Full text of Commercial and Financial Chronicle : January 5, 1950, Vol. 171, No. 4870

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JAN 12

ADf^j

BUS.

ESTABLISHED 1S39

LIBRARY

Tk e

Chromcle
Reg. U.

Volume

Number 4870

171

New

S. Pat. Office

Price 30 Cents

York, N. Y., Thursday, January 5, 1950

a

Copy

EDITORIAL

Truman Urges Enactment
Of Fair Deal Program

As We See It
That Second Half

century. It is now the fashion, accord¬
ingly, to expatiate upon the achievements of the
past 50 years and to formulate the tasks of the
There

that in many

ever

to date has been

can

be

no

ward

the

one.

President
session of

the

nature

to

the

so-called

The

we

not

are

teeth

on

edge, and laid before

really frightening

scope,

us

a

to be entered

President

even

Congressional

full text of
follows:

Let

President's

trade

certain

trends.

failure

no

is

It

useful,

about one's
reasons

them.

Certainly the more def¬
quickly> one will become aware
certain trends to develop.
And clear

more

of

are

under

and are

way

likely to continue is the first step in attempting to stop
those

trends that

dislikes.

one

likely to happen

Hence

predicting what

help prevent it from hap¬

may

pening and thus help to make one's forecast turn out to

Finally and most important, examination of

parent long-term trends is

a

ap¬

good way of gaining insight

into the institutions and activities of the
present.

My remarks will deal only with the United States and

established

through

that I make

you

recognition that certain trends

important steps in securing the North
community against aggression.
We have con¬
tinued our successful support of European recovery.
We
international

the

of

is, the

one

be false.

our

remarks

expectations and about one's
for

inite

We have taken

to

,

these

therefore, to be definite

at home.

returned

me

sume

Prof. S. H. Slichter

Atlantic

have

begin

by
apology
for speculating about the future of
private enterprise. Men cannot avoid
making many decisions which as¬

seems

policy of expanding
reciprocal agreement.
We

will

assume

that the country escapes a major war.

I shall

have

strengthened our support of the United Nations.
While great problems still confront us, the greatest
danger has receded—the possibility which faced us three

37

Continued

on

<8>-

*An address by Dr. Slichter before the American
Eco*
nomic Association, New York

City, Dec. 30, 1949.

41

page

Continued

on

page

34

€>___

SEE pages 20 and 21 for pictures taken at Annual

Pennsylvania Electric

ap¬

assuring
the

economy.

I

I ar^ happy to be able to re¬
port to yog today that the state of
iUnion contlhues to be good.
Our
Republic continues to increase in the

Truman

abroad and

ledger.
page

receive

outright planned

which

of

most

no

of

During the past year we have made notable progress
in strengthening the foundations of peace and freedom,

century is not

on

fast enough to maintain high
employment level and there will be

dom throughout the world.

challenge of

Continued

to

previous State

dominating

concerns

Contends incomes will in¬

crease

enjoyment of freedom within its borders, and to offer
strength and encouragement to all those who love free¬

However,

the credit side of the

on

en¬

good.

it still is far from clear

that the net of the first half of the

plea for the

large

industry.

ad¬

gress that the state of the Union was

if all this has in later decades set the world's

even

In

inflationary and forecasts contin¬

uation of

Mr. President, Mr. Speaker, mem¬
bers of the Congress:
A year ago I reported to this Con¬

backward

with great accuracy.

assess

be

message

peoples of the
many instances. Early in the century
evidence of deterioration in political
relationships
undeniably began to develop, and early in the
second decade of the
century the old balancc-ofpower procedure for securing the peace of the
yet able to

ship, reduction in corporate savings and decreasing use of
by business. Holds government policies will

bank credit

this

message,

Union

failed

in

world failed—with results which

Looks also for broader participation in corporate owner¬

proval last year.

stamping out conditions which
produce epidemics, have brought untold benefit
even

in. his

the

ment of methods of

world

State of the Union.

ommended

probably true that at few if any
history have the blessings avail¬
become so widely or so nearly avail¬
Much better
understanding of the
control of disease, and the
develop¬

and

technological
fairly slow population growth in next 50 years.

actment of that part of his so called
"Fair Deal Program" which he rec¬

in

able to any
able to all.

con¬

Says strong
should be continued.

dress he renewed his

also

other times

Harvard economist foresees rapid rate of
progress,

Harry S. Truman appeared before a joint
Senate and House of Representatives on
Jan. 4, and delivered his message on

techniques, has been revolutionary in the past
half century.
is

monopolies and

on

University Professor, Harvard University

the

physical sciences, and in modern industrial

It

By SUMNER H. SLICHTER*
Lamont

housing and rent legislation.

defense program

respects the twentieth century

remarkable

Asks further curbs

areas.

tinuation of

doubt what¬

Knowledge and
understanding of the physical world about us
naturally grow in geometrical ratio. It is, there¬
fore, hardly to be wondered at that progress in
a

At Economic Trends

Message to Congress he renews
plea for higher taxes, Taft-Hartley Act repeal, Federal
compulsory health insurance, Brannan Plan for agricul¬
tural support, and financial and technical aid for back¬

twentieth

decades.

Long Look Ahead

In State of the Union

The world has entered the second half of the

next five

A

and BOND

CLUB.

On page 2 will be found this

Dinner
week's

of

the

CINCINNATI

participants

and

STOCK

selections

In

'THE SECURITY I LIKE BEST" forum.

State and

Company
Cumulative

Preferred Stock,

Funds,

4.05% Series D
Price $102.53 to
Prospectus

yield 3.95%

550 Branches

Franklin Custodian
inc.

Monthly Commercial Letter
upon request

request.

PREFERRED STOCK FUND

TIIE

BOND FUND

White,Weld&Co.
Members New York Stock

Exchange

UTILITIES FUND

40 Wall

on

THE NATIONAL CITY BANK

OF COMMERCE

request

Street, New York 5
FRANKLIN DISTRIBUTORS, Inc.

Boston

Chicago

64 Wall

Street, New York 5

Bond

Dept. Teletype: NY 1-708

New York

Investors Trust

Underwriters

and

Investment

Company

may

be obtained

from authorized dealers,
VANCE,
cS.

SANDERS

OTIS & CO.
Established

Stocks and

ANGF.LES




New

BONDS

Chicago

Denver

interesting workout situation
Booklet available for

&

Co.

Cincinnati

Columbus

Toledo

Dominiox Securities
Grporatioh
40

Buffato

115 BROADWAY

NEW YORK

105 W. ADAMS ST.

CHICAGO

Exchange Place, New YorlcS.N.Y.

Teletype NY 1 -702-3

Members New York Stock
Exchange

111

other

Principal Exchanges

Broadway, N. Y. 6

WOrth 4-6000

WHJtefcnH 4-8181

Dealers

IRA HAUPT & CO.
and

MEMBERS NEW YORK STOCK EXCH.

Dallas

England

Institutions and

CLEVELAND
New York

YORK

& STOCKS
An

Goodbody

BANK

NEW

Public Service Co.

ESTABLISHED 1891

(Incorporated)
CHICAGO

LOS

1899

OF

San Francisco Loi Angeles

Corporate Securities

COMPAN Y

YORK

CITY

or

BOSTON
NEW

THE

Bonds

and

for this Open-End

OF

Agency: 20 Exchange Pl.

Portland, Ore.

Distributors of Municipal
Pro* peel ut

NATIONAL

CANADIAN

Canadian

Department

THE CHASE

Head Office: Toronto*

Seattle

ISAassachusetts

Bond

CANADIAN BANK

OF NEW york

INCOME (BALANCED) FUND
Prospectus

Bonds

1

COMMON STOCK FUND
on

Canada

across

A Mutual Fund

Municipal

Boston

Teletype NY 1-2708
Telephone: Enterprise 1820

2

COMMERCIAL

THE

(54)

The Security I

IN

MARKETS

TRADING

Kentucky Utilities

New York Hanseatic

all

for

asmuch

BAILEY,

Vice-Pres., Dayton Haigney & Co.,

Mass.

Inc., Boston,

recent

has

years

in

field

Trust

Investment

The

Teletype NY 1-583

to the
believe

grown

giant.
We
that this trend will continue and
of

stature

a

the

that

With

reached.

Specialists in

growing

a

this

Rights & Scrip

e

value

asset

to

seems

BROADWAY, NEW YORK 5

that
Benjamin

tend

minish
The

the

like

I

best

American Air Filter Co;

agement

Common

mendous

Black Star Coal Corp.

is-

no

tre¬

a

the

shares

Chairman,

let Floor,

Kentucky Home Life Bldg.

LOUISVILLE 2,

KENTUCKY

Purchasing
traders

($141.37
D.-J

of Dec. 31, 1948

as

average

approximately

The

capitalization is comprised
of 65,457 shares $4.50 Preferred
and 89,911 shares of Common. The
trustees

the

of

more

Oxford Paper Company

C.
C.

Cotting

Dumaine

Dumaine, Jr.

F.

will

Portsmouth Steel Corp.

William

Frank J.

-

New York

:

Stock

Midwest

Exchange

Union Commerce Building

CLEVELAND

B.

tors

Jr.

Sulloway

.

&

Our firm has been

interested

over

in the so-called

a

of
more

or

period of

less

years

SECURITIES

OLIVE

having

the

for

element

At

the

with favor

Members

one

investment

irinciple of reasonable diversifica¬
I prefer a minimum of 10
issues
but for the purpose of
tion

Established

1856

H. Hentz & Co.
Members

New

York

Stock

New

York

Curb

—

discussions

Briefly stated, here
the

things

like

I

ideal.

is

My

Corning Glass.

York

New

Exchange

Exchange

Cotton

Exchange

product — glass and silicone
chemistry — whose application to
home

industrial

and

between

trebled

in

the

is

use

1937

past

Inc.
Trade

And

other

Exchanges

N. Y. Cotton Exchange Bldg.
NEW YORK 4, N. Y.

pro¬

sales
1937,

and

CHICAGO

DETROIT

PITTSBURGH

GENEVA, SWITZERLAND

1947,

two

years;

a

time,
including
the
depression period;

of

management,

but family
ownership that

and

LAMB0RN & CO., Inc.
99

STREET

WALL

extends back for nearly 100 years;

for
research
(50,000 formulas for making glass

large

al¬

from

expenditure
of

90

in

Charles

J.

Collina

97

the

known

half-owned

emphasis

—

a

f f i 1 i at

include

phar¬

chemicals,

maceuticals, rayons, and
individual situations, such

certain

ture

Min¬

postponed

qualify

limited

the

of

be

must

but

to

contemplated
At

commitment.

my

Refined

—

—

Liquid

Exports—Imports—Futures

(Dow-

e s

purchase

or

portion

as

Mining.

Raw

Dlgby 4-2727

silicome

their

and

SUGAR

on

plastics
and
resins,
Owens - Corning — fibre
glass, Pittsburgh-Corning—build¬
ing glass) not yet Reflected in
Coming's earnings statements
whose aggregate sales may even¬
tually be double that of the
Corning

NEW YORK 5, N. Y.

ele¬

longrange
expansion, .extension
of
existing markets and price reduc¬
tion; a leading stake (tubes and
other glass parts) in the rapidlygrowing television industry; three
with

ments),

six

me

of

1930-33

management

success¬

nesota

Exchange,

Board

New Orleans Cotton Exchange

of
Corning:

about

young
j

examples of which were some

issue

Commodity
Chicago

some

are

other

a

full

Royal Bank of Scotland
Incorporated by Royal Charter 1727
HEAD OFFICE—Edinburgh
Branches throughout

LONDON
3

times

time

necessary

capital

gains

pur¬

present
on

time

look

we

the shares of East¬

markets

and

come

bull

markets

growth goes on forever.
Analyze the basis of the invest¬
ment fortunes of the country and
but

go

it

will

be

found

that

they

have

portunity
studies

accumulation.

for

49

Scotland

OFFICES:

Bishopsgate, E. C. 2

8 IF est

Smithfield, E. C. 1

Charing Cross, S. W. 1

indicated

that

Steamship
on

the

Lines, which

Boston

Stock

are

Ex¬

TOTAL
Glass

common,

undervalued

at

in 1949, would be
18,

MR. HUGO

has this

Bought—Sold—Quoted

overvalued at

pansion

that

Offerings Wanted

ASSETS

£155,175,898

a

Long Beach Gas

partner

firm

our

Associated Banks:

Williams Deacon's

,

Bank, Ltd.

Glyn, Mills & Co.

Na Q. B«
OVER-THE-COUNTER

J. WEINBERGER

day become
in

Street, JF. 1

Corning

been

We take pleasure in announcing

Mexican Eagie Oil

Burlington Gardens, W. 1
64 New Bond

My

largely built upon the ex¬
40.
For 1950, making allowance
of one to several com¬
in
panies over a decade or more. Of for the company's progress
change and traded in the over- the some
1,500 companies whose 1949,
similar figures are 20
the-counter
Here
is
a
market.
common shares are actively traded
and 43.
company where the possibility of over the nation's markets, I esti¬
Continued on page 14
loss at present prices is slight in¬ mate, roughly, that about 10%, or
ern

listed

Midwest Stock Exchange

branch offices

our

.

STREET

St. Louis l.Mo*

cardinal

the

violates

critical

situa¬

"special situation"

poses.
509

Choosing

selection by
type of securities—securities that,
within
the
same
in our opinion, offer price appre¬ saying that I lean to the last men¬ (occasionally
ciation possibilities on the basis of tioned type of issue, the so-called year)
they underdiscount
the
liquidations or dissolutions and "growth" or "trend" stock. Bear trend, affording an excellent op¬
also

INVESTMENT

to

growth rating.

a

stock for emphasis from this total

period

seek

(1)

Let

& Co.

Birmingham, Ala.
Mobile, Ala.

strong earnings record over a long

of the

tji

NY 1-1557

Hflnover 2-0700

New Orleans, La. -

Of these 150, a

reorganizing utility holding
J. Linzee Weld
companies in the 'Thirties
and
of the unseasoned power
This Trust's portfolio is well di¬ many
and light stocks of recent years,
versified and includes many soor (2) they endeavor to find issues
called "situation" stocks.
$3 per
where the
long-time promise is
share was paid in 1949.
parent company.
A more complete description of for substantial growth in earnings,
Growth stocks sometimes sell at
dividends, and asset values. Fairly
this issue is' available in the var¬
recent examples of the latter type a price that overdiscounts the fu¬
ious financial services.
$

xix

150, merit

some

again

tip

to.

tions,
ful

Exchange

York 4, N. Y.

and have increased by one-quarter

promises

special

Snow,

dealt

months. Inves¬

G. Stone

Robert

of the stocks

take

on

any

three

L. Higginson

Stock

York

New

Direct wires

quota¬

or

profit

a

Ralph Lowell

Member

in

their

flyer

a

G. Peabody Gardner

Incorporated

differ.

sounds, f

gong

that

E.

Mead, Mead, Miller & Co.,

when

most

F.

Associated Transport, Inc.

Broadway

operate

closing

too,

F.

150

Detroit

pres¬

on

Charles

WIN. J. MERICKA & CO.

are

deals

William Amory

Members

A

as

point

a

the

Steiner, Rouse & Co.

Baltimore, Md.

Counsel,

S p e c u lators^

l

are:

names

long

as

ent

177, now 197).

roll

choice would be

profits of %th

a

$140

Co.,

25 Broad St., New

gressively
expanding;
tions, not caring particularly what doubled between 1930 and
in

about

Charles Francis Adams

Inquiries Invited

in

COLLINS

objectives

net

of

Bell Tele. LS 186

Long Distance 233-9

end

reacquired

Letters, Inc.,

,

per

with

,

common
year

Inc.; President, Investment

Floor

has

share

per

share

,

at

Investment

about

$80

&

City.

—

are

value

Stone

Mathieson Chemical Co.—W. Car¬

these

43%,

break-up value.

New York

Leonard

Co.—N.

Hayden,

fast-growth stocks.

par

CHARLES J.

man¬

discount,

asset

BANKERS BOND ^

assets.

outstanding

in the over-the-counter market at

5% Preferred

pend¬

1949.

In¬

Amoskeag Co. Common quoted

Common

claims

are

di¬

an

Can

Jarvis,

substantial

and

will

selling at
about

type

its

from

less

dis¬

i to

of the

vestment Trust issue

suits

384,505

disappear in the future.

or

stock

further

salable

•shares

us

any

count

Bailey

A.

it

troit, Mich.
American

com¬

Capitalization consists solely of

Members

York Stock Exchange
New York Curb Exchange

that

ditional

a

Bought—Sold—Quoted

De¬

Inc.,

Letters,

further subdivision
ing which could increase the cash would place about one-third in the
to
$34
a
share,
it has
been slow-growth classification, another
estimated.
Two steamers in op¬
one-third
showing mediumerating condition represent ad¬ growth, leaving the last third as

discount from

New

the

against the government

are

available at

is

ment

vestment

companies

Investment

element of enhance¬

war-damage

closed-end in-

ftjcpONNELL&fO.

in

funds

1948 and the

of

shares

Since 1917

cash

Louisiana Securities

Inc.,

Corning Glass—Charles J. Collins,

pany's hands equal approximately
$17 per share as at the end of

that

s

a share and
dividend of $1

annual

share, on the basis of 25c
quarterly, to yield about 4%.

buy-

Co.,

&

The stock is currently

an

The

Haigney

Boston, Mass.

the company

as

per

of

group

r

pays

b y

security

Dayton

quoted around $23.50

re¬

alization

Kentucky Stone Co.

ship Lines—Benjamin A. Bailey,

has been
willing to buy in its own shares
a few points away from the present

peak

is far from

Tel. REctor 2-7815

Amoskeag: Co. and Eastern Steam¬

particular security. Selections may be suitable
individuals, for trustees and for institutions.

quotation.

York 5

Incorporated

and

Selections

Alabama &

for favoring a

Corporation

m

Participants

Their

a continuous forum in which, each week, a differ¬
of experts in the investment and advisory field from
sections of the country participate and give their reasons

BENJAMIN A.

120

Forum

Constituting

Paget Sound Power & Light
South Western Public Service

BArclay 7-5660

Like Best

Thursday, January 5, 1950

ent group

National Gas & Electric

120 Broadway, New

CHRONICLE

FINANCIAL

&

INDUSTRIAL STOCK INDEX
10-Year Performance of

5s 1956

35 Industrial Stocks
Memorandum

on

request

STEIN & COMPANY
Membets

z1ppin & company
208 South La Salle St., Chicago 4
Tele.

RAndoIph 6-4696

Tel. CG 451




27 William

National

Association

St., New York 5, N. Y.

1950

Dealers,

Inc.

Jersey City 2, N. J.

Telephone—DEiaware 2-0100
Teletype NY

3,

Securities

1 Montgomery St.,

Telephone—Dlgby 4-2190
Jan.

of

1-1053

Blair F.
Member

Claybaugh & Co.

Philadelphia-Baltimore Stock Exch

52 Wall Street, New York
Tele. HAnover 2-7064

5, N. Y.

Tel. NY 1-2177

BOOKLET
NC

ON REQUEST

National Quotation Bureau
!

incorporated

46 Front Street

New York 4, N. Y.

Volume

171'

Number

4870

THE

COMMERCIAL

FINANCIAL

H.

Slichter

1950

Stock

Pointing out recent currency devaluations have induced mone¬
tary inflation, Dr. Palyi sees no impelling reason to devalue

Cover

Problems—Melchior Palyi

3

;—

Treasury and the Price of Gold—Herbert M. Bratter
The

Market—George Weiss

Business and Financial Outlook for

the dollar at present,

4

bullion

7

Wright

Can

Jones

Street

than

a

did

Rush"

last

not

couple of weeks.

18

Stimulated?—Lewis A. Froman

1..

;

is

longer

It

the

money- volume
plentiful,
than four times what it was

more

in¬

20 years ago; it can be
expanded
further at will, since national debt
certificates have become the vir¬

it .could

occur.

23

tual

was

equivalents

nonsen

—Messrs.

Leroy Klein and Louis S. Lebenthal
:Js

ffi

;

Security I Like Best.

n

Secretary Sawyer Reports Taxation Discouraging Risk
Capital 21
Security

Holdings

in

Third

Quarter

David W. McKnight Sees
Major Upward Trend of Stock Prices
in

1950

...

Dr.

25

Halsey, Stuart

&

Co. Issues Year-End Bond Survey

25

Experts Discuss 1950 Stock Market Picture.......

26

Raymond Foley Says Million New Homes

27

But

Let's Have Real Competition!

Economic

Advisers

and Government

Discuss

Year Are Needed

Melchior

in

terms

porarily)

Risk

Capital
of

28

of

would

ances

and

Business

Insurance

Man's

Canadian

32

Cover

Stocks

12
14

_

Securities

34

be

.....

When

EC A

used

8

at

News About Banks and Bankers

and

390

not

claims

of

Hol¬

countries—move

to

The

from
the

French

the

official

dollar.)

combined

amounts to

with

deflation

devaluation

an

unmitigated expan¬
currency
base—to
monetary inflation. That we most
sion

47

Governments...

down

(disinflation),

5

on

other

"Transferable

so.

discounts.

is

to

If

12

Observations—A. Wilfred May..
Our Reporter's Report

under
of

at

of

the

certainly do not need.

Not

Walter J.

the

the

years

or
a

Run

foregoing refers to the
one

Every debt structure,
out

of

proportion

to

the

of

core

are

four

leading

CALIFORNIA

CLASS B (common) STOCK

and

Earned

the

and accelerated

it

converted

If
no

more

may

be

permitted

kept

Investment Securities

long-

in

Square, Boston 9, Mass.

HUbbard

2-1990

BUY

size—

deficits—the

debt

to

gradually
decline marketwise, until a yield
is established so high as to ac¬
complish the same result as un¬
der

Tel.

and the

into

constant

depreciation of $1.74

LERNER & CO.

bonds held by the public.

(2)
with

to Class A,

arrears

speak—

can

of

term

Selling about

$9.00

•disregarding

10 Post Office

economy,
so
to
be unpegged

it

bulk

1948

$5.22*

(1) The debt may be reduced
gradually until it is cut to the size
until

brief review of

a

the Cement Industry.

to

that goal:

of

OF

RIVERSIDE CEMENT CO.

depression.

a

roads

ANALY8IS

the

savings of the country,
call?
for
liquidation or scaling
down, which is what then consti¬
tutes

AN

once

"natural"

There

Aout Available—

long run out¬
totally different question.

all other countries added
together
be "unloaded" sooner or

grown

Teletype-BS 128

two

or

—must

later.

HUbbard 2-3790

The

so.

1923

30 FEDERAL STREET, BOSTON 10

money

Problem

outlook;

Connolly & Co.

INCORPORATED

this

markets from

open

$2.80 parity to the equiv¬

high

349

8

Our Reporter

But

by ^Britain in

again in appreciable volumes and

16

NSTA Notes

the

on

new

land

<

from

Stock

Bought—Sold—Quoted

ever

weakness

devaluation

Long

immediate

maladjust¬

CORP.

dollar.

not

are

the

even

The

once.

substantially.
October,; the pound has

sterlings"—pound

40

...

bal¬

dently. the patient is dulled, but
his condition is not
likely to im¬

franc
Funds

the

managers' point of view, look like
a
perfectly silly, idea.

devaluations,

incalculable

alent of $2.20 or

22

Indications of Business Activity

reserves

juncture,

Presently,
the
devaluing
countries
in
Europe and Latin
America apply large doses of the
anesthetic, but omit most of the
operation, the disinflation.
Evi¬

fallen

8

__

From Washington Ahead of the
News—Carlisle Bargeron

Mutual

tem¬

(Since

5

...

Ends?".

devalue

makes

look is

the

Dealer-Broker—Investment Recommendations..
Happen

at

rest

PRENTICE

impelling

no

Devaluation, domestically, may A
colossal
national
debt—the
as an
"anesthetic," to dull largest, in current dollar
value,
the
pains of a
wag$ deflation. that any nation ever
had, larger
That was one of the
purposes for | than the present public debt of
which it

8

,

l___!

Einzig—"What Will

(and
trade

offset

forced into fresh

prove

Coming Events in the Investment Field
Dealer Briefs

enjoying

STREET, NEW YORK

REED

world's hunger for American

that

1331.

...

Bookshelf

the

slightly

Was

Bank

Britain

WALL

Telephone: WHitehall 4-6551

con¬

be used

Business

...

to

Given

run.

the

ments.

Relations

System, is

virtually all other currencies, the
flight of capital from them, and

we

and

PalyS

improved

creating

27

,

(Editorial)

a

her

are

be

Regular Features
As We See It

gold

Also, all foreign currencies would
a

(Boxed)

National City Bank Analyzes Dearth of
Truman's

Our

proceed

that

man's pocket!

any

the

'goods together with its inability to
lar, the little
pay for them—it all adds up to an
advantage international
position of the dollar

22

.

bucks enough

Common

any,

to cut the dol¬

of

1949

o v/

far

called

whatsoever, if there

was

would

problem. If

17

BUCKS

those obsolet.es to clutter

"

reason

o n,
naively
expecting that

solve

gold—so

press,

Reserve

t i

17

of

printing

There is at present

devalua-

that

Earl E. Crabb Predicts Good
Business Year in 1950

Reduced

cerned.

into

2

Elliott V. Bell Condemns Government Bond Price
Pegging—

Individuals

Federal

have

We

the

as

forced Britain

President Truman Urges Enactment of Fair Deal
Program__Cover
The

out¬

the

set.

24

*

•

sical

from

Review and Forecast of the
Municipal Bond Market

you

-

other country.

any
on

The

that

.

up

99

"Gold

teresting thing about it is the fact

..

Individual Investment Be

recent

Wall

11

Should Life Insurance Companies Invest in
Equities?
—Homer

The

,

__

in

currency

Strong Economy, Chief Weapon in War and Peace

give1

We'll

for

standard and ascribes
strength of the dollar to heavy
favorable U. S. trade balance, and absence of
redeemable gold

6

Disposable Income and the Business Outlook—Arno H. Johnson

CLUTTER

but holds heavy national debt in long run
Denies U. S. is' on an international gold

bring it about.

may

4

—

1950__Roger W. Babson___

—Ivan

AND COMPANY

By MELCHIOR PALYI

<

U.

S.

SAVINGS

BONDS

(1).

Continued

only

on

page

32

18

Prospective Security Offerings

46

Public Utility Securities..

24

Railroad Securities

Securities

pleased to

are

announce

that

26

Salesman's Corner

has become associated with

44

Security I Like Best

i

5

-

(Walter Whyte Says)

us.

2

...

The State of Trade and
Industry

Tomorrow's Markets

Mr. Graham Walker

30

Securities Now in Registration
The

We

Joseph McManus & Co.

9

...

Washington and You

MEMBERS
New

48

York

Stock

Exchange

-r-

.

New

York Curb Exchange

Midwest Stock Exchange...

39
Published

Twice

Weekly

1

The

COMMERCIAL

FINANCIAL

and

c/o

Gardens.

Park

DANA

COMPANY,

Place, New York 8,

REctor 2-9570

to

ary

N. Y.

DANA

WILLIAM D.

25,

York,
8,

Y.,

President

RIGGS, Business Manager

Every

Thursday

records,
■tate

issue)

statistical

corporation

and

Other

Chicago

(general

and

issue

city news,
Offices:

3,

Til.

news

every
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news,

and

Canada,

bank

ad-

quotation

of

Countries,

S.

(Telephone:

$25.00

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State




St.,
0613);

per

per

Note—On
the

La

and

Monthly

clearings,

etc.).

135

$25.00

(com¬

rate

eign

be

of

$35.00

per

$38.00

$42.00

per

Quotation

year;

per

PREFERRED STOCKS

S.
of

Record

—

Monthly,

(Foreign
of

in New

York

the

postage

Spencer Trask & Co.
Members

25

New

Broad

extra.)

fluctuations

remittances

for

York

Stock

"^""-^Rements must
funds.

Exchange

Street, New York 4

HAnover

Members

-

Chicago

-

York

Glens Falls

Curb

profit from

York

Times readers

.

..

banking

executives, corporation officials,

2-8200

1-5
-

investors.
story

-

you

to

telling

your

all four? "*

2V Jveiu Ijork Sxmca
"AH

Schenectady

Are

regularly

Exchange

Street, Boston 8

Hubbard

"^"Teletype—NY
Albany

New

50 Congress

2-4300

in

for¬

advertisers

professional and institutional

year.

—

account

you

security buyers — arid individual

year.

(Foreign postage extra.)
Earnings Record
Monthly,

exchange,

profit for

the four-fold audience of New

in

year.

year.

offerings of

High Grade Public Utility and Industrial

Publications

subscript-*"™"

made

Y.

Financial

interested in

are

matter Febru¬

post office at New
the
Act
of
March

Dominion

Other

Monday

market

the

Under

Union.

Bank

rertising

at

Pan-American
Other

N.

Dana

We

second-class

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

Thursday, January 5, 1950

plete

as

1942,
N.

6,

Eng¬

1879.

9576

SEIBERT,

C.,

Subscription Rates

HERBERT D. SEIBERT, Editor &
Publisher

WILLIAM

E.

Company

Publishers

York

Smith.

Copyright 1949 by William B.

CHRONICLE

Reg. U. S. Patent Office

25

London,

Edwards &

Reentered

WILLIAM B.

New

mean

Drapers*

land,

FOUR AUDIENCES

Broadway

Worcester

3

llCHTtnSTflil

Problems

Page

Long Look Ahead at Economic Trends

About Gold and Related

(55)

"

Articles and News

—Sumner

CHRONICLE

About Gold and Related

INDEX
A

&

the News Thot's Fit

to

Print"

4

5, 1950

Thursday, January

CHRONICLE

FINANCIAL

&

COMMERCIAL

THE

(56)

*

violates

Treasury and the Price of Gold
By HERBERT M. BRATTER

done in

of

the

The 1950 Stock Market

actually

deliberately took tlie
off the
gold standard,

utilizing

Gold?", Mr. Bratter reviews previous and existing legisla¬
tion relating to price of gold and gold content of the dollar.
Holds President now has no power to devalue dollar, since such

Enemy

given under Gold Reserve Act of 1934, has lapsed,
but Secretary of Treasury still has power, with approval of

By GEORGE WEISS*
Director of Research, Baclie & Co., Members NYSE

year,

dorsed

8

overnight

Treasury

increase the price

of gold?" This

question was put to the writer by
the editor of the "Chionicle." The
for years as

a

rnment

g o v e

economist and

private citizen
watched

American gold

legis I

a

t i

o n

from the ring¬

side, hastens to
state

the

at

outset

he

that

"cir¬

The power remains.

cumscribed."

"Price of Gold" and "Gold Content

Under the

gold standard, as un¬
derstood by economists, the terms
"price of gold" and "gold content
dollar"

the

mean

the

same

Thus, in the United States
today—regardless of the fact that
the dollar is not internally re¬
thing.

deemable

in

Herbert

M.

might

be easier. Had

editor asked: "Do you think
Administration wants to raise
the price of gold or devalue the
dollar
any
time in the visible
the

the

future?",

that the
moreover,
is

desires,

Treasury

be,

thing

last

The

"No."

would

reply

my

legislation of a positive or nega¬
nature on

any

gold question. The

phase of the

Treasury wants

Pandora's box.
The editor's question relates to
power, not intent. It arises from
the fact that there i's on the stat¬
utes a clear power for the Secre¬
tary of the Treasury to change
the price at which the govern¬
ment buys and sells gold.
While
that power, last enacted in 1934,
has never been specifically re¬
pealed, some hold that it has been
in effect repealed by the subse¬

to open no
t.

quently

Bretton

enacted

words of the

Woods

In the
present Secretary of

the Treasury, the

1934 power has

been "limited" by

the 1945 act as

policy which the
Treasury has pursued since 1934
relative to gold and the dollar.
as

by the

power

March

from

1933,

6,

to

do

...

proclaim,

hereby

today is that the

the

"discretion of the Secretary of

Treasury" to change the price

of

Business

a

rious

measures

by the then Congress, but

setting.

tions

of

value

par

Hence, there has been

unchanged.

change in the official price of

no

term,

understanding of which is neces¬

between

As

two

currencies

countries

defined

each

are

whose
as

to

se¬

single country
unit as
weight of gold, parity is that
Within

gold.

a

back

most dire pre¬

Treasury would be
The miner, taking his

the

doubled.

gold

the government, would
payment twice as many

to

receive in
dollars

formerly.

as

Similarly, if the Treasury
of

price

gold is changed, the gold con¬
of the dollar is correspond¬

tent

ingly altered in the opposite di¬
rection, according to the rules of
gold standard. If the Treasury,

the

which today

buys gold at $35 an

ounce, were

leaving unchanged the
nition of the
but

WE'VE GOT PLENTY!

legal defi¬

weight of the dollar;
is

that

if

.

.

.

done, the

country

is $2.80

pound, namely 35 di¬

per

vided by

12.5.

losses
wholesale unemployment. In

and

all

these very fore¬
helped create an atti¬

probability,
have

from

include at¬

prices, and ratings to

discriminating

and the more specula¬
investor, as well.
—

must con¬
stantly purchase for thousands of customers
satisfy nearly that many

.

.

.

different needs.

helping the business¬
budget his planning more

tributed by
to

man

nearly in line with mounting or
falling inventories and increasing
or
decreasing consumer demand.

the
varying degree of the shortages
Probably more significant is

built up

both

during the war—shortages
capital and
consumer

goods—and the speed with wihch
is at the official parity whenever conversion and production in the
it equals 1/35 of an ounce of gold. different' industries could replen¬
ish these requirements.
As some
It is this which the Congress ob¬
industries caught up with demand
viously had in mind in the Bretand began
swamping the pipe¬
ton Woods Agreements Act cited
lines, other industries were just
below.
getting their production lines roll¬
President Has No Power to
ing.
Accordingly,
while
some
Devalue Dollar
businesses
were
already facing

authorized
of

to

the gold

50%.

No

the President

1933

of

ment"

Amend¬

"Thomas

the

Under

reduce

the

was

weight

dollar by as much as
limit was set on

time

that power.

But the Gold Reserve

gold in the United
States had been raised to almost

market price of

$35

the

put a time limit on
of the President. It also

a

high plane.

cial weight

from

1945

corporated

in

Act of 1934

was

tb

in¬

power

Gold

Reserve

several times ex¬

but

lapse in June,

the Treasury may
over

the

have

Sections 8

terms

of

dold

Reserve

Act

any power

and 9 of the
of

the

1934,

authority used in 1933

was

a

law

Trading Department

the Treasury may
of
the
bonds
or

Merrill Lynch, Pierce, Fenner &
70

PINE STREET, NEW




YORK 5, N. Y.

Offices in 97 Cities

Beanb

of

purchase coin with
notes

of

the

any

United

authorized by law, at such rates
and upon such terms as he may
deem
most
advantageous to the public inter¬
est."
Compare this language with the
text of section 8 of the Gold Reserve Act
States,

of

on

more

correction, as some
characterized it, can¬

conclusively be proven by sta¬

not

(the chart was made avail¬
show at a glance widely

tistics

to

able

divergent
swings
in
areas of the economy).

page

36

different

The fig¬
ures used are the monthly Federal
Reserve Board Production Indices.
intentionally chosen typ¬

I have

ical

examples
the

and

consumer

past

show

to

have

times

taken

five

for

goods

heavy

how
place

years

different

adjust¬
during

at different
industries.

Furthermore, we know that even
within

industries, the corrections
Com¬

have been of a serial type.

ing

at

different

have enabled the
to

intervals,

they

entire economy

operate on a high plane.
These

production

*A paper

adjustments

by Mr. Weiss read be¬
Amer¬

fore annual meeting of the

ican

1934, cited later in this article.

Continued

far

have

us

ments
1 The

industries

some

year,

precipitous de¬
clines than others. (See chart A.)

price of gold under the

arranged for a banking syndicate to sup¬
ply 3,500,000 ounces of gold in exchange
for obligations of the United States.
2 The 1862 act read "The Secretary of

an

Early in the summer

This rolling

finally was allowed
1943. However,
the extent that the Secretary of

tended,
to

the

that

showed

of the dollar.

Presidential

The

show

of the decline in
the peak of wartime

sharpness

of

of 50

chart will

the

at

look

A

York

ket

Statistical

Association,

City, Dec. 30, 1949.

New

use

Weekly
Stocks.

Industrial

make

com¬

of individual group ac¬
the action of the mar¬

whole.

a

as

the

From

beginning

of

1949

through the end of the third week
in December, the index shows a
rise of 10%.
The

movements

group

vary

widely as against the average re¬
flecting
the activity and pros¬

perity of the different industries.

As

as

extreme

move-

follows:

against

10% advance for

a

industrial stock index:

entire

the

the

of

Some

ments are

Automobiles moved forward 16.1%

Building materials

10.6

Chemicals

20.1

Foods

17,9

Paper

21.0

These

were

the indus¬
highly profit¬

among

tries

that

able

operations during the

enjoyed

industries

are

that

ther

readjustment

The

Coal

down 16.0%
10.9

group was

Equipment
Market

Stock

fur¬

showed

during 1949:

Copper
Railroad

year.

of the ledger

On the other side

11.8
as

a

Business

Forecaster

in¬

dustries at different times.

the

with

will

Poor's

&

365

series of

result has been a

The

we

purpose,

of

parisons

The

corrections affecting different

production.

must be within the range
to 60% of the pre-1933 offi¬

their

production, other enterprises were
stepping up their output helping
to maintain overall production on

an ounce,

powers

inven¬

surplus

of

problem

tories and were cutting back

1934, passed after the open

Act of

passed in 1862 to enable the President to
secure gold
coin for the protection of the
government
debt.
In
1894
President
Cleveland invoked its authority when he

time

and use of bet¬
have con¬

States the dollar

inquiry involves preferreds, why not check with us first — see
for yourself what we can do?
next

restraining busi¬
d i n g

over-e xt e n

statistics

business

ter

this

This will permit us to

tion

to

of stocks.

Standard

Index

happened

what

see

us

For

the

increasing

business,

able

of

the United

In

Enough variety

BUT, we'd like even more

SO,

George Weiss

activ¬

The availability

example, under British law

this power

tractive selections for the most

—

Let

the price

unprofit¬

ity,

up

dustries charted.

dictions of de-'

weight.

If for example the U.S. an ounce of gold is presently
gold content of the dollar were to $35, parity of exchange; between
be reduced by 50%, the price of the dollar and the pound sterling

Preferreds ? ? ?

tive minded

show

hearing the

clining

another 'were
noticeable during this
The production figures
clearly for the few in¬
against

1944,

as

the

compare

prices with the

The divergent trends of one

past year.

themselves.

passu.

at

interesting to

especially

have been

we

-

fluctuations in industrial produc¬

far

the President under the temporary

institutional buyer

It is

movement of stock

industry
as

postwar

a

plateau relatively high com¬

a

tion.

a

For

achieving

of

wartime oper¬

nessmen

Were today the pound sterling is de¬
the gold content of the dollar to fined as 2.48828 grams of gold and
be
reduced, the price
of gold the price of an ounce of gold as
would
be
raised
automatically, 12.5 pounds sterling. Since in the

gold

be approaching the final

may

Divergent Trends of Stock Prices

of

level

we

pared to the prewar figure.

go

justment fol¬
lowing the
high

especially in the heavy industries,
stages

on

economy

failed

which defines its currency

gold in the United States.

pari

the

accompanied by lower

prices. This suggests that perhaps
some
further
correction,

with

stabilization, that for some time
to come will permit us to operate

tude of caution,

the

exploring

had

why

was

the

From

United

the

another

is

dollar"

States

area.

additional

and business will have

have been

One of the ques-

of

weight or gold
content of the dollar has remained
1934

of

raised

"Par Value of the Dollar"

"The

movement

making

to

ations.

provided that any adjustments in
of the gold dollar by

yields,

were

fine

."

Process

read¬

enacted

not

were

experts

current

casts

.

stimulated

The other day at lunch a group
of business economists and finan¬

the weight

in

the

in

specific weights of gold, parity is
the ratio of the two official prices

.

be

Readjustment

through

prices

of bull

possible amelioration
capital gains and dividend taxation, and SEC administration.

of

order, direct, declare, and fix the
weight
of
the gold
dollar to
be
15-5/21
grains
nine-tenths
Since

by resumption

better political climate, with

a

rising

proclamation, however, speaking sary in connection with the sub¬
gold nine-tenths fine in these ject of this article. Parity means
words:
equality of value, expressed in
"Now, therefore, be it known terms of the monetary standard.
I

benefit of

cial

of

that

will

investors

weight of the
dollar, the gold content of our
monetary
unit, remained un¬
changed. The departure from the
gold standard and the buying of
gold on the open market at everthe

1934,

30,

interpreting and stretching exist¬
ing statutes and obtaining Con¬
gressional approval after the fact.2

an ounce

tomorrow to pay $70
an ounce, the
dollar would equal
But policy may be changed over¬
480 grains divided by 70, or 6.85 +
night, while "limited" is not the grains of fine gold.
It is possible for the Treasury
same as "eliminated."
The most
to increase the price of gold while
that the Treasury has stated about
1934

Throughout the

actively ratified.

followed

reflecting

market is

Expects intermediate market

purchases by fact of market's rise;

legal price of gold was retro¬

Troy. The
Troy ounce contains 480 grains.
The gold content of the dollar,
gold is $35

present-day

pur¬

administrative actions justified by

Act of 1945.

Agreements

the

lawyer.

no

reply

Bratter

of

legality

be

to

Believes

gold at premiums above

gold coin—the price

of

therefore, is 480 grains divided by
Had the ques- 35, or 13.71+ grains of fine gold.
tio n
been This is the gold content fixed by
phrased d i f- President Roosevelt in his proc¬
ferently, the lamation of Jan. 31, 1934; the
is

the

1934

the

asserts

discounting events.

surpassing the 1946 high and entering the 1920's boom

Gold Reserve Act

the

of

9

chase of

Jan.

of

reaction

legality of
In sections

to the
doing.1

as
was

months

of Dollar"

who

writer

has

gold has been "limited" and

it

and

of

the

"Can

the

Treasury
what

economist

rather than

the Administration raised
the price of gold in the open mar¬
ket, despite some question in the

Foresees Treas¬
above current rate

runing out of funds should it buy gold
of $35 per ounce.

Market

Tnomas Amendment
May, 1933. Subsequently, tnat

in

President, to purchase gold at his discretion.
ury

tne
Tracimg-with-theAct.
Congress later en¬
steps taken when it

the

passed

power,

its

rules
was

The Administration

1933.

country

of

Well

It

that time

at

Answering question "Can Treasury Overnight Increase Price

tive

the

of

one

standard.

gold

Now the question may be asked
these

—Are

reflection

price

of

movements

developments

a

at-

do they fore¬

leady behind

us,

tell

to come?

of things

this

At

point, I

examine

all

would like to

traditional

the

belief

Stock Market is the best

that the
of

or

business

br1"'»metric
tributed

the

This

forecasters.

quality
sto.k

generally

at¬
price B luxa¬

tions is

an

and

have been true in the
era
of completely urn e-

old Wall Street adage

m3y

earner

stricicd

and

non

i

egulated

mar¬

kets.

Perhaps
tion

Section

16'A

and

of the Securities &

16B

Sec¬
Ex¬

change Act of

1934 discouraging

purchases

sales

and

by

the

so-

called "insiders" has had its effect
on

the market's ability to prognos¬

ticate coming business events.
any

At

rate, an examination of what

has happened

during the past few

is most revealing.
1945, the last ;year of the
the high point of '-he Federal

years

In
war,

Reserve

Index of

duction

was

and

Industrial Pro¬

reached

in

January

February with the figures of

234,236

respectively

From that

point,

(corrected).
production de¬

clined steadily, touching a low of

Continued

on

page

38

Volume

171

Number 4870

THE

COMMERCIAL

&

FINANCIAL

CHRONICLE

(57)

5

"A
Steel

The

DEALER

Production

Observations

Electric Output

Carloadings
Retail

State of Trade

BRIEFS

==s=ss

find

investors

realize

that the

end may be

Industry

proaching to the unusually high
available in good utility
operating
company
equities.
business

has

resulted

in

from

emphasizing that
utility stocks yielding 5% to 7%

our

area

entirely out of line with the

are

company's

same

3%

taxable

bonds below

yield.

a

Arthur

Nauman,

McFawn

&

(formerly
Co.).

Cray,

Nauman,
Fawn &

Mc¬

Total industrial production held

com¬

The
'

demand

equities
good

for

sound

utility

reasonably
persists.
Unlisted

industrial equities have thus far
failed to fully reflect the more

optimistic

feeling prevalent in
locality, but we feel the dis¬
parity will be corrected in the
early part of 1950.—Boenning
& Co.

Electric kilowatt output and freight
adversely affected by holiday closings.
*

#

note

marked

a

Mutual
small

More

investors

of

vantage

vided
End

public interest in

Funds.

by

and

more

taking

are

the

ad¬

protection

pro¬

well-managed Open-

a

Trust.—E.

T.

Andrews, Jr.,

E. T. Andrews & Co.

Cleveland, Ohio
Cleveland's
of

December,

lack
:

trad i

of

tax

curities.
a

n

disappointed

was

the

of

good
but

years,

month

because

selling in
has

source

past

fraternity

g

in

This

of

the

local

always

stocks, all

tered

business

this

year

not reflected

was

working

days,

the
Most

gains

during

1950

with

Cleveland

view

optimism that has

an

not

the total since the week

with

five

the

in

Ward's

to

Automotive

were

cars

and

1,130,500

con¬

years.—Morton

A.

units, consisting of 290,400

cars

*

*

high note in the steel markets, "Steel,"
national metalworking magazine, states in its
summary of latest news
developments in this industry. Mill order backlogs are heavy, espe¬
cially in the light, flat-rolled products, wire and pipe. Ingot produc¬
tion is booming along above 93% of capacity. First quarter steel out¬
put should be among the largest on record. Consumer pressure for a
few products is reminiscent of the shortage days of 1947-48. Upward

reasonable

are

many

and

better

today,

both

motive and
I

building industries.

ratios of

*

The rate

ment

and

offer

the

of income,

best

marked

in the

inflation hedge,

—Otto

era.

Baum, Otto Baum & Co.

With Pohl & Co.
(Special

to

ihe

Financial

The

same

A

of

business incorporations

new

the

third

time

this year that

corresponding month
aggregate

has shown little varia¬
Corporations

of

incorporations exceeded those

a year ago.

stock

corporations organized during the first
This compared with 88,680 in
corresponding 1948 period, or a decline of 12.5%.

this

for annual reports,

goes

*

"

D. GILBERT

This stop-gap thesis seems to me to be both fallacious and dan¬

For the over-adornment of reports, their inclusion of irrel-

gerous.

evancies,

their

attempts

at

diversionary and misleading.

creating

folksiness,

affirmatively

are

In thus pandering to the stockholders'

any pangs of conscience which shareholders may harbor over
their lethargy toward spending an hour a year in reading a report,
or two hours in
attending an annual meeting, to check on the enter¬

prise in which they have placed their good

in

a

&

4%

the

and

some

preceding month, business failures reached
November, the highest total since April, 1949, according to
Bradstreet, Inc. Casualties were almost twice as numerous

year ago

The
as

from

failure

rate

20% below the level in 1939 and 1940.

rose

to

40

per

10,000 businesses

in operation,

shpwn by the Failure Index which extends the monthly rate to

annual basis and

an

make
time

us

skeptical

bestirring

over

to

take

liabilities and the

increase

in

the

number

failures reflects the fact that the sharpest rise is currently

tabloid

advantage

of

any

their

Concerns

times

failing with liabilities under $5,000

The

rose

effecting several
this

is

the

seriously needed

slipshod and non-uniform

dividend-basis; varying from
A

managements

financial reforms.
of

method

reporting the true

to company, and from pub¬

company

leading brokerage house tries to solve this

by listing dividend payments in two ways—for the previous calendar
year

and for the latest 12-month period—but the process of osmosis

through comparing the dividend reports
publications remains the only effective
Uniform

dividend

as

tabulated in

avenue

reporting, and clarification
mean

open

of

what

from company to company,

a

variety of

to the investor.
a

"regular"

which could be

Continued

on

page

of

occur¬

to 203, almost

number a year ago and the highest total since
More than one-half the November casualties had liabili¬

Failures increased during the month in
manufacturing, retailing
commercial service; slight declines occurred in

wholesaling and

construction.

Geographically the month's increase

was

OHIO—John

concentrated

E.

Pohl

STEEL OPERATIONS

SCHEDULED THIS WEEK AT HIGHEST

LEVEL SINCE EARLY MAY OF LAST YEAR

&

COi, Inc., Dixie Terminal Build¬
ing.

The

strain

according to

on

"The

management. in

Iron

the next decade will be terrific,
Age," national metalworking weekly in its

annual review number.

Whether It's Hot

it

Or Gold

Whether
make good is beside the point. But when they do make good
always means more taxes and more payroll, this trade paper adds.
can

The

1949

pension

battle is only part of the welfare state idea.
Management can cite statistics. It can use clear
logic—and prove on paper that we are headed the wrong way. But
for some reason or other these pleas fall on deaf ears. Or
they are
ridiculed. Or they are called reactionary. Or worse
yet management
is accused of trying to hold on to what it has. The
only way out of
It is hard

Be

sure

read

to

Reporter's

Report"

"Our

col¬

-

The politicians and labor
people know how to promise.

they

to

this

change

is

to

beat.

the

tone

of

management's

voice,

contends

"The

Iron Age."
umn

every

week in the

"Chronicle"

those

going. >

to

see

issues

new

;




how
are

:

INVESTMENT
Members New York Stock

Yet what can industrialists do?
They can only try to get their
story to the public and to their employees. But in doing this they
have to talk the language of the street and eliminate the
pussyfooting
attitude which in the past has
brought nothing but gains for the
other side.

Continued

on

page •'!
39!.
i

>

■

■ i;

!,»

-

».

BANKERS

Exchange and Other Leading Exchanges

UNDERWRITERS AND

DISTRIBUTORS OF

INVESTMENT SECURITIES
BROKERS

Management may have to make as much noise as the politicians.
It, too, will have to make promises, and may have to assume certain

from

Exemplifying

ties between $5,000 and $25,000.
and

or

overstressing of public-relations is further diversionary in

drawing the attention of the nation's corporate

their

March, 1943.

later

rights

ring in small casualties.

three

and

press

responsibilities.

$23,894,000 in October
$24,416,000 in the comparable month of last year.
The decline in

our

the possibility of stockholders at

themselves

Liabilities fell slightly to $22,799,000 from
and

of

reading-public's preoccupation with pink-pill journalism should

and "extra" dividend

adjusts for seasonal fluctuation.

money.

Picture Books No Cure for Laziness

in the Middle Atlantic and Mountain States.

CINCINNATI,

af¬

viewpoint justifying

lication to publication.

Up

Chronicle)

Buse has joined the staff of

child

If this indeed be "spoon-feedingwhat
firmative harm is there to it?

Looking at the continuing popularity

11 months of this year came to 77,634.
the

fulfill¬

security in this postwar

children.

the "over-public relations-ing"
in the current reporting by corporations to their shareholders on
the ground of it serving as a harmless but useful "come-on" device,
is widely held, we shall consider it rather fully.

our

seeking charters in November numbered 6,755, a drop of 1.8% below
the 6,877 during October, according to Dun &
Bradstreet, Inc. It was,
however, up 5.3% above the November 1948 total of 6,413, and it

security to equity which

think

we

Since

i
*

tion from month to month during the past four months.

with various

estate

pills.

minded too.
A. Wilfred May

-•
■
.

listed and unlisted, railroad, util-

ity, and real

like

educated

easing

There

bonds

be

They must be bright and cheery—later we caii
tighten up on the documents for the statisticallyj

a

adjustments, initiated in mid-December, have not been fully
consumers but no sign had yet appeared to indicate de¬
mand has been adversely affected by the advances.
On the whole,
the outlook at the turn of the year is encouraging
despite a measure Of
uncertainty with respect to market conditions beyond March. Steel¬
makers' hopes for sustained demand and production are
buoyed by
promising prospects for continued high-level activity in the auto¬

as

possibilities.

than average

yield

re¬

you

digested by

are

a

believe

price

835

constantly searching for
good medium grade bonds with

criticisms of current

justified, I

do
sufficiently realize the extent to which stock¬
are

allergy to factual information, management is measurably—wittingly
or
unwittingly—substituting distracting color and pictures for the
quantitative information which is indispensable to the investor and
to which he is entitled.
The glamorous literature is destructive in

Dun

Cincinnati, Ohio

interesting and important.

your

LEWIS

70,500 trucks, Ward's reports.

opens on

very

of

trucks.

were

ber output in this country to 360,900

Cayne,

Cayne & Co.

We

some

does not like bitter medicine; it is therefore.coated

Reports,

Model changeovers and the effects of the steel strike held Decem¬
and

"Observations" in the "Chronicle"

porting practice

week

prevailed in the past couple

of

.

in

This agency's preliminary estimate for 1949 places the year's vol¬
ume of plants in the United States at
6,249,400 units, of which 5,118,900

The

in

your

(Dec. 22)

While

this higher trend is
expected to hold up through February and March, with a leveling
off in the second quarter and a sharp drop in the last half of the year.

month.
dealers

May:

today

compared

detailed accounts of the hap¬
than 100 shareholder meetings.)

more

Mr.

in sugar

According

in
was

of which regis¬

substantial

investors

find,

I

s[:

been

disappointing.
offsetting factor was
strength in markets in local

bank

Dear

loadings were likewise

car

(Sometimes called "America's

annually furnishes to about 5,000 of such in¬

penings at

holders must

four

*

welcome
the

He

terested

not

se-

extremely
A

noted,

the automotive industry the upward trend in production was
continued at the year-end. In the latest week output showed a sub¬

Nineteen-fifty

of Hartford

we

was

In

*

Hartford, Conn.
first time,

it

Mr.' Lewis D. Gilbert.

trend of steel ingot production the past
week was brought about by a curtailment in operations at the steel
mills occasioned by the Christmas holiday.

this

For the

Minority Stockholder Number One," Mr. Gilbert has become widely
known through his representation, by
proxy, of
small stockholders at their companies' meetings.

A reversal in the upward

only
preceding.

affording

yields

steady the past week when

the corresponding week one year ago.
Unemployment,
continued to rise moderately in scattered localities.

tained

Philadelphia, Pa.
.

Our

stantial rise but it

Company

===

preceding column, captioned "Must the Stockholder Be
Spoon-fed His Company Information?" has elicited the following

pared with the previous week, but it continued slightly below that for

P.

—

.

The Harm in Sugar-Coating Company Reports

Business Failures

comment from

to
ap¬

returns

Good

.

J

coming

are

By A. WILFRED MAY

Index

Detroit, Mich.
We

.

Auto Production

and

J

v..

Price

Food

i

.

Trade

Commodity Price Index

Private Wires

OF
•

BONDS, STOCKS, COMMODITIES

Home Office: Atlanta

•

Phone LD-159

47

6

FINANCIAL

&

COMMERCIAL

THE

(58)

Thursday, January 5,

CHRONICLE

of

Business and Financial

Mr.

Babson foresees

but

decline in business in 1950,

some

predicts there will be fewer strikes and fewer wage increases.
Looks for fluctuating commodity prices, increase in Federal
market will

move

in

Holds stock

retail sales.

budget, and moderate decline in

narrow range.

tinue

than

that

but

of

pork,

dairy

into

preparation

in

die next crop

ness

although many schemes for detouring this law will be devised.

of busi¬

total volume

that

for 1950 will be less than

may

and

ness

sufferer
will be

to

for

obliged

It is hoped that all parties
will begin to realize during 1950
that
the
real
road
to
national

bills, it seems
that

bad

is
through
increasing
production and greater efficiency.
This is the bright light we see in

labor troubles
should

the

progress

upset

applecart.

(2)

all

threats,

labor situation.

the

Even

with

by consumers.

(6)

the

pay

too

to the wageworkers and
aid in ironing out the busi¬
cycle, but they will be paid

helpful

chief

the

be

sick and other
These will probably be

benefits.

will

consumer

for pen¬

for

and/or

sions

innocent

the

will be

companies

big

that

sidering

The great drive against the

(5)

1949, due primarily to the un¬
fortunate
labor conflicts.
Con¬

of

in

for

failure.

Commodity Prices

there

wage

in¬

creases

Roger W. Babson

dur¬

different groups

ing

1950.

On

tions

take

minds

the

of both the

and the management
off their regular business.
How¬
ever these negotiations come out,

employees

result

•they

standpoint

in
of

a

the

loss from the
country as a

(3)

will not be fewer extended nego¬
tiations which

will

in

than

1949,

are

but

there

expensive

very

be less than for

1949.

(10) Practically all retail prices

in themselves.

(4) The Taft-Hartley Law will
throughout 1950,

continue to stand

will

less in 1950 than in
notwithstanding the excess

average

1949,

had

they

will

American concerns,

averaging less than in 1949.

War III

popular

ernment

be

criticize the vast
which the gov¬

to

of

crops

owns

is making loans

or

but this surplus in storage may

failure

but be harm¬

War

Fear

when

ac¬

war

price

Over-all

Federal

and

there

be

even

may

not

taxes

will not be increased during

the

some

change much

will

there

build

one way

(40) The

less

ance

000,000 being distributed as insur¬
refunds

veterans

to

will

be

mostly spent.

capital
gains tax of 25% will remain un¬

the

in

creases

and

more

"sales"

will

local

be

and

reaching

taxes

many
state

for

Market

stocks will work

during 1949.
Stocks of companies

during 1950
(31)

■

Goods

up

as

known

in

with

1950

1949.

during ..1950

making
be

consumer

as

and

slackens due to a de¬
employment and other

and

companies

labor-saving machinery
popular than other
railroads.

or

The

investors

wisest

will

fair amount of their funds
liauid
throughout
1950 pending
the great break
i" -^"k prices
keep

will be moder¬

1950

should

more

may

(33)
in

utilities

industrials

The dollar value of all re¬

sales

stocks,

the greatest

demand.
(32) There will be more invest¬
ment buying for
income during

Markdown sales will con¬

in

inflation

as

have

on

ately downward, and the unit vol¬
ume
of retail sales will also be

a

which will

(22)

crease

Bonds

bonds

rate

Foreign Trade

bearing

prices during

same

course,

lower

low

coupon

1950,

off in

publicly

in

1950

(42) There will not be much
change in business rentals during
1950, but residential rents will
average higher in 1950.
Only as

property

granted high¬

owners are

rentals

er

will

there

be

more

houses built for rental purposes.

(43)

Mortgage

the

same

rates
about

interest

will continue
during 1949.

1950

during

as

(44) The growth in industrial
pensions should help real estate
sales in Florida, California, New
Mexico and Arizona.
General Business

Many

business

the

between

during

due

labor

selling

during

as

the

in¬

installation

machinery

saving

prices

1949. Un¬

gradually

will
to

point.

much margin

as

and

costs

1950

employment
crease

concerns

sliding down

break-even

There will not be

other

1950

(35)

fading

but,, of

they will sell for much
prices when money rates

increase.

the devalua¬

little and

a

building.

toward

High-graae taxable corpo¬

(34)

(23) Our exports will be down
during 1950 and our imports will
be up during 1950 — comparing
both with 1949.
This will partly

and

of

to

causes.

will
see
a
further
(46) Military preparedness will
certain tax-exempt, continue to bolster general busi¬
ness

and employment during 1950,

but this is not

a

healthy develop¬

ment.

TOJANN OUNCE THE

Excluding government
commodities, the physical
Stock piles of manufacturers will
rprnain
about
the
same
during
(47)

APPOINTMENTS

HENRY BENSON

THE

VICE-PRESIDENT

TO

PLEASED

ARE

WE

ASSISTANT

/

find their operations

Less will be spent on new

be accounted for by

price.

during

(45)

someday.

come

less in 1950 than in 1949.

building and equipment by stores
and factories during 19507

commu¬

private building. The cost of such

financed

and down in about the same range

of

forms

Most

(30)

relief by

other

or

sus¬

and, perhaps,

up

| building will decline

Stock

in¬
taxes,

small

but

There will be some deduring 1950 in industrial and

(41)

crease

There

will be

acreage

1950;

large

for

demand

Congress

changed.
(18)

boom

will not change {the quality of workmanship will
price of gold during 1950.
improve.
There should be an in¬

(29)

long-term

The

r-ates should continue at about the

FOLLOWING

in¬

farms, especially those lo¬

increase in

the antici¬

to

1

reduced.

construction

nities, will hold

nuisance taxes may be eliminated

tail

PLEASED

to

little

be

cated close to established

pated Federal deficit the $3,000,-

(21)

WE ARE

old

and

new

farm

during

tenance

will
or the

adjustments to encourage venture
capital.
Moreover, some of the

(17)

residential

commercial

1950.

In addition

(28)

re¬

-

bonds

government

of

other during

1950

factors.

New York

taxes

save

should continue well into 1950.

for 1949.

us

Broadway

to

space

down

come

Deficit Financing:

cline

120

pulling

by

III,

of

will

(27) The supply of money will
be increased during 1950, but the

spending

Exchange

throughout 1950

continue

Taxes

tinue

Members New York Stock

out¬
con¬

city prop¬
On the other hand, the con-

Federal Budget will
be increased during 1950 over that

were

Wertheim & Co.

estate

It should

provide parking spaces. Owing to
high costs and the fear of World

some

tually comes.

comes.

or war

The

(15)

(20)

has become associated with

real

available rental

less

clination to

most-unobtainable

great blessing when the next

a

counters will be
of better grades in 1950 than they

MR. RICHARD F. ABBE

city

short

,

is

amount

(19)

that

The

structures

assets mostly in natural resources,

announce

systematically staggered.

caused

r

pleaded to

maturities

either

•

Retail Trade

are

are

,

to hold

raising needed funds.

We

bond

they

war with
Russia erty.
during 1950. World
| tinual movement out of our large
sometime; but cities—in the interest of decenit
will
not
start
during
1950.
traiization—may cause prices to
Those in large, vulnerable cities
soften.
should use these years of peace to
(39) There will continue to be
get some small farm or country
a
fair
demand
during 1950 for
home to which they can go in case
suburban real estate with a shad¬
of war.
Such places will be al¬
ing of prices for large places; but

(26)

will

Farmers will continue to
present subsidies. It

(14)
work

their

that

due to

ful to others.

will

watch

see

tinue to hold firm

during

benefit

Poultry and dairy prod¬
especially increase in
volume during 1950 with prices

or

We believe that the cost-of-

(9)

There will be fewer strikes

1950

This

1949.

(13)

ucts

(16)

We, therefore, advise going
easy
on
inventories.
1950 is a
time to get out of debt and stay
out of debt.
Speculation in com¬
modities should be discouraged in
(8)

living index has turned down for
the present. The average for 1950

in

than

catastrophe.

1950.

1950.

whole.

1950

The importance of diversi¬

(38)

in

of industries and
of products, but altogether there
will be a general lowering during

the other hand, all labor negotia¬

ing

will
same

policy which it followed

look is uncertain.

will

competition from for¬
of raw materials
manufactured goods dur¬

of

the

1950

or

pioducers

and

is¬

Federal Reserve

during

to

more

eign

should fall off, barring
weather, insect or blight

crop

Movements

(7)

few

be

will

are

progress

interests

American

have

products

commodity
prices during 1950 will vary with

will

(25)

be

fication will be given more atten¬
tion in 1950 and wise investors

channels.

trade

to

1949.

(37)

ex¬

investments

the

considerable

The

general
in

our

Hbusing

new

during 1950.

(36)

would be noticeable along foreign

during 1950 than at the same time
during 1949.
The prices of these

on,

the

which

made,

The
supply
of
certain,
vegetables and fruits (ex¬
citrus)
should
be
greater

some

If

the

to

Obligations

continue

direct

legislation by the foreign country

canned

cept

be

empt from any new tax or other

(12)

(1) The

will

these

of

that such investments will be

in 1950, get out of
their surplus money

savings,

to

investors.

for

more

debt and put

sued

credits will con¬
be granted during 1950,

some

due

Authority

business firrris and
government will
get foreign governments to agree

means

average

diversify

bonds

and

by American

lower prices
wheat, corn,
poultry, eggs and certain
products.
.Farmers should

the

on

less

be

which

1949,

BABSON

By ROGER W.

should

Pound

English

Foreign

(24)

Outlook

The total farm income for

Ml)
1950

the

of

other foreign currencies.

below.
Farm

Outlook for 1950

tion

mentioned under 27-28

money

and 29

1950

\

_—.—

TO ANNOUNCE

FOLLOWING HAVE BEEN

PARTNERSHIP

GENERAL

THAT

ADMITTED

IN

OUR

FIRM:

owned

1950

during 1949.

as

Politics

HAROLD T.
ASSISTANT

MARCUS

VICE-PRESIDENT

RESIDENT

MARGARET GUNDEL

p.

Clifford

Mr.

IN

ST.

OUR

mcKinney

LOUIS

OFFICE

ministration will continue to talk

Gill

Mr.

W.

Mr.

ASSISTANT

1950 will be an election
year.
The Republican Party will
remain in the doghouse. The Ad¬

(48)

Clarke Simonds

Ronald

radically against Wall Street and
so-called "Selfish Interests,"
but at heart the Administration

SECRETARY

IN

RESIDENT

OUR

the

PROVIDENCE OFFICE

will

ARNOLD M. COWAN
HAS

ALSO BECOME
BEVERLY

ASSOCIATED

WITH

RESIDENT

US

IN

IN

OUR

HARTFORD

(49)

OUR

MEMBERS:

MIDWEST STOCK

John

NEW

EXCHANGE

YORK
NEW

STOCK

EXCHANGE

YORK CURB

PROVIDENCE

L.

that

190O

.

NEW YORK

2-8244




its

will

be sympathetic to or¬

Lewis

event,

goes

such

a

too
man

HARTFORD

far.

(ASSOC.)

the

of

consent

other

ST.

LOUIS

In

will be

made the whipping boy, but

-

EXCHANGE

I

with

prominent

labor leaders.

232 S. BEVERLY DRIVE
DIRECT

BEVERLY HILLS/CALIFORNIA

PRIVATE

WIRES

TO

ALL

OFFICES

(50) The
tions

HAnover

Its

than

ganized labor unless someone like

Wm. E. Pollock & Co., Inc.

