenses and otherwise from the supervised the use of this material.
by the American public in foreign sion of the Puerto Rico
James
C. Sargent
Planning
:; some Mediter- American • investing public. The These results help to illustrate the
business in the community of free
!
' : " ;
Board. A graduate of the Univer-.
) ranean island- lo®s of even one investor .resulting r maturity of our capital formation
nations,
but
I
cannot,
as
a
matter
sity
of
Puerto
Rico,
Mr.
Noguera
-'-and bask in the'sun -I-sit in a: ejifoer from a bad. experience or process. It was only 30 years ago
is the author of various studies
commissioner's chair in the SEC duplicity must be cause for great that
summarized
informational of law or fair play, understand
•
istn&fnn
building in Washington; which
far cry .:from a Mediterranean
£?
a
V
u'eij
?
-
-
-.
,
•.*/'
f'.Y'-w.v.
a most inflationary
type .were
circulated
to
assist
^Pe
;wer© circulated to assist
flotation of
financing by mislead¬
;
■
,
.
ing and misstated means. The evils
"lustrate what has beent inherent in abbreviated brochures
toT.ur'countey's"'economy, and'to done to keep the financial markets : can best be understood by looking
.the financing needs of .corpora- Iree of «»bve«ive influences, let .at some:
tout forms distributee!
relationship of the
tionti
'
Let
y-,
f
-
market
ranital
markpf
r,uences
me
give you
and relate
ures
reP°rt the following:
me
;
corporations
domestic
that
ards
issuers
the
in
figcal
last
\
year
,
This is not
by Canadian brokers and dealers
y
ending
ait
■
about-some speculative securities.
Government finance. He served
as
First
a
with
must
the
Lieutenant,
S.
U.
Army
Infantry,'
in World
War II.
offering of these shares for sale, or an otfer to buy, or a solicitation of
any of such shares. The offering is made only by the prospectus.
June 30, 1957, we have referred' These 'abbreviated sheets tend to
26, criminal cases to the Depart- omit , most of the vital statistics
ment
of Justice,
involving ' 132 and are anathema to anyone who
lateshiig-r
practical de-
our
some
foreign
such
-
gh:th^ capital market
"
v"f
the
through
money
on
why
should be exempt from the stand¬
offer to buy
an
456,813 Shares
.
v
velopments with which we have
perS0pg
the largest number in
* recently
been concerned—and I'll the last decade. In the last two
cleave ,-thevcrystalball-gazing to fiscal
years, 87 injunctive
cases
-
i
lirWA.
.Cni:,
ord
mildK- '. hoHor '
J_I
I
seeks the complete facts about
investment.
.
As
the
-
Rule
i'nni-n
i V
nMnn
Northern Natural Gas
now
reads,
prospective investors
hn.rn
nil- i-kin
„
an
Company
may
nnn
Jinn
Common Stock
$10 Par Value
X'-li
„
These'figures are-important-be- ing a. complete
cause
that the Com- pectus.
Section
-
L,«
Public
10
Rights, evidenced by Subscription Warrants, to subscribe for these shares
pros¬
theyeillustrate
at
$47.75 per share have been issued by the Company to holders of its Common
Stock of record
-
v'V
mission ha's acc e l er a t e d its
Incidentally, I want to let you
i"Hu'SIn'-the-first nfoe months of 1956, enforcement activities at the same ;knbw that we have developed" an
^ J corporations} offered? fok';! public time; that this nation's/ economy excellent liaison with the provinsale $7.9 billion pf corporate se-'has
achieved
heretofore v.mn- eial authorities < in Canada and
tPurities. For the -very:-same period equalled horizons. Although the these "tout" sheets at the present
of 1957, corporations have offered last year has-indicated less activity time - are
definitely on the de$9.9 billion of securities — repre- on share sales on the New-York ; crease.
•
"
senting an increase of $2 billion Stock Exchange, corporate financ- V Le^.
us
realistic!
In
my
for the .dike : period.:
Certainly,;-irig has, nevertheless, been on tnej opinion, the average investor does
these-rather dramatic figures are increase. It
s^ms most obvious
n(y|; -scrutinize a prospectus. How£ realistic indications that securities
us *that we have an1; urgent, en- eyerj /most persons have brokers
1
:
-
January 28,1958, which rights expire F ebruarv 11,1958,
'
fully set forth in the Prospectus.
as more
.
The seyeral Underwriters have agreed,
any
subject to certain conditions, topurchase
unsubscribed shares and, during arid after the subscription period, may
offer shares of Common Stock
as set
forth in the
Prospectus.
-
Copies of the prospectus may be obtained from any of the several underwriters only in states in which such underwriters are qualified to act as
dealers in securities and in which the prospectus may legally be distributed.
*
-
-
*
'*
I
-
v
-
,
V
-
=
*
forcement task because the'slight or dealers who utilize financial
decrease in-market; activity,'; whenadvisory - services. These services
coupled with increased corporate are' constantly 'analyzing compaduring this period has been con- fui»ncing, dramatically illustrates^ TrieS arid comparing their respecsistently going up/? a trend which, > jho vital: peed tor finding new tjve
performances
within
the
as
you well know / was recently investors. .The savings Of-Amenparticular industry and generally.
offerings are continuing' at a high
rate. ;• They bear an obvious relationship to the discount rate which
reversed
;
:
by the Federal
*
Reserve
Board. The record highlights the
point that corporations have been
looking to the public capital
kets
and
more
more,
for
mar-
fi-
the
cans
who>-have,/heretofore
^
not
BIyth & Co., Inc.
:
Eastman Dillon, Union Securities & Co.
The First Boston Corporation
Glore, Forgan & Co.
Ilarriman
Ripley & Co.
Goldman, Sachs & Co.
Kidder, Peabody & Co.
Lehman Brothers
Incorporated
'
Merrill Lynch,
public receives digested in-
invested in. the securmies k
formation which eminates from
American business must be foupa, investment advisors and brokers,
soucited, ^nd attracted into the s€me 0f the information collated
caPltal markets. Our enforcement £rom filings with this Commission
nancing, in addition Jo retained ;
includes figures such as current
earnings, essential to support their
A0.
a4y P^/ ratios^, debt ratios, book value,
programs of expansion as well as sl,blJIlty =,°f any
.as\ a
' yield
yield on
on investment,
investment, and
and numernumerof fraud to such new,investors.
,;^.ous other- yardsticks which guide
for, other intra-corporate develop-
Pierce, Fenner & Bcane
Stone & Webster Securities
Drexel & Co.
W. C.
F. S.
-
Smith, Barney & Co.
White, Weld & Co.
Hornblower & Weeks
.
Lee Iligginson Corporation
Moseley & Co.
Clark, Dodge & Co.
*
Corporation
-Hemphill, Noyes & Co.
Langley & Co.
"
•-
Carl M. Loeb, Rhoades & Co.
Paine, Webber, Jackson & Curtis
,
Dean Witter & Co.
Dominick & Dominick
"
'
W. E. Hutton & Co.
_
??
ment.
•
■
Rule 434A
Significantly, such dynamic
tivities relate to
a
ac-
important"
very
phase of this Commission's work
various corpora-
with which your
firms
ttre
tenance
concerned
of sound
—
the
main-
securities
mar-
,
T
..
.
.
'
.
.
-
'-The- ingenious mind
of man
never ceases to discover and
de.
new ways of circumventing
safeenards
and - the
velop
.
..
.
assist corporations in nature is the
oroer
*
*
t
investors. The "very soundness of
' ihes« /figures and their public
one
salient difference
reaching-these new investors, the between-the ,'20s and the '50s. I
Commission has provided for the believe the Commission's con¬
of a summary prospectus by/tribution to our economic developthe promulgation of its.Rule 434A. 'ment is- the very - key to- the
use
The
kets.
A
'
■
is
aim
to
of
omit
certain
a
summary
in
prospectus
absence of volatile market action
part or summarize Market movements can certainly
set forth-in he significant but the emotional
inf°rmati°n
more complete prospectus reQuired to be used in the s^le of
securities. The Rule permits registrants usinS Form s"x or s"9 t0
factors behind human action have
been tempered and calmed by
Rccurities business
if anv
is the
cold, hard, investment facts behind
flpto
to wtoph the mind of subour securities markets. The very
version seems' to be of the highest avail themselves of this sales and firm recovery of the market after
orde^ We ^re continuously bat- informational weapon. Rule 434A President Eisenhower's recent illtiine thoS"demSts^which de"'se is designed to facilitate a wide ness illustrates the resilience of
statiitnrv
■
■,
.
An
address
-
by. Mr.
.
Sargent
dissemination
-
tariep
Jan.
.
8,
*'
igo
Chapter,
Chicago*
1958.
of
information >in . our economy. Of course, we cansecurities and not control human emotions and
before vy-egard to registered
the American Society of Corporate Seci*-
III.,
jis0
serves
which
as
assists
a
screening device
"corporations
the
reactions
that
followed
and/'news of temporary illness to
the
our
A. C. Allyn
Robert W. Baird & Co.,
and Company
I ncorporated
-
Company
Kirkpatrick-Pettis Company
Laurence M. Marks & Co.
Piper, Jaffray & Ilopwood
Burns, Potter & Company
Company
Caldwell Phillips Co.
Cruttenden, Podesta & Co.
Ellis, Hofyoke & Co.
-
Incorporated
Estes & Company, Inc. '
r
■
J. J. B. Milliard & Son
•
McCormick & Co,
Company of Omaha
Pacific Northwest Company
Wachob-Bender Corporation
Newhard, Cook & Co.
Quail & Co., Inc.
.
■
.
■
Shearson, Ilammill & Co.
Harold E. Wood & Company
Woodard-El wood & Company
January 29, 1958.
-
G. H. Walker 8c Co. "
Crowelf, Weedon & Co.
Chiles-Schutz Co.
The National
-
Stern Brothers & Co.
Baker, Weeks & Co.
Henry Herrman & Co.
Ilailgarten & Co.
The Mitwaukee Company
William R. Staats & Co.
J. M. Dain &
Incorporated
Goodbody & Co.
Kalmgn & Company, Inc.
McDonald &
A. G. Becker & Co.
Incon>or«tp<l
Blunt KHis & Simmons
.....
.
-
-
12
The Commercial and Financial Chronicle
(516)
dwelling units and
new
What Is
Happening to the
Economy and What Mast Be Done
By DAVII) J. McDONALD*
new
a
of crisis, it is necessary to speak
forthrightly about the state of our
Twenty
national economy.
Another; pe¬ electrical
riodic
Yrv■■Y1
busi-
coming
Fifty
as se¬
as,
•tools.
or
worse
than, the
cent
appliances
cars.
•:
less
machine
downward
a
months.
re¬
J.
David
McDonald
of
capable of turning out an addi¬
tional 50 million tons of steel in¬
gots
our
a
i
;
meet
to
year
defense
and
have
is undermined.
about
tized
across
the
our
civilian
requirements,
are
shut down.
npw
Meanwhile, 125,000 members of
the United Steelworkers of Amer¬
ica in basic
■,
the sky and drama¬
rapid
rise
of
Soviet
scientific, industrial and military
might, our own unmatched pro¬
ductive system — the inspiration
and defensive bulwark of the
tire
free
world—-had
en¬
entered
dangerous downward drift.
a
*
Manufacturing and mining out¬
put
in
the
trend
more
in
recent
and more fami¬
become
their
debt
sumer
apprehensive
jobs and debts (con¬
is
at
now
trade inventories
a
record
United
States
has
dropped
7% between December,
1956 and December, 1957.
More¬
over, the fall-off has been accel¬
erating rapidly during the last
four months.
The Soviet Union, on the other
near an
are
all-
time peak. As could be anticipated
under these circumstances,
incom¬
ing orders and the unfilled back¬
logs of many manufacturing con¬
cerns, are now declining.
Y
Thus, the immediate outlook is
not good. Y;' v:v;'Y - r:: ;,YY\Y'Y Y--Y."
During the 1949 recession, rap¬
idly rising federal, state and local
expenditures and rising automo¬
bile sales helped to cushion the
decline.
During the 1954 slump,
booming home construction and
steel, ferrous and nonmetal
As spokesman for over 1,250,000 ferrous
mining,
and
in
steel workers who are deeply af¬ metal fabricating establishments
are
fected by these events, and as an
unemployed and 200,000 addi¬
American, I cannot refrain from tional members are working shortY;Y-'' YYY ^YY;
expressing my candid views about time,
The loss of purchasing power
what is happening and what must
suffered
be done.
by
our
membership rising
Even before the first sputnik alone, due to unemployment and same.
flashed
As
high) a lag in sales is not sur¬
States stands idle. Blast furnaces, prising.
ipen
hearths, and rolling mills
Meanwhile, manufacturing and
already begun to
deteriorate, our security is being
weakened, and our prestige over¬
seas
7y^v,yyy^ y
;fy.y-
millions
Idle Capacity
•••".
:
living
millions of
another..
what in
a
have apparently proceeded with
caution, and there is no particular
softness
loss
of
15
million
tons
that
we
could have turned out in the last
six
months
of
try
sales than
a
now
predict
lower
few
areas.
During the
reports that its industrial
production went up 10% during
.
In
in
1949
yy y v-*':: :
Morton D.
May
Halsey, Stuart & Co. and asso¬
on Jan. 24 offered $5,700,000
3% % equipment trust certifi¬
the talk of
cates
of Great Northern Ry. to
recession in the
economy as a
1,
whole. If the predicted readjust¬ mature semi-annually Aug.
to Feb.
1, 1973, inclusive.
ment is not more severe nor pro¬ 1958
longed than most economists be¬ They were offered at prices to
lieve, we could show a sales in¬ yield from 3% to 3.50%, accord¬
ing to maturity.
crease.
The issue is to be secured by
One of the factors in our sales
outlook is that we have two more 15 Diesel-electric road switching
branch stores than we had a year locomotives; 150 Covered hopper
our
own
as
ciates
of
y-'-'-yy yYyY
ago.
Looking
three
sales
back
months
were
these
last
that
our
find
we
down
y-\:y:Y;
over
in
November—
probably due mainly to bad wea¬
ther, the flu epidemic and the late
Thanksgiving.
December sales
bounced right back and were sur¬
prisingly good — 6.5% above last
year.
to
extent,
some
and 250 double sheathed box
cars
estimated
cars,
manufacturers
to
than $7,155,000.
Associates in
not
less
offering
are:
cost
the
Dick & Merle-Smith R. W. Press-
prich & Co.; Baxter & Company;
& Company; Ira Haupt
Co.; McMaster Hutchinson &
Freeman
&
Co.; Wm. E. Pollock & Co., Inc.;
Hammill & Co.
Shearson,
Joins Fulton Reid
(
y
Special to The Financial Chronicle)
CLEVELAND, Ohio—Albert G.
Imhoff has joined the staff of Ful¬
ton Reid & Co., Inc., Union Com¬
merce
Building, members of the
Exchange.
Midwest Stock
With Schirmer,
Athertoii
(Special to The Financial Chronicle)
NORTHAMPTON, Mass.—John
Mokrzecki Jr. is now with
A.
Schirmer, Atherton & Co., 16 Cen¬
ter Street.
year ago.
Chicago Bond Club Annual Meeting
1957, but did not.
1957-1958—as
■;
■
Halsey, Stuart firoup
Offers Equip. Tr. Ctfs.
words, we ex¬
pect to h o 1 d
Since mid-summer, exports also
have been falling.
•
Furthermore, in the face of idle
production capacity, businessmen
1954—Our constantly rising capac¬ are revising their plans for new
the year just ended.
ity to produce has again outpaced plant and equipment downward.
Our output, moreover, continues the ability of 55 million American An over-all
drop of at least $2
to decline and most economists families to buy. the wealth our
billion—or| about 7%—is forecast
foresee no upturn before the sec¬ national economy is able to turn for 1958.
-Outlays by manufac¬
ond half of 1958, if by then, un¬ out.
Y\v,. turers are already expected to fall
less vigorous, corrective action is
For two years our soaring in¬ 16%. If demand fails to rise
very
taken immediately.
vestment in new plants and in
quickly, these totals may well be
hand,
manufacturers'
the
of ; any soft spots that exist or
develop in the next few months.
To sum it up, I would say that
we
expect our company to ride
through this readjustment period
rather well, and we expect 1958 to
be a good year for us.
consumer
sources
v
";".Y
.
Our January sales have been
purchases did the running somewhat ahead of a year
Unfortunately, no compa¬ ago in a number of our store
the reduced workweek, now ap¬ rable upward movement in any communities,
although they are
proximates a rate of $850 million major
area
is
immediately
in off in a few.
a year.
As far as prices are concerned,
Y; y ;■*>.t Y-:y
sight on the basis of production
••;y -Y
Steel industry forecasters ex¬ forecasts.
we
find them surprisingly firm,
press only a hope that production
Housing starts now show no despite reported slumps in some
"may" rise sufficiently in the last sign of rising appreciably above parts of the economy/There seems
to have been some over-produc¬
part of 1958 to achieve an average the leVel of 1957/
Automobile
operating rate of about 75% of
production — with tion in fhe textile industry, and
capacity for the year. But even if 800,000 new 1958 models reported there is notable softness in prices
this goal is reached, the United to be in dealers' shoWf66ms and as these manufacturers liquidate
On the other
States will have lost—and irre¬ overflowing the lots—hardly looks their inventories.
trievably—about 35 million tons promising for 1958. In fact, indus¬ hand, while appliance sales are off
of steel that could have been pro¬
duced. This is in addition to the
in
prices.:
Our
own
inventories are
in
good balance, and we believe we
are in a position to take advantage
compared with
y y•;yy y lies find their income falling, and last year in spite of
cent
per
!v-6
YY
_
cent produc¬
tion cutbacks,
families
little
downward,
the
decline year ago, al¬
gradually spread, like a chain re¬ though they
are off some¬
action,
from
one
industry
to
Retail sales have likewise shown
cent less freight
per
basic steel industry of the United
Standards
a
moved
personal income of the American
1949 and 1954,
the
are
that began last July. As produc-; ahead of,the
same period a
tion
schedules
leveled
off
or
"
►
less
per
And, today, over a third of the
production capacity of the great
Because of
optimism
Waning
For three successive months the
re¬
of
cessions
4
are runn ing
in motion the stock market slump
mobiles.
evi¬
Forty
perhaps
off
•
dence of be¬
vere
fell
also
•
has overtaken
shows
sales
•
Hopeful 1958 sales prospects are announced by May Depart¬
ment Stores head based on assumption current recession will
be no worse than what most economists predict. Mr. May
y.
v :
surprisingly finds prices are still firm.
down
months
j u s t
major
people has been going down, al¬
ahead, we ex¬
are
being
though most of the drop so far is pect this trend
manufactured than could be pro¬
in "labor" income, and reflects the to
continue.
duced.
wage losses from unemployment Y In other
Twenty-five per cent less auto¬ and the shorter workweek.
downturn
ness
:
By MORTON D. MAY
President, May Department Stores Co.
from the
before,
Furniture
Thursday, January 30, 1958
.
Optimistic
Sales of The May Department
about
the Stores Company during the last
health of the economy was finally three:months—November, Decern-,
reflected on Wall Street and set ber, and January—on the whole
-
capacity
rapidly
expanding
could provide.
An
electrical
appliances also lagged in 1957—
freezers were down 5%
.
than
of the
about 15% below a year ago.
the
to halt and reverse
its
year
major
Freight carloadings
downturn, and proposes management, labor and government Y
pursue-together enlightened policies to achieve suggested
Y' Y'_\
YYY/Y.;-Y.x ' objectives.
As America enters
more
course
about 10% last year.
'
■
of
Shipments
:
steel union President asserts, to
reverse the downward trend rather than vainly waiting until
later to see if the situation gets worse. President McDonald
presents a fourfold program to secure free world's defense,
provide expansion to meet our growing needs and raise our
living standards,, and to utilize fully our idle resources. Avers
•
the
refrigerators
9%%,. ranges down 14%.
Action mast be taken now,
means
in
before.
year
year
President, United Steelworkers of America
Federal Government has the
million
1.3
.
and
Meeting of the
CHICAGO, 111.—The Forty-Seventh Annual
Club will be held at the University Club of Chicago on
Feb.
Thursday,
13, 1958. Cocktails, 6:00 p.m., College Hall; Dinner, 7:15 p.m.,
Cathedral Hall.
,
By
^mid-November, 3.2 million
Americans
were
already
unem¬
ployed. This
was the highest job¬
less count for arty November since
1949.
Since then—although offi¬
cial figures are not yet available
all know that unemployment
—we
has gone, up still more.
Workers in manufacturing are
particularly hard hit. By midNovember,- factory jobs had al¬
ready
since
been
slashed
by
654,000
December, 1956. In the
same
period, the work week in manu¬
facturing fell off from 41.0 hours
more
efficient equipment sparked
the boom which ended last year.
In 1956, capital investment
sky¬
rocketed
to
cut still
our
more.
(At the same time,
capacity to produce with more
efficient machines and with fewer
record
$35 billion, employees will still be rising rap¬
billion higher than idly as expansion programs for
the year before.
In 1957 it rose this year as well as for previous
still higher, to $37 billion.
This years are finally completed.)
tremendous expansion of produc¬
Governmental Outlays
tion capacity has created the pos¬
sibility of an unprecedented
Although t o t a 1 governmental
growth in the output of goods of outlays will go up in 1958, there
more
a
than $6
all sorts.
is
Unfortunately, however, de¬
mands
from
all
sources
have
no
now
indication that the increase
planned will be sufficient to
restore full employment and pro¬
duction in the months immedi¬
lagged far behind our rising abil¬
to 39.2. Furthermore, employment ity to produce. In fact, in many ately ahead. The national Admin¬
important
categories 1957 sales istration, although belatedly ac¬
in major non-manufacturing cate¬
were lagging behind the levels of celerating
defense
procurement
gories has also leveled off or de¬
a year or even two
years before. contracts, apparently will propose
clined.
For example:
an over-all federal budget rise of
Unemployment and under-em.In the first 11 months of 1957, only $2-$3 billion. At the state
ployment inevitably overtake the
the sale of new automobiles came and local level, where tax collec¬
economy when the output of one
to
million, a shade less than tions are beginning to level off,
great
American
industry
after the
year before. During the same public assistance costs are rising,
another stagnates or declines.
period
in
1955, however,
over and the debt burden is now at an
Today, the aluminum industry seven million new cars were sold. all-time high, we cannot be too
is turning out about 12% less than
Last year, new housing starts certain that public works outlays
fell to less than a" million for the will continue to rise substantially.
Address by Mr. McDonald at a meet¬
As steelworkers, we have no deing of Union Officers, Washington, D. C.. first time since 1948. In 1956, we
*
January 6, 19S8.
started
to
build
over
1.1
million
Continued
on
page
50
Homer P. Hargrave
H. Gerald
F. Newell Childs
Nordberg
The Nominating Committee, Ralph S.
Longstaff, Taylor, Rogers
& Tracy, Chairman, Andrew M. Baird, A. G. Becker & Co., and
Henry W. Meers, White, Weld & Co., has proposed the following
Officers and Directors for the coming year:
President: Homer P. Hargrave,
Merrill Lynch, Pierce. Fenner
& Beane.
Secretary: H. Gerald Nordberg, Dean Witter & Co.
Treasurer: F. Newell Childs, C. F. Childs & Co.
For
Directors, the officers and: Woodward Burgert, Harris
G. Dern, Smith, Barney & Co.;
Co.; Sampson Rogers, Jr., McMas¬
ter, Hutchinson & Co.; F. Girard Schoettler, Wayne Hummer & Co.;
George R. Torrey, McCormick & Co.
The Club will furnish facilities for those wishing to play cards
Trust and Savings Bank; James
Fred W. Fairman, Jr., Bache &
.
after dinner.
Reservations should
Wayne Hummer & Co.
-
be
made
.
with
F.
.
Girard
1
"•
>
•
Schoettler
at
Volume
167
Number 5712
,
.
The Commercial and
.
Financial Chronicle
Private Credit Will Centime
To Spaik Oar Nation's Progress
By JOSEPH C. WELMAN*
President, American Bankers Association
President, Bank of Kennett, Kennett, Missouri
ence, or even for bankers as we
know them. In the Soviet
way of
doing things, banking and credit
merely constitute, in essence, a
system of bookkeeping. The plan
is decided upon by
the high com¬
mand, and the books are juggled
to carry out its financing.
In
requirements, which he claims
those of the
ABA, in order
in .general agreement
arc
have given. broad ex¬
to ~ individual
decision.
with
to allow
inflationary
and "will have to be reduced
to
are
accommodate
It has long been recognized that
unfair and obsolete.
are
-
it is
more,
clear
that
the
the
reserve
the
Congress
appropriate time.
subsidence
pressures,
per-
of
life.
the
With
at
inflationary
opportunity
an
may
on
centages in ef-
a
feet today are
reduction and reform. Action along
these lines already is long overdue
to
be
longer.
reduced
ahead
if
banks
of
reserve
The
get the
sooner we can
enabling legislation
the books, the better.
•
'
/ '
necessary
the
r*
to
are
program
and should not be postponed much
the years
over
systematic
u
,1S
k
ji
^ / !?wC?s*ury
-
on
economy
exert
this freedom has
\Ur
reminded that the past few
eronomv'<?
^eeKslmye given Americans cause
our way
Perhaps
j
'
-
reserve
requirement
deposits
over
under
for
or
unusual
rising
the
concentrating much of their atten-
timing left
to
the
of
chief
dis-
top
In
Federal
the
Re-
past
obstacles
to
getting
bankers
what
on
one
reserve
The
A.B.A.
plan
which
set
themselves
should
out
would
be
to
be
design
eraf public.
plan
.
certain.
our
those tests.
It dethe enthusiastic
support of
entire membership.
meets
i
|
l ederal
n
which
are
plan
our
for
some
under
time.
It
that' Federal
ficials
are
with
us
on
be
can
think,
in
active
said
I
of-
agreement
of
many
features of the plan.
study
Reserve
general
the
basic
As yet
how-
i'ndica-
ever, we have no official
tion as to whether the Board
endorse
our
proposals
or
it will advance alternate
of its
It
Federal
our
earnest
Reserve
known its views
will
whether
soon
make
that any points
"
"credTt^'^Confertnce
■
of
given
1958,
Chicago,. III.
business
in ; which "the
-
a
the
free
market—in
and their institutions
broad latitude for in-
a
forces
of
a
supply
world
man-
satel- '
e
been
acute
dictable,
but
We commend
the Federal Re¬
activity in 1958,. and we feel
country is fortunate to have
the;
experience
and
7leadership of the
Governor, his associates,
courageous
quite' Board's
and staff.
and has
un-
foresee
can
a
Board for their policies and
available
has
atmosphere of
we
ness
the
devel-
opments
Harold H. Helm
.
_
Sees Strong Loan-Demand
"
The banks of the country made
more "loans
so
in
1957 than
in
any
former year. This means that they
much demand for further
construction from both private and
public sources—the latter requir-
have been more useful to business
generally and to their-individual
ing roads, schools, and other mu- communities in particular than at
nicipal improvements — that we any previous time. It would apbelieve this sidewise movement of
our economy may well be of short
that a strong demand for
bank loans will continue both in
the money centers and in smaller
communities. We- feel confident
that bankers will approach the
new year with a keen desire to
pear
duration. A further correcting influence will come from accelerated defense expenditures and
from higher consumption brought
about by population increases and make their, lending /facilities as
by the tremendous savings which useful and helpful as prudence
have been accumulating at such a permits, and we expect that rea-
quickened pace. Nevertheless, sonable rates will continue to
strong and vigorous political lead- prevail.
ership is most important in dealThe officers of Chemical Corn
ing with all the existing current Exchange Bank are aware of the
conflicting reactions.
many
interesting and challenging
such choice.
opportunities which confront us.
PraisCs the Fed
Praises the Fed
<.
seizing
The Federal Reserve Board has
our
setting
the
in
ities
have
which
business units both at home and
and especially on the
abroad. The financing of substan-
0f inflation
•
-
Democratic Finance
state
state
every
of
process
participate
democratic
How
different
^om
a
vain
it
is
in
in
the
finance.
behind
the
Polish bo^TIo' theTr
'^f Siberia searching
for
a
Soviet
as
..
In
Credit Confer-
.
.,
,
ut tnr®e-xlitns 01
^
durables
services
by
by
the total $72 billion expansion
'"^"addU^ontlnotL^rie^mTon
new
lion
growth of output went into
construction; almost $9 bil¬
of
billion
that
was
was
for
for
residential
remaimng $7
factories, stores,
~
Continued
on
page
48
ternational field.
—*
Comptroller of the State of New York
agent of New York State
Thruway Authority
.
New York, on
$50,000,000
New York State Thruway
Authority
Bonds
State Guaranteed Thruway
(Sixth Issue)
Principal and interest unconditionally guaranteed
by the State of New York
Dated
January 1, 1958, and due serially in
1985 to 1995, both
to
their
and
various amounts from
inclusive.
The Bonds will be
$24 billion, and for
$33 billion, to make
require
February 6, 1958, at 12 o'clock Noon
01
billion, went for personal consumption. Individuals increased
their spending for consumer durabl^s by $15 billion, for non-
will
banks which specialize in the in-
will sell at his office at Albany,
enterprise, as real output by government rose only $3 billion
while output by the private sector
,
trade
foreign
tial foreign trade will require
—
The
_
up
Some 1,000 bankers from almost
people who fail to ap-
tial
large advances from all New York
w
real 8ain of $122 billion in terms
of 1956 prices.
- •
This growth in production came
almost exclusively from ^private
,,
-
0f
X<K|al neignpoinoocl cus-
tomers. dnd to our many larger
policies
influences
nvprhanf,inff
masses
our
on
deep
econ0my
of
of
we re™ w xne seiwing ra our
great powers and the responsibil- numerous
^
Production Growth
The
market in
Hrid de-*
in which market forces in important sectors are introducing a
correcting influence, despite the
iact tbat tbe basic pattern is one
of economic growth and technological progress
Treadies
16,
no
increased $119 billion.^
Now let us look, st the other
mand are allowed expression. So s}de °f the production-consump—after an extended period of ex- Jion coin and see how the growth
pansion—we find ourselves today 1,1 our national output was abin an uncertain economic picture s01'b®d*.
<t79
which
proposals
hope that the
will
so
today
men
own.
is
in
are
dividual decision. It is
,
The Federal Reserve Board has
had
We
concept
.
Reserve Agreement
latest
,
serves
our
this
basic concept : of our economic
system is being tested. It is the
gen-
We believe that
that
different perspective
a
situation
the
of
the
and
managers
a
clearly
-the, best. interests
monetary
to
done
acceptable
to bankers and would also
is
Platform and in the corridors. I Between 1946 and 1956, our total
sba11 leaye to the other speakers output of goods and services intbe j°b of talking in detail about'creased from $209 billion to $412
credit conditions and the outlook billion. In 1957 it rose further to
tor 1958, and shall devote my brief an estimated $435 billion. If the
remarks to my views on the mean- figures are adjusted to correct for
of tbe challenge of "Sptitnik price inflation to show the growth
versus Vanguard" for this Con- in real terms, then, the increase
ference.
"
between 1946 and 1956 was from
The economic picture is un- $290 billion to $412 billion, or a
reform had been the difficulty of
serve
d
on
Bond
in the-program of
"leaning against the wind" and in
being
alert
to
changing times,
Their policies will-have a very
great influence on general busi-
lites and other
an
of
achievements
psychological
precipitated
members
serve
m a
of the
States" Government
eriencing
just such a
effect of
value
savings account.
the
next two days this Conference will consumption possible has been a oveihanging dangers of inflation,
hear frequent reference to the truly remarkable phenomenon of The results of inflation are too
new
challenge,
both from the the American postwar economy, often overlooked by the great
might add that the reserves
project was undertaken with enofficials.
it
growth of production and
to
the
economic
and
financial investment by the private sector
climate. I am sure that in thev of our economy to make personal
I
couragement
anrfscfentiRc^unremacvC°~ admit
believeit.that
honest politicians will
For the Russian, thdre is
and scientilic supremacy,
has given
cretion of the Reserve authorities,
agree
indus-
standard of living for our people, certainty. The length of this peWhile the Russians have been riod of hesitation is still unpre-
Free World and the Iron Curtain
Fi-
part of required reserves. These
changes would be put into effect
gradually over a period of years,
the
number
our
the
counterbalances the income
condition. The
dustry to facelift models, already
very acceptable, and multiply ity
^
innumerable facets of oqr
consurr}Ption pattern, and one can
aPPreciate the driving force of
competition in our economy, and
a
; accumulate
time of need—a
a
3% .in
tries have been
J,lon+s sPenJ; annually by the in- |
toward 1
a
but
exp
?.ne ven^ur.e* ^dd to this the bil-
phase of the struggle between the Jv
12%
conditions.
as
of
of
capital in this, "
-
Certain
demand
range of 8 to
a
nomk'
nomic
nally, vault cash would be counted
serve
of
and
a
influence
and
save
dollar (another way of expressing
the increase in the cost of living)
not. only
are
mobiles in a raa'b,c^ xhat 13 blSbV"
competitive and that many coiiv
fi. ±r ^T^ea
saturated. It is said
^at this company has invested
new
policies
~
banks. The Federal Reserve Board
would be empowered to
vary the
with
loss
adjust ment
United
mv
*
to
something for
strengthening,
$250 million of
Board's
preciate how it nullifies their efforts
necessary
'
i
Reserve
^"
major
i
a
We cannot expect all segments
of our economy to continue to expand and make new records year
9ftPv
Periods of industrial
after year
find, nbf
[or so^r
run
-
Federal
better example, than in the recent
con}Panies
City
and personnel.
of economic
could
we
J
tk on the frontiers, of pure
growth needs
f! Sputnik Aj- still circled the science ancj military power at the
'Joseph C. Welman
for additional
§1° ' ^anSua,« sputtered; and expense of needs and desires of
credit
and
tb£.wbolj;
world since has^ been human life, we have been preasking whether one kind ol
money.
e£o- occupied with making the lives of
The
reserves
ulan
nuhli«?bpd
and social system has 0ur people more comfortable. The
last year by A.B.A's
Economic Suin
superiority over another. aVerage American would rather
Policy Commission offers
sound
re
i?n.e AmericanjPeo- rj^e jn an Edsel than a Sputnik,
and workable solution for "thpse P
aad their friends abroad has Hc has only halfheartedly supdifficult problems
To
mind
ranged from disbelief to shock, p0rted expenditures for national
it is one of the most constructive a™azement>
disappomtment, and security at the times when the
and
forward -looking
DroDo^als
dls-Bra^*,'^ow jhat the initial mi-. threat of war has subsided, but
which organized banking has out pa
ft these developments on a he has yeiied 0ften and loudly for
forward in many years
Briefly
scientific front has been absorbed, his go-called right to a better
it calls for eventually reducing of they nuglit be viewed as aPearl standard
oi! Hying. The ground
reserve
percentages to
10%
for
f .r,T~ai\
dct?at ln swell that developed in the Condemand deposits and 2^ for time
a 31gniflcant battle between ideol- gress for a reduction in governwith
these
requirements
to
hp
a
economic systems, but men| expenditures last year is a
made
uniform
for
all
member
same time a challenge to manifestation of this fact, and I
b
Mlong
leadership" and praises
introduction by one of the
.its
accommodate
.our
to
a
-
the
motivation of
be presented to get started
soon
excessively
high and that
they will have
•
before
earliest
demand
toward
York
rates and, while unable to
predict the length "of this period of
hesitation,", describes correcting influences at work in the
economy. Refers to need for. "strong and vigorous political
forces
invaded, but nevertheless it
itonif
Unci.
always reasserts itself as the basic
of disagreement may be ironed out
a suitable legislative proposal
laid
the
oiwovc
and
Further-
and
for
se¬
wide
been
sanity and reliance
market forces without inflationary environment.
the present reserve provisions for
Federal
Reserve member banks
supply
of
all national economy, and calls for fiscal
upon
freedom
a
truly com¬
; environment,
techno¬
logical improvement, and a higher
standard of living. At times and in
varying degrees "in some sectors
additional credit and money." Reviews ABA's Economic
Policy
Commission reform plan, discusses
banking's role in the over¬
-
of
national
Bank,-New
Chairman Helm perceives continued
strong demand for bank
loans in money centers and small communities at reasonable
petitive
the years ahead if the banks
over
range
of
area
have encouraged
themselves
pressures.
economy's long-ran growth needs for
our
we
of
timely Congressional action
Mr. Welman opines
present' requirements have long been recognized as unfair and
obsolete, and that the percentages today are excessively high
with, subsidence of
curity,
By HAROLD H. HELM
Chairman, Chemical Corn Exchange
we
pression
Beyond ;the
challenges Federal Reserve officials to make known
their views with respect to reform of member bank reserve
1
contrast, under the capitalist
system
ABA head
13
(517)
Authority, prior
time on
certain terms and conditions, in¬
subject to redemption by the
respective maturities, as a whole or in part at any
after July
1, 1965, upon
cluding specified redemption prices.
Principal and semi-annual interest, January 1
able at the
and July 1, pay¬
principal office of The Chase Manhattan Bank, New York.
Copies of the Act and Resolution authorizing the Bonds, Official
Proposal, Notice of Sale, and form of
Statement, Official Form of
opinion of Attorney General will be furnished upon application
to The Chase Manhattan Bank, Fiscal Agent, 43 Exchange Place,
New York 15, New
York.
ARTHUR LEVITT, State
Dated: January 28,
Comptroller, Albany 1, N. Y.
1958
T~
14
(513)
T7ie Commercial and Financial Chronicle
Britain's
that ground alone there is now
justification for some degree of
guarded optimism.
Disinflationary Policy
.vln-recent
Strengthens Sterling
Optimistic
X
By PAUL EINZIG
money in other countries. During
the past week there were bank
rate
reductions
in
the „United
declares alternative to Mr. Macmillan's
be
would
Labor
Government's
disinflationary
inflationary
program
coupled with physical controls.
Expresses guarded optimism
sterling's prospects in view of Britain's refusal to follow
recent "reflationary" policies of U. S. A.,
Germany and Hol¬
land, and opposes suggested borrowing to reinforce gold
about
reserve
for fear it would end
LONDON, Eng.—
The
vival
of
the
strength
in
gilt-edged
re¬
a
sterling
market.
mination
of
political
un¬
Mr.
allega¬
the
resigna¬
of
tion
Mr.
ing
the
of the
Opposition, Mr.
Gaitskell, made it quite clear that
assuming power a Labour Gov¬
on
pol¬
a
for
came
end
Jan.
on
with
21
public aof
the
Tribunal's Report, which emphati¬
cally stated that there was no im¬
of
confidential
the
Govern¬
is
a
of least
'
Large
resistance
strong
ever, as
remains/ how¬
In his
as ever.
an-
niial
chairman's
speech
to
the
shareholders of Lloyds Bank, SirOliver
Franks
put forward the
,,
proposal of
loan
for
ing
the
large
a
the
international
gold
Such
reserve.
solution
would
Autumn
the
*
of reinfore-;
purpose
ay
N.
T.
Masterson, Jr.
go
far
as
towards
budgetary
economy
as
M r.
Thorneycroft
would like them to go, the alter¬
be
resulting from
a
defeat
of
present Government, would
the complete abandonment of
have
r
Government
elaxed
its
drive
as
above
parity and
s
en
as
as
soon
outflow of gold became
Such
would
elected
it
as
.
>•'
increased resistance by those who,
Dakota.
being incapaule of seeing beyond
l3iJ.
behind
usable
bankers
for
a
way as
to make
attack
against
an
and
to
policy of the Socialists
disguise growing inflation
a
screen of
physical con¬
would
their
maintain
would
encounter,
nose, would prefer to
enjoy
speculators, there is
in Tribunal's findings ernment, Mr. Harold
dollars in the monthly statements
Wilson, re¬
likely to weaken the affirmed
on
the gold and doilar reserve.
their
intention
to
do
Government's
position
in
the away with the credit squeeze and Given also the insatiable appetite
country.
Hence the relief that replace it by import restrictions for dollars of the
Sterling Area
found
expression in the firmer to prevent domestic inflation from countries, it would not take
long
tone of sterling and of Govern¬
affecting the balance of payments. before the easily acquired dollars
ment securities.
They refuse to see that such a would become easily depleted, in
It is even more
important that policy is bound to prove to be the same way as the proceeds of
the danger of a split in the Con¬
servative Party resulting from Mr.
futile in the long run as indeed it
proved to be futile under the La¬
Thorneycroft's resignation is now
definitely past.
It is true, Mr.
Thorneycroft and the two junior
Treasury Ministers who resigned
bour
Government
erable
following both
a
economy
very
in
consid¬
Parlia¬
ment and in the
country. But Mr.
Thorneycroft's resignation speech
on Jan. 23 made it
absolutely clear
It
'
.
is
to
be
:
hoped
money would be frustrated by the
refusal of the United
States to
lend itself to assisting in such a
inevitably detri¬
to
exports not only be¬
prices of many goods would
to be
competitive abroad but
also because inflated
domestic de¬
mand
would
divert goods from
exports to the
This
means
domestic markets.
that in spite of
import
controls
the balance
be gravely
of
tinuing
Government
yield
would
which the import of food and raw
materials could not be curtailed.
Before very long, too much
KANSAS CITY, Mo.—Oliver K.
Wright has been added to the staff
of E. R. Bell Co., 4627 Wornall
would
Road.
Indeed, largely
as
a
result
his speech, a Motion of Confi¬
dence was passed
by
unusually
an
large majority.
This
does
not
that
mean
Mr.
Thorneycroft and those who share
bis views will not criticize the new
Chancellor of the Exchequer if he
does not display sufficient zeal in
keeping down expenditures. Judg¬
ing by the statesmanlike tone of
Mr.
Thorneycroft's
resignation
take it for
granted, however, that there can
be no question
of any "revolt"
speech it is safe to
similar to the
one
staged by
seven
Conservative Members of Parlia¬
ment who had expressed their dis¬
approval of the withdrawal from
Suez by resigning from the Con¬
servative
ally
Party and by occasion¬
abstaining from supporting
the Government with their votes.
No matter how critical Mr. Thor-
neycAift
be of
the
nomic
give
supporters
will
inadequacy of the
eco¬
drive, they
the
sunnort
such
his
and
Government
on
every
is
support
that
means
certain
are
ment
should
tions
it
even
lose
would
their
to
full
occasion
when
essential.
This
if
the
a
few
retain
a
limit
a
espe¬
beyond
money
be
chasing too few goods,
and in order to ensure
cation of the
a
ment.
is
on
pressed
with
before.
There
are
the
unions
do
not
longer
vigor as
same
has
been
preme test case so far
on
appear
bringing matters
as
to
to
no
to arbitration
or
vided that the
be keen
a
CITY,
'
Mo.— Paul
Clark has joined the staff of A. E.
Weltner & Co., Inc., 21 West Tenth
Street.
suc¬
some hope that
excessive demand
would not be pressed
unduly. On
there
is
v
Jr.,
partner,
,
James
S.
Graham, of
Allison-Williams
Co.,
i
F.
Kennedy,
partner,
Bosworth,
Sullivan
&
Co.,
cisco,
was
,
-
,
..
.
C. Callan of Mitchum, Jones &
Templeton, San Fran¬
elected Co-Chairman, succeeding Robert Revel Miller
& Co., Los Angeles.
,' '
Y
'
of Revel Miller
District No. 2 comorises the states of
the
■
California, Nevada and
territory of Hawaii.
State Banks
/
Urged to Join State
Bank Supervisors Organization
State
.
bankers
invited
are
to
become
associate
members
of
National Association of Supervisors of State Banks and
sup-
port newly created
help
Washington, D. C., office in order
dual banking system.
to
letter now mailed to all
exceptions "every State bank in
chartered banks, savings the nation is
already subject to
banks, and trust companies in the Federal regulation either
by the
United States, the National Asso¬ Federal Reserve
System or the
ciation
of
Supervisors of State Federal Deposit Insurance Corpo¬
Banks is inviting them to become ration.
If ever the State super¬
associate members of its
organiza¬ vision weakens or abdicates, one
tion.
Their financial,, support is of these Federal
agencies is ready
for
the
the
i9*>o
A
Office
is
being
at
Munsey Building,
Street, N.W., Washington 4,
e
D. C.
I-
Washington
Association which
'
V
.
pamphlet explaining why the
banking institutions / will
and
an
willing to supplant it.
eventuality would take
from every
dom
of
State
vision
trary
to
operate in the
the National
It could result in super¬
system
-
Such
away
bank its present free¬
choice
system.
State
find it to their advantage to back
the new venture
letter.
"Why "is Such an Office
Necessary and Why Should the
State Banks. Support it?" asks the
(Special to The Financial Chronicle)
ST.
a
that
and
or
in
would
less
become
responsive
arbi¬
to
the
accompanies the banking needs Of the nation."
A. G. Edwards Adds
Chancellor of
been,
Edwin
established
head.
in convincing them that he
be no less
tough than his
had
succeeds
■
,
V
asked
(Special to The Financial Chronicle)
KANSAS
conciliation. Pro¬
new
Exchequer, Mr. Amory,
would
1009
Joins Weltner Staff
an unusual degree of
willingness to submit their claims
the
Company,
su¬
the trade
HobbB,
T.
was
Hill, executive Vice-President, Hill, Richards & Co.,.
Angeles, was elected Chairman of District Committee No. 2,
succeeding Richard Lawson of Lawson, Levy, Williams & Stern,
San Francisco. "
•
'
:
of
They show
ceeds
&
Midwest Stock Exchange.
no
by-elec¬
Donald-Evans
Baltimore Avenue, members of the
it
predecessor
and
KANSAS CITY, Mo.—Harry O.
now connected with Mc¬
wage
which
Texas; Neill
State
(Special to The Financial Chronicle)
that it does not
go far enough. It has
actually pro¬
duced some impression on
claims
G.
Robert C.
In
McDonald, Evans
the ground
Govern¬
safe
With
Gray is
If it is open to criticism
William
preserve
inadequate supplies
There seems to be no
acceptable
alternative to the
policy of disin¬
flation pursued
by the Govern¬
succeed
White, partner, Piper, Jaffray & Hopwood, Min¬
fair allo¬
,
state- of
(Special to The Financial Chronicle)
domestic controls over raw mate¬
rial
allocation and
rationing of
foodstuffs would have to be re¬
introduced.
to
E. R. Bell Adds
ment.
is
the
be
highly
detrimental to the general inter¬
ests of the British people.
T
payments
affected,
there
as
-
its policy of con¬
on
borrowed
which
comprising
Los
to
would
cially
v
inflation
solution
6,
Denver, was re-elected Chairman of'District Committee No. 3
consisting of. the states of Arizona, Colorado, New Mexico, Utah
and Wyoming. William E. Sweet,
Jr., of Peters, Writer & Christensen, Inc., Denver, was re-elected Vice-Chairman.
'
that he intends to remain a whole¬
hearted supporter of the Govern¬
of
Claflin, III
.
should
that,
mental
British
He
PaUl.
Bernard
de-.
were
Socialists fail to realize that in¬
flation would be
cease
their
up
pleted.
to
1946
the temptation,
failure
back
1945
of
the
cause
to
from
the dollar loan
1951.
with him feel
very bitter and crit¬
ical towards the Cabinet for its
They have
H.
NASD
Both Mr. Gaitskell and the the
fruits
of
the
false
security
prospective Chancellor of the Ex-, conveyed by the appearance of
chequer in the next Labour Gov¬ thousands of millions of borrowed
is
drive.
Wm.
members in District No. 14 elected William H.
Claflin,)
III, partner, Tucker,"Anthony & R. L.-Day, Boston, as Chairman
to succeed Frederick H. Foster of Lee
Higginson Corp., Boston.
The district comprises the states of
Maine, Massachusetts, New
Hampshire/Rhode Island and Vermont.
—:
T
trols.
nothing
which
Clinton C. White
neapolis, was elected Chairman of District Committee No. 4, con¬
sisting of the states of Minnesota, Montana, North and South
is
The
No.
Chairman
Clinton C.
.
declared
it
O'Keef
H.
Creston H. Funk, Hobbs & Co., San Antonio.''
reversed.
disinflationary efforts
District
interpreting
evidence in such
Robert
rXasterson, Jr., partner, White, Masterson & Co.,./Houston,
the
as
In
,,
,
disinflationary
sterling rose
any effort to resist inflation.
the
Edwin C. Callan
Kenneuy
j
Loan •;»;*,
Even though the Oppo¬
sition has every intention of mis¬
and
F.
Bernard
temptation to take the line
England.
Report
Hovorka
ef¬
handled
ment and directors of the Bank of
the
J.
does
not
the
of
Robert
inflation.
native
directed
Such
C. Hill
surely mean the
r.Isrshall Co., Milwaukee, was elected Vice-Chairman. The district
end of the disinflationary efforts.'''
consists of the states of Illinois,
Indiana, Iowa, Michigan, Nebraska
Were it not for the fear that the
This means that even
though
uM Wisconsin.
y
' ;•."
,
v:'' •" •••■ «v;- • •
Mr. Macmillan's Government
sterling crisis would return next
of
gations
contrary
costs.
policy, su¬
perimposed as it would be on the
existing inflationary background,'
would greatly accelerate the
pace
information, and rejected all alle¬
against Members
embark
inflation
Opposes
The
Leader
ernment would
Robert
;
re-
however,, that
outlook.'
the
23,
cause
the
the
Jan.
on
on
of
Provided,
For, in his speech dur¬
debate
less
an
States, is
unfavorably the1'
under¬
icy of economic expansion regard¬
tion
to
and
former
to
United
the
fectively Britain has no cause to
be unduly pessimistic about the
government whose financial
reasonable
,
de¬
say/
commodity-pro-
affect
domestic
policy they consider inadequate is
Thorney croft.
un¬
the
in
to
serve.
The
easiness
disclosure
Inflation
Thorneycroft's attitude, and
his
supporters, in voting
standable.
from
Want
of
a
arising
tions and from
Einzig
that
for
perfectly
Leak
proper
cession
liable
Socialists
certainties
the Bank Rate
in
to
NASD
cheap
Sterling Area gold and dollar
and
is
ter¬
Needless
local
uucmg countries of tne Sterling
Area, combined with business re¬
v_ouimons.
It
taneous
sterling.
pression
-
disinflationary efforts.
oi
largely attributable to the simul¬
Paul
of
dependable majority in the House
past week witnessed
to
return
a
States, Germany and Holland.'; A
contrast between the reflationary
policies indicated by these changes
and the continued disinflationary
policy ' in Britain justifies some
optimism regarding the prospects
program
avowed
of
11)
;
elections, Robert J. Hpvorka,
President, The First Boston Corp., Chicago, was selectedl^ainnan
,.of District Committee No. 8, succeeding James G.-Dern,..partner,
j Smith, Barney & Co., Chicago. Robert H. O'Keef, President, The
'
.
Internationally known British economist again returns to
political-economic background of his country in a search for
presageful clues regarding anti-inflation outcome. Dr. Einzig
evidence
in
Sterling
on
An
additional ground for Tonfi-.
dence in sterling is the growing
1958
Thursday, January 30,
/
.
NASD Announces District Elections
-
•
.
.
LOUIS,
Mo.—Paul
pamphlet
Ullman
answer
and then proceeds to
this j inquiry.1 "The State
Jr. has become connected with A.
system of banking
G.
served
Edwards
Eighth
&
Street,
Sons,
409
members
North
of
the
New York and Midwest Stock Ex¬
changes.
.
.
.
can
be pre¬
"It
cies "which
every
ment
latest
its
prerogatives
by
the
Federal^Goverfiment." With minor
"for
the pamphlet con¬
advocates of the
the
State banking system to see that
its members have equal facilities"
with those of the Federal agen¬
only if those interested in
its success join forces to resist the
constantly increasing encroach¬
on
is time,'-'
tinues,
ington
are
with
centered in Wash¬
representatives
state and territory who
kept constantly advised
ton." *
developments
.
1
at
as
in
are
to the
Washing¬
Volume
187
Number
5712
.
.
The Commercial and
.
Financial Chronicle
the
Overcoming Points of Friction
■i:>'/•/'
"
By H. W. RALGOOYEN*
Executive Vice-President, American & Foreign Power Co., Inc.
New York City
Newly elected Chairman of the United States Inter-American
/
Council reviews exciting
battles of free enterprise
between sound and unsound
ence
thering
of
of free enterprise — all
part of the background
for
the
more
successful
1954
plenary meeting of our Council
in Mexico and the highly success¬
plenary in Buenos Aires last
July. The success of the Mexico
meeting, however, was achieved
:
resisting socialistic and extreme; nationalistic onslaughts at
past plenary meetings, and the "sore points" of friction caused
by American and Latin American. practices. Mr. Balgooyen
trusts U. S. I. A. C. will awaken American
being
ful
in:
groups
gains
economics,
formed
v
"'
■
impressive
achieved by Mexico under an ad¬
ministration dedicated to the fur-
guard
and
to
be
placed
portance
ble
against the encroachments
1
only
after
over
a
long
series
nating from
•
mission for
v
had
a
of
debate
ema¬
the Economic
Com¬
Latin America
which
superficial
nationalistic
people to the im- -
hours
resolutions
of
appeal
sentiments
to
of
delegates,
portance of their inter-American ties, and acquaint them with
Latin American economic problems and of their
attitudesy
but were not in
with
the
principles
mony
'
practices
;that
activate
the
some
a
har¬
and
free
statism.
Businessmen
are
minority group. There was
this minority group
a
when
cised
an
influence out
as
a
business partner in
indispensi-
time of peace, and an
on
war
a
national
or
It would be
time
to
ally in time of
supplier and
'
In Inter-American Ties
13
(519)
emergency.
waste of my
a
of propor¬
tion to its numerical strength but,
in most countries, that time is past
America
and
source
means
—particularly essential
gone—perhaps forever. This
that an enlightened body
of business opinion can make lit¬
tle impression on economic policy
or on political action unless busi¬
ness
can
of
its
the
are
or
mate¬
raw
chief
recipient
foreign investments. These
tangible facts of our economic
Not
the
tangible,
so
but
none
real, are the ideological
and spiritual ties that bind us to
the peoples of Latin America.
In a recent speech, one of our
opinion groups; and
ability to do this will rest
success
States'
the
is
important
imports
most
United
our
life.
sell its ideas and its pro¬
the
is
of
rials—and
gram to other
on
time
recite
foreign trade statistics
to a group as well informed as
this one. We all know that Latin
exer¬
failure of the IAC.
I believe
less
'
that the most import¬
ant function of the IAC is to serve
esteemed
trustees, the Honorable
and the resolutions fi- as a liaison between the business¬ Spruille Braden, commented on
nally approved did not posses the men, and, in case of need, the gov¬ the
essential
solidarity
of
the
I; future of Latin America and warns against trade policies that
forthright clarity of expression ernments of Latin America and Americas and the reasons for it.
result in exporting our ailments to our Latin American friends. ■
;
that were to distinguish those of the
United
States
respectively. He then made the very significant
/
<
.
the more
recent Buenos
Aires The USIAC, for its part, should statement that "this solidarity of
The
first
plenary meeting of would afford some measure of en- meeting. •
strive to keep the United States our
peoples, based on dignity,
the United States Inter-American
couragement
and
protection *to
and
mutual
All,-of us who attended the Government and the American freedom
respect,
Council which I attended was the free enterprise and
private invest- Buenos
Aires
plenary
were
public continuously informed as makes us the only nations on the
one held in
Chicago in 1948.. Per- ment ; in Latin America, x made thrilled by the spirit of solidarity
of
the
globe that, in an
to the attitudes, the requirements face
haps a review "
many of us wonder .whether all
that existed among all the various
/
toward
economic
our
economy;
policies., Calls for faith in long-term
-
-
«
,
*
-
T
of
what
spired
tran¬
at
that
v
meeting
and
*
others
be
of
and
in
1952
*
Ir'-.f
.
groups' represented
there.
No
at
the
Lima
;
,
h e 1 p -to"
v
some
objective of embarrassing
j
.
erings of busi.
.
...
H. W.
...
4U
from a few of the
tries,
Peronista
brand
of
Balgooyen
coun-
who^listened more or less at-,
delegation; • got
dictated
by
the
Peron
govern-,;
ment. As this crucial meeting got
under
it
way,
apparent that
was
ultra-nationalistic ideas of the
enjo^d-Jthe
sociability^ of the oc- Argentine group had some supcasion.
The
fine .art
writmg was atill
of: resolution
its infancy and
in.
And
convinced
more
raising than the USIAC in their
Peronistas
us
necessary.
and
delegation
and
overplayed
on
their
the
cause
speeches, abounding of private enterprise in the
completely sans Americas could have suffered a.
resolutions. ,v We hadn't apprecimost serious setback. It was only
atea, or reckoned with, the cumu- by the narrowest of margins that
lative impact of the New Deal, the We
emerged with resolutions that
United /Nations,
the heresies of could be considered at all acceptDr. Keynes, the Foreign Aid Pro- able to the
private business orgram, the dawning realization that ganizations that we
represented
,
world
was
under-
developed and the belief of many
economists, educators, and even
businessmen
Government
that
-r
it
was
goverment
any
government—to
every
thing about it.. But this
a
different
kind
of
the ,f prototype
of ;
were to follow.
up
do
of
or
organization".
which
;
Manyvmay remember the Chiconference, the meeting two
years later in Santos, and the 1952
meeting in Lima, each of which
characterized
sort
of
by
fundamental
the
same
conflict
be-
tween the
philosophy of free, pricompetitive enterprise and
vate,
the
ultra-nationalistic
cialistic
philosophy
autarchy
licity
and
and
of
statism.
propaganda
and
so-
economic
The
pub-
emanating
as
mean
a
the
end
hemispheric
■
—
ated
:
The Turning Point,
•
The
between' 'Statism
served
enterprise
tion
to
and
to
forces
before
never
in
the
their
in
f?ee
the
IAC
as
determina-
to
about »the
fundamentals
of
the
economic
system which had
given them their livelihood, who
had not understood the close rela-
tionship that exists between
eco-
from the petroleum expropriations
in Mexico; the election of labor
nomic theory and political action,
and
who had
been
content
to
governments in Great Britain and
delegate
Australia;
Argentina
of
the
a
the
rise
and
his
of
constitution
new
infamous
Peron
in
promulgation
Article
containing
40
which
proclaimed that all public services
belong to the State; the Bolivian
expropriations; and, most of all,
the prevailing trends in education
and economic theory, had a tremendous impact throughout Latin
America
as, indeed, they had in
country; and this was refleeted in the speeches, the discussions, the debates and the reso-
our own
lutions of
monious
our
plenaries.
nature
of
The acri-
some
of
the
debates, and the exhausting task
of pounding out resolutions which
—
Neweorieanl? ilTupSlT'"eiectio^o
Chairman
of
the
Council.
and
v
in
resisting,
alike,
the
spurious attractions of socialism
and
extreme nationalism,
while
phere
issues realized that, henceforth,
they must think and act for themselves. They had learned that the
forces of socialist reaction recognize no
national
or
industrial
boundaries; that they will rglentlessly pursue any advantage; and
that it is not pertinent to ask for
gress.
whose business the bell tolls.because, when the bell of socialism
tolls for one, it tolls for all.
The awakening
forces
at
of the free
Lima;
ample of the vigorous
of
the
freed
Peruvian
from
the
omy
public
opinion
America,
aware
of
of
Our
y
into
,we
alii-,
Old,
and
enemies
believe
Latin
that
I. hope and
of
some
seen
enemies*
our;
Continued
of its primary im¬
have
transformed,
changed into friends:
informed
concerning
generation,
a
several of our friends
development
an
the
of
World; but, within the short span
USIAC, there¬
be the
this i country
nations
should
our
our
on
present
page
51
the
the
en-
ex-
expansion
economy
shackles
of
nationalistic
of the Argentine; the
sound
and
a
of
for
them
the
Report to the Investment
Country.
information
Investors
.on
*
company.
your
'
/
'
'
look to
•
~~
,
Addressograph Service
Those of us who have been
privileged to attend a series of
these plenary meetings and have
witnessed their evolution as the
authoritative and unified voice of
sound business opinion in this
hemisphere, would agree wholeheartedly with the statement of
one of our members that if the
USIAC did nothing but play an
active role in these plenary meet-
i"gs at two-year intervals, the
organization would be worthy of
support. ..
.
econ-
com-
munist debacle in Guatemala; and
Must Convince Majority
But this is not, and should not
be, the sole function of the Coun¬
cil.
It is not enough for business
leaders to be
a
metal stencil in our Addresso-
Department
graph
for
every
investment
banking and brokerage firm in the country,
alphabetically
arranged
by
States
and
Cities, and within the Cities by firm names.
This list is revised daily and offers you
most
up-to-the-minute
aware
Our charge for
the
service available.
addressing envelopes for the
complete list (United States or Canada) is
$7.00
We
per
can
thousand.
also supply the list on gummed roll
labels at
a
small additional charge.
Herbert D. Seibert & Co., Inc.
Publishers
.
gov-
We have
positive set of prin-
the
achievement
of
lasting economic pro¬
when
controls/the collapse of
absurdly
Mail your Annual
Houses
the contribu-
Perhaps I have dwelled overlong on the record of the past
plenaries of the Council, but I
believe that they do provide a
measure of the success of the free
enterprise groups in this hemis-
developing
ciples
for
terprise
fore, should
in
enterprise.
in the
we
did
welcomed
to others the responsibility for formalizing and defending,„ their positions - on economic
ernment
a.djr cs.s .by iMr' Bflgoo.yen h*iore
cil,
and
tary chaos. Here was hope, indeed, for the future of private
enterprise in the Americas!
efforts by govdominate, control or
intervene in private business enterprise.
Practical businessmen,
who had not thought, too deeply
free
business
concern
well worth
is
strengthen
with
ances
United
of
and
retain
this
Certainly,
uncompro-
to the economic development of
their countries, who recognized
the perils of inflation, and were
willing to take their stand against
fiscal irresponsibility and mone-
economic
unite
resist all
ernment
objectives
that
tion of private foreign investment
sharp lines drawn at Lima
freedom
cago
was
IAC
,.V-
*
to be
was
conference—-
several
nature would
to
some-
and
speak, with one
voice in support of sound economic principles. Here, also, was
a group of younger businessmen,
economists, and government advisors who had turned their backs
on
Keynsian economics, on statism, and on the excesses of misguided nationalism; who appreci-
States; and we were
agreed that one more meeting of
'the/
States
first
and
believe
pondering.^
,
speak,
in the United
that
ments
senting the most important" trade
and financial interests of an entire, continent, that was able to
,
this
forthright
in
friendly to it,
obvious desire to
with
of
in
their opposition to system of
state planning and ownership of
the means of production.
Here
was an outstanding group of experienced business leaders, repre-
the United States
countries
on
with
with goodwill and
most
national, sections
trust
another.";
one
with the bitterness of: support of private enterprise, and
that resolu-, their attacks
American
not-
arriyearat^the Chicago meeting dominate'the meeting,
replete
I
various
in
The Buenos Aires plenary furnished convincing proof that the
IAC had come a long way.
The
Argentine, Brazilian, Mexican and
Peruvian delegations were even
the
.absolutely
the
so
presented by
port in other delegations and, had
ouFl'Hj'Wh''.American
-friends 4 had their hprfd
not
were
the
full
have
may
confidence
American conference.
were
msqussed'mutual problems; and the
yet
were
United Nation's spokesmen; and
;its''J instructions the meeting resulted in as fine a
" its every decision and act
.
imporutiu
tentively tp eaca other s speeches,
tions
resolutions
no
na-
dally - from the Argentine' Em- ?spt of economic recommendations
bassy. Its resolutions, its speeches, as has ever come out of an Inter-
^
leaders
rjess
„
the
for
:tkin^;;'^<^Mia«i^T The; IArgentine
a d
b e e n'?:
-friendly gath-v
,
and
plenaryto sive rivalries of the Chicago con- Latin America should
keep their
the^Peron government had ■- ference; there was none of the
and
peoples
in¬
sent:a hand-picked group of al- prolonged argumentation between governments
leged businessmen, with^thevde-'.practical businessmen and aca- formed
regarding the require¬
; liberate
ing, the Countcil -.plena ries;f
-
emergency,
the aspirations of our count¬
erparts in Latin America, just as
•
?.demic theorists that characterized
question's.
the ..United States, causing troubie-the meeting at Santos; the bitter-..
I rior/to
the
; for
United States' investors,tand mess and the political overtones
Chicago
meet-'making the L^C a sounding boards of the Lima meeting were gone;
h
and
which
interest¬
answer
•'
.
the
low -'spotin V the graces remained of the confused
fortunes of the IAC was reached economic thinking and the divi-r
will
,
worthwhile.
was
Perhaps
that'
followed
'
the effort
of the differ¬
of "Security Dealers of North
25 Park Place
REctor 2-9570
America"
New York 7
16
The Commercial and Financial Chronicle
(520)
;
but
popular except with the
erudite investors, and
usual reference to Royal
Looking Back and Forward
most
THE MARKET..
the
AND YOU
By WALLACE STREETE
^ The
stock marKet was given
inconclusive meandering
to
again this week after the in¬
dustrial average
briefly had
nudged through the Novem¬
ber recovery high without
setting off a rush for stocks
that had been anticipated.
The penetration, by a narrow
margin,
might / have been
chilled by a disposition to
wait on the earnings reports
a
firm stand
on
spe¬
'•
_
*
#
President, American Stock Exchange
of
American Stock
Exchange head is certain that within
the recession will lift without
States
our
next
is fundamentally sound and, though there
adjustments, the financial outlook orer the
several years is extremely promising.
Weighs the effect/
spending and believes it is wishful thinking to
defense
of
substantial tax load reductions.. Enumerates ^present
safeguards which together with national economic
expect
built-in
controls and
financial circumstances
new
against
.
..
,
"1929
any
.
1rt„;
'"/•
a
for our nati0nai
..
prosperous
year
*
„
tor
.
said to .militate
fidence
a
company
economic
of
era
an
to
prosperity.
in
No "1929
sickest
1957 earnings over
are
in the making."
.
.
Despite the fact that 19o7 was
Gorinaria w.men nas ibeen sue
a year
experiencing a-depression.
our
economy
will be industry
,
,
cessful with its Kent filter-tip industrial economy when measchange weren I itern
is expected to improve ured against the historical averspots in the list 2957 earnings by nearly $2 a ages, it left
and a few comforting figures
share over the $1.^4 it re.; much-to be
desired
for
were
presented by some of ported in 1956 K//:
those of us in
them, notably Northern Pa#
ff
the
securities
cific's two-cent improvement
! Moreove the
industry.
re¬
P
Kails
the
cific issues.
•
Oil
Standard
which has heen sue-'
Tnrillnrrl
see
taking
than
jersey." It is, in fact, second
only to Jersey Standard in its
aencies
was
possible didn't far flung operations.
look for any more than an
intermediate recovery, f o 1; Despite the setback given
lowed by new easiness around- the
cigaret issues, they were
tax time in late March and in
good standing with many
early April; or if it is delayed of the market students, both
beyond that time, in late because some good profit
April when the first quarter news for 1957 is due plusreports will be emerging.
bright prospects for this year.
Convalescent Rails
how bad the final quar¬
ter of 1957 really was before
to
By EDWARD T. McCORMICK*
Dutch has been of the "better
value
1958
Thursday, January 30,
.
I
do
the Making"
believe, obviously, that no
is in the making/Our na¬
"1929"
new"
economic controls and
tional
financial
against
militate)
circumstances
dismal
such
any
sions. We have
conclu-;
only to enumerate,
safeguards,'
built-in
some bad
the prej
brought out an to* sputniks,
which were absent 25 years ago,;
coming weeks is both
to recognize the validity of this:
muttnicks,
conclusion. Take, for example, in-1
generally anticipated and was
restrictions of
sured bank deposits and insured
reflected starkly by various
credit, reduc¬
savings and loan accounts; farm'
tion of buying
dividend actions including ior,. snarp
declines
in
ine is exPected
to Pushthis
"fir nhpoH
nf Inst vpar s
price supports, unemployment "in¬
and
cuts by Hudson Bay Mining,; profit. Northern Pacific, how- sa es , ?.r anef,d oi last, year s orders,
1™
vnnrti'
xrecord figure,
surance,
social security, flexibleas one source consequent
American Smelting,
.
and • a ever, has interests ranging lar
Government money-management,*
enthusiksticallvloss of general
few others, and by outright from railroading alone,
in-1put n enthusiastically.
,,
long-term home mortgages" With!
securities"
E. T. McCormick
amortization provisions, and last,
business
omissions in a few cases in-; eluding a couple of million
:
T
*
but not least, the factors of Govacres of potential oil land and
^Pkilip Morris with a yield. volume, we
eluding the surprise deferral1
important
timber
holdings::In
P1
wel1
lnta
the
6%
bracket
found,
in
1957,
very
few
matters
to
ernmen spending andthe Gov-;
by Foster Wheeler.
line with the general shimn in 1S expected to report record cheer about.
•
ernment commitment of full em*
«fe
//';/
:
in
That there will be
news
What
with
our
present
in
forensfarpSedectefTnn The
.
■
>
rail eouities
rail
But what I want to discuss is
equilies, Northern
lNortnern Pacific
racilic sales for 1957 and an imAgainst t his background
f
f npariv 10% in that
there is good reason for
now is available at a trim of Pavement ui
neai ly iu/o m
changing
in some measure the exthe more surprising aspect of
some 25%
from
its
pression
on our figurative deity
high and earnings and go on irom there
the market was its ability to offers a 5 u2% vield
to more impressive achieve-- that looks ahead to 1958 and the
hold around its peak without^
,.{
'
'
ments this year. Here again, years to follow.
'
<
any drastic selling to be ab¬
"'"rvL '
one
source
enthusiastically
I confess that I don't possess any
"
There
sorbed.
, <
wasn
,
i
.
t too much
grist
Tobaccos Cancer-Jolted
Tobaccos,, however,
makers-although
henvv
which
nt'.Zi
CUrred
had countered the trend
throughout
when
a
2n£o
1958
«'/lAlllr!
iju
L
i.Q
no
n
comnanv
n„1]ai
7,
77
the
market
you. Perhaps because of this I
should refrain from any attempt
where good yields
Chemical
prevail, or in issues like Corn
Products that have been
stalemated, f
in
a
new
inint
nnn.
Apmi A
oern
;auxl A
♦X
with the
Russell
Lowell that you should, "... never perity.
nothin' without you're comWe, in the securities business,
pelled
to,
nothin'
that
but, bullish
don't
'then
an
you
can
I
as
am
say
in
be held to,"
the long-
us
on
preSsing
my
have stated on
convictions.
many
As
die
__
-«
country
1.1^
_
_
l
is
.
:
fundamentally forces, butter for
1^*1
J
il
.
ing
As
a
matter 0f fact, many of
H™
a
for 1958
and
becausepin
there
was
considerable
Oils weren't in much
difference of opinion whether
eral
it would
kind words
top out around 460,
not too much
rent
was
higher than
or
although
were
a
gen¬
few
directed
at
cur¬
whether there
area.
those
And
conceding that a
brief period .of rallying ten-
year's
yeai b
♦
hieh
nign
around 38.
of
oi
abovn
anove
do
not
necessarily at any
r
(or
one
must
say
that I
time coincide with those of the
heartiiy disagree with these
ChronicleThey
presented are
am
no
of caiamity. i
«s those of the author only.]
"Pollyanna,"
who
protests
that
there is nothing to.be concerned
about, but it is my view, that
I wo With Milius
there are sound reasons why we
especial to the financial chronicle)
people, and
•
1
This COUntry is now engaged in
running
the biggest" business
World 'has-ever
not merely
the-'
branching
throughout our
seen,
48 states, territories, and pos^ssions, but to all corners of the
own
by economists in any -previous
generation. At times, :I doubt they
are fully appreciated by ecohomists in our own generation, r-
80
DU
to
lO
Moreover, foreign
securitip<?
securities havp
nave hppn
been anirfbincr
anytmng
CLAYTON, Mo.
ni
H
J°inea
ms
-
Anthnnv
t
Thomas J.
PnH
SteffTwiUiam
B
in^
,7,™
the
and Co.,
101
hairo
?ani?ver lxe nfxxt severa,1,yeal's'
look forward with reasonable
con-
South Meramec.
*An address by Mr. McCormick before
the
Syracuse
Bond
cu.b,
Jan.
20,
1958.
•
;
»
e
s
mn,-0
"2°re "
ordtoarv
than
And,
and" at
n » at
effort
ordma y
more
I
reference
fort»
times'
* P1
ordinary courage.
wish
to
to
those
»
make special
complicated
and weighty decisions as to future
fiscal policy which comprise only
a
part of the massive burden that
be borne of this "Nation.
must
Taxes
Our
and
budget
1959 fiscal year
gering
doesn't
of
$74
seem
Spending
"plowshares into
proposed
missiles"
pect
Mi-
;
.
TvSl.
'bhiWv
propheJts
»
-
)u"y a"d *°.make the momentous
(
Royal Dutch, mostly because
its current
financing had deenough basic strength to pressed the stock irom last
levels,
reach the 480-490
even
demand
article
an
to continue,;
our
,,
.
but
is
*11
,
,
before
in the protracted period of inter-
several years is extremely promis-
western companies/Southern
Jjcipated.B
h/dr°
other
our
posed
now
the past six months or more, I national tension that lies before
believe that we will not have a us a program of supplying misdePresslon: that the economy of siles and guns for our military
s^on were proceedirig at an,the adjustments we have experiabove-average clip,, such as enced and will experience in the
the West Coast and South- n?ar future, are the consequence
,
have
the problem of adjusting to
I ent national task
occasions in
years. : Corn
Products; in-fact; has held in;
an
unusually. narrow' range
rhxmixnl
poor water conditions that Penty.
, ■
ever since it was
split in 1955.
2?^
2 ? PW, on, the verge uamDered
low-cost joutnut
*
Pcvnhnin^ai
It posted a low.of 26 in 1955,. ot being taken over by Reac^^ Need Psychological Boost
sold as low as 28 last year and tion Motors \vhich is 50/7 Was somewhat agGard s nce, a I firmly believe .that what we
only this week finally brokej
u
through the 1S57 peak of less Grand Central Rocket Co.,
'7' r
Vneo There is a need for national optithan 35, so the new shares which has also emerged as an
ut
mism
this
have yet to widen their range - important missile company, is better
operations
travelling about in business and
ciniorT
•+'
recent
rate
increases will in other circles, particularly in the
slated
to
have
to a full 10 points/
a
major inter- ,
,
;
; <
results and the stock past six months, I have noted an
est in it
acqtnred by Tennesj
-mate for a moderate extraordi,lary
number of long>
Sentiment: Still Bearish
see Gas Transmission. All of ?
canaiaate ior a moderate dour faces on
business scene:
Over-all sentiment was still; which makes it
improvement
in
its
dividend,
the
harried
appearances
of
a
hard for even
The present payment offered growing number of pessimists who
bearish by an overwhelming, seasoned
analysts to figure
a
yield of around 434%
at have come to the conclusion that
majority. It was conceded out where the best profit pos- d yu7a
,
uu?a
dl our economy is skidding and that
recent price levels.
that some reason could spark c;Kiiu,r
a
severe reaction or
a depression
sibility exists.
a near-term show of
❖
*
f The vieivs expressed in this is in prospect
strength
o r
with all of
common
citizens,
term future of this great country, extended period of expensive,
U is ?ifficult t0 refFain fromA ex: constant preparedness Our pres-
rruav\/>/\
group
James
The big
confronts
v b question that vviix*
vwvu
this time is not whether we
will have a severe depression, but
whether we can live in a state of
total cold war, or rather wage
total peace, and still have prosus at
say
.
also in league with Stauffer
accord
of
advice
sage
rtori
in
prophecy
at
is
late selling which was given to a new
year, were jolted by a sinking spell when attempts largely stalemated
the gennew
British
reeling bearish and caureport linking to get another Vanguard go- e
Jim(lllnflAP£,fj T\/r^^lion the keyword.
cancer
and cigarets and the
ing were unsuccessful. Martin
-■<
profit-takers moved in swiftly is prime contractor for this Utilities Still Forging Ahead
to protect their gains, giving one. There was little
speculaUtilities were generally in
the stock some rough mo¬ tion over the size and
scope of miid demand and it was not
rn e n t s.
futiir^ nnpratinn,
ir.
ciemana ana 11 was no,
Incidentally, this iuiure
operaiions in me ex
unusual lor the utility avergroup, except for Reynolds panded missile program.
age |0 forge ahead quietly
Tobacco, didn't reach historic
Missile
while the general market was
luissiie Lineun Confiisinir
Ajineup coniusing
highs during the big bull
^iHncr
^
^
oiml^cclv
Then, too, the missile line- 22
®
a round aimiessiy.
swing that began in 1949.
*
«i«
*
p was
getting confusing,
e n e r a 1 Tire's
Otherwise the .favored
subsidiary,
items more often than not Aerojet General, which is a
induTtrlaf exndnwere found in the fixed in¬ big factor in such work, was
d Fnaystr.lai expan
last
come
the
U1C
in
111
see
5CC
of
are un-
the
to
tu
me
111C
future what is not evident to all
,
Such
year.
allows
cillUWo
that
llldt
.
expressions
when
for
-AVPDOrl
Vf
m8ly profitable
r£"
confident
CO.
Martin
as
renorted that thp
were
<;ethaekc
L
such
few
.
..;
I do not mean to intimate that
I expect the present recession to
end and the boom to start again
next week or in the next few
months. But, I feel certain that by;
^ lme next year you will have
specially constructed crystal ball
amPle cause tor rejoicing,
,
around for the aircraft-missile
Ployment.^
for
billion.
to
the
represents
be
reduction,
coming
a
And
any
real
stag¬
there
pros¬
but rather
Continued
on
page
an
52
Volume
187
Number 15712 V.
.
The Commercial and Financial Chronicle
(521)
OVERSEAS
NATIONAL
AND
Breakdowns
Portfolios
GRINDLAYS
—
Gov't Bond
A Sources of Income
BANK LIMITED
Altnalgamating National Bank 0/ India
and Grindlays Bank Ltd.
Ltd,
Head Office:
26 BISHOPSGATE,
LONDON, E.C.2
13 N. Y.
London Branches:
S.W.I
STREET, S.W.1
City
Bank Stocks
Bulletin
on
Request
13 ST. JAMES'S SQUARE,
54 PARLIAMENT
Bankers to the Government in: ADEN. KENYA,
Laird, Bissell & Meeds
Members New Tork Stock Exehasfl*
UGANDA, ZANZIBAR A SOMALILAND PROTECTORATi
Members American
Branches in:
120 BROADWAY, NEW
INDIA. PAKISTAN, CEYLON, BURMA, KENYA,
TANGANYIKA, ZANZIBAR. UGANDA,
ADEN, SOMALILAND PROTECTORATE,
NORTHERN AND SOUTHERN RHODESIA.
Stock
Exchange
YORK 5, N. 1
Telephone: BArelay 7-3600
Tel'ty e
NY 1-LM8 49
BeO
Dept.)
Stocks
(L. A. Gtbba, Manager Trading
Specialists in Bank
17
The Commercial and Financial
13
Marshall
The
Milwaukee,
by
Bank,
Ilsley
&
its
17 by elect-
a
13.
ing
increased
Wis.,
Board membership to
;*//:,./
*
.
Thursday, January 30, 1958
.
Trust
The Chase Manhattan Bank has
Vice-President
charge of the Bank's New York ecutive Committee.
■'/
William
*
Lyon
has
been
of
Dry
Dock
President
elected
y/ /■/ '/'•:
*
*
A.
and
Superintendent of Banks
was
ft
established
was
location
bank.
New York before
State of
of the
the
of
.
\
ft
Jr.,
retired Vice-President of the now
Criqkard Chairman of the Board,
26 at
Jan.
the age of 80.
of
Of
Com¬
Trust
Westbury, N. Y., was given
to increase its capital
stock from $350,000, consisting of
14,000 shares of the par value of
$25 each, to $487,500, consisting
of 19,500 shares of the same par
valuer
//■•' /■'.••/
dent
\
ft :
ft
:•
...
"
■
N. Y.,
$375,000, consisting of 3,750 shares
of the same par value.
/'■/■ //
f.s
ft
"V";'"'
J.
Garypie
elected
was
President of the Sag Harbor Sav¬
ings Bank, Sag Harbor, L. I.
1
ft
ft
N.-^Y.,
given approval to increase its
was
on
of 51.
';
Ohio,
Columbus,
$3,000,000
value
increased
shares, par
'
Robert
ft
'
ft
■
Vice-
Drovers
National
111.,
elected
was
Trust
Hi
President
to
elected
and
111.,
Chicago,
Bank,
Chicago,
Bank,
director of the
a
&
Savings
Bank.
Vice-
Senior
Hart,
of
both
the
Board
banks,
of
was
Drovers
National.
ft
ft
"
ft
,
President, announced on Jan. 24.
*
Marine Trust Co. of West¬
The
New
ern
ft
•
Buffalo,
York,
elected Harold
N.
Mr.
Y.,
to the Board.
Joseph M. Dodge, Chairman
dent
F.
of
former Presi¬
Amos,
the
Watertown
Savings
Bank, Watertown, N. Y„ died Jan.
His
22.
90.
was
age
Mr.
Amos
President of the bank for
was
until
years
years
his
He
ago.
retirement
was
19
five
elected
then
Chairman of the Board. In 1956 he
made
was
VicepPresidents
Bank
of
and
former President of
Plainfield
Savings
Bank,
the
Plain-
Assistant Cashiers to As¬
Dean, Jerome R. Heyer, Eugene J.
Hogue, D. James Watson, Jr.
Assistant
ft
Edgar
in
Lewis
S.
Assistant
the
Banking
Mellon
National
Savings
Savings
Mich.,
Holly,
and
State Bank of New Lothrop, New
Lothrop,
consolidated
Mich.,
charter
of
title
and
un¬
tinued banks and the branch for¬
merly operated by First State and
been
Department
and
of
Trust
erated
as
branches by
the continu¬
ing bank.
&
*
.y
*
24.
The
common
capital stock of the
Michigan National Bank, Lansing,
ier in the Banking Department.
Mich.,
was
000 to
$10,000,000 by
Mr. Lewis
Crocker
was
First
associated with the
National
Bank
of
dend
of
ft
t
shares
shares,
ft
increased from $7,500,-
effective Jan.
par
National
Grove
City,
Pa.,
with
Bank
(Number
ft
.
common
; ^ Lobi^gier," Assistant
Vice-President,: started work with
t
Worth
roF
National
^
on April
23. 1953, jn the Personal Loan De-
and
P.
partment, where he is currently
was
u
yanshLel XaSJ°^ working. On Jan. 10, 1956, he
£ou;,./ea°s ago after ISvears apP°inted Assistant Cashier.
sta{f
Cash-;
*
,
n#
National Citv Bank
"!
*
• j
Assistant Cash-
J- Allen Wren
' ier> began
v
N
his banking career with
of the
ier, respectively,
h
.r
for commercial loans was
>
1932.
William.
Since that, tin^ be has
_
Cisper
R. Murray, who came to the Bank.:*
?erve0dJ5 the Transit, Bookkeepelevated to seven years ago from the Buffalo in&> Statement, Auditing, Accrual
As-,^industrial Bank of Buffalo, N. Y. and General Bookkeeping Depart-
was
Assistant Vice-President from
sistant
Trust
Commerce
the
City, Mo.
came
ago as
has
Cashier
Assistant
been
since 1947.
-it'""opened'-Its^mew banking,
since
'
'
Mr. Cisper is in
charge
house in
tellers.
The
Latest
of
Board
City,
Mo.,
of
Directors
Trust
Commeree
sas
ments> handled the duties of Exchange Teller, Paying and Receivin£ Teller, and Loan and Discount
'Teller. At present he is Manager
of the Collection Department. •
Over 12 000 square feet of work-
Mr. ing space'has been added to The
to the bank 43 yearsniaieali-Miami Springs Bank Iliaoffice boy to W. T. Kemper;^ leah, Fla.":: in the fourth expansion
Cisper
and
of
Cashier
Co., Kansas
the
:
elevated,
increasing
ant Vice-President to
Assistant
Cashier
Vice-President.
ant Cashiers
Two
Assist¬
new
McMillin
R.
Bixby, Simon C.
Kelly and Donald J. Hall.
.
Mr.
Luby
joined
bank
the
Vice-President,, in
Assistant
Trust he
Commerce
The;
as
serves
directorsA of
of John S. Coleman
1956.
:
The
-
39,374,697
-
Brighton
State
Bank,
Colorado, has changed
its title to First Bank of Brighton,
Brighton, Colo, yy c
Birmingham
Chairman
as
54.839,515
Brighton,
1:
!?"•
" -.yv; ,v/■-.
.
Harrv
;
Murahr President
C
of
tbe Burlington Railroad and John
r>
Mitrbfll 2nd
were
elected
C. Mitchell
2nd I.were
elected Hidi¬
of the Board and Frank A. Plum-
as
snGlvT."seVurTty' 50,592,M9 53,777,751
Dndl^ed
Trust National Bank, Birmingham, Ala.,' announced the election'
..
25*7,076,317 2oar73i,869
"'holdings
holders also elected three new di¬
rectors: Walter E.
5
,
281,560,338 230;632,595
Loans and discounts iiq,482,26285,851*336
until bank
reach $75,000,000.
Currently, assets of the bank, founded
in 1925, are in excess of $29,000,ooo. vy.t
:v;-;y
."
:
The stock¬
Anthony J. Lombardo.
ARIZONA,.
Dec. 31/56
C':, ''y.
- $
Ca«h ,and due from
resources
and
Vt ,"f:
resources—'—.
Deposits
designed :to'
room
OF
ARIZ.
Dec. 31, 57
v
y
u
provide sufficient
elected from the
were
William
Assistant
to
is
space
"
.
•
Total
Vice-Presi-Square feet?
new
y
:
space
dent, and Mr. James H. Linn from; y The
•-
BANK
PHOENIX,
the', total
3
I
NATIONAL
FIRST
additional space for operating de-
Kan-; partments,
Company.
recently
1950.
7-';
improvement is the ad¬
a second floor to provide
of the oldest state-chartered
Mr. Joseph M. Luby from Assist-'bank in Greater Miami! to
27,000
Manager of the Bond Departments mer
as President,
rectors" of
the -Denver National
supervising the underwriting and y ,v
I
Bank, Denver, Colo.
distribution of Municipal Securixhe
First
National ; Bank,
.•;
.•
*
ties throughout the United States*,
shreveport, La. elected Walter B.
and the purchase and sale of govJacobs, Jr. Executive Vice-Presi-: Gorman J. Schoonover'was ap••
ernment bonds.
joined the bank in
training program and
was assigned to the Credit Depart¬
ment the following year. In 1952
he
Since
of
17
^
ft
21
by
v
-
pointed
Vice-President of The
" i Idaho First National Bank, Boise,
.
members-^Idaho by^ the Directors on...Jab, 21.
staff
The appointment of Norman J.
Schoonover" as Vice-President of
Bank of
announced Jan.
was
Bank culminated nine years
of association with the institution,
during which time he has served
Fre^ F. Florence, Chairman, the
?
as Executive7 Committee, and Jdmes
Depart-, w. Aston, President of " thja bank.
Credit
the
of
Dallas, Tex.j-
April 1953 he has served
Manager
~
-
,y
ft
of the Republic National
Cashier.
Assistant
*
y:
Promotion
a
elected
was
'
Hpnt
5Cy'
Linn
1948 under
,
ment.
ad capacities, beginning as a
at the ^Bank's Parma
.v I
David C. Grimes was promoted
Mr. McMillin has been employed from Assistant Vice-President to
by Commerce Trust since 1946. He Vice-President; J. • Frank : Fields,
has worked
in
various
depart- James : R.
Mason,
Vincent
E.
Office. He became Manager of the
Wendell Office of The Idaho First
James M.
dent,
was
elected
a
a
Trust
merce
associated
Loan
in
1947
with
and
the
Walter A.
is
now
Installment
Department.
f
?
Reich
elected
was
director and John R. Mier
a
a
Vice-
Assistant
was
Auditor
Republic in 1951
Oil
Co., Kansas City, Mo.
$
f-
%
./
The Commercial National Bank,
Kansas City, Mo., elected
Breidenthal
E.
ceed
named
W.
President
Stilwell,
suc¬
who
was
an
Assistant
Assistant
Citizens Fidelity Bank & Trust
Louisville,
Ky.,
elected
Earl
Houston
Co.,i Houston,
L.
in
1955.
was
and
has
Tex,
y
; :
*
~
to
Mr.
Weyrich who has
*
Seiler
elected
was
; to
*
capital
The First National Bank
Company
in
creased from
$750,000
*
1
stock
&
of the
Trust
Macon, Ga., was in-
branch
and
San Francisco, Calif.,
as
Vice-President
^
Cunningham, who assumed
the post upon the death of B.v F.
Vandenburg, Jr., last summer; re-
*
:
tires
on
March 1.
:
/
.
;
In making the announcement in
San Francisco President S.
Clark
creased its common capital stock Beise said that Mr. Sage will come
from
.
*'
common
-
and Manager of the bank's Sacraelected mento Main Office, v
*,y \
been elected Chairman.
P.
senior
Trust
President
Bybee
;
-
named successor to Gordon K.
Cunningham
.*
Bank
Sage,
and V of America,
Cashier in"; 1953
By a stock dividend, The Citizens
Robinson, Vice-President,
Executive
Vice-President,- an d-National Bank of Waco, Tex., inP.
been
administration officer of the Bank
Booker
Lewis
has
visor for 11 of the Bank's branches
clerkTh the
Vice-President
succeed Oscar R.
Co.,
as a
❖.-/*'
The
Charles
Chairman.
He
Head Office's credit
department and is the loan super¬
tot: Assistant
Department. /He .was/elected
Willard
to
1954.
in
active in the
promoted from
Cashier, and George E." Wilkin,
at various points in Idaho.
Jr., was promoted to Trust Officer/
Mr. Grimes joined the 'staff/of
& Trust
the Board.
Director of the
President
L. E. Elder
President of the Mercantile Bank
■
City Bank, Detroit, Mich.
Head Office as an Assistant Vice-
joined the Com- dents. ;
,
Vice-Presi¬
1952 and trans-
ferred to the institution's Boise
•
Mr. Lombardo
The
French,
National Bank in
as-
Thompson, and James C. Wilson,
sociated with the Real Estate Loan Jr., were promoted from Assistant
Department.
Cashiers' to Assistant Vice-Presi-
ft
of
capital stock of $250,000 was ab¬
by First Seneca Bank &
sorbed
16.
value $10.)
*
First
stock divi¬
a
outstanding—1,000,000
San Francisco.
The
MacCarthy
C.
Ad-
of the
members
and
visory Board were re-elected,
The Hialeah-Miami
t
St. Louis, St. Louis, Mo.
J.
to Mellon Bank
coming to Mellon Bank,
i
'
■
Vice-President and Assistant
Savings Bank, Holly, will be op¬
in March 1956, as Assistant Cash¬
Prior to
rectors
Meyersieek have been elected. wjth the Manufacturers Trust
M.
Citizens
Savings Bank. The
ap¬
has
Bank
came
&
Vice-President
announced Jan.
Mr. Lewis
❖
former main offices of the discon¬
Pittsburgh, Pa., Frank
Denton, Vice-Chairman of the
bank,
ft
Bank,
Company,
R.
Vice-Presi¬
Commercial
Commercial &
pointed
«
.
meeting of The
.
field, N. J., died Jan. 21 at the age
t
Kansas
1
1
:/y/
annual
the
holders, held prior to the bank's
Board of Directors meeting, all di¬
Kansas^
ments in the bank and is now
of 75.
ft
ap¬
dent.
der
ft
At
by Estil Vance,
yy
Fort Worth National Bank's stock¬
Mr.
ofyhe bar^.
^
F
elected.
was
Company,
0
Bank, Flint, Mich., First State and
Raymond Morrow Smith, Chair¬
man
Francis A.
S. Rudy, Jack L.
sistant Vice-Presidents: Robert E.