Telephone:

worse

Administration

The

continue to

ESTABLISHED

5, N. Y.

far

OFFICE

HILLS, CALIFORNIA OFFICE.

20 PINE STREET

conservative.

fairly

will' be

bite.

G. H. Walker & Co.

NEW YORK

be

bark

Louis Walker

Mr.

Telephone:

CRestview

4-6308

JANUARY

of

Congressional

1950 will not

Elec¬

change the

19SO

political status of Congress to
great extent.

any

Volume

171

Number 4870

THE

COMMERCIAL

1949

Disposable Income and the

&

FINANCIAL

greater than in the first

was

9 months of 1948.

Most of the in¬

however,

crease,

CHRONICLE

into

went

in¬

(59)

creased

lieve the need for deficit financ¬

savings
since
personal
consumption
expenditures
held
close to the 1948 levels.

ing.

During 1949 we experienced a
period
of
pessimism
and
fear

.

Business Outlook
;

Savings

posable

(Billions)

Income

$82.5

$78.8

$3.7

45.1

46.3

—1.2

72.0

3.7

4.9

tory. Estimates surplus

188.9

178.1

10.8

5.7

178.7

14.8

7.7

that

1950

Goal

200.0

188.0

12.0

6.0

because by

A

Higher Standard of Living Can
Make

living to highest point in his¬

Possible

Government

for discretionary spending at four
Concludes demand must be created

It

Balanced

expenditures
The

Budgets

third

increased

or

which

present

high

income,

which

at

2 xk

over

perous

times

prewar

level

of

na¬

$230

billion.

stands

now

vide

over

most pros¬

years

posable

of

our

taxes.

jli)40

51/2

1929
and

or

times

the

would

billion

personal
With

posable

over

This

$200

$200

income

billion

in

of

present prices would

1933,

is

basic

a

chal¬

to

of

power

after

for

tures

all

goods

could
billion

greater

crease

of about

6%

a

stand¬

diate

ard

living

ican

savings

people.

Only

Johnson

of

can

Let's look
national

markets

with

increasing ability to pro¬
duce, or can provide employment
at
satisfactory
wages
for
our
increasing

by

workers each
A

over

be

a

ing

national

for

at

the

income

of

fast

in

1949

of

Total

9

months

almost

of

1949

identical

first 9 months of

(1st 9 months

(1st 9 months annual rate)
war)

and

before
of. t

ciat

the

December

American
1,

are

level

derived

came

fr«m

the

%

will

high

29

8,113

18

4,528

ist

they

other

ability
did in

never

still
our

with

applied

out any

toward

an

with

and

extra

sales

to

a

5%

and

on

the

Income,

business

on

of

in the

to

10%

tures.

This

would

certainly

Continued

re¬

the

part

of

on

page

42

sales
Se¬

again

MORGAN STANLEY & CO.

the

011

living

Savings

9

with

crease

and

first

dependent

business

that

in

an

our

in the

ANNOUNCE

THE

ADMISSION

OF

activity.

increase of

standard

corresponding

a

overall

DUDLEY X. SCHOAI.ES

of

in¬

markets for

AS

A

GENERAL

PARTNER

OF

THE

FIRM

goods and services in the United

months of

States

would

result

in

adding

2 Wall Street, New York 5

January 1, 1950

January 1, 1950

\

pleasure in announcing the admission of the following
as

General Partners in

firm:

our

We

Henry Hornblower

Ralph Hornblower, jr.

2nd

BOSTON

NEW

the

YORK

take

pleasure in announcing that

following members of

have been admitted

Tristan Antell

Joseph Gimma

YORK

NEW

Harold F. Carter

YORK

to

Mr.

PHILADELPHIA
Resident

Harry W. Puccetti

William J.

CHICAGO

Lawlor,

our

organization

general partnership in our firm

John L. Moore

Partner, Empire State Building, N. Y.

Mr. W.

jr.

CHICAGO

Resident

J. B. Smith

Partner, Lancaster, Pa.

Mr. Leroy Smith
*£*•

T~ 1T~T
:! \

Resident Partner,

1

Allentown, Pa.

HORNBiroVRRlS# WEEKS
Established

Members
.

1888,

Reynolds & Co.

of the New York Stock Exchange

and other

Members

principal Exchanges
New York Stock Exchange

40 Wall
New York--

-Boston

Bangor, Me.

Portland, Me.
.

Concord, N. H.




Street, New York 5

Chicago

Cleveland

Providence, R. I.

Detroit

120

Chicago. III.

Scranton, Pa.

Hartford, Conn.

Springfield, Mass.

Broadway

'

Empire State Building

Westerly, R. I.

Representatives in

Dubuque, Iowa

New York Curb Exchange

and other principal

Philadelphia

effort

attitude

Consumer

Disposable personal income af¬
taxes

of

It is estimated

Trends

ter

level

ex¬

pre¬

production

favorable

government

heavily

of

and

power

from

on

which

words,

are

create

history and justify the belief

somewhere between $5 to $10 bil¬
lion to government revenues with¬

change in the tax struc¬

to

elements

purchasing

productive

as

war

10

needed

fundamental

high

our

43

living if

make the small ad¬

effort

demand.

The

100%

standard T>f

our

we

profits,

Social

directly
dependent
of employment.

In

223.4

Expenditures

1949

NEW

further

only

12,920
sales)

1950

our high level of production
employment and to advance

and

ditional

on

pre¬

incomes

business

contributions

revenues

Conference

We take

tain

re-

1948

19,003

a

in

come

223.5

Disposable

City, Dec. 28,

or

(over 2V2 times pre-

Marketing Asso-

New York

individual

mostly excise taxes
10%

curity

230.0

Johnson

profits,
personal taxes

income

and

were

1949)

Mr.

Government

sense,

no

18% of government revenue was
from indirect business taxes which

the

5%

by

corporate

from

on

employment

\

rate)

on

came

which, of course, depend almost
entirely on the level of employ¬

Billions

1948

came

mostly

aver¬

1948.

.

1949

taxes

43%

39.6

address

Federal

$44,564

from

81.3

*An

of

,

ment

with

year

over

29%

in

place since 1940 in oiir national
productivity and real purchasing
power will indicate quite clearly
that it will be possible to main¬

surpluses.

income)-

on

ceipts of 441/2 billion dollars

during

Depression low

(3%

into

is,

but any

unemotional analysis of
the basic changes that have taken

1948, the last calendar year
which figures are available,

i
Indirect business taxes (mostly excise taxes
Social Security contributions-

in

Trends

Last

Goal

In

markets,
applying an extra 5%
to selling—selling

now

diction of events to

consumption along with improved
standards
of living can operate
quickly
to
change
government

„

(mostly
Corporate profits taxes

1950

1940

1950

This

in¬

income

increased production and

on

GOVERNMENT RECEIPTS

Personal taxes

$12.

as

1933

,

An

national

Millions

$87.4

annual

government

maintained.

the

level

employ¬

(Calendar Year)

along

income

Pre-depression high
prewar

reduced

are:

in¬

high level of

Income

national

first

aged

',

1929

but

balanced budget.

a

FEDERAL

potentials.

Total

1950

income

rate
as

conservative goal for

a

is

'.he

goal

budget

and

a
so

—

for

$10

or

1949—an

annual

National

million

one

oper¬

in

deficits

These

to see what this means to market¬

year.

conservative

would

now

desir¬

based

be

can

crease

profitable

income

for increased

exist

effort

that

our

growing labor force which

balanced

a

the

and

business

1940.

living

provide

the

for

of

government

ment

bringing about

And personal
continue to accu¬

an

the

high

a

national

for

need

we

goods and services that will
give consumers a higher standard
of living — the delicate balance
between
prosperity
or
depres¬
sion can be swung to the side of
prosperity in 1950.

men¬

encouragement of

in the imme¬

billion—over 4 times

vancingstandard

at

acceptance

that

there seem to be
only two alternatives offered for

potential for increased

could

mulate

ad-

an

1950

There is fairly

unfortunately

for

standards of living.

of

for the Amer¬

activity

rarely

consumer

the

services

billion

$188

higher

H.

Ameri¬

exceed pre¬

and

than

ously

reach

oC

business

ability of
ating on

by 60% and 1949 by 6%.
Personal
consumption
expendi¬

en¬

climate

general

dis¬

correction

courage, an d
to work vigor¬

for,

of

the

an

favorable

kets for business.

after

1940

war

lenge to busi¬
ness

dis¬

1950, the real

purchasing
can
people

tioned, is

is

and, hence,
upon the standard of living of the
people which .provides the mar¬

pro¬

of

income

depression low

Arno

not generally
recognized
completely government rev¬
enues
depend upon a high level

is

taxes.

to

than ever,

Now, more

important

more

was

basic

recognition of the opportunities

a

of

and

alternative

how

provide market for greater output of goods and services.

tional

relating

193.5

year

that
any

power.

(1st 9 months annual rate)
(1st 9 months annual rate)

prewar

of

to
The

buying

1948

money

times rate of decade ago.

conditions

Last

1949

only make possible balancing of government's
budget, but will also give public real purchasing power of 60%
1940 and raise standard of

4.5%

1940

consumer expen¬

will not

over

heavy unemployment
entirely unjustified by

—2.7

75.7

an expectation of de¬
domestic
markets
and

clining

f/r of Dis¬

(Billions)

Pre-depression high
1933 Depression low

ditures, and savings trends during last two decades, predicts
rise upwards to $230 billion in national income in 1950.
Says
this

Personal

penditures

i

1929

Co., New York

Market economist, analyzing national income,

'

p

along with

Savings

tion Ex¬

Taxes

(Billions)

By ARNO H. JOHNSON*
Vice-President and Director of Research,
Waiter Thompson

'

'

'

Consump¬

After

come

J.

Personal

Disposable
Personal In¬

7

Philadelphia, Pa.
Pottsville, Pa.

Morristown, N. J.

exchanges

New York 5, N. Y.
•

New York 1, N.Y.

Allentown, Pa.

York, Pa.

Bridgeton, N. J.

Winston-Salem, N. C.

Lancaster, Pa.
East Orange, N. J.

Syracuse, N. Y.

Lumberton, N. C.

6

Thursday, January 5,

FINANCIAL CHRONICLE

&

COMMERCIAL

THE

(60)

1050

Graham Walker With

From

attacks

Coming from the sources
licity than they seem to have

try.

of

the

"In
reflect
the

York

operating

Douglas

Walker

has

study

recommendation for a
view to evolving and carrying

came

transportation set-up with a
unified transportation policy.

unified

recommendation,

specific projects take into account the effect which a particular proj¬
ect might have upon other forms of transportation, but in general it is
believed that this factor is not weighed in reaching a decision to rec¬
ommend

of this

particular waterway improvement. For the purpose

a

determine whether the anticipated

report no survey has been made to

of

particular projects have actually materialized although
general impression that in many cases the traffic which

a

less than that

the waterway was far
when the project was recommended."
developed

subsequently
assumed

Sawyer could

Mr.

traffic

for which

was

on

Line
The
The Panama

have cited the New York State Barge
anticipated at 20 million tons annually.

highest it has ever handleH was 5 million tons, in 1936.
Canal undoubtedly justified itself in World War II but it has never
boon to American shippers.

any

1950

Public

the

increasing

trespass .upon

Public
stream for navigation. Thus

TVA

constitutional

made

was

as

tying

by-product of making the

a

Navigation on

navigable, and to control its floods.

Tennessee river

a

Heaven

knows how

only

at

many

millions of dollars have been

thrown

these waterway developments or are being

thrown away on

In the meantime, you have only to look

at the present time.

away

present transportation costs to realize they have not come

Nothing has been accomplished, in fact, except to advance
the

when

down.

the day

Republican

of the long pending St. Lawrence waterway-

sponsors

"self-liqui¬
Republicans did this with their tongues in their

palatable by providing that tolls be charged to make it
These
because

cheeks
serious

the

project

enthusiasts.

thinks

subject

ever

charge tolls has lost

committed

were

the

of

student

should

they

to

In

the

fact,

the

and

proper

to

And the charging of really self-liqui¬

Undoubtedly the St. Lawrence will be heard from
sion
at

argument.

at this ses¬

Another resolution authorizing it was introduced

of Congress.

the

it would be

likely kill the cheaper transportation

would

to

charge them on other inland waterways,

Mississippi, for example.

dating tolls

charged

proposal

among the

festly, if tolls were to be charged on the St. Lawrence

only fair

be

No

waterway
the innovation of tolls.
Mani¬

support for the project

They don't want to see

budget.

the

that tolls would

authorized.

be

cutting

by 20 Senators and it is before a sub-committee

last session

The Senator plans to hold

headed by Senator Tydings of

Maryland.

hearings in

Whether the Senate will take action

is

the near future.

The

support

project.

proponents claim, however, to have

picked

up

considerable

companies which have heretofore opposed the
The companies involved have gone along with the Hanna

from

steel

interests of Cleveland, to develop the Quebec-Labrador ore
about

which

so

much

has

been

heard.

In fact

heard that I had assumed the development was
and

was

Executive

rather

amazed

to

learn

recently

so

bring

the

held

Washington, D. C.
New
to

governors

the

these

steel

investing steel

though, that if and when the Senate gets around

companies will

over

the

years

more

of

an

changed attitudes
embarrassment to

After all, the arguments they have
against this costly proposition are still true.

proponents than assistance.

made

prove




to be elected

represent districts where some
will

new

Landreth Bldg.,

—

Richter

Scherck,

—

Meeting at

Montebello,

Quebec.

Va.)

Public

Bro¬

Co.,

Wm. E. Pollock Go.

Service

Co.—Special survey—Ira Haupt
Co., Ill Broadway, New York

Appoints Officers

6, N. Y.;

E. Pollock

Wm.

"Water & Power
Co.—Memorandum—Boenning &
Pennsylvania

1606 Walnut
delphia 3, Pa.
Co.,

I.

for
du

Street,

nounces

Phila¬

Harold

&

that
T.

& Co., Inc., 20

New York City, an¬

Pine Street,

Henry Benson and
have been ap¬

Marcus

pointed Assistant Vice-Presidents,
and
Margaret Gundel. ^Assistant
Secretary. Arnold M. Cowan has
become associated with the firm

1950—Discussion
Pont

of the Na¬

Security Traders Associa¬
tion at the Cavalier Hotel.

St. Louis 2, Mo.

England

Convention

Annual

tional

&

Co., / 1

York 5, N. Y.
available is a brief analy¬

Wall Street, New
Also

Club,

Seigniory

in

the

office,

sis of Pullman, Inc.

Beverly

232

South

California
Beverly Drive.

Hills,

also will take office at

governors

the

The

occur.

the

Los Angeles

Industry

Gas

Natural
chure

Feb. 26-27. —Francis

on

are

of Canada 34th Annual

640

Company, 208
Chicago 4,

Zippin &

Prospects

annual meeting.

Mr.

Sullivan,

is

ver,

native of Den¬

a

own

business

Sullivan

&

of

owned

his

He

under

the

from

Co.

NSTA Notes

of

name

graduation

1, 1946, when his firm

until Nov.

with

consolidated

Loughridge

Chanute,

Bosworth,

form

degrees

with

LL.D.

and

was

of Regis Col¬

graduate

a

Denver,

lege,

Bosworth,

to

Co.

&

Sullivan

CINCINNATI STOCK
At

Co.

&

Club

at

a

& BOND CLUB,

INC.

The Cincinnati Stock and Bond
week, the following officers were elected to serve during

meeting of the Trustees of

1950:

Mr. Sullivan became President

this

that time.

is

He

director of the Fiducial

a

and

Corp.

of

Chamber

Denver

Commerce; Past Chairman of

the

Rocky Mountain Group of the

In¬

Bankers

vestment

former
was

served

Committee.

Code

No. 3 of the NASD in

the

to

194-3-47. He

Denver

Denver,

Denver

Country,

He

District

of

Chairman

as

a

the Investment

member of

a

Association;

of the IBA, and

governor

Bankers

Mile

Athletic,

High and Rotary Clubs of Denver
and Attic Club of

Joseph H. Vasey

Harry J. Hudepohl

Fred H. Becker

Paul W. Glenn

Chicago.

Eustis & Co.
Westheimer & Co.
Vice-President—Fred H. Becker of Field, Richards & Co.

President—Joseph H. Vasey of George

Robt. H. Glemence With
R. L

ated

with

Church

merly

L.

Street,

Haven

New

ence

R.

has

an

—

become

Day

&

He

Robert
associ¬

Co., 215

as manager

office.

of the

was

for¬

officer of Gaynor, Clem¬

& Co., Inc.

2nd

Vice-President—Harry J. Hudepohl of

Treasurer—James F.

HAVEN, CONN.

Clemence

1st

Secretary—Paul W. Glenn of Edw.

Day & Co.

NEW

H.

again to debating this hearty perennial that the
of

Hotel,

Shoreham

the

in

of¬

take

meeting to be

annual

pretty well underway

that the

Maybe
first whether the waterway will be authorized to

guess,

officers will

new

at

deposits

much has been

the ore into this country.

It is my

,-Wallace H.

Fulton, NASD, Washington, D. C.

companies have four years in which to take up their options.
they want to see

^Director:

Dealers Association

Sept. 26-30, 1950 (Virginia Beach,

—

New

Bostdh Corp., Pittsburgh.

belongs

problematical.

Ker-

S. Davidson Herron,

Treasurer:

the First

Co.,

III.

Co., San Francisco.

A.B

government has to take over the railroads.

hydroelectric project, sought in the 80th Congress to make it more

dating."

&

vacancies

the Tennessee is a joke.

Francis

Weld & Co., New
York; Eaton Taylor, Dean, Witter

Field

(Canada)

5-8, 1950

June

^outh La Salle Street,

White,

The

by

dum

■

Investment

In

Oil—Memoran¬

Eagle

Mexican

for

^

.

Vice-Chairmen:
nan,

.

Private; Utilities

the

Bosworth,

nominated

were:

years

plant onto the development of a

Power

the

•

of

EVENTS

Broad

14, Calif.

Co., Denver.

officers

Other

the waterway enthusiasts have been joined by fice
Power advocates who seek to justify the government's

recent

In

&

Sullivan

South Spring Street,

Mr. Sulli¬

announced.

President

is

van

Dealers,

Securities

of

was

Staats

R.

New

10, N. Y.

COMING

Radio Corp.—Analysis

Hoffman

Offers

Park,

Gramercy

60

York

Investment

—William

Fund

Balanced

a

bot,

111.

been

of the National As¬

Governors

Inc. it

benefits from

is

has

Denver

What

—Floyd D. Cerf, Jr., Co., Inc., 120
South La Salle Street, Chicago 3,

nominated Chairman of the Board

sociation

recommending

whether the engineers (Army) in

"It is not clear

of

806

Co.—Circular

Products

Gerber

Moreland,

Avenue, Houston 2, Tex.

Corp.—Circular
30

Co.—Circular—

&

You—Designed to develop leads
for
salesmen—Henry Ward Ab¬

Industry—Anal¬

Stern,

&

Con¬

465

Co.,

Utilities

Mosle

Rotan,
Rusk

Street, New York 5, N. Y.

WASHINGTON, D. C.—John J.
Sullivan

Commerce Sawyer, pressing this
in part, as follows:

Secretary of

Lomason—Memo¬
Securities Corp.,

Enamel

•Herzfeld

Office

Street, Portland 2, Maine.

Maryland Railway.

Ferro

Securities

Texas

Co.—

Broadway, New York 6, N. Y.

Western

a

wrote to the President,

been

associated

become

Post

10

Shops—Circular—

Saco-Lowell
Maine

ysis of factors affecting the out¬
look—Eastman, Dillon & Co., 15
Broad Street, New York 5, N. Y.
Also
available
is a study of

As NASD Chairman

commission's

the

of

Out

there

Graham

that

announce

retain.

the traffic they

a

change,

Sullivan Nominated

sidized

Refining

&

Entertainment

transportation medium is with the firm. Mr. Walker for¬
seldom a consideration. Neither is any consider¬ merly
was
with
the
National
ation given to the question of whether the water¬ Quotation Service.
way, instead of proving a benefit, does not work
Bar*eron
a harm on existing transportation
facilities. The
railroads, for example, losing traffic to a sub¬
waterway, have to make up the loss by increased costs on

Carlisle

out

Ill

Walker

Graham

total
need

and

randum—Aetna

Co.,

Square, Boston 9, Mass.

gress

Oil

&

—Lerner

*

*

& Co., 115
Broadway, New York 6, N. Y.

a

as

4, N. Y.

Danciger

Savings accrue to the shipper, but from
national viewpoint the economy of water trans¬

waterway

Booklet recording

Analysis—Goodbody

carrier pays only the transportation cost and
remaining cost is borne by the general tax¬

a

Riverside Cement Co.—Analysis

Industrial

Counter

—

*

payer.

for

-

Bureau, Inc., 46 Front Street, New

and not the cost of providing
The user of the subsidized water¬

portation is illusory since the balance of the
cost is met by the non-shipper."
This report also pointed out that the

the

-

10-year performance of 35 indus¬
trial
stocks—National Quotation

rates

transportation,

owning and

cost of

the

equipment

the

Over

Stock Index

Hoover Commission on
Government.
It said:

water

of

case

only

the

of

the waterways.
way

of the

Force

Task

a

sharp, authoritative
waterways in this coun¬

they did, they deserve more pub¬
gotten. First, there was the report

Reorganization

a

firms mentioned will he pleased

interested parties the following literature:

send

to

two

been

have

willy-nilly development of

the

on

there

months

recent

It is understood that the

CARLISLE BARGERON

By

In

of the Neivs

the New York Stock Ex-

of

bers

Recommendations and Literature

McManus &• Co., mem¬

Joseph

Ahead

Dealer-Broker Investment

Joseph McManns Co.

Washington

Brockhaus & Co.

Moriarity of W." E. Hutton & Co.

following trustees were elected to
along with the retiring President: Fred H.
Becker of Field, Richards & Co.; Paul W. Glenn of Edw. Brockhaus
& Co.; Paul Hood of Seasongood & Mayer; Harry J. Hudepohl of
Westheimer & Co.; Robert A. Jameson of Pohl & Co.; James F.
Moriarity of W. E. Hutton & Co.; Jack H. Neumark of Middendorf
& Co.; Chas. H. Snyder of J. E. Bennett 8c Co.; Joseph H. Vasey of
George Eustis & Co.; Robert Weiss of Weiss, Work & Co.
>
At

serve

the

annual

meeting the

for the coming year

Volume

171

Number 4870

THE

too

are

see

Markets

Whyte

to

I

of

appearance

gen¬

point to decline. Continued

up

I should devote

suppose

that

I

I'm

what the market will do and
the reasons, if any,
it.

to

Over

period of weeks the downside it has remained

this

❖

method

a

crossed the 31 sell

*

sjs

should be held.

nor

make

the

do I try to.

of the market

top

me

When

too full of

is so,

the

cycle

seems

pitfalls. If that

the

market;

times the market goes

More next

The

some¬

[The

*

❖

only stock

The

Financial

Chronicle)

Calvin G.
Heisler has been added to the staff
of

Boettcher

&

—

Co.,

828

one

ScLwanz Co. Adds

no

(Special

to

The

Financial

Chronicle)

AURORA, ILL.—Harold

added to the staff of

Schwanz

Co.,

&

National Bank

Thursday.

Inc.,

Merchants

Building.

article

you are

still

higher long of is Denver Rio Grande.

views
do

With Merrill Lynch Firm

Whyte.
in

expressed

(Special

this

not

necessarily at any
time coincide with those of the
Chronicle.

They

presented as

are

those of the autnor only.}

The

to

Financial

BOSTON, MASS.

Chronicle)

—

dar, taxes, bills and

Beane, 10 Post Office Square.

only

lot of

a

*

mail

from

people

I

v?

4c(>t»VV

never

$8$

II1

••

heard of.

Maybe all that adds
({

to

up

/

'i 'iC-tS

*

"

*

<

*

to

I

as

But

come.

•

jLh

..j

..

r

try as

might it doesn't add

'

to anything I can lean on.

up

v-

1IS8PST

-

good forecast for the

a

months

hard

>•

,

*

j'Jji

wk

T

<fZ

V

^

s< ;t

.

v. v

In

the

week

next

see reams

space

given

and

anything

I

would be

add

'

*

K£ <

g

pslfesi!

-

thing

one

'

t

can

you

weeks

to

the

come

big

winds will blow out of Wash¬

ington

with

vengeance.

a

You'll hear about

our

foreign

policy, the tax structure, civil
liberties, Taft-Hartley ad nau¬
There'll

seam.

interpretations

they'll make
stock

be

so

this

dizzy.

you

The

still

market,

the

sensitive

all,

react

will

big

it knows

way

how.
❖

*

From

❖

where

I

the

sit

breezes blow in all directions.

main

This

be

to

seems

current,

south,

doesn't

however,
or

mean

down.

that

the

whole market structure is

the verge

Willi I.II

The

1916.

INC., is

in

inter-city mileage of SOUTHERN EXPRESS,
equivalent to a trip around the world every
14 hours.
That one statement affords a
rough idea
of the
scope of Southern Express' operations.
But it
lacks a lot of
telling the whole story.

IV

14

HIIH11S

of collapse.

on

There

a

carrier in Texas, Southern

spectacular growth.

500 units of modern

now

Paso

and

some

200

other

lully equipped shops, and a large terminal
freight handling facilities.
Also,
new
freight terminal facilities have recently been
completed in St. Louis, Oklahoma City, Tyler and

operates

over a vast area ex¬

Austin.
in

points in Texas and

While

Orders Executed

1

on

are

terminals

new

and

Kansas

connected

Express handled 318,701,000 pounds
compared with 163,012,000 pounds in

published for

And

Line"".

continues

to

more

on

than ten

years

Southern

stales.

economic

development

Schwabacher & Co.

DALLAS

the

welcome

South

the company's

private wire

system.

opportunities

to

company

contribute

by supplying capital funds

to

by Equitable

concerns

to

the

in

the

further

sound enterprises.

NASHVILLE

Members

of

will

a

expand.

Corporation featuring outstanding industrial and commercial
Equitable

by

under construction

All

that sound foundation the

Securities

Pacific Coast Exchanges

are

City.

pursuing an aggressive policy, Southern Ex¬
is ever faithful to its motto, "The Reliable

This is another advertisement in the series

Securities

as

And

Houston

terminals

In 1948 Southern

freight,

New
New

York

Stock

Exchange

KNOXVILLE

York

Curb Exchange
(Associate)
Francisco Stock Exchange
Chicago Board of Trade

EQUITABLE

BIR MIN'GHAM

San

14 Wall Street

New York 5,

COrtlandt 7-4150
Private

Wires

N. Y.

NEW

ORLEANS

MEMPHIS

to

Principal

Offices

San Francisco-—Santa Barbara

NEW

YORK

HARTFORD
CHATTANOOGA
GREENSBORO

Securities

Teletype NY 1-928

Brownlee O.

Corporation

AND

'JACKSON.

MISS:

Currey, President

Monterey—Oakland-—Sacramento
Fresno—Santa Rosa




322 UNION STREET, NASHVILLE 3.

new

gen¬

mechanized

press
of

program prepara¬

eral offices,

with

Oklahoma,

Pacific Coast

aggressive company is engaged

Just last month Southern Express moved into its
headquarters, comprising air conditioned

tending from south Texas to St. Louis and Kansas
City. Regular daily schedules connect St. Louis and
Kansas City with Oklahoma
City, Tulsa, Dallas, Ft.
Worth, Tyler, Houston, Waco, Austin, San Antonio,
El

this

now

Dallas

as an intra¬
Express has enjoyed

The company

equipment

And

a

thoroughgoing modernization
tory to a still greater volume.

Organized in February 1946, primarily
state

The

THE

them

these

to

only

AR□ IJIVII

most

of

barometer

breezes the

many

all

of

TWO WALL

ft

w a •••.<-. §a a

jj

of and that is that in

sure

the

..

So

1-

There's
be

a

.

■

.

yiyj#

meaningless.
*

.

x-} :%>

this

to

:

-

?

>

to business

forecasts.

can

v

so

-

of newspaper

over

industrial

or

<

®s®
X=>VV,

you'll

Evelyn B.

Biddle has joined the staff of Mer¬
rill
Lynch,
Pierce,
Fenner
&

calen¬

me—a new

E. Cos¬

ter has been

for doing

a new year means

thing to

Seven¬

teenth Street.

Unfortunately the begin¬

ning of

.

to

is that sell¬

answer

*

(Special

DENVER, COLO.

further additions to be made

—Walter

getting's good. Sometimes I'm

are

to to the list at this writing.

in, I get out when the ing is called for.

of

There

9

With Boettcher & Co.

figure. On

look

may

Buying stocks at this stage

however,

repeat,

can't

to the New Year;

space

Up to this writing it has not

for.

long of stocks and want

ahead
some

of

one

while I preach caution.

have

to cash

caution advised.
I

That is

(61)

speculation calls

#

ing

strength, signs continue eighth,

eral

sold.

CHRONICLE

bad. comfortably above the 263A
I know all this is becoming Yet, I prefer it when viewed stop point. So long as it stays
over a
long term.
between those two figures it
monotonous. The market's
go¬

WALTER WHYTE

Despite

FINANCIAL

the chances

immediate break.
❖

I Says—
L=By

any

&

strong under¬ after I've

many

pinnings still present to fore¬

Tomorrow's

Walter

COMMERCIAL

STREET, NEW YORK 5.

.

.

10

FINANCIAL

&

COMMERCIAL

THE

(62)

CHRONICLE

Thursday, January

and the balance in

Harris, Upham Opens

Acquires Eastern
Pennsylvania Site

BOSTON, MASS.—Harris, Up¬
& Co., members of the New

ham

have ad¬
mitted C. Handasyde Whitney and
Geoffrey G. Whitney to limited
partnership, and will occupy the
offices of Whitney & Elwell at 30
State Street to carry on the busi¬

in

by that

formerly conducted

ness

firm

'has

which
T.

William

dissolved.

been

will become

Whitney

of the Boston office and
associated with it will be Leo E.

manager

Quinn and E. Harold NfcDonough.

We solicit

inquiries in

Altoona & Logan

ol

last

year,

a

Corp.

Pittsburgh, U. S. Steel's largest

whose

York,

dropped

use

as

site for

a

Sea¬

Eastern

an

reports, tracts of
varying sizes were bought by the
real
estate division
of Pennsyl¬
vania Railroad from private own¬
have

and

the

approximately
total

square

consolidated

been

six-mile

being

now

C.

President

Cox,

American Cone & Pretzel

acquisition,
"the

A. B. Farquhar

operating and maintenance em¬
ployees.
The
present contract expires
Feb.

of

not

has

thorized."

It

such

yet

been
known

Steel

STREET
.

10

last

been

has

ment

site

tract

considered

is

Refusing to
this

deal in

demands.

and that increasing

Pennsylvania Water

have

operated

Steel's

The

Common Stock

River

ware

and

extends
It

Request

Pa.

NEWBURGER

Steel
close

from

across

south

Dela¬

of

sources

to

say

of

as

3,500

to

Car¬

homes would

new

directly

Stock Exchange

cruing

and
to

permanently
the

we

to

more

1342

STREET

WALNUT

quick

were

from

7

PHILADELPHIA

at

cated

ac¬

Pennsylvania

benefit
Telephone

KIngsley

5-4500

plants

large

Morrisville,

the

year

to

1942."
however,

disagree.

Aside

increase,

wage

plan

pension

substantially

proposed

from

development.

A

for
conditions

working
various' categories including
increase in the differential

in
an

for

work

night

hour;

to

10

cents

day

increased
elimination
operation. The

and

pay

one-man

30-

pay;

severance

siek-leave
of

an

increase of uniform al¬

an

lowance from $37.50 to $50;

car

claims union demands
will
cost $21,000,000 and that
funds to meet them are just not

company

fingers,
what

are

sounds

broken

the

Cambridge Bldg. 3s 1953
N. E. Walnut &

Juniper Common

Pittsburgh Hotels Common

be

proceeds

with

riders,

crossed

again
listening
to
suspiciously like a

A

applied

The
as

to

the
por¬

tion

of

plans

which

will

approval

retirement.
as

maintenance

Division

well
of

a

large steel plant would require

not

the

of the

Public Utilities

SEC.

plan provides for a

from

of

Teletype

Underwriters

in

1900—on

beef and

pie,

game

Phila.

Transp.

Wks.

cake,

pudding

Kilowatts"

"Acres of

Pfd.

Boenmng
draws

&

attention

of

stock
Power

the

to

common

Pennsylvania

Water

&

Co., a seasoned and welloperating utility pres¬

situated

undergoing
the
administered by

ently
lumps
eral

are

pain
of
Fed¬

the

Commission.

Power

rates

too high,"

PHILADELPHIA




be

may

for

converting
gasoline in the

"For

the

present,

at

least,"

huge

of

reserves

available

gas

cheap
are

seven

days

interference

are

natural

which

freely

he
at-,

more

a

allowed

week

a

national'

by

unions."
*

*

$

Quickies
Follansbee Steel Corp, of Pitts¬

burgh has sold

its Toronto plant
equipment to Kovalchick In¬

and

dustries, Inc. Price not disclosed.

hit

Hard

earnings

by

of

the

steel

strike,

Steel

Lukens

Co.,

Coatesville, Pa., for the fiscal year
ended October

about

30,

$5

expected to

are

share

per

com¬

'.

'

don't

panies
rate

entitled to

return

of

replied

agree,"

the

"After all, utility com¬

are

vested in

will

earn

the

on

fair
in¬

a

money

the

point in court."

our

litigation is
the

jnudently
d'hddend

share, the

In

on.

thorized

indebtedness

000.000

to

Dillon

$4

the

if

FPC

the

plans

where

it

the

American

sticks.

hard for

even

Pennsyl¬

6%,

isn't

which

too

Quaker to take.

a

twist is
&

has
down
to

Co.'s

under

operates

costs

under

Balti¬

of

terms

the

of

call

a

&

on

Power

to

par

its

Tel.

&

H:

parent,
for $25,-

Tel.,

*

*

has

approved

proposal of
Pennsylvania
Gas
&
Electric
Corp. to liquidate in compliance
Public

the

Utility

Holding

Act.
*

*

:!:

Pittsburgh Consolidation Coal
has

Co.

acquired

acreage

esti¬

mated to contain 97 million tons

recoverable

of

coal

its

from

largest stockholder, M. A. Ilanna
Co.

of

volves
an

Cleveland.
about

The

deal

in¬

$6,000,000, mostly

excharige

of

securities.

Armstrong

$6 per share, compared with $7.54
reported in 1948.
*

Kellett

the

Pennsylvania
Co.

Dow Jones estimates

Corp Co.'s 1949 earnings at about

which
on

power

dividends

common,

sold

are

contract

a

Gas

Consolidated

Penn¬

250,000

Pennsylvania

that

Power

of

issue

000,000.

Co.

order

stock

yields

tax-free,

vania

be

to

with

per

selling,

tax

sinking

Co.

to

additional

$100,

reflect¬

reduction in dividend, pius

year-end

$5,-

Eastman,

offer

to

Telephone

shares

ing the effect of decreased reve¬
nues

Co.

au¬

com¬

from

$12,000,000.

&

Bell

$2

to

latter figure

in

debentures.

fund

annual

its

have

increase

an

pany's

SEC

quite

company

reduced
from

Stores, Inc., Phila¬

stockholders

plant and equipment. We

prove

The

Fair

Food

delphia,

"Your

phia.

under
since

vision
make

a

*

*

Aircraft

new

Co., Philadel¬
federal court super¬

October,

1946,

effort to

reorganize

will

under the Chandler Act

by merg¬
ing with Central Aero Supply Co.,
Camden, N. J.

the

have

expense

against earnings of
and

are

a

charge

income

taxes, interest

on

Partnership Changes in
E. R. Jones & Co.

LIBRARY—For

teen

9

ate^
ALLENTOVN

•

PITTSBURGH

NEW

YORK

SCRANTON

•

&

BALTIMORE, MD.—E. R. Jones
Co., 221 East Redwood Street,

members of the Philadelphia-Bal¬
timore

mitted

John Lewis Bites Hand

Incorporated

-

-

Incorporated

Chicago

into

sylvania

"We

STROUD & COMPANY

PEnnypacker 5-0100

Boston

basis

in

Standard

Jersey

a

gas

said, "this looks like

in effect, said

(AAA) and dividends on
its junior securities, all of which
are
of investment caliber. Yipe!

Bought—Sold—Quoted

New York

the

New

the

Texas oil fields.

the FPC.

Federal

Wood Steel Pfd.

1528 Walnut St., Philadelphia 2

that

Library

year.

arresting title,
Co.,
Philadelphia

Consolidated

Com.

E. H. Rollins & Sons

at

with

of

as

equal

senior to the Baltimore company's

Wood Steel Common

(Alan)

Co.

natural

its bonds

(Alan)

so

•1'

Under the above

ating"

Com.

Com. &

is^

supply

unique position of being an oper¬

City Elec. Com.

Richmond Cedar

Johnny

salad,

cost

indicated

conjunction

did
cocktail,

mushrooms, potato

green

mate¬

raw

a

the

sums

which

pared with $7.58 for the previous

Water

Atlantic

fact

coffee.

and

Thus;

Common

Merchants Distilling

the

output not sold to
Electric Co., Penn¬
sylvania Power & Light .Co., Met¬
ropolitan Edison Co.
(Reading)
and
the
Pennsylvania Railroad.

Distributors
Phenolic

Suffi¬

group.

string beans,

entire

and

COrtlandt 7-6814

Amer.

industry

seafood

great

future

and

developed

the

of

notation is

are

would

person

as

the

Love

without

near¬

Philadelphia

N. Y. Phone

,

this

Consolidated, has

Bldg. Philadelphia

PH 375

remarkable

for

more

Exchange

Mr.
process

to flow

replete with the achievements
this

bad

unreliable."

age

in

landing

The annals of American
are

pany

Stock

when

indefinite

so

venture

a

a

rela¬

things

investing

first du Ponts.

with

Samuel K. Philli

rial
so

re¬

probably the lowest of any utility
in the area. Moreover, the com¬

Whitehall Cement Com.

Phila.-Bait.

the

of

sane

tied to coal

ly 80, celebrated the 150th anni¬

Water

Transportation Co.

Packard

the

of

family, ranging

versary

labor

these

in

of

present

tractive venture because there

year-aiul-a-half to

a

The

Issues

Members

from

1.,

Eagle.

members

brought

total
$23,000,000, represented by
less than $17,000,000 in cash

The
of

by

Central RR. of N. J. Interest Ctfs
Phila.

of
its

Railways Co. and
underlying
companies
was
in December, by formal

Pittsburgh

Co.,

debt

632

meantime,

Reorganization

step toward comple¬

reorganization

Warner

initial construction
future

Rwys.

further

marked,

from

Newport, R.

of

money

was

in

Gardens, Chester County,

Pa.,

record.

Pitts.

to

sale

by

landed

On New Year's Day, at Longwood

So

55

sold

American

ship

company.

available.

tion of the land included in the
was

of

used

the

requests

and

in

changes

lo¬

stands

Dines

Victor,

and

the

union is demanding an improved

and central-mix

with

concrete

I.
at

cient

Railroad, Warner Co., producers
of sand, gravel

Dynasty

America

our

asking

are

officials,

Streetcar

Aside from increased business

Exchange

meet

to

will

PTC

Company

and their families. '

Stock Exchange

dream

Oil

l.n. the year 1800, Pierre Samuel
du Pont de Nemours and his two

E.

Under

the

of

none

type

cheap coal

assurance

supply.

possible. No

be referral to the

balls,

have to be built to house workers

Members

that

itself of its traction holdings.

sons,

this

have

tions in the industry are

bankruptcy court for a hearing
effectuating order. Comple¬
tion of the Pittsburgh Railways
system reorganization is a step to¬
ward, rather negation of, the ex¬
isting
SEC order under which
Philadelphia Conrpany must di¬

A

to

circumstances,

The next step toward final con¬

vest

of

complete

a

regular

SEC by Jan. 15.

summation will

have

and

to be filed with the

are

plant

a

would

Division's

the

it would

facilities

the

What

rebate for

tax

Morris-

dollars

the

roast

a

billion

a

to

in addition is to receive $1,000,000

Trenton

from

cessful,

system

that they dined again as they

negie-Illinois'
Homestead
plant
outside of Pittsburgh. Possibly as
many

& COMPANY

Philadelphia-Baltimore

the

of

certain

get $4,500,000
out of its recent fare increase and

parallels the main

duplicate

Curb

side

the

along

"The

major
steel plant would involve the di¬
rect expenditure of many millions
of dollars as well as furthering
the industrial development of the
cost

York

lies

construction

area.

York

in

well afford

can

won't amount
than $3,000,000 all told.

line
Pennsylvania Railroad and
may also be served by deep-water
cargo ships.

BOENNING & CO.

New

position

strike

any

certainly

of the

The

New

S.

to weaken U.

site

new

vilJe.

Philadelphia 3,

freight rates

competitive

Pennsylvania

on

mill

the Eastern markets.

& Power Co.

Memorandum

the

findings

nowned

discuss

wants to bargain fairly. The

pany

PTC

at

into

went

said: "We can close
two days if the com¬

Quill

plans,

pur¬

foregone

a

FOB

which

fares

effect last October.

an

of

Exceptions

This

reached.

was

of

steel

sold

compromise

followed by a higher sched¬

conclusion. It is pointed out that

is

hour

-

8-

an

ule

the

this

for

Subsequently

an

-

agreement

paralyzing 10-

a

was

in

for
for

reach

to

agreement

au¬

the develop¬

and

years

of the

pose

looking

Seaboard

Eastern

failed

cent

steel

a

to

up

day strike.

that

well

is

line

negotiations car¬
the final dead¬

year,

on

to

securities.

1950.

and resulted in

the

steel circles, however, that U. S.

HERBERT H. BLIZZARD & CO.

10,

Last

Car¬

emphasized

building

mill

Roberts & Mander

of

12-cents-an-hour

a

increase for the 10,500 PTC

wage

trans-

in discussing

list of 14 other union

a

is

parent,

plant will close this week,

George A. Love, President of
Consolidation, said: "To be suc¬

and

is

demands

ried

R.

an

table.

Heading

According to

ferred.

LOcust 7-6619

town
last
"or else" pack¬

the

on

ference

board steel mill."

negie-Illinois,

CHESTNUT

into

Philadelphia Trans¬
portation Co. union-company con¬
age

and left

The

c o m p a ny.

Co.,

guarantees

Transport

30 miles
northeast
of
Philadelphia, "for possible future
County,

Riverside Metal

1421

Michael J.

—

ubiquitous
President, of
Workers Union, CIO,
headquarters are in New

Quill,

reorganized

in
an

economical basis.

receive 50.9% of the new stock
will
be
relieved
of
its

week

into

Valley

over

PHILADELPHIA

for coal, particularly
converting coal to gasoline on

and

subsidiary, announced that it was
taking title to 3,800 acres in Bucks

ers

American Dredging

for

progress

week Carnegie-Illinois Steel

*

Spot Again

on

the

Philadelphia

*

:!:

PTC

Following

Exchange,

com¬

pany's products.

piecemeal
acquisi¬
tions of acreage which have been

Stock

the

of

quantities

large

U. S. Steel

markets

mortgage

Pennsylvania Brevities

Office in Boston

York

new 5 % first
bonds, to be distrib¬
uted to public security holders,
together with 49.1% of stock in

1950

5,

LANCASTER

the

past

thir¬

months, a pilot plant oper¬
by Pittsburgh Consolidation

Coal

Co.,

has

functioned

around-the-clock
effort

to

find

schedule
new

on

an

Exchange, have ad¬

Donald

Arthur

Peek

to

general
T.

partnership and William
Bunting to limited partnership.

Edgar M. Everton has retired from
the firm.

an

in

Stock

commercial

G.

Melvin

become

Readmond

associated with

has

also

the firm.

Volume

171

Number 4870

THE

COMMERCIAL

&

FINANCIAL

CHRONICLE

of

Strong Economy, Chief Weapon

Branch

In War
strength,

lais end.

Cites neglected

economy

and points out need for reducing Federal
and revising

We
our

hear

much

about

country strong and

keeping

for
mies

the

up

of

ideas

an

army,

while

and

ing

scientific

research.

creased,

our

the

resources

will

have

reestablish

finances

a

petition

this

on

other

paredness,

countries

must

be

eco-

nomically and
f'inanci ally

strong.

No

country
ever

ed

Wright

t

has

succeed¬

in
i

a

n

maini

n

olace

first-rate

power

without

in

economic

as

the

and

its

g

back it up.
A casual
around the world
at the
decline of first-rate
powers to sec¬
ond and third
positions, even of

glance

victorious
that

countries,

these

caused

will

show

have

declines

been

largely by economic and
mismanagement. Maybe

financial
the

wars

tor

in

were

an

important fac¬

depleting their
Restoring the position

countries
not

as

seem

major

resources.

of

these

powers

does

without

possible

first

restoring financial

and industrial
strength to back up
military pre¬
paredness.
History will .back up
the statement that
first-rate mili¬

tary preparedness depends
dustrial

and

financial

for its support.

ness

in¬

on

prepared¬

It

is, there¬
fore imperative that
we,
in the
United States,
realizing our posi¬
tion
and
obligations
in
world

affairs,

take

the necessary
steps
country strong eco¬
nomically and industrially in order
to have the
military preparedness
to

keeo

to

out

our

obligations

in

of another world
emergency.

case

How Strong Are

Defenses?
It

is

well-known

a

United

States

industrial

leads

fact

the

production

the

world

countries want the products of
free

enterprise

system

in

our

such

large quantities that we are un¬
able to supply them and
they are
unable
from

to

buy all the products
they want because

that

us

they do

not

have

enough

dollar

exchange. This is called a "dollar
shortage,"
when
all
it
really
that the rest of the world
does not produce enough goods to
sell us to buy from us the
prod¬
ucts they want.
This condition is
further
aggravated
means is

by

and

inflated

depreciated

currencies, and
restrictions preventing the
balancing of prices and costs in
trade

free

pends

multilateral

exchange mar¬
kets.
We will strengthen our in¬
dustrial and economic position
by
helping other countries restore

of

their
are

spending many billions of dol¬
lars to maintain obsolete defenses
and
antiquated practices which
will be of little

com¬

economies
Whether

of

their

that

production

in

materials

fenses in

depend.

case

they

may buy from us and
countries, and pay for what
they buy.
We will not strengthen
our

of

position,

however,

nor

that

the countries

we are trying to
giving away
our
re¬
piling up debts on
the American taxpayers unless the

help,

by

and

sources

countries
necessary

we

are

steps

helping take the
put their fi¬

to

production

nances.

and

trade

sound, balanced condition

dicate

used

are

production, restore

can

meet

markets.

period of
aid

of

the

If,
our

billions

in

and

free

In

increase

domestic

lend-lease
to

other




of

the

and

gift

countries

which

of future

de¬

our

will

wars

Secretary Johnson's

sug¬

that

all

government

need

Every patriotic

ex¬

reexamining.

citizen will

sup¬

productive
and

the

and

The

and

useful

elimination

unproductive

defenses

of

all

tures

of

is

funds.

an

military

our

emphasized

waste

of

use

importance of such

ination

that

for the most

money

exam¬

the

succeeding war has al¬
ways been fought with new and
improved weapons and the weap¬
ons

of past wars have become less

The

ample

Federal
of

ernment.

civilian
ernment

payroll

is

an

over-inflated

our

ex¬

gov¬

In
December,
1932,
employees of the gov¬
were
563,805.
In April

1948, the number of civilian em¬
ployees stood at 2,050,420.
The
overlapping
bureaus

known.
that this

of

and

the

of

budget
the

includes
in

be

terprise- helping
needed

Three years after the
war
the
federal

world

almost $40 billion, and

was

present

$43.5
1951

year's

billion.
is

about

Before
eral

lion.

debt

is well

War
less

was

1,

our

than

After World War I

reconstruction

is

about
estimate ' for

$45 billion.

World

debt

outlay

The

reached

loans,

and

the

total

a

Fed¬

$1

of

economy

bil¬
our

Federal
$26

bil¬

At present our Federal debt

estimated

at

$255

billions, and

the deficit is expected to carry the

debt this year to $260 billion.
It is

interesting to point out in

connection

with

there

Federal

our

penditures that
Branch

in

the

ex¬

Executive

of the

is

government alone,
employee for every
taxpayers in the United

one

21 income

States.

be little doubt

can

For every

large number of civilian

should

wealth

functions

departments

There

employees
who

second

lion.

useful.

employ¬

only

$4 billion.

fact

each

useful

war

expendi¬

by

of

Three years after the first world
our federal
budget was

this

dollar of

every

number

ees.

as

many

people

productive

to

United

en¬

produce

to

the

for

9.3c for

is

paid out
18.3c is paid

housing

and
Every time the

clothing.

the

pay

dollar earned in the

States, '31c

in taxes, while only
for food, 13.8c for

Continued

on

page

14

we

sources
of weakness
that should not be neglected. Our
Federal debt is too large. It is

equal to

$6,000

mortgage of

a

on

Our

market

money

prices

than

more

home in America.

every

and

Privilege of Immediate Payment

bond

rigged.
We do not
free money market. There

are

have

a

is

no

such

at

the price of 1%

thing

To the Holders of AS!

earned capital

as

2% in

or

a

free

market at today's costs and prices.
This is a maladjustment in the
cost

or

which

ing interest rates and
ment

in

readjust¬

a

5% Gold Debentures Due
1958, 1963, 1966,

the prices of capital with

effort

any

to

return

to

sound

money.
Our money is inconvert¬
ible and our currency and bank

deposits
of

the

on

inflated far in

are

needs for

any

of

excess

the

country.
high and as a
result venture capital for produc¬
tion purposes is almost impossible
Our

to

taxes

obtain.

As

scarcity of

evidence

money

empJoyrrvent

in

of

in

July,

reasons

for

various

types
and

the

giving the:
against holding

tures

assets

of

issue the

spending

by indi¬
units with

of

savings

hereof,

stocks; 92%
bonds and bank

common

A

discussion
in

of

taxes

as

economic

our

defenses

be
separated
from
the
other industrial and financial fac¬
cannot

tors in the

of

fhe

strength and weakness
Taxes

economy.

major factor.

are

will

be undermined.

and

undermined,
debts,
past

employment

needed

and

up

our

operating with

us,

are

below.

defenses

In

a

Commission

at

Ownership certificates should

President

pro

Senate

and

the

the

Sneaker

other
es¬

present

of

gressmen

listed
pre¬

principal must be accompanied by
instruments of assignment in blank where payment to anyone
than the registered holder is desired.
CITIES

SERVICE

COMPANY

By: W. ALTON JONES

January 3, 1950.

President

the

of

administration,

coupons

the
the

House, include leading officials in
the

all

proper

were

President,

tempore

accompany

Or¬

on

bers of the Commission who

by

their respective offices

\

■

ganization of the Executive
Branch of the Government. Mem¬

appointed

to March 1,

Debentures registered as to

weakened.

July, 1947, the Congress

of Debentures due 1963 and

(including interest

of Debentures due 1969.

sented for payment.

co¬

Reducing Federal Expenses

tablished

case

respective Trustees of such issues

obligations for
supply the money

build

case

may sur¬
render their Debentures with all unmatured
coupons attached to the

are

our

defenses of countries

1950, respectively) in

Holders of the above issues who desire to avail themselves of the

our

and

to

the

on

presentation and surrender of the Debentures

privilege of immediately receiving the redemption price,

capacity to col¬

our

meet

wars

1950) in

When

lect taxes, make payments

upon proper

Debentures due 1966, and to $1,065

out
of
production by discouraging investment in venture
capital, production and employ¬
ment

their

Company, however, is giving to holders of each
right to receive immediate payment and has accordingly

and March 1,

a

If taxes drive cap¬

ital

production

on

redemption price consisting of
Debentures, the premium due thereon and
the accrued interest to the
redemption date, amounting for each $1,000
Debenture to $1,045 (including interest to
April 1, 1950) in case of
Debentures due 1958, to $1,055
(including interest to May 1, 1950

fac¬

a

redemp¬

with all unmatured
coupons, the full
the principal amount of the

deposits.
tor

to effect the

outstanding Debentures of the above issues

instructed such Trustees to
pay to any holder on and after the date

above, which

that only 5% favored the

favored

hereby notified that funds sufficient

with the terms of the
respective Indentures under which such Deben¬
were issued. The

a

1948

and

incomes of $2,000 or

showed

are

respective next interest payment dates have been
deposited by the
Company with the respective Trustees of such issues. Official publica¬
tion of the Notices of
Redemption will later be made in accordance

the

production,

You

tion of all of the

capital seeking

Federal Reserve Board released
survey

,

too

are

an& 1969

Aggregating $41,569,700 in Principal Amount

to carry

money

business

Outstanding

CITIES SERVICE COMPANY

price for the use of money
will correct itself with ris¬

Debentures due 1958 and 1969
are

Con¬

and Senators from both

mer
President Hoover was the
Chairman of the Commission. The
full report of the Commission was

end

military de¬

taxpayers'

furnish

us

lesser

But

us

many

competition of free
the

new

to
help
by using

to

11

money
markets.

competitive

our

have

to

parties and outside experts. For¬

at

be starv¬

the

it

owes

sound

they

so

value in fu¬

we may

upon

the

helping will be

successfully the
are
giving for re¬ penditures

we

construction

order

other

while

velopments

no

or

ing research and

sound financial conditions and in¬
crease

military defenses and
might reveal that we

our

costs

and

how

on

in

other

tion

economic

purcase

and

un¬

research investiga¬

production

are

viduals

Our Economic

expenditures

reducing

strength or gestions of how he plans to cut
weakness, in cooperation with us the costs of defense
certainly in¬
in
building up our defenses, de-1

this

carry

A competent

ture wars,

the

we

of

of

reducing taxes?

and

countries.

source

a

world

financial

to

power

a

are

sound basis in

with

necessary pre¬
we

indus¬

depleted,1
help¬

we

start

their

But

their

over

to

in orderto

Ivan

econo¬

meet

countries

have

D».

their

to

and financial competition in
the free markets of the
world, our
economy and theirs will both be
weakened.
Our debts will be in¬

navy,
air
force, marines

and

purpose

by

unable

are

the

necessary costs and strengthening
the economy of the country

trial

thought such statements call

;

for

expenses

reconstruction,

prepared

as

gov¬

ernment

domestic

our

much

defenses

conditions.

government

support

government

as

ernment

tax laws.

our

these days. At

for any
emergency

first

of weakness in

sources

modern

citizens

costs

competent employees in' the gov¬
service.
Why not ex¬
amine every branch of the

economic

steps be taken toward

urges necessary

the

military

necessary

meet

could

reduce

Wright, contending military preparedness requires

and financial

the

of

port
to

$2,000,000.000 and still raise the salaries
of
necessary
officials to attract

Peace

or

By IVAN WRIGHT

Dr.

the Commission, Mr. Hoover
indicated that the proposed reor¬
ganization of the Executive

(63)

made public for the 81st Congress.
In commenting upon the

to be

presented to:

Debentures due 1963
are

to

be

presented to:

Debentures due 1966
are

to be

presented to:
'

The
of

Chase

the
43

National

Bank

City of New York
Exchange Place

New York

15, New York

Central Hanover Bank
and Trust
70

Company

Broadway

New York

15, New York

Manufacturers Trust

Company

Corporate Trust Department
45 Beaver Street
New York

15, New York

findings

\.

12

(64)

THE

COMMERCIAL

|

FINANCIAL

CHRONICLE

With

E. JOHNSON

Byllesby Co.

News About Banks

PHILADELPHIA, PA.—Charles
L.
Wallingford, formerly Man-

CONSOLIDATIONS
NEW BRANCHES

NEW

This Week—Bank Stocks

Scattered

Thursday, January 5, 1950

Charles Wallingford

Bank and Insurance Stocks
By II.

&

Bankers

and

OFFICERS, ETC.

REVISED

reports of banks in New York and Chicago for the
year just ended show results about in line with previous expecta¬

CAPITALIZATIONS

tions.

Operating

i

tained

tions

and

to

earnings for 1949 have, in general, been well main¬
security profits have enabled somp institu¬

Barnard

increased

Townsend, President of
Guaranty & Trust Co. of

Title

earnings than in previous periods.
.{•;•< 4-Central Hanover Bank & Trust was among the first to publish

N

(results and showed net operating earnings of $7,166,000 as compared

election of

■with

$7,200,000 for 1948.
Security profits were considerably larger,
rising to $1,041,000 for 1949 from $606,000 in the previous year. Total
net earnings reflected the gain of approximately $400,000 in secu¬

William

President

o

rity profits

the bank.

Mr.

higher total

report

and for the period totaled $8,207,000

Hart

for 1948.
On a per share basis operating earnings were equal to
$6.83 in 1949 and $6.86 in 1948. Security profits added 99 cents and
cents

57

share

a

Thus, total

respectively.

City

Bank

City

Bank

Farmers

of

New

amounted

to

equal to

for 1949 compared with $1.36 a year ago.
with most other banks were considerably higher
For Irving they totaled $235,605 against

$1.38
as

in

than

1949

in

1948.

Total net income amounted to $7,350,425 for
1949 compared with $6,948,278 for the previous period.
Per share
results were $1.47 and $1.39 respectively.
First National Bank of New York reported net income which
$^1,275

earlier.

a year

profits

on

sale of

of $7,905,900 for

securities

1949

n

ager of the

Trading Department of

Title

National

the
in

&

Bank

Trust

net earnings

reported

of

in the previous year.

with $13,853,000

$14,038,000

Per

Stock

President

in

1949
t

For
$9,357,000

Chicago net profits totaled
1949, against $9,175,000 in 1948.
Per share results on
First National

Bank

of

a

com-

patable basis were $12.47 and $12.23 respectively.
"

>■

One

of

the

Stock

Exchange

John

E.

to

Manning

the

Total

banking

of

profits were reduced or losses reported as a result of lower prices
prevailing in the securities market, in 1949 they have in most cases
jidded considerably to income.

other

Concerning

Trade

Hutton

was

year-end

to

statements,

Central

First

Hanover,

National,

Deposits

a

Cash

Sept. 30/49
$

2,299,855,999

on

Jan.
a

Public

National,

5.

ments

or

annual reports, a more

tions will be

presented when

586,973,445

F.

Wertheim

&

Company

Abbe

Co.,

has

120

U.

counted

Merrill

Chronicle)

DENVER, COLO. — Henry B.
Andreasen and William P. Parvestment

Service

with

Corp.,

In¬

650

Seventeenth Street.

G.

Goodspeed

is

Beane, 70 Pine Street, New York
City, members of the New York
Stock

Exchange.

previously
Boston Corp.

was

Goodspeed

Mr.

with

First

the

of INDIA. LIMITED

and

Bankers

INSURANCE

to

the Government

in

Kenya Colony and Uganda

STOCKS

Branches In India, Burma,

Ceylon, Kenya

Colony, Kericho, Kenya, and Aden
and

Subscribed

Laird, Bisseli & Meeds
Members

New

York

Telephone:

Stock

Exchange

NEW YORK 5, N. Y,
BArclay 7-3500

Bell Teletype—NY

1-1248-49

(L. A. Gibbs, Manager Trading Dept.)




Paid-up
Reserve

Zanzibar

Capital

Capital
Fund

£4,000,000
£2,000,000

Loans and bills dis¬

33,708,839

Undivided

£2,500,000

Bank conducts every description ol

banking and exchange business

Trusteeships and Executorships
also undertaken

69.340,304

6,529,489

6,258,676

profits—

299,033,854

ij

BROWN

'

&

CO.,

YORK

74,279,149

132,033,461

98,670,600

Dec. 31/49

Sept. 30/49

$

124,673,600

________

121,914,968

113.385,507

2,843,980

Total

Cash

5,270,215

$

■'ff

•.'

233,501,099 216,265,101

resources.—

199,742,262 18S,887,778
•
•'

———

due

and

from

banks
U.

;

'

.

IIARRIMAN

BROTHERS,
NEW

$

56,072,647

S. Govt,

60,253,435

56,954,763

49,564,592

42,717,475

14,005,284

holdings

$

47,990,102

security

guarantee

and

new

counted

trust

—

Capital and surplus

york

13,985,284

#

Total

Cash

due

56,452,047

12,379,008

15,902,815

________

Loans and

bills dis¬

vided

$
Total

undi¬

profits.

3,565,760

3,578,906

due

bank

from

—

U. S. Govt,

37,754,115

_

NEW

of

57,447,460

resources.

Deposits

members

of the

Stock

Cash

york

Undivided

$

5,051,988,339

4.897,643,284

Loans

1,264,319,880 1,194,580,598

U. S. Govt, secu¬

vestment firm Richard F. Abbe &
Co.

rity holdings. 1,902,584,206 1,853,265,018
bills

and

__

1,381,156,840 1,346,355,859
50,463,116
46,570,600

*

William Weed Joins

farmers

Merrill Lynch Firm

Detroit

and until

for

many

trust

years,
own

Total

Cash

U.

Cash

and

due

holdings

232,144,322 220,333,546
156,561,875 148,752^856

profits—

85,125,189

14,303,795
86,492,340

U. S. Govt, security

holdings
counted

;

Undivided

profits—

1,079,215

10,033,243

9,988,260

resources

iianover

company,

Capper, 29 Broad¬
New York City, have admit¬

ted Edward W. Russell to
partner¬
ship in the firm. Mr. Russell is

partment.

trading de¬

new

$
resouices.

Cash

Deposits
and

due

Loans

holdings.
and

undiv.

surp.

__

,

35,170,582

holdings

66,058,357

68,784,34,0

48,969,396

i—

32,856,330

935,000

910,016

Leans and bills dis¬

profits—
£

GRACE

NATIONAL

#

BANK,

NEW

YORK

Dec. 31/49

Sept. 30/49

$

$

1,592,385,470

1,507,113,320

Total

1,361,687,694

Deposits

424,355,883

380,648,839

Cash

resources

and

due

636,351,311

556,04.9,290

443,611,932

484,887,391

110,515,684 103,415,287
96,057,893
89,068,930

from

banks

29,646,078

U. S. Govt,

27,148,221

45,199,277

45,272,408

26,871,520

22.959,144

4,536,238

4,444,470

security

holdings
Loans and bills dis¬

&

profits

from

security

$

bills

discounted

Capital

$

Sept. 30/49

U. S. Govt, secu¬

rity

Sept. 30/49,

36,658,049

Govt,

trust

due

banks—

YORK

145,504,842 131.002,623

banks

1,448,101,335

and

from

&

york

Dec. 31/49

Deposits

Edelmann &

bank

TRUST

153,662,996 139,028,509

counted

ifi

NEW

&

$

U. S.

1,107.449

>

BANK

Dec. 31/49

Undivided

Total

OF

6,853,982

*

NATIONAL

COMPANY

Cash

Loans and bills dis¬

V

Edelmann & Ogpper
Admit I. W, RusseiS

9,223,080
#

118,190,283

STERLING

Total

company.

manager of the firm's

from

security

from

banks

central

$

125,863,055 113,117,907

S. Govt,

$

84,171,023

due

Sept. 30/49

43,740,244

and

Sept. 30/49

505,319,220 475.247,889

*

111,945,613

___

AND

YORK

544,034,712 513,408,102

resources

company,

145,226,928

resources

Deposits

BANK

NEW

$
Total

Deposits

york

$

recently headed his

NATIONAL

COMPANY,

Dec. 31/49

Undivided

Dec. 31/49

DETROIT, MICH.—William F.
Weed has become associated with
Merrill
Lynch, Pierce, Fenner &
Beane, Buhl Building. Mr. Weed
has been in the investment busi¬
in

TRUST

counted
city

sfe

Loans and bills dis¬

:S

new

ness

PUBLIC

THE

banks

discounted

Undivided profits

1,687,322

*

due

banks—

1,983,442

profits—

4,669,251,863 4,526,158,895

and

from

49.043,773

Sept. 30/49

$
Total

58,507,332

51,924,606

—

*

Dec. 31/49

Richard F. Abbe

18,209,871

security

holdings
counted

city

129,691,370 113,236,077

——

and

banks

Sept. 30/43
'
$

Loans and bills dis¬

s&

%

•f

national

OF

163,135,673 146,405,714

resources

Deposits
Cash

counted

and

COMPANY

YORK

Dec. 31/49

20,160,422

security

holdings

Surplus

TRUST

NEW

13,612,349

24,207,217
20,588,203

S. Govt,

STATES

UNITED

from

banks
U.

$66,109,457

59,571,751

and

June 30/49

$69,278,107

resources

Deposits

way,
The

466,541,652 471.957,695

___^

S

Head Office: 26, Bishopsgate,

London, £. C.

234,791,082 215,601,272

—

security

counted

Sept. 30/49

Dec. 31,'49

with

Lynch, Pierce, Fenner &

NATIONAL BANK

BANK

120 BROADWAY,

!

from

——

Deposits

company,

New York City,

With Merrill Lynch Firm.
Edward

affiliated

due

$

Loans and bills dis¬

detailed report on year-end condi¬
are available.

Service

now

and

the figures

Two With Investment

are

trust

profits.-

Exchange.
Mr
Abbe formerly headed his own in¬

ella

Cash

Sept. 30/49

security
— —

Undivided

YORK

766,806,909 739,967,802

—

—

from
—_

S. Govt,

'

'

TRUST

815,484,764 788,041,337

resources

Deposits

york

364,104,524 272,926,040
due

Title

New York

Financial

new

390,574,345

_

state¬

to $3.00 as compared with the $2.40 previously paid.

to The

midland
of

resources

holdings

joined

Broadway,

The announcement made yesterday raises the annual payment

(Special

71,661,565

70,568,483

Loans and bills dis¬

,

dividend rate of Corn Exchange from 70 cents to 75

quarterly

cents.

956,427,340

954,967,571

—

marine

and

NEW

&

$
Total

Another item of interest to bank investors is the increase in

;

the

COMPANY,

•

BANK

EXCHANGE

Dec.31/49

bills

banks

Weriheim &

12,927,697

t'fi

■?

1,102,405,251

company

Cash

381,682,980

13,005,689

__

sjs

581,726,047

1,038,072,400

—

profits

the

Deposits

381,224,232

2,315,252,598

Dec. 31/49

Richard F. Abba Joins

458,345,593

profits

holdings

Total

306,338,691

452,413,721

bills

and

discounted
Undivid.

banks

Mr.

1,060,924,525

311,035,067

holdings.

U. S. Govt,

partner

Corn

As all of the large banks have not yet published their

j

Undivid.

1,193,241,910

due

secu¬

and

Loans

$

banks—

CORN

holdings-

rity

york

Sept. 30/49

1,052,448,028

—

and

2.749,862,758

31,*49

of

Exchange and Bank of Manhattan.
Capital funds were generally higher, reflecting the retention of
earnings ana in some cases transfers from reserves.
For some
institutions the capital accounts have been increased over those of
a year ago by
the transfer of funds from surplus and undivided
profits.
.

banks

U. S. Govt,

new

company,

1,187,464,523

resources-

rity

partner

Co., Board

formerly

Total

due

and

from

M.

trust

U. S. Govt, secu¬

of

2,730,5 74,964

—-—

13,633,413

St

$

Loans

resources-

451,216,714

13,896,315

Dec. 31/49

york

firm's

Warner

changes appear to be mixed.
A number of the larger New York
City banks reported increases in all of the important balance sheet
items.
However, the trend was not general and while some showed
increased deposits, the loan portfolio reflected the contraction which
had taken place earlier in the year.
Among the banks which have
published their statements and did show a larger volume of loans
were

company

trust
new

$

Richard

relative

points

&

Building

Washburn

—

become

462,758,440

__

profits

irving

lrom

guaranty

337,340,148

*

Cash

#

259,353,530

329,184,373

bills

and

Deposits
«

$

statements

published so far is the increase in security profits. The gains reflect
the rising tendency in the government securities market which pre¬
vailed throughout the year. In contrast to the previous period when

*

F.

Trust

Ohio.

discounted

E.

Central

Cincinnati, Ohio, and as
State Superintendent of Banks in

$

ILL.

338,662,479

in

Co.

$

1,143,734,317

secu¬

discounted

Undivid.

Sept. 30/49

1,127,809,682 1,040,504,316

banks

having served as a

Total

in

Loans

He

identified with banking

31/49
$.
I

1,232,332,464

holdings.

rity

William L. Hart

COMPANY,

YORK

due

and

from

Dec.

CHICAGO,

12,935,931

*

MANHATTAN

—_

U. S. Govt,

other partner.

Washburn will

THE

resources.

Cash

n

Vice-President

To Admit W. Washburn

OF

Deposits

for many years,

E, F. M@n & @o.

482,255,261

13, 623,977

Dec.

c e-

i

has been

partnership.
is

436, 846,232

bills

profits

NEW

AssisV i

division.

NEWARK,
N.
J. — Manning,
Shanley
&
Co.,
11
Commerce
Street, have admitted Robert E.
Eising, member of the New York

494,256,596-

*

in Lamson Bros. & Co.

significant points in the earnings

most

and

discounted

May,

as

t

a n

the

com¬

share figures

$7.80 in 1949 and $7.70 in the previous period.

equal to

were

Loans

Undivid.

372,489,973

598, 546,438

secu¬

holdings..

Guaran-

tee

Manning, Shanley
Admits Robt, Eising

432, 295,401

joined the

Harrison & Co., is now associated
with the Philadelphia
office of
II.
M.
Byllesby
&
Co.,
Inc.,

Exchange Building.

1,327,824,775

due

banks

division.

g

He

com¬

pared with $8,399,320 in 1948.
This moderate decline in net income
reduced per share results to $79.06 for the period from the $83.99
shown in the previous year.
The two principal Chicago banks showed earning results sim¬
ilar to those of the New York City institutions. Continental Illinois

pared

rity

as¬

,

includes

and

irom

bank-

i

Chas. L. Wallingford

respective periods was $3.65 and $3.47.
*
Irving Trust was also able to show a small gain in earnings
for the year.
Net operating earnings for 1949 amounted to $6,922,042 as against $6,802,647 for 1948.
Per share operating earnings
Security profits,

Cash

$

1.479,365,504

1,449 ,655,700

U. S. Govt,

f

the

COMPANY,
Sept. 30/49

1,593, 278,135

resources.

Deposits

charge

of

year.

together with its affiliate
reported net operating earn¬

ings of $21,491,263 for the year compared with $20,888,785 for 1948.
This was equivalent to $3.46 a share and $3.37 a share respectively.
Security profits amounted to $1,154,974 equal to 19 cents a share in
1949 as against $643,186 or 10 cents a share in the previous year.
Total net income was equivalent to $22,646,237 for the year just
ended and $21,531,971 for 1948.
Net income 'per share for the

\yere

•Total

L.

sumed

York

Trust Company

has

TRUST

YORK

$

the

BANK

$7.82 for 1949 and $7.43 for the previous
National

earnings

Hart

&

NEW

Dec. 31/49

Vice-

as

BANK

k,

o r

announces

against $7,806,000

as

Y

e w

CHEMICAL

counted

Surplus
133,192,794

132,126,795

vided

and

undi¬

profits—

Volume

171

HENRY

J.

Number 4870

SCHRODER

CORPORATION,

BANKING

NEW

Total

resources

Cash

and

due

from

.banks

11,622,029

U. S. Govt,

holdings

security
_

8,903,196

,

51,878,803

__

41,005,869

Loans and bills dis¬
counted

Surplus
<

11,020,458

3,503,022

3,297,565

TRUST

YORK

Sept. 30,'49

$41,865,394 $34,337,016

Deposits

36,392,454

and

U. S. Govt,

29,043,066

10,626,478

due

8,746,888

from

__

security

holdings

23,873,752

18,888,967

6,307,617

5,745,516

Surplus

and

•vided

2,752,062

TRUST

Dec. 31,'49

Cash

Sept. 30,'49

$24,989,037

$24,665,946

23,081,852

22,766,007

6,254,737

6,460,246

12,039,125

11,604,025

5,258,682

Deposits

5,157,392

900,995

885,073

__

and

due

from

U. S. Govt,

security

holdings

bills

dis¬

counted

Surplus

and

vided

undi¬

profits.—

BROOKLYN

TRUST

BROOKLYN,

COMPANY,
N.

Y.

Dec. 31,'49

Sept. 30,'49

$
Total

resources™

banks

$

____

54,391,819

<fc

bills

130,552,856

_

125,724,598

Louis

28,863,855

Undivided

27,201,957

1,786,763

1,878,244

profits..
*

League.

Secretary.
Mr. Noli
banking business in

the

Manufac¬

turers Trust Co. since 1939.

He is

alumnus of New York Univer¬

sity and

member of the National

a

of

Cost

Si

•

de

Accountants.

*

*

.1:

COUNTY

TRUST

BROOKLYN,

Noyelles, Real Estate

June 30/49

41,407,211

and

46,248,551

banks

12,627,488

14,372,985

20,213,327

_

22,418,072

security

holdings
counted

1,535,934

and

2,321,817

8,390,542

appointed

Vice-President, it
Dec.

on

Brownell, President.
elles

entered
in

the

May 1946

previously

DeCoursey

tees has

pleted

with

25

the

Lincoln

Fales,

Mills,

President

President

Assistant

of Jan.

as

Comptroller
retain

bank

Both

of

that

as

1. Mr. Sillery

the

bank

title.
teller

a

Viceand

Coming to
in

1922

he

mortgage department of the bank
1939.

#

*

ment

try,

the

of

more

in savings
remarkable

sideways

move¬

economically in this

with

strikes,

ments, etc.

effect,

coun¬

adjust¬

price

The strikes had their

sending

same

withdrawals

in

new

were

pre¬

their

at

of

Trust

of

of the
City Bank

Co., of New York,

Jan. 3, Foster B.

on

G.

Noel

Cooper

named

Secretary of the

December

board

of

"Savings

financing

make

trustees.

of

about

Paul

W.

Jan.

on

elevated

to

were

The

New

York

Murray Assistant Trust Of¬
Herbert E. Nevins As¬

Secretary. Mr. Cooper and
were formerly Assistant

State

Department approved
certificate

a

ital

stock

of

Banking

of

of

cap¬

the

of

Schenectady,

from

Y.

Company

Associated

the

foreign

sisting of 14,000 shares of the

Mortgages

#

par

THE

Customers'Acceptance Liability

$

PHILADELPHIA

NATIONAL

31/49

resources____

banks
U. S.

756,058,383

233,365,734

and

main

292,488,427

146,405,868

office,

10,700,988

profits__

Deposits
Edmund
President

tional

F.
of

Bank

been

Schnieders,

Vice-

Security-First
of

Na¬

appointed

Angeles, hac
Vice-President
and

i

Comp¬
of

the

Payable February 1, 1950

Reserve for Taxes and Other

.

Expenses

.

.

Other Liabilities

Acceptances Outstanding $ 23,621,031.88

of

Less Amount in Portfolio

with

Capital Stock.

Dec.

29

...

$111,000,000.00

(7,400,000 Shares—Sl 5 Par Value)

•'

Surplus

PrioKto 1926 he

mhde

1,875,378.05

Capital Funds:

department at
where he has

appointments
on

Dividend

Los

official capacities in the
branches in Europe.

company

LIABILITIES

bills dis¬
________

served in

Edmund

.

137,112,90?

11,071,499

security

successively as Assistant
Manager and Second Vice-Presi¬

Other

4

211,260,756

298,585,414

__________

Govt,

counted

721,736,297
645,852,065

from

holdings
Loans

Other Assets

$

687,282,486
due

and

.

Sept. 30/4.0

$

Total

.

Banking Houses

PHILADELPHIA, I'A.
Dec.

....

BANK,

served

bank's

Loans, Discounts and Bankers' Acceptances

*

Trust

1926.

.

value of $100 each.

the bank since. 1919, he continues

dent since

Municipal Securities

Other Securities

Accrued Interest Receivable

New York announces the appoint¬
ment
of Kent
G. Colwell as a

Vice-President.

Obligations

$1,300,000, consisting
13,000 shares of the par value
of $100 each, to $1,400,000, con¬
of

Secretaries.

Guaranty

State and

......

Schenectady

Company

N.

Cash and Due from Banks

Dec. 20

on

troller

Mr. Noel

*

OF NEW YORK

RESOURCES

U. S. Government

increase

Trust

ap¬

Stephen P. Loughnane and War¬

*

BANK

kfank an¬

Auditor.

189,000,000.00

Undivided Profits

.

.

45,388,273.70

by
the
E. F. Schnieders

University

of

were:

C. *

St.

Louis,

O'Brien,
Assistant
Manager, foreign department, for¬
merly Assistant Secretary; Louis

college, he worked for the Tower

B. Palmer

Grove Bank and the Snell Financ~

and Guido F.

Verbeck*

Mo.

While in

Jr., Second Vice-Presidents, bank¬ ,Corp. He remained with the lat¬
ing departments, formerly Assist¬ ter after being graduated from
tfie University in 1926. In May
ant Treasurers; G. Kenneth Crow-

ther, Second Vice-President, for¬
merly, Assistant Credit Manager;
Carl H. Johnson, Assistant Treas¬
urer,
formerly Assistant Credit
Manager; Stuart K. Barnes, As¬




1927 Mr. Schnieders joined Secu¬
rity-First National; he was made

Auditor

in

1941

dent in 1946.
\

;

and

•

Continued

Vice-Presi¬
,

;
on

• i..v

page

.

15

United States Government and other securities carried
secure

public and

trust

deposits and for other

Member Federal

at

purposes as

$321,043,912.00

required

Deposit Insurance Corporation

hold

continuing
of

all

home loans in the country, on the
basis of latest official figures."

at

Tis-

still

one-third

Con¬

Louis R.

3.

the

up 4% over
1948.

group,

STATEMENT OF CONDITION, DECEMBER 31, 1949

the

under

the number one

as

CHASE

CITY

For

up.

In the third

loans

and

their position
to

of

a

bank

meeting

nelly, President of the

Undivided

pointed Assistant Vice-Presidents;

ficers and

THE

everone,

were

honor.

Wade, Auditor of the
Savings Bank of Kings
County, at Brooklyn N. Y., was

Cash

meeting

Directors

Clarence

OF

in

home

loans by savings and

period

same

home

16%

were

period of 1948.

of

Stephen

Deposits

,*

regular

a

Farmers

the

"The record increase

in 1949 is all the

new

the

NATIONAL

with

watches

in

During World War II

he served in the Navy as a Lieu¬
tenant Commander.

the

quarter

loan associations

THE

com¬

Bank

men

gold

held

Mills has been associated with the

with

loans

at the close of World War II.

billion

off

example, in the first six months,

Law¬

service

of

subsequently served as Assistant
and
Deputy
Comptroller.
Mr.

sistant

whicn surprised
financing, has shot

Equitable

Savings

with

sented

of

years

Brooklyn.

that the board of trus¬

appointed Russell Sillery,

S.

L.

and

later,
home

employ of the
and bad been

J.
Kelly
and
Wendling
recently

rence

nounced

Executive Vice-President and Al¬

ren

figures are
the early
loans have

in

was

when

just getting started,
but with the big push in building

was

Society in the City
Mortgage Division.
Frank McLoughlin, Assistant Secretary, has
been
appointed Personnel Offi¬
cer.
Mr. McLoughlin entered the
employ of the bank in 1930.

The Bank of Savings of New York
announces

and

less

1949

Savings

because

lending in 1948, being down
than 5% early in December.

final

sometime

lending
months

six

was

Life Assurance

been

held

gage

"Mortgage
the first

building

growing at the rate of over
dollars a year for the
past five years since the upsurge
a

Mr.

"Home f inancing is almost equal
the record volume of mort¬

billions,

strong forward
savings accounts.

by R. H.
Mr. de Noy¬

sct, Assistant to the Auditor, has

At

1950.

in

29

8,319,863

undi¬

profits....

Board

in

their

movement

ings Bank of New York has been

the

...

Loans and bills dis¬

since

these institutions

one-third

This should put the

been

Conner said:

Fulton

from

due

U. S. Govt,

will

spring.

savings to rise another 25 to 30%
in

the

tabulated

Mr.

in 1949, and he expects

and

total resources close to $15 billion

when

savings

about 32%

continued

savings

Y.

resources....

Deposits

the

Conner said savings
and loan associations
throughout the country increased
in

three and

will have increased

and

estimate.

all

of

1949

one

was

dollars.

COMPANY,

N.

Dec. 31,'49

is

we

Loan

with

*

Officer of the Union Square Sav¬

luncheon

KINGS

fred

about

that

are

has

Comptrollers
been appointed

1920 and has been with

the

pur¬

chased

vided

loans in

sav¬

over

as

of the National Savings and

Assistant

entered

that

Thomas
67,006,343

Govt, security
holdings

Surplus

century and predictions

1950 will be about

bank's

the

Department
an

from

due

_

U. S.

Cash

a

"Resources

associations

completing the greatest
year in their history of

which

billion

224,602,848 208,066,773

Cash and

Total

ings

loan

1948,

savings up some 6% from Jan. 1
Sept. 30, but even in the face
situation, savings and loans

242,364,115 225,645,551

Deposits

Loans

are

and

of

bank

__

Loans and

As¬

•;»

announces

announced

banks

Savings

of this

one-half

Conner, of Atlanta, Ga., President

Frank

COMPANY, NEW YORK

resources____

Savings & Loan Assns.

13

to

with

York

$

s»«

I
Total

Jones,

(65)

Final figures should show the vol¬
ume to be almost neck and neck

Reports Record Year for

good, it was
stated at Washington by John L.

Association

*

CLINTON

•it'

3,634,193

undi-

profits

CHRONICLE

Harvey D. Gibson, President of
Manufacturers Trust Company of

an

Loans and bills dis¬

counted

FINANCIAL

Noll

COMPANY,

Dec. 31,'49
resources

&

New

#

NEW

banks

L.

formerly Assist¬
Manager.

Credit

undi-

SCHRODER

Cash

Frank

sistant Treasurer,

11.C97.949

profits
*

Total

Treasurer;
ant

___

and

vicled

Secretary, who is an As¬
Attorney; at the
company's Fifth Avenue Office.
John S.
Schaffer, Second VicePresident,
formerly
Assistant
sistant Resident

Sept. 30,'49

$95,732,370 $78,372,420
74,324,818
59,382,041

Deposits

COMMERCIAL

sistant

YORK

Dec. 31,'49

THE

or

are

pledged

to

permitted by lav/.

14

(66)

THE

Continued

from

COMMERCIAL

11

page

tatoes
and

In Wai

the

tax

clock

ticks,

$1,585

is

cost

into

paid

Federal, State and local

of

taxes

1%

A
budget of $42.4 billion is
$300 annually for every man, wo¬
man
and child if the population

hold

is

.

to

price

1949

billion,
"man,

the

As

States.

local

300%

gregated

$14.4

$109

for

each

1940

food

billion

Since

have

public

increased

tax

but

more

than 200%

in¬

Waste and subsidies by

of

varies

from

3c

to

6c

a

60

made

government

no

could

end.

market

potatoes continues to

surplus

destroy

15c.

be

Company

a

multiplied

as

first

a

and

tax

in

step

only

collections

preparing

to

we

Municipal Securities

3,314,280.52

....

Stock of Federal Reserve Bank

600,000.00

....

Other Securities

3,589,736.96

Loans and Discounts

121,914,968.49

po-

Revising

Our

Tax

delay

2,142,363,44

Acceptances

1,298,164.38

.

Accrued Interest Receivable

909,6-16.02

Other Resources

98,119.54
$390,574,311.94

Capital

.

for

of

building

which

of

their

resources

our

tax

laws

the

up

direct

strong

a

and

costs

through

have

can

depleted

high

live

times.

by high

until

they

period

a

Taxes should

should

back

be

of
re¬

Surplus
.

Provision for Taxes, Interest, etc..

.

$ 22,843,980.39

an

as

to,

can

enterprise

going

are

$10,699,186.53in the above

public deposits and for other

statement

are

II.

The Marine Trust Co.

claims imposed upon it.

Measure

EDWARD

Foundry Co,

II.

LETCH WORTH

Kenefick, Coolce, Mitchell,
Bass & Letchivorlli,
Buffalo

of the Board,
Corp.

STUART

MC

CAMPBELL

Director,
McCampbell & Co.

RAYARD

J.

CLOUD

L. FULLER

Commissioner

South

Ltd.,

10th

Carrier

ert D.

Corporation
.

WRIGHT

'

HENRY

as

&

Johannes¬

—

(American

Street,

Relations

110 William Street

500 7th Ave.




can

well

as

metal frozen

both

of

which

as

food

offer

on

the

container,

tremendous

potentials.

mately $125 million
of expansion

gram

the

war

years

this

on

which

stifled

was

York

3,

12s 6d.

Personnel

Practices
Los

of April

1,

of

Angeles

1949—Rob¬

Section,

California

In¬

Technology, Pasadena 4,

143

Park Ave.

at

Practices
Liberty Street

as

of

of
in

April

Selected
Los

1,

Personnel

1949—Robert

D.

46th Street

Gray and

Staff—Industrial

Deposit Insurance Corporation

tions
of

Rela¬

Sections, California Institute

com-

in

1949

and

1950.

Most

of

from

these

in

expenditures,

of

excess

in

metal

—Paper—$2.50

with

$460

million.

margins should ap¬
10%,
which
should

net

earnings
a

in

substantial
for

markets

that the company

as

dependent

the

though food

food
cans

upon

is

the

pack alone, al¬
probably repre¬

the

sent

major
part
of
total
shipments. The non-food division,
made up mostly of beer, oil, pet
foods and all other so-called

foods,

is growing by
bounds although
the

leaps
beer

non-

food

referred

to

and
can,

item,
growth
item today. American Can's milk
probably

containers

reached
such

as

as

a

fastest

the

have,

as

only

yet,

few of the major cities
New York, Chicago, San
a

Francisco

and

Los

Angeles, al¬
though some are shipped from
these areas to several other points.
At any rate, it is easy to see that

product,

higher

cially

if

warrant

a

price-earnings

common

there

expecting

slock,

were

espe¬

bans

a

for

that

earnings
would
follow the growth trend and that
larger dividends
(now
only $4

annually)
would

these

of these earnings
forthcoming. Both of
developments seem to be in
out

be

excellent

prospect.

enough, the shares

Interestingly
available at

are

around 53% of the Dow-Jones In¬

dustrial averages, which is at about
the lowest range of all time. Dur¬

ing the World War II period, the
stock

sold

at

Dow-Jones

around

65%

of

the

and

averages

in

the

late
thirties, it sold as high as
74%, whilst in 1934, its high was
104%. In 1936, its market high
was 137 Vz when
earnings amount¬
ed to

only $5.80 a share and sales
only $170.3 million.

were

In

opinion,

my

growth

much

possibilities

further

exist.

think of at this time. Its
ment

is

is here

In

can

manage¬

certainly tops. .Yes, gen¬
the great American tin

tlemen,
can

is

AC

of the safest stocks that I

one

to stay

and grow.

opinion, this security is
suitable not only for speculative
my

but

for

also

viduals.

conservative

Certain

admirable
issue

for

The stock
York

insur¬
also find

characteristics
investment

indi¬

of

types
would

companies

ance

in

the

purposes.

is listed

the New

on

Stock

Exchange and while
it may not be considered as a socalled legal type of investment, I
would

be

when,

as

of

the

and

if

opinion
states

stocks

common

that

qualify
for

legal

investment, American Can will be
included in most such lists.
CARROLL MEAD

W.

Partner, Mead,

Miller

&

Co.,

Baltimore, Mcl.

dairies

growth

item

still

met

chemical

industry,

and

within

the

chemical

i

dustry,

I

in¬

will.,

choose the
M

t hie son

a

Chemical

Corp.

as

the

I

like

stock

The company

formerly

was

regarded
rather

alkali

of

the

nor

on

a

basis. This increased to 38

1945,

improvement that has taken

place.
Starting
has

in

1945,

completed

habilitation

and

the

company

large

very

expansion

than

invested
to

a

and

More

gram.

been

in

re¬

pro¬

$29,000,000 has
plant

modernize

additions

and

replace
equipment. At Lake Charles, soda
ash
capacity
has
been
raised
-

100%; at Saltville, the caustic
potential was increased by

soda,

much

pounds
it had risen to

W. Carroll Mead

has the market discounted the

vast

The

tinplate
per
capita

pro¬

change in the

40%;

continued

a

status of the company in the past
few years is not fully appreciated

raised

has

as

static

ducer, but the

big

that in 1929, 33 pounds of

In

minimum

a

by

are

the

and

dry

ice

capacity

was

purchased

the

30%.
company

Lake

indication

1939.

has

and

labor factor. These characteristics

the

growth of the tin can industry, as
a
whole, is shown by the fact
consumed

industry that has growih char¬

acteristics

a

ahead.

An

The stock I like best must be in
an

for

essentially

center

larger

in

con¬

best.

been

so

cans

of

share

per

$11.

has

nearly

size

was

Technology, Pasadena 4, Calif.

capita

pro¬

Last

expended

County

per

were

this

Angeles

juice

orange

would

company

ratio for its

during

year about $26 mil¬
put into plant and prob¬
ably another $30 million are being

not

this

certain

During the
last
three
years,
American Can has spent approxi¬

population
Survey

Member Federal

pressure

fiber

and

increased

relatively

are

often

New

Calif.—Paper—$1.00

J. WYATT

MAIN OFFICE —120 BROADWAY

Battery Place

The

President, Crum & Forster

Barringer & Brooks

17

—

Gray and Staff—Industrial

stitute of

Leesburg, Va.

12R Chambers Street

being developed con¬
stantly and it is believed that the
company is now working on the

is

County

WAMPLER

BURDETTE S

Jackson, Nash, Brophy,

markets

There

Rissik

Streets,
Africa

Large, Employers in

II. If USTED

JOHN G. JACKSON

vac¬

manu¬

facture of the fiber milk container
and the beer can. New uses and

of around

agents: Hafner Publishing Co., 31

Selected

President,

President, International Salt Co.

packing of coffee, the

result

Executive Committee

Sullivan & Cromwell

Buffalo, N. Y.

mato and fruit juices and the
uum

beer

sumption.
Ordinarily the growth
poientialities that are inherent in

a

ably

The

Company of Buffalo

PAUL

minute. Research helped to
solve
chemical
problems
which
had hindered the
canning of to¬
cans

Pre-tax profit

Busschau—Central

Agency,

burg,

EUSTACE SE LLC MAN

President, The Marine Trust

high¬

the result that sales in 1949 should
reach a new record level, prob¬

International

as

N. Y.)—Cloth—

F.POPE

Chairman,

Gold,

Gold

Money—W.
News

East

SAMUEL S. CONOVEK
Executive Committee

of

1

Treasurer &

General, Retired, U.S.Army

of

H. LEONARD

JAMES C. BLAINE, President

General Reinsurance

Its

company.

developed

diversification

of Bu ffalo

Machine &

American

EDGAR II. BOLES

this

shops

proximate

Chairman, Executive Committee,

II. DI EE EN DO RE

machine

of

most

contributing to

speed machinery to increase pro¬
duction from 60 to more than 300

fit

Man's

Role

Honorary Chairman,

growth

the two

are

reasons

with

being important conwibutors

the

to

of

earnings and depreciation.
It is only recently that the com¬
pany has finally started to bene¬

Business

of the Board,

HERBERT

LUCIUS D. CLAY

the

distribution

divisions and all has been financed

pledged

G. BAIRD

Vice President, Marsh &

packaged goods

important

develop¬

of its expenditures have
gone into
the beer and fiber milk container

KNOX

Yorlctown

McLennan, Inc.

improved

and

new

and

lion

Bookshelf

SEYMOUR

Office

research for

containers
of

record of

new

pletiely.

required hy law.

purposes

Chairman

EDWARD

be

to

35,024,583.16

Chairman, Advisory Board,

GIIARLES

already re¬
willing to invest

survey,

are

their savings in risk capital, the
productive foundations of Ameri¬

IUItEC T (> It S

Chairman

Unless

673,912.92

GEORGE M. ADRIAN

DAVID

incentive to

an

capital.

shown by the Federal Re¬

$390,574,341,94

secure

so

ment

out

Special Deposits

to

be

of the people who
income of more than $2,-

Board's

serve

ferred

329,079,940.81

at

should

1,472,014.38

.

Securities carried

re¬

1,479,913.28

.

Other Liabilities

Deposits

and

be

The tax struc¬

rates

Constant

better

a

support the present debt and tax

Acceptances

on

should

to create

indenture

tide

years.

than 5%

more

000,

tax

as

lean

corporate

incomes

relieved.

or

and

invest

on

to

up

by 1930, sales hit
$160 million.

production, a reduced
number of jobs and a weakened
capital base which cannot long

2.843,980.39

.

taxtion

forward

carry

set

boosted business to $60 minion
by
the beginning of World War I and

decreased

I E S

15,000,000.00

Undivided Profits

Liability

duced

revised

be

liberalized.

through

-

individual

ture

and

should

Double

be

the

and auto¬

cans

N. Leonard Jarvis

Taxes

Small busi¬

economy,

of

closing
equipment

the very back¬

are

develop¬

undermined, which will result in
1

$5,000,000.00,

.

aver¬

matic

Laws

our

revised

be

destroy business.

have

Mortgages

ten

net

open-end

depend to support

strong military defenses.

businesses

132,033,460.67

first

ment

economic defenses

our

which

Carry

Obligations.

the

years,
sales

million.

losses

$124,673,599.92

becoming
one big
happy
family. For

about

It K S O U K C E S

Cash and Due from hanks

makers

into

$ 2 5

lowances

1910

small

aged

cannot

DECEMBER 31,

who

num¬

of

can

with

vised to aid all necessary produc¬
tive enterprise.
Depreciation al¬

L 1 A B I 1.1

ber

The

hard

OF CONDITION

pro-

expenditures

taxes

of New York

of far-

tninking

1949
cans

corporation

a group

illustrate how urgent an

bone

Marine Midland Trust

best

investigation is of all government

nesses,

on

by

These

But these examples

to

serve

can

Liability

iuol

in

lected from the taxpayers which
discourage investment in venture

purpose

Customers'

formed

a

the economic misuse of funds col¬

strengthen

the

for

and well-balanced economy.

Stale and

Company,

pounds and last year, it was
55.8
pounds.
The figure
should be even higher for ihe
year
to

up

of American

a

and

consume

Without

United Stales Government

Can

stock

r s

should

STATEMENT

which I like

common

talked

upon

from

44.8

mote

not

capital

remove

the Fereral Government which keep the

security

is the

depart¬
subsidized

profit by selling the sacks back to

pounds.
But the Federal
Department of Agriculture carry¬

dividual.

The

Federal

disposed of its
potatoes by selling them to local
people at lc a sack, who then

JARVIS

Hayden, Stone & Co., N. Y. City

A

the

has

have

per

the

LEONARD

could

for

pound, depending upon where you
buy them.
A bushel of potatoes

increased

costs

market.

Security I Like Best

N.

dumped the potatoes which they

buys.

pays

where

ing out the Federal legislation to

100%,

free

a

from:>page 2

examples of government waste and

which

about

costs

higher

he

interesting little
sidelight is the price of potatoes,

ag¬

or

of

on

he consumes. An

Federal,

individual.

which

mucn

a

products

the

way

be

subsidies, the sub¬
sidy to hold up the price and the
higher price than he would other¬
wise have to pay for the food that

1940,

governments

this

pay

the

The

holding up the
you buy from
what the price

bursement

$55.2

as

for

collections

and

about

early

supplies

parity

the collection of taxes and the dis¬

fiscal

at

to $377 for every
and child
in the

woman

tax

the

estimated

are

equal

United

state

for

collections

tax

year

to

for

and

ment

the price and require the

up

taxpayer
In

ginia

subsidies and to de¬

pay

the

little story comes from West Vir¬

are

of

surplus

stroy

143,000,000.
The total Federal, state and lo-

cal

living and taxes high
by the collections

to

Continued

Maine

of the potatoes

price

illustrated

govern¬

collectors.

tax

in

Thursday, January 5, '1950

elsewhere after

farmer

money,

would

ment

Long Island,

on

CHRONICLE

price for these potatoes with your

Peace

ci

FINANCIAL

in Idaho and

paying

Stiong Economy, Chief Weapon

&

Charles

which

ammonia

plant,

Mathieson operated for the

government during the war, for a
little
has

over
an

$7,000,000.

annual

This plant

nitrogen

capacity

of about 60,000 tons.
In

April,

Nichols

1948,

was

Mr.

elected

Thomas

S.

President,

Volume

and

171

since

Number

his

4870

election,

he

has

THE

with Southern Acid

or¬

Wholesale

ganization a number of highly
capable and outstanding men.

company's

brought

the first

In

for

the

Acid

Mathieson

quarter of 1949, the

completed

company

the

the

into

acquisition

&

negotiations

-

of

Southern

Sulphur Co., operating in

Southwest, for approximately

265,000 shares of Mathieson
mon

com¬

stock, and also acquired the

Standard

Wholesale Phosphate

&

Acid

Works, Inc., for approxi¬
mately 225,000 shares of Mathie¬
son

net

sales

were

these

of

two

companies

sales.

net

earning

The

increase

resulting from

power

these acquisitions will not be fully
reflected for 1949, as they were

acquired

of April 1,

as

1949. Had

Mathieson owned these companies
for the first nine months of this

combined

year,

earnings

would

have amounted to $4.68 per share
on
the
1,327,727 shares of Ma¬
thieson
stock
new
outstanding.

Earnings

for

the

third

major

producer

implies
of

new

search

for

plant.

This

been

the

fourth

The consolidation

as

merger

opened

past

two

has

years

possibilities for
finished chemicals and they

new

will

up

all

be

greatly

advanced

by

com¬

Mathieson's

by

products

broad

a very

industry.

supplied

are

Gazette"

states.

previously,

for

real

field,

estate

indicated,
Oates

37

has

been

are

con¬

cross

sec¬

Many products
industries

to

which

are

"Tribune"

of

Dec.

Bank

anhydrous

ammonia

of

of

general

a

had

Pioneer

A

that

been

President

of

of

*

*

The

capital of the

of

*

of Mathieson

This

stock

yields

from

The

•'

First

than

8

mated

based

on

$2.50

a

is

and

selling for less
times 1949 earnings esti¬
at about $6 per share. The

outlook for

is deemed

1950

to

known

in

the

of

:

The

Buffalo

Dec.

Aug-

purchased

Corners Office.

jji

State Bank

^*.

•

..

#

of

•

•

•

the

Trust

&

Hartford,

"Evening

16.

directors

Conn.,

■

Phoenix

Company

have

of

named

bank

and

the

became

Five

In later years

the

acquired three additional of¬

fices, the Bergen Avenue Office
(formerly
the
Bergen
Avenue
Trust
Company) the Mercantile
Office
(formerly the Mercantile
Trust Company) and the Jackson
Office

Avenue

(formerly
the
Jackson Trust Company). In 1948
the

ident

three offices in Bayonne were in¬

succeeded

in

Raymond
time

he

1944;
the

A.

John

has

been

Presidency

Ball.

At

by

the

same

and

Woodard

Head

Arlo

of

assets

Company

the

corporated

Bayonne

Trust

purchased and its

were

branches

as

family
Trust Company.
banking

of

into

the

Commercial

When the Com¬

Cash, Goip and Due

U. S. Government Obligations

(.Direct

"

•

'■

."

National

Obligations
Agencies'
State

:

'

Loans

Stock

with

the

Phoenix

Company

State

Feb.

First Vice-President.
time

he

Bank

&

York

as

of

that

with

was

Trust

Bank

&

1949

as

1,

the

Chemical

Company of New
charge
New England di¬

Vice-President in
bank's

vision."

the

late

Robert

S.

In

was

As noted in

toward

bank
of

took

the

of

issue of Nov. 3,

action

in

October

taking over by the
Capitol State Bank

the

Hartford,

had

our

1770, the stockholders of the

Phoenix

the

name

of

which

been

changed from the Cap¬
itol National Bank & Trust
Co.,
to the Capitol State is now
oper¬
ated

as

branch

a

of

the

Britain,

Conn.,

Phoenix.

increased

its capital as of Dec. 9 from $500,000

to

$600,000

through

a

stock

years,

elected

was

year,

identified

with

activities.

and

New

oldest

Jersey's

banks

largest

celebrates

its

50th

anniversary this year.
Dur¬
ing the half-century of its exist¬
ence

Commercial

Trust Company
Jersey at Jersey City, has
grown from one office with seven

of New

officers and employees to nine of¬
fices in Jersey City and Bayonne
with

300

over

ployees.

The

officers

first

plus

and

em¬

statement

1900 gave capital as

$500,000,

in

sur¬

bf

$500,000 and deposits of
$1,500,000. Capital funds are now
over
$8,000,000 and deposits ex¬
ceed

$120,000,000.

{Commercial

paralleled

Trust

the

The growth of

Company

growth of

1905

has

as an industrial center. In
1914 the Third National Bank was

.purchased and became the Grove
;Street Office, and soon after the

City

Trust

Company




years

of

age.

and

was

was

dividends

since

been

paid

regularly.

have

with

.

6,559,133

Branches

22,960,969

.

13,472,380

,

9,527,700

for:

Unearned Discount

and
.

Other
•

.

.

.

8,053,790

.

Interest, Taxes, Other Accrued
Expenses, etc.

19,194,542

7,500,000

,

Dividend

27,021,458

.

.

Surplus

3,675,648

.......

.

.

.

.

.

.

.

.

.

2,480,000

.

.

126,000,000

.....

Undivided Profits

$5,051,988,339

50,463,116

.

Total

Figures oi Overseas Branches

are as

300,463,116

$5,051,988,339

.

of December 23, 1949.

United States Government
Obligations and $7,665,500 of other
$220,807,891 of Public and Trust Deposits and for other
purposes required

(MEMBER

r.

....

$124,000,000
(6,500,000 Ft,ares @ $20 Par)

7,000,000

.

25,778,521

FEDERAL DEPOSIT INSURANCE

assets are
or

deposited

permitted by law.

CORPORATION)

Chairman of the Board
Wm. Gage Brady,

Chairman of the Executive Committee

Jr.

President

W. Randolph Burgess

,

Howard C. Sheperd

;Js

sis

S.

dent

Fidelity

the

of

to

Union
N.

Trust

J.,

entered

from which

that in 1942 he

Secretary

service

Cash

and

Due

Banks

from

(Direct

.

.

Agencies.

Assistant

.

.$ 43,740,244

State

and

Treasurer.

of

Vice-President' in

many years

charge

of

the

trust department of The Pennsyl¬

Company

Trusts

of

retirement

for Banking and
Philadelphia, reached

age

on

Dec.

31.

Wil¬

liam M. David, who has been with

for 39 years, suc¬
Sayre as the senior of¬

Loans

and

in

.$111,945,613

.

.

Municipal Securities

,

,

,

7>473>628

......

Capital

.

1,107,449

3,248,072

.

.

.

•

•

•

•

•

•

.

$10,000,000

.

•

'
[.us

and

.

1,550,958

.

101,038

Advances

.

(Includes Reserve for Dividend $310,590)
,

Real Estate Loans
Stock

.

Reserves

Other Federal

Other Securities

Sayre, for

Deposits

84,171,023

Fully Guaranteed)

appointed As¬

or

OMITTED)
LIABILITIES

U. S. Government Obligations.

Obligations

and

DOLLARS ONLY—CENTS

ASSETS

in 1936, the
quote, adds

we

was

the

(IN

.

ac¬

"Evening
Stating that

20.

trust company

vania

of December 51, 1949

as

Second Vice-Presi¬

Dec.

Frank G.

of Condition

has

the Newark

of

sistant

3rd,

Newark,

Atwater

paper

Office: 22 William Street, New York

Condensed Statement

a

of the

Head

con¬

.

Atwater,

been named

of

CITY BANK FARMERS TRUST COMPANY

payment.

Edward

the

$29,520,102

.

Foreign Central Banks

to

Capital
.

$4,669,251,863

.

"7:

The

current dividend is the 174th

Mr.

51, 1949

in

Commercial

by

Co.

Securities

Federal Reserve Bank

.

.

1,105,978
600,000

.

Bank Premises

2 923 16?

Other Assets

SURPU

•

10,000,000

'

■

_

UNDIVIDED Profits

10,033,243

30,033,243

......

$145,226,928

2,453,448

Total

$145,226,928

Total

company

ceeds Mr.

ficer -in charge of trust operations.
#

Hudson

County

Jersey

recently

Association's

first dividend

Trust

News"
of

62

was

...

Portfolio

Transit

in

George
elected

Savings

B.

*

Bank

of

of

of

United

(MEMBER

has
the

States

Government

$1,604,832 of Public Deposits and for other

#

Oates'

President

$7,802,829

Obligations
purposes

FEDERAL DEPOSIT INSURANCE

are

required

deposited
or

to

secure

permitted by law.

CORPORATION)

been
Dollar

Pittsburgh,

Pa.

succeeding Charles F. Chubb who
is retiring.
Mr. Chubb, President

Chairman of

the Board

W. Randolph Burgess

ac¬

past

Commis¬

Gubel¬

Mr.

President

the

The

in

declared

cording
f

One

was

serving the allowable one
but has since been actively

1928,

Company

dividend of $100,000.

,

and

Research

OMITTED)

Unearned Income
,

to secure

Field, after serving
Association as Secretary for 25

secutive

New

Cooksey

Bills.

and

a

sion of the latter Association.

$303,564,822 of

active in the organization
New Jersey State Bankers'

The New Britain National Bank
of

the

to

Accept¬

on

Reserves

560,011

for

stenographer.

1902 Mr. Field and

the

Securities

Car-

Associ ation. Mr.
page

was

(In Foreign Currencies)

1,381,156,840

.

Total.

man were

of the

.

.

michael, who became Vice-Presi¬
dent in 1924, was bookkeeper and
George Harrison

and

.

of International
Banking Corporation

dents, Oscar L. Gubelman was
Secretary and Treasurer, William
J. Field, President since 1924, was
Cashier,

Prior to that

Due

Ownership

Bank Premises

associated

Items

315,078,023

.

Federal Reserve Bank

in

Other Assets

Trust

reports, this

Less: Own Accept¬

Acceptances

Young and

said:

ances

90,859,706
.

Customers' Liability

Vice-Presi¬

were

Liability

33,038,025

Real Estate Loans

George W.

became

Association

ers

......

ances in

Discounts

and

Ross

S.

1,902,584,206

.

Other Securities

Robert

Ball

Press

stating that he

President of the Kentucky Bank¬

in

DOLLARS ONLY—CENTS

Deposits

"

.

President,

21, which

.

Ken¬

5

!•"

Bank

$1,264,319,880

.

Municipal Securities

and

Presidents, according to the Hart-

"Mr,

count

of

Other Federal

of

lord

Dec.

the

Office: 55 Wall Street, New York

Fully Guaranteed)

or

mercial Trust opened in 1900, the
late
John
W.
Hardenbergh was

of

of

LIABILITIES

Banks

from

died

Mr. Cooksey

THE NATIONAL CITY BANK OF NEW YORK

Hibler, Vice-Presidents, were
designated to
be
Senior
Vice-

M.

"Courant"

Treasurer

& Trust

Ky„

be

Charles A. Lillie, Chairman of the
Mr. Lillie had been Pres¬

Beard.

since

also

Green,

Dec. 18.

on

of Condition as
December
Including Domestic and Overseas Branches

President of the Niagara National
Bank of Buffalo, N. Y. was made
News"

Bowling

excellent.

Vice-

Assistant

capital

a

s;s

recession, if

13

page

The election of Charles H.
an

of

Associated

Council Bluffs, Iowa, was placed in

(IN

as

had

(common).

Cooksey, Sr., President of

named

ASSETS
spurger

National

currently selling for

5.3%

o£

the

eventuates.

one

was

tucky Chamber of Commerce, the

*

Condensed Statement

Continued

G.

was

Saginaw, Mich, from

N

...

National Bank of Chicago, 111. has
been increased from $750,000 to

First

$100,000

suddenly

$500,000

increase the capital
National Bank &

*

Shore

Savings
This

Bulletin

Comptroller of
Currency which reports that

R.

ports.
Lake

of

5

the Bowling Green Bank

$2,000,000 to $2,500,000, the en¬
larged capital having become ef¬
fective Dec. 13, the office of the
Comptroller of the Currency re¬

latter

Dec.

Second

Trust Co.

1931.

*

the

the

Office

Co.
of

effective

of Council Bluffs.

in

15

absorbed

Bluffs

ijt

*

dividend

has served to

Amberg

the

stock

*

Council

increase,

by
the
stockholders
12, became effective Dec. 15.
❖

1924 with

Mr.

Bank.

The

reserve'.

the

the

authorized
Dec.

Chicago

states

by

cago

for

refrigerants. Mathieson,.on its new
widened base, should prove rela¬
tively well-protected from the in¬
cidence

28

which merged in

institution since

rayon producers, ammo¬
phosphate for fertilizer, dry

and

the

"Tribune"
leaving
about
$400,000 in undivided profits and

Vice-

Mr. Amberg in 1921 helped found
Scheubert and Amberg State

for

ice

the

Mr.

the

the

the

The

voluntary
liquidation
22, having been

Nov.

same

being * drawn
from
undivided
profits, it was stated in the Chi¬

that

Dec. 27 at the

years.

the

noted

John F. Amberg President of
the Pioneer Trust & Savings Bank

81

At

Bank

internal

of

divi¬

stock

a

total needed to effect the increase

Executive

on

through
$250,000.

paper

was

President and trustee of the bank

enjoying
strong
growth
trends; for instance, caustic soda
nium

of

time the surplus is being increased
to the same extent, the
$500,000

the

states

$1,000,000
dend

(67)

in. the

years,

says

which

He

for many years.

age

of

1936, will con¬
the Pittsburgh

trustee,

of Chicago died

panies' facilities.

tion

since

CHRONICLE

many

the combination of the three

sumed

as

FINANCIAL

quarter

settled, and
quarter
will make good reading.
earnings

Moreover, the

in the

dividend

Texas

it

considerable expansion
products. Mathieson's re¬

(Houston),

now

"Post

fertilizer

&

bank

tinue

a

47

has

of

of the

the

basic

of

coverage

materials.'

were adversely affected
by a pro¬
longed strike in the Pasadena

strike

and Standard

greatly widen

chemicals and will establish
a

1948, the

approximately equal to Ma¬

thieson's
in

In

stock.

common

will

COMMERCIAL

President

Lindsay Bradford

Mx.

1G

COMMERCIAL

THE

(68)

FINANCIAL

&

/

V

CHRONICLE

Thursday, January 5, 1950

"

as

small investors who budget their income to make mutual
regularly.
The dependable source of supply of

many

fund
fund

Mutual Funds
Outlook for
Prospectusyour

.

upon

request from

investment dealer,

NATIONAL
RESEARCH

or

1950

pared

have

is

there

indication that this medium for the cooperative in¬
in American industry is just beginning to win

every

of savings

vestment

public acceptance.
gross sales of mutual fund shares
approximately $360,000,000, an in¬
crease
of $100,000,000
over
the previous year.
Even though these sales were the largest in the

Last

year

amounted

to

benefit

the

to

mutual

dealer

fund

and

alone

investor,

and

field

the

in

of

one
in¬

with

the

total

assets

investment

of

media.

Moreover,

with

the recent shift of national wealth to the middle income
group, mil¬
lions of potential investors who have never owned securities before

Despite the record growth of the mutual fund industry in 1949,

120 broadway, new york 5. n. y.

mutual

a

However, there is still much educational and sales work to be
by the industry. How much is indicated by the relatively in¬
significant position of mutual funds when their total assets are com¬

Wellington Fund

CORPORATION

is

common

done

&

SECURITIES

is

vestments.

By A. J. WILKINS, Vice-President,

from

shares

which

By HENRY HUNT

S ECU R ITI ES^S Eft IES

purchases

to

The need of educational work among this
group

created.

been

cannot be too

Given

strongly emphasized.
public

of mutual funds among large and
with the public acceptance of insur¬
ance, savings funds and building and loan associations, and it is
immediately evident that the mutual fund Industry is just beginning
small

a

to grow,

acceptance

alike

investors

on

a

par

and in fact is still

considerable distance from maturity. I
will make considerable progress in
1950 toward this goal of general public
acceptance.
confident that

am

of the industry, they represent only a
small percentage of the annual savings of
the American people, which for 1949 alone has
been estimated at $10,000,000,000.

mutual

a

funds

history

Thought for the Week

very

Bullock Fund
Dividend Shares

Nation-Wide

Securities

Prospectuses
available

from
Investment
Dealers

or

CALVIN BULLOCK
Established 1894

People

entire mutual fund industry
with some $1,750,000,000 in net assets represents
only a very small percentage of the total savings
of the American people, as the figures on savings
tor the 10-year period to Jan. 1, 1949, show.
In
that decade, the combined assets of building and
loan associations, savings funds and life insurance
reserves
rose
$58,000,000,000
while assets of
mutual funds rose only $1,000,000,000.
A. J. Wilkins
Thus, if the 1949 sales record of mutual fund
shares has any significance, it is that the Ameri¬
can people are only just beginning
to recognize this type of institu¬
tion as a medium for the preservation of invested savings with gen¬
erous
income return and protection against inflation.
While such
recognition must be based upon the fine performance record of the
industry, it is the educational and sales work of the dealers that
brings this performance record to the attention of the public.
Similarly

the

have found that this work is best carried on by

Many dealers

special mutual fund departments. Last year more such departments
were set up than ever before.
Invariably these departments not only

bring to the industry a stimulating enthu¬
siasm, but they also serve to make the older men in the business
appreciative of the role that mutual funds can play in an investment
attract

LOW PRICED

young

who

men

program.
When

youth teams with experience as it does in these special

That is why I believe that

departments, the combination is dynamic.

SHARES

dealers'

departments will increase substantially in 1950.

Today, as never before, there is a popular demand among the
of

large and small investors alike for prudent, expertly managed invest¬
ments, combining a minimum of risk and generous return.

Group Securities, inc.

of

only one type of investment that meets these

I know

specifications—the

mutual fund.

Large
ering this
Fund.

convinced

a

prospectus on

institutional and individual investors have been discov¬
too. At least that is the experience of the Wellington
while I can speak only for the Wellington Fund, I am

And

that

fraternal

trade
unions, educational institutions and cooperatives purchased mutual
funds for the first time in 1949 than ever before. It is our experience
Loo that once the large investors, whether institutional or individual,
are sold on mutual fund shares, they become repeat purchasers just

request

from your investment dealer or

more

organizations,

church

groups,

Distributors Group, Incorporated
63 Wall

Street, New York 5, N. Y.

\|

ATTENTION,

&

Investors/

on

J $un J,

dealer

K yston
e

and

e

to

your

houses

Custodian

well

as

and

it's

recall it, Arthur Brisbane

we

good

a

in-and-out

the

the first to tell this story

was

A friend of Brisbane's

one.

trading profits
similar

that

boasting about his

was

on

the Stock Exchange. Brisbane replied
that he too had indulged in this so-called
sport but that his experi¬
had

ence

been

to

of

the backwoods of Georgia.

the novice

wild

turkey trapper in

'

"It seems that in

Georgia you don't use guns on wild turkeys—
trap 'em. You build a turkey hutch with a trap door. You put
plenty of corn inside the hutch and a liberal sprinkling of corn
leading up to the hutch. Then you hide yourself in a bush 'blind'

you

with

a long string in your hand attached
to the trap door, the idea
being to pull the string when you get enough turkeys inside the
hutch.
Only sissies settle for less than a pair of birds.

"The
in

his

friend

turkey trapper gets up

'blind'
of

while

the

turkeys somewhat

as

before

daylight and

settles down

turkeys

are still roosting in tall trees.
A
described his first experience at trapping

Brisbane's

Mr.

follows:

"Shortly after sunrise while the dew

still

on the bushes, my
'clucking' and turkey
In a minute, I could see them approaching, pecking,
away at the trail of corn.
It was a large flock, nearly 20 birds.
It
seemed hours but was probably only a few
minutes, before the first
one, a large gobbler, walked into the hutch. My finger twitched but
my judgment told me, not yet, there are plenty more getting closer.
A minute lathr, another bird walked in.
Then another, and another.
'This is the life,' said I; as three more joined their mates in the
hutch, making seven in all. Just then, however, two walked out and

nerves

tensed

at

the

sound

of

turkey

was

hens

cocks 'gobbling.'

then two more.
'What a sap I am,' said I to myself. 'I should have
pulled the string when I had seven tuurkeys.' But no, I was wrong
—they started going back into the hutch, first one, then a pair and

another pair. Eight birds were in the hutch! Til make it an even
10,'
said I as three more approached the open door.
One walked in
and another

of

a

was

close behind.

Just then I

gun shot not far behind me.

nothing.

saw

looked
of the

the

But

back,
day.

turkeys

hutch

my

was

startled by the sound

was

I looked around

had

empty

heard

and

that

involuntarily and

shot

remained

When

too.

for

so

the

I

rest

"The moral of this tale is obvious; when trapping turkeys or
trading in the stock market, it takes a good man to know when to
pull the string."—Reprinted from "National Views."

Justin

(0t

tic.

F.

Barbour, prominent Dow Theorist: "Study of the 53year history of the averages indicates that (1) the market is in the
first phase of major advance; (2) the averages are not vulnerable to
decline;

and

(3)

the

Hugh W. Long

averages

are

likely

rise

to

or

sub-

Kuhn, Loeb Grants

Company, Inc., 48 Wall

Kuhn, Loeb & Co., 52 William
Street, New York City, announce
A

prospectus and other de¬

REGISTERED

COMPANY

scriptive material about

INVESTMENT

that it has granted Joint Power of

Attorney

INVESTING ONLY

IN

Jonas

to

C.

Andersen,

Manager of its Municipal Depart¬

BONDS

ment, and Benjamin

F. Feldman,

Manager of its Statistical Depart¬

Funds
Certificate.? of

answer

Turkeys and Trading Profits
"As

St., New York 5, for the offi¬
cial

might

local investment

to

glass

doorbell.

substantial

Write

in

live

Bull Market?

(m anhailan

M
-w

Bond

who

ment.

Participation in

INVESTMENT FUNDS
investing their capital

■

We

announce

~

the formation of

prospectus from
your

»

or

IN

THE FORMULA

BONDS

^

investment dealer!

JUST OFF THE PRESS:

i

[PHILADELPHIA^/PA>^

FUND

"What

a

Balanced Fund Offers

(Series B1-B2-B3-B4)

OF
STOCKS

PREFERRED

BOSTON

You."

an

COMMON STOCKS
(Series SI-S2-S5US4)

Designed

to

.

(Series K. 1 -K2)

Am

Open-End Investment Trust

FUND

Jr

of

*

v

Prospectus

be obtained from

develop

leads for salesmen.

BOSTON

may

■

i

.

Tlie Keystone Company
of Boston

may

authorized dealer

be obtained from

Investment Research
53 State Street

50




WRITE TO:

Henry Ward Abbot

your

or

Corporation

Boston 9- Mass.

Congress Street

Boston 9, Massachusetts

\2E/
A BALANCED FUND

■

Prospectus

Prospectus

y

jj

from

your

60

on

request

investment dealer or

|i

% 44 wall ST.

NEW YORK 5

Gramercy Park
York

10,

N. Y.

m

LOUIS II. WHITEHEAD CO.
December 14, 1949

New

for free

copy

and

rates

for

additional copies

%
22

/

THE

Number 4870

171

Volume

COMMERCIAL

stantially next year."—From "These Things Seemed Important," is¬
sued by Selected Investments Co. of Chicago.

the
to

&

Federal

FINANCIAL

Group Securities Comments
That

major

is

prices occurred last June is
"strongly indicated," according to the annual report of Group Se¬
curities, Inc., "and the market should continue in a generally upward
course."
'
a

"The

tinued.

in

turn

security

capital goods industries

picking up," the report con¬
long deferred.

are

"Settlement of the coal disputes can hardly be

The strong demand for steel plus

the need for rebuilding steel inven¬
tories should necessarily keep the basic steel industry near capacity
levels

into

well

should

well

be

will be

employment

Thus,

spring.

Personal

maintained.

price

market
on,

ing

that

of

personal
consumer

beginning in January. There are also indications of
ing willingness to spend a larger portion of income."

operations."

of

other

Year in 1950
>

Cites

artificial

level

of business

elements

to

turn

of

and

less

exercising

control,

brings the

and employment

MINNEAPOLIS, Minn.—A high
level of

employment and business
activity was predicted for 1950
Crabb,

E.

president of Inv e s

issue

of

concludes: "This
the

proper

t

Di-

o r s

,
I

■

to

to

our

the

supply

leaned

banking in particular. It is also

years,

a

question

moment

some

to

and

cost

reserve

MAIN

o

basis

of

frequently

so

in

n

devel¬

oped
by the
company's
and

unprecedented

volume,
for
equip¬

in
and

ment

items, based

which, it appears, will con¬

Certain supporting

factors, self-

limiting by nature, tend to mini¬
mize
negative
factors
in
the
For example, Mr. Crabb

economy.

there

said,

considerable

is

evi¬

ments.

employment of our growing labor
force
at
reasonable
levels;
the

that

this
did

vide
E.

Crabb

pro¬

not

prices;
result,

sound

a

basis for opti¬
ma

i

for

s m

Mr. Crabb

pointed out that cur¬

On

demand, partly deferred and

that

said

U. S. Government

586,573,444.91

Obligations

.

.

1,088,072,399.73

.

Loans and Bills Purchased

Public Securities

954,967,571.12

$

.

Stock of Federal Reserve Bank

54,846,500.43
9,000,000.00

.

.

Other Securities and

.

.

Credits Granted

.

.

on

.

Obligations
Acceptances

7,410,534.00
9,613,956.14

Accrued Interest and Accounts

9,180,989.25

Receivable
Real Estate Bonds and

Mortgages.

5,385,197.89

.

95,437,177.71
5,083,067.78

Bank Premises

41,302.86

Other Real Estate

$2,730,574,864.11

.

side, Mr.
industries

many

have filled their deferred demands

of

demands, notably
automobiles
and
housing; a

affirmative

the

recurring, such as Federal budget
deficits; return of portions of vet¬
erans' insurance premiums; loans

ferred consumer

Hand, in Federal Reserve Bank, and Due from

on

Banks and Bankers.

Total Resources

and have

grants to Europe; as yet not
filled
but
disappearing war-de¬

Cash

in

profit margins, as a
may
trend
moderately

the economy is receiving
support from sources at least not
ordinary and in many cases non¬

and

increase

further

RESOURCES

an

and

Crabb

rently

duction

conditions

the
of

competitive

fully

market

a

made

up

current con¬
demands.
Thus,
he

replacement

sumption

or

pointed out, no drastic economic
collapse is foreseen, but there is
necessity

a

LIABILITIES

adjusted prices and pro¬

to

further ad¬

make

to

justments, and a cautious attitude
is in order until these adjustments
have been made.

$

Capital
Surplus Fund

............

Total

100,000,000.00
200,000,000.00

Undivided Profits.

.

.

.

.

Capital Funds

.

.
.

70,568,482.54

.

.

.

$

Treasurer's Checks

32,439,051.74

Outstanding

Total Deposits

2,299,855,999.00
$

....

18,039,264.31

$

Acceptances

10,490,427.74

Acceptances Held for
7,598,836.57

Investment

Gosistas Government Bond Price

Pegging

Dividend

York
State, in Annual Report, points out Treasury's fixed price
policy for Government Bonds prevents Federal Reserve System
Bell, retiring Superintendent of Banks of New

of credit regulation and control of
banking operations.

genuine flexibility to the
government securities market has
long
since
arrived,
Elliott V.
Bell,- retiring
store

and

York

Although the

Super¬

parently

f

annual

report

clear whether

and

Legis¬

lature,

con¬

the

demned

governme n

bond

t

price

pegging policy
of

the

clarifica¬

for
tion
Elliott

Bell

V.

Treas¬

and calls

ury,

the

of

policy

new

open

on

market

operations announced by the Fed¬

Open

28,

the

Market Committee

on

1949.

ceiling

the

not any

or

reached

floor

Mr.

60,150,482.57

Bell

with

points
was

fiduciary

System
power

of

this

evidenced later in

posals

its

renewed

to fix

nection

Federal

the

reserve

nonmember

with

for

of

the

he

demand

J. LUTHER

and

increasing

"In

other

the

J. LUTHER CLEVELAND

CHARLES

P. COOPER

bility to return to the government
market in a period of

inflation

as

well

as

in

a

time

of

declining business. The statement,




JOHN

A. HARTFORD

JOHN

W. DAVIS

GANO

der government
bonds, the Su¬
perintendent states: "As long as

President,

Co., Inc., Dalton, Mass.

of Davis Polk Wardwell
Sunderland & Kiendl

CHARLES

pegs un¬

President, The

E. DUNLAP
President, BerwindWhite Coal Mining Company

DUNN

President, The J. G.
White Engineering

Corporation

Member Federal

President,
Railroad Company

Chairman of the

Board,

The Great Atlantic 8s Pacific Tea Company
CORNELIUS F. KELLEY

Chairman of the Board,

Anaconda

Copper Mining Company

MORRIS W. KELLOGG

Chairman of the Board,

The M. W.

WILLIAM

M. CROCKER
President,
The Columbia Gas System, Inc.

Referring to the difficulty that
monetary authorities are having
in breaking away from the war¬
keeping

,

M. CRANE, JR.
Crane &

banking community."

time practice of

The Pennsylvania
LEWIS GAWTRY

Kellogg Company

L. KLEITZ

CHARLES S. MUNSON

Presbyterian Hospital in the City of New York

System and other elements of the

securities

Chairman of the Board

CONWAY

STUART

opinion

and between the Federal Reserve

statement,"

WALTER S. FRANKLIN

Committee, Union Pacific Railroad Company

officials

Su¬

28

Chairman, Executive

F. W. CHARSKE

pro¬

Bell declares, "at
first gave rise to the hope that
the Open Market Committee had
at last resolved to permit flexi¬

June

President, American
Cyanamid Company

B. BELL

WILLIAM

W. PALEN

powers

L. KLE1TZ

President

Chairman of the Board, Duke Power Company

siderable

of

WILLIAM

CLEVELAND

DIRECTORS

WINTHROP

Reserve

above Statement are pledged to qualify for
required by law, and for other purposes.

moneys as

GEORGE G. ALLEN
1
Director, BritishAmerican Tobacco Company, Limited, and

Reserve Board,"
"there was brought out
into the open evidence of a con¬

cleavage

public

$2,730,574,964.11

con¬

Federal

Federal

•

Chairman of the Board

for

requirements

banks.

this

Reserve

says.,

among

perintendent

powers, to secure

the year when the Board of Gov¬
of

f

•

Securities carried at $118,068,756.80 in the

decision

that

rr

•

off

respect to

out

ri

•

ap¬

them."

under

reluctance

ernors

42,935,351.45

.....

-1

apparent reluctance to make it

in his

has been

.

.

Total Liabilities

government bond prices, there is

Banks,

or

policy has

new

taken

an

to the Govern¬

1,724,703.38

Payable, Reserve for

Expenses, Taxes, etc.

by various officials of the Federal
Reserve System served still fur¬
ther to increase the
ambiguity.

New

o

Foreign Branches

was

State

intendent

5,000,000.00

2,000,000.00

Accounts

ambiguous at best
subsequent pronouncements

however,

......

.

Items in Transit with

from exercising its powers

Declaring that the time to re¬

Payable January 3, 1950:
$3,000,000.00

Regular
Extra

370,568,482.54

$2,267,416,947^26

Deposits

Less: Own

Elliott V.

St.

BRUSSELS

PARIS

downward.

a

longer period.

increasing costs with

evitable

in

present

movement is having the

pension
effect of

data

same

60th

at

Condensed Statement of Condition, December 31, 1949

unbroken

on an

string of years of high prices and
good weather; and low interest

price level is too high to maintain

Crabb

Ave.

home

dence to indicate that the

Mr.

Madison

accordingly.

search depart¬

However,

MADISON AVE. OFFICE

St.
Rockefeller Plaza at 50th St.

investment re¬

warned

44th

at

OFFICE

Broadway

President

Chairman of the Board,

Air Reduction

WILLIAM

C. POTTER

Company, Inc.
Retired

GEORGE E. ROOSEVELT

of Roosevelt & Son

W. STETSON
Chairman, Executive
Committee, Illinois Central Railroad Company

EUGENE

THOMAS J. WATSON

Chairman of the Board,

International Business Machines Corporation
CHARLES E. WILSON

President, General
Electric Company

ROBERT

W. WOODRUFF

Chairman, Executive

Committee, The Coca-Cola Company

Deposit Insurance Corporation

money.

recent

then be relegated to
minor role in credit, policy."
can

and longer term opinion

mechanization

of

economic

Ave.

140

LONDON

tinue with little change.

data

AVE. OFFICE

open

requirements

buying

FIFTH

to the

which the Federal Reserve has

to

of

—

—

national economy as a whole and

con¬

more

market operations and changes in
the discount rate
to influence

Changes in

of vital importance

once

instruments

ROCKEFELLER CENTER OFFICE

rates

the

"The

resort

can

traditional

on

.

versified

eral

kind

serve

Guaranty Trust Company of New York

Services,

June

is

that is

powers

system into

of the year,

whole

who

Banking Department
private business at the

of support for governments is one

desirable

new

Bell,

the

enter

With the rigid
abandoned, the Federal Re¬

pegs

Superintendent
leaving

open

important factor in current high

as

should be tempered

farm

—

This, he goes

reaching out for

Fifth

in

level, it
effective

17

bank supervision.

increas¬

an

Investors' President Predicts Good Business

Earl

most

control

the bank¬

,

stimulated additionally, of course, by the GI Insurance pay¬

ments

by E.

its

credit

ing world.

govern¬

leads inevitably to the seek¬

means

the

of

flict with other parts of

expected

of

fixed

a

(69)

income

and
and

income

deprived

means

is

Reserve

the

support

ment securities at

CHRONICLE

a

18

(70)

THE

Perry Dryden Joins
Ames, Emerich & Go.
CHICAGO, ILL.
den,.

veteran

a

years'
in

Co.,

security market made considerable progress on
side during 1949 because of the limited selling of bonds by
Federal, low money rates and short-term low-cost financing by the
Treasury.
.
The shortage of higher-income issues brought about
sharp price increases in the longer Treasuries, with the most distant
eligibles, both the taxables and partially-exempts, vying with the

e

Inc.,

South

Salle

Midwest

Stock

Jan.

3,

Julien

Collins

&

Dryden

Perry

Co.

Mr. Dryden

twice has served as

POPULAR

.

Equity investments
surance

States

ISSUES

in

in

.

Fire and

.

.

the

whereas

of Directors of

sets

the

intermediate and smaller

The supply, of

when

.

were

year.

.

the

on

effective Jan. 3,
1950, and will continue to do a
general commission business un¬
the

name

Gruntal

of

Co.

&

firm will continue to

The merged

the offices of Stern & Co.,
at 25 Broad Street until comple¬
occupy

of

tion

and

new

enlarged

offices

of January.

&

Stern

1945.

Co.

&

and

back

date

cessors

Co.

its

the

following

Benedict

member

change;

of

Kohl,

Curb

nine

New York Stock

erick

M.

Stock

Rental

Exchange; Fred¬
Sandler;

Mark

again in 1949,
the highest

Price

Yield

Yield

Chge.

Chge.