Citizens
*
si'
Vice-Presi¬
to
Talbot.
an
Comptroller of the bank.
as c°mptr°ller
0
•
The
of
Trust
&
Mr.
Harry
Meredith to the Board.
S'S
6
City, Mo.
:
Fisher,
Montpelier, Vt„ elected L. Douglas
ft
Jan. 21:
dents: Harold P. Carr,
pointed
National
on
of Di¬
Board
the
at
meeting
Also, Mr. Dexter Ferry was
fj
t.t
First
made
Banking Department—Assistant
Honorary Chairman.
$
The
ments
rectors
.
Ilialeah-
The
'.
.
Hecht, Thomas of The Detroit Bank and Trust
E.
Moffitt.
Howard
W.
Pearce, Company,
Detroit,
Mich.,
an¬
Ralph F. Peo, George F. Phillips nounced the following appoint¬
Jacob
Bank
At
y ft
ft
M.
and Franz T. Stone
director
a
ranks:
capital stock from $9,481,990, con¬
Peter
Van
Cleave
has
been
sisting of 1,896,398 shares of the
par value of $5 each, to $9,671,630,1 elected to a one-year term as a
consisting of 1,934,326 shares of Director of the Bank of Chicago,
the same par value.
J
Chicago, 111., George H. McClure,
ft
*
Lowell R. Johnson
dition of
President of Drovers Trust & Sav¬
ings
of
Springs Bank, Hialeah, Fla.
as
...
Senior
Lough,
President.
Bank's annual meeting, y
the
Omaha,
nouncement made
Nebr., elected Congdon E. Paulson I / Stewart Price was elected VicePresident in addition to his post
of
$10.)
ft
Lobingier from Assistant Cashier
elected to senior pisitions at
were
of
Directors, at a meeting
14, promoted Jack G.
of
hekT Jan.
to
.
$4,000,000 ef¬
shares
400,000
—
common
$250,000
-
officers
Three
Miami
•
ft
Bank
^
outstanding
*
•
ft
*
Joseph
was
to
capital of $125,000
a
National
First
ft
ft
stock dividend, the com¬
a
Board
Ja^ le^Numblr'of shares Ippohiled'j'
Office _of
by the
surplus of $75,000.
a
•
capital stock of The City Na¬
Bank & Trust Company of
mon
Drovers
Traders
Buffalo,
Company,
died
tional
'•? Richard
ft
and
Manufacturers
Trust
By
Com¬
Trust
Ohio,
fective Jan. 17. (Number of
$250,000, consisting of 2,500 shares
of the par value of $100 each, to
Peter
ft
■'
■
.
from
given approval
was
increase its capital stock from
to
.,
.
Vice-Presi¬
Central
Cincinnati,
Jan. 22 at the age
The Lindenhurst Bank, Linden-
hurst,
and
Leonard
r'-■:r\
Chappell,
the
of
pany,
';
■
O.
ft
ft
f/.
John
approval
ft
The bank has
President and Cashier.
pany,
"
charter
a
Vice-
Executive
Morgan
Z-
Westbury
.
L.
ver
and Den¬
Hinkle President,
Paul
of New York, died
»
Bank
Bank
National
Harriman
Trust Co.
from
stock
v
SRsaas -say
Solberg is Cashier.
Bank,
National
Charleston, W. Va., elected Mason
defunct
Fla., increased Mts
capital
The Fort Worth National Bank's
r
at'Winter
Bank
Assistant Cashier.
a
and
sued
The Board of Directors of The
Charleston
Clark
Benedict
National
Lakes, Hoyt Lakes, Minn., was is-
in the
absorbed
,
ft'
ft
going to the bank.
Thomas
Pittsburgh, Pa.
ft
ft
.
branch
former
*
:
The First National Bank of Hoyt
Tilghman Bank, Tilghman, Md. A
Chairman
Committee
sell L. Davison who has retired.
and William S.
formerly
Chairman. Mr. Lyon was
Executive
\y-
County Trust Company of Mary¬
land,
Cambridge, Md., absorbed
N. Y., succeeding
Thurman Lee who becomes Board
Bank,
Savings
III, was elected
the trust divi¬
First National
in
Bank & Trust Co.,
;Vr
*
Park,
sion of the Peoples
will
Ex-
,
office June 1.
Rus
succeed
First
Vice-President
advertising department.
announced
has
who
Jr.,
Baker,
*
William Dignan
relations and
the staff of its public
Na-
Bank, Atlanta, Ga. elected
tional
ft
ft
f,-.
John R. Meekin to
Ganon and
effective
Oil City, Pa.,
Co.,
to
21.
Dec.
" V•"■■«/? security
Mechanics
and
elected William C. Christopherson
announced the election of Edward
President Eisenhower for national
affairs, Chairman." Mr.
Anderson will succeed James A.
,
(
Southern
R- William. Phelan a Vice-Presi- his retirement. '. Mr. Baker
Minneapolis, Minn., dent. He will become officer in continue as Chairman of the
Savings Bank,
a
./
Citizens &
The
;
*
*
Farmers
The
■'
.
stock dividend effective Jan.
The Texas National Bank, Hous(Number of shares outstand- ton, Tex., elected Dillon Ander-.
—
100,000 shares, par value son, former special assistant to
ing Burleigh Jacobs, Jr., Norman $10.)
R. Klug, and Herbert C.'KurtK;>"^:
directors.
J.
Chronicle
(522)
Jan.
sale
14.
standing
to
$1,125,000
and
to $l>500,000
by
new stock
effective
of
.
(Number^ shares out—
$875,000 to $1,000,000 value. $10.)
150,000
-
-
shares,
par
to Sacramento in mid-February.
]\fr>
Sage,
and Manager
Angeies
.
now Vice-President
of the downtown Los
Broadway
and
Seventh
.
Continued on page 47
Volume 187
Number 5712
.
The Commercial and, Financial Chronicle
.
.
(523)
Let
Shorl-Teim and Loncv-Tirm
trace
me
my
reasons
for this
Canadian
conviction.
with
Temporary
people, has shown
Imbalance
The Second World
/
the
arid* the
war
By G. ARNOLD HART*
banker
of Montreal
*
•
Montreal
reviews
*
depicts strong uplift forces at work.
slackening trends for at least the
serves
being
the
*
*
Canadian
current
Mr.
conditions
pansion shifted, of course,
and
Hart anticipates
months, and ob¬
next few
cycle of economic fluctuations in Canada
I
-have
/been
very
forcibly
by the sharp changes that
to
be the accepted order of
so
short
things
,
.
three,
there
was
sion
to
tries
m
the
from
!
-
Arnold
Hart
scene
on
within North
America the subject of
predominant
has
concern
suddenly
/
But in them
from
traction.
shifted
inflation
the
premium also, of course, operated
to the
disadvantage of our exports
,
t
-
mixture
the
of
the
'
,
which
on
an
have embarked. Be¬
a bank and
have
we
I work in
opportunity to observe influ¬
affecting all kinds of busi-
ences
utiV.LUUft
in
nesses
ail
...
.......
all
parts of Canada
if
is the business scene that
chiefly
interests me and it is about it
that
I propose mainlv to sneak
proceeded
our
steadily.
expansion has been
iu
uui
■
addition
At
yeaT
"u
whlch
called
Let
Dut
it
thi_
materials^LiLrd
should not rise to a percentage of
the labor force that would be re¬
known
gard'ed
for
some
years.
by
serious
as
times discovery and development these
have
ical
in
had
await
technical
or
the
to
some
affected.
who bas
mechan-
break-through,
Suffice
it
to
and
elaboration.
that we are
no
say
clearly in the midst of
m-
amnlpo
the
Thpv
north. Yet at
whatever-^which
enterprises
and
most
Canada have felt in
/
business
most
of
areas
some
degree,
x
d0;not
need to
mention
Df
sales of such durables in the
year
.
Moreover, there is a broad area
of what might ' be called social
capital
tures
where"
that
^
expendi¬
deferred
in
the
to
a
reflection
their
cause
so
purchase,
many
had
post*
partly bebought
been
in the two preceding years,
partly
because
credit,
which plays
a
now
large role in-their purchase, was
less readily available. But I feel
made, and likely will be made.
that this element of postponement
past two
be
needed
were
have been
general disposition
to
r
a
pone
-
or
three years
can
^
r^g
includes
and
housing,
other
public
schools,
works,
will not persist indefinitely. Sooner
or
later, and possibly before
It
lor
the person
cannot find
,
and
no
/tabor /.orce-
But■ th6
extent
of
oth^ timVs puV payments have been extended to;
ft onnoXtoties will open up, as always, with
.
the coming of spring*" Some, mdustr.es will
be' conscious
to
r
of
the
in
continue
the
problems
months
of
oper-
Agato^.w.thout
economy by the provision of nipre
efficiency
d^'
b"llv?„and
required by a
Jlor
population that
fchds to b6 enlarged rapidly by a
ln
.
^a
the birth rate.
that
me
our
found,
and
opened,
quickly
same
0f
iarjy
is
treasure chests cannot be
not
do.
case
con-
sidering this historical' pattern
that
often
at
increased
beeh
all
hit
industries
Bank
at
can
give
information
certain
SCarce
Moreover, in the
materials, particumetals that
have
for
some
years,
sales
you
on
time.
some
complete
plant sites,
representation,
distribution facilities
more
many
adequate supplies are being welcorned as opening, of re-opening,
or
picture in Canada.
The Toronto-Dominion
put and that some excess capacity
.
desirable to meet peak demands
•tbe
; The point that
seems
to
important to bear in mind in
'is
something less than full-scale out-
.
...
and
other things which
help to make Canadian
easily as the need arises, and our
prospects of wider long-term
broader development cannot keep markets. In the case of other
;
exactly.
abreast of requirements, materials, however, notably some
1
Such capital expenditures which, other mbtals and petfOleum, the:
'seem
to prescribe "more of the with - exports,
are
the
prime problems of Canada's position as a
;
same," at least through the wirt- movers in our prosperity, are immarginal supplief to the' United
ter months.
/ . mense^ and; often relatively long- states have reared their heads
Nor do I intend to add
luvnripc
historical
;
llse
or
cpmi
expansion and our whole pace of
business activity havebeen "-re- ployed, and moie jod opportum
of somewhat less active
business—
be
it
labelled
a
levelling-off,
nrp
purchased
the
r*se
down-tilt, let-up, readjustment
^fsses
unemployment should • be miti-century and more recently gated by the concerted
efforts
the way the aeroplane and the being
made
to
provi^b
more
geodetic survey have/opened up winter jobs, while governmentup
period
a
oflivineween
unemployment is 100% of the
one,
the railways opened
the west in the early years of
way
has
sufficiently > analyzed
-
diagnosed to need
hiffh
J?on oT these falrlvlonetastiL
"big-ticket" fte^ of !X®ch aut"?
business
been
record
are
goods.
Th_
,
,
roads
have
beginsuch
as
were
past.5f/^hioi e, phases of rapid^^g^d
Slow-
on
business
wav
consists inDart of the
.
We know the national
Low-Down
durable
consumer
me
down."
The
quite into)
there is,
f
longer-term
garages,
develojiment have.-ala^ng
a ioweT level in relation
to outdo the headline
style of a ways brought m their .train am
|
-t
th
haye been
prominent financial weekly of this accentuated need for other capital
.wustomed
to
in
years
past
city
by
entitling my address, outlays
broaden the base of the fgaTn without minimfzfng the
"Here's
v
new
n
,
.
that other countries
I might have tried
so,
neld
elrlyTosp^Vfor^
.
external needs for basic materials
A
conditions in the recent
Were I to do
expun
.
ac-
^
oess
rptail
this
think, a somewhat
swing in the demand for what
economy m the form of a wide poor
ra„ge of soclal security benefits past
to be seen, also,
not, however, intend to re- tarded ^ a» abatement of demand
th«'
iu**
in the United Statesor,, in our
the
changes that
have occurred in
market generally.
'
Canadian'busi- export
„T_
-
In
acteristic of some sectors of the
why Canada's growth Canadian economy at this time of
are
I do
in
ripfaii
;iew in
detail
nf
which, or the npi
to its resilience, grading of which into later
models,
there are elements of resistance can fori a time be postponed. I
a.ceitairf, to recession now built into our
suspect that the
comparatively
abate-
an
seems
vipw
'
tuuictgcmcin
;
~
implications of these and
developments for the year
cause
from
aDDli
and
sertor<?
minerals in the 1950's. At other standards but it will be serioUs for
the
other
basic
traditional
-t»at I have .described
ning
to run
short
of,
forestry products in the 1920's and
con-
/I find
difficulty, and I imagine
I am not
alone, in trying to diecern
of
expansion
is in
their
pressure that would
have
been
felt.
The
industries, mainly to serve export But now, with resource
develop£markets.. That e * p a n s i o n ap- ment diminishing and
inflationary
preached completion in, 1957 just forces
subsiding, the
exchange
hmwms*
reauire
many things that will go into new
houses and into (or not
the
otherwise
furnishines
wenk
Anart
^ch
in
dna^*
few
trade
njck_ljn
wi?hTt iaree"
f0®
We may therefore expect to see Housing will undoubtedly emerge this year is out, there may be a
celerated
by
sharply. - enlarged mThe next few rhonths reports of
renewed surge of demand for durworld demand for our resources/ rather1 more unemployment, both as a souice of strength in the year
as during wars, or by mounting absolutely and relatively, than we
Continued on page 24
ahead. With special assists from
quite
to
.not
times
beyond the horizon; and
of
some
inflationary
was! in
+he
imports,
the
But
so
has
----
the economic
to
of
growth.:
our.abundance in,return for
the reasons
e
skies
-
price
alleviate
well rounded and
as often to be lost sight of, ficulties- which are still with us
frequently aired as to be in and to which are being added the
danger of becoming platitudes,
/. seasonal slackness that is char-
thrust
moons
into
d
served
-
direction .of
its
domestic
the
bl'.in„
externaljfexp^,-thein-subsiding Of
or
two
a
in
[.Vvious
the
saw
shifts
the
to me, are-forced di aught.
,
...
eternal verities of Canada's ; These conditions have-created
economic growth
that are so ob- difficulties in the past, year—dif-
coun¬
a n-m
a
balanced
the
the,
interna¬
as
of these
; spurt in. 1955 and 1956
r
-
living. These, it
a
tional rela¬
tions
whole
a
our
added
western
to
S
/he
even wider variety of things from the loi^ penod during Which
that contribute to
standard of the
.economy
opeiated
under
dimen¬
was
emphasis was
well
,
our own purposes, or with <mtode
assistance in response to
trade
a
on
Canada;
new
result
.
as
,;needs;.;lpn.<*-v-.the:-: '.willingness hto^capitaL.expansionl
the
political front
in
1955
Also
wiu
ments
of
.
change
to
over-all
abundance; the diligence and skill
develop them
To mention
only
re-
catching up with the formation of
other, capital
facilities.
In, the
decade
well
height, the
flow of foreign
capital, which financed mudli
much of it.
nut nut
if, put
our" curcurrency at a premium. At the same
time, the premium, in reducing
to
"
ago:
towards
again,. later,
again,,
free
and
possession
time
a "
back
and
seen
our
ents
.
have Occurred in what seemed
Korea,
armament
a
at
was
after.
V:
sponsibility for keeping tlie economy on an even keel cannot
be left solely to monetary authorities but miisf rest as Well
upon government, business and individuals.' Claims rising' pro¬
ductivity is the key to rising income and profits with rising
prices—"the key to growth without inflation."
struck
example of this is to be
the
con-
was
rapidly regaining
momentum in 1957, and 1958 could
quite
possibly
see
more
new
dwellings started than any year in
our history.
remarkable
role! played by
exchange rate. In' 1956
to
thing of the past, but progress has been made to reduce
the severity of its effects. Credits Bank of Canada for accom¬
plishing much in "taming business gyrations" and believes re¬
,
in
•foemcTvUiaCna^CfXeSvy
^ ?*■
Civilian, then subsequently, £&
velopment
is far from
.
An
institutions, residential
struction
cumstances and the advantages of
that flexibility are again apparent,
the
as
a
cial
times in
many
past that it has
the government and from finan-
ability to adjust to changing cir-
since have been an unusually long period of unusually
strong demands on the Canadian
economy.
The emphasis of ex-
years
General Manager, Bank
economy. This country,
free
institutions I and
its
19
the
business
specific forecasts that are
always made at the time calendars
are
changed. The majority of these
many
more
addition,
profitable. In
we can
supply
you
with national credit reports
and other
*
important data.
'
cuss^some o/thffthouebts^hat T"
me,
t
serve
tions
me
put
cufrent
into- perspective;
to
were,
t
to
condU
that
keep my bearings, as it
in the changing pattern of
events.
--
'*",•
/j\
'
.
people have achieved, and
i
joying,->
_
a-
rrieasuro
of
are en-,
material
(
__
well-beine that
mar
^
or
tne
is
second
: I
united
onlv
btates.
There
are
other
ACROSS CANADA
.
difficulties
that
j c.ohid' describe.- But, like those I
have
rhentioned, they are- largely
did we"achieve it? I think
you
to
L
how
will
'agree that the principal ingredi—-—
preoccupied with the problems we",
can easily become discouraged'. If,'
over-capacity howeVef, we" keeh them in the
such as we are now in.j But ob- perspective of the conditions that
\7iniicltr"H7f» r>annrit PYnppt In malph
ill
<-.irrW4-r*
viouslYwe cannot expect to match caused them, arid focus our sights
capacity to demand, and phases of on: the forces that seem likely to.
temoorary -surplus'* are bound' tcx altm- those condition^
and alter
avoid ; periods
,
of
j
recur.
*
;
;
them for the better—I believe we
believe
nature,
|
.
One of the forces
work
THE
TORONTO -DOMINION
is
the
already at
resilience
of
the
BANK
*
THE
BANK
j
If I felt that ;this: present phase-ha ve.gOod grounds for confidence
would be other than a passing one/^that the problems can be resolved.
Empire c^iTcf
To"'„.o? ja". Ts, I would toe worried. But I
it will be of a temporary
1958.
v
-
—
,
MORE TIUN 4S0 liRASCIlES
.
_
we could, as it were, turn" a
^aP to--attract or create all the^
working people and-to produce, all
,
To beginr with, it is^ a demon- ithey were needed,and- no more
strable ; fact that the. Canadian-than
were
needed,
we
would
j
•
/
-Curfent Conditions
^ ^ 0t
^
-Forces
.the material^ pipelines, seaways, manifestations of- the-set of cirfactories,-houses, roads artd so dtf" cumstajnces that surround .us. If
that were needed, precisely when we an0w ourselves to become
-
.
.
;
help-
^'"ut" "fltop
der"an^ that give rise to them.
THAT'" LOOKS
Head Office: Toronto,
New York
AHEAD
Canada
Agency: 25 Broadway
-708$
20
The Commercial and Financial Chronicle
(524)
*
/
v
4
.
.
.
Thursday, January 30, 1958
.
,
_
Canada's Business and Financial Leadeis Speak Altei Tun of the Year
Continued from
S.
M.
first page
In
BERINGER
W.
V. ASH
M.
President, Shell Oil Company of
While
a
expansion of the Canadian petroleum
somewhat slower rate than that main¬
tained in 1956. This moderate levelling-off was in line
with overall economic activity.
Even so, demand for
petroleum products increase 7% and
continued
to
outpace
the general
During
Canada, Limited
industry
superficial observer might view the shortwith some misgiving, there remain many
term economy
basically strong growth factors which will not be denied.
Canada in 1958 may well enjoy the second best business
year in its history—in itself no mean
achievement.
As to the petroleum
1957,
at
was
a
It
its influence
fact that
the
export
The
daily average crude produc¬
was about 500,000 barrels
Stuart M. Berinjjer
—an
increase over 1956 despite the
slackened demand resulting from the
loss in the California market and some reduction in
demand from the U. S. Pacific Northwest refineries. Both
that exports in 1958 will hold at about the
same level as in 1957, crude production should increase
to a daily average of 550,000 barrels, which is still far
short of Western Canada's producing potential. Current¬
Assuming
ly, this is about 900,000 b/d and is estimated to increase
to one million b/d by the end of 1958.
Canada's refin¬
eries are expected to attain a capacity of 785,000 b/d in
special
1958—about 11% over 1957.
In Canada's energy picture, new prominence is being
given to natural gas. During 1957, Westcoast Transmis¬
sion completed their line and Trans-Canada continued
BUTCHER, III
work
witnessed the beginning of a
future.
confidence in
It
our
is
no
time
dynamic and grow¬
ing economy.
Capital expenditures by Canadian
,
industrial
companies
pected
continue
to
this
extent
will
by
the
projected
to
and
electric
power
expansion
industries.
shareholders
of
International
are
we
major block to this was removed a few months ago when
the Canadian-U. S. tax treaty was amended to reduce
the withholding tax on dividends paid to non-residents
by majority owned subsidiaries. The remaining problem
holders but at
a
a
basis fair to
our
own
share¬
minimum risk to Canadian purchasers.
We decided this could best be done by
ible debentures
or
offering convert¬
securities with stock purchase war¬
rants.
Last
month
Canadian
Utilities
Limited,
electric
subsidiary, sold in Canada $6,000,000 of 5%% convertible
debentures.
These may be converted into
at specified
prices at
We hope ultimately
equity stocks of
our
common
stock
any time for a period of 10 years.
to have Canadian partners in the
this
the
time
readjustment process seems to be
Here fhSfTin'ThlSt United States,
ir-!'
try.
Taking
tions
are
change in
uct
1958
as
that
there
whole,
will
'*
7
practically unlimited and
level.
1957
little
is
currently accruing to wageand salaried people.
As
regards exports, prospects are for
approximately the same volume as
last year, although there will be a
The
shift
in
expected
vestment
their
drop
should
be
private
is
economy
our
CRUMP
R.
Canadian
Railway
Pacific
Company
was reflected in a sharp decline in rail¬
traffic.
While the carry-over from the previous
year's high level of investment in non-residential con¬
struction
and
equipment
strength
to
the
nevertheless there was a
slow-down
in
construction.
This
with
adjustment
wide
a
and
machinery
new
gave
'residential
decline, together
as
on
in
inven¬
result of the Firemen's
a
Canadian
Pacific
1
January.
Despite
these
in¬
offset
A.
F.
Campo
tial
international transactions,
easier money con¬
decline in direct U. S.
traffic
some
factors
resulted
decrease
enues
Government
our
Canadian
The
way
strike
authorities, at every level, will
undoubtedly follow more expansionary policies, par¬
ticularly in view of the cloudy employment situation.
In
re¬
growth in 1957
suffered
by in¬
creased spending on public improve¬
ments.
natural
population
our
,^
composition.
in
year
some
over
earners
further
Our
a
for
tories, resulted in lower carloadings
a
broad range of commodity
groups.
Grain
traffic,
too,
was
sharply below 1956 levels through¬
out most of the year due to the de¬
cline in exports.
Rail revenues also
Consumer
spending should be well maintained,
as a
larger share of the national in¬
come
had
is basically
businessmen
will be faced with many problems in 1958 we can look
forward to making good progress on the whole.
v
rapidly.
economy,
indica¬
be
have
we
strong and dynamic and although
marked
-
Gross National Prod¬
our
the
from
a
"
than
The adverse effect of the decline in Canada's economic
severe
more
of the big problems facing
ways
and means to keep
one
devise
long-term outlook is sound.
are
President,
in
rate
in
earnings.
in the period
lines
*
a
-
in
-
relief,
substan¬
N.
R.
Crurocp
Rail rev¬
January-October declined by
some
$13,800,000: freight traffic revenues were down $11,400,000 and revenues other than freight and passenger were
lower
Rail passenger receipts, however,
improvement of $800,000.
*•*..'
type now evident in
overshadow Canada's
by $3,200,000.
showed
an
here, coupled with a
investments, will continue to reduce the country's net
Short term developments of the
the national economy in no way
capital
long term growth prospects. While current revenues are
ditions
imports. Our current account deficit, perhaps
somewhat alleviated by a drop in imports of goods and
services,
on
may
thus exert
a
further downward
pressure
the Canadian dollar in the exchange markets.
The oil industry which has during the entire postwar
period been one of the most dynamic sectors of our
economy looks forward to a further—though more modest
—increase in the domestic demand for petroleum
prod¬
disappointing and will bring Canadian Pacific's return
on net railway investment below even last year's unsat¬
isfactory rate of 3.2%, nevertheless, to the extent that
resources permit, the company will continue to invest
in new plant facilities and to enlarge and modernize
existing equipment and services.
Si:
ucts.
However, due to rising operating costs, mainly
wages, it is unlikely that this will be translated into
industry are expected to increase as the trend towards
diversification, improvement in product quality and dis¬
tribution services
stimulated by consumer demand —
—
continues.
The
area
production.
where
some
uncertainty exists, is crude oil
Recent developments
in
the
United
have
and cooperation across the border. We recommend it for
consideration by other U. S. companies with subsidiaries
itself.
recorded in 1957.
in Canada.
development—particularly the latter—may be
Should
no
improvement
occur
decline in spending for crude
in
this
Rail
One
hundred
and
fifty-four new
acquired during the year, bringing
of diesel locomotives in service.
diesel units were
to 822 the number
In accordance with the
company's dieselization program, scheduled to be com¬
pleted in 1961, 122 additional units have been ordered
for delivery in 1958.
Scrapping of discarded steam locomotives, of which
232
were
dismantled
during the year, is proceeding
steadily as new diesel units come into service.
Four thousand eight hundred and twenty-five new
•
States
adversely affected our export markets there. It is
felt that the import restrictions which now also
apply
to crude movements from Canada
may well be contrary
to the long-term economic interests of the
United States
some
$
*
Progress in all phases of the company's activities was
higher earnings for the industry in the current year.
Capital expenditures in most phases of the petroleum
two natural gas subsidiaries. Plans
for their future financing are being considered with this
in mind. The closer community of interest obtained in
this way is bound to bring about better understanding
our
to
uncertain
more
the
very
CAMPO
of readjustment
likely to continue into the second half of 1958.
,
have long recognized
the desire of Canadian investors for direct participa¬
tion in the equity securities of their local companies. A
on
F.
the preceding—1955-56—b oom was
also more pronounced in this coun¬
We believe that favorable decisions on gas export pro¬
to distribute stock
little
growing
While
posals which further these objectives would be good for
Alberta. They would greatly stimulate the development
of additional reserves and all phases of gas processing
and transportation. This would be particularly beneficial
during this period when Alberta's oil production is tem¬
porarily curtailed until new markets can be opened up.
was
a
sources
somewhat
priority for such requirements.
However,
lines.
The Canadian economy is in a period
quirements are fully provided for. Their interest in any
export pipe line is mainly intended to assure first
the
gas
be
ordinary level of past few years.
Although Canada appears to be entering into
of the country)
which is
export of gas unless their long range re¬
of
natural
West-
President, Canadian Petrofina Limited
provements to provide for future demand.
The principal business of International is and will
continue to be its gas and electric companies in western
Canada.
Our primary interest, therefore, is to protect
the fuel requirements of customers in Alberta.
Our
Alberta utilities have always resisted and will continue
30%
will
efficient and in balance with persistent,
It is expected there will be a moderate
in capital investment spending from the extra
in many fields of
some
previous year.
Large expenditures are required to
develop and connect new natural gas sources of supply.
Substantial amounts are needed for extensions and im¬
Over
business
N.
pective leveling off of inflation ten¬
Howard Butcher, III
dencies (even though temporary) are
i»*
particularly
favorablfe ffor
public
utilities. Our Alberta subsidiaries plan to spend at least
50% more on their 1958 capital program than in any
residents of Canada.
Trans-Canada
or
A.
The decline in money costs and pros¬
to resist any
Most indications point to a good year for manufactur¬
ing industries although
ex¬
and development of Canada's natural
gas
for any drastic readjustments.
Growth
The effect
cushioned
be
are
greatly
concerned
-possibility of
imposition
of
higher tariffs by United States and
should
this
occur,
coupled
with
present low metal prices, it would
Douglas Campbell
be
a
crippling blow to the Base
Metal Industry and economy of this
country. Due primarily to an overexpansion in the
newspaper industry few Canadian companies will use
all their productive capacity, but operations are expected
to continue at sufficiently high level to avoid the need
over
time
declining
their
trend for several months.
of
be
may
Transmission
the
possibilities for this energy source (new to much
should mean a great surge of expansion
industry.
1
Regarding Canada's general economic picture, present
considered opinion is that before the end of .1958 the
nation will see a resumption of the growth that has been
so characteristic of the
economy in recent years.
lose
to
1958
decline
economic distribution reach of either
greatly reduced metal prices
year
and the forecast for
is not encouraging.
Canadian
past
producers
It is estimated that
coast
a
in
natural
within
tunity to catch up with the present excess of productive
capacity in almost all lines of in¬
dustry. During this period we should
better
enced
productivity
rising costs.
Montreal, scheduled for completion late in 1958. The
gas development will be increasingly important.
a total population of over 7 million,
with nearly 1.3 million potential customers, will be
re¬
adjustment period for business in both Canada and the
United States.
Consumer demand must have an oppor¬
the foundation for
the line from the Alberta-Saskatchewan border
on
to
President, International Utilities Corporation
to build
adversely affected Alberta nominations.
of these factors
if not taken now, may be lost for years to come.
strive
.
*
This, it seems to me, is the immediate
answer to the problem of the western producers and the
provincial governments involved.
It becomes all the
more vital when it is realized that these export outlets
past year has
number
tion in 1957
significance.
HOWARD
Canada's
a
industry.
markets
ready and waiting takes on
reasonably good although
sensitive to international
surplus continues to be
one
problem which in the past has
been
aggravated by United States
subsidization
and
giveaway pro¬
grams.
Prospects for the sale of
agricultural products
abroad next
year
appear
generally
favorable
providing normal Canadian markets
are
not interfered with by United
States. Base Metal industry experi¬
the petroleum indus¬
and 1958 is expected to
renewal surge of growth at
record levels in some phases of the
circumstances
Outlook for the year 1958 is
Canadian prosperity extremely
conditions. The prairies wheat
However, the situation in Can¬
strengthen as the year
bring
duction.
The
on
CAMPBELL
M.
Premier of Manitoba
should
ada
production,
particularly in
a
period when the statistical situation
W. M. V. Ash
worldwide
(and the Canadian oil
industry is very much a part of the
world picture these days) is not favorable to price sta¬
bility. Canada's short-term problem is the same as that
of the world oil industry—to dispose of surplus oil pro¬
for gas,
of
try.
of
are
period
a
DOUGLAS
progresses
completed.
A continuing problem of industry
is the need to contain the rising costs
these
that
and
important construction projects al¬
ready under way in both the refinery
and
petrochemical fields will be
refinery construction is planned
In
expected
be expected to push forward by
about 5% to reach 770,000 b/d. New
may
for natural gas
is
adjustment and flattening - out in
business activity will continue well
into 1958 and will, of course, have
depiand
product
while
1957,
HON.
economic growth.
industry, Canadian crude oil produc¬
tion should show an increase of 7%
over
conclusion, while 1958 holds certain problems for
industry and for Canadian business in general, the
basic soundness of our competitive economic system, as
well as the favorable long-range outlook, should create
sufficient confidence for new aggressive business plan¬
ning this year.
the
President, The British American Oil Company, Limited
situation,
freight
cars
of all types were placed in service during
Canadian Pacific's inventory of box cars,
the year and
oil exploration and
expected.
Continued
on
page
22
Volume
Number 5712
187
.
.
The Commercial and Financial Chronicle
.
First Boston-A. E. Ames
Dempsey-Tegelerto
Admit Bert Horning
LOUIS,
ST.
,
Bert H.
Mo. —On
Group Offers $50 Million
Quebec Hydro-Electric Commission 3%% Debs.
<
Feb.
6,
Horning will be admitted
The
and
First
A.
rated
E.
Boston
Ames
joint
are
&
Co,
Incorpo¬
banking
offered
Jan.
29:
the
of
managers
investment
on
Corporation
group
-
that
issue
.an
of
$50,000,000 Quebec Hydro-Electric
Commission
3%%
debentures,
series T,: due Feb. 1, 1983, at a
price of 98.75% to yield 3.83%.
The
issue is guaranteed
uncondi¬
tionally as to principal and in¬
terest by the Province of Quebec.
The
debentures
new
not
are
redeemable prior to Feb. 1, 1968.
Thereafter they are redeemable at
the
Bert H.
to
Horning
partnership
in
DempseyTegeler & Co., 1000 Locust Street,
members
of
Midwest
the
New
Stock
Horning is
York
and
Exchanges.
Mr.
of the firm's
manager
syndicate department.
Feb.
Offer Underwritten
1,
of the
1971,
redeemed
As
Commission
at
a
on
to
or
100%
for
those
after Feb. 1, 1977.
sinking fund for the deben¬
tures, the Commission has agreed
to set aside, in Canadian dollar
equivalent, an aggregate of 43%
of
Northern Natural Gas
option
redemption prices ranging from
103% for those redeemed prior to
the
principal
debentures
funds
will
debentures
amount
their
over
be
or
life.
invested
in
of
direct
Such
in
or
the
the
other
guaranteed
obligations
Province of Quebec.
The
net
mission
proceeds
from
to
the
of
the
the
sale
Com¬
of
the
will
be
applied
to
meet, in part, capital expenditures
in connection with its construction
program, including the repayment
of
approximately
$12,000,000. of
bank advances.
•
•
Between Jan. 1, 1952 and Nov.
30, 1957, the Commission made
capital expenditures of approxi¬
mately
program
$522,000,000 and has a
covering the period from
Sept. 30, 1955 through 1962, which
originally
provided
for
capital
expenditures of $495,000,000, but
which
has since
been
accelerated
to 1961 and increased to
000 to
of
$610,000,-
provide additional facilities.
Nov.
remained
to
30,
1957,
be
giving effect
$50,000,000 of series
T debentures; the indicated bal¬
ance of about $172,000,000- will be
obtained through additional bor¬
rowings.
expenditures.
$347,000,000
spent. The
After
Correction
to the issue of
In
Jan.
The
of
Commission
the
Crown
is
in
an
agency
right
the
of
Province of Quebec. It was created
by
Act
of
Province
in
Legislature
•
1944
the
of
is
and
em¬
powered to generate, acquire, sell,
"Financial
9,: in
f
e
of
Raf-
nsperger,
Hughes & Co.,
Incorporated,"
Indianapolis,
photo¬
the
graph
throughout the Province,
is
properties of the
Commission.
of
owner
the
months of
for
the,
first
R
b
o
e
11
1957 amounted to $72,-
of
J.'
t
r
Myers,
Total operating revenues of the
Commission
to
Vice-Presi¬
dent
and
gas
Chief
Actuary of the
Department
of
Health,
$17,510,000. This compared with total
operating revenues of $76,580,000
Education and
and net income
used.
034,000
and
net
income
of
to
$23,754,000 for
the full calendar year 1956. Giving
effect
to
the
sale
of
the
new
debentures,
funded
Commission
debt
amounted
of
to
Welfare
i
n a
dve
of
&
Clifton
of Robert
shown
J, Myers
Raffensperger-Hughes.
With Stewart, Eubanks
$517,-
(Special to The Financial Chronicle)
Reynolds & Co.
is
now
with
^
-
the
SACRAMENTO, Calif. —Henry
C.
MyerS
photograph
is that
SAN
With
J.
Robert
was
rtently
The
above
940,000.
mission expects to have available
from its operations and provision
for reserves approximately $125,-
election
J.
Myers
transmit and distribute electricity
and the Province
of
Chronicle"
reporting, the
Robert
of
Com¬
000,000 to apply toward the re¬
maining
$347,000,000 of capital
the
,
"
debentures
As
21
(525)
Reynolds
Co., 919 Tenth Street.
Arthur
FRANCISCO,
L.
Wetta
De
C
is
a
'
1 i f.
—
with
now
Stewart, Eubanks,
Meyerson &
Co., 216 Montgomery Street, mem¬
bers
of
the
San
Exchange.
Francisco
>
.
,
[
Stock
.
Northern Natural Gas Co. is of¬
fering to the holders of its $10
value
par
common stock
rights to sub¬
for an
additional 456,813
shares at a price of
$47.75 perscribe
share.
The
offer
chase of
will
allow
the
additional
one
pur¬
share
for
each
eight shares held on Jan. 28.
Subject to \allotment, stockholders
will
be
tion
privilege.
allowed
an
oversubscrip¬
An
underwriting group headed
by Blyth & Co., Inc. will buy any
shares
unsubscribed
when
rights
expire at 3:30 p.m. (EST) Feb. 11.
Net proceeds from the
offering,
V
together with other funds, will be
applied to completion of payment
of 1957 construction
expenditures.
This includes bank loans incurred
for construction
purposes, acquisi¬
tion of distribution
properties and
purchase
of
subsidiary
company
securities.
In
the
last
quarter of
dividend
on
quarterly
stock
the
common
increased from 65 to 70
was
cents per
The
1957
share.
and
companv
subsidiaries
operate
a pipeline system of about
11.535 miles of main,
lateral, dis¬
tribution and
gathering lines
through which they transport nat¬
ural gas from noints in the Texas
Panhandle, Oklahoma
to areas to the northcentral
where
it
is
sold
to
Increasing the production and sale of Canadian iron ore to U. S. and
Canadian industry has never been as important to the entire North
American economy. By the mid-period of this half-century, experts
estimate, the annual value of this production can be in the range of
one-half billion dollars. Most of this will be for export and chiefly to
the United States..
and Kansas
states
domestic, in¬
dustrial and commercial customers
through
the
Natural
nual
meeting
holders
to
company's
Gas division.
will
increase
Peoples
At
the
an¬
March 19 stock¬
on
vote
on
common
proposals
stock
on
two-for-one basis by wav of
a
stock dividend of
one
for each share held.
paid
on
date
a
new
Long before that date, iron will be in first place
from
000,000 to 15,000,000 shares. $10
and split the common stock
par,
a
share
This is to be
.*.■>> i %
minerals.
1
v: *
among
Canadian
'V-!
This is the most
Canada's
shortly after the
significant single source of new funds to reduce
trading; deficit and finance continuing purchases in the
United States. :
meeting.
Operating revenues in the 12
months ended Sept. 30, 1957 were
$121,029,000 and net income was
The
position of Steep Rock in the industry
can
be judged by the Com¬
$14,847,000, equal, after preferred
pany's present objective—yearly production of 8.5 million tons from
dividends
mines
to
$3.69
share, based
on
ing
In
shares.
1956,
ner
common
3.654,000 outstand¬
revenues
the
calendar
were
and net income
vear
share,
on
directly-operated and under lease to others, sustainable for
i
more
than 160 years.
$111,280,000
$14,400,000. enual
after preferred dividends, to $3.56
per
o
the
same
basis.
H. E. Work Co. Adds
STEEP ROCK IRON MINES LIMITED
Producers of
High-Grade Open Hearth and Blast Furnace Ores
(Special to The Financial Chronicle)
SAN
S.
FRANCISCO, Cal.—Milo
Bergeson has become affiliated
with
H. E. Work &
Steep Rock, Ontario—in the Lake Superior Region.
Co., 100 Bush
Street.
Joins A. G. Becker
(Special to The Financial Chronicle)
CHICAGO, 111.—Ronald D.
Schmidt has joined the staff of A.
G. Becker &
1
South
of
the
La
Co., Incorporated, 120
Street, members
Salle
New
York
and
-
Midwest
Stock Exchanges.
I.
4"
^ j
,V-»*
:
*
The Commercial and Financial Chronicle
.
.
.
(526)
Continued
cient service
from page 20
able
covered hopper cars,
ore cars,
drop-end gondola cars and flat cars is being
steadily increased to keep pace with the demands of the
country's industrial growth.
,
automobile cars, triple-hopper and
acquired during the
Pacific fleet to 43 units,
in the world. These selfpropelled rail diesel cars, which are steadily gaining
in popularity with the travelling public, not only brought
Twelve
RDC
"Dayliners"
were
year, increasing the Canadian
second largest of any railway
about
an
increase in traffic but have also provided oper¬
ating economies on low density runs formerly served
conventional steam trains.
bj
During the year some 400 miles of new rail and 250
relay rail were laid in main track to replace
rail, while 1,800,000 new ties were installed and
miles of
worn
Maintenance forces
535 miles of track were x^eballasted.
were
mechanized
further
purchases
by
of
power
anticipated.
operating
a
coordinated
rail-highway service in Western Canada, has met with
increasing success. A new head office and truck terminal
were completed in
1957 at Winnipeg and expansion of
the service is continuing.
./■..■/■ i /■;
'
Communications
the
Installation of Centralized Traffic Control
(CTC) sys¬
the Montreal-Toronto
Sine between Glen Tay and Agincourt, with control for
the entire area being located in the dispatching offices
tem of signalling is proceeding on
at Toronto.
Automatic block signals were installed on the remain¬
ing 26
miles
of
Toronto-Sudbury
the
line, and
miles of the Calgary-Edmonton line.
Further modernization of passenger
at Calgary, a
start
construction of
on
on
55
station facilities
communication
a
building in Winnipeg and enlargement of diesel servic¬
ing shops at Calgary and Montreal, highlighted the com¬
pany's building projects during the year.
integration of Road—Rail Transport
An outstanding development in Canadian Pacific serv¬
ices during 1957 was the inauguration of common carrier
piggyback between Montreal and Toronto. This service
provides for the carriage of highway semi-trailers on
Bpecially equipped railway flat cars. Since the inaugura¬
tion of the service in mid-October, solid train loads of
semi-trailers have been moving each night in both direc¬
tions between Montreal and
Toronto, with a number of
highway trucking firms taking advantage of the oppor¬
tunity of moving their units by rail. Canadian Pacific's
common
carrier piggyback service combines the advant¬
of mass movement by rail with the flexibility of
highway operation. This integration of rail and road
services in piggyback operation will result in more effi¬
ages
first time
in
airliners
on
v; *•; yv-
e
its
entire
*
-s
;
-
the
Vancouver :r;^Whitehorse
and
(Kitimat). services.
Vancouver
\
>~0.
;
.
.
the
(">,
history of aviation in the
Canadian. North, CPA introduced Super DC-6B airliners
on scheduled domestic routes
during the year. The com- f
pany is now Operating .these four-engined airliners on
-
Terrace
/.
-
/
v-
.\
Steamships
"
-
•
Progress of Canadian Pacific Steamships' major modin Communications serv- ; V
ernization program was marked by the placing in service : ;
the introduction, jointly with
*;on the Atlantic of the hew 25,500 ton "Empress of Engthe Canadian National Railways, of 'Telex."': The popu¬
land." Plans were also announced during the year for
larity of this new service, which enables subscribers to
-theconstruction.of a third and larger "White Empress"
"dial" others for direct teletype communication,,is re-designed to carry some 200 First Class and 875 Tourist
fleeted in the substantial growth recorded in this phase
The outstanding development
ices
during the
year
was
.
„
passengers, This vessel will bercompletely ak~conditioned '
Canadian
Pacific
Communications: during
1957.
and fitted out for: cruising;in the winter months and
'H.fough telegraph and cable connections, "Telex":en- :
ables. Abscribers to establish communications with 30,^trah^Atlanhcr^ervice aduring the St. Lawrence season.
^Negotiations;-for^her construction; are being carried out
000 suUeribers throughout the world.
*
;
with Vickers^Armstrongs Limited,' Guilders of ' the: "Em- '*
Micro-waye facilities of the company's communications
/press of England."
V;.'-V v-v.V
services were extended during the year to Sherbrooke,
;
A modernization program for the "Empress of France,"
Rimouski and Jonquiere and now serve jointly 11 tele¬
/plahned for this winter,-;;wilhiprovide Canadian Pacific
vision stations in Canada, with approximately, 8^^^
Steamships' with three Vessels to "maintain weekly voy- *
of network.
"I"' s
ages between the (United Kingdom and Canada in 1958..
Air
Inauguration of a steamship cargo service between hi
Expansion of Canadian Pacific Air § Lines'. > inter¬
Europe and Great Lakes ports reflects the company's r
national services and the decision to seek authority to ] interest in the traffic
potentialties of the St. Lawrence '
c'
"
.
machines and power tools.
For
,
Pacific Transport,
Canadian
commercial
global-route.pattern.
carrier piggyback may >be
in common
in-service
fastest
of transportation and a consider¬
to users
expansion
Thursday, January 30, 1958
'
.
operate
ice
a
on. a
competitive domestic transcontinental air
new
of actual and
the year..
New
•
serv¬
Seaway.
Two small freighters charted by Canadian
Steamships, the "Otto Neubel" and the "Auguste "•
Schulte" made five round trips each during the season
between European and Great Lakes ports.
'y[r','y
.
V'
main line route pattern linking nine cities
from Vancouver to Montreal were among the
Pacific
highlights
proposed expansion of air services during
.
**'
international
services
to
three
Hotels
countries—Por¬
tugal, Spain and Chile, were inaugurated. In May, CPA
established the first air service linking Canada and Por¬
Progress in construction of
tugal and in September this Toronton-Montreal-Lisbon
service
was
extended to
Madrid, Spain.
The route
Late in September, Chile became the fourth
country in CPA's South American network now serving
Toronto.
Mexico
vide
greatly enlarged convention facilities, making the
Royal York by far the largest hotel in the Common-/
; wealth.
v-j'
■
City, Lima, Santiago and Buenos Aires.
An
$20 million order for six giant 100-passenger Bristol Britannia turbo-prop airliners, with an addi¬
from
tional
the
Placing of
a
coast
to
coast
hotel.
planned
to
give
a
^
of
rooms
•A-.
••
V
distinctive
the various convention
to
"
/
is
//' •>, >
-t.
Integrated Data Processing
Completion of the essential links in the first,* as well ;
the largest system of advanced Integrated Data Proc-.
•cssing in Canada, and one which has few, if any, paral- '4
lels in the business field anywhere in the
world, was
in the
new year, CPA will in 1958 become one of the
major airlines to operate the world's largest and
all-Canadian decorative theme covering provinces
Canadian character
five under option, highlighted the ^equipment
expansion program of CPA during the year.
With
delivery of six Bristol Britannias scheduled for early
first
•
will increase the hotel's capacity to 1,600 rooms and
pro¬
con¬
nects with CPA Mexico and South American services at
17-story air-conditioned
a
400-room extension of the Royal York Hotel in Toronto
continued on schedule.
When completed, this addition
;; as
achieved
with installation of the high-speed electronic
computer early in the year.
Under the new system,
designed to gain the benefits of automation in the mass
handling of paperwork, information required for operat- '
ing, transportation, traffic, statistical and accounting y
purposes is recorded on punched cards or tape at source
and transmitted
the company's communication net-
•
the high-speed electronic'com¬
puter in Montreal, and thence transmitted, in processed
form, to points of use.
,
'
over
work for processing
private wireg
on
...
.
.
.
Source
■
tO
Vv-:
recording is now in operation at 30 points f
using advanced equipment and at 34 others using tern- ^
orpary equipment which will "be replaced as delivernes L
;; of new models are received.
Canada's
Complete
of the Can¬
coverage
adian investment market is
proud
to
transportation.
identified with
be
Canadian Pacific
the progress of Canada
to be in the
vanguard of growth through expansion
and innovation in its land, sea and air services.
These
developments contribute to Canada's preeminence
transportation—both domestic and international;
located from Victoria, British
If
Canada, is
in
retain her position of leadership in
field, it is imperative that recognition
importance, in terms of efficiency
and economy, of allowing all transportation services a
full measure of competitive freedom.
~
I
Columbia to Montreal,
to
the transportation
Quebec.
A complete Cana¬
be
dian investment service via
direct
been closely identified
This will continue to
in the future, just as in the past.
and
James Richardson & Sons,
|
has always
advances
be
so
in
v-
..
with
is
provided through 26 offices of
progress
,
,
private wire is avail-
accorded
the
to
H.
able through Dominick
& Dominick.
NORMAN
DAVIS
President,) The Ogilvie Flour Mills Co., Limited
a
Basically business in Canada is healthy and I see
nothing bearish in the long term outlook, always pro¬
viding sound policies, both monetary and management,
a
are
followed.
Canadian
:,V '" '"Vk"r
business
is
now
suffer¬
ing temporarily from "too much, too
fast" and requires a respite to catch
its second wind.
With
too
INVESTMENT DEALERS
MONTREAL
TORONTO
VANCOUVER
SASKATOON
PRAIRIE
WINNIPEG
VICTORIA
MEDICINE HAT
PRINCE ALBERT
KENORA
CHATHAM
CALGARY
MOOSE JAW
KINGSTON
KITCHENER
ST.
EDMONTON
CURRENT
MEMBERS NEW YORK.
PORTAGE LA
THOMAS
LEAMINGTON
Dominick
&
LETH8RIDGE
SWIFT
BRANDON
GALT
A
SIMCOE
TORONTO STOCK
BARCLAY
EXCHANGE.
EXCHANGE, CALGARY STOCK EXCHANGE,
STOCK
EXCHANGE.
WINNIPEG
STOCK
WINNIPEG
GRAIN
OF
EXCHANGE.
on
dependence
in
agriculture
,
has. been
the
past.
One
industry which naturally hasgone hand in hand with agriculture
is flour milling, resulting in an over
situation in
7-4600
domestic business
H. Norman Davis
and a vieavy reliance on
markets which it .has successfully developed
over the years—Canadian mills having built up a repu¬
tation for high quality flour which has enabled it to gain
and hold markets in. many countries in the face of
keen competition.
However, developments since the close of the last war
export
CANADIAN STOCK
VANCOUVER
resources
get away from
capacity viz-a-viz Canadian jpdpulation
of
three
to
one,
which has
brought about a highly competitive
AMERICAN
EXCHANGES
WINDSOR
TORONTO STOCK EXCHANGE, MONTREAL.STOCK
EXCHANGE,
DEALERS' ASSOCIATION
much
placed
Dominick
WINNIPEG
PRINCE GEORGE
REGINA
natural
yourself" policy in order to balance
manufacturing with agriculture, as
James Richardson & Sons
-
great
being hewers of wood and drawers of
water, Canada has adopted a. "do it
Serving Investors Across Canada
EXECUTIVE OFFICES
its
and determination to
ESTABLISHED 1997
14
WALL
STREET
NEW
YORK
INVESTMENT
CANADA
,
WJMAIMSMIiMi MMi ii§i!
f
§1 liniii
/
A-
.
hhh urn
Continued
on
page
25
Volume
Number
187
5712
.
.
.
/
The Commercial and
Financial Chronicle
(527)
j
■
.
period
Canada's Current Consolidation
And Basic Growth Bias
■By N. J. McKINNON*
Canadian bank President addresses himself to
prospects
policy, and larger dependence
ownership of domestic resources than would be
Canada
t
not
were
welfare state.
a
'A year ago
hnth
phere
was
■
by
"
o
e
v
Fourth
23%/
by
1,954.
r
/,/;i
-.
Cap i t
a 1 in- ,/
vestment ./in/:
1956
The
23%
d
by/
d e
pattern yand
•
a
in;
in
degree.
1946 represented the
-both./domestically, and
"
e r e
.
i d es/
n d s
s
W
.
-
.
Neil John McKinnon
'
-
.
still holds
well.
up
^^ y1<?ePen.
The
future
^eve\
s. 011
in
the/5
ictafoe ®P Alrttnnrtli
'
^d f °
2^5® ^
„„hin„
U
r.
J,tP
P
4.
ma
ay.
_
in'4e!r exLeded ^4 800 fton
The first
c
w
-videm^^
t
i
to
i
i'p
In external
I5?
the "inevitable
marked
upward
consequence
economy generated
pressure
conflict;
prnnnmir
today is in
tht^ed
y
on:
the
third
by the Korean
in
1954
wit-
..//v/. nessed- temporary adjustments in
The
Thp
pnvirnnmpnt
noticeable
aboSt
off
nf-
contrast to
Natinml
rTrn«
to^level
began
PrnHnrt
mid-vear
Production and consumption/ We
have .comethrough another
up-
buoyant-months of 1955 and 1956
Have culminated- in a high plateau
If oft/thh full ?%£ S ^ fhe economy in!957. Although
not
•
and
influences un
on
nmueiiLes
the
of gross
uie amount
amuuiH ui
gross
corporation profits. Gross private
investment, the second major domestic
««»"«
element
««
outlays, has
nr
/interna-/uct
tionally from waT;/to; peace-time
conditions; the second in 1949 re-•
the
■
,
Wil
nnn
o
d
dp7 P^vate investment is the level of
exnnrl
ntWc
„:
trainsition\^^?f^ W
U
n
n i,/ld
in
iu
total
iuiai
national
nauuiicu
importance much
an
in
this
but
1956
billion,
an increase of $800 million
and $2.3 billion over
1956
over
1955. There
are some indications
^hat^l}o total capital investment
for 1958 will not be as great but
thisyear'/total
tms yeai s total
at
mure
at moie
is
a
over
con¬
will
still
;
adding
corresponding amount of
goods or services to the
production side of national transa
This
actions.
has witnessed
shrinkage in the profit margins
a
-
Gf
a
number
industries.
of
In-
ising such plans
are
likely to be
a
increase.
As govern¬
spending in the aggre¬
gate about one dollar in six on
behalf of the taxpayers, it can be
seen
that public programs hold
an
important place in the eco-,
nomic.' as well as the ; political,
field.
The portion of public in¬
vestment which goes into roads,,
schools, public utilities, and into
transportation facilities aa
urban
a
whole, is
one
of the important
the
in
economy.
Be-;
of this there is fully as im¬
portant as economic as political
significance in the deliberations
of the councils charged with set-,
tling the primary fiscal relations
between our three levels of gov-,
ernment.,
another
/
,
.Investment
year
vestment plans are, of course,
made in anticipation of adequate
to
are
tt not only represents the plans
and aspirations of all business but
also contributes to personal income without in the first instance
consumer
continued
their 1956 level.
ments
cause
thlS
thc /vestme,nt and
than wVT'lf
28 /0 when the on
prospects are not prom-
ol Gross National Product
tion—have
influences
'deferred. At present many indus:.will
greatly exceed the 1956 statistical ..indications l d e n 11 i
yAl *neS are. fo<a"8cond,^°nf of
ns~
level
Wholesale Drices earlv in the recent exDerience
levelhe exPeetod to be maintained. Ai- mg costs while selling prices
)
the^
L ^r /eimino
/
experience as a level though the composition of capital under competitive pressures
tendency and this .itnd'leems
Jproeets
*Plateau is ™veSnent wm'chaiig'e, Yhc'"wtai not" be 3." BudSST^h 'a
.tendency
as
construction
tinued to increase while
greater than its actual dollar size.
-
prices.
;
the
considerably
above any year prior to 1957.
,
of
for
expenditures
sumer
pressing
with
continu-
year will
show a levelling-off that we shall
enter 1958 with a level of con-
/V/;///;:/>//;
>
,fleeted some. slackening : in the /rac e \s to domestic activity.
to heavily on available /initial postwar expansion and was r The total capital investment for
supplies/of materials and labor/followed by new stresses on thefl?57 is estimated to approach $8.7
m
-
non-residential
gories of
aggregate dollar value of exports
"thf
J/e
Cana-PJedu^on
fn
passed
of
end
fcasions differs from the others
were /a t - a
high and - in- >
creasing level.;
~/w
the
since
and
industrial
buildings,
and
lor
equipment, have more than dou¬
bled
since
1950.
During
1957,
—
cuan/economy will have
through:- a -period
through
period of
significant
of,;significant
.adjustment.
adjustment.
Each
of
these ;ococ-
year
expenditures "
all
time
private expen¬
tained
rose
a time when there was
noticeable easing in other cate-
?f raw materials has dechned and final figures
n ;\;
Recession;/ •/;/ / "•//
dollar terms,
for
new
ditures
commercial
expenditures. Between represent a very high rate o£
1955 and 1956 consumer expendi- housing expenditure.
tures increased by more than 8%
Government
expenditures
on
Three Influencing Factors
and jn the early quarters of 1957.
goods and services which cover
th® fase °? external
exL!r
trade, this rise was continued but at a about a billion dollars of public
g
*"e
a^hough
t}ie. PriPe
price of a number / slower rate. It is likely that the investment
mostly in construe-
accumulating evidence sug-"
fourth
and- consumer
on
War
«
of em¬
; consumer expenditure.
"•
World
■
sources
ously at
In 1954, for example, con-
expenditures
sumer
trade,*new capital investment and
;
/'•/:/'PP-
Second World-War that the
over,the
previous
There
-
In
important
a
spend.
economy. The
principal ones which must
"--.be kept under scrutiny are export
<
nhe =
had", in-
c r e a s e
Post
whole.
a
Canadians have in recent years
a
marked
disposition to
-.*V t0v a degree the terms of trade
/////>/turned against Canada, the
1955
over
as
shown
three
v
agricultural nroducts
ployment of labor.
large
a
slightly reduced.
;influencing the
pricing policies have gen* erated.
erated." This
This" is most noticeably
^
of
This
higher level than for the same
period a year ago while the ratio
°f consumer debt to income is
•
mestic
and -abroad
abroad
such
the
pace
expendi¬
tures on machinery
and equip¬
ment showed some signs of easing;
a. little.
In
housing, the other
major investment sector, a revival
has been in progress since about
mid-year.
It is doubtful if out¬
lays on new houses and apart¬
ments this year will exceed 85%
of the unusually high level at¬
upon
5"
plays
tudes of the people
though from the author's point of
view there is probably no venture
'quite as profitless as an attempt
\ to forecast the future there is no
-.
creased
d
home
products.
which
slackened.
•
creative resourcefulness,
new
has
Aggregate earned income currently appears to be running at a
of
boom. ^The
The
Gross true of the-United
Gross-tme-of:
the " United States in Tts
its
Product in 1956 had in-"international
disposal policies for
one
11%
ot
both <at
National
a n
the economic atmos-
high level although the
increase
total,
V' reason
foreign //'/
why we should not address
ourselves to the year
1958 and
necessary if
'
Turning to long-run outlook,' r//
'- consider some of the majof factors
energy-sources,
a
been the case in the several
previous readjustments since the end
of the Second World War.
Al-
in/
;
Mr. McKinnon predicts current consolidation will not stop ;
.'// basic inclination to growth and that this bias is
continuously
reinforced with new
fr•:and generation of
of
part in economic activity, is governed not only by available income but also by spending atti-
/
by considering major factors influencing the economy
including elements of stability, sources of unemployment, role
of monetary-credit
at
periods
of
this
kind
there are always doubts and mis//givings about the future. This has
1958
■;
following
of
During
President, The Canadian Bank of Commerce,
Toronto, Canada
.;
consolidation
period
'
"
''sV'.
'
of
rapid
expansion
aiming the past two years.
tnis
23
in
element
;
,
inventories
in
our
is
national
expenditure pattern, and it may
involuntary. De¬
be voluntary or
circumstances, how-,
symptomatic of the*
forces of economic expansion or
economic decline.
In 1957, as in
pending on
ever,
it is
each
year
since
1954,
non-farm
inventories continued to increase.
Ratios of stocks to sales fell dur¬
-
can-
V
ti^end^^seems
consume/pri///v-hidi"/Zntlv
hX Tost mo^of t/e^r upwaJd
imnotno
vtnHnnnn
thp
of
narp
nf
pnnnnmv
thQ
jo
rather
uneven;
clines
are
others
.
j
akn
to
ho
ih f*educed freight car loadings,
a
cut-back in
petroleum/
production' to under one-half of
seen
there
'£
in
some
eases
de- .fcr
taking place while in
continues
4.
i
to
j
be
a
1958 will undoubtedly
be
a
position
finds
lar«e one by comparison concentrate
wlth any year prlor to 1956'
™ther than
ve!'y
.Consumer
expenditures,
which
further
on
on
it
necessary
stabilizing
to
costs
giving thought to
If prospects
enlarged invest-
expansion.
y
^
rePreser|t nearly two-thirds of the are inimical
We n0w appear to be entering a Gross National Product, continue ment there is
to
a
ing
1956
ever,
year
off.
have
and the early part o£
subsequently rose. How¬
the increase during the past,
has recently been tapering
In
some
lines liquidations
been occurring;
in others
1955
but
diminution in one
.
Continued
on
page
33
(
capacity, a lessened rate of
growth in consumption of electric
and
energy
industrial
of shipments
far
so
the
lowered
a
volume
production.
The
to external markets;
somewhat
exceeds
that
corresponding period of
Consumer expenditures
tinue
at
is
high
a
level
con¬
although
indication
some
in
last
year.
there
of
value
that the
of increase is
pace
lessening.
unemployed
year when the
While the number of
has increased in
labor
force
has
a
shown
a
marked
LIMITED
increase, employment continues at
a higher level than last year.
There
has
emerged
during
clear evidence of
year
that
has
been
time
some
building
but
the
GENERAL
condition
a
which
for
up
had
been
DOMINION
SQUARE
OFFICES
BUILDING, MONTREAL, QUEBEC
concealed
by demands for ab¬
normally rapid industrial expan¬
equal
excess
mand
and
and
to,
of,
for
capital
of
which
are
many
current
all
Prices
in
effective
of
forms
goods
cases
in
de¬
Specialists in Iron Ore Properties
consumer
and
♦
services-
freely traded in world
declined
noticeably in
mid-summer, partly due to in¬
creasing production in relation to
demand and partly due to a re¬
versal of the stock-piling policies
of other governments
SUBSIDIARIES
commodities, the prices of
have been maintained'by
government
support,
have
shown weakness as not all
ernments
the
*An
the
of
have been able
stock-piles
address
annual
the
Bank,
by
which
Mr.
meetin?
Dec.
10,
of
INTER-AMERICAN
MINERALS
REALTIES
CORPORATION
LIMITED
•
JULIAN
IRON
CORPORATION
to
the
IRON
CORPORATION
•
SIMONE
IRON
CORPORATION
also
hold
dobefore
shareholders
Toronto.
JUBILEE
gov¬
their
McKinnon
1957,
JAVELIN
reflected in
sales contrasted to purchases. Some
other
'
commodities
many
markets
which
.'"/'./.
♦
sion and government stock-piling,
a
situation in which capacity is
-jT
24
t
(523)
Continued from page
<
,
.
through .normal channels and for
legitimate purposes. ;
'
19
"But the
Shori-Teim and Long-Term
View ol Canadian Economy
be
left
to
the
rest
erated
oy
entirely from that gen¬
Housing construc¬
new
ing
dog, may not seem signifi¬
will in time be others*
a
Nor
can
I be
anything but
op¬
timistic about the outlook for our
industries. That ~we have
at the moment capacity to produce
more
than we can sell is, as I
have said, a transient condition.
have in abundance what
we
other
particularly our
neighbor, have needed more of in
the past and will come to need
yet more of in the future, is the
abiding fact. You may remember
that
the
Paley Report of 1952
countries,
which forecast the enormous needs
of the United States for imported
materials, especially metals, was
published at a time when many of
these
materials were
in ample
supply, and
decried
in
its predictions were
quarters. But in
some
succeeding five years its con¬
were
more
than vindi¬
the
clusions
and I
cated,
be
feel sure they will
again.
the fabled cow.
carrying
is
about
significant
the
said
satellites is that the race for space
for
call
will
of
dimensions
new
spend an additional four billion
for
defense, which was
President Eisenhower in
the Union Address a
nis State of
and
manpower
did
wealth
material
our
be
to
have
not
diverted, to an even larger extent
than they are now, to armed pre¬
paredness. But the defense of our
a matter of paramount
freedom is
importance and urgency to which
there can be no alternative. It is
realm
the
has
in
which
we
of
our
wisdom
rather
shifted
cent
out
rising
must
months
rely
statesmen.
little
chief
concern
trained
Given
the
make
can
difference,
a
Roger W. Babson
,
Waterloo College
Investment Courses
WATERLOO,
"Wise
Ont.,
make 5."
factor under
lieves in his heart that the present
a
Investment
in
and
Bonds
business
for
future
that
vote
a
Will
Some
character
or
will finally
education
in
of
that
when
to
to
people
at
bank
of
prospect of lack of demand for our
products and services, or lack of
young people to pitch in and pro¬
duce them.
Canadian
keen
trade mission
and
warm
and
reception it
the
re¬
ceived from British firms. Beyond
that horizon, again, are the trade
possibilities that could arise from
the
economic
rope
integration of Eu¬
that took a step forward this
month
of
with
the
the plans
formal
for
a
inception
common
mar¬
ket.
:
this
country,
States "and
as
in the United
elsewhere,
that
the
force to be
rec¬
In another way, I am
mand
that
for
be
a
industrial
upon
beginning
resurgence
us
sooner
of de¬
materials
than
we
expect. I pointed out at the out¬
set that
added
a new
to
dimension had been
international
One satellite, or a
relations.
second
carry¬
—
..
,
.
-
-
.
,v
-
-^ -
New
York,
nationwide
a
performing
other
but in
cases
most
acts of mercy;
they may serve
allowed
and
millions
to
the
til
efficiency;
employ
short, will
to
selfishness
until
last
replaced by unselfishness; un¬
was
are
streets? Can
In
character, almost
inefficiency
was
replaced
by
dishonesty
and
by
to
bring
back
prosperity
without
restoring these fundamentals of
honesty.
Now
Congress
plans
unselfishness,
counting
are
really
on
e
ff i
e
i
and
e n c y,
not
am
these
disputing
new
the
What
ability
to-do
laws
some
Scientific
Is
Education?
buying; but will they create
or will they, instead,
Washington
take:
yet been tried. No true busi¬
ness depression has occurred since
sociology, and
sciences
of
equal importance. Russia can give
us
some
great surprises
along
these
lines, far more important
than
"Sputniks." A nation pro¬
these
gresses
sumer
confidence,
business
make
one
fearful?
more
knows. These
No
"pacifiers" have
not
"humanitarian"
enacted. My point
laws
were
this week is to
emphasize
that
no
one
knows
whether existing legislation will
or
increase fear.
Economics,
merchandising
are
only by
a
balanced educa¬
tion, not by going off half-cocked
line. What will the young
one
on
physicists and chemists do if we
enter
upon
a
workable disarma¬
Reducing Stock Market Margins " ment program?
They will
be
"a
consider
the
recent, dime a dozen."
reduction of stock market margins
Were I a young man or woman
.from 70% to 50%. This was done
today, I should become an expert
V- by Washington to,make, it easier on the
subjects taught at Insti¬
to buy.stocks; but stocks are very
different from food. We buy food tutes of Business Administration.;
Harris, Upham & Co., 120 Broad¬
way,
for
apparently thinks
good. They will relieve much suf¬ that Science refers only to physics
fering and encourage some con¬ and chemistry. This is a great mis-;
Building
Toronto.;; % * ;C...'.
f
April 7—Panel discussion. 7
-v
* "■
y ; 5 y; -|- - Install Teleregister
work
honesty. Can this safely be done?
I,
ment Portfolio—T. P. N.
Dominion
"cure-
many
pain. These should
while
in
relieving
investors
create confidence
the Invest¬
Jaffray,
Securities Corpn.,
enacted
in¬
,
"Let
us
eat; but we buy stocks to sell at
profit.
1
to
a
.
The graduates of
will
be
in
such institutions
demand
great
as
we
vestment - brokerage firm with. 36 :Instead,of increasing
confidence; approach
disarmament.
Almost,
offices coast to coast and members
stocks, this action by wellkoned with "and, as you realize,
every
sane
man
in Washington
meaning Washington bureaucrats
the tight money policy made life of the New York Stock Exchange,
has frightened investors, who fear will admit that the ultimate choice
very difficult and uncomfortable has announced that Teleregister
that the real inside conditions may is "Disarmament or Destruction.".
for the
chartered banks, which
Corporation's 500th electric stock be worse than the public expected.
If World War III comes, all our
are
the principal means throughTherefore, this act, at this time,
which central bank policy is im¬ quotation board has been opera¬
schools may be laid low and their
has done more harm than
central bank is
plemented.
of
But within its sphere
influence
has
done
a
the
much
Bank
of
Canada
towards
taming
business gyrations by exerting re¬
straint
when
restraint
was
called
for and
to think
may
Certainly we have all been aware
during the last two or three years
in
There is
also, on the horizon, the
possibility of an enlarged flow of
trade with the United Kingdom
that may follow-from the recent
:
the beginning of time: Fire, the
Wheel and Central Banking."'
31
Congress
alls" to relieve
these laws which businessmen and
of
.
March
Will
ing the depression of the 'Thirties,
work?
ment-^A. E. Ames & Co., Kitch¬
ener.
;
' ;
/
..
--
Rogers once remarked in his typi¬
cally dry fashion that "There have
bben three great inventions since
>
Follow¬
answers.
a religious con¬
version. Previous depressions were
business
loss?
a
the
money
forced
be
dent knows
to
idle and wolking the
—
risen 36% while that of the States
late
prices
end our present form
only a"s mustard plasters or aspirin
when our people need a change of
Questions
when
market
employers
the
panic
fail? Will
insurance
give
prevent a
begin
unemployment
*
The
knows.
artificial
these
say
ulti- "
What the
vote.
which hunger, warding off failures, and
prevent
insurance
confidence
of
cushions"
banks
stock
one
no
the effect on
depression.
the
deposits
—
policy.
farmers'
irrespective of
.
Which brings me to the role of
<
mis¬
a
take.
mate result will be, no One
Unanswered
Some
lectures,
are
>
monetary
Congressman be¬
every
regulation of farm prices is
the
devised
been
another real
—
who
<
with everyone
investments
and
have
—
aroundr our suburbs
will one day herfilling out appli¬
cations in our employment depart¬
ments, the prospect may be a lit¬
tle frightening,, but it is not a
hereafter
must
2
having
saying
by
"unemployment
,
surge
plus
demo cracy,
knows what will be
—
now
"2
.Almost
They believe that Secretary ;
Benson is basically right, but they *
dare not say so for fear of losing.
economics in this column. Let
start
me
Canada—
given Monday evenings,
note, we seem likely to be facing
*
are:. ;,
past, and of conscientious slackening trends for at least the
next few
months. Inflation and
February 3—Bonds to Buy for Se¬
conjecture about its future, that
deflation are opposite tendencies
will form a sure footing on which
curity and Income—D. R. Datand
are
widely
regarded
as
to base informed public discussion
tels, battels & Co., Ltd., Kitch¬
mutually exclusive. In the short
ener.
of current and future problems.
run
they are. But in the longer February 10—Common and Pre¬
Moreover, regardless of what may
perspective that I have tried to
ferred
Shares
G. S. Watt,
be thought of some of its particu¬
take, they are manifestations, at
Gairdner & Co. Ltd., Kitchener.
lar findings and suggestions, the
different times, of the same thing, February 17—Mutual Funds—J. P.
Gordon Commission has sketched,
the undulations in the
Henderson, Calvin Bullock, Ltd.,
in broad outline, dimensions of namely
Montreal.
possible ' future
growth
which, intensity of business activity that
we must expect in this country. In
while not guaranteed, should in¬
February 24 and March 3—How
recent years it came to be con¬
to Understand Financial Statespire us to great endeavors.
sidered by many that thp business
ments
D.
B.
Gill, Nesbitt
One aspect of our growth that
cycle was a thing of the past. The
Thomson & Co., Ltd., Toronto.
is worth dwelling on for a mo¬
year 1954 and the years 1957 and
March 10
Preferred
Shares to
ment is population. The number
1958 should serve to remind us
Buy for Security and Income—
of people in this country has been
that the cycle has not been ob¬
R. A. Mitchell, A. E. Ames &
increasing at a faster rate than literated. -But
I
believe
that
Co. Ltd., Toronto.
**
for some decades past and at a sig¬
progress has been made towards March 17—Common Shares to Buy
nificantly greater rate than in the
taming it and that the need to
for Income and Profit
G. S.
United
States.
Since
1945, our mitigate its extremes must be con¬
Watt,
Gairdner &
Co.,! Ltd.,
population, apart from the entry
stantly in our minds, on whatever
Kitchener* •„ * *
- • "
*
-7 • of
Newfoundland
in
1949, has curve of the
cycle we happen to be. March 24
Investment Manage-
the small fry and teen-agers
ignore them is like legislating
largely be the
deciding
however, allowed to dis¬
am,
Stocks" will be the subject of an
and its
^
to
.
I
Scheduled
Policy
why it travels, or where it goes.
Yet, we all use electricity con¬
tinually. Economic forces are just
as powerful even though they can¬
not be seen. For Congress to try
,
cuss
to
Monetary
is,
government. We dare not say
government, is so because neither I nor anyone
psychological factor that my
else
knows.
crazy and cannot long continue.
thoughts have been directed. My
There
must
be
a
shakedown
Certainly we are skating on ice
remarks, for what conviction they sometime * and
a
return
to the of unknown thickness. One person
may carry, have
been aimed at.
I
see
is
very
bearish;
republic which Washington, Frank¬ whom
discouraging discouragement.
lin, and Hamilton established in another is optimistic. We are all
1788. We have drifted far away toying
vvith questions to which'
neither Congress nor the Presi- .from our original ideals.
'«
which
has risen 23%; When we think that
knows what elec¬
where it comes from,
one
no
tricity
that
means
however, is our attitude to current
conditions.
It
is really
to this
now,
birth rate will
democracy.
This further
term, or long-term, prospects.
What
that the
means
willingness to work,
and given the ability to keep our
problems in perspective as we
tackle them, we surely need have
no
misgivings about our short-
.
as
This
children.
how
was
to
on
we
live or
how we were
where
to
they should work.
inflation
went
according
physics and chemistry.
as
discuss
to
in this column. Most of
Republicans or Democrats
inflation.
This
not built by people
evening course in investments
given by the Adult Education De¬
partment of Waterloo College.
I
are
important
as
place
my
business profits with¬
prices — the key to
re¬
as
not
politics
us
can
we
quickly in
from
contraction. And
dollar,
a
is
without
whose
sincerity that
wish with deep
our
rising
country was
ning.
1
and
growth
be only the begin¬
week ago may
It
hardly complain if a dollar does
less for us. Rising productivity is
the key to rising personal incomes
dollars
made by
for
less
equally
are
distinguished prede¬
my
increase fear/'
or
ington to know that sciences of economics and merchandising
prepared
are
Mr. B. C. Gardner, that if
do
we
expenditure in the free
world. The request for authority
to
by
cessor,
effort and
downswing "will create confidence
only if
to work
those rewards. It has been well
for
What
cycle
Doubts
depressions can be ended unless fundamentals of unselfishness,
efficiency and honesty, are resurrected which, Mr. Babson
states, was the case in previous depressions. Wants Wash¬
the conscience
business enter¬
its currency preserved,
Canadians
For
try, and in the studies and reports
that have appeared or are yet to
be published, there is a body of
knowledge about our economy
governments,
of
Race
Defense
on
more
upon
knows whether
one
no
existing legislation designed to mitigate the business
must
sured, and the purchasing power
into
farther
my
part, I feel competent
significant, of course,
has been the sweep of the forward only to comment that what I have
called
the
race for space may be
look taken by our own Gordon
Commission. Seldom, if ever, has a a stronger force than we can yet
country so thoughtfully, so thor¬ gauge in changing business con¬
ditions from slack to stress in this
oughly and in such detail at¬
tempted to plot the future course country as well as in the United
States and throughout the Atlantic
of its economy as a basis for ex¬
amining its policies. In the hun-' Community.
To mention the subject of infla¬
dreds of painstaking submissions^
tion in Canada in January, 1958
which were loosely called "briefs,"
that were made by business or¬ may seem belated, or premature
or
even
incongruous. As I noted
ganizations, governmental bodies
at the beginning, general concern
and individuals across the coun¬
Even
well
It
system.
Well-known business advisor asserts
mainly
even
space,
a
Gordon Commission
or
unancial
as
that should
one
possibly over the moon and even
export
That
not
primarily
prises and individuals. J In this
connection, I feel strongly that
this country's growth will be as¬
cant. Tneie
penetrating
tion.
is
keel
even
Thin
on
By ROGER W. BABSON
ing the Canadian economy on an
of
ables apart
Skating
responsibility of keep¬
Thursday, January 30, 1958
Financial Chronicle
The Commercial and
u i
of
subsequently, in the light
changed business conditions in
recent
months,
significant
ease.
by
degree
Without
permitting
of
going
a
monetary
into
detail,
in
tionally
-
Denver,
installed
in
Colorado
offices
Seventeenth Street.;
■
the,; firm's
at
740
.
Commemorating the occasion in
A.
Denver,
F.
Goll,
retired
sented
Harris,
Vice-President, Pre¬
Upham
manager,
Denver
office
and to Henry U. Harris,
Jr., a visiting partner of the firm
straint
from its 120
is
on
not
now
an
inhibiting
the. availability of credit
various
other
palliatives are
put into force? They will relieve
hunger; but will they cause in¬
vestors
to
buy stocks or auto¬
one
else
I
don't
know—and
main office.
Broadway, New York,
,
Scherck, Richter to
Discuss OTG
no
knows.
ST.
What About
Economic
porarily
not
be
Economic
laws
can
Laws?
be
tem¬
ignored; but they can¬
long ignored. Economic
forces cannot be seen; but neither
can
electric
on
TV,
"
plaque to R. E. Sargeant,
a
graduates killed!
J
the
mobiles?
Teleregister
it may be said that monetary re¬
factor
good.
Now what will be the effect when
forces be. seen.,. Even
LOUIS,
Scherck,
North
on
Mo.
Partners
of'
Company,, 320
Richter,
Fourth
—
Street, will
appear
KETC, Channel 9, on Feb. 5 to
discuss the over-the-counter mar¬
ket.
.
„
Number 5712
Volume 187
Continued
—as
a
from
,
.
.
The Commercial and Financial Chronicle
in
22
page
place of two-party lines were cut
Forty-five
result of price supports of grains and consequently
showing
Surpluses of wheat which have accumulated in
both countries pose a problem of distribution. The U. S.
vested
embarked
on
"give-away" policy
a
on
grains and
subsidy policy on flour which present a grave problem
for Canadian mills to face.
Many traditional markets
a
temporarily at any rate, lost to Canadian mills.
the 12 months ending Aug. 31, 1957, Canadian
exports were down 2,803,033 cwt. from the pre¬
vious year.
In the same period American exports were
up 5,358,315 cwt.
If a 10 year average is taken, the de¬
cline in Canadian exports last year is 7.994,933
cwt.
Unfortunately the Canadian Treasury cannot compete
with its U. S. counterpart so that the condition is not
are,
For
necessitate
to
as
and
The situation is sufficiently serious
amalgamations,
reorganization
some
our
in
of
of
a
now
indi¬
further rise in the vol¬
the
The
in
shares
two
company
Act
total
of
I
in
the
offered.
bond
A
have
we
purchase
total
of
of
to
Parliament
that
indicated
for
under
rates,
Atlas Steels manufactures a
The
supermarket selection of
ing steels, which are sold to widely diversified industries.
The forecast of business for Atlas
1958 must be
predicted
on
that of the whole Canadian economy
bqcause all industry uses our type
of product.
It is difficult to present a longforecast
term
effects
the
time
this
at
home and abroad
are
because
conditions
world
of
In
the
past
the
approved
:
was
case
our
.
.
the
unit
heard
cost
rate
:
the
States
United
as
the New Year begins.
the
and
fast-growing economic giant, with
many
mines to open, factories to
erect, oil wells to drill, roads to
build, railroads to extend, airports
to
construct, harbors to improve,
rivers to make navigable, telephone
lines to string, and water powers to
Canada has
emerged
as
among
a
young
harness.
Men, money, and knowhow comprise the indispensable ele¬
.
j.
_
ments of all of these vital ventures.
Once the funds
found, the neces¬
and the requisite
knowledge usually follow.
The urgent problem for Canada to
November
1
in
nations of the world
providing
during
.
,
of
Board,
Railway Company
capital
of
decade
sary
■
are
manpower
technical
direct
dialing by customers of their own long
calls, introduced for the first time in Canada
in Windsor in 1956, will be established in Toronto and
Guelph late in the spring. Within the next few years we
plan to have this service in Montreal and many other
distance
cities while at
the
customer
same
by direct
the country.
time
dialing
the
areas
will
be
solve
U. S. industry, itself,
widened
Early Warning Line
acted as project agent for the !
System in the construction of the line, and in a similar
capacity has a continuing responsibility for its main¬
tenance.
out
her
further
progress,
has ambitious plans for expan¬
cost running high into the billions, within the
next few years alone.
Those who are active on the
American business scene have been keenly conscious of
the increasing competition for capital for some time.
sion, at
of the line. Our company
mapping
therefore, is how
she will raise the tremendous capital
she must have to move forward rapidly.
available to the
steadily
in
material
Cyrut S. Eaton
completed by the Trans-Canada Telephone System,
in association of major Canadian telephone organizations
which is now responsible for maintaining the larger part
The
a
Now, as the inevitable consequence of the unwise finan¬
cial policies of the U. S. Treasury Department over the
past five years, America is in the grips of a tight money
squeeze.
-
During this period when capital is hard to come by,
Canada remains one of the world's most attractive areas
-
.
transcontinental microwave
network
being built
by the Trans-Canada Telephone System now stretches * for investment, particularly because of the stability of
from Quebec City as far west as Calgary and Edmonton, - her institutions and of herjFederal and Provincial Gov¬
and the full network from Sydney, N. S., to Victoria, ! ernments, under whatever political party, It is my firm
B. C., will come into service in the summer of 1958.
Continued on page 26
The construction of several additions to the existing
at
unknown. How¬
ever, for the short-term, it is appar¬
tnat business for the first few
ent
of
months
level
1958
will
be
at
a
lower
compared to the latter part of
Do you know how a
1957, and greatly reduced from the
activity in the first quarter of 1957.
We hope for an improvement in
H.
George DeYoung
the second
company may
duction in excise tax
on
automobiles
sales volume.
How about income and
The
other business taxes?
pattern for the year should develop more clearly during
the second quarter.
A not too
What
export market
countries show
great sensitivity to political developments.
Unless this
trend is reversed, export business may well be jeo¬
pardized.
Our program
of consolidating business in
European markets through our Belgian affiliate is pro¬
ceeding but will not be in full operation until late 1958.
buoyant outlook exists in
be
incorporated in Canada?
quarter, if the recent re¬
has the obvious anticipated effect on
are
the
our
personal
income tax rates? Are
because the economies of many European
there provincial as well
as
federal taxes? The
answers to
these and
other
questions—vital to
the businessman planning
Operating costs which continue to increase and show
sign of lessening despite casing of the boom, are our
concern
in facing the lower level of anticipated
no
chief
This condition will necessitate a great
business.in 1958.
'A
deal of
adjustment by all industry to achieve profitable
operation. At Atlas we are continuing to increase our
productivity through the installation
new equipment and plant facilities.
-
•
-
in
.
'if//,;
For your copy—free
v-
period of economic readjustment in Can¬
to end during 1958, with a healthy re¬
covery underway by the year end. (Several measures
have already been introduced to alleviate the effects of
the
relatively high unemployment
which
may
be
experienced
this
write to Business
is expected
Development Department,
;
The
-
For the year as a
whole, the gross
will probably be
product
higher than
slightly
1957.
in
Royal Bank of
Canada, Head Office,
winter.
national
and
without obligation—
The present
ada
"Memorandum
Business In Canada."
m/i
President, The Bell Telephone Company of Canada
our
Relating To Carrying On
<0^, u *'/
„
operations in
Canada—are to be found
EADIE
W.
THOMAS
to set up
h ' A'"'*
tit--""
operation of
and
360 St. James Street West,
Montreal, Canada.
Total
capital expenditures are likely to be
down
slightly,
business
decreases
with
expenditures
being
in
THE ROYAL BANK
par¬
tially offset by a substantial recov¬
ery
in housing.
The
continuing
phones
the
from
demand for tele¬
receive adaed impetus
may
struction.
increase
A
in
home
further increase
OF CANADA
con¬
in
our
capital outlays over 1957 will be re¬
quired to meet these demands and
Head Office: Montreal
Thomas
W.
Eadie
New
were
able
20,000,
a
to
reduce
reduction of
the
some
of
to
8,000. Orders for individual
list
waiting
customers
York Agency—
68 William
keep abreast of technological devel¬
opments. The company spent over $175,000,000 during the
year on new construction in our Ontario-Quebec terri¬
tory to extend and improve service.
Development of our company's services in 1957 was
marked by the addition of some 190,000 new telephones,
raising the total telephones in service to 2,960,000. While
the demand for service continued to grow steadily, we
*
of the crucial questions of concern on
one
both sides of the border
amendment
was
highly specialized electric furnace quality steels . . .
high speed, tool and die. stainless, machinery, and min¬
Steels in
and
in
Construction of the Mid-Canada
H. GEORGE De YOUNG
shortage
as
has remained
steady .increase
and December.
across
President, Atlas Steels Limited
acute
stands out
service. The company, as a result, applied to the Board
of Transport Commissioners for permission to increase
coming year, the outlook is not any worse than it
was a year ago,
but Canadian mills will not hit their
real stride until either surpluses are manageable
or
both countries can agree on a mutual price policy.
The
$40,000,000
issues.
applied
the
of
The Chesapeake and Ohio
99.5%
the company to increase its capital stock to a
$1,000,000,000, subject to the approval of indi¬
Estimates
its
"
-
CYRUS S. EATON
of
structure which
the
a
Chairman
oL:
spite of the difficulties created by the U. S. subsidy
the
were
and
vidual issues by the Board of Transport Commissioners
for Canada, received Royal Assent in December.
of
territory was started during
in the planning stage. Tele¬
added to the Toronto-Buffalo
start was made on a Montreal-
our
now
link.
York
ever
confidence
unchanged, our dividend
requirement would not be met in 1958, largely because
price that will interest overseas buyers.
While I do not look for too much improvement during
link
in
are
channels
microwave
New
Incorporation to permit capitalization be¬
yond the $500,000,000 par value limit set in 1948. A bill
to allow
system
Others
year.
phone
*1956.
largest stock issue
$75,400,000, and the
reflected
was
2,230,000
raised
of its
over
closing down of unprofitable units especially those that
are strategically
out of position and the obtaining of a
better balance of output to available markets.
policy, Canadian mills are confident that their quality
will
ultimately win back markets which have used
Canadian flour over the years,
and with economies
effected in production, will be able to come within a
the
$124,000,000 of new capital was in¬
the company in 1957—the highest figure for
investors
was
integration of production facilities and methods, the
In
microwave
11,000.
have
about
any one year. The
undertaken yielded
the
was
about
by
customers
increase of almost 8%
an
total
A
flour
likely to improve.
of
of long distance calling, the number of calls handled
ume
mills.
has
cent
per
vidual line service. There
building up of surplus stocks — have created a serious
situation for Canadian agriculture and particularly flour
25
(529)
'
Over 900
St., N. Y. 5, N. Y.
branches in Canada, West Indies,
Central and South America.
Offices in New York,
London and Paris.
Correspondents the world
%Tt
Total
Assets
Exceed
over.
3%
Billion Dollars
26
The Commercial and Financial Chronicle
(530)
ada is thas a good deal less buoyant
Continued from page 25
belief that Canada
to lose
new
has everything to gain and nothing
foreign investment to supply the
she needs for economic development <ahd
by encouraging
money
expansion.
/ ;
President, Canadian Marconi
Company
be no basic reason why busi¬
activity and general economic conditions during
should not be maintained at the 1957 level, although
not believe that we can look for any marked up¬
There would appear to
ness
1958
I
do
swing in that year.
In the electronics
there
are
field specifically,
of indications
will improve
;
There
Iti the field of electronics as a result
and
development
pro¬
carried out during the past
few years which should result in in¬
creased production in 1958.
Another factor which it is expected
grams
will
tend
ume
in
1958
is
to
the
an
field
in
a
import competition.
'
:V
farther ahead, the long-term prospect for?;
to be a strong one because of the
sorts of resources she possesses, the momentum of popu¬
lation growth and the rapidity of technological change.
during
How
M. Finlayson
S.
Dur¬
-
.
soon
reassert
business,
which
should be compensated for by additional business during
and
the
the
and
on
5
this year
included
.
v
the trend of events in
SYDNEY
FROST
Although economic activity in Canada is continuing
a
high level, the expansionary forces that were so
1955
and
1956
have
upward momentum. With
for
now
of
immigrants and
in-
an
of 10% for first class and 5% for coach class fares
crease
The railway,, continuing its program of- eliminating
those passenger services which result in large deficits, in
of
their
National Railways
that great progress has been achieved within the system
while the railway was and is under severe financial
stress.
Like
/ ..■/Vv/:.v\//v.//.'■
the
majority of railways all
final quarter turned
perceptibly
the end of the year
By
over
At the
relatively few industries were still
working at full capacity. Capital in¬
year-end the CNR faced the certain
prospect of a substantial deficit.
Against this background the CNR,
vestment
in
strong,
ways, has before it contract demands
of the non-operating unions which,
expenditures continued
but not quite up to mid¬
expectations. Taking into ac¬
count
pears
for
the
wheat
showed
only
crop, it ap¬
that the Gross National Product
195/
the
over
small
1956
record.
a
small
rise
Increasing by
something like 3%, it probably came
fairly close to $31 billion, but, since
as a whole averaged approximately
4% higher than in 1956/it may actually have declined
little in volume terms.
indications of slackening in
imports, which in October
and November, the latest months for which
figures are
available, were 12% below a year earlier. Another is the
slowdown in the rate of
common
inventory accumulation, partic¬
ularly in manufacturers' stocks of materials. And re¬
cently there has been a levelling-off in the consumer
price index, following the earlier marked declines in
basic commodity prices.
In these circumstances, the demand for credit has
eased, interest rates have declined, and the monetary
authorities have given some indication of a
change in
the policy of restraint.
v
As the new year begins, the economic climate in Can-
THE
granted, would cost the CNR about
$77,000,000 annually. If
the
same
provisions were extended to; other
employees the
total
annual
wage
bill
would
be
/
increased
by
1957 discontinued train runs representing an annual saving cf/290,000 -train miles, rv// "//■
Our policy of raising the quality of passenger service
wherever improvements are economically justified was
continued. The westbound schedule of the Super Continental was reduced by one and one-half hours and the
eastbound schedule by 30 minutes. Other schedule re¬
ductions in-irjain line service were made between Montreal-Toronto-Chicago; and between Montreal and Halifax.
/// Keeping pace-with these main line improvements has
/ been the change in schedules and equipment on branch
.
*
.■
lines, and 1957 saw new RDC railiners put into service
oh seven routes in provinces from Nova Scotia to Sas¬
katchewan/ improving travelling
comfort
in
the
areas
affected and leading to substantial reductions .in Tunning
times. Railiner service will be extended to several other
/ runs during.1958.
i'/ Studies; of
;
/■;../*//;/;/>•:■/%////:. .V"/;
trends
new
and, possible
//
innovations
in
service of meals to passengers is continuing, with the aim
of providing the most practical types of service con¬
sistent with passenger preferences and over-all costs.
Donald
Five
Gordon
new
dinette
(lunch-counter style)
cars
were
sched¬
uled for delivery by the year-end and will be placed in
service
between
Montreal and
Van-
about
transcontinental
$100,000,000.
;
Progress of the CNR was indicated in the opening of
important new rail lines bringing rich mineral and other
couver.
/,
*••>.
Last March the CNR placed two. cafeteria cars in serv¬
ice
.
on
an
experimental basis
the Maritime Express,
on
to market; in improved freight and
service; in significant advances in communica¬ / Montreal to Mont Joli. These cars, converted in our
shops and featuring an attractively priced self-service
tions; in modern operating devices; in more efficient
with paper dishes, won general acceptance and proved
administrative techniques.
that savings could be effected. As a result, a third car,
.Decline in Freight Tonnage .1;
seating 33 passengers instead of the 22 in the two pilot
models, is being prepared for service. Further tests will
But during the year the railway's revenue
freight ton¬
resources
passenger
v
•
showed a decline of 11,000,000 tons, or 11% below
the record tonnage of 1956. Because the
greater part of
this decline occurred in low rated commodities, and also
be conducted on other
nage
;
■
:
■
■
runs.
.
.