%

32nds

—Closing—
Bid

Low

Price

1.28

100.24

100.11

100.11

101.00

1.36

101.5

100.23

100.23

.91

10U.8

1.34

100.22

100.8

100.14

1.02

9/15/51-53

101.8

1.50

101.28

101.8

101.12

1.17

.06

—14
—

9

+

6

+

4

101.10

1.52

102.2

101.10

101.17

1.17

3/15/52-54

102.28

1.55

103.13

102.24

102.24

1.20

2 %

6/15/52-54

.101.11

1.58

102.10

101.11

101.27

1.23

+ 16

2'/4%

6/15/52-55

102.1

1.62

103.00

102.1

102.12

1.23

+ 11

+ 24

2%

12/15/52-54

+
—

7
4

Stock

Exchange,

Latin-American

Uruguay,

101.12

1.62

102.17

101.12

102.4

1.26

%

3/15/54

100.10

100.6

102.9

103.27

1.91

106.19

103.27

106.4

1.45

+

2.9

2V4%

9/15/56-59

102.10

1.92

105.8

102.10

104.31

1.46

+

2.21

21/2%

9/15/67-72

101.29

2.37

106.6

101.29

105.31

2,09

+

4.02

and

represen¬

will

continue

to

.

were

as

Bid

Yield %

Price Range

Tax-free

Price

Issue

.

-1949

Bid

Tax-free

Pries

101.8

101.3

.52

103.28

.06

104.00

102.26

102.26

.66

9/15/51-55

3%

21/4 %

Low

102.18

104.28

.97

105.00

103.24

103.24

.65

12/15/51-53

*

103.6

.9,7

High

Price

—Dlosing—

.85

Yield %

.35

—

.39

—

.36

—

Chge.

103.12

102.24

102.24

.70

1.01

104.6

103.13

103.25

.73

+

—14

104.28

1.11

106.8

104.28

105.20

.80

+ 24

103.8

1.25

109.31

108.7

109.15

.85

+

1.7

108.28

1.29

111.5

108.28

110.27

.90

3/4%

+

1.31

6/16/58-63

109.0

1.46

112.5

109.00

112.4

1.05

+

3.4

12/15/60-65

1.57

114.6

109.20

114.3

1.17

+

4.15

the

no

prices might

2

go.

market leaders

.

.

Taxable

Price

6/15/59-62

y4%

100.5

12/15/59-62

.32

—

.27
.28

.31
.40

—

.39

—

—

.41

—

.40

during 1949,

prohibited

restricted

not

or

se¬

such

holdings
factors—public
opinion, management opinion, and
three of these

law—are based
extensive

upon

belief that

a

investment

would involve

in

equities

large and improper

risks.

the

companies
that

that

the

High
103.12

Bid
Low

Yield

safeguards

social

a

some

then

Price

100.5

103.11

%
1.85

100.5

103.10

1.87

+

3.5

101.27

105.19

1.99

+

3.24

101.15

2.38

105.4

101.15

105.2

2.07

+

3.19

2.40

104.24

101.2

104.22

2.12

+

3.19

101.00

2.42

104.20

101.0

104.17

2.14

+

3.17

3/15/65-70

100.31

2.42

104.16

100.30

104.13

2.15

+

3.14

2 V2 %

3/15/66-71

100.27

2.43

104.14

100.27

104.11

2.18

+

3.16

6/15/67-72

100.15

2.46

103.29

100.15

103.27

2.23

+

3.12

2Y2 %

12/15/67-72

100,15

2.47

103.29

100.15

103.27

2.23

+

3.12

in

of the possible

practical

Equity

of

the

corporation:

Walter

%
—

—

—

—

—

—

—

—

.37
.35

.35
.31
.28

consideration of the

.27

.25

.23

—

.24

—

to

savings

place

pattern.

their

funds

Slaight Heads
Granbery, Marache &
Company Dept.

in

make but limited net
of

corporate

tate.

Briefly,

the

form

can

done

be

currently take
excessively, what

to

the

correct

of

the

New

situation?

Some

changes in public policy,particularly in the field of taxa¬
tion, might increase the willing¬
of

ness

individuals

equities. Some
desirable

to

invest

in

unnecessary or un¬

attractions

the

of

sav¬

ings institutions for funds might
desirably be reduced. Changes in
the

tax structure might increase
willingness of business to fi¬

itself

with

equity

But it

rather

seems

un¬

rectly into equities.
If personal

saving is to continue
predominantly into the
savings institutions, these institu¬
to

flow

tions must be looked to to provide

adequate

an

for capital

source of

equity funds

formation.

While

any

all of the various types of sav¬

or

ings institutions might provide
equity funds, it is the life insur¬
ance
companies which are rela¬
adapted to this pur¬
the savings institutions

If

pose.

whole

a

acquire

large

so

an

they cannot

properly all be invested

equities

in

debt,

stock

Instead

or

their

of real

saving

es¬

flows

ings

and

loan

associations,

and

under

vested

York

Stock

which flows
institutions must in
laws

present

primarily in
then arises

question
private

enterprise

consider

what

extent

be

in¬

debt.
The
whether a

economy

can

operate successfully depending

largely upon retained busi¬
earnings for equity and ab¬
sorbing all or a large portion of

very

in

life

and

to

insurance

companies

could legitimately in¬
equities it is necessary to
examine the traditional objections
vest in

to

such investments.

The life in¬

companies have fixed dol¬
liabilities.
They attempt to

lar

carry on

their business

sumption

of

the

form

of

certain

a

on

an

as¬

minimum

rate of earnings.

fluctuate

Because equities
price and
income

in

from them

is uncertain it is held

that they are not appropriate as¬
sets for the insurance companies.
There

are

to this

problem. One is

ness

saving

whether
the

surance

government securities.

savings

equity
the institutions.

Practical Possibilities
To

acquisitions

primarily into the life insurance
companies, the banks, cash, sav¬

Granbery, Marache & Co., 52
personal
Broadway, New York City, mem¬
bers

con¬

savings

during the past two decades. They

.28

G. W.

J.

If
debt

amount of funds that

equity invest¬
by life insurance companies

turn

Gruber, Walter H. Weed, Jr., Ray¬

debt

tively well

The personal saving

Vice-Presidents

further

tracts.

as

into

Assistant

into

lenders from

investment by

3.6

12/15/64-69

elected

entering

inhibit

would

individuals have shown reluctance

32nds
+

105.21

Corp., 65 Broad¬
City, announced
following
have
been

flows

the life insurance companies offer
the best opportunity for

103.11

York

income

both borrowers and

entire

%

the

total

the evidence available shows that

2 Vz %

New

creasing debt charges relative to

Yield

2.34

Union Securities

as

in¬

quate flow of personal saving di¬

possibilities.

upon

The

be

advantage of

Social Need for

propor¬

savers

Fur¬

can

presump¬

consider

increasing

income to go to
to consumers.

any

charges

likely that enough can be done
by any means to assure an ade¬

es¬

advantages of insurance
company investment
in equities
will

from

debt

Chge.

2.22

Corp.

opposed

fixed
an

nance

public
and

economic

Chge

101.3

-

emanating

than with debt.

It should be

An

Price

101.27

6/15/64-69

recession

powers

equities would be greater than the
disadvantages.
This
paper
will

depends

—Closing—<

1949

%
2.22

reduced.

depend

should

investing life insurance funds

first consider

be

up debt at such
find itself in partic¬
ular difficulties in case of business

the

two premises.

institu¬
will

rate would

a

ment

Bonds

.100.5

6/15/62-67
12/15/63-68

way,
that




most states have

their

To conclude that public benefit
would flow from

Price Range

Yield

Elects Four Officers

Teletype N. Y. 1-3690

have

anticipated good experience from
holding such assets. The laws of

tion

12/30/49

—Closing-

.

Union Securities

Telephone WHitehall 3-1200

insig¬

Insurance

ther, there should be

BONDS

St., New York 5, N. Y.

assets.

managements

.30

—

2V2%

INCORPORATED

inappropriate
company

.

v

2 Vz %

2 V-i

15 Broad

the

company assets. Public
has
considered
equities

.

.33

The report for 1949 showed:

21/2%

8c Co.

explain

tablished

eligibles, then the longer end of the list. .".
question about support levels, last
year, but how high

Issue

*

very

fraction

.

was

to

Lenders

unwilling to lend such amounts
indefinitely as the margin of pro¬

tion of

a

set up to prevent
great risk.

—

3/15/55-60

2J/a%

1

opinion

verely

%

—

9

9/15/56-59

There

add

savings.

The

Chge,

—

2%%

were

individuals
tional

cause

Yield

1.7

2%%

The ineligible obligations
for a time the near-term

unlikely that enterprisers

will be willing
indefinitely to add
to their debts at such a rate as

cause.

nificant role of equities
among life
insurance

All

.28

—

—

1.4

—

103.16

109.20

appears

would

of the housing
Three closely re¬

country.
reasons

.46

—

1.2

—

6/15/54-56

21/4%

2%%

Aubrey G. Lansyon

the

lated

.46

—

32nds
—

6/15/53-55

2%

Bid

NOTES

of

on

6/15/51-54

2%%

to

million,

tiny

of

102.15

,

CERTIFICATES

.35

—

.

9/15/50-52

%

u. s.

BILLS

.35

—

12/30/49

'—Closing—

2

amounts in the areas
which expansion is needed. It

building

Proposals to enlarge the

Restricted

★

.33

—

Eligible Partially-Exempts
12/31/48

2 V2

appropriate
in

is

follows:

12/3 1/48

★

.32

...

Results

corporate earnings
necessarily to be found in

not

are

1.3% of
their
assets

.45

—

—

Considerable switching took place in the
partially-exempts dur¬
year, as the large commercial banks moved into the
higherissues.
Retirement of the 2Vzs and 3V8S eliminated
$2,277,000,000 more of the tax-sheltered obligations.

*

★

—1.22

ing the

income

represent the merged firm.

TREASURY

%

1.30

3/15/56-58

1 %

Undistributed

tection

about

Homer Jones

12/15/51-55

.

2%%

operating in this
unlikely to succeed.

is

manner

system

insurance

$7 60

.

.

whole.

a

and

.

23/4%

Buxbaum, member of

tative of Stern & Co. in Montevi¬

deo,

High

hous¬

as

A system

ing owned by

was

12/15/50

2%

2%

100.25

9/15/50-52

%

of

Ed¬

Milton Goldberg.
The

3/15/50-52

2%

Ex¬

member

Exchange;

Stern;

York

2 %

Gruntal,

Necarsulmer, Jr., member of

Howard J.

1%%

obligations.

1949

%

New

amounts

decreased

...

Price Range

Yield

Price

Gruntal;

H.

York

New

Louis

York

New

in

established

was

of

partners:

ward

and

1880

to

Morris Hartig; Edwin A.

New

prede¬

The combined firms will be

composed

Issue

i y2

debt.

life

2\k %

part

at the same address the latter

Gruntal

Bid

listed

Stock

Exchange.

buying

12/30/49

—Closing—

& Co. will merge,

n

companies

was

eliminated.

12/31/48

firms of Gruntal & Co. and Stern

der

were

o

m

the

cn

Eligible Taxable Bonds

Stock Exchange

The New York

to

all

of
m

York

.

.

o

c

stocks

.

concerns

eligible taxable bonds

$4,404,000,000 of. 2s

rate used for replacement of retired
The record for the year:

Firms fo Merge

as¬

and

0.6%

STATISTICAL RECORD OF 1949 MARKET

GuiiffaS and Sierra

United

Common

their total

market

side, especially during" the latter part of the

the Bond Club of Chicago.

in¬

holdings amount to 0.7 %1 of

casualty companies assumed

government

.

ciation of America. He is a mem¬

the

small.

very

more important
during 1949, doing considerable
switching in addition to outright purchasing.
Life insurance com¬
panies, especially the large ones, continued to be sellers of Treasuries,

roles

Investment Bankers Asso¬
Board

companies

are

by life

.

.

the market.

member of the Executive Com¬

mittee of the Central States Group

the

demands of economic system

Among the commercial bank obligations, the September 1967/72s
and the partially-exempt 1960/65s were the most
sought after issues.
The smaller deposit institutions were the
largest buyers of the
longest taxable bond, while the big money center banks took prac¬
tically all of the. last four maturities of the exempts that came into

He

with

of

.

stock

an¬

.

ber

.

.

MOST

formerly

of the

.

on

nounced.

a

.

spread to the rest of the list, as the June and December 1967/72s
went on to be the pace setters for the
group.

1950,

firm

was

.

later

Ex¬

change,
the

Savings institutions dominated
market, because these institutions were sellers of the
eligibles and buyers of the restricted obligations.
The nearer
eligible tap issues at first attracted much of the buying but this

of

e rs

Economist emphasizes importance of
proposals accentuated by
consideration of today's entire
savings pattern. Concludes the
extreme
limitations restricting investment of life insurance
funds are no longer
necessary or desirable; and that any gov¬
ernment controls
should recognize this in connection with

the government

.

b

the

Companies
Equities?

Economist, Federal Reserve Board, Washington

.

tap issues for market leadership.

La

Street,

m e m

Invest in

up

.

105

Thursday, January 5, 1950

Should Life Insurance

Governments

The government

the

West, will join
Ames, Emerich
&

CHRONICLE

By HOMER JONES*

service

M id d 1

FINANCIAL

By JOHN T. CHIPPENDALE, JR.

banking in
e

on

&

thirty

over

investment

t h

Reporter

Perry Dry¬

—

of

Our

COMMERCIAL

of

the

and

two

possible

character

the other

of

on

solutions

on

the

the side

liabilities

the side

of

the

assets.

Ex¬
*

Abstracted
from
address
by
change, announce the opening of
mond
R.
Wilson and Milton J.
a
municipal bond department un¬ Mr. Jones before annual meeting
Yoeckel.
The new officers have
der the managership of G. Wilmer of the American Finance Associa¬
been associated with Union Secu¬
Mr. Slaight formerly tion. in New York City, Dec. 29,
rities Corp. for the past several Slaight, Jr.
was
a
partner in Chadwick & 1949. Mr. Jones prepared the pa¬
years. Messrs. Gruber and Yoeckel
Slaight, municipal bond brokers, per before joining the staff of the
are in
the Buying Department of
for two years, prior to which he Federal Reserve Board and the
the
corporation, Mr. Weed is Syn¬
views expressed are entirely his
dicate Manager and Mr. Wilson is headed the firm of G. W.
Slaight own and do not necessarily reflect
in the Municipal
Department.
Company.

thyse of the Board.

The

income

insurance

necessities

companies

are

of

the

not

ab¬

solutely fixed. Through alteration
their

of

dividend

companies
tial

can

fluctuations

Proposals
alter

payments

the

adjust to substan¬
of

have

income.

been

made

to

radically the character of the
liabilities of the companies in or-

Volume

cier

171

that

Number 4870

equities might

THE

more

ap-

i

lia-

|

the

bility contracts might provide that
liabilities fluctuate in amount
with
changes in the value of

equity

I

assets.

not

am

technical

aware

practicality

contract

has

been

If

ment.

The

propriately be acquired.

that

of

the

such

a

demonstrated.

.But
assuming the technical practi¬
cality, there seems little likelihood

that

such contracts would be at¬
tractive to the public. One of the
great attractions of life insurance

they

made

equity investments

than

supplying
ment

they
liquidity

should

against
credit
cies

if

by

the

should

of

companies
basis of

equities

of

living. This should be more in¬
teresting to the public than con¬
tracts
linking liabilities to the

nies

price of assets.

value

should

to

the

combination

sets and fixed

living

equities
It

It

attractive

cost of

are

the

govern¬

relation

of

agen¬

basis

a

the

concerned

of

the

insurance

and

not

on

specific assets.

of

also

be

insurers

equity

as¬

liabilities since the

as

companies

they will
bilities
of

life

10%

as

their

assets.

small
of

its

A

compa¬

decline

percentage
assets

cent

per

of

in

would

a

of the

If

situation may

ment,

they

quired
more,

listed

not

equities

have

stocks

of

system.

all

the

but

a

at

Further¬

cross

if

equity

such

eco¬

lesser

a

cal

tions,
mains

fact

a

equities
would

at

be

the

In

probably

that

market

ownership

value

life

do

of

market

most

commonly valued
cost.

at

declined

an

the

basic

I

criterion

equity holdings
there

permanent

we

The

desirable

to

they should be offered
in

the

make

appeal.

an

to the

hope that

pub¬

they would
we

A BANKS BUSINESS

have to proceed on the assumption
that ehher such contracts will not
be efered to the
public or that
they will not make a widespread

IS

appeal.

Insurance companies
might find

equities

attractive if they
obligated to pay or lend
upon their policies upon demand.
more

not

were

But here again the public is so
wedded to this practice that there
seems little likelihood of
We must

statement

whether equities
can
be
appropriate assets even
though we continue with the pres¬
see

by

the

would

investment

life

depend

behind them? Yet when
you

in, equities

insurance

stories these

companies

mainlv

three

on

factors—liquidity, valuation,

to

figures tell,

how important

and

Take

diversification.

learn

some

of the

they are
to everybody.
"Deposits," for instance. Included

There
of

is

for

room

opinion

to

as

the

li¬

quidity factor may constitute an
impediment to equity investment
by the life insurance companies.

money

In

in

retirement free of financial

It may be that the chances
of net

withdrawals of funds from
insurance company are so
that

this

terfere

possibility need

with

equity

slight
in¬

not

to

even

ment

estimate

this

the

roofs it

paid

banks

serve every¬

.

year,

.

.

and will continue to

gear

itself

this pattern of American
progress.

\jp

Whatever

M,

improved equip¬

every income group.

During
the Irving has been serving
people in more capacities than ever

before
^

figure helped buy for the

investment.

people in

more

Or consider "Loans." It would be hard

life

a

ways, you see,

its 99th

to

worry.

new

realities.

to

myriad

needs of

future

a

new

body's business and help meet the financial

home of

a

college education,

it financed, the

cars

dreams

...

wisely set aside for

their own, a

the

for, the vacation trips it transformed from

figure are not only the cash balances of
large and small businesses, but also the "nest
eggs" of people in all walks of life...

difference

a

whether

.

workers. Or for that matter—the

more

family

this

Liquidity

.

.

.

and

begin to realize

you

merchandiser

or

products it launched and the expansion it made
possible . . the jobs it thus created for more

large. How many people stop to analyze the
figures or think of all the accomplishments

ent irsurance contracts
unaltered,

Successful

manufacturer

Maybefinancial
you wonder why a bank publishes
its
the
public at

changing

it.

it

your needs may be, you'll find
good business to do your banking at

the

mi

Irving Trust Company.

The record of the
insurance com¬
panies in this regard is better than

that of any other
type of institu¬
tion. If we avoid extreme finan¬
cial crises in the future it
may
be a very

unlikely

for

a

life

company

to

future, it

the

may

companies

be argued that
such

own

large

of government securities
their market will be so well

and

Cash and Due from Banks.

.

.

311,035,067

Capital Stock

U. S. Government Securities

.

.

452,413,721

Surplus

Other Securities

.

11,807,009

Stock in Federal Reserve Bank

.

3,150,000

able

to

meet

withdrawals

even

though they hold substantial equi¬
ties.
Finally, it may be argued
that since the insurance
compa¬
nies will in any event invest
only
part of their funds in equities they

Loans and Discounts

First

Mortgages

on

$

Customers'

for

.

.

their

cash

and

govern¬
ment bonds cannot be relied
upon
to provide liquidity^
possibly we
need other means.
Whether the

companies
not

their

invest

in

equities

liquidity depends

Acceptances Outstanding

a

whole

drawals

.

Dividend

6,011,678

.

$

50,000,000
55,000,000

.

.

.

Capital Accounts

13,005,689

.

.

.

$

1,052,448,028

.

Payable

118,005,689

Expenses

2,918,630

1,500,000

....

Portfolio

6,884,569

Other Liabilities

3,788,799

.......

United States Government Securities

5,707,607

are

$1,187,464,523

stated at amortized cost. Of

of, public monies and for other

or

.

these, $34,560,526

purposes

are

pledged

to

secure

deposits

required by law.

-

upon

i IAVISFC.

VIC I 'ST

experience net with¬

of

dependent

.

$1,187,464,523

government in time of depression.
Whenever the savings institutions
as

.

Acceptances: Less Amount in

can

if

.

Reserve for Taxes and Other

Liability

Other Assets

.

Deposits

14,280,800

depend upon the remainder
of their assets to
provide liquidity.
But

Total

3,753,217

.

.

.

.

........

UndivideclProfits.

381,224,232-

....

Real Estate

Headquarters Building

1340

LIABILITIES

amounts

maintained in time of depression
that the companies will
always be

of December 31,

as

ASSETS

circumstance

insurance

experience an embarrassing net
withdrawal of funds. Even if net
withdrawals are experienced in
the

Condensed Statement of Condition

their
upon

funds, they
the

Federal

are

Re¬

serve, the Reconstruction Finance

Corporation,
ment

with

of

or some other instru¬

government

which to

meet

for

They need access to such facilities
equally whether they invest in
equities or not. If the facilities
are
no

provided, liquidity will offer
impediment to equity invest¬




NEW YOIIK

funds

withdrawals.

William N.

Enstrom, Chairman of the Board
MEMBER

FEDERAL

Richard H.

DEPOSIT

INSURANCE

CORPORATION

decline

embarrassing

danger

Continued

equities,

see

But I think

likeli¬

)

be developed along these lines. If
such contracts can be worked out
lic

little

level

prove

greatest

and the return from

be

long period

over a

seems

But if
their

will experience any

price

would

workable contract could

a

acquired

to them.

com¬

to

applied

were

time

which

If this prin¬

ciple

were

of

valuation

panies should be cost.

companies

hood that

suggest that

for

perma¬

embarrassing situation.

the

price

of all assets of life insurance

remained

quired the companies would be in

at
are

amor¬

mar.ket

and

nently below the levels at which
they had on the average been ac¬

assets

Bonds

price.

Current

equities the earning prospects
which
improved relative to
those of equities in general. If the
price level of equities in general

at

insurance /companies

current

prospects

by

any

not

the

Equities,

earning

of

equities
companies.

we

most

of

of

insurance

point of fact,

long-term

general, would have

price

incompatible with

life

become practi¬

companies.

to be marked down in
value. But
such write-downs would be offset

re¬

valuation

current

extensive

by

it

would

the

19

of which declined
relative to those
of equities in

Despite these considera¬

however,

assets

for

the

tion of prices of equities would be

reduced.

by the companies.

section

equity in the economic

Finally,

debt

is not a meaningful basis for valu¬
ation of the rental real estate held

ac¬

entirely

and

tized

govern¬

they would hold not simply

insolvent.

the

would

their

of

the peak of the market.

the

if

insistence

greater role in the

a

system

one, the leverage factor would be
less and the amplitude of fluctua¬

of

compa¬

reasonably sound
either on their initia¬

the

or

nomic

present

followed

render

example,

the

of

playing

be in¬

number of respects.

a

the managers

nies

the typical life insurance
company
For

it ap¬

uncommon

equity investments can¬
possibly be practical. But this

tive

large

the

pears that

in

a

not

are

principles,

Lia¬

say,

valued

were

company
would be insolvent. Since declines
in stock market
prices of as much

adequate in

insurance

equal to

price,

\

value.

percentage

surplus to assets,

market

possibility that

decline

of

are

rather

is'the

the

to

10%, and the stocks

not

assets for life insurance

stocks, they de¬
price by a per¬

(71)

positively correlated.

would

whether

equal

at

CHRONICLE

company consisted en¬

in market

centage

view

popular type
<of contract
might be one which
provided for fluctuations of lia¬
bilities with changes in the cost

a

a

common

clined

Probably the major objection to

A somewhat more

more

assets of

In

Valuation

character.

FINANCIAL

tirely of

not.

prejudiced
Extensions
of

on

credit

general

are

&

are

government

be

no

be

not

equities.

and annuities is their fixed dollar

than

provided,

liquidity problem will be

greater if

a

not

are

COMMERCIAL

West, President

of

on

equity

page

31

20

(72)

THE

COMMERCIAL

&

FINANCIAL

CHRONICLE,

Thursday, January 5, 1950

Cincinnati Stock and Bond Club
r

Chet

Terrell, Clair S. Hall & Co.; Joe Work, Weiss, Work & Co.; Walt Dehner,
Lynch, Pierce, Fenner & Beane; Arch Montague, W. E. Hutton & Co.;
Lee Staib, Geo. Eustis & Co.
These five, with Max Kaplan, now of St. Louis, formed
Merrill

.

.

the nucleus that started the Cincinnati Stock & Bond

.;

Dave

Chas.

Ellis, Ellis & Co.; Pat Gerrard, C. J.Devine & Co.; Lee Staib, Geo. Eustis & Co.;
Whiting, Otis & Co.; Jack. Neumark, Middendorf & Co.; A1 Widmann, Widmann

&JyO;..Bob Isphording, Doll & Isphording; John Heimerdinger, Walter, Woody &

Club.

Heimerdinger; Ron Murphy, Widmann & Co.

.

Henry Poor; Merrill Lynch, Pierce, Fenner & Beane; Paul Hood, Seasongood & Mayer;
Co..: Pete Schwindt, Seasongood & Mayer; Ed. Meiners, Braun,
BoswOrth & Co.; Don Raymond, Bache & Co.; Chas. Richards and Fred Becker,

Harry Filder. Fins

Field

Richards &

Co.
Cliff Reiter,

C. H. Reiter & Co.; Don Kuemmerling; Irv Klein, Westheimer & Co^
George Happley, C. H. Reiter & Co.; Jim Chambers, J. D. Chambers & Co.; A1 Mack,
Westheimer & Co.;*Sam Gertzmann, A. & J. Frank Co.; Lou Wanner.
;
><V.' f- ■■
•*
Seasongood & Mayer
'

-

Bill Dohrman,

Edvo.

>

Harrison & Co.; Frank Willis, Field, Richards & Co.; George Riley,
& Co.; T. B. Johnson, Breed & Harrison; Dan Schwartz, W. D.

Brockhaus

Gradison

&
•

Co.; Robert Srnalley, Merrill Lynch, Pierce, Fenner & Beane;
Herb Oettinger, W. D. Gradison & Co.

,Jir?i Mor.iarjty, W. E. Hutton & Co.; Paul Glenn, Edw. Brockhaus & Co.; Chas. Coulson,
L. W. Hoefinghoff & Co.; Jack Siegman, Bohmer, Reinhart & Co.; Jack Cronin, The
'Cincinnati Enquirer; Henry Arnold, H. B. Cohle & Co.; Tom Hughes, Edw. Brockhaus.
j& .Co.; Cliff Grischy, Field, Richards & Co.; Clete Oilier, Edw. Brockhaus & Co.:

(Speakers table)

: John Muehlenkamp, Doll & Isphording; Jean Bennett, J.E. Bennett
Co.; O. W. Hirst hie Id, Stranahan, Harris & Co.; Joe Vasey, Geo. Eustis & Co.;
Joe Van Heyde,-;,Secre ary of N. A. S. D. District No. 10, Columbus, Ohio; Gil Davis,
Harrison & Co,;1 H Frank Burkholder, Equitable Securities Corp., Nashville Tenn.,
President of N. S. T. A.; Lloyd W. Shepler, Merrill Lynch, Pierce, Fenner & Beane;
Ed Welch, Sincere & Co., Chicago, retiring President of N. S. T. A.; Harry Hudepohl,
Westheimer & Co; Clair Hall, Clair S. Hall & Co., First Vice-President, N. S. T. A.;
Morton A. Cayne, Cayne & Co., Cleveland, Ohio, Secretary, N. S. T. A.;v Chas.
Odenweller, Securities & Exchange Commission, Cleveland; William Pohl, Pohl & Co.;
George Kountz, Widmann & Co.; Harry O'Brien, W. E. Hutton & Co.; Dick Welling-

&

hoff, C. J. Devi'ne & Co. (Front table—left): William Worth, Westheimer & Co.: Don
Turner, Westheimer & Co.; George Morgan, Geo. Eustis & Co.; Norman Humphries,
The Keystone Co, Detroit; Bill Berlage, Westheimer & Co.; John Hitzler, Westheimer
& Co.; Warren Woodward, Thayer, Woodward & Co.; Dick Thayer, Thayer, Woodward
& Co.
(Front table—right): Bob Brink, W. C. Thornburgh Co.; Bob Lahman,
W. C. Thornburgh Co.; Walt Dehner, Merrill Lynch, Pierce, Fenner & Beane; Charles
A. Hinsch, Charles A. Hinsch & Co.; George Eustis, Geo. Eustis & Co.; Fred Latscha,
Geo. Eustis & Co.; Gordon
.
.

„

.




Reis, Seasongood & Mayer; William Cummins,
Edw. G. Taylor & Co,

T

Chas.
&

Whiting, Otis & Co.; Don Turner, Westheimer & Co.; Henry Arnold, H. B. Cohle

Co.

(shaking hands); Joe Vasey, Geo. Eustis & Co.; Bob Isphording, Doll &
Isphording; George Morgan, Geo. Eustis & Co.; George Kountz, Widmann & Co.;
Ralph Walvogel, The Central Trust Co.; Fred Latscha, Geo. Eustis & Co. (shaking '
hands); Bill Berlage, Westheimer & Co.; Harold Roberts, John E. Joseph & Co.; '
Lee Nussloch, J. E. Madigan & Co.; John E. Joseph, John E. Joseph & Co.;
'
1
The Kirschner.TwinVentertainers,- playing piano *. w .

...

Volume

THE- COMMERCIAL

Number 4870

171

&

FINANCIAL

CHRONICLE

(73)
>

Holds Annual Dinner

Power

Hirschfeld, Stranahan, Harris & Co.; Harry O'Brien, W. E. Hutton & Co.; Dick
Wellinghoff, C. 'J. Devine & Co.; Harry Hudepohl, Westheimer & Co.; Lou Wanner,
Seasongood & Mayer; George Kountz, Widmann & Co.

C. W.

gaging:; in

Secretary Sawyer Repcrts Taxation
Discouraging Risk Capital
In letter

which 'are

i "I

i Secretary of Commerce Charles

to taxation, although of
there is no way to know

subject
course,

tailed
of

results

his

recent

trips

survey

throughout the
nation, com¬
mented

on

in advance what the net effect of

repeal

reduction would be.

or

"The

difficulty
of
obtaining
capital for the financing of
business expansion was repeated¬
business

attention. Many

firms unable to

been

small

cumulated

forced

to

large business
ef¬

cially
To

gar d

i

fects

of

n g

present

tax

structure
b

u

i

s

o n

ness ex¬

pansion.

1

Ac-

cording to
Secretary

Sawyer

finance

own

for

.

sion exists

as

v

■

TEX

DALLAS,

Seay has been admitted to part¬
nership in Louis B. Henry, In¬

associated

Co.,

vestments, and the firm name has
changed to Henry-Seay &
Offices

Co.

Building.

Kirby

associated

been

to what is and what

Cor

permissible under Federal
legislation and regulation in this
general field. These problems are,
of course, being given attention

will

some

continue

in

ber

the

by the President's Committee on
Business

and

Government

Rela

-

Sawyer:

business

situation

J.

Proprietorship

Arthur

120

George de Treville is now sole
proprietor of George de Treville
Co., 30 Broad Street, New York

announce

'double

that

firm's

sales

ac¬

and
more

measures

taxation,'

by
original tax
earnings of the corpora¬
meant the

was

the

increasing business effort
risk required to
meet the

demands of the buyer's market of

paid out in dividends;
liberalization of deprecia¬
tion allowances, thus encouraging
the purchase of new equipment
which
would
not
only reduce
costs, but would stimulate other
industries, and (3) a liberal inter¬
pretation of Section 102 of the In¬

*

*

*

tion followed by a tax against the
individual
on
the
part
of the

and

1919

brought an almost universal
plea for tax relief as a means of
stabilizing costs and prices and as
a-stimulus to business expansion.
Although I took occasion to point
cut that reducing expenses is eas¬
ier

talk

to

about than

to

accom¬

plish and that the problem of re¬
ducing the Federal budget sub¬

stantially
with the

requires

that

deal

we

in which large and

areas

vital expenditures must be made,

there

was

insistence

an

that

"Business

leaders

a

ternal

everywhere

reductions in the military budget
the
President's
action
in

and

Revenue

Act

to

permit

small

businesses, in particular, to
a
larger share of earnings
working capital, without run¬
ning the risk of being penalized.
retain

as

"From

well

expressed enthusiastic approval of

sult

as

of

the

tax

standpoint,

standpoints, one re¬
trips was a clear de¬

my

lineation of the divergent position
of large and small business.
It

Congress
proposals

to
the
reorganization

businessman to accumulate out of

was

designed to streamline govern¬
ment operation and reduce ex¬

earnings

penses.

per,

"The

taxes

mentioned

that

duced

of

taxes which

when

not

either

such

The

a

the

basic

was

that

spending

retained

at

policy is

no

a

time

longer

It is clear

necessary or desirable.
from

re¬

imposed during

discourage
be

ex¬

universal

a

be

course,

were

to

war

should

was

they

eliminated.

or

argument,
the

frequently

the wartime

There

cise taxes.

request

most

were

of com¬
this subject

great number

plaints made to

me on

that these taxes have

sufficient

capital

to

make his business grow and pros¬
it

and that that very fact made
difficult" for him to sell his

stock

outsiders.

to

spots it

was

puting

its

In

numerous

suggested that in com¬

taxable

income

the
allowed to
deduct a certain specified amount
in
dollars
or
a
percentage of
earnings.
By some it was sug¬
gested that these amounts should
only be deductible if they were
small

used

corporation be

for

working capital or .for
purchase of plant and equipment.
"In

repeatedly
and in
practically all of the areas visited
throughout
the
South,
Middle
West and West, complaints from

continu¬

cooperatives who get special tax
advantages.
They
complained

conferences

there

was

a

ing volume of opinion from both
labor and business that excise tax
reduction
ber

well

of
as

will increase

business
gross

the

num¬

transactions

as

small businessmen regarding their
difficulties, in competition
with

that

it

was

increasingly difficult

for them to pay the taxes which
the .government
requires while

business eaffiirigs they compete With; enterprise^




and its depositors are fortunate in having as
"gentlemen well known by the community," dis¬
tinguished by their leadership in industry, finance and public
affairs and by their readiness to carry on the abiding traditions
of trusteeship established by the founders in 1848.*
This

bank

Trustees

,

LOUIS B. ALTREUTER

Vice Pres., Horace S.

en¬

Ely & Co,

EDWARD E. ANDERSON

Vice Pres., Discount Corp.
Netv York

of

EDWARD F. BARRETT

President, Long Island Lighting Co.
BRUCE BARTON

.

,

Chairman of the

DOUGLAS GIBBONS

President, Douglas Gibbous &
Co., Inc.
HARRY C. HAGERTY
Vice President and Treasurer,

do.

Metropolitan Life Insurance

*

PERCY C. MAGNUS'

President, Magnus, Mabee &

Board, Batten,

Reynard, Inc.

Barton, Dmstine 6 Oshorn, Inc.
NEAL DOW BECKER

BENJAMIN PATTERSON, Jr.
*

President, Intertype Corporation
WM. GAGE

Chairman of

»

The

BRADY, Jr.

the Board, The
of New York

National City Bank

HENRY P."BRISTOL

President,

Patterson-Sargent Co.

ANTONIO

PISANI, M.D.

LESTER VAN BRUNT
Executive Vice President

Chairman

of the Board,
Bristol-Myers Co

JOSEPH A. BRODERICK

WM. WHITE

wanna

President

-

President, The Delaware, Lacka¬
and Western Railroad Co.

WM. ROGERS COE

LEROY A. WILSON

Vice Pres., The Virginian

President, American Telephone

Railway Co.

connection with taxation, I

encountered

depressing
effect upon retail sales and that in
the case of jewelry, furs, luggage,
admissions, etc., the effects are,
in specific cases, very serious. I
might add that throughout my
a

OF

as

other

pointed out repeatedly that it
is extremely difficult for a small

recommending
certain

(2)

re¬

ductions could be made.

YEARS

earnings

*

The Trustees
in the

same

are

and

/

*

Telegraph Co.

listed alphabetically and are pictured

order, clockwise from the upper left

comer.

EAST RIVER
SAVINGS BANK
Member Federal Deposit

Holdeft

v.'-;./'

NEW YORK

New

&

Co.,

Inc.|

York" City,1

George

A.

-

Ritter,

and Richard A. Rutter have joined!

the

City.

Warner

Broadway.

frequently
recom¬
(1) the elimination of

mended:

which

num-j

a

J. A. Warner Co. Adcta

most

sc-called

Ball,

-j

time.

invest¬

investment

attractive three specific
were

on

"The

this

remedy

with

■

plant and equipment and
This is espe¬
true of small enterprises.

make

formerly for

was

years

Mr.

not

Now

of

becofti<?j

with Mallory, Adee &
Broadway,
New Yorkjj

&co.■

Seay has
Henry

Mr.
with

120

City. He

been

111

Mallory, Adee Co.

William C. Loughlin has

William H.

—

for working capital.

the

With

comments

ment in

re-

William G. LoBghlin

New Firm Name

impressed

ions.

their

use

earnings

executives

Charles

the *. numerous

themselves by issues of stock have

views of both
and

my

Henry-Seay & Co.

regarding gov¬
ernmental activity in monopoly
and fair trade
practice matters.
While independent retailers and
wholesalers 'were extremely anx¬
ious for adequate safeguards to
assure
fair
competition, it was
clear that a great deal of confu¬
is

risk

ly brought to

particularly

was

with

business expansion.

Sawyer, in his final report to Dr.
John R. Steelman, the Assistant
to
the
President,
giving
de¬

the
same
activities
relieved;: from
those

from businessmen

survey on

i

&

taxes.

business conditions to John R.
Steelman, Presidential Assistant, Commerce Secretary says
there is almost universal plea for tax relief as stimulus to
concerning

Clancey, W. P. Clancey & Co.; A1 Mack, Westheimer & Co.; Jim Chambers}
Co.; George Happley, C. H. Reiter & Co.; Irv Klein, Westheimet
Co.; Cliff Reiter, C. H. Reiter & Co.; T. B. Johnson, Breed & Harrison
'■ *

J. D. Chambers &

Insurance

Corporation

organization.

•

22

(74)

THE

gories of liquid savings, the

Individuals Reduced

reveals

$1.7

Security Holdings in
SMS Third Quarter
SEC,

though

crease

in individual

estimating

third

C.

the

ners

B.

the

bond
net

issues.

preferred
taken by

The

however,

stock,

Mr.

are

Shawell
an

Cooke

and

George

LONDON,

future,

Company
—

William J.

Co.

to

be

He

was

formerly

of

With¬

in

two

end.

to

When

the

question.
far

is

possible

judge now,

it

as

size

continue.

even

if

world¬

likeli¬

no

British

from

substantial

recently

cut

the

in

oil

United

,

an¬

pur¬

States.

cuts' be

eliminate

sufficient to
abnormal
dollar

the

deficit?
Or will that deficit be
financed by some form of Ameri¬
can financial aid?
In many quarters much
to

revival

a

hope is

of

Ameri¬

can

232,144,322.05

9

7,473,554.74
156,561,875.42

.

.
.

to

seem

be,

investor

does

keen

very

flow

of

however,

The Ameri¬

not

appear

to

on

resuming the
part he played during the interwar period, when it
was his losses
that

financed

the

American

ex¬

will be

in

to

1952

substantially

it

in

some

form,

or

increase of Ameri¬

an

fought out between the American

taxpayer and the American busi¬
From

British. and European
point of view it would be of the
utmost

importance

States

if

the

United

Government

could

and Congress
quite plain at the
possible date that there

make

it

further government aid
1952.
There
are
far-vdtoo

after

people

many

it

take

this

on

side

who

for

granted that, in the
interest of the American
exporter
and of the American businessman

anxious to safeguard his domestic

markets, dollar aid will continue
after

even

There

1952.

a
widespread concep¬
tion that the United States
simply

has

to

provide
the

nance

plus.

the

dollars

perennial

to

export

fi¬

sur¬

This assurnpton goes a long
toward weakening the na¬

way

tional efforts to achieve

indepen¬

can

hardly be blamed if he is

ovei-anxious

1,240,014.95
275,692.37

.

relieve

the

not

tax¬

payer of this burdensome and

grateful
some

$544,034,712.35

to

task.

.

There

government-sponsored

vate

investment

politically

in

safe

un¬

be

may

pri¬

of

some

backward

the

coun¬

&

Co., members
Exchange,

Clifford

that

announce

P.

Mc-

Kinney has been admitted to gen¬
eral

be

in the firm and

partnership

will

in

resident

Louis

St.

the

W. Ron¬

office, 503 Locust Street.

ald Gill and Clarke Simonds have

general partners and will
in the- firm's Provi¬

become

resident

be

office, Hospital Trust Build¬

dence

Louis Walker also has been
to
general partnership
resident in the Hartford office, 50
ing.

admitted

Mr.

McKinney

has

active

been

investment business

the

in

Louis for

St.

in

He joined
the Walker organization in
1942
and has been sales manager of the
years.

many

St. Louis office for the past seven
years.

theories

with

built up in justifica¬
tion of this order of things.
The
are

the Socialist Party. During recent
Weeks
the
influential
Sunday

tax¬

Walker

H.

dence of American support
during
the
next two
years.
Elaborate

assumed

American

G.

of the New York Stock

State Street.

is

payer, and the American investor

the

Walker

no

apologists of Britan's dependence

by

Louis

Clarke Simonds

a

port .surplus.
Since the second
World
War
this
role
has
been

2,272,739.19

Accrued Interest Receivable

this

that

660,000.00

.

Banking Houses

of

al¬

585,826.44

.

Stock of the Federal Reserve Bank

dollars

be

16,957,632.35

Municipal Securities

Other Securities

extent

grossly exaggerated.
can

i

Customers' Liability for Acceptances.

private investment abroad on
large scale.
Estimates of the

probable

W. Ronald Gill

nessman.

will be

a

Other Assets

is

the

as

these

.

can imports and to a reduction
of
American exports.
The "battle of
the dollar" will then have to be

earliest

31, 1949

.

Einzig

The

really

any

attached

Loans and Discounts

existence,

There

such

Will

Slate and

Paul

Area,

(includes $13,139,000 pledged to secure public
and trust deposits, etc.)

found

aid

agreeing to
Dr.

scarcity of dollars is likely
of

be

will be narrowed
through further
cuts in imports from the
Dollar

$125,863,054.84

is

as

ernment

decline.

may

McKinnej

is now, the choice
between continuing gov¬

same

will

so

increase

RESOURCES

it

the

is

In

Clifford P.

its dollar accounts.

the situation

chases

......

is

What

nounced

U. S. Government Securities

preventing an in¬
imports.
But, as far as
possible to judge from this

balance

of the
exports of the
non-dollar countries to the Dollar
Area.
To some extent
the

CONDITION

the

will¬

of

that

hood

STATEMENT

extent

of

the

on

in favor of

happen

wide

Main Office, 37 Broad Street

indi¬

Govern¬

the

narrowing

depends

then?

to

realize

the

gap

be

American

having realized the need for
lowing the rest of the world

Aid

come

gap

.

which

dollar

to

appear

that

officials

side, American businessmen and
politicians are still very far from

years

Marshall

will

its

Cash and Due from Banks

to

it

the dollar
gap
remain in

December

ment

crease

the

to

of NEW YORK

There

cations

will
as

Phillips Invest¬

AND TRUST COMPANY

ation.

sure

pros¬

distant

an

The Public National Bank

future aid will follow ECA.

States Government to resist pres¬

the

will

OF

no

urges

complacency,

ingness and ability of the United

it

officer of J. R.

problem, and

giving
thought

for

own

known

dollar

and

more

cate- ment Co.

CONDENSED

clear that

ENGLAND—The

turn of the year is a suitable mo¬
ment
for
detaching' one's mind
from the problems of the
present
and the
near

pects

shortly form his

firm

&

Jordan Is Sales Mgr.

to breakdown British

some

investment

was

different

the

Milton

Lucas.

Shawell will

individuals.

Separating

late

Lucas, 115 Broadway,
City,
will
become
of*the Exchange. Part¬

HOUSTON, TEX.

and

common

acquire

solve

not

Government, in order
to make it

Exchange

York

To Form Own

greater part of
of

issues

new

&

the

U. S.

future.

bonds, absorbing
million of net new

$400

will

Stock

William J. Slsaweli

period, institutions
purchases of $900 mil¬

same

lion of corporate
all

private investment will

to

reports, were reduced by almost
$300
million,
and
holdings
of
stocks by more than $200 million.
net

Cooke

12, and the firm of

Cooke

Four Hew Partners

Einzig, forecasting continuance of dollar gap in Britain
after Marshall Plan aid ends, notes
feeling in Britain U. S. aid
will continue after 1952 deadline.
Says influx of American

of

members

G. 11 Walker Admits

Dr.

York

Jan.

on

New

their

to

Gordon

Thursday, January 5, 1950

By PAUL EINZIG

by

Exchange Member

New

CHRONICLE

sav¬

associations

membership

the period as has been done in
previous periods. Individual hold¬
ings of corporate bonds, the SEC

made

loan

Sam

corporate security holdings during

the

their

pension

by $1.5 billion and in

and

N. Y„

1949, the Securities and Exchange
Commission reported on Dec. 28,

In

and

Cooke & Lucas to B &

the savings in liquid
individuals of $1.7 bil¬
during the third quarter of

add

increased

$200 million.

by

to

holdings of
deposits in the

insurance

FINANCIAL

What Will Happen When
ECA Ends?

their

to

&

SEC

added

sav¬

security holdings.

individuals failed

in

reserves

Despite
lion

individuals

quarter and

ings

tember at $1.7 billion, finds in¬
dividuals failed to add to their

form

billion

equity

ings between July through Sep¬

corporate

that

currency and bank

in¬

liquid

COMMERCIAL

dollar

on

aid

of

confined

"Observer"

newspaper*

the

not

are

to

to

came

support iof the Socialist point
view

by

trying

the

amount

of

aid

granted

to

since

more

of

financial

financial

the

less equal

or

that

prove

British

war

aid

G.

1943

has

H.

in

associated

&

Co.

since

charge of the firm's sta¬

tistical

and

research

department

Simonds joined the Walker
1945 after five years of

Mr.
firm

in

service in the Army Air

Corps. He
employed as an account
executive and currently is sales
manager of the Providence office.
has

been

Mr. Walker, youngest son of the
firm's founder,

the

of

received

ager

same

April, 1949.

by
period.

been

Walker

in the Providence office.

was

to the amount

Gill

Mr.

has been co-man¬
office since

Hartford

tries where the risk involved does

Capital

....
.«»..««
.

Surplus

.

.

.

.

Undivided Profits
Dividend

.

.

$9,625,000.00

$31,223,079.73
275,000.00

Less: Own in Portfolio

Other Liabilities

Deposits

.

1,775,977.16
.

.

.

»

754,960.67
419,220.19

.

•••••••••••••••

505,319,220.14

$1,500,000.00 transferred in March, 1949, from Undivided
Profits as a reserve for such purposes (including Employee Retire¬

Reflects

ment

as

Directors

may

MEMBER: N. Y. CLEARING HOUSE ASSOCIATION

H. Bixby, senior partner of
the firm, also has announced that

statistically

John H. Jordan became sales

In any.case,
generally speaking
it is true to say that the influx of

that

dollars through American private

other
so

would

not

solve

the

it

is

of

In

other

easily achieved—there is

how
but

to

it.

The

finance

how

to

the

is

dollar

eliminate

it.

not

deficit
Efforts

will

undoubtedly be intensified
during the next two years to in¬
The

exports to the Dollar Area.

success

of

the

dollar

drive

depends, however, largely on the
willingness of the United States
to

receive

the

goods which

countries
on

are

its markets.

take

to

listed

after

f

has

far

so

soft-currency
which

from

and

very

them in this
he

until

the

clear that

this state of affairs must

come

to

end in two years, this concep¬

tion
of

will

lead

least

to

to

taking the line

resistance,

Military Institute in
1921,
and
joined the firm of Harris Trust &
Savings of Chicago, representing

need

im¬

and

Brothers,
later

members

the
in

nothing

accomplished

in

Clark

Inc,
his

because
own

of

of

has

the

personal

affairs.

Clark

ciples of that statement into

firm's Los Angeles office.

oper¬

was

&

associated

with

as

Co.,

pressure

the directions of putting the
prin¬

of

the

of

Gatch

Gatch

New

&

York

of

the fall

G.

H.

Walker

&

Co.,

of 1942.

H.

Lewis

&

Co., 63

Wall

Street, New York City, members

retired

Blyth

partner

of

McKinney,

Exchange. Mr. Jordan joined

firm

John

M.

a

and

With John H. Lewis Co.

E. M. Clark Retires
Ernest

officer

Jordan

Co.,

Stock

until 192.9 when

area
an

and

From this

or

became

will

weaken the dollar drive.

Vice-President

man¬

ager, effective Jan. 3, 1950.
Mr.
Jordan
graduated from Virginia

is

hard-currency

Unless

States makes it

W.

no

the

here, little
been

ex¬

tragic view of the

countries.

an

words,

non¬

anxious

Washington
meeting
in
September
sounded
promising, but as far as it is
over

a

to
feat

surplus

port

United

point of view the text of the state¬

CORPORATION

Greater New York

problem

surplus

to

British

a

port

countries—a

proved

assistance

there is

as

depend

corresponding

a

British

countries.

long

be

can

dollar gap but would merely
post¬
pone it and, in the long run, ag¬

known




there

amount

investments

ment

FEDERAL RESERVE SYSTEM

25 Offices Located Throughout

Co.

&

dollar loans and grants so long

dollar

from time to time authorize.*

FEDERAL DEPOSIT INSURANCE

was

Walker

on

unload

Plan)

H.

as

crease

$544,034,712.35
*

of G.

ter if Britain continued to

gravate

5,114,423.87

$2,530,937.83

Acceptances

Prior thereto he

offices

Louis

cessation of Marshall Aid.

928,807.75

Contingencies

the

likely to go very far toward
covering the dollar gap after the

Payable Jan. 3,1950

Reserved for Interest,Taxes,

complacency.
They tend to'cre¬
ate a feeling that it does not mat¬

the total of such investments

during

is not

Unearned Discount
*

connected with the New York and

St.

But

12,375,000.00

9,223,079.73

.

Such arguments tend to stimulate

to be materially higher
it was during the 'twenties.

than

22,000,000.00
*

Britain

not appear

LIABILITIES

of
Mr.
the

of the New York Stock
have

Fay

announced

has

become

that

Exchange,

C.

Edmund

associated

as

a

registered representative. Mr. Fay
in

the past was with

bert & Co.

Clinton Gil¬

Volume

171

COMMERCIAL

THE

Number 4870

furnish

Can Individual Investment Be

changes in purchasing power and high tax rates,
of satisfactory equity financing. Decrying
merchandising efforts as short-run curatives, he concludes
that apathy toward saving and misunderstanding of private

am

but which is

aware

remarks

hand

sit¬

a

you are

basic to my

so

concerning the subject at

that

must

sure

be

it

t i o

a

which

I

000

decline

in

the

of

all

the

fact

of total

income went

income

40%

some

this

to

receiving

over

class,

when the change in the price level
is taken
into account,
it would

For

probably be fair to conclude that

relatively smaller proportion of
total income was going to the top
receivers

1929.1

In

ing

1948

in

than

in

fact, the $5,000 income

1943 would

to

power

in

come

equate in purchas¬

$3,000 of in¬
in that year

some

1929,

and

nearly 50% of the income went to
those

receiving

Total
was

national

194P

$3,000

more.

or

income, of

than

more

twice

(in dollars)

as

course,

high

in

in 1929.

as

Strength
The
I

pertinence of this to what
attempting

am

we

to

are

investors

ual

capita]

bring

to

look

out

furnish

to

is

individ¬

to

only

little

a

type, we should first take
cognizance of the potential invest¬
any

ment

strength

Whether

not

or

of

individuals.

individuals

earn¬

ing less than $5,000, or some such
figure, at the present time should
be

considered

tors in

know

as

potential inves¬

equity securities. I

interested

in

level below which

pect

not

am

debating.
We do
is
certainly a

there

that

individual

less remains for

income

there

saving

great

bulk of individual

from those who receive

low

sav¬

than

$5,000 a year.
What¬
be the income level be¬

which

cannot

we

expect any

investment

funds it is, of course,
considerably
higher
now
than
during the 1930's, which is the
reason

2%

it will

the total

of

individuals
method

a

erate

this

(1933-

years

What

(1946-47,

years

ability
to invest, what is going to be their

as

made.

He

does

which

not

substantial

to

investments

will

become

cussion

My

that

of

in

evident

more

are

of

corpo¬

the

likely

the

future?

potential

investor

this

on

figure at present
should
compare
with something
like
a
$3,000 income figure 20
years ago.
If, therefore, the $3,-

high income groups.
The higher income tax rate at the

from

an

time

present

much

income than

earlier

1920's, for example,

less

address

before

by

annual

the

was

not
lower purchasing
maining income.

current

a

for the

case

mention

to

the

of the

power

re¬

at the

that there are
fewer
high
individual incomes,
taking
changes
in purchasing
power and tax rates into account,
than
there
were
during earlier
periods when individual investors
were furnishing more equity cap¬
ital
than
they are today.2 Our
first point is, therefore, that there
potential equity capital to

earlier

the

incomes

current

than

periods.

of

true

was

We

of

know,

that the potential volume

course,

investment

of

26,923,864.06
27,576,728.37

Stock of Federal Reserve Bank

3,150,000.00

Securities

17,188,332.48

Loans, Bills Purchased and Bankers' Acceptances

557,375,053.18

....

Mortgages

15,547,912.39

Banking Houses
Other Real Estate
Customers'

10,550,333.13

..........

Equities

457,620.88

Liability for Acceptances

6,363,498.13
7,189,157.62

$2,451,996,774.10

outset, there is
in this review

startling

nothing

less

Mortgages

Municipal Bonds

Accrued Interest and Other Resources

which merely states

is

700,693,983.16
1,078,980,290.70

High Individual Incomes

As I said

is

funds

LIARILITIE S

Capital

$45,000,000.00

.

Surplus

60,000,000.00

.

Undivided Profits

Reserves for Taxes, Unearned

Dividend

Discount, Interest, etc.

.

.

7,784,963.34

.

Payable January 15, 1950

1,350,000.00

Outstanding Acceptances
Liability

as

Cash held

Endorser

as

on

Collateral

6,913,827.34

Acceptances and Foreign Bills

or

.

2,556,734.24

.

in Escrow

14,678,810.72

.

Deposits

2,281,747,790.52
$2,451,996,774.10

the

not

136,964,647.94

$

31,964,647.94

.

only determinant of the volume of
investments

at

certainly sets
probably could

We

the

given time,
maximum.

any

it

but

a

United States Government and other securities carried

public junds and

trust

deposits and for other

today solely

of equity capital
individual investors

basis of the
which I have alluded, but

facts to

the

on

nevertheless

they

factors

are

which must be taken into account.

Investing Willingness
of

the

2 The

eral

ability
Board

Reserve

of

that

there

individuals
f 1949

VI,

Association, New York City, Dec.

than

System

in

only

are

hold

of

the

of its

one

finances

about

Fed¬

recent

estimates

million

seven

corporate securities,

Survey of Consumer Finances, Part

Federal Reserve Bulletin

1949).
the

Governors

consumer

who

spoken only
individuals to

of

of

This

is

have

we

number

a

for

October

somewhat

been

of

lower figure
using with respect to

dirferent

as

required

are
or

pledged

to secure

permitted by law.

individuals

New York

Director, Lambert Company

Steamship Lines

OSWALD

BRUSH

HAROLD

L. JOHNSTON

KENNETH

Corporation

F. MacLELLAN

Chairman, Trust Committee
Board of Directors

of America
L.

JOHN T. MADDEN

CHARLES A. DANA

A.

VAN BOMEL

President, National Dairy

President, Emigrant Industrial

Chairman, Dana Corporation

Products

Savings Bank

HORACE C. FLANIGAN

GUY

JOHN P. MACUIRE

Vice-Chairman, Board of Directors

i-

President, John P. Maguire & Co., Inc.

JOHN M. FRANKLIN

President, United States Lines Company

C. R. PALMER

President, Gerli & Co., Inc.

GEORGE J. PATTERSON

HARVEY D. GIBSON

President, Scranton & Lehigh
I

Coal Co.

*

Corporation

W. VAUGHAN

Chairman., Wright Aeronautical

Corporation
HENRY

Director, Cluett Peabody & Co., Inc.

PAOLINO GERLI

SMITH

ERNEST STAUFFEN

President, United Biscuit Company

President, George A. Fuller Company

City

V.

President, Home Insurance Co.

Simpson Thacher & Bartlett

LOU R. CRANDALL

President

HAROLD C. RICHARD

JOHN L. JOHNSTON

Chairman, Atlantic, Gulf anrl
West Indies

Vice President

Chairman, Lincoln Savings Bank

EDGAR S. BLOOM

ALVJN G.

WILLIAM G. RABE

FREDERICK GRETSCH

Chairman, The Sperry & Hutchinson Co,

Products

have

we

$84,599,284.02

purposes

DIRECTORS
EDWIN J. BEINECKE

Chairman, American Home

Thus far

at

explain

not

volume

low

corning from

meeting of the American Finance
29, 1949.

from

date,

Fewer

with

compared

as

the rate of the

$

.

U. S. Government Insured F. H. A.

Other

and

.

U. S. Government Securities

middle

surveys

Froman

close oj business December 31,1949

RESOURCES

Cash and Due from Banks

C. VON

ELM

Chairman, Board of Directors
ALBERT N. WILLIAMS

President, Westinghouse
Air Brake

hold¬

Company

ing

1

All

recent

the

figures
years

Board

sumer

eral

taken

are

of

from

Capacity to

as

Leven

and

Earlier

in

the

method

seems

figure

Fed¬

the

are

others, America's

which

the Brookings In¬
unlikely that any dif¬

would

is

negate

being

here.




the

corporate
securities.
The
survey
makes
no
statement
with
respect
to
whether or not this is a lower or
higher

Con¬

figures

Consume,

It

ference in
trend

Survey of

reported

Bulletin.

stitution.

eral

individual incomes for
taken from studies of

Governor's

Finances

Reserve

on

gen¬

emphasized

than for previous years.
previous estimates have been

rate

unless

or

cannot

be

conclude

this

trusted,

that

the

more

we

recent

would

number

of

be

no

IIA\kl\(;

OFFICES

Street, New York City

IX

GREATER

NEW

YORK

figure
led

to

European Representative Office: 1, Cornhill, London, E. C. 3

individuals

holding corporate securities is not keep¬
ing up with the increase which is taking
place in our population, and is perhaps
even

Head Office: 55 Broad

Unless
inaccu¬

contracting in absolute numbers.

Member FederalReserve System • Member New

as

to
re-

dis¬

Continued

as at

and

the part

what he thinks his chances of

COMPANY

of Condition

ac¬

this

First
on

MANUFACTURERS

•Condensed Statement

to

runs

proceeds.

TRUST

popu¬

or reverse

foremost is the belief

Slichter's,

as

income

declining

the important consid¬

which

in

trend

forth

view

own

Professor

a

celerate, continue,

these

set

are

erations

by which these small and mod¬
groups could he induced
to

securities.

counter

For those who have the

investments

growth

larity of equity securities.

declara¬

income

make
rate

State and

income

*Abstract

pre-war

postwar

tremendous

a

investments and

investments in cor¬
porate securities amounted to only about

perfectly clear that there is
ample room for disagreement.with

percentage of the in¬
come which may be available for
savings or investments for the

for stating earlier that the

$5,000

President

the

the

makes

earlier

an

the

of

in the popularity of fixed

individual

48),

invest¬

or

the

affect

individuals

comes

may

witnessed

are

emphasizing here
all the more important, is that dif¬
ferences in tax rates noticeably

of

ing

ever

of

decade

involved,

am

receivers

the

more

and

Slichter

face

in

that during

1941)
and

be

more

A third factor which makes the

point that I

had from

give us some information
point, and we know that

this

on

Professor

the

1920's, the last two decades have

per¬

moderate incomes and

or

with

pared

open

of

ment.

be

anything left for invest¬
ment or saving after meeting their
current living expenses.
The sav¬
ing figures for various income
groups

analysis in order that

savings

4% of the

as

since

that

ex¬

cannot

we

have

to

tion

furnish

equity capital. I point to the
subjective nature of this part of

of the

their
aggregate expenses and taxes will
be greater.
This will siphon off a
higher proportion of the total in¬
come
going to the group so that

equity

to make investments of

or

1949.)

statement

more

the

the

example,

percentage

same

individuals

leaves

Potential Individual Investment

that if

to

"An

new

in

small

recently said,
capital is

of

savings could, if corporations of¬
inducement, be substantially in¬
(How Big in
1980?, Sumner
Slichter, Atlantic Monthly, November

H.

the individual in¬

induced

has

corporations
with

that Professor Sum¬

person

source

this alternate investment

possibility as fixed income types
of investment, and of course we
have in mind primarily bonds and
mortgages.
We know that, com¬

top income receivers

a

of

be

refer to

has been the

than
past.

means

more

$5,000

income

can

in¬
con¬

fered

of

not

top income receivers in 1929. This
Dr. Lewis A. Froman

a

In 1948, although

year.

larger

a

grouping, although that will not
an
entirely accurate method
of handling the problem. We shall

these

what I shall say.3

takes

total national income

more

$5,000

the

1948 received

than

re¬

ceiving

of the

in

indi¬

viduals

today

in

15%

34%

to

it

that

case

income

went

than

income

ex¬

ample,

is

vestor

the question

answer

or

a

Slichter

com¬

be

creased."

if

to

are

whether

ability

as

We shall lump the alternate types
of
investments
in
one
general

percentage of total national

same

In

for

1948.

we

it cannot be avoided

the

of investment

pared with alternate types of in¬
no investment at all.

number of people at the high in¬
come
levels
to
account
for the

higher income
1929,

above it in

account

go-

to

of the income receivers

A second factor to be taken into

the

receivers.

some¬

same

above this level in 1929, but

were

amount

ing

50%

tne

of

impression and
opinion.
Even
though
reliance
must be placed upon such consid¬

only 40% of the income receivers

refer

of income

to

sons,

realm

have

less

H.

in

purchasing
power position in 1929 as the $5,000 income group in
1948, then
the figuies to be kept in mind are

is the relative

total

stood in

group

like

3 No
ner

enormous

invest in equity securities must be
the

not

type

23

vestment or

sideration is the attractiveness of

figures, any discussion of the
willingness of the individual to

from fulfilling his

income

thing

were

to

n

to

and

role.

that

quite

clear. The situ

does

vest, then the most important

erations,

May I begin by reviewing
uation of which I

this

which

combination of both the abil¬

a

been said thus far by way of facts

than in earlier periods

investor

outcome

ity and the willingness of the in¬

into account

keep

final

the

dividual to buy.
It will be recog¬
nized at once that unlike what has

President, Russell Sage College, Troy, New York

proper

that

consider further the group

is

Mr. Froman points to the fewer high individual incomes, taking

will

know

we

By LEWIS A. FROMAN*

functions

their

of

(75)

inclination to buy securities in the
future as compared with their in¬
clination in this respect in the

We turn

consideration

a

CHRONICLE

willingness and desire in this directioin.
This is exactly the same past?
Since we start with the as¬
type of analysis we make in con¬ sumption that they have the means
sidering effective demand, that is, to
invest, for there is no reason to

Stimulated?

investment

FINANCIAL

equity capital.

to

now

&

York Clearing House Association • Member Federal Deposit Insurance Corporation

page

30

24

(76)

THE

COMMERCIAL

&

king bonds and borrowing

Review and Forecast of

lower

at

bonds

Municipal Bond Market

interest

bear,

market's

the

1949

year

continuance of

ume

of

new

the

by

the large vol¬
of

issues

State

Municipal bonds and by the

smaller

capital

and

types

of

construction.

Buyer's"

Index

loans

The

for

panies

these

the

year

2.08%.

By

the

had

averages

This,

end

despite

of

risen

the

issues

new

to

1949

on

during
rising market. Part of

a

the

cause

ket

was

of this strength of mar¬

the

and

ury

sold

were

action

the

by the Treas¬

Federal

Reserve

maintaining their control of in¬
terest rates, and during July and
later taking various steps to in¬
the

crease

the

Louis S. Lebenthal

tinuance
markets

the

of
of

supply

of

credit

for

of

counteracting a
prospective business depression—
this resulting in a big demand for

Leroy Klein

purpose

types of bonds and especially
Municipal bonds.

relatively stable

Later in

Municipalities all over the coun¬
try with materials and labor now

of

available

come

engaged
in
all
types of construction projects in¬
volving large-scale permanent fi¬
nancing.
There were fewer large
were

issues for bonus and similar pur¬
poses

and

a

large

extension

to

the year,

the prospect

probably higher corporate in¬
taxes during 1950, the pros¬
pect of setting up huge pension
funds

rievfr
an

contracts

as

well

undo amount of speculation

as

by
he so-called "10 Percenter" (buy-

of

than

their

before

and

the

holds

be¬

have

continued

large capital
their

for

funds.

with

1950

it

that

tinued

is

will

be

market

Housing Authority bond prac¬
tically guaranteed by the Federal
Government and tax exempt. The
a

emission

TRUST COMPANY

this

At the close

of business, December 31, 1949

and

chat

ASSETS

U. S. Government

432.295,401.24

ONigarion

State, Municipal and Public Securities
Other Bonds and Investments—;
Loans and Discounts

'

.

Banking Houses

__

Other Real Estate-Credits Granted

on

they

credit

.

Acceptances

598,546,438.45
103,725,216.73
4,474,951.48
436,846,231.70
462,459.85
2,229,260.72
9,300,865.86

4,501,340.32
895,968.26

Other Assets.

will

be

may

standpoint,
factors

entirely
pump

changed
be

probable

even

Kansas

Less

Light

0.6

Capital Stock.
Surplus
Undivided Profits

were

as

.

Power

St. Joseph

317

Lt. & Pr

50,000,000

State

of

North

Caro¬

Reserve

forConringencies

43,000,000

New

York

State

Housing.

The

.

York

New

state courts

and

Court

of

Consolidated Edison about Jan.

(Less

out t

City

held in portfolio)

a

of

Philadelphia,

$100,000,000

2,119,875.96

Other Liabilities

'of

time

1,449.655,700.45
$1,593,278,134.61

received

adjustments,

rate cut

$140,000,000
City Housing.

York

The

But

the

10 last year.

able to

was

if

find

hopes to

such

an

in

S.