/ New Lines
■
~':'
'
During 1957 the CNR continued to play its historic
freight rate increases, freight revenues de¬
role of assisting in Canada's development by pushing
creased by a smaller amount than tonnage, some 4%.
new
lines
into
undeveloped
regions where surveys
The major decreases were recorded in movement of
grain, bituminous coal, ores and concentrates, certain / showed sufficient traffic* would result. ,< The :161-mile
westerly arm of the Chibougamau line (Beattyville to
forest products, crude oil, other petroleum products and
Chibougamau) was officially opened in November, ena¬
bling development of vast areas of Quebec's mineral-rich
country. Grading of the first 66 miles of the easterly arm
running northwest from St. Felicien was expected to be
more than 90% complete by the end of the year.
A con¬
tract has been let for grading and construction of bridge
because
of
,
J
Quarter
Six
_
bra'hch
opening marked completion of the
line from Bartibog to Heath Steele in
ores.
To
for
the
transport
of
valuable
part of
a
Northern Manitoba to the great new nickel deposits be¬
1957
ing developed by International Nickel Ltd., at Thompson
Lake-Mystery Lake region.
in the Moak
Dieselization
$2,767,314
Continued strides towards greater operating economies
were made through addition to the program of dieseliza-
.
..
$1,899,385
•
$
again
Still another branch line became
the CNR with acquisition of the newly constructed 30mile railway from Sipiwesk on the Hudson Bay line in
81,933
qco
212,286
1957
arm.
official
Brunswick,
mineral
151,534
39'™>
n°:se~? '945'568
"
$
New
Months
Dec-31,
$1 K?
second
22-mile
31st,
Ended
Tons Milled
iotal
A
report
PERIOD ended
Dec
"fcU
To0ta|RCOVered'°ZSRevenue
substructures for the remainder of this
NINES LIMITED
oeconH
Second
ii
Ii
;
with other Canadian rail¬
summary
FOE
/
/
•:
if
natural
of the most striking
the economy is the decline in
-
// //.///P-'
the
materials continued to climb.
consumer
/
even
the
decline in
a
,
Railways ended 1957 with evidence
purchases of automobiles and appli¬
ances, the trend of Canadian busi¬
ness levelled out
during 1957 and in
year
year
most
Canadian National
continent, the CNR suffered
severely from the decline in many
phases of the economy, which caused
its freight tonnage and revenues to
dwindle while costs of wages and
many
downward.
C. Sydney Frost
lost
easing in world markets
of Canada's basic export
an
products and
One
Contributing factors in this increase
record movement
which became effective between certain points Sept; 1.
GORDON
Chairman and President, Canadian
President, The Bank of Nova Scotia, Toronto, Canada
a
Passenger Revenues Up
revenues rose for the third consecutive year,
by 3.5%.
a
charges, an increase of 75% since
bringing the total to 272.
year,
.
C.
prices for the
/r'///
// Passenger
world economy.;
DONALD
in
beginning of the
.
vigorously the forces of expansion
themselves, however, will depend / in' large
on
developments in the United States (par¬
the year 1958.
marked
'
The railway also greatly expanded
the number of agreed
how
ticularly defense policy)
put into effect.
were
,
continues
measure
1957 there has been a marked
slowing-down in the placing of such
ing
at
;
July 1.
Certain
tended
year
Looking
Canada
government
contracts for defense purposes.
of
faced with keen
prpvide increased vol¬
electronics
increase
tions were'published in our tariffs on
competitive types of rates were widely., ex¬
ago, and the recent moderate tax re¬
during 1957 to meet increasing highway comductions along with the increases in old age pensions, / petition. Last April 4 the CNR
published special incentive
family allowances and unemployment insurance cover¬
loading rates on a broad range of commodities moving
age will help to maintain purchasing power. The decline
between most major, points in Western Canada. On Oct. 7
in the premium on the Canadian dollar will also be help¬
;
"piggyback" rates covering the movement of highway
ful both to Canadian exporters and to manufacturers
common carriers by rail between Montreal and Toronto
have been substantial advances made
research
v
.
by the recent pick-up in housebuilding. For an¬
thing, consumer incomes have continued to run
generally—especially with respect to
of
<
The Maritime Freight Rate subsidy was increased from
big uncompleted investment projects including
the Seaway and the Trans-Canada gas pipeline, by large i 20 to 30% last spring on movements from the Maritimes
to
the rest of Canada, and the corresponding rate reduc¬
needs for many types of public and institutional building,
ahead
apparatus.
iron and steel articles.
Freight rate' increases continue to lag behind the in;; creased costs they are designed to meet. The only major
.'rate change in Canada during 1957 occurred Jan. 1 when
of
over
other
communications
likely to be
however, be exaggerated. There are, -.the Board;of Transport Commissioners granted an in¬
fortunately, a number of factors at work to sustain eco-r terim general increase of 11% in'lieu of the interim
nomic activity in 1958 and prevent downward pressures
/ increase of 7% granted in 1956. A new application for a
from becoming cumulative. For one thing, capital in¬
:
further 10% general increase was made last autumn. /:;
vestment expenditures, though they are expected to fall'
-Revenues benefited to some extent from freight rate
somewhat short of the extraordinary 1957 record, are i
increases granted in the United States.
'!
likely to be sustained at quite a high level by the carry¬
and
number
a
business
are
.
marked by a greater degree of unemployment than any
winter since the war.
V' - ■v'ViS,"'v •«
The likely extent of the readjustment that is now in
volume
that
economy,
Thursday, January 30, 1958
.
progress should not,
FINLAYSON
S. M.
ot/ relative slackness in the
.
manufactures, while the main offsetting increases oc¬
curred .in fuel oil, other mine products and manufactured
than it was a year
a^d the months immediately ahead, always a time
ago,
.
437,550
tion.
72%
era
of all freight gross ton-miles
the system was in diesel operation, as was
By September, 70%
recorded
on
of yard locomotive
senger
miles
and
about
44%
of
pas¬
train miles.
Complete dieselization of the Chicago Division of the
Grand Trunk Western and of tve Central Vermont Rail¬
LIMITED
ino
»tft«ON«i
iiAsiiirn
as through passenger service between Mont¬
Sarnia, was accomplished.
By mid-1958 all train operations on the Atlantic region,
way, as
well
real and
the British Columbia District and our lines south of the
St. Lawrence River will be dieselized.
It
MINE OFFICE:
YELtOWKNIFE, N.W.T.
HEAD OFFICE: 2810, 25 KING STREET WEST, TORONTO, 0NT.
is
expected that deliveries of locomotives during
early 1959 will make possible the progressive
dieselization of the Quebec and Alberta Districts.
1958
and
To meet the
expanding diesel operation, the tempo of
Continued
on
page
28
-Volume
Number
187
5712
.
.
.
The Commercial and Financial Chronicle
in
and Outlook
Canadian
::
'the Canadian economy
on
<-
The
limit,
attractive.
surprise
A mild slump
should
prices
that
earlier
in
'little
cause
inflation'of
by
:
to
more
of
an
reserves
as
been robbed of
a
in excess of the
pre¬
income which
had
Clearly, we would
only be taking care of a tempor¬
ary swing which would soon cor¬
if
reserve
calculated
now
not almost
requirements
a
on
means
.
made to
James Muir
But
Chronic Inflation?
flationary
had
oressure
broken
through the price barrier
and out into the open.
After that,
retail prices continued to rise, un¬
til
the
'beginning of last Novem¬
ber.
Fully and chiefly manufac¬
tured goods continued the steady
climb
that
in
began
1955,
but
general soft¬
wholesale ..prices in
the beginning of
ened from
reflecting
and
sharp
a
'partly
rials
and
more
drop
in
manufactured
grains.
In fact,
1957,
raw
mate¬
all the
sensitive indicators of busi¬
activity show either a level¬
ing off or a decline during 1957.
ness
This, is clearly confirmed
common
est
to
shall
by the
observation of those clos¬
the
not
economic
picture.
I
here to de¬
attempt
termine whether in the
gobbledy-
gook 'of "economic forecasting we
having a "recession" or a
"rolling readjustment." Whatever
we
call
the
phenomenon it is
abundantly clear that, though all
are
ada
and
by
the
J*n.
address
Annual
by Mr.
Meeting
Muir before the
of
Shareholders,
9. -1958.
prime
chartered
rate
charged
banks
keeping with
have
moderate
a
easing of the tight money policy
of the past two years. It is logical
that flexibility in chartered bank
lending rates should be main¬
tained and that those rates should
adjust
to
charged
by
add
can
were
that
it
manly
changes in the rate
the Central Bank. I
a
should
role
rather than
of
ket
that I wish Bank
more positive thing—
only
Rate
the
assume
of
being
a
create the
more
leader
interest
rates
money
has
and
is
it
do
not
mean
unlikely,
view,
that the time is yet ripe to adopt
either deficit financing by gov¬
ernment or easy policies by the
monetary authority and the char¬
my
banks.
tered
It
in
would
1953
Our facilities
can
the industrial
investors
m
it
was
seem
that now, as in
1954, price adjustments
necessary to maintain stabil¬
arranged between the Bank
of Canada and the chartered banks
that
the
latter
would
maintain
a
secondary reserve of 7% of Can¬
adian deposit liabilities in dayto-day
loans
and
Government
Treasury Bills. The maintenance
of secondary reserves by the banks
was
lay
nothing new: the innovation
in stating reserve require¬
ments
in
terms
of
positive ob¬
a
jective.
What
we
that this
an
have
is
An inflexible
reserve
is not in fact
all
a
Frankly,
avoid
objective should become
inflexible figure.
but
to
now
a
reserve
at
compulsory investment.
matters
stand,
rather than sacrifice securities, the
Royal Bank of Canada would not
as
now
hesitate to allow its secondary re¬
serves
to
fall
below
7% for a
temporary period: provided al¬
ways,
of course, that we knew
beach,
but
have
of the
"creeping
Second
population than it
the short run.
Perhaps I
does in
may
make
point clear by
my
con¬
sidering the effect of creeping inflation
do
'children
and
widows
alternately'
inflation
and surging"
been
through
War
suggest
a
Gairdner &
320
(1) The impact on the economy
large government budgets.
(2) The buoyant effect of largo
liquid holdings, consumer credit,
other
or
means of
increasing pri¬
expenditure beyond current
vate
income.
(3)
The
buoyant
round-robin
effect
We
financing in Canada.
provide
selecting suitable investments through which to
dealers
budgets of wartime and post-war
years, combined with the nature
'
and composition of taxes and ex¬
penditures, have made increasing¬
ly important certain built-in sta¬
come
(hat tend to damp down
and
Thus
tax
in
national
progressive
structure
to
revenues
the
causes
rise
■
1
Continued
•
on
invited.
Members
Limited
'i
Members of The
Head Office:
Montreal Stock Exchange
Canadian Stock Exchange
Winnipeg Stock Exchange
'
;
•
Investment
Dealers'
Association
355 St. James Street
Branches in the principal
of
Vancouver Stock
Canada
Exchange
W., Montreal
Cities of Canada
Affiliate
Gairdner %
Nesbitt, Thomson & Co.
Members
Montreal Stock
Exchange
Canadian Stock
—
Toronto Stock Exchange
Nesbitt, Thomson and Company, Inc.
25
Broad Street,
140 Federal
New York 4, N. Y.
Street, Boston, Massachusetts
New
connections between
Montreal
-
Company Inc.
Street, New York 5, N. Y.
Kingston
•
Hamilton
-
'
•
-
■
'
New York
Private
Wire
Winnipeg
Edmonton
London
of Canada
Vancouver
Calgary
Quebec
•
Kitchener
,
(Ont.), Winnipeg, Calgary and Vancouver
.
Investment
Dealers*
York, Montreal, Toronto, Ottawa, Hamilton, Kitchener,
London
.
Member:
The
Association
Direct wire
,
Exchange
60 Wall
than
the
over-all rise in the national money
had
The Toronto Stock Exchange
income
government
faster
participate in Canada's assured growth.
Nesbitt, Thomson and Company
in¬
expenditure.
our
Private enquiries from
are
a
cost-price
in¬
interdependent to a degree
with (1) and (2), but greatly ac¬
centuated by other developments
in
public and private economic
policy.
(1) The
large
governmental
complete service for corporate
a
of
of
creases
Company Limited
development of Canada and of benefit to
be¬
of
Bay Street, Toronto, Canada
be of valuable assistance to those interested
the
to
number of pos¬
ity and prosperity at home and to
ensure
our
competitive position
j4l
since
seems
sible explanations—
fluctuations
that
dull
a
a different
genus.
How
account for the difference?
we
bilizers
those classes.
on
If, for example, we were to read
in our papers that a part of all
old
age
pensioners' checks had
been
stolen; that someone had
picked the pockets of all those
drawing superannuation payments;
by
reasonably stable
a
World
I would
the
of
we
long to
economy.
classes
have
we
be
Moreover, the harm that infla¬
tion does may in the long run bear
even
more
cruelly
on
certain
followed
In contrast, the
norm.
the
on
been
prices back to
in
will
marauder
morning-after, a business depres¬
sion
or
recession, that brought
a
rising tide the
just as surely and
effectively destroyed in a per¬
fectly calm sea. Similarly, a wave
of inflation may create great or
little harm in the short run, but
if the tide of inflation is rising
the long-run
effects may be of
supreme Importance to the future
castle
the
and
OPPORTUNITIES IN CANADA
in
that
become really "easy"
inception of a tighter
policy some two years ago,
money
impression
meekly 'following money mar¬
operations.
However, lower
are
*An
89th
the
fallen in
catch
ing temporarily exceed the supply
of goods at current
prices or, in
the common and useful
phrase, we
have "too many dollars
chasing
too few goods"; but the
key word
is
"temporarily."
In the past,
spending
sprees
of
this
kind
,
castle
to
spend¬
time-<payment
delinquencies,
This brings us to a problem that
amplication clearly i^that transcends the events
of the im¬
today's sales are being further in¬ mediate
past: "Must we look for¬
hibited by the mortgage on dis¬
ward "to a gradually
rising tide of
posable income, which is the her¬ inflation such as
we
have wit¬
itage of excessive credit commit¬ nessed in the
sand
name
to reach.
The typical kind of in¬
flation usually arises from the fact
that business and consumer
II
child's
His
something more of his
genesis and life history, and here
I am
thinking particularly of the
chronic type of inflation that mon¬
etary and f iscal policy seem unable
a
the
apprehend the marauder?
must know
and the
With the
crywould
"Inflation."
is
.
-
and
and
Well, he is still around.
apprehension: it would
be unrealistic to expect our econ¬
years since the Sec¬
omy Jo go
on
ond World War?" 'On this
expanding
in¬ ments in the past.
as in the f ran- ;■
rising
definitely without some kind of J'.'?The process of healthy adjust¬ 'tide there may be waves that lift
tic pace of?
breathing spell..
? • ment would seem now to Require the level of prices sharply, after
consumer
the elimination through price re¬ which the waves break
and sub¬
Ali i, this
has
buying, busi-";
implications for
ductions *of inflated
production side. But if we look at the various
ness
monetary, fiscal and businessipolexpan¬
ajid distribution costs.,
A tight waves of inflation since the
war,
sion, and the icy.- In 1953 and again in,1954, in
ltqney policy has inhibited infla¬ we find" that prices fell very mod¬
general tight¬ a previous
period of declining
tion and 'has indeed been instru¬ erately, steadied or
very
business activity,- we .referred to
gradually
ness
of mar¬
mental in breaking the circle and rose for a
period, and then rose
three: methods j of
kets in both
meeting the
commodities problem, viz., tax reductions, price ending, for a time at least, the sharply once more in a new in¬
round-robin
cost
and
price in¬ flationary wave.
Perhaps, then,
and labor." In
reductions, and easier credit terms.
creases that can continue indefinwe should-consider the course of
January
1957 Some tax reductions, small and
the
tide
and
not merely that of
nitely only if the money supply or
I
had to
re¬
impotent- as
they, may appear,
the velocity of the monetary cir¬ the individual waves.
We may
cord
that
by have already been effected, and
culation is allowed to increase.
debate
which
wave will destroy
both the rate of the Bank of Can¬
mid-1956
in¬
or
hue
land
superhuman efforts be
to
quarterly average of charteredbank deposit liabilities in Canada.
increase
the
a
monthly
greater
flexibility, but still adhering to
the arrangement, I think we
might
well consider as a
minor, though
important, ^modification that sec¬
ondary reserves be calculated on
As
average.
this, would there not
tremendous
throughout
Secondary
of the meager
some
a
read all
a
27
hard working man
to create for them:
striven
we
be
rect itself..
scarcely be
Already we
generous.
news
bank
were
scribed figure.
arfe
business
already 'expanded to the
terms, including "no
receiving
chartered
wnole
produc¬
and
made
have reached what
surge.
time
as
retail
down payment" could
in
this
in
attempt
credit is
to be the end of the latest
inflationary
that
hign costs and consumer
apathy
through
easier
credit
terms, always unsound in itself,
must by now be
especially un¬
rewarding. 'Consumer instalment
inflationary forces have, not dis¬
we
fact
overcome
appeared,
at
today,
concealed
are
Seems
In'January 1956
pointed out
that, owing to inflationary pres¬
sure built up during 1955, "there
are definite danger signs, not so
much in prices
more
The
material costs have not
tion and distribution costs.
problem of inflation as a thief; suggests domestic and foreign
economic policy changes; and discusses national attitudes and
long-run policy definitely shaping Canada's ftfture. Mr. Muir
would like to see: (I) flexibility in required secondary re¬
serves of 7%;
(2) improved export financing; (3) broader
'General Review of 1957
reflected
a
and
healthier future prosperity and expansion; deals with chronic
v
been
even greater
market base, and (4) municipals made
markets,
raw
period, that we have suffered not
only from open inflation but from
4>y Royal Bank head
perceives current readjustment leading to an
money
world
lower
means
By JAMES MUIR*
Chairman and President, The Royal Bank of Canada
This discourse
(531)
,
System
,
■
'
page
38
28
The Commercial and Financial Chronicle
(532)
Continued
jrom
26
page
diesel educational program was stepped up and en¬
our
extended, jointly with Canadian Pacific, to provide
are
CBC
television network service to stations at Rimouski
outlets
and Jonquiere, Que.
to become familiar with
courses
shop at Cote de Liesse
(Montreal) should be in operation by the summer of
1958 and work is under way on a similar shop at Ed¬
monton (Calder), to be in operation by the end of 1958.
Meanwhile conversion of motive power shops from
steam to diesel electric repairs has begun at Moncton,
Point St. Charles (Montreal) and Battle Creek, and plans
for
similar conversion at Transcona
a
(Winnipeg)
are
in
preparation.
Sarnia, Ont., and Joffre,
in operation in 1958.
1957
all of which should be
Que.,
the
nearly $3,000,000 is
on
order for instal¬
lation at the Cote de Liesse hump yard, one of the largest
on the continent.
installations of its kind
Canadian
eral
office following
into
election
plight
of
the
of
June,
textile
In the U. S.
become
5%
remedial
correct
Limited
cotton
1957, in the
industry in
A., when imports have
taken
to
25%
of their do¬
to 50%
mestic market taken
over
George Blair Gordon
by imports
weakening of customs laws against dumping and
sub-cost importations, left the Canadian market open to
trains, and those between Winnipeg
and Edmonton 117-car trains.
six-year main
line
track
the Western Region moved
on
second
improvement program
ahead
on
scehdule in its
Bank
widening and ballasting- has been
completed during 1957 over a distance of about 300 miles.
year.
New
rolling stock acquired during 1957 includes 6,524
freight cars, 100 passenger train units and 152 units of
work equipment.
'
Other improvements in
operating procedures are being
a through teletype circuit for
handling train manifests between Montreal, Toronto and
Winnipeg, and extension of this system through to Ed¬
monton and Vancouver, now under
way; installation of
a
car
tracing teletype circuit between Montreal and
achieved by completion of
Joffre and between
Montreal-Capreol-Hornepayne; stud¬
of train marshalling programs to
improve yard- ef¬
ficiency; work on progressive installation of C. T. C.—
type signalling on the transcontinental line; studies
ies
aimed at mechanization of all
accounting functions.
efficiency was acquired dur¬
A major aid to speed and
ing the
650
car
with installation of
year
electronic
computer.
an
Housed
advanced IBM Type
in
a
computer center
Tariff
reductions
made
from
puting and production of pay cheques for the entire CNR
system, and will also be directed at other functions re¬
data handling.
This automation program
assistance in speed and efficiency
of
accounting and clerical operations and in supplying
of the statistical information
upon which many de¬
cisions of management are based.
some
The year also saw acceptance
by the CNR of
plan for
21
acres
to
stronger
a
around Central Station in Montreal into
ing business, commercial and
massive proportions. A model
entertainment
of
wide assortment of manu¬
which arises
the ready supply available across the border.
The
by prompt deliveries and
It
Under
the
agreement
with
seven acres
this
buildings on the area
completed within five years.
master
a
center
of this
a
the
In
one
Prospects has predicted
consumer
demand
steadily expanding
to 25 years, while
the
report of National Industrial Conference Board,
which was requested by the Commission to report on the
primary textiles industry, makes it clear that, in their
opinion, the industry is well managed and in a position
to take good care of a large proportion of Canadian
over
the
next
to
look
channels to meet the
continuing heavy demand for pri¬
vate wire and other related services.
Extensive facilities
were also provided for use
by the Canadian Government
in
defense purposes.
CNT also placed in operation
tape
ters at Moncton,
proceeding
completed
the
service
on
in
a
relay message
cen¬
Winnipeg and Vancouver, and work is
similar installation in
Montreal, to be
1958.
These
relay
centers
greatly speed
and effect substantial
economies in message
relay handling.
"Telex" service,
inaugurated
jointly with Canadian
1956 between Canada and
overseas
countries, was expanded this year to provide service
between many of the
larger points in Canada. "Telex"
Pacific Telegraphs
in
provides direct dialing and instantaneous
two-way
by teleprinter between its subscribers
munication
service
is
receiving
an
com¬
The
excellent response from business
organizations.
.
of
CNT completed
a
microwave
survey
system
work
between
and
Johns, Newfoundland, for television
munication
service.
During
began construction
Sydney, N. S.
1957
and
and
general
microwave
St.
com¬
facilities
The
into
trend
of
certain
seems
with
1958, paralleling
men
confidence
to
further
a
A.
E.
GRAUER
the
only
•>
easing of bond yields, and
stimulate borrowing. The
of savings should continue
growth
in
as
quarter - century.
Sales have been
doubling every six or seven years.
Utilities concerned with the market¬
A. E. Grauer
ing of these highly desirable forms
of energy have, therefore, come to
be regarded as sound investments,
bad.
periods of adjustment before.
On such occasions, sales to some types of customers have
tended to level off more than others. Sharp cut-backs in
whether the short-term outlook is good or
We
have
encountered
LABORDE
geological outlook for Canada's oil and
industry, promises substantial pew discoveries in 1958.
in
turn will accentuate the need
to widen estab¬
lished markets and to develop new areas of distribution.
Creation of
,
new
matter of first
try's
and
markets will be
concern
a
to the indus¬
leaders throughout the year,
particularly to Canadian Home¬
Oils
stead
Limited.
The
United
States and Canada consume
a
volume
tremendous
Canada's
products.
reserves
should
contribution
ments
a
of
oil
make
the
to
an
annually
petroleum
and
gas
important
require¬
future
countries.
of both
connection
this
In
have
mutual
both
interest
in
nations
the
de¬
economically strong
North American oil industry. In the
velopment of
re¬
quired in such volume as have elec¬
tricity and natural gas. Consumption
has increased steadily over the past
H.
The favorable
ing placed upon them, our engineer¬
ing and operating departments will
have a greater opportunity to plan
for the orderly development of their
services in the years which lie ahead,
been
same
President, Canadian Homestead Oils Limited
war rate of growth will have its com¬
pensations.- With fewer demands be¬
have
the
on
1957.
,
commodities
Hungerford
G.
may
eventually be described
as a period of economic consolidation.
During this inter¬
val, some industries may experience a falling off in out¬
put and revenue. Yet, to others like my own, something
less than our extremely rapid post-
Few
J.
further
this
The next 12 to 18 months may
i
boys and higher
be expected in
Mortgage interest rates would follow
a
These
,
President, British Columbia Electric Company Limited
de¬
The profit
relentlessly separate
This
salutary
at least temporarily, should
dampen the fires of inflation.
the
manufacturing industry.
continue
process,
20
some
cur¬
business
to
EDWARD
forward
that
by
Only the immediate
downward
activity
gas
Queen
Construction of the hotel
Telegraphs established during the year 47,000 miles of
carrier telephone and
110,000 miles of carrier telegraph
experience.
With these basic considerations in mind, it seems rea¬
substantially
chain of distinctive hotels will make
of the world's main convention
cities.
of
communications, Canadian National
a
Limited
future presents some uncertainty.
market requirements.
construction
field
indeed
strengthened
industries.
area.
system's
the
is
selected
has proceeded on schedule.
in
confidence
can
Economic
Company
diminution of confidence in the long term
Canada;
from
A major highlight of the Canadian
National system
during 1958 will be the official opening of the
Montreal
no
for
earnings
has also played its part in facilitating the
entry of American goods from the standpoint of laiddown cost in Canada. The Royal Commission on Canada's
New Hotel
passenger
There is
will
years
Trust
Toronto, Canada
outlook
rent
HUNGERFORD
National
«
the
of
Directly adjoining the CNR's
train facilities at Central
Station, this latest
President,
squeeze
1
mid-April.
,
G.
discount value of the American dollar in Canada during
strik¬
.
Elizabeth Hotel in
the payment of
.
J.
from
the
company,
under lease will be
of
urban transporta¬
monies will go
'
recent
prepared by Webb & Knapp
was
(Canada) Ltd., who have leased
At least five
the re-equipment and
on
As about 70% of these
the purchase of materials and
cline in capital spending.
buildings and the
area, which is to be called Place Ville Marie, was un¬
veiled last August.
spent
rail freight and
factured goods in order to meet the situation
development that will eventually transform
a
be
our
towards
devoted
Company will obvi¬
ously be doing its,part to make 1958 a relatively prosper¬
ous year for the Province of British Columbia.
onwards, together
the present time. Despite their difficulties, the
units in the industry have followed a policy
of maintaining their plants at a high level of operating
efficiency. Aggressive merchandising has been supported
up
future of the Canadian coflton
Building in Montreal, this
processing machine and other modern machines
working with it are progressively taking over pay com¬
1938
the impact of the widespread depression in the textile
industry which came in the aftermath of the Korean
War, and which has persisted in one place or another
data
mass
will
of
be
systems.
towards
with
sonable
will be of invaluable
dollars
will
sales of natural gas.
our
or
in the International Aviation
quiring
million
'
longer trains and to handle traffic more
efficiently. With the work planned for completion dur¬
ing 1958, sidings from Montreal to Winnipeg will ac¬
The
dollars
Ten
expansion of
'
failures
to accommodate
100-car
facilities.
the construction of
salaries and wages in our area, my
The record of the industry
of loss of employment, financial
lengthening of passing sidings
commodate
on
tion
during the last few years.
one
roads
ing nearly $100 million
modernization
difficulties, and little or no opportunity to
share in the expanding economy of the country.
the
on
Capital outlays on new churches,
and other civic and local im¬
provements may also be stepped up. These influences,
together with a modest recovery in B. C.'s exports of
lumber and pulp and paper products, may yet suffice to
make the current year one of the best in British Colum¬
bia's short, though spectacular, history.
B. C. Electric, like most other utilities, must plan for
the longer-term future. Its expansion programme reaches
million
hold the situation in check.
from
easing
an
higher than in 1957.
schools, hospitals,
the
Canadian textile manufacturers have
seen
With
reduction in down payments,
a
will be spend¬
new plants
and the installation of new machinery and equipment.
This is close to our all-time high of $110 million in 1957.
Around $80 million will go towards the erection of new
electric power generating, transmission and distribution
the Fed¬
been
for optimism as well.
are reasons
three to five years ahead. During 1958, we
which
of domestic production,
steps have
or
and local retail
closely to con¬
more
houses will be built this year. Investments in new
stores
and
other commercial
establishments may be
the
interest of
Government,
since 1951 has been
Operating Efficiency
Work continues
•
Company
Canadian
tied
are
more
Canada.
development of major classification yards
in Canada were centered in Moncton, Montreal and Win¬
nipeg. In the case of Cote de Liesse Yard, Montreal, a
contract was let for grading, and clearing of the site at
Moncton will also commence shortly. Signalling equip¬
at
for
and reflects the
came
on
ment valued
outlook
activities
of credit restrictions and
manufacturing
industry in 1958 and beyond is closely connected with
the outcome of a series of hearings before The Tariff
Board, Ottawa, scheduled to take place in the first half
of the new year. A reference of the
textile tariff items, comprising cot¬
ton, wool and synthetics, to The
Tariff Board was announced by the
Minister of Finance in September,
new
Good progress was made on construction of yard facili¬
ties at Battle Creek, Flint and Pontiac, Mich., and at
Studies
President, Dominion Textile
The
diesel maintenance
new
GORDON
details of locomo¬
tives of the various builders.
The
G. B.
Thursday, January 30, 1958
.
spending.
There
totalled 3,085 by Oct.
31. Nearly 2,800 of our men have completed the basic
course for engine maintenance and are now taking fur¬
.
various wholesale
are
as
whose
sumer
rollment in these training courses
ther
affected,
were
.
event
Edward H. LaBorde
that
an
Middle
Eastern
sources
should be cut off, this industry must
have
been
prepared
to
supply
oil
needs of two
highly industrialized countries. The indus¬
try itself will be able to increase its reserves only if
normal growth has been assured through markets for
its present production.
The industry in the United States is receiving govern¬
mental support in the form of import restrictions, de¬
signed to strengthen domestic producers. Unfortunately,
these restrictions have been applied to Canadian oil as
well
to
as
Middle
Eastern
and
other
distant
sources.
the output
of certain manufacturing plants, though short¬
lived, can cause the over-all requirements of industry to
level off for some months. Residential and commercial
In
customers may also postpone their investments in new
power-using and other durable equipment. Yet, com¬
pensating influences are usually at work. Population
growth and the drive for greater efficiency in industry
constantly result in the opening up of new accounts and
the growth of others. Not only are new homes and stores
being built, but industries whose sales are falling off will
want to install more labor-saving devices.
On balance,
these decisions will augment the business done by the
electric power and natural gas distributing companies.
The outlook, of course, differs from one region to the
next. In British Columbia, our resource industries have
been expanded considerably over the past decade. Now,
as the postwar programmes of expansion are being com¬
pleted, we find that export markets are not able to
absorb all of the lumber, pulp and paper and mineral
products which they are able to produce.
Inventories
have been mounting and over-production has resulted in
lay-offs in some outlying communities. Firms supplying
these industries with process materials and equipment
the United States should permit increased marketing of
integral part of the
combined North American supply, available for indus¬
trial and defense purposes. Therefore, in its own interest
my
view,
Canadian
oil
is
an
Canadian crude, whenever economically feasible.
In Canada itself, the Canadian Government
actively support oil
and
gas
to create wider markets.
As
can
producers in their efforts
an example, the Montreal
currently imports more than 260,000 barrels of oil
day, principally from Venezuela.
For Canadian
crude oil to gain access to this market new pipe lines
and other transportation facilities must be built.
Such
a
program would need to be backed
by Government
policy, to persuade the Canadian refinery industry to
establish its own voluntary control of imports.
While
voluntary quotas are the soundest approach, the Canadian
Government must consider
the possibility of import
duties on foreign crude to strengthen its own producing
area
each
industry.
Furthermore, the Canadian Government can
take
positive action to help cultivate markets for oil and gas
Continued
on
page
30
Volume
Number 5712
187
The Commercial and Financial Chronicle
.
.
.
(533)
Canada
Behind the Headlines in
dians
well
I
as
grievances regarding
our
been
principal Canadian
trade, investments, and surplus crop
answers
west
the
to
10
all
of
a
night
south
malefactory designs behind our exports or investments,
holds Canada responsible for adverse trade balance and exten¬
Victoria Island in the
on
know
I
Frobisher
Baffin Island and Labra¬
Bay
on
dor
and
sical economic
but
policies. We believe that not only
prosperity but peace :rest tp a very
considerable
Newfoundland.
I
have
U
a
extent
the
on
rela¬
n
i t
d " States
e
It is not
Government
policy.
of the word,
sense
do believe in liberal trade
we
members of the trading commun¬
and
I have set foot in all
Circle.
we
this
provinces.
Arctic
the from the United States.
Ontario—
I have been to the
mouth of the Mackenzie and spent
Avowing friendship, Mr. Merchant vouches theref ore
by
Canada
tively free movement of goods, as
well as people and ideas, between
over
Lakehead
to Windsor.
no
The
second
point
.
I. want
Canada's
ing
with
the
trade
United
relationship
States
from-all
of Canada's other
trading relation¬
ships. I believe, and I think most
enlightened economists around the
world
ity of the world.
believe, in
"multilateral"
what is called
trade.
This
What does this mean in connec¬
tion
with
the
complaints
one
sometimes hears that the United
with the resultant
States has forced
determines the health of
Canada
on
ex¬
ports of goods
so greatly in excess
imports it takes from Canada
Of
that
the
resultant
imbalance
is
to
make runs to this habit of isolat¬
means
simply that it is the totality-of a
country's
imports
and
exports,
balance, which
coun¬
a
try's foreign trade position. If you
try to balance your books every
three months
every year with
country, you come
ence
frequently drawn is that down to barter which is, I believe,
cities and the woods of Quebec. I
Canada can only pay for this ex¬ the most restrictive and-stultify¬
have been in Calgary, Edmonton
cess of imports from the United
ing basis on which to trade that
and Winnipeg several times. And
States by borrowing money or by any sensible person
on all these visits I have met and
caa-imagine.
acknowledges more must be done
surplus disposal harmful side effects. Turning to our
to
twice
been
sive U. S. investments and
to lessen
much
province
pretty
thriving
disposal record, and claims U. S. A. is not a "free trader"
and must keep favorable balance of trade to continue "our
shares for the defense and economic well-being of the free
world."
claim, however,
in the last year and a half—by
air, by train, by automobile, and
infinitesimally on foot.
I have
By HON. LIVINGSTON T. MERCHANT*
Like
not "free traders" in the clas¬
are
increase my un¬
sold
export
every
government.
derstanding of this great country,
I have traveled over 50,000 miles
Ambassador of the United States to Canada
American Ambassador to Canada
understand
you
can
to have tried to
Canadian-U. S. A. Relations
and
understanding Cana¬
or as
as
each other.
29
Vancouver
twice to Nova Scotia.
world leadership role, author states "serious negotiations must
and
I know the
dangerous to Canada?
The infer¬
or
each individual
.
be conducted in private
negotiations
are
.
.
and it is folly
.
end in itself" since there
an
to think
...
are some
talked
to people in government,
business, journalism and banking, and in the universities. I read
of Canadians for those south of five
of
your
newspapers
from
the
border
though
it
is
accompan¬
A Change In Mood
Winnipeg to Montreal every day—
ied by the constant apprehension, and a half dozen
others, though
It is now nearly two years since
as someone put it, that the great
less thoroughly.
I was appointed as United States
elephant to the south, in the most
So
it
is against this background
Ambassador to Canada and in re¬
friendly and unconscious way may that I
cent weeks I have been reflecting
say I think I have detected
roll over in his sleep and inad¬
on where and
signs of a change in the mood of
vertently break Canadian bones. Canada in the past 12 months in so
to
.
.
.
things "we cannot in decency compromise."
what extent
Canada
with
it
for granted.
do we.
have
familiar with
when;
Icame hereon'
this
I
visited
ber
tions
had,
a num-
;
our
rela¬
as
economies
our
ex¬
panded side by side the points of
contact with
inter - relationship
would grow in number and that
ficial.
I
had
many
Canadian
friends. Indeed, I think it is accu¬
world
the
as
rate to say that at every foreign
post in which I have served my
best and closest friends outside of
plex
became
this
in
of
age
have
would
more
mpre com?
science we
problems to
solve,. many of which would not
Embassy-have been Ca¬ be susceptible to traditional ap¬
nadians. Moreover, in my former
proaches. I did not then believe
capacity as Assistant Secretary of that as the
problems multiplied
State I had during more than three
and became more complex the at¬
own
years
direct responsibility to Sec¬
retary of State Dulles for
mosphere itself might change and
with the change solutions become
our re¬
lations with Canada.
I
arrived
Canada
in
with
This I
cer¬
that
was
pening.
important to the
United States than any other coun¬
try
more
Since
in the world.
difficult.
more
tain convictions. The first
Canada is
I
year or
mood
or
climate which it behooves
both j^iir coa^iiea. to
came
look at. I
both sides
am
in that conviction. It has deepened.
there
Secondly, I arrived in Ottawa
impressed with the deep well of
respect between our two peoples.
This is well, for we each have
deep need of the other. This basic
basic
in
the
friendliness
the
on
a
that
on
friendliness
basic
and
attitude, however, does not auto¬
matically produce smooth rela¬
United
States.
This, too, is unchanged.
There exists also, I am satisfied,
Canadian
convinced
is
tions.
*An
address
by
Mr.
Ontario, Jan. 22,
When I say
of Hamilton,
to set
1958.
myself
which
we
C,
•
think I
detect is reflected in a steadily
growing criticism of certain poli¬
cies • of the United States Gov¬
ern ment
I
actions which
or
reflect
sumed
to
United
States
contribution
are
as¬
of
the
policies
Government.
to
better
a
As
a
under ^
standing by
Canadians of. the
United States, I thought that to¬
night I would discuss several of
these subjects.
In doing so, let
me
be frank in saying that we
not
do
the border.
for
would
don't
we
all,
my
last
to
as
an
expert on
lem and not
created
one
forced
or
to
third country which produces
a
Canada by a predatory neigh¬
bor. Imports into Canada from the
peanuts, which
United States represent in the ag¬
ables the coffee produced in turn
to ship coffee, to Canada. In this
on
gregate the individual choices of
the
to
are then shipped
country-which en¬
coffee
.
case it. is as simple as that. I have
private citi¬
of
course,
but
buying what they want, on oversimplified,
terms which they consider more basically that is how multilateral
trade operates.
advantageous than are available
Now when you look at Canada's
elsewhere.
If
Great Britain or
total trade balance the picture is,
Germany or Ruritania can offei*
to Canada: bnttcrticeboxes or nia-i considerably; different from what.
chine tools or leather goods or it appears when-you look only at
whatever at lowerpricesfor; the, the table of imports from and ex¬
to - the .United "States, "The same quality and with comparable ports
excess of .total Canadian; imports *
delivery and t m aintenance: terms,.
over exports is far smaller. Morethen the Canadian ^
; over,:I think fewjwould deny that
turn to .Great'Brit#^^
•the " margin- is largely / accounted
or Ruritania for those needs:
; We
lieve in a competitive world and for by imports of; capital goods de¬
I don't think you will find us com-: signed to increase .Canada's own
-future production, and hence quite
plaining if we prove unable toi
meet competition, provided that it properly, in the case of an ex¬
is fair and. not encouraged by dis¬ panding economy like; Canada's,
to be paid for "on; time."
criminatory impprt measures.
.4
millions of Canadian
zens
The point I am making is that
it is
•■-."•-•As", for United Btatestkwestment
in" Canada—this, also-seems to
the.choice of individual Cana¬
essentially
dian consumers which controls the
volume
of
me
problem,, if it is
Continued on?page
Canada
into
imports
a.
I
t
J M
*
'//
j\v
1
Vy
'//
Vs.
\
'
that
or
4
A
>{/yl v*\]
*
•
"
M
4
'
harm her.
'
these
you
approach
to
familiar
are
Canadian
of the matter.
aspects
better
From much that
with
My
admittedly is to seek
explain
the
United
read
you
Securities
Investment
three
topics
general
or
0|f our relationship which I
discuss are, first,
of trade between
plan to
question
countries
United
and
.>
the
in
Canada;
second,
surplus wheat disposal poli¬
cies; and third, this matter of
how the United States is trying
to
discharge its responsibilities
of leadership in the tree world.
Our
our
connection
latter
.
.
i
,
v
,
States
investment
this
1958'-'.,
iaao
i
our
I
organization is actively engaged in under¬
writing and distributing Canadian Government,
Provincial, Municipal and Corporate Securities.
:
want
It is
to say a few words on the ques¬
tion or negotiation with the So¬
also
equipped to execute orders
Canadian Stock
on
all
Exchanges.
viet
Canadian economy
Union, which has figured so
prominently in recent newspaper
and
Your
radio comment.
Inquiries Are Invited
*
Monthly, the B of M's Business Review
ports and interprets for you Canadian
nomic
as
or
news
they
ni
re¬
Answers
eco¬
and trends. To receive copies
published, write
Head Office, Montreal.
are
any
U.S. office
Let
turn
me
There
countries.
of
or
TO IWIUOM CmDIAHS
op
T
Bank
New York
- - -
Chicago:
of
64 Wall Street
Special Representative's Office,
- - -
141
•
two
several
seem
overlooked.
We
Blvd.
RESOURCES EXCEED $2,700,000,000
do
the
not
Incorporated
which
forgotten
First of all, like
be
to
West Jackson
Canada,
A. E. Ames & Co-
as¬
333 California Street
Office: Want*cat
700 BRANCHES ACROSS CANADA
and
our
States is
what can be called a private en¬
terprise
country.
Goods, are
bought and sold on what is to a
very real extent a free market.
Montreal
San Francisco
are
trade
relationship
this
sometimes
to
between
investment
pects
Complaints
now
New York
United
have
a
socialist
Boston
,
Canadian
t
Affiliates in
Winnipeg
Toronto
Montreal
Calgary
Vanrwuvor
Victoria
and other Canadian Cities
or
economy.
We
state .trading as is,
do not
the case
in Russia, where every import is
purchased
by
the government
planned
have
I
London, England
-
4
'
1
?
.
»
w
.
\
*'
i
>
,
\ ♦'
'
J
f
-rf?
4
k
:
.
••
'
;
t
.
c
i
■
•
■
.-4
1.
?
S
"n
V
•.*■
r.
1
a
39
to the benefit of Canada and
nope
In
only
decisions and actions in¬
our
two
each month of the
producer
Now, since the United States is example, doesn't raise, then Cana¬
dians go without coffee at break¬
a state
trader, I think it fair to
fast unless they sell wheat, or
say that the problem—if in fact it
is a problem—is a Canadian prob¬ whatever else they have to sell,
that
assert
mistakes
make
coffee
not
coun¬
government. >
my
the
be
country wants coffee and
sole
wants peanuts, which Canada, for
you
tfn advocate for
as
and
one
the
to
resources
nor, do I
have the pa¬
tience for me to give a compre¬
hensive and completely balanced
exposition on each point. I stand
try
birthright of natural
foreigners south of
If
time
the
have
believe, would
The
this J .do not pretend
up
assuredly
or
haftg separately."
change
This
areas
Merchant before
Women's Canadian Club
together,
all
its
States.
II
part
Three Grievances
the
.
ure
friendliness toward Canadians and
a
This is ter¬
concerned.
are
hang
Shall
believe may be hap¬
There have been for a here
more signs of a change in
now
here there has been no alteration
things
its relations with the United
as
States
I
that
sense
L. T. Merchant
tourist and of¬
our
far
longer be "auto¬
no
think, though, that at
the time I took the phrase,in the
times1
of
that
No one does. Neither
would
matic."
vacationer,
as
before
current: at that time: that
assign-.,
ment.
than
ribly important to me and I think
it is important to Canadians as
Thirdly, I felt sure two years well. We are both living in an
ago that though problems existed
increasingly • dangerous
world
between us and more would arise,
and, as Benjamin Franklin said
they would be relatively rapid and during a period when Canada
easy
of solution,
t accepted, I and the American colonies did
think, the statement: which was hot- see eye to eye: "We must hli
changed
in
that interval.
I; was not un¬
Canada
better
Canada doesn't want to be taken
and
relations
our
realize
I
ideas of
ray
in
selling
' i.
30
The Commercial and Financial Chronicle
(534)
.
.
Continued from page
NEIL
28
should
Canada
a.
revise
its
President, The Canadian Bank of Commerce
Toronto, Can.
first step,
the exportation of
on
help make
structure and
tax
in
industry fully competitive. As an example, deple¬
tion allowances
in
Canada are granted only on n#
income. This is in marked contrast to the United States
available
for future
substantial
use
sioii
Canada.
western
restriction.
Such
We
would
be
immediate
the
to
the
and
long-term advantage of both nations.
With the
shown,
leadership which the Canadian industry has
by forceful Government policy, in
supported
1958 much
be
can
done
markets and
establish sound
to
strengthen future growth.
In this way, Canadian Home¬
Canadian producers plan
to make further worth-while contributions to Canada's
Oils
stead
other
and
western
economic development.
spencer lewin
Vice-President, Bowater Corporation of
i
The
two
North America, Ltd.
y
■
probabilities
now
that
are
it
at least
take
will
for newsprint consumption to catch
capacity and with the in¬
creased capacity that will be avail¬
years
with
up
existing
in
able
the
1958
at
and
cost-price
a
1959.
Meanwhile,
is
squeeze
the Canadian
and
us
still
^
premium.
Ail
these
lenge
to
with
dollar remaihs
things
present
government,
!
chal¬
a
management
It is my view that the long-range
planning of the Canadian pulp and
paper industry has been sound, but
we may now have to take a bit of a
breather for
not
a
was
never
tackle
move
the
better
a
problems
abnormal; gain
an
and increased ca pa-/
the
In recent years
For
H. ML S. Lewin
r.
immediate
future
and
to
slightly in 1957,
reflected
as
North
It
of
in the
now
slowed
trend
year-end
in
America. Any decrease in the
expected
of
growth
concern
to
the
airline
industry is
management
because it has been possible to main¬
tain fare levels only by reason of
the
lower unit operating cost which
be
can
achieved
with
traffic volume. In
tended
We
ate
increased
the
past, this has
offset steady increases in
to
the cost of labor
^and materials.
nevertheless
traffic
expect
increase
in
at
Trans-Canada
moder¬
a
1958.
Air
In
the
Lines
have been made for the provision of
additional capacity to meet public
requirements. In the coming year we
shall
put in service an additional
eighteen
of
the
popular short to
medium range Viscount prop-jets. Two more of the
large
Super Constellations will be in operation on the longer
Gordon R. McGregor
'
*
-
New York and Toronto-New York services to ten
daily
in each direction. There will be moderate in¬
flights
most
of
our
services
into
Seattle, Chicago,
Canada-Florida services
Cleveland and Boston, and our
will reach a higher peak at the
height of the southern
in
Trans-Canada
February.
Air
Lines
will
introduce
an
approxi¬
mate
13% Domestic tourist fare reduction in 1958 and
it is hoped that this will attract more business
by mak¬
air
transportation available to
group. At the same time the discount
class services will
broader
a
on
be reduced from 10%
income
round
trip first
to 5% bringing
TCA's fare structure more in line than those of other
North American carriers. TCA carried
2,375,000 passen¬
gers
in
1957.
The high capital investment in
transition to the turbine or
jet
new
airplanes for the
age is a sign of the air
transportation industry's confidence in the future of our
economy.
Trans-Canada
its
Lines
changeover to become
is
investing $200,000,000
in
one
of the first airlines to
be
completely turbine powered in 1961. Our fleet will con¬
sist of Douglas DC-8s, Vickers
Vanguards and Vickers
Viscounts.
In the
believe that the premium
the availability of more
long-term financing from the United States,
export- market, however,
Canadian
the
on
favorable
will
to
continue
we
dollar,
exert
and
adverse
an
effect
on
the
export
v/of capital equipment from this country.,;C ./■',
L.
In
RAMSEY V
M.
attempting to give
our
field
statement
a
on
•
the outlook of
doubt the first requirement is Xp
no
define just: what our
'
field comprises.
t
Threads:
(Nylon, Cotton, Silk, Rayon, etc., in a great
variety for the Wholesale, Retail and Industrial markets).
earn
a
.
fair profit.
'
change
between
the
U.
S.
and
Ca-
which
dollar,/ it has watched the
Canadian price for its
Clifford W. Michel
production
decline from $38.50 per ounce, when
the Canadian dollar was at 10% discount, do. a price as
$33.15
as
in the year just past-as the Ca¬
per ounce
nadian dollar
rose
U. S.
In the
upon
the income
to
a
premium of
face of such
more
than 6%
over
price pattern bearing down
equation, the balance of
profit has been constantly lowered as the costs of mate¬
rial and labor
constantly rose under the pressure of
side
of
taken
will
number
a
operate
a
the
world-wide inflation.
and
hopeful
are
sition
this
meet
to
we
such
conditions, it
was
obvious that many of
the marginal mines would be compelled to close and the
production of gold, much of it being a by-product of
base
metal
4,400,000
1957.
.
'
.
There
:7r
-
be
•:
indication "" that
some
Production
would
moreover
substantially lower if the Canadian Government
did
Program which, while it pro¬
vides no benefits for the low cost
producer, at least is
helpful as a subsidy to certain of the higher cost seg¬
ments of the industry in
keeping them alive.
About the middle of the year just
closed, there were
that some alleviation of the industry's problems
signs
might be in the making. The world-wide postwar infla¬
tion which forced up prices
generally, except gold, and
the
appeared
greater
creation
at
last
than
to
the
of vast
have
prices then prevailing.
new
created
consumers
production
a
volume
required,
Indices
at
facilities,
of
least
of production
material prices in Canada and the U. S. started
that has not yet been stopped.
goods
at
and
a
the
raw
decline
This, if continued, should
general price level, hope¬
fully at a lower plateau, and the cost side of the miner's
equation has a reasonable chance of being brought under
tend to create
a
more
stable
The
same
may soon
ing volume
rising trend of the premium of the Canadian dollar
that of the U. S.
As this
premium fell from
over
July) to about 1% currently, the industry is
over
6% (in
once
again
next week
or
so.
We
believe textile
inventories, both at the manufacturing and retail levels,
are low and salesmen have been off the road for three
weeks and
are just starting out again.
,
v
.
Looking to the year 1958, our two greatest problems
are
,
imports of foreign textiles and the unrealistic atti¬
tude of
some
of the labor unions.
Imports continue to grow at the expense of the do¬
mestic
than
industry, in
50%
of
this
some
market.
lines of textiles taking more
Japan, particularly, poses a
serious
threat, and in a number of our lines, notably
elastics, has cut seriously into our trade. We are hopeful
that, after the textile tariff hearings are completed
sometime this year in Ottawa, we will be afforded more
protection, particularly from low wage countries.
Labor continues demanding more money each year
despite the generally depressed state of the industry and
in the face of stationary or lower selling prices, which,
of course, results in more and more imports and grad¬
ually lessened job opportunities for Canadian workers.
To sum up, although we expect 1958 will be a difficult
year for Canadian manufacturers, we do not think the
impact on the textile industry will be too serve and look
for considerable improvement in the latter half. .
Our
factor of physical over-capacity and declin¬
of production and prices also reversed the
-
start to im-v.
prove and, although recent business
in
general in Canada, as
in the
L. B. Ramsey
United States, has been very slow,
with many mills closed down for two weeks over the
holidays, we feel that there should be a marked upturn
not continue the Cost Aid
induced
,
will be in a po¬
competition and
v.
is
hosiery prices
operation, has barely held steady at about
ounces per annum.
steps
costs,
possibly show improved results over
evident within the
Under
of
lower
to
„
nadian
low
have
we
the basis of the going rate of ex¬
on
control.
Air
s
products will continue at a good level next year.
least two
.
; With the advent of more prop-jet equipment TCA
anticipates further expansion of its trans-border serv¬
ices. By summer, we expect to increase our Montreal-
ing
.
•
Ribbons:
(largely Rayon and Nylon, also in great
Simply stated, it needs either a /•j variety). •;•/.' ■
.<■ ///"'" ■:!%;'"*•' '/•/• ;%;***■&
higher price for the gold it produces, ,v.: - •'"?'•v-'4
Braids, Tapes; Shoe Laces, Elastics (on a. wide variety).
or
it needs a general economic at¬
•^AlsoWomen'sandChildren'SKhittedputerwear/FulK
mosphere of stability in which oper¬
Fashioned Hosiery, etc.,'etc.";p/ V.
ating- costs, incurred in winning the
The Full-Fashioned Hosiery Industry in Canada, like
gold from its reserves, could be con-:
its counterpart in the U. S. A., has been plagued by over
trolled and whittled down.
capacity for over six /.years..*.and '>%■>:■ :<-V•'%
On the price side of the equation,
prices have been dropping steadily
the industry has been faced with a
until they reached an all-time low in
fixed immovable figure of $35 per
1957. This has /naturally, adversely:,
ounce
set by the U. S. Treasury in \
affected our year's operations but al1934.
To ; compound
the * problerh «:
though we look for very tough com-',
further, as the Canadian gold mine
petitive conditions generally in 1958, '
is paid by the Royal Canadian Mint r
.
haul services.
quality requirements, rather than to
increase capacity. ,;;> /•
Because of these factors, we feel
that domestic requirements for MLW
W. G. Miller
President, Belding-Corticelli, Limited
,
of
case
season
equipment chiefly for manufacturing
efficiency
and >; to
meet, customer
business in
Limited
on
It appears
MICHEL
Mines
year
phasis
-
the world wide air transport industry
expanded by approximately 15% annually.
that this rate of growth may have
tourist
to place continuing em¬
cost control. /
"
; t
that industry in general
will consider installation of capital
next
decades, the Canadian Gold Mining
industry has patiently waited for alleviation from the
two, fundamental outside forces that constrain its ability
to
>
McGregor
appears
in
-
reasonably expect a period of more normal
growth in 1958, with an aggregate level of production
in terms of volume not greatly different to. that of 1957.
Increasingly keen competition, both at home and abroad,
seems
likely to result in pressure on profit margins,
and will require the highest possible level of •productive
efficiency.
vv/;Vv
The level of capital investment will be an important
factor, and while it will probably not repeat the sharply
rising trend of the past two years, a relatively, high level
is expected to be maintained in the coming year. Declines
in some categories are to be expected, but should be
substantially offset by continuing heavy outlays ; in
others.
'■"/'/
//:'.:J//:
'•%
VV'
Dome
experi¬
During 1958, it is evident that we
■shall again experience sharp compe¬
tition.
For this reason, we expect
may
CLIFFORD W.
for Mont¬
•
loans has occurred in recent weeks, but
yet no significant indication that the money
supply is tending to-be in excess of demand.
President,
year
volume
>'
v;
upswing takes place.
new
"
as
conditions, of which
mild, and if 1957-58
fourth, past experience suggests that the
good
While competition has been
keen, such factors as product design improvement, new
; v'?
cost-saving installations as well as
facility
rearrangement,
and
close
supervision
over
manufacturing
processes have enabled the company
to maintain its profit margins.
V
aggregate
there is.
a
increased
in all product lines.
enced
in
•
in
been
Works with
Locomotive
real
'•
position /to
of
ahead when the
creases
"V Nineteen Fifty-Seven has
city coming into production follow¬
ing the heavy capital expenditures
of the past two years, while much of the upward pres¬
sure
on prices, particularly of raw materials, has sub¬
sided'.
•
//M;7>//' % V, .'/V^
A net decline in interest rates and some leveling off
bad
a
g.
Jhas
of
'v':
\V
MILLER
President, Montreal Locomotive Works, Limited
•
to be a
long-term nattern of growth will not be affected.
President, Trans-Canada Air Lines'
f
'
and
re- /
measurably lessened
the labor force,
proves
two, which is
thing for all
Certainly the industry
in
now
labor
:'/.
.•
,
.
WILLIAM G.
year or
necessarily
concerned.
price of gold.
expan-
.
on-
Postwar adjustments to changing
there have been three, have been
and labor in their respective spheres.
being a lack of "full employment"' in - the
conceivable that there could be set in motion
the forces that would lead to a world-wide rise in the
into
came
U. S., it is
Neil John McKinnon
We
m.
f
-;j/--
is
result
a
in the rate of
unexpected.
pressure
sources
as
not
was
The
5
S. buying price for
However, if a decline in the volume of free world trade
were to continue for any length of time, or even if there
operating under great
circumstances, some
the
deceleration
in having
should be endeavoring to
strengthen our North American petroleum economy by
reciprocal
development
rather
than
by
reciprocal
in
gas
In
strain.
and
$35
the
gold, there has been no change in the U. S. Treasury s
position. It continues to oppose the requests of virtually
every member of the International Monetary Fund to
raise the price so as to increase the value of the gold
reserves
of all the central governments of the world.
fact that all our productive
the
resources were
of oil and
reserves
On thevlast fundamental o£ the U.
shows
balance,
on
economy,
and
.-J/%/:
is fortunate
American continent
realm of possibility.
six
past
signs of slowing down, we must bear
in
mind
the
extraordinary levels
from which the slowdown started,
equal footing with the United States
•
The North
the
the
procedure, which permits depletion to be based on gross
income.
Through changes in this and other aspects of
the Canadian tax law, the Canadian industry can be
a more
per
months suggest that
the Canadian economy has entered a period of consoli¬
dation of the very considerable gains made during the
previous two years. Certain industries are undergoing
corrections, while others, still at an
important
stage
of
development,
continue to make new gains. While
Developments
the oil
placed on
industry.'
more than $34 per ounce for its production
parity, or even a discount in sight a price of
/ounce or better, in Canadian funds, is within
receiving
J. McKINNON
with
it should relax
Canadian natural gas.
In the Province of Alberta supplies are available for
export to the United States without in any way curtail¬
ing future domestic gas requirements of Canada.
As a potential exporter of oil and gas, Canada must
compete price-wise with other sources.
To do this
As
States.
United
the
in
restrictions
Thursday, January 30, 1958
.
\
•
or
own
other
position
loans
is
a
very
outstanding
liquid one with no bank
and,
provided
the
interna¬
tional
picture does not worsen, we look forward to the
future, particularly the long term, with reasonable
optimism.
Continued
on
page
32
Volume
Number 5712
187
.
.
The Commercial and Financial Chronicle
.
(535)
solved.
The Prospects for Uranium
Look Extremely Encouraging
successes
in
btcii
cropping
up
time
ever
-—and
Public
explains why he believes
/
increase
progressively
Mr. Winters
years
go
development of other
or
the
and urges
J.
,
*,
'
.
engaged Cis
now
am
'
»'
.
.
not
greatly
hoped
usually fol-
are
■
•
™
periment and the
of energy and the prospects for its
of
industrial
an
There
mistake to
a
minds altogether
our
I think
ergy,
voting
tion
great deal of
a
and its
try and
atten-
our
thermal
the
to
now
reactor
development in this counabroad. There are good
reasons for making this
should
mention
Future energy
have
already
needs
briefly.
in
Canada
like to
been
closely and authoritatively
estimated, but at this stage I think
An early example of this type
0f development has been the con-,
struction in India of the C-I-R-;
Canada India Reactor, under the
aegis of the Columbo Plan. This
is only a research reactor, but it'
js undoubtedly the forerunner of
international transactions involv-
8rowth in that postwar era, and
although we* may
be
taking
actual
nlant
a
add
creation
which
Why Import Coal?
can
If
we
assume
A
valuable pillar to our
a
*
develops
.
exportable
an
[
25^5®;^
velopment o f
tremendous
of
impact
the
on
required, and the capital costs in-
econ-
country. By the end voived, would doubtless limit the
uranium will be
1958,
use of this process, even
earning
if it
were
•''n#e^IeS°Ur?®S:^2 e —0nfy:; 0^ ?anad^ tban any.-technically feasible.
^gle metal. Already
many
arc~, depend—
and
of
nothing
fascmat-
more
ing
.
ber
■
■.
•„
I
o
was
start
oc
Ann
m
Rv the end
mining
tmerit of
detail from the
the
other
urunium
as
is
a
^
^eC
,h<>
fuel
interesting
most intriguing
the only
that°our rtla™ountHes shZd
„
make
of
therp
tnere
Jt
-
them;
but
thP
the
arp
are
vast
vast
■
.
.
■
addition,
in
hlork.;
blocks
nf
of
.m
un:
tapped water power, such as those
in
in
thp
tne
Columbia Rivpr
uoiumbia
mver,
kilowatts'
in
hydro
over
fuel
uranium
of
inTn
thp drain
tne
ctra.n-
using
uranium
and since I
—
UOWfcr
p
fusion
need
energy
calculations
om.
considerable
ance
business, I thought I
better rerresh
mv
memorv
age basm of
ilton .River,
nrp
enter
of -demand
the
and
on
ther-
uranium fuel,
wp
makp
ran
allow-
aaVPnf
^ay
fak
15
nf
n^
thP
20
or
into
h-ppder
rpactor
in
b.eeaer rector.m,
years'
account
time,
the
while
large
in-
•
S olwf-
.
f
^actolFwUI8 fmve^reached
alternative
of power must
sources
be used.
-
As
had
ways
as
Nova
a
a
Scotian, I have al¬
keen interest in coal
fuel because
a
much
so
of
our
local economy is dependent upon
it.
Here is resource that is far
valuable
more
realize.
than
most
people
The full potential of coal
won't be developed until its principal utilization is in the chemical
and
than
publicly that in the years that lie
ahead, it will be a punishable offence
to
coal
use
fuel.
as
That
be extreme and in this country where we have such vast resources
of this mineral, it is difficult to conceive that the day will
mqy
practice
is
to
almost
contemplate
it may
best
for
other
and
purposes. •
that
resource
a
to
conservation
important
with
be
will have
that sufficient
ensure
more
even
must
to
available
perhaps
seems
we
stringent
measures
But
when
come
coal
now
limitless
the
day
weS
when
have to be reserved for its
use.
-
__
..
-
TT
Merits of
.
Uranium
Having been immersed in problems
related
with
which
endowed
k„
to
energy
Canada
in
such
.
to
abundance,
be
I
,
even a
that I should
now
few years
be discus-
~7aT
address
by Mr. Winters
the Institute of Power Engineers.
three
to
meeting
turn
S.
h
reserves
foroed
hp
to
of
of
essential
an
n
thern
raw
should
have
engaged
start in
search
.
the fission
of
of
tne
the
before
relative
Steti activltv In
would mration on^
unUed
fieid
x
three
easeous
^ ® fkins^^fissionable
does
entists who
for
warn us
uranium
minished,
will
once
the
•
is
one-third
about
of
aooui one uuu ui
field,
the
js
the
Under
d
r;31?,3",3,
material
United
with
>Jnaer
States
rommission
commission
the
Atomic
American
Continued
urgent.
greatly difast breeder
as
the needs for it
progressively as
the years go on, notwithstanding
fusion, breeder materials or the
development of other sources of
energy, and I will try to explain
briefly why I feel that way.
tiply
and
would
that
increase
keys to Canada
yours
—
for the asking at the BNS
Whether you
Canada's
unparalleled growth is
providing new business oppor¬
Saskatchewan
tunities every
Ontario
take
day. And to help
of Nova Scotia offers you
of its
you
advantage of them, The Bank
coast-to-coast
the services
network of nearly
men
.
.
.
need market facts
.
.
trade
on
contacts
in
financial counsel from
who know
overall
.
Quebec
...
or
an
picture of business trends in
Canada, you'll be glad you consulted
The Bank of Nova Scotia.
500 branches.
Depicts Increasing Use of Uranium
*n ^be first place, the fusion
if it is to be used for the
generati0n of energy for civilian
process,
purposes,,
implies
a
controlled
hydrogen bomb explosion.
is hGFG
3.
There
gigantic problem to
b6
Energy
engineers
The
London
BANK
Toronto
of
NOVA
will
combine optimum economy with
must be marked up already as
— ~
sci-
500
all
the
of
/yrnerican ciig111 yia
not
for uranium would mul-
of
uidt w
aeeis
and scientists are experimenting
with several different kinds of re-
t
process
uses
that
the electrical generating plants m
as
Breeding in
the name implies,
of
creating,
or
breeding, within the reactor itself,
fertile products which can readily
be converted into fuel, thus limitjng the need for uranium to the
initial inventory. However, when
I entered the, field of producing
uranium oxide recently, I did so
in the confident expectation that
this
tha
plants whose generating capacity
is developed.
process
As
thia
U-235.
...
that the needs
be
ap¬
size
size
These installations require power
bomb,
principle. In
hydrogen is the ele-
picture at all.
Then, too, there are those
tha
diffusion plants used
atom
and uranium
used
program,
from
creation and
the
into the
come
responsi-
tremendous effort of re¬
a
into
indipation
indication
an
even
„
all
the
in
only to
plication of nuclear energy.
from our soutnern neignoor, witn
whom we are constantly trying
,
international
her
weapons
uranium,
neighbor
was
and
should be lorcea to import even
more
It
bilities
materials,
imoort
net i tors
•expected tnat tne united states,
Wlth
Duncan,
large
com
evnerteH that the United States
h
irony if this country, a major
chmild
eh ief
more
of energv were available. It would
with
other
f. chief competitors in tne
•
immediate future.
Chairman of
Ontario Hydro, stressed only recently the urgent need to develop
nuclear power in this Province,
pointing out that by 1982 Ontario
be
the
nations, who will after
sources
seems
,
dly expected,
ago,
so-called
on
ment
a
same
ever
the
as
deliver
energy as one pound of
uranium.
I heard one prominent
United
States
citizen
speculate
hai
than
based
this process,
field,
rather
fuel where it required
Now, fusion,
have
in
1 understand
it, is the joining to¬
gether of two nuclei, as opposed
to
fission, the splitting of one
atom. The fusion of two hydrogen
nuclei has already been achieved
in the hydrogen bomb, and as is
well known, the hydrogen bomb
explodes with vastly greater force
metallurgical
about 1,500 tons of coal to
the
fashioned fission.
will
develonments
which to reduce pur trading deficit. I
lTCan"0t
OU
pmb!!'CVe
uThis
snOis
T'Ta aproblem,
un.,W
Sa^'nwhich
eC"T
ht^vb?ct°r'
^
and wil1 un?°ubll'
pass
in due course a type which
.
.
we
James
the Yukon, the Ham- aiso ke neiniul to one'or two
g
accor
xae
8 u: .
the tides of the Bay even in an audiei.ee tiiat
ll'?1. uran!um inventory
of Fundy and others which upon,
ously s0 weu versed in technical
even
cursory
examination, open rnattpr*
;
PUT:
tnen annual consumption
tip enormous horizons for the fu¬
Toaay, we sometimes read in
a very
ture growth and development of
the n^Da^^mdum^
reactors wni nave reacneu a vuxy
na nJa
Rut
thprp
af
ofsubstantial figure anyhow.
v
Canada.
But
there
are
areas* of
ing outmoaed, even at this early
Canada where all water poteiitial
date, by a process known as fus¬
is
already fully developed and
ion,
rather than the more old
.
been
^or u?'
x
P°wer developments in me omer
present,
from other sources of energy. Mr.
if we wish for the possible
adve"|iot
011
which" might
qelmitions
±ew
electrical needs
has
j*
ji
cl
e
oav us
i
^
attention to nuclear
i
nmfLr
but it seems clear that in the years
uranla?}-9re'can af}aK:e a11?^
d'i.• &ince 1 an; ^iatl^iy
in tbiS
liew
our
tne
ronnfkption it win
•
to
nresent
to
forecasts of demand for world supplier of _»w.
any
nrnninm
relatively
llda Deuer ieiresn my menriory on
a
time
mai reactor feeds
.
nad
of
the
up
Development
d sometimes be sobering
x
for some- would have to import about $500
thing which is essentially revolu- million worth of coal from the
tionary—is here to stay for a very United States if no other source
general^
10
am
Tn
and
aeveiopea ana
to
Power
Competition
all,,
from
develoned
-
Un
power
90%
ahead
come>
The point I really wish
t0 make is that the conventional
thermal reactor—if one can use
splitting of the atom by what is
inter-; known as nuclear fission.
our
sources
Nuclear
The
undeveloped—is about 50 million
for nuclear energy for many years
as a-result.. This is all
of the general concept of the
ale ?athy
amoiifc, the
being
initial
ventories
jnt0
In, realized
f„ ti^
situations,
available
power
hvdro
sion easily, with enormous quan"t "
la'ent energy being the word "conventional"
r'ohf ihl
hm./i
prove
and
any case require large
trolled
.
that
now,
in aneaa we win nave to turn moie
ghort,_I do not believe that con- and more to electricity produced
t,.'-naturally occurring material coniy fke tammg an isotope which will fis-
*
Sahvaao
eeonomicallv
ventories oi uranium fuel.
uran-
around uran
the lact that it
in
some
are
around
total
maximum
com-
kilowatts
memseives economically, ana in over au /o oi our eiectricai neeas,
some
accommodating
built
themselves
million
100
distant future, but sucn Kilowatts.
l
."lining community reactors would still have to
The value of
lies
case of breeder
nerhans forecast
mav
about
w,e may pernaps iorecast nyaro souices
•
.
pnmmiimtv -
35,000 people. And there
lu® " ?
wo
and
- by the end of the century.
a technical breakthrough in the
onewhole ;not too distant future
hut
<?nch
appommodatin?
lor the De-
reactors
a iivmg^ rsy tne ena
every
and
communities
Resources and
living-
a
1958,there will be
responsible
pai
nQrf
it for
num-planned
years
,«knof :T
Winters
on
? in2o
of
o•
a
of
-.whilst
R. H.
ent
new-uranium
ror
,
Secondly, in the
Ic^ think ^thousands of ;P6Qpl&?
kilowatts capacity in 1980,
pared with about 16 million
product
by other coun-
of
concerned
ex-'
Any enterprise which
p0rt trade.
that^ Canada will
x
was
eco-
nation
great deal
States, the United Kingdom, Russia and Canada.
It may confidently be anticipated that these
four
nations,
including Russia,
will be increasingly called upon
to supply other countries with
nuclear plant and/or "know-how."
economic
statement which I
sound
devoting a
of thought to nuclear reactor development. At present, there are
only four nations in the world
with any sizable
experience in
this field. These are: the United
en-
ought to be de-
we
another
should be
longer-term issues of breeder
reactors and controlled fusion
is
nomic reason why we as a
£ ?i
break~ Pause for breath, I have no doubt
e
Si°^0n1r^r that continued expansion will be
a ^aboratorv t
the keynote in the coming years' i"S larger plant and which could
a
a laboratory exCA-
ference
between
r
c
b
tween
jlvawivc
Utiwtcn
,
'•/,
-
.
source
it would be
we might contemplate them for a
to discount the pos-
+V
lifTr 1^,+
(
the
;
u
f
"?
While
dismiss from
f few moments- As a nation, we
fcl?.to have been favored with a particzatl01} ularly rapid rate of economic
mi
h? hipS
wonlri
shortage of uraninum 'r
.the merits of another
sing
is
if
/;
.
it
be pursued beadvances in tech-
}nnk fnrIT
if
at economic prices to meet growing upsurge in uranium demand
that the work-in which-1
is
and
thermon-
laboratory
stimulating
will
such
knowledge
'rthink
pessimists
„
been
nas
°hIrJer ~ b7
as a
Canada and abroad without ignoring long-run issue of breeder
reactors and controlled fusion
energy.> Concludes
I find
This
news
all
meal
energy-*
under
no
will be confounded ten years hence with
it
controlled
a
research
cause
point m using—in not too many
fuel, let alone importing it for electric power, '
meeting tough competition for thermal reactor in
years—coal
sees
to
the
hydrogen
successfully tested
reaction
scientific
notwithstanding
on,
have
time
from
recently
conditions.
Minister, optimistically
and demand for uranium will
the
as
fusion, breeder materials
sources.
.Works
uses
just
produced
*
ciear
Federal
field
claimed from certain British
press
sources that British scientists
have
President Rio Tinto Mining Company of Canada Ltd.
Ex-Canadian
of al-
rumor
this
since
bomb itself was
By HON. R. H. WINTERS*
Toronto, Ontario
Reports and
le^ea
31
SCOTIA
New York
Correspondents wherever men trade
The Caribbean
on
page
38
32
The Commercial and Financial Chronicle
(536)
Continued
from
30
page
CHARLES
-
twice
'
;
much equipment over
as
it has
.
;
\
;
wards similar representation in
Business Prospects for 1958
,
,
^
v
In
,
many ways 1957 was a year of challenge for elec¬
trical manufacturing as the different segments of the
industry adjusted to meet the changing requirements of"*
will depend above all on investments which will supply
the Canadian economy; The year saw a slowing down in
work and purchasing power, but it will also result lrom
industrial expansion programs as well as a decline in de¬
economic conditions in other countries, particularly the
mand for consumer goods, largely brought about by the
United States.
sharp reduction in housing starts and a tight money
While it may be expected that the
supply.
Vv"
777;' \v;
inflow of American capital will not
Working off a backlog of orders, heavy apparatus
be as large as last year, undertakings ..-manufacture continued at a high level in
1957, but de¬
mand for consumer durables, and the industrial products
already in progress or projected will
entail very large capital expenses.
associated with consumer durables, declined at an unex¬
,
The trend of business in Canada
during this
new year
.
,
The
of a. slowing down of
activity and the narrowing
profit margins have induced many
industrial corporation to1 curtail
prospect
of
an
postpone
or
appear
mature.
But
may
Charles
St.
the
heavy
better balance than
spending
will be felt in the
:
Moreover, the rapid growth of the country will compel
federal, provincial and municipal authorities to under¬
take various public works and the construction of roads,
HON.
schools, hospitals and other buildings.. It may be ex¬
pected, therefore, that total capital expenditures will
compare not unfavorably with last year's figure.
more-
than half
a
workers of all
categories, during the first nine months
1957^ exceeded by $900 million the total for 1956.
Popular savings is on the increase. '
V
of
or,
at worst, recession
we
not alter in the least the bright future of our country so
richly endowed with natural resources and where the
extension of industrial equipment has been remarkable.
To turn these assets to full account, we must find outlets
for our agricultural, forestry and mineral products and
for an increased volume of manufactured goods.
<
It would be neither wise
World conditions
to
conjectures.
We
are
so
are
unsettled that
we
sometimes hear
seem
A
nor
as
good
J.
as
HERBERT
for
Sissiboo
serves
,
industry by utilities
industries undergoing capital expansion
program^.
Preliminary estimates indicate 1957 output of
and
by the Canadian electrial manufacturing
industry will reach a value of approximately $1,132,000,000, a decline of 7V2% from 1956's figure of
$1,226,800,000.
Despite 1957's decline in the output of the electrical
manufacturing industry a glance at past industry perfor¬
indicates that the long-term trend is
up. Value of
output in the industry in 1957 is well over double what it
mance
decade ago. And, looking to the
future, the indus¬
upon
to
produce
over
a
■
During
1957,
its
future
agreement
and
dollar
Coal
Corporation
and
improvement
program. The Atlantic Provinces Economic
Council pursued its aim of uniting businessmen and
pri¬
vate persons to work for tlie economic
the
Canadian
prosperity of this
In company with the Atlantic Division
Manufacturers'
Association, the Coun¬
cil sponsored an exhibition of Atlantic
apparel and foot¬
wear
which achieved such success that it
immediately
encouraged
plans
for
making
it an annual event, for
broadening its scope to include other products and for
transporting the entire exhibit to such large market
centers
The
as
New
Premiers
York, Toronto and Montreal.
of
the
Atlantic
Provinces
occasions during the year, and, in
plans to establish
an
as
met
on
two
center
has
exceeded
all
ex¬
as
an
gradual
workers'
the
as
office city. A
new
Ltd. will
Tankoos Yarmon
soon
complete
a
new
Calgary
in
continues
area
a
to
thrive,
even
though
great amount of new office construction
the last 10 years. Space is still scarce, and no
small
rental units in the
1,000 to 2,000 sq. ft. range, are avail¬
Trans-Canada pipe line is ex¬
tremendous stimulus. •
able. The opening of the
In
a
Montreal, one of the outstanding events of the
the
purchase
investors
of the Boulevard
ginning in 1953. The
such
way
Tankoos Yarmon interprets
developments is that the funds thus freed for other
activities will not
long be inactive.
Prophecy is usually
,
year
by Tankoos Yarmon for a group of
Shopping Centre, for lease¬
back to the original owners. The price was $5,500,000
which funds become immediately available to the lessee
for further construction activity. Boulevard Centre, like
others in Canada, expanded phenomenally from its be¬
was
:
^
thankless job. But as to the out¬
look for 1958, considerable light can be provided by
looking at some figures that are already in the record.
If Canada's performance over the next five years only
equals that of 1951-1956, we will have a 67% increase
in dwelling units, new apartments will be up 103.5%,a
industrial construction
cial up
up
dollar volume up 23%, commer¬
49.85%, and dollar volume of home construction
80%.
should
be
pressures
Considering
borne
in
these
mind
for growth
recorded
that the
performances
it
momentum and the
in Canada are greater now than
when those records were made.
Nearly three-quarters of foreign investments in Canada
United States. Recent figures disclosed that
is from the
American investment in Canada now totals
000
$12,000,000,-
compared with $8,500,000,000 three years ago.
While most of this has been placed in Canadian busi¬
as
ness—about
smelting,
allied
September, concluded
S. interests, is being expanded
the
office
The
with
modernization
in
noticeable
a
there has been
:
'
Dominion Steel
,
in Vancouver and other
Calgary and Edmonton,
come
building for the California Standard Com¬
pany. Imperial Oil has just completed a large new head¬
quarters building. Rentals are on the rise.
prospects
•
multi-million
part of Canada.
some
-7;
change in Edmonton,
city, while Calgary was
11-story building has
just been completed renting to oil companies and law
regarded
head
equipment in the next
and
"
an
is
pected to be
achievements
into
volume
known
firms.
Company
but also in the field of forest improvement
planned management program.
continued
of
7
portent of things to
There
accomplishment of 1957 which will have
in coming years was the entering
by the Nova
through
improvement
and
7-7'7'7,
Sales
long
formed company, Nova Scotia Pulp
Limited,
is good reason to hope, will establish a
of
manu¬
factured goods
a
new
eral economy,
.
try anticipates it will be called
A
a
newly
which, there
large pulp mill
an Eastern Nova Scotia;
With expert guidance and tech¬
nical advice from Stora Kopparbergs, the Province fore¬
sees considerable advantages from this
development, not
L only in the realm of increased employment and the
gen-
it has been affected in some
measure by each of these phases of
J. Herbert Smith
expansion. Although overall industry
output declined in 1957, due in large
measure to a
softening of demand for consumer durable
goods, this decline was offset to a degree by the high vol¬
was a
30%,
ultimate
Government
renovation
and
itially promoted by U.
Another
Scotia
construction, purchase of existing
in office buildings, are in a
rising trend. New shopping center activity is in evidence
all three cities, and others in the Prairie Provinces;
The greater Edmonton shopping center, which was in¬
of
power companies, coupled with exten¬
sive Federal Government plans for thermal power- de¬
velopment throughout the Atlantic Provinces, will surely
effect
corporate take-over of anything.:
a
new
Western Canadian cities such
guarantee any new industry of adequate power resources
all sectors of the
of orders placed upon-the
One
its first
Scotia
for years to come.'
economy,
ume
present
any
of them.
years.
Such
the Nova
•
or
properties,
active
in
generating and distributing
five
one thing,
of the extractive industries, such
oil. It is the investment of what are really
concern
Involved will be
a new
an
'
,
mostly office buildings and shopping
personal funds, not
thermal generating plant near
capacity of some 500,000
Its plans include the spending of $40 millions
Dartmouth, with
7
Tankoos Yarmon executives all across
to be most welcome in Canada. For
seems
mining
as
a 45,000 kw addition to its Halifax
plant and is currently constructing another similar unit
for operation in August 1959.
This company also has
goods and
manufacturing
Under construction is
River is
plans under way for
spending superimposed on an econ¬
omy already operating at a high
level; and the third phase, just now
being completed, was the result of
expansion in a variety of both pri¬
mary and secondary industries, and
the consequent demand for capital
equipments 7
Since the electrical
that
be assured of ade¬
may
In October the Nova Scotia Light and Power
services; the second, during the Ko¬
rean War, was the result of defense
involve
it does not
program
see
pros¬
77.
centers, the kind of investment of non-Canadian funds
Limited completed
on
industry
its
portrays the frame of mind
people, with whom all
is the fact that rental rates
companies
new
S. J. 'Tankoos, Jr.
Canada, and they are regularly on the local scenes in
all the important cities, reveal a great backlog of de¬
mand in all parts of the country. Especially notable are
the requirements of Western Canada.
In Vancouver,
which was relatively quiescent in 1957 because of a slow¬
down In lumber, its biggest industry, there are definite
signs of action soon to come. Tankoos Yarmon, upom
behalf of its investors, will put $10 million into real
pectations.
kilowatts.
scarce
has
now
the
regard
we
%
Observations by
present facilities and have plans on hand for still more
developments. In August, the Nova Scotia Power Commission completed a new 4,000 kw hydro-electric plant
Early in 1957, after a period of rapid expansion of over
two years' duration, the Canadian economy reached the
peak of its third distinct postwar, growth phase. The first
of these phases of expansion—following World War II—
was brought about: by
pent-up con¬
demand for
It
sale.
or
estate
expected early in
developments,
It will
20,000 kw- addi¬
development on
prospect and investigations are proceeding with respect to a proposed develop¬
ment at Wreck Cove in Cape Breton.
SMITH
year.
new
in
President, Canadian General Electric Company Limited
sumer
lease
at Bear River.
optimists had hoped.
action is
the
quate
the
more affected than others may be
apt
generalize, the trees hiding the forest from sight. But
the situation must be viewed as a whole and, if one in¬
tends to forecast, one would do well to bear in mind that
the turn things are taking is never as bad as pessimists
real
estate in Vancouver early in 1958.
the state of things within Nova Scotia it¬
tion to the Trenton steam plant.
to
had feared
its
in
supplies of electric power, the power companies
of the Province have completed numerous additions to
whose business is
ernment
As in the United
In order that
man
the
of
One
root of the matter because it
was
factories
The gloomy prognostica¬
to be ill-founded.
indication
new
house-building situation as a reliable
symptom of general conditions. It gets right down to the
successful operations.
is reduced
solid
house
STANFIELD
mapped out and we may hope that 1958 will
nonetheless justified in looking
to the future with confidence.
tions
one
of the outstanding elements in the Canadian
during 1958. ; There is already definite evidence
that the nation will establish a new high in construction
volume, which may be taken as a
>
'
one
economy
brokers, do not specialize in house¬
building aside from apartment-
'
set up to assist in the development of second¬
ary industry in the province through the provision of
suitable industrial sites and such necessary services as
power, water, sewage, roads.
This company will build
prudent to disregard the
fact that 1958 has in store many difficulties and problems
arising mostly from our dependence on foreign markets.
Therefore, it will be of primary importance to follow
closely the evolution of countries that constitute our
principal markets. As long as this period of uncertainty
prevails, the best attitude to adopt might be one of pre¬
paredness for all contingencies.
Irresistible needs and growth pressures will make real
estate
turn will be affected by world
States, Canadian industry
and commerce seem to have reached a plateau after a
period of unparalleled expansion. Most experts appear
to consider this no more than a healthy consolidation in
preparation for further advances.. Nevertheless, if we
are
to limit our view to prospects for 1958, we must
recognize that the present economic softening in Canada
as a whole is likely to have some effect on conditions in j
Nova Scotiai'
777' 77" • ',/Y;
- V;'rV=:?■;; - ■'■
ited,
nor
TANKOOS, JR.
Partner, Tankoos & Company
of the rank and file of the
As regards
of stabilization
will have to go through, will
S. JOSEPH
While we, as real estate investment
self, it is difficult to speak too highly. There is present
a very high morale in the attitude of all
people, groups,
associations and government—a determination to get re¬
sults and a willingness to work for success.
During 1957, a crown company, Industrial Estates Lim¬
-It goes without saying that the.period
and
perity originates..
doubtedly, that
million
national
degree, depend upon what happens in Canada and, un¬
conditions.
Official statistics disclose that the income of
and
strongly adverse, the advance should not only be con¬
tinued, but accelerated.
v
:
veloped a 15-point plan for hous¬
ing revival on which favorable gov¬
What will happen in Nova Scotia in 1958 must, to some
lack of sustaining factors.
added to the domestic market
consumers.
L.
justified
with reason anticipate
advance and. if hopes are
world
influences not too
of continued
year
consisting of 33 local associations
Premier of Nova Scotia
During the ex¬
tensive period of development our country has experi¬
enced, neither securities nor raw materials have been
the object of. reckless speculation, y Conditions in that
respect remain "sound. The trend of price indexes'jus¬
tifies the hope that inflation is gradually.subsiding. Last
year, immigration and the natural growth of population
no
R.
a
from coast to coasFin Canada has de¬
•
capital investment that applied in 1957 and 1956.
as
National House Builders Association,
>'/■ ;7:
; 77<7'V7\7;,V'7;7:V;
The year ahead is a time for confidence in manage¬
ment planning for capital investment. On our part, Ca¬
nadian General Electric expects to maintain the level of
new
1958
that
durable market in the latter
consumer
New York and the West
can
encouraging sign is
housing starts are already
increasing in number, as they have
begun to do in the United States. The
year ago.
half of the year, and should be reflected in a lift in the
overall economy.
easing of credit restrictions may induce smaller indus¬
tries to effect urgent improvements too long delayed.
There is
a
-Nova Scotia
summary,
outlook.
Recent changes in inter¬
est rates, indications of a general easing of credit, and increased federal action on housing have introduced a note
of optimism that 1958 levels will be somewhat higher
than those prevailing in the latter half of 1957. The ef¬
fect of an expected significant increase in housing starts
required for the completion of pro¬
grams initiated over these last years
by governments and private enter¬
prise will be added the investments
new constructions entail.
A gradual
Pierre
77.-. !7
Electrical manufacturers face 1958 with inventories in
projects which today
over-ambitious or pre¬
to
;%-'';Vv':'77'; 7%7:.777'77-7
pectedly fast rate.
economic
.Thursday, January 30, 1958
.
Indies.
In
Xationale
President, Banque Canadienne
Montreal, Can.
as
since its inception 65 years ago.
PIERRE
ST
the next decade
.
50%
in manufacturing
petroleum
fields—there
and 25%
in mining,
and development and
steady increase during
amount of U. S. capital
exploration
has
been
a
the past three years in the
channelled into real estate investments across the coun-
Atlantic Provinces' House in Lon¬
don, England, with future thoughts
to^be
directed
to¬
Continued
on
page
34
Volume
187
Number 5712
.
.
The Commercial and Financial Chronicle
.
1."
Continued from page 23
In
the
supply
for
Canada's Cnneat Consolidation
field
has
the
and
in
show up during
months in line with
the income ^and output factors that
suggest an economic plateau.
Much
over
been
sumer
referred
to
the
as
this index
has shown
a
a
prices but there
consumer
other
are
and
perhaps
im¬
more
last
case
wnetner
in
production
force
index is not wholly
prices.
There
tions
that
a
are
indica¬
many
have
consumers
changed
their
that they now
preferences
■
and
increasingly pur¬
goods—notably foods—in a
chase
finished form.
more
price
function of
This involves
processing
and
different
packaging which reduced to sim¬
ple terms means more labor in
more
the
tion
manufacturing and distribu¬
plants and less labor in the
home.
At least
in
sents
a
lay by
'■
'
consumers,
v
-
•
V
.
....
as
a
Welfare
State
1
During
the
postwar years a
number of nations in the western
hemisphere
caused
have
increasingly
their-governments to as¬
obligations for social and
sume
welfare
payments to members of
the( populace, the funds
central
are
being derived
taxation
These
of
far
so
governments
cerned
as
con¬
by income
progressive nature.
a
payments have become
known
transfer
as
Because
of the higher percent¬
of the labor force unemployed
age
and
also
payments
as
on the part of
employers to
their pay-rolls close to pro¬
duction
trends, average output
per person,
in the Canadian popu¬
lation
remained
has
have
one,
welfare
been
de¬
in
immature
an
and
rapidly
developing
but
under¬
capitalized economy, such as Can¬
ada, on the ownership of domestic
resources.
Although many natural
industrial
and
resources
develop¬
ments required the application of
massive amounts of capital which
simply
and
did
these
foreign
not
exist
could
sources,
taxation
in
Canada,
only come from
the incidence of
the
and
high
consumption which
ence
this is
are
of
prominent
for
mand
less
unpredictable,
been
not
this condition
of
capital,
for
in
are
the
or
more
situation
compensating
tinuing
pattern
in¬
classes of mineral
some
such
oil,
as
nickel and iron
uranium,
There is
ore.
con¬
the changing
agricultural ex¬
concern over
of
our
in
notably
evidence
is
wheat.
available
to
Little
indicate
any
serious
reform
in
United
States agricultural policy; this in
,
turn
to
raises
complex questions
the long-run equilibrium
Canadian wheat
of
Another
as
level
production.
of
unemploy¬
ment
during 1957 was in those
Canadian industries which depend
on forest products.
Here, too, ex¬
source
have
ports
although
off
sharply,
long-term
outlook
tapered
the
remains
favorable.
Events
industries
primary
our
to remind
serve
us
that
of the Canadian
large degree subject
open economy
to
a
rather
world-wide
market
than
conditions.
manufacturing sector of the
which
plained by international develop¬
carried
ownership
tion.
of
The
shown
a
tern in
our
ments.
with
it
of
sources
past
produc¬
have
merchandise
account,
dian dollar remains at
due to
a
capital.
ports
pav-
deficit on
the Cana¬
a
premium
is
our
is like
part
a
of
that,
large part of our im¬
capital goods which
to future production, an
in
order
current
a
man
to
finance
consumption.
part
This
borrowing to finance
day-to-day living costs and,
all
domestic
bulk
know, there is
a
as we
limit beyond
wrhich that cannot be continued.
about
much
premium
dollar
has
factor, since
cheaper.
This
it
an
industry
be
mium
on
of
can
the
not
t
banking s
powerless in itself to create it.
of
what
has
been
tight money
past two years. There
differences
of
nature
and
monetary influences
authorities
but
clear; if all the
made
was
may
degree
of
by
is
exerted
thing
one
$30
were
riod
of
blind
year but a
consolidation should
us
every
to
growth.
have
clination
to
a
basic
the
of
and in the
to
come
In
means
fluences
generation
of
manufacturing
Canadian
dollar
haps under the changed economic
facing, it
would be reasonable to expect the
monetary authorities to exercise
through the market an influence
the
we
are
international value
monetary
handicap
of
unit
to
minimize
both
to
domestic
ducers and to
resulted
in
maintain lending rates to enable
the system to add to bank capital.
w lcb !n turn, will be needed by
a growing economy over the years..
huge
a
of
non-interest
with
Federal
these
said
...
bank's
stock in every one of
states, Mr. Moore also cited
reserve
re-
Chicago banks. Banks in these
areas
are
nu¬
keep
than
Reserve
Banks
Federal
Reserve
Mr.
in
higher
the
sections.
Moore
_
.
,
MJ.
inventories
a year ago,
are
trial production has
.
Tjr
receded."
■,
4
He further "oted- however, that
said,
lar value of all goods and services
produced set another record,
mainly
.
.
because
D
.
the
of
through
nse 111 prices T
the
this
pro¬
export industries.
spring
,
and summer months. 'Bank loans,
as
well
demands
as
for
and trust services in
banking
general, reg-
-
.
.
.
The
increase.
further
d
t
other
•
"This
easing in business to
"goes
moderate;
■
,
date has been
the economy at year-
level
end continues to operate at a
lishment
Reserve
not far below the top of the boom.
System in 1913, when banks in a
These conditions were reflected in
of
the
Federal
large cities held
balances
of
their
the
reserve
correspondent
banks."
the
record
volume
of
pany
V.
have made Available
Strategic Companies
which We Maintain Active
WISENER
and
Trading Markets
COMPANY
LIMITED
Members
of the Investment Dealers'
of Canada
Association
73 King St. West
TORONTO 1,
CANADA
TELEX
02-2461
Corn-
in the year just closed."
NATURAL GAS
on
business
handled by Bankers Trust
Growths in
And
peristent
the
°
Canadian
On
business*
ample, and indus-
the
we
a
.