Bridge

rate

legal

thority.

at
$58,472,642.30 in the foregoing
deposited to secure public funds
for other purposes required by law.

statement are

and

Stein Go. Partner

appeal should be considered by the Court, the

any

return to the Public Service Commission

case

the

Mr. Maltbie sharply reduced the

Charter Member New York

New

Clearing House Association

Member Federal Reserve System
Member Federal Deposit Insurance




Corporation

York

Co., 27 William Street,
City, announce that

mitted

as

firm. Mr.

ly

in

the

a

general partner in the

Weinberger
trading

Herzog & Co.

was

former¬

department of
,

a

temporary return

low interim

case

rate

of

fixed will

return.

This

been fully tested although

never

the commission recently

offered the

$300,000 increase if it would stop litigation based

a

The commission under its

liberal than during

on

the

might be

new

leadership is considered somewhat

the long Maltbie regime, and Consolidated

able to regain

at least part of its current loss of

income, particularly if it is willing to compromise
issue.

mission

The question still remains foggy

can

use

them itself in setting

The, Court of Appeals stated: "In

where

a

accrued

the deprecia¬

up

a

such

case

a

depreciation is $95 million

itself

has

by

com¬

working rate

as

the present,

witness for the commission has testified that the

by the

reserve

on

to whether the

as

actually order these bookkeeping changes, even though

be entitled to

may

the

Hugo J. Weinberger has been ad¬

5V2 % return under the

a

This law permits

this

for

company

company

indicated
some

fact that the

on

that

its books, and

the

actual

than the

more

a

figure fqr

reserve

accumu¬

witness for the company

depreciation exceeded the book

$40 million, the commission need not blind itself to
reserve

does not—as reasonable

Stein &

grounds of confiscation.

"recoupment" section of the law.

it

Hugo J. Weinberger Is

on

of only 5% but with the proviso that permanent rates when

base.

22.700,000 Puerto Rico Aqueduct
and Sewer Authority.

com¬

the electric

to appeal

means

tively high figure, and then allowed about

Edison

84,000,000 State of Minnesota.

share

a

base, principally by raising the depreciation reserve to a rela¬

more

Au¬

$2.35

report

Supreme Court

bargain for "permanent" rates.

tion

Triboro

(now retired)

two lower
in the 10%
imposed on

$21.5 million,

was

company

company

even

New

thority.

reversed

a

rate decision to the U.

lated

Securities carried

2.30

pared with $2.28 in the corresponding previous period.

pur¬

84,000,000 Port of New York Au-

11,393,885.08

8,767,476.65

Deposits

City

Approximately

141,000,000

acceptances

23.00

While the gross annual
the company at the same
temporary increase in gas rates of $11.4 million.
After deducting the latter and also the savings in Federal and other
taxes on income,
the net reduction would have been reduced to
around $5.7 million or about 50c a share on the common stock. While
these changes were put into immediate
effect, the company for¬
tunately was able to offset the reduced income through lower fuel
prices, use of new generating plants, heavy air-conditioning load
last summer, growth of television use, etc.
Thus for the 12 months
ended Sept. 30, which would include about 35c "loss" through rate
of the

amount

in the Staten Island Edison

1,125,000.00

6.5

electric rate cut which Chairman Maltbie

poses.

Acceptances Outstanding $ 13,513,761.04

11.10

1.50

Appeals recently

provision of the law has apparently

-

17.20

22.20

upheld the Public Service Commission

50,000,000 Louisiana State, Bonus.

4,243,495.48

28.50

6.3

$38.80

reimburse

Los Angeles for various

4,468.600.40

6.3

1.40

Consolidated Edison

so-called temporary rate law.

lina, Roads.

Almost

Reserve for Taxes, Expenses, etc..
Dividend Payable January 3, 1950-

1.80

0.1

Light

&

ikWlnHfekLLi i J

company

13,623,976.55 $ 113,623,976.55

7.20

0.6

Iowa-Illinois Gas & El
Iowa

company must

follows:

$77,500,000 State of Pennsylvania
Turnpike Authority.

75,000,000.00

$15.40

0.5

1,904

and

$25,000,000.00

Light

$25.75

$8.20

1,587

Pa.

LIABILITIES

6.2%

$1.60

Subscription Price.

44,0^0,000

$1,593,278,134.61

United

12.00

City Pr. & Lt.

Some of the large borrowers of
1949

Share
Value

Est.

Net Value

more

the

banking system,
resulting in even higher prices.

Accrued Interest and Accounts
Receivable

our

is

into

do
Re¬

economic

it

it

levels
We

Federal

political

a

the

justified,

Cash and Due from Banks.

price

little.

which control

rates,

from

should

to

Despite

volume

that

very

policies,

interest

STATEMENT OF CONDITION

expected

believe that the

serve

CONDENSED

is

dollars.

expected

assured

change

not

Broadway, New York

this

billion

a

large

will
165

of

over

seems

Four, (Jed 1824

Fer Sh.

Yield
Basis

Est.

United

Company

are

addition, therti will be a new
type of tax exempt obligation —

be

Est.

Div.

Rate

PerSh.

<000>

con¬

m

Si

prices to the recent price of United Light:

NO. of

and
sewer
supply
planned for in great
numbers throughout the
country,

BANK

liquidation.

water

ways,

systems

EMI CAL

final

used along with other

Shares

as¬

a

supply of new fi¬
schools, roads, high¬

as

of United,

Light to stockholders

Light has advanced this year from 21 to 38%. This seems
to discount fairly well the estimated immediate break-up
value,
although the subsidiary companies have excellent capital structures
and their stocks might eventually sell on lower yield bases. The fol¬
lowing table reflects an attempt to adjust possible "when delivered"

large

nancing

&

outstanding.

practically

there

four

United

outstanding
general
obliga¬
tions of Municipal Bonds approxi¬
mated $18,000,000,000 and in ad¬
dition
thereto,
in
excess
of
$2,500,000,000 of Authority and
For

the

principal steps in the plan

in

June

sinking
approximately

of

sured

of

probably in March, for
cash to pay off
$31 million bank loans of the two holding companies; (4) distribution
of Iowa-Illinois Gas & Electric and Iowa Power & Light stocks in

and

were

stocks

common

be initiated by arbitrageur houses.

$23 million, proceeds being

By the end of 1949 the volume

bonds

the

to

Power

However,
$140,000,000 of New York } City
Housing
bonds
(guaranteed by
the
City of New York)
were
publicly sold, part of which were
bought by the City's sinking fund.

Revenue

in

may

are (1) transfer of Continental's
United, (2) distribution of the stock of St. Joseph Light &
Power, a relatively small company, to stockholders of United (orig¬
inally scheduled for October); (3) sale of the shares of Kansas City

their
.

it effects dissolution of
consummation of plan
"when delivered"
subsidiaries (all 100%

few weeks, and it is uncertain just how soon

a

The

bor¬

finance

Continental Gas & Electric, has a few

company,

outstanding with the public (United Light
it will be necessary to call a stockholders' meeting

99%)

owned)

Instead, they

to

of United

stock

common

trading

largest

improvements

pension

own

dissolution plan

the

of Continental to approve the plan in so far as
that company. These requirements may defer

in

borrower, New York City,

for its account.

approved

no need to apply to a Federal court for enforcement
However, due to a technicality resulting from the fact

sub-holding

of

over

assets

coming in to the market to
row

Light & Railways

finally

to be

plan.

shares

were

without

passed

year

the

that the

other good security.

any

has

&

appears

of

greater

conscious

SEC

Railways, with proposed minor changes with respect to
voting rights of subsidiary stocks, which changes will probably be
agreed to promptly by the company's directors. Since the common
stock is the only remaining security of the holding company, there

orders

in

ever

securities

normal

by corporations under their
labor

Light

Of note is the fact that another

all

1948.

The

taking
advantage of the comparatively
large tax exempt income at rela¬
tively reasonable levels compared

the

largest
annual volume in the history of
the business. Over $3,000,000,000
of

By OWEN ELY

United

were

and

fraternal

investment

came

2.21%.

pension

Individuals

numbers

large

was

of

and

bonds.

municipalities at the beginning of
the year was 2.20%, the low dur¬
ing February and again in June

con-

again

bought only limited quantities of
the
highest
yielding
long-term

"Bond

20

banks

sinking funds continued to be
large investors; insurance com¬

for

Utility Securities

at

year

large

investment

Contend municipal
levels will undergo little change.

marked

was

the

buyers of the
Municipal
Bonds;
States and Municipalities for the

expected to exceed $1 billion in amount.

The

Public

shorter-term

ipal bonds and the persistence of relatively stable markets over
last two years, Messrs. Klein and Lebenthal forecast
equally
large supply in 1950, with Federal Housing Authority bonds
bond price

the

highest levels.

ending

Commercial

issues of State and munic¬

new

Thursday, January 5, 1950

them

on

than

practice and not recommended by
investment bankers), resulted in

extremely

large volume of

CHRONICLE

dangerous

very

the

Lebenthal & Co., New York City

on

a

costs

the

By LEROY KLEIN and LOUIS S. LEBENTHAL

Commenting

FINANCIAL

so

men

accumulated
would

use

upon

the company's books

the word—'show' the accrued

depreciation."
Regarding the
January has been

temporary gas
extended

from

rates,
Dec.

31

the
to

increase

quite possible that the commission might allow
until

Edison

obtains

the

benefits

anticipated

J natural gas, probably early next winter.

.

a

granted

28 and it

Feb.

last

seems

further extension

from

introduction

of

COMMERCIAL

THE

Number 4870

171

Volume

mand

Unlike

a

the funda¬

ago,

year

volume

business

of

activity sug¬
total volume

gest stability with a

ent

from

and

the

ing

to

W.

Director

G.

H.

&

Co.,

bers

of

level

the

Ex¬

W.

David

McKnight

spending plans

private account call for mod¬
erately lower new construction
on

of

more

reduction

a

in

plant and equipment expenditures
by
businesses,
Mr.
McKnight
stated. These two factors, although
very basic considerations, do not
tell the whole economic story for
it is to be expected that Govern¬
ment spending — Federal,
State
and

local—will

close

to

maintained

be

present record
it

addition

is

doubtful

similar

that

In
in¬

in

last

to

rates.

1950 will be
year
when the

change

ventory

liquidation of business inventories
was a major influence in the mild
that

recession

industrial

took

place.
recalled

be

should

"It

in 1948 business

was

whereas

greatly stim¬

ulated by the

accumulation of $6.5
inventories that
plus

of

billion

factor became

negative

a

one

dur¬

ing the early part of 1949. And by
quarter of 1949 business

the third

inventories
at

being liquidated

were

annual rate in

an

excess

billion. Current basic

of $2

price trends

in fact, semi-inflation¬
certain aspects, and it

year ago,

in

ary

far

was

above

incomes, dividends in
the aggregate increased and de¬
spite the rise in stock prices in the
latter half of the year, stock yields

greatly different at the

not

were

in

bil¬

$5

from

of

close

circumstances

of

the

fact,

revenue

question. As

virtually
matter

a

for greater tax
undoubtedly will result in
pressure

review

of

the

tax

status of

in¬

companies and a long look
the exemption of co-operatives,

surance

schools
tion

and

with

in

churches

properties

connec¬

be¬

owned

1949

was

limited

to

government agency financing, ag¬
gregated
close
to
$8
billions,

slightly
term

91-day

nancing

about

were

offered

at

yield

a

September
to

iy8

of

almost every

1% %

of
the

rate

was

month

until
in
reduced

cent. An exchange of¬

per

fering

Certificates

1.087%.

414

1%%

year

notes

made in December reaffirmed the

Treasury

policy

of

interest

low

kinds

effect

for-nothing'

dependence

on

Big

Government in 1949. Whether this

dependence
until

it

is

nation

the

completely socialistic
pends

upon

comes

free and

grow
into a

economy

the growth of

ter-understanding
must be

to

allowed

forces

de¬

a coun¬

nothing
day the piper

that

some

paid."

in

more

vey

characteristic

of

price

range

years," the

"As

sur¬

measured

by

mains

"It

is

such

flood

a

on

a

far not been

so

vey

declared.

will

not

known

the

be

realized," the

97.26

100.15. The municipal market
within a similarly narrow

range,
bonds

measured by one average

ranging only about .20% in yield.

cluding

financing' in
federal farm

until

will

be

marketed

ston, Illinois, at the age of 67. He
wa« formerly associated with En-

and

yart, Van Camp & Co..

might well now direct

position is satisfactory
condition of statisti¬
cal under-valuation exists for the
the demand

a

question. In cases where
for

reason

an

Bankers Trust Company

unsatisfactory

showing in 1949 has been reversed
the
opportunities appear to be

NEW YORK

greatest for, after all, many com¬
panies last year suffered losses
that seem unlikely to be repeat¬
ed,

particularly

losses

in

inven¬

tory due to severe price declines.

industries
from
a
standpoint of maintaining or in¬
creasing profits for 1950 are con¬
sidered to be: retail trade, electric
Outstanding

utilities, electrical equip¬
construction (particularly
residential),
paper,
television,

and

CONDENSED STATEMENT OF CONDITION, DECEMBER 31, 1949

ASSETS

gas

ment,

business

DIRECTORS

Cash and Due from Banks

...

U. S. Government Securities

(with large natural gas interest),
and

tobacco

...

$

435,386,023.54

petroleum

machines,

532,298,777.48

.....

ALEX H. ARDREY
Executive Vice President

textiles."

Loans and Bills Discounted

576,710,609.34

FRANCIS S. BAER
Senior Vice President

State and
ELLSWORTH BUNKER
Chairman, The National Sugar
Refining Company

A Year-End Bond Survey

Banking Premises

President

S. SLOAN COLT

1950 with volume of utility and railroad financing
at 1949 level.
Looks for decline in indashrial

.

.

A

Union Dime. Savings Bank

Chairman,

takes note of 1949 stability of bond prices.

probable substantial increase

tax-exempt

volume

of

financing
a

offerings,

bond

a

utility and railroad
the 1949 level, and

near

decline in industrial bond issues

predicted for 1950 by Halsey.

were

Stuart

&

Year-End
"The

gas

Inc., in its annual
Survey for 1949.

Bond

total
of

ments

the

Co.

new

money

require¬

the

utilities, including
and telephone companies,

likely to be lower; but it is
possible that refundings in 1950
are

issues

of

the

bring
near

outstanding

now

total

utility

will

offerings

their 1949 level," the survey

pointed out. "As with the utilities,
decline

in

railroad

equipment
offset by
financing
will continue to be placed private¬
ly and will decrease in amount.
a

financing

may

refundings.

"The

also

be

Industrial

World

will go into
refunding of¬
fering 6f $100 millions, its first
public financing since the initial
1947 issues of $250 millions. While

the

market

Bank

with

a

financing by the Federal govern¬
ment has been by way of the short
term market, long term offerings
are
quite possible in the future.
"In the tax-exempt field, heavy
volume is anticipated," the survey
continued. "The apparent
ness

sues,

willing¬

of voters to approve bond is¬

demonstrated by authoriza¬




in

tions

bring 1950's offerings of
state and municipal bonds close
to the 1949 total. Add to this vol¬
could

the Housing

ume

and

Authority issues

substantial increase in tix-

a

exempt offerings is probable. With
likelihood

of any

reduction
in taxes, and the probability that
tax exemption will become more
little

tax-exempt

limited,

Customers'

Liability

on

Acceptances

.

.

10,249,115.79

.

$1,624,145,646.93

Shoe Company

JOHN W. HANES
chairman, Executive Committee,
United States Lines Company

WILLIAM H. JACKSON
Partner, J. II. Whiting it Co.

LIABILITIES

FRED I. KENT
President, Council o] New York
Un iversity

Capital

.

.

$30,000,000.00

.

.

100,000,000.00

.

....

.

37,169,137.98

WARD MELVILLE

/'resident, Melville Shoe Corporation

Surplus

New Jersey

PAUL MOORE

....

Undivided Profits

will

bonds

4,799,674.08

.

WILLIAM B. GIVEN. JR.

ejections,

November's

13,312,486.24

.........

Accrued Interest and Accounts Receivable

President, American Brake.

in

29,805,375.21

.

WILLIAM L. DeROST

maintained

bond issues, and

21,583,585.25
.

HENRY J. COCHRAN

President, The Franklin Savings Hank

ings in

Municipal Securities

Other Securities and Investments

Halsey, Stuart & Co. Inc. forecasts increased municipal offer¬

.

$

167,169,137.98

THOMAS A. MORGAN

continue to be in demand.
"In

general,"
Halsey,
Stuart
"the biggest demand for
corporate bond offerings will con¬
noted,

tinue to be that of insurance

/'resident and Chairman of the Board,
The Sperry Corporation

Dividend

Payable January 15, 1950

.

.

.

1,500,000.00

.

1,431,527,782.51

.

5,206,709.80

JOHN M. OLIN
President, Olin Industries, Inc.

DANIEL E.

Deposits

New Jersey

POMEROY

panies and banks. The demand
undoubtedly will be augmented

GEORGE A. SLOAN
Chairman, Southern Agriculturist
/'resident, The Nutrition Foundation, lac,

.

Accrued Expenses, etc.

PHILIP D. REED

the requirements of pension
funds—requirements which may

.

Reserve for Taxes,

com¬

by

very

Chairman, General Electric Company

Less Amount in Portfolio

Other Liabilities

well become tremendous.

B. A. TOMPKINS

"According to the supply-de¬
mand equation, bond prices should
continue steady with a tendency
to advance. This

projection is bol¬
by the probability
that
prices for long-term governments

$12,076,764.82

Acceptances Outstanding

509,612.03

.........

11,567,152.79

7,174,863.85

Senior Vice President

$1,624,145,646.93

THOMAS J. WATSON, JR.
F.rei utire

Y'irr

President,

International Business Machine* Corp.

JUSTIN R. WHITING

-

,

President, Consumers Power Company

stered

will

remain

around

Securities in the above statement
annual report to

present

been

levels."

are

carried in accordance with the method described in the

stockholders, dated January IS, 1949. Assets carried at $77,307,194.74 have

deposited to

secure

deposits, including $34,111,903-45 of United States Go\ernmeot
deposits, and for other purposes.

In

looking over the past year's
financial picture, Halsey, Stuart
warned that government

spending
driving the
completely so¬

and fiscal policies are

nation

close

cialistic
"With

to

a

economy.
an

estimated

income

of

Member

oj the federal Deposit
Insurance Corporation

'

ex¬

1949,
loan

attention to those industries where

the

arid

James J* Forstall died at Evan-

expected to continue upward as
stabilized earnings are
a more normal appraisal.

stocks in

if?

they will appeal**'

accorded

and where

it

definitely just hovy

lower but

Investors

sur-

answer

James J. For stall Dead

the fluctuation for 20-year
as

real

concluded. \

moved

would

bonds

"The

prices

between

of

available

more

issues

as

decline in prices have

it

fluctuated

of

said the

much

as

to which buyers

and

market

Act might
$1 billion of
housing bonds per year, and a
total of $7 billions. Early expec¬
tations that the mere anticipation

generate

of "the averages which includes
issues of diverse quality, corporate

one

"Total

principal

than ten

continued.

confined

were

narrowest

the

on

of

was

stemming from th«r
Housing Act of 1949 re¬
to
be seen,
said Halsey,,

Stuart.

bring
the

billions,

volume

of

"Corporate bonds

$5

Federal

gations.
within

about

was

The

issue

tax-exempt situations, too, may be

subsidies, welfare pro¬
grams and spending continued to
cultivate the nation's 'something-

Long
bonds

approximately 20%
represented by stocks."

rates, at least for short-term obli¬

reviewed.

1948.

which

and late in December the average
was

in

municipal

$21
and all-time high. Fi¬
of
corporations
of
all

billions,

certificates. Of¬
ferings of bills ranged from an
average 1.16% basis in January to
a
low average of 0.923% in July,

was

bills and one-year

than

and

totaled about $3
billions, bringing
the total
outstanding to about

yond their necessary plant. Other

"Federal

less

state

major trend of stock prices

"The

is

such

relief from high taxes is

The

last summer.

gan

from

1949 increased

Under

year-end than when the rise be¬

to be more favorable than

appear
a,

earnings

corporate

Indicated

still

of

a

concept of normal. Moreover,
notwithstanding
these
smaller

change.

and

greatest

any

York

Stock

their

1949
fear,

during

investors

for

of

$253 billions to almost $257 bil¬

out

at

for

process

stocks should continue in

business depression
would decimate corporate profits.
While corporate earnings in the
aggregate did decline by perhaps
one-fifth from 1948, the residual

Mem¬

New

revaluation

namely, that

Walker
of

plant equipment spending.

1950

and

partner

construction

private

abandoned

f

o

in

common

McKnight,

Research

moderate

indicated

the

of

"The

last

accord¬
David

year,

this

again become a con¬
structive business influence—one
that could well counteract the ef¬
once

decline

greatly differ¬
average of

see

deficit

a

next June

year

billions, far more than
previous peacetime year,"

any

lions.

a

not

1950

surprising to

would not be
factor

with

debt
to

fects

business in

of

December

current fiscal

the survey reported. "The national

in market.

mental factors that determine the

America's

in

shares undervalued

companies having

and

cash

(77) ■' 25

bond
market
during
stability, with a tendency
to strengthen, said Halsey, Stuart.
"Treasury financing, aside from
continuing sales of savings bonds
and tax anticipation notes, until

30

McKnight, of G. H. Walker & Co., says investors
attention to industries having satisfactory de¬

position,

estimated

and

CHRONICLE

expenditures of $46 billions, fed¬
eral finances are expected to end
the

direct

should

FINANCIAL

lions to $7

Major Upward Trend

Of Stock Prices in 1950
David W.

billions

$41

Research Director Sees

&

'

.

26

(78)

COMMERCIAL

THE

Mr.

Experts Discuss 1950 SioGk Market Picture

&

FINANCIAL

CHRONICLE

Weiss, whose remarks are
in full elsewhere in this

given

of

issue

the

"Chronicle," held a
stimulant to an upward

George Weiss, Glenn Munn, James Hughes, A. Wilfred May,

major

W. W. Cumberland and Ragnar D. Naess give views on stock
market trend. Hans Widenmann presides at panel.

stock market in the New Year will

by

showing

any

of

course

ments

rent trend towaYd wider diffusion

and

accentuated,

through

"The market will

the

cally bolstered

1937

of

also be specifi¬
by the generation

better climate in which busi¬

a

will find

nessmen

stanced

themselves, in¬

by the currently-released

report of the

President's Council
of Economic Advisers," Mr. Weiss
continued.
Mr. Munn

emphasized the "cold

war" with Russia
tor
G;enn

George Weiss

G.

1

James F. Hughes

Munn

presaging

ket.

Wilfred Mav

A.

.-Jfc:

of

"The

a

direct

our

and

indirect

blood

"The

Munn.
float

the

on

Other

Munn

the

as

stream,"

stock

which

the

confetti

our

cited

basis

of

for

stock

have

much

a

prices

are:

prac¬

understated

the

assets, and which will be
corrected; (2) "technical" market

In

1950

a

can

"The

Market

Picture," held
auspices of the Ameri¬

Statistical

Biltmore
on

discussion of

panel

Stock

under the

Association

Hotel,

December

the

at

New York City,
views on the

30,

topic were expressed by George
Weiss, director of research, Bache
& Co., members of the New York
Stock Exchange; Glen Munn, con¬
sultant to Paine, Webber, Jackson
&

and

Hans

Curtis,

members of the New
York
Stock
Exchange;
James
Hughes of Auchincloss, Redpath &

of

the

"Commercial

nancial Chronicle" and
of the
for

mann

Fi¬

&

Research;
of

William

influence

kets, and
to

D.

He

Exchange, and Ragnar
Naess, of Naess, Thomas &
Thielbar, investment consultants.

Stock

market"

tion

bond

residue

since
of

The

the

with
years.

also

the

"There is too much

many

as

month

Exchange,

years.

Naess. "We

have

can

whether

Mr.

sibility

been

'

-

mobiles

Freeman, Hough & Go.

mar¬

Formed in Ft.

govern¬

cited

the

FT.

pos¬

lower

Freeman

industries

auto¬

have

formed

Co.,

with

key

as

construction.

and

Myers

MYERS, FLA.—Howard W-

considerably

of
in

levels

is

not."

or

Cumberland

bear

a

business

William

and

Freeman,

R.

Hough

Hough

&

This,
of
considerable curtailment of capi¬

Street, to engage in the securities
business.
Both were formerly as¬

tal

sociated with A. M. Kidder & Co.

together

with

likelihood

the

expenditure

programs

by

in¬

offices

at

828

First

dollar-

the

on

as

an

securities

mar¬

effective obstacle

Highlights of 1949 Rail Market

will

of

be

the

"the

stock

critical"

market's

fu¬

likely to

major decline being
ensue from the profes¬

discouragement prompted

The

1949 closed on

year

optimistic note, at least so far as

an

markets are concerned. Strength, and increased activity,
continued right up to the end of the last full trading session. In the
case of the rails there was a slight reaction during the short session

security

the year last Saturday but this action on the eve of
weekend can hardly be considered significant.
Losses on the day were no more than fractional
and apparently
merely represented evening-up operations by traders. On the basis
of present prospects, it is generally considered likely that the new

that wound
the

long

up

holiday

will witness a resumption of the upward
technical reaction is possible any time now.

year

Brown Brothers Harriman
YORK

that

has

a

»

around, with overem¬
phasis by all and sundry on the
inflationary factors," asserted Mr.

major market movement.
specifically
that
predicted

sionals'

NEW

announced

Sheldrick

B.

the excep¬

bullishness

ket,

»&

yields;

of

ture course; a

presided.

PRIVATE

municipal
Rollins

general partner. He
ha'? been with Freeman & Co. for

possi¬
in

H.

war

firm

Malcolm

markets

the

-

E.

1929,

the

admitted

lower

of

Sons, Inc., having, been with that
firm

advanced

Naess

Mr.

Skinner previously

of

department

business

a

Mr.

manager

whole.

as a

any

January

Hans Widenmann,
of Carl M.
Loeb, Rhoades & Co., members of

York

was

by the Securities and Ex¬
change Commission as the greatest

Thal-

New

Skinner.

tered

W.

York Stock

the

on

bond

eral

& Co., members of the New

Ladenburg,

the

of

industries, since 1929, Mr.
May urged continuing appraisal of
individual securities

opening of a mu¬
department under
management - of Charles L.

nicipal

Mr. Hughes pointed to the Fed¬
securities laws as adminis¬

member

a

(4)

selectivity

the

announce

at¬

overflow."

faculty of the New School

Social

Cumberland

"the

and

A. Widenmann

Miller; A. Wilfred May, executive
editor

stock

the

Co.,

61 Broadway,
City, specialists in rail¬
equipment trust financing,

road

1935-

no

within

the inordinate spread

between

of

paid

&

New York

industries and between companies

Mr.

value of

signals; (3)

and

movements between

ment-stimulated

by

(1) conservative accounting
tices

mar¬

of

the Potomac."

on

elements

higher level

Ragnar D. Naess

market price

arma¬

tide

product flowing from
machines

a
Freeman

conversely

markets

Demonstrating

year.

will

Skinner With Freeman;

tention to the SEC," said Mr. May:

coming

business

our

"Credit

money

and

1945-1946

of

ket

Cumberland

bull

and

bilities

said Mr.

W. W.

broad

big post-war

of

continue.

'midst cheap

stock market, just
it has acted as the main feeder
our

concluded.

ele¬

and

financing;

well

business

and

fiscal

may

both

in

equity markets, Mr. Cum¬

berland

a

ment activities is the

as

market

and the

major fac¬ value basis instead of attempting
forecast
movements
of
"the
sizable bull mar¬ to
as

$20 billion annual cost

stimulant to

stock

business

occurred

Weiss.

recession

present during major bear as well
as
bull markets. The market de¬
clines of 1937-1942 and 1946-1947
deficit

Mr.

the

would

mutual

said

dustry's policy makers,

monetary inflation have been

insurance companies,
eleemosynary institutions, and the

funds,"

"fa¬

Mr. May asserted that complete
divergence between the general
external

be
greatly
buying by

market

cause

provided by greatly broadened
securities
ownership. "The cur¬

equity securities will

of

tigue."

be

of holding of

Thursday, January 5, 1950

&

Co.

BANKERS

BOSTON

Despite the better tone that prevailed in the markets toward the
railroad stocks as a whole, as measured by the Dow-

end of the year
Jones average,

Dec.

PHILADELPHIA

Business Established 1818

trend although some

52.76.
10

made no net progress during 1949.

As of the close on

31, 1949 this average stood at 52.86. A year earlier it had been
During the 12 month period there was a net change of only

cents, and that was on the down side. People do not buy aver¬
however. They buy individual stocks. As is usual there was
variation between the performance of specific stocks in both

ages,

Statement

wide

oj Condition, December 31, 1949

the
PARTNERS
Moreau D. Brown

ASSETS

F. H. Kingsbury,

Jr.

Cash

on

Hand

and

Due

Banks

from

.$ 56,072,647.23

....

Robert A. Lovett

Thatcher M. Brown

Thomas McCance*

Prescott S. Bush

Ray Morris

Louis Curtis

H. D. Pennington

E. R. Harriman

Knight Wooleey

Stephen Y. Hord

and

Loans

and

60,253,435.13

Other Public Securities

Other Marketable Securities

.

45,445,332.39

.

5,006,166.68

.

Discounts

Customers' Liability

49,564,591.79

on

Acceptances

Others did not do at all well.
and

mons

United States Government Securities

State, Municipal

speculative and investment categories.
Some holders of railroad stocks had

16,108,356.01

....

.

Limited Partner—W. A. Harriman

Other Assets

1,050,569.39
$233,501,098.62

M. D. Morehouse

David G. Ackerman

Ernest E. Nelson

speculative and semi-speculative preferreds) listed on the
Stock Exchange 32 showed net gains for the year, 26
losses and two were unchanged on the year. This last

recorded net

consisted

group

Mobile & Ohio
net

William F. Ray

R. H. Chamberein

also

where

10

moved, net,

John C. West

Joseph C. Lucey

Gale Willard

Howard P. Maeder

Harry L. Wills

Edwin K. Merrill

$ 19,358,343.06

Less Held

in

Portfolio

.

for

$

Herbert Muhlert

12,005,283.54

Arthur L. Nash
L.

James Hale, Jr.

14,005,283.54
$233,501,098.62

J. Newquist

William A. Hess

Arthur K. Paddock

William C. Horn

Arthur R. Rowe

As Required by Law $1,600,000 U. S. Government Securities are Pledged to

Secure Public Deposits

end

were

up

held

to

&

up

fractions.

All

told, 38

and 16 down.

points the best showing

of the year and

was

that of

New

closed slightly below that figure, at 100Vfe.
was made by Western Maryland

the best showing

The third best
common

showing, percentagewise, was Kansas City South¬
advanced 31% in price in 1949.
There were

which

three

other

rail

year.

They

were,

that were up more than 20% during the
in order, Chicago, Rock Island & Pacific common
(25%), Illinois Central common (23%) and Chicago, Rock Island &
Pacific preferred (22%). Kansas City Southern preferred, Seaboard
Air Line common and preferred and Western Maryland 2nd pre¬
ferred

L. W. Simonds

John A. Knox

losses

point—22

a

were

common which, at 16 V2, was 39% higher than at the close of 1948.

ern

2,000,000.00

Surplus

Western and Gulf,
for the year, 10 had
Of the 26 that were off in 1949 there

point.

a

the

actual

in

Lackawanna

Of the 32 that

Chicago Great Western common was a close second, up 36% at its
closing price of 12%. It is notable that none of these three stocks
has been paying dividends. As a matter of fact, they are not in line
for dividends as in each instance there are unpaid dividend arrears.

1,500,000.00

.

Capital

Jr.

18,074,662.13
178,891.27

Contingencies

Managers

Merritt T. Cooke

1,283,680.93

.

.

Accrued Interest, Expenses, etc
Reserve

Louis C. Farley,

1,745,908.32 $199,742,261.68

Acceptances

Delaware,

than

more

Percentagewise

L. Parks Shipley

Joseph R. Kenny

Assistant

$197,996,353.36

Deposits—Time

of

common.

gains of less than

were

the
Deposits—Demand

year.

(com¬

York, Chicago & St. Louis which advanced from 78 to 102toward

LIABILITIES

Edward Abrams

happy time of it last

a

list of 60 railroad stocks

a

York

New

Measured
Managers

Of

were

stocks

among

preciation last

the

others

showing

significant

percentage

ap¬

year.

FACILITIES

On
Complete Facilities
George E. Paul, Treasurer

Thomas J. McElrath,

Domestic
•

Loans

Commercial Letters

Comptroller

Brokers
Herbert Gray,

for

Deposit Accounts

for

Purchase

and

and

•

of

Sale

Foreign Banking

Acceptances
Credit
of

Securities

Auditor
Custody

of

Securities

/

Investment Advisory Service

was

as

Private Hankers and subject to examination and regulation by the
Superintendent of Banks ot the State of New York and by the Department of

Bankinc of the ( ommonwealth of Pennsylvania. Subject to supervision and examination




by the Commissioner of Banks of the Commonwealth of Massachusetts,

other

side

of

the

picture, the widest decline in points

Percentage¬
wise, the hardest hit in the railroad group was the Central of Georgia,
with the preferred down 35% and the common off 28%.
Chicago &
North Western securities also fared poorly with both the preferred
and common down 22%, the same as Delaware & Hudson. The coal
roads reflected pricewise the unsettled labor conditions in the coal
mines.

Licensed

the

suffered by Delaware & Hudson, which was off 8%.

than

a

called

More

point

than

half

of the

Pocahontas roads.

nrocession

with

railroads

heavily dependent

are

In

this

on

group

whose stocks

declined

more

coal, including the three soNorfolk & Western led the

drop of 8V4 points while Virginian held the best,
being down only 1% points, or about 4%.
a

Volume

171

Number 4870

THE

Says Million New Homes

COMMERCIAL

Year Needed

a

M.

Foley, Adminis¬
trator of the Housing and Home
Finance Agency, in statement on

those

I)ec. 31 asserted that

mendations

must

we

ex¬

ceed the prob¬

million

n

o

f

n

new

a

r

m

homes in 1949
to

meet

i

n

require¬

g

ments

in

next

the

decade.

"The

19 4 9

record

repre¬

sents the min¬

imum, not the
level
Raymond M. Foley

of
t i

u c

set

Foley

must

we

have

make

to.

under the Housing Act of

up

"Statements

home

cent

for

American

every

family," Mr. Foley said. "We must
not accept the best that we have
done

the

as

best that

We

have

the

the

1949

record

the

years

our

efforts

the

means

"The
be

to

we

capacity
in

can

to

do.

exceed

1950, and in
if we center

to

corne,

on

good housing within

of the average

its record

on

in 1949. The 1.949 production dem¬
onstrates
that
we
can
produce
than

more
a

year as

million

a

normal average with¬

a

out undue strain
rent

housing units
even

on

our

cur¬

capacity."

-He

pointed

record

private groups that these
programs will hurt private home¬
building are entirely unjustified,"

reached

was

the

with

1949
about

16% lower production of building
materials

than

and with

the

before

year

increase in peak labor

no

requirements.
••

in

lower

of

ability

our

price

and

to

rental

large section of

a

income

the

demands

middle

the

which

area

meet

have

we

scarcely tapped," Mr. Foley said1.
"To do this requires the concerted
efforts of all phases of the in-

dustiy and
Mr.

of government."

Foley said that,

middle

income range

while

varies

the
con¬

siderably in different parts of the
country,
the
general
average

Schoales

to

about

$73

private industry and the chief aids
of the
government are directed

1

Schoales

toward

became

helping it in that task."

Mr. Foley

summarized expected
the new Housing
follows:

under

progress

Act of 1949 program as

Housing Research—Though

tirely

the

in

new

broad

en¬

scope

authorized by the Act of 1949, this

9

2

9.

through

and

way

wide¬

more

spread use of cost-saving methods

Public

Housing—Estimated

to

made

to

the

new

middle-income

the

Government

said,
in

aids,

played

1949

requirements.

an

Mr.

one-third

homebuilding

was

commitments

to

insure

of

the

Federal

Housing Administration,
including most of the large-scale
rental

he

construction.

said, about 30%

In

addition,

of mortgages

recorded under $20,000 were made

by savings and loan
which

are

30.

1950,

tion

important

an

rural

in

overall

in

large

Slum

reserves

through

ance

Loan

eral

the

Federal

Home

Bank

System and the Fed¬
Savings and Loan Insurance

Corporation. The sharp upturn in
GI home loan financing through

the

Veterans

said,

was

ondary

through

Administration,

stimulated

by the

Clearance

intention

mortgage
purchases
the
Federal
National

Mortgage Association.
Mr.

Foley

increase

in

also
the

pointed

the

to

proportion

of

rental

housing in 1949, stimulated
through FHA mortgage insurance.
He said, however, that in 1950 the

rental

demand

substantially

is

for

lower

housing at
rents




than

only in particular European localities.
competi¬
mass-production
industries, nor are the Europeans equipped so to
compete."—Paul G. Hoffman, ECA Administrator.
There

of

Mike

will

Exchange,

opening of

department

under

E.

terms

Edersheim,

be

and

John

associated

Lobiak

with

the

to

participate

in

R.

Street,

cent H.

&

Co., Inc., 48 Wall
York City, will be

New

nedy,

Herrmann, Frank T. Ken¬

Carl

conducted

F.

William J.

by C. J. Devine & Co.,
partnership. The partners are

Reilly,

J.

Kreitler,

Samuel

Stoutenburgh.

WIUTXEY

GEO ROE

Condensed Statement of Condition

President

December SI, 1949

HEXRY C. El LEXAX DER
Executive Vice-President

ASSETS
Cash

Hand and Due from

Stock

Corporation

Government

Stales

State and

Banks

$164,459,613.33

Securities

283,545,914.34

Municipal Bonds and Notes......

of the Federal Reserve Bank.

O ther Bonds and Securities

CARTER

of Morgan

President Morgan & tie.

Grenfell

$

(including Sh ares
Co.

Limited

and

12,458,094.13

manager

division

CHARLES S. CHEST OX

of Walston, Hoff¬

President The B. F.

statistical

the

.

war

he

was

X.

and

more

with

President Continental Oil

firm,

with offices in 24 American

de¬

cities,

statisticians,

economists

in

an¬

their

York, San Francsico and Los

Angeles offices.

Surplus

20,000,000.00

Undivided

Company

1

.......

30,000,000.00

Profits

10,900,180.73

JUNIUS S. MORG AX

ALFRED P.

$666,778,008.73

SLOAX, JR.

Chairman General Motors

United States Government securities carried

Corporation

statement are

now

reasearch staff consisting of

and

10,174,663.46

Capital

CUSTAV METZMAX

partment of the Walston firm in¬
cludes Elmer E. Callen and James

experienced

6,100,127.21

Vice-President

Angeles research

local

$589,603,037.33

Credit Issued...

<

President New York Central

Railroad

31,770.249.40

Payable, Reserve for Taxes, etc...

Acceptances Outstanding and Letters of

Company

research de¬

510,743,673.61

Accounts

L. V. McCOLLUM

of San Francisco.

The

$ 47,089,114.32

Other........

I.AMOXT

Vice-President

partment of Mitchum, Tully & Co..

Kennedy.

All

Company

THOMAS S.

Insurance Co. of New York and as

Los

LIABILITIES

Deposits: U.S. Government

Official Checks Outstanding

Insurance

Life

of the security

JA Y

President New York Life

was

Mutual

D.

DEVEREUX C. JOSEPHS

senior

recently

the

10,023,139.27

$666,77S:008.73

Incorporated

economist for the War Production

identified

Letters

I). DICKEY

CHARLES

Chairman Morgan & Cic.

sition with Hornblower & Weeks.

the

on

of Credit and Acceptances

Vice-President

alyst of Paine, Webber, Jackson'&
Curtis and occupied the same po¬
During

2,426,958.47

Vice-President

de¬

partment of Orton, Kent & Co., of
New York; senior industrial an¬

173,091,293.71

3,000,000.00

Liability of Customers

II. P. DAVIS OX

alysts in the United States.
A
graduate of University of Idaho
and New York University, he has
of

Purchased.

Banking House

Goodrich

Company

headquarters in Los Angeles, 550
South Spring Street.

Bills

Accrued Interest, Accounts Receivable, etc...

JOTIX L. COLLYER

& Goodwin and will have his

head

Loans and

16,272,998.48
1,500,000.00

.

Morgan $' Cie. Incorporated)

Incorporated

of the research
department of the Southern Cali¬

on

United

CABOT

BERXARD S.

Blackburn has been ap¬

mund G.

YORK

AXD EES OX

Chairman Executive Committee

CALIF.—Ed¬

ANGELES,

LOS

MORGAN
& CO.
INCORPORATED

NEW
A R 77/ UP M.

JAMES L.
,

TH6MSOX

at $60,231,998.94 in the above
pledged to qualify for fiduciary powers, to secure
as required by laze, and for other purposes.

public monies

Chairman Finance_
Committee Hartford Eire
Insurance

Company

Member Federal Reserve

JOHX S. Z1XSSER
Chairman Sharp & Dohme Inc.

Member Federal
w

System
Deposit Insurance Corporation

Matthew

Revits,

Chairman

Investment

New

Devine

J. P.

PAUL C.

alysts

J.

C. LEFF1XG WELL

President State Street

16

Effective Jan. 1 the business of
C.

0

the

Vice-President

a

Christopher J. Devine, Arthur J.
Bellinzoni, Stewart A. Dunn, Vin¬

Partnership

DIRECTORS

I.C.R.ATKIX

has

Be

to

a

firm in this department.

175

to launch slum
clearance projects and in assem¬
bling land for this purpose. Some,
already well advanced in their
preparation, will probably begin
actual work on project sites.

The

Devine

and Urban Re¬

necessary

surveys

head

made where?

manage¬

of

Many of these will be
engaged in 1950 in the plans and

Board

products foreign goods compete?
Why not let natural forces decide what shall he

partner of Stern & Co.

Aaron

is, of course, much truth in what Mr. Hoff¬
but why should we hesitate no matter'

says,

with what home

an¬

foreign

a

the

Maurits
a

also

man

members of the

Stock

the

nounce

program.

he
sec¬

City,

cities have thus far indicated their

been

handicraft, artistic and artisan products
market, together with such prod¬
as wines and
perfumes, whose individual qual¬
depend on their being made out of raw mate¬

housing volume.

development—Approximately

man

Hoffman

though quan¬

areas,

not

contribu¬

G.

"These commodities do not offer direct
tion to the products of American

Burnham & Co., 15 Broad Street,

formerly

associations,

aided through financial
and
investment insur¬

attaining the

Commander.

ment

13,000
repair
and
construction
loans
under the new program by "June

Paul

rials found

World War II,

housing need—that of low-income

estimates

will

indus¬

as

ing

families.^
Housing—Farmers Home

or

our

consumer

ucts

experienced security research an¬

by

Co.,

ities

York

role

of
the
year's
financed under

&

of New

Mr. Blackburn is one of the most

construction. He said that

about

Blyth

York. He served in the Navy dur¬

York

Foley

important

with

Inc. and the Guaranty Co.

New

Administration

well

as

for the

been

New

what

fornia

be

Morgan

Stanley & Co. in 1946, having pre¬

would be
achieved
otherwise, restricted to a market
well below that of private enter¬
prise and serving the most critical

about

to

production.

viously

100,000 new starts be¬

add

yond

posals will

Congress to stimulate
private housing to meet more of

with

already available.

pointed

of

first
associated

Edersheim Heads Dept.
Of Burnham & Go.

lowering costs, benefiting
housing, through work under

essential

obtain

N. Schoales

sults in

and still pending before the
Congress, further legislative pro¬
session

Dudley

rank

all

numerous
are

Europe proper v/e can
mainly products of spe¬
cial-skill
industries, including
specialized tools and machinery

in

should produce definite
if presently hard-to-measure re¬
program

need

"From

Mr.

Foley said that in addition to
existing
programs
directed
to

year

trial

n g

University

Mr.

middle income housing assistance
and to recommendations made last

i

we

materials which

become

n

e r

month.

a

i

Cornell

of primary need comprises
families
needing
rentals
from
$45

territories
raw

was

graduated

range

about

in

Cleveland, Mr.

from

duction

lies

r, effective
Jan. 1.

engine

titatively

"The key to expanding our
pro¬
of homes in the future

a

part-

n e

he said. "The contrary is true. The
bulk of the job must be done by

Farm

that

out

for

competition the Mar¬

countries of Europe
dependencies are best
equipped to offer us will be
complementary and helpful,
rather
than
harmful, to our
economy.
From the overseas

N.
as

general

of

Plan

and their

f

o

Born

spokesmen

some

family.

homebuilding industry is

complimented

by

kind
shall

an¬

Dudley

programs

1949 will also contribute to greater

real

progress toward our goal of a de¬

that

said

"Theoretically, there is nothing we import which
competitive in some sense with something
we produce in this
country.
"However, it does happen that, in general, the

the

admission

27

is not

New

nounced

(79)

But Let's Have Real Competition!

Stock

Exchange,

production of housing in 1950.

pro-

o n

directed

the

York

Schoales
Mr.

maximum
d

be

toward this lower rental field.

the

Nation's hous-

of

in

will

CHRONICLE

Morgan Stanley & Co., 2 Wall
Street, New York City, members

1949, and that
both the Agency's administrative
policies and its legislative recom¬

able record of
a

attained

FINANCIAL

S^W1.

Raymond M. Foley, Housing Finance Administrator, holds key
to expanding
housing production lies in providing lower-priced
homes for middle income groups.
Says this move will not
hurt private home building.
Raymond

&

and

28

THE

(80)

COMMERCIAL

&

FINANCIAL

CHRONICLE

Thursday, January 5, 1950

P
f

•

..

reason—which '' requires
no
eco¬
wizard to discover—is the

Explains Dearth of Disk Capita!

and to 77%

nomic

steeply graduated Federal income

January issue of "National City Bank Letter" ascribes it mainly
to terrific toll of taxes,
along with other barriers to risk

and

The

are

"Once

their

up,"

bonds,

those

for
large profits from new ventures,
or even from old
ventures. They

again this question crops
the "Bank Letter," "this
time as the subject of the investi¬
says

than

savings

therefore

they

investing

in life insurance
in savings banks.'

and

"

'The

prising

venture

capital,

by

it

capital into

in

of

omy

well

Mr.

as

terms

lack of
cannot

the

time

econ¬

ownership

at

investigation.

the

'The

to

doubt

why

vigor

in

the

have

been

(Total

the

of

up.

income

Individual

Income after Taxes.

on

markets,'

•seems

to

he

indicate

testimony

moderate.

$25,000, Federal Taxes, and Net
111,232 Returns in 1928 and an

the

Terrific

Toll

of

OF

"The

first

and

most

"In

from

other

investor at

other

words,

to many

large

win, tails I lose.'

you

the

the

in

good deal

a

prospect

appreciation; the

sure

income

for

least, it is

'heads

like

of

pretty

game seems

hardly worth the candle.-

"Because

DOLLARS'

10

the

of

unreceptive

.

companies^have found it. too dif¬
10

TOTAL

ficult

costly*

and

to

equity

- raise

capital from outside investors, and

NET INCOME

that

have either had

anyone's
of

borrow

to

cut

or

back expansion
8

When

this

plans accordingly.
true of large cor¬

is

porations whose

known

names are

in

FEDERAL TAXES

The

every
household, how much
more is it true of the Tittle fellow'
who is

trying to start

6

-

build

ness or

bigger

a

NET INCOME

the

Taxes
4

important

busi¬

a new

little business into

a

It is fortunate for

one.

that \

country
have

their

requirements

been

many

so

cerns
-

ma¬

deduct

market for hew stock issues, many
BILLIONS

been

The

'loses

his shirt,' he
himself, except for
$1,000 which he is permitted

to

Estimated 174,200 in 1948.

i

investor

Barring

AFTER TAXES

continued,

that

Treasury De¬
on
Statistics of

report

of experienced men in the invest¬
ment

the

stream

daring.

and

the

stands the loss

computing his overall tax.

with

cut,

partment

over

Based

government takes a minimum of
25% of the gain.
On the other
hand, if the stock goes sour and

the

Income for 1928—20 years before,
when
the tax burden
was
still

tax,

Incomes

successfully and yields a profit
through capital appreciation, the

tax

for

graduated
to 82% in the

Federal

given in the Senate Finance

1

Committee report on the Revenue
Act of 1943, giving effect to the

so

particularly

$25,000. The follow¬
compares
the esti¬

diagram

mates

reasons,

have

of

outset

still

is

ing

indeed, are plain, and
emphasized again and
again by businessmen, investors,
economists, and others.

as

in terms of debt,' declared

O'Mahoney

is
as

however,

the

of

excess

venture capital has not been flow¬
ing into enterprise with its old-

steady flow

a

private

the

a

and

exist unless there is
of

there
mind

private capitalistic system

is being threatened

thing,

drawn,

of

case

nomic

—

investments

taxes—ranging

gation

comments:

from

and untried business ventures.
"To
illustrate how

policies,

by a House-Senate Eco¬
"The committee will be doing
sub-Committee, headed by a great service if it brings out the
Senator O'Mahoney, of Wyoming,
real facts as to causes of. these
which began hearings last month." conditions and drives them- home
Continuing,
the
"Bank
Letter" to the American people. The sur¬

toll

new

of

in government

savings

risk

largely

are

most

terrific

a

in

fortunes of the relatively well-todo from
which
the savings
for

jority of people with savings are
more
desirous
of
security
for

January
issue
of
the
"Monthly Bank Letter," published
by the National
City Bank of
New York,
contains an analysis
and summary of reasons for the
current
dearth
of
risk
capital.

taxes, which (along
myriad of other taxes)

the

exact

investment.

upper incomes, let
us take,
for
example, the figures for incomes

estate

with

in the Federal estate

tax—have drained off this pool of

able

con¬

finance

to

largely

from

their good earnings since the war.
Yet these earnings have been sub¬

ject to constant criticism
-

1928

2

as

excessive.

is,

Even

being

good
earnings for established
enter¬
prises do not provide the answer
to
the
problem of finding the
equity capital for starting new
businesses.

1948 EST.

it

as

This

dependence

on

earnings for equity capital weights
will

"It

pool

GRACE NATIONAL BANK

of

$25,000

IIANOVER

NEW

that

seen

incomes

bracket

the

$9,472

YORK

increased

million

ingly

the

from

1948,
an

of Condition, December 31, 1949

by the

income,
and

war

brought about
its attendant in¬

flation, from $79
billion. Here

RESOURCES
Cash in Vault and with Banks
Demand

U.

S.

Loans

....

Brokers, Secured

to

Government

the

Securities

.

$ 29,646,077.88

.

45,199,276.72
4,236,684.59

.

Stale, Municipal and other Public Securities
Other
Loans
Stock

Bonds

and
of

201,718.75

..........

Discounts

Federal

Customers'

26,871,520.04

.

Reserve

Bank

180,000.00'

....

Liability for Acceptances

Accrued Interest and Other Assets

.

2,705,960.13

.

274,446.31

.

$110,515,684.42

the

upon

after

While

high

the

Capital Stock
Surplus

1928

and

million

Undivided Profits

1,536,237.74 $

Outstanding

.

3,060,342.60

.

3,250,550.24

Income

Government Deposits

C. R. Black,

Corporation

Sugar Company

F. G. Kingsley
Chairman of the Board,
Mercantile Stores Company, Inc.

Hugh J. Chisiiolm
President, Oxford Paper Co.

Clark H. Minor

J. Cuddihy

Vice-President and Treasurer,
Funk ii Wagnalls Company

Honorary President,
Co., Inc.

from

million,

by

or

In

balance, of

in¬

$1,045
conse¬

in¬

net

Individual

cess

Vice-President,

New York

of

number

of

1928

to

"This

that

come

to

means
was

much

smaller

had

people.

more

cut from

was

Executive Vice -President,

Harold J. Rorc

Mining Company

Vice-Chairman,'

•

'; "
•

In

$68,000 to $28,-

000.

Returns Over

$25,000

subject

to

President,

174,200

$9,472,300,000

1,045,198,000
7,590,390,000

4,660,300,000

68,239

has been identified with domestic and international

for almost

all

Taxing Too
this

Much

really

comes

to is that we are spending
taxing too much. Here we see
the seamy side of programs that
call for the spending of billions of
dollars in subsidies, bonuses, and
down

and

ambitious
at

social

schemes

welfare

time when

a

the

budget is al¬

load of the

"It

is

all

cold

well

very

27,623

•

enor¬

war.

for

Vice-

President Barkley to speak scorn¬

fully,

he

as

Democratic

did

at

dinner

a

of

Party leaders in New

York

last

month,

the

consequences

of

those
of

who
the

growing size and costliness of
government.
But how does this
belittling

—

sequence

of big taxing—reconcile

change

in

the

purchasing power
of these dollars. Adjusting by the
Department of
Commerce
con¬
sumers

taxpayer in the over
$25,000 class had in 1948, after he
had paid his Federal income tax,
disposable

income

worth

not

$28,000 but, in terms of 1928 dol¬

"Squeezed

thus

a century.

INSURANCE

CORPORATION

tools

and

equip¬
ment, and the costs generally.
You

"Heads

"Today

the

see

both

rising

many high bracket tax¬
compelled to invade cap¬

shares

of

well-known companies with

many

long

Win, Tails I Lose"

we

dividend

records

selling on
at
prices

stock
exchanges
yielding 6, 7, and even 10% to
the
purchaser.
Certainly these
the

small

average

unfamili-

with

arity

stitutes

got

Yet for the

investor

a

stock investing con¬
strong deterrent.
Many

badly 'burned' in the stock
collapse of 1929. At the

market

time for the investor in

same

the

it find?

Because of the

prices, it takes twice

as

rise

capital

expand

to start
an

true

as

that

will

to

old

a

new
one.

the value

This
of

or

holds

is

its

threatening the very
the private capital¬
Would the Vice-

of

President

in

include

the

of

one

the

Senator

Democratic

—•

stalwarts

Congress—among

the jittery
who, as he
put it in an oratorical flight, 're¬
gard every tree frog as a roaring
lion
and
every
innocent angle¬
prophets

worm

as

of

'statism'

\

spreading adder'?

a

"Despite his expressed concern
over the fate of
private capitalism,
Senator
sees

O'Mahoney

apparently

of cutting govern-,
expenditures
and, taxes,v*

no

ment

way

Following

collector, much

pany

ent

than

the

testimony

before \

nesses,

tax

real.

In

more

the

case

appar-^
of

an

investor, for example, who reaches
the

50%

be at

much

business

of big
inevitable

dangers

system?

income brackets these 6, 7,
10% yields are, thanks to the

upper

a

money

the

with

O'Mahoney that dearth of venture
existence

and

savings available for risk eriterprise tries to go to work, what

of

with the apprehensions of Senator

istic

yields look attractive.
by

living costs, the average
'wealthy' taxpayer finds his mar¬
gin for saving correspondingly re¬
duced, and in many cases wiped

of

in

investment

price index indicates that

the average

does
Chairman, Executive Committee,
Comerford Theatres, Inc.

commerce

and

"What

spending

"Then when this shrunken total

Frank C. Walker

DEPOSIT

eign lands?

19,787

of

Ingersoll-Rand Company

at¬

$226,204,000,000

Vice-President

President,

Yet if
not

the high yields on sea¬
soned
securities
at" home, why
should they want to expose their
savings to unknown risks in for-...

68,239

James H. Sharp

Kirlin, Campbell, Hickox & Keating

D. C. Keefe

economi¬

are;

fear

4,812,000,000

return:

per

ital.

Cletus Keating

of

investors

tracted by

mous

$8,635,588^000

tax

national income

payers

Company, Incorporated

shortage and de¬

resources

American

1948 Est.

111 232

out, with

W. R. Grace cj> Co.

John C. Criswold

dollar

the

cally backward -countries.

pool of in¬

a

other words, the average income
of such individual taxpayers after
the U. S. Treasury had taken its
slice

velop

Spending
that

far

support

the

are

example, that we must
invest more abroad, to help alle¬

estimated

an

174,000 in 1948.

returns

taxes and

I

•

Ceneral Foods Corporation

Robert E. Dwyer




the

viate

We

for

$78,700,000,000

William M. Pvobbins

banking and

in

111,000

Income Tax

lars, only $20,000.

President

David Dows

FEDERAL

table,

currently reported
Adjusted for change in purchas¬
ing power of the dollar

a

International General Electric

Chester R. Dewey

MEMBER

to

between

"Still this does not allow for the

President,

name

spite of the general
of incomes resulting

widespread.

are

told,

Sources: Treasury Department report on Statistics of Income for
1928; Senate Finance Committee report on Revenue Act of 1948.

The Cuban-American

Jr.

Anaconda Copper

net

group

reporting incomes in ex¬
of
$25,000
increased
from

As

President,

C. R. Black. Jr.,

in

David M. Keiser

Vice-President

The Grace

following

Net income after tax

aggregating $2,092,796.58

Robert F. C. Benkiser

this

inflation, including the mov¬
ing of more taxpayers over the
$25,000 level. As shown by the

Federal tax

610,661.09

etc.

DIRECTORS

Criswold and

strikingly.

Average income after tax

U, S.

of

from

......

Contingencies, Interest, Expense,

decline

taxes

1928

Total

Robert

the

Number

$110,515,68442
♦Includes

upshifting

7,536,237.74

.4,454,663.99
Less Own Acceptances in Portfolio
1,204,113.75
Reserve for

left

managed

four-fold.

in

Work

ready overburdened by the

96,057,892.75

Acceptances

income

their Federal

$4,660

Federal

Deposits*
Certified and Cashier's Checks

to

this

after

More

Do

persons

killing effect

soared

3,000,000.00

.........

the
the

group

1943,

than

quence,

taxes

to

"Moreover,
income

occurred

going

"The ramifications of this whole

question
Income

favor of large

concerns.

drop of 36%.

Less

pre-tax income of this

taxes

$3,000,000.00

.

in

modest increase

a

come

of

incomes.

that

income

record

effect of

one

of taxes shows up most

more

LIABILITIES

is

taxes

see

$226

to

erosion

upper

it

"But

1,200,000.00

.

....

we

cumulative

billion

a

amaz¬

small gain considering the
expansion of the total

national

heavily, from

$7,590 million to $4,812 million—

or

tremendous

Statement

after tax fell

come

esti¬

an

in

by 10%. This in itself is

SQUARE, NEW YORK

total

above

$8,636 million in 1928 to
mated

OF

be

net

the scales in

tax

return
and

income

net

a

husband

bracket,

and

5%,

inventory

tendant

have—to- be- carried,. the

tion. -If

with
upon

the

of $44,000

will
for

wife, the current

tax

after

which

is

all

an

cut

to

the

risks

3,

3%,
at¬

ownership posi¬

investment

pans

out

his

in

committee

of

several

government costs, the

burst
"

'I

this

wit-

including insurance com¬
executives, advocating cuts
Senator

out:.
frank to say to you that

am

is

arrant

nonsense

from

my

point of view—the talk about cut¬

ting government expenditures
less
shall

we

are

not

willing

defend

to

say

ourselves,

un¬

"We
we

-

Volume; 171

shall

let

international

the

lem catch up

'I

;

Number 4870,.

with us"

.

prob¬

.

.

curious to know whether

am

(81)

claims com¬
ing ahead of shareholders' equity,

represent additional
Mr.
"

there

are

whether
the

insurance

any

executives

who

should

we

executive

down

,

on

What life insurance

is

going

the

to

us

appropriation

that—

warned

'Were corporations today who

have

signed

with

a

true

and

pension

a

labor union

liability

without

show their

to

immediate

contract

past

service

the

considering

Us

continuing entity of the corpora¬

When you

tion, it could easily wipe out their
entire surplus.'
V

tell

to

-

where to cut and how?
come

tell

cut

$6,000,000,000

for veterans.

company

would

McDonald

committee;

and

,

.

.

recommend

that
the
budget be
"Is it any wonder, in view of
by cutting expenses or the tax barrier and discourage¬
increasing taxes, you've got to ments, that capital for risk en¬
tell us how.'
terprise has not been plentiful in

balanced

"Now

the

it

happens that on
that Senator
gave, voice to
these

so

the

markets?"

investment

self-same "day

O'Mahoney

sentiments, Senator Byrd of Vir¬
ginia, Chairman of the Joint Com¬
mittee

Reduction of Nonessen¬

on

tial- Federal'

public

Expenditures,

made

could' be

to -vield

made

Reynolds & Company
Admits tinee Partners

balanced; and

surplus—not by
but by lopping
billion of expenses
a

increasing taxes
off

$7

some

from the President's latest budget

estimate

of

$43

billion

for

the

fiscal

current

year. ' A few days
leading Democratic
Senator, Paul H. Douglas of. Illi¬
nois, outlined nine specific ways of
cutting expenditures totaling.$4Vi

another

ago

billion.

there

And

careful

other
the

have

studies,

Hoover Report,

„

Wiesenberger & Co., 61
Broadway, New York City, mem¬
bers of the

New

York

Stock

change and New York

Ex¬

Curb Ex¬

change, has announced the ap¬
pointment of Lawrence G. Chait

Advertising Manager.
Mr. Chait has, since, 1945, been
with Dow, Jones & Co., Inc., as
Direct Mail Advertising Manager
in charge of mail subscription so¬
licitation for the Eastern, Pacific
as
:

and

Southwest

Editions

of

"Barron's

Weekly."
Mr. Chait's
resignation from the Dow, Jones
staff will be effective as of Dec.
30, 1949.
;
•
Currently Vice-President of the
Hundred Million Club, New York
group of mail order specialists, Mr.
Chait has frequently appeared be¬
fore Direct Mail Advertising As¬
sociation annual meetings and at
various advertising clubs around
the country to discuss mail adver¬
tising problems. He is a contribu¬
tor to "The Reporter of Direct
Mail Advertising" and to "Circu¬
lation Management."
Mr.

duties

been

Chait
on

for the

old

alibi

membership the following:
Ellett. G.
Scarrztt, Scarritt &
Bardach New York, N. Y.; Maybarn F. Landgraf, Vice-President,
Indianapolis Bond & Share Corp.,

Indianapolis,
Ind.;
G.
Gordon
Meeks, President, Meeks, Reddoch
& Co., Inc., Memphis, Tenn,; Berwyn T. Moore, President, Berwyn
T. Moore & Co., Louisville, Ken¬
tucky; Milton A. Manley, M. A.
Manley &
Co., Detroit,
Mich.;
Frank J. Shader, Shader-Winckl'cr Co., Detroit,
Mich.; George
Eustis, President, Geo. Eustis &
Co., Cincinnati, Ohio; Theodore
Donaldson,. Hicks & Price, Chi¬
cago, 111., and Roy E. Bard, Shearson, Hammill & Co., Chicago, 111.

new

1950.

economies

this

fiscal

rifice of

"The

as

to

John

L.

Moore

Leroy Smith

Walter

would

business formerly
Gaynor, Clemence
& Company of Bridgeport. ; The
new
acquisition henceforth will
be

by

operated

fice of the
under the

J.

man

as

the Bridgeport of¬

Scranton

organization,

co-managership of Nor¬

Gaynor

Arthur

and

Laufer Joins Staff
Of L. F. Rothschild
L.

F.

-

Rothschild

&

is,

that

announce

Jr.,

has

Arthur

become

E. / Allen,

bers

of the

change,

New

York

announce

the-firm-as'head

the firm in the investment depart¬

merly
& Co.

of

its

with

Laurence

Casli in Vaults and Due from Banks

spending

can

W.

J.

spree

State, Municipal and Public Securities
Reynolds & Co., 120 Broadway,
York
City, members New

which they

New

embarked.

York

Stock

Other Barriers to Risk Investment

Exchange, announce
that John L. Moore of the Empire

the

State Building office; Leroy Smith

of

"Taxes

course

not

are

only barrier, to finding risk
There

cap¬

of

the

W.

Allentown, Pa., office, and

J.

B.

Smith

of

the

Lancaster

They
from uncer¬ Pa., office have been admitted to
international sit¬ general partnership in the firm.
The three new partners, all for¬
uation and fear of war, to doubts
as
to the soundness of the do¬ merly managers of their respective
mestic
situation and as to how offices, will now become resident
long the present good business partners of these branches.
are

all

over

earnings'
"On

business

way

the

home

front, the little
finds the going in¬

man

creasingly tough in the face of in¬
creased

of

competition, the jacking
minimum wage laws, the

increasingly

burdensome

work involved in

titudinous

making out mul¬

government

collecting taxes,
restrictive

paper

etc.,

reports,
strikes and

practices by labor, and

bickering with labor union lead¬
questions frequently triv¬
ial, but often involving funda¬
mental management issues. At the

Moore

Mr.

be expected to last.

can

the

many others.

the

range

tainty

time, big business finds it¬

Hudson & Co.

"Finally, underlying everything
is

deep-seated

a

.

distrust

businessmen and- investors

among

of the socialistic trend of govern¬
ment

been

He is

a

director of

latter

ques¬

Chairman

of

dynamite was
Harry A. McDonald,
the

Securities

and

Exchange Commission, in an ad¬
before
of

the

annual

conven¬

/the Investment Bankers

was

a

American

branch

man,

manager

for

■

v;

Dillon & Co.

was

Real Estate

prior
with

to

of

Three in

17,454,504.56

.

83,708,839.15

.

.

.

.

.

.

.

.

.

.

.

.

564,545.26

,

.

49

.

563,592.98

7.580,776.64

.

Accrued Income Receivable

'

.

.

1,969,628.06

.

Other Assets

260,203.04

$815,484,764.17
LIABILITIES

Capital (750,000 Shares of $20

Surplus

.

...

.

Undivided Profits

.

Par Value)
.

.

.

.

.

.

.

.

.

.

.

$15,000,000.00

.

.

.

.

25,000,000.00
6,529,488.78

.

Reserve for Taxes,

Expenses,

etc.

.

.

.

$ 46,529,488.78

1,142,132.90

.....

$ 1,546,140.24

Less: Held in Portfolio

539,906.61

(Includes $13,597,219.77 U. S.

1,006,233.63

......