Peak, home building has re-
For Investors
T
^
back to the time before the estab-
few
the
products in
to
balances with the Federal
feature,"
is
asked
on
-—
"f°r the year as a whole, the dol-
the
reserve
spending
equipment
and
mained below
re-
the
in
"business
plant
mainstay of the boom—has passed
reserve
discrimination
that
new
Reserve
a
the
reviewing
Previous year's banking business,
bearing
Mr. Moore said that
in
Moore,
Mr.
the
and
population. By
new
mb* Because of this, the comme™a! banking sy st em must
c
when the
quirements against New York City
the least among the in¬
growth
average lower in the year ahead.
u'l,e °bera n^ costs continue to
they
report, which is sent to
more
than 20,000 holders of
the
and
toward
form
the 48
creative re¬
sourcefulness and this is fully as
true
of
immigrants as
of
the
energy
1930's
in general
*
bank earning rates are likely to-
banking centers abroad.
clear energy for which Canada is
a storehouse of vast quantities of
uranium. People, too, provide in¬
dividual
late
d.° ?ot P°inJ
further easing
a
.
banking system more
closely in line with those of major
in¬
"
.
business activity.
<2> Money market yields an<*
American
not
1958, also made
h,Kinp(!? aotivitv
percentages would bring the ratios of the
energy — hydro¬
petroleum, natural
years
V
...
™os} f^ns
toward
Reserve
duction in
but this bias is
being continually reinforced with
sources
the
had
banks.
pe¬
....
that
,
not far below what
balances
we
grow
electric power,
in
Report
System are required to keep from 12% to 20%
of net demand deposit money in
Not only does our de¬
resources
Annual
Currently, member banks of the
veloping
and
under-populated
country equipped with rich na¬
tional
in
Federal
inclination
basic
our
1957
volume of idle bank deposits."
three years of unprece¬
advances in real output.
pace
:
.
the company's owners.
are
abroad
We cannot expect to maintain this
rapid
/1V
was
depressed and
a
tremendous inflow of funds from
have had
dented
;
discriminatory
these remarks:
economy
more
billion and
to
,
ratios
said
about tight
but there would have been
than
of
cessation
Busineso Outlook
moded in many respects" and further
stated
that
"the
required
demand there would have
more
■■
Moore, looking at the out-
Moore, who assumed the
chairmanship of the New York
bank in September of last
year,
said that the "system of reserve
requirements has become out-
nothing
money
much more vocal and much
•
,
iiA'
national picture and the defense
program, it is difficult to believe;
bank's
Mr.
the
well
the
and
percentages
the
,«•„
de¬
to
as
or
enterprise.
Mr. Moore made the statement
mailed
money had been
for which there
available
a
been
over
view
dividual
work
creative
and
,be done through in-;
corporate activity apcE
<X) Aithough there are .™an3r
imponderables, such aa the inter-
meet
the
It
not be inappropirate to add
that there has been a great deal
of
unjustified
and
uninformed
as
it
expanding credit requirements of a growing economy,
to
Appear in a Number of
imports and
displace both domestic
which
Canada
reserve requirements
SECURITIES
production and employment. Per¬
outlook
for
whether
°n °f rommerci+al look of business
to
vw0
may
a
a buoy¬
be attributed in
degree to the pre¬
the
every
help the banking system continue
Canadian
in
is
close attentions
economic cli-**
for
hard^
Bankers
ing demand and lowered expendi¬
tures money supply tends to be a
neutral
element,
adequate
and
willing to support an upswing but
scribed
the
incentives
and
William H. Moore, Chairman of
Trust
Company, called
money
the volume of output and
employ¬
ment. Under conditions of declin¬
criticism
pay
mate
applied to Chicago and New York City banks. Sees
market yields and bank earning rates averaging lower
in the year ahead.
rec¬
directly linked to
our
which has subsidized
to
reserve
ognized tnat it is the expenditures
and
to
Chairman Moore of Bankers Trust Co.
argues for reduction in
bank
ratios
are
have
providing
Urges Reduction in Bank Reserve Requirements
money
no
to
■ewM
supply of money availabe
limit expenditures it must be
supply that
capita output and wealth wr
shall
optimistic about the
outlook
in
gas
there
achieve
and
we are to
in production
public
ex¬
can
important
served
on
long-term
monetary policy
Studies
decline
to be
contributing
makes
imports
the
on
been
summarize,
to understand its limitations.
While it is true that a restriction
themselves
increase
constructive
To
reflected in money supply and
interest rates and its influence on
the economy and it is
important
market—though
ant
assuring
increasing amount is in consumer
In other words, we are
using imported capital which car¬
ries
a
continuing obligation to
service
the
because
in what had hitherto been
less
goods.
of
the
the
still larger net inflow of
in
will add
cannot
A
current trade lies in the fact
although
ments
trend
of this pat¬
large
a
This
manufacturing output is destined
foreign balance of
shows
1957.
for
Although Canada's foreign
trade
omy,
years
few
continuance
increasing
been
however,
an
per
elec¬
and
If,
econ¬
began falling off early in
our
has
discussion
new
syn¬
are
reason
as
to
plastics
Such
as
tries.
issues although trading vol¬
There
of
years
is small.
ume
the
gain benefit.
examples not only of
products but of new indus¬
new
anticipation of
we
recent
fibres,
tronics
where
nroducts
very
thetic
began
to home, another cause of
unemployment appeared in the
duction
a
bond
in
of reassurance*
sources
na¬
development, if
it was to take place at all, had to
be financed by foreign investment
large part of
that
things
which
elements of stability
many
Should be
But,
durable goods pro¬
over
a
wide
range
of
meant
Market
natural increase in
in
1957
of
closer
large
their
been weaker this year, and a no¬
ticeable diminution of our export
trade would have occurred had it
Canada, which
a
September
The year now closing has estab¬
lished a Gross National Product
rate
posses
to decline.
in
projected into future years. Ex¬
ports of farm products also have
tional
as
but
justified criticisms of sharply ris¬
ing prices.
In
reservoir
Since
and
from which
now
point
soon
this year cannot be automatically
that is apt to be venturesome.
such
may
and, in the short term, there ar&
of it conducted in larger and more
mature economies it is true but
lower interest rates has
strength¬
ened
the prices of government
be
help.
conditions
related labor demand
type is to
mobile
seasonal
agricultural
capital accumulation •—
particularly the kind of capital
did not previously
have
year
and
timing,
to lessen
nation
con¬
A sizable portion of the
em¬
ployment gap originated in the
agricultural sector of the econ¬
omy, where harvest reductions in
some regions
cut the normal de¬
an
a
rather unusual
a
Agricultural Exports
aspects of the welfare state tend
and
or,
dition.
ports,
states.
One less discussed aspect of the
welfare state has been the con¬
sequences
constant
in real terms, even fallen slightly
since 1956. In our postwar evperi-
products
is
reluct¬
trim
whole to pay to specified and
usually
wide
segments
of
the
population. Such nations, of which
as a
as
because of some
ance
creases
scribed
full
of
curve
a
war.
they involve taxing the populace
Canada
the
labor
the
see
situation we have
to expect since the end of
consumer
Canada
i
This
the question
spring upturn
will
on
the
was
part of the in¬
a
prices repre¬
voluntary additional out¬
crease
back
employment,
labor
on
usual
tne
result,
a
the
this time.
at
year
focuses attention
come
consumer
As
of
force is out of work than
the
the
faster than opportuni¬
larger proportion
a
the
in
to a record
because of
immigration, the labor
partly
ties for employment.
portant factors which suggest that
rise
output
But
usu¬
delay between a drop
in wholesale prices and its reflec¬
tion in
1957
level.
force grew
gradually
rising movement while wholesale
prices have declined.
There is
normally
increasing employment
higher
year
point of view of pro¬
rapidly growing labor
a
and
con¬
cost-ol-
living index. During the past
force
raised
given
period of years to the
price index, and it is
a
ally
attention has
duction,
quite constant
of the year
loans after rising
Treasury Bill rates
increasing trend until
an
August
From the
may
downward.
increasing variety developed
through scientific research—most
money
part
the
off
showed
banking,
been
aggregate
earlier
And Basic Growth Bias
of
greater
levelled
liquidations
the coming
33
(537)
/
.
Financial Chronicle
The Commercial and
i.
/
.
Continued
;
•
c
Recent estimates indicate that apart from mort¬
U. S. investments in Canadian realty total close
$200,000,000 of which almost half has been invested
gages,
to
since 1954.
International Nickel
of nickel shortage for civilian pur¬
poses, the combined supply of market and premium price
nickel came into close balance with demand in nearly
all areas of the world during the last part of 1957. In
fact,
in the
largest market, the
United States, the supply exceeded
the demand. In that market the year
tomers'
with
end
inventories
about
of the
/of
government
This
change
States
di¬
reduced
sharply
ernment's
endeavor
to
defense
Dr. J. F. Thompson
in¬
divert to
during the year all nickel
scheduled for stockpile intake. The last two factors had
the effect of greatly increasing the civilian supply in the
dustry
Some nickel
United States.
United
was
also
the
released from
stockpiles for distribution in that
While free world defence requirements were
Kingdom's
country.
substantially lower than in 1956, civilian consumption in¬
creased to the extent of approximately compensating for
the reduced defense consumption.
Free World Nickel Supplies at New High
world
Free
nickel
1957
supplies in
estimated
are
at
490,000,000 pounds, compared with the previous high of
approximately 450,000,000 pounds in 1956 and 425,000,000 pounds in 1955.
Deliveries of the metal by the several Canadian pro¬
ducers will reach a new high total of about 360,000,000
pounds, representing approximately 75% of the free
world's entire supply. Of the balance available to the
free world, Cuba will account for about 9%; United
States, 4%, and New Caledonia, Japan and others, 12%.
International Nickel, the world's largest nickel pro¬
ducer, operated at capacity in 1957 for the eighth con¬
secutive year. The company's deliveries of nickel in all
forms will exceed 290,000,000 pounds, or about 5,000,000
pounds above deliveries in 1956.
the
1957,
total
free
world
estimated 60%
with about 40%
an
States,
was
supplies available in
delivered to the United
Canada,
the
United
Kingdom and other countries of the free world. Whereas
there have been recent years in which 40%
world's nickel
consumed
was
of the free
by defense and stockpiling
requirements, only about 20% was wanted for these
purposes in 1957, making a greater quantity available
for
civilian
applications.
market
price
for
Canadian
nickel
in
1957
was
74 cents (United States currency), including the 1% cents
United States import duty. This
price has been in effect
since December 6, 1956.
Premium price and market price nickel contracted for
United States Government stockpile was offered to
the
civilian
consumers
on
Government
authorization.
The
prices for this premium-priced nicked ranged from 88
cents to
per
pound. During the last quarter of the
large portion of this premium-priced nicked
year a
not
$1.16
taken
by civilian
the United States there
By the
consumers.
was
more
was
year-end
in
than sufficient market
price nickel for the civilian requirements.
the
steel
industries
of
the
world
production
The
Production of
States
continued
of
during
primary nickel,
stainless
equipment to
ferred base metal for
silver-plated articles such
as
table¬
ware.
nickel
30%
to
10
cupro-nickel
for
with
the marine, petroleum
in
were
alloys
industries for heat exchanger tubes operating
conditions.
severe
Industry continued to recognize the advantages gained
through the use of nickel as an alloying agent to im¬
the properties of cast irons. Production of "NiHalrd'* abrasion-resisting
nickel-chromium cast irons
showed an increase during 1957. The mining and cement
industries continued to be the principal users of these
prove
alloys in grinding balls and mill liners for grinding ores
and cement in North America, the
United Kingdom,
applications involving turbocharger and other diesel en¬
gine components. A large use of these alloys continues
in castings for corrosive service,
although increasing
interest is being shown in their application for high
temperature service.
development of new and improved nickel alloys
having special magnetic properties continues to meet
constantly expanding
industries
instrument
scope of the
the production
electronic
development of devices such
and
of automation,
communication equipment.
computation and
the
in
Although
the
general
expansion
provides
of
possible
by
all
of
these
this
field.
further expansion in the application
nickel-containing
high-tensile aluminum-bronze
for
large marine propellers. This development is attracting
leading shipyards and ship operators
Requirements of nickel for catalytic and chemical ap¬
plications
increased
the
In
year.
Europe,
the
coupled with the shortage of indigenous oil, is leading
a
greater percentage of the total stainless
output during 1957 than for
In the United Kingdom
10%. The demand for
steels
since
1948.
to many
nickel-containing stainless steels
high in all fields. Greater
amounts
of
these
are
The amount of nickel consumed
by the steel industries
ment
in
1956.
Total
alloy steel production
lower than in the previous
year,
but there
demand
higher
for
steels
containing
was a
was
greater
percentages
of
an
important role.
at
International
announced
Lake
area
;;
these programs and the announced expansion;
on
plans of other producers/it is expected the annual total;
free world nickel-producing capacity in 1961- will ap¬
proximate between" 650,000,000 and 675,000,000 pounds,";
with much, of the' increase government .stimulated or;
sponsored. Included in the estimated 1961 total produe-;
tion capacity is the nickel output of the United States.
Government-owned plant at Nicaro, Cuba, which is un¬
derstood
its production facilities to,
to, havei -increased
50,000,000 pounds annually, and also that of such Can-:
adian producers as Falconbridge Nickel Mines Limitedand Sherritt Gordon Mines Limited which
have an-;
nounced that
tions
they will increase their respective produc¬
55,000,00Q and 25,000,000 pounds annually/ ; / ?
to
''
-,v'-.vr.Vtc V.Nickel Outlook
;
Dec.
Nickel's
5,
1956.
available, to the industries of the free world in
nickel
than was the case in 1957. Consequently,
supply-demand situation throughout the world' in
1958 should'be in close balance, although some supplies
the coming year
the
offered
year will continue at premium prices.;
th<anno'uncemnt of the United States Gov¬
to divert to industry all nickel;
for stockpiling, it is expected that the supply
during the
In view
ernment
of
that it desires
scheduled
in that country will exceed
the demand.
Creating lafger markets in preparation for the time,
the above-mentioned nickel production capacity goal is,
realized irt 1961 i$ a major task confronting all producers,
in the
7
industry;'/
-
new
nickel
develop¬
project
in
In the Thompson-Moak
400 air miles north of Winnipeg, the company
a
refin-
A recent major development was the completion on
this year.
a
30-mile railway spur started in January of
Thus spur, linking the project's plant site
Thompson
with
the
Canadian
stockpile requirements in past years
have!
kept total demand well ahead of the available supply,
despite the fact that nickel production doubled in the
period from 1946 to 1956. Much time and effort have;
been spent by industry and governmental agencies in re¬
placing nickelrcontaining alloys with substitutes which
used less nickel, or ; none at all. Although some of thesesubstitutes are .likely to continue in general use, the.
vast majority of;cases in which specifications were thus
downgraded represented a compromise, or an acceptancebF^onditions
sidered
today
which, "while
far
necessary-at the time.
from
ideal,
As
result, there
a
were
con-;
are*
specifications in use which, as a conserva¬
many
tion measure,
limit nickel percentages, and which should
be revised to.take advantage
of the increased new nickel;
supply;.• "ri;
:
.
The correction which has how occurred in the
position- together with the
.
supply-!
outlook for much
larger quantities:of market price nickel a few years hence:
should give
old nickel
confidence both to those who wish to restore'
uses
and to those who will benefit by
ing nickel in their long-range plans.
includ¬
-
National
CLIFFORD R. WALKER
I
President, Merrill Petroleums Limited
The
oil
and
in Western Canada is in a period
awaiting expansion of refining facilities
industry
of consolidation
markets
export
to
accommodate
the
substantial
growth in production that has occurred during the past
five
years.
and,
dollar
wells
will
tract
risk
Income- per producing
consequently, return on
invested in producing
.
not
^
be
capital
sufficent
and
to
at¬
exploratory
activity will decline. Independent oil
companies who/.have concentrated
on building oil'reserves and produc¬
tion will seek diversification into the
ural gas as
smelter, mill, a modern town, and ultimately
Oct. 20 of
;
Barring any presently unforeseen large increases in1
defense demands,- it is expected that there will be more-
dustry
is opening a new nickel mining operation and building
at
are
production and transmission of nat¬
..
northern Manitoba. Plans for development of this project
ry.
as
playing
are
were
a
same
heating,
and
power
The year 1957 marked the first full year of
ing engineering alloy steels in 1957
approximately
of
Inco's Manitoba Project
of the United States in the production of
nickel-contain¬
was
sources
developments in gas production in which nickel
catalysts
increase of almost
an
being employed for structural parts in mili¬
tary aircraft and missiles.
the
greater
production of wrought nickel-
containing stainless steels showed
continues
any year
for
during
demand
nickel-containing types will
the
O
Based
per
the
saw
;*
year.
well
in the United States and Europe.
lished in 1956. However, the
steel
announcement of two other;
aimed at increasing nickel
production capacity -in future years. Freeport Sulphur;
Company announced that it will ; produce 50,000,000pounds of nickel annually from its deposits at Moa Bay,;
Cuba, and the French nickel company, Le Nickel, with,
mines on the island of New Caledonia, disclosed plans
to increase its output to 50,000,000 pounds or more per
year
important projects which
transistors supple¬
as
enlarging market in
an
a
made
at
1960
in
Important Nickel Expansion Programs
past
ments these nickel alloys in many fields of applications,
ments, will be less than the all-time record high estab¬
account for
Other
The
demand
The
the
start
to
.
Defense and
from
scheduled
is
*
applications
Principal
en¬
by reduced defense require¬
production
*"
18% nickel, remained as the pre¬
loys containing up to
attention from all
steels,
nickel-containing stainless steels in
occasioned
transportation
and
silvers, a group of copper-nickel-zinc al¬
nickel
materials
gineering alloy steels and jet engine alloys.
United
processing
industrial
prevent product contamination.
men,
project,- which will have an annual
capacity of 75,000,000 pounds. The program in¬
volves an initial investment of $175,000,000, of which
International Nickel's capital investment will approxi¬
mate $115,000,000.
In combination with the progress
undef way at its operations in the Sudbury District ofOntario, the Manitoba/ development -will increase the
company's ..annual', nickel-producing capacity to 385,-.
000,000 pounds in 1961.
_
cately shaped corrosion and heat resistant components
of missiles and jet aircraft. Increased interest is being
shown in the use of relatively thick nickel deposits on
line, now provides year-round transporta¬
equipment and supplies.
Bay
for
Initial
,
especially by the automotive and home appliance indus¬
tries, continued to grow. Notable advancements have
been made in the use of electro-formed nickel for intri¬
There has been
1957 to constitute the largest markets for
principally for the
precise demands of modern industry.
Despite increasing competition from aluminum and
other metals, nickel-plating continued to play its vital
role in decorative and engineering applications in all
areas
of the free world.
Its use as decorative trim,
Applications
The
turbines for
Europe and elsewhere. "Ni-Resist" corrosion-resisting
nickel cast irons have become important in heat-resistant
Nickel Prices
The
the world as
industry for a wide variety of corrosionresisting applications, particularly in the power, chem¬
ical and marine fields.
Increasing use of these alloys
was made during the
year for sheathing for protection
of the legs of off-shore oil drilling platforms.
In the
atomic field, the plants for the extraction and refining
of uranium and the utilization of atomic energy con¬
tinued to make wide use of the corrosion-resistant prop¬
erties of nickel-containing stainless steels and "Inconel,"
"Monel" and pure nickel.
These alloys, together with
other high nickel alloys produced by International Nickel
and its affiliates, provide materials required to meet
under
nickel
going to
subsidiary,
and power
Nickel Distribution
Of
Limited, and the "InconelZ:
developed by Inco's United
The International Nickel Company,
alloys,
throughout
record high free world production
nickel,
alloys
components as combustion chamber linings,
stator and
rotor blades and for afterburners.
The
"Monel"
nickel-copper alloys
were
again employed
demands and the United States Gov¬
^
Thursday, January 30, 1958
.
nickel
vital
such
brought about by
was
the <(Nimonic" nickel-chromium
as
Inc., maintained their position throughout
materials for use in aircraft gas
hands
nickel
such
developed by Inco affiliates in the United Kingdom, The
Mond
Nickel Company,
Limited, and its subsidiary
standard
verted from stockpile.
of
nickel,
of
percentages
high
containing
alloys
Nonferrous
nickel-chromium
government of a large supply
unsold
petroleum industries. The most important new
applications were those involving heat-treated highstrength structural plates and shapes containing up to
about 3% nickel for bridges, pressure vessels and hulls
for submarines and naval surface vessels.
Henry Wiggin & Company,
25,000,000
ago and
in the
Inco's ..'Manitoba
increase
cus¬
a year
accumulation
an
in
stocks
pounds greater than
with
civilian
for
much greater than supply
will
and
demand
with
purposes
therefore, that nickel alloy steel output will
proportionately. The major portion of the con¬
sumption of engineering nickel alloy steels was for
established applications such as in automobiles, trucks,
pected,
road and
Company of Canada, Limited
After many years
started
tion
tractors, aircraft, military equipment, farm machinery,
road building equipment and components for the rail¬
JOHN F. THOMPSON
Chairman ot the Board, The
During the year plans were announced in the
Kingdom and other-countries for the expansion
of facilities to increase steel production and it is ex¬
Hudson
United
nickel.
from page 32
try.
a
.
.
(538) "
34
area
Railways'
these segments of the in¬
have excellent growth po¬
tential.
Merging With companies who
already have' stifch diversification is
undoubtedly: the ..cheapest and fast¬
est
method;; of acquisition.
If the
Clifford R. Walker
natural gas. industry is permitted to
expand
according
to
the
natural
laws of economics, a recession within the industry can be
averted.
The
drilling of producing gas wells; the con¬
struction of gas processing
gas
transmission
plants; and the expansion of
facilities can do much to
absorb the
unemployment resulting from lack of additional crude
oil
markets.
Volume 187
Number 5712
.
.
The Commercial and Financial Chronicle
.
I
J
the
past
about
7%,
and
above
1956
levels.
The
sales
of
oil
products
Further
growth
J. 3. Clark III With
production
was
approximately
5%
1958.
is expected in
Securities
the
world
Why Do It the Hard Way?
progressed. In mid-year
oil
lost
the
markets
tem¬
Sometimes you can
porarily/ gained in California at the
self
time of the Suez crisis. At year end,
application of United States import
.
,
of
export
:•
;
oil
discoveries
A
isinggas dicoveries
;
:•
'
.
Exploratory
•
•
-
drilling
J- R- White
readily
A
rec-
dividends
for
;.
in
time
more
con¬
.
up
p 'alphabetically
alphabetically.
List all telephone numbers on this
list
and
aciuresses.
When
new
ZTL?™
and g
go
to'°workUl It's" ^real
list
time
xo
to
worK.
it s
a
real
saver.
-
;
y
refineries in the Toronto
area.
Keep
A,
Card
It
The
together with
an
volumes reached in
1957, will maintain investment inter¬
industry at a high level.
faced
with
have
been
beset
a
real
met
tobacco
cost-price
and
a,
so
far
in
are
agreeable
new
Keep
the
Edward
v
case
C.
Wood
.
a
year ago
dp not
billion
mean
that
cigarettes
an
been
sn^oked, because the introduction of
new
brands has* naturally, resulted
in larger inventories than was the
at- this time.;;A:'. V
•
Flue-cured tobacco farmers in Ontario, by a majority
vote, brought to a close the association of buyers and
growers who had co-operated together for a long num¬
daily
of
have
to
list
your
a
the
tobacco
then
note
you
growing country such
nevertheless,
in
a
vigorous
and
Canada, it would seem a safe
and reasonable assumption that this
industry will grow
and. prosper with Canada.
as
Bateman Adds to Staff
cur-
your
PALM
If you make a
study of a situa¬
tion take your time. Come to
your
on
when
a
week-end, during the
lre dofne
ou
D^ns-.'
some
BEACH, Fla^-Frank B.
Bateman, President of' Frank: B.
Ltd., and the Florida
Bateman
Growth
Fund
Inc*,
243
South
County Road, has announced that.
George Ruckert, formerly of F. P.
Ristine
&
Co.
in
New
York, will
?,eftain.
you don t overlook
dd«S
to
your
you
.
on
be
check
accomDhsh
study when
ta-
da^°"
a
o£
importance must be made unless
man staf£ and will speciaU2e in
portfolio analysis. She
son
you can do so at a time when you
will not be interrupted.
Choose
more
Cut down
have
you
to
send
your
to
or
prospects
dictation.
your
Some
of
Of" pads
hand,
name
these
imprinted
"From
,
note
.
on
the
are excellent.
make your
Joseph Faroll & Co., 29: Broad¬
way,
If
it.
Jan.
Exchange
on
admitted Asher Lane
to
Desk
J. L.
The
informal.
secre-
.
,
16
limited partnership.
Use long
your
New York City, members of
the New York Stock.
suggestions
and clients
small sized note paper which
use a
has
on
Jos. Faroll Admits
accurate and less
articles
former¬
Company, Boston.
the time for this kind of work and
you will be
fatigued.
was
ly associated with, the David. Bab-
,
is
type-
Weinberg, Dir.
election of Jbhrn L. Wein¬
berg: to the Board, ctf Directors of
Cluett, Peabody &
Co*, Inc. has
write the address of the recipient been announced*
on
are
an
envelope and mail.
busy—don't
say
Mr. Weinberg' is a. partner of
People
anything
in
two words you can say in one.
Goldman, Sachs*
CO*, and;
list
your
the
next
and
is
com¬
mission accounting is made.
Keep
book
handy
a
,
little
address
in
your pocket which lists
of all customers, and other
names
numbers
,
frequently needed. There
is
.nothing more annoying than
trying to .thumb, through a bulky
telephone \ book while you are
standing in a phone booth and at
the same time trying to juggle a
circular
or
prospectus
a
in
Investing
your
in Canada?
free
hand j(if
you
have one).
Sometimes there may also be no
Discard
useless
need. I once knew
thought
having
his desk
on
information.
circulars, correspondence
other data that you may not
a
salesman who
pile
a
denoted
of papers
that
he
CONSULT ONE
OF
THE
HUNDRED
was
busy successful man.
On the
contrary, a cluttered desk is a
handicap to clear thinking and
accurate doing.
a
A
handy
to keep informa¬
you may need is to obtain a
large legal size file folder. File
MEMBER FIRMS OF
THE
*
MONTREAL STOCK
EXCHANGE
way
tion
circulars
be
file
for
for
EXCHANGE
WHEN BUYING
OR
SELLING
A
con¬
CANADIAN
SECURITIES
securities, Mutual Funds,
whatever may be of use to you.
RED
something
in
proper
CROSS
away
its
when
STOCK
another
corporates,
When
must carry on I
THE CANADIAN
may
tax-exempts, another for
vertible
or
that you
issues
on
following alphabetically. Have
one
Your
a,
rector of Van Raalte Co*,, Inc.
commission
have carry¬
certain there
when
any- Gilchrist has also, joined the. Bate-
hen ^oose a
^Por a^
concentraTe and
at
all
off
this
can
mistake
and
industry;
to
receive
you
accounting
Toss out
Forecasting is always hazardous, even short-term fore¬
casting for 1958. Many, factors affect the well-being of
add
De-
your
do; is
with
If
of
payment period
tario, and in its place,
being evolved.
now
can
Gas
was
commissions
when
commission
overs
no
record
gross
Then
phone book available.
system of public auction is
con-
;-
ber of years in the orderly marketing of crops
through
the Flue-cured Tobacco Marketing Association of On¬
a
no
customer
your
1
statement.
form
additional
have
A
a
end
you
Altogether, ac¬
cording to the latest figures avail¬
able,. 25.4 billion cigarettes were ex¬
cised during'the tbrf tnonths ended
October- 31,
1957; the correspond¬
ing figure for the first ten months
of: 1956 being 22.2 billion. These fig¬
ures
on
and
your
reached record levels.
3.2
in¬
same
Destroy all copies of
earned.
tobacco products. Filter tip cigarettes
continue to, appeal to smokers and
this
you
(but only if it is important and pertinent),
the
s
-/". /
sales
1957.
Cigarettes gained increasing favor
of
which
rent file
Give this material to
cards.
among Canadians, to some extent to
the detriment of the use of other
sales
your
sary underline the essentials with
a
red pencil and clip the article
tary and all she need do
now
difficulties
These
squeeze.
overcome
who
put it in
SmnnSnn*
yourPost
firm issues
copies.
every
transactions
variety of problems
manufacturers
down
firmations after you have received
commission and have entered
President, Imperial Tobacco Company of Canada, Limited
to
Department.
Mr.
Clark
formerly Vice-President of
Goyler & McNaughton.
twice, then stop,
mind, and if neces-
week and you will find this is
salesman
C. WOOD
Rising-costs of production and
vestment firm in its Oil and
If it
real mental
a
note of it. Read it
like
their
burden.
continue
number.
birthday if available, should be on
card. Keep all customer
copies of
est in the Canadian oil
EDWARD
divided
of
formation should be noted on the
card.
Names of family members,
the record sales
over
telephone
be listed. Purchases with
.
expected increase
holdings.
address
a
ledger page. Sales
dates, price, security,
total received by customer should
and
improve services and product quality
outlays by the industry.
;
high rate of the industry's activities,
continued
and
include
and
should' be
middle
This cutback appeared to have substantially cor¬
rected the inventory position by late 1957.
Keen competition for consumer markets—a feature of
1957—will again be evident during the new year, and
add to capital
trades
should
customer
year.
will
up-to-date records of all
customer
In 1957 Canadian refineries processed approximately
670,000;barrels Caily of crude oil, 6\k% above the previous year. High product inventories slowed down the
operation of domestic refineries in the last half of the
further efforts to
story.
any
vou
-
serve
in
7ahdmaklnadeditfoanse period taktin? readinS alLd you 7aat to be Join the sales department., Bernice
ically.
Set it
in
provinces,
;
/
V
A
Canada's two major crude oil pipe line&.increased their
V capacities
during the year. These are the Trans Mountain
Pipe Line from Alberta to the west coast, and the Interprovincial Pipe Line from Alberta to Ontario. The latter
extended to
meat
important, make
,
the Atlantic
was
for the
is
office
-Make up a list of all customers
that you call
regularly. Have this
,V';Av\:a.
continued
are
-Some Suggestions
southwestern On¬
tario and in the St. Lawrence lowlands: Geological and
geophysical surveys were carried out- in some areas o±
.-
him
pay
prom- ;
.
your
they
energy saved
structive work. ;
foothills belt of Alberta and; British
Columbia.
and
when you need them.
and
made in the
were
ar-
working tools in order
northeastern
number/of
your-
by
ogmze that the small effort needed
to put his
will
British Columbia, central and westcentral Alberta and in southeastern
Saskatchewan.
desk
that
so
save
work
well organized individual will
prospects.
in
extra
your
a variable
Exploration and development con¬
tinued* at a high rate in 1957. There
were
needless
ranging
records
quotas to Canadian oil entering the
Puget Sound area added to the un¬
certainties
i
White, Weld* & Co., 20* Broad
Street, New York City, members
of the New York Stock
Exchange,
announced that Joseph. S. Clark
III, is now associated with the in¬
By JOHN BUTTON
easier sup-
an
situation throughout
Canadian
:
Salesma
producing phase of the industry in Western Can¬
the year
as
Canadian
year
ada felt the effects of
ply
35
R. WHITE
President, Imperial Oil Limited
-During
(539)
not
useful
with it.
elaborate
or
is
added put
alphabetical
it
place,
longer
do
You dou't need
an
any
complicated system to
keep yourself up to the minute on
information
and
have
it
readily
For
Free
Members)
Montreal
available.
Xavier
Be
spots.
10%
the
a
reader
Most
made
H
Canada's "Industrial" Market Places Since 1874
that
news
up
of
hits
stories
the
are
essential
high
only
news,
r^st is "filler." Learn to look
Booklet
and
Stock
(including list of Exchange
Monthly
Review
Exchange,
St., Montreal, P.Q.
453
write:
St.
The
Francois
di-
Financial Chronicle
The Commercial and
36
.
.
Thursday, January 30, 1958
.
(540)
added
jrom page 31
Continued
stimulus
States
United
to
60's,
the
On
Competition
Foreign
for Uianium
Extremely Encouraging
The Prospects
Look
in every-day
optimum efficiency
commercial use.
1966
suggests
with
the
greater concern
than with the
demand side of the equation. The
a
supply
It
will
that
some
tougn
markets
will
laced
be
other
tne
mental
all
reactors,
fairly small
is
one
of
from 1960
size, but
it
onwards
but
anticipated
that
electricity generated from nuclear
power plants will be flowing in
fiteadily increasing quantities into
the commercial system. By 1962,
United States atomic generating
electrical
of
United
The
States ftas the advan¬
tage of enormous financial and restarcn
to meet demand in the
foreseeable
future, except at inflated prices.
In
the
field
the
sizable
of fossil fuels,
United States already has a
oil
deficit, and will need to cover
capacity will have climbed to its oil requirements more and more
1,200,000 kilawotts. Costs of nu¬ from foreign sources, including
clear power are very high at the Canada. In the meantime, it may
moment in relation to those of be anticipated that the prices of
conventionally generated electri¬
both
cal
their
but the Reactor De¬
velopment Division of the Atomic
Energy Commission foresees a
energy,
rapid decline in costs per kilowatt
hour during the next two dec¬
ades.
By the
early 70's it is
oil
and
coal
will
continue
rising trend. As in Europe,
there are sound political reasons
present for avoiding over de¬
at
pendence on Middle East supplies
of crude oil. The American author¬
equanimity
United
foreseen
that
nuclear
energy
Kingdom
and
Russia
in
the field
should begin to compete with en¬
ergy
derived from conventional of nuclear energy development for
fuels, and the same source fore¬ civilian purposes. Russia has an¬
ities cannot view with
the advances made by the
casts
drop in costs to 6 to 7 mills
a
per kilowatt hour or
?nills
per
horsepower
3980.
At
the
same
41/2 to 5
hour by
time
an
ex¬
tremely rapid growth
nounced
capacity, based on nuclear en¬
ergy, will be 2 million kilowatts
by 1960, or twice that planned by
the
United
in nuclear
power development is expected
during what may be termed the
"competitive era." By 1975, the
fossil
United States should have 80 mil¬
reserves,
lion
trical
on
of
kilowatts
generating
installed
capacity
elec¬
based
nuclear power.
It
is
evident
that
the
United
that its installed electri¬
cal
States.
Meanwhile, the United King¬
faced with high costs for
fuels
and dwindling ' coal
and
has embarked on an am¬
nuclear
is
energy
program,
just a year since
Calder Hall, the first commercial
power reactor in the world, began
it
now
,
heavily on nu¬ to flow current into the national
for sound eco¬ system. Britain's program is to
nomic, as well as other, reasons. have 6 million kilowatts of nu¬
The fact that the Atomic Energy clear energy by 1965.
In short, I
Commission
has
guaranteed
a think there is good reason for sup¬
market for its domestic produc¬ posing that nuclear developments
in other countries will provide an
ers of uranium up to the end of
States is counting
clear energy, and
real
very
experience
commercially
running
in
operated
plants.
Russia can ignore tne eco¬
nomic
realities
trade
and
to
come
arrange¬
any
uranium
enriched
by
led
ing of many foreign buyers, wno
may wish to base tneir operations
natural
on
uranium
than
ratner
be
dependent on American sup¬
plies of enriched fuel, or incur
the
cost of
enormous
building their
diffusion
:
time.
These then
lems
be
in
now,
the
of
long
very
a
;
are
concerning
and the
strong base from
attack world markets,
preparation of
which
to
to
which
a
should
we
be
able
to
supply both plant and fuel. Some
of these markets are already in
potential stage. The Euratom
the
lion installed kilowatt capacity by
1967. Germany is at this moment
in
the
of
process
agreement
with
concluding
Ottawa
an
the
for
supply of Canadian uranium pre¬
cipitate. Japan, another energy-
are
is
scene
for
years
many
not
predictable—
in
fields
such
ships
nuclear-
as
aircraft,
and
state of free world
mere
uranium
of
easily
without considering develop¬
powered
ore
reserves
is hardly indica-
over-supply. Free world
reserves of U30# contained in ore
amounted
to
little
more
than
three-quarters of a million tons at
the end of last year.
This is hardly
impressive figure for
an
a
source
of power
themselves
object
in the light of continu¬
are
an
ously growing demands for energy.
U. S.
A.
the
continued
growth
in
use
of
the
thermal,
Now
reactor.
anticipated
rapid
use
how
of such
match up with the sup¬
ply of uranium ore? Taking, for
example, the well known Kitimat
hydro project which will have a
potential of nearly i,2b0,00u kilo¬
watts
of installed
tion,
present rate of produc¬
10
.United
States
re¬
The principal object of
the A. E. C.'s procurement policy
guaranteeing a market to domesyears.
ulate
of
exploration for new reserves
;
ore.
Predicts
Whiles
ent rates of
This is big mining
Now in
Canada,, by next
year, the output of uranium pre¬
cipitate—that is the U;tO* concen¬
trate
as
it leaves
the
leaching
plant—will be upwards of 15,000
tons.
United States output will be
about the same, and
South Africa
will supply around 6,000 tons. The
rest of the free world combined,
African
*
.
Cana¬
the
International
the
from
I
production, responsi¬
alone amount
precipi¬
by the early 70's. In short,
see it, the problem will not
"how
are
market
to
we
uranium?" but
"where
are
our
to
we
get enough uranium, at economic
prices, to meet the upsurge in de¬
mand which may be anticipated
in little more than a decade?"
If, in this brief and unavoidably
superficial review, pf
ponppfe r»f thp nnnlpnr
aspects of the nuclear
uranium
scene,
a
the
which is
as
in
young
and
of
power,
no
history of past trends
to
base
one's
industry
and revolution-
that of nuclear
connected at
was
early stage with the preparatory work which led to the crea¬
an
tion of the International Monetary
Fund, and has thus been intimately concerned with the Fund's
problems
over
a
period of 15
He
years.
Advisor
Executive
United Nations
the
Financial
Monetary aad
Woods, N, H., in 1944, which resulted in the establishment of the
Fund and
for
on
projections,
At
that
and
time, he held the
Director of
Monetary Research with the U. S.
Treasifry Department. Mr. Bernstein took a leading part in postdiscussions
financial
war
sistant
to
the
with
which
is
one
in
was
the
charge of presenting
the
AnglorAmerican Loan Agree¬
ment of
"
1946.
Other Activities
Bernstein
Mr.
now
encour-
aging.
twice
was
given
leave from the Fund: first, in 1950,
when
President
named
Truman
member of the U. S. Sur¬
him
as a
vey
to the Philippines, generally
as
the Bell Mission, and
known
again in 1952, in order to act
staff
for
director
Public
the
as
Ad¬
visory Board for Mutual Security
in
its
preparing
Trade
"Report on a
Policy in the
Tariff
and
National
Interest."
headed
Fund mission to India in
a
Mr.
Bernstein
..
in(-Q
~
Stability "
ol&DHlty,
was
W3S
published by the Indian Govern¬
ment.
Mr. Bernstein
Economics
was
the
at
Professor of
University %of
North Carolina from 1930 to 1940,
and in the summer of 1957 he was
a
at
visiting professor of economics
Harvard
University.
widely
mind extremely
As¬
of the
Treasury under Secretary Fred M.
Vinson.
Among, other things, he
Development,"
happening
and what is happening
is to my
as
Secretary
been
is
Develop¬
Assistant
of
and
what
Bank
the International
Reconstruction
the
of
Bret ton
Conference,
author
light
Secretary
0f the United States Delegation at
obliged to interpret the future in
now;
Technical
Chief
was
and
*ke^Velopment
w?th
VGIOpmeni
Wltn
power
an
"
Mr. Bernstein
nnrl
nnwpr
accused
am
estab¬
June, 1946, has resigned
Fund to enter private
was
business.
crystal ball, my only
that
is
excuse
I
Fund
Monetary
department
lished in
mines
power purposes
ary as
charge alone.
some
to well over 40,000 tons of
tates
Bernstein, Director
technical material to Congress on
ble forecasts of demand for civiltan
M.
Department of Research of
since
could outlast the century, at pres¬
tons of uranium
business.
at
South
and
dian
.
in Decade
Shortage
reserves
gaziftg into
for the initial
private business.
Edward
°f
ment.
in 1968
Reserves
known
capacity, a nu¬
clear
power
plant of this size
would
require
the
mining
of
roughly two and a half million
ore
resignation to
announces
enter
position
the
At
be
in
World War II international insti¬
the
of
tive
as
good grounds for con¬
fidence
the
cer¬
reactors
of
of
a
study
which
reprinted,
other
numerous
monetary
He is the
"Inflation
on
and
and
has
also
studies
financial
than
a
few
thousand
tons.
Total free world output of precipi¬
tates will, therefore, amount ap¬
proximately to 40,000 tons a year.
How will these 40,000 tons be con¬
sumed?
STOCKS
BONDS
OCEANIC IRON ORE OF CANADA LIMITED
Of
the
three
major
the United States has
a
PRESTON EAST DOME MINES LIMITED
to
PRONTO URANIUM MINES LIMITED
RIO CANADIAN EXPLORATION LIMITED
producers,
guaranteed
market to its domestic mines up
1966; South African producers'
contracts
with
the U.
K.-U. S.
A.
Markets
combined development agency ex¬
tend to the period 1964 to 1966,
Stock orders executed
Atomic
Stock
Energy
in
1962
A.E.C.
has
out
to
Commission
run
1963, although the
options
production
on
335
Bay Street, Toronto, Ontario.
As is well known, the bulk of
precipitates produced in the free
world have been going into strat
tegic stockpiles for largely mili¬
tary purposes, while power re¬
actors, to which I have so far
confined
need
my
remarks,
may
not
anything like 40,000 tons of
precipitates until the late
uranium
of
Canadian
on
Direct
Private
wires
request.
to
Toronto,
Calgary, Vancouver,
BELL
the Montreal and Toronto
net New York markets quoted
or
on
the
expiry dates of present contracts.
OF CANADA LIMITED
Exchanges,
further
beyond
in all classes
external and internal bond issues.
while Canadian contracts with the
Canadian
THE RIO TINTO MINING COMPANY
maintained
SYSTEM
Montreal, Winnipeg,
Halifax
Victoria and
TELETYPE
NY
1-702-3
Dominion Securities Corporation
Boston
Philadelphia
Associate Member American Stock
40
EXCHANGE
Calgary
Exchange
YORK
Telephone WHitehall 4-8161
London, Eng.
Ottawa
PLACE, NEW
Canadian
Affiliate
and
—
Member
Canadian
Stock
Toronto,
Exchanges
5
.
Montreal
on
subjects.
including Australia and Central
Africa, will probably not provide
more
NORTHSPAN URANIUM MINES LIMITED
continue
have to
target of 15 mil¬
a
Monetary Fund, who helped
tution,
strong
—after all the future international
countries—Belgium, France, Ger¬
many, Holland, Italy and Luxem¬
bourg have set
tional
lay the foundation for this post
mar¬
severe
putting into the balance
possibility that miiitary stockpiling of uranium will
the
ourselves
particular the question
development of nuclear
Noted research head of Interna¬
Without
of concern
the kind of prob¬
which
I
suggest
we
with
should
docs
MILLIKEN LAKE URANIUM MINES LIMITED
a
which
uranium-fed,
ALGOM URANIUM MINES LIMITED
will be faced with
keting problem in the mid-sixties,
but
these
are
big assumptions.
worries, at least for
There
Canada
producers
destined to play such an
important role in the future and
compares unfavorably with esttmates of reserves of fossil fuels,
gaseous
nation, will
tainly need nuclear power.
Tinto Group in
that
plants.
Meanwhile, we in Canada have
plenty of uranium in our own
back yard and have no
supply
own
starved industrial
the Rio
pessimists
Resigns
Monetary Fund
From
af¬
the
demand,
concluded
have
ments
not be altogether to the lik¬
may
will not be renewed
expire and that uranium
civilian
On the otner
American concentration on
plants
Bernstein
that
assumptions
producers will then be entirely
dependent on a market of limited
and
purposes.
hand,
ter they
which best suit tier expan¬
ments
sionist
international
of
present
power for our own needs,
dom,
bitious
United
Tne
resources.
indicates
energy
clearly that power from conven¬
tional sources will be inadequate
nuclear
nations—and for different reasons.
is ex¬
long-term growth in consumption Kingdom nas had the
pected to have 10 purely experi¬
benent
of actual
By 1959, the United States
with
competition in foreign
irom
twin
contracts
appreciated
readily
be
Canada
after
few years
expire.
a
contracts
efforts in tne same field.
Toronto
Montreal
Winnipeg
Vancouver
Halifax
Volume 187 * Number 5712
Continued from
first
.v.
The Commercial and Financial Chronicle
(541)
spective productivity
page
inconsistent with
are
g a in s
stable
a
same
time that tax rates
are
Clark and Alff
high that relief from them,
price level." Obvious, too, is even if temporary, constitutes
the
so
of the statement a
great temptation. He is cer¬
problem of inflation tain that stable prices are
quences of wrong policies and can only be aggravated by much to be
desired, and forthinsists on those that will yield
wage increases that are de¬ rightly asserts that
govern¬
real economic growth without manded and obtained on the ment must
encourage stable
inflation."
assumption that living costs and presumably reasonable
No one whose judgment or are
going to rise; and the re¬ prices, yet all agricultural
knowledge is worth a fig sumption of economic growth legislation in recent years,
would, of course, deny that can only be slowed by wage and other farm
legislation
the developments in the busi¬ demands that imply either an
P°w proposed by the Admin¬
ness
world during the past increase in prices or a further
istration, definitely make pos¬
months, or for any other term narrowing of the margin be¬ sible and even
vigorously en¬
of months or years, are com¬ tween
prices and costs."
courage prices for many com¬
plex and not well understood
modities
which
Few
would question
a re
much
the
even
by the very elect. Only validity of the observation higher than there is any good
ductivity gains are inconsist¬
ent with a stable price level.
The problem of inflation can
only be aggravated by wage
increases that
are
demanded
and obtained oh the assump¬
tion that living costs are go¬
ing to rise; and the resump¬
tion of economic growth can
only be slowed by wage de¬
mands that imply either an
increase in prices or a further
narrowing of the margin be¬
tween prices and costs. Gov¬
„
ernment's
role
is
the
dreamer
follow moment
to
for
would
claim
that
a
that the economic
growth and
reason
for.
there
is the
And as to the policies of the
general economic welfare
the we all seek can be achieved if labor unions, it
hardly lies in
policies that will help keep any "easy solution to
our economy stable and pro¬ problem of
maintaining high "weight is given to long-run the mouth of
Washington
mote sound economic growth employment, vigorous e c o - as well as short-run consid¬
authorities to appeal to labor
with reasonably stable prices. nomic growth and reasonably erations in
policies and prac¬ to be reasonable when for
"The resumption and main¬ stable prices." It is, of course, tices that affect our economic
years past the main concern
tenance of economic growth obvious that the "combination welfare" or at least that solid in the
nation's capital has
of
policies and practices fol¬ and continuous progress is not been to
which can
be
a c h i e v e d
eliminate, or at least
lowed in the recent past by
through suitable private and
likely without such policies drastically reduce, the com¬
the
various participants in and
attitudes.
public policies assure expand¬
petition that is demanded of
our economic
life has given
the working man. Hard, re¬
ing economic strength with
Only a Homily?
which to meet the nation's results that in certain respects
lentless
are
needs, accomplished through
an
enterprise system that pre¬
individual
serves
;
put, accompanied by a stable
This
be
can
achieved if weight is given to
long-run
as
well
short-run markets, lower output, under-
as
h
and
competition
statements
as
be saved
can
its
It is at: this
s
your
North, South, East
Pitfield's coverage
or
West you'll find
of key Canadian
and institutional investors with
reliable wire system, a
Canadian Government,
We maintain
-
your
on a
W.C. Pitfield & Co., Inc.
fag
Street, New York
business
C.
Crary
and
Andre
With Kidder, Peabody
PHILADELPHIA, Pa.
— Kidder,
Peabody & Co., members of the
New York Stock Exchange and
other leading exchanges, announce
that Lewis C. Scheffey, Jr. has
become associated with them
HAnover 2-9250
1957, Mr. Scheffey was Assistant
is
a
even
threat of
the
is
Teletype: NY 1-3708
Canadian Affiliate
labor
or
Greenshields & Co Inc
when there
Business established 1910
sort be¬
some
exhortation, and a
alien to : our free
Montreal
and what
labor, and
would govern labor were it
permitted to do so, is natural
law. When government as it
has been doing regularly and
assiduously for a good many
years past i n t e r f e r e s to
shield this, that or the other
group of citizens from the
New York
Toronto
,
>
...
Ottawa
Quebec
Slierbrooke
.
London, Ontario
governs business,
should govern
,,
of
natural
events,
it
McLeod,Youhg,Wei* & Company
imiTCA
UWTiO
Members ef The Investment
robs the economy of the force
which prevents these sins of
omission
and
Dealers' Association ef Cenad*
DEALERS IN ALL
CANADIAN SECURITIES
of commission
'
'
against which the President
now issues his warning.
Canadian Affiliate:
Co., Ltd.
JifL
Members of the
Investment Dealers' Association
He is apparently disturbed
about
a
costs of
of Canada
too
!
•
•
'.
,
Montreal, Ottawa, Hamilton, Kitchener,
London, Windsor, Winnipeg, Edmonton, Calgary, Vancouver,
and The First Boston Corporation, New York
Direct private wire to
rapid recovery of
Stock orders executed
on
all Exchanges
plant and the like, yet
Head Office
just that
has
been
deliber¬
Associates—
ately
Hugh Mackay & Company
Member of all Canadian Stock
as a
registered representative in their
Philadelphia office, Fidelity-Phil¬
adelphia Trust Building. Prior to
joining Kidder, Peabody & Co. in
.
W. C. Pitfield &
E.
partnership.
64 Wall Street
likely to be effective.
likely to lack real
effectiveness
force
30 Broad
Robert
Jahan to
Telephone: WHitehall 3-9525
and our traditional
free economic system. What
Provincial,
trading markets
glar¬
society
interested in
Net U. S. basis where desired
fas
Co., 3323: Wilshire Boulevard,
members of the New York Stock
Exchange, on Feb. 6 will admit
Provincial, Municipal and Corporate Securities
are
threat
network of
exchanges in Canada.
Whether you are
at
not
They
hind
a
branches and memberships on all
Municipal or Corporate securities
passkey to Canada is Pitfield.
j
Lbs ANGELES, Cal.—J. Barth
8c
Specializing in Canadian Government,
point that the
ingly into sight. Polemics di¬
rected
are
particularly helpful in solving
your problems. Reaching from
coast-to-coast, Pitfield provides dealers
MR
Crary & Jahan
Greenshields & Co (N.y.) Inc
ministration and of those that
markets
ipn
Pitt.
J. Barth to Admit
Secretary of the Textile Machine
ableness than all the
essential weakness of this Adr
went before it comes so
stock
reason¬
con¬
to do business under the
of Amos C. Sudler &
Co., it
is understood.
our eco¬
For Canadian Securities
/
do
can
induce
to
Lloyd W. Hammer will
tinue
name
President's
report dis¬
narrowing of the return on misses this aspect of the mat¬
nomic welfare. It can be guar¬ capital investment." Equally ter with very few and very
anteed by a public opinion certain is it that "wage in¬ vague words to the effect that
that is alert to the conse¬ creases that go beyond pro- "government's role is to fol¬
low policies that will help
keep our economy stable and
promote sound econoraic
growth and reasonably stable
prices."
v
more
firm.
obstruct them.
that
own
considerations in policies and utilization of capacity, and a The
practices that affect
far
John H. Alff, Vice-President
and Treasurer of Amos C. Sudler
&
Co. have resigned from the
creases
form of increases in real out¬
level.
Most people would concede,
su c
are
and
we are
However, if this opportunity
is to be fully realized, eco¬
nomic growth must take the
price
But
these
DENVER, Colo. — Phillip J.
Clark, Executive Vice-President,
preach¬
certain, that "price in¬ from the status of an impo¬ ments of politicians or of¬ Works of Reading, Pa.
that are unwarranted tent homily on good economic ficials.
Edgar A. Clark
by costs or that attempt to re¬ behavior if the government is
To suppose that mere ap¬
Edgar A. Clark, senior partner
capture investment outlays prepared to do what is neces¬
peals to labor, or anyone else in E. A. Clark & Co., New York
too quickly not only lower the sary to induce such policies
for that matter, will get real
City, passed away Jan. 23 at the
purchasing power of the dol¬ and practices—and, of course,
lar but may be self-defeating prepared to avoid with the results is naive to a degree.
age of 68.
by causing a restriction of utmost care those policies of
.
freedoms.
unfavorable."
Withdraw From Sadler
truth
that "the
37
Exchanges
.--X
'*
time
encouraged
again by laws which permit
for tax purposes
50 King Street
and
Montreal
Kitchener
such accel¬
erated amortization
—
at the
Ottawa:
Winnipeg:
Quebec
West, Toronto, Canada
London
Sherbrooke
Hamilton Calgary
Edmonton
New ^ 01 k
-Vancouver
Windsor
38
The Commercial and Financial Chronicle
(542)
Continued
from
page
demand out of their
27
dollar
automatic
Canadian Review and Outlook
Similarly, tax revenues
income.
and
fall faster than the national money
but
income on the down
than the
deficit in deflation.
However,
once
the circle is
broken, by effective monetary and
fiscal policy, mutual restraint is
clearly in order. Profits fall first
and
unions might well
at this
swing. This
ineans that an automatic surplus
appears in inflation, an automatic
But the sym¬
theory has apparently
political reality, and
of
metry
fallen prey to
each
new
inflationary
not far short
gins
be¬
wave
of where the
old one left off.
tion
Large
control
more
difficult.
As
I
have had occasion to remark be¬
fore, there are still large sources
the
temper
obtain
liquid holdings by
the public after the war have un¬
doubtedly made the task of infla¬
(2)
point
These
sources
liquidity
of
are
especially important in financing
consumer credit,
and any clear
indication of a change of heart
Oh the part of our monetary and
fiscal authorities, e.g., a move to
reverse their tight money policy,
may through the activation of
these otherwise idle funds cause
greater increase than expected
outlay.
a
in total
,(3) ft is sometimes argued that
inflation
chronic
is
excessive
peated
and
creases
in response
to
re¬
wage
in¬
due
to successful
trade-union pressure; or perhaps
that there are two culprits: suc¬
increasing labor costs
and profit margins both in excess
of what the traffic can reasonably
cessively
be
expected to bear.
This
round-robin
cost
of
and
even
the
best
intentions
the
on
part of both labor and manage¬
ment cannot long resist an infla¬
tionary environment created by
excess spending through the errors
or
inefficiency of monetary and
fiscal management. In such a sit¬
uation
wages
would rise even
without trade unions to press for
them.
to
to
The
employer finds that
increase production in response
rising demands he must bid for
^higher price, and 'even
present production he
labor at a
to maintain
must resist
to
the efforts of others
He -may
raid his labor force.
find It necessary 'to raise
prices, but these higher prices ^can
be paid only because the original
inflationary environment makes ft
possible for his customers to pay
often
them.
Under
these
conditions
to
deficit, and that
should
we
argued that the
our trade
any
stoppage of
remember
that
first
a
large part of our imports, espec¬
ially of machinery and equip¬
ment, are the result of the inflow
of investment funds; and, second,
that,
investment
foreign
should
(and investment-induced imports)
fall off, our flexible exchange
rate
provides an automatic device for
adjusting any deficit remaining in
our
trade in goods and services
Ill
with the outside world.
'
Improve Export Financing
Among the "built-in stabilizers"
of our economy is one that may
It is
in this light that 1 Would
to 'meet the demands of those who
easily be overlooked. I refer
free foreign exchange rate.
It is now over seven years since
that we should interfere with
free-exchange market in or¬
der to bring about an-artificially
low rate for the Canadian dollar
say
our
Canadian
the
its
Government
to set the
dollar
Since that
Canadian
free.
the
made
important decision
to
Canadian
encourage
tional accounts.
market, that
does
due
to
a
from
order
an
millions
to
industry
abroad
dollars
of
tractive
to determine Whether or riot it is.
is the
ready by this -time to outgrow its
of income
system.
I
investment funds,
now
the
to
needs
Small Borrowers
V
provided (a necessity under ex¬
change control), private individ¬
uals
and
business
firms
of U. S. dollars have
in
credits
usually
are
the
a
being that the lender
substantial percentage
credit
he
as
off-setting deposit
an
extends
to
be
MARKETING
it.
have
exercised
whole
ease
or
ap¬
about
am baffled when I
I cannot
impression that the
must be grossly exag¬
that, perhaps without
It is more important
the
small
merchant
is
educational
the
than
now
should have
we
the. Re¬
system,
facilities,
search
and
the
trained
personnel in science and the hu¬
manities to harness and control
these
in The
force's
interest both
df defense and of the ^general wel¬
taking place in our economy and
that
that
before
ever
fundamental change is
a
the
becomes
commonplace of today;
possibilities are
so vast that they are beyond
the
comprehension, and even the im¬
agination, of most of us../
r
may be witnessing
and evolution in this field. It may
that
rapid:
more
tomorrow's
and
realizing it. we
be
been
almost the
of these things and
gerated,
never
unattainable of yesterday
Frankly, I
the
Scientific progress
world.
the
fare.
ex¬
I
;'
i
,
periencing something that credit
cannot help. There is some evi¬
dence not only that sales outlets
are becoming more and more" con¬
centrated, but that sales and pro¬
duction units are developing an
increasingly
close
relationship
intend to
limit welfare toeconomic welfare;
with
we
one
do
of
not
nevertheless
course
our
/standard of liv¬
built upon an 'economic
foundation, and orir whole way
of life is heavily influenced by
economic considerations.
Unless
ing
another.
the
From the inception of the tight
is
through 'hdrd work and
can,
of
advance
science,
bur
our
by repeated written commun¬
ications to all of its branches that
ductivity which will allow us to
match in quality and price the
they were still required to deal
sympathetically with applications
for personal and' smail
business
West, both our economic and our
social progress will be in serious
loans.
jeopardy.
facilitate
that
foreign
bank's
I
would
like to
suggest that
a
money
.
the formation of
rowers
a
commercial
discount
to
with
company
covering the kind of longtransactions which I
paper
term export
In the area of domestic
would
like
ments:
one
to
make
policy I
two
com¬
is concerned with the
improvement and extension of the
money market; the other with the
needs of small-borrowers whether
or
Some
Some
In
Canadian exporters, and perhaps
other interests,
should consider
banks,
Canadian
as
but
well
in
a
amount borrowed
ion rups so
particular field. As far as
concerned, the credit fa¬
cilities have been -available, our
Managers have known of this pol¬
icy, and yet it would seem that
small borrowers have not taken
to
obtain
this
In
are
advantage
ago.
years
I
used
these
"We must not be carried away
by the opinion of -the outside
world, especially when the opin¬
substantial reduction
the
level of'material pro¬
words:
in this
we
a
our
output of other nations, East and
spite of the Bank's lending
policy there has been a reduction
not only in the number of bor¬
consortium^ of
maintain
and
leadership,
and
strongly dn our favor.
area
number of legiti¬
a
mate doubts, a becoming humility,
perhaps I should sajr a certain
amount of caution, should inform
or
our
economic policv. 'Our future
depends not on what the rest of
the world thinks of us: what the
of their opportunities
credit.
public.
four
ago I men¬
might be worth
while 'to investigate the possibil¬
tioned
that
ities of
a
*
years
it
■*
*
*
'
1
Canadian Realty] HIP
short-term money mar¬
ket in Canada. Such a market did
Investments
into being about six months
come
Speaking from the experi¬
of our
ence
own
bank,
we
have
found that this market is serving
a most usefulpurpose.
Everyone
recognizes
CALGARY, ALBERTA, CANADA
in
our
dian bank is asked to lend its cus¬
later.
COMPANY,
authorities
ernment
and
national attitudes
and long-run policy.
Today, tremendous-mew forces
for good or for evil are at work
and gov¬
economy;
appropriate
an
re-examination
the
appraisal of
has
our
for
this is
policy, the Royal Bank has
made it clear by word of mouth
private
NATURAL GAS
time
past
of
IV
.
I believe
class of customer.
the
the
ease
actually seen cases in which
the absurdity arises that a Cana¬
have here described.
PIPELINES
yard¬
having
us
fact, and again speaking gen¬
erally, the banks have been in a
position
throughout
the
tight
money
period to look after this
In
and
technology
lending operations.
'
beter
a
clients
securities
have
to
'REFINING
as
We
money which he, in turn,
deposits with non-Canadian bank
PRODUCTION
regard
of $100,000 or less
"small borrowers." As a matter
escape
of
fully integrated Canadian
lack" of
we
read
requires
provided the
' For
of
onerous, one
need
are
in
of paper maturing
tions of such
lower rajte
a
to Interest earned
tax
financing for the small
municipality. \
"_r
If the principles involved in the
scheme were found by actual ex¬
perience fn this restricted field to
be sound and constructive, a fu¬
ture study of its wider application
might also prove worth while. :
-
Generally speaking, banks
these
of
small-scale borrowers.
parently become
United
application of
burden of
of
sector
especially from
States, to
develop paper. During a period of tight
primary and secondary industry money, the chartered banks do not
in Canada, and to the flotation of have
available in any
quantity
Canadian provincial
and muni¬ funds for this purpose. The result
cipal bonds in the New York mar¬ has been that some of our Canad¬
ket. Here, too, the free rate has ian corporations have had to go
proved its worth: instead of an outside the country to arrange
automatic purchase by the Gov¬ their
credit
requirements with
ernment of the U. S. dollars thus non-Canadian banks.
The condi¬
the
at¬
the
to
investing public.
One device that might be justified
•.
■
come
own
requires is the discount
over a period
years or
a
term loan for a
similar
period secured by that
munici¬
more
swaddling clothes' and become a on these securities. With proper
more
lusty and an increasingly safeguards, this could provide an
independent part of our financial inducement to the freer purchase
when
What he
continued flow of
could be made
market is,
it would, I believe, be worth While
few months, how¬
ever, there has been a great to-do
about scarcity of credit for this
needs.
not
moderate-sized
or
palities
present money
our
of
Canadian
the typical
of
has
small
not, of course, bear a bank
I repat that, useful
acceptance.
illustrate:
a
it
market
a
stick
the exporter considers his
financing, we have no device
within this country suitable to his
price
import surplus has of course
been
for¬
Export Credits Insurance
Corporation
guarantees
to
any
lender the repayment of thi§ paper
over a period of years.
However,
of foreign cur¬
rencies and to provide its own
corrective. The continued strength
of the Canadian dollar in spite of
our
their
to
and the
proved to be. At the same time,
an
import surplus tends to in¬
the
available
amounting
sur¬
plus in recent years, inflationary
pressure in Canada would have
been even greater than in fact it
crease
attention
investor,
been possible fpr
that would include them to obtain term loans except
commercial paper in the form of" for a modest amount.
I think that 'serious considera¬
bankers' acceptances. To a limited
extent there is now a market for
tion should be .given, to some
means
prime commercial paper, which
by which the securities of
is,
As matters stand at the moment,
we have an
absurd situation.
To
power
and
real money
a
credits with
obtains
import
EXPLORATION
fOYAUTE OIL
ture of
ers.
Petroleum company.
•
securities Whidh would attract the
that
tomer
•
particularly in mind is a study of
possible steps to achieve the sta¬
competitors.
ROYAtlTl...
•
borrow money. They are not large
enough to make public issues t)f
with
our
tered
is, 'I think,
However, what I have
eign
employment," the floating
rate provides the only
of adjustment, other
than rigid exchange controls, to
the
ever-changing requirements
for equilibrium
in our interna¬
now
encoun¬
their
than three years
term
exchange
"full
community. I should like
to refer to,the difficulties
market
mechanism
r
•
this
position to take care -of the
legitimate needs of all credit¬
worthy small to moderate borrow¬
price levels, and with a do¬
fiscal
policy geared
to
balance not bearing interest.
•
within
seeking export markets may
be hampered, not by high costs
and inefficiency
but by inade¬
quate export financing compared
ble
ness
As of
only instruments avail¬
use
debatable.
men
mestic
far, I have considered small
Government
are
Nevertheless deserving business
In the absence of flexi¬
carried
a
market.
exports.
time, the hopes of those who urged
this policy have been abundantly
realized.
thus
and
now, the
able for
as
Domestic Policy
Foreign and
should, I believe, study the
possibilities
of
broadening the
by small municipalities in
public financing efforts dur¬
ing
the
last two years.
Treasury Bills.,
>
The
and government bonds witn a ma¬
public services of these
turity not exceeding three years. communities have not only to fee
maintained but improved and en¬
Whether we Should, as part of the
broadening process, admit Gov¬ larged, and it has soften been ex¬
ernment bonds of a
slightly longer ceedingly difficult Tor them to
of strong
absence
this flow would be disastrous. But
the
So
borrowers who belong to the busi¬
We
base of our money
the
in
It is sometimes
merely full employ¬
ment and growth, but stability as
well, the exercise of restraint in
making demands must become the
responsibility not only of labor
and business, but of electorate and
government as well.
Were it not for
price rises is undoubtedly a factor
in any inflationary situation. But
the money
Broadening Money Market Base
control
investment flow covers
not
of
liquidity outside the banking
system and beyond the direct con¬
trol of our monetary authorities.
wind
increase in
an
tion of the free market.
In fact, if we are to
shorn lamb.
of
supply, inevitable under exchange
of inflation.
cause
Canadian
Instead
counter measures by the Central
Bank, the inflationary threat "has
been turned aside by the opera¬
profits rise together,
they are the symptoms rather
wages
own
balances.
Thursday, January 30, 1958
..
.
small
that
child.
it
is
still
give
some
ster's
turity.
a
Nevertheless,
time is approaching when
we
very
the
must
thought to the young¬
development
towards
ma¬
TANKOOS YARMON LTD.
320
Bay Street
Toronto
1, Ontario
TANKOOS
CO.
331 Madison Ave.
Nefir York 17, N. Y.
*
*
♦
Volume 187
Number 5712
.
..
The Commercial and Financial Chronicle
rest oI the world thinks of us de,
pends ultimately
for ourselves."
*
f
,
v
This, too,, is
should
'
*
■
t
we
Continued
page
and dairy products. Many of those
situations have now been pretty
29
well cleaned up.
problem,, of Canada's
country with the same
the same enormous na-
tion.. There, is
Goveriiment
tural resources, and the same potential for prosperity and eco-
capital
crea-
own
United
no
States
invested
in
of our obligations. We have done
all this and seen, in addition, for-
holdings
eign
of
United
States
Canada unless you count common securities and foreign-owned dedefense facilities like the DEW .posits of dollars in our banks rise
Lin.e which in construction costs every substantially in the past
nomic growth. There is no reason,
pessimism born of
ran upwards of a half billion dolfive years,
lars of the United States taxpayJ would challenge
anyone
to
prosperity and ex¬
ers'
money.
The United States .find anywhere in the world as
pansion of the past few years. In
capital which I understand to be iarge and as stable a market for
fact,
I have already suggested
the target of some Canadian com¬ their
goods as the 170 million citi¬
herein that, properly handled, the
plaints is private capital which zens of the United
States, not¬
readjustment may lead to an even
has gone into business in Canada
withstanding the actions which
»3". greater and healthier
prosperity
because,
presumably,
Canadian
we admittedly take from time to
'<&■ and expansion in the future.
individuals or corporations wanted time to protect some sector of our
-ib'
Let us then remember the prin¬
it to and because the general cli¬ own producing economy. These
ciples of service and humility mate of political
stability, eco¬ actions understandably upset
:»(
which,
in
prosperity, we tend nomic, expansion and general hos¬ some of our
trading partners but
sometimes to forget.
But let us pitality attracted it to Canada.
nevertheless
they
are
actions
remember them, not in a spirit
.Government
capital
invested which in terms of our total im¬
b*
of gloom and guilt, but as sources
abroad by a Communist govern¬ port trade are relatively minor.
of even greater strength in Can¬
ment will go where that govern¬
To summarize, I don't think we
ada's
continuous
and
inspiring
ment directs it and for a purpose are a bad
trading partner, and I
struggle towards the great destiny which is
political. Private capital assure you that there is no sinister
Which, I believe Providence it¬
is different. It is skittish and sen¬ and go governmental design be¬
'<*4"
self has ordained for this young,
'
temporary check to the almost
T. a
unbelievable
.
strong, growing giant of the north.
Marshall Dwinnell With
sitive to climate.
hind either
part
vestments in Canada.
It is also in good
function
of
expansion.
Should Canada's expansion cease
a
should
or
the
climate
turn
exports
our
Stone & Webster Sees.
or our
in¬
IV
gen¬
uinely chilly, then I do not think
you would find capital from the
United States or any free trading
' (Special to The Financial Chronicle) -; •. ;
country flowing into Canada. In¬
BOSTON, Mass. — Marshall deed, in recent months I would
Dwinnell has become associated judge by the decline in the pre¬
Surplus Wheat Problems
Now for
our
surplus wheat dis¬
posal policies.
,
with
Stone
Webster Securities
&
mium of the Canadian dollar over
the
United States dollar that the
Federal Street.
Mr. Dwinnell was formerly an of¬ movement qf United States capi¬
tal.,
to
Canada
has
appreciably
ficer of Dwinnell, Harkness & Hill,
Corporation,
49
.;
.inci:.
.
■
.
■
diminished.
-7,..v.
Now you will say of
that, maybe
so, but that the other side of the
* equation has been deliberately ig¬
nored. What about the charge that
the' United
States
unfairly re¬
stricts " imports from other coun¬
HARTFORD, Conn, -i- E. Welles
tries, and particularly from Can¬
Eddy has formed E. W. Eddy &
I. Welles Eddy Forms
Own Co. in Hartford
Co. with offices at 750 Main Street
to engage
Mr.
&
in
securities business.
Earlier. I
the
made
United
the
States is
that
point
not
"free
a
was
Hollywood Mgr.
States
joined the firm as assistant man¬
ager of the office in Hollywood,
—to
we
if
sell
we
our
abroad
more
In point of fact
are
do
we
to continue—as
what
than
we
conceive
we
we
have to
will
to
be
share for the defense and the
economic well-being of the free
Florida.
world.
Form American
It is the
excess
of
our
ex¬
ports of goods over our imports
of goods that enabled us, for ex¬
Equity
United
with
large
carryovers or surpluses of wheat.
We should note in passing, I think,
that these surpluses have arisen
in
part from
unusually
good
weather in recent years. Mostly,
however, they have come as the
New York
production of food for a hungry
arid
disorganized world.
More¬
over, it is impossible quickly or
easily to reduce production of
wheat, or any other farm product,
once a higher level has been at¬
Our investment services in all fields
the United States at
our
are
in Canada
been much criticism
New York and
Chicago offices
which have direct private wire connections to offices
in fifteen principal Canadian cities
and London,
England.
These facilities
Stock
enable
us
Exchanges in Canada
to. execute
or at net
orders
on
all
prices in United
States funds if desired.
affiliated with
Wood, Gundy & Company
Members
The Toronto Stock Exchange
Canadian
of
Montreal Stock Exchange
Stock
Exchange
and
Wood, Gundy & Company,
Limited
Toronto
Quebec
Halifax
Montreal
Saint John
Winnipeg
London, OnO Regina
Vancouver
Ottawa
Edmonton
London, Eng.
Kitchener
Calgary
Victoria
Hamilton
show them how to cook it, as in
Disposal of surplus wheat under Japan, which is historically a ricePublic Law 480 in exchange for eating country.
Our motives, I think, cannot be
strategic commodities — the socalled
barter program — has
troubled many Canadians. It has
also
been
controversial
in
the
United States.
My Government
now
only
give
has
taken
when
the position
governments
that barter deals
assurance
will not
mercial
barter
that
foreign
quarreled
with.
We
mistakes,
to
sure.
have
hurt
wheat
be
have made
Canada
We
and
exporters in certain
in the past.
But
may
other
cases
doing our
such hurts in
are consulting
daily basis with Can¬
we are
very best to avoid
the future and we
displace the normal com¬ on almost a
imports will it approve ada to this end.
transactions.
As
And
result,
a
now
before I leave the sub¬
ject of our relations in the field
of agriculture, let me make one
other important but little-publi¬
cant.
cized point. The general image of
Sales of wheat for local cur¬
the United States presented to the
rency under Title I of Public Law
world, I think, is as an exporting
480
have
also
troubled
many
Canadians. Let me give you one country. In point of fact, we im¬
port more agricultural products
figure. More than, half the wheat
barter agreements in the last
half of 1957 have been insignifi¬
now
than we export. For the 10 years
ended in 1957, the United States
authority — 250,000,000
bushels out of 469,000,000 bushels, exported agricultural commodities
at the average annual rate of $3,to be exact
has gone to India,
500,000,000. This included, in ad¬
Pakistan, Turkey and Yugoslavia.
dition to commercial exports, all
No one can claim that these coun¬
moved from the United States un¬
der
this
—
the contributions under the Mar-
tries have been able to afford to
pay
in dollars
on
Continued
the barrelhead
on
page
Underwriters and Distributors
Government of Canada Bonds
Provincial and
over
United States po¬
We
have
tackled
the
in
or
At
certain markets we
Direct private wire with
20 Broad
United
Goldman, Sachs & Co.
Street, New York 5, IV. Y.
Equitable Securities Canada
LIMITED
Members: The Investment Dealers* Association of Canada
220 BAY
STREET—TORONTO, CANADA
i
Telephone: EMpire 6-1141
Branch
Office: 360 St, James Street West, Montreal
Corporate Financing
First, it is not generally known
we
Treasury Bills
U. S. Funds for delivery in the
may
1953
;.
Municipal Debentures
problem
orthodox methods to this end.
since
.
United States.
pete fairly. We have used novel,
ar«d, Canadians would claim, un¬
and in
,
quoted in Canadian Funds for delivery
Canada,
vigorously on a broad front. We
want to sell our wheat but to com¬
times
i
Corporate Bonds and Shares
licies and actions with respect to
the disposal of its wheat surplus.
have reduced
the acreage sown to wheat in
available in
these
tude.
Prices
There has
that
Chicago
to
countries and to the other desti¬
unfortunately wheat is the nations of our wheat, the proceeds
important product from Canada's of the local currency taken in
point of view.
payment by the United States
Since 1954 under Public Law have been in large part loaned
480—which is the basic legislation back to the country in
question
under which our surplus disposal for economic development.
Our
program operates—we have given purpose and our effort has been
away—gratis—free for nothing— to make wheat "available where
more than a billion dollars' worth
people were hungry, where they
of food for the victims of
flood, had no dollars to pay for it, or
earthquake, famine, and other where it would be in amounts
natural disasters around the globe. additional to what
they could buy
I don't think anyone in Canada with dollars. We have
used part
objects to that, although many of this local currency to encour¬
have been unaware of its magni¬ age people to eat wheat and to
countries during World War II and
the Korean War to increase the
have hurt Canada. We have
COLUMBUS, Ga. — American ample, to pay for the DEW Line, not done it
intentionally, and I
Equity, Inc. has been formed with to pay the costs of our troops in think that with frequent consulta¬
offices in the Murrah Building to Korea and in Europe, as part of
tion with Canada before making
engage in
a
securities business. NATO's defenses, to keep our new
disposal agreements we have
Officers are Zimri L. Coffin, pres¬ billions in aid to underdeveloped
eliminated or certainly minimized
ident; and B. A. Coffin, secretary countries going and to do all the future misunderstandings.
That
and treasurer.
things which we look on as part
certainly is our desire.
Having said this, I would like
to make a few points which are
not generally recognized concern¬
ing the operation of our program.
Wood, Gundy & Co.. Ine.
fojr-wheat which undeniably they
needed dreadfully.
In the case of sales
result of conscious effort in both
mand.
buy.
had joined
the
Canada
practice.
our own
reported that Justib R. Du¬
and
troubled
are
tained. It is not as simple as turn¬
ing off a production line in a fac¬
tory when production outruns de¬
trader" in philosophy or
A. M. Kidder &
Co., Inc. in Miami. Mr. Dusard has
sard
States
Like Canada, we have tariffs. Like
feel a duty to protect
producers from excessive
It is also true that in
HOLLYWOOD,- Fla: — In the damage.
Financial Chronicle of Jan. 23 it terms of goods we in the United
Dusard
)•)
a
Eddy was formerly with Eddy
Company.
ada?
Canada
Both
39
and
Canadian-U.S. A. Relations
we
After all, we have
a
Wheat and feed
grains remain the most stubborn,
Behind the Headlines in
same
therefore, for
from
do
*
extreme that
an
avoid.
people,
;
■
What
Today, in contrast - to - the, high
spirits and great expectations of
that time, we find a growing uncertainty aiid lack of enthusiasm.
the
-
on
(543)
in
the
Canada
States
by 35%. We are
trying not only to dispose of an
accumulated surplus from the past
but to prevent the re-accumula¬
tion of surpluses in the future.
Then on the question of price
supports, which played a part in
the original earlier effort to in¬
crease production, the Secretary of
Agriculture announced recently in
Washington that the price support
level for wheat in the coming
crop year would
down from $2.00
be $1.78
a
We invite you to consult us if you are con¬
sidering the establishment or extension of your
business in Canada, involving the raising of
capital through the issue of securities.
With
more than 50
years' underwriting
distributing experience, we believe we
can
offer you competent advice and useful
cooperation.
and
bushel
the previous year
and from a high in 1954 to $2.24
a bushel.
I think I can claim that
we
are
tackling vigorously the
question of avoiding future sur¬
pluses comparable to those plagu¬
ing us from the past.
Next, a few points on how our
surplus
disposal
program
has
operated. Incidentally, it has ap¬
plied to a wide range of -products
which were in surplus, such as
vegetable oils, cotton, feed grains
ROYAL SECURITIES
LIMITED
CORPORATION
244
ST. JAMES STREET
WEST
Business established 1903.
•
MONTREAL, CANADA
Offices from coast to coast.
Affiliate:
-
ROYAL SECURITIES COMPANY
Members Montreal, Toronto and Canadian ^terk Exchanges
40
40
(544)
The Commercial and Financial Chronicle
Continued
adv.
jrom page 39
It is said
rifice
would not
we
tect vital interests.
sac¬
safety to fulfill our
pledge. I only reiterate the solemn
Behind the Headlines in
word
Canadian-U. S. A. Relations
all
and
abroad,
exports
Public Law 480.
the
In that
our
world
half
about
takes
and
bilateral
arrangements
Canadian
of all
collective
with
security
United
Finally,
words
total
a
of
42
I
to
want
say
few
a
to
discharge
Nations
to
lective
responsi¬
its
bilities for leadership in the com¬
They
munity of free nations and in par¬
police
ticular
to
restate
negotiations
Union.
The
United
attitude
our
with
States
on
Charter.
in
Canada, were one of its founders.
Though the United States is onlyof 82
third
of
members,
we
and
of
the
department
in
system
a
of
Soviets
a
now
atomic
bomb,
and
make
the
sacrifices
resolution
and
to
in
support
our
necessary
and mate¬
Allies who are
money
our
own
resources
by themselves alone the
which
is
In
the
and
sup-
to
the
they
have
and I agree, that
say,
on
defenses
our
is
Others will
not
say,
or
have
hydrogen
because
believe
we
in
the
our
prin¬
in
ciple of collective security.
accommo¬
with
the
accusation
is
We
tions
believe
as
in
the
forum
a
Na¬
ly
expres¬
as
United
for the
sion of the public opinion and the
—an
aspirations of its members.
which
You
our Allies
as well
selves could shelter.
add together the popu¬
of
45
members
of
the
can
lations
in
Charter,
"on
sovereign
the
the
words
have
we
us
the
never
in the Charter.
I
demonstrated
such
for the past
might note in
response
to
on
other
acted
belief
not
20 years to dis¬
that score.
theme-song
is that
become so terrible
that the United
States, if one of
its Allies were
attacked, would
has
not risk
We have
that
pel any doubts
war
I said that we believe in
collec¬
security.
or
The
its veto 82 times in the last
12 years.
tive
15
in
rain
a
only
now
bringing down
upon
itself
of
tion oy
thermonuclear destruc¬
going to the defense of its
over
the Austrian State
Foreign Ministers Confer¬
at
ence
Geneva
later
President
that
same
Eisenhower
and
Secretary Dulles have both in
cent
days reaffirmed
re¬
constant
our
readiness to make any conceivable
effort that might help to reduce
today
ask you to look at the recoi'd
of
the United States in world
affairs
availed
passing that the Soviet Union has
used
abroad
leadership, impetuous by nature,
essentially irresponsible.
I
the
of
from
and
right of veto in
Security Council accorded to
the
hears
the
year.
occasional voices burdened with
two themes. The first is that
the
United States is inexperienced in
the principles of
equality of all its
members.'' We have
ourselves
of
One
world
tensions.
of
negotiatiins, let
make
me
sev¬
eral
points. The first one is very
important. It is that serious nego¬
tiation must be conducted in pri¬
The channels through which
vate.
such
serious
negotiation
be
can
open
the
Soviets.
under
or
of
inc.
M
o n
t
r e a
1
These
channels
are
SHERBROOKE
—
the
auspices
—
TROIS-RIVIERES
—
—
CHICOUTlMi
DRUMMONDVILLE
—
is
one
ST. JOHNS
are
we
can
agree to
with
the
Soviets.
further
last
and
What
I
of
mean
on
about
in
his
Ipd
to
be
expected
and
months
to
re¬
de¬
a
pendable agreement on any major
problem in all its complexity. It
has been
ment
an
cai-efully
level.
such
In
successful
heads
of
of
area
agree¬
negotiated
the
at
absence
the
they
They
communique
when
have only two choices.
can
agree
worded
but
on
in
a
terms
general
reflect
leave
of
preparation,
governments
meet
would
Savard
-
Hart
&
•
Canadian Stock
Exchange
There
nities
Members: Montreal Stock
Exchange
'•
real
no
which
agreement
the
dangei'ously mis¬
leading impression that a genuine
meeting
of
occuiTed.
minds
had,
in
Alternatively,
fact,
and
on
'
dangerous, they can
then, for all the world
meet
and
to
case
fail to agree.
disillusionment
what
may
In the first
see,
be
laxation.
an
In
will
follow
initial fatal
the
other
re¬
the
case
world would be shocked and ten¬
sions increased with all
that would mean.
To
recapitulate,
the risks
serious
open.
They remain open.
It is
folly, however, to thing of nego¬
tiation
the
as
itself.
answer
or
an
end
If the Russians
on
every
keep on
issue which
conscience
our
and
to
think
that
choice
no
in
but
the
to
to
we
reach agreement.
Fi¬
should be wary of high-
ful
the
to
in
areas
at
in
the
was
the
beginning
role
the
countless
of
that
advocate.
OFFICE; 230 Notre Dame Street
West, Montreal
1203
Phillips Square
—50
embark
that
Jean-Talon
St. West
subcommittee
tions.
j
and
Z170 Bay Street, Toronto
SHERBROOKE
—
QUEBEC
THETFORD MINES
NEW
YORK
—
MIAMI
—
—
ST. JOHNS. P.
Q.
TROIS-RIVIERES
BEACH
to
Geneva, Switzerland
the
SAVARD & HART LTD.
London, England
the
our
United
Canadian Securities
Na¬
the
Pacific.
and
It
the
line
It
is
to
Watt & Watt
Arctic.
States
of
principle.
Can¬
ada and the United States and our
other Allies do not frame their
foreign
ciously
foreign
assure
policies
or
on
lightly,
expediency.
policies
across
from
the
Pole
and
the
on
power
to
longer
North
Canada
are
facing the only
the
front
in the
its leaders'
repeated
statements
seeks
domination of the world.
The second great fact is the
na¬
ture of the regime which controls
that center of
industrial, scien¬
military power, the So¬
tific and
viet
Union.
We
can
hope—and I
have complete faith we can
rightly
believe — that the nature of that
regime
in time will change and
that the people of Russia will then
able to live as the
people of
Canada and of the United States
be
want to
and
live, in
feai'ing no
But
us
long
as
together
threat
common
peace,
threatening
mam
as
and
against
:
Security Dealers, Inc.
as
us
long as this
endures, our
requires that
we understand each
other and work together. If I can
contribute in any small way to
furthering our understanding of
each other, I will be
serving, I
think, Canada as well as the
United
States.
Schrijver Partner
Schrijver & Co., 37 Wall Street.
New York City, members of the
New
York
Stock
Exchange, will
Herzenberg to part¬
Feb. 1.
admit Irving
nership
on
William K. Shepard
Dr.
William
K.
Shepard passed
Jan. 22 at the age of 82. Dr.
away
Shepard,
who had
associated
with
Meeds
in
New
assistant
Yale
recently been
Laird,
Bissell
Haven,
professor
had
of
University from
&
been
physics
1916
to
1920 to 1932, when he
he had served in managerial
I
positions
I
companies.
with
several
industrial
*
Street, Toronto
Exchange
Winnipeg Grain Exchange
Investment Dealers' Assn. of Canada
New York
Buffalo
Fort William
Port Arthur
70 Pine
These
Street, New York 5, N. Y.
London, Ontario
WHitehall 4-3262
Bell System
.
geography locks
survival, if nothing else,
capri¬
designed to
national survival and pro¬
are
or
world today which
by
Montreal
Concessions
of
threat
no
not
the
nothing
own
Incorporated
them.
The second point which I want
one
is
over
two
our
do
the Atlantic
aci-oss
Members National Association
Limits
of
can
Private Wires Between
purpose
is
Soviets choose
of
life
we
Montreal Stock Exchange
of
not the
avail themselves
to make is
SAVARD & HART S. A.
of
seriousness
or
the
The greatest
national survival is
Toronto Stock
repeat, the channels are
One vital test of good faith
whether
and
it.
Members
•
I
open.
—
all
coun¬
they
preceding
years of negotiation in that same
Montreal
DRUMMONDVlLLE
in
two
opportu¬
Kingdom, France and the
United States met in London last
and
cooperative
our
Affiliate of Watt & Watt
United
year
Branch Offices:
and
r
and the delegations of Canada, the
HEAD
about
ness,
General
to
is
000 mile border locks
together the
destiny
6 Jordan
six months
think
establish¬
the
Soviets
I
opened his own investment busi¬
Friendly Relations
said
I
There are two great facts which
dominate our common existence,
There is
geography, first. Our 4,-
1920. From
I
or
States.
tries.
at
VI
in
actions
what
between
of agree¬
advance.
One
serious negotiations on the con¬
and limitation of armaments
during
to
tually-respectful
relations
an
staking out of
ment
arrival
of
most
we
"yes"
my
United
important aspect of my
foreign policy. This is
the maintenance of
friendly, mu¬
our
end
say
ip-
this, I hope, in good
contribute
nego¬
tiation must be conducted in pri¬
The
channels
have
been
vate.
There
trol
'
Toronto Stock
Exchange
the
I
think equally
1953.
were
for
a
__
heard
country's
United
cannot
weeks
meetings in the absence of
adequate preparation and success¬
International Atomic
speech
Dec. 8,
on
to
the
ernments
the
puixns
have
temper, and, I can assui*e you,
solely for the purpose of trying
south.
Assembly of the United Nations
*
to
imee
I
the
of
done
meeting with the West at the
highest level. The heads of gov¬
in order
Energy Agency which was first
suggested by President Eisenhow¬
er
have
a
nally.
business
they will respect privacy.
of the
policies
from
take
uii
which
creasingly since
Canada, criticism
bears particularly on the So¬
viet campaign in recent weeks for
have
the
lyutucu
level
have been examples of this.
which
nave
countries and
point
am
in
Thursday, January 30, 1958
.
criticism
survival, it is childish and danger¬
fairly simple test
If the Soviets
ment
SOREL
then, that there
say
ous
Soviet, intentions and serious¬
tion
QUEBEC
One
touches
was
the
negotiation
which
re¬
sulted in the lifting of the Berlin
Blockade in 1949.
Another was
the initial stage of the negotia¬
Members: The Investment Dealers
Association of Canada
means,
saying "no"
to
diplomatic,
either
through
our
Ambassador in Moscow or the So¬
viet Ambassador in
Washington
ness.
Hart
This
limits to what
in
conducted have always been
open
and will always remain
There
&
chess game.
In connection with this
question
United Nations.
Savard
things on which
decency compromise.
these, if course is that we
will not dispose of other
peoples
as
though they were pawns in a
some
One of
lower
at
our¬
are
cannot in
but
Treaty, at San Francisco, in New
York at the United
Nations, at the
Summit Conference in 1955, and
Defends Our Leadership
United Nations before you reach
the figure for the population of
the United States. Notwithstand¬
ing, we have attempted to conduct
ourselves,
as
there
we
there
at Vienna
public trust
umbrella of px-otection under
have proved three times in the
last half century. This means that
easily refuted. We are not only
willing in the future to negotiate
Conference,
stock of weapons and
high¬
developed vehicles of delivery
in the nature of a
more
is
a
highly risky enterpidse to
bring the heads of governments
together for a conference before
That
demon¬
our
value
uinely willing to seek
dation
by negotiation
in
monopoly and still effective
words, there
we
quired to work out in detail
willingness in the past. I, myself,
recent
months
their
and operations. We fought in sup¬
have
participated
in
literally
port
of
the
principles
of
the great advance in developing the months of negotiation with the
United Nations Charter when the means of delivering that weapon
Soviet representatives in the past
Communists attacked the Repub¬ to any spot in our world.
four years at the BeiTin Confer¬
lic of Korea in 1950. We fought
We have regarded the retalia¬ ence
of P'oreign Ministers, at the
in that defense against aggression tory power inherent
originally in Geneva Far Eastern
strated
peace
said, that this appears to be
the program of the United States;
that the United States is not gen¬
Communists.
not only the
also
stand
good enough.
but
camp,
we
negotiation.
in
peace, but not
of the cemetery or
things
some
proximately
billion
want
labor
negotiations
You will
dis¬
slave
last 10 years we have contributed
in economic and military aid ap¬
$50
re¬
highly than peace. There are some
things which we will fight for, as
necessary
defense.
common
threat of militai'y attack and sub¬
international
possess
but
will
doubt
no
version.
auspices. The Soviets refused. The
far higher proportion of the costs
of many of its subsidiary organs
equally be
our
make
the
are
there
a
control
under
and
poi't of the free world against the
security arrangements.
are
the equivalent of the
armament
one-
pay
its annual budget
defense
atom
bomb.
In
that period
of
monopoly it offered to participate
United Nations. We, together with
one
the
will
our
to
for
monopoly of the possession of the
in,
wholeheartedly supports, the
and
asure
to
as
contribution
Until
The United States has great ma¬
terial power.
It had for awhile
believes
with justice. In other
doubt
no
unable out of their
civilized,
freedom-loving civic community.
Soviet
the
be
to
freedom of its members, we have
no choice but to
rely on such col¬
the efforts of the United
on
States
able
Leadership Role
peace
riel of those of
such day as the United Nations is
World
We
the
friendly nations as contemplated
by
and
authorized
under
the
exports of agricultural products.
wrong.
to
maintain what George Washing¬
ton called a "respectable defen¬
sive posture."
A part of this is
Organization
of
American
States, and to other multilateral
averaged
Eisenhower
just the
as
the
S3,900,000,000.
My recollection is that,
excluding wheat, the United States
over
resisting aggression in Korea
joining together with other
like-minded countries in signature
to the North Atlantic Treaty, to
10-
same
annual imports of
products
from
all
period
agricultural
year
President
resolution.
but in
under
of
They also
flect the essential element of what
we
think is right and what
is
when I say that the United States
will fulfill its pledges.
Let there
Let
in
shall Plan, all donations for relief
our own
.
.
Teletype N. Y.
1-374
.Volume 187
Number 5712
t
The Commercial and Financial Chronicle
«>.
v<945)
Continued from first page
Canada's main
war.
41
\n
contribution^
this deterrent lies in' the step#
she has taken to assist in proyid-,
to
ing units for the SHAPE forces in
Neighbors Over the Back Fence
^
War, a position, of leadership and .time, there
correlative responsibility among vision. ;
Alleghany Corp.
.
the nations of the free world.
The
is
lack
a
.
.
the forces of the Strategic Air
clear.Command;:and qf :thp industrial
capacity of North; America.,,
■!
of
.
precise
Europe, and*in,the protection of
.