766,806,908.86

Deposits)

$815,484,764.17

U. S. Securities

pledged
required by law

De

Machine

& Foun¬

Philadelphia

Senior Partner

formerly of Starkweather & Co.,
Philadelphia, are now associated

Girard Trust Building.

purposes as

$ 22,136,174.66

■

,,

the Philadelphia office of
Paine, Webber, Jackson & Curtis,

.

RALPH

OF

DIRECTORS

PETERS, JR.

President

DUNHAM B. SHERER

JOHN

HERBERT J. STURSBERG

Treasurer, Livingston IT orsted
Mills, Inc.

Drysdale & Company
II. PH1PPS

JOHN R. McWILLIAM

Chairman

Executive Vice President

C. WALTER NICHOLS

EDMUND Q. TROWBRIDGE

Chairman, Nichols Engineer¬
ing & Research Corporation
CEORGE DOUBLEDAY

E. MYRON BULL

President, A. 11. Dull & Co..
Inc.

BR UN SON

Chairman, Ingersoil-Rand

S. McCUTCHEN

SIDNEY A. K1RKMAN

Consulting Engineer

Company
HENRY A. PATTEN

WILLIAM C. HOLLOW AY

Vice President

PA. —Howand E. Duryea, Howard E. Duryea,
Jr., and Robert H. Preston, all

with

deposits and for other

BOARD
ROBERT A. DRYSDALE

Chairman, IP. R. Grace &

PHILADELPHIA,

Pointing out that pension agree¬
ments; won by
organized labor

to secure

manager

Walt, Inc.,
that,, company's merger

American

.

1.200.000.00

Mortgages
Liability on Acceptances
Banking Houses

Dyer,
Hudson
&
Co.,
and
Clothier, Jones & Co. He is a for¬
director

.

Customers'

of

mer

.

Memorandum:

branch

a

.

East¬

W. J. B. Smith has managed the
Lancaster branch since 1938.
He

Association in Florida last month.




.

Deposits

tion is loaded with
indicated by

.

Leroy Smith has been the firm's
branch
manager
at
Allentown
since 1937.
Prior to that time he;

the

Paine, Webber Adds

this

*■.

849,940.00

Loans and Discounts

Acceptances Outstanding

of

growing monopoly
dry Co.
power of the great labor unions —
Admission of the new partners
the.latter manifested by the. situa-r
was
previously reported in the
tion in the coal industry—and by
"Chronicle" of Dec. 22.
the summary manner.in which the
vastly complicated question of in¬
dustrial pensions was dealt with
itmder pressure of a paralyzing
strike in the steel industry. The
to which

.

Other Securities

Progressive
Health Insurance Co. of New, York.

and

and. the

extent

*

Federal Reserve Bank Stock

branch

Electric Arc Co. of Newark, N. J.,

formerly

self under constant attack.

has

at the Empire State of¬
fice for the past nine years.
He
formerly was a partner of Dyer,
Hudson & Co., and
Whitehouse.
managers

ers over

,

•

466,541,652.18

can

upon

1919

$234,791,082.30

U. S. Government Securities

Smith

B.

be made
dangers
of
the

people

the

of

aware

•

Company

■

JAMES A. FULTON

President, Home Lije Insur¬
Company

ance

The Corn Exchange Safe Deposit
57 of the 75 branches located

Company

operates

vaults in

throughout the City of New York.

Member Federal Deposit Insurance Corporation.

was

M.

fpr-

Marks
:

■

ASSETS

no

if the

*"

•

Ex¬

Research

Mr. Laufer

-

At the Close of Business, December 31,

of "Minnesota,
budget-

Stock

that Edward ■] B.

REPORT OF CONDITION

about

expenditures and taxes

be cut

1853

120

mem¬

Laufer has become associated with

associated, with Department.

ESTABLISHED

Representa¬

as

Judd,

Co.,

Broadway, New York City,
F. S. Smithers & Co., 1 Wall
Street, New York City, members
of the New York Stock Exchange
and New York Curb Exchange,

O.

.

Jennings.

sac¬

'Where there is no will,
way.' Unquestionably,

there is
both

without

Exchange,

investment

the

conducted

cut

to do it.

observed

cutting,

tion

Stock

they have acquired

Corn Exchange Bank

the

be done when

can

trouble

recently

dress

York
that

announce

military efficiency dem¬

there is the will

else

New

put into ef¬

that

year,

onstrates what

same

HAVEN, CONN. — Chas.
& Co., members of

Scranton

the

F. S. Smithers Adds

military expenditures by $1.5 bil¬

up

NEW

W.

by

fect

ital.

to

veterans, etc., the state¬
Secretary of Defense

defense,

Johnson that he had

are

Gaynor, Clentence Co.

Midwest

elected

showing how

untouchability of expenditures for

tive

the

has

including

*

lion

of

Exchange

ment.

his

assumed

Jan. 3,

Committee

Stock

Arthur

•

Senator seriously wants to know.

ment

tive

Chas. Scranton Absorbs

The Execu¬

—

could be reduced if the

expenses

"As

CHICAGO, ILL.

the "Wall Street Journal" and for

tion by function how the 1950-51

budget

Mgr. for
Arthur Wiesenberger

Coast

report spelling out func¬

a

Midwest Exch. Members

Ghaii Adv.

29

30

(82)

THE

Continued

from

page

COMMERCIAL

23

&

FINANCIAL

CHRONICLE

capital to business enterprise have
been very significant in vol¬
ume but they have exerted a tre¬

to

mendous influence upon the atti¬
tude of prospective investors. The

hold

tory comments from the potential

two

in

are

types

into

the

of

future

the

account

these

on

investment,

differences

principal.
It is important
emphasize the investor's beliefs

in

this

matter,

though he

because

even

be wrong, his be¬

may

liefs will still be the determinant
of his

choice.

own

Let

us

consider

first the investor's attitude toward

possible changes in the principal
sum

broken in the

and

war

We turn

equity

the

postwar periods

great deal to discour¬

a

age
investors
from
purchasing
equity securities. During the
1920's, for example, when invest¬
ments of

On the

to the second

now

continuance

con¬

For

sideration in the attractiveness of

The
failure
of
the
prices of
equity securities to respond to the
increased earnings of business for
has done

future.

near

point, then, of the attractiveness struction Finance Corporation, and
of equity securities so far as ap¬ the Federal Reserve Banks, have
preciation of principal is con¬ served the same general purpose
cerned, we have a negative factor, in most instances as equity capi¬
in my opinion, in the
probability tal. Here again the future would
of individual investors purchasing seem to me to hold an expansion
this
them in larger quantities in the of
type of activity rather
than a contraction or merely a
future.

of his investment.

Investors Discouraged

the

seems
to be no good reason for
anticipating that it is likely to be

in

risk of
to

1

taking

of

securities—the
much

a

them

from

larger

fixed

First, let

us

income

Here

again

tifiable

lar, the greatest attraction was the
possibility of appreciation in the
principal sum of the investment.

may

we

securities.

ernment

capital

claim;

we

are

a

only

deal

furnish

to

being

was

either

their

steel

steel

of

caught

con¬

However, it

tive

what

of

whenever

as

up

demand.

jus¬

our

causing
funds

investors

in

saving, and not to such

less

incidental

considerations

to

and

such

as

effective merchandising

more

short-run
the

more

of equity

there

may tend to
judgment in evaluating
this type, but I feel
sufficient widespread evi¬

our

factor

a

as

experience

own

warp

is

of

dence

that

feeling

on

consider

can

we

their

over

hands), for this factor
more than just the

to be listed
of

as

few

a

we

produc¬

with the
indica¬

was

expect

may

bottlenecks

It is my belief,

individuals.

that the individ¬

ual investor will not play the role

is

Kayos Joins
J.

the

investments is rapidly passing into
other hands
(and to them, into

he

John

the part of potential in¬

vestors that the control

attitude

equity

provide directly for
capacities.
This

to

or

issue lost its timeliness
tion

concerned

not this is

factor

a

official

its

additional

be too high.

not

are

or

is

less capable

ago at

year

(and the Administration had

great

a

position) con¬
cerning the necessity for the Gov¬

consider several very

corporations

role.

present
a

time

stated

factors, beginning with
the current feeling that
earnings

with whether

this type were so popu¬

from

general
of

the

said

possibility

return

of

example, about

this

compared with the return

as

or

would be less likely
give it weight but insofar as it
we

liquid a securities. Although I am pessi¬
Government
through its various form as possible or- to place them mistic about our
accomplishing
agencies, of course, has not fur¬ in types of investment where the very much
along these more fun¬
nished equity capital in the strict principal sum seems wholly se¬ damental
lines, that may be all
sense in which
we use the
term, cure, then it is very important to the more reason why we should
but we know that the loans made the
question at hand.
Individual work hard at them.
by such agencies as the Recon¬ illustrations which come within

Stimulated!
turn

more

investor,

not

Can Individual Investment Be

Thursday, January 5, 1950

of

capable

playing

the

or

role that it would be desirable for

Herbert J.

Sims & Co., Inc., 52
Street, New York City, an¬
nounce that John P.
Kayes is now
Well

associated

with

the

firm

in

its

municipal bond department.
Mr.
Kayes. who has been associated
with the municipal bond business
for the past 10 years, was former¬

ly associated with Harvey Fisk &
Sons, Inc., Grunwald & Co. and
Fitzgerald & Co., Inc.
*
,

him

to

play

capital

to

furnishing

in

the

businesses

country.

This is

gret, but

one

to

be

so

this

situation I

a

which

seems

definitely

very

equity
of

re¬

to

in

tarn

me

pros¬

develop in
what the most
comT
pect.
The
individual
investor
monly held point of view is and any basic industry, regardless of could be
encouraged to furnish
how temporary the shortage may
With the large increase in dollar the effect of this point of view
more equity capital, but the only
PHILADELPHIA, PA.—William
earnings which has taken place upon the ability of corporations to appear to the seasoned analyst.
really
effective
encouragements M. David has succeeded Frank G.
Both of these factors, the
during the 1940's, there has been continue their present level of
feeling would
go
to such basic matters
Say re as senior officer in charge
nothing approaching a corre¬ earnings or increase them in the that current earnings may be too as a
complete understanding of
In terms of the general high, and the increased acceptance
sponding increase in the prices of future.
the function of private investment of trust operations, Pennsylvania
equity securities. It seems fair to public, there is little question but of the role of Government in sup¬
and the need and desirability of Company for Banking & Trusts.
conclude, therefore, that investors what the prevailing point of view plying capital, mitigate against
are
not
anticipating large gains is that corporation profits are too the attractiveness of equity secur¬
taking place in the principal sums high at the present time. This is ities and especially the prospects
cerned with

of

curities

of their investments in
equity se¬
in the future.
The very

further buttressed by an apparent
point of view in high Government

upon

them.

fact that

circles that earnings

pects

for

and

greater

greater

returns

Although the pros¬
enlarging and perhaps
they are not anticipating
are too high.
even maintaining
I can see no
increases
in
the present re¬
probability of a re¬
equity
securities
prices, of course, contributes to versal of this prevailing point of turn on equity securities are ob¬
scured by these factors, the pres¬
the fact that the prices of those view in
the future, in fact, my
ent
return
on
securities do not increase.
equity securities
Thus
opinion is that it will grow in would seem

we

have

sort

a

mate which

so

of

circular

to offer the only basis
optimism in the attractiveness

stale¬

strength.

far at least has not

The

been broken and since it has been
true for about ten
years, there

for

efforts

Government

on

to

the

part of the

furnish

equity

of

equity securities to individual

investors.

Current

advertising is
spot-lighting this feature of equity
securities
by emphasizing their

Securities Salesman's Corner
By
The Ohio

Company in Columbus, Ohio, has been using almost

entire newspaper page
that

JOHN DUTTON

"Investments

an

of display advertising built around the theme
Gifts."

Ideal

Are

The

ads

themselves

had

usual Department Store approach.

general appearance of the

tainly this is telling the story of investment securities in
almost any one can understand.

a

the

Cer¬

that

way

6%-8% return.

This may be little
inducement to the investor who is

BROOKLYN TRUST

holding 2% to 4% fixed income
securities, as long as he feels the
6%-8%

COMPANY

return

equity securi¬

on

ties is temporary. But if the

securities, at least
to
yield

many

continue

MAIN OFFICE:
177

NEW YORK OFFICE:

Montague Street

26 Broad Street

Brooklyn 2, N. Y.

New York

4, N.Y.

6%

this

All of this

that

securities

is

there

that

to

not

will

The
tween the 2%-4%
securities

Cash

on

Hand and Due from Federal

equity

Reserve Bank and Other Banks

$ 67,006,343.35

U. S. Government Securities
State and

130,552,856.33

Municipal Bonds

10,339,901.32

Other Securities

3,343,971.42

Loans and Bills Purchased

28,863,854.78

Bonds and Mortgages
Bank Buildings

1,000.00

1,650,000.00

„

Other Real Estate

1,000.00

Other Resources

605,187.83

$242,364,115.03

LIABILITIES

Capital

$

Surplus

8,200,000.00

6,000,000.00

Undivided Profits

1,786,762.71

Reserve for Contingencies
Reserves for Taxes,

835,220.02

Expenses,

etc.

603,298.79

Dividend Payable January 3, 1950

205,000.00

Deposits

224,602,847.68

Other Liabilities

130,985.83

$242,364,115.03

United States Government and State and
carried

at

$28,656,272.50

deposits and for other
One
„

are

pledged

purposes,

as

member federal deposit

Municipal bonds
to secure

public

required by law.

insurance corporation




and

be

of

equity

continue

to

and

difference be¬
on fixed income

the

6%-8%

federal reserve

\

the

memo

a

left

corner

as a

ideal

are

i

of

the

ad

appeared

an

illustration

of

it was written in longhand, "Mom
gifts." Along side of this cut were advertised

pinned to the page,

—Investments

(just

hand

upon

department store would do it) $18.75 to $100, U. S. Savings

$25; Price $18.75 each. Interstate
share, Price 10 shares
approximately $92.50. Booth Fisheries Stock—Current annual div¬
idend, $1 per share; Price: five shares approximately $58.75.
Next came little boxes outlined with holly wreaths and in the
boxes were illustrations of Telephones, Power Plants, Radio Sets, and
ESonds, Maturing in

10 years at

Power Stock—Current annual dividend 60c per

•

Factories.

Then

next

to

the

illustrations

were

Investment

Gifts

in

various
•

price ranges, as follows:
$100 to $250—American Hardware

idend

$1

Crowell

per

share—Price:

10

shares

Stock, Current annual div¬
approximately $205.
Also

Collier and Borden, were included in this price range.

$250 to $500—S. S. Kresge, Fairmont Foods and Columbus and

on

were offered as a pre-Christmas special.
Suggestions included Home Insurance, Central Light
it will do for the investor who & Power, and duPont in the $500 to $1,000 price
range.
Another
has relatively large sums to in¬
grouping was for gifts of $1,000 and up.
vest and who is dependent upon
A jolly Santa stood in the lower left corner of the page.
Over
the income therefrom for his live¬ his shoulder hung the usual bag of Xmas gifts and he
smilingly said,
lihood.
"Give Gifts That Keep on Giving."
Above him across the page in
script ran the caption, "These Are Merely Suggestions—Hundreds of
The "Laboristic Society"
Gifts That Keep on Giving Are Available to Fit the Stocking of
There is another consideration Your Choice!" Copy above the holly bedecked coupon in the lower
which is perhaps even less capable
right corner (which offered further details about any of the offer¬
of
definite
summarization
than
ings mentioned in the ad) included the following statements: "In¬
some of those just mentioned, but
vestments will make this Christmas the most important one in your
which 1 feel plays, and will con¬ life. For
years to come the regular dividend and interest payments
tinue to play, a very important from these
investments will be a constant reminder to your family
part in determining the attitude that
you cared enough to give the best.
Consult a friendly invest¬
and hence the action of the inves¬
ment man in our office for Christmas giving suggestions to meet
tor toward the purchase of equity
your individual needs.
It's easy to give securities and you pay no
securities.
I
have
in
mind
the
gift tax on investments under $3,000."
transformation
which
is
taking
ANOTHER VERSION
place in the basic organization of
our economic system which some
This ad also was almost a page in size. In the

securities

is

great

very

Southern Ohio Stock

when considered in terms of what

observers have

referred

to

as

the

development of
ciety." I agree

"a laboristic so¬
with those who

feel that

fast

Other

Gift

upper left hand
boy about 10 years of age. He was
looking at a certificate marked "A Share of Ohio" which is being
held before him.
Here is the copy:
So Easy to Give
A
SHARE OHIO
So Easy to Own.
An investment in Ohio's in¬
corner

was

an

illustration

of

a

.

a

we

are

approaching

time when the opinions and pol¬

icies

of

will

organized worker groups

be

the

of

our

most

dominant

economic

fea¬

organiza¬

desirable
the

effect

ward,
of

transformation, but with

the

and

upon

hence

the attitude to¬
the willingness

potential

investor to pur¬
chase equity securities. I feel that

it

is producing

a

very

system

effect.

Insofar

as a

significant

feeling of this

type merely brings forth deroga¬

...

...

dustries—a

share

in

state's business—will earn and grow for
years—each dividend check and interest payment recalling your
gift.
The securities listed below represent only a few of Ohio's
finest companies." Then listed under such captions in heavier
type
.

tures

tions. Again we are not concerned
here with whether or not this is a

of the Oldest Trust Companies in the United States

NEW york clearing house
association

assumes

will

8%, and I feel that
a
wholly unrealistic

assumption.

RESOURCES

year

year, this feeling that such
condition is temporary is bound

yield

Condition, December 30,1949

6%-8%

after
a

to subside.
course

Condensed Statement of

equity
of them,

AN EXAMPLE

In

.

your

.

FOODS, MANUFACTURING, PUBLIC UTILITIES, BANKS, DE¬
STORES, REAL ESTATE, MUNICIPALS, OILS, were
offerings of securities in various price ranges. This ad too carried a
coupon for further information and an invitation to call or
phone.
as

PARTMENT

I hope I have made this somewhat clear. The ads are
truly out¬
standing in arrangement, illustration and copy. The approach is new
to the investment business
back
are

as

far

as

I know.

Possibly

you can secure'

copies of the Ohio "State Journal" for Dec. 2, 8 and 16 if you
interested in seeing these
advertisements—they surely cannot-

be described in any way

to do them justice.

Volume

171

Continued

Number 4870

from

THE

COMMERCIAL

19

page

&

FINANCIAL

CHRONICLE

monly permitted to invest

Should Life Insurance

Invest in
investment

by the life insurance
is inadequate diversi¬

companies
fication
holds

a

risk.

If

a

company

section of the

cross

the

of

of

equity

acquired

economy,

over

a

Companies
Equities?
would

ers

essential

feature

ment

age

of

of

the

make

sales

sound

man¬

invest¬

major objective of supervisory
rules and regulation by the
gov¬
be such diversifi¬

cation.

vided

be di¬
three major
may

roughly into
categories—rental real estate .and
other tangible
goods, publicly is¬

A

stock

holdings

undertake

overvalued

sales.

sive

A company

investments

making exten¬
in

to

companies
increase.

not
of

order

It has

rather than of the company being
able

to

sell

enterprises in which equities are
held, not to profits from trading
in securities.
This

futility

of

trading

must be evident to

profits
the large com¬

panies.

of

But

some

the

smaller

life

do

It

seems

now

use

worth

altered

longer necessary

as

have such pow¬

them

the

to

while to

have outlined the companies would
be

the

will

be

tempted
profits a ma¬

to make speculative

jor objective of' their operations.
Following such objectives would

likely to have disastrous

re¬

willing to

powers granted

somewhat

the

use

to them. The

com¬

deterred

by the fact
that some of the largest companies
do not have the power.
If all
companies were permitted to in¬
vest in

Broad

Southern

single city might be
concentration of losses.

a

a

Certainly
place
in

a company should never
large portion of its funds

a

the

of

stock

corporation.

If

single business

a

company should

a

undertake to invest in the equities
of
small business) it should not

concentrate its

particular

commitments in

line

of

business

particular geographic

or

a
a

might be acquired in a year. Or
companies might be required not
to dispose of equities for at least
a
year after date of 'acquisition.
Speculation might be further lim¬
ited

by

Diversification of equity invest¬
ment is much

easier for the large
companies than for the small. It

that all or a
portion
of
trading
profits should be allocated to val¬
uation

This

reserves.

equities there would be

companies

prob¬

can

in
real
estate
equities only
through purchase of the stock of
real

The

estate

investment companies.

large life insurance

certainly

company

adequately diversify
in publicly issued
stocks by direct purchase.
can

its investments
common

Indeed,
be

the

small

successful

would

in

companies
this

can

regard

and

need to patronize invest¬
companies only if they

ment

confidence in their capac¬

lacked

ity to determine what constituted
reasonable
If

the

diversification.

large companies

were

to

system
profits

part

for

pf

Edward

the part of those now

permitted

write down

to

their

assets

If

ties.

in

can

make such investments.

Com¬

in states which
investment
in
common

value when

the

book

they go

in market

up

companies than to the needs

ance

of

individuals.

able

The

achieve

to

Bank

the

Wellington, formerly

was

offices

at

15

a

individual
less

is

complete

of risk.
The indi¬
vidual is likely to need to dispose
of his equities at a time when the

is

market

NEW ORLEANS,

Wil¬
'

CONDENSED

'I'M-

STATEMENT OF CONDITION
December 31,1949

ASSETS

company

Other Public Securities
Other Securities

objections

are

to

equity investment which must be
taken seriously, many objections
ity

to have

not

when

is

it

and

much valid¬

recognized

that

personal invest¬

338,662,478.86
329,184,372.76

7,836,896.37

....

...

.

14,262,572.27

.

Loans and Discounts

F.H.A. Insured

462,758,440.40

Mortgages

Other Real Estate

47,886,847.34

Mortgages

.

.

3,900,203.44

.

Banking Houses Owned
Customers'

11,381,305.97

Liability for Acceptances^.

6,536,281.93

Other Assets

Liability of Others

2,698,703.99
on

Bills Sold Endorsed

7,224,360.67
$1,232,332,464.00

LIABILITIES

Capital (2,500,000 shares)

....

$25,000,000.00

.

.

.

Surplus

there

seen

.

$

.

.

hold

can

indefinitely and is not

the market.
While

Obligations

.

Undivided Profits

Year End Dividend

40,000,000.00
13,896,314.74

Quarterly Dividend Payable January 3,1950

Payable January 3,1950

$

750,000.00
250,000.00

.

Deposits
Cash held

78,896,314.74

.

1,127,809,681.61
as

Collateral

........

4,729,168.19

.......

7,565,862.77

which

Bills Sold With Our Endorsement

ments of funds.

the

those

like

acquiring

estate, would

development

essary

investment

by

the

be

a

for

nec¬

equity

smaller

com¬

panies.
of

have

life

insurance companies

should invest extensively in equi¬
ties they will have to look upon

commitments

these
less

pect

as

more

or

permanent.

to

prices

be

of

They cannot ex¬
selling out when the
equities are high and

for

need

now

per

to

insurance

amounts to about

If

year.

funds

to

funds

companies
$3V2 billion

billion

a

were

the

dollars
flow

increase in

the

flow

an

of

equity funds into business
But

it

would

not

the

early years result in a
large portion of insurance

in

very
com¬

pany assets
If company

consisting of stocks.
assets increased from

$55

to

billion

years

Quite apart from the question of

$90

billion

in

ten

was

whether

they

high

can

or

tell

whether

low at any

par¬

ticular time, the institutional hold¬




while

$10 billion of stock
acquired, even at the end of
the period stocks would be
only
11%

are

of

total

assets.

The

$39,895,753.45 are pledged to secure public deposits and for
and certain of the above deposits are preferred as provided by law.

Member Federal Reserve System

Member Federal Deposit Insurance Corporation

DIRECTORS

of

into

stocks there would be

enterprise.

buying back when they are low.

prices

$1,232,332,464.00
Of the above assets

addition

life

outside

5,107,076.02
7,224,360.67

to

greatly for the immor¬

net

the

.

Liabilities, Reserve for Taxes, etc

other purposes;

The
of

enormous

.If the

developed

individual

Other

tal institution.

common

Holdings

been

atomistic

these

Permanence

not

are

be revised

real

rental

to

seem

ments

same

calculations apply to housing. The
insurance companies are now com¬

J.

STEWART

BAKER

HARRY I. CAESAR

Chairman

GEORGE

H. A. Caesar & Co.
(

NEAL

DOW

BECKER

ROBERT M. CATHARINE

President, Intertype
Corporation
WALTER H. BENNETT

Trustee, Emigrant Industrial
Savings Bank
GRAHAM B. BLAINE
Vice-Chairman
JOHN

C. BORDEN

President, Borden Mills, Inc.
JAMES F. BROWNLEE
GEORGE W.

BURPEE

Coverdale & Colpitts

President, Dollar Savings
Bank of the City of New York
F.

ABBOT GOODHUE

L.

MORRISON

President,
General Baking

WILLIAM J.

Company

MURRAY, JR.

Chairman,
McKesson &

Robbing, Inc.

Trustee
FRANK
WILLIAM V. GRIFFIN

Chairman, Brady Security &
Realty Corporation
LAWRENCE C. MARSHALL
President
HENRY D. MERCER

President, States Marine
Corporation

F.

RUSSELL

President, Cerro de Pasco
Copper Corporation
FREDERICK SHEFFIELD

Webster, Sheffield & Horan
PHILIP

YOUNG

Dean, Columbia University
School of Business

a

securi¬

offices at 2106

1799

Cash and Due from Banks and Bankers

in

29.

LA.—William

engaging in

Audubon Street.

particularly depressed.

insurance

subject to the hazardous vagaries
of

reported

Dec.

YORK, N. Y.

Chartered

strictly analogous.
The principles of investment

panies devoted to acquiring pri¬
issued business equities,

of

Manhattan Company

of the

U. S. Government

Street,
of
R.

William B. Miller Opens

a

Street, New York City.

Acceptances Outstanding

vately

previously

"Chronicle"

ties business from

from

NEW

diversification

institutional

com¬

William

management

B. Miller is

broadly diversified basis. But they
could use investment companies
devoted to making such commit¬
Investment

at 57

the

Sims Reeves.

Wellington

of

value

Equities are in some ways better
adapted to the needs of life insur¬

and

a

under

effect

price.

are

on

office

\

their books

when

They could not each develop
field organizations able to make
supervise commitments

York

trading

they go down
in market price they can scarcely
be permitted to write them up in

its equities

encounter greater difficul¬

R. Sims Reeves

He

them by buying similar securities.
If the companies are not required

in the equities of small businesses

would

its

as

not placed in valuation

companies

undertake substantial investments

rectly or through local representa¬
tives. But the smaller companies

firm

manager.

partner in Phillips & Wellington,
will continue in the investment

acceptable

an

valuation.

are

reserves

The

they could possibly achieve diver¬
sification through investments di¬

the

Continues in New York

only help to reduce the
search for trading profits as an
operating motive but would be a

developments of efficient size. But
smaller

65
an¬

a

by selling those which have gone
up in market price and replacing

the

with

wholesale

Edward

would not

may

ably make significant investment

Corp.,
City,

York

Mr. Reeves' association with the

practice

write up securities on

be feasible for them to have
diversified holdings of real estate

Sales

New

requiring

considerable

necessary

area.

general

firm

liam

ing in
courting

matter of sig¬

Dallas, Texas.
Mr. Keeler was formerly whole¬
sale representative for Distribu¬
tors Group, Inc.

permit

portion of its funds in rental hous¬

a

will be located at

business

large

Street

associated

panies organized

a

is

that D. Acheson Keeler is

nounces

to

placed

New

Any government con¬

Broadway,

greater tendency to use the power
on

a

desirable. The

panies having the power are also

and

Co., of Syracuse,

opening of

Broad Street Sales

consider

companies may feel that they can
buy and sell without influencing
market

&

the

full.

along lines which I

much more

Johnson

D. Meson Keeler With

could be done in part by limiting
the gross amount of equities which

which

L.

announce

nc

investment of life in¬

whole.

a

pervision to limit speculation. This

company

or

are

trols should recognize this

of

one

equities

Manage

New L Johnson Office

nificance for the economic systerr

these groups needs to achieve di¬
versification within the groups. A

any

in

31

interest.

why present powers are not used.
Liquidity may be a factor.
The
valuation situation is certainly a
major deterrent. If these factors
were

funds

surance

of

been argued that giving
insurance companies ad¬

not

Reeves to

states

In summary, the extreme limi¬
tations on investment of life in¬

funds

equity investments

in

prohibit such investments

surance

powers to acquire equi¬
ties would be futile since the com¬

ers

which

business

do

to

manner

system.

panies which

desire

suggested

for life insur¬

play their needed role in the

economic

frequently loath to use
to the full since they

are

powers

magnitude

this is

as

needed

company

the

seem

stocks.

ance

does

if the

even

ditional

be primarily one of
price discrepancies

sults for many companies. It may
therefore
be
necessary
for the
rules of law and government su¬

making

what is

effect would

ership

stocks, and the own¬
of -businesses not
public issues of their

funds

Some such

the

But

sued common

element

acquire

it
the

before

years

quota would be filled

correcting

risk.

of

A

Equity investments

in

to

much of its holdings.
Companies will have to look for

diversification

ernment would

they tried
great blocks.

which considered certain

company

its

if

income to the productivity of the

ments of the companies would be

achieving

buyers

the

equity

nine

housing

rate at which insurance

their

The most

by

be

in

year

of operations

might

supervisory authorities.

would

per

as

of

in large measure offset each other.
But if its investments are concen¬

in particular segments of
economic system it may meet
with
adverse
experience which
will
require its closing

If

dollars

lack

of

trated

hold

to

the

as much
10% of their assets in housing.
they were to invest a billion

stocks indefinitely because of the

long period of time, its risks will

the

have

stocks

as

(83)

THE

(84)

n

FINANCIAL

&

COMMERCIAL

CHRONICLE
Continued

ficiently far downhill

Discuss

Advisers

Economic

President's

action by
became entirely
tory'

Relations of Business and Government
In Fourth

Leon H. Keyserling and

Annual Report,

Clark, constituting Council of Economic Advisers, call

spending, alone is inadequate to prevent
The

the

Annual

Fourth

nomic

Advisers, set

of

Report
of

Council

President's

Eco¬

by Con¬

up

under the Employment Act

gress

matters

John D.
for close

depressions.

a

as

basis for

setting

up

policies for individual and
businessmen,

sound

collective action by
and

rejects the theory, developed

violent

swings in business condi¬

of 1946,

is devoted almost exclu¬
sively to a philosophic discussion
•of the relations

.Leon

H.

business

between

It is signed

and Government.

Keyserling,

by

Acting

as

Chairman, and Dr. John D. Clark,
who, at present, constitute the
Council.
who
its

Edwin

Dr.

had

been

G.

Nourse,

its Chairman from

inception, resigned his post

Nov.

on

1.

The

report contains no specific

recommendations,

in

urges

but

general

terms

merely
a closer

cooperation between business and
Government in efforts to prevent

unhealthy
and

to

business

promote

fluctuations

reasonable

sta¬

but

necessary

was

About Gold and Related Problems

teract

fully

duction.

general depression—

a

when

even

coupled

with

Further,

tax

public

re¬

action

To

speculate

cumstances

tion

on

and

cir¬
early devalua¬

under
an

such

ment,

that the net gain is not

so

equal to the total number of pub¬
lic dollars spent.
Similarly, in

if

—

on

world's

the

a

currencies

be devalued some more,

should

the dollar

still could and presumably would
hold
its own
(barring war-like
increases
developments). Before we are un¬
effectiveness of Government "com¬ in taxation and reductions in pub¬
der any outside pressure to de¬
pensatory" actions as a means of lic spending, while useful weap¬
value, the pound would have to be
promoting stability and prevent¬ ons, are difficult to employ fully below rather than above
$2.
As
ing severe business fluctuations. enough to curb inflation without
a matter of fact, we are not likely
Discussing this topic, the Council bringing on an excessive defla¬ to
precede the Swiss in any such
concludes that such "compensa¬ tion. Nor do these fiscal measures
step.
tory" efforts on part of Govern¬ alone deal adequately with the
The Swiss situation is most in¬
maladjustments
in
the
ment alone are inadequate in pro¬ internal
structive.
Switzerland
had
de¬
moting
stability
and
growth, price-income structure which are
valued by some 26%, much less
though they may form an impor¬ primary sources of danger in the
than we did previously. In 1947,
tant part of the techniques to be kind of inflation that we have re¬
gold payments were resumed, but
cently witnessed.
used
for
stabilization
purposes.
the demand for gold coins was so
"This
leads to the
conclusion
Regarding this, the report states:
persistent that the National Bank
that 'compensatory' public action
"During the mid-1930's particu¬
soon
had to stop
convertibility.
larly, there grew up an influential can help to iron out minor fluc¬ This was done under a wartime
school which held that our free tuations of the business cycle and
emergency law.
But on May 26
enterprise system was necessarily must indeed be used if big ones of this
year, the realistic Swiss
subject
to
violent
fluctuations develop, but that complete recov¬ people in an overwhelming popu¬
which could not be ameliorated ery from a substantial downswing
lar vote rejected the proposal to
substantially within the system. depends primarily upon the rer declare the notes of the National
And
It held that only Government ac¬ vival of private investment.
Bank
legal tender, although the
because that revival becomes pro¬
tion, mainly through enlarging or
total
circulation
including
the
contracting the volume o£ taxa¬ gressively harder to accomplish as Bank's sight liabilities is better
tion and public spending, could the economy moves further down¬ than
100%
gold
covered.
On
fill in
the gaps in employment ward, the main concentration of
Sept. 11, another referendum was
economic policy should be upon
and production when
these be¬
passed making emergency laws
encouraging stability and growth
valid for only one calendar year
came large or curb inflation when
within our free enterprise system
beginning next Jan. 1, unless the
it became dangerous.
itself.
This is doubly true in a
emergency
law
is
ratified
by
"The experience in the 1930's, prosperous period like the present,
popular vote.
This means, in ef¬
One of the most

interesting

sec¬

deals with the

tions of the report

John D. Clark

3

sufficient to restore and
high levels
of general economic activity. The
(3) It may be wholly or par¬
reason
for
this was
not
simply tially repudiated.
that the 'compensatory' action was
(4) Its "burden" may be re¬
not big enough.
The fact was— lieved
by rising prices—by in¬
and still is—that the range of use¬
flation.
In that case, the most
ful projects susceptible to under¬
probable one of all, devaluation
taking by Government cannot be of the
currency will become un¬
sufficiently voluminous to coun¬ avoidable.

the

tions.

Keyserling

page

corresponding
depression
of
the beyond certain levels or in certain
early rise of gold stocks—is very
1930's, that the free enterprise fields may be offset by declines
system is necessarily subject to in private spending and invest¬ hazardous, to say the least. Even

during

Leon H.

from

maintain satisfactorily

They hold "compensatory" government

promoting stability.

'compensa¬

fighting inflation,

mere

when action is feasible before the

should

out

however, demonstrated that when
the

private

economy

ran

suf-

ment

American

free

convertibility

Incidentally, there is

Kings County Trust

minimizing

in business

activity. This approach
creat¬

as

busi¬
ness.
This is true although the re¬
sponsibility does not lie wholly

Company

climate favorable

a

with

areas

business

BROOKLYN 1, N. Y..

to

Within

Government.

mous

342, 344 and 346 FULTON STREET

of action and

holds

enor¬

decision,

within

its

own

hands the factors which condition
its

a

free

business

and

500,000.00

This

course.

nature of

Capital .....$

fluctuations

the

is sometimes referred to

ing

essential

the

is

enterprise system,

should

when

aged

be

encour¬

Government

recog¬

nizes this cardinal fact.

Surplus

...

.

Undivided Profits

7,500,000.00

.

890,000.00

"Despite all efforts by business

WILLIAM
CHESTER
J.

ALLEN.

A.

LEONARD

D.

J.

WASON, JR., President

Vice-Pres.

MEHLDAU,

Vice-Pres.

O'BRIEN, Secretary

important

the
techniques to be used for sta¬
bilization
purposes.
The
differ¬

OFFICERS

CARL

RICHARD C.
JOHN V.

LAMBRECHT, Asst. Sec'y

HAROLD W.

an

SCHAEFER, Comptroller

the

of

'compensatory' approach
Council's approach is a
matter
of
degree or emphasis.
This problem is further treated in

and

a

the

later section of this report

stresses

the

need

stability
nomic policy.

RESOURCES

Cash

on

Cash

in

Hand

.

Banks

.

.

.

U.S. Government bonds
N.

Y.

State

Bonds
Other

.

Bonds

Stocks

and

7,379.886.63

Estate

Assets

.

Surplus

500,000.00
.

Due

637,338.17

397,788.64

.

.

.

1.138.144.85

.

.

.

.

.

Depositors

.

.

.

.

.

,500,000.00

890,541.70
41 ,407,210.65

Cheeks Certified

9,762.77

Unearned Discount

2,615.39

Reserves

.

.

824.765.31

.

Collateral.

Bills Purchased

Other

6,987.750.30

.

Capital

Undivided Profits

......

on

Demand and Time

Real

20.213,327.30

City

...

....

Bonds and Mortgages

Loans

954,573.35

11.672.914.48

.

555,000.00

....

424,640.46

for

Expenses

tingencies

.

Con
.

.

662,545.39

.

213,453.59

Official Checks

Outstanding

'$51,186,129.49

Lord

Keynes

was

national

eco¬

$51,186,129.49

too

sizable an
enterprising a

too

tent

ourselves

that, insofar

We shall con¬

here

as

any

with

saying

popular ver¬

sion of the 'Keynesian economics'
identifies it with the school which

KINGS COUNTY TRUST COMPANY
The

Kings County Trust Company offers to its depositors every facility and
accommodation known to mcctern
banking,
if you are not already availing
yourself of the advantages offered by this institution, the Kings County Trust
Company will be glad to have you open an account.
MEMBER

FEDERAL DEPOSIT INSURANCE




CORPORATION

"black

the

on

gold coin sells

market"

at

have

would

is

tem

fects

placed

exaggerated

stress

upon

'compensatory' action, that school
is

neither

own

representative

thinking

characteristic

segment

today."

of

nor

of

in

our

any

of

our

opinion

important

Government

thought

inasmuch

the mone¬
tary volume and the out-flow re¬
But flows of this nature

duces it.

constitute only a
on

base

which

determined by the

is

of

amount

bought

government

Secondly,

tain,

do not even main¬

we

free flow of gold in inter¬

a

relations.

national

abroad

cannot

Only foreign

provide it.
it

but

As

it

information,

it

when

had

did

to

good

to do to their

National Bank: con¬

New

to

York

with

en¬

an

larged dollar balance.

Thirdly,

gold

that
we
the value of our
against
gold
on
the

at

par

But

markets.

is

that

not

dollar
balances
and
being exchanged on the

case;

notes

international

an

presupposes

maintain

are

Zurich

other

and

markets

"eagles" in a ratio of
to 2, and nothing is done

against

depreciation

of

the dollar.

accordingly. If

This

not

is

hairsplitting

about

academic definitions. It is of para¬
mount

quandary
in
which the
Swiss National Bank finds itself is

the

intend

premium price, and come

a

this actual

crisis will be on hand.

sus¬

the dollars into gold, sell the

vert

1

monetary

the

what

marketeers"

"black

Swiss

about

international

to

reason

exactly

us

about

devalued

on
my

pect that the Portuguese authori¬

would

is

any

refused

once

of
the
National
Bank's vaults — unless the Swiss

an

so

Portuguese central bank's request
for
converting a dollar balance

Paris.

franc

do

time, and actually did refuse
some occasion.
According to

repeating the operation over and
over again.
Obviously, the some
reserve

rule it does,

a

refuse to

could

world

gold

cen¬

get it—if and when

can

monetary management wishes

our

the

out

Individuals

get gold from the

U. S. Treasury.

tral banks

gold coin and sell it on the other
side of the street for 42 francs,

be

bonds

sold by the Federal Re¬

or

System.

serve

to

fractional influ¬

the size of the monetary

ence

currency

billion

the

as

in-flow of gold adds to

to

soon

on

The latter af¬

the former

the National Bank, get a 20 franc

$1.6

dependent

monetary sys¬
independent of

virtually

movements.

with

francs

be

gold

can

paper

volume

monetary

to

less to say that our

francs.

20

mone¬

changes of the gold reserve. Need¬

standard

go

present

our

the

standard,

prices

from

current

a

It is being described
as an "international gold (bullion)
standard."
It is nothing of the
kind.
To be an international gold

40.5 to 42.0 Swiss
Under redeemability, one

varying

importance to realize that

have

we

The

no

gold

standard

any

longer, international or otherwise.
Ours is an irredeemable, managed

instructive. It shows up the
paper money standard, one that
abysmal ignorance in matters in¬
happens to be in an extraordi¬
of Mr. Allan Sproul
narily favorable position (for the
(New
York
Federal
Reserve) time
being).
The return at once
who, in a recent speech, poohto any sort of gold standard would
poohed the open market in gold
mean a total reversal of the Wel¬
as
"insignificant speculative ad¬
fare State.
It would presuppose
ventures around the fringe of the

very

ternational

supply

world

and

for

demand

That is typical of bureau¬
crats: the superior attitude they
take toward markets which are

gold."

abdication of New Deals and

the

Fair

Deals, of money management
pegging. It is definitely

and bond

in the cards.

not

not

values,
is strong
face
Europe's most
technician for
us
to attempt to
powerful central bank with the
evaluate his great work in a re¬
alternative
between
losing
its
and

port of this kind.
.

20 franc Swiss

A

of

nature

the

back

What then?

"legitimate." In Switzerland,
satory' approach is referred to in mind you, gold dealings above the
popular discussion as 'Keynesian official price are illegal, too. But
economics.' In fact, Keynes placed
the "black" market, that is sup¬
more
emphasis upon structural posedly inhabited by sheer cranks
problems than upon the cycle. and has no importance in deter¬
economist

Taxes,
and

which

somewhat

"Sometimes the purely 'compen¬

LIABILITIES

S

.

.

for

in

more

the close of business, December 30, 1919

of

part

between the exaggerated use

ence

CUMBERS, Asst. Sec'y

STATEMENT
at

policies

'compensatory'

growth,
form

for

redeeming its notes into

start

so,

and Government to promote steady
.

on

paper

tary system.

to

carry

of

misunderstanding in vogue about

gold.

thus

the

can

Bank

gold standard: the free
gold coins and the

money.

gold at

Swiss

that

fect,

Government

are

even

circulation of

National
another
policies, if year the policy of non-converti¬
appropriately designed, can place bility, but by Jan. 1, 1951, it has
hour.

"Many

we

a
few years' lag.
It is a
healthy sign that a move¬
got under way to restore the

very

ties

eleventh

that

direction

same

if with

ing steady business expansion and

It points

the value of education in economic

obvious

be

moving in the

foremost emphasis upon encourag¬

bility and growth.

1950

Government

not alone

and business as means of

cooperation between government

the

Thursday, January 5,

mining

real

enough

to

gold reserve or sacrificing the sta¬
bility of its standard.
And the

problem has nothing to do with
country's balance of pay¬

that

ments;
are

in

its international accounts
excellent shape, actually

bringing in gold year after year.
Gold Standard

Nowhere to Go!
What makes the dollar
is

not

strength" based

—

fids

muntrv

a

strong

so

"inherent

the country's
We might as

well be in the doldrums if it were

fact that the

the

not

for

the

world

is

so

much

rest

worse

of

off.

unparalleled balance of trade
could disappear almost
overnight if the Europeans would
begin to work as they should; if
Central Europe would be liberated
from the Russians; if China had
Our

surplus

developed

along

the lines of its

previous growth instead of turn¬

cans

world's
that is what their
—

has

shock.

It

"adjustments" amount to

on

productive power.

its

ing Bolshevik; if the Latin Ameri¬

Controversy.

The break-down of the

currencies

merely

would

contractual
even

respect property and

rights, etc., etc.

But

with that unique commercial

position,

the

dollar might

come

Volume

under

a

171

gold loss

Treasury
ments

that would

pressure

much

so

Number 4870

to

abroad

to

as

stop

gold

to

protects

impose

spite

of

State,

against
the

such

a

(85)

Wall Sbeet

in

Fairclough & Company

Riding Club

is

TORONTO, ONT.,
Blair

the

practically

anywhere

else.

also

Venezuela
is

where
and

legal

The

and

the

earth

on

would

With A. C.

free

(Special

be

any

maining

certainty

may not

that

of

areas

the

Allyn

&

Street.

with

Alberta, and to
quarters

ru¬

about

He

mystery. Actually, Can¬
is again slightly
par.
And
nothing
has

caught,

Members of the Wall Street Riding Club Participating in the Club's Annual Costume Ride Held at
Split Rock Riding Academy, Pelham Manor, New York City.

is

that

nan

She

one-half

and

tourist

And

mind

in

that

her

S.

that

net

&

•{,

&

with

Cq.

and

prior

Harris, Uphana

Co.

v

too

OF

DECEMBER

31,

1949

down

even

to

U.S. Government

of

Unearned Discount

4,191,777.16

to

invite

State,CountyandMunicipal

Warren P. Prosser

....

12,541,647.86

Demand Loans

establishment

of

.

4,991,629.63

Bills Discounted

•

•

50,526,588.83

a

general invest¬

Dominick & Dominick.

Banking Houses

Mr. Smith

Customers'

formerly a partner in ShearHammill & Co.

3,040,871.58

Liability under Acceptances

Accrued Interest Receivable

.

.

.

.

.

Other Resources

A

.

Meeting of
Chicago Analysts

133,418.09

la

the

30,312,500.00 16,000,000.00
....

3,002,708.89

19,002,708.89
Reserves

1,733,623.86
$301,103,567.38

t

Alert

Vice-President of the Continental

Co., will address
Analysts Club of

.

$301,403,567.38

CHICAGO, ILL.—On Thursday,!
5, Mr. Francis M. Knight,f*
&

.

Undivided Profits

678,011.73

■,

Jan.

Bank

Surplus

416,267.87

.

Luncheon

National

3,015,506.93

(Far $20.00)

72,187,765.97

through

'

Capital Stock $5,687,500.00

an

office at 14 Wall Street, New York

clearing

■,

502.396.14

.

•

156,406.25

$3,517,903.07

16,669,547.51

Time Collateral Loans

Smith, member
of New York Stock Exchange, an¬

business,

.

571,868.65

Jan. 3, 1950

Acceptances Held in

Portfolio

Prosser

City, to conduct

.

■

Less:

20,612,151.11

Opens Own Office

ment

Reserve for Dividend Payable

Acceptances Executed

8,070,503.25

Other Securities

.1,964,156.30

.

Accrued Taxes, Interest, etc

$204,305,031.03

position

precarious

$277,172,107.29

(Includes United States Deposits $11,361,791.39)

Agencies

Securities

responsible for
sterling.
In sum,

investors.

the

Deposits.

IJ.S. Government Securities 123,407,153.16

that

support

LIABILITIES

Cash and Due from Banks $ 76,706,150.71

Securities

Warren

AS

RESOURCES

be

$200 mil¬

international

American

Trusty

Friendly

Investment*

Efficient

Chicago on hiS)
observations during vacation trip)
to Europe.

mm

National Bank
Established 1858

Dayton & Gernon Takes
Over

was

formerly manager

and

is

"convertible"

remains

STATEMENT

cur¬

dollars,

American

Canada's

Illinois

was

traffic,

should

annual

an

being held

by

Britain,

son,

with.

American

to

it

deficit in U.

if reduced to

was

associated

He

Cruttenden

thereto

by earnings in
sterling.
Her net

payments

capitalists.

nounces

become

of

be offset by interest

dividend

is

has

other current items,

gold

tends to

lion.

Chronicle)

covered

as

level

Financial

trade deficit

a

about

"convertible"

rent

The

a

runs

only

borne

to

Lynch, Pierce, Fenner &

for

and

for

income from
such

Fuller, Cruttenden & Co.

Merrill

Canada

against the U. S., including ship¬
ping. as high as $1,000 million (in
is

formerly with Betts, Bor¬

Co., Alfred O'Gara & Co*,

(Special

presumably
long time, in
the British plight, notwithstand¬
ing the prospect of substantial oil

which

Jackson

Beane.
fact

remain

1947),

Webber,

OMAHA, NEB.—Ray P. Hiffer¬

one.

basic

exports.

Paine,

axd

Trust Company

PHILADELPHIA

Leighton Go.

ST.

PAUL,
MINN. — M.
F.
Leighton & Co. has been absorbed
by

Dayton

&

S-

associated

Merrill Lynch Staff

other revaluation experiment that
is likely to be as abortive as the

will

Walter

Ray P. Hiffernan Joins

changed in her international posi¬
tion or domestic set-up that would
remotely indicate or justify an¬

is

with.

Chronicle)

—

become

was

and

a

still

Monroe*

right after the last

currency

The

ILL.

has

land &

for the rumors, other than the fact
of the Dominion's experiment in

previous

West

formerly

was

Curtis, 209 South La Salle Streets

Canadian dollar (from 90.9 to 100
U. S. cents).
What the basis is

below

100

Jov-

A. :€L

a

forthcoming "revaluation" of the

is

Co.,

J.

with

now

vSpecial to The Financial

prospects

war,

is

He

Schinz

ada's

Chronicle)

ILL.—Earl

CHICAGO,

sion, due especially to the rich oil

that direction

AHyn & Co,

Financial

With Paine, Webber Co*

well.

as

Latelyr the Dominion is in the
limelight of investment discus¬
of

partner ia

Herrick, Waddell & Reed, Inc.

Investing in Canada?

some

was a

re¬

be "forced off."

in

The

Jr.

gensen,

convertibility

That holds for Canada

mors

to

CHICAGO,

transfer¬

ability of the respective currency
into gold or even dollars. Nor is
there

prior thereto

Belgium,

left

taxation

with

asso¬

Taylor, Deale & Co. of New York.

security of property

tolerable

combined

and

spot

no

CANADA—
become

Fairclough & Co., Ltd.*
Bay Street. Mr. Deale was for¬

220

city of Tangier, perhaps

there

Deale has

merly manager for Wisener & Ce>

fact is that outside of Switzerland
the

B.

ciated with

capitalist

has viitually nowhere to go.
He
is still
better off at home than

and

33

Blair B. Oeafe With

ex¬

Welfare

run

American

CHRONICLE

the

dollar,

domestic

our

that

fact

the

FINANCIAL

pay¬

change restrictions.
What

&

COMMERCIAL

mean

force

all

and

THE

Gernon.

Myron

Leighton will be in charge of the
new
Dayton & Gernon office in
St. Paul.
•/
- •




MEMBER

FEDERAL

DEPOSIT

INSURANCE

CORPORATION

F.

A

J

34

(86)

THE

COMMERCIAL

&

Continued

FINANCIAL

from first

CHRONICLE

Thursday, January 5,

page

them and to whom the
enterprise
means

Along Look Ahead

Canadian Securities
official

remarked

sta¬

tistics tend at times to give a mis¬

situation

and

not be used

basis

a

they

certainly

with any

for

can

certainty

consideration

the

as

of

the prospects for the future.

TJie
last issued figures covering Cana¬
dian exports
for example were

surprisingly favorable in view of
previous
wide-spread
concern
with
in

regard

probable setbacks

to

It

markets.

overseas

must

be

borne in mind however that these

figures

transactions

cover

that

took

place during a period when
many factors that no longer oper¬
exerted their beneficial influ¬

ate

Moreover

ence.

view

in

past

the domestic front

business activity was extraordi¬
narily well maintained. Here also
several factors of an exceptional

give exceptional

to

business
activity.
Governmental
stimuli
in the form of large non-recur¬
rent
disbursements
representing
the final repaymeat of wartime
impetus

the

to

of

pace

issue.

of natural

year

of

Alberta

nium.
is

during

development

concerned

notably
Quebec tita¬

resources

oil

far

As

last

and

the oil situation

as

the

major influx

of

U. S.

capital during the past year
is not likely to be repeated on a
similar scale this year. The enor¬
mous
acreage
initially acquired
will take years for its complete
exploitation.
In
the
meantime
there

now

are

temporary

indications

world-wide

that

a

over-sup¬

ply will tend to arrest the ardor
to

seek

that

new

fields

manifested

of

itself

ly at the time of the
dian

production
strong¬

so

new

Cana¬

discoveries.

As

will

previously

mentioned

offi¬

acute.

In

eventual

not

can

fail

capped

within

British

henceforth

be

as

the

1949

there

are

results

many

causes

of

for

gravely

recent

tion

during 1950 will be consid¬
erably impaired especially when
comparison is made with the re¬
sults

of

1949.

Similarly in view
dollar shortage, Cana¬

of the U. S.

dian

exports

to

South

which had displayed

promise

during

doubtedly

be

America

considerable

1949

will

un¬

detrimentally

af-

The

of

level

internal

that

the

1949.

of

factors

tioned

that

small

of

is

1949

cient to

cause

Under

normal

in

the

the

this

their

in

a

members

the

Presidents

the

of

Cabinet

the

this

communication

leaders

that

state

has

that

and

by

labor

is

to

Canadian

not

false
or

external

imperil the entire
During the
section

NEW

YORK

N.

Y.

internals

and inactive.

and

in

NY




1-1045

funds

view

of
the

were

can

the

the

weaker

for

a

population

There is

return

a

no

the

to

for

ap¬

much

stockholders

their

that

with

the number of

employees
into
believing
corporations are widely

the

owned.

Most

individuals

are

re¬

luctant

to put their savings into
corporations." They prefer small
enterprises which they themselves

operate or residences which they
themselves occupy.
In 1947 and

1948, for example, individuals in¬
vested

nine times

much

as

plant and equipment of
porated
stocks

As

enterprises

be

in

the

of

of

suitable

a

investment

of modest

persons

is

than

corporations.
fact, the stocks
corporations are too risky

matter

of most
to

bonds

and

a

in the

unincor¬

needed

for

A way

means.

by which tens

mil¬
lions of persons of modest means
can
become owners of corpora¬
tions.

The investment trust is the

obvious

and

answer,

investment

see

of

I

expect to

trusts

achieve

great importance in the next gen¬
eration.

Most

investment

trusts,

however, will buy shares in only

like¬

large

a
century or less ago.
outlook, however, is that the

as

small

as

well-established

enterprises

—

encourage

shares

that

the

who started

Raw materials

discovered

and

are

I

realize

that

lief

that

the

corporate

is

suc¬

of

part

environment

that the

prospect

will

be

will

be

community

preoccupied over how in¬
divided.
That will limit

is

come

the interest of most people in
couraging private investment.

time I believed

one

interest
them

of

to

en¬

At

that the self-

unions

support

would

lead

public

policies
which encourage investment. This
may

eventually

date

does

The

not

happen,

motives which

but
be

to

seem

cumulation of
funds

the

near.

the

cause

ac¬

investment-seeking

various, but most per¬
savings are used to buy con¬
things—such as plant and
equipment for unincorporated en¬
are

sonal

crete

terprises

houses.

or

indicated in

as

table,

both

before

recent

far

war,

purchases of

These

uses,

the accompanying

in

the

and

years

exceed

government

or

the
cor¬

porate securities, private life in¬
and increases in savings

surance.

accounts

cash.

or

it

Hence

ap¬

that most saving is not done

pears

because

of

desire

a

but because of

for

income

is

the

the

of

in

it

appears

demand

terms

elastic

an

security

desire for larger

a

Furthermore,

fu¬

for

of

present
demand so

to increase the vol-

way

of investment and to stimu-

Forms of Investment by Individuals in

1939, 1947 and 1948

NON-LTQUID

(billions
1939

Plant and
Plant and

1943

$8.0

4.8

4.5

1.2

3.7

4.9

$14.7

$17.4

$3.0

$2.9

1.7

3.7

0.1

____

$6,2

1.4

dwellings

1947

$2.9

$5.5

Non-farm

likely to

this

some

mildly unfriendly to business,
especially to corporate business, is

equipment, non-farm
equipment, farm

Total

materials

new

tnough

even

industry is something more or less
apart from the community.
A principal reason for
my be¬

income

persons

to

believe

.

view

ture
concerns

I

increasing the proportion
community that owns their
and in breaking down the

of the

most

the riskiest

the

than

in

that

At any rate,

better

with

corporations may have
cess

risky ventures

be developed.

gov¬

with

be

enterprise.

income.

may

will
fault

that this will be true

though specialized trusts to back

family will not
seemed likely

LIQUID

$3.5

2.4

1.3

—.23

.4

1.2

—.24

1.0

1.9

.06

1.2

1.25

a

Total

half

have

turned

to

out

be

of

Certainly
important

develop¬

the
new

raw

ma-'

$4.4

——

$11.6

Sooner

the

or

community

is

fact

this

cover

later, I suppose,
bound to dis¬

and

to

seek

to

private investment

$9.15

has

cessitated by the rate
tion

increases.

worker

and

increase

If

income

is elastic.

Un¬

grow

relative

of

to

the

number

The rapid growth

relative to

line

has

been

the

however,
economic
self-interest has only a
limited
and often tardy effect upon men's
political
views
and,
therefore,
upon the course of history.
I see
no
immediate prospect that the
community will seek to raise its
standard of living by a carefully
planned
policy
of encouraging
private investment.
p

officers—it operated almost
solely with line officers. The eco¬

nomic consequences of the rise of

|

of'

the staff

call

(5)

important, and I shall
to

them

presently.

The ownership of the cor¬
part of business, which is
restricted to less than one-

porate
now

are

attention

(7)

The

seeking
smaller

need

funds

for

will

investmentrepresent

of the net
product than in the past.
sult

slower
crease.

be

rate

In

the

rapidly

in

as

the past and if the labor force in¬
in the next generation

about

the
be

by

one-fifth,

roughly

6%

of

national product will need to
devoted
to
increasing plant

aqd equipment. Between 1879 and
1929
nearly 9% of the national
product was used for these pur¬
poses.

(8)

ing,

The rate of corporate sav¬
which during the last three
has

been

as

large

as

divi¬

some

years

larger

than

will

considerably smaller than

be

dividend

during the last several

payments,
years.

recent

ing

high rate of corporate
has been caused by the

cumulated
for

plant

need

and

The
sav¬
ac¬

of

corporations
equipment.

(9 The prospective ratio of per¬
saving to disposable income

sonal

to me to be

Several
are

more

needed

to

quite uncertain.

years'
shed

experience

light

on

this

matter.

This

re¬

smaller

by

the

fore the

population

in¬

dle and low income brackets
seem

produced
of

per

manhour

national

part

will

a

ne¬

popula¬

creases

seems

staff

of

per

as

dend payments and in

future

been

capital

output

about

years

revolutionary changes
in business methods during
the
last
50
years.
Indeed, prior to
1900, business had virtually no

ten¬

free

of

need

to

few years ago and that the pop¬

one

dull

this section

highly vulnerable.

of

of staff

re¬

development of selling!

pressure would find

the market

likewise

market

rise

the

fail

it

find

to

the

business

shortcomings of business

ume

to

external

market

rate

of line officers.

At the current level
of

will

(4) The number of staff of¬
ficers of enterprises will continue

the

sence
of a supply of bonds ade¬
quate to fill the potential demand.

dency
WORTH 4-2400

the

bond

managements

broader
ownership of American
corporations. They are misled by
comparing the number of their

for

economy.

week

the

field

porate

fortunately,

mained in the doldrums in the ab¬

The

5,

of

in' either

move

population.
Selling stock to
the public is an expensive
way of
raising capital—by far the most
expensive of all ways. Most cor¬

hands of

in

years.

external

trade complicates the task of gov¬
ernmental control to the extent
a

the

The

suspicion, and
politics

con¬

hostile

of p>rofit.

view

raise its standard of living by en¬
Nevertheless, when
couraging investment. That would
one
contemplates .the enormous,
be a revolutionary discovery and
rate at which industry now con¬
would quickly cause the environ¬
sumes
raw
materials, one cannot
ment to become friendly to enter¬
avoid the expectation that metals
prise.
All persons who believe
and fuels are likely to be scarcer
that the course of history is de¬
relative to the demand for them
termined by economic Lclf-interthan in the recent past.
In the
est, all Marxists, for example,
next 30 years* for example,
the
must believe that the community
industries
of
the United States
will eventually adapt public pol¬
will consume considerably more
icies to the fact that the demand
raw material than in the
past 150

against their successful operation.
Furthermore the precarious bal¬

domestic

in industrial corporations
wiljl
soon become a high
proportion of
ers

impressive.

of

CORPORATION

that

manhour

per

terials in the last century is most

"hun¬

can

Dominion's

bright that

The

ment

this country the absence of an ade¬
quate domestic market militates

the

prospect is

is

the

wrong.

to

MUNICIPAL

of

greater

military
than
ever.

is

believe that the stockhold¬

to

comes.

adopt
further
artificial
stimulative measures but unlike

ance

and

it

that

a

prevent the devel¬

authorities

ever, and
discoveries

than

no present rea¬

speculative statement and
similar
forecasts
by econ¬ late the formation of
capital is to
omists during the last century and'
reduce
the
price of future in¬

major depression the

a

new

population, will

broader

less

or

that

the

determined

somewhat

son

highly

national

a repetition of, the
thirties."

order

business

both

thirties.

unemployment
a

be

today, but there is

developed more slowly than ca¬
Currency and deposits.-pacity to convert raw materials
Insurance reserves, private
into finished goods is improved.
U. S. securities.
In other words, raw materials are
State and local securities
likely to be more expensive rela¬
tive to finished products than they Corporate securities
Savings and loan deposits
were
in
the twenties
and
the

the total labor force,
the
Canadian
labor

that

movement

avail¬

discovering

to make

pressure

(3)

unemployed
number 300,000 which repre¬
of

in

use

in the forties.

be

Dominion

the

become

accumu¬

is

will boost the number of births.

provided

of

of

Twenty years or
more
hence
the
extraordinary
population increase of the forties

the Canadian Prime Minister and

the

tenth of the adult

which

will

be

will

that

ulation, therefore, will more' than

probable

is

ernment

reproduce itself.

effect

of

more

to

the pursuit

usually by the

a

ex-

1950

in

be

to

will be owned by a few persons—

The first indication

corroboration

down-trend

In

STREET

the

become

many

concert ed

during 1949.

volume

size of the average

country

that

conducted

The

prolonged

influences

is

families of

course

WALL

for

(2)

brought
recession
of

owing to the impact of the
ted

the

knowledge which

a

opment of

TWO

rapidly,
lated

bound to increase

seems

growth will be fairly slow—faster
than in the thirties but not as fast

proportions similar to that
experienced south 0f the border.
However the customary time-lag
between the development of an

stimulative

The number

people engaged in technological

research

about

permit

INCORPORATED

of

suffi¬

have

in

technological

rapid—probably

little faster than in the past.

some

trend

of

he

shall make.

I

lihood

gry

A. E. AMES & CO,

which

before

economic

rate

will

buoyant

alone

and in Canada has been

to be especially

me

rapid than in the past sev¬
eral generations, This is probably
the safest of all the predictions

would

sents 6%

CANADIAN STOCKS

The

as

now

PROVINCIAL

(1)

progress

output

no

conditions

postwar

to

expecting

more

termination of the sellers' market
now

the

of

convincing.

reasons

definite reaction.

a

for

reasons

seem

Hence

men¬

contributed
to

the

them

for

absence

.previously

measure

conditions

The

characteristics

knowledge is larger than

business

activity during 1950 is also likely
to make unfavorable comparison

emergency,

GOVERNMENT

Fi¬

comment—partly because of
importance and partly be¬

cause

able

in the current year.

ieeted

specific

their

handi¬

the

of

in

brief

change in British policy. Conse¬
quently Canadian ability to ac¬
quire U. S. dollars in this direc¬

in Canada

CANADIAN BONDS

whole.

a

economy during the next genera;
tion? I have,selected 17 trends for

to

Despite the present op¬ Trades and Labor Congress and
timism created by a survey of the the Canadian Congress of Labor. In
economic

as

II

will

exports

markets

result

a

disposal

have seri¬

to

Canadian

vital

business
tinue

preciate

the

purposes.

Dominion's

economy

be¬

by the recent letter addressed to

cial statisitcs reflect the past and
serve
us
no
criterion for future

the

of

purchases

abroad

repercussions

ous

of

tacular

offshore

Their

abroad

with

in
participation
payments" to farmers on wheat.
Internal
activity
was
further
spurred as a result of the spec¬

three somewhat different

on

meantime
embarrassing
U.
S.
What are likely to be the prin¬
surpluses of grain and other farm
products are becoming a burning cipal trends in economic series and

income

and

touch

in the

cut

severe

immediately

come

compulsory savings, reduction

taxes,

a

wheat

Diminion.

returns.

served

Canadian

the

ex¬

out¬

nally, I shall discuss prospective
in Canada.
When the U. K.-Can¬
changes in the basic institutions of
adian Wheat Agreement expires
the economy and in the organiza¬
next July the problem of placing
tion of decision-making.

sus¬

important

of

be

ECA

that

previous
year.
Unusually
large exports of locomotives and
other capital goods to India also
figured in the past year's trade

nature

of

fact

the

on

total

well

port items in the shape of wheat
and base-metals was higher than

Likewise

there will

the

of

price-level

the

the

concerning

In the subjects.
First, I shall discuss very
export field many sustaining fac¬
briefly the probable trend of cer¬
tors
that
prevailed during 1949 tain
important economic
series
will be conspicuous by their ab¬
and kinds of behavior.
Second, I
sence. There is little question that
shall speculate about the behavior

were

export values

year

tained
the

during

disquietude

The environment in

groups

look for the current year.

leading impression of the current

job.

a

(6)

At Economic Trends

By WILLIAM J. McKAY
As often

1950

past,

over

half of

to

save

Large incomes will
source
war.

be

a

of

saving than be¬
Persons in the mid¬

primarily

as

a

result of

a

Volume

171

decision

buy

Number 4370

invest—a decision

to

house

a

of

owners

the

to

upon

of

case

reached

unincorporated enter¬
buy plant, equipment,

prises,

to
inventories.

or

in

oy,

THE

About

40%

saving is of this
Such saving does not create

cial question
of

ume

sents

the

personal

one-third

saving, will rise

sim¬

(10 Bank credit will
as

a

source

than

it

be

of

business

be

tre result

for

population

bank

of

growth.

credit

the

with

them

of

seeking funds.

need

credit

of

device

extent

by

sustained

to

I

comes.

believe,

1900

7-fold

ending in

and

and

In

1929,

the

in

30

it also in¬

1900,

7-fold.

the

20

years

rapidly

during

as

the

If output rises by

if

last

2%

20
per

the

labor

30

years

de¬

ment for the

various

their

the

be¬

are

to

I

A moderate rise in the

Union

rise

upward

will

cipal

be

retailing

The

on

the

employees in
wholesaling,
the
workers, and govern¬

will

The

upward

pressure

on

will probably not be as
strong as
has been during the last three

unions

established,
competition

become

there

will

better

be

less

them

between

and

they will be under less
to

pressure

justify their existence to their
by getting large wage

members

increases.
ward

Nevertheless,

pressure

stronger

than

of the twentieth century
during most of the nineteenth
century.
Consequently,
money
wages will rise faster than output
or

to

manhour.

be

(13)
ence

The
of

or

budget
mean

diminishing

private

short-term
more

This fact

is

likely

an
important influence
policy.

fiscal

a

on

depend¬

business

the

government

moment,

slow

rise

the rise

in

a

so,

to
in

the

money

highly

made

susceptible

contraction.

of.

sources

increase

If they

are

will have to be

busi¬

and in helping new

concerns,

enterprises

departments

And purchasing

be expected to
interest in increas¬

may

greater

industry with investment-seeking
funds

in

the

volume

desired.