The complex and expensive
In
this
development, may I tween our two countries at any technical requirements for modThe death of Robert R. Young nanced partly through cash and
late last week came at an ironic the sale of equipment trust cer¬ assure you that
the people of given moment is not easy to de- ern defense have increased the
Canada rejoice. Nevertheless, we fine or even to- describe.
time. For two years he and Alle¬ tificates.
During the period Dec.
Perhaps need- for ever closer co-operation
_
relationship
be-
,
.
*
#
ghany Corp., of which he was
Chairman,
had been fighting
through the courts to have a plan
of recapitalization approved. The
plan had been opposed by a group
of minority stockholders.
31,
1956 to Nov.
30, 1957, there
were
sales of equipment obliga¬
tions in the amount of $60,434,318,
while retirements of these obliga¬
tions totaled $28,202,591, or a net
increase during the period of $32,The
United
States
This brought the total
Supreme 231,727.
Court on Monday gave approval amount outstanding at the end of
to the plan. Alleghany attorneys the period to $252,565,490. Grand
now will request the United States total of the
amount of debt Out¬
District Court to pass on the few standing at the end of November
formalities in order to clear up was $982,250,547 as compared with
the exchange offer and activate a total of $958,076,183 at the end
the plan.
'
^
It i? anticipated the of 1956.
v;
lower Court will act rapidly. The
Operating ratio for November
as
exchange offer is expected to have was 87.73%
compared
with
the effect of increasing the asset 85.05% in the like 1956 months
value of the
The
New
and for the first 11 months it was
stock.
common
vast
York
-
84.28% against 81.45% for the like
Central
System, second largest carrier in 1856 period. The transportation
the nation, is controlled by Alle¬ ratio also showed an increase, be¬
49.67 %
in
November and
ghany Corp. For years the road ing
had shown improvement in earn¬ 47.27 % in the 1956 month, and for
are
coming more and more to
realize something which may not
be so obvious to you who live in
the
larger
nation.
and
more
fact
that
tne
position
of
primacy
free
nations
two
most
the
world
plex
as
has
States
the
of
the
countries
made
more
its
and
ada.
accuse
as
Cannot
will
national
bias
Can-
States
between
your
other.
Between
have
indicated
I
and, I hope,
well
of the de¬
v
were
The
drop in Central's earning York Central.
power has been brought about by
number of factors.
a
been
piling
up
Losses have
from
passenger
wishes the other
us
will not de-
.
there
country
and
us
who
are,
in
my
indicates
tional defense.
Effective
the- extent
to
'
which
Therefore, he has
right to know that what is being
put before him as a defense reholding public office in our two quirement is indeed essential. In
countries. Mr. Dulles said in the our co-operative enterprises our
article to which I referred previ- two Governments must constantly
ously, "We do not forget that bear in mind the aspirations and
every government has a primary susceptibilities of the citizens
duty to serve its own people. But whom thev represent.
'
;
there is
in
coincidence of thought
context
between
those
a
this
a
usu2Uyih„at
r^ce can be K '
rendered by f
finding ways which
oAhich
^de of^ou^'two^eonles
lS I rnmS
hv
hnvp
n
Th^J^iFhhnrh?Hri
These neighboily differences do
consolidate
or
trains
+h a TTnited
nual
and
ate.
Higher wages also have been
reflected in higher terminal costs
and
The
man-
hours involved in terminal
operations.
oper¬
yard
ations
particularly heavy
are
of the Associ¬
ation. Mr. McIllvaine
•
Working capital at the end of
November
is estimated officially
$42,800,000, a decrease of $6,500,000 from Oct. 31 and a decline
of $20,600,000 from Nov. 30, 1956.
at
Part
capital
of
increase
>
the* drop
can
in
working
by the
be .explained
f
Studley, Shupert & C o.,
Inc. whose
term
expired.
Other offi¬
cers
responsibilities
t
w*
need
vmi
with
flt
of
a
in
nnmo
The
eves
of
of
against the multitude of
obligations and conflicting inter-
ShI Wnop!
Substance to that
fected by many influences. As so principle. One practical contribuoften happens, a poet has put my tion will be a constant search for
can
the
this
alone
from
use
we
our countries' that groups such as
should be well-informed at
selfish
of "made at home" products;
must look to the defense in-
can achieve economy and efficiencv bv the use of the talents
y0urs
times if
they
are
of o^emf
to play their
the-United
trading
inevitably
involved in all matters of foreign
relations.
I ;reiterate
that
the*
the
to
interests
of
and
the
interests
exc^rthe'Lm6 ofh<it!
d°S* not exceed the sum 01 1,8
p
1™*
•
.
and Power Development
Specializing in
Canadian
States
Mining Securities
has. the greater is the chance that
Government and its potatoeyed advisers might, in this re¬
spect or in that, overlook or •
your
underestimate the relative impor¬
gives complete and up-to-date information
Canadian
of the
tance
on
producers and potential producers.
effect of
a
contem¬
plated action on Canada and in
particular upon the Canadian
economy.
Copies
on request
This chance is
-••••-
to
concern
matter of deep
in
common
defense.
has paid and seeks to pay
John M. Easson
&
Co. Limited
way,
those
217 flav St red
T<Ie|'lioiie
TonO.YiO l. LA W HA
LMjtac 4-1138
is
55
less
speak
to
pliant
nor
you
as
its own
your
neither as a sup¬
jingoist.
thoughtful
eration of the hazards if,
•
Toronto 1
•
Telephone EMpire 3-4236
Members: Toronto Slock Exchange
Montreal Stock Exchange
a
a
Yonge Street
Canada
helping hand to
fortunately placed.
I
to lend
merely
MABOCK SECURITIES UNITES
your
Canada is your close part¬
ally.
ner
a
Canada
us.
I
ask
consid¬
at any
BRANCH
MONTREAL
150 BROADWAY
BARCLAY 7-8100
ST.
*•
OFFICES:
NEW YORK
W.
CRAIG
~
Canadian Stock Exchange
UNIVERSITY 6-5305
455
.
hearing completion, .xnis^ g
x
wbrk cod
have been accom:
* Continued on page
the
United
-
.
,
The roost stnking examine isot
course the St. Lawrence^ oeaway
are
of these outside obligations
more
in substantial advantages to both,
almost belying the ancient mathe-
huvl
community which
OF URANIUM
a
national point
of view which would require the
This growing and developing
orgamsm Wl11 inevitably be m-
Stares
n
OUR
not
problem
somewhat
Should
violate treaty obHgations?
nrnJrnm^
of
by which the
requirements
defense
be shared. We must examine
Q
elected at
Company
means
of
burden
meeting
%hP«A Stfs nf
were Spencer
apfnn wl
fn Relations Between Two Countries
l. H. Mclllvaine
D. Wright, III,
common with your Government.
In the all important defense
of Wright,
For us in Canada there is also the field, Canada-United States relaWood & Co., Vice-President; Wil¬
important consideration: how does tions have been close and firm for
liam G. Berlinger, Jr., of Elkins, this affect the Commonwealth? In
many
years
through war and
Morris, Stokes & Co., Treasurer; your case, one readily sees that peace.
These essential common
and William A. Webb of DeHaven
perceptive glances must also be endeavors are based in geography
& Townsend, Crouter & Bodine, directed
towards the
Organiza- and in our common acceptance,
Secretary.
tion of American States, the together with our allies in NATO,
The following were elected to Foutheast Asia Treaty Organiza- of the strategy of the deterrent to
the Board Of Governors to serve tion, ANZUS, and a host of bi¬
for three years: Spencer D. Wright, lateral undertakings. All of this
III, William G. Berlinger, Jr., Wil¬ is in addition to the many domes¬
liam A. Webb and John F. Erdosy tic interests and more particularly
purchases of new of the Insurance
equipment which generally is fi¬ North America.
and
ways
offenu
the
in.
NATO partners to give
nrnnSi rnnrc^nf ful1 role in helPing shaPe policies
Everyone" Is ready with the
n^Snst resolutions 011 international matters. ;;
cliche about our undef ended
United Nations'?
Will it
1 intePd to review briefly some boundary. I prefer to cite several
action
of
our
^er ^resd^r
its" growth, is constantly at-
to S f iM fluenced by many factors and it terests of the larger community
nnTi K nrnnS pf 1S of utmost importance for both and recognize that on occasion we
f potato
D.
o
the
charge
for^i^n
realize^ tl^t
wr
Foster
ber to be operated and the expen¬
sive switching.
Consolidation of
;
suc¬
ceeds John
in
the East because of the large num¬
yards is underway and something
along these lines have been ac¬
complished. This, however, takes
working capital.
On Nov. 30, 1957, cash approxi¬
mated $32,200,000 and short-term
investments
were
$31,100,000,
making the total of these two
items $63,300,000, a decrease of
$6,100,000 from Oct. 31, 1957 and
a drop
of $13,700,000 from Nov.
30, 1956.
•
meeting
election
States in the
5^
so
there will be fewer trains to oper¬
1
The close eo-ooeration of Can-,
at least
Prices of materials and sup¬
thought more succinctly than I
PHILADELPHIA, Pa.—Leighton not worry me.
possibly could in the simple, diplies have been rising and wages
H. Mclllvaine of Goldman, Sachs
rect words:
are
up
substantially. To offset
Clear Vision
& Co. was elected President of the
higher costs the roads have been
During the brief period that I "Not a having and a being
Philadelphia Securities Associa¬
seeking
to
abandon
passenger
But a growing and a becoming."
been called upon
tion at the an¬ have
to dis¬
trains
constant
Liiv S fhslwhSitEt do not hurt others.
principle of interdependence
rancour^becaUse of the knowledge vBeC^Ufn ^.jfaUonsUp ' is which has been espoused by the
nnrf
IfJStww allve ltfollows that it is growing Atlantic Alliance. We must strive
and
understanding of one another
Who
fic.
with the other,
the
Mp other,
si^
Elects Officers
one
quote Mr. Dulles again. I would
think that the "foreign ministers' union" spends all
and that the direction and extent
Phila. Sees. Ass'n
business and these have been eat¬
ing into profits from freight traf¬
take for granted
us
each of
and
not have you
the sale of the latter two
holdings
used to buy control of New
so
co-operation requires
recognition of natiOnal
susceptibilities.
The reJts time back-scratching, but I
quirements of national defense in *
think I can safely say that find- this modern
age impinge upon
ing my views so well expressed every citizen.
He is asked to ;
by your own Secretary of State sacrifice in the interests of na-
teds5™-
some indication
cline in earnings.
continue
wm
the
can
is that each of
title,
neighbors over the back fence,
ings and increased its operating the first 11 months it was 47% as
there
will inevitably
be many
efficiency. However, last year compared with only 45.38% in the
minor sources of irritation such
earnings dropped to $1.30 a share like 1956 months.
as sarcastic comments about
one
as
compared with earnings of
At one time, Alleghany Corp.
anothers
noisy TV, complaints
$6.02 a share in 1956. Only last controlled the profitable Chesa¬
that the dog next door does not
week, directors of Central failed peake & Ohio Railway and also
to take any action on the dividend the
New
York,. Chicago & St.
for the first quarter of 1958. This Louis (Nickel Plate). Funds from beds, or the equivalents at the in-
gives
and
.
of our two countries. The Cana- ;
dian Government has: not failed
to recognize this need and Canada
will do all in its power to meet
it. The life blood of effective
co-operation is the constant twoway flow of information and ideas
between the partners., For the
success of our special efforts in
the defense field, a special endeaVor must therefore be made to*
ensure the adequacy of our con- *
next-door liberately harm the other. May I sultation,
that between
United
in
special and, indeed, an intirelationship which does not
exist
any
the
can
day after. In
brief, we dare note take one another for granted. What we should
the
friend,
you
mere
claim
and
a
is
sure
of
me
when I
mate
close
feel
I
ada
and
aw
tomorrow
com-
between
^
neighbor
—
a
among
one
powerful
relations
the
United
and
that
gEwjn*. In consequence, neither
0f us dares to assume that things
emer-
gence of the United States into
trie few- things
of
safely be said is that the relation
ship is not static but alive and
pdwerful
something is the
This
inescapable
0rte
LOS ANGELES
215 WEST 7TH
ST.
TRINITY 9077
42
Continued from page
National
41
the
is
by
Perhaps
less
which
Niag- haps
oi tne
recently
completion
friends.
party alone.
well known is the
either
plished
is
This
a
all share
we
The
States
less
to
equal
it
is
that
uanaua
z%
tnan
of
trade
with
ine
oi
but it is per¬
.
measure
co¬
with
traue
in
experiencing
are
snoulu
you
in
our
loom
so
much larger to us tnan any trade
Passamaquoddy Bay, on the
border between Maine and New
stable
a
at
economy
home and which will allow other
makes
Canada
vulnerable
so
to
a
hope and expectation that
co-operation and mutual
understanding will bring about a
earnest
similar
decade
has
setting
The
so.
or
taken
States
United
leading part in the
a
of regulatory bodies
in the sphere of world trade and
up
happy issue in the exchanges now
taking place through diplomatic payments. The United States, by
virtue
of
its
trade
agreements
channels and in the International
Joint Commission concerning the legislation, has also been able to
development of the waters of the play a major role in the expan¬
sion of world trade through the
Columbia River.
I
could
mention
many
other lowering of tariff barriers. The
result of these various initiatives
co-operation — as/for
has been the gradual emergence
example fisheries conservation —
of a multilateral trading
world
but I am sure many of these in¬
in which the use of restrictions
stances
are
already present to
upon trade and discrimination in
your mind.
of
areas
the conduct of trade has been held
Economic Relations
I
our
turn next
economic
to
some
relations
to
cordance
aspects of
with the
was
need
issued at the conclusion
circumstances
with
in
ac¬
formulated
rules
tell
not
agreement.
I
how much impor¬
and
world."
we
must
course,
ful
to
The
draw
that
we
do
cause
our
way
>a
unnecessary
economies
of
economic
not to
as
injury to
allies
our
the
and
trade
more
on
a
per
capita
To
illustrate the importance of
trade
to
Canada
comparative
trade
with
here
figures.
the
C
United
equal to about 25% of
some
a n a
d a's
States
our
is
Gross
record
a
have
been
of
about
the
same
order.
f
Now
tend
in Canada do not
we
between any two
should be strictly bal¬
Indeed
would make
such
contention
a
nonsense
of the
of multilateralism
cept
we
attached
are
think,
has
trade
two
and
helped
other countries
is
con¬
that trade
right
and
past several
think that the
should
recognize
which flow
situation:
for
we
the
do
we
States
this
which
which,
first, that it
Canada
to
seek
to
broaden the markets for its goods
and
the sources
of its
imports;
and
second,
that
Canada
would
understanding
One
l
of
•:+/
us
Available
A
O
to
ANNUAL
be
pleased
Request
REPORT
to
send
States
and semi-manu¬
materials.
This
is
be¬
raw
tariff
your
inhibit
structure
tends
the
importation
of
finished
products.
We, on the
other hand, import largely fin¬
SCUDDER FUND OF CANADA LTD.
We will
trading
United
composition of
you buy from
What
largely
cause
h
on
is
ished
products from
you
blow
a
this
action
particularly ^
other
to
w h e h
affecting
actions
Before
I
the
leave
trade
subject- of
with
the
problems
United
copy
of this annual
report
upon request
say
a
I
and
you
such
a
world
the
of
expense
as to
way
of
with
the output of
manufacturing
And while I am on
observe
cial
that
in
we
of
tariff
the
however, if I pretended that cer- >■•
tain aspects of this very substan- /,,
tial American investment has not ^
causing
been
Canada.
in
concern
some
y"
It is possible, I think, to
out: two
-
aspects
.
of,-this L,
matter
which Canadians *' have
found disturbing.
First, United
^
future
mar-
n a
d i
perhaps not surprising, that Ca-
nadians
should
ficulties
in
ascribe
their/difmaintaining their" fair
share of world markets for wheat
to
with
methods
be unrealistic to
like
Canada
to
it Would
which
expect
a
compete.
country
v,..
tional
interests.
There
Ways/in which thev
.
.
....
American
barrier
trade.
There
of
create
a
favorable
confidence
The
,•
.
..
way
is
to
....
climate for
which
it.
foreigners
have shown in Canada is
has
invested
in
Canada
by
Americans.
Now
I
it
than
would
various
are
to
make
it
investment
this
would
what. I
seem
to
have
said,
there
two
main
derive
which
considerations
very
from
uncertainty
and,
e
countries.
way
mention
one
field
By
only
which
of example, I
matter in this
is
currently
occupying us in Canada. It
before Christmas that
just
United
nounced
States
the
Fund
of Canada, X,td.
A
fully managed .Mutual Investment Companv
in
Government
extension
of
pre¬
was
the
an¬
import
the
dine Canadian
expanding
Canadian Ec
Lconomy
|v
Prospectus from
•
your
local
investment
,
dealer
or
M
at
worst, cause
injury to the interests of friendly
should
be
in considering international prob-Z
lems which do or may affect rela-
*
other
trade
upon
in
Special Relationship
From
SgeLing long-term CAPITAL GROWTH
which, at best, create doubt and
be
kept in the forefront of our minds
desire
that
less
no
more
been'
clear
est
the national interest of Canada,
attested
than $15 billion that
they have so far invested in our
country. Four-fifths of this total
by the
Restriction
restrictions
so.^V
give opportuhity" f
participation by Canadians in
the direction of such enterprises.'Another is to participate in Can- :
ad a's research efforts and in the/.
One
Capital Flow j /
not, of course, the
to the free flow of
are
do
training of Canadians for. positions of technical and managerial /'
Because of its very close con'- responsibility. Finally, we would/;
nection with trade, I intend noW'"wish to see'United States owned: -,
to say
something about invest-, and controlled companies in Can-/
ment.
There* eSn be little doubt, ada adoot purchasing and export-;
I think, that Canada has encour- ing
policies
that
would
allow ^
aged investment and that succes- them to purchase in and to export1 "
sive
Canadian
Governments
by to any market. It is our view that
their policies have endeavored to this would be in their own inter.
.
everywhere.
U. S. A. Oil
:
»'t
for
at¬
trade
>
many -a
are
can-
a
multilateral
What
economy.
a n
would you say, members of the
Bond Club, if the situation were r /
reversed? ...
;
'
/
'//■■"/
declined by just under 50 million., jn their policies of their Canadian
In these circumstances it. environment and of Canadian na-
is something we re¬
important not only for
of Canada, but for the
of
to r
of ;
bushels.
lowering
throughout the
barriers
as
forms
frank, /
than
ketings of other wheat exporting
countries, mainly Canada. Indeed,
over
the past two years United
Now one very simple remedy
States
exporfs rose by ;;no less .is lor United States investors to;/
than
200
million
bushels
-per make certain that all their Cana-:
annum
while """ Canada's
exports dian enterprises take full account
This
trade
only
City
less
«
...
...
should' be
I
'the-"the C'a
* at
commercial
our
Canada
initiatives toward
Tariffs
Address
abroad.
increase its/decisions that have a bearing on;
markets
tach
great value to the United
States being in a position, in con¬
cert with other like-minded coun¬
New York
Name.
^
very rapid; advances which we .,
have made in the postwar period. /
On this there ought to be no mis- *
understanding either in the minds
of Canadians or among our friends *•
rency the United States has'been/economy
has tended to shift
carving out markets: for its wheat the United States the making
in¬
dustry.
the
subject of the United States tariff,
gard
One William Street
„
agricui-
growing
own
world.
Lehman Brothers
We
perhaps
States, I should
word about your
tries, to continue to take benefi¬
a
mat
and
ings in enaoling us to make the
adversely the Canadian economy/ single
our
welcomed
nave
siidii continue to welcome.
many of these are products which
compete
1957
Canada's
basic
our
the
course,
factured
v
*
of
trade.
our
e
facet
problems with the
is,
*
for
trading problems.
*
added
cogently,-elostraightforwardly
and
y
we
These edi- .*
States.
express
11
severe
represents,
is
greatly to expand
over
But
to
con¬
Canada
consequences
due
« tf
how
share
expect the United States to show
o
torials
q u e n
in
just under $1,300 mil¬
lion. Indications are that the fig¬
ure for the year just ended
may
from
are
reached
Canada's deficit in
was
United
Trade Vulnerability
and
surprise
decision, I refer
only to the many editorial' comments which have been published
in leading financial papers and
in the press generally throughout the United
the *
in
sometning tnat we in ./-'.
recognize tnat tnis investment has
defense been an important supplement to
' our domestic resources and sav-
this
at
Canada
reasonable
the
to
Canadian
for
dismay
commodity trade with the United
their
other country.
basis
States
years.
of
is,
when
anced.
must all be care¬
formulate
policies in such
this
from
imbalance
1956
countries
basis than any
that
corollary
in
to
of the other countries of the
free
This
tance we in Canada have attached
these developments except to
of the heads
of government of NATO countries, remind you that Canada is today
special recognition was given to the fourth largest trading nation
"the interdependence of the econ¬
in the world and that we probably
omies of the members of NATO
of the recent meeting
witness
and
panada
or
Canaua,
on"
or
tuiure
economy, is
States fimita-
economic
Thursday, January 30, 1958
.
gio/vtn potential or me Canadian /
is any justi¬
tnere
United
.
abroad, this vote of confidence in
tne
/accept
not
could
.
States investment is. very heavily, :
concentrated in certain sectors of/,
tural
surplus disposal program, the Canadian economy. Thus?/,
particularly as it relates to whfeat. f>0% of our main manufacturing
Let me say first of all'that we industries
are ti owned
and con- /;;
have no quarrel and, indeed, sym- trolled by United States interests
years the United
pathize with the Use of agricui-"and this element of ownership and ;Z,
States has taken 60% of our ex¬ tural surpluses to relieve hardship"- control is even larger in some of
ports and it has been the source and suffering in emergency1' situy:our primary resource .industries, -.'u
of between 70% and 75% of our ations.
This is something whidh, such as the oil. industry to give Z'
example/ The second"
imports.
In other words, fully within our more modest - m'eahs, but rone
we
have
two-thirds of Canada's trade has
equally "endeavored* to po.inl'of concern to Canadians//
What has caused us concern arises
been with the United States. Apart do.
directly, from
this
fact. /
is that, in one way or another, What Canadians are afraid of is:/
from its volume, this trade has
been marked by a growing imbal¬ by the payment of subsidies; by that United States control of im- /'
ance in favor of the United States.
barter, and by sales for locaLcur- portant sectors of the Canadian'/
international
by
United States. In the communique
that
special
au-
oil coming irom
on
As
economic conditions in the United
countries to expand their trade States and to United States
trade
renewed effort is
with
the
United
States
to the
policy. The pattern of our trade
being made under the aegis of
benefit
of
us all.
with the United States serves to
the International Joint Commis¬
Now it is only fair to say at reinforce that
sion to find an economic way to
vulnerability. The
harness
the
vast
movement of this point that we in Canada rec¬ trade carried on between our two
tides in the Bay of Fundy for the ognize the positive and construc¬ countries is the largest trade be¬
tive
policies which the United tween
common benefit of our two peo¬
any two
countries in the
States has followed over the past
world. In recent
ples. In the far west, it is our
Brunswick,
way
grounds."
upon
for
make
eitner
a
interests
it ciear at tnat
maue
we
for
on
lions
our
that
view
tne
wmcii' we
I say
In
that
time
fication
prooitms
We
versely.
in such
oil
on
aifect
10
tne
the United States. problems which you may be en¬
this not because I think the countering with us. Tne figures
operation a landmark of great
United States ought somehow to that I have just given to you
beauty has been preserved against
serve
to highlignt tne point tnat
the destructive effects of erosion carry a relatively greater burden
than others. I say it because the I made a few minutes ago, which
and, incidentally, additional
United States is so very much the was that, while the economies of
power can soon be generated in
world's strongest economic power all of us in the free would are
the State of New York and in
the Province of Ontario.
Again, that it is within the ability of interdependent, we in Canada are
Americans to influence the eco¬ just that much more interdepend¬
in
certain areas
of the Great
nomic well-being of millions of ent* with the United States.
Lakes combined action has been
But it is not only the very large
taken
to overcome a
menacing people outside their own country.
That is why we look to the United place which
situation which had begun to arise
foreign trade has in
States to follow
policies which our national economic life that
from air and water pollution.
By
Works.
Remedial
restrictions
as
naraiy suipiMsmg, inereiore,
Canada
responsibility
that devolves in largest
one
Product.
United
American Gross National Product,
Neighbors Over Ihe Back Fence
ara
Financial Chronicle
The Commercial and
(546)
ft ••
XLtfe Keystone
Company of Boston
A'
50
/Congress iStreet, Boston 9, JMassacliusetts
Volume 187
tions
Number 5712
between
United States,
it
is
essential
there
part
Canada
v
.
.
The Commercial and Financial Chronicle
of
be
the
New School Schedules
leading
-
a
series
11
Helen
of
equality of status, and with a full
recognition of the distinctive Ca¬
tee,
F.
that
ensure
Canada
steadily ta increase
tion
to
the
.
is
e c o n o m
able
its
contribu-*
combined
strength/
begin,
whose
report
of
the
Na-
and
other side.
<
-
On the
December.
tion.
Buying Policy
Employment
itFigures
for January show
em-
Mflnv
g
predicted last month, ployment
as
generally
worse
The
optimistic
than
and not since before World War II
somewhat
have
these figures reflect concerning _
notpd
the near future. While there is no Llttle change isnoted
great, wave of optimism, there is ures for capital
b,
19, ; at;
Bros.
mon
&
former
hard-to-get items, particularly in
F
e
of
*neak
rpnnrt<?
Wed nesday,;
are
I'i-i;':
~
over
the MRO classifications, as current
than «shelf items." This availability rePurchasing Agents find the in December. However, comments fleets itself in the cqutinue4 shortdownward
slide
has
continued, from our reporting members are enjng 0f forward commitments in
the members
-
Speakers in subsequent weeks
John Stevenson, partner, Salo¬
inevitably has effects,
or
otherwise, on the
beneficial
reductions
is Chester least temporary increases in their
Vice-President,
The inventory levels.
Company, Detroit,
so
many
almost immedi¬
ately
under the present
There
are
conditions.
business
Chairman
Ogden,
*
ics,~
in
29
said that their pro5:30 p.m.
duction situation is worse. FortyGlen 11
G.
eight per cent, state that January
of the:free
world.'"'.5?';>< f'frZ
Munn, Paine,
production is down from Decem¬
; As I have already indicated and Webber Jackber, 40% the same, and only 12%
Helen Slade
indeed emphasized, there is be¬
*son
& Curtis,
better.
Similarly, the new order
tween the United States and Can-"
and
Pierre
R.
Bretey,
partner, situation is gloomy. We have to
ada a special relationship. We are
go
back
to 1949 to find so many
Hayden,
Stone
&
Co.,
will
lead
allies in the cause of
freedom, but off the series on Feb. 19. Mr. of our committee members
report¬
because of the facts of geography,
Munn will speak on "Probabilities ing poorer new order
bookings.
history, and inter-twined growth
Bearing on 1958 Stock Prices" and In this category, 48% say their
and
development we are some¬
Mr.
Bretey
on
"Have Railroad position is worse, 37% the same,
thing more — neighbors over the
Shares
Seen
the Worst
of
the and only 15% better.
back fence. What is done on one
Present Adjustment?"
It is obvious that current busi¬
side of the fence
military, economic, cultural and
spiritual, of our two countries and
.
n
Jan.
^io?MantbePTtHHUSinef'
lnwhich
Xh?8h
off to the plodding start
.
and
with
maintained
be
Detroit Edison
identity. In the'
second;- place, the continuing Journal, and.
growth;, expansion and strength¬ lecturer,, on
ening of the Canadian economy finance/and
Will
The
ing
The
nadian .national
balance
only 6% who report any improvement this month over last. With
tional Association of Purchasing other hand, 16% report that the 41% showing no change, Ahe maAgents Business Survey Commit- slow-up in sales has caused at jority, 53%, are in a worse posi*.
Slade, Manag¬
Editor,
Analysts
f^'irg that, by stabilizing work¬
keeping shifts in
production require¬
ments, maximum employment can
a
definite thread of optimism concerning the future. Significant
number of purchasing agents believe we are at or near the
bottom and predict a definite upturn this year.
Re¬
of
talks, "Outlook for Investments,"
by leading financial and securities
experts under
the leadership
recognition of Canada's
upon
announces
43
ing hours, reducing #r jejtpiinating
overtime
Survey reports current business in the doldrums but devines
The New School for Social
search
a
Purchasing Agents Expect Business Upturn
Investment Series
continued
role
Which the United States is play¬
ing in the world today—together
with
all its attendant responsi¬
bilities... Recognition of this pri¬
macy is.at the same time entirely
consistent with and even depend¬
ent
(547)
the
and
In the first place,
that on Canada's
should
recognition
.
Schroeder
Hutzler;
Boulton (partner, Baker,
the
in
is
ness
definite
But de¬
doldrums.
present dip, there is a
of optimism con¬
spite this
threat
more
both
Hand to
and MRO items,
production
in thc fi£.
Per Cent
Reportipf—-
30
GO
*
90
*
Days
Days
6 Mos. to
"
% Year
Mouth
Days
Production Materials
11
40
37
12
.-d*—'
MRO
31
41
21
4
3
14
i7
14
22
43
2
January:
Supplies
Capital Expenditures
'
W m fig-
'
'
■
^
-
December?
Production Materials
13 V
34
38
13
MRO
29
40
23
7
1
5
9
23
49
Supplies
14 1
Capital Expenditures
Commodity
Specific
Changes
Careful market reviews and in-
trical equipment,
bariums, borons,
freight charges.
cerning the future in this month's
Op the down side are: Brass,
report. The question, of course, is dividual commodity analyses ,pre
.
how pronounced and how long- resulting in lower prices for the copper, lead, zinc, coal, PR.
tion. A sincere and
friendly dis-~ F. W. Elliott
In short supply: A3 in December,
Farr, Vice-President, lasting will the current recession prudent buyer.
position to one another and to
Girard
Trust
Corn
Exchange be? A significant number of our
On the up side are: Some elec- nothing.
one another's
problems is an out¬
Bank,
Philadelphia; Gilbert H. reporting members believe we are
standing/characteristic of neigh¬
Palmer, Vice-President, National at or near the bottom. They hope¬
borliness,, This .attitude is not
City Bank of Cleveland; M. Dut-> fully expect and predict a definite
shown
at. all
times
and
in
all
ton Morehouse,'manager, Chicago upturn this year.
circumstances and by all members
office, Brown Bros., Harriman &
The present curtailed produc¬
of our two democracies.
To the
Co.; Jeremy Clayton Jenks, Part¬ tion schedules are reflected in this
extent that there is a
falling short
ner,
Cyrus
J.
Lawrence
&
Sons;J
month's
of the
employment and inven¬
ideal;; let us be frank to
Percy H. Buchanan/Morgan Stan¬ tory data. Employment is down,
acknowledge the failure and seek
ley & Co.; A. Hamilton Bolton, and purchased inventories have
to overcome it.
True friendship
partner, Bolton; Tremblay & Co., again been trimmed to fit the gen¬
cannot
be
wrecked
by honest
Montreal; Ralph A. Rotnem, part¬ erally lower volume of output.
frankness.*' '
;/■
With all materials readily avail¬
ner,
Harris, Upham & Co.; W.
This relationship of
neighbor¬ Truslow Hyde, ;Jr., partner, Joable, the law of supply and de¬
liness is not a static
relationship, sephthal & Co.; G. Howard Conk- mand is in full operation and
but alive and
growing.
May it lin, Dana Investment Co.; George prices are more competitive than
ever
continu e * to
grow
and M.
Copy of Annual Report to Stockholders : ■
Hansen, Keystone Custodian they have been in years.
flourish!
Funds, Inc., Boston; Lucien
O.
The financial plight of some of
available on request
Hooper, W. E. Hiitton & Co.; Wil¬ the railroads and the
rapid rise in
liam
A.
Hobbs,
partner,
Clark,
To Speak on NYSE
transportation costs have empha¬
Dodge & Co.; Ragnar D. Naess, sized the
importance of these costs
Mrs. Simone H. Bosc, registered Naess
&
Thomas;
Richard
W.
related
to
delivered
goods
representative with Harris, Upham Lambourne, Treasurer, The Ford as
& Co., 445 Park
Avenue, nation¬ Foundation; Shelby Cullom Davis, prices. For January's special ques¬
wide investment
brokerage firm
tion, we asked, "Relative to the
Members New York Stock Exchange, American Stock Exchange
Shelby
Cullom
Davis
&
Co.;
Neighborliness devoid, of friend¬
ship would become mere tolera¬
-
Weeks &
Co.);. Roger
F. ■; Murray,
dean,
School, ;of
Business;
Columbia
-
,
•
.
.
Carl M. Loeb,
with
36 offices coast to
coast
and
James
members of the New York
Exchange, will discuss the "Birth:
and
Development of the New York
Stock
of
Exchange" before members
the French
torical
Society
at 8:30 p jn:
Hautes
Folklore
on
His-'
and
short
Auchin-
Hughes,
closs, Parker & Redpath; and Ed¬
mund
and
W.
Tabell,
Director
Vice-President
of-Institutional
Re¬
of
cost
costs
you
greater, the
a
lesser significance
or
buy,
and
principal Commodity Exchanges
that transportation
assuming
are
same,
items
the
than
WALL
42
Branch Offices, Correspondents and their
Wire System to
Private
NEW YORK 5, N. Y.
STREET
connections in 100 cities
throughout the United States and (Canada
All but 8% think that transpor¬
Friday, Jan. 31,
hi the Ecole Libre
total
would you say
they have previously?"
search, Walston & Co.
tation
Market
des
Corp. Formed
costs
gotten
have
line with the other
out
of
price increases
(Special to The Financial Chronicle)
Etudes, 52 East 78th Street.
they have experienced.
The lecture will be followed with
a
F.
Stock
Rhoades & Co.
ST. PAUL,
speech by Henry Goiran,
Minn.—The Market
Corporation is engaging in
President of the Society and Min¬
curities
ister
93 East Sixth Street.
Plenipotentiary.,
business
from
a
offices
se¬
at
pressed more than
these increases and told
over
cern
Many ex¬
casual con¬
a
of various ways that
they are try¬
Canada
ing to combat high transportation
costs.
Commodity Prices
NEW
continue under pressure.
Prices
CANADIAN STOCKS
The combination of
demand
WALKER 5-1941-2
is
resulting
Buffalo,
•
^
Chicago,
Cincinnati,
Cleveland,
Milwaukee,. Philadelphia-.-^nd
most
the
in
St.
Detroit
Louis
ENTERPRISE 6772
PITTSBURGH
ZENITH 0210
report
ers
that
Alert buy¬
review of individual items is pay¬
members
our
are
80%
up,
Over-all, 11%
say
the
their prices
and
same,
9%
report reductions.
MGR. U. S. DEPT.
It would appear
S. J. Brooks &
•
The
Company
Toronto
185
Stock
BAY STREET
TORONTO
Exchange
1
still
are
schedules.
Many
over
concern
finished
goods inventories.
about
who
resources
diversi¬
Canadian stocks and j[2) rein¬
Prospectus
may
be obtained from
authorized investment dealers
or
say
the
have
their
same,
While
inventbries
there
effected
VANCE, SANDERS & COMPANY
111
buyers
are
some
are
41%
further
Devonshire Street
Boston 9,
mounting
express
43%
(1) investments in the
fied holdings of
un¬
being adjusted to meet lower pro¬
duction
ties through:
and industries of Canada by means of
scrutiny and are quickly
der close
Members
■
incorporated
Canada, seeking long-term growth possibili¬
that purchased
inventories
materials
in
vesting all net earnings at low tax cost.
Inventories
—
A mutual investment company
careful market
a
ing real dividends.
of
JAMES A. TRAVISS
LIMITED
competitive market situation that
has existed for years.
Boston,
General Fund
plentiful sup¬
plies of all materials and reduced
YORK
NEW
6i Broadway
Mass.
LOS
CHICAGO
YORK
iio
South LaSalle Street
no
ANGELES
West Seventh Street
44
The Commercial and Financial Chronicle
(548)
-
rnntitouod
frrvm
^onunuea
until deflationary pressures have
?
<nnno
jrovi paye o
been
Looking Ahead—1958 and Beyond
rates
money
bond
over the
higher
and
prices should continue
period just ahead with no more
It should also be noted that the than minor interruptions.
This
lion in 1955 rose sharply to $35 average consumer is in a less fa- does,yt mean a return, to the low
billion in 1956 and climbed further vorable position to maintain or rates of the
early 1950's.
As a,
|jy business, which from $29 bil-.
to
bililon
$37
lions
off
last
that
are
in
the
Indica-
year.
spending
last
tapered
of
quarter
1957,
however, and that substantial cutbacks will be made in 1958.
SEC-Commerce
October
Survey
November
and
The
made
in
reported
anticipated drop to $35.5 bilrate in the first quarter of
an
lion
1958.
of
The
McGraw-Hill
Business
leased
11%
in
decline
levels.
New
and
October
And
Survey
Plants
indicated
in
1958
in
the
below
most
cent figures show consumer debt
outstanding
964,000
an
half of
1957
recent
capital appropriations survey
The most re- matter of fact, there would sdem
to be a reasonably good balance
at
about
14%
of jn |jie present area of rates. Inspendable
income
(i.e.,
after vestors are receiving a good break,
taxes) as against 12% in 1953 and are happy about the whole thing,
9% in 1949.
while
borrowers
are
no
longer
The housing picture is more en- complaining as they did. Our most
couraging.
Non-farm
housing recent experiences indicate that
starts apparently touched bottom some large
institutional lenders
last March and after running at a will have to reduce their sights
expand his buying.
re-
con-
annual
in
rate
1957, picked
up
first
the
total
million
1
to
it.
For
or
close
very
.1958,
experts in this
the National Industrial field are forecasting slightly over
Board, manufacturers l million starts, in view of the
substantial drop in new trend of the last few months and
ducted by
Conference
reported
a
those
Commonwealth
of
.
.
Thursday, January 30, 1958
to date at least,
bear this out. . :
Gas & Electric.
do
not seem
to
The cost of living index has con-
of the general uncel*tainty existing in the natural gas
industry at the present time, particularly in regard to the pipe
line companies, as the result of the
so-called "Memphis Case" court
ruling, there is some possibility
that many of the pipe line bond
financing undertakings will be
postponed.
One major pipe line
company, Natural Gas Pipe Line
of America, a subsidiary of Peopies Gas, Light & Coke, already
has announced postponement of
its proposed sale of bonds pending clarification of the present
Because
tinued to rise.
Labor contracts
with escalator clauses add to the
spiral. No one can seriously expect a labor union to use restraint
—
they
are
committed
to
get
everything possible for their mem-,
bership — and likewise there is
little use in telling a corporation
not to pass along higher costs to
the consumers.
v.:
Other Considerations
The accomplishments of Russian
scientists in the field of sputnik
and mutniks served to point out
dramatically the fact that we were
running second best.
Our pride
was hurt.
Bipartisan feeling ran
high in the direction of a crash
program to
regain our position
and with costs definitely secondary. Funds will be provided. The
new budget, largest in peace time
confused situation in the gas industry.
In addition to some $437 million
Price of Governments
Gf utility financing scheduled for
The sharp rally that has taken the first quarter, at least two maplace so far among U. S. Treas- jor industrial offerings are in*
uries has brought about a correc- prospect. West Virginia Pulp &
tion in yield relationships.
The Paper will offer $40 million of history, calls for $74 billion with
tendency of short and intermedi- bonds around the middle of Jan- national defense items using 64%
ate maturities to exceed long term uary and one of the larger credit of the total. The Rockefeller Comyields has been reversed and an companies is expected to bring out mittee says a realistic space age
somewhat
lose desirable
or
com-
enough in mitments to other investors.
the second half to bring the year's
to
being
Edison here in Chicago and Pacific
arrested.
The current trend toward lower
.
.
appropriations, foreshadowing, the the expectation of a more plentiBoard concluded
"a prospective ful
supply of mortgage money and
declinc in capital outlays by man- lower
borrowing rates.
C
ufacturing industry which may
Apart from housing the rest of extension of this more normal a $50 million issue some time dur- program would mean a progrescontinue through the year."
the c01istructi0„ picture is iike- pattern should continue.
In re- ing the month.
sive increase for this specific purReasons for the prospective cut- wiSe encouraging
The commerce ceat
triPs to the market the
pose of $3
billion annually for
back are not hard to find; a con- and labor
departments at year-end Treasury
has shown renewed
Non-Refundable Glauses
several years. ($3 bililon—$6 bildition of excess capacity generjointly forecast an increase in new viS°r in stretching out the maOne of the most interesting lion—$9 billion, etc.)
ally
throughout industry
as
a construction
expenditures
from turity of the Federal debt. Pres- points likely to develop in the
We are being told that the
result
of
over-expansion,
with the $47 2 billion in 1957 to $49.6 entlythe marketable debt coming new offerings will be whether or budget will be balanced, but 'it
operations well below the "pre- billion in 1958. It may be ques- due within one year, exclusive of not inclusion of non-refundable would appear that expected rev¬
iewed operating rate"; the pros- tioned how much
if any, of the kills, exceeds $48 billion, a fact provisions will be needed to make enues are being blown up, while
pect of still further additions to increase is not simply the result which serves to illustrate the need some of the scheduled offerings a attempts to cut other civilian procapacity
ti
tight
plants
as
etruction
under
now
con-
0f price
rates at levels
high
so
tually the economic climate
is
Bond and Money Market
mid-November
in
as
to invite postponement or cancellation of expansion or moderniza-
lengthening action. Ac-
for
increases.
1958;
market in 1957 with
money
money
in
completed
are
the
Federal
Reserve
System dramatically an—
nounced
a
change in credit policy
such
to
as
make
lengthening
measures
The Treasury
not too far
s next
away.
now
additional
feasible, duction in the rediscount rate by will be raised.
activity to make its expected sea- recognition to the fact that infla- lion refunding which could grow
pick-up and by appre- tionary pressures had abated and
$15. billion if March and April
hension over the possibility of a the direction of the
economy had maturities
are included.
Even
recession.
turned downward.
Effect on the though the atmosphere of the bond
Present indications
that the
are
and
money
bond
markets
was
in capital spending in 1950 startlingly
swift,
IVIost
money
will be on the order of $4 billion market rates
skided downward
below
the
1957
level
although and bond prices rallied sharply,
further
deterioration
in
business
sentiment could bring with it additional plans for retrenchment.
Note
the
market to investors is favorable,
issuance by the Treasury of a
really long term bond could remove considerable buoyancy from
were at their highest been described by the industry as
levels, buyers were reluctant to inflationary.
Steel prices are
purchase new offerings having slated for an increase at midrelatively high coupons without year when wage boostsjunder the
some
assurance
that early call three-year contract become effecwould not he undertaken when tive* Fuithei, I think it should foe
interest rates turned downward, a generally accepted fact that over
Thus, many bonds contained a the longer term we can expect
bond yields
Jhe market action of outstanding restriction against refunding for slowly creeping inflation
following:
loilfi term Treasury
periods of upwards of four years
—hi some cases extending to 10
years or more. In a few isolated
Inventory Spending
recently as mid-October it had
instances reversion to the oldWhat business does in 1958 in been 3.66%.
,
style completely lion-callable fcathe way of reducing or increasing ; 2. The Treasury's 4s, of 10-1-69, stocks, particularly those of better ture was necessary in order to
its inventories may have an im- were offered in late September quality are likely to meet with attract buyers.
Unless there is a
jpor'tant bearing
The *ate on the Treasury
91-day bills
close to 2.75 k.
is
Deficit financing
opportunity the Federal Reserve banks, the looms as an almost certainty. The
It will come past year was featured by the recently announced UA.W piogiam
eonal fall
drop
success.
Apart from the sharp grams will run into difficulties in
rise in interest rates, and the sub- an election year and during a
sequent decline following the re- business recession. The debt limit
s
As
issues.
The corporate bond market faces
bright prospects over the immediate future despite the sharp increase in new offerings. Preferred
We expect the level oi business
to continue on _a comparatively
high plateau, and what looks like
a sound foundation is being laid
lor an eventual upturn, probably
to be started by the consumer
goods-industry with capital goods
and issued on Oct. 1. Shortly after increased investor interest.
radical change in the situation, to follow. This reasoning is based
issuance they sagged fractionally
Despite the sharp pick-up in the there is the strong possibility that on the fact that many of the connew
orders coming in at a rate below par.
Currently they are number ancl total value of new many of the forthcoming issues sumer goods industries have albelow sales, it is likely that man- priced at 109.
offerings of bonds and preferred will be offered without either the ready been through a sort of rollufacturers will continue the liqui3. This past
week
Aaa rated stocks scheduled to come into the non-refundable or the non-call- ing adjustment period and find
dation process into the first half Connecticut
Light & Power of- market
during
the
next
few able provision.
themselves in a reasonably good
the
of
economy
i
the
on
as
of
course
whole.
a
With
1958.
fered
The inventory liquidation process
in 1953-54 took a little over
30-year bond
a
on
3.889%
a
weeks,
there
is
little
likelihood
On Sept. 23 similarly that any material upturn of yields
rated Consumers Power also of- will be witnessed. It is possible
a year and dropped book values
fered a 30-year bond but for that because of the relatively large
by $4 billion; in 1949 book values 4.71%.
amount of new issues, the latter
yield basis.
reduced by $3 billion in just
were
under
In
October
the
Federal
one year.
The latest available figures show end of Novem-
Loan
tier
This past week on
inventories
of
manufacturers
193%
es
of November sales-up
171% two years earlier but
from
r
t
end
^
204%.
the
In
where
durable
much
of
eoocU
the
on
borrowed
4%%
a
a
Home
for
yield
Sx
basis
similarma-
turity,theslmea«ency naid3 30%
below the 1949-1953 peak of 200%
eector
Banks
months
™
t>
TX
top
a
®
/o *
y
,on, 0?U2rer Municipal
3'?7% on Aug* 15'
?
a
,
.
stood at 2.97%,
Money is a commodity and as
such the Pr*ce
commands is
subiect to the laws of supply and
202% at the 1949 and 1953 peaks. damandEast summer and fall
Whit tho
win
a
' witnessed a reduction in credit
the
of snonrhnr* i<?
demands on the part of business,
of
rmestion
mirk
it
thic
r°1C due Primarily to lagging sales and
than it iisnallv i/pprcnnai in
reduced profit margins which in
rose
steadilv
in
the
fir«t
tura bl'°ught about cuts in invenmonths of 1957
then slaekeH 7fF tor*es and capital expenditures. A
moderately
f'aetorv livnffs -° i c°ntra-seasonal
contraction
of
shortened
work
weeks
rut
thn
loans by banks to business develtake-home
Tn
rrtiii
sii °
°.pe(* simultaneously with a reducthe pattern
similar
' S *ion *n corP°rate bond offerings:'
generally sidewise movement
in
1949 and in
1954 consumer
heaviness
trated,
to
seems
the
be
November
228%,'compared
concen-
ratio
was
with 201%
and
'
r»nn<jnirwnr
wav
i
as
nav
was
t
io4q
•
in^
that
spending
factor.
was
But
consumer
ol
ana
strong sustaining
spending
now
a
with
raised
extremely
than
had
was
shown for
arrested
and
available figures, it is estimated
that more than $500 million of new
bond financing will be undertaken
in the first quarter. Most of this
will be concentrated in the first
two months and does not include
the $720 million of American
Telephone & Telegraph convertible issue nor the $150 million
World Bank offering. The latter
is non-callable for 10 years and
met with considerable demand
from buyers who ordinarily might
concentrate their funds in corporate issues. Likewise, while the
debt
financlimit
a
seems
^ole).
in
tax cut
(unless
slump much
now
ters, and indications of declining
money rates, buying interest in
preferreds of good quality has
been given over primarily to
words
flation.
rights basis to stock-
com-
stocks with but passing interest in fixed income securities,
Common stocks for income, common stocks for appreciation and
also as an attempt to protect to
some extent at least the purchasing power of the dollar—in other
mon
offered
a
ci
tap
the
more
prob-
this condition with the rediscount
might
rate
available
cut
in
November.
While
the
Federal
Reserve's action of itself
did not increase the credit
supply,
it implied that further
steps would
be taken to make credit available
throughout^, the
banking
system
ordinarily
for
be
considered
investment in
corporate bonds.
other
The bulk of the
corporate bond financing will
come as the result
of expansion
new
programs by
panies,
two
electric utility comof the largest issues
t#
r
selected rortioiio
the longer range viewbeen reawakened.
point we continue of the opinion
Probably a year ago a discus- that
carefully selected growth
sion of this nature would have stocks,
equities
in
companies
American Telephone issue will be
on
.
a
form of hedge against in-
We have already seen the
From
which appear well situated to participate in the future expansion
of our economy and which may
have the benefit of aggressive and
progressive management supported
by adequate research, have a definite position in the average fund.
Those investors who already hold
stocks in this category and who
are
distressed* at seeing current
prices considerably below recently
establshed highs might consider
deflationary forces moved to the holders, many institutions, as large competition for the income-seekthe help fore.
The Federal Reserve gave shareholders, are expected to exing dollars from other forms of
reductions, official and formal recognition to ercise their rights. Such funds too investment while the determined several alternative
deficit
slim
economy should
severely
economy
months
New Filiancin& Scheduled
According to the most recently
had
tax
prospect, the chances of
are
the
several
rediscount rate.
each of these years
in
substantial
whereas
ing
a
wiU have to come at some con~
cessio»s
current markets, but
differences are unlikely to be as
wide as some o£ the issucs brought
out Plior to the reduction in the
On balance, it would appear position from the standpoint of
that the corporate bond market inventory This coupled with allwill show sustained strength with time record figures lor disposable
only modest variations in the income and with the apparent
yield structure during the periods willingness
ol
individuals
to
of heaviest financing.
spend to improve their standards
So far as preferred stocks arc of living seems to justify the beconcerned, many investors now lief that companies in this field
are turaing ,heil" attention to this can expect a good volume of busi¬
media. Yields from many of the ness together with reasonable
better-quality
preferred
stocks profits over the near to mterstill are around the levels obtain- mediate term.
Obviously, such
able from common stocks.
With groups include retail trade, merthe economic uncertainties still chandising of various types, food
being stressed from many quar- chains, drug% to name a few.
fight
against
inflation
well
tary authorities,
as
statements
persons
places in
effect
by
our
that
by
as
in
mone-
strong
high
to tre
winning the
Government
we
are
fight, has tended to perhaps make
many
people less
scary.
The facts,
programs.
(1) If
mentioned above it may well be
held through what should prove
to
be an intermediary decline,
(2)
Present
market
conditions
might offer an opportunity to upgrade present holdings while perhaps at the same time establish-
Volume
Number 5712
187
The Commercial and Financial Chronicle
.
.
.
(549)
45
ing losses for tax purposes while
reinvesting the proceeds within
the
same
Public
group.
Looking ahead for perhaps five
years it is quite possible to paint
a very optimistic
picture for our
economy.
The real base for such
optimism is in the
population
growth which can be fairly ac¬
curately charted. As a result of
an
unusually large number of
late
births
in
the
middle
and
1940's
we
will
have
group
a
of
people in their early and
mid-twenties by 1962 or 1963 who
will be at the right age to start
new
family
formations.
This
means
new
homes and all the
young
.
necessities
that go into a home,1
greater need for utilities,schools, in other words substan¬
tially increased demand for the
.
even
i
better things in life. This probably
'
would
be
in¬
accompanied; by
creased plant capacity to provide
-
these
things, higher wages, per¬
haps
lower
Federal
taxes
but
somewhat higher local taxes—and
don't forget
should
tell
we
people
our
for guidance?
ask
us
can
see
who
As far
I
as
it doesn't change basically
the
philosophy
of
investment
planning which our firm has been
preaching for a number of years.
First, the individual should own
his home
outright — real estate
He should
values should increase.
protect himself with a life insur¬
program, following that, and
With some cash reserve for emer¬
ance
West Penn Electric
West Penn Electric
Water
right acquisition of sound common
stocks. In setting up such a pro¬
he should seek the advice
his banker, take advantage of
the broad experience of individ¬
in
uals
the
on
as
field
the
material
of
wealth
finance
of
Works
and
available
the
subject from these sources
well as from reputable invest¬
&
1949 West Penn
Company
in
1925
as part of American
and when the latter
System,
Electric recapitalized and completed its integration
common stock was issued in 1951, 1952,
under the Act.
Additional
1953 and 1957.
The stock
split 2-for-l in 1955.
was
West Penn Electric is
approximate 29,100
areas
7/
,,
',/>•
miles with
a
The
territory
/,
■
has
substantial
mistic.
from
far
are
pessi¬
being
We appreciate that we are
going through a period of what
would
'
be
to
seem
ad¬
necessary
justment, we are on a relatively
high plateau where business.rpanagement seems to be consolidating
its position so as to participate in
a broad advance, which seems al¬
most a certainty, over the longer
term.
V
'■
stock
the
by
Revenues
During the five
kw
years
of the three
about $23 million.
generating capacity
000 kw.
bonds
$171
while
million
$21
The company
in
of the
stock.
common
In
the next two years,
as
in February,
(with
a
4.8%
for
1958-60
on
sales
of
In conclusion
we
have
"
seen
that
:
over-all
the
it
showed
to
indices
Such
figures
for
1957
record
year.
be
a
as
GNP,
Personal
two-thirds
area
31%, the ratio having
should
not forget that rising prices prob¬
ably offset any physical gains over
the preceding year. Looking closer
we
find that the year was quite
selective and that certain seg¬
ment^ of industry had their own
regards
the latter
we
bear markets and distress periods.
seems
accompanying table, revenues have
Share earnings have
steady gains with the exception of the setback in 1951.
Dividends have increased in each year since
the stock has been in
public, and the price of the stock has been in a
the hands of the
general uptrend, excepting for the slight setback last year.
(Millions)
Dividends
Paid
Earnings
Price
authorities
audacious
132
2.15
1.43
29-26
127
2.06
1.28
29-23
1954
116/
1.88
1.15
25-18
1953____l
115
1.72
1.10
19-16
1952
108
1.71
1.03
19-15
1951
100
1.49
1.00
15-14
0.93
14-11
:—
1955
—
a
decline in
Central
Bank
of the Federal
modest amount of
reserve
reserves
rate
is
Reserve
have been
In other
position of the commercial banks has
available a small amount of net
slow process so far but the indica¬
now
a
has
of
not
action
the
been
does
tight
too
not
money
bold
so
Reserve
Federal
System.
Imminent,
policy
far
but
by
the
the
monetary
time for
more
to be very far away, in the
specialists. This will take the
appear
opinion of many money market
form of lower reserve requirements
For
a
of the member banks of the
been con-
long time there has
sidrable opinion around that the deposit banks have been operat¬
ing with too high reserve requirements. To be sure, reserve re¬
quirements were kept at present high levels because it was one
of the measures which the powers that be had used in fighting
the
forces
the
inflation
of
inflation.
For a time, at least, it looks as though
spiral has been broken because the economy is on
the down grade.
is
as
such
sures
Therefore, it does not appear as though the need
was to keep the member banks operating with
large reserve requirements as when the inflationary pres¬
were going full blast.
great
as
it
More Bank Money to Be
With
Available
decrease in the demand for
credit, it was not unnatural
that the loaning rates of commercial should be revised downward.
The prime bank rate is the bellwether of the loaning rates and the
reduction from 43/2% to 4% means that, in time, all rates for
borrowings will be lowered. If competition for loans should in¬
crease, and there is not an insignificant amount of opinion around
that it will, then it is expected that more bank money will be
finding an outlet in government securities. It is evident that the
most liquid short-term issues will get the bulk of this buying.
And, the way in which the return on Treasury bills has gone
down appears to be proof enough that substantial funds are being
invested in these and other riskless securities.
a
Refunding Operation Eased
The reduction in the Central Bank rate means
Range
28-24
1956
reversal
New
-
$1.50
' $140
,
the
in
the program
a
Cut in Bank Reserves Believed
The
Approximate
$2.18
(Est.)
decrease
This has been
Stock Record*
Common
Share
Revenues
Year
1957
The
reversed, since there is
reserves.
cash
from
likely that this will include
output of heavy industries in the area.
Income, Consumers Spending and
Construction rose to new peaks.
As
available
be
to
consistently in the postwar period despite irregularities
also shown
>
more effective and positive action 7
being taken in the not distant future.
will continue
equity financing, possibly in the ratio cf l-for-16.
As will be noted from the
/
tions point in the direction of
indicating the confidence
internally, leaving $50 million to be
It
.
require about $150 million of
estimated
is
raised, probably in 1959.
in the
Readjustment Lengthy
been
senior
l-for-16 basis. The construction program
a
hand and to be generated
moderate
defensive.
words, the negative
free
16% in 1949. The last equity financing was
will, it is estimated,
about
in government securities.
retirements
gross
1957
was
.
made available to the member institutions of the system.
and
Power
1957, when 528,000 shares were offered on a rights
basis, this amounting to
which
the
on
;
of Sept. 30, 1957,
'77
The reduction in the discount rate by most of the
Federal Reserve Banks from 3% to 2%% means that the demand
for loanable funds is decreasing and the trend of business is still
livestock
to increase at a substantial rate.
ratio
•
interest rates.
expects to add 240,000 kw this year, 165,000 kw
over
y 7.7.
•.
.
augment the supply of credit and thus bring about
coal,
added, bringing the total up to 1,751,-
management that electric demands in the
The equity
'
Stronger Credit Ease Measures Expected
1959, and 165,000 kw in 1960..Thus capability will be increased
about one-third
brought with it important money
Federal Reserve Banks.
Seemingly,
policy will have to be resolved in the near
of
...7/.
-
the movements
securities approximated $34 million, and common stock $13 million.
'
•
conflict
a
During that five-year period some 444,000
was
20, 1957 and the end of 1957
by the Federal Reserve
market
market is waiting for the announce¬
billion refunding operation and these
terms should be made available today
(Thursday) or tomorrow.Even though money market conditions continue to be
favorable,
this large Treasury undertaking has tended to limit the
scope of
Financing during the period included $34 million mortgage,
and
of the
This is the first time in many years when successive cuts
future.
companies (in the order
million,
the latest
shows that the
7 ;
The government bond
ment of the impending $15
1952 through 1956 the system construc¬
aggregated
program
out
banks has been such that
Monongahela
public),
1957,
credit; help from the
such
named) approximate $77 million, $37 million and $27 million.
tion
taken
mainly psychological, but
held
Potomac Edison.
increased
'I'
■'
been
now
and
farming.
The principal subsidiaries are West Penn Power
minority
November
taking
in the Central Bank rate has not
:
"
V, We
has
heavily indus¬
Agricultural activities include fruit-growing,
and general
are
The monetary authorities have been taking steps designed to
bituminous
It also has navigable waterways and is
trialized.
still
of
Reserve System
of the member banks between Nov.
Banks.
limestone, glass sand, natural gas, salt, timber and other natural
resources.
middle
population of 2,-
of
amounts
the
credit out of the money
The $1 billion of credit which, was
put at the disposal
market.
-V V,:7'7' 7:77
/"■.
since
authorities
386,000. The 26 largest communities have populations ranging from
10,000 to over 40,000.
of the second lowering of the discount rate by the
Banks
monetary
an
square
Governments
on
available figures of the Federal
integrated utility holding company
serving areas in Pennsylvania, West Virginia and Maryland plus
some small adjacent sections in Ohio and Virginia.
The combined
increased steadily from
ment firms.
formed
was
Electric
liquidated under the Holding Company Act in 1947, West Penn
Electric's stock was distributed to holders of Water Works.
In
gram
of
Central
was
were
which would contem¬
plate owning a small cross-section
of American industry through out¬
program
In spite
Company
properties now composing the West Penn Electric
System had their beginnings as scattered electric street-car lines
(later interurban lines) which led to the use of electricity by cus¬
tomers along the rights of way. Soon the electric power and light
division outgrew the railways and the latter have now been prac¬
tically all sold or abandoned.
gencies, he would do well to set up
a
Reporter
By JOHN T. CHIPPENDALE, JR.
The electric
and what
answer
Our
By OWEN ELY
the creeping inflation.
What then is the
Utility Securities
ury
that the Treas¬
refunding and new
raising operation at better rates than would have been
will be able to take care of its coming
money
if there
true
appears
trict
as
There is
had been
no
decrease in the discount rate.
There
in the financial dis¬
what issues will be used in the impending operation.
rather definite feeling around that a certificate and a
to be the usual number of guesses
to
a
'
Now
are
we
told
that
1958
will
1.75
94
1950
Again
1957.
surpass
believe
we
it will be highly selective.
True,
Government
spending
will
in¬
crease
these
but
it
takes
additional
time
to
into
funds
get
the
production stream. There are few,
if any shortages.
There are sur¬
pluses of basic commodities as
well as surplus capacity.
Pipe
well filled.
lines
are
ably
inflationary
Unquestion¬
implications of
Government spending and
deficit
financing will have a psychologi¬
cal
supports
should
and
effect
for
the
serve
stock
as
market.
However, it will take time to cor¬
rect the imbalances of supply and
demand which have been
built
up
86
1.66
0.76
13-7
1948
83
1.64
0.50
10-
1947
73
1.54
1946
64
1.15
1949_
.
Penn area.
in the rate schedule.
lower than in
sound basis for the up¬
turn which we
confidently expect
\
a
the past,
of steel and coal in the West
In 1949, when steel operations
averaged 12%
1943, share earnings increased 1%, and in 1954
they
In 1958 it
appears likely that another modest increase in share earnings will
be registered despite the current sharp dip in steel operations.
In 1956 revenues from iron and steel
coal 21% of total industrial revenues,
over
approximated 25% and
but the remaining 54% were
including glass, chemicals, fabricated products
other industries.
creased
and
Revenues from chemical plants have in¬
250% during the decade.
West Penn Electric
being 28V4-23V2.
variances of opinion. How¬
decisive extension of maturities
in this refunding venture are talking about a 3%% or a 3Vz%
bond. The way in which a long-term bond,, if any is offered, is
received, may be a clue as to what will be done in the new money
raising operation of the Treasury in the near future.
Investment
Analysts Society of Chicago has
announced the following schedule
CHICAGO, 111.—The
of
January 30—Corn Products Refin¬
ing Company, Mr. William T.
Brady, President.
The
Company,
President.
the
longer
term.
price-earnings ratio is 12.9.
lirir
0(1
Mr. R. E.
— Dresser Industries,
Reimer, Vice-Pres.
March 6—Open.
March
13—Allied Chemical & Dye
Corporation, Mr. Glen B. Miller,
President.
March
20—Inland
Steel—Field
Trip—Invitational.
programs:
February 13
recently recovered to 28, the 1957-8 range
Paying $1.50, the stock now yields 5.35%.
February 27
Chicago Inv. Analysts
Schedule of Programs
TTnKvi
over
those who are looking for a
protection against loss
depression because of demand charges
gained 9% despite a drop of 21% in steel operations.
many
period in which to re¬
during
part of the refunding picture.
bond involved in this under¬
taking appears to be open to some
ever,
But the company has substantial
of steel revenues
Whether there will be a long-term
7
split In 1955.
of public.
because of the substantial production
questionable that six months is a
a
hands
(even a short bond) will be
note
* %
Possibly investors have felt some apprehension, in
well diversified
establish
for 2-for-1
r'Adjusted
^Stock not in
during recent years and it appears
sufficient
'
"
'
—
March
27—Life
Magazine,
Study
of consumer expenditures.
April 3—U. S. Rubber, Mr. John
W. McGovern, President.
Marquette Cement April 10—Anaconda Copper Co.,
A. Wecker,
Mr. Roy H. Glover, Chairman
of the Board, or Mr. Clyde E.
Mr. W.
flnPH
Weed, President.
46
The Commercial and Financial Chronicle
(550)
Continued
from
herent in the economy.
5
page
Including Common Stocks in
Open Maiket Operations
inflation
that
took
place
since
1947.
There
In recent years, the expectation
of
creeping inflation led to stock
buying as an inflation hedge. As a
rule, stock market prices are de-f
termined by the forces of supply
and demand, the level of current
prdfits and future outlook, the
growth in the net worth of cor¬
porations, general economic ex¬
pectations and by what money
in
earns
ments.
other
financial
invest¬
The rate of interest enters
only indirectly insofar as it en¬
courages investors to switch from
liquid asset to another. Nat¬
urally, the hope of an out-drawn
period of appreciation and fear of
one
inflation
well
as
the burden of
as
the
capital gains tax so far have
restrained
many
people from
switching.
Better marketing of
stock
common
by the appeal to
people's capitalism, too, have en¬
couraged a steady demand for this
type of investment.
When
look at the net worth
we
of
corporations and their invest¬
ment spending already paid
for,
Overi the
last
decade, the market
value of common stocks currently
running at $180 billion, does not
be
to
seem
out
of
line
with
the
appeal.
involved
in
this
hedging, too, with potential losses
in
income and
on
the
development of the inter¬
and
rate
est
tal
increase
and
for
demands
inflation
Ultimately,
come
capital dependent
stocks.
might
still
capi¬
the real
loss.
The rate of interest has
a
direct
bearing on the value of bonds
which, under a rising rate, decline
as
it happened in recent years.
Should the rate decline from
now
on, additional losses from bonds
would be unlikely, at least for a
period, and this might ex¬
plain the rising demand for this
instrument.
investment
of the continuous growth of busi¬
and individual
ness
saving which,
if taken together, are not
basically
out of line with present private
investment spending,
we should
not expect the rate of interest to
move up still further.
economic
home
political
or
other
trends
at
evalua¬
and bonds, a com¬
with
parison
to
the
In
abroad.
or
of stocks
tion
relative
stocks
common
shows
1929
how
_
capital and the book
plant and equipment
minus long-term debt, amount to
$250 billion. Corporate expend¬
various govern¬
ment measures
are
contributing
to the far greater economic and
financial stability at present.
I
mention only the banking and in¬
itures
on
vestment
ment
alone
of
plant and
new
amounted
equip¬
$200
to
billion in the last decade.
Busi¬
ness
saving of corporations in the
of retained profits and de¬
preciation allowances alone pro¬
form
,
duced $200 billion and, thus, made
possible to finance internally the
entire outlay for growth.
Today's Choices
Considering thd data jUst
viewed, there should exist
re¬
wide
a
range of choices
today of how to
evaluate
whether
form of
assets
stock, bonds
in
the
other in¬
or
vestment and to switch
from
one
the other keeping all market
values fluid. However, the amount
to
of
stock
common
kept
that
is
being
permanently
is
steadily
growing.'' Institutional investors,
for example, are bound to hold
to
on
these
assets.
Likewise, all
those who
bought stock for appre¬
ciation, and have not yet seen the
realization
their
of
hopes,* will
keep them. Stock speculators who
are looking for a
quick dollar nat¬
urally
act
differently.
Margin
requirements set at 70% have put
much
restraint
on
such
transac¬
tions, however, and limited them
to
small percentage of the total
stock market.
a
In recent years, common stocks
have changed hands to the amount
of more
than
$20-$30 billion
an¬
nually, equal to 6% of the Gross
National
Product.
turnover
losses
the
a
small
indicates that profits or
in
played
This
the
market
must
have
relatively minor role for
economy
and
affected
only
moderately total private purchas¬
ing power.
ysis
picture of this anal¬
indicates that under normal
psychological conditions
iff bound to
duce
occur
no
pariic
that might re¬
drastically the present
mar¬
ket
value
of
common'
stocks.
While it is easy to sell
them, the
real problem is what to dot with
the money, what other sound and
profitable
find?
estate
investment
outlets
Buying diamonds
as
or
to"
real
to¬
Naturally,
day.
that
laws
have created
banking
that control
and reduce speculation including
margin requirements, farm price
supports and other so-called auto¬
a
financial
strong
structure,
and
measures
stabilizers.
matic
Even
more
im¬
large size of
the Federal budget should be
mentioned which provides a reg¬
ular and very large
portion of
portant,
the
very
demand.
total effective
From
to
1923
1929,
common
prices advanced by 320%
against a growth in
industrial
output of 30%.
Far worse, the
number of employed and annual
and
wage
payments in¬
the entire period by
salary
creased over
In the last decade the
advanced by 140%
only 5%.
stock
market
industrial
while
output
gained
44%.
However, wage and salary
payments
and
similar incomes
available for immediate consump¬
tion
spending, advanced by 83%.
In 1929,
the market value of com¬
almost equalled the
stocks
mon
National
Product.
entire
Gross
Today,
in spite of the far larger
structure,
corporate
the
market
value of all stocks amounts to less
than
40%
of
the
Gross
National
Product.
in
stock
1929.
market
In
this
by
1931
To
the
or
incomes
wage
equal
such
market
would
billion
being
all
entire
an
losses,
have
day.
Such losses obviously would
impossible, even theoretically
the stock market served
chiefly speculation. Broker loans,
for example, rose to over $8 bil¬
lion and amounted to 8% of the
Gross
National
Product
in
1929.
A similar expansion of call loans
today would
lion.
New
were
amount
security
excessive
at
an
$35 bil¬
issues,^ too,
to
and
inflated
annual rate
of $11
and
respond
to
$45 billion new
issues
annually
today.
Under
these
circumstances,
ther first
stage of the stock market crash
over
in 1929 and
come
as
ability
1930 should not have
a
real
of
the
surprise.
entire
The in¬
economy,
however,* fo* redover subsequently
was
the
tragedy
of the' thirties.
sion
depres¬
the crash
auickly. As it was,
triggered all negative forces in¬
has
been
support
for
needs.
in
decent
a
way,
eliminated.
would
I
similar
that
we assume
equally well stock buying... arid
selling? After all, such purchases
would give the system more than
debt-repayment
promises;
like
anybody " else,
the
system,
by
buying stock, will acquire a stake
in the American economy includ¬
ing corporate assets and income.
a*
that'*
standard
to
done
and credit
money
many
operating
like
their
Why should
the System will fail to administer
program
living. In this
something
market value of all stocks.
tax money
and Productivity
In spite of the insufficient level
either.
of:
7
the* of
for
Prevent
-
the
stock
".t
Depression
a
•In view of the enormous
have,
market
impact
the
on
total
,r
-
,
the
inclusion
of stock
buying for
the Federal System would become
Wants,Stocks
Supported
by
the most
important step to prevent
•V'
incomes in 1929, the ecoiw
Federal Reserve ;
a
depression once and for all.71
as long as a very
The Federal Reserve,
do
not
have
to emphasize that this
through/
high level of exports of goods Open Market
buying, has given! measure, more than any; .other
and capital, business profits, capi¬
support to government bonds for; economic ; device, , would
hujrt
of wage
,
prospered
omy
-
„
v
tal
income
and
profitable
domestic
invest¬
outlet
for
the
domestic
present,
the
side
tivity,
bonds
and
following
the
creased
duced
50%
at
end
the
for
from
produc¬
stituation
goods
the, decade against
beginning,
did
he
sufficient
income .to
purchase
the
riot
be
earn
able
additional
and
available
social
income
to
ing
an
at
aid.,
"J
a
For the coming year, I foresee
slowing down of consumer price
a
and
In
"
the
desirable
.so
stability
for
trends
the
has been lacking all its"
view
of
the
relatively
annual
turnover
of
the
but
of
what
people
feel
about economic forces in the.
future, there is far
near
tumour
more
in view of -its -vastness,
economy
ability to
ductivity.
advance
In
Soviet Russia,
fast
selling of stock would affect stock- than
prices and prevent exces¬
and
pro¬
contest
with
there is also
more
our
our
economic strength.
In
concluding with the wOrds of Dr.
sive-fluctuations
up
or
down.:
Adenauer, used in his1 inaugura¬
Naturally, I do not suggest that- tion address last
October, "The
the
market
regular
keep consumer spend-*
annual rate of $230
purchase
longtime
ago,
stock market, even small amounts'
of
Federal
Reserve
buying
or
pen¬
billion. The major part of produc¬
tion and services can be bought
Reserve
•
should" underwrite'*
purpose of life is not arii ever iriprofits but a suffi¬
creasing standard of living ' arid
ciently judicious method could be
stock
market
growing luxury,-or a scramble
just to protect the market after
money and matefialpleasure."
really bad swings, nothing' Man, his spiritual
worth, his health
longer more/
/. /
v.; V and his family pome first."
To
with current earnings of em¬
now
life.
small
payments
sufficient
to
war
furnish
security
he, so to speak, produced
automatically.
This
destructive
discrepancy between the rise in
productivity and wages took place
in the golden era of stable prices.
sions
for
market it
which
make
;
*
Outlook
or
would
to
output
Today, wages and salaries,
credit
Run
*
hour
per
Short
-
each worker pro¬
more
of
group. This is my message.
At
rises and a slightly growing Grofcs
financing
and National Product. While industrial
less a deadweight on- the' output is still
stagnant, perhaps
economy
now.
Why not extend waiting" for
a
clearing of
in¬
Open Market operations to sup-' ventories, demand for services is
port the real, living economy that- rising. I also expect a cheapening
tomorrow
will; feed
us
better,* of the cost of money and moder¬
build
new
factories, utilize re-- ately declining commodity prices.
search and new technology and- For these
reasons, stock and bond
create more jobs? The Congress prices should not move
spectacu¬
of the United States should amend- larly
upward • nor should they,
Federal • Reserve
legislation
by however, ; be
faced
by ? sharp
a
*•
permitting the Open Market Com-, declines;
mittee to buy and sell commonWhile the development of the
stocks just like Federal bonds. We.
stock market will remain one Of
must not forget that the stand-by
the
important
barometers,
not
alone—even if not much used—.
necessarily of economic long-term
more
by 50% in the twenties—
other words
the
problem
wages
Soviet Russia and the Communist
course
has-ac¬
Reserve
issued
needed
While productivity had in¬
arose.
in
the
at
of
the
eral- Reserve
promptly.
Looking
the
it
does
not
hesitate to furnish so-called Fed-'
consumption and investment dried
up
intervention,
cumulated $23 billion in bonds.
very
demand
this
of
profits, stock market gains and
foreign demand dwindled or dis¬
appeared,
three decades. In
over
large individual and business sav¬
ing of the era.
When business
ployed
found
from
people. Sales no
greatly
on
fluctuating
To those who might object to- protect these values is our
purpose
business profits, capital incomes,
this method as being too ''social¬ and our dedication.
uncertain
windfall
profits
or
istic," turning over "control of
large-scale exports made possible" stock
prices to the government."
by private foreign lending. For I would make
Retires From Board
this reply.
>
They
this reason, consumer demand re¬
never would refuse
support if of¬
Charles Allen, Jr., Chairriian Of
mains praised as the stabilizer of
fered by private banking groups."
the Board of Campbell
the economy that on several oc¬
ChibougriThis used to. be done
dejrend
casions
has
..in
balanced
successfully
weaknesses in other sectors of the
Wage
economy;
decade, of
in
pressures
have
course,
have
rates
wage
beyond
the
over¬
gains
advanced
in
productivity.
While this meant some price rises,
at least consumer
spending can
continue
on
a
large scale and
furnish
the
economy
the
mostpowerful
stimulus
for
rising
in¬
vestment spending which remains
the set screw for economic ad¬
vance
bil¬
lion of one-eighth- of the national
income in 1929; this would* cor¬
Government,
whole in
The
economy.
stock market, the importance ofv economy,"
promoting growth' arid
which for the economy is not less, stability; even if
predominantly
than* that of the farmer. I do not. psychological in nature —a
though
ask for measures that
will cost real enough in its consequences^-
speaking, because this sum ex¬
ceeds by $60 billion the current
Wage Income
the
the worst sore
of the national economy in exist¬
ence fbr over a century has been-
annual wages and
be
of
price
tected
$230
equivalent" of
salaries to¬
the
temper
while still having many blemishes,
has done the job. Food output hasf
been increased and the farmer pro-;!
stock
lose
to
mately
of the
at
least
over
periods, I would like to
proposals
to
strengthen
now,
farm
year.
the
the
anchor
years
actually
equivalent of all
in
for
Federal
comparison,
operators
purchases,
it
has pur¬
$23 billion bonds legiti¬
and soundly in order to
serve the private banking
system,
the
public' and economy -as a
chased
importance of the stock
economy,
submit
lost—not paper losses—$15 billion
in 1929 and a total of $50 billion
many
In 1929,
A sound economy in 1929, though
holding of stocks ao-; it' could ndf have
pfeve^te^ a
pears to be equally good. And as
temporary break in the market,
a hedge against deflation?
{ sup¬ would have overcome the
example,
as the
ability of the sys¬
is concerned to finance Open
tem
Market
entire
salary incomes,
amounted
to
$50
far
So
been the
shorter
the demand side.
Thursday, January 30, 1958
.
market
market
econ¬
and
wages
billion
the
of
done the keeping-up of this major
source
of purchasing power and
in 1929
The Break-Down
hedge against inflation?
that the building up of sav¬
ings accounts or the purchase of
for
last
In this case,
pose
break-down
omy came from
stock
ran
The entire
The
ment
in
plant, equipment and
housing
could
be
maintained.
In general, changes in the rate
Exports of goods and capital and
of interest have become a minor, domestic investment in particular
factor
in
influencing prices of provided a sufficiently large and
much sounder the situation is
working
mendous
view
In
of
For example, total assets
corporations
including
net
maintain the economy and to pur¬
chase all the goods it produced.
both,
or
short
former.
value
,
would
risks
are
panic selling which has
principal cause of serious
declines, will not occur.
Nevertheless, in view of the tre¬
Total
bonds
Federal
Most im¬
portant,
people
did
not
have
enough regular incomes—outside
of fancy speculative profits — to
.
.
and
growth.
Government spending, too, while
to
some
extent
painfully financed
bv taxes, is very important. To¬
day;
the
Federal
Government
alone
the
spends
total
ar»d
riot
of
much
less
than
private
consumption
expenditures in
investment
1929;
While
become
the
economy,
far
thus,
and
the
example,
tempts,
of
House
.
the
past
Morgan,
successful, to stem
financial panics. Today, the mar-,
nounced.
ket
is
too. ^big,.for
any
one.
individual
or
job.
the
do
Reserve
using
could
the
for
dwindled.
If
to
ment
stock
for
number
market
quickly,
on
said
Federal
re¬
W.
Clark,
•
President,
the resignatiori Of Mr. Allen
was.
it
do
arid
"accepted with rhariy expres¬
successfully
sions of regret and of
appreciation
is not the:
for
the
valuable
contributions"
government. Its decisions, made:
made during Mr. Allen's tenure as
by the Board of Governors, are,
which,
by
the.
way,
Chairman.
independent of government. They,
are
made
by experienced
and
astute
Mr.
senior
businessmen who have the
benefit
the
of
entire
economy and nothing else in their
minds. They should be considered
a
caoable
match
speculators
case
or
for.
mass
serve
stock
would
as
that Mri Allen's
ari adviseri to- Camp¬
market; bell CHibougamairwill beraccepted
in. and his services will be utilized as
an
fto
circumstances dictate,
sor
Chairman has
as
little socialism, nated/
the present ownership of
billion bonds by the system.
The argument that
as
hysteria
as
has
Offer to act
by the Federal Re¬
be
arid
Broad Street, New York.
Mr. Clark rioted
of panic. An accumulation of
common
•
,
fourider
is' the
partner of Alleff & Com¬
pany, 30
American
7
Allen
•*
1
■
•
"
succes¬
been desig¬
*
'
'
.
of
to
-
e x a rri d
enough
they
income
With Sutro & Co.
extension
get
rich
System does not have the
to
finance
as
invest¬
appreciation
to
stem
thus,
money,
such
10,
has convincing.
people hold would come
own
or
oersons
onerations, is r»ot
Buying
of'
stocks
into
the tide
could
not
operation
of deflation
cause
;
$23.
;
more
The
the
Charles
private organization
Only
(American
Exchanges), has
signed from the board due to the
press of other interests, it is an¬
some
to
Ltd.
Toronto Stock
remains famous for at¬
secure
fori of Open Market
buying and sell¬
steady, proper functioning,- the- ing to common- stock wmild' be1
stock market, too; has become far
"inflationary" or that the Reserve;
sounder.
Mines
mau
for
only
and,
inflation.
(Special to The "Financial Chronicle)
.
SAN
FRANCISCO, C
a
li f.
~
George W. Guppy has become
con¬
Co.,
460
nected
with
Montgomery
the
New
Stock
Sutro
Street,
York
•
Pacific
and
Exchanges.
&
members
-
of
Coast
5712
Number
187
Volume
.
.
The Commercial and Financial Chronicle
.
(551)
47
K
Continued
jrom
of unemployment,
11
page
1
the
credit during
A completely elastic money supply, expanding and
contracting with business activity,
lower
Policy
recovery.
would
the
reduce
government's spending. and limit its reliance on bank
credit. Similarly, if the decline in
intensify business fluctua-
demand has
aggregate
far,
very
ties
can
the
power
reserve
Continued irom
authorian
naae
18
News About
proceeded
monetary
do little to induce
ex-
the addition to the money supply tions. On the other haqd, it is pansion of investment through
must be provided in such a way impractical for the monetary au- easy credit and low interest rates,
as not to intensify the fluctuations thorities to induce large contra- Instead, it will be necessary to
in production or the rise and fall cyclical changes in the money increase government expenditure
of prices that may Accompany the supply. ^The better policy would until consumption and investment
business cycle.
—'<*
be - to time the additions to the have recovered enough to make
to raise and
requirements/thus
acting directly on the excess re; serves
of
the
banking
system,
Such • powers - were
used
when
large increases in reserves were
brought about through the inflow
of gold. They were also used when
/the Government was a heavy bor-„
/rower, aided by the credit operahas
also
nec-
contract
to
essary
the
The Role of Monetary
it will be
Banks & Bankers
Office,
his
began
with
career
Bank of America in 1918.
Bis appointment to the Sacra-
'
•
w
"this reason,/the induced
/J tions of the monetary, authorities, changes in the money supply, inFor
f
r
«.
.
n
His career has also included
i3 to imply that monetary policy important senior administration
cern of the monetary authorities age.
«
i»
vo«woi or Monetary Folicy
In recent years, all governments is always sufficient to deal with assignments at the bank's head
have found it necessary to attach the problems of inflation and office in San Francisco.
S*"eat importance to economic ob- deflation.
*
*
*
...
business.
jectives. This is true not only in
There is no necessary conflict
Toward the end of 1957 rethe monetary authorities to act and the rise in wages and prices tlie low-income countries, where between an administration con- sources
of
Bank
of
Montreal
promptly, without intervening in will tend to limit the amount of economic development is the prin- cerned to maintain high levels of passed the $3,000,000,000 mark for
//the market, variable, reserve re- "credit that the banking system can cipal concern ot governments, but production and employment and the first time in the bank's his(
quirements can be useful in emer- provide without additional re- also in tne nign-income countries, the monetary authorities con- tory
'^GllCy C
i v* ni/-l v-v /»A A n
X'^.a —i. L _
Ai.^. —
___
W ll O f P T.ll lr^ Till 1 ill 1P IS 1H ClSt Pn 1" fill
a 1 X» * — A- •
A
i
..
Under these conditions, the change jtiated by the monetary authori-
/
*.< in reserve
'/ secondary
requirements limits the ties, do not ordinarily have to be
expansion of credit to large.
Thus, during a period of
Because
they enable expansion, the increase in output
.
t
_
v
//different banks
//justify its use in
„
c
_
-' /' ments deficit, there will be a £ur- ^g/"7he
*ct of
f 1946 declares it to be the±r
policy of
01
purpose of selective credit ther,limitation on the increase ut.
~ "'V ~"u- 'I
controls is to enable the monetary credit. Under ideal conditions, the *he Federal Government, subject
authorities to restrict credit in the capacity of the banking system to ™
lu s°Pe quaiiiicauon, to .use
use a
an
./stances.
-
r,
-
.,
»,
...
..
-
.
The
4
t
inflated
equivalent degree of "restriction-when-the increase of production
other sectors of the economy, has reached its cyclical peak and
an
rin
;
^
imposing expand credit would be exhausted
without
sectors
before.there is
borrowers: have
business
Many
an
inflationary rise
for-which in prices. /.'..,
..
;
-they use their own resources and ■ The availability of bank credit
borrowed funds.
Such - borrowers-" should follow a cyclical pattern.'
than
more
one
purpose
--.j.
tern ' the
Treasury and the oounronn"~"1' tllc
tllv: nedbuiy, diia me
mc v^uun-
practical means to piomote maxlmam employment, production,
and purchasing power. As monetarJ Phlicy 1S orle of the most lmPortant means 0I attaining the ob-
{ratio/
,
.
..
Having
heard
these
views,
.
^
—-
•»
that
controls
credit
selective
On the other hand, if
production.
are
-
lower the rate-of
effective, they
"
-
at
gregate
restriction
/,. : active, steps
attained.
be
uj /i -l
rfv
l„rLr+nirrtw1S impossible to
intelligent monetary policy
Pre.sent
■
may
to
•
-
credit
for
restrict
will
it
because
•investment
cost
raises
gross
ties should
to
gross
to
relative
yield
As other im^••portant factors enter into compu/tatibns of gross investment cost
and
gross investment yield,
the
'elasticity of demand for crtdit
'•'< with
respect to interest rates may
f
not be high at certain times. Even
/. so, if the rate of interest in the
capital market rises above the
1
it
tu
level that is expected
iJicvctn
to
prevail
in the relatively near future, some
borrowers may be induced to put
d,V investment
*
"
<
-
*
off
*
issue"
the
of
^
W.ithin this general cyclical pat-tern, there are difficult problems
pf timing monetary policy
inflationary rise in prices may begin-in some sectors of the economy while there are still unused
icsuuiies
j. the
uic monetnuncresources iii
in uiiicxs.
others. aIf
tary authorities could not restrain
securities
new
*
until the interest rate has declined
*
to
a
lower level.
•
r-
:
,
The
effectiveness
policy
requires the
of contiguity
the
with
monetary
of
of tne money supply
of
needs
the
economy.
the productive resources
coum_y impnes some measure oi
is exces- waste, it is also
sive, the monetary authorities may involves waste
be
able to slow down inflation, 111
production,
When the money supply
„
but
.
widespread,
monetary policy
come
tinn<5
'
Under such condi-
difficult.
more
thA niihhV
mav
inrrease
pSturePdn aSkip/tion
further rise
rise in
in urices-and
turtnei
prices, ana
ex-
of
a
borrowDorrow
may hasten their borrowing m
anticipation of a further increase
in interest rates. The response to
in
large nart on confidence that the
monetoy' /easurl/ d/pendf
:
monetary
in
author?ties
ivUl succeed
their objectives.
The Timing of
A
A
fxrowincr
glowing
growing
pfnrv
an
11 1S a mistake to tolerate inflation
m order to offset the immobility
of some productive resources.
.
Monetary Policy
reauires
requires
.
hanks
hold
frac^oSnalte^erveshithere ^mus^be
aTrfS «Son of te mon^
.
.
when production is
raDid
down
t
°7/°,Z/Z^ndoubtedly
base
to
enable
the
•
T
ti
......ij
be
expansion
cause
provided through the
of reserve credit.
Be-
^
.1946
106.0
1932
20.2
1947
108.5
Limited. Sir Cassie was a
Deputy Chairman from 1948 to
1933—
19.2
1948—
108.3
1955.
the
1934
21.4
1949—
107.1
authorities cannot make
1935
policies,
•
economv
are
the
„
mild
w:|u
arpflfpr
r»rp«:<;iirp
oo
thp
25.2
1950—
1936___
29.0
195n-'_
114.7
1937—
30.7
1952—
121.2
1938—
29.7
1953
124.3
1939
33.4
1954
125.2
1940
38.7
1955
130.6
1941
45.5
1956—
133.0
1942—
52.8
1957—
133.3
*Dcmand
deposits
rency
production, will generally be sufficient to stop the inon
nn
dqcv
pasv
provide
ade-
to undertake more investa period of contraction,
generally be sufficient to on-
ment after
c0Urage
^
jn
recovery
automatic
jiayjor
of
Board
Washington,
"Federal
and
1943,
Reserve
Ba., has resigned from the board
and that of
Executor
&
Midland
Trustee
Com¬
pany
and
cur-
Monetary
Governors,
pp. 34-35;
Bulletin."
and
Federal Land Banks
Offer 3%%-31/2% Bds.
The
twelve Federal
offered
publicly
Land Banks
January 29
$83,000,000 of 3%% bonds, due
April 3, 1961, and $83,000,000 of
3V2% bonds, due April 1, 1970.
The 3%s of 1961 are being offered
at
on
100y8%, and the 3l£s of 1970
at993/4%. These
new
consolidated
bonds will be dated Feb.
14, 1958.
mAnqiow
mnnptarv
Quate^credit to enable the economy
adjusted
"Banking
with regret that after 38 years as
a director Sir H.
Cassie Holden,
110.2
circulation outside banks.
Statistics,"
of
AnH
And
in
SOURCES:
any
is
the
Board
there
of
any
good
Governors
of
renaon
the
Federal
its opinion on the fiscal policy of
the government and its management of
press
ttie P"*>hc debt,
Joins Walston Staff
contra-cyclical be-
the social security system will add
somewjiaf
thP effectiveness of
monetary policy. '
fiand if an exces.un ine otnyr nana, lr an exces
other
«<*
demand ,s bemg
fed
. by
government expenditure,
financed by bank credit, it is fil¬
tile to think that the monetary
(Special to The Financial Chronicle)
BAKERSFIELD, Calif.—Lon S.
Garrett
is
now
agent,
William St.,
New York City, with the assist¬
ulTOUgn the banks
John T. Knox, 130
of
ance
banker
event/
government finance and
A
why
Reserve System Bhould hMi,„e
affiliated
with
Walston &
Co., Inc., 1704 Chester
Avenue.
He was formerly with
First California Company.
used
3%%
nationwide dealer
a
group.
to
fiscal
and
will be
$140,000,000 of
maturing Feb. 14,
Proceeds
redeem
bonds
1958, to repay
commercial
borrowings
from
banks, and for lend-
tng operations*
The Federal Land Banks make
long-term loans to farmers through
1,000 national farm loan associa¬
on the security of first mort¬
gages.
The local associations are
owned entirely by farmers.
The
tions
With Aim, Kane, Rogers
(Special to The Financial Chronicle)
11 The View that the Employment Act
0f
1946
hampers
an
effective
CHICAGO,
c an. au w,
The change in credit policy from
one
ease
associations in turn
own
all of the
Alm, Kane, Rogers & Co., 39 South invested in the banks. The banks
and
With C. F. Childs Co.
fSS'If'themoney
reserves
Joins Mason Brothers
(Special to The Financial Chronicle)
CHICAGO, 111.—Daniel F. Sul-
(Special to The Financial Chronicle)
SAN JOSE, Calif ^Frederick C.
Don has become connected with
D
„
system shall be directed; to further pro-
mote the maintenance of a stable gold
^^1^-^
the
credit during
accumulated
Federal Reserve B-ard and the Federal livan, Jr. has become associated
^
with C. F. ChUds and Company,.
^
_
,
.
.
.
141 West Jackson Boulevard. He
Brothers, Bank of America
23,
1913,
known
as
the
Federal
Reserve
was
previously
with
Baxter
&
™a£
formerly
wlth
Act; to define certain policies toward
Schwabacher & Co.
which the powers of the Federai Reserve Company.
ocnwaoacuer oc
irftaf5Z0YkTsMeTflood
bank
have
surplus of $270,000,000.
monetary
"a Bill to amend the act approved Dec.
commerce,
w;+b
stock
Banks.
siock of
oi the
me Federal
reuera, Land
««. r»„.,
Goary has become associated with Farmers have about $113,000,000
ject;ve 0f monetary policy, it is worth
noting, however, that in the 1920's the
sion, but only after the danger of
ppnnomv
111.—Norman
C.
in.-norma,, v..
La Salle Street.