Hence enterprises have used bank

credit

to

munity
than

force

it

com¬

of

rate

saving
voluntarily to

ready

was

the

upon

higher

a

accept.

Many

people

strongly

are

pes¬

simistic about the capacity of

the
increase production
to maintain a high

to

economy
fast

enough
level of employment. One reason
for pessimism is that the extraor¬

being occupied. Hence,
undeveloped
natural
resources

ing

both
ond

and improving their sources
supply. The result will be some

Nevertheless,

tern

of

the

essential

pat¬

was

produced

of

strong demand
and equipment. A
a

men

for

reason

for
sec¬

pessimism is that

the

employees are organized far
more
effectively than ever before
to maintain a rising
supply price

production,

with a few for their services.
As
I
have
large concerns in each industry pointed
out, employers as a gen¬
doing most of the business, will eral rule are not
strong enough to
continue, especially in those in¬ prevent unions from
raising the
dustries
der

where

their

ultimate

(17)

sell

concerns

brand

own

un¬

names

to

consumers.

The

supply price for labor faster than
technological progress raises out¬
put per manhour. A third reason
for pessimism is that the

organization of pro¬
duction will continue to be messy.

environment

By

favorable

this

I

that

mean

different

this

system,

The




only one industry. Auto¬
mobile
companies will continue
to
make refrigerators >and loco¬
to

flour

make

of

and

electric

bile parts to make

either from business

manufacturers

of

automo¬

chairs, heating
plants, and other household equip¬

borrowing or
borrowing, to increase ment. The organization of labor
will also continue to be messy.
the money supply.

consumer

Unions will

(15)
the

The

of prices

course

long-term will

ward.

The

conclusion

basic
is

over

be slowly up¬
this

belief that

my

for

un¬

reason

der free collective bargaining the
price of labor will increase faster
than physical output per manhour.
I

do

not believe that employers
strong enough to prevent this,
unless they are spurred by strong
are

pre¬

vent

trade

unions

from

raising

the price of labor faster than the

and

managers

increase

to

engineers

output

are

able

manhour,
rising prices
would be very
substantially di¬
minished, though not eliminated.
They would tell by the possibility
likelihood

deficits

The

per

of

in

the

government

structure

continue

to

be

of business

characterized

bership in
the
or

in

This messiness

organization

and

of

mem¬

orderly fashion to
a
given industry

an

occupation.

the

limit their

not

workers

workers

of

in

production

is due

is

likely

political

to

be

un¬

for

to

various

of

concerns

holding
ones.

a

their

The

concerns

with

will

mean

small

concerns.

that the small

have
own

difficulty in
with
large

pattern of a few large
existing side by side

many

small

ones

is found in

wide variety of human activi¬
Twelve large unions, or 6%

ties.

comes

high

presses

me

good—though

as

I

think the

economy has some dif¬
transitions ahead.
In the

first

place,

investment
levels

drop

a

from

in the rate of

the

be offset

can

by

high
drop in

a

nity

is

plowed-back earnings of
corporations.
A substantial part
of

personal

savings is plowedearnings of unincorporated

back

enterprises.

The

proportion

of

assumption,

one-tenth

business

of

enter¬
pro¬
en¬

terprise—that is, about half of the
real

to

drive to expand, to

make

innovations.

improve,

It

is

also

safe assumption that about onetenth of the to million workers

provide
prise
The

about

half

provided

of

the

enter¬

individuals.

by

drives that motivate

the

en¬

terprising minority among enter¬
prises and individuals are prob¬
ably too strong to be greatly de¬
terred by mildiy unfavorable
pub¬
lic policies. Within the next dec¬
ade or so, I believe that economics
will

direct

glected
that

attention

topic

of

economists

to

the

ne¬

enterprise
and

and

others

will

gain insight into what conditions
determine

the

amount

of

enter¬

prise in the community.
tion

of

Acquisi¬
knowledge should

that

greatly

increase

the capacity of
provide high-level

the economy to

employment.

1 Finally,
there
is
always in the background the pos¬
sibility that the community may

discover

that

the demand for fu¬

income

ture

income

in

terms of present
elastic and that it will

is

encourage
investment by help¬
ing to make future incomes avail¬

able

on

favorable terms.

more

IV
Will

the

of

movement

business

continue to be wave-like and will
the

economy continue
stable?
I believe that

like movement of
has

been

to

be

the

un¬

wave¬

business, which

characteristic

so

of

the

during the 19th century

economy

and the first part of the 20th cen¬

will

tury,

be

considerably mod¬

erated.

Hence? the
business cycles will

problem
be

less

of
im¬

portant to the community and of
less interest to economists.

much

This

in the stability of the
is partly a result of ex¬
perience and partly a result of
improvement in economic institu¬
gain

economy

tions.

For example, it is safe to
that banks will never be per¬

say

mitted to fail in such large num¬
bers as they did in 1929 and 1932.

community has

now

learned

by experience the wide repereuss

i

of

o n s

Hence,

banking difficulties.
tendency for banks

any

fail

to

will

be

combated

with

boldn.ess and vigor than

more

done

during

the early
the grpat depression.

recent

the propensity to save. About half
of the net saving of the commu¬

million

prises outside of agriculture

The

prospect for increasing in¬
fast enough to maintain a
level of employment
im¬

ficult

four

Important
been made

changes

was

years

have

of

also

in the economic insti¬

tutions of

the country. Bank de¬
posits have been insured up to a
certain point, about three-quar¬
ters of all

employees in American
industry are now covered by un¬
employment insurance, the dan¬
short-term

gerous

second

mort¬

earnings retained in the business
gages have
been
pretty much
quickly drop in response to
eliminated, and the Federal
a
decrease
would

people envisage the development
of a sort of syndicalist organiza¬
tion of production with associa¬

tunities.

tions of employers in various in¬
dustries and the unions
exercising
control

over

messiness

of

production
alone be

the

industry.
The
organization of

the

and

of

labor

would

strong obstacle to the
of syndicalism.

rise

a

us

shift attention to the be¬

havior of the economy as a whole.
The two questions most
frequent¬

ly

asked

(1)
will
demand
rapidly enough to maintain
a
high level of employment, and
(2) will the movement of busi¬
are

grow

ness

Let

be

us

wave-like

in

and

will

the

continue to be somewhat

first

whether

demand is likely to grow
rapidly
enough to sustain a high level of
employment. One of the most re¬
markable

characteristics

of

the

economy

has been its capacity to

increase

incomes

tures about

as

fast

and
as

expendi¬

it increased

physical production. This is shown

fall

of

time

the

in

oppor¬

the

propensity

would decline
sponse

to

rate

of

to

save

substantially in

re¬

decrease in investment

a

opportunities. In the second place,
tendency of unions to raise
the supply price of labor faster
the

managers
increase output
manhour will be offset, as I

per

have indicated

prices.

I

this will

do

above, by
not
in

occur

know
the

a

rise in

whether

absence

of

special

steps, but if it does not,
steps will be taken. In the

the

third

place, it is probable that
minority of enterprises and of in¬
dividuals who
of

most

are

responsible for

the

enterprises in the
affected in only
moderate measure b,y public pol¬

community

consider

investment

The

saving would not immediately and
completely prevent a drop in the
rate of spending, but in the course

than

Ill

Let

unstable?

number

century.

The

but particularly to changes
in technology and markets.
Some
causes,

economy

This does not

i

milling companies
crust

irons,

extent upon the growth
short-term
debt, originating

competitors of the large

de¬

pie

any great

considerable

to

largely

and

by a few large concerns in each
industry that produce most of the
output of the industry and by a

the

unfortunate

based

different industries, and en¬
terprises will not be confined to

motives

Let us hope, however, that
community does not rely to

will

increasing

of. providing

needed

the money supply.

(16)

the country's money
supply could
scarcely be devised. This method

monetary

ness

found.

will

the rise in short-term private
debt. A worse way of

velopment

infant mortality among

community as a
unwilling to supply

one

that

was

and

a

budgets would be large enough to
produce a rise.

change in
the monetary system
of the coun¬
try.
For nearly a century prior
to-192.9, the principal source for
the increase in the money
supply

bobms

the

a

The

19th

upon

bank

revolutionary

economy

quantities.

rule has been

do

next

imports labor in small

kinds of output will not fall neatly

the

credit and the
less chronic deficit in the

of

Even

in

the up¬
on wages will be
public opposition to rising prices.
during the first If employers should be able to

quarter

per

to do

so

I

the

in

it still

into

wages

it

As

or

sold.

goods

country

considerably
better job in improving the qual¬
ity of business births, in reducing

the

the

are

employees.
Organization
grow
in these three areas.

years.

the

the

money

explain
possible

not, other

prin¬
at

groups

and

white collar
ment

percentage of companies will con¬
tinue to produce one-half to nine-

checked by law, the economy also
imported labor in large quantities,

enterprise.
Cer¬
tainly the opposite was true in the

in

will

pressure

strong.

unorganized

present time

makes
of
cigarettes,
breakfast
foods, cars, or soap. Consequently,
in industry after industry a small

of

by enterprises for
agents of production has usually
been greater than the
capacity to

and

peo¬

of few

one

demand

I
suspect that the deficits in
the government budget or imports
of gold will be large enough to

in

anti-

as

membership

and

wages

the

supply will increase in the proportion of busi¬
to prevent a ness done by the smaller concerns.

the

supply will be slower than
in the past.

deflationary.

■■'(12)

buy

than 26-fold.

United States imported capital on
balance.
Until immigration was

most of them to belong

to

more

bring about the

goods. Hence a moderate
the debt may be described

grow,

If the

money

supply to rise as rap¬
the physical production of

as

shall

prices.

money

idly

in

make

public debt
during the next 30 years will
probably be necessary to permit
the

present prices.

The increase in the money
supply
will have to be large
enough, as

press

requests for expenditures.
public debt will slowly rise.

The

of

needed merely
drop in prices. If the growth in
the money supply were no greater
than this, it would be the slowest
rise in the history of the country.

Govern¬

groups

terms

national

net

be

de¬

indefinite future, and

pressure

the

billion

The cold

coming better organized

the preferences of

them

The

little

a

supply them. Until about 1880 the

A few people write most

of

output
(expressed in constant dollars) in¬

creased

show

next

week

velocity of circulation ceases to
drop, an increase of about $120

are

substantial

so

most

the meantime the national

safe

a

a

In

in

fourth,

mocracies which do not
accept the

Federal

a

1939.

and

A

of the letters to newspapers.
as

1850

users

draw most of the books from

library.

or

absenteeism.

between

tinent

the

ticians

the

the

raising the quantity of
This increased about 143-

and what
favorable to enter¬

vide about half of all the real

in

than in the past.

in

millions, and if the length
work

impose

of

the

35

enterprising
are

It is also

however, that about

30%

drops by oneproduct
by 1980 will be about $416 billion

rises

the

on

fold

about
employees will

prise.

capacity

money.

are

conditions

Underlying
of the economy to
incomes as rapidly as
physical production has been its
the

success

Likewise,

the

about

grow. The schools of
business will give far more atten¬
tion to these matters in the future

force

year,

72.5

will

of

cerns

raise money

as

sug¬

last

prices

dinarily strong demand for agents
of production during the 19th cen¬
tury was based in large measure
upon the fact that a vacant con¬

per

to

mands

a

proportion of library

decade

of

war

small

expect

(II) The policies of the govern¬
ment will be
inflationary. Spend¬
ing is more attractive to the poli¬

"red" most of the time.

If

the
of

upward in more years than it
downward. In 1940, the whole¬

for

one-half of the accidents

cause

tenths

it increased by 50%.

manhour

,

philosophy of laissez-faire
.Virtually certain to be in

employees.

In

1939)

years.

in increasing the
proportion
individuals who buy corporate
securities.

Hence,

the

Just

(represented by all

Between

increased

as

suc¬

cess

taxing.

concentrated."

is

one-tenth

the absence of war, I do not ex¬
pect the money supply to increase

of

than

expressed

responsibility

gestion system is put into a plant,
about half of the suggestions will
be made by about one-tenth of

to

that

some

events

be

may

"The

during

movement

price level was
higher than in 1850.

concentration is found in
wiae variety of activities. There
seems to be a fundamental social
which

the

sale

a

between the two great wars (1920

some

however,

was

few large churches or unions,
their preferences will
cause

creased

a

corporations will have

coun¬

(87)

that

fact

century

mem¬

the

cause

years

drop in the ratio of
savings to personal in¬

liquid

of

the

by
was

ple

it

It is possible that

be

half

over

the
223

to

trebled.

enterprises for bank

will

United
over

bership in all Protestant churches.

money

except interbank
and money outside of banks) has

impose upon the community a
higher rate of saving than it pre¬
the

have

try

one-half

less rapid than in
In the last 20 years the

money supply
bank
deposits

to

ferred to have.

in

the past.

Hence, enterprises
a

of

the

About five out of

supply will be

to
investmentas

money.

(14) The increase in the

community

have used bank credit

new

change for the

a

etary system whicn helped make
the economy unstable with one
which helps make it stable.

will

the* past,
the demand of
enterprises for cap¬
ital
has
usually
exceeded
the

willingness of

of

course,

better because it. replaces a mon¬

In

previae

private
debt
mining as the

metal

source

is, of

occurred

the

slower rate

a

me

need

depression. The smaller

great

principal
It

which

short-term

superseded

less im¬

before

in

increase

change

half

members

law

when

of funds for

was

principal

increase

the

have

CHRONICLE

-

Similar

the

on,

an

unions,

States.

follows:

to

ply reflect the accumulated needs
individuals for tangible goods.
,

about two-thirds of

supply.

of

all

FINANCIAL

Protestant churches in this

were

system, comparable in importance

of

business

and

year

supply will probably be a
in the public debt.
This, as I have said, is a revolu¬
tionary change in the monetary

is lower relative to
disposable income than before the

portant

were

of

&

union

slow

fall.

may

1929

money

gross
or

of

now

sources

repre¬

of

but this low ratio

money

From

At present it

war,

source

the

vol¬

liquid saving that

about

debt,;

in

the net national

as

the

lor

the

cru¬

is whether

private

culmination

-large

as

product

of gross personal

The

its

when commercial bank loans

two-thirds

type.
an investment
problem.

short-term

COMMERCIAL

icies which
ness.

are

are

unfriendly to busi¬
economists,
inquiring into the

It is curious that

who have been
nature

and

causes

of nations for two

not

made

it

very

much

what

kinds

a

the

wealth

point to find

about
of

of

centuries have

out

enterprise —
people and con¬

Reserve
Board
has
been
given
authority to control stock market

credit.
the

The

staff

will

business

that

prospect
be

or

will

of
the

and

environment

the

more

business

growth

enormous

in

less

hostile

tend

to

to

make

of expansion much! less
buoyant than in the nineteenth
century. As I have indicated, the

periods

increase in staff
is far

ness

ideas and

that busi¬

means

better

before

ever

organized than
investigate new

to

new

proposals. In short,
organized to say

it is much better

"no."

Hence

much
fore

the

business

less inclined

will. be

than

to accept optimistic

short-run

outlook

ever

be¬

views of

and,

even

to the extent that it accepts them,
to act .upon them. A more or less

hostile attitude of the

community

toward business will tend to pre¬
vent periods of expansion from

becoming buoyant. If cyclical up¬
swings are less pronounced than
in

the

will

past,

also

Finally, the
stability

cyclical
be

less

economy

from

the

downswings
pronounced.

has gained

revolutionary

Continued

on

page

36

36

Continued

from

Continued

35

page

CHRONICLE

FINANCIAL

&

COMMERCIAL

THE

(83)

from

Thursday, January

4

page

standard

unit

of

1950

value

forms

A

Treasury and the Price oi Gold

Long Look Ahead
At Economic Trends

change

recently

has

which

oc¬

curred in its

monetary system

that

reduction

is,

the

term

private
importance as

supply.
What will happen to the organ¬

ization of the American economy?

institutions

Economic

con¬

are

stantly evolving. What comes after
planned

Socialism, a
or something

it

Is

capitalism.

economy,

in

|

yet

is

evolution

there

I know that
steadily occurring.

and

difficulty

the

Perhaps

that

varieties

several

are

is

of

capitalism and that they are not

Let us look
why neither
planned economy

easily distinguished.
first

the

at

Socialism

reasons

nor

a

immediately ahead and then let

xs

speculate

us

what is

about

just

ahead.
must

One

expect,

think,

I

a

vided by government.

This trend
has been going on for generations
and it will be encouraged, not dis¬
couraged, by the general rise in
per
capita output. But an in¬
in

crease

free

services

is

not

Socialism. Socialism in the twen¬
tieth century faces the tremendous

disadvantage
operation on
a

a

reality, not

tions

being in actual
considerable scale

of

countries.

several

it

Hence

is

Utopia. Its limita¬

a

its

and

inadequacies are
made evident by actual practice.
Consequently, I do not expect to
.see
the public ownership of in¬
dustry spread except where there
is
some
special reason for
it.
Enterprises connected with re¬
gional
development
and
with
atomic

will

energy

owned

be

and may also

In

operated.

publicly

be publicly

declining in¬
dustries
public ownership may
hail out private enterprise. The
railroads may end up in public
hands

be sure that the
exigencies of politics will pre¬
vent consistent economic policies.

public

Finally,

reason.

ownership

become
important in industries which need

to

be

subsidized.

Housing

is

Nor is

planned economy likekinds of planned

a

are two

(1)

in
which a national economic budget
is planned and enforced and (2)

economy

toy

—

an

economy

in which activities

are

guided

large and consistent body of
economic
policies.
Certainly
if
planning of the first sort is de¬
veloped, one would expect it to
grow
up
first in rather small
a

countries

with

a

limited

number

of industries and with the

of
is not
economic

development

the

planned

truly

economy

likely,

more and more
decisions will be made by various

of
government.
The
prices which are af¬
more
or
less directly by

agencies
number
fected

of

decisions of government

will
slowly increase. I see no prospect,
for example, of a substantial drop
in the number of prices which
are
subject
to
government-im¬
posed ceilings or floors. The level
the

will be the subject of

considerable
controversy.
Subsidies
of
one
kind or another will probably in¬
crease

ait h

r

•Transfer

sonal

larger part of per¬

a

incomes.

highly

various

of

payments

kinds will be

diminish.

than

e r

will

industries

regulated

of

number

The

probably increase. Over-the-road

trucking, radio, investment bank¬
ing, and air transport are recent
additions to the number of highly

industries. There is at
a
good prospect that two
industries, consumer credit

regulated
least
more

and

agriculture, will be added to

the list.
The important
that the
ized

fact, however, is
growth of central¬

slow

decision-making
that

the

not

does

is about
unique and most
important characteristic—namely,
mean

to

lose

its

economy

most

decision

decentralized
The

most

important

-

making.

activities in

the economy

will remain the de¬
consumption made
by tens of millions of consumers

cisions

and

about

the

decisions

tion made

about

produc¬

by millions of business

enterprises.

Although these deci¬

sions

be

will

within

made

a

an

.Socialist.

one

consistency

only

may

•example. But the economy which
develops will not by and large be

)y. There

a

slowly
growing
framework
of
public policies, the economy will
continue
to
be
guided by the
preferences and the knowledge of
millions
the

to

of

people who

facts.

ample

There

to

are

will

opportunity

concerns

close

still

be

for

develop

markets,

develop new processes, and to
adapt themselves to new condi¬

tions in their

own

These are

way.

the characteristics of the economy
which
make
it
extraordinarily

adaptable, which give it dynamic
drive, and remarkable inventive¬
ness.

necesr

Decentralized

decision-making

The United States offers about the

has proved in this country to be a

feast favorable conditions for the

hardy plant. It has shown great
capacity to survive in a changing

development
a

national

can

and

economic

is

budget

that

in the world today.

be found

There

enforcement of

compelling necessity

no

for it, such as

would exist if for¬

world. I

about
age

see

serious

a

shrink¬

in the United States. For that
I

reason,

think

that

while

during the next generation

and

of

the

vol¬

enormous

highly optional expendi¬

tures made by consumers who

are

thus enabled to shift quickly from

good

One

tremely

difficult

operating

budget.
solete
.and

plan

before

the

conditions

ex¬

for

economic

would
year

be

ob¬

was

over

becoming obsolete would
difficulties.

many

quarterly
make

create

national

a

A

by

cause

another

to

it

revisions
work.

provide for

a

What

7-fold

would
plan

Even

not

could

increase in

consumption of frozen vegetables




has

done

ticularly
capital

many new

in

the

new

institutions

last

it

it

one,

will

par¬

in

the

funda¬

economy

in

which

of

millions of persons work out their
own

destinies with

a

good deal of

help and guidance but, in the last

analysis, in their
is the
that

reason

the

strong
not

own

why I

economy

and

way.

am

and

8

1934

of

the

of

9

read

Gold
fol¬

as

lows:

of

Section 3700

8.

vised

Statutes

the

Re¬

(31U.S.C.734)

amended to read

a

That

remain
driven

few officials but

by the restless ambitions of tens
of millions of producers.

Section

is

follows:

as

purchase geld in
any amounts, at home or abroad,
with any direct obligations, coin,
or currency of the United
States,
authorized by law, or with any
may

funds in the

Treasury not other¬

appropriated, at

and

such rates
such terms and condi¬

upon

tions

he

as

deem

may

ad¬

most

vantageous to the public interest;

relating to
the
maintenance
of
parity,
or
limiting the purposes for which
any of such obligations, coin, or
currency, may be issued, or re¬
quiring any such obligations to
be offered as a popular loan or
on
a
competitive basis, or to be
offered

issued at not less

or

than

to the contrary notwithstand¬

par,

ing. All

gold

Sec.

as

fund

(31 U.S.C.

purchased

so

included

general

shall
the

of

bers, and
gold at a

at

minus

shall

above

the

buy
value

par

margin,

price

a

mem¬

Section

par

down

sets

changes in

the

the

procedure

for

values; and section
7
deals with the procedure for
uniform changes in the par values

ton Woods

therefore

interest for

has

no

us.

follows:

as

rebate

a

in¬

of

terest upon the coupons, as to

sell

gold in
abroad,

in

such

conditions

most

him

amounts, at home

any

and
such terms

manner

at such rates and upon
and

as

he

deem

may

advantageous to

public

the

interest, and the proceeds of
gold

any

sold shall be covered into

so

general fund of the Treasury:

Provided, however, That the Sec¬
retary of the Treasury may sell
the gold which is required to be
maintained

security

as

for

reserve

a

tent

to

necessary

at

dollar."

by

only to the

maintain

ex

¬

such

parity with the gold

a

of the Gold

10

Reserve

Act

gives to the Exchange Stabili¬
zation Fund full freedom in fixing
the

prices at which

it

and

buys

sells gold. Apart from any effects
of
Fund
membership, the only
limitation

this Treasury power

on

to increase the

price of gold is the
size of the Exchange Stabilization
Fund itself, since the fund, if used
as a revolving fund, can exchange
gold for General Fund
dollars
only

the

at

consistently denied

on

$35

value,

statutory

oz.

gold.

of

Snyder has
intention

any

In

the

statement

a

handed

to

form

Oct. 5, 1949,

in

press

written

the Secretary
went further. He not only denied
made it clear

sections
by

that

9

of

Act

change.

the

and

8

Resejwe

limited

power

of

the

1934

Woods

Agreements Act

The Act which authorized U. S.

number of factors,"

a

the United States

member of

a

as

the Fund. After

quoting Article 4,
2, of the Fund agreement

(cited

above),

Snyder's

Mr.

Oct.

such

President

United States
to any

action,

nor

shall

agency

.

law

has

Fund

prescribed

States

par

or

the

of

value of

dollar

under

the

low

value

par

Article

IV,

par

sec¬

"

the

Articles

of

Agreement

of

par

value of the

currency

it;

time

a

the

9

and

the

Exchange Stabilization
by

the

Treasury

of 1% less than
the official price of $35 an ounce

sells

gold

the

There
fect

14

at

official

is

of

1%

more

of

price

$35.

legal opinion to the ef¬

that

the

Treasury's

only

power to
set these margins de¬
rives from sections 8 and 9 of the

Gold
8

Reserve Act.
9

and

thought,
have

to

be

Were

sections

repealed,

it

be granted for the

to

is

other power would

some

of

use

the

Exchange Stabilization Fund.
Otherwise, it is held, the Ex¬
change Stabilization Fund might
be

unable

on

its

to levy
operations.

such

charge

a

Similarly, the !4 of 1% charge
which

the

Treasury

makes

at

home, in buying and selling
newly-mined and industrial gold,
draws

its authority from sections

8 and

9.

Supersede

1934 Law

While

the

present

to

purchase gold at

sell gold at less,
minus

long

more

or

than $35 plus

or

the

prescribed margin so
the par value of the dollar

as

declared to the Fund remains

The

changed.
dollar

be

can

suant to the

value

par

un¬

of

the

Secretary of
evidently regards

changed only

pur¬

provisions of the Ar¬

ing the

powers

sections

8

and

of

him

the

under
Re¬

1934, it does not
follow that a later

nec¬

essarily

eliminates
earlier

the

law,

sions

are

Nov.

17,

provisions

unless

law

of

those

an

provi4

specifically repealed. On
1933, Attorney-General

ton Woods

Roosevelt

requires the approval of Congress

given

9

Act of

serve

the

Agreements

Gold

Homer

Agreements Act, which

Woods

1945 obligation as overrid¬

ticles of Agreement and the Bret-

Cummings sent President
written

a

opinion that

the

such change. Section 5 of

any

that Act

provides that neither the

President

nor

shall

agency

national

person

any

Monetary

change

in

United

States

the

Fund

value

par

dollar

or

general change in

any

unless

or

to the Inter¬

propose

any

of

the

values

Congress by law authorizes

"Even without the

legal obliga¬

tion to the International

there

Fund

Monetary
important con¬

are

siderations of policy which, in ef¬

circumscribe the discretion
of the Secretary of the Treasury
to change the price of geld. The
gold policy of
been

has

"Since

the United

States

directed

primarily to
stable relation be¬
the

1934

We

standard.

buying

by

so

freely

at

States

done

selling

and

fixed

a

have

gold

price,

$35

legitimate monetary

pur¬

poses.

other

gold

that

Act)

importance
States

which

attributes

of

legislative
parity

Ac i

of

were

in

sec¬

still alive in 1933. Cum¬

"Nor do

I think

that the broad

authority conferred

the Sec¬

upon

been

a

stable

repealed

the

to

the

dollar

provisions.

The

statutes contained

in

even

iar

rule

in

such

the gold

dollar *shall be the

being that

cases

implied repeals of particular leg¬
islation

by

legislation

subsequent
the

on

general
subject

same

not favored."—Osborn

are

olson, 13 Wall, 654; U.S.

U.S.,

166

185

U.S.,

U.S.

601;

83;

v.

v.

Nich¬

Green¬

Rogers

v.

Washington

v.

Miller, 235 U.S. 422.
In

the

written

same

opinion,

Cummings cited Attorney-General
Charles

Devens, who in
to

response

an

1877,

in

inquiry by Secre¬

of the Treasury John Sher¬

tary

gave

man,

the

Secretary
3 Note

it

as

1862

of

that

the

both

1864

laws,

Treasury

the

1900

and

un¬

the
may
1933

the books when, late in 1933

acts

were

the

Administration

on

his view that,

and

raised

the

price

of

gold without the dollar being formally de¬
valued.
Also

note

that

section

states:

May 1*2, 1933, provide

impliedly by

subsequent legislation, the famil¬

der

"The

re-enacted

mings added:

an

in transactions with foreign
governments and central banks
all

since

powers

tions 8 and 9 of the Gold Reserve

house,

United

has firmly adhered to the require¬
ments
of an
international
gold
bullion

the

retary by the sections quoted has

action.

such

of

powers

Secretary of
Treasury enacted in 1862 and
1864
to
buy and sell gold (the

approve

par

the

.

and

operated

not

the Gold Standard Act of 1900 and

"The

The

Fund

Act of

Monetary Fund

value

follows:

as

Stabilization Fund

International

Monetary Fund
in Article IV, section 1, define par
as

this

the

use

devaluation to

Sections 8

the

price for gold is demonstrated by

International

view

Bretton

maintenance

The

it

to recommend

the

United

What Fund's Articles Provide

does

nor

Treasury

for

ap¬

increase

to

power

the

Agreement' of the Fund, or
prove any general change in
under

the

for purchases

ounce,

tion 7

has

price, it does not plan to

Accordingly, the
United States has an obligation to

and sales of gold.

IV, section 5, or Article
XX, section 4, of the Articles of

Article

values

or

margin of 14 of 1% above and be¬

the

person

behalf

propose or agree

..

no

raising the price of
devaluing the dollar. If it

gold

a

au¬

neither

any
on

change in the

United

by

the

has

of

1945 Law Does Not

"The

tween

Congress

that

thought

no

5 handout reads:

maintaining a
gold and the dollar.

that:

"Unless

doubt

Administration

"is

first of which is the obligation of

section

be

can

than

fect,
Bretton

In view of the above
statements

there

and

change in the dollar

propose a

in

a

be

while he is President.

for

U. S. C. 733).

(31

Section

as

or

issued

currency

the United States,

currency

the Treasury John W.

expedient; and he may

may seem

Comments

repeated occasions, notably
in press conferences, Secretary of

Gold

may

without

or

Snyder's

On

ury

of

with
will

buys gold at

Above Powers and Obligations

He

the
anticipate the pay¬
ment
of interest
on
the
public
debt, by a period not exceeding
one year, from time to time, either

with

Secretary

on

conference

press

change in the price, he added,

no

determination of

values and

price

the

Truman

10,
1949, replied
"categorical no." There

Agreements Act above,

relates to initial

current

increasing

Nov.

XX, section 4, of the
articles, cited in the Bret-

given the Secretary of the Treas¬

Re¬

President

gold,
his

Congress.

Article
Fund's

to

of

of

during

par

of Fund member countries.

par

Asked about any Administration

mar¬

article

same

be

present

prescribed

of

5

shall

consideration

or

below

of the

3699

(31 U. S. C. 733) is

"Sec. 3699. The Secretary of

Treasury

an

price

prescribed

gold

value

gold by

member

no

the

sell

in

the intention to propose a

734).

amended to read

the

transactions

for

Treasury."

the

Section

9.

asset

an

of

vised Statutes

or

shall

all

coined

with this

price

Fund

provision of law

any

be

article

same

and
or

standard and it shall be the
duty
of the
Secretary of the Treasury
to maintain such
parity.' " 3

."

.

.

the

of

ex¬

gin."

President, the Secretary of the

Treasury

wise

2

be

as a com¬

specifies that:

"Sec. 3700. With the approval of
the

denominator.

mon

plus

confident

will

progressive,

by plans of

Act

of Gold Reserve

Act

Reserve

Sec.

shall

member

pressed in terms of gold

prescribe a
margin above and below par value

Sections

the

tens

each

of

-"The

Provisions

thorizes

institutions

market,

as

mentally remain what it is today
—an

final

Monetary Fund provides (Sec. 5)

tries, the rapidity of technological

ume

the

will continue

economy

develop

in

well,

as

participation in the International

American

changb,

action,

analysis.

the

eign exchanges were scarce. The
extraordinary variety of indus¬

to

the

power:

prospect that it is

no

suffer

to

has

also

to consent. And the Presi¬
dent's power to consent is cer¬
tainly in fact the power to initiate
power

business

new

to

fdty of rationing foreign exchange.

President

may

in public
policies is that they appeal to
voters
or
to
various groups
of
voters.
They represent political
planning, not economic planning.
The

some

this

for

the second

planning in

one

sense,

of the ceilings and floors, of course,

gradual increase in the number of
free or nearly free services pro¬

in

for

As

same

Although

economy,

frozen-fruit
period?
of

consumption

juice in the

else?

My vision seems to be poor. I
do not see Socialism or a planned

3-fold increase

] in a decade or a

—

shortdebt to secondary
a source of money
of

of money issued
by the
United States
maintained at a parity

8

specifically

"any provisions of law relating to
the maintenance of parity ... to the con¬
trary

notwithstanding."

<

Volume

171

sell

at

gold
below

or

Number 4870

THE

price either above

a

the

standard

unit

of

value.

operable.
true

The

if

the

Washington

Several

members of

September and the subsequent de¬
valuations abroad, some fanciful

mining industries.

rumors

tentions

circulated,

that—as

part

of

to

the

understandings

of

effect

agreements

reached

British—the

would

the

United

with
States

shortly

increase the price
devalue the dollar, etc.

gold,

Rep. Arthur L. Miller of Nebraska

have

Fund

subsidized

of

Conference

this

on

tice

the

the
are

While

of

in¬

somewhat obscure

in

value

of

the

national

received from Assistant Secretary

objected and Canada had to alter

ury

Ernest A. Gross

the plan.

medium-

to

dispel

stated

"not
ard

and

Department

that

the

discussed

a

the

aware"

the gold

price

of

during

meetings.

for

reply intended
rumors.
The reply

the

that

Department

stand¬

gold

the

were

tripartite
the letter

Moreover,

continued: "So far

was

this Depart¬

as

ment is aware,

the question of the

gold

was

standard

either at

the

discussed

not

Board

of Governors

[of the International Monetary
Fund] meeting or in other recent
international forums."
Mr.

Gross's

the

dollar
the

undo

be

correctly

devaluation of

a

would

only

tend

advantages which

to

may

gained by the foreign countries

which

this

devalued

year

currencies;

then

but

their

weakly

added:
"In

view

the

of

apparently

doubtful

authenticity of the sev¬
points covered in the infor¬

eral

that

mation

desk,

has

reached

your

not wish to insert
it in the Congressional Record, at
least not without providing ade¬
quate qualification respecting the
you

may

acceded to the

subsidize

now

directly,
basis.

but

on

South

gold

State

would

have

Department's
been

more

letter

Individual

secret

just

are

miners

as

Fund articles,
satisfactory to

concerned.

It

agreements reached at
Yalta
Conference,
agreements of which the State
until

learn

not

it would

be

say

$40

dollar

remains

recent

Within Fund's Articles

tors

board

And
any

this

can

be

That it would

be

the

of

in

Fund,

which

the

United States has the largest vote,

have it in their
(under

power

Article

IV,

to prescribe

section

for

transactions

members.

the

In

in gold

Fund's

by

present

rules and regulations this margin
is fixed at
lk of 1% above or
below.4

The

ticles

of

agreement.
Only the
have to be changed.

would

Were

the

to,

monetary

of

the

at present un¬

reasons

has

had

ex¬

and their application

gold
the

gold-

mining industry in this country's
economy.

not

have

laws and

always

long

prom¬

what

mean

seemed to

mean:

example, the gold clause. Who
be

can

ob¬

and

these

need

generation

do

they

without

more

for

powers

ises

done

system

smallness

sure,

future

some

therefore,
with

1933,

in

that

another

FDR in the White House, another
Homer

Cummings as,, Attorney,
General, another Herman Oliphant

as

Treasury

will

be

not

General

Counsel,

determined

that

it

the

to

increase

the

price

5 It

was

Herman

the

Oliphant who in

Administration

the

could

at

Higher Price?

Assuming that the Treasury
gold at more than $35

can

buy

under

ounce

tion

8

of

the

the

Gold

an

of

sec¬

Reserve

Act,

powers

from first

use

his

Gold

Reserve

Act

automatically

not

yet

We

so

have

if it

ever

dividual

"found"

that

"security" is not supplied—as
supplied save by the in¬
himself—for many individuals by the system
had been

under which

we

could be

or

operate, and that it must be afforded

else the individual will no longer
degree of individual freedom and
liberty that is left him. Experience has also "taught"
us
that large numbers of people even in [his country
tolerate

or

the

even

do not in the normal

usual

or

of their lives

course

earn

enough to satisfy their wants, and if they are not to
rise up and smite the rest of us down,
they must in this
way

that he subsidized—or should

or

we

,

"bought

sav

off"?

Cannot Look Out for Themselves
It is also "obvious" to

us

wise

now,

with the

as we are

wisdom of the New Deal and the Fair Deal

philosophies, that'
many, quite possibly most, men and women in the country
are
not capable of
looking after themselves, but must be
put under the protective wing of government or made the
victims of organized groups which will tell them in blunt
language or blunter instruments what they may and what
they may not do in their day-to-day affairs. The wageearner
may prefer to work for what he is able to earn rather
than to starve

looking for work at some rate of pay which
willing or able to provide, but somewhere some¬
one knows better.
It may be that the farmer would
prefer
o trust
his own judgment as to how much
corn, or how
much wheat to grow or how
many hogs to raise—but no,
there are others' who are
running the show and he must
knuckle under. If liberty is sacrificed somewhere
along the
way, then that is a mere detail which can be heartily denied
on the
hustings in any event.

no

is

one

Then these wise men,

learned in the "modern" lore
behavior, cast their eyes beyond our borders.
There they see unfortunate individuals who do not have
of human

the

luxuries

to

which

Many of them lack

we

have

become

what "security"

even

accustomed.

we

enjoy.

In

instances they are in abject want. Now all this
has its origins in circumstances for which we ar6 in no

>

some

Counsel of the Treasury.
The then
Under-Secretary of the Treasury, also a
lawyer, was Dean Acheson. Out of sym¬
pathy
with
what
the
Administration
wanted to do in regard to gold, Acheson
resigned. Two days later Cummings sent
President
Roosevelt
the
above-quoted
opinion, confirming what Cummings had
orally told the chief executive.

responsible, but,

!'

these

soothsayers, there
can be no
security, no assured peace, and no enduring
prosperity anywhere in the world so long as these things
exist anywhere. We must, therefore, in our own selfway

so

say

interest play Santa Claus to the rest of the world if

continue to enjoy what

to

tainly if

page

we

are

we

now

have, and

we

cer¬

to move forward.

Not the very real problems of the next
half century, but
these absurd ideas of how to approach their solution are what
disturb us.

Different Elsewhere
Yet in

4 The

sections

Fund's

executive

odically submit to the
in

the

to be in¬

now

directors

peri¬

changes

governors

and

rules

regulations. The
directors take the position that the gov¬
ernors "note" the changes,
nothing more.
In
theory the Fund could check any
proclivity of the United States to buy
gold at a premium. Actually, the United
States would not only wield the large bloc
of votes deriving from its own quota, but
would
certainly enjoy in any effort to
raise the price of gold the enthusiastic
support of various smaller members which
have an interest in gold mining.
the

Fund

has

of agreement and
committee

members

at

construed

its

fields it

quite the thing to say that the most
urgent problem of the day is that of finding some way
of making as certain as may be that what man has
learned about nature and its workings will be used to
benefit, not to destroy, mankind. These ideas, as every
one knows, have been
given great popular emphasis by
developments in nuclear physics, including the atomic
bomb.
They are reinforced, though, by many other
findings and inventions about which the public knows
but little but hears a great deal which is vague and
frightening. Man must learn somehow and rapidly how
to

Woods

in

course,

be the master and

which he

articles

has

not

the victim of these monsters

saying
hysteria in all this.
so

the

goes.

Fund members in

of

both

recent




prac¬
years.

the

of Laidlaw

name

in
&

1854 and

Co.,

was

adopted in 1873.

Display New Offices
Laidlaw &

traces

back

whose

to

1842.

(Jan. 4)

history

dedicated with
the

soon-to-be
on

the

financial

occupied

When

the

in

firm

40

span

conducted

in

new

quar¬

it

will

change in location

the

years,

Broad

formally

week-end

first

its

been

Oil

the

over

its

offices

new

takes possession of the
mark

recep¬

ground floor of 25

Street.

ters

a

press

business having
over

that

long

in the old Standard

space

Building at 26 Broadway.

The

new

Walker

offices

were

Poor,

features

rangement,
also

&

and

of

layout,

lighting.

end

lished

&

in

of

Co.,

the
was

banking

Civil

well

and

War,
estab¬

with

the

rise of the corporate form of busi¬
ness

it acquired a membership in

the New York Stock Exchange in

1878, though still maintaining its
position
one

as

private bankers.

of the oldest Stock

It is

Exchange

member firms in Wall Street.

ships include the New York Curb
Exchange,

Boston

Stock

and

For
us

our

part, the fact that these problems exist disturbs

less than what appears to be our approach to their

tion.

All too often

our

notions of the way to overcome

solu¬
these

the Chicago Board

of Trade.

the

American

Bankers

Associa¬

ar¬

They

fully air-conditionecl and

tion.
;

The

firm's

operations

worldwide and branch offices

Laidlaw & Co., is (he successor
firm
of
Heran
and
Lees, who

maintained

started

business

as

Ext

The firm also has membership in

sound-proofed.

Some False Concepts

To-,

day its other exchange member-,

change, Montreal Curb Exchange

designed
architects,
and embody the most modern and
by

the

Laidlaw

yesterday

tion

to

At

Co., banking and in¬

firm

vestment

are

are

number of instances

law entered the firm

Laitffaw & Go.

attractive

brought into being,

There is both truth and

1944,

presently permitted to sub¬
sidize their gold mining industries, buy¬
ing certain newly-mined gold at premiums
well above the
% of 1% margin; and
they are also being permitted to sell gold
internally at large premiums. There have

by

It is, of

the minutes of the gold

Bretton

some

re¬

prior to the Bretton Woods

those two

tices

have "learned" during

we

complex that it can no longer direct and
itself, but must be directed and managed by
groups of elected politicians or their appointees.

small

Gen¬

of

Agreements Act of 1945, assuming

a

become

to

As We See

powers

stored to the full force they pos¬

been

things which

manage

are

Continued

must

One of the

buying at rising prices through the
RFC.
Oliphant was then with the Farm
and

or

—

we

the past decade or two, so we are told, is, for
example,
that modern life, particularly modern economic life, has

1933

seems to us that the picture is quite
different, even opposite. In science we have learned a great
1934
to
buy gold at $38.50 an
deal; in certain other matters we have also "learned" a great
ounce.
deal—and much of it is simply not so!
One of the most
If the Fund should go out of
existence, the powers of the Sec¬ urgent tasks of the second half of the century is, therefore,
retary of the Treasury under sec¬ to unlearn a good deal that we have thought that experi¬
tions 8 and 9 of the Gold Reserve
ence had
taught us.
Act would be

the

under

As

course

of

way

be de¬

to

are

something closely approaching it — then of
inevitably suffer serious, perhaps even cata¬
strophic, disappointment.

century

gold

Administration

If in addition, these fallacies

to bring in the millenium during the next half

upon

10%, the Secretary of the

say,

made

out foundation.

pended

eral

Could Treasury Finance Buying

margin to be expanded

Treasury

sessed

upon "modern" precepts about economics
and related matters which must be
regarded as quite with¬

gold? 5

showed

37

difficulties rest

Secretary of the Treasury has the
power

Credit

margin could be in

creased without amending the ar¬

rules

the

will

discovering that

is,
most unlikely, in view

of

2,

the Fund's articles of agreement)
the margin above and below par
value

in

pos¬

gold,

surprising ends:

for

done

of

price

for example,
Trading-with-the Enemy Act
in 1933. It has had experience with

legislation by the Con¬

new

gress.

relative

direc¬

executive

of

to

weight

are

powers

the

served.

of the lack of need for

Possibilities for Price Increase

and

unchanged.

policies

Whatever

when the government, some

This

unchanged.

and

devaluation

perience with long-dormant laws

(3) The Fund's articles of agree¬
ment

increase

an

predictable.

(2) The par value of the dollar
remains

Washingtonian

Administration
the

over

powers

to

maintain

or

dollar.

government,

that:

of the

a

the

there

desires

Truman

come

ounce

an

as

behind

or

(89)

by government,

it
has no intention of using them.
Nor has it any intention of sur¬
rendering them. The time may

For example,

possible to

the

sesses

excess

year's output at,

of course,

long afterwards.

The

of

to buy all of the gold
of the previous

were

produced in

far

so

observe,

the

suppose that the Secretary of the
Treasury with the President's an-

proval

surface

ministration

subsidize its gold-mining industry
without violating the Fund ar¬
ticles of agreement.

premium

at

in the price of gold or

be

States

on

is not the
slightest sign that the present Ad¬

but
the

would

possible for the United

purchases

the

can

indi¬

to

suggests that

possible,

long-terms to finance

or

gold

scenes,

"fabri¬

subsidies

above-quoted

famous

did

mining

or

This

doing the
thing again, for the Treas¬

On

vidual gold mines get around the

reassur¬

ing, had it not been so carefully
hedged. In extenuation of the De¬
partment's caution we may recall

Department

mem¬

Africa,
moreover,
complaints
of
the

"industrial"

inter¬

The Outlook

despite
the
Fund, aids its gold mining indus¬
try by the sale of gold at premium
prices abroad, the gold being sup¬
posedly

the

markets,

prices.

non-uniform

a

be

Fund's

wishes. A number of Fund

in

the

to borrow from the public

the

but

a year,

lowering

of

dollar

Slates.

would

same

uniform-

a

subsidy for

(1) The gold content

The

the

with

away

the end

reliability."

the

got

bers

it

Southern Rhodesia, it is

per-ounce

in

a

cated."

letter

pointed out that

true,

out

run

gold
bought with obligations of the

was

plan to sub¬
sidize its gold mining on a uniform-per-ounce basis the Fund

State

would

exchange

comment and under date of Oct. 10

the

went very

process

process

United

wrote

observed

buy more gold.
1933, when the government

was

so

Canada announced

$35. If the

In

prac¬

gold-mining sub¬
long as they are not on
uniform-per-ounce basis. When

a

have

of funds to

tolerates

sidies

finance for it

sound
Some

far, the Treasury

Woods

point, the Fund in

be

CHRONICLE

entered on the Treasury's
only at their official value

books

gold

the

Bretton

be

can

World

their

so?

do

FINANCIAL

that, unless the official price of
gold also is changed, purchases of
gold at more than $35 an ounce

Subsidies to Gold Miners

in

talks

it

to

States from the Fund.

Following the Anglo-AmericanCanadian

the

would

be

exercised

his power to withdraw the United

State Department's Assurances

or

would

same

President

&

COMMERCIAL

commission

in

Boston,

are
are

Washing¬

ton, Montreal, Toronto and other

merchants in 1842 in offices at 51

cities.

Broad

is conducted at the main office.

Street.

Henry

Bell

Laid¬

A general

banking business

38

(90)

THE

Continued

from

COMMERCIAL

4

page

in

October

at

y^ vr

fad

AA

163.

closb.g the
same
time,

the

of

the

during
reach

ber.

the

high of 195.82 in Decem¬
(See Chart B.)
a

In other words, the market was

low

found

the

ahead,

more

almost

each

new policies
already going

market

less vigorously.

or

Major Business and Market
Influences
In

in

shaping the

1950

pattern

must confess that I

month.

to

am

some

is

ket

strong market helps
business—not only
does it influence businessmen by
establishing a favorable psycho¬
logical background, but more di¬
rectly, an expanding Stock Mar¬

discounting greater and
significant developments—
chiefly the winning of the war—
was

more

here at home liberation from

and

economic

and
political controls,
profits taxes and other war

excess

Perhaps this is true.

measures.

Let

look at

us

The rising

1946.

forecasting

business

good

a

good

ket makes easier the sale of

securities
funds

Industrial

able

with

for

which

capital

Most of the

to

by the government and pri¬
industry show estimates of a

substantial

decline

at the

equipment

expenditure

output
eral

measured

as

Reserve

the year of
the

the Fed¬

by

Index hit

low for

a

152 in February with
lowest month in May

second

at

159, followed by a slow but
steady move up to 182 at the close
of

the year.

The

212.50

of

the

May market
was the high of
1946, and as you
know, the market has yet to see
that

figure
that later.)
In

the

the

again.

Fall

Stock

touching

(More

Market

year

broke

in

that

decline
was

the

was

sharply,

At that

will remember,

told

we

time,
all

were

explanation

obvious.

and

of this

The market

simply performing its tradi¬
function, of forecasting the

tional
trend

"bust"

of

business.

was

Now, let
in

us

business

ket

The

postwar

its way.

on

what happened

see

after

the

Stock

Mar¬

warning, in the Fall of 1946.

Business continued good. Not once

carries forward

%

What

for
at

❖

other

budgets

conclusions

of

1943.

short periods, the market reflects
than discounts events.
.At

rather

times, it acts entirely independent
the

business

curve.

The 1949 figures

as

to the

government

deficits, but in the
meantime, they are a stimulus to
business,
taking
up
the
slack
where
private expenditures are
the

cast

decline.

that

the

It

is

being fore¬

Federal

deficit

weeks

on

June

before

resumed

its

13,

a

reaching
bare two

industrial

upward

activity

march. Fur¬

smaller, unless our world
program is to be changed radi¬
cally. It is unlikely that in the
face of developments in the Far

The
call

will

we

areas

reverse

of the world

revenue

10%

credit

for

all

against

dividends

common

budget is what I
"political budget."
We

next

board

taxpayers

of

received

of

10.%'

a

$1,000

or

across-the-

Investment circles are also hop¬
ing that some changes in the SEC
regulations of a procedural nature

be effected during the com¬
year.
Such changes would
less

cumbersome

less

and

costly the distribution of

new

about that

more

indications

curities, while at the same time
retaining
the
safe-guards
that
protect the investing public.
There

other tendencies out¬

are

side of the political sphere which

during the coming year will have
important bearing on the Stock
Market.
Large insurance
com¬
panies and other institutions are
leaning

more

and

towards

more

the theory of common stock

ership.

Educational

institutions

synary

creasing

the

funds

be

to

and

into

of

their

common

income

group

the

Some of them

open-end

1949

was

investment

probably

open-end

trusts.

record year

a

trusts, with present

wider range of common stocks.

ing securities is receiving further
impetus from the educational pro¬

unfavorable

nancial

see

to

private

business

Conceivably

we

gram

38%
to 42%, but
change is only likely to
offset to

nation

of

reduction

a

the

excise

such
come

or

a
as

elimi¬

taxes

widening interest in

being carried

and

possible relief in other spheres of
a

*

tee

of

on

*

*

by business plans for 1950 pro¬
duction.' Generally, most of us
seem to be in agreement that the
year will start with a high level
of

nature

is

the

likely to be given to

measures

equity
for

the

affecting the
capital.
Studies
Joint

Commit¬

the Economic Report point

CHART A
Federal Reserve Index of Industrial Production
Compared With
Industrial Indices

business

this

group

for

should

to

are

and

f"Factors Affecting Volume and
Stability of Private Investment"
—Assembled

by

Subcommittee
Joint Committee

the
on
on

staff

of

the

Investment,

profits

extent limited
by
arrangement, the in¬
should be approaching a

Report.

the

the entire

year,

especially

more

probably been
anticipation
of
their
receipt.
How much it is

actual

estimate,

The suppliers of aircraft manu¬
even

tool

the de¬
makers

1950

or

The

10%-12%

figure.
the

At

the

schedules

automobile

and trucks for
below the

outset,

call

for

running at the rate
that of 1949.

1949

however,
output

an

above

or even

There is little doubt

but that the major companies will

show

distribution

felt.

This should result in

profits for the first

half

of

the year commensurate with those

chip

may

away

of

some

the profits of the independents.
Commercial

further

Banking

Federal

financing
return
on
the

prospect, the
bond
portfolios

banks

should

cient to

high

level

of

of

more

commercial

itself

suffi¬

be

less guarantee a

or

of

With

—

deficit

in

dividend

payments

to the holders of bank stocks.

Building

Construction

and

dustries—Like
economy,

much

In¬

in

else

the

the biggest influence in

ernment, but
cline

from

even

the

should witness

with

1949

lus

A

check with

vidual

on

in

the books

as

of the 1st of

that

record

of

a

year

ago,

great

as

from road

million
this

is

tions

building, public works,
systems, util¬

Further
price adjustments in
building costs, either through re¬
duction
in
material
prices
or
through the greater productivity
of labor, would act as a stimulant
and help keep construction going

high level.

large
reflect

extent
the

its

economy,

research

while

to

a

operations

will

level

the

general

entire

the
are

are

3V2

sets in 1950. Whether

new

understatement

an

or

of

optimistic

an

Electric and

Gas

the
one

Utilities—An¬

that should be

group

men¬

tioned before going 011 to the dis¬
cussion of the Stock Market is the
electric

and

According

gas

partment

utilities

the

to

of

SEC

for

group.

and

Commerce

expenditures

De¬

figures,

plant and
equipment for the first quarter of
1950 are estimated at $740 million
against $680 million for the cor¬
new

responding quarter of 1949—not a
big increase but showing a ten¬
dency.
Continued growth, espe¬
cially of the natural gas division
of

this industry, is
The
Now

the

for

market

indicated.

Immediate Market

prospects

of

the

immediately ahead. Prices

moved

up

steadily

during

the past six months from the low
of

161.60

dustrial
Such

an

ficient

for

the

Average

Dow-Jones

to

almost

advance of itself
to

reason

look

In¬

200.

is suf¬

for

sorrie

correction.
Both

speculators

of

benefits

likely

to

of

and

investors

dynamic. They buy stocks not
only for income but also to make
are

profit.

After

a steady rise such
witnessed, it would be
all past experience if

have

we

violating
we

didn't get some adjustment in

prices.

Frequently when the technical
position of the market indicates a
decline, some outside event comes
along to give the ostensible ex¬
planation for

industry is noted
and

of

indicating

Demand is coming

research

sale

depend largely upon the ac¬
taken by the Federal Com¬

other

as

its

the

munications Commission.

a

for

durabje

The manufacturers

possibilities
will

ities, etc.

a

in¬

expansion

wide

estimating

now

water and sewerage

at

generally,

consumer

show

to

next year.

operations for at least the

full year 1950.

class of the

goods

have

of the indi¬

the

December, almost twice
as

trade

Television receiving sets will be
one

building

building
group, the cement industry, for
example, shows a backlog of or¬
ders

retail

to

1950

$19,250,000,000

some

industries

of
be

fairly

a

the consumer capital
goods as well as soft goods.

de¬

some

figures,

level of

a

un¬

to

substantial contra-seasonal stimu¬

in the first half of 1949, but com¬

petition

still

are

cluding

industry is planning total produc¬
tion of between 5,500,000 and 5,700,cars

effects

the

this

period.

pressed

but

major

impossible, to

000 passenger

retail

in

spent

doubtedly,

—

economy,

the

of these funds have

dustry
highly

Automotive

companies
profit.

some

Veterans' Insurance Refund. Some

gov¬

high level

some

recent

the Economic

removed,

contractual

machine

on

trade will feel the benefits of the

although

prosperous

tax

be reduced or en¬

the

by

mean

excise

the

re¬

the

expendi¬

aggregate

operations,

activity with certain

This

time

collapse

it

the
may

market's

be

a

drop.

financial

of the Argentine,

or

an

unfavorable interpretation of the
President's Budget Message or un¬

satisfactory
State

be

implications

in

his

of the Union report.

Whatever the immediate stimu-

CHART B
a

Few

Selected

Comparison of Dow-Jones Industrial Average and Federal Reserve Index of
Industrial Production

1945

1948

and

The

The chemical

favorable

consideration

prepared

by the Fi¬

The third budget is represented

taxation.
Of

on

own¬

Community.

may

increase in corporate taxes

an

shortly.

a group
scientific

Beginning shortly after the turn

be

announced

that

this industry will

in

of

should

from

especially,
medical
Furthermore, with

cosmetics may

manufacturing

aircraft

companies

making their

are

indications pointing to even larger
sales in 1950 and investing in a

The

various

estimated for the current year.

investments through the purchase
of

Allo¬

—

■

companies,

benefits

search.

cation of government contracts to

approximating the

coming into the market.

drug

also

tirely
Manufacturing

this group is likely to be the gov¬

stocks.

that

market.

already in¬

are

percentage

placed

own¬

eleemo¬

My only comment is
do not point to
the
enactment
during
1950
of
much legislation hostile or even

Treasury policy.




se¬

the

are

likelihood

Aircraft

J

-

,

Allied to the chemical industry

panies of these groups will largely
influence the action of the general

divi¬

on

would,
in
my
be more feasible politi¬

to fruition.

—more

exemp¬

$1,500

income,

make

the

should also benefit.

flat

a

for

1950

individual company efforts

as

first part of the year, since in all
probability the shares of the com¬

on

opinion,
cally and sounder economically.

ing

least

at

facturers, including

exemption,

dend

week.

that

flow

1945

a

stock.

Instead

promising,

ernment

proposed

measures,

felt

come

on

of the early

one

espe¬

an

of those groups that look

some

most

some

Lynch bill, intro¬
Fall, and which may

last

of

ture

for

taxation

The

form the basis for

for

policy.

our

second

the

rumblings
of
a
possible
change in Federal Reserve, and
an¬

duced

provide

double

next

who

hear

actual

dividends.

the

are

various

The

will

from

that

$5,000-$7,500

be

can

thermore, by the middle of June,
were
already beginning to

we

hoped

$51/2 billion. Conceivably, it will
be larger. It is difficult to see how

an

low

also

it

of the year, the market moved

sympathetic direction,

relief

period.

on

We might discuss the prospects

cap¬

from

come

new

from

its

affecting

may

Finally, there is the large
crop
of investors—those in

more clearly.
With business
declining throughout the first half

in

for

the 1951 fiscal year will be around

enterprise.

emphasize this

even

a

1950

First, there is the fiscal budget.

will know much

To me the figures cited
clearly
point out that except for possible

of

there

are

How large will the deficit be? In
the long run, we may regret these

East and other

March

❖

to examine before arriving

us
our

on

is

It

new

business.

that

market

again re¬
peated its warnings with a 163.21
low in May of 1947 and a 165.39
in

into

ground, the ability to raise
capital through common stock

although

bottom

earlier action

months

may

did the Federal Reserve Index
go
below
176 during 1947 or 19,48,

the

next

financing will change some of the
capital outlay budgets now being
prepared by both big and little

(1946),

October

163.55 in November.
you

and

for

prospects?

of the

163.12

about

market

new

plant

It is conceivable that if the

year.

high

in

year were derived

a

investment

tion

purposes.

vate

The volume of

raise

on

than

the shortening of the holding per
ried to 3 months from the present

equity

figures made avail¬

Average
reached
a
closing high of 212.50 in May.
What was going on in business
time?

for

but because experience

shows that

create

market of the preceding 12 months
continued
until
the
Dow-Jones

same

ital

Congress

believe that the market

Perhaps 1945 is not a fair test.
It might be argued that the mar¬

less

Thursday, January 5,

industries operating
cially high plane.

studyt

one

taxes on capital gains.
Perhaps it is too early to hope
for any change in connection with
the capital gains tax.
However,

6

influenced

next year,

As

the

in

by the current
strength in the Stock Market. Not

extent

is

revenues

somewhat

$150 million

some

in my
mind of the likely trend for 1950,
I

of

average,

because I

going up throughout 1945, while
business, inversely, was making a
new

nouncement of these

and climbed upward
next
12
months to

year,

CHRONICLE

shows—for the years 1935-1945
the

the Dow-Jones Industrial Average
made its low of 151.35 in January

terms

capital gains tax.

The 1950 Slock Market
in

FINANCIAL

out, for example, how unimport¬
ant

1G2

&

1949

B

1946

1947

1948

1949

1950

Volume

171

Number 4870

Continued

lus, the reaction will not
a
total
surprise.
From

come

it

that

market

ably

level

will

of

move

to

on

since

nessed

overtake

1946

and

the

conceiv¬

prices not wit¬

the

pre-depression

As

that

to

it

might

be

the last time

that

the

reached

in

was

the

212.50

level

year—1930.

the

create

base

both

as

to

price and volume from which

to

a

forward.

move

CHRONICLE

5

page

The State of Trade and Industry
trends

here to stay and that the best way of

are

to try to keep

At

least

here

we

in America will continue to

move

ahead.

overcoming them is

production

more

output

front,

output;
and more
higher standard of

means a

living for the country
and

thi$

products, new techniques and a better scale of living is the abso¬
lute necessity for cutting costs. If the present system, of doing busi¬
ness in this country is to survive this must be done.

companies are solving the question of bigness without
That trend will spread. Big companies will have sub¬
sidiaries which will have to compete with other companies and with

for

greater

a

individual

business

means

level

climate in which

a

be translated

can

of

into

satisfactory profits and favorable
dividend

disbursements.

One of my partners has characI terized the years ahead as "a dec¬
ade of' opportunity for America."

Perhaps it is not too much to hope
that

this

to

characterization

prices.

or Congress does about f.o.b.
Freight rates have gone so high, labor is so expensive,
to exploit the area nearest the plant or plants.

that it pays
the

basic

steel industry there will be more and more market
by plants close by. Crosshauling and freight absorption
will be pretty much out of the question.
served

Biggest changes in the next decade will

the

operating

rate

steel-making capacity

Exchange
Weekly Firm Changes
The New York Stock

has announced

Exchange
the following firm

changes:

Lipsky, Woodley B.
Gosling, Exchange member, and
George R. Cooksey, Jr., Exchange
member, retire from partnership
in
Bendix,
Luitweiler
&
Co.

Geddes

the

of

in

late

Clark,

Donald

C.

Dodge

I.

Sprayregen
limited

&

Co.,

Maurice

and

Bruck,

Eisele

Bertram R.
in

Smith, limited part¬
Co., died Dec. 22.

Ernst &

Johnson

Garrett

retired

Thomas

T.

partnership
Dec.

Coxon

retired

Hallgarten

in

31.

P.

Merritt

Dec.

James

from

Co.

withdrew

from partnership in F. S.
Co.

&
•

Melville

&

from

Moseley

31.

M.

C.

Newman

retired

Colgate V. Mann, member of
withdrew

from

Schirmer, Atherton & Co., Dec. 31.
Winsor
Shippee, retired from
Shippee & Rawson Dec. 31.-

John

W. Jordan, general part¬
and Frederick R. Horne, gen¬

eral

limited

and

partner,

drew from Thomson &

with¬

McKinnon,

Dec. 31.

Transfer of the Exchange mem¬

bership of William C. Ridgway,
Jr., to Giorgio Uzielli will be con¬
sidered by the Exchange Jan. 12.

ALBUQUERQUE,
Leonard G.

225'

Mr.

South

Phillips

ner-in
New

Carolisle

was

Phillins

York

from

2,

1950.

This

to

castings compared to

month

ago

1,690,500

the

tons;

rate
year

a

ago

1,716,300

was

91.7%
it

net

and

stood

at

tons

benefited

formerly
&

a

It

and

&

York

nounce
come

Co.,

members

Stock

that Jack Levine

associated with

co-manager

and

of the

Exchange,

has be¬

the firm

East

57th

as

Paul Levine as
its office at

associate manager of
1

an¬

Street.




and

crops

contracts

the

prospective

official

winter

wheat

slightly lower; milling demand was light,
slow, and government purchases were practically nil.
winter wheat crop was reported greatly

new

by general rains

or

snows

the

over

West

Caution prevailed in the domestic flour market.
bakers

were

in the

Southwest.

and

However, chain

market for substantial

quantities of hard wheat
fair demand for export, largely due to
allocations of funds by the ECA.
Cocoa values held steady in rela¬

bakery flours, and there

tively light trading.

was a

Spot coffee prices

in futures markets.

were

firmer, aided by strength

The spot Santos 4s grade advanced 1 cent

a

pound

week ago. Spot sugar prices were
steady but futures reacted
downward following release of the 1950
over

a

quota, which

larger than

was

in the trade had expected. Domestic demand for lard was fairly
good with prices somewhat stronger at the close. Demand for dressed
many

meats was

seasonally slow.

Livestock receipts in the Chicago markets
week due to holiday influences and prices

smaller last

were

steady

were

a

1949 government

loan

stock continued

volume.

198,000 bales. For the

through Dec. 15 this year, entries totaled
with 3,587,000 bales entered to the same
I
Repossessions of loan cotton for the rseason through mid-Decem¬

date

a

,i

A

season

as compared

year ago.

69,558,000-kwh.,

and

or

1.3%

lower than

the

total

output for the week ended Jan«-1, 1949, but 918,867,000 kwh. in excess
of the output reported for the' corresponding period two years ago.

PREVIOUS WEEK

was

decrease of

a

ing week.
It represented

16,420

cars, or

2.6% below the preced¬

increase of 14,604 cars, or 2.4%, above the
1948, which included the Christmas holiday
and an increase of 23,949 cars, or 4% above the similar period in 1947,
which also included Christmas Day.
an

corresponding week

RETAIL TRADE STIMULATED BY LATE
CHRISTMAS SHOPPING
—WHOLESALE BUYING EASES

The late rush of Christmas

in

AUTO OUTPUT SHOWS

SUBSTANTIAL RISE IN DAILY RATE

According to "Ward's Automotive Reports" for-the past week,
vehicle production in the United States and Canada is esti¬

110,319 units compared with the previous week's total of
(revised) units. It was the first time since the week ended
Nov. 19, that the total has exceeded 100,000.
mated

at

116,567

The

daily

however,

rate,

week, the
The

agency

total

up

was

week contained only four working

substantially,

since

summary of trade.