^
through an easier credit policy.
production grows unevenly, is increased too
23.5
the
and
exaggeration to say that a con- policy is not tenable. There is nothing
can be avoided merely J" the Act inconsistent with the view
nnlinxr
that stability of prices is a proper ob-
vooonn
to
1931
Txes
traction
nrpoco
have
Bank
and
PYnnn<linn hgA(yinc fnPmanHwf ifc.if
expansion
begins to manifest itself
in a rise of prices rather than an
Vao
It would be
c
exchange reserves by
the monetary authorities, it will
94.2
aulhonbes^canbold _themflation
the^expa/sioT^The' forc/s' that in check bv restricting credit to
induce cyclical fluctuations are
/ aZ/ZZ /
/ /
not" all monetary in character, al- inflation may be to increase taxes,
though they are obviously affected
banking
and foreign
of the bank
1945
year)
_
of restriction to one of active
should be for the purpose of
facilitating the ensuing recovery
vstem
to
orovide
additional
bank
rather
than prolonging
the boom.
^ystem to proviae aaailipnai uaim
+V,:C
nhnrurp in nnlir»v
credit. To the extent that the in- For this reason a change in poncy
in thn mnnptarv base is not
is n0^ Called for at the first sign
mpf hv thp^accnmulSion of gold of the termination of the expanetarv
80.9
25.1
have some effect^ in prolonging
an
a
a
suoply. In a monwhirh
Similarly,
,
APnnomv
in
Qvcfpm
distribution,
by monetary policy.
economy
mcrney
through distortion
nse.
ers
;
$71.9
1944
1930
of a cyclical characmonetary policy is likely to
be adequate for preventing the
emergence of inflation or defla¬
tion. A tight monetary policy, ex¬
true that inflation
the national product. Whi e
\l ia not ,.(le®ira+l;e ;rw
^
the making of bank credit on the first signs of
becomes much full employment in some sectors,
they cannot stop it; and once
expectations of inflation have be-
1943
empioyment objective is achieved. policy>' designed to
///roducttve3
^^/^^? ^
ine_pr>aucuyei resources oi i
announce
26.2
ter,
flation
Limited, London, Eng.,
$25.9
the
increase
«
1929
/luxations
em-
are
«
1928
n
ployed, a very considerable inflation
tion might 6mGrg6
emerge before the full
*
The directors of Midland Bank
Billions
m0netary policy effective,
Wh
■"r.mh].mc A.
the expansion of credit until all
Uruguay.
Year
appropriate
fj.ont
and
+
1928-57*
(June
^
Formerly Resident Inspector in
Venezuela and1 Manager of the
Caracas Branch, Mr. Peet has had
many years experience in South
America, including service with
the bank's branches in Argentina
of the
govtnmenfus/lf pur-
tate the next period of expansion
in production.
•.
c*
the Royal Banks operations in
Venezuela.
.
Billions
-anageme^
gues
a
-ath"fJL ,£??'•/c.reated be"
cause <£the growing importance
Year
exoenditure
^ce^more begin to add
the^monetary oase in order to
tt
„
Canada, Montreal, Canada.
30th
tj
prices fall, the monetary authori-
demand
the
tvr™»,vv c,mni
Money Supply of the United States,
•
P employment the stated
\h budget:'^he amount of Dublic
consequence
to; interest
suc^
as ^h^ap On
~na!?£~
public debt.
the
mone-
ififla-
-of reducing merely to restrict credit.
After
the availability, of credit is a rise 4be period of expansion has come
in- interest rates.
A high rate of to an end, and output declines and
One
-
of- credit will tary authorities
the
have to take
reduce and not
credit is inducing an
tionary rise in prices, the
easy
the desired ag-;
which
interest
of
ing
•
e $2,910,000,000.
it
-
j
oin nnnnnn
nrara
were
_
e
Res.erve w°Mld Proceed with
.ft can avoid the controls 'by arbi- At the beginning of recovery, the
a monetary policy which in its
trarily assigning their loans to the banking system should be able to
judgment would be suited to the
/ unselected,
rather than the se- create sufficient credit to encoursound monetary policy is an economic situation. To say that
lected, fields of credit- restrictions age:the expansion of investment < ^s9^tial. part of, a .comprehensive the Federal Reserve should give
4
Selective credit controls are more and production. As the expansion ^cpnpmic piogram
to encourage full weight to the views of the
/-successful, however, in. restraining proceeds, the monetary authorities economic growth and the best use administration is in no sense to
non-business borrowers
con-- may
have to provide additional
p productive resources of the make it subordinate to any other.
sumer credit, mortgage credit, and
reserves to enable the economy to C0V. ^ An intelligent monetary agency of the government.
: stock market credit.
To the extent continue to respond to increased P£hc> cannot to directed po lesser
APPFNnrx" \
.
Qecote
a«i<!etc:
reprehensible for the Treasury
■
an(j the Council of Economic AdAppointment of J. R._ Peet as
visers to express their opinion on Supervisor of Branches in Venethe measures that should be taken zuela with headquarters in Carby the monetary authorities.12 acas, was announced by The Royal
•*
.
of Finance. toAqin
year
earlnnn nnn
ior
ipr fnfoi
tntal
cil of JLconomi
Cil
of Economic Advisers. It is not
CmresaTa would be expected that the Fed-
tte
m
T
twcen the Federal Reserve Sys-
dollfr'
industry, agriculture
for
°^er
purposes."
suoply
much in a period ing office, Washington, 1929.
Joins
and^em-
Witherspoon Staff
(Special to The Financiai Chronio »)
Joins
SAN
The
L.
Elworthy Staff
(Special to The Financial Chronicle)
FRANCISCO,
Calif.-
LOS ANGELES, Calif.-James
Elliott has become connected John G. Bunnell has Jpjhed
with
Witherspoon
&
Company, riaH of Elworthy
Inc., 215 West Seventh Street.
street.
the
& Co., Ill Sutter
The Commercial and Financial Chronicle
Thursday, January 30, 1958
.
(552)
48
through
particular pension fund is not
simple as it would appear. It
is a full-time task calling for the
services
of an
expert. Another
reason
for retaining professional
advisers is that trustees have their
own occupations,
which normally
demand their full attention. Con¬
a
Continued jrQfii page 9'
,,
Specialist
Eia of Specialists
The Investment
In
an
of time, it will mean that their
experience will be unhappy 111i the
long run. They will find that they
have made purchases only when
s
were
ec
high,
irp
and
"il
have failed
pension funds were divided as follows with respect to their investment portfolios,
7
improper acts if the
any
trustees, but rather through lack
of skill and experience in manage-
as
find 'that years
employees
to the extent
planned for them. It will be of no
if
money
they
later their officers and
ing the assets? There is grave
responsibility placed upon trustees
which many have not fully met,
possibly because they are fearful
of making errors in investment.
have
not
satisfaction to union leaders
more
This timidity, often resulting from
sequently, who is going to be the
lack
of knowledge
of a highly
motivating factor in the manage¬
ment of a pension fund? What is specialized and technical subject,
is costing pensioners considerable
everyone's job, is no one's job.
sums
today with the likelihood
A
the
if
profited
the
benefits
they obtained at
bargaining
table
collective
fail to achieve for their members
the
which were con¬
time a pension
up..
The
money
advantages
templated
fund
at the
set
was
which has gone into
will, not
pension funds
produce the good will
professional adviser, who is paid
that such losses will continue with that it should if investment pro¬
for
his
services, will take the
v*t
grams fall short of their objectives.
not
only
in
making the years.
corporation Bonds—:——
52
to take advantage of prices when initiative
This is a problem which falls
The importance of sound invest¬
preferred
stock—
3
but, more im¬
+bev were relatively low, and this recommendations
Common Stock—______
2.J,
<*
directly upon
cr.„n Hicactpr
the shoulders of ment policy and the programs
portantly,
in
seeing
that
they
are
other Assets——
6
can only spell disastei.
trustees but it is far more reach¬
needed to implement it have been
acted
upon.
In other words, his
—r
There is another reason why
ing than that because it affects the subject of this discussion and
■'trustees
should carefully weigh leadership will give direction to the
corporations which set up the I sincerely hope that the com¬
the investment program.
To some extent this analysis un- tbe risks involved in the purchase
pension funds and the employees ments and suggestions offered will
Investment management has to
derstates the significance of com- 0j common stocks for a pension
which are the beneficiaries. It will be helpful to those charged with,'
mon
stock investment, since
it fund. Since prices at some time be continuous. A portfolio cannot
be
of
little
satisfaction
to -the
this vital trust in keeping with'
successfully managed simply
does not take account of market wm decline, it is entirely possible be
companies which, in a spirit of the best interests of American in-y
values. If it did, common stocks for uninformed persons to criticize by taking an occasional look at it.
enlightened
management,
have dustry, American labor and the
would have represented not 23%
the trustees on the ground that It has to be lived with. So much contributed
huge
amounts
of nation as a whole.
but 32% of these combined port- "m0ney
has
been
lost."
The can happen between periodic re¬
folios. This represents a consider- trustees
should
evaluate
real- views that reliance upon such
able change in policy as compared istically whether they
are pre- practice would be highly dan¬ Continued
from page 13
with ten years ago when it was pared
One would not buy a
to stand by their policy gerous.
fairly unusual for pensions funds despite the possibility of criticism security which does not appear to
to be invested in equities. The from persons who are less knowl- have favorable prospects at the
basic explanation for the change edgeable. In
other words, it is time of purchase, but industry
to an increasing emphasis on com- always possible for an investment conditions and the management of
mon stock investment is twofold:
]n common stocks to be made into a
company
can
both
change
one, the recognition that, over a
a
political football, but if this rather quickly, so that it is neces¬
period of time, well selected com- danger is recognized and can be sary to keep constantly vigilant,
mon
stocks eventually build up disregarded by the trustees, then or serious losses could result. You and other facilities. Moreover, this $287 billion. The private sector—
ac¬
value, even' if they fluctuate in f^ey are psychologically in a bet- cannot buy stocks, lock them up increased rate of investment by businesses and individuals
the
for
meanwhile;
two, they
are fer position to engage upon a pro- in a safe deposit box, and then people and business in construc¬ counted
$262 billion. State
viewed as a possible hedge against gram 0f investment in common blithely forget about them.
tion was supplemented by another and local governments contribu¬
'
,
v
1+
„
0f,
,
—
,
—
—
.
Private Credit Will Continue
To
Spaik Our Nation's Progress
—
inflation.
stocks.
Funds and Inflation
.
'
When
it, but I think
From these comments, pension
"Inflation" fund trustees may well ask themis here to stay—at least for the seives the question:
What is a
foreseeable future. The efforts of conservative policy? Is it "conthe
Federal Reserve Bank and servative" " to
buy * exclusively
other agencies of the Government fixed-dollar
investments
which
now at work on this problem will
may shrink in purchasing power
I
regret
to
say
it is nevertheless true.
only interrupt the trend, not stop
it.
The recent decline in stock
under
prices should not confuse anyone.
The debacle of 1929-1932, when
there occurred the worst drop m
servatiVe" to take the hard-earned
prices the country has yet
seen, did not prevent inflation, although it interrupted it with a big
.stock
jolt for a period of time. The pressure
asserted upon the Government for many social projects to
maintain
of
ard
present high stand-
our
is
living
and
enormous,
.
probably cannot be resisted by
any administration. _W|th, "that fact
as
a
background,, we must then
ask how we can be sure of! at-
personal
of
speak
we
attention
what Is Conservative Policy?
by investment manage¬
ment, we mean that investment
policy must take account of the
specific requirements of each pen¬
sion plan. It is necessary to apr
extent to which the
plan should hold securities which
act as a hedge against inflation;
what the schedule of liquidity re¬
praise
the
COiP?eT-
emPl*?yees
•
supposed,
is
time
of
provide lems
with
which
trustees
are
less
terms of purchasing power faced and which
they might find
j.or pensioners in the future? Or,
difficult to solve. If they find it
on tbe other hand, is it not more
necessary, in the best interest of
"conservative" to invest a suffi- fund
management, to retain out¬
cjerd percentage of pension trust side
experts, then they should as¬
funds in those forms of securities
sure themselves that such invest¬
jn
will
which
seCurities
.
—
;
.
.
However
ft is too naive an assumption that common stocks will,
indeed help fulfill that func-
tion, but, to do so, they must be
lor that purpose.
stocks which
pay
a
wisely selected
There
are
tne
otnei
nana,
of
likely
are
Courageous Equities Policy
,
Investment-
stocks
.common
however,
cannot,
-
in
be
undertaken
stocks
of
the
plan.
fluctuate.
If
the
auto¬
their
security
for
upon
the
in
of
years
retirement9
'
can properly discharge their oh
ligation for providing and sustain
ing
income for
make
retirement
choic^
wigegt
th*
th»
Is" to
of
baianced port
a
tbe
^bat
all time*
p0rtf0lio is at
supervised and well-managed,
Management's Task
willing to
the market
couraged
buy
is
them
rising,
then investment
inadvisable
only
but
low
m
for
or
while
dis-
are
frightened.
or
when prices are
is
what
does investment manage*
■
th
effective to
To be
involve?
t
maximum
degree
it
away
-
declining,
common
them.
stocks
If
they
lack the capacity to.stand by a
policy cf purchase over a period
which
the
be
flict
of competence
of
trustees
in
adviser
how
he
can
whose
from
activities
seling
the
difficult
what
is
each
to
the
the
investment
income
is
other
investments
on
best
position
comes
than
coun¬
often in
are
of deciding
for their clients
and
what is best fpr themselves.
Un¬
integrity
will
strive
of
men
surmount
to
divided
can
they
of
their
influence
the
overcome
dilemma
the
interest, but
have
called your
specialists
as
attention to
in
the billions of dollars invested
self-insured pension fund
have indicated
some
problems
of the invest¬
which
plans are
with
these
have
plans; I
the
con¬
suggested
have
with
the
retention
of
a
ellites,"
Yet,
own
viet
go
which
warfare
be faced
to
were
through push-but¬
the future. Thus,
in
security is a cost we have to bear
for protecting the very things we
hold so precious to our way of
life. That is "old hat," but ever so
often the American people have to
be
of
roused
out
slumbers
their
of
the
credit in the economic
of
use
development of our so-called free
which
markets,
today
again
are,
being put to the test.
•
The
record
is clearly
..,
v
of
one
serving the needs and desires of
private enterprise and personal
consumption and investment. If
analyze the $262 billion growth
in
private debt between 1946 and
1956, we find that corporations—
and
small—accounted for
large
current
for
was
and
chases
$89
consumer
billion
for
pur¬
mort¬
gages—mostly on private homes.
While these, like all other dol¬
lar figures for the postwar period,
have a significant element of price
inflation in them, they neverthe¬
less tell a story of serving human
needs—a story the likes of which
could not be told in the Soviet
Union,
and a
story which our
friends in other parts are eager to
learn
as
a
lesson
in economic
the individual.
' /
go no further than
and automobiles for an
progress for
One need
the
of
tremendous
pri¬
impact exerted through our
vate
credit markets. These
two
key elements of our economy go
hand in hand with our national
personal
toward
attitude
con¬
investment. The
contribution they made to the re¬
covery from the 1954 recession is
sumption
and
still fresh
in mind, and
they are
always in the front ranks of any
discussion
of
general
business
prospects.
complacency.
We
should
is
forces
talism,
Preventing Losses
wards
crept
to
economy.
But, have you ever
given thought to the less obvious
but possibly
greater losses that
occur
in
pension
funds, 1 not
most
system
relies
me
on
power¬
of capi¬
the re¬
review the postwar
1946-1956
sparked
the
show
to
credit
how
has
enterprise
system
private
was
some
debt
of
American
held by others than the
a
net growth of
showed
not
very
groups were
ulation
long ago that
calling for reg¬
of consumer and
real es¬
credit. They argued
of credit were
responsive to general con¬
exercised through the mar¬
tate mortgage
these
that
not
trols
ket
areas
place. Today, as we have
from
a
period of
emerged
just
in¬
creasing credit restaint, we knowthat the argument was not valid,
that
and
total
economy
issuers
the
savings and investment
more
worth living.
dynamic
The
of
our
life
this condition exists, then
our
in
It
the
dynamic credit mech¬
which
of
make
overlook
never
Controls
Credit
Dynamic Credit Mechanism
decade,
advisers,
we
with extinction
Again, let
investment-
of
illustration
worthless if
and
promulgated by Federal Reserve
authorities, have exercised a tre¬
mendous
responsibility
toward
housing
ful
as
Choosing securities appropriate to
go
preoccupation with the stand¬
ard of living—humanitarian and
correct as it may be — would be
un- into the handling of pension funds
to whether they can have been so thoroughly aired in
devote adequate time
to super- the public press that it could
vising the fund's investments. If contribute little to dwell upon
sional
framework
fraternity
operating in the
monetary
policy
lenders,
Our
one
here.
other
really a symbol of scientific ac¬
complishment in a field by which
our very
existence is threatened.
anism
them
cannot
and watch the So¬
theirs. The Satellite is
certainty
the ob¬
banking
a
such advisers should possess.
have
it must
way
a
which
Caviar."
or
obviously
we
our
fact that
abuses
we
day there is "Sat¬
"Satellites"
and
outlined
The
as
be.
profes¬
qualifications
butter
"Satellites
even
or
The
$147 billion, of which $34 billion
if
today in Russia there could be
slogan "Satellites and Caviar,"
The order of the
investment accounts.
and
could
even
would have liked. I doubt wheth¬
er
part of its debt was trans¬
public to its own
as
trust
Butter."
we
Butter,"
much
sional advisers; and finally, I have
the
or
that
lion,
ferred from the
only $115 billion. Individuals and
noncorporate business, including
farmers, showed an increase of
had to be content
we
as
well., Furthermore,-there, is
vious solution is to retain profes-
and
"Guns
not
"Guns
later
temporarily
possible solution to these problems
through
slogan,
learned
ton
subconscious bias?
I
be
perform
faithfully
principal
of
to
an
duty? Self-interest can preju¬
dice a decision and those advisers
trustees
of
con¬
no
his
fronted;
time
be
client; otherwise,
his
and
for themselves. If they are well
informed about securities and can
management
that it
or
between
interest
ment
sufficient
should
There
source.
pension fund will have to decide
devote
impartial
should
continuous> personal and unbiased,
question
it
that
doubtedly,
°
investment
in investment management
factor
is
important
most
and
derive its advice from an unbiased
.
b^eficiaries/
final
The
We
The
„
the
is not just an
advice
a
rise.
the
to
Government, on the other
hand, showed a decline of $4 bil¬
we
to
would be rather unusual for them
responsible for a pension fund are
communities.
brief
of
our
economy
and
people. World War II gave rise
trustees
rnately responsible for the administration
so
their
to
is
its
Common
is involved by those who are ulti-
provide
This
governments,
many essential
motivation
fund, then
this factor has been satisfactorily
disposed of. However, since many
trustees
are
representatives
of
either
labor
or
employers,
it
without full recognition of what
which
by
different
to
outpace the economy generally.
and
for
policy
and
pensioners may be protected, not
wjtb reSpect to the dollars which
expanding segments
which
business
stocKs
aie
mere
local
state
services
accounted
was
matic
changes
the price level,
jn ^be cost of living, so that
I
representing
billion
$16
remaining
The
purposes.
ment
^steady
dih dend, but which participate very little m major price
hotter
curity
wbjcb will keep pace with
of
changes; they act more like bonds
the
absorbing
was
jn tbe economy, in
sarvVhedgeaaga?nst
inflation^Thev
among the several classes
sary hedge against inflation.
In y folio
investments, and to make sura
can
government
picture of the
progress we have made as a con¬
sumption economy. I believe it
tells the story of the fundamental
m<fFe one. considers .this
sets of the pension fund ought to Problem, the ioore one comes to
be invested in securities which
conclusion that the only way
will respond in value to the major ln which pension fund
trustees
nrirp lpvpl
dividual and business investment,
of continuing quirements may be; whether the remaining $33 billion, or almost
inflation? Is it "con- plan is contributory or non-con¬ one-third of the total. The Federal
accounted
for
$17
tributory; and what the stability Government
dollars which are today set aside of future contributions is apt to
billion, of which $11 billion repre¬
in pension funds and invest them be. These are some "of the
prob¬ sented purchases for national se¬
changes in the cost of living—
then obviously enough of the as-
swings of the economy and of the
to turn put goods in larger quan¬
tity and more efficiently.
While
the private sector was
thus absorbing the major share of
the $122 billion growth in current
personal
consumption
and
in¬
iong_term
income they have to depend
a period
with major
over
to keep pace
Federal
the pressure
application of a uniform
covering any number of
pension plans. The in¬
vestment policy should logically
taming the ultimate purpose of the are paid
them, but more real- develop from the terms and ob¬
pension fund. Since it was estab- istically,; with respect to the purjective of the plan Itself.
lished to provide retirement inchasing power which, ultimately,
-which
ted
for durable
production equipment
billion
$29
$12 billion expansion of spending
ones who cried the
freauentlv those af¬
the
loudest were
fected by a
^
T_. t I
-«
4--»»
*-v
f
reduction in the availlr
i
v*
/J
n
^in't
1
4"
4^
Volume 187
Were
Number 5712
The Commercial and Financial Chronicle
...
3 said,
to .be uncontrollable
without direct government inter¬
.
-v*-:'
.;•
that
Now, faced with the specter of
missile warfare and "satellite
psy¬
-
chology,"
that
if
system
make
should
we
is
to
survive,
that the
sure
of
world
has
since
tasted
and the cards
stacked against any one who
believes
that
it
work
can
an
as
present-day economic mind of the
our
average person is too "sharp" for
6f> diat. As I indicated at the outset,
people fona higher standard
living, nurtured partly -through
of
use
anced
we
rely in our system upon mar¬
credit,, is properlybal¬ ket forces, in which men and their
against what we need to institutions .are given a
broad
in
survive
the
Communism.
struggle
If
two
against.
automobiles
for the
so
family, better homes, and
have to give. way. to the ex¬
on
igencies of national security, I
range
/"for
Those
forces
react -in
individual
a
would
decision.
be
quick
burst of
new
widespread that the costs of sat¬
ellites,
missiles,
whatever
comes
next were to be met by
important — I believe
that they" extended
deficit
financing. The
understand what is
necessary for argument that such forces could
them to do. They have to be told** be contained
by a resumption of
clearly and convincingly what the direct controls is fallacious, be¬
requisites of national security are, cause past history has demon¬
•
and
the
importance for 'getting1
them accomplished in the hew en¬
r
strated
do
not
that
are
some
not
need
we
thing to meet all
desires
for
better way
extinguish
.
needs
security
that
and
and
a
industries
some
sidered
could
be
\
things, thab are;con¬
vital. No
better
given,
in
example
the
light of
discussions concerning the
current
Soviet
scientific
than the problem
There is
breakthrough,
•
of education.
as
in
national
the
third
should
be
burden
they do not always want to ;
for the new schools these
pay
communities
vide
require,
attractive
teachers.
They
to
or
salaries
want
pro¬
for
their
shiny
new
automobiles in which to travel to
from
and
of
not
the
travel
too
what
safe
that
will
make
and efficient.
the
Instead,
of them would rather
pass the burden of such costs over
many
to the Federal Government
that
the
on
else
someone
the bill.
pay
can
;
.
:
I have great faith in our demo¬
cratic processes, because I am sure
that in the long run if our
people
understand what is required, they
will rise to the occasion.
They
will
not
made
permit
for
decisions
to
be
them
by government
fiat, but will balance their desire
for
still
with
higher
-
the
living
needs
of
standards
Free
a
World
for survival.
....
;
-
.
;
'
the
coming
-
months;,
there
will be great temptation for many
to
groups
use
the
present emer¬
gency as an excuse for waste. Gov¬
ernment
on
spending will be sought
the ground that it is needed in
the
name
burden
to
for
pay
and fourth, how much of a
any—can be tolerated
temporarily
kindling
without
of national security. The
importance^ of a balanced federal
budget will be forgotten by many.
and serious fire
of inflation.
the questions that must
are
the
fiscal
be
and
scene,
real¬
answered
the fiscal problem
Yet,
is only
challenge as I
visualize it. The balancing of our
individual desires against national
needs for security obviously brings
facet
one
of
the
into focus the
the
interests
of
growth, but also
have
I
broad
not
outlined
which,
over
our
survival.
our very
already
area
merely
the
the
in
has
been
essential
an
and
con¬
structive balancing influence. For
the most part, lenders—including
the
eral Reserve efforts
flexible
policy
to exercise
which
has
a
for¬
of fiscal sanity
We should help
carry
called
ment..
;
Democracy of Credit
_
The
bedn
lending
allowed
dictated
to-function
tered
has
the
in
understand
that
Van¬
have
credit
get
be denied
that
programs as
it.
national
At
se¬
determined by
adminis¬
been
by government, the private
has
markets
to
should
time
leaders
our
to
them
who
same
open
people.
with
run
throttle
wide
to satisfy the demands of the
created
by a
growing
population. Credit has been of the
guards and the successful rockets
most
important ingredients in the
and
fuel
that
satellites
come
paid
on
for
that
costly.
are
by
are
bookkeeping
the ledgers of
sure
to
They cannot be
a
entries
commissar of
finance, but by the work
Bankers
with the
other
basic
pay
would
and
be
foolish
believe
indeed
that
to
we
can
for such implements of
sur¬
vival through renewed inflation.
Those who contend that we were
able to finance Worlld War II by
has
this
powered
have
responsibility
ple.
It
lending
eco¬
—
be
lenders
to
—
concept
of
see
that
is
reflection
drive
of
the
democracy
of
be
Democracy of credit will
preserved only if we and
counterparts
the
financial
kind
of
in
other
system
judgment
sectors
our
banks,
well
as
"(3)
collective
competitive
;
.
.
•
'
/
has
meant
the
unsound credit.
toleration
//
• -
:
/:.
of
V;y-
Vv
lending should be
within
the
,
;
accomplishments
con¬
great. It has made
have
of
economic machinery. It has
our
played
a
significant role in the
investment needed to get the
production
job
done,
their
attempts
much progress as
in
short
as
however,
nored
fact
make
possible,
as
have
groups
that
ig¬
sound
a
stable structure of credit is
and
essen¬
be
constantly
stimulate
ways
the
and
downgraded
expansion
that
we
of
to
pro¬
markets.
consumer
I
constantly should
history has al¬
credit
unsound
always ends in disaster. Thus, it
is incumbent upon us to put to the
test the policies of our own in¬
dividual
times
institutions.
find
it
too
Do
to
ride
we
have
easy
along with the tide,
or
do
at
we
firm convictions that what
we
are
doing is in the interests of sound¬
ness
and
stability? This is
tion each of
field must
If
in the bank
us
in
and
ques¬
'■
..
'
-
Head of
reports
the
conscientiously
can
weight is cast
credit
of
that
be
we
we
the
know
credit
our
shall have
democracy
cherish
and
preserved for the future;
shall be confident that
we
we
that
the side of sound
policies, then
credit
will
on
say
will
nation's
private
continue to spark our
and we shall
have discharged banking's respon¬
sibility for continuing to contrib¬
ute to the superiority of our eco¬
nomic
and
kind
istic
governmental
proc¬
This, I believe, is the real¬
esses.
other
can
progress;
of
answer
that
we
and
segments of those processes
must give to the propa¬
evolving from a "satellite
Harbor," the roots of which
deeper than the event.
and
ganda
Pearl
are
Correction
In
the
Jan. 23 it
Chronicle
Financial
prominent
banker
said
Long
recently
Island
that
:
the
banking community is experienc-
of
is
a
Weld
and
limited
on
Feb.
eral partner.
&
Co.
Mr.
partner in
Jackson
the
1 will become
a
firm
gen¬
"
.
/
r*
•
It needs to be
t
,n
„
■■■•
.
.Iii
,
J.
L,
■
■
ings
-
■
•
the
for
bank
in
Net
1957.
profits, he announced, were $1,~
349,649 compared with $1,212,296?
in 1956. During the year the bank,
declared two cash dividends total¬
George A. Heaney, President of
Security National Bank of
Huntington, third largest bank on
the
20 that 1958 will probably set the
pattern for banking for many
years hence.
Heaney pointed to
proposed legislation in Congress
and the N. Y. State Legislature as
indication of the changes
templated for banking.
an
con¬
"To meet the challenges of the
future," Heaney added, "bankers
must remain highly flexible—able
to adjust to changes in the needs
and demands of the community."
on
Bank Traditions
share.
per
t
y"
Rousselot Pres. of
Long Island, told shareholders at
the
bank's annual meeting Jan.
'
Commodity Exchange
Commodity
announced
Exchange
election
the
Inc.
has
Presi¬
as
dent of Harold A. Rousselot, gen-,
eral partner in Francis I. duPont
&
Co. He
ceeds
suc¬
Theo¬
dore A. Lauer
of
E.
Hut-
F.
ton & Co., who
two
served
c
onsecutive
terms
as
Pres¬
ident.
Mr. Rousse¬
"Bankers," he continued, "have lot is a Gov¬
forced to step out of tradi¬ ernor of the
paths in order to keep pace 'American
with our expanding economy and
stock
Exthe new concepts brought about
change,
a
by the rush of scientific discov¬ member of the
eries.
He warned that banking Board of Man¬
been
tional
traditions
will
be
under
even
greater pressure in the future.
"Sputnik has launched an era to
which the banker must constantly
keep attuned,' he said.
agers
a
nor
casting aside sound banking
principles. "The basic principles
of good banking will always ap¬
ply," he said.
Harold A. Rousselot '
of the
member
of
the
0f Trade.
A
Heaney declared, however, that
"flexibility" does not mean any
lessening of banking safeguards,
<
New York Produce
.
Exchange, and
Chicago Board
-
member
the
of
Exchange since
•
Commodity
1938 and
a
Gov-
since
1950> Mr. Rousselot i»
President of the Commodity Ex¬
ernor
change Hide Clearing Association
a director of the
Commodity
and
Exchange Rubber Clearing Asso¬
ciation, the Commodity Exchange
that 1958 Metal Clearing Association and
would be a good year for Long" the Commodity Information Corp.
Island banks.
"Business activity,
The Commodity Exchange pro¬
as
measured through our 16 of¬
vides facilities for futures trading
Heaney
declared
fices, is still at a high level," he
said. "Despite reports to the con¬
quite healthy. Savings deposits in
Security National have increased
during the past four months at a
rate faster than at any time in the
bank's history." he reported.
White,
^
;,I
,
ing $1.50
trary, the Long Island economy is
partnership in
:
.
ing a period of readjustment "un¬
paralleled since the days of the
Jackson, Jr., of Boston would be
admitted to limited
//.'•
Bank Holiday."
reported that James
was
,
quite healthy."
A
Pressures
seemingly
critical period that lies ahead
t
/
.
Security National Bank of Huntington asserts "despite
to
the contrary, the Long Island economy is
lending
for himself.
answer
now
a
J
'
a labor
monopoly, or better
monopoly itself, which has for so long
been encouraged by government.
tial.
They seem to believe that
lending standards can and should
;
Predicts Good Year for Long Island Banks
;
as
they would like
time
a
some
the
to
more.
.
'
W-
made it possible for consumers to
take the goods from the market.
In
J
.
,
free of the exactions of
has
and
-,'v/'
•still of the
vital contri¬
a
r.
..
That
Yes, but the public needs
been
bution to the production and dis¬
tribution of the tremendous output
to reflect their will.
,,
/;
.
tive bargaining relationship which give rise to the
exercise of coercive power by one'
asVa^ij^t:.the
other tending to impede the peaceful develapment
of that relationship, or which
infringe *the :legifimate
rights of innocent third parties."—President
Dwight D. Eisenhower.
environment
developed by monetary policy. It
is my firm opinion, moreover, that
its
;
adas
"(4)
.
:
.
"(5) That the public is protected against unfair
practices within the: collec-
most, part, the banking '
fraternity has been free to decide
the basis
upon
which such re¬
sourceful
be
^
labor and management
For the
ducted
will
'
working people
Pres. Eisenhower
are more
fully protected from
v:
- •
;:
dealings between representa^
tives of labor and
management Vhich have the
effect of
preventing the full exercise of their rights
to organize and bargain collectively.
•
and better understanding"
problems of busi¬
farmers, and individuals. It;
not
action
ministered in such fashion
.
of the financial
ness,
That
organizations in
which working people associate together voluntarily to improve their status .through
small country in¬
as
treasuries
■
applica¬
niques,
of
exercise the
which
will
union
advance¬
private consumption
economy I described earlier.
The
change has taken place in large
contributed
by workers to! *r: j
&re being'. *
used solely "to advance their
' •
welfare.
:}/;■'
: /'';
: .>
\\::
Will
the
of
"
y
t
"(2)* That the monies which \
-
are
concept of bank
must continue to
and
our
credit in the market place is pre¬
served.
f
;
of resourcefulness. It hard¬
one
a
an
important
which they share
monetary authorities and
r
"
ly need be repeated that the loan
portfolios of banks have changed
markedly in recent years. This is
nomic machine.
and •—
if needed—the sacrifice of the peo¬
hope
modern
reassurance
community
-
and who should
ward the message
the
The
for restraint most of the
time, but
which, as in the past few weeks,
has constantly been adjusted to
the
existing economic environ¬
'
,
a
tion can give to human better¬
ment, instead of destruction?
that
sector
see
used
scientific
proved
times, private deficit
has
financing
appeared
about
ready to get out of hand, but a
wise policy of restraint — espe¬
cially in the most recent years—
ple. We should help to
help
is
both
have
ment and benefits that its
that
curity
credit
personality?
a
be reminded
At
that government
judiciously and in
the long-run interests of our peo¬
to
ence
not
submit
ment.
the
influ¬
machine,
that
as
^
.
*
those decisions help to tell the rest
of the world that we can continue
and personal and business invest¬
bankers to
own
the
^
working men and women in health, welpension plans are accounted for. ;
.//.
fare and
basic
a
system
individual
over
upon
quirements of rising consumption
place for credit. No commissar has
our
looks
reassurance:
set aside for the
are
benefit of
in
as
public is in need of
"(1) That the funds which
eco¬
our
its
prove
duction
spite rising expenditures.
" Because of these threats, I be¬
lieve that it is important for us as
exert
superiority
that
continue,
can
to
postwar period, private credit has
been generated to serve the re¬
broad environment of the market
.
system
past,
new
Some will seek tax reductions de¬
*.
nomic
the
a
banking fraternity
have
given intelligent support to Fed¬
-V.-.V
Fiscal Sanity
•
In
tax
area
responsibility of the
homes, but they lending
community for seeing that
to
bear the cost
private credit is used wisely in
want
premise
security
these
roads
demonstrate
or
an emergency
imposed
required to get the job done. The be faced on
people want the new homes our they
must
growing suburbs have to offer; istically.
but
eliminated
as
deficit—if
These
tax
long
exists;
new
the
and
whatever expenditures are decided
luctance
bear
which
:
be
can
deferred
updating of our nation's educa¬
tional plant, but there is great re¬
to
effective
an
national
survival:
upon;
crying need for the
a
of
security
pro¬
gram; second, what ordinary ex¬
penditures
not
related
to
our
our
of the
some
the essentials
realistic
abundantly
people haveynot
been willingvto hearV the, cost».of
progress, or impair it.
they be the kind of decisions
Will
stitutions like my own. Resource¬
explore the alternatives to any :
ful lending has meant exploration
such
course.
They
are:
first, a of new areas
of credit, new techredefinition
of
what
constitutes
:Of^l^e.ip^y ;j)o^vto.
evidence. Yet it is.
clear
dp
they
/
rvc:': ;y:7:v,; ^£ them down.
who
contend
It is necessary for us, therefore,
sacrifice any-; to
our
both
capacity in
excess
as
the long run
-
There
.
in
inflationary
b"t merely temporarily damp
vironment created by the satellite- f'res
age.
that
"The American
aid
that
and
—
'r;/ .'j
progress.
Bankers should review decisions
to. to
inflation
if the impression were to become
ain
convinced that the American pet)pie will see it through. But it is
economic
inflation,
instrument of national policy. Tho
must
we
desire
the
modern
are
recognize
and social
economic
our
49
borrowing and have survived very strengthen the contribution that
well, indeed, should be reminded, credit can make to our nation's
.
vention.
(553)
The
Security
President
National
reported
record
Bank
earn-
in
rubber, hides, silk, burlap, cop¬
lead, zinc and tin.
per,
C. W.
Floyd Opens
(Special to The Financial Chronicle)
CHICAGO. 111.—Cluiss W. Floyd
is
engaging in
ness
a
securities busi-,
from offices at 328 West
Place.
90th
*0
Continued
construction
from page 12
What Is
Happening to the
Economy and What Must Be Done
,
.
^
,
.
.
,
_
is
also
less
Under
level,
are
we
harbor improve¬
ment, flood control, the expansion
of power facilities, the strength¬
lagging
in
ening of our merchant marine,
the improvement of our national
and
parks and forests,
It
ing
situation
months
the
possibility
with a much
cope
g
gets
S?e
worse,
in
in six—and fac-
or
iifUfirHAvpi"
ad
^ainly Ya
the
having
of
to
difficult
more
problem later on-action must be
free
oped
should
that
of
m
less
in
is the
$2 OOCi
a
with the assistance
cooperatjon ot industry, agi'i,tur
*fabdr and state and local,
rn^ents to coordinate . and
ernment
19d6,
prosperous
of our
29%
humani- was^jng
nations, for
tanan and security reasons alike.
utilize
ulate employment and utilize in-V
dustrial capacity we are presently
the
Furthermore, the wealth
theb
of
nation'
entire
to
and
Fur-
Federal Reserve Board.
of its
all
Jesources
J:
-
.
plans, functions,.,
for
the. purpose 1
'
thermore, 53% of our famUies had of c^a!
less than $500 in liquid -savings
e P
with which to face emergencies;
-Thereds no need to tell steer.r
23% had none at all:
Ud, :
workers—with thousands of our/t
be
could
before taxes, aceoi ding
$3,000
..
.
nd
Even
year.
^
t>>:
continuing policy and;,
responsibility oft he-Federal Gov-
families with cashrincome
than
Con-
when
ago,
years
people that:
can
surprise
no
as
Time
passed the Employment Act
qf 1946 it pledged to the Ameri-
found 31 million Amerr
years ago,
leans
come
a
Action.
.Twelve
Congressional inquiry, two
a
This is
Re-,-
Must
gress
,
ov
,.m
if
for
Fully
and Our Leaders
Guide the Way.
of catastrophic illness.-
cost
_
three
sourees
disability and the soaring medical
the con-
to make
•
.
We Must Be
Utilize
to
Unmatched
America's
incurred
non-work
to
.
the
f
due
Thursday, January 30, 1958'
.
Most Important,
laws, payments
incurred
loss
political capital out today only four out of every 11 strUction of Federal buildings,
deteriorating
economic high school graduates who are
An
f th
bu
faciIities_
situation and the absence of an qualified, actually enter college? « ,
,
t t
*
.
,
adequate effort to change it. How- The rest either lack the necessary *
' sand
ureentlv
needed
ever, events are becoming increas- motivation to continue their edu- Dublic imDr0vements
ingly critical
for. hundreds
of cation, or are financially unable p
1
/
•
thousands of our members, and to Puy for it.
By accelerating this kind of
for th* notirm
T„
m„ct fnrlho..
Construction llOW, We could stimof
.
Determined
for
injury, and for
death, continue to be scandalously
low.
Besides, we still have no
adequate system that insures the
American family against income
work
.
(4)
workmen's
state
our
compensation
Federal
the
of
half
than
need.
current
our
On
sire
Chronicle
The Commercial and Financial
(554)
Stronger economies, as well as greatjy and permanently increased,
military aid, are essential every- 6
' . FpHpral lpaHprshin
where to strengthen freedom. Unevf0^
..
there is no moral and 171 e
ber
no economic justification for unward trend.
Ruction and slum clearance
working part-tiine,and fac g
,y
rather
than clties across the country.
Only
is
used
getting
wider,
factory
and
farm^
capacity.
certainty
and distress—that this .,
The great American productive
last
month "Fortune"
magazine
when so many American families- i
diminishing.
;
natlonnot
be
.
system can be, and must be, im"WWhniifd h* hoininf* mnrP hv pointed out—'"Today some 17 mil- still are in need of so much.^ ;fulfilled. ,
.
*
taken
to
now
down-
the
reverse
fortunately, the gap between the
poor nations and the wealthy ones
-
-
in
--
mediately restored to fujl operation to meet the daily needs of our
in^®
f-JJl d btGaiJy beneficial
mcreasint> mutually beneficial
expanding population and the defense
requirements
of the im-
^a£®' by
:nnMnc.{„
+A„i
rt
hv
nnr
Surely,
lion Americans live in dwellings
that
KmmnH
beyond
are
f*hahiiitotir»n
rehabilitation
family
keep
®
a
Slants ana mans particularly at .
xfiis problem affects all our
must, in fact,
move
constantly a
,me ^
, demands
on our in- metr0politan cities . . . but it is
forward to higher levels of pro- dustry are slack and our farmers.; mogt severe in the biggest, richest,
duction and efficiency.
a£e caPafc)le of producing an and most industrialized. The numperiled free world.
By
the
1958,
it
record
is
months
three
possible
of
achieve
to
a
than
higher
during
the
quarter
(2) The
Physical
American
Be
of
Facilities
Communities
Expanded
to
of
nee
«
.
Offers fourfold
We
this
achieved.
about
These
why
are
Meet
Our
home
that
could
keep
America's
mammoth productive system concan
be tinuously and fully employed.
our
views '
For
example, at the present
it,
time we could be producing
'
,
.
,
^
(1) The Defense-of the Free World
Mus
Be Made Secure.
shortage
across
American
As
effectively deter aggression.
steel workers,
we
do
not
deem
ourselves
who
experts
can
advise
precisely what must be
done, how much, and how fast.
But this we certainly do know,
No other nation
the face of the
on
We
and
a
units
million
now
required if the dream of
new
a
home
for* every
family is ultimately to
Surely, we can at
least achieve the 1.5 million an-
^
housing starts long ago pro-
the late Senator Taft.
be done with proper Fed-
by
can
schools
"-'J.
expapd the.bepefit?
coverage
of our social
'.-its
^uld
command
haye been done.
much
,
-
:v
w
.
fulfilled.
posed
itb« economic;.know-how an ^
monetary fiscal and procurement
-so that the unem-; •' While-' am increase, in.^family,
ployed, the aged, the sick,-widows spending : shouldbeen^-4 »:
and orphans, and the victims of^wajor tax policy objective at_th£,;.
industrial accfdents can begin, "to e.bd of the Korean'War, the-Fed- ;
iive in dignity and decehdy.'eral. Revenue Code Amehdments
_:
1l xft - l954
conveyed billions in tax ;
We must oppose the increasing
to
wealthy
individuals
use of sales taxes apd \\age taxes
saVin&s
that already bear so..heavily on a"d ccrporations
--
year
adequate
be
- •
'/
u
u
should
We
emptions
the
x,_
.
families.
lowest-income
our
nation.
eral
leadership. • ,
and colleges.
In 4be first instance, public pol-
the
immediately.
dir
onAvaS
standards *
minimum',,wagQ
of
public groups re-- and the
national housing goal security laws
two
an
raise, the
should
coverage
laws
American
to help end the critical classroom it
for
Federal
Ex-
dependents. .;under;<dn
income tax laW ;nmst.
M
<*">' n0^e
iiu
*2S
ih| dth.ei hand, ;o the
u
b?P^ede^|
•
.
taxPa.J^° ^
of $5,000 or
lighting inflation •
+;m, nf wp11 bll;it and reasonablv
raising a
-—brought on largely by profiteerf
^ced hTmes for the middle-in- Furthermore, all wage/an^salr
a^d.. ihe capitaJ..; nx.pansM)n
J,ome> market by allowing low
ary earners must fairly share; in., bo°m-—a blundqrous nard.mpney,
attendance is expected to injtial payments and long-term
benefits from productivity ^gains tugh interest rate .policy-has been ,
be 15 million higher than it was mortgages at low interest rates,
that they constantly are-helping, pursued .without adequate(thought:
lty lB55
-.
geared to abi]ity to pay.
to bring about.
v
IIs .consequences. .Unfortu- .
Already the classroom shortage
To meet the needs of families
Steelworkers can claim a meas^
exceeds 150,000. In the next five
ure of achievement in this regard,
ratps
have:
years, 'according to responsible bbh®eC^nersWfDr<^ublicHhousIng
Many argue that until a world- are already filled to overflowing.
wide disarmament agreement can Yet, enrollments are now increasbecome a reality, only our own ing by over a million a year. By
overwhelmmg retaliatory power 1965, elementary, high school and
will
port that
'By working cooperatively witn?,
urgent.'state and local governments, ond
is clearly most
.'
whole."-
to
fast" enough
fastest where the need" >
move
Responsible
more ♦nual
steel, cement, aluminum, and glass
how:
_
a
of
confident
achieve
must
we
as
There is much to be done at is
Program
completely
production
goal
are
is
crowded into slums
growing faster than the cities
with
ability
must
ber of peopie
Must
Growing Needs.
1957.
and
cannot ourselves
we
consume-
output
our
last
abundance
incomes
pace
ing
Our economy
production rate at least $25
billion
level
last
;Yet, in the hands of the federal ' ;
to-Government, there are, and have
its constantly-ris-; been, the means to prevent this
produce.' And/it unnecessary economic downturn.set about Talsing ■"
America must
—
decayed, dirty, rat infested, without decent heat or light or plumb-
ldes
must
support
also be raised to
coristruc-
the
level that more
a
comes
reflects the "cost, t of"
child.
• •' 'l" *".'
"* ^£%£t-jpC
In the name of
realistically
^
.
-v.-.
estimates,
America
should
build
h^e own.ersh:ip, public housing
in
Yet,
,
basic
the
,
,
industry
steel
Sldfs%
iL
filo"
^arrvintf'
productivity—the. real outpuUrise, ad4ed bl?!'??s^£%"■J''■
at least half a million new school- arp®p?
substantially
per
manhour—has actually - gone charges of
c a
,
.■
manpower resources available to rooms.
A total. of about 15,000 creasea. ,
:
• •
i ^ ^
.
do any job.
Given the facts and new schools should be constructed
Is not now the time — particu- up far faster than the real .wage appliances, .a u
.
the
leadershin
Ameriran<?
will
throughout the nation.
larly when idle plants and man- gains of the workers.-homes,-and tp . the;public cos
1939 and 1957, real hourly straight./meeting
the charges on feder
support,
and
wm
accomplTsh
Passa8e of The Federal School power are available - to move
v
whatever must be done
' Construction Act will give needed faster towards the goal of decent time wages went up 53%.-, -Steel state and local debts. ^
productivity,
on
the
other-hand,
"in
the
name
of economy, rising
Is it not time tn hp erpttinf*
aid in this area. More than Fed- homes in decent neighborhoods
*
public service needs have been^
with the job?
eral aid at the college level and for all Americans, regardless of rose 71%.
The determination of many "inFrom mid-1957 to the end of for scientific
and technical re- their economic status?/
|gnGrcd and ^ existing plograms
this year, about 50 million ions of sfarchA is now needed; we must
(3) We Must Raise the Living
Standards
of
All
American
steel
that
this, I trust, is all behind us.
America
could
and strengthen our entire school sysFamilies, and Particularly the ?nghiboithe scapegoat'for the
should
have been producing to tem from the bottom up. Passage
;LetJis nwipftjo
Neediest.
remain
higher prices they impose-^is a -,Let
strong
and
prosperous, ?
®nKifn Srihtipf our'
.,jls Ap ls. essential to help
will likely be lost if we keep on buulld
Millions of our fellow citizens major reason why real familyi in- ■-tton
pritiraiw :
schools m communities
where
globe
can
match
physical and
our
^
nn
.
-
evlS-'^^ag^increa^e-whilemak- "sut
an
K
drifting. This tragic waste is actually equivalent to over 80%
ov/o
vi
of
v,u
the
entire
60-xnillion-ton
steel
production goal the Russians have
Furthermore, the present
sion
is
alreadv
pausing
a
los^
nroduction
mmin
othPr
now
9?
u
most
criti,.
^
.„:ii
*ii
work.
aPd.important,
machines
Most
recognize
factors
many
"ronr^e
$of
other
amount of money
fhaf
than
the
spent and mate-
HvineWUP de*erfmine the elfer
ness.
Scienhfic
production
l
i
mg
for its
an n
own
American
welfare
sake, alone.
educational
ship—on which
technicel
®averty
Far
—
more
research
And,
eontim,es to breed upon
Sub-standard wages.
"jTlMo" we^w^'e ^nat'frfnTf
132 million neonle
mfllion
Thpro
179
America's today!
demand
facility.
for
every
now
Moreover, the construc-
record postwar state
construction of streets
our
and
must be
re-
and
for
and industrial waste
local
Educational
highways,
water, sewerage
facilities, air-,
training ports, parks and recreational
.
deficiencies.
Discrimination because of color,
race
.
.
.
.
,
.
.
^pTra^s
family
purchasing power to match;
rising capacity to produce.
our
Uncounted millions
1
Standards
of
our
fel¬
work for less
.
ep,
.
nn
than ^L0° an hour'
intended
Although steel prices had. already been raised $13.50 a;'ton
in less than one year, only Tast
July
they
Yet,
prices
were
The Protec-
by
the Fair
1
'' * * Labor
'
laws
has
just
passed
them by
If
but
we
use
our
unmatched.
human resources',
can
have adequate :
and
physical
hiked
$6' more.
Wisely/'we
scbools jor ;an
have
been^^ cut
cent homes and
our children, de-:
neighborhoods for!
all Gur families, and banish pov-'
compared favorably with profits
erty forever from this land,
earned by the industry
:'in - most - unwarranted business
could
by $6 and profits still would have
any
prior year.
it
any
.
low Americans still
y
.
Is
creed.
or
tion
face.
Despite
protected family.
type of public
tion lag during the depression and
two wars has intensified the crisis
we
°ld"age with°Ut adeduate re"
sources*
The impaCt °£ accidents'
iU"
upon the un¬
Natiu"ally, this astronomical
population rise is increasing the
kept
maKin0 process operates.
under-em-
Ten health, and death
be 2°°
not
^
and
Unemployment
—besides our school requirements ployment.
ir-
facilities
economic
e^P^n^in^ population so c
pace^wifh;
rising capacity to produce, ^e^ds-• :
and, in fact, why for millions real
let us no\v msmagejn
,
income has been fallings•
v- ^or and government togetherpursue those enlightened policies
The steel industry is a classic
t
necessary
to build uphave
comes
our
™
all
and
the
despite
m5an misfortunes which still abound in
these United States. These include:
must 0nce agaln lead the world,
In addition» a tremendous back-
public
our
defense
our
revocably depend
stored.
leader-
scientific and
our
advances,
and
scientific
n g,
*
educaJ.lori
™
research^"m^fitary Son"0"1 ™W ^
and the
training of technical personnel are
increasingly vital too We are not
apostles of frenzied defense spendp
poverty
gains 0f the last 20 years.
tlSl ZSInd eX" 1 l0? of -unmet Public lacil»y
We
in
live
.
J?
+p
t0
.
back
still
same time, unequaled American
iju
reces-
of
are
«
!t
set for themselves in 1958!
tainous
they
■
'
%:..,^, d<),wnturn can be
wonder.thatr;mr 1?57,,^aiiy; overnight.
.
despite drastically reduced^ pror
dUction, steel profits were higher
than at any time before? " .; v
/
effort
This
by
industries
other
profits
higher
the" steel
wring
to
from -ever
It
;
fatal doctrine of a bal-1
abced budget while their country:
erate the
and keeps drifting down!
t
ever
higher ;
has triggeiod thc' inflatipn
pnccs
practi- •
must be!,
ended
^^niericans are in no mood to tol-
For the unemployed, our state
compensation system barely pro-
;
*
«
"*
at another grave
tjme
lor
p1G steelworkers, the;
Executive
Board
of this great;
Jn April. 1954
vides an average of $28 a week, tionship between costs and profits unl°? SaiTT"
"The
United
Steelworkers - of
Only in two states do even these is never long established. While
'
buildings, the need keeps meager benefits continue beyond a few profiteer, the many suffer. America neither view the present,
schools, and kept there, by the mounting, particularly in the con- 26 weeks; in 13 states, they end Ultimately, the process becomes nor the future with hysteria. Our
payment
of -adequate
salaries, gested metropolitan areas where after 20 weeks, or less.
self-defeating even for those who faith in this nation anddts capac-Furthermore, a vast extension of most of the population growth is
For the aged, our Federal social start it, because prices move so ity to meet its problems is un-.
must
be
established.
teachers must be
higher
education
must be achieved
Competent
attracted
in
all
to
the
fields
through scholar-
ships and by other
means.
Is it not a national
scandal, that
.....
ters,
hospitals and
other
cen-
institu-
tional
.
occurring.
According to government studies, even the present peak rate
now
of
state
and
local
public
works
security
system
is
providing
an
high
that
be
a
reason
of only $24.50 weekly for
married couple, and only $16.10
for
a
primary beneficiary alone.
full
maintained.
average
occur
for
every
production
This
is
a
cannot
major
the ^recessions-which
three"or four
years,
limited."
We hold true to this view today,
get on with the.
But it is time to
"job!
Volume 1ST
Number 5712
.
.
.
The Commercial and Financial Chronicle
Continued from page 15
(555)
such agreements is based, on sound
economic grounds, and that the
position
have
we
taken
will,
in
the long
run,; be most beneficial
to
Latin America; but,
"in. the
long
•
;7
•
ames
allies
•
v
•'
v.
which is beyond dispute. vAnd, in the mean"me,-several,
time,
^ several ' Latin
American
<\
•
stand
by
oy us when the ous agricultural support programs,
chipsare down, despite their large, One
of,
foremost ol our Am
-1
J
communist
1
and
socialist
4.1—
-4.
^4-
aijure
xxiies
or
iu
ixxt;
uniieu
oicues
cia
a
of
to:
irresponsibility
Latin-American friends if and
the final showdown
.comes
attempts to cope with the
tremendous
coffee auxyiuo
uuuciiuuus
uutitc
surplus loomiwt"
They will be
on
our
XI.'
....I
„
' *
l
ii
-
_
missiles
nf,l
the
or
largest
,
per
because they share
3 "w
£k?istiain.^which
;
dignity
!
.
products
and
worth,' and our-:faith in the
very
sincerely,
done
a
but
the
public or to our
officials, ail appreciation
lem
thp
Jai'v
Droducts:
or
with Drod
we'
cAif
"self-
not
are
|
laming
ana
poiici€s
frequently
rejection
our
consis-
price
of
out
"e/ma&in™
-
between
which
the
communism and those of
freedbm,
our
Latin American friends will
be
among: our
allies — and
whether
in
adversity;
exists
may be made within the
few weeks or months which
be^lons
to
he^next
g-Jcoulcl seriously_impair them. Most
Policy^meEi^ns
hiWno conception of
most dependable, .has long been the sacred cow
of
fhe/iaSortah^ of foreign trade
this will be true our
politician's; but it is time
time
y
.
I know that agricultural
tha#«t0
of
prosperity
whether
full
a
nrofess
we
forces; of a"d 111 whlch we Pr°tess to
not
or
of
measure
the general public in
or
there
became
mutual
aware
our
bui:sisteiWepublics
country-hemisphere,
of how the
this animal is curdling our
ternational relations.
>
we
in
point
sore
with
SE
'
^ls of^e
^ g^wav pro-^ick to call upon them for
time of emergency, and
thefl5£;ands;i^am fb?I^M AnSrica Theyy hre
easy-to elirpin- pam tor Latin America.
points of
friction
between/
a
deal
great
a
^Vein^AnH
standiifg11 ef£°rt at mUt"al Und6r" not
the
American. people
it
is-
tot they do not understand
befn T need'toa
moTrheuuseful
efif?"• than
fh^^h
"1°
function
to help
more
.pwaken
Qirl
+n
rehabilitate
war-torn
to
economies and to bolster the deAmerican t^stacquaintth/ptvlth ^enses of those countries which
under the communist guns and
tne
nature
Latin
are
of
America's
economic
problems
attitudes,
toward
policies, and thus
mosphere
mg
of
which
and
of
Before
I
close
g^^
understand-
lead
to
a
satisfactory .lelationship.
}
ready and willing to fight .for
their, freedom. They would agree
j.hat some of these expenditures
are
their
.oqr
^ economic
create therat-
mutual
will
do
.
and
.ri.
the USIAC
them.
I
can
know
that,
do to
that
be
can
help
also
by
Nume.rous
cases
be cited of positive action
is
our
or
past
fatuous
and
programs
contrary
give-
present
make
can
—
coun-
like
resistant to
more
communism.
Now, I realize that foreign aid
a
mghly controversial subject;
going to
urge more of it, rather than Ipcc
less,
as the result of
Sputnik, and that
a-P
if
are
rofliDv*
ihon
I /C-V°n
?
age.ncies;
«
•
4
•
in
^ that
mote
that
the
is there.
to
oi
good
advantage. ,Sa,,fa.r
ciates have
we
never
have appealed
failed
to
:as,
I-
l^aim
erecit^r
greater
/vxixexxca
concern
concern
us/Jvhen. £hap.- forin anjr^pds • J
,(•.
_
our
anu
for
for
the
tidn -which
signed
international aspects of
Granted
vari-
It goes by many names;
it produces
our
allies
and'
.5
derive
points o£ frie_
from
Latin
of
the
vul-
American
as
to
our
com-
gov-
interna-
tional commodity agreements deto
restrict
production
or
support prices for products vital-
ly
important
that
to
Latin
oixr
America,
opposition
to
Louis
Unibn
LINCOLN, Neb.
Huston has become
Trust
Com¬
—
John
E.
associated with
E. E. Henkle Investment
Company,
confiscation
erty,
breaking
business
sion
of
the
that
by selling them to
us
at
lhen> they say, wnen tne crisis
i-s over and
prices fall, we become
greatly concerned with the situa¬
tion
of
our
domestic
producers
quickly erect import barriers
against Latin American products.
and
Unfortunately,
a
there is more
grain of truth in this con¬
tention,
witness
as
the
present
drive for higher import duties on
imports of lead and zinc and the
recurring agitation to place re¬
strictions of various sorts against
imports of such Latin American
commodities
of
foreign
of
contracts
agreements,
and
foreign interests
cost
of
complete
prop¬
and
exclu¬
even
at
disaster
to
In
its
milder forms, the ones
prevalent in Latin America,
it leads to
of
wastage and dissipation
national
nomic
resources
industrial
on
uneco¬
projects, and to
needless government expenditures
projects which could be fi¬
by private capital if con¬
on
nanced
ditions
were
created under which
private investors could earn a fair
profit
on
their
enterprises
in
reasonable safety.
Economic Problems
The
expansion of the economic
activities
of government during
years—the needless inter¬
recent
vention
of government in what
should be private business matters
—surely
prime
are
contributing
factors to the unbalanced national
budgets, the excessive currency
issues, the spiraling price levels
the deterioration in currency
that make it increasingly
and
values
difficult to do business in certain
Latin
ing
countries.
American
of these countries
some
That
are
wag¬
this
part
exerted
by
the
to
influence
business friends
They need, and are
certainly worthy of all the sup-**that we can give them in
port
this
crucial
battle.
I
trust
that
of us will be too
busy during
the coming year to give serious
thought to the economic problems
that will be faced by our friends
in Latin America, and that we
will be able to contribute some¬
none
-
thing,
individually and
tively, to their solution.
All of
have faith in the long-
us
without
is
works
dead—dead
as
been
be
threatened
when
commodity prices fall; but,
surely, a way can be found to
take
of the few who
care
di¬
are
_____
of
v/i-
_
of the few nareally be depended
rpallv
some
uvinx/A.
can
.
to help us in the next emer¬
gency.
It seems particularly ob¬
upon
tuse
——-.
on
our
---
—
..
part,
v
-
when
,
every
4^_+
.x
Sfor
the need for
conservation, to use
the national security argument to
support a policy of more rapid
depletion by excluding imports.
Certainly we, as members of this
hemispheric organization, and ac¬
quainted
can
been
do
as we are
far
with the facts,
than
we
have
doing to bring this broader
picture
to
American
ly,
more
our
the
attention * of
the
public and, particular¬
friends in Congress.
IT« living you want umtj
term future of Latin America, but
the Good Book tells us that faith
livelihood
may
t
collec¬
Maynard Keynes says that we all
will be in the long run. The next
copper,
^rjfttou'r* feeling qmmrktf
our
IAC.
the
J\
^
courageous battle to halt
disastrous inflation is due in
a
petroleum,
tung oil, fishery
products
and
sugar. Our Congressmen are never
so
concerned about the complai¬
sant consumer as they are about
the more vocal producer whose
as
,
the local economy.
in
than
a
.
stuffs but
w«
welfare'
smay of
or the
ine nature an
welfare
study
economies to fluctuations in
field of economic policy—
particularly commercial and financial policy: First, and
certainly
not the least
exasperating, are the
our
^
ui
" 11
Now, as to the principal points
"modity prices, such
of
friction, most of which lie with- ernment's opposition
in
the
actual
:.,.rhe^;'are.bther
1?,neKability
Reviews "Sore Points"*
.
to,them to supply additional
our alleged "neglect"
them
emergency; -and I hope tote wer
can be equally useful.to
them, -.
thentheir
mote
mote
years will be
Latin America;
two
for
will
depend
dition of
that
said
States
United
of
have
cause
of
the
pneu¬
America.
number
a
in
sneeze
a
can
Latin
in
monia
one
our
critical ones
how critical
largely on the con¬
own economy. It has
I
am
Americans
considerable
done
has
developed
some
similar respiratory symptoms.
I
hope
that we can cure them
raoidly and restore the traditional
vigor of our free enterprise econ¬
omy: but for own own sake and
theirs, let's try to avoid trade
policies that will result in ex-
possi-
St.
Huston With Henkle
causing untold distress to millions
of
people,
and
straining
the
every
the
(Special to The Financial Chronicle)
sneezing during the flu epidemic
qn
C.
pany.
our
and
up
Mo. —William
Goldman, Sachs & Co., 314 North
Broadway. He was formerly with
xc
remove
„
immton,
is impairing
certainly, the
LOUIS,
that
who
evidence, of
influence
eye so
to assist
rectly affected, and at relatively
cost, without endangering
economy of entire countries,
seem
their
used
And,
at
ST.
Glaser has become associated with
the
remove
pwn
better
see
vision..
large
XI
American
,
turn,
try to
us
be¬
begin
Latin
j_iauxi American
rvxxxeixcaix friends
mcmus to
iu
they always have responded, not
only by expanding production of
industrial raw materials and food¬
fu Me occasion against those aspects friendship
appeals,
made by the of our forejgn aid program which tions that
to
its
Latin
who,
must
the
aK
ttqtaa
UMAC
only pointed
shortcomings
popular in certain circles. Nevertheless,.; I think that all of us
investment, shouid
speak
friends
the
programs can make one very un-< small
opposing some of these foreign aid
£ ••?£
■*•
our
the
pr0ponents
their
part to avert the passage of legis
lation prejudicial to United States
orivate investments.
investment
Thero
arp
private
There are
TTnitlri
|g
could
on
is
Jugoslavia, Poland, India and Indonesia, to name a few,
more friendly,
more
democratic,
TAv^n
Past..
as ours.
understand
our
tries
*r*endf
m the.
IAC, who have been
so helpful in
the
their sewhat they
persistant belief—against all
away
in
protect
evidence Ho
that
remove
there
done
we
well
as
not
this'/somewhat/^the
points of friction and what
t0
,curity
more
rambling discourse, I want to .be
more specific about some of
these
much
help
_n„
which will not be
ate but jvill require
of
this
in--^essJ# £he
^Dependent,
.
-
reform
our
can
o*
lHnited States market,
aif many of them are,
Latin^on d^exporta^on—mostly to the
Americans
centers
around
are better than friends
onr^^mfcey^-Statesy-of one or a few
of circumforeign aid programs. They hav.ciom^dities^#)r the dollar exstance or necessity. At the
preswinced at the announcement df- ^hange they i^ust have to buy our
ent time,
unfortunately, many of each
muiti-million or multi-bil-^an^facturecSggoods and service
our
southern neighbors are ecoiiorl. dollar program with the in- our^^estments, any restriction
' ugglm
■.
n/ 4ur!
Elusion of huge sums to help erst- of tot accesfccan cause an immewith economic
ills
that
threaten to get more serious. be-; Wj,nc enemies, lukewarm friends diatecrisis and lead to widespread
H
nominal
nexitrals
on
both "distress.' Latin Americans .cornfore they get better.
Furthermore,
iron curtain
It is no?Plain
that "our government is
there are a number of
understanding among us.. But,
strong allies are better than weak A
Another
allies, and understanding friends
I have
our own
Let
^me.
of the extent of
dependti*ce on continued ac-
produet-^heir
of
that
home.
,
struggle
fault
and inconsistencies because I
lieve
more
Foreign Trade Policy
But the greatest actual and potential threat to our inter-Ameri-
run
of
some
.
strengthening
our
pheral trading noli- can relations lies, in the field of
inter
American relationships/lioerai
trading Pj>ii
»foreign trade policy where decihavp said
cairl ihat
in thp wnrM
nave
expect others to follow^xVieiK11
uaua pqxxcy wxxextr ucu
that, in the world-wide ClbS^We
.
*
,
United States.
.
of
the
all
are
to
in
'
govetofiehi^^^a^^Mo^^i^Sls-xiur^"Sim-"/
A
the
j
tions"
Goldman, Sachs
(Special to The Financial Chronicle)
pression that the sources of friction in our inter-American rela¬
we could strive for more
"
suPP°rts and international commodity agreements regardless of
whether the commodities are produced iln the United States, iu
in
Latin America, or elsewhere.
Whether
nL if
to
With
tend the emergency assistance our
Latin American friends will surely need during the next two years.
It would be helpful,., of course, if
tency
it
wTth surnlus cOm^s ^ wheat cotton
^such
sue-
answer
Latin American Faults
,
I do not want to leave the im¬
Federal Securities Building. Mr.
variety of disturbing
symptoms; it is not restricted to Huston was formerly with Dean
Latin America; it is not unknown * Witter & Co. and Central
Republic
in
in the
t.hp United States:
and it has
States; and
Company as local manager.
been
raging
in epidemic form
C. V. Moore has also joined the
throughout the less - developed
areas of the world.
In its worst firm s staff,
form, it is the kind of blind, un¬
reasoning nationalism that leads
-
to
W9V
America
dealing
are
■
-
no
wheat farmers create their problem. We are in no position to lecture anyone on agricultural policy
and
ana we must
must be
oe pxepareu
prepared to
iu
exca-
become ..accus^
v./. "*•'/.
v
con-,^^%, ?
veying
have
Latin
modities
have/not
effective job in
very
we
believe, this
we
to
s
.
quantities
' j_"
;; Thi
triumphof right and justice.;
';/* I am. sure that all of us who
know Latin, America
they
the
tomed." *
ulti-;
mate
in
.
It is
years.
that they created this probfor themselves.
So did our
say
of meeting their dethat they continue to prosand
continue to
grow
the
.
on
ceeding
American
to
m-oduceVs
producers
1
i
pocketbook, the most,mands
.
•
Acceptable
means
for >i«
on the
the hnH™
horizon for
'58 and
ing
able, willing and even eager
give its agricultural surpluses
away, in the absence of any other
side—not
.ooi because
cecause it
it is
is tne
the side of
or
4 V,
rfe blgg
Powerful
W
in
to
between the forces of
communism
and freedom.
uc-
and
,
.^axm
4«:—
its trade polby. icies Where-farmers are involved,
when
way,
j°utheir
liahW tn
I.have no. doubt whatever as
the stand which will be
taken
our
£
parties
ican.^ert^
;ervoirs Ofng00d^will/
^e^O^rs
good will/'But,
tt'O
mendously rich country, liable to
tux uitrvcii
our '
Will all be dead"—
we
Keynes, by the
v.,'j
win
will
run,
of the few statements by Dr.
.one
•
51
VV MV
»
I'm
-W
v-
afraid
^
that
our
national
economy
£rtinC° ou7ailmentsVour
American friends.
Latin
e a
Many
checkup yearly
cancers can
Ifs important for you to have
a
thorough checkup, including
Joins E. F. Hutton
a
chest x-ray for men and
a
pelvic examination for
women,
each and every
(Special to The Financial Chronicle)
KANSAS CITY,
S. Hensley has
West
was
10th
Street.
for
matter how
weO you may feel.
become associated
/
Company, 111
Miss
Hensley
formerly with H. O. Peet &
Co. and prior
year... no
Mo.—Catherine
with E. F. Hutton &
be cured if
detected in time. That's why
thereto was cashier
Martin-Holloway-Belcher.
-
5E
AMERICAN CANCER SOCIETY
•
*
The Commercial and Financial Chronicle
52
expenditures
lor several years.
is
It
budget
a
drafted for ex¬
traordinary times—drafted under
cold war—with the
conditions of
preventing a total war and
waging a total peace. To accom¬
plish this end, a great part of the
budget will be allocated — and
such expenditures, far from being
improvident,; are both wise and
aim of
V..y
essential.,.
two-thirds of the Fed¬
Almost
eral
budget
Fiscal Year
expenditures for the
1959 will be reserved
major National security pro¬
for
both domestic and foreign.
grams,
Large though they may
.
Thursday, January
30, 1958
which
tions with
our economy
reducing
remove
There
spent for peace, for we
only so long as we
dollar
be secure
can
powerful to be attacked.
If there be errors in this figure,
too
are
power
hope
us
that the errors shall
prove to be those
much rather than
for
security.
of spending too
saving too much
I should
much pre¬
fer to allocate a little more to
de¬
fense, and discover I had allocated,
too
much, than to allocate too
a sum and discover too late
that the sum
provided was in¬
email
adequate.
approximately $46 bil¬
expended for major
be
to
security
national
programs,
a
minor percentage, al¬
significant amount, over
$3 billion, will be reserved for
our
mutual security program—to
relatively
though
In
a
be relatively
past several
assurance of
in these indecisive
and unsettled times. As a fellow
who started his economic life as
is
con¬
notwithstand¬
years,
costs of goods
services to the Government.
increased
ing the
and
This, I believe, is a strong indica¬
tion of the fiscal conditions under
which
we
would
be
operating
were
it not for the present dis¬
international af¬
of
state
turbed
fairs.
it is extremely dif¬
ficult sometimes to satisfy even
the
minimum
needs of
normal
course,
of
such
stress
that, in the main, our country's
general and fiscal policy will be
effective
and
that
the money
durable
combat
and
overcome
the
prevailing disease, hunger, pov¬
erty, and ignorance which provide
so
fertile a soil for the propaga¬
tion of communism.
This, too, is
money
know
ever
well
by
now
spent. We all must
that we cannot for¬
survive
"island." iWe
present
little
need allies in the
alone
on
>
struggle—allies
our
who are
spending
required.
At
that such
demand
and
this
ideal
the
be
of the best
one
achievement,
accomplished
through two terrible World Wars
and unprecedented periods of eco¬
nomic boom and bust.
run
and, barring a decided
improvement, I believe there is
actually little hope of our achiev¬
ing the blessed state of pay as you
go in the immediate future.
which
lect
the
in
Government
the
to
extraordinary
We must continue
expenditures.
defense.
knows
long
do
col¬
must
these
meet
to spend for
to
little hope
high taxes
see very
reduction
how
None of
shall
we
us
have
We cannot afford to be
so.
unprepared. These huge defense
expenditures both for ourselves
and for
others, and the high taxes
which they
entail, in a period
that
is
technically
known
as
peace, are economic facts which
have
to
novel
been
in
to which
adjusted.
In my mind,
for
fully to
of
think
ductions
load.
If
war
or
shall
in
we
have
the
prevailing
peace,
the
the
positive1
past
50
from
present
international complexities, be any¬
but
reassured
and even
glowingly optimistic. From a weak
and tremulous birth, we have, in a
thing
relatively brief period of time as
lives of nations are counted,
the
to giant size in the family
nations, and have assumed our
rightful position as leader of the
free
countries of the world. In
grown
times
men
fraught with danger when
throughout the world are
soul-searching choice
between the conflicting ideologies
of
fear
and
freedom, we have
taken upon ourselves—or, rather,
I should say by force of circum¬
the
given
stances
have
had thrust upon us,
but welcome responsi¬
bility of seeing to it that funda¬
mental rights and freedoms are
the
grave
then
is
not
the
time
for
contraction, for drawing the reins
too tightly. This is the hour for
continued expansion—for progress,
not
not
retrogression — for optimism,
pessimism — for positive, not
negative thinking..
tax
costs.
we
Re¬
Administration
HILLS, N. J.—Cador In¬
corporated has been formed with
offices at Far Hills Center to en¬
in
Officers
a
are
high
we
that
So
level
might
for
as
a
securities
well get used to
fact.
long
the taxes
are
LOS
business.
neces¬
fear
Weston & Co.
favor,
without
loopholes
least
At
was
counselor, and steelman.
.1.';-'.
things
better
for metal-
-
have
July,
that
observes this trade weekly.
obvious by September,
became
•
thef.
.
Scrap prices, a barometer of economic trends,
turned up slightly. Scrap prices started a long decline last
which was reflected
in a slide in metalworking volume
Usually, scrap prices move several months before metal¬
working sales change direction.
In the week ended Jan. 22,
"Steel's" scrap price composite hit $34.25 as against the $33.33
level that has held for two weeks and the $32.77 average chalked-
(The scrap composite is an index based on prices
melting grade at Pittsburgh, Chicago, and
eastern Pennsylvania.)
If the rebound holds, continues this trade paper, it presages
better business for metalworking, particularly the steel indus¬
up
last month.
of
the
No.
1
heavy
try, which has been more depressed than the general economy,
because of inventory liquidation.
;
>
The bottom should be felt this quarter at close to present
of capacity for
of 55.5%
levels
the week ended Jan. 26.
Weekly
capacity is now 2,699,173 tons compared with 2,559,490 tons in
1957 and 2,461,893 tons in 1956.
Last week, mills turned out about 1,500,000 tons, some 38,000
tons less than they did the preceding week. The rate is equal to
an
of 93.4%, based on average
index figure
49.
A year ago that index stood at 153.9.
More miscellaneous small orders are
production in 1947,
,
being placed, particu¬
miscellaneous
buying, the pickup is thought to be a reaction to stock cutting
in December that was too drastic. Most steelmcn believe we will
While encouraged by the rise in
larly for sheets.
do
volume matches January's.
if February's
well
orders are presently limited, the long
outlook for demand is promising. Bigger military spending
Though
range
new
should
larger orders in the months ahead and the seasonal
construction will spur heavier buying of building steel
products.
Expectations are that public construction, notably
highways, will provide strong support for steel demand begin¬
ning in the second quarter.
>
Hopes are still pinned on a spurt -in automotive needs, but
auto steel inventories have climbed to the 16-20 day level on
the basis of curtailed production schedules.
As a result, the in¬
generate
in
surge
dustry is ordering steel largely on a day-to-day basis. Automotive
steel buyers are not likely to resume heavy buying soon. Dealers'
car stocks are around 800,000, far more than the industry desires,
notes.
"Steel"
Iron
American
The
and
Institute announced that the
Steel
of steel companies, having 96.1% of the steelmaking capacity for the entire industry, will be an average of
rate
operating
for the week beginning Jan. 27, 1958, equiv¬
ingot and steel for castings (based on
average weekly production for 1947-1949)
as compared with an
actual rate of 93.1% of capacity, and 1,496,000 tons a week ago.
The industry's ingot production rate for the weeks in 1958 is
based on amiual capacity of 140,742,570 net tons as of Jan. 1, 1958.
For the like week a month ago the rate was 93.4% and pro¬
92.1%
of capacity
1,479,000
to
alent
tons of
A year ago, the actual
duction 1,501,000 tons.
placed at 2,498,000 tons or
was
of production is
Index
for
weekly production
155.5%.
based, on average weekly production
1947-1949..
Electric Output
'
'
-
*
-
Declined Below the Previous Week and
Like Period
•*
Year Ago
a
distributed J by the electric
the week ended Saturday, Jan. 25.
1958, was estimated at 12,399,000,000 kwh., according to the Edison
Electric Institute.
Output the past week registered a decrease
below that of the preceding period which totaled 12,400,000,000
amount
The
of
electric
energy
light and power industry for
the
kwh.
under
kwh.
or
week
0.1%
Opens
with
Daniel
Jan. 25,
1958 output declined 1,000,000
of
that of the week ended Jan.
28, 1956.
Car
Loadings Week Ended Jan. 18, 1958 Rose
Above Previous Period
Loadings of revenue freight for
0.5%
the week ended Jan. 18, 1958,
2,909 cars or 0.5% above the preceding
American Railroads reports.
week, the Associa¬
of
cars,
D.
ended
the previous week and declined 11,000,000
below that of the comparable 1957 week but in¬
that
by 887,000,000 kwh. above
creased
were
Beverly Boulevard. He
formerly
sign
concrete
one
tide.
hints
working.
and
securities business from offices at
4050 West
by
third or fourth quarter as
either the
experts pick
time for the turn of the business
vice
ANGELES, Calif.—
A. Saari is conducting a
equitably
and
reasonably
imposed, and collected without
sary,
or
five
All
Loadings for
Mathew
as
banker, builder, educator, investment
nent
tion
M. A. Saari
':
biggest part of the cutback took place in the fourth quar- 3
likely to get much worse, say a promi- .
The
Charles S. Dewey, Jr.,
president; Alan B. Grady,
president
and
Treasurer;
Erica E. Feigner, secretary.
long time,
i
ter and conditions are not
For
gage
,
kwh.
Form Cador Inc.
FAR
;
sight/ That is the consensus
outstanding- economists interviewed
nation's
the
of
some
posterity but for that of mankind.
This
,
"Steel," the metalworking weekly.
preserved, not merely for our own
hold forth in Washing¬
taxes will have to be kept
a
of
of
may
ton,
and
it is pure
wish¬
substantial re¬
meet
to
of
over
aside
and,
years,
become
anyone
total
a
achievement
might be, to
of
The bottom of the recession is in
facts
want to win the cold
wage
gardless
that
the
extreme
are
must
we
day-dreaming
at
the
Americans, but they
of life
mind it would be prac¬
impossible
for
anyone,
my
however, skeptical he
examine our record
situation
Similarly, I
To
be
prophylactics that could be used
against inflationary pressures. But
in the light of the present world
of
plausible, than
predictions only
economic and productive
record of
and
it
possible
business,
gigantic
would be
to
way
the
of our present stand¬
living and of our present
of
ard
cannot pay
We all agree that that
it goes.
would
are
50 years ago
know
to
more
would have been
why the Government
as
much
and
many
horror
—
made of—
fantastic by far,
but, they are less
economists
and
businessmen throw up their hands
in
fantasy
things that dreams are
budget
of
predictions and convic¬
tions border on
tically
mention
mere
a
better and
for our¬
neighbors
a
throughout the world.
There are those who might say
Balanced Budget
Taxes and
deficits
well
might
deficit
and
peace
life, not merely
selves
but
for
our
fuller
a
them
expended and proposed to
expended, is and will, by and
large, be well spent. I believe that
out of this present period of doubt
and fear we shall emerge with a
be
by far the larger part of the
helping hand to other na¬
purse, and other so-called
non¬
tions
less
fortunate
than
our¬
essential or peacetime operations
selves and to provide those na¬
must be cut to the bone.
This is
tions with the arms they need to
particularly true when defense
withstand attack, armed insurrec¬
and related expenditures are esti¬
tion, and subversion, and to help mated at so high a level that
lend
less as a matter
being
(including
1957 totaled
217 cities
Operations Scheduled at 92.1% of Ingot
Capacity This Week
Steel
more
of necessity, a
practical approach to
life's problems. I do not expect
any such assurances. And,
more
importantly, when it comes to the
American way of doing things, I
am
an
incurable optimist — con¬
vinced in my own mind and heart
or
operations, must be given
defense
eight,
reasonably
are,
functions,
essential
most
these
as
at the age of
have acquired,
I
believe
I
In dayr
the
such as
Governmental operation.
two, who
and expect a
newsboy,
at' Chevrolet's St. Louis
decline ' of 3.1% ' from the record
;
•
\
For New York City alone, building plans filed during 1957
were down 24.3% to $652,001,448 from $861,609,508 in 1956.
infallibility
a
out
reporting to Dun & Bi adstreet, Inc.; for
York)
Government—an
in
fact, such expendi¬
been reduced in the
have
tures
Of
the
Of
lion
will
servative.
on
and
people,
or
carried
$6,005,163,308, representing a
$6,196,884,821 total for 1956.
propheticthe part of our leaders
insist upon
Governmental
other
for
tures
functions
some
are
we've all heard one
for
Apart from the expenditures
Optimist
Incurable
was
and Lincoln's Wixom, Michigan, factory. -
The volume of building permits for the,
/•,;
.
New
saddled, and which no
of
sharp-pencilling can
from the balance sheet.
amount
-
assembly
Six-day
Corvette plant
pressures—by
total
supply of
the
.
money.
it may sound,
though
let
for
the billions
to
services,
international
atomic energy, defense
productions and other defense ex¬
penditures, the budget includes
"major fixed and continuing
charges" of almost $13 billion,
largely attributable to the cost
of past wars.
Of this, a major
portion will be spend for interest
on the National debt, and the bal¬
ance
for war veterans' services
and benefits.
These are obliga¬
Paradoxical
major National security programs
every dol¬
and
the
fixed
and
continuing
spent for missiles and guns is
proposed expendi¬
charges, the
be money well spent.
lar
addition
In
military
security,
Cor¬
division and Chrysler
various Ford
poration locations.
batting inflationary
universal fight for freedom.
4
page
Michigan factory and
merely militarily strong, but only as a means of meeting the
physically and economically extraordinary costs of Govern¬
sound, able to stand with us in ment, but also as a means of com¬
this
from
any
not
be, and already
growing though they are, we can¬
not gainsay the wisdom of these
defense
expenditures.
It should
have
can
us
Looking Back and Forward
increase, in the basic
Continued
a few, none of
justifiable cause
for complaint.
No one can seri¬
ously dispute that high taxes are
essential at present and will be
for
the
foreseeable future, not
benefit of
the
for
16
Continued from page
a
.
.
(556)
a
18, 1958, totaled 572,353
12.9% below the correspond¬
decrease of 126,933 cars, or 18.2% below the
the week ended Jan.
decrease of 84,916 cars,
or
ing 1957 week and a
corresponding week in 1956.
Automotive Output
Turned Slightly Upward in Past
Week
production for the week ended Jan. 24, 1958, ac¬
cording to "Ward's Automotive Reports," advanced mildly above
Automotive
.Volume 187
the
.
The Commercial and Financial Chronicle
v
.
of the prior week, but passenger car output for the
January is expected to fall 20% below the same month
level
month of
a
Number 5712
^
ago.
year
'
•.
(557)
ably at the beginning of the week, but fell later on. An upsurge
in
the buying of wheat occurred
on
Friday, followed by a
price rise. Prices on corn and rye finished the week
fractionally below those of a week earlier.
moderate
.
week's car output totaled 111,582 units and compared
109,761 (revised) in the previous week. The past week's pro¬
duction total of cars and trucks amounted to 129,448 units, or an
increase of 1,060 units above that of the preceding week's output,
Last
Wholesalers reported
with
week's
output advanced above that of the previous
car
week
by 1,821 cars, while truck output decreased by 761 vehicles
during the week.; In the corresponding week last year 145,191
-
and
cai-s
23,138 trucks
were
assembled.
V
A
:
Last week the agency reported there were 17,866
in the United States. This compared with 18,627 in
week and
23,138
a
year
trucks made
the previous
ago.
Canadian output last week was
placed at 4,830 cars and 1,100
built 7,039 cars and
1,078 trucks and for the comparable 1956 week 8,485 cars and 1,736
trucks. -In the previous week Dominion plants
>V:V
trucks.
v
•
for
domestic
f
like week of 1956.
^
J
Week
Business Failures Climbed in Latest
Commercial
failures
industrial
and
Jan.
ended
week
23
from
260
in
the
climbed
to
preceding
333
week,
in
the
Dun
&
Bradstreet, Inc.* reports. At the highest level in any week since
1940, casualties were considerably above the 258 last year and
However, they remained 14% below the level of
the comparable week of 1939.
The 284 in 1956.
385
in
Failures
of $5,000 or more rose to 271
Small casual¬
ties with liabilities under $5,000, were almost twice as heavy as
the week before, numbering 62 as against 34 and exceeding the 37
of this size in 1957. Thirty-two of the failing businesses had lia¬
involving liabilities
from 226 in the previous week and 221 a year ago.
bilities in
week.
excess
of
$100,000
^
Failures in December Reach Postwar
■
reached
a
High
seasonal dip in December to 1,080, business failures
total in 1957 of 33,739, the highest number in any year
Despite
a
since 1939.
However, the rate of increase slackened considerably
1957, amounting to 8% as compared with a rise of 16% be¬
in
tween
1955 and
Dollar
liabilities
9%
climbed
in
1957
with
failing
sharpest rise centered among concerns
between $100,000 and $1,000,000.
r'
$615,000,000.
to
ones
in
excess
The
liabilities
those under $5,000, or excep¬
of $1,000,000, were as numerous as
1956.
in
•
•;
■
Construction
most
the
and,.retail businesses continued to
increases
in
casualties,; while
marked
-
Wholesale Food Price Index Touched
Since
The
wholesale
food
Highest Point
a
year ago.
"
April 19, 1955
'■;
;
■
Contributing toward the increase the past
week were higher
prices for wheat, rye, potatoes, sugar, cocoa, cottonseed
cheese, steers* lambs and bellies. Lower prices were
in corn, oats, barley and eggs.
The
of 31
index
raw
represents
tion is to show the general
oil, butter,
registered
price per pound
the sum total of the
foodstuffs and meats in general use
and its chief func¬
trend of food prices at the wholesale
level.
•:
■
i
Wholesale Commodity Price Index Recorded Further
Mild Declines the Past Week
There
was
somewhat.
prices
another slight decline in
the general commodity
Lower prices on some grains, copper and
tin, offset increases in butter, sugar, hogs and tea. On Jan. 20 the
daily wholesale commodity price index, compiled by Dun &
Bradstreet, Inc., fell to 276.54 from 277.02 a week earlier and was
appreciably below the 299.09 of the similar date a year ago.
Most grain prices ended close to those of the preceding week.
Following a report that the government's estimate of the carry¬
over of soybeans
at 50,000,000 bushels was 25,000,000 too high
and would be subject to revision, soybean prices climbed notice¬
price level last week.
Friday
and
last
33,027 for
has
announced
York
.;■;
both
the
previous
week
similar
earlier.
1957
Beef;
period.
A moderate increase
hog prices occurred as buying expanded substantially. Hog
receipts were down slightly from the prior week. Purchases of
lamb slackened, but prices were
steady. Wholesalers reported a
slight decline in lard prices as trading lagged.
firm of
second
successive
Chair¬
term
as
man
will
end
May
19,
on
made his deci¬
sion known in
Nominating
Committee.
year
ago.
For the
mated
current
2,492,000 bales
period last season.
Increased
over-all
for
of
cotton
were
and print
cloths boosted the
gray goods during the week.
Except
orders, sales of cotton yarns were sluggish.
woolens, worsteds and carpet wool was close to that
in
the
of
be
the preceding week.
Mr.
by
on
Chairman
a
to
Kellogg,
the
42,
elected
was
a
Governor in 1950 and Vice-Chair-
in 1954.
1957 he
In 1956 and
again in
elected Chairman.
was
He
started his career in the brokerage
business
the
telephone
and
a
as
clerk
floor
trading
on
ad¬
was
to
Exchange membership
July, 1936, when he was 21
old.
in
Slight Increase Over
and
membership
at the annual election May 12.
mitted
Trade Volume Registered a
has
committee
The
Board
voted
man
sateens
Kellogg, 3rd
'
responsibility of naming nine
nominees for incoming members
esti¬
scattered
some
Interest
in
14 exports
against 3,282,000 during the similar
as
bookings in
volume
through Jan.
season
at
J. C.
letter to the
a
the
on
Tuesday a week ago, were estimated at 163,000 bales by the
New York Cotton Exchange. This compared with
141,000 bales a
week earlier and 125,000 bales in the
comparable period a
be
in the spe¬
ner
cialist
plantings resulted in
noticeable decline in cotton trading, caus¬
ing prices to drop moderately. Cotton exports for the week ended
not
He
Reports that the Administration planned to ask Congress for
new
legislation to allow lower price supports and increased
a
Exchange,
would
as
Chairman.
whose
the
and
were close to those of a week
Stock
he
available for
re-election
Receipts of cattle in Chicago dipped noticeably below those
years
Like Period in 1957 the Past Week
women's
"The office of Chairman," Mr.
Kellogg said, "carries with it great
honor and also heavy responsi¬
bility.
I feel that the time has
come when I must give more con¬
in
sideration to the demands and
Although
buying slackened somewhat in the period
ended on Wednesday of last week, it was slightly higher than a
year
ago.
Merchants reported year-to-year gains in sales of
consumer
apparel, furniture and food products offsetting declines
and some major appliances. Sales
of new passenger cars were slightly less than those of both the
preceding week and the similar 1957 period, spot reports indicated.
men's clothing, housewares
total
dollar volume
of
retail
trade in the
period ended
on Wednesday of last week was unchanged to 4%
higher than a
year
ago, spot estimates collected by Dun & Bradstreet, Inc.,
showed. Regional estimates varied from the comparable 1957 levels
by the following percentages: New England States +3 to +7%;
Middle Atlantic and Pacific Coast +1 to +5; East North Central,
West North Central, Mountain 0 to +4; South Atlantic and West
South Central —1 to +3 and East South Central States —4 to 0%.
Reduced-price clearance sales
the buying of women's
promotions
cloth
courage
The
was
close
to
call
for
that
of
continued
coats,
to
sportswear
en¬
and
fashion accessories, millinery, and lingerie
a
week earlier.
Interest in men's apparel,,
fell slightly below that of both the preceding week and the simi¬
lar 1957 period.
Volume in children's clothing equalled that of
the prior week.
f
Furniture stores reported
•
,
-
sales
of
increased
their buying
juices, fresh meat and dairy products,
poultry, fresh produce and baked goods.
upsurge
in wholesale
New
York
Furniture
of frozen foods, canned
offsetting decreases in
that of
Show
was
a
year ago.
noticeably
the similar event last year.
The buying
coverings improved during the week with
of the comparable 1957 week.
Bookings
fixtures expanded appreciably.
Chicago
appreciable gains from last year in sales
Women's Spring
salers
of
women's
occurred last
Attendance at
higher than at
of draperies and floor
volume equalling that
in lamps and lighting
wholesalers reported
of housewares.
Kellogg is
He is
eral
President and Director of
Kellogg & Sons; President of
the J. C. Kellogg Foundation (an
pany;
in food
products
advanced moder¬
1958, increased 3% above the like period last year. In the pre¬
ceding week, Jan. 11, 1958, an increase of 1% was reported. For
the four weeks ended Jan. 18, 1958 an increase of 10% was re¬
ported.
For the year 1957 an increase of
that
1956.
of
Retail
trade
sales volume
1% was registered above
in New York City the past week
3% to 5% over that of the like period a year ago, estimates
by store executives reveal.
rose
According to the Federal Reserve Board's index, department
store sales in New York City for the weekly period ended Jan.
18, 1958 increased 4% above that of
the preceding
For the four
the like period last year.
In
week, Jan. 11, 1958 an increase of 1% was reported.
weeks ended Jan. 18, 1958, an increase of 11% was
For the year 1957 the index registered an increase of
2% above that of the corresponding period in 1956.
registered.
devoted
organization
to
medical
research); and a director of Man¬
hattan Shirt Company:
He is a
Trustee of 'the Bay Head (N. J.),
Chapel
and Westminster Pres-.
byterian Church.
I/ W
:7;> 'i/j v
Mutual Fund Inv.
WASHINGTON, D. C.—Mutual
Investments
Fund
with
formed
Ltd.
offices
has
been
1511
at
K.
Street, N. W. Roger A. Kingsbury
III is
a
principal in the firm.
Cunningham Co. Opens
OKLAHOMA CITY, Okla.—Ray¬
in
Cunningham is engaging
securities
a
business
offices in the Petroleum
under the firm name of
ham
and
Co.
Company.
from
Building
Cunning¬
He
was
for¬
with Clisbee-Thompson
merly
&
\
Opens Own Office ^
Gertrude B. Steele will conduct
offices
volume
Loan Association
J. C.
her
wholesale
&
and the Central Home Trust Com¬
acetates and synthetic
fibers picked up somewhat the past week in most textile markets,
while increased buying of print cloths and sateen boosted over¬
all volume in cotton gray goods. Volume in woolens, worsteds and
carpet wool lagged again during the week.
Total
director of the City Fed¬
a
Savings
orders.
ately last week.
Department store sales on a country-wide basis as taken from
the Federal Reserve Board's index for the week ended Jan. 18,
a
ity and Vice-Chairman
of the
Authority's Finance
Committee.
merchandise climbed moderately and whole¬
millinery reported a considerable rise in
Trading in industrial fabrics, rayons,
re¬
business."
Commissioner
my own
of The Port of New York Author¬
mond C.
orders for furniture
week and volume was close to
the
Mr.
upholstered chairs,
Housewives
An
sponsibilities of
moderate gains from
a week earlier
dining room suites and bedding.
Volume exceeded that of last year. While year-to-year gains pre¬
vailed in purchases of draperies and floor coverings, interest in
linens and towels remained at the comparable year ago level.
The buying of lamps, lighting fixtures and refrigerators climbed
somewhat over last year, but over-all volume in major appli¬
ances was down fractionally.
in
price index, compiled by Dun & Brad-
street, Inc., continued to rise for the fourth straight week, reach¬
ing $6.52 for the week ending Jan. 21. This is the highest point
since April 19, 1955. Compared to the week previous, the current
index figures shows an increase of 1.1% and it is 6.2% higher
than
on
export
New
Spear, Leeds
& Kellogg.
Mr. Kellogg,
dresses.
account for
wholesaling
showed the least year-to-year change.; In retailing, totals surged
to record levels in furniture, and furnishings stores,
building
materials
dealers, automotive group and eating and drinking
places. On the other hand, casualties were less severe than in
1956 in the food, general merchandise, apparel and drug lines.
Failures among manufacturers rose at a slightly accelerated rate
in 1957, lifting their total above the previous 1949 peak.
Con¬
siderably more concerns succumbed than a year ago in the lum¬
ber industry, mining, stone, clay and glass.
In contrast, totals
dipped the lowest in four years or more in textiles and apparel,
leather, iron aiid steel and machinery.
In
seven
of the nine major
geographic regions, failures
reached postwar records in 1957.
The West South Central and
East South Central States suffered appreciably heavier casualties.
Increases also exceeded the national average in the East and West
North Central States.
Non-metropolitan districts accounted for
nearly all of the year-to-year rise as total failures in 25 of the
largest cities held relatively ;steady.
•
terminals
Kellogg, 3rd, Chair¬
of the Board of Governors of
the
Although transactions in coffee remained high, future prices
dipped slightly.
Interest in cocoa improved substantially, but
prices were unchanged. Increased interest in rubber
helped boost
Neither very small casualties,
tionally large
railroad
James Crane
man
is senior part¬
The
1956.
Casualties occurred at a rate of 52 per 10,000 listed enter¬
prises, edging up from 48 per 30,000 in the preceding year, but
remaining noticeably below the prewar rate of 70 in 1939.
;
New York
38,489 sacks with 5,462 for
Flour prices were steady**
use.
compared with 20 in the preceding
as
:, /■/
Ceylon, the export market lagged.
m
week ended
V Jan. 18, 1958, were 3.0% below production, according to the Na¬
tional Lumber Trade Barometer. In the same period, new orders
were 8.5%
above production. Unfilled orders amounted to 28%
-of stocks.
Production was 10.1% above; shipments 11.1% above
and new orders were 22.5% above the previous week and 7.3%
above the
at
Except
The
prices
Lumber shipments of 493 reporting mills in the
.
to
unchanged.
were
call for rice was sustained at a
high level as prices held
unchanged from those of the prior week. Wholesale trading in
sugar expanded moderately, with a slight increase in the
price
of the raw product.
of
Fell 3.0% Below Output in
Week Ended Jan. 18, 1958
:
receipts
amounted
For Re-Election
moderate rise in the buying of spring
orders for flour from
some
>
Lumber Shipments
a
flour, while purchases of other types
Flour
states "Ward's."
Last
53
own
York
was
a
investment business from
at
52
Wall
New
she
partner in Steele and Com¬
City.
For
Street,
many
years
pany.
Butcher & Sherrerd Branch
HAGERSTOWN, Md. —Butcher
Sherrerd has opened a branch
office at 10 North Jonathan Street
&
under
the
direction of Joseph H.
Dagenais, Jr. Mr. Dagenais was
formerly
resident manager for
Goodbody & Co.
Three With J. C. Roberts
(Special to The Financial Chronicle)
SPRINGFIELD,
Mass.
—
Agos-
Jr., Raymond D.
Jordan and Kenneth W. Lessard
have become affiliated with Jay C.
tino
DiRoma,
Roberts
All
18 Vernon Street.
previously with King
& Co.,
were
Merritt & Co., Inc.
54
The Commercial and Financial Chronicle
(558)
.
.
.
Thursday, January 30, 1958
if INDICATES
Securities
Now in
Brunswick-Balke-Coliender Co.
^-Allegheny Ludlum Steel Corp.
offered
for sale pursuant to company's Thrift Plan for eligible
salaried employees of company and its subsidiaries.
Jan. 27 filed 50,000 shares of common stock to be
20
Dec.
(Walter
H.)
Co., Inc.
(letter of notification) $150,000 of 10-year 6%
unsecured debentures, due Nov. 1, 1967, to be offered to
stockholders. Price—At par (in units of $1,000). Proceeds
—For construction of a new addition to present building.
Office—6210 Denton Drive, Dallas, Texas. Underwriter
4
—None.
American
European Securities Co.
Jan. 15 filed 76,563 shares of common stock to be
to
holders of outstanding
common
on
offered
the basis of one
new
share for each 6 shares held of record to the effec¬
tive
date
of
registration statement. Proceeds—For in¬
Price—To be supplied by amend¬
Office—Jersey City, N. J. Underwriter—None.
vestment
ment.
purposes.
Dec. 3 filed 101,667 shares of common stock (par $1) to
be offered for subscription by common stockholders at
the rate of
one new
share for each two shares held; un¬
subscribed shares to be offered to public.
Price—$10 per
share. Proceeds—For capital and surplus accounts. Office
—Fargo, N. D. Underwriter—None.
American Mutual Investment Co., Inc.
Dec. 17 filed 490,000 shares of capital stock. Price—$10.20
share. Proceeds—For investment in first trust notes,
per
second trust notes and construction loans. Company may
develop shopping centers and build or purchase office
buildings. Office — 900 Woodward Bldg., Washington,
D. C.
Underwriter — None.
Sheldon Magazine, 1201
Highland Drive, Silver Spring, Md., is President.
Ameefcan Provident Investors Corp.
Feb. 15 filed 50,000,000 shares of common stock (par one
Price—$2
cent).
per
share.
Proceeds
—
capital and general corporate purposes.
For working
Office—Dallas,
Tex.
Underwriter—Peoples Securities Co., J. D. Grey,
Orleans, John S. Tanner, of Dallas, and C. L.
Edmonds, of Houston, three of the 22 directors, are
of New
Chairman, Vice-Chairman and President, respectively.
:
r J
•
163,500 shares of common stock (no par)
exchange for outstanding common stock
of MacGregor Sport Products, Inc. at rate of one share
stock for each
share
of
MacGregor stock.
PREVIOUS
ITEMS
REVISED
ISSUE
J:
.'■!'-*•
$2,000,000 of single payment investment
plans and $8,000,000 of systematic investment plans and
systematic investment plans with insurance, both for the
accumulation of .shares of Atomic Development Mutual
if Columbian
-
filed
(N.
Yi)
27
filed
Jan.
The /
offer is subject to acceptance by holders of at least 90%
Financial
Co.,
;.vv
Development
Inc.
(147,150 shares) of outstanding MacGregor common ^ Fund, Inc.;,,//
•/*;.;,/• //./V!/ :.:/ :*.<S ::
(which condition may be waived by BBC if offer,is
Commerce OilRefining Corpi?'>;.®
accepted by at least 80% of outstanding MacGregor
Dec. 16 filed $25,000,000 -of first'-'mortgage bonds due
stock). Offer expires Feb. 4, 1958:?Underwriter—None. ;
Sept. 1/ 3968, $20,000,00 of subordinated debentures due
Statement effective Jan. 13.
:/ ;/■'/^w'v^;
Oct. 1, 1968 and 3,000,000 shares of common stock to be
Cador Production Corp., Far Hills, N* J. ^
offered in units as follows: $1,000 of bonds and 48 shares
;
of stock and $100 of debentures and nine shares of stock.
Dec. 16 filed 1,680,000 shares of common stock (par five
■
■
.
cents), of which 1,600,000 shares are to be offered in
exchange for oil properties located in Oklahoma, Texas,
Mexico, Louisiana, Kansas and elsewhere; the remaining 80,000 shares are to be issued as commissions.
Underwriter—Cador, Inc., Far Hills, N. J. /
Jan.
23
Electric Power Co.,«(2/27)
filed
Price—To be supplied by ^amendment.
,
Proceeds —To
refinery. Under writer/-/Ldiman Brothers, New
'
'■
Consolidated Cuban Petroleum
30 filed 500,000 shares-of common stock (par ^20
cents) to be offered for; subscription by common stock¬
Dec.
•>;
holders
$12,000,000
of first mortgage bonds due
.bank loans and for construe- '
tion program. Underwriter—To be determined by com- i
petitive bidding. Probable bidders; Halsey, Stuart & Co. L
Inc.; The First Boston Corp.; Kidder, Peabody & Co.; U
White, Weld & Co. Bids—Expected to be received up to "/
9 a.m. (PST) on Feb. 27 at offices of O'Melveny & Myers, %
Room 900, 433 So. Spring St., Los Angeles 13, Calif.
''
Proceeds—To
1988.
construct
r
New
ic California
American Life & Casualty Insurance Co.
k
•
to be offered in
of BBC
Allen
Nov.
Registration
ADDITIONS
SINCE
1 the
basis
oLxme
pew share for each dour
supplied by amendment. Pro¬
ceeds 4- For exploration; activities and capital expend¬
itures. / Office—Havana," Cuba.
Underwriter—H. Kook
& Co., Inc.,./New.York., ,./
jd
on
shares held.
repay
Price—To be
,.
Consumer Finance Corp* of America
Dec. .27, filed $1,000,000, of capital /notes
(2/3-7)
due Feb. 1,
(with detachable class A common stock -^purchase
j'
?
Camoose Uranium Mines of; America* Inc.
warrants) / Price—To be '.supplied by amendment; •; Pro¬
Jan. 9 filed 3,000,000 shares of common stock (1 cent >, ceeds—Tor educe bank loans and for working capital.
par), all owned by Camoose; Mines Ltd.,/which is in / Change, in Name—Formerly People's Finance Corp. Of¬
liquidation and has equivalent amount of stock out-/ fice—Denver, Colo. / Underwriters—Paul C. Kimball &
standing (1 cent par).; When registration statement be- • Co.,: Chicago;-111. /
-v" /
:Vi':/
comes effective, Camoose Mines will issue qs a liquidat-z
Continental Mining & Oil Corp.
ing dividend, on a share-for-share basis, the 3,000,000
Dec. 9 (letter of notification) -250,000 shares of common
Canadian Uranium Mines shares it owns. Office—New
stock (par 10 /.cents). Price—SI per share. Proceeds—
York City.
Underwriter—///:"-■/'■
For mining expenses. Office—1500 Massachusetts Ave¬
Caribe Stores, Inc., Aguirre, Puerto Rico
nue, N. W., Washington, D. C. ,Underwriter—:Ei L. Wolfe
Dec. 2 (letter of notification) 247,560 shares of common
Associates, 1511K St., N.W.,;Washington, D. C.
;; r
•
stock (par 50 cents) being offered for subscription byCooperative Orange League Federation, Inc.
common
stockholders of record Jan.
10 on a l-for-3
Sept. 27 filed $600,000 of 4% subordinated debentures
basis; rights to expire on Feb/15/ Price—52 cents per
due Jan. 1; 1966; 10,000 shares of 4%' cumulative pre¬
share.
Proceeds
For
general cbroorate pu^o^es.
ferred stock par $100; and 150,000 shares
of,, common
Name Change — Formerly Tybor Stores, Inc.
Under¬
stock (par $5). Trice—At principal amount or par value.
writer—Lerner & Co., Boston,' Mass,/ ,1,
'
*
s r ; /
Proceeds—To finance inventory purchases, to make cap¬
ital loan advances to retail subsidiaries;-to reduce bank
if Central Illinois Public Service Cov (2/25).;-:
loans; and for working capital. Office — Ithaca, N, Y.
Jan. 29 filed $15,000,000 of first mortgage bonds, series
,
:
i
,
.-',i.
t,
1
■
1' -i,;
<#**:
-fte-
4
'
/Y V*
< •*•
r\''f
,
1973
..
—
•
American Telephone & Telegraph Co. (2/7)
Dec. 31 filed $718,313,000 of \>/\ % convertible debentures
due March 12, 1973, convertible into common stock, be¬
ginning May 12, 1958, at a price of $142, representing
$100 debenture and $42 cash, to be offered for subscrip¬
tion by stockholders of record Jan. 24,1958 at rate of $100
principal amount of debentures for each nine shares
held; rights to expire on March 12, 1958. Subscription
warrants are expected to be mailed about Feb. 7. Price
—100% of principal amount. Proceeds — For advances
to subsidiary and associated companies; for purchase of
stock offered for subscription by such companies; for
extensions, additions and improvements to company's
own plant and for general corporate purposes.
Under¬
writer—None.
Statement effective Jan.
17.
•
Anderson Electric Corp.
Dec. 23 (letter of notification)
14,700 shares of class B
$lb Price—$12 per share. Proceeds
—To go to selling stockholders.
Office — 700 N. 44th
Street, Birmingham, Ala. Underwriters — Cruttenden,
Podesta & Co., Chicago, 111.; Odess, Martin & Herzberg,/
Inc., Birmingham, Ala.; Courts & Co., Birmingham, Ala.;
Wayne Hummer & Co., Chicago, 111.; and Merrill Lynch,
Pierce, Fenner & Beane, Birmingham, Ala.
common
I
stock (par
A., Inc., Phoenix, Ariz.
Sept. 30 filed 85,000 shares of common stock. Price—At
par ($3.75 per share). Proceeds—For investment in sub¬
sidiary and working capital. Underwriter—Selected Se¬
curities, Inc., Phoenix, Ariz.
•
Atlas
Sewing Centers, Inc., Miami, Fla.
$1,500,000 6^>% convertible subordinated
debentures, due 1973. Price—Par. Proceeds—To increase
inventories, expansion, and reduce bank debt. Under¬
writer—Van Alstyne, Noel & Co., New York. Offering—
filed
6
Expected in about two weeks.
/
Proceeds—For working capital. Underwriter—None.
Blacksmith
Shop Pastries Inc., Stockport, Mass.
Sept. 17 (letter of notification) $100,000 of 6%% deben¬
tures dated Sept. 16, 1957 and due
Sept. 15, 1972 and
,40,000 shares of capital stock (par $1) to be offered
units of
stock.
$50 debenture and 20 shares of capital
Price—$90 per unit. Proceeds—To retire mort¬
one
gage notes and for working capital.
& Gould, Salem, Mass.
Blue
Star
Mining &
Underwriter—Mann
-
-
Survey Corp.
Jan. 20 (letter of notification)
400,000 shares of common
stock (par 15 cents). Price—25 cents
per share. Proceeds
Office—208 Collins Bldg., Col-
—For mining expenses.
ville, Wash.
K
^
^
Underwriter—None.
v• .vtk
—
Underwriter—None../;',.,..
<
■
-
Explorers, Ltd.
(letter of notification) 600,000 shares of common
$1-Canadian), Price—50 cents per.share-U. S.
stock (par
Proceeds — For exploration and drilling costs.
Suite 607, .320 Bay SL, Toronto, Onti; Canada.
Underwriter—Stratford Securities Co., Inc., 435 Broad¬
funds.
Co. and Equitable Securities Corp.f( jointly); Kuhn, Loeb
& Co. and A. C. Allyn & Co. Inc,'. (jointly); Salomon
Bros.
Cubacor
Oct. 28
mined by competitive bidding. Probable bidders:. Halsey,
Stuart & Co. Inc.; Eastman Dillon,! Union Securities &
Office
&
Hutzler; Blair & Co., Inc.; Blyth & Co., Inc.,
Kidder, Peabody & Co. and Merrill Lynch, Pierce, Fen¬
ner & Beane (jointly).
Bids—Expected Feb. 25. ///
—
New York,
way,
•••;
„•
Disc, \ne.+ Washington, D. C.Oct. 10 filed 400,000 shares of class A common ^tock (par
Central Mortgage & Investment Corp.
$1). Price—$2.50 per share." Proceeds—For investment.
Sept. 12 filed $5,000,000 of 20-year mortgage bonds and
Business—Purchase add development of reaUprOperty,
500,000 shares of common stock (par five cents) to be
and acquisition of stock of business enterprises. Underoffered in units of $100 of bonds and'10 shares of stock V
wTiter—None. Irving Lichtman is President. and Board
Price—$100.50 per unit. Proceeds—For purchase of first ' Chairman.
-///''''
mortgages or to make first mortgage loans and for con- •
• Dixon Chemical/ &.
Research, iInc. V> ^
/
struction business.
Office—Miami, Beach, Fla. .Under¬
Dec. 24 filed 165,625 shares of common stock Kpar $1) to
writer—Aetna Securities Corp.;- New York. Offeringbe offered for subscription by common stockholders at
Date indefinite.
'
^
:*•, •*...
* ••
.
the
of
rate
Price—To
Central Power & Light Co. (2/4) f . ^
6 filed $12,000,000 first1 mortgage bonds, series H,
due Feb. 1,1988. Proceeds—To repay bank loans dnd for
one
new
share
for
four
each
shares
held.
be
supplied by amendment. Proceeds—For
expansion and 'general corporate purposes, r-office —
Clifton/ N. J. Underwriter—P. W. Brooks & Co., Inc.,
construction program.
Underwriter—To be determined./ New York. Offering—Not expected before March 1/ ' ":by competitive bidding. Probable bidders: Halsey, Stuart.
Doctors' Motels, Inc., Kansas City, Kan.
& Co. Inc.; Eastman Dillon, Union, Securities &
! Oct. 25 filed
Co.;
500,000 shares of common stock, of which
Kidder, Peabody & Co.; Lehman: Brothers and Glore,
426,497 shares are-to be offered publicly, 39,568 shares
Forgan & Co. (jointly); Blyth & Go. jnc.; The First Bos- " are to be offered in exchange for $432,055
outstanding 6%
ton Corp.; Kuhn, Loeb & Co.;^ Merrill Lynch,
Pierce,
debentures, 3,085 shares are"to be issued as a Stock divi¬
Fenner & Beane and Salomon Bros.,& Hutzler (jointly).
dend and 30,850 shares are presently outstanding. Price
Bids—Tentatively expected to be received up to 11:30
—At par ($15 per share).
Proceeds—^For construction
a.m.
(EST) on Feb. 4.
and operation of motels and to repay bank loans.
:/>■'•••"
Un¬
Jan.
,,
.
• Black & Decker Manufacturing Co., Towson, Md.
Jan. 22 (letter of notification) 20,000 shares of common
stock (par $1) to be offered ot
employees pursuant to
Employees Stock Purchase Plan. Price—At 90% of last
in
bank loans and
To be deter-
repay
Underwriter
,
• Barton Distilling Co., Chicago, III.
Jan. 28 filed $1,000,000 of secured notes due Oct.
1, 1962
(with warrants attached to purchase whiskey warehouse
receipts. Price—To be supplied by amendment. Proceeds
—To repay short-term bank loans of
$400,000 and for
working capital. Underwriter—Fulton Reid & Co., Inc.,
Cleveland, Ohio.
bid.
Proceeds—To
r
Anita Cobre U. S.
Jan.
G, due Feb. 1, 1988.
for construction program.
,
if Chenango & Unadilla Telephone Co.
Jan. 29 filed 20,000 shares of common stock (par $20) to
be offered for subscription
by common stockholders.
Price—To be supplied by amendment. Proceeds—To re¬
pay short-term bank loans and for additions and im¬
Underwriters — W. E. -Htitton & Co., New
York; and Laird,, Bissell & Meeds, Wilmington, Del.
provements.
Chess Uranium Corp. /••.'•
:>•//.'
stoek
(par $1—Canadian).
Price—50
cents
common
share.
(U. S. funds). Proceeds—For exploration costs, etc. Of¬
fice—5616 Park Ave., Montreal, Canada. UnderwriterJean R. Veditz Co., Inc., 160 Broadway; New York.
Cleveland
Jan. 8 filed
Electric
.
Illuminating Co.
per
(2/25)
$30,000,000 first mortgage bonds due in 1993.
Proceeds—Retire bank loans in amount of
$9,500,000 and
Latter, for 1958, calls for $65,000,000 outlay, and over next five years total is approxi¬
mately $280,000,000. Underwriter—To be determined by
competitive bidding. Probable bidders—Halsey, Stuart
& Co. Inc.; Blair & Co., Inc. and
Baxter, Williams & Co.
(jointly); Glore, Forgan & Co.; Blyth & Co., Inc.; The
First Boston Corp.; White, Weld &-Co.; Dillon Read &
Co. Inc. Bids—Expected to be received up to noon
(EST)
for construction program.
on
Feb. 25.
»
'
:
%
.
:s
•
-
v»
,
-
Durox
of
.
.....
•.•
.
i /
,
...■
Minnesota, Inc., Denver, Colo.
•
Sept. 23 filed 750,u00 shares of common stock (par $1).
Price—$2 per share. Proceeds—For capital expenditures
and .working capital.
Business — Building material.
Underwriter—American Underwriters,- Inc., Englewood,
Colo.
Statement effective Dec. 11.
Electro Precision Corp., Arkadelphta, Ark.
Oct. 30 (letter of notification) 60,000 shares of common
•
May 14 (letter of notification) 600,000 shares of
derwriter—None.
stock (par $1). Price—$4 per share Proceeds—For offlee
and laboratory equipment;
inventory, working capital,
etc.
Underwriter—Nunn-Groves Co/, Little Rock, Ark.-
Ex-Celf-O Corp.,
Nov.
25
filed
Detroit, Mich.
shares of common stock ^(par $3)
exchange for common stock of Bryant
Co. of; Springfield, Va., at rate of
four-tenths of an Ex-Cell-O share for each full Bryant
share. Offer will become effective upon acceptance by
to be offered
88,000
in
Chucking Grinder
holders of not less than 209,000 shares (95%) of all com¬
mon stock of Bryant outstanding. ' Underwriter—None.
Expanded Shale Products Inc.
(letter of notification) 60,000 sheares df
Nov. 26
stock (par
common
$1) and $180,000 of 6% redeemable debentures
maturing Dec. 15, 1987. Price—Of stock, $2 per share;
of debentures, at par. Proceeds—For .exploring and de¬
veloping mineral properties with objective of producing
Volume 187
Number 5712
expanded shale.Coio.;
.
.
The Commercial and Financial Chronicle
.
ing
Office—728-29 Symes Bldg., Denver 2,
.r'
.7. ri
^
i.*
\
<**
.
capital.
Office—Portland,
be named by amendment; Sol
.Underwriter—Minor,' Mee. & Go., Albuquerque,
N.TVl
Ford Home
Virginia Foods Corp.% vr;- ,?».>
ut.
5,000 shares of,common
Price—$6.67: per /share. ^Proceeds—Toftftselling
Nov.
.
6
-Stockholder.
Office—922
Jefferson" St., Lynchburg,
V a.
,
homes.
Forest
ft"p
:
—
'
of company's products, working
capital, addift
inventory and accounts receivable, for research
development and for other general corporate purposes. Office—Brooklyn, N. Y. Underwriters—Alfred L.
Powell Co.; New York; and H. Carroll &
Co., Denver,
"Colo.
.1
•
>':
,
*
NEW
Chicago & Northwestern Ry._
.^Eids
accounts
.Equip. Tr. Ctfs.
ft//
•ft 4;'./«'• ";Vl
Gulf
Power
^Debentures
/,/V
New
York
(Bids 11 a.m.7EST)
;
,
:
...
Forest
%>-'
L.
(Bids
■
A;NjF,ebl*ljary 4^(Tuesday)
-'-'V
Central Power & Light Co;CiAr-L;_;_-_.__
'Bids
:
11:30-,
Common
$500,000
11 "a.m.
EST)
„
Bonds
(Bids to be
invited)
Bonds
$15,000,000
Cleveland Electric Illuminating Co
,
'
(Bids
Bonds
EST) $30,000,000
noon
\
•.
26
(Wednesday)
ft
4
2
;
Southern New England Telephone Co
/ft. "
Bonds
New York, Chicago & St Louis RR. Equip. Tr. Ctfs.
'••VI A.®Ws noon EST-V $5,130,000
I-
■-
ft; (Bids to be invited)
,
,
United
%;;"
■
^Tennessee? Gas Transmissions,Co._':LJ
v7.
?'r
1 ^
/(Stone-& Webster Securities Corp and
,
"
&
V'
bo.,
jointly
1,000,000
t
Gas
(Bids
,
February 27
Texas
Utilities
Co._
(Bids
Weld
(Bids
EST)
*'
shares
340,000
^ American Telephone
'
(Offering
(Bids
;
•
(Friday)
Underwriting); $718,313,000
February 10- (Monday)
> ft
•
.
.
;
.
,
,ft
-f
'•
Shell
Transport & Trading Co., Ltd
~
V
(Offering'to holders
no
Southern
■t
■■
York
New
underwriting)
'///
>Jt
:
;
February 11
-Common
March 4
(Morgan
$30,000,000
Pierce.
«fe
Fenner
March 5
$35,000,000
to
ft
Preferred
Beanc)
$25,000,000
bidding.
Probable
February 12
-
Iowa Illinois Gas & Electric Co
•"
Union
Electric
Debentures
$9,000,000
(Lehman
Bros.,
J.
(Bids
to
invited;
be
Gas
6
$35,000,000
(Thursday)
System
(Bids
to
be
Debentures
$25,000,000
invited)
Indiana
&
Michigan
Southwest Gas
,
.
and
Electric
"ft
(Bids
1600, 250 Park
(Bids
Co
ft
.
to
Bonds
/
.
bidders:
Stone
&
Co.)
40,000
invited
up
17
(Tuesday)
Carolina Power & Light Co
(Bids
shares
.Bonds
$20,000,000
invited)
be
to
20
March
February
18
$10,000,000
to
(Monday)
(Thursday)
Bonds
Georgia Power Co
*
Niagara Mohawk Power Co.—
(Harnman
..Preferred
Ripley 8c Co. Inc.)
(Bids
11
a.m.
EST)
$21,500,000
to 11
'(Offering to stockholders—to be underwritten by Kidder,
Sierra
—Common
Co..—;
Pacific Power
•
Peabodv
&
Co.,
Inc.;
February 18
Gulf States Utilities
(Bids
365,693
Co
11
(Offering
shares
to
stockholders)
April
(Tuesday)
22
Consolidated Edison Co. of N. Y. Inc
I
Preferred
-
(Bids to
April 23
Co.,
Halsey,
Stuart
and Savard
&
&
White.
Co.,
Weld
&
(Bids
EST)
$4,140,000
'
Bonds
$3,000,000
a.m.
Jan. 20 filed
common
Dec.
(by amendment) 200,000 additional shares
Price—At market. Proceeds
stock (par $1).
Industries, Inc., Sinking Spring, Pa.
20 filed
227,500 shares of common stock (par 25
cents) to be offered in exchange for outstanding common
shares of Van Dorn Iron Works Co. Underwriter—None.
Home Owners Life Insurance Co.
Nov. 1 filed 50,000 shares of class A common stock to be
.
to be
June
$12,000,000
3
(Tuesday)
Appalachian Electric Power Co
Bonds
!
<
Northern
Illinois Gas
(First Boston. Corp.
Spur
Co—:
Preferred
and Giore, Forgan Co., jointly)
Distributing Co...—...
•
(Bids
11
a.m.
EST;
73,039
$10,000,000
—Common
shares
(Bids
to be invited)
June
Virginia Electrir*
10
$25,000,000
(Tuesday)
'~v
(Bide to be invited)
Lauderdale, Fla. Underwriter—None.
Horlac
Mines, Ltd.
(letter of notification) 300,000 shares of
Nov.
20
mon
stock.
Price—At
com¬
($1 per share). Proceeds—
To repay loan, to purchase equipment and
machinery
and for working capital. Office—1551-A Eglinton Ave.
West, Toronto 10, Ont., Canada. Underwriter—D'Amico
& Co., Inc., Buffalo, N. Y
X
par
Indiana & Michigan Electric Co. (2/13)
20 filed $25,000,000 of first mortgage bonds
Proceeds
—
due
For reduction of bank loans and
construction program.
for
Underwriter—To be determined
by competitive bidding. Probable bidders: Halsey, Stu¬
art & Co., Inc.; Harriman Ripley & Co. Inc.; The First
Corp.; Eastman Dillon, Union Securities & Co.
Bids—To be received up to noon (EST) on Feb. 13 at
30 Church St., New York 8, N. Y.
^ Institutional Financial Services Corp.
(N.
$20,000,000 face amount of investment
Jan. 20 filed
the
for
accumulation
of
shares
of
Y.)
pro¬
Institutional
Growth Fund.
Bonds
Co
invited)
public at $5 per share and 116,366 shares
common stock to be offered to stockholders
at $6 per share at the rate of two new shares for each
five shares held. Proceeds—For working capital. Office
grams
(Monday)
Improvement
(Bids
Equip. Trust Ctfs.
noon
Gas
(Wednesday)
Norfolk & Western Ry
(Wednesday)
be invited)
May 12
United
.(Bids
Bonds
Co.,
$13,500,000
Hart)
February 19
to
Lehman
Boston
$50,000,000
be invited)
Sierra Pacific Power Co..
Debentures
&
shares
(Tuesday)
$7,500,000
a.m.)
Montreal Transportation Commission, Que.
(Shields
57,362
Corp.;
—For investment.
1988.
(Wednesday)
April 16
ft
....Common
Securities
Dec.
$25,000,000
South Carolina Electric & Gas Co.__
Webster
★ Heritage Fund, Inc., New York
Bonds
$8,000,000
i
&
Langley &
Bids—Tentatively expected to be received
(EST) on Feb. 18.
Co. (jointly).
—Fort
(Tuesday)
.
..Common
Securities
be
March
.
Union
lift
Indianapolis Power & Light Co.
$25,000,000
(2/18)
(par $100). Proceeds—To repay bank loans. Underwriter
—To be determined by competitive
bidding. Probable
of class B
—Bonds
$20,000,000
EST)
noon
March
,
Corp.—
(Eastman Dillon,
(Monday)
Piper,
(Thursday)
(Bids noon. EST)
ft
Debentures
Co.
Hopwood) $3,500,000
February 13
10
March
Merrimack-Essex Electric ?Co
&
construc¬
bidders:
Gulf States Utilities Co.
Hofmann
—Bonds
March
Columbia
(Wednesday)
Mft Dain
,Jaffray &
;•
new
determined by competitive
Ave., New York 17, N. Y.
,
Co
—Preferred
Witter & Co.?
Red Owl Stores, Inc.___—.1—
To be
Bids—To be received up to 11 a.m.
(EST) on Feb. 20 at
office of Southern
Services, Inc., Room
offered to the
^
bank loans and for
—
Halsey, Stuart & Co. Inc.;
Dillon, Union Securities & Co.; Kuhn, Loeb &
Co.; Blyth & Co.,Tnc.; Lehman Brothers; Merrill Lynch,
Pierce, Fenner & Beane and Salomon Bros. & Hutzler.
of
(Wednesday)
•
.
Stanley & Co. 1 $150,000,000
(The First Boston Corp. and Dean
1,000,000 shares
v
Bonds
(Bids to be invited)
(Tuesday)
repay
Underwriter
Brothers and Equitable Securities Corp.
(jointly); Kuhn,
Loeb & Co.; Glore, Forgan & Co, and W. C.
.
Debentures
$1,500,000
Southern California Edison Co._
j
—Bonds
(Tuesday)
invited)
Lynch,
~
'
be
to
General Motors Acceptance Corp._____.Debentures
-•
(Monday)
Co.—i^
Public Service Electric & Gas Co
(Merrill
;«.•.*
.___•
(Johnston, Lemon & C0.1
Underwriter—None.
^ Gulf Power Co. (2/20)
$8,000,000 of first mortgage bonds due 1988.
Jan. 24 filed
Jan. 15 filed 75,000 shares of cumulative
preferred stock
Ohio Edison Co.—
,
shares—
$12,600,000
Oxygen Co.__._-_
•
.
; •
of
are to be sold at 25 cents per warrant
to organizers, incorporators,
management, and /or direc¬
tors. Price—$10 per share. Proceeds—For
working cap¬
ital and general corporate purposes.
Bonds
$5,000,000
(Bids to be invked). $10,000,000
,ft..>
(Bids
•
be. invited)
to
Iowa Public Service
& Telegraph Co._-Debentures
to? stpckhodeis-7ho
Guardian Insurance Corp., Baltimore, Md.
Aug. 16' filed 300,000 shares of common stock, of which
200,000 shares are to be publicly offered and the remain¬
ing 100,000 shares reserved for issuance upon exercise
.
March 3
February 7
$12,000,000
PST;
a.m.
Bonds
Virginia & Southwestern RR.
.Common
v
'
"■.."■J
!
9
shares
_^
11 a.fti.
(Thursday)
California Electric Power Col
?
:
(letter of notification) 44,400 shares of common
(par $1). Price—$6.75 per share. Proceeds—For
capital stock and unassigned surplus. Office — 119 W.
Rudisill Blvd., Fort Wayne, Ind. Underwriter—North¬
western Investment Inc., Fort
Wayne, Ind.
Eastman
Bonds
—
$30,000,000
EST)
noon
Debens.
$30,000,000
ifti.i—
Corp....
,
.
-Common
White,
7
stock
tion.
4 •
:
Great Northern Life Insurance Co.
Proceeds—To
'•")
February
Underwriter—
of warrants which
$29,000,000
Central IUinois Public Service Co
■■•//.■
Corp.
'
EST> $12,000,000
a.ni.
7
(Monday)
February 25/(Tuesday)
•
■''
Co......—Bonds
$25,000,000
Powell'7&,.Co/and HftCarroll & Co.)
&' Bond
1
$8,000,000
Gas
EST)
a.m.
Pennsylvania Electric CoJ2J1
■
Great Divide Oil
Oct.
Laboratories, IncL-—
(Alfred
x
of America _ft___l__Notes
-cbi£j.Lathrop; Herrick &rcilnger, Inc. and
Brooks & Co. and Barret, Fitch, North &
Co.) $273,498 .>
U
Electric &
Offering
Oct. 11 (letter of notification) 300,000 shares of common
stock (par 10 cents).
Price—$1 per share. Proceeds—
To pay balance on oil and gas
properties, and unsecured
notes and for drilling and working capital. Office—207
Equip. Trust Ctfs.
EST;' $3,435,000
Bonds
State
purchase of receivables. Un¬
derwriter—Morgan Stanley & Co., New York.
accelerated, expected on Feb. 11.
—If
Lake City, Utah.
Birkenmayer & Co., Denver, Cola
(Thursday)
February 24
hivesyng. CowIncft arid Security "ftft
<C6./>$299,000
"
;
■
Corp., New York City.
Co
■7
Southwest Grease & Oil Co> Ina—i.^.Nrnnmon
.
New York.
—
Price—To be supplied by amendment. Proceeds—
Newhouse Bldg., Salt
(Bids noon
,1
Kimbai;&£o.y% $1,000,000
x//.
Mo 1 hesor* Co,, Inc.!j
ftft.ft/ft ftu~<ft_ Debentures
ft;
-
share. Proceeds—To
Office
Baltimore & Ohio RR.—
February 3; (Monday)
1;.
Securities
(Bids- 11
^ipuey;^:-.;Uoft/jnc/i ;$'*5;000
Consumer? Finance Corp,
i;
per
general corporate purposes.
'
•
January 3 J(Friday)• -ft-.ft/ :•/ '
Young (Donald WA & Son*
„
Jan.
CALENDAR
_
•'ft-
Co., Inc.
payable, etc.;? and for working capital
Underwriter—Harris
*7 Seaboard Air Line RR.—_
__ft_
Ea uim Trust Ctfs.
.Vftftv f,r
>Bids aoon EST-i $5,445,000 vftft/v/.:-
!" ft'?/1 r'
★ General Motors Acceptance Corp. (2/11-18)
27 filed $150,000,000 of
21-year debentures due
,,.
(par 10 cents). Price—$3
February 20
^
General Credit, Inc.,
Washington, D. C.
Aug. 17, 1956 filed $2,000,000 of 6% subordinated sink¬
ing fund debentures, due Sept. 1, 1971, with detachable
warrants to purchase
160,000 shares of participating
preference stock, to be offered in units of $500 of deben¬
tures and 40 warrants. Price—$500
per unit. Proceeds—
For expansion and working capital Underwriter—Nons
named.
Offering to be made through selected dealers
Application is still pending with SEC.
For maturing debt and for
ISSUE
CSTH?,145.000
lscen
May
654, 101 Indiana Ave., N. W., Washington 28,
stock
January 30 (Thursday)
;;
•>V'tf
/
i
"ft- /
,
13 at Room
D. C., but bidding has been postponed.
1979.
and
Price—$3
Underwriter—To be determined by competitive
bidding
Probable bidders: Blyth & Co., Inc., and The First Bos¬
ton Corp.
(jointly); Kuhn, Loeb & Co., Lehman Brothers
and Glore, Forgan & Co.
(jointly). Bids
Had been
scheduled to be received up to 3:45 pjn.
(EDT) on
Nov. 27 (letter of notification)? 100,000 shares of common
reduce
.'per share." Proceeds—For exploration work
and work¬
'■
•
Electric Construction
*
Fluorspar Corp. of America '
General Aniline & Film Corp., New York
Jan. 14 filed 426,988 shares of common A stock
(no par)
and 1,537,500 shares of common B stock
(par $1). Pro¬
ceeds—To the Attorney General of the United States.
-
i
Freeman
—
%
(2/24)
and
Si, Englewood, Colo; Underwriter
American Underwriters, In
c.iEnglewood, Colo.
ft
First Leaseback
Corp., Washington, D. C.
Nov.27 filed? 500,000 shares of
class A common stock
(par five cents). Price — S5 per share.
Proceeds
To
purchase properties. < Underwrite*—Whltmore," Bruce
& Co.;
Washington, D.'-'C.""""-ft'" /'7
'
;; •
"
stock.
—
tional
<3395 S. Bannock
common
Laboratories, Inc.
Underwriter
Y.
motion
—■
Dec. 26 filed 470,000 shares of
N.
—
Aug. ,28 filed 200,000 shares of capital stock (par 10
cents). Price—$2.50 per share/ Proceeds—For sales pro¬
Aug. 26 (letter of notification) 100,000 shares of
common
"stock (par $1). Price —
$3 per share. Proceeds
Foi
'capital and surplus and for first year's deficit Office—
:I:
Office
McDonough,
Philipson & Co., Utica, N. Y.
Ave., Portland"11, Ore;" Underwriter—None.
First International Fire Insurance Co.
(letter of
a
$100 debenture and five shares of stock. Price—
$100 per unit. Proceeds—To repay $90,000 of notes and
for general corporate purposes.
Business—Financing ol
★ Far West Oil & Exploration Co.
r :V/,/ft/: */.J;J'
Jan. 21 (letter ef notification)
;2,550 shares of common
stock.
Price—At par ($100 per share).
Proceeds—For
'development ofbiland gas property. Office—4638 N. E.
-
29
of
♦Underwrite*—Whitney & Co.; Inc.; Washington, D. C.
/34th
,
notification) $250,000 of 6% sub¬
ordinated debentures due Jan. .1, 1968 and 12,500 shares
;of class A flpmmori stock (par $1) to be offered in units
(letter of notification)
.stock.'
Underwriter—To
.
Leases, Inc.
Famous
Nov.
Ore.
Goldberg is President.
w*.'
Janaf, Inc., Washington, D. C.
July 30 filed $10,000,000 of 5%-8% sinking fund deben¬
tures due Aug. 1, 1972 and 100,000 shares of common
stock (par 20 cents) to be offered in units of a $1,000
debenture and 10 shares of stock, or a $100 debenture
and
one
share of stock.
""ids or Debs.
Price-
r \
• - *
Continued
$25,000,000
\
•
on
^
page
56
The Commercial and Financial Chronicle
56
National Bowlero,
55
Continued from page
Dec.
capital im¬
retirement of present preferred shares;
construction of a shopping
center and other
provements; for
working capital, etc.
end for
1
Koeller Air
■
of Stock. Proceeds—For
for each 10 shares
$2 per share
•
.
.
1958
.'Thursday, January 30,
(560)
'l
,
Underwriter—Isione.
'
" ''
i"
'
" ''
.'
'
»
t
f
,
-
i
■
Products, Inc.
stock (par
equipment, repayment of
Business—Welding and cut¬
ting equipment.
Office — 253 Boulevard, Hasbrouck
Heights, N. J. Underwriter—Pierre Rossini Co., West-
capital expenditures,
loans and working capital.
For
wood, N. J.
■
' '/
•"
'
■
stock (par $l)l apd 451,740, warrants to pur¬
451,740 addmonal shores of commorvstock being
of debentures, one common share,
warrants to purchase four/common shares plus $1 in
cash. These units are to be Issued in exchange for each
common
...
chase
10-year debenture bonds,
offered in units of $50
9,000 shares of 4% non-cumulative preferred stock (par
$100) and 15,000 shares of common stock (par $10) to be
offered in units of $9,000 of bonds, 90 shares of preferred
stock and 150 shares of common stock.
Price—$19,500
(par $25) plus
on Jan. .31,
Purpose—To eliminate or reduce preferred divi¬
arrearages.
Underwriter—None. Statement effec¬
outstanding
1958.
dend
Skirball is President.
of
share
-
dividends.
accrued
operation of two
Underwriter—None. William N.
Proceeds—For erection and
unit.
per
bowling sports centers.
notification) 150,000 shares of common
five cents). Price—$2 per share. Proceeds—
25 (letter of
Nov
Inc., Cleveland, O.
$900,000 of 5%
filed
4
stock
preferred
offer
The
will expire
tive Dec. 13.
Pipeline Co. of America
Nov. 19 filed $40,000,000 of first mortgage pipeline
due 1977.
Price—To be supplied by amendment.
Natural Gas
bonds
Pro¬
ceeds— To reduce bank loans.
Underwriters— Dillon,
Read & Co. Inc. and Halsey, Stuart & Co. Inc., both
of New York. Offering—Temporarily postponed.
,
..Pleasant Valley Oil A Mining Corp.
Sept. 30 (letter of notification) 2,000,000 shares of com¬
mon stock.
Price—At par (five cents per share). Pro¬
ceeds
For geological studies, reserve for contingent
liability, for machinery and equipment and other re¬
serves.
Office
616 Judge Bldg., Salt Lake City, Utah.
Underwriter—Steven Randall & Co., Inc., New York. .
—
—
Laughlin Alloy Steel Co., Inc.
(letter of notification) 300,000 shares of common
stock. Price — At par (SI per share). Proceeds — For
+
Jan. 10
operating a steel mill. Office—710 South Fourth St., Las
Vegas, Nev. Underwriter — Stauffer Petroleum Corp.,
Oklahoma City, Okla,
f
,
,
^ Lefcourt Realty Corp., New York
Jan. 29 filed 250,000 shares of common
stock (par 2o
Price—To be supplied by amendment. Proceeds
—For development of property in Florida. Underwriter
—Frank M. Cryan Co., Inc., New York.
cents).
Co., Lorain, Ohio
Lorain Telephone
(letter of notification) 1,785 shares of common
stock (no par) to be offered for subscription by common
stockholders at the rate of one new share for each
13
Dec.
Price—$28 per share. Proceeds—
additions and improvements. Office—203 "West 9th
60.4364
For
shares held.
St., Lorain, Ohio.
•
Matheson
17
Jan.
Underwriter—None.
8299,000 of 6% sinking
1978. Price—Of debentures, issued
in denominations $1,000 and $500. Proceeds—Refunding
of outstanding Bonds, Debentures and increase working
capital. Office—-932 Paterson Plank Rd., East Ruther¬
ford, N. J. Underwriters—Mohawk Valley Investing Co.
Inc., Utica, N. Y.; Security & Bond Co., Lexington, Ky.
fund debentures due
it McLaughlin Restaurant Corp.
notification) 300,000 shares of common
stock. Price — At par ($1 per share). Proceeds — For
Jan. 24 (letter of
operating a restaurant business. Office—Cheney Bldg.,
139 N. Virginia St., Reno, Nev. Underwriter—None.
it Mercantile Acceptance Corp. of Calif.
17 (letter of notification) $21,000 of 6% 15-year
Price—At par. Proceeds—For working cap¬
ital. Office—333 Montgomery St., San Francisco, Calif.
Underwriter—Guardian Securities Corp., San Francisco,
Jan.
debentures.
Calif.
"•
.
Corp.
200,000 shares of common
($1 par value). Proceeds — For
Mineral Basin Mining
Dec. 30 (letter of notification)
stock.
Price —At
par
Office —1710 Hoge Bldg.,
mining expenses.
Seattle 4,
Wash. Underwriter—None.
•
Minneapolis Gas Co.
Jan. 2 filed 166,070 shares of common stock
(par $1)
being offered for subscription by common stockholders
at the rate of one new share for each 10 shares held
as
of Jan* 23, 1958: rights to expire on Feb. 5, 1958.
Price—$22.25 per share. Proceeds—For property addi¬
tions.
Underwriter—Kalman & Co., Inc., Minneapolis,
Minn.
;
.
,
.
it Montreal Transportation Commission
$13,500,000 of sinking fund debentures due
Feb. 15, 1978 (guaranteed by City of Montreal). Price—
To be supplied by amendment.
Proceeds—To purchase
new autobuses, construct new garage and for improve¬
ments and new equipment. Underwriters—Shields & Co.;
Halsey, Stuart & Co. Inc.; White, Weld & Co.; and
Savard & Hart; all of New York.
Jan. 29 filed
<
Roanoke, Va.
Nov. 18 (letter of notification) 60,000 shares of common
stock (par 40 cents.).. Price—$5 per share. Proceeds—
For purchase of land, construction and working capital.
Underwriter—Southeastern Securities Corp., New York.
Motel Co. of Roanoke, Inc.,
Motel Corp.
of Italy
Jan. 14 filed 20,000 shares of class A common stock and
10,000 shares of 7% cumulative convertible preferred,
to be sold publicly at a unit price of $101, representing
one share of preferred and two shares of common. Pro¬
ceeds—To be invested in the stock of Motels Americano,
an
Italian
land.
organization.
Springs, Mary¬
Office—Silver
Underwriter—None.
Multnomah Kennel Club,
Fairview, Ore.
unsecured debentures and
400,000 shares of class A non-voting common stock (par
$1> to be offered in units of $250 of debentures and 400
class A shares.
Price — $910 per unit.
Proceeds —To
loans and short-term unsecured notes. Underwriter
Stone, Moore & Co., Inc.; Denver, Colo.
Offering—Expected early in February.
:
■
repay bank
—
Municipal Investment Trust Fund, Inc. (N. Y.)
May 9 filed 5,000 units of undivided interests in Munic¬
ipal Investment Trust Fund, Series A. Price—At market.
Proceeds—For investment.
Sponsor—Ira Haupt & Co.,
/
:
:
New York.
•
■
;
Underwriter—To be determined by com¬
petitive bidding. Probable bidders: Halsey, Stuart & Co.
Inc.: Kiddei\ Peabody & Co. and Salomon Bros. & Hutzler (jointly); Blyth & Co., Inc.; The First Boston Corp;
and Glore, Forgan & Co. (jointly); Harriman Ripley &
Co. Inc. Bids—Tentatively scheduled to be received by
this company up to 11 a.m. (EST) on Feb. 20.
tion program.
Nichols, Inc., Exeter, N. H.
Nov. 14 filed 25,000 shares of common stock (no par).
Price—$27 per share. Proceeds—To repay short term
bank loans and for working capital.
Business — Sells
hatching eggs and day-old chicks. Underwriter—None.
George E. Coleman, Jr., is President.
North American Contracting
The Matthew
Biochemlcals, Inc.
(letter of notification) 100,000 shares of com¬
mon stock (par 10 cents).
Price—$3 per share. Proceeds
—For cost of plant and inventory and for general cor¬
10
A'ew York, N. Y.
Houston Title Bldg.,
Taylor & Co., Inc..
(letter of notification) 80,000 shares of common
Price—$2.50 per share. Proceeds—
equipment and research, development program and
.-working capital. Office—4130 Howard Ave.,. Kensing¬
stock (par 10 cents).
For
filed
27
(par $1).
President, and Marcus T. Baumann,
Treasurer.
•
Jan.
filed
10
Vice-President and
Stanford
•
456,813 shares of common stock
record Jan. 28, on
($10 par
subscription by stockholders of
the basis of one new share for each
eight shares then held (with an oversubscription privi¬
lege); rights to expire Feb. 11. Proceeds—Completion
of payment of 1957 construction expenditures, including
repayment of remaining bank loans incurred for that
purpose, also acquisition of distribution properties and
purchase of securities issued by subsidiaries for their
construction costs. Of the $105,000,000 construction out¬
subsidiaries in 1957 ap¬
proximately $39,000,000 were not made and have been
re-scheduled for 1958. Price—$47.75 per share. Under¬
writer—Blyth & Co., Inc., San Francisco and New York.
lays planned by company and
Nuclear Science &
Engineering Corp.
■>«
Dec.
preferred
stock, series A (par $100), 12,410 shares of 6% cumula¬
tive preferred stock, series AA (par $100) and 364,000
shares of common stock (par 81) to be offered in units
of
preferred share and 26 common shares.
one
Price
-—
$126 per unit. Proceeds — Together with proceeds of
debt financing, will be used to purchase hotel site, con¬
struction, furnishing and equipment of the hotel. Un¬
derwater
Compania Financiera de Inversiones, Inc.,
San Juan, P. R. Statement effective Jan. 17.
—
$15
16
per
Champaign, III.
120,000 shares of common stock. Price—
share. Proceeds—To increase capital and surplus.
filed
Underwriter—None.
Public Service Electric & Gas Co.
•
: \
(3/4)
stock
(par $100). Price—To be supplied by amendment. Pro¬
ceeds
To repay bank loans and for new construction.
May 29 filed 250.000 shares of cumulated preferred
Corp., to
capital
Underwriter—Hayden, Stone & Co., New York, Offer-,
ing—Temporarily postponed because of market condi¬
Norden-Ketay
indebtedness to
purchase additional equipment and for working
—
Merrill
Lynch, Pierce, Fenner & Beane,
Negotiations to sell these securities were dis¬
continued last June because of unsettled market condi¬
New York.
but have now been resumed.
tions at that time,
Public Savings
Life Insurance Co.
-
113,000 shares of common stock (par 50
cents). Price—To be supplied by amendment. Proceeds
—To' Public Savings Insurance Co., the selling stock¬
Nov.
filed
29
holder.
Office—Charleston, S. C. Underwriter—None, ;
Red Owl
Jan.
Stores, Inc.
(2/12)
of convertible subordinated de¬
due 1978. Price—To be supplied by amendment.
20 filed $3,500,000
bentures
Proceeds—For expansion program.
man
Underwriters—Leh¬
Brothers; J. M. Dain & Co., Inc.; and Piper, Jaffray
& Hopwood.
Reichhold
•
Sept. 20 filed 100,000 shares of common stock (par 25
cents). Price—To be supplied by amendment. Proceeds
prepay
Hotel Corp., San Juan, P. R.
12 filed 1,590 shares of 6% cumulative
Ponce
Underwriter
Natural Gas Co.
value) being offered for
—To
'
subsequently withdrawn.
—
-
Northern
Underwriters—First Washington Corp. and The
Corp., both of Washington, D. C. Change of
ton, Md.
Name—Formerly Acme Tool & Engineering Corp. Letter
Dec.
Phoenix, Ariz.
300,000 shares of class B common stock
Price—$5 per share. Proceeds—For working
capital and other corporate purposes.
Underwriter—
None.
Sales to be made through Eugene M. Rosenson,
Nov.
Oct.
10 filed
Price—To
be
Chemcials,
Inc.
200,000 shares of common stock (par $1).
supplied by amendment. Proceeds—For
expansion program and working capital. Underwriter—
Blyth & Co., Inc., New York. Offering—Postponed tem¬
porarily. '
r
Resolute Bay
tions.
Trading Co., Ltd.
(letter of notification) 30,000 shares of common
stock. Price—At par ($5 per share). Proceeds—For work¬
Oct. 29
Oil & Mineral Operations,
Inc.
Nov. 4 (letter of notification) 100,000 shares of common
stock (par $1).
Price—$2.50 per share. Proceeds—For
development of oil and mineral properties. Office—208
Wright Bldg., Tulsa, Okla. Underwriter—Universal Se¬
curities Co., 201 Enterprise Bldg., Tulsa 3, Okla.
'
Pan American Tool
Oct. 28 filed
Co., Houston, Texas
165,000 shares of common stock
to be offered in blocks of not less than 3,000
'
'
(par $1),
shares. Price
be
Pennsylvania Electric Co. (2/24)
$29,000,000 first mortgage bonds, due March
1, 1988. Proceeds—To be used, along with proceeds of
previously-authorized sale of 500,000 shares of common
stock to parent company, for repayment of short-term
Jan. 16 filed
notes
issued
to
finance
1957
construction program
ing capital, etc. Business—Purchase and
Office—St. John, N. B., Canada.
dities.
Irving Weis & Co., New York.
Resolite
and
part of $41,500,000 construction outlay scheduled
for 1958.
Underwriter—To be determined by competi¬
Co.
Bids—Tentatively scheduled to be re¬
to 11 a.m. (EST) on Feb. 24.
"
- : ; ;
(jointly),
ceived up
Peoples Security Investment Co.
Oct. 28 filed 1,000,000 preorganization subscriptions to
class A voting common stock and 250,000 preorganization
subscriptions to class B non-voting common stock to be
offered in units of four class A shares and one class B
the purchaser agreeing to donate each class B
to the Peoples Security Foundation for Christian
Education, to be incorporated as a non-profit corpora¬
tion. Price—$2 per share. Proceeds — For capital and
surplus to finance a proposed insurance company to be
named Peoples Security & Endowment Co. of America
Office
Montgomery, Ala. Underwriter — None. T. J.
—
Patterson
is
President.
Pittsburgh
shares of common stock to be offered
subscription by stockholders of record Dec. 1, 195T
in the ratio of 3% new shares for each 10 shares held;
unsubscribed shares to be offered to public. Price—$10
share. Proceeds—To pay $100,000 outstanding obli¬
gations and for improvement and rehabilitation of plant
and facilities. Business—Fiberglass panels. Underwriter
per
—None.
/ Rocky Mountain Quarter
stock.
pay
Brewing Co., Pittsburgh, Pa.
Nov, 15 filed $5,646,750 of 5% sinking fund income sub¬
31, 1992; 112,935 shares of
Racing Association
(letter of notification) 300,000 shares of common
($1 per share), Proceeds—To re¬
Oct. 31
Price—At par
outstnding indebtedness.
Underwriter—R. B. Ford Co.,
Office
—
Littleton, Colo.
Windover Road, Memphis,
Tenn,
Royal Dutch Petroleum Co.
Dec.
7,602,285 shares of capital stock being of¬
subscription by stockholders of record Jan. 17,
the basis of one new share for each eight shares
20 filed
fered for
1958
on
rights to expire on Feb. 10, Price — $30 or 114
guilders per share. Proceeds—To be made availale to the
held:
Royal-Shell Group of companies for their capital and
exploration expenditure programs. Underwriter—Mor¬
gan Stanley & Co., New York, heads list of American
underwriters.
,
•
Schering Corp., Bloomfield, N. J.
•
•••
,
filed 278,983 shares of 5% cumulative con¬
vertible preferred stock (par $30) and 418,475 shares of
common
stock, (par $1) to be issued in exchange for
stock of White Laboratories, Inc. (which is to be merged
with Schering Corp. effective Sept. 19, 1957)
on the
basis of one share of preferred stock and IV2 shares of
common stock for each White class A or class B com¬
Sept.
mon
19
share
held.
Underwriter—None.
Scientific Industries, Inc.
Dec. 27 (letter of notification) $120,000 6% convertible
sinking fund debentures,/due Feb. 1, 1968,/ convertible,
except as provided in case of redemption, into common
,
ordinated debentures due Oct.
Underwriter-
Corp., Zelienople, Pa.
Dec. 6 filed 20,000
•
tive bidding., Probable bidders: Halsey, Stuart & Co.
Inc.; The First Boston Corp. and Harriman Ripley & Co.
Inc. (jointly); Equitable Securities Corp.; Kidder, Peabody & Co., Merrill Lynch, Pierce, Fenner & Beane,
Eastman Dillon, Union Securities & Co. and White, Weld
&
sale of commo¬
•
for
supplied by amendment. Proceeds —• To dis¬
charge trade accounts payable, to buy tools and equip¬
ment and for working capital. Underwriter—None.
—To
share
For investment.
Polytronic Research, Inc.
Professional Life & Casualty Co.,
North American Finance Co.,
share,
(by amendment) 300,000 additional shares
(par $1>. Price—At market. Proceeds—
porate purposes. Office—Room 202
Houston
Tev
Underwriter—Scott
Securi¬
Corp., Washington, D. C. and Ross
•
Nov. 4
ties, Inc., New York, N. Y.
it Mutual Investment Fund, Inc., New York
National
Corp.
(letter of notification) 169,500 shares of common
stock (par 10 cents). Price—$1.75 per share. Proceeds—
For working capital and expansion. Office—1526 Con¬
necticut Ave., N. W. Washington 6, D. C. Underwriters—
Jan. 24 filed
of capital stock
Sept.
due
and for construc¬
to pay
Dec. 26 filed $250,000 of 10%
•
Proceeds—To repay bank loans
1988.
Dec. 27
(2/3)
inc.
Co.,
(letter of notification)
it New York State Electric & Gas Co. (2/20)
Jan. 24 filed $25,000,000 of first mortgage bonds
.Volume 187
Number 5712
stock
( 5 cent
par
—At
par.
...
The Commercial and Financial Chronicle
value) at a price of SI per share. Price
—
For expansion of plant in the
Proceeds
manufacture
of
laboratory. and
scientific
15
—
Park
St., Springfield, Mass.
Willis E. Burnside &
Underwriter
Co., Inc., New York City.
—
-
Price—To
be
(par $10)/
by amendment. 'Proceeds—For
Office—Salt Lake City, Utah. Under^
supplied
working capital.
Transport & Trading Co., Ltd. (2/10)
filed a maximum of $12,600,000 of New York
20
Shares (representing
like amount of ordinary shares)
subscription by holders of ordinary
a
being offered for
shares, including stock represented by New York shares
of record Jan. 17, 1958, on a l-ior-10 share basis; rights
to expire March 3.
This represents 10% of the total
offering by the company, which 10% is to be offered for
subscription by American l^sidents. Price—5 pounds,
ten
shillings: $15.40 at current official exchange
Proceeds
None in
—
the
For
exploration programs.
United
States.
rate.
Underwriter
Statement effective Jan.
—
20.
30
filed
$9i>O,0OO
first
of
mortgage
sinking fund
bonds clue Dec. 1, 1973. -Price—At par.
Proceeds—To
Tepay indebtedness.1 Underwriter — Sheraton Securities
Corp.,
a
legislation
■
by
.
be offered for
the
of
basis
be
.
subscription by
one
new
$10) to
stockholders
common
on
subsidiary^
'
"
•
publicly at $1:20 per share and 15,720 shares are to be>
offered to certain individuals under options. Proceeds—
St., N. W., Washington, D. C.
Co., New York City. -
share, for each four shares held
supplied by amendment Proceeds
—
To
retire short term bank loans and tor working capital and
Office
general corporate purposes.
Underwriter—The First Boston
—
Rochester, N. Y
Corp., New York. Offer¬
Tekoll - Corp., Dallas, Texas
9 filed 677,408 shares of common stock,
of which
to be issued for the account of selling
stockholders and the remaining 300,000 shares issued
from time to time in exchange for oil and gas properties.
are
Of the 377,408 shares,
132,558 shares, 61,392 shares and
47,606 shares, respectively, are to be issued as dividends
Co., Mountain Valley Oil
Office — 3612 Quesada
Underwriter—Wagner &
(Canada)
Western Copperada Mining Corp.
Aug. 30 (letter of notification) 300,000 shares of common
Stock. Price—At par ($1 per share). Proceeds—For de-r'
velopment and exploratory work, drilling costs and sur¬
vey, and for working capital.
Office — 1205 Phillips
Square, Montreal, Canada. Underwrite!;—Jean R. Vedita.
Co., Inc., New York.
Dec.
377,408 shares
57
(561)
ruy
For general corporate purposes.
Taylor Instrument Companies
Worldmark Press, Inc.
•
Dec. 20
(letter of notification) 150,000 shares of common
(par 10 cents). Price—$2 per share. Proceeds—
For working capital and general corporate purposes.
Office—207 East 43rd Street, New York, N. Y.
Under¬
writer—J. A. Winston & Co., Inc., New York.
stock
to stockholders of Texolina Oil
Corp. and Trigg Drilling Co.; while 57,239 are to be of¬
immediately to the public, while the balance oi
fered
78,613
are to be similarly offered m the neai
Price—To be supplied by amendment. Proceed*
shares
future.
—To selling stockholders.
Sheraton Properties, Inc., Boston, Mass.
Deo.
necessary
Oct. 1 filed 99,195 shares oi common stock (par
"Shell"
Dec.
of
ing—Indefinitely postponed.
writer—None.
•
passing
,■
Price—To
Sentinel Security Life Insurance Co.
27 filed 5,000 shares of common stock
Nov.
pending
up
Congress.
instruments
and to build up company's new electronics division. Of¬
fice
Held
•
•
Underwriter—None.
Tennessee Gas Transmission Co.
(2/4)
y ;
Jan. 15 filed 1,000,000 shares of common stock (par $5).
Price—To be supplied by amendment. Proceeds—To re¬
Young (Donald W.) & Son, Inc. (1/31)
14 (letter of notification) $75,000 of 10-year 6%
debentures due Oct. 1, 1967, with common stock war¬
rants to purchase 7,500 shares of 10-cent par common
stock at $1 per share.
Price—$100 per unit of a $100
debenture and one warrant.
Proceeds—To repay short
term debt and for working capital. Office—Stockholm.
N. Y. Underwriter — Sherry, Maloney & Co., Inc., New
York.
V'Nov.
.
short-term bank loans. Underwriters—Stone & Web¬
White, Weld & Co., both of New
York-v.,/ ,/ ■■■>.',•
pay
,
ster Securities Corp. and
Shopping Centers Corp., Pittsburgh, Pa.
■
Dec. 17 filed 50,000 shares of common stock
(par $2.50)
$2,500,000 of debenture bonds to be offered in units
of one share of stock and one $50 bond. Price—$52.65
per unit. Proceeds — For1, construction, ownership and
management of shopping centers, luxury hotels and other
commercial property./ Underwriter — None. Offering
to be made through Akiba Zilberberg, 5857 Phillips Ave.,
Pittsburgh 19, Pa.,' the company's President.
V <
Texam Oil Corp., San Antonio,
and
—To
be supplied by amendment. Proceeds—To repay
indebtedness, fpr acquisition and exploration of oil and
gas leases, for drilling and completion of wells, and foi
other corporate purooses. Underwriter—None.
Texas
selling stockholders. Underwriter—Merrill Lynch, Pierce,
Fenner & Beane, New York. Offering — Indefinitely
postponed.
.v...:;- / .t.;■ :/./■;;/
.
• Southern California Edison Co. (2 11)
27
Jan.
stoek
filed
1,000,000 shares of cumulative preferred
Price — To be supplied by amendment.
(par $25).
Proceeds—To. repay bank loans and for construction
pro¬
Underwriters—The First Boston Corp., New York;
gram.
and Dean Witter &
Co., Los Angeles, Calif.
on
23
(letter of notification) $300,000 of 6% second
mortgage>serial bonds (with common stock purchase
warrants). Price—At par (in denominations of $1,000
eacfi).
" Proceed®—For
payment of demand notes pay¬
working-capital. Offioe—2301 Huntsville Road,
Birmingham, Ala. Underwriter—None.
able and
•
Southern
Oxygen Co.
(2/10-14)
Jan. 20 filed $1,500,000 convertible subordinated deben¬
tures due in 1968. Proceeds—Purchase of equipment and
new
for
share
expire
each
Tourist Industry
bentures
at
par,
in denominations
Southwest Grease &
Oil Co.,
stockholders about Feb. 3
on
a
l-for-4
basis. Price
—$7.75
per share. Proceeds—For the acquisition of Battenfeld Grease & Oil Corp. Office — 220 W. Waterman
St, Wichita, Kan} Underwriters — Small-Milburn Co.;
Lathrop, Herrick & dinger, Inc.; and Brooks & Co. of
Wichita, Kan. and Barret, Fitch, North & Co., Kansas
City, Mo.
'Sovereign Resources, Inc.
Nov. 19 (leftter of notification) 1,500 shares of 7% cumu¬
lative preferred stock. Price—At par ($100 per share).
Proceeds—For construction, payment of promissory note
and
working capital. Office—3309 Winthrop St., Fort
Worth, Tex. Underwriter—Reilly, Hoffman & Sweehey,
Inc., New York, N. Y.
Offering—Delayed.
Co., Inc., Kansas City, Mo.
Nov. 27 filed $650,000 of 20-year 0% convertible de¬
bentures due: Dec. 15, 1977. Price—At par (in denom¬
inations of $1,000 each). Proceeds—For working capita]
and
to
reduce
for loans to or invested in hotels, re¬
inland transport. Office—Jerusalem, Israel. Un¬
derwriter—None.
bank
loans.
Underwriter—White
&
Co.,
Offering—Expected this week.
Superior Commercial Corp., New York
Sept. 16 filed 256,300 shares of class A common stock
(par one cent), of which 233,000 shares are to be sold
for account of the company and 23,300 shares for the
account of Ben Degaetano, President of the underwriter.
Price—$1.50 per share. Proceeds—For working capital
to be used in realty financing activities. Former Name—
Allstate Commercial Corp.
Underwriter—Midland Se¬
curities, Inc., New York.
;
•,
Owens
Underwriter—None.
Al¬
Manufacturing Co.
%% i
Dec. 5 (letter ofi notification) 15,000 shares of common
stock (par $5). Price — $4.50 per share. Proceeds — For
working capital and payment of current liabilities. Ad¬
dress—Wrigfltsboro section, 3 miles north of Wilmington,
N. C. Underwriter — Selected Investments, Wilmington,
.
;
.
\
■
,
Atlantic City Electric Co.
Jan. 20 it was reported
y:'
Ulrich Manufacturing Co.
Blyth & Co., Inc.; The First Boston
Co. (jointly); White, Weld & Co.
•
United States Sulphur Corp.
ley & Co.
America, Portland, Oro.
amendment. Graham Al¬
bert Griswold of Portland. Ore., is
company
may
issue
and sell
competitive bidding. Prob¬
Halsey, Stuart & Co. Inc.; White, Weld &
Corp. (jointly); Harriman Rip¬
Inc. and Alex. Brown & Sons (jointly); Kuhn,
Registration—Expected early in February.
Baltimore & Ohio RR.
Bids
will
be
received by
President.
Washington National Development Corp.
Oct 2 (letter of notification) 50,000 shares of common
stock (par $1) ef which 34,280 shares are to be offered
(2/20)
the company
at 2 Wall St.,
N. Y., up to noon (EST) on Feb. 20 for the
purchase from it of $3,435,000 equipment trust certifi¬
cates. Probable bidders: Halsey, Stuart & Co. Inc.; Salo¬
New York 5,
Bros. & Hutzler.
if Boston Edison Co.
;
Jan. 27 it was reported company may issue
■
-
and sell in
additional
first mortgage bonds and preferred stock. Proceeds—To
repay bank loans and for construction program.
Underwriter—For bonds to be determined by company, with
prospective bidders including Halsey, Stuart & Co. Inc.;
the second or third
The
First
Boston
quarter of this year some
White, Weld & Co.; Lehman
Ripley & Co. Inc. (jointly). For
Corp.;
preferred stock, The First Boston Corp.,
New York.
*
Brooklyn Union Gas Co.
Nov. 25 it was
announced that company expects to issue
$22,000,000 of first mortgage bonds next April
May. Proceeds—To repay bank loans and for con¬
and sell
or
struction program.
-Underwriter—To be determined by
competitive bidding. Probable bidders: Halsey, Stuart
& Co. Inc.; Lehman Brothers; Blyth & Co., Inc., and
F. S. Moseley & Co. (jointly); Merrill Lynch, Pierce,
Fenner & Beane; Harriman Ripley & Co. Inc. and The
First Boston Corp. (jointly); White, Weld & Co.
April 30 filed 1,250,000 shares of common stock (par 10
cents). Price—To be supplied by amendment (expected
to be $1 per share). Proceeds—For exploration purpose*
Offering-
Electric Co.
reported
Co. and The First Boston
one
Equitable. Securities Corp., Nashville, Tenn.
was
able bidders:
and
cent).
1
it
$30,000,000 of first mortgage bonds early in March.
Proceeds—For construction program. Underwriter — For
None.
Oct. 8 filed
Underwriter—To be named by
16
&
about
Surinam Corp., Houston, Tex.
Oct. 21 filed 10,000,000 shares of common
Tax Exempt Bond Fund, Inc., Washington, D. C.
June 20 filed 40,000 shares of common stock. Price—$25
per share. Proceeds — For investment. Underwriter-
Gas
Baltimore
Jan.
Corp. and Drexel &
and Shields & Co.
■'
(jointly).
Brothers and Harriman
Sept. 24 filed $600,0Q0 of 6% sinking fund debenture*
and 30,000 shares of class A common stock (par $1) to
be offered in units of $500 of debentures and 25 shares of
stock. Price—To be supplied by amendment. Proceeds—
To reduce bank loans, to repay all or part of an out¬
standing 5% term loan and/or provide additional work¬
ing capital. Office—Roanoke, 111. Underwriter—Whit*
& Co., St. Louis, Mo., on a best-efforts basis.
Uranium Corp. of
plans to issue and sell
be
—To
Jan
stock (pai
Price—$1 per share. Proceeds—For explora¬
tion and exploitation of. oil, gas and sulphur properties
Underwriter—T. J. Campbell Investment Co., Inc., Hous¬
ton, Tex.
company
$10,000,000 of first mortgage bonds. Underwriter
determined by competitive bidding. Probable
bidders: Halsey, Stuart & Co. Inc.; Eastman Dillon, Union
Securities & Co. and Smith, Barney & Co. (jointly);
in 1958
1,500,000 shares of common stock (par on*
Price—$1 per share. Proceeds—For plant rental,
etc.; to retire corporate notes; for core drilling; foi
working capital; and for other exploration and develop¬
ment work.
Office — Houston, Texas.
Underwriter —
cent).
before
.
mon
of Waterloo, la., is President.
Trask
N. C.
determined).
Salomon Bros. & Hutzler and Lehman
Loeb & Co.
Uranium Mining Corp.
3,000,000 shares of common stock (par one
mill). Price—25 cents per share. Proceeds—For land
acquisition, exploratory work, working capital, reserves,
E.
—
Brothers, both of New York. Offering—Expected
July 1. v., ■ :;.v :
/ J'
Trans-America
fred
plans to issue and sell
additional debentures (amount not yet
.
Nov. 6 filed
and other corporate purposes.
Investment Co.
^Associates
Jan. 23 it was reported company
bonds, to be determined by
shares of common stock (no par).
Price—$4 per share. Proceeds — For working capital.
Office—442 W. California Road, Fort Wayne, Ind. Un¬
Dec. 20 filed 250,000
Stuart-Hall
St. Louis, Mo.
of $1,000 and multiples
Town & Country Securities Corp.
.
Inc. (2/3)
Jan. 17 (letter of notification) 35,290 shares of common
stock (par $7.50) to be offered for subscription by com¬
•
Development Corp. Ltd.
real estate, also
sorts or
Appalachian Electric Power Co. (6/3)
reported that this company, a subsidiary
of American Gas & Electric Co., plans to issue and sell
$25,000,000 of first mortgage bonds. Proceeds—To repay
bank loans and for construction program. Underwrite*
—To be determined by competitive bidding.
Probable
bidders: Halsey, Stuart & Co. Inc.; The First Boston^
Corp.; Kuhn, Loeb & Co. and Eastman Dillon, Union
Securities & Co.-(jointly); Harriman Ripley & Co. Inc.
Bids—Tentatively expected to be received on June 3.
held; warrants
Proceeds—To acquire mortgages or other liens
thereof.
derwriter—None.
mon
then
$2,250,000 7% perpetual subordinated de¬
(4% fixed interest and. 3% of earned), to be
Underwriter
•
shares
14 filed
on
Dillon, Union Securities & Co.,
seven
on
company
Dec. 2, it was
Underwriters
Feb. 7, 1958. Price—$6.15 per share. Pro¬
ceeds—For working capital and surplus. Office—2 Gate¬
way Center, Pittsburgh 22, Pa. Underwriter—McKelvy
& Co., Pittsburgh, Pa.
to
*
plans to sell approxi¬
mately $3,500,000 convertible debentures. Underwriters
—To be determined by competitive bidding.
Probable
bidders: Van Alstyne, Noel & Co. and Crowell, Weedon
& Co. (jointly). Offering—Expected in March.
American Electronics, Inc.
Dec. 30 it was reported
some
stockholders of record Jan. 8,
sold
Eastman
■■.■-/•••V}.-
y-.v;v C: •./■
40,000 shares of common stock (par $1).
Price—To be supplied by amendment. Proceeds—To re¬
pay short-term bank loans and for construction program.
—
of common stock
notification) 38,642 shares of common
$1) being offered for subscription by common
1958, on the basis of one
stock (par
• Southwest Gas Corp.
New York.
J/
(2/4),
shares
Dec. 27 (letter of
Jan.
(2/13)
340,000
Feb. 4.
capital. Price—To be supplied by amendment. Un¬
derwriter—Johnston, Lemon & Co., Washington, D. C.
22 filed
9
Thrift Investment Corp.
♦
new
Jan*
Utilities Co.
filed
(no par
value).; Proceeds — For construction program of sub¬
sidiaries, estimated at $78,271,000 in 1958 and $92,763,000
in 1959. Underwriter—To be determined by competitive
bidding. Probable bidders: Kidder, Peabody & Co. and
Merrill Lynch, Pierce, Fenner & Beane (jointly); The
First Boston Corp. and Blyth & Co., Inc. (jointly); The
First Southwest Corp., Rauscher, Pierce & Co. and Dallas
Securities Co. (jointly^; Lehman Bros, and Bear, Stearns
& Co.
(jointly); Eastman Dillon, Union Securities &
Co. Bids—Expected to be received up to 11 a.tti. (EST)
Jan.
Southern Electric Steel Co.
Dec.
t
May 29 filed 300';000 shares of common stock (par $1),
to be offered for-subscription by common stockholder*
on a basis of tWo new shares for each share held. Pric«
Simplicity Pattern Co. Inc.
Oct. 10 filed 155,000 shares of common stock (par $1).
Price—To be supplied by amendment. Proceeds—To two
Texas
if Carolina Power
& Light Co. (3/18)
it was announced
22
that company plans to issue
$20,000,000 of first mortgage bonds due 1988.
Underwriter—To be determined by competitive bidding.
Probable bidders: Halsey, Stuart & Co. Inc.; Kidder, Peasell
body & Co. and
Merrill Lynch, Pierce, Fenner
& Beane
Brothers; Kuhn, Loeb & Co. and A. C.
(jointly); W. C. Langley & Co. and
The First Boston Corp. (jointly); Equitable Securities
Corp.
Bids—Tentatively scheduled to be received on
(jointly); Lehman
Allyn & Co. Inc.
March
18.
.
Continued
on
page
5S
58
The Commercial and Financial Chronicle
(562)
Continued
jrom
page
57
it Central Hudson Gas & Electric
Jan. 22 it
in June
reported company plans to issue and sell
July 1958 $18,000,000 of first mortgage bonds.
was
or
This may be done
privately.
^Central Illinois Light Co.
Jan. 22 it
announced stockholders will vote March
was
27 on increasing the authorized preferred stock
(par
$100) from 250,000 shares to 500,000 shares. Underwriter
—Eastman Dillon, Union Securities & Co., New York.
announced company
plans to sell about
$5,000,000 of first mortgage bonds sometime after the
turn of the year. Proceeds—To repay advances made by
Peoples Gas Light & Coke Co., the parent. Underwriters
—Probably Dillon, Read & Co. Inc. and Halsey, Stuart
Co.
&
was
Inc.
Chicago & North Western Ry. (1/30)
Bids are expected to be received by the company up to
noon (CST) on Jan. 30 for the purchase from it of $2,145,000 equipment trust certificates to mature annually
from Jan. 1, 1959 to 1973, inclusive.
Probable bidders:
Halsey, Stuart & Co. Inc.; Salomon Bros. & Hutzler.
Chicago Rock Island & Pacific RR.
Dec. 18 it was announced company plans to issue and
sell in late Spring of 1958 between $16,000,000 to $20,000,000 first mortgage bonds. Underwriter—Te be de¬
termined by competitive
bidding.
Probable bidders:
Halsey, Stuart
Co.; Eastman Dillon, Union Securities
& Co. and Blyth & Co. (jointly); First Boston Corp.;
Kuhn, Loeb & Co.
8
it
was
1958 to sell
reported company plans in
about $15,000,000 of first mortgage bonds. Proceeds—
To repay bank loans and for construction program.
Underwriter—To be determined by competitive bidding.
Probable
bidders:
Halsey, Stuart & Co. Inc.; Morgan
Stanley & Co. and W. E. Hutton & Co. (jointly); Blyth
& Co. Inc. and The First Boston Corp. (jointly); Mer¬
rill Lynch, Pierce, Fenner & Beane and Lehman Bros,
(jointly); Eastman Dillon, Union Securities & Co. and
White, Weld & Co. (jointly).
Citizens & Southern National Bank of
Savannah, Ga.
Jan. 15 it
was
Jan.
plans to issue and sell
16 it was reported company
Equitable Securities' Corp.
reported Bank plans to offer to its stock¬
holders the privilege of subscribing for 100,000 additional
shares of capital stock in about 60 days. Underwriter—
None.
sell
$25,000,000 of 25-year debentures.
issue
and
Underwriter—To
be determined
by competitive bidding. Probable, bidders:
Halsey, Stuart & Co.; Morgan Stanley & Co.; Merrill
Lynch, Pierce, Fenner & Beane and White, Weld &
Co. (jointly). Bids—Tentatively expected to be received
on
March 6.
was
Dec. 9 it was reported company
plans to issue and sell
250,000 shares of common stock. Under¬
Dillon, Read & Co. Inc. and The Ohio Co.
in 1958 about
—
(jointly).
•
Consolidated Edison Co. of N. Y., Inc. (4/22)
Jan. 28 directors authorized an issue of $50,000,000 first
and
refunding mortgage bonds. Proceeds—To repay bank
Underwriter—To be determined through compet¬
itive bidding, probable bidders: Halsey, Stuart & Co.
Inc.; Morgan Stanley & Co.; The First Boston Corp. Bids
—To be received on April 22.
loans.
Consolidated Natural Gas Co.
Company reportedly plans to issue and sell approxi¬
mately $45,000,000 debentures. Underwriters—To be de¬
termined
by
competitive
bidding.
Probable
bidders:
Halsey, Stuart & Co.; White, Weld & Co. and Paine,
Webber, Jackson & Curtis (jointly); Morgan Stanley &
Co. and First Boston Corp. (jointly).
Delaware County National Bank, Chester, Pa.
Jan. 15 Bank offered to its stockholders of record Jan.
14 the right to subscribe on or before Feb. 4 for
11,000
additional shares of capital stock on a l-for-10 basis
(with an oversubscription privilege). Price — $30 per
share. Proceeds—To increase capital and surplus. Under¬
writer—Drexei & Co., Philadelphia, Pa.
★ Delaware Power & Light Co.
was reported company plans to issue and sell
$10,000,000 of first mortgage bonds due 1988. Proceeds
Jan. 22 it
—To repay bank
loans and for construction
program.
Underwriter—To be determined by competitive bidding.
Probable bidders: Halsey, Stuart & Co. Inc.;
White, Weld
& Co. and Shields & Co.
(jointly); Eastman Dillon, Union
Securities & Co.; The First Boston Corp. and Blyth &
Co., Inc. (jointly); Merrill Lynch, Pierce, Fenner &
Beane and Kidder, Peabody & Co. (jointly). OfferingExpected in June.
Duquesne Light Co
Dec. 12 it
.
reported company plans to issue and sell
around $15,000,000 of first
mortgage bonds due 1988.
Proceeds — To repay bank loans and for construction
was
program.
Underwriter—To be determined by
tive bidding. Probable bidders:
competi¬
Halsey, Stuart & Co.
Inc.; The First Boston Corp.; White, Weld & Co.; Glore,
Forgan & Co.; Kuhn, Loeb & Co.; Eastman Dillon, Union
Securities & Co., and A. C. Allyn & Co. Inc.
(jointly);
Drexei & Co. and Equitable Securities
Corp. (jointly).
Offering—Planned in first half of 1958.
'
plans to issue and sell
$6,000,000 of fir$t .mortgage bonds in the Spring °£ 1958.
Underwriter—To» be v determined ^ by competitive < bid7
ding. Probable>bidders: Halsey,- Stuart & Co. Inc.; Lee
Higginson Corp.; Equitable Securities Corp. .and Eastman
Dillon, Union ^Securities & Co. (jointly); Kidder, Pea¬
body & Co. >and Stone & Webster Securities Corp:
(jointly); White, Weld & Co.; Salomon Bros. & Hutzler.
it New York, Chicago '& St. Louis RR.
(2/4)
:
c
-
Bids will be srebdived by. the company up to noon
(EST)
tor the purchase from it Of $5,130,000 equip¬
Feb. 4
on
trust'certificate's
ment
to
mature
semi-annually from
Aug. 15, 1958 torFeb. 15; 1973, inclusive. Probable bid¬
ders: Halsey/Stuart &■Co. Trie:; Salomon Bros. & Hutzler.
(3/11)
it Niagara Mohawk Power
and sell
Co.y(2717);.'t
to.issiie and sell
$25,000,000 of additional preferred stock. Underwriter—4
Harriman Ripley
'Co. Inci, New York.
Jan. 21 it-was'reported company plans
t
Norfolkr St Western Ry.
(2/19)
Bids are expected to. be-received ,by this company up to
noon
(EST), on .Feb. 19 ,fpr the purchase from it. .of
$4,140,000 equipment trust certificates (third instalment)
to/mature .semi-annually from May 1, 1958 to and in¬
.
'
i
(3/5)
cluding Nov.., 1, J 972. JProbable bidders: Halsey, Stuart
announced company plans to
issue and sell
&
po. Inc.; S^)omon 3ros. & Hutzler.
v
/
$9,000,000 of debentures (probably convertible). Proceeds
Northern llirnois Gas Co. (2/19)
—To repay bank loans and for construction program.
Jan. 6 company "announced that p^bposed • $10,000,000
Underwriter—To be determined by competitive bidding.
fifigncing will'tonsist of 100;000 shares of $100 preferred
Probable bidders: Halsey, Stuart & Co. Inc.; Kuhn, Loeb
sto^k. Proceeds—New construction. Underwriter—First
& Co.; Glore, Forgan & Co.; The First Boston Corp.;
Harriman, Ripley & Co. Inc., Eastman Dillon, Union Se¬ 't, Boston Corp: and Glore, Forgan & Co., jointly. Offering
—FJxpected
Feb. 19.
curities & Co. and White, Weld & Co. (jointly); Lehman
Brothers'; Merrill Lynch, Pierce, Fennerc & Beane; Equi¬
Northern; States Power Co. (MiniiJ
v
*
'
table Securities Corp.; Blyth & Co. Bids—Expected on
Jar). 13 it .wasYeported; that the company'may be con¬
was
'
Registration—Planned for Feb. 5.
Iowa Public Service Co.
sidering thb issu^qpd/sale this Summer of abbut $25,000,000 of
(3/3)
Dec. 18 it, was reported company
plans to issue and sell
$10,000,000 of first mortgage bonds due 1988. Proceeds—
To repay bank loans and for construction program. Un¬
derwriters— To be determined by competitive bidding.
Probable bidders: Halsey, Stuart & Co.; Eastman Dillon,
Union Securities
Co.
&
and
Salomon
Bros.
&
Hutzler
(jointly); Blair & Co. Inc.; White, Weld & Co.; The First
Corp., Kuhn, Loeb & Co. and A. C. Allyn & Co.,
Inc. (jointly); Kidder, Peabody & Co. and Blyth & Co.
(jointly). Bids—Expected to be received on March 3." -
* Kentucky Utilities Co.
Inc.;
Merrill
first mortgage bonds. Underwriter-/To be deter¬
competitive bidding. Probable bidders: Halsey,
The.;-Thb-First Boston* Corp. and Blyth &
mined by
Stuart & Co.
Co.', Inc. (jointly)/ Merrill Lynch, Pierce, Fenner &
Beane; Kidder/ 'Peabody & "'Co. arid- White,. Weld Sc Co.
(jointly); Lehman Brothers * and Riter. & Co. (jointlj-);
Equitable ' Securities; "Corp. and Eastman Dillon, Union
Securities & Co. (jointly).
"
,
.
Boston
(3/4)
'Ohio Edisoh Co.
reported company plans to offer $30,000,-»
$35,000,000 first mortgage bbnds dir^ 1988. Pro-i
ceeds—To repay bank loans, etc. and for new construe-?
Dec. 12 it
was
000 to
To he determined by competitive
Jan. 21 it
tion. Underwriter
bank loans and for
bidding. Probable bidders:;Halsev;^Stuart: & Co. Inc.;
Morgan, Stanley &. Co.; First Boston Corp.; Glore, For-?
gan & Co., White; Weld & Co. and Eastman Dillon,
Union Securities & Go. (jointly). Bids — Expected on
was reported company, plans to issue and sell
$10,000,000 of first mortgage bonds. Proceeds-pTo repay
new
construction.
Underwriter—To
be determined by competitive bidding.
Probable bidders:
Halsey, Stuart & Co. Inc.; Blyth & ,Co;, Inc:; Lee Higginson Corp.; Equitable Securities Corp.;
Eastman Dillon,
Union Securities & Co. and Merrill Lynch, Pierce, Fenner
& Beane (jointly); Kidder, Peabody & Co. and White,
Weld & Co. (jointly); Kuhn, Loeb & Co. Offering—Ex¬
pected in September or October.
★ Kentucky Utilities Co.
21 it was alio reported that company may offer
approximately lGpJOOO additional shares of its. common
stock to its common stockholders on a l-for-15 basis.
Jan.
Underwriters—Blyth & Co., Inc. and J. J. B. Hilliard &
Son.
.
„
'.
..
:
..
Litton Industries, Inc.
Dec.
of
14 stockholders approved
16,000 shares of $100
crease
in the authorized
par
the creation of an issue
preferred stock and an in¬
stock from 2,000,000 to
3,500,000 shares. Underwriters — Lehman Brothers and
Clark, Dodge & Co. handled last equity financing which
was done privately.
common
Louisiana Power & Light Co.
Dec. 16, it was announced company may borrow
$11,500,000 from banks pending a final fiAancing program relat¬
-•*
Oklahoma
Nov.
18 it was reported company plans to raise about
Beane underwriting..
on
Davis
bidding.
Probable
Kidder, Peabody & Co. and White, Weld & Co.,
(jointly); Halsey, Stuart & Co. Inc., and First Bostoii
Corp. Bids—To be opened at noon on March 10. Regis¬
tration—Expected early in February.
.
approving
Merrimack-Essex Electric Co. (3/10)
Jan. 20 company announced intention to issue $20,000,000
series C first mortgage bonds, due in 1988. Proceeds—To
by competitive
.
a
.
proposed offer of 44,708 additional shares
$20) to stockholders at the rate of
of common stock "(par
per share.
determined
,
National Bank, San Francisco, Calif..
Jan. 28 it was announced stockholders Will vote Feb, 11
Pacific
Gas Service Co., a new company.
be
}
G^$ &'Electric Co.
$20,000,000 ihis^Sprin^, through sale of bonds and other
securities. Underwriter—To be determined.by competi¬
tive bidding. 'Probable bidders: (1) For bonds—Halsey/
Stuart & Co. Inc.? Equitable Securities Corp.; The First
Boston Corp.; Kuhn, Loeb & Co., Merrill Lynch, Pierce;
Fenner & Beane and White,- Weld & Co. (jointly); Harr
riman Ripley
Co. Inc. and Eastman-Dillon^ Union
Securities & Co. (jointly).
(2) For preferred stock -Merrill LyfiehV Pierce, Fenner & Beane and White, Weld
& Co. (jointly); The First Boston Corp.; Lehman Bros,
and Blyth & Go/Inc.' (jointly); Smith, Barney & Co.;
Harriman Ripley-St'"Co. Inc.; Kuhn, Loeb & Co. Any
offering of common stock may be made to common
stockholders, with "Merrill Lynch, Pierce, Fenner &
one
bidders:
—
March 4.
ing to the disposition of its gas properties to Louisiana
—To
reported company may issue and sell be¬
tween $15,000,000 and
$25,000,000 of first mortgage bonds.
Underwriter—To be determined by competitive bidding.
Probable bidders: Halsey, Stuart & Co.
was
March 5.
redeem like amount of series B 5%s of 1987. Underwriter
Florida Power & Light Co.
Jan. 20 it
New Orleansi Public Service Inc.
Dec. 4 it wast announced company
announced that company expects to issue
$8,000,000 to $10,000,000 of first mortgage bonds.
Underwriter—To be determined by competitive bidding.
Probable bidders: Halsey, Stuart & Co. Inc.; Eastman
Dillon, Union Securities & Co.; White, Weld & Co. and
Shields & Co. (jointly); Blyth & Co.; Kuhn, Loeb & Co.;
Lehman Brothers and Goldman, Sachs & Co. and First
Boston Corp. (jointly); Equitable Securities Corp. Bids
—Expected March X1-. ;/"/
-1-
companv
Office—VaiicouVer, 3. C.,,Canada.
of first mortgage
Indianapolis Power & Light Co.
,
has applied to SEC
for permission tb .issue arid, sell in the United States- its
class A coihmAn.shared,..of which there are authorized
1,000,000 shares. <par $l) and l0,000 share! outstanding.
issue around $20,bonds during
1958. Proceeds—For construction program. Underwriter
—To be determined by competitive bidding.
Probable
bidders: Halsey, Stuart & Co. Inc.; Eastman Dillon, Union
Securities & Co.; White; Weld & Co. and Merrill Lynch,
Pierce, Fenner & Beane (jointly); The First Boston
Corp,; Harriman Ripley & Co. Inc.
Jan. 6 it
.was*^nbunc6d
'
Columbus & Southern Ohio Electric Co.
writers
;.MultnomahvCaciat<|i9ii Fund, Ltd.
Nov. 25 it
Illinois Power Co.
Dec. 9 it
to
ShieldsT& 4C,o. (jointlyJ; Bl5lth:& Co., Inc.j Merriil
Lynch,Pierce,Fenher
Beane, Eastman DMlon, -Uniori
Securities
Co. ;> White/ Weld & /Co. and Kidder Pea¬
body & Co. (jointly); The First Boston Corp.
and
t';'
Iowa Illinois Gas & Electric Co.
Columbia Gas System, Inc. (3/6)
23 it was reported company plans
Dec.
Mississippi Power/& Light Co. >
plans to issue and sell,
Jan. 20 it was reported company may
$30,000,000
registered under the Invest¬
probably - in Mdy"bl* June of 1958, $10,000,000 of first
mortgage, bonds. •„ Underwriter—To,- be determined by
competitive bidding/. Probable bidders: Halsey, Stuar$
& Col Inb^Kuhri;%deb &;Co-; Equitable Securities Corp.
Gulf, Mobile & Ohio RR. '•-/'/
"
Dec; 20 ICC granted company permission to.issue $28,343,800 of 5% income debentures to mature Dec. 1, 2056,
in exchange for the 283,438 shares of outstanding $5 pre¬
ferred stock (no par) on the basis of $100 of debentures
for each preferred share.
Offer expires Feb. 14, 1958,
but may be extended. Underwriter—None. ;v
to
fund
DeC. 4 it was announced company
■'
.
;
new
von Kjarman, Chairman of the advisory group
aeronautical research and development of NATO. ^
for
plans to issue and sell
$21,500,000 of first mortgage bonds due 198$/ Proceeds—
To finance construction program. Underwriter — To be
determined by competitive bidding; .-Probable bidders:
Halsey, Stuart & Co. Inc.; Morgan Stanley &.Co.; Leh¬
man Brothers; The First Boston Corp.; Blyth & Co., Inc.,
Kidder, Peabody & Co. and Shields & Co. (jointly);
Equitable Securities Corp. and Eastman Dillon,. Union
Securities & Co. (jointly).
Bids—^Scheduled to be re¬
ceived up to 11 a.m. (EST) on Feb. 20. Registration—
Planned for Feb. 21.
this
Theodore
(3/20)
Georgia Power Co.
7
.Company4Actr of 1940. "Plans- to issue $15,000,000
common stock/-of. which $7,500,000 will be underwritteh
on a firm basis by Ira Haupt & Co.
Price—$10. Proceeds
—For investment. Technological Advisors—Include Dr.
ment
California
$20,000,000 of first mortgage bonds, probably this Sum¬
mer.
Underwriter—May be determined by competitive
bidding. Probable bidders: Halsey, Stuart & Co. Inc.;
White, Weld & Co. and Kidder, Peabody & Co. (jointly);
Paine, Webber, Jacksdn & Curtis and Stone & Webster
Securities Corp. (jointly);
000,000
Cincinnati Gas & Electric Co.
Nov.
General Telephone Co. of
Dec. 6 it was announced company
Chicago District Pipeline Co.
Nov. 12 it
On Jan.
Co.
Corp.
Thursday. January 30, 1958
Missiles-Rockets-Jets & Automation Fund, Inc.
Lynch, Pierce, Fenner & Beai>e and Kidder, Peabody &
(jointly); The First Boston Corp.
>
...
new
share for each four shares -held.-
Price—$37.50
Prdceeds V- To increase capital and surplus.
Underwriters/— Elworthy & Co.; Schwabacher & Co>;
&
Skaggs & Co.; Pfluger & Baerwald; apd J. Barth
Co.; all of San Francisco, Calif.
*
*
Pacific
Jan. 8 it
Telephone & Telegraph Co.
reported company plans $300,600,000 capi¬
was
tal outlay program;
Proceeds—For construction program
invj9$8 and 1959 ($137,000,000 in 1958). Underwriter-^
To/be determined by competitive bidding.
ders—
Probable bid¬
Halsey, Stuart & Co. Inc.; Morgan Stanley & Co.
Volume 187
Number 5712
.
.
.
The Commercial and Financial Chronicle
V.
Je Philadelphia Electric CoJan. 27 it
X
(jointly).
&
Jan.
Co.
1
"
' !
Planned
for
mon
:
&
it was announced
20
stockholders about Feb.
right
subscribe
to
on
of
17 to Feb.
before
or
March
12
nounced
20, 1958 the
for 365,693
near
was
common
York.
Union
sell
-
,
—
•
-
Dec. 3 it
Richfield Oil Corp.
Jan. 6, it was reported that
company may. fate,in January
'announce its financing
plans, which' are; hot "yet com¬
announced company plans to raise in mid-
was
.
pleted.
Underwriter
May
Fenrier & Beane, New York.
Riddle
Oct. 21 it
I
.
be
—
1958 between
$5,000,000 and $6,000,000 new capital, about
through bond financing and
through common stock financing. Under¬
writer—For stock, may be Hornblower &
Weeks, Wil¬
Merrill/Ltfnch,/pierce,
V'v'V;
was announced
plans'to, register with
the SEC an issue of new common stock, the numbef of
shares and the price at which
they will be offered not
yet determined, 'The authorized commb'trstock has been
increased from 7,500,000 to 15,000,900
shares,.: Proceeds
company
finance route expansion and for;
Working capital.
Underwriter—James II. Price & Co^ ih^M^bfal Gables.
and' New
;
sell
To
&
1972, inclusive.
it was
offer to
its
also
"V1// Z1-
for 57,362 additional shares
with an oversubscription
of
comnioii
stock
-
(probably
$3,000,009 of first mortgage bonds due 1988.
To
repay.bank loans and for construction
derwriter—To
Proceeds—
program.
Un¬
of
73,039 shares of
sents
55.5%
of
determined by competitive, bidding.
Halsey* Stuart &,;Co. Iqp4 J<idder> Peabody & .C04 Stone & Webster Securities Coj*p.;. and Dean
Witter & Co. (jointly). Bids—Tentatively scheduled to
from
stock.. An offer to purchase the stock for $5,038,-
has
been
agreed to accept such offer unless
bid is received.
or
principal,/but
on
tial
balance
of
became
what
usually
five-year period.
Under this method of
the
financial
burden
owners
was
results
were*
a
be
gage
extensive
with
properties
home;
The
foreclo-*
for
sale
Thus,>vwnat
Let
gage
me assure
you
two
hardship
that
lenders.
no mort¬
We have
-.,
only
a
86%
a
on
Ahd
for both
borrowers
and
remember
that
all
this
With
"
But
there
too, which
was
was
ized outside of
ing industry;
What"
mortgage
another
factor,
not generally real¬
the mortgage lend¬
It
was
started
often
out
gage
as
and lender is
•Instead
as
a
as
the self-amortizing mort¬
today, the risk to both home
owner
this:
became
a
few—
object to the long-term mort¬
on
the grounds that it is
was
A
65%
was
the
mortgage,
much
reversed.
■
of
diminishing equity,
case with the old-style
we
now
have
ishing mortgage, and
a
dimin¬
an
86%
loan before the parties
Stone
and
&
an
increas¬
Securities
owed
that added
have
year's taxes
June
on
10.
on
Feb. 27.
Washington Natural Gas Co.
Oct.
in
18
the
directors
debentures.
authorized the sale of $5,000,000
Proceeds—For expansion program. Un¬
derwriter's lyth
&
Co., Inc., San Francisco and New
York.
provided
,
employment which to buy the goods and
ices which
home
purchase today is a
systematized,
enforced
saving, because with every month¬
ly payment, the buyer adds to his
equity in his property. In effect,
it is the same as depositing in a
of
I
am
serv¬
produced.
are
this is recognized
sure
by
and Home Finance
Agency under Administrator Cole,
and by the Federal Housing Ad¬
the, Housing
ministration
under
Norman P. Mason.
Commissioner
These/men and
their agencies, together with
jnem-^
bers of the Congress, are continu¬
ally demonstrating their desire to
help the building industry to pro¬
duce homes.
I and my
supported
I
No
on
do
every
not
want
the
any manner
to
deprecate in
enormous
aid the
FHA and the VA have been to the
home
building industry and to the
home buyers of America.
And
I
Federal
of
do
not
housing
business.
of
some
contend
that the
agencies
out
go
Government-backing
mortgage
necessary
loans
doubt
no
is
ih many areas, and for
types of lenders, and should
be continued.
But
I
do
want
to
declare with
a
all the force at my
I
believe
the
institutions of
command that
mortgage
America
lending
have
had
enough experience, and have de¬
veloped enough skill, to* be able
to
conduct their
out
continually
operations with¬
leaning
on
gov¬
ernment.
months
interest, the mortgage is written for a long simply transferred their rent pay¬
And
I
against inflation. But we cannot
honestly believe that
3%, making a enough
term
s.o„„that
monthly ments to payments on the homes
have maximum production unles* loans of 90%, or more, on a con¬
Then, if in addition, principal and interest payments they have bought—and in doing
had accrued (prob¬ are
realistic in
relation
to
the this have created billions of dol¬ the American people are provided ventional basis are inherently safe
another
total of 13%.
a
six
Corp.; Kuhn, Loeb & Co.
Corp. (jointly). Bids—Tenta¬
Bids—Expected to be received
.
owner
(6/10)
Virginia & Southwestern Ry. (2/27)
Company plans to sell $5,000,000 bonds. Proceeds—To
redeem similar amount due
April 1, 1958. Underwriters
—To be determined by competitive
bidding. Probable
bidders: Halsey, Stuart & Co.; Salomon Bros. & Hutzler.
month
ing equity.
Proceeds—To repay
Webster Securities
American
•
.
(5/12-16)
reported company plans to issue and sell
bonds or debentures.
Underwriter—To be
on
principal and interest production of homes at a high
30-year 5%% mortgage, and
level, and home building is one of
Tbd'jy,
with
home
mortgage the payment of $10.98 per $1,000 the
Front the date the mortgage was
greatest means we (have- for
payments * on a monthly budget on a ten-year mortgage.
made, ordinary obsolescence and basis
Those
who
claim
that
home creating real wealth.
whereby payment on prindepreciation of the property be¬
cipal,,Jnt^rest, taxes and hazard mortgage debt is too high have
The nation's prosperity depends
gan.
It can be easily seen that if
insurance is- covered in a single apparently
overlooked
the fact
upon a high rate of production of
depreciation amounted to only 2%
millions
of
lump sum, as so wisely provided that
families
have
a
year, in five years this would
by "the- FHA rules, "a family can ceased being rent-payers and have goods and services of all kinds.
amount to 10%.
Production,
and production
buy a home with no more hard¬ become home owners in the past
If, on top of this, the home ship than paying rent—provided 15
years.
These
families
have alone, is our most effective weapon
as
realized it.
:
was
for millions of persons.
form
-:
up
for
reported company plans to issue and sell
—
-
,
part.
our
are
22 it
and insurance paid
in advance,
prudent banker will allow
interest on a current basis, and
family to buy a home it can¬
larger
equity
than
when
the loan
not
afford
whether or not the
was made, it is easy for a
mort¬
loan, is insured.
The FHA itself
says
insurance does not make a gage lender to help that home
owner over any temporary finan¬
mortgage sound.
It is only the
cial crisis.
quality of underwriting which de¬
I want to repeat and emphasize
termines soundness.
But. for the family of moderate my belief that liberal home mort¬
means
to afford a home requires gage lending policies are vital to
this nation.
that the mortgage be written for
Such policies serve to broaden
as long a term as possible.
There
is a great deal of difference in the the base of home ownership. This
payment of $5.84 per $1,000 per broader base is necessary to keep
mortgage principal re¬
mained.. static.
Only
the equity
declined.
/
\
'
to sell —money and
We consider a foreclosure
failure
there
and
Registration—Planned
bank have consistently
move made by
Congress and the housing agencies
toward liberalizing mortgage lend¬
mortgage
lending
policies
are
Furthermore, the home owner
sound and inherently safe, when with a
long-term, "self-amortizing ing practices—and we have never
based upon the borrower's ability mortgage need have no fear of regretted this support for a single
instant.
to meet his obligations.
losing his property.
With taxes
,
,
as
Safe
and
26.
■//■■;//"
any
time,r the
things
service.
an
the old days, in spite of all the
Affiliates
lenders want to get into the
real estate business.
became
loan at the end of five years. Yet
these loans were considered sound
in
Estate
ostensibly
was
65%*^ mortgage
or
money.
Real
/ '■",• /■'/■..
coridition.'f;/ ' /
for rent, in order to recover their
No
Sound
Feb.
ownership possible for ever in¬
creasing
numbers
of
American bank the sum credited each month
of the equity had disappeared at'
families, the rising mortgage debt as payn nt on mortgage principal.
the end of five years.
endangers our economy.
Howe er,
to
become a home
'/•Therefore,' the 65% mortgage
Experience proves that nothing owner und cease being a renthad become an 81%
mortgage; and" could be further from the facts.
payer,
it
is
imperative
that the
if repairs had accumulated, per¬
In the first plate, as I hope I average
family be granted the
haps another 5% might be neces¬
concession of the lowest possible
sary'to put the property in good proved conclusively in citinf my
ownbank's
/
experience, liueral down payment.
themselves in the real estate busi¬
ness
Are
unsound, or that by making home
and mortgage lenders found,
sures,
a
//'//://■ 7//": /"/>'////
am
who
financing
back-breaking.
.
determined
stitution—and
three-
upon
/
:
really quite critical of any
individual, any agency, or any in¬
a substan¬
due at the
was
/
on
tively expected to be received
General, who
higher accept¬
by competitive bidding. Probable
bidders: Halsey, Stuart & Co. Inc.; Equitable Securities
Corp.; Eastman Dillon, Union Securities & Co.; and Salo¬
may
They
Is Sound and
end
/
Attorney
(EST)
by competitive bidding. Probable bidders:
Halsey, Stuart & Co.; Salomon Bros. & Hutzler; White,
Weld & Co.; Eastman
Dillon, Union Securities & Co.;
derwriter—If issue is not placed privately, underwriter
Private Liberal
paid
.
the
noon
determined
Toledo Edison Co.
I
/
by
$30,000,000 of
Virginia Electric & Power Co.
stock (no par), which repre¬
issued and outstanding
103
received
sell
$25,000,000
company's
has
6
page
common
the
was
and
Dec. 26 it
common
announced
that the company plans to
first mortgage collateral
bonds due 1978. Underwriter—To be determined
by com¬
issue
on
plans to issue and sell
about $15,000,000 of first mortgage bonds in April or
/May of this year.. Proceeds—To repay bank loans. Un¬
Probable bidders:
Continued
Scheduled to be received
—
it
March 5.
The First Boston
Jan. 20 it was reported company
be
23
on
(2/26)
ders:
if Spur Distributing Co.. Nashville, Tenn. (2/1 J)
will be received by the Attorney General of the
States, Office of Alien Property, up to 11 a.m.
(EST) on Feb. 19 for the purchase from the Government
>,.
reported company plans' to issue and sell
if United Gas Corp.
Jan.
& Co.
bidding. Probable bid¬
Halsey, Stuart & Co. Inc.; Morgan Stanley & Co.;
Corp.; Kidder, Peabody & Co.; White,
Weld & Co.; Merrill
Lynch, Pierce, Fenner & Beane and
Eastman Dillon, Union Securities & Co.
(jointly). Bids
—Expected to be received some time during the week
of May 12.
Telephone &
Underwriter—
Bids
able
if Sierra- Pacific-1- PowerCo,/"(4/23'jUw**
was
program.
Shields
Bids—Expected to be received
bank loans and for construction
program. Underwriter—
To be determined by
competitive
Registration—Planned for Feb. 4.
■
Jan. 27 it
Corp.
$12,000,000 of first mortgage bonds.
repay¬
United
petitive bidding to be sought; Stone & Webster Securities
Corp.>and Dean. Witter &, Co. (jointly) were only bid¬
ders lor last rights,
offer; which .was om a competitive
basis,.,
/:.•/v >]■
; :/';•
■
Proceeds—For
determined
Feb. 26*.
privilege);: Trciceeds^-Fbr con¬
Underwriter—Exemption from com¬
struction program.
debentures.
Fenner & Beane./ Bids
'/'
reported that the company/plans to
stockholders the fight to subscribe
common
be
-k-,
if Sierra Pacific Power Co.
Jan. 27
of
Co.;
Probable bidders: Halsey, Stuart
Co.'Inc.; Salomon Bros. & Hutzler.*
ton
Jan.
bidders:
(EST)
equip¬
annually from Aug. 1,
ties & Co. and
if United Gas Improvement Co.
by: /competitive bidding.
Probable
Halsey, Stuart & Co. Inc.; Morgan ©tanley &
White, Weld & Co. and Kidder, Peabody & Co.
(jointly); Lehman Brothers and Salomon Bros. & Hutzler
(jointly); The First Boston Corp.; Merrill Lynch, Pierce,
*v•
(1/30CfT//■•?'//;
Bids will be received by the
company'up tbJrioon
on Jan. 30 for the
purchase from it of $5,445,000
ment trust certificates to mature
1958 to
Inc.; Hornblower & Weeks and
(jointly).
Telegraph Co. and construction
per
'
-Ar Seaboard Air, Line RR..
$30,000,000
Inc.; Lehman
(jointly); White. Weld
Dillon, Union Securi¬
(jointly); The First Bos¬
Brothers and Bear, Stearns & Co.
& Co., Blyth & Co., Inc., Eastman
(jointly). Bids—Tentatively scheduled to be received
ment of advances received from American
/York^N!;/; hahdled^^^ttus ; public'
offering oil 500,000 shares of common stock at'$3.25
share in July,-1956. I/"/
"."'VyAM#'.,
^V"•
(joint¬
Southern New England Telephone Co. (2/26)
Dec. 12 it was announced company plans to issue and
•
plans to issue and
mortgage bonds.
first
Underwriter—To be determined by competitive bidding.
bidders: Halsey, Stuart & Co.
Feb. 3.
Co.
•'/'"
(3/S)
company
$35,000,000
Probable
to
&
(Mo.)
reported
was
approximately
Halsey,
Stuart
Electric Co.
it
11
ly). -For bonds, to be determined by competitive bid¬
ding. "Only bidders in 1956 for $4,000,000 bonds were
William R. Staats & Co.
—To
Elm
balance
liam R. Staats & Co. and The First California Co.
Airlines, Inc.
a public stock issue in the
Proceeds—For working capital and other
petitive bidding. Probable bidders: Halsey, Stuart & Co.
Inc.; The First Boston Corp., Harriman Ripley & Co.
Inc. and Goldman, Sachs & Co.
(jointly); Kuhn, Loeb
& Co.; White, Weld & Co. and
Equitable Securities Corp.
two-thirds of which will be
the
(jointly); Carl M. Loeb, Rhoades
corporation plans
future.
Nov.
May
Southern Counties Gas Co. of California
Proceeds—To,repay bank loans and for construction pro¬
Dec. 16 it was reported company plans to issue and
sell,
gram.
Underwriter—To bejdetermined: .by/competitive . in
March, 1958, $15,000,000 of first rtiortgage bonds. Un¬
bidding. Probable .bidders: Hatsey, Stuart &/Co Inc.;
derwriter
To be determined by competitive
bidding.
White, Weld & Co.: and Shields & Co^Jjointly); Blyth
Probable bidders:1 Halsey, Stuart & Co.
Inc.; Blyth &
& Co., Inc.;
Salopion':Bros./ &!/ Hutzler;. Kuhn, Loeb & : Co.; Inc.; White, Weld1 &
Co.;
Merrill
Lynch,
Pierce,
Co. and Eastman Dillon, Union Securities &
Co. (joint¬
Fenner & Beane.
s7
y".*.ly); The First -Boston Corp.; Glore, Forgan & Co.;
Southern Nevada Power Co.
Equitable Securities Cov•/■*•>*
■}*'*»?, ;v-■ '•>;■//". *•
■
& Hutzler
corporate purposes.
Underwriter—Kidder, Peabody & Co., Inc., New
Registration—Expected momentarily,
gram.
Bros.
Co.; The First Boston Corp.
Tuttle Engineering, Inc.,
Arcadia, Calif.
Nov. 6, Harry Oedekerk, Chairman of the
Board, an¬
(2/17-20)
company plans to offer to its
common
59
' 1
■
—
'
stock on a l-for-10 basis.
Proceeds—To repay bank loans and for construction
pro¬
,
reported company plans to. issue and sell
$J 6,000.000 of first mortgage bonds, due ,1988.
in
Registration
'/■< ^
-;
,
additional shares
★ Public Service Co. of Oklahoma
Jan. 20 it
April 23.
V
★ South Carolina Electric & Gas Co.
„
mortgage bonds due 1988. Under writer-^To be deter¬
by, competitive, bidding,, Probable bidders: Halsay, Stuart & Co. Inc.; The First Boston
Corp.; White,
Stanley & Co. and Drexel
'
•'!
on
March 25...,
mined
Weld & Co.;..Morgan
'
1
received
be
reported company plans to issue and sell
in May, subject to market
conditions, $40,000,000 of first
was
(563)
ably another 3%)
a
total of 16%
family's income.
J*-
i
lars in
new
wealth for this
nation, with
the
means
and
terms
with
and sound.
€0
The Commercial and Financial Chronicle
(564)
'
Janney, Dulles Branch
BALTIMORE, Md.
J a lin e y,
have opened
•
of Richard H. Bond.
;
&
Holman
McDonald,
have
opened
Co.,
J215 North Canon Drive under the
management of James N. Johnson.
FUND
l&ationat
Stoat Sciied i
WRITE FOR
age
FREE INFORMATION
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a list
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Incorporated
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A•
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The Parker Corporation
200
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Boston, Mass.
by
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to¬
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Shifts
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however,
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the
from
'
investments. "
*
*
in industries
at year end were: oil, 17.61%. of
investment assets; public utility,
15.14%;'office equipment, 9.68%;'
and
electrical
and
electronics,
8.85%..
'
..
J:,'
:
•
new
with the
of
purchase of 14,000 shares
South
Utilities, Inc.;
Middle
increases in holdings
10,000" shares
of
ACF-r
Wrigley Stores, Inc., 9,500 shares
of Atlantic City Electric Co., 3,800
Important
were"
chemicals.
Electric Co. '
During the
ments
same
period, invest¬
The 10
largest individual company holdings at year-end were
Business Machines Corp., $35,764,300; Standard Oil
Company (New Jersey), $33,166,825; Texas Company, $26,390,862;
Goodyear Tire & Rubber Co., $26,171,287; Bethlehem Steel Corp.,
$25,462,500; U. S. Steel Corp., $25,430,625; Standard Oil Company
of California,
$23,855,000; General Motors Corp., $22,612,500;
General Electric Co., $20,295,000; and duPont, $19,754,000.
International
On Dec.
31, 1957 the Trust's portfolio contained the commiwr.
stocks of seven companies not held a year previously, including
International Nickel Co. of Canada; McGraw-Edison Co.; Ameri¬
can-Marietta Co.; Atlantic Refining Co.; Newmont Mining Corp.;
Coca-Cola; and Parke, Davis & Co. Eliminated during the year
were eight other common stock holdings.
of
shares
These figures compare with net
of $47,097,030 on Dec. 31,
assets
lines, Inc., and Eastern Air Lines,
Reductions included the sale
Inc.
of
13,000
shares of Beckman In¬
struments, Inc.,
of Amerada
4,400 shares
and
Petroleum
Corp.
•
;
distribution
1956
gain.
Sees
Strength
T71
.
f \
•'
If;"
'i;,'
Dec.
■' ;;
Ti-n
;
376
a
fUl Ji
ft.
assets
Net
L*
Asset
value
in
share
of Na¬
tional Investors Corporation was
$8.62
at the
end of 1957, the
per
"There
are
to
$22.05
investment
The annual report notes
that "this compares
with
a
stock prices gen¬
many
strengths
in
a
of the current report
than
life
insurance
company
stocks,
comprising 38.8% of net assets, the
trustees observe that:
"During
1957 sales of new life
of
such
than
by
1956
that
and
ticipated earnings.
The
annual report
incomes
"The
number
and,
1957,
holders,
there were
However, many shareholders have
substantially
invested
amounts: shareholders with
vestment of $50,000
Business
and
statistical
with
investment of $100,000 or
an
^crfwraticn
infor-
Company
Fund
Common Stock Investment Fund
ANNUAL REPORT
Investment
objectives of this Fund
possible
long-term
capital and
income growth
for its shareholders.
FOR
are
ONE WALL STREET, NEW YORK 5
Prospectus
upon
1957
Available On
request
Request
Nsume.
65
Lord, Abbett & Co.
New York
—
Chicago
—
Atlanta
Los
Angeles
of the
shareholders
planning is better
more
in¬
own
shares
Affiliated
incorporated mutual fund pro¬
viding diversified, managed investment in
Canada. For free prospectus mail this ad to
A
or more
$10,000,000
approximately
larger
an
Trust's
—A U. S.
bullock
At the end
7,360 share¬
a new high, the average
holding amounting to about $6,000.
of
industries, less volatile
the
manufacturing
indus¬
with
states
shareholders
of
continues to increase.
A Diversified Closed-End Investment
Established 1894
also
from
derived
dividends
that:
service
tries.
corporation
in
paid by banks in the portfolio are
covered by current and an¬
well
added,
"are buttressed by favorable so¬
cial legislation,
the strength of
labor unions, and the larger share
vestment
the
-
"Consumer incomes," he
holders who maintained their in¬
in
in 1958."
section with
the present
in¬
effected dur¬
lip with claim experience and that
decline a profitable underwriting cycle
of 12%% in the Dow Jones Indus¬ has always followed an unfavor¬
trial Stock Average for the same able period. Results for the clos¬
1957 give some
period, and a drop of about 14% ing months of
in the Standard and
Poor's 500 indication that an improvement in
underwriting
operations
is likely
Common Stock Index."
than 3%.
insurance continued to grow. It is
economy," the Chair¬ estimated that the increase over
man noted, "to support the view
1956
was
about 20%.
Mortality
growth stock mutual fund an¬ that downward spiraling into de¬
experience continued satisfactory
nounced in its 21st annual report.
pression is not in prospect. There
and investment income was at a
Although down from $9.86 a year have already been readjustments
record high. The outlook continues
earlier,
reflecting
lower
stock in the textile, metals and con¬
favorable for this industry."
prices in general, the asset value sumers' durable goods industries,
As to fire and casualty insur¬
"held
up
significantly
better" to
name
a
few,
accomplished ance
companies, representing
than well-known
market
aver¬
while
the
nation
enjoyed high
46.0% of assets, the report com¬
ages, it was brought out by Fran¬
prosperity. Integration in indus¬
ments:
cis F. Randolph, Chairman and
try and mergers have reduced the
"The year 1957 was another one
President, when'adjusted for the number
of
marginal
concerns
December distribution of 35 cents
of growth for the fire and casualty
which, under stress, in the past
insurance industry with the vol¬
per share from gain realized on
may have dumped inventories on
investments.
ume
of premiums written esti¬
unwilling markets.
from
were
per
With
respect to the 10.6% of
photographs and
assets in bank stocks, the trustees
from
realized background information about the
note that most of these institutions
management of the Trust.
reported higher earnings last year
$61,933,527 at
Commenting on the holdings of
31, lower than the $66,409,year earlier, reflecting the
decline
1957
*
were
day claims, numerous increases in
insurance rates
ing the year and more' are in
share on 2,136,291 shares then out¬ prospect. Varying periods of time
standing. After allowing for the are required, however, for in¬
capital gains distribution of 78 creased rates to be fully reflected
cents
a
share paid
in January, iii operations. The industry's ex-^
3957, the decrease in net asset poriencc over many years indi¬
value per share for the year is less cates that rates ultimately catch'
amounting
A feature
taking shares in payment of the
Air¬
American
—
is
totaled 25 cents per share
1957, the same as in 1956. Mr.
Randolph stated that this meant
a gain of 5.7% in income received
from National Investors by share¬
*
through
eliminated
were
of
In its 30th annual report, Cen¬ mated at over 5% greater than in
tury Shares Trust—the oldest mu¬ 1956. However, larger claims for
tual investment company special¬ losses, particularly in straight fire
izing in insurance company and and automobile bodily injury cov¬
bank stocks
reports total net erages, adversely affected under¬
assets of $44,101,665 at the close writing results.
of 1957, equal to $20.68 per share
"To correct the inadequacy of
on 2,132,593
outstanding shares.
premiums in the light of present-
3956,
in
I
and;
shares of U. S. Vitamin Corp.,
3,000 shares of San Diego Gasj&
Century Trust's Shares Off Slightly
stock investments in 135
companies, representing more than 20 industries. The largest in¬
dustry holdings were in petroleum, $210,382,512; utilities, $100,-313,350; steels, $72,568,125; tire and rubber, $60,426,937; and metals
and mining, $57,294,575. A year ago, the five largest holdings by
size were petroleum,
steels, utilities, metals and mining, and
come
Address
.
investment position was;
established in the fourth quarter
A
20 years
At year-end the Trust held common
Dividends
calvin
;''"" ':. /
;
•
holdings
Largest
sale
aircraft
Seven new securi-I
reduced.
ties Were added to and. two
individual
try, and holdings were increased
!n the drug, electrical and elec¬
tronics, food chain, natural gas,
erally.
prospectus
ished
."The
the nation is not dimin¬
During 1957, a new position was
securities, other than gov¬
ernment securities and short-term notes, totaled $84,348,582 and
$40,018,289 respectively, compared with $99,279,232 and $41,535,552 in the previous year.
111 Economy
A
stated.
investments,
Purchases and sales of investment
T
number of years.
a
products and public utility
Investments in the avia¬
and thirty-seven hundredths of 1%
National Investors
vM
V:i
and
tinue to be made."
report shows that the ratio of operating expense to aver¬
fund whose
first
...m.
'
ahead.
year
warranted.
10 years ago, had further
been reduced to twenty-one hundredths of 1% in 1957.
This is
the lowest expense ratio of any mutual investment company.
;
for
net
of
for
per
net assets of the Trust, which was one-half of 1%
accounted
and, ■ in - your
corporation's view, continued con¬
fidence in the long-pull outlook
.
The
stocks
of National Investors
at
trend
ward
share on Dec. 31, 1957 was $9.72,
reflecting the general decline in stock values. Together with a
capital gain distribution of 17 cents per share declared Dec. 31,
1957, the year-end asset value amounted to $9.89, compared with
$11.63 a year ago.
;
value
United
continued
man
asset
net
the
and
"No major change in this posi¬
tion is now planned," the Chair¬
For the 14th consecutive year dividends from
The
in
progress
maintained for
net income paid
during the year were greater than those of the previous year,
amounting to 41 cents per share in 1957, the largest per share total
for any one year, compared with 40 % cents per share in 1956. The
four quarterly dividends paid amounted to more than $40,000,000.
It brought total dividend payments from net income during the
Trust's 33 years to $331,494,000.
INVESTMENT
technical
end, Mr. Randolph
the growth stock
in the virtually
fully-invested
position
it
has
fund
shareholders.
A MUTUAL
and
continuing popula¬
and
growth
reported,
Massachusetts Investors
vestment company,
;:
of
Common
Trust, the nation's oldest mutual in¬
had total net assets of $976,108,094 on Dec. 31,
1957, representing 100,469,960 shares outstanding, owned by 184,215
shareholders, according to the Trust's 33rd Annual Report for the
year ended Dec. 31, 1957. A year ago the Trust had total net assets
of $1,098,594,429, with 94,476,155 shares outstanding and 159,414
.
inferences
nated
assets
Inc.,
office at
branch
a
fields.
able forces
98.17%
Is Again Reduced
:
paper
more
States and throughout the world."
Massachusetts, Investors Trust Expense Ratio
Branch
BEVERLYHILLS, Calif.—
on
plans
were
scientific
■
than
business
grounded
And, underlying all interim
developments are the basic favor¬
tion
By ROBERT R. RICII
I McDonald, Holman
are
fears.
direction
the
under
Street
wood
facts
on
Mutual Funds
branch office at 210 East Red-
available,
decisions
and
—
Dulles & Battles, Inc.
a
mation
.
1958
Thursday, January 30,
.
.
.
Broadway, New York 6, N. Y.
.
Volume
187
more
own
ooo./:
-
Number 5712
.
The Commercial and Financial Chronicle
.
approximately $6,000,-
}>f:X* f
"Fiduciary
shareholders
the Trust.
and
.
and
institutional
about
own
Among these
individual
■
30%
of
banks
are
(565)
rates
United
Corp. Net
Eaton & Howard
Income
Up in Year Funds Report
Net
investment
income
of The
Combined
assets
of
the
two
r
v
.
profits
the sale of securities in
on
1957
amounting
22.7c per share.
5i
Incorporated
Total
||unds:Hadf|pSJ
*
Record Sales
to
$3,196,326
or
:
:
investment
net
>
income
plus realized profits amounted to
$6,632,437
47.1c
or
share.
per
Dividends totaling 35c per share
;
paid during 1957, of which
were
with 3,594,464 a year ago.
Value per share on Dec. 31, 1957,
pared
$18.14 which, adjusted for
December distribution of realized
was
profits
of
vested in 130
25c per share was from net invest¬
in U. S.
ment
income
notes
of Incorporated Investors
from
realized
and In¬
corporated Income Fund, has just
announced
sales for these
record
Funds in 1957.
Combined
:
:
.
:
:
-
reached
sales
.
$73,-
1957 compared with
in 1956, a 35% in¬
crease.
Sales of Incorporated In¬
vestors in 1957 were $30,100,000
and sales of Incorporated Income
Fund $42,900,000.
in
$54,000,000
000,000
Total
redemptions
holders
by
18.8%
were
of
stock¬
in
sales
1957 compared with
25.8% in 1956.
comparison, in a
favorable
This
it
years
been
ruled that these
hands
a
common
stocks; 14%
Governments, short-term
and
cash.
The
five
major
As in past
investment holdings by industries
tentatively
were
income
in
oil
(13.9%), power and light
(9.9%), insurance (8.8%), chemi¬
cal (6.1%), and natural gas (4.1% ).
dividends do not
taxable
of
share
per
profits.
has
constitute
10c
cents
share, was
equivalent of $18.34. At beginning
of year asset value was $20.79.
Report shows 86% of Fund in¬
j? The Parker Corporation, invest¬
ment managers
and distributors
and
20
the
shareholders.
Eaton & Howard Balanced Fund
Net asset value for United stock
companies had
a
market value of
$47,186,354 at Dec. 31, 1957.
During
the
117,526
year
common
stock
controlled
affiliate
amounted
True
also
63.1%
ket
to
in U. S.
the
in
year
after deducting $5,-
General
to
of
share
per
common
Uhe 1,800,220 shares out¬
Service
common
stock outstand¬
'
The
1956
standing.
Public
Corpo¬
ration, closed-end investment com¬
pany, reports that its net assets
at market value on Dec. 31, 1957,
were
$24,406,553, equivalent to
$4.92 per share on the 4,956,528
ing/
on
cash.
The
five
major
stock holdings by indus¬
oil (16.0%), power and
(11.0%), insurance (4.6%),
banking
(4.4%),
and
chemical
(3.3%).
Whitehall Share
Value Maintaind
report
Investors
shares of
$28.09
and
were
light
the year end was $4,392,-
575,000 preferred stock, were equal
stock
11.9%
833.
the net assets, after payment of
$4,429,545 in dividends and $219,232 for preferred stock purchased
for retirement, was $10,399,511.
Net assets,
Dec. 31;
Governments, short-term
common
tries
Other important group holdings
oil
shares, $5,904,621;
for
decrease
notes
Corporation were
added during the year. Mar¬
value of True Temper stock
Closed End News
The
;
on
included:
annual
American
of Fund
invested in preferred stocks;
14.0% in corporate bonds; 11.0%
was
of this
steel, $2,317,975; rubber, $2,251,of 8^8; electrical equipment, $1,572,Co., 438.
Inc., Frank Altschul, Chairman,
stated that as of Dec. 31, 1957 net
assets were $56,142,943.
31st
the
value at the
asset
equal to $5.07
was
close of
per
share.
Per share asset value of White¬
■
hall Fund, Inc., was $10.79 at the
end of 1957, the balanced mutual
fund's
11th
annual
dis¬
report
closed today. Francis F.
Randolph,
Chairman and
President, stated
that this was only 3.4% less than
the $11.58 reported a year earlier,
after allowing for the distribution
of
40
cents
realized
share
a
the
on
gain
from
sale
of
invest¬
ments.
"Asset
value," Mr. Randolph
commented, "thus was well-main¬
tained during the year."
The report pointed out that after
allowance for the 19 cents per
Dividends of 46 cents per share
were paid in 1957, the same as in
$3,299,- share distributed to shareholders 1956. The Chairman stated that
from realized net gain on invest¬
dividend income was 6% higher
682, of which $3,299,134 was from
ments during 1957, there was an
for shareholders who kept their
long-term capital gains.
increase in the asset value "dur¬
capital at work by taking White¬
Net income from dividends, in¬
ing a year of broadly declining hall Fund shares in payment of
terest and royalties for the year, market values for common stock."
the 1956 distribution of realized
Net
profit from the sale of se¬
curities for the year was
after
$1,142,977.
The
report
stantial
paid during the
were
follows:
on
the preferred
stdck,
$253,035;
stock,
$882,107 from
from
was
,
Dividends
year as
taxes,
and
expenses
on
the
common
income
net
been
"The
added:
sub¬
gain.
position has
long-term
group that was
were
investment
maintained
in
growth utilities, a
outstanding in its relative
ket performance in 1957."
mar¬
$1.83
share
per
from
long-term
capita* gains.
Principal holdings
1957
Pa
r
on
Dec.
were:
Value
< $000
omit'd)
$2,800 U.
S. Treasury
1,500 Missouri
First
Pacific
Oil Company— 16,600,000
5,400,000
60,000 Pittsb'gh Cons. Coal Co.
1,890,000
60,000 Amerada Petroleum Corp,
Oil
29,900 Seaboard
50,000 Signal
1;.
Oil
Company—
&
Gas
-
1,704,300
Co.
80,000 American Metal
10,000 Gulf
Oil
i
Co.,
——
Ltd.
Corporation
of
Southern
1,360,000
1,070,000
Natural
Gas
shares of Hooker Elec¬
trochemical.
At
Dec.
31,
1957,
holdings
year
*.
50.5%
gas,
11.7%;
and
d i
natural
s
t
r
bq'th
net
assets
gas
i bution,
11.2; miscellaneous industrial,
in¬
and
vestment income.
Whitehall
Fund's
assets
con-
tined to be invested roughly 50%
in bonds and
50% in
decline
in
common
and
distribution made during the year
which aggregated $5,515,874, or 50
.
-
Within the
common
stock cate¬
and while each of these periods
has differed from the others, they
out, purchases favored have in common the fact, that in
stocks of companies whose busi¬
every instance our economy has
ness seemed likely to be resistant
emerged stronger than before, apd
to cyclical influences. Investments
has
subsequently achieved new
were increased in the drug, public
high records in production.
utility and shipbuilding indus¬
In Mr. Lovelace's
opinion, the
tries.
A common stock holding
present period of readjustment
of investments, the Chairman
gory
brought
was
eliminated
,
equipment
tions
were
in
office
has
industry, and reduc¬
made in building, elec¬
electronics, natural gas
the
end.
preferred stocks and
stocks at the year
was
no
significant
There
change in the over-all investment
position in 1957 and, the Chair¬
man stated, "none is planned."
There were, however, numerous
changes in individual securities
owned, with 19 securities added
to, and 17 eliminated from the
the
of the characteristics of
1937-38 period as well as the
1948-49 and 1953-54 periods. The
senior
of
fixed-in¬
securities
shifts
were
made into bonds from
preferred stocks.
were
made
in
Moreover, shifts
holdings to
bond
21.6; coroorate bonds, .2; and U. S.
take advantage of
the—at times—
governments and cash, 4.8.
unusually
differential
wide
in
Chicle
Com¬
some
ing labor costs not matched by
higher productivity. "Today," he
said,
"there
areJ elements
of
strength not present in any of
the earlier periods mentioned. Our
the same period, the
holding in Shell Oil Company was
reduced by 1,100 shares.
In
Investment Co,
economy
of America
facing
base
is
on
a
much
than
a
in 1937,
step-up in
broader
and we are
national de¬
fense
expenditures, not a reduc¬
Many American economists
expect a turn-around in business
tion.
Net
Record
at
in the middle of 1958, but the tim¬
income of The
ing and vigor of the recovery may
Company of America
depend largely upon the trend of
set a new high record of $3,031,wage
contract negotiations and
320 in the year ended Dec. 31,
the psychology of consumers."
1957, Jonathan B. Lovelace, Presi¬
During the year The Investment
dent, stated today in his 24th an¬
Company of America increased
nual report to the shareholders.
cash
and
government
holdings
Such net income was equivalent
from a low of 4.3 % of net assets
to 28.3 cents per share on the 10,following the market decline in
722,385 average number of shares
February to a high of 18.8% in
outstanding during the year, and
July. On the subsequent decline
compared with $2,502,609 or 27.8 in
the market,
common
stocks
cents per share on the average
were
purchased
in
substantial
number of shares (9,015,870) out¬
volume, and at Dec. 31,' 1957, the
standing in 1956.
cash and government ratio stood
Net
investment
Investment
,
Total
38,388
043
a
shareholders increased to
at
12.1%,
1, 1957.
Dec. 31, 1957 from 35,year earlier.
f *
/
on
*
up
from 10.5%, at Jan.
The Fund also made
a
number
1957 of changes in investments in an
were
reported
at
$88,737,452, effort to adjust holdings to the
equivalent to $7.58 for each of the changing economic outlook. Sub¬
11,708,464 shares outstanding at stantial increases were made dur¬
that date, and compared with a ing the year in the holdings of
total at Dec. 31, 1956 of $95,038,- bank and insurance stocks and in
012, or $9.43 per share on the 10,- the auto parts, drug, electrical and
074,300 shares then outstanding. electronic products, grocery chain,
The
decline
in
net assets,
Mr. office equipment, oil and steel in¬
Lovelace said, was a reflection of dustries.
Total net assets at Dec. 31,
What the.
.
.?
'"If
we try to operate the United States with 75%
parity for farm products and other raw materials,
the nation will lead capitalism into an economic
collapse throughout the world.^ A
of
*
■' #
*
"When farm
prices are below parity, society is
position of either accepting a loss in
income or mortgaging its future income by exces¬
sive increases in total debt—public and private—
forced into
a
against the income of the United States.
"The
point that needs to be driven home is that
as a whole sets the stage for losing $5 of
national income and $1 of earned invest¬
the nation
earned
capital for every dollar that raw material
are paid below parity levels."—Carl H.
Wilken, Economist, Raw Materials National Council.
ment
producers
From
pose
during the past
year were concentrated in bonds,"
Mr. Randolph reported, "and some
come
of American
pany.
common
"Purchase
of total net assets; oil and
natural
to
expenses,
of portolio of investments.
utility common stocks represented
transmission
1,675,000
34,000 Thompson Products, Inc.
1,666.000
21,000 Newjnont Mining Corp,^.; 1,480.500
Class A
shares of Oklahoma Natural Gas.
shares
10,000 Superior
a
up
tion
and 6,000
Sh3r6S
earlier.
Fund
31,
cluded,
Value
982,500
Whitehall
of
nah
Major purchases during 1957 in¬
Market
Co.
RR.
Mortgage 4 W!o—
assets
$8,072,964 at Dec.
slightly from $7,942,047
Mr. Ran¬
dolph noted, were only $33,452 in
1957, continuing to be low in rela¬
Among holdings eliminated dur¬
ing the year were, 18,000 shares of
31, Louisville Gas and Electric, 13,000
shares of United Gas, 3,000 shares
of Colorado Interstate Gas, 5,000
Secugitips .$2,813,130
Net
Operating
10,000 shares of Savan¬
Electric,
10,000
shares
of
Tampa Electric, 5,000 shares of
capital gains. Dividend payments Idaho
Power, 10,000 shares of Ar¬
on
the common
stock
were
49 kansas Louisiana
Gas, 6,500 shares
of
cents a share from net income and
Southern Union Gas and 6,000
dividends, interest and royal-
tigs, and $3,294,402 from long-term
general
possible during most of cents per share.
1957 to buy bonds on a relatively
Figures contained in the. report
generous
yield basis and often of the Fund
which now enters it3
with protection against
early re¬ Silver
Anniversary year show that
demption or refunding
an investment of
$10,000 made 24
"This," he added, "helped to years ago would have been worth
improve the Fund's income for $181,464 on Dec.
31, 1957 if all
the
year.
The improvement in dividends and distributions had
bond
prices
that
accompanied been reinvested.
easing in the money supply in
According to Mr. Lovelace, the
the final quarter helped bolster
country has been through seyeral
the value of its investment as¬
periods of economic readjustment
sets."
v
*.-•
:Tj.r,: ir..Tr 'Z *
during the lifetime of the Fund,
shares
ized profits of 41 cents a share in
Temper
held at
In
time
some
it
with $21.77 a year ago. After ad¬
justment for distribution of real¬
V
72,000 to 95,000.
Funds under $12,134,590 at the year end.
management of The Parker Cor¬
Twenty-one thousand four hun¬
dred shares of common stock of
poration now total $280,000,000.
General
made
trical and
Market value of the 746,170 share¬
holding of
$56 Million
for
among in¬
The tight money market
vestors.
26th Annual
ad¬
record rise,
■Assets Now at
the
stock prices and was without any
adjustment for the capital gain
latter two periods of decline were
Report, issued to 26,809 shareholders, shows assets of and oil stocks.
largely the product of inventory
New common stock investment liquidations. In 1953-54 there was
$161,778,741 compared with $174,527,840 a year ago. Shares out¬ positions were established during an additional factor of reduced
standing totaled 8,223,404 com¬ the fourth quarter through pur¬ national
defense
expenditures.
Investments owned in common pared with 8,016,699. Asset value chase of 1,500 shares of Middle The current decline he attributed
stocks of domestic public utility per share was $19.67
compared South Utilities, Inc., and 1,000 more to imbalances created by ris¬
stockholders
General American
is¬
$84,723,938 or $6.02 per share
at Dec. 31, 1957.
At the end of
1956 net asset value was $92,819,979 or $6.60 per share.
when stock prices generally ditional shares of common stock December, the share value on Dec.
declined, was gratifying to man¬ of Canadian International Power 31, 1957, was 7.8% lower than a
agement.
'•/"/: Company Limited were purchased. year ago. Common stocks totaled
also
registered
a
with an increase from
new.
was
year
During the year the number of
favoring
issues which had been
well-distributed
were
(trus¬ United Corporation for the
year Eaton & Howard Mutual Funds
tees, guardians/ executors, etc.), 1957 increased to $3,436,111 or were
$242,958,742 on Dec. 31,1957,
insurance companies, educational 24.4c
per share from $3,332,350 or compared with $249,253,028 a year
institutions, hospitals, homes, la¬ 23.7c per share in
ago.
Eaton
& Howard Stock Fund
1956, according
bor unions, profit sharing
and to the company's annual
report 27th Annual Report issued to 21,pension funds, religious organiza¬ sent to shareholders over the past 946 shareholders shows assets of
tions, other investment companies week end.
$81,108,001, an increase of $6,454,and many business, philanthropic,
In addition to net investment 813 during the year.
Shares out¬
fraternal and miscellaneous organ¬
income
the
company
realized standing totaled 4,475,791 com¬
'
return
over
outstanding
fiduciaries
izations."
of
sues
61
such statements
that
"parity"
from above
of
fact
it
is
on
was
as
these
one
would
sup¬
something handed down
tablets of stone, when as a matter
"trumped-up" figure resting upon
clearly fallacious assumptions.
*The trouble is that there are always naive minds
a
which
accept foolish concepts and shaky figures
merely because they spund learned and have politi¬
cally impressive
sponsors.
-J
,
62
The Commercial and Finaitcial Chronicle-.
r»
(506)"
The
Indications of Current
week
Business Activity
AMERICAN IRON AND
STEEL INSTITUTE:
(per cent of production)—
Feb.
Indicated steel operations
following statistical tabulations
latest week
Latest
Previous
Month
Week:
Week
Ago
'93.1
§92.1
1
month ended
or
Year
,-ir^ p
—IT—
93.4
155-4
r'~
Feb.
'1,496,000
§1,479,000
1
2,498,000
1,501,000
«
(<
of quotations,
cases
,
.
STATES—DUN
INC.—Month
of
either for the
are
of that date*
are as
Latest
'•
■
UNITED
.
castings (net tons)
r"-
I
in
or,
1
• •
BUSINESS INCORPORATIONS
Equivalent to—
Steel ingot# and
•
.
production and other figures for ths
cover,
that date,
on
Thursday, January 30, 1958
.
Dates shown in first column
month available.
or
.
Year
Previous
Month
Month
Ag6
(NEW) IN THE
BRADSTREET,
&
10,788
9.27C
10.575
December/———/
AMERICAN PETROLEUM INSTITUTE:
Crude
gallons each)
42
COTTON
(bbla. of
-Jan. 17
oil and condensate output—daily average
117.675,000
26.724,000
(bbls.)_
6,849,985
7,772,000
6,924,535
Jan. 17
output (bbls.)
Jan. 17
Kerosene output (bbls.)
i
Jan. 17
Distillate fuel oil output (bbls.)Jan. 17
Residual fuel oil output (bbls.)
—
—
Stocks at refineries, bulk terminals, in transit, in pipe lines—Jan. 17
Finished and unfinished gasoline (bbls.) at
Jan. 17
Kerosene (bbls.) at
—
——
;—.—
Jan. 17
Distillate fuel oil (bbls.) at
Jan. 17
Residual fuel oil (bbls.) at
Jan. 17
Crude runs to stills—daily average
Gasoline
26,981,000
2,524,000
2,712,000
13,189,000
13,733,000
6,914,800
7,431,115
7,713,000
27,264,000
2,436.000
13,106,000
r 8,120,000
November:
14,841,000
7,581.000
8,923,000
191,373,000
27,261,000
27,719,000
27,542;000
135,406,000
57,952,000
141,349,000
152,383,000
114,424,000
58,257,000
57,674,000
41,009,000
Received
,
.
189,486,000
:
Cotton Seed—-
2.472,000
7,705,000
198,738,000
COTTON
AND
SEED
PROD¬
UCTS—DEPT. OF COMMERCE—Month of
27,107,000
7,132,000
200,636,000
25,343,000
SEED
'
Crushed
crude
(pounds)
Produced
i-_
-
——
—
Stocks
Revenue freight loaded
572,353
Revenue freight
534,938
(number of cars)
Jan. 18
received from connections (no. of cars)—Jan. 18
CONSTRUCTION
ENGINEERING
CIVIL
'
590,343
569,444
490,066
,
657,269
^
108,132,000
173,802.000
223,092.000
£29,605.000
146,271.000
142,251,000. "169,019,000
ENGINEERING
—
Jan. 23
Private construction
Jan. 23
Pufcjid construction
Jan, 23
Jan. 23
Mate
and municipal
,
—Jan. 23
Federal
$218,880,000
93,338,000
125,542,000
105,118,000
114,822,000
122,226,000
151,541,000
51.662,000
170,480,000
97,497,000
80,115,000
135,124,000
120434,000
28,045,000
34,707,000
16,417,000
50,046,000
•
-
(tons)—.
Pennsylvania anthracite
Jan. 18
8,440,000
*8,790,000
Jan. 18
556,000
506,000
AVERAGE
SYSTEM—1947*49
=
100
Jan. 18
108
I
Jan. 25
12,399,000
12,400,000
<
FAILURES'(COMMERCIAL AND
INDUSTRIAL)
—
DUN
11,218,000
100
'
// 12,410,000
250
166 /;•/
260
333
METAL PRICES
(E.
$66.42
$34.33
(East St. Louis) atAluminum (primary pig. 99#)
(New York)
5.967c
$66.42
$62.90
$32.00
$57.83
t:
,
5.622C
5.967c
$66.42
$33.17
"
Shipped
"
at.
at—
26.550c
24.575c
24.600c
33.350c
.•Jan. 22
20.875c
21.625c
.Jan.22
13.000c
13.000c
.Jan.22
12.800c
12.800c
12.800c
.Jan.22
10.500c
10,500c
10.500c
14.000C
.Jan. 22
"19000c/.
10.000c
10.000c
13.500c
.Jan. 22
20.000c
26.000c
26.000c.
.Jan. 22
92.250c
92.250c
92.375c
,
,
.1
22.450c:
r
13.000c
-
~
„
1G.000C
15.800c
-
*,
'
Death
U. S. Government Bonds
Aaa
.:
a
92,94
96.07
95.62
*92.93
Jan. 28
103.13
102.80
100.49
Jan.28
99.68
99.52
96.69
Jan. 28
96.85
96.54
*93.38
Jan. 28
—
zzt—:::::::::::::::::::::::
i
94.19
Jan. 28
—
l.
Baa
-
94.13
Jan. 28
85.72
84.94
82.40
Jan.28
91.77
92.06
8933
;
Railroad Group
*
Jan. 28
Public Utilities Group—
Industrials Group —
Jan. 28
.
—.
97.94
98.09
98.57
Average
Am
A
corporate;
Jan. 28
——
.
3.56
3.77
Railroad Group
Publie Utilities Group.
95.92
-
98.25
OF
-
COMMODITY
3.10
*4;21>'Y '"•/"•
3.95
3.72
3.96
4.48
4.47/1
4.09
4.73
4.79
4.27
3.88
3.95
—Jan. 28
3.84
/
3.87
Jan. 28
391.2
.
395.6
..Jan. 18
255,702
Jan. 18
281399
•
•*
"
Orders received (tons)—
(tons)
•
*4.17
Peraatage of activity
Jan. 18
SO
d8
Unfilled orders (tons) at end of period.
Jan. 18
377,663
402,939
Jan. 24
108.49
108.44
"
•
432.9
*'
237.425
AVERAGE
=
95'
430,271
108.26
111.14
:
sales
Other
Total sates
Other
_
transaction^ initiated
on
—
purchases
1,661,710
1,296,210
1,497.380
1,273,040
jan.
4
209,250
194,070
304,800
196410
jan*
Ijan!
4
1,408,310
932,940
1,147,680
4
1,617,560
1,127,010
1,452,480
1,319,980
1,516,790
Total sales
.
4
335,910
Other
24,400
44,900
26.400
194,650
306,490
►—Jan.
4
320,620
219,050
403,520
448,420
.Jan.
4
529,591
505,535
494.825
.Jan.
4
74,290
460,164
46,590
130,300
104,780
-
Total sates
-
-
PRICES
*
EXCHANGE
—
SECURITIES
Dollar
value
EXCHANGE
(customers'
527,102
596,404
Cotton
.Jan,
4
491,330
382,512
657,402
701,184
Feed,
,
Jan.
4
4
302,550
265,060
480,000
327,999
4
2,126,960
1,463,512
2,078.302
2.222,874
Potatoes..
Jan.
4
2,429,510
1,728,572
2,558.302
2,550,864
Tobacco*
2,527,211
2.400,025
2,250,394
1.478,388
$53,115,822
1,069,228
1,225,767
1,306.817
$39,504,282
$50,692,078
$67,436,972
1,127,326
8,917
11,084.277
.1,072486
$45,181,849
1,118409
$38,952,023
$43,552,805
$46,447,579
396,200
347,330
320.570
222530
1,332,090
5.389
.Jan.
1.322,701
.Jan.
Jan.
'945,750
11,791
4
396,200
347^330
520,530
323,610
"
5,723
•
4
.
■
U.
320~570
-
,
31.7
;
s.
.
3—1
.inn.
4
Jan.
4
13,484,520
-
Total
at
521,260
.
■
367.890
663,830
411510
of
—
10,021,700
11,668470
12,332,300
10^84,780
10,389,590
jqn'
Meats
All commodities other -than
farm and
foodsul
118.8
118.7
94.3
*93.6
93.9
89.2
109.2
*108.9
107.5
104.5
Jan. 21
101.0
10O.7
96.8
Jan. 21
126.0
*126.0
125.8
.
84.0
125.2
241
Western Zinc sold
on
delivered basis at centers where freight from East St. Louis exceeds
237
266"
270
9 T
152
156
221'
219
187
235
/
-
164
154
473
483
>
Z58
*
'
.20*7
262
154'.
.
*.277
«278//- /
./
'
•
/
«■
■
279
-1
!
443
1
230
v'>279-
r w 231-
274;.*'-
163
U;■/AlOO'/r
188*
-267
232
y
•; '■'.254 V-
.
->* "--27 9"x*
;
231
'
"
182,
'
"
■
£53
•
$1,672,909
1,141,000
$1^41,200 '
$i;670.900-
1,007,100
1,121,000
LIMITATION
(000's omitted)-:
31
that may be. outstanding -
amount;
——
'
public debt-7„-7——7———
obligations. not * pwned. by, the
2
-
limitatum_77—■
103,584
$275,002,145
• $274,850,434
.
103,229*
:
$276,730,757
•
438;507-
:„4..
439^11
.
.""
,"455,077*
.
under
total
.
UNITED STATES GROSS DEBT DIRECT AND
GUARANTEED—(000's omitted):
Net
274i74€,849.: 2^6^27,527
104,361
—.—
outstanding.public debt obli-
1
outstanding——7_/7_i—7— r $274,563,638 $274y4I1^23 .3276,275,680
face amount of obligations/ issuable
586,776
' T.724.319
gbove authority
./_•.—7*_1-—
436/361
Grand
of
$278,900,000,
$£75,000,000
274,397,784
public debt and guaranteed
obligations
December
General
-
$275,000,000
,
Treasury
Balance
'
234
224
221
*
_L^_/_-l27-i2/4r7i/2-.r-
gations not subject to debt
As
Revised figure- Jacluces 901,000 barrels of foreign crude runs. §Based on new annual capacity of 149742 570 tons
mf °4u.n7 '
' fsL?g
"It.Jan- !• 1957 basis of 128,363,099 tons. tNumber of orders not reported since introduction of
-s-Prime
.
*
24C
242
—
7—
fre^h
time.!
Deduct—other
Il7;0
118.4
ut
jan. 21
_
Monthly Investment Plan.
* 319.3:
,
15:
———7—27-
of Dec.
face
any
■
10.995,990
•
——Jan 21
30.4.
I8.9
:
,"
INDEX
Nov.
•^722—-ip-7—7/&/7*522'__;^
Total gross
*
foods
:
;
:*
STATES
Total- gross
.
products——
31.7
*22.1
*331.0
AGRICUL¬
OF
eggs_2_—L—2—1/7—»_2L7^_7
Outstanding—
dept. of
commodities———
7.7
50.7
-
330.5
1_7——227/77—7-_:—:7,22_/2^/i2ii/7i7i7'_7 v"
I
Guaranteed
457,890
13,026,630
5.9"
8.0
*503B
S. GOVT. STATUTORY DEBT
•
4
*6£
'
,
*
.
~
u.
31.9
jf- 38.6
f
50^
-
v
:7_—.—777.2-77—/'
._—217i_2'7—_
-
2.
—as
222,03'
452,460 *
y. STOCK
Jan.
—
61.4-
;•
"'6.8-
"•1
_
LABOR — (1947-49=100):
Commodity Group—
All
' /. .34.1
940.027
,
Other sales
101^,
"
EXPORTS AND.' IMPORTS
BUREAU OF CENSUS — Month of Oct.
,
(ooo's ptnittedi:
:
1 r
-— •
TRANSACTIONS
Total sales
233.1.
>64:3
8.0
7——T
crops
_j_
•Wool
Total round-lot gates-
Wholesale prices, new series
$334.9
3101.3
22.0-
DEPT.
vegetables,
Meat-' animals
•
'
-
,
7^/./7.7*240.1
107
UNITED
.Jan.
.Jan.
FOR ACCOUNT OF MEMBERS
(SHARES):
t$345.9
7
'
£39.2v*
4
—.Jan.
TOTAL ROUND-lot STOCK SALsg ON THE N.
EXCHANGE AND ROUND-LOT STOCK
Farm
$345.4
and dividends—
BY " FARMERS
S.
Dairy products
Jan.
—_
4.13
^
payments
U;
—
Oil-bearing
;
-Jan.
Other sates
4.58
2,081.365
Livestock
—jan
Round-lot purchases by dealersNumber of shares--
Processed
income
ittterest
Poultry and
Short sales
3:2s'
4.77
-
4
4.^:4———.———
Jan.
,
4.4/
3/56
u
•
-
4.84
4.84
7—7_21
products
—Jan.
Round-lot sales by dealersNumber of Shares—Total sales
Short sates
^iJuD S*AT^"L^"trV i'li
5.04
346
grains and hay——
—,
grains
——7——:—1—1_——7_—"
Food
Jan.
Customers' short sales
.
farm
335,922
Customers' other sales.
Dollar value
r.
.
.
cbhtribution
RECEIVED
417.040
Odd-lot purchases by dealers (customers' sales)—
Number of orders-Customers' total sales
3.90
6.01
/
224
COMMISSION:
•
4.36
7.71
,
•
income
Commercial
.
purchases)—)
-
4.58
8.31
5.09
.
TURE— 1910-1911=^100—AS
STOCK TRANSACTIONS FOR ODD-LOT ACCOUNT OF ODDLOT DEALERS AND SPECIALISTS ON N. Y. STOCK
Odd-lot sales by dealers
Number of shares—.
$4,856
'V I;;;
//';
4.89
.....
"7——7_7_7^i£l—7:77£_777v("
NUMBER
.
332,8,-0
4
.
&
honagricultural income/7——1—
-Jan.
.
pates
967
:\-.i::
;
—
Tel.
569
-
$4,602
v .
1
;
Amer.
$3,320
293,500
397,110
294,020
19,010
301,610
purchases
Short sales
$5,732.
7.'—^n>77^1^777^'|T^2u77"
j—.X7/77w_-7.77_7_:;/i: ""
_
labor
Personal
round-lot transactions for account of members—
Total
517
'672
'*
Tel.J (24)
—7i:/7-u—
Total transfer
[ Total
4
—
.
«•
Proprietors^ and rental income—7„,
i,
4
—
510
'
"
Jan.
u
Other sales
Total
Other
All
Short sales
•"84,500.000
,
*
4
-Jan.
i
'*
/>
—
incl.
employees'
surance
transactions initiated off the floor-
Total
(not
■
the floor-
—
Total sales
Other
Less
,jan.
sales
Other
95.800,000'
—+
^Government:
'
-Jan.
Short sales
9.500,000'
"45.500,000
'
$3,413
$3,978
<Distributing, ihdustr-ies
"...
Service industries "
7—7_T._l77__—7.177--''
1
•.
Total purchases
157.700.000;
w
42,600,000
92,500,000
97,300,000
•
TRANSACTIONS FOR ACCOUNT OF MBRI¬
BERS, EXCEPT ODD-LOT DEALERS AND SPECIALISTS:
Transactions of specialists in stocks in which registeredShort sales
$223,200,000.'
/
9,100,000
',17244
:_J3^'_r37/
personal income
Wage and salary receIpts/4btaL-i-7i.7/_,„
Commodity producing industrle^u.-—
"
'■
purchases
1,152"
"
Total
'
93
ROUND-LOT
Total
1,456
616
t
-
-
''(DEPARTMENT" OF"- CO»tWEttCE)^Mbntfi^'f**
of November (in billions)
7
V
-
100
r7
—
PERSONAL INCOME .IN THE
278,737
276,494
(125)
(25) 7
.Average. (199).-.
OIL, PAINT AND DRUG REPORTER PRICE INDEX1949
1461
October
r
-.Insurance... :;(10).'
3.98
206,345
290,705 "
i
of
^
-Banks ,(15)
""
394.3
275,279
"
/..v.-.'.
•
Utilities
3.97
4.00"
264,368
2,729*
$587,100;000 '$496,900,000 "DSlg.eOO.OOO
INSTITUTE
*■ '
/_7„
Total
7';;/'/
Industrials
3.99
:
'
INDEX.
—
INSURANCE—-Month
*
Railroads
.
,
1.846
r
$202,400,000
'53,000.000
*
10,200,000
'tv v'/..-v/,./.., J'
MOODY'S WEIGHTED AVERAGE YIELD" OF
"V
100 COMMON STOCKS—Month
of Dec.:
4.01
4.99
4.29
LIFE
**
3.86
*4.18
Jan. 28
*!*
•;
47;600,000
—7—7"
Industrial.
3.72
:•
3.97
-Jan. 28
1,099
;
-
96.54
3.22
3.58
1.086,
1J44
;
.
Ordinary
89.09
NATIONAL PAPERROARD ASSOCIATION:
Production
payments
649.;
;
1,392
t
64.000.000
(000,000's omitted):
94.71
96.38
3.78
'
^
96.23
|
/
96.07
-
162,907,
-t
.
V
lu;—
~
202.224 :
143,620
V ■?" : 1.039
T-
$248,800,000
_17——
INSURANCE PURCHASES
LIFE
100.49
,
'
Industrials Group
MOODY'S
;
-Jan. 28
—
.-•v'
2.99
4.03
4.00
Jan. 28
Jan. 28
Jan. 28
_
Baa
3.00
r
;
'
212,278
-
199,332
91.23
.
..
,
Jan. 28
;
689
7
.
LIFE
OF
136,783
*
102.375c
AVERAGES:
/
252*096
i-i
Surrender.Values-,——Z-'H—I'-*
■*'1118:300,000
Policy dividends '——7—:7—1-i "-58,200,000"
~
*93.52
96.85
TO
—£1———1
payments
Annuity
...
MOODY'S BOND YIBLD DAILY
U. 6 Government
.'-or.-v,
—
Total
——
•
•*> 294.637
——
endowments
^-Disability
,
1
'
benefits
/'•' Matured
25.000c
.
108,863
177,697135,056
—
142,245/
136,097
"
.r.? '?
INSURANCE—Month of October:
35.425c
'
MOODY'S BOND PRICES DAILY AVERAGES:
Average corporate
.
—
POLICYHOLDERS—INSTITUTE
.-
"
.Jan. 22
Zinc
tin
v
.
,
30
LIFE. INSURANCE—BENEFIT PAYMENTS
Electrolytic copperDomestic refinery at.
Export refinery at
Lead (New York) at——
Lead (St. Louis), at
tzinc (delivered) at
Straits
5.967c
Jan. 21
J. QUOTATIONS >:
31.
&
—Jan. 21
—Jan. 21
v
^
'
131,667
vv 112i73S
Stocks - Nor.730
>■■<& 2^364.
Produced'.' ——————■ 1,207
v,,.
——
Nov.
;
'
——~
61,652*-
77.319
96,248
;
Shipped. ———————2—c
Hull Fiber (l.oOo-lb: bales)—.
;
% :%Xi ' 7
;
•- Stocks' Nov. 30
•1849
/
Produced
——1,007
Shipped
1,197
Mofces, Grabbots,' etc. (1,000 pounds)—
4- i V ■ ~
.
'
'
Finished steel (per lb.)
Pig iron (per gross ton)—
Scrap steel (per gross ton).
I
"
312,428.
4*,
'
'
Jan. 23
(tons)
—
,
&
BRADSTREET, INC.
IRON AGE COMPOSITE PRICES:
**-"
Produced.
EDISON ELECTRIC INSTITUTE:
(in 000 kwh.)
Stocks
./
.
274;
■[
-
259,656
268,047
.■
186.106
'327,720
-
299,826
'
'
•"
Produced
''
-249,383
261,578
Stocks (tons) Nov. 30—
"
/ 565,000
•
Electric output
"227,164.000
54,699,000
280.242
——
Shipped (tons), —:
Linters (running bales)—
w
469,000
DEPARTMENT STORE SALES INDEX—FEDERAL RESERVE
103
Hulls—
.
Nov. 30—
(tons)
ShipiCd. (tong). l—
-:
•> 9,925,000
9,380,000
-
Produced
$222,142,000
$273,767,000
$219,940,000
COAL OUTPUT (U. S. BUREAU OF MINES):
Bituminous ooal and lignite (tons)
30-——————313.978^00
Nov.
-
v
...
1
Stocks (tons)
',
construction
/
r
NEWS-RECORD:
Total U. 8.
(pounds)
2,353,184*
?
Prpdudeci: (pounds) :li" 133,^7l?,Q0O •> 130,973,000 V7159.780,000 ;*
Consumption (pounds) —l__i—li— ' 109,610,000 7116,520,000 .^.127,954,000;,
V
-'mCake and- 'Meal—
'i-',
**>•*;•»• -?•.
//. 604,898
552,316
676,669
v:; 912,009
Hv
203.699.000
'"
ASSOCIATION OF-AMERICAN RAILROADS:
1,233,215
127^628.000
30
Nov,
(pounds),'
,
(pounds)
Refined Oil—.
\
JL.070,580 '
,.
645,936
610.411
,
.
T
J
v/-///;
Shipped
1,139,754
,,931.617
_
Nov. 30__—^11
oil—
Stocks
>
7
">
(tons)
' Stocks (tons)
i,
7 7
„
/ /
"
,
milte .(tons)-———
at
-
31
funds balanees——.—
debt
——72
Computed annual jate_——--—7
—
$275,002,145 $274,850,434 ;$276,730,757
4^64^55"
^4,427.373
-4,606,162
1—1_" $270.395,$83
2_ *
2.889C0
$269985,'579
2.893<i*
"$272^03.384
;
2.671
Number 5712
187
Volume
.
.
The Commercial and Financial Chronicle
.
(567)
DIVIDEND NOTICES
With. John G. Kinnaird
DIVIDEND NOTICES
DIVIDEND NOTICES
63
DIVIDEND NOTICE
(Special.to Tee Pinancial Chronicle)
MINNEAPOLIS,
-
Minn.—Robert
AMERIC AN CAS
O. Lee has been added to the staff
G,
John
of
&
,Kinnard
Co.;
AND KLEt TltlC COM PAX Y
80
f
H
,
Eighth, Street. .'V;.: •?
South
TITLE
;
f
C
oiiiiiioii
Slock Dividend
f\
C$.40) per share on the
stock of the Company
cents
clared
(Spec'al to The Financial Chronicle)
Main Street:
Inc., 292
-
:
.
,issued and outstanding in the hands of the
public has been declared payable March
10,•"1958, to the holders of record at
the close of business February 10, 1958.
:
.
/
■.
"
-
-
^
now
are
ner,
the
of
Locust Street,
members
and
Midwest
York
New
■
WILLIAM H. DEATLY
President
ft
f
.
sylvan COLE.
the Board
A
quarterly dividend of 50c
share
•
•^
J
declared payable March 28, 1958
to stockholders of record
Feb¬
A >*»
»
quarterly dividend of $1.06
share on the AM % Preferred
-
*'•
record
National
February 28,1958.
Johns
£
Stock Exchanges.
28,1958.
ruary
Stock has been declared
payable
April 1, 1958 to stockholders of
'**?■» ;
V*
Distillers
ERICAN
l
per
the Common Stock, par
on
value $13.50 per share, has been
per
with Reinholdt & Gard¬
400
jjoard of Directors has declared
regular
quarterly
dividend
of
20c
share on the Common Stock, pay¬
able February 28,
1958 to stockholders
of
record February 14,
1958.
Transfer
books will not be closed.
-
T.t Tobermhn
Joseph
•*>
'
The
a
per
A
r
Mo-—Ernest-'Gi
LOUIS,
and
1958k
OF DELAWARE, INC.
.
(Special to The Financial ChroNicle>>i.
ST.
DIVIDEND NOTICE
a
Chairman of
With Reinholdt Garner
Smith
^
ROSE, Secretary
j
January 28, 1958:
Company
66
dividend of 3114
cents per share designated as the first
regular quarter-annual dividend for
1958, payable February 21st, 1958 to
stockholders of record on February 6.
Common capital
ROCKLAND, Me.—Everett' S.
Blethen4s with Lincoln E. McRae,
NUMBER
NOTICE
Trustees of Title Guarantee
and Trust Company have de-
A regular quarterly dividend of forty
m
Improvement
Company
..DIVIDEND
Joins Lincoln McRae
The United Gas
GUARANTEE
and Trust
METER
.t-.
COMPANY
INCORPORATE
.
.
Hopkins, Treasurer
Philadelphia, January 28,1958
and
O
Reserve In v. Adds
DIVIDEND
(Special to The Financul Chronicle)-
Ohio—Virgil
CINCINNATI,
b
•••£.
du/iokftoC
I
Burtnett is with The Reserve
vestment
I'hjDixie ^Term¬
Company,
been declared
mon
inal Building..
,
it-*''*"/.'
vh
The Board
;
of
Director
*
Slay ton
v
Mo.—Walter
T.
s-
ST.: LOUIS.
Grimmer,
troller of
■
Comp¬
and
board
'
DIVIDEND
The
Corporation
payable March 10, 1958,
•-
to
stockholders of record
at
the
February. 28* 1958.
',.'•
Kl.
>
Board
clared
payable
company,
NOTICE
Company
Allied Chemical & Dye
on
January t3, 1958, declared
stock of the
Railway
the Com¬
on
Stock of
.^March 14,.. 1958, to stockholders
...
w s
..
25{
March
share
Directors
has
de¬
DIVIDEND NOTICE
1958,
New York, January 28. 1958.
the outstanding
on
Stock,
3,
of record
Richard F. Hansen
B. ASHBY, Secretary '
per
of
quarterly dividend of
Common
close of business
February 14, 1958.
b
a
payable
Dividends aggregating
on
stockholders
to
The transfer books will not close.
C.
of
January 23, 1958.
-»
two
RECTOR
1957 earnings,
york
new
6,
N. y.
i'■
COMMON
;
.
STOCK
)
IMPORTANT
The Board of Directors of, the
Company,
at
a
dividend
of
25
a
quarterly
cents
dividend
will
not
V0*okiep Copper Company
be dis¬
Preferred and Common
of -the.
,.
shares
per
■'!i-Jtare • ^>»>- the Commoii;? Stpplr
Feb.
14.
May
15,1958
!'/»% (2S<)
Sept. 19. 1958
Aug. 15. 1958
have, been
:
to
:
,
thef shareholders rbf /recv
ord^at- -the close ,c©f 'business.
February.
y.ir"
'
-the. Ordinary. Shares of the Company pay¬
able March, 4; 19 58. > '/■■*1. '
• •
f.
y.-v The Directors authorized the distribn-:
i
fion-of: the ,'«aid. dividend oil March 14,
; 1958 to tlie holders: of record at the close
!. of busiiiess.iOn Atarch
7,) 1958 of American
'
'
• -it:
3."
-
• v •:
are
to
which 7'
entitled.
tin-
der theVPlau of Reorganization
..
of the
Coippany, which became
February 29, 1952. 1 [
effective
10, 1958.'v'^V
.
holders
:
r.
are>
shares
terms
of
tlie
approximately
share,.; subject, Jiovvever, to any
$.41 per
change which may occur in the rate of
exchange, for • South. Africa funds prior
,
to
V
II. W. Balgooyen.
Executive
tlie
l)fci>osit_Agreement da,tqtl Juiie 24, 1946.
The dividend will amount to
all of whose rights expire on March 1,
urged- to communicate with the Company.
January 24^ 1958.7-
issued' under
,
' ',
Holders -op the old stock,
195C,
Vice
President
and
Secretary
per
way
N.Y.
Company
of
the
has
todoy
surplus
of
net
Alarch:4, 1958. "t nibn of SoutJi Africa
non-resident, shareholders
;
I-'
tax at tlie rate
On
declared
profits
of
the
year ended Decem¬
ber 31,
on
to
1957, payable
stockholders of
business
on
March 14, 1958,
record at
the
close of
February 14, >958.
MAKER, Secretary
January 22, 1958 a regu¬
quarterly dividend of 75
lar
cents per
share was declared
Corporation's Com¬
mon
Stock, payable March
15, 1958 to stockholders of
the
on
record
on
at
the close of business
February 15, 1958.
SINCLAIR
of 6.45rb will be deducted.
73rd
REGULAR
The directors,
By.iGrder of the Board of Directors,
j' F.iA. SCHECK, Secretary.
New York, New York,
been
Company for the fiscal
No. 109
Tl;e Board of Directors today declared a
dividend of three shillings
per share on
exchanged
for the new:securities
•those
(70<)
cents
DIVIDEND
Dividend No. 45
such
.
March TO,." 1953
payment
dividend of seventy
1958
NEW YORK 20,
STOCK
x^iiiiited
Stocks
until
Company
"
for
of Budnesson:
J. J.
tributed to holders of the old
meeting held
^jhis day, declared
Payment
Mar. 14. 1958
shore on 6,491,000 shares of Common
Stock without par value of Southern Rail¬
COMMON
;
This
follows:
600 FIFTH AVENUE
x< -t '•
>•
as
Record at t heClose
.
fe,v
DIVIDEND
.
-
payable
Date of
June 13, 1958
A
V
,
Southern
114% (25*)
out
-
of
H/4%(25*>
Organization in 1920
POWER COMPANY INC.
STREET:
Amount
Treasurer
Have Been Paid Since
FOREIGN
Stock
To Stockholders of
Continuous Cash. Dividends
&
3%% on 3,000,000
JAMESON
January 28, 1958
Slayton, President, has announced.
AMERICAN
Preferred
Railway Company of the par volue of $20
per share hove today been declared out
Secretary
PAUL
of
shares
February 11, 1958.
on
^13500 Philmont Ave., Phila. 16, Pa.
Hilton H.;
directors,
Directors,
of reconi at the close of business
Slay ton & Co., Inc.; !4'08
of
of
Southern
Corporation
•'
•
a
quarterly dividend of fifty cents
<.*£. (>.50) per share on the capital
^,
Street, has been elected to
Olive
its
Treasurer
.
^
/'
♦
Chemical
Quarterly dividend No.
148 of $.75 per share has
A Great Name in Oil
mon
January 22, 1958,
DIVIDEND
January 17, declared o
regular quarterly dividend (No. 73) of
thirty-three (33) cents per shore on its com¬
stock,
an
poyoble
holders of record
dividend
(No.
Cumulative
March 15 to shore-
February 7. The quarterly
11)
the 4per cent
on
Preferred
Stock,
Series
A,
at
28'/|th cents per shore, and the quarterly
dividend
-IOWA SOUTHERN
UTILITIES COMPANY
SOUTHERN
(No.
11)
on
GAS
each will be paid on March
Common Stock Dividend No.76
regular quarterly dividends:
35% cents per share on its
4%% Preferred Stock ($30 par)
44 cents per
share
on
its
$1.76 Conv. Preferred Stock ($30 par)
■*,
32
share
its
Common Stock ($15 par)
cents per
on
A
been
has
Common
per share
declared on the
stockholders of record
close of business
ary
SUNRAY MID-CONTINENT
Git
SUNRAY BLDG.
TULSA, OKLAHOMA
Stock of Southern
Natural Gas Company, pay¬
able March 13,
1958 to
on
at the
Febru¬
IYALE &TOWNE
Declares 280th Dividend
28, 1958.
all dividends payable March 1, 1958, to
stockholders of record February 14,1958,
EDWARD L. SHUTTS,
cents
37'/2<(
H. D. McHENRY,
a
Share
Vice President and Secretary.
On Jan. 23,1958,
Dated: January 25, 1958.
Chairman
January 24, 1958
to
February 7
January 17, 1958
regular quarterly divi¬
dend of 50
per
1
W. D. FORSTER, Secretory
Birmingham, Alabama
following
cent
Cumulative Convertible Second Preferred
shore,
COMPANY
The Board of Directors has declared the
per
Stock, Series of 1955, at 41 Vilh cents
NATURAL
shareholders of record
DIVIDEND NOTICE
the 5 V^t
dividend No.280
of thirty-seven
and one-half cents
canmsssssssszL
per
share
was
declared by the Board
of Directors out
THE SOUTHERN COMPANY
of past earnings,
(INCORPORATED)
payable
The Board of Directors has de¬
clared
quarterly dividend of
30 cents per share on the out¬
standing shares of common
stock of the Company, payable
on March 6, 1958 to holders of
record
on
a
at
the close of business
February 3, 1958.
L H. Jaeger,
Vice President and Treasurer
THE SOUTHERN COMPANY SYSTEM
on
April 1, 1958, to
Serving the Southeast through:
stockholders of record
Alabama Power Company
Ot the close of business
March
Georgia Power Company
Gulf Power Company
Wm. H.MATHERS
Mississippi Power Company
Southern Services. Inc.
13,1958.
Vice-President and
ME
Secretary
YALE « TOWNE MFG.CO
Ctsh divides paid
in evaty .ear since 1899
Commercial and Financial Chronicle
The
.
Thursday, January 30, 1958
.
.
^
(568)
€4
BUSINESS BUZZ
on..
And You
Behind-the-Scene Interpretations
from the Nation's
•
Capital
DOWN
OUT
AND
SECURITIES
decade, with our
population expected to climb
to 200,000,000, the electrical out-;
put is expected to double over
that
five
years
Eisenhower and
the
President
government? The answer, at
it has beeir
curbed to some extent, but the
con¬
tinues to go up.
perennial question of public
private power pertaining
series of pending bills. They
versus
a
range
late
for
providing for them.
Now
which
TVA,
band of
Congress is
little
a
dozen states, was
spending billions each year on
atomic research and develop¬
tions
However,
United
States Atomic Energy Commis¬
sion and Britain's Atomic Energy
Joint disclosure by the
that
bomb
hydrogen
can
nessed for unlimited
electric
of
har-l
production
probably
funds will
of electricity is grow-;
ing and growing in this age of
industrial revolution. Air con¬
ditioning alone is tremendous
and
it promises to
get many
times bigger than it is today. It
is because of the big growth
and
the
industrial revolution
does
taking place in this coun¬
try that members of Congress,
like Senator Clinton P. Ander¬
Democrat of New Mexico,
is 'seeking to
get the United
son,
to
Government
States
expand
atomic - power activities. P
its
i
issue
to
-
-
bonds
up
and
expand,
the TVA territory.
group
panies
the
it
is
which wants
$750,000,000
to
generally
Meantime,
best
of Congress
for
the
country that
competitive private
the
of
United
is
pooled
j
the
„
down
agency
similar
•
an
equal tax-pay¬
Federal
the tax
upon,
ex-,
Government's
eral
in
Nevertheless,
the
from
public
power
the
Fed¬
withdrawal
field is
power
extremely unlikely. The chances
it
are
will
grow
and
grow
pretation from the nation's Capital
and may or may not coincide with
the "Chronicle's" own views.]
and
?
25c; Excise Tax on the Transv
[This column is intended to re¬
flect the "behind the scene" inter¬
an
Conference
an
Requirements, 100; An
nuities, 250; Depreciation, 200'
Highway Motor Vehicle Use,
150: Income Tax Regulations (as
: of May 31, 1956)* $1.75;
Incom
:•*>Tax Regulations (issued; Jul
December
1956), ' $1.75;
Em
plpyee Pension,. Annuity, Profit
Sharing and Stock Bonus Plans'
250: Pension Trust Procedure,
and
Guides
for Qualification.
portation
Government
the
public
Falcon Dam
States
United
and
85%
About
borders.
Federal
River
Grande
Rio
power
in
A. S.
on
United States Envelope
Morgan Engineering
National Co.j i
on
the
CML Marks
Mexican
of ' all •"
the.
Federal
the
-20 BROAD STREET
has jurisdiction over
navigable streams.
•
NEW YORK 5. N. Y.
TEL: HANOVER 2-0050
>
fact
Government
the nation's
& r.o Twr
-
LERNER & GO.
•
TELETYPE NY 1-971
*
p^^.1 <Jiyjl|l|l,UUJI|WIIIIII
% t>\
'•<
in
n
I
Ml,i
.
I.
m
v
}-r
I
\
"-t
I.., .....
-
,>
f
><•
.■■<.—
--j
Riverside Cement
Flagg Utica j
FOREIGN SECURITIES SPECIALISTS
this country
view. of
Botany Mills
Campbell Co.; Com
Fashion. Park
hydroelectric. This is under¬
that
Printing Office
Indian Head Mills
-
in
150
Documents
TRADING MARKETS
States juris¬
United
of
Washington 25, D. C.
tion and the International
has
Persons,
of
Superintendent
States Govr
question. The others are
Army "Engineers, Interior De¬
partment's Bureau of Reclama¬
diction over the
10C;
Practice
in
the future.
of
'
I
under
bodies.
has turned
to. TVA
100;
government
to
granted
for use of the U. S.
Statement of Proced
ment of Tax,
Rules,
emptions and special privileges
and
creating
on
frown
areas
f,
Thus far Congress
thumbs
Papers and Tubes, without Pay
living outside the Federal power
the
Department
a
self-
as
However, the people generally
TVA.
an
15C; Revised pages t
Part 275, 5C; Dealers in Tobacc
Materials,
15C;
Removal
o
Tobacco Products and Cigarett
in recent years.
also
and
more
T o b a cco;
Importers
Dealers,
the Fed¬
projects
become
have
Manufactured
20C;
Manufacturers,
liquidating and more tax-paying
the Bonneville
over
i
ing footing and
than
area
on
power
is
TVA put on
whole
than
is
Federal
the
said
Power Administration which is
]
The TVA is one of four agen-
of
basin
Northwest
j
...
basin
most of the power. The power
which it can do without
difficulty, according to qualified
■
in
more
Engineers
Army
the Interior.
.:
that
- Trade
Zones," 20C;
and Cigarettes: Manu¬
Cigars
facturers, Importers and Dealers
eral investment. The Committee
Bureau of Reclamation generate
|
standable
want
The
t
under
within its present
companies
,
j
■
private
larger in land
companies want TVA in the
future, which is strong, to stand
•■on its own feet and pay its own
boundaries,
The
J
transmitted
tions.
and returns interest
Other Domestic Articles to
and
Works
Public
Elis-
Spirits,' Wines and Beer,
14p: Drawback on Liquors Ex¬
ported," 20C; Removals of Aleoholic Liquors, Tobacco Products,
tilled
Foreign
generation of power from Fed¬
eral projects is self-liquidating
greater than the TVA.
Columbia
the
TVA be kept
-
10 times
The
:
Boundary and.Water Commission
that
potential is
;
which
seeking to convince
are
electric
,
'
„
Committee reported in 1957 that
the Pacific Northwest the hydro¬
contributed to
people who know the ramifica-
River
Columbia
/
.
Senate
The
for
maintain
-
of
lands, 25C; Importation
!
More Public Power?
work.
!
in
a
the
have to be a
way
the region.
engaged primarily
users
defense
Engineers
an
in
of private electric com¬
majority
in
ernment dealing with the
most
spirited
"public versus private power
issues" shaping up in Congress
the
involves the TVA
some
•
!
of
with the power development
goes
power
'
cooperating in connection
been
and
Spirits
of
Wines, 450; .Wine,: 400; ;Beer,
25c; Liquors and Articles from
Puerto Rico " and the Virgin Is¬
the Bureau of Reclamation have
resale and
of it is sold to large in¬
it
of
some
people have
this development;
cies
Fight Over TVA
Perhaps
get
understand that
That is why
are
preferentially to municipalities,
cooperatives and other public
power agencies. Private utilities
all of the American
fiscal expert to
.
that is
generated
dustrial
one
west,
the Columbia
Spirits, 25C; TaxBottling Houses, 10C;
Taxpaid
Rectification
the big Missouri River j
twice as big
and twice the
hydro-electric potential of TVA.
However, army - engineers and
Bonneville
and
Administra¬
Power
said to be
basin,
a?
usually
and most dramatic.
largest
erally
2,600 peoplevfrom 80 nations of
the world came to study TVA.
Neither
|
They also are responsible for
producing about one-third of
the hydro-electric power in the
nation. Nearly half of all Fed¬
comprehensive r i v e r development-power, flood control, and
agricultural and industrial de¬
velopment in the world. It has
been terrific. In one year alone
More Atom Power
use
is
TVA
the Atomic Energy
The
the
the
in
Dams
to
understand that
perhaps the greatest
engineer
earmarking for
Commission.
for
sought
be
energy
public
more
means
he
Coulee
Grand
a
have to be
Bonneville
than
100
hydroelectric
projects, like the Hoover
more
power
-
not
does
One
r; }.
tion for
TVA No "Orphan"
mighty
the
that
determined
father of TVA.
been
has
it
of
'
FederalGovernment's
The
the
late
Senator
George Norris, Republican of
Nebraska, is regarded as the
,
Authority
of
Administra¬
Franklin D. Roosevelt.
ment.
45C;" Warehousing of
Spirits, 50C; Bottling
Brandy,
paid Wine
100 Federal Projects
the
under
1930's
-
•
.
halfcreated in the
serves
all
Distilled
responsible
Stagg
weighed
v
Administrations in
Republican
have
Denatured
of
Denaturation
20C; Production of Distilled Spirits, 450; Production of
Rum,
'
stormy
atomic pile in the
Chicago's
would
15C;
of
Rules;
Proceedings,
for
Formulas
15C;
Alcohol;
formed the partnership they
the psychological angles!"
"You'd think before they
of
1920's had been
of
Practice in Permit
Dam.;
Hoover
to
the
before
scientists.
Dam
15C;
Concentrates,
giant;
of
name
Non-
beverage Products, 10C; Produc¬
tion
of
Volatile
Fruit-Flavor
New
Deal
Interior, Harold
Ickes, had been responsible for;
changing the name from Hoover to Boulder in 1933, althougii the
Valley Author- j
ity) to atomic energy which had
its inception little more than 15'
years
ago
when wraps were
Field
Boulder
Secretary
TVA (Tennessee.
University
the-
The
from the depression-born
taken off an
changed
Spirits
Distilled
on
Manufacturing
in
Used
Republicans controlled the
House and Senate in 1947, they;
Congressional Committees are
to bring up the old
preparing
to
porizing Process, 20C; Stills, 10C;
Drawback
a dam in
for Presi¬
dent Theodore Roosevelt. Sub-,
sequently, Roosevelt Dam was
by a larger dam
superceded
named Coolidge Dam in honor
of
Calvin Coolidge.
When
least in part, is: Yes,
but
'
from
christened
Arizona,
15C;
arms,
supplied
was
the
power
Fire¬
Industrial Alcohol,
750;. Liquor Dealers, 20C; Pro¬
duction of Vinegar by the VaCertain Other
and
Guns
public power project
The first
the
Republicans have been in con¬
trol of the Executive Branch of
capacity of public
Distilled
public powerFranklin D. Roose¬
velt
crushed
Herbert Hoover
and the Republican Party in the
1932 Presidential election.
question has been raised:;
Has the spread of public power
been slowed down precipitately
Arti¬
Containers of
Spirits, 150; Machine
of Substances or
Returns
cles, 50; Traffic in
started when
the
during
•
few if
toward
trend
Capitol
nation's
the
in
Stamp Taxes
Transfers
of
Conveyances
of; Realty,- and Foreign Insur¬
ance Policies, 20C; Disposition of
Seized Personal Property, 10C;
feel that the
people mistakenly
Arrested?
Here
Stocks and Bonds,
since 1902 has been
public
power.
Many
toward
Been
and
Issues
on
of the recommendations of
the private companies. The facts
are
the overall trend in this
country
Power Trend
Excise Taxes, 15C;
any
capacity.
Public
Has
the
of Public Power
will comply with
gress
Transportation of Oil by
Telegraph, Radio &
Messages and Services,
150; Excise Taxes on Admis¬
sions, Dues and Initiation Fees,
25C; Excise Taxes on Sales by
the Manufacturer,.30C Retailers'
MR. DOWN
extremely doubtful Con¬
It is
ing the next
the present
Cable
properties subject to state
and local taxes, and limit TVA
to its present territory.
The Incidence
Safe Deposit
on
Pipe Line,
TVA
Dur¬
10 years.
the TVA; make
they render
Russia; Britain, West Germany,
Canada, Japan and Italy. Since
1862 the industry has doubled
its output every
Boxes,
TVA to pay Federal
corporate and excise taxes; re¬
quire TVA to compensate other
Federal
agencies for services
including f.
Taxes
Excise
whole invest¬
public project:
the
on
Pursuant
Code:
1954 Internal Revenue
to
adequate
pay
require
today is greater than
other combined seven
any
nations of the world,
to
ment in the vast
:V;a.
country
in
interest
capacity in this
The electrical
TVA
quiring
Regulations
Individual
plan
Their
wealth of the
nearly half of the
globe.
Commission control.
would include re¬
Power
— The
with only 7% of
the
World's
population, pro¬
duces more than 40%
of the:
world's
electricity,
and owns
WASHINGTON, D. C.
United States,
tn vpstment
Securltle# ;;
,
»• Post Office Square, Bestos 9, Nasi,
Telephone
- "
HUfebard 2-1996
Teletype ".
BS «0
@FedFRASER