With the help

of

one

year ago.

Measured by unit volume the increase over the
similar 1948
week was even larger due to
many price reductions.

The

total

unit

volume

of

notes.

output for

FAILURES

DOWN

IN

HOLIDAY

holiday-

shortened week ended Dec. 29 from 196 in the preceding week, Dun &

At the lowest level

involving

above the

liabilities

Casualties of this size

of

$5,000

were

less

in

over a year, they
1948, 38 in 1947, and

or

more

numerous

dropped
than

a

to

83

year ago.

$5,000, although down to 26 from 42, remained

1948 level.

Failures in
were

less

tion

and

all

categories,
than

numerous

service;

a

were

year

wholesaling

ago

and

lower last

week.

failures

West

New

South

Central

Decreases

England, Middle Atlantic,

from

East North

slightly

1948

occurred

Central and

in

Pacific

States.

exceed

Hardware

and

by the following percentages:
New England and East

+2 to +6; South +1 to +5; Midwest
Southwest +3 to +7; Northwest and Pacific Coast 0 to
+4.

and

As

a holiday quiet
prevailed in some wholesale markets the past
week, buyer activity was generally restricted to
replenishing depleted
stocks. Aggregate dollar volume of wholesale
commitments continued

somewhat below that of

a

year ago.

The number of buyers at¬

tending many wholesale markets dwindled
noticeably below the level of a year ago.
Department store sales

on

a

in

country-wide

the

basis,

week

as

and

was

taken from

the Federal Reserve Board's index for
the week ended Dec. 24,
increased by 14% from the like
week

increase of 1%

an

For the four weeks
from

the

show

a

was

ended

1949,
period of last year. In the preceding
registered above the like week of 1948.

Dec. 24,

corresponding period

a

1949, sales registered

year

ago,

but for the

no

change

year

to date

decline of 5%.

cus¬

According

FINAL 1949 WEEK

Continuing the mild downward movement of the three preceding
weeks, the wholesale food price index, compiled by Dun & Bradstreet,
Inc., fell 1 cent in the final 1949 week to stand at $5.72 on Dec. 27.
This compares with $6.21 a year ago, or a drop of 7.9%. The current
of 2.7% above the 1949 low of $5.57 recorded

to

the

Federal

Reserve Board's index, department
City for the weekly period to Dec. 24, 1949,
period last year. In the preceding
1% (revised) was registered below the similar

store sales in New York

advanced
week

FOOD PRICE INDEX EXTENDS MILD DECLINE INTO

level represents a rise

to

Retail trade in New York the
past week experienced the

regions except the East South Central

States.

continued

tomary post-Christmas lull with estimated department store sales
volume placed at close to
8% below the corresponding period
in 1948.

exceeded those of 1948.

Decreases occurred in all

purchases

dipped somewhat
high in most sec¬
holiday decorating materials were eagerly
sought by many shoppers. Small appliances generally continued to
be very popular; the demand for
upholstered furniture slackened
during the week.

tions.

Casualties

in manufacturing, construc¬

retailing

food

year ago.

The retail volume of
many consumer durables
last week. The interest in television
sets remained

to be

WEEK

Commercial and industrial failures declined to 109 in the

a

of last week

and 18,434 trucks built in the United

BUSINESS

pre-Christmas shopping day than in

more

the corresponding week in
1948, the total dollar volume of retail trade
last week slightly exceeded that of a

Retail volume for the
country in the period ended on Wednesday
was estimated to be from 2 to
6% above the level of a
year ago.
Regional estimates varied from the levels of a
year ago

the

days, compared with five last

the current week was made up of 86,616
States and 3,787 cars and
1,482 trucks built in Canada.
The wreek's total compares with 81,968 cars built in the U. S. and
Canada a year ago and 18,535 units in the like week of 1941.
cars

shopping and the early start of post-

instrumental in sustaining total retail trade
Wednesday of last week near the high level
according to Dun & Bradstreet, Inc., in its latest

were

in the period ended on
of the previous week,

Loadings of revenue freight for the week ended Dec. 24, 1949,
totaled 623,303 cars, according to the Association of American Rail¬
This

1,976,803

holiday promotions

CARLOADINGS AGAIN DROP BELOW LEVEL OF

roads.

33,413 bales, leaving a net stock in the hands of the CCC
bales, as against 3,587,320 bales on hand on the com¬
parable date a year ago. Activity in the cotton gray goods market
was rather quiet in the
pre-holiday week.
of

a

by 12%

decrease

week of 1948.

Hirsch

December

year.

were

2,010,000 bales,

501,269,000 kwh. lower than the figure reported for the

was

previous week,

and

Two With Hirsch & Co.

expiring

ber totaled

in

City.

the

During the week ended Dec. 15 entries were 261,993
bales, or about 6% larger than the previous week with 247,000 bales.
In the corresponding week of last
year entries into the 1948 loan were

distributed by the electric light
and power industry for the week ended Dec. 31 was estimated at
5,492,674,000 kwh., according to the Edison Electric Institute

Failures for less than

part-,

Wellington

EASIER

Although off slightly for the week, corn prices showed considerable
resistance to selling pressure, aided by
fairly active demand for cur¬
rent offerings and good export sales.

in good

The amount of electrical energy

the

New

in

Entries of cotton into the

one

OUTPUT SHOWS SUBSTANTIAL CONTRACTION IN

Failures

Avenue.

CONTINUES

1950.

during the week.

production

97.8%

1949

The condition of the

in

operations will be the highest since early
indicating that mills maintained their regu¬

and

A

of

Dairly price movements in the domestic cotton market continued
narrow range with final
quotations showing a further slight rise
Early strength in the market reflected approval by
growers of marketing quotas on the 1950 crop by a larger than ex¬
pected percentage. Other sustaining influences included fairly
good
mill buying and price-fixing against sales of cotton for
export.

compared

Monday.

FINAL WEEK OF 1949

from 154.

offices

INDEX

FOR

generally

190 in 1939.

MEX.—

N.

business

pound

per

to slightly firmer.

94% of the
will be 96.1% of

1,802,500 tons, and for the average week in 1940, highest prewar
year, at 1,281,210 tons.
"
*
A '

Phillips is engaging in

securities

at

Jan.

compared with 128 in the comparable week of

Phillips
Opens in Albuquerque
a

entire industry

beginning

Bradstreet, Inc., reports.

Leonard

price

Wheat prices finished

having

motor

Exchange,

ner,

week

on

ingots

ago.

amounted

Newman, Baum & Hollander

R.

for the

companies

This week's operating rate is equivalent to 1,771,600 net tons
week

the

of

active in the past holiday week, reflect¬

were

moderately the high level of

Dec. 31.

the

Steel

of

week's steel

steel

from

limited partnership in Robert Gar¬
rett & Sons Dec. 31.

the

lar schedules

in

partners

&

King, Libaire, Stout &
Co., retired from the firm Dec. 31.
ner

This

G.

ceased Dec. 31.
S.

for

ELECTRIC

31.

Interest

I

Age"

93.1% in the preceding week.

In May of last year,

of

Cornelius

Dec.

capacity
with

PRICE

operations

the

on

yield for next

The American Iron and Steel Institute announced this week

New York Stock

evening-up

estimates

comes

that

-

Iron

"The

come,

concludes, with the way management does things. If you have some¬
thing that is good you will have to yell about it, promote it, advertise
it, make it in quantities and keep the price right. This will be at a
tempo far surpassing today's methods.

true.

COMMODITY

Grain markets

ing

in

what the Federal Trade Commission

mill

In

total

There was a further slight easing in the general price level dur¬
ing the past week. The Dun & Bradstreet daily wholesale commodity
price index closed at 245.55 on Dec. 27, as compared with 246.26 one
week earlier, and with 269.53 at this time a year ago.

come

Industry is starting to realize that it does not make much differ¬

areas

sum

WINTER WHEAT YIELD

export sales

in the chair running things.

new man

a

ence
cor¬

represents the

general use.

and rather general liquidation following issuance of final

is the forming of self-contained or nearly selfcontained market areas which hope to give their industries as much
as they need without long hauls, this trade
authority points out.

its

of

the

index

WHOLESALE

Anything that will not stand on its own feet must give way to
something better, a better product or a complete junking. If ma¬
chines can't pay their way they will be replaced. If competition can't

whole

a

For

favorable

a

operations

as

number

citizens.

poration,

The

each other.

years

11, while the decline from the Jan. 4 high of $6.12 amounts

31 foods in

inefficiency.

be met there will be

89

INFLUENCED BY FINAL 1949 CROP ESTIMATES AND

new

the

(91)

6.5%.,

them from getting worse.

Coincident with this trend which other industries will follow
the

On
means

Oct.

on

The auto

longer term business

prospects, the further adjustments
likely to be witnessed in 1950

should

FINANCIAL

The real drive to make the next 10 years a progressive decade for

Parenthetically,
market

&

to

days of 1930.
mentioned

from

as

COMMERCIAL

will

spring another phase of the rising
212.50

THE

from
of

the like

For the four weeks ended Dec.

reported from the like week of Jast year.
volume decreased by 7%.

24, 1949,

no

change

was

For the year to date, how¬

ever,

NOTE—On

another page of this issue the reader will find
the
comprehensive coverage of business and industrial statistics
showing the latest week, previous week, latest month,
previous year,
etc., comparisons for determining the week-to-week trends of con¬
ditions, by referring to "Indications of current Business
Activity."

most

40

(92)

COMMERCIAL

THE

The

Indications of Current

&

FINANCIAL

following statistical tabulations

latest week

Business Activity

CHRONICLE

week

month available

or

month ended

or

Latest

AMERICAN

IRON

Indicated steel

Month

Ago

Ago

Jan.

._

8

96.1

(net tons)

ingots and castings

8

1,771,600

1,802;500

1,690,500

Crude

oil

Wholesale

INSTITUTE:

output

condensate

and

—

daily

(bbls.

average

of

42
4,995,450

5,000.150

5,191,850

"Gasoline output

115,482,000

5,389,000

5,331,000

5,855,000

(bbls.)

Dec. 24
24
24
24

18,045,000

18,329,000

18,204,000

18,175,000

—

(bbls.)
Dec.
(Das, oil, and distillate fuel oil output (bbls.)
Dec.
Residual fuel oil output (bbls.)
Dec.
(Stocks at refineries, at bulk terminals, in transit and in pipe lines—
Finished and unfinished gasoline (bbls.) at
Dec.
Kerosene
(bbls.) at
Dec.
Kerosene

output

oil,

Gas,

distillate fuel oil (bbls.)

and

(bbls.)

Residual fuel oil

,

2,525,000

2,555,000

2,033,000

2,542,000

7,335,000

7,293,000

6,971,000

7,808,000

8,046,000

8,056,000

8,104,000

9,562,000

i

24

110,164,000

108,490,000

104,917,000

100,286,000

24

21,017,000

22,267,000

26,069,000

24.191,000

-Dec. 24
Dec. 24

at

at

78,662,000

82,450,000

91,795,000

62,786,000

67,087,000

Total

Revenue

CONSTRUCTION

ENGINEERING

—

ENGINEERING

§639,723

§664,555

608,699

§568,427

§584,885

§613,494

592,980

NEWS-

and

Bituminous

U.

lignite

and

anthracite

coke

S.

SALES

(COMMERCIAL

INDEX—FEDERAL

steel

35,925,000

75,372,000

104.151,000

46,412,000

29,421,000

53,146,000

53,684,000

35,451,000

In

6,504,000

22,226,000

50,467,000

10,961,000

In

storage

INDUSTRIAL)—DUN

8,715,000

12,650,000

9,779,000

616,000

618,000

780,000

969,000

9,100

Export refinery

*20,500

9,700

142,300

539

"582

COTTON

SPINNING

Read

(St.

in

Spinning spindles

active

spindle

■Zinc

5,993,943

5,492,674

5,562,232

5,742,915

(in

109

196

-

"

'

221

128

Wheat,

all

Government

S.

J3.836c

*3.836c

$45.88

$45.88

$45.88

$46.91

S.

$26.92

$28.92

$43.00

Rye

3.720c

Oats

—

(bushels)

spring

grain

Sorghum

forage

12.000c

12.000c

21.500c

Sorghum silage

11.800c

11.800c

11.800c

21.300c

Cotton, lint (bales)-———-;

9.750c

9.750c

9.750c

17.500c

Cottonseed

104.50

104.18

(pounds)

Alfalfa

3

116.22

116.02

115.43

112.00

Red

3

121.46

121.67

121.04

118.00

Alsike

101.02

seed

Average
Aa'

119.82

119.61

116.41

Sweetclover

115.63

114.66

110.70

Lespedeza seed

3

108.52

107.80

106.92

103.97

Timothhy seed

3

111.62

110.88

109.60

107.09

Beans,

3

117.20

117.20

•117.00

112.75

Jan.

3

120.22

120.22

119.82

116.61

Jan.

3

2.17

Jan.

3

2.84

Jan.

3

2.58

——

■

2.17

(bushels)
(lbs.)(bushels)

2.43

Velvetbeans

2.85

2.88

3.06

Potatoes

2.57

2.60

2.75

2.65

2.83

Tobacco

2.86

2.87

2.92

3.13

3.25

3.29

3.34

3.51

Sorgo sirup (gallons)
Sugarcane for sugar and

3

3.08

3.12

3.19

3.33

Sugarcane

Jan.

3

2.79

2.79

2.80

3.02

Sugar

beets

3

2.64

2.64

2.66

2.82

Maple

sugar

Maple

sirup

Broom

corn

3

346.7

346.5

346.9

390.6

Hops
fJATIONAL PAPERBOARD ASSOCIATION:
received

Dec. 24

153,405

167,383

164,709

139,128

Dec. 24

200,595

204,204

199,368

174.319

Dec. 24

92

92

90

87

Dec. 24

327,641

377,366

374,086

285,601

(tons)-,

1

(tons)

Unfilled orders

(tons)

I

at

Q

(tons)

PAINT

AND

DRUG

REPORTER

Dec. 30

124.8

LOT

DEALERS

FOR

AND

THE

Odd-lot sales by dealers
Number of orders
Number
Dollar

ODD-LOT ACCOUNT

SPECIALISTS

EXCHANGE—SECURITIES

ON

EXCHANGE

N.

THE

OF

Y.

124.6

124.5

142.0

Pears

28,415

Dec. 17

13,390

10,168

;

9.422

292

(tons)

—

—

229

1,614

(bushels)

crop

—

1,445

44

30

49,819

133,131

(12 States)

26,334
3,044

244

214

200

(toi s)

74,780
2,702

—

———

88,407
65,352

36,627

(bushels)

(bushels)

Cherries

7,665
6,778

11,770

.

49.34G

States)

(2

Prunes,

dried

Grapefruit
Dec. 17

25,417

23,996

876,698

25,561
776,625

755,910

702,133

-.—Dec. 17

$34,525,262

$30,688,357

$30,614,497

$26,104,621

Dec. 17

38,412

31,856

28,507

23,760

Dec. 17

200

187

269

90

Dec. 17

38,212

31.6'69

28,238

23,670

Dec. 17

1,075,662

897,933

782,893

632,666

Dec. 17

(customers' sales)

(tons)
(tons)

(tons)

247

(3 Stutes)

(tens)

.*

—

,—

(boxes)

7,708

6,987

9,615

(boxes)
<5 States)

Cranberries

70

175

184

127

84

110,000

—

(boxes)

States)

—.

96

104,020

36,350

—

States)

(3

(4

45,520

12,000
(barrels)

—

9,930

85T.

968

3,516

(lbs.)

Pecans

Tung

113,694

;

(5 States)

nuts

(tons)

short sales

Customers'

other

i

sales

Number of shares—Customers'
Customers'

short

Customers'

other

total sales

sales
sales—

Dollar

STRUCTURAL

FABRICATED

—

orders—Customers' total sales

of

Customers'

—Dec. 17

1,067,954

890,946

773,278

629,150

.-Dec. 17

—

value

$36,658,497

$30,473,267

$28,598,905

$21,237,083

sales by dealers—
Number of shares—Total sales

Pound-lot

Dec. 17

INSTITUTE

ICAN

177,667

66

_—

427,730

350,080

278.910

169,890

closed

Contracts

Shipments

sales

Dec. 17

sales

Dec. 17

427,730

350,080

278,910

169,890

Dec. 17

241,460

228,910

284,410

STEEL

(AMER¬

STEEL

CON¬

158,120

(DEPT.

OF

"120,373

162,739

95,350

162,139

164,024

880,647

CASTINGS

IRON

GRAY

(tonnage)—estimated

(tonnage)—estimated

872,013

1,088,051

COM¬

MERCE)—Month of September:

(short

tons)

(short

tons)

For

sale

For

Short

OF

STRUCTION)—Month of October:

Shipments

Other

producers

459,014

445,981

615,978

421,633

428,032

472,073

980,070

—

1,048,308

2,587,385

253,840

j

Round-lot purchases by dealersNumber

PRICES

NEW

SERIES—U.

S.

DEPT.

OF

LABOR—

PLANTS

Dec. 27

1

'

commodities other than farm and foods

products

and

Metals

and

Building
All

155.3

178.C

Dec. 27

170.3

Number

of

Number

of

157,9

Dec. 27

145.4

145.4

145.1

152.4

137.5

137.5

137.6

130.5

130.4

130.4

137.0

169.4

169.6

169.2

174.0

190.8

190.3

189.2

201.3

115.4

115.5

116.5

129.5

1941

skins.

to date.

—

^Includes 544,000 barrels of foreign crude
The weights used

1948 inclusive.

159.8

160.9

162.3

170.9

Dec. 27

188.2

187.9

187.8

Month

of

Oct.:

vehicles.,

572,917

cars
trucks

motor

626,180

491,803

487,391

534,493

383,755

34,704

91.389

107,369

322

.

NON-FERROUS

motor

coaches

298

CASTINGS

MERCE)—Shipments,
Aluminum

(thousands

(DEPT.

month
of

of

OF

679

COM¬

Sept.:

203.8

205.3

211.2

228.7

Dec. 27

201.0

201.5

202.9

runs.

tThe weighted finished steel composite

are based on the average product shipments for the
§Reflects effect of five-day week effective Sept. 1, 1949.




pounds):

27,559

23,9.97

35,877

Copper (thousands of pounds)
Magnesium (thousands of pounds)

60,771

58,055

86,973

727

753

35,609

35,020

1,319

832

(thousands oi pounds)
die (thousands of pounds)

745

t

221.4

Dec. 27

1

1

jL946 to

of

146.5

Dec. 27

—

figure,

—

Number of passenger

155.6

number

Zinc

—.

Livestock

and

MANU¬

*155.0

Dec. 27

—

Hides

(AUTOMOBILE

S.

ASSOC.)

155.1

Dec. 27

1

Materials

Meats

V.

IN

155.6

Special indexes—

♦Revised

FROM

162.0

Dec. 27

materials
metal products

other

Grains

SALES

at

FACTORY

151.4

Dec. 27

lighting

end

—

month

*151.1

Total

tons)
of

151.1

Dec. 27

—

(short

sale

Dec. 27

products

Foods

Fuel

for

use

tons)

FACTURERS'

commod'ties

Textile

orders

own

VEHICLE

MOTOR

1926—100:

Farm

Unfilled

(short

shares

of

WHOLESALE

years

1,980,325

6,012

7,323

value

Number

All

1,990,129
(tons)

Lemons, Calif,

(customers' purchases)—

Odd-lot purchases by dealers

All

50.204

^

—

Oranges (5 States)

ODD

STOCK

COMMISSION:

shares

of

454,654

54,232

——

Prunes, other than dried
STOCK TRANSACTIONS

350

401,962

::

seed

(lbs.)

Grapes (tons)

Plums

AVERAGE=100

2,338,470

.

INDEX —1926-3)

PRICE

3,435

1,853,140

(lbs.)

Peaches

223,006

2,982

—

(gallons)

Apricots (3 States)

OIL,

222,305

(gallons)

Apples, commercial

Percentage of activity

3,580

._j_

—

sirup

20,827

—

(lbs.)

—

3

(lbs.)

405

21,554

3,267

—

—.

—

(bushels)

3

2.67

574

240,060

826

Sweetpotatoes (bushels)

2.66

396

244,600

337

3

Jan.

—

(tons)

Jan.

Production

-

1.045

1,789

344
598

——

_

-

(bags)—-.

Jan.

Orders

—

dry field (bags)
Soybeans for beans (bushels;

2.20

12,678

1,896

—

seed

dry edible

5,945

99,471

1.262

—

(bushels)

Jan.

-

14,877

6,477

(bushels)

Jan.

——————_—

Baa

7,602

4,529

16,034

12,296

Jan.

■

A

131,596

99,305

Cowpeas for peas (b ishels)
Peanuts picked and threshed

Bonds:

—

—

Peas,

•

DAILY AVERAGES:

——

—

—

seed

115.82

3

309,125

6,541

4,423

,

(bushels)

120.02

3

corporate

Aaa

-

-

seed

clover

.Jan.

Government

(tons),

(tons)'

.Jan.

S.

(tons)——_—-_

85,056

156,597

;

—.

—

(bushels)

(tons)

clover

6,305

54,529

89,141
152,630

Popcorn

(tons)

26,449

5,184
•

Sorghum

all

315,894

18,697

43,664

23.425c

wild

1,493,304

238,104

•'
—

(bushels)

Hay,

44.680

260,991

1,322,924

I

23.200c

.Jan.

——

—

303,671

38,864

—

(bushels)

103.000c

.Jan.

;—.

1,007.863

—

1

85.000c

.Jan.

:

1,313,534

244,795

——

18.425c

3

17

205,931

18.200c

104.53

389

3,681,793

(bushels)

.Jan.

—.

409

AGRI¬

Dec.

(bushels)

(bushels)
(bushels)

.Jan.

;

OF

—

78.000c

•1

Bonds

8,681,000

429

;•

18.425c

,

21,231,000

8,978,000

REPORTING

(bushels)-'—

18.200c

12.000c

23,772,000

20,215,000

9,442,000

901,668

78.000c

-

Nov.

23,315,000

20,314,000

1,146,463

.Dec. 28

—.

—

U.

54,425

21,219,000

3,377,790

.Dec. 28

—.

:

YIELD

292,504

40.111

20,215,000

23,338,000
—

Nov.—

(bushels)-

18.425c

1

30

30

issued

report

.Dec. 28

—

BOND

CROP

—

18.200c

DAILY AVERAGES:

Industrials Group

240,951

42,913

omitted)

.Dec. 28

A

MOODY'S

(000's

.Dec. 28

——:

——-

;

—;—

246,439

20,314,000

Nov.

Nov.

.Dec. 28

——

.

•Baa

30

'

(bushels)

Flaxseed

Aaa
Aa

1,635,081
8,458,339
116,366

COMMERCE):

on

on

DEPARTMENT

Barley

$26.58

3.705c

.Jan.

Average corporate

685,881

1,130,457
8,351.467
143,096

131,518

Nov.

(bushels)

Hay,
TJ.

of

as

(bushels)——

spring

-Jec. 27

at

at

725,602

1,455,149
10,516,430

hrs. per spindle in place,

U.

all

Rice

PRICES

BOND

hours

thousands):

Dec. 27
Dec. 27

at—

(East St. Louis)

MOODY'S

30

November—

OF

place

PRODUCTION

Other

at—tJI——1—-—

Lbtlis):

(DEPT.

Spinning spindles

——

at——.-i.

York)

of

771,833

Nov.

473

330

J. QUOTATIONS):

York)

(New

month

of

30

public

Active spindle

BRAD Dec. 29

&

-

Electrolytic copper—
Domestic refinery at

COM¬

storage as of Nov. 30
Cotton spindles active as of Nov. 30

PRICES:

M.

OF

as

Nov.

consuming establishments

CULTURE— Final

ton.)—

&

of

as

Linters—Consumed

Buckwheat

(E.

of

November

of

public

.Dec. 31

(per gross ton)

PRICES

DE¬

BALES.

month

In

Winter

gross

S.

Month

—

DEPT.

—

31,688,000

——Dec. 24

(per lb.)

(per

Scrap steel

(New

$'205,100,000

LINTERS

115,496,000

SYS¬

RESERVE

—

AND

—

COMPOSITE

Bead

$463,500,000

COMMERCE

OF

—

Durum

tin

$196,800,000

CORPORATIONS —U.

80,135,000

AH

Straits

$24,416,000

30,933,000

'

-

$23,894,000

REPORTED

consuming establishments

INSTITUTE:

STREET, INC.

METAL

$22,799,000

In

Corn,

iron

1,382,000

MERCE—RUNNING

BOARD

Pig

955,000

1,248,000

$78,100,000

9,040,000

output (in 000 kwh.)__

Finished

3,456,000

1,989,000

1,281,000

$219,647,000

Dec. 24
__Dec. 24

(tons)

AVERAGE—100

ELECTRIC

BRON AGE

5,833,000

4,362,000

$155,507,000

CROP

.

5|929,000
liabilities

$66,858,000

Dec. 24
.-

STORE

TEM—15)85-89

•FAILURES

2,690,000

OF MINES):

(tons)

(tons)-

DEPARTMENT

Electric

460

$15,933,000

2,927,000

liabilities

AND

Active

KOISON

802

$11,897,000

November

Dec. 29

S. BUREAU

(U.

coal

Pennsylvania
Beehive

335

service

PARTMENT

Dec. 29

—.——

—

<X)AL OUTPUT

31

2,808,000

DIVIDENDS—PUBLICLY

Dec. 29

—

municipal——

Federal

58

$8,419,000

Dec. 29

construction

State

37

63

!

Lint—Consumed

Private construction
Public

55

90"

liabilities

Dec. 29

construction

S.

—_____

liabilities

Total

BY

§623,303

RECORD:

Total U.

number

liabilities

COTTON

CIVIL

129

208

63,374,000

Dec. 24
of cars)—-Dec. 24

(number

181
109
364

33

—

liabilities

Commercial

Ago

97

service

Construction

Year

Month

197

number

Retail

Previous

395

74,576,000

61,647,000

RAILROADS:

AMERICAN

OF

freight loaded (number of cars)
freight received from connections

Revenue

:

BRADSTREET

number

Manufacturing
Wholesale

CASH

ASSOCIATION

of that date)

November:

number

5,693,150

.Dec. 24

—

&

number

Commercial

Dec* 24
(bbls.)

stills—daily average

to

runs

of

number

Construction

gallons each)
Crude

FAILURES—DUN

Manufacturing
Retail

AMERICAN PETROLEUM

are as

either for the

Latest
BUSINESS

INC.—Month

1,716,300

are

Month

97.8

91.7

93.1

Equivalent to—
(Steel

of quotations,

cases

Year

Week

Jan.

(percent of capacity)-

operations

Previous

Week

INSTITUTE:

STEEL

AND

in

or,

1950

production and other figures for the

cover

(dates shown in first column

that date,

on

Thursday, January 5,

7

years

1937

to

192.5

Lead

WINTER WHEAT AND
AGRICULTURE—As
Winter

was

revised

1940

for

inclusive

the
and

inclusive and

RYE—U.
of

Dec.

S.

1,

DEPT.

OF

1949:

wheat—Production

Rye—Condition

•Revised figure.

5

903

884,658,000
——

901,668,000

88^

tCurrent figures comparable only from June, 1949 to date.

86

r/c.

171

Continued

THE

Number 4870

COMMERCIAL

from first page

Volume

the

FINANCIAL

&

peaceful adjustment of teilse If the

international

Urges Enactment
Of Fair Deal Program

that most of Europe and
area
might
collapse under totalitarian pres¬
sure.
Today the free peoples of
the world have new vigor and
Mediterranean

the

hope for the

new

In

notable

toward

broader opportunity and a better
life for all our citizens.
the

reversed

first significant downturn in eco¬
nomic

activity since the war. In
accomplishing
this, government
programs for maintaining employ¬
ment and purchasing power have
been
the

of

tremendous

benefit.

As

result of these

programs, and
the wisdom and good judgment of

business

our

major

and

men

readjustments

made without

workers,

have

been

widespread suffer¬

ing.
also made

past

year

have

we

good start in provid¬
housing
for
low-income

ing

a

.

groups; we have raised
wages;

tural

have

we

with the

minimum
forward

gone

development of

our

na¬

have given
stability to
the
farmer, and we have im¬
proved the organization and ef¬
ficiency of our government.
resources;

greater

we

of

assurance

Free

and

Prosperous Nation

Today, by the
stand

free

a

God,

grace of

and

prosperous

we
na¬

tion, with greater possibilities for
the

future

had

ever

We

than

people have

any

before.

now, in this year of 1950,
nearing the midpoint of the twen¬
are

tieth

century.

The

lent

first

and

corded

half

this

of

as

century

the most turbu¬

eventful

period

in

re¬

history. The swift pace of
promises to make the next

events

50

decisive

years
man

The

the

in

history

this planet.

on

scientific

industrial

began two

cen¬

turies ago

has, in the last 50

caught

the peoples of the globe

a

up

no

destiny. Two world-

common

shattering

wars

have proved that

of the earth

corner

years,

can

be iso¬

lated from the affairs of mankind.
The human

turning
the

tered

new

Man

of

has

nature

reach

can

civilization.

If

a

opened

and

mas¬

uses

them

If he

powers.

wisely, he
of

has reached

race

point.

secrets

heights

new

he

them

uses

foolishly, they may destroy him.
Man must create the moral and

legal

framework
will

which

powers are

for

evil.

the

the

that

insure

world

his

new

used for good and not

In

people

for

shaping the outcomethe United States

of

will play a leading role.

Among

the

all

years none is more important than
the change in the position of the
United
States in
world
affairs.

Fifty years ago we were a coun¬
try devoted largely to our own in¬
ternal affairs.
Our industry was

growing,
terests

the

Our

and

in

had

we

the

Far

Caribbean, but

we

in¬

new

East

and

were

in

pri¬

marily concerned with the devel¬
of

areas

our

own

continental territory.

Today,

our

population has dou¬

bled.

Our national production has

risen

from

terms

of

$50

today's

year.

We have

billion,

prices,

staggering figure
a

strength

of

$255

a more

to

in

the

billion
produc¬

tive economic system and a greater

has

with

it

tremendous

look

to

for

us

re¬

wise exercise

a

economic

our

to

great

this

our

In the world

fronted

with

demand

where

for

of

defense

well-balanced

organiza¬

The selective service system

backs

the

people
and

better

a

their

na¬

effort

prosperity.

For

the

other

nations

free

shall extend

we

of

the

the

full

world,

benefits

of the democratic way of life to
Recovery Pro¬ millions who do not now
enjoy
working with gram. This program has achieved
them, and preserve mankind
other
nations to
achieve
peace great
success
in the first two from
dictatorship and tyranny.
depends largely on what we do years of operation, but it has not
I believe that we shall succeed
at home.
We must preserve our yet been completed.
If we were
in our struggle for peace because
national
strength.
Strength
is to stop this program now, or crip¬
I have seen the success we have
not simply a matter of arms and ple it, just because it is succeed¬
force.
It is a matter of economic ing, we should be doing exactly had in our own country in fol¬
growth, and social health, and what the enemies of democracy lowing the principles of freedom.

of mankind

Our

at stake.

are

the

of

vigorous

institutions, public

private.

We

achieve

can

maintain

and want

European

peace

foolish

as

We should be just

to do.

us

who,

man

a

as

for

produc¬ reasons for false economy, failed
tive energy, our democratic insti¬ to put a roof on his house after
tutions, and our firm belief in building the foundation "and the
our

individual freedom.

walls.
World

Our surest guide in the
prosperity also requires
days
that lie ahead will be the spirit in that we do all we can to expand
world trade.
As a major step in
which
this
great Republic was
founded.
We must make our de¬ this direction, we should promptly

International Trade Or¬
The purpose of this
men are created
equal, that they ganization.
are
equally entitled to life, lib¬ organization, which the United
erty, and the pursuit of happiness, States has been foremost in creat¬
and that the duty of government ing, is to establish a code of fair
practice,
and
an
international
is to serve these ends.
authority
for
adjusting
differ¬
This
in

the

conviction

that

all

join

the

country of ours has ex¬
ences in international commercial
perienced
many
blessings,
but
relations.
It is an effort to pre¬
none
greater than its dedication
vent the kind of anarchy and irre¬
to these principles. At every point
sponsibility in world trade which
in our history these ideals have
did so much to bring about the
served to correct

failures and

our

world depression in the 1930s.
shortcomings, to spur us on to
An
expanding world economy
greater efforts, and to keep clear¬
requires the improvement of liv¬
ly before us the primary purpose
ing standards and the develop¬

of

existence

our

as

nation.

a

They have enshrined for

us,

as

ment of

in

resources

areas

where

a

human poverty and misery now
principle
of
government,
the
prevail.
Without such improve¬
moral
imperative to do justice,
ment, the recovery of Europe and

love

to

divine

the

and

one

These

that

can

we

that

the

the

meaning Congress

they

be

mean

tolerant

tyranny. They
throw

side

of

our

of

mean

weight
freedom

our

it

to

own

economy

I urge that the

secure.

adopt

before

now

never

or

of

future

will not be

policy,

must

we

men

do.

we

foreign

oppression

to

another.

principles give

that

In

command

the
legislation
provide for in¬

flow of technical
assistance and capital investment

creasing

the

underdeveloped regions.

to

It

is

more

essential

now

than

if the ideals of freedom and
better life for all peoples. representative government are to
These
principles confirm us in prevail in these areas, and par¬
carrying out
the
specific
pro¬ ticularly in the Far East, that their
grams for peace which we have people
experience, in their own
on

and

greater

ever,

a

lives, the benefits of scientific and

already begun.
We

shall

continue

wholehearted

to

give

support

to

our

the

This program

economic advances.
will

the

require

movement

of

from the
particu¬
organization can ultimately
provide the framework of inter¬ larly from the United States, to
uses
in the
under¬
national law and morality with¬ productive
Re¬
out which mankind cannot sur¬ developed areas of the world.
Nations.

We

believe

this

It

standards

has

already set

for

up

the conduct of

that large amounts of capital
industrial
nations, and

new
na¬

cent

This

tions in the declaration of human

rights

and

the

convention

on

of all

in

genocide.

world

events

make

prompt

action imperative.

is in the interest

program

peoples—and it has nothing
with

common

either

the

old

It is moving ahead to
meaning to the concept of imperialism of the last century or
the new imperialism of the Com¬
world
brotherhood
through
a

give

The

events

cultural, economic
of

United Nations in

showed

the

the

munists.
Our

cratic

past

value

of

year

the

bringing about

be

aim

of

a

the

which

arms, but by an appeal
minds and hearts of men.

in

nation

our

dedicated

is

50

At

which

a

has

man

to

citizens do achieve greater
than others as a reward

individual

merit

and

effort,

and this is as it should be. At the
same

time,

more

than

for
of

country

our

land

a

of

must

select few. It must be

a

land, all

a

be

opportunity

opportunity for all of

such

grow

as

have

we

in the past, we can get
grow

present

our

the

over

a

coun¬

next

total

our

Billion
national

production is $225,000,000,000 a
Our working population
and our output per worker are in¬
creasing. If our productive power
year.

continues to increase at the
rate

as

it

past

50

years,

increased

has

same

for

the

total national
production 50 years from now
will be nearly four times as mucfat
as
it is today.
Allowing for the
expected growth in population*
this would
of

come

the

our

that the real in¬

mean

the

average

2000

year

A.

D.

family

in

would

be

about three times what it is today

„

These are estimates of what we
do

can

in tne future, but we can

these

heights only if we
right policies. We have
learned by bitter experience that
progress
is not automatic—that
follow the

wrong policies lead to depression
and disaster.
We cannot achieve

these

gains

stable

economy

trophes

unless

of

have set

we

boom

and

back

in the

us

have

and avoid

a

catas¬
that

bust

past.

These gains cannot be achieved
unless

business

our

men

maintain

their

spirit of initiative and en¬
terprise and operate in a competi¬
tive economic system.
They can¬
not be achieved unless our work¬

share of
nomic

can grow

a

land

us.

In

benefits of

the

system.

our

eco¬

They

achieved unless
and

we

cannot be
have a stable

agriculture*
achieved unless

prosperous

tural

for

as

National Income Is $225

we

our

shall

we

future

years.

portunity

advance beyond his fellows. Some

success

the

should

try

The ideal of equal opportunity
no longer means simply the op¬

of

that

assume

50 years,

have been increasingly realized in
the lives of our people.

They

be

cannot

in

resources

Our system will not

terest.

unless

people

our

well-educated

citizens

all

are

work

healthy,

confident

and

It will

the future.
less

develop our na¬
the public in¬

and

conserve

o2

not work un¬

can

participate*

national life.
achieving these gains the
government has a special respon¬
sibility to help create and main¬
fully in

our

In

and pros¬ tain the conditions which will
per¬

together.
mit the growth we know is pos¬
The simple truth that we can all
sible. Foremost among these con¬
go forward together is often ques¬
ditions is the need for a fair dis¬
tioned by short-sighted persons.
tribution of our increasing pros¬
It is strange that this is so, for
perity among all the great groups
this proposition is so clearly de¬
of
our
population who help tomonstrated by our national his¬
bring it about — business, labor
tory.
During the last 50 years,
and agriculture.
for
example,
our
nation has
per

grown
enormously
well-being.
This

in

material
has

growth

Investment Incentive Necessary
Business

men

must continue to

about, not by concentrating have the incentive
necessary foy
of our progress in
investment and for the develop¬
the hands of a few, but by in¬
ment of new lines of enterprise
creasing the wealth of the great In the future growth of this coun¬
body of our citizens.
try lie possibilities for hundreds
Jn the last 50 years, the income
of thousands of new and indepen¬
of
the
average
family has in¬ dent businesses.
As our national
creased so greatly that its buying
production increases, as it doubles
power has doubled.
The average
and
redoubles
in
the
next 5®
come

the

benefits

hours

from

of

60

work

to

40

have

declined
years,

the number of independent

week, while the and
competing enterprises should
hourly production of the average
also increase.
If the number does
worker
has
tripled.
Average not
have

a

allowing for price changes

wages,

increased

cents

an

from

hour to $1.40

about
an

45

hour.

We have accomplished what to
earlier ages
of mankind would
have

been

miracle—we

a

shorter hours,
and

we

work

produce

more,

we

increase, our

constantly grow¬

ing economy will fall under the
of

control

few

a

dominant

eco¬

whose powers will

nomic

groups

be

great that

so

challenge

to

they will be a
democratic institu¬

tions.
To

live better.

avoid

this

danger we mus*

curb monopoly and provide aicla
Increasing freedom from pov¬
to independent business so that iterty and drudgery has given a
may have the credit and capital
fuller meaning to American life.
to compete in a system of free en¬
Our people are better educated;
terprise.
I recommend that thewe
have mdre opportunities for
Congress complete action at thin
travel and recreation and enjoy¬
session on the pending bill to close

ment of the arts.

If
of

we

can

We enjoy more

the United
before.
continue in the spirit

personal
liberty
States today than

peaceful, demo¬

free

peoples will
achieved in the long run, not

by force of
to

for

world

liberty

to

of course, can foretelX
exactly. However, DP

ing men and women and their
unions help to increase produc¬
the ideals
tivity and obtain for labor a fair*
and equal opportunity

Over the last
of

one,

future

fast

in

success

we

the

reach

part, I welcome
I
believe
that

my

liv¬

of

enjoyment

every¬

democratic

in

experience

world

wider

41

democratic freedom.
No

grown
are con¬

danger that the

of

freedom

which

tions

standard

our

still

a

good idea of how much
today, we

the

rising

of

we

own

own

est




to

task, because we know that
As an immediate means to this
security and the future end we must continue our support

our

again

ana

races.

our
to working together—and
We
shall continue
our
efforts challenge.
I am sure they will continue to for world economic recovery, be¬ country, at this crucial point in
world
history, will
meet
that
work
together—to achieve
this cause world prosperity is the only
I believe
end.
We are prepared to devote sure
foundation
for
permanent challenge successfully.
that,
in
cooperation
with
the
our energy and
our resources
to peace.

all other peoples. Even the slight¬

economic

all

Backward Areas Endangered by

mitted

living is

our

the

to

in

ing, and

can

extended

and life may be corrupted and be¬
remains trayed by the false promises of

determined

ard of

changes in

way

and

unsettled,

and technical activities.

inspiration for

forces

world

the

their

increases

law

through.
Both of our fense plans that are being worked
political parties are com¬ out.

on

an

the

have

international

While

order.

will

of mass destruc¬

it

see

nation

Our stand¬

will

and

that

of life

demonstrate

increased

Communism

Nations

United

weapons

successful,

strength, and for vigorous support is an essential part of our defense to secure a better life for their
citizens.
This challenge to us is
of
the
ideals of
representative plans, and it must be continued.
more
than
a
military challenge.
government and a free society.
Under
the
principles
of
the
It is a challenge to the honesty of
We will not fail them.
United Nations Charter we musi
our
profession of the democratic
Our objective in the world is continue to share in the common
faith; it is a challenge to the effi¬
peace.
Our country has joined defense of free nations against
ciency and stability of our eco¬
with others in the task of achiev¬ aggression.
At the last session
nomic system; it is a challenge to
ing peace.
We know now that this Congress laid the basis for
our
willingness to work
with
this joint effort.
this
We now must
is not an easy task,
or
a
other peoples for world peace and
put into effect the common de¬
short one. But we

wide variety of

globe.

Be

working toward the time

the

military tion.

and

industrial potential than any other
the

to

be

however, and as long Communism. In its ruthless strug¬
security and the se¬ gle for power, Communism seizes
sponsibilities.
We
have
moved
from the outer edge to the center curity of the free world require, upon our imperfections and takes
of world
strong and advantage of the delays and set¬
affairs.
Other nations we will maintain a

vive.
about

tion

as

United

opment of vast

are

preserve

tremendous

brought

to all

changes

great

that have occurred in the last 50

World

must

tney

benefits of
be

Maintained
We

the

Affairs

cisions

and

revolution which

in

Center of

Now

S.

Position

Defense

control

U.

have

nations is to

settlements. nations and all

peaceful

on

around

Nations

to bloodshed and paved
to

way

Strong

effect

United

the

a stop

the

when

only if

will be known

of

their
all

are

During the

A

have

put

world,

have

we

advances

We have met and

life

countries

of peace.

cause

affairs

domestic

our

made

social
other

of

forts

(931

policy of the demo¬

peace

In cratic

controversies.

Indonesia and in Palestine the ef¬

Truman

years ago

CHRONICLE

cooperative

has

marked

our

progress,

in

ever

adventure

the
we

recent
can

which

years

of

expect fur¬

loopholes in the Clayton Act,
now
permit monopolistic
mergers.
I also hope before thia
session is over to transmit to the
the

which

Congress a series of

strengthen
•

ther

scientific

advances,

further

the

proposals to

anti-monopoly

r^nrttiniiofl

rm

nnrip

4.T

-$2

COMMERCIAL

THE

(94)

Continued

from

41

page

and

the

consumers

the growth

encourage

of

new

In the

tive

of labor, free collec¬

case

bargaining must be protected

and

encouraged.

of millions of
metropolitan areas.

power

in

recommend, therefore, that rent

I

enterprises.

buying

continued

for

If

we

life

achieve

to

are

The

Federal

statute

now

gov¬

year

that

able.

Government

erning labor relations is punitive

i;he conservation and

of

has

been, inconsistent with the
practice of true and effective col¬

the country.

lective

tion

necessary
future economic expansion

pres¬

adequately.

more

to

of

economic

downturn

the

was

the

real

first

of

and

and

coverage

in¬

its

benefits.
In the

field of health, there are

immense
to

of

more

of the

opportunities

extend

to

people the benefits

our

amazing advances in medi¬
We have made a good

eral

cal

A

full

understanding

problems

of

modern

of

the

labor

rela¬

regions

tions is of such importance that I

public

educational

activities

field.

but

New

as

In

Another

essential

growth

prosperous
years

is

for

our

con¬

stable

a

and

agriculture. For
have

we

many

benefits

that

their

the

among

special

hazards

exposed.

That

Projects

Important

to

pro¬

which

legislation

resource

should

be

passed

Although
the
properly declared
policy

at

the

last

Congress
as

that

has

matter

a

of

safeguards
against

maintained

slumps in farm

prices, there are
shortcomings in the meth¬
available for carrying out

now

this

policy. Mandatory price

ports should be
commodities

which

provided

not

major

are

sup¬

for the
covered

now

authorization

Seaway and
the establish¬

Valley Ad¬

fit

of

abundant

our

production.
tion

A

system of produc¬

payments give the greatest

promise

of

purpose.

I

use

agricultural

of

accomplishing
recommend

such

that

system be

a

this
the

author¬

ized.

construction

of

more

up-to-date housing.

In

such

is

as

there

ours,

good,

country

a
no

reason

why decent homes should
within the reach of all.

not

we

progress

have

in the

made

last

few

increasing the number
Despite
still

an

for the

be

With the

help of various government
grams,

is

pro¬

children

dren

natural

our

sure

of

and

resources, we

transmitting to
our

children's

our

chil¬

a
country far richer and
productive than the one we

more

know today.
The

value

of

natural

our

atomic

re¬

stand

wonders.

machines

the

threshold

The

first

for

from

and

new

experimental

producing

useful

energy
are
now under construction.
We have
made only the first

beginnings in

field, but in

history they
the

first

the

may

perspective
loom larger

airplane,

or

the first tools that started

even

man

on

the road to civilization.

To take full advantage of the
increasing possibilities of nature,
we must
equip ourselves with in¬
creasing knowledge.
Government
has

a

responsibility to see that our
country maintains its position in

should

complete

action

increase, there is measure to create
shortage of housing Science Foundation.

lower

of

we

atomic

this

acute

a

As

a

step

Congress
on

the

National

Advocates More

Social Security

Another duty
of the govern¬
relieving
the ment is to promote the economic
plight of lower-income families in security, the health, and the edu¬
the Housing Act of 1949.
To aid cation of its citizens.
By so doing,
we
middle-income
strengthen^both our economy
families,
I
rec

groundwork

for

ommend

that the Congress enact and the structure of our
society.
In a nation
as
legislation authorizing a vig
rich as ours, all
citizens should be able to live in
program
to help
cooper
atives
and
other
non-profit decency and health*.
groups build housing which these
Our
social security system
families can afford.
should
be
developed
into
the
new

orous

Rent

control

has

deal to prevent the

done

a

great

housing short

main

reliance

basic

protection

of

our
people for
against the eco¬

from having had worse effects nomic hazards of old
age, unem¬
during this period of postwar ad
ployment and illness.
I earnestly
justment.
Rent control
is still hope that the
Congress will comnecessary to prevent widespreac
olete
action
at
this
session
on
hardship and sharp curtailment of legislation to increase the benefits

country
people are being handi¬
capped for life because of a poor

education.

The

rapidly increasing

number of children

coupled

with

I

that

of
this

Congress
delay in pro-

assistance

that

so

year.

the

longer

Federal

States

shortage

makes
critical each

more

no

viding

of school age,

the

teachers,

believe

this

situation,

they

th£r

to

As

I

am

greater
greater

opportunity
*,wc

effort

to

should

.

which
the

for

grant

economic

I

Alaska

greater

a

self-government

Some

of

a

as

changes in
will

expect

Our

the

yield

of

some

the

inequities,
activity, and

tions to

of

amount

I

revenue.

transmit

we

system which

present

moderate

a

ject at

tax

our

business

ditional

specific

ad¬

expect

to

recommenda¬

the Congress on this sub¬

early date.

an

we

forward

move

into

the

half

of the 20th century,
always bear in mind the

must

of

purpose

We

love

do

national

our

not

for

seek

material

ourselves

luxury;

Continued

best

own

do

we

government

because

do

not

page

aid

jrom

for

labor,

we

can

about

the

future

discour¬
let's

look

carefully at the details on
purchasing power in the first half
of 1949 before strikes and depres¬
sion scares took their toll of in¬
come.

Purchasing
Can Be

The
our

Power

in

1950

60% Over 1940

purchasing power of
population—that is, the dis¬

taxes

personal

and

full

income

correction

after

for

in¬

shall

add

In

strength

to

which

skills

will

these

bring

extend

existing

men

here.

I

and

measures

its

I

the

level

income

nearly
in

concerning
our

hard

by humbler

work,

self-restraint in
one

another, and by

tion

to

and

the

make

we

look

of

as

this

nings
have
to

deep devo¬

a

principles

of

justice

equality.

It should

ful

means

by a spirit of
dealings with

our

come

country,

make

that we
along the road

far

so

better life

a

for

humble

us

truly thank¬

us

back to the begin¬

all.

to

It-should

think,

as

we

ahead, how much farther

look

we

have to go to accomplish, at home
and
abroad, the objectives that
set

were

for

out

the found¬

at

us

ing of this nation.
As

approach

we

mark

in

the

the

half-way
century, we

20th

should ask for continued
strength
and

guidance from that Almighty
has placed before us

Power Who

such

great

opportunities

for

good of mankind in the

the

years

to

come.

to

meet

peace.

dominant factor in
same

must

This
our

to

is

cbrrection

had

in

the

the

than

before

we

goal of $200

personal

in

opportunity,
real

consume

goods

the last

entered

billion

the

of

income

would

first

purchasing

physical

more

services

more

level

a

dispos¬

in

our

1950,

range of

provide

purchasing

full
war.

60%

than

power

in 1940 and 6% more than in 1949.
1950

Goal

$185.7

$194.6

$200.0

100

169

169 V2

165

$109.8

$114.8

$121.2

the

im¬

in

gain

of

additional

power.

for

has
new

This gain

after

power

prices

would

sharp contrast with the condition

of

in

existed

the

under

after

entire
what

before the

it

World

population
had been

war

War

purchasing

I.

power

1%

was

in

started, and

1913,
on

a

capita basis the real purchas¬
ing power in 1920 was 9% under
per

1913.

This factor should be

sidered before

sions that
tion

we

of the

con¬

jumping to conclu¬
must have

1921

Furthermore,

a repeti¬
depression.

the

purchasing

of

in

into

in

j

the real

its

per

an

or

standard

account

population

there has been

the

gov¬

population

1949

52%

over

able

at

was

half
same

1940. In other words the

ability to buy and

power

and

and

the

power of the aggregate of accu¬
mulated savings in 1920 after cor¬
rection for consumer prices was2%

the

work

substantial

real

purchasing

Taking

fiscal pol¬
I

time, the

make

times

leaving a
$46 billion

purchasing

crease

and

of

first

buy to improve
living over 1940.

necessarily requires large
expenditures of funds. More than
70% of the government's expendi¬
wars

1948

the

above

$75.7

Inflation

60% in the number of units

which

required

half

5%

was

improved quality of goods and
services that our population could

program to meet our
needs.
It is a program

past

prices—in

1949

American

make possible an increase of over

carefully

a

creased

dollars

1940

almost 2%

real

full

domes¬

considered

At the

be achieved

$75.7

in

in prices
dissipated $78.8 billion of this

persons

recommend¬

am

Congress
foreign and
tic policies represent

icy.

to

—by

In 1920 the real

a

discriminatory

our

ernment

They
are
not
to
be
by military aggression
political fanaticism. They are

or

1949

mediate prewar level of consumer

broaden

displaced

remove

world

history.

that

real

for

than

more

conquests of

1st Half

be reached in 1950 is at

can

income.

features.

are

as

goals,
They

ones.

great deal

a

the empires and

which

the abil¬

the prompt enactment by the
of the legislation now

of

all

The disposable personal income
rate of
$200 billion after taxes

Congress

costs

worth

are

simple

seem

not little

1948

so

urge

tures

their

serve

1st Half

Disposable personal income
after taxes (billions)
Consumer price index
Real, disposable personal

share in pro¬

and

national

may

which is well within

real

posable

well

women

to

These

year

Real

interests, require

democracy through

ing

dignity,

fit.

see

but they are

A

vote.

as

ideals,

a

ities

both

they

of

aged

our

and

The

excep¬

in

communities, and worship God

over

too

(billions)

law and

conditions

live

may

perform useful work,

52%

becoming

more

and

and tyranny.

war

to

material

which, without

men

half

Before

victims of

it

tion,

of

viding homes for the unfortunate

the

in

life

depression.

meas¬

to

come

fair

our

we

those

of

7

we

and

income

doing,

to

with

they have been endowed
by their Creator. We seek to es¬
tablish

have prosperity in 1950 instead of

duty of the elected
the people to

democratic

our

our

a

result of growth in

a

reduce

stimulate

gifts

Business Outlook

in

them, as well as those who
them,
should
recognize

it is

that

can

employment and national income.
To further improve our fiscal out¬
look,
we
should
make
some

those

representatives of
let these proposals

as

na¬

possessions,

have

that

we

the

made

proposals
been
before
the
Congress
long time. Those who op¬

favor

our

extraordinary postwar programs
declines, and as government reve¬
rises

great

for

put

Disposable Income and the

opportunity,

to

provide

lumbia.

for

that

the cost of

as

the

use

life

may

achieved

clearly
I again

and
accord
home rule to the District of Co¬

pose

years,

men

to

rights and their

statehood

island

show

have

we

past,

proposals

their democratic

of

our

cripple the

to

shortly transmit to the Con¬

profess, and the herit¬

search

ure

impair

or

improvement in our
fiscal position over the next few

ot

which will protect
people in the exercise of

Hawaii,

would

substantial

we

statutes

our

essential

budget recommendations I

prosperity

February, 1948. There are pro¬
posals for the enactment of Fed¬
eral

shall
gress

good

better

a

all

every

benefits

place that duty upon us.
urge the
Congress to enact

all

the

strength.

The

that

so

course.

for

The religious ideals

from

rights

and

essential

programs

tional

all,

work

our

institutions

freedom

received

all

make

the

extend

we

of

age

for

expendi¬

international

our

prospects for peace

life.

go

with

which

central

forward in achieving
economic
and
security

we

Federal

needs of economic
growth and the

second

maintain

can

that

tures be held to the closest levels

slashes

We

which

meet

As

adequate schools.

aige




steps

young

before

middle-income

groups, especially in large metro¬
politan areas.
We have laid the

,

on

power

particularly,

energy,

great the advance of science.
in toward
this
end,
the

homes

immediate

to strengthen our educational sys¬
In many parts of our

civil

is

good

tem.

which

be

To

nue

take

ment of
can

enable

care.

must

people

years

of

We

citizen.

Needed than

growth

the

afford

every

of

One of the most important fac
tors in our continued

to

democratic

this

More Housing Legislation

will

our

constantly being in¬
Moreover, we should provide a creased by the progress of science.
method of supporting farm income Research is finding new
ways of
at fair levels which
will, at the using such natural assets as min¬
same
time, avoid piling up un¬ erals, sea-water, and plant life.
manageable surpluses and allow In the peaceful development of
to obtain .the full bene¬

which

Americans

medical

system of medi¬

a

Through wise government poli¬
cies and government expenditures
tor the conservation and develop¬

sources

consumers

all

Lawrence

project and

ministration.

of farm

sources

income.

the

power

this

at

public health services,

insurance

should

ment of the Columbia

ods

spread

Recommends More Federal Power

adequate.

serious

be

and

qualified
problem

St.

be

assure

favored few.

a

of

must

we

to

will

session of the Congress.
However,
our
farm legislation is still not

national

in

and not restricted

many

includes the

improved

was

as

programs,

session

gram

well

as

policies

benefits

irri¬

and

been

building a
program to give the farmer a rea¬
sonable
measure
of
protection
against
the
which he is

resource

continue

must

to

England

hydroelectric

our

other

our

tinued

in

power

gation undertakings,

Prosperous Agriculture Essential

also

of large-scale
development have
yet been experienced.

not

this

in

such
the

where

recommend the establishment of a
labor extension service to encour¬
age

projects,

power

ex¬

penditures.

science.

and to establish

This is true not only in
regions which have already

necessary

well-being of our people. At tne
same
time, we must guard against
the
folly of attempting budget

operation

nurses

public

its

improving its
creasing
its

those

of

meet

requirements

power.

enlarge the produc¬

transmission

to

system,
but
it has
also
made
strikingly apparent the need for

received great benefits from Fed¬

democratic ideals.

our

and

the govern¬
receiving enough rev¬

consistent

with

be

Congress,

not

is

test has proved the wisdom of the

repealed and replaced by a law
that is fair to all and in
harmony

should

It

80th

enue

test

beginning in expanding our hos¬
pitals,
but we must go on to
remedy the shortages of doctors,

bargaining.

present

the

ment

proposing

cal

We need to

meet

system of unemployment
insurance has had to meet. That

in

development

is

resources

our

to

our

investment

in purpose and one-sided in
oper¬
ation.
This statute is, and always

unemployment

law

needs

better

a

for

the

ent-day
The

all, the natural resources
economic freedom for labor. It is of the country must be regarded
We must use
also a strengthening and stabiliz¬ as a public trust.
ing influence for our whole econ¬ our precious assets of soil, water,
forest
and
grassland in such a
omy.
way that they become constantly
more
Taft-Hartley Act Attacked
productive and more valu¬

fundamental

a

1950

of

coverage

our

compensation

another

year.

Collective bar¬

gaining is not only

strengthen

last

be

control

Thursday, January 5,

old, expenditures which are necessary other nations because we wish to
The j to the growth and expansion of increase our
power.
We have nol
widespread movement to provide' the domestic economy.
devised
programs
for the secu¬
pensions in private industry
rity and well-being of our people
Asks Tax Changes to Increase
dramatizes the need for improve¬
because
we
are
afraid
or
un¬
Revenues
ments
in
the
public
insurance
willing to take risks. This is not
At present, largely because of
system.
the meaning of our
past history
I also
urge that
the Congress the ill-considered tax reduction of or our

Truman Urges Enactment
Of Fair Deal Program
to

the

extend

CHRONICLE

and survivors' insurance.

age

laws, to assist small business and

FINANCIAL

&

the

since

of

in¬

1940,

increase of 39%

capita purchasing

the

the

real

total

whereas the

of

This 60% increase in real
power

pur¬

since prbwar is in

purchasing power
savings in 1913,

$220 billion of

accu¬

mulated savings at the end of 1949

represent
double

a

real purchasing power

the

purchasing

the

power.
chasing

under

aggregated

This

reserve

double

the

savings

of real

power

in

of

1939.

buying powdr,

prewar

levels

aftbr

Volume

171

Number 4870

correction for prices,

.is

THE

stabiliz¬

a

greater significance

on

COMMERCIAL

when

amount needed to maintain

did

FINANCIAL

DISTRIBUTION

the

ing factor of real importance that

&

CHRONICLE

OF CONSUMER

basic standard of living at present

exist

not

Important

purchasing
billion
and

1950 will

G.I.

insurance

$1.0 billion of U.

Maturities
should
now

S.

Savings

free

cash

the

savings

major

a

in

available

of

mass

bonds

part

analysis

any

widely

for

by

the

of

spending
They

consumers.

held

these

bonds.

transferable
used

all

they

They

and

the

as

income

basis

of

cash

when

each

to

be

loans, hence

unencumbered

they mature and will

decision

a

not

were

not

were

represent

require

holder

the part of

on

whether to

to

as

re¬

invest the proceeds in savings, or
to spend for something over and

above what might have been pur¬
chased out of regular current in¬
come.

basic

taken

the

of

costs

discretionary
spending
available to improve the
of

living

add

to

or

1950

these

on

bond

maturities

sums,

far

will

billion

In

the

first

half

income

surplus

of

of

Surplus

Money

ing

discretionary spend¬
savings was at a level about

or

four

times

levels.
the

Jt

the

was

highest

The

interest

since

come

in

before

18.0

6.048.000

12.0

1940

able

the

to

tent

prices

basic

maintaining

left

balance

a

of

of

current

Disposable

into which they move.
If
17,985,000 families who have

the

of

moved up above the

of

level

from

level in

they

goal

of $200

income

cretionary

billion
in

of

would

power

spending

fully

income
will

in

not

The

cumulated

since

alone now is
total national

the

1940.

apply this

How

consumers

pool

vast

discretionary spending
matter

of

been

their

of

new

is

power

a

discretion.

own

They could put it into additional
savings, into increasing the quan¬
tity or quality of their basic liv¬
ing items of food,
clothing or
shelter

they

into

or

may

additional

desire which they

have had before.
billion

things
never

Since this $107

available

In

1950

is

dis¬

cretionary spending power be¬
the things considered basic

the

in

last

10

it

necessities

in

1940,

$185.7

$194.6

93.7

rate

ceeding

of

$178

$200

1948.

able personal income in

1950

the

discretion

can

offer opportunities for an increase
of $10
of

billion

$188

for

goods

1949 to

over

billion

in

total

a

markets

for

personal

consumption
and still provide $12 billion sur¬
plus for personal savings — an
amount

the

over

three

times

as

great

saved

$3.7 billion

in

1940.

This

high level of personal con¬
sumption and the accompanying
increase in

standard

our

take'place without

can

pation

of

huge

our

of

any

living
dissi¬

backlog

of

Much

in

emphasis has been placed

durable goods

in discussion of

prospects,

durable

yet

total

1949

consumer

(11%

with

trast

in

cur¬

expenditures

1940).

In

con¬

this,

the non-durable
represented 56% of
expenditures
in
1949

commodities
1950
;
-

Markets

Services

for

Can

Be

Goods

$10

and

Billion

Personal

consumption expendi¬

consumer

have

dropped

tures for all goods and services in

consumer

the first

1949

at the

were

from

37%

comes

1949.

1940

47%

goods

_

$101.8

As

we

the

55.7

$72:0

market

opportuni¬

1949
in

study

are

since 1941.

creased

sales

maintain

omy.

.

eral
of

vital key to the in¬
that are necessary

high level econ¬
The present distribution of

different

89%

our

by income
than

Reserve
Consumer

in

groups

1941.

Board

breakdown of the

The

1949

Finances

is far

strated

buv

(families

Fed¬

this

1941

1949.

Survey
gave

50,400,000




showed

startling

family

income

Over 21 million fam¬

$2,000 since 1941 with

or

con¬

or

to

from

35,230,000

The

total

an

increase

14,009,000

in
with

in

February,

their

new

cars

have

and

financial

cars

if

pur¬

demon¬

ability

to

they wish.

Prewar there
000 of these

new

of the

equation

—that is, to the creation of suffi¬
cient demand to provide a market
for
the goods and services we

have proved
must

consider

domestic

factors

of
of

that

now

affecting

passed

returned to the
ation of

necessity
high
level

the

have

We

the

consumption

temporary
mand

produce.

we can

maintaining

and

more

de¬
have

we

normal situ¬

"buyers' market," with
of creating a suffi¬
cient demand to keep the fac¬
tories busy.
its

were

only 5,703,-

a year families,
they were the ones who usu¬
ally bought new rather than used

and

cars

over

new

if

ownership
them.

those

in

the

was

$3,000

or

group were educated to want

here are the potentials
would represent (based on
ownership data by income

cars,

they
the-

car

among

car

reported

groups

Reserve

Board

by

in

the

the

Federal

November,

1949 Bulletin).

11,500,000

prewar

owned

cars

6V2 million of these
least

cars

earlier models

or

11

were

now

at

over

$3,000

who

some

owners

may

of

soon

replacements).

are

car

po¬

indicated

securities.

Apparently $500 is suf¬

ficient in liquid assets to indicate

ability
30%

of

owned

to

buy

all

new

a

post

war

by those

who

car

since

models

have

are

even

less than $500 in liquid assets.

9,000,000

owned by
$500 of liquid
assets (5 million of these cars
prewar

those with

were

1939

cars

over

or

earlier models).

8,000,000 with liquid assets
$500 owned

no

over

car.

17,000,000 total potential new car
buyers with liquid assets over

$500.

levels.

war

But the

fact

that

have gone

we

half way and

already had in 1949
purchasing power of 52%

real

a

higher

than

in

significance

is

1940

and

of

presents

major
real

a

challenge to business to maintain
This

level and

drive

to

attainable goal
in

^^nmntion

terms

of

and

the

to

production.

constant

would

have

sume

one-third

present if

on

of double pre-war

In

to

prices

produce and

we

than

at

reach

the

more

to

were

we

con¬

standard of living typified

by the
family in J941. A
goal of $200
billion disposable
purchasing power in 1950, provid¬
ing a level of real purchasing
$50

week

per

and a standard of living
higher than in 1940, is con¬
servatively low in view of our

power

60%

proven productive

ability.

The

—

Will

to

Buy

in

Factor

a

Changing Standards of Living

adequate pur¬
This fact makes

There

that

of these wants into active

(2)

buying

expanding these wants ad¬
vertising and selling can become a
major educational factor in build¬
ing the demand for new and bet¬
ter

products—a demand for-step¬
ping up from one standard of liv¬
ing to the next in such

a way that
markets for goods and services can
be expanded to the point where

basic

factors

markets—these

are:

People

Purchasing Power

(3)

Th^ Will to Buy.

demand.

By

three

are

make

(1)

wants and the translation

common

The marketing
to

nis statistics

that

is

U.

S.

He

will know

population

has

that

the

by
million, from 131,669,275
to
about 152,000,000 by

20

over

in

people because
starting point of all

the

markets.

looks first

man

on

1940

July,

1950.

about

15%;

or

grown

increase

an

that about 9

of

million

; people have moved from rural
they will sustain the high level
| areas to cities where, the pattern
production
and
employment
this country is capable of reach¬ j and standard of living is quite
i rfiffpw*: thp+ by 1950 the farm
of

ing.

population will have decreased by

Since the

war

our

economy has

about

three

high level.
It
high
because
"break-even points" are, in most

while

the

that

the

businesses,

rate

since

operated
must

in

on

a very

be

kept

much

so

that

prewar

any

higher than
major recession

demand

consumer

would

quickly
make
production
un¬
profitable and lead to heavy un¬
employment.
There is no need,

however, for this serious drop in
demand

the public

if

standards

is educated

higher

of living made possible

by our productivity and by the
increased real purchasing power
resulting from increased produc¬
tivity.
Ability

to

Consume

in

Domestic

A

study of different standards

actually existing at dif¬
of income, prewar,
clearly that the standard
of living of the typical American
family could be doubled over pre¬
levels

shows

million >from
non-farm

1940

population

will have increased

by 23 million;
abnormally high birth
1940

has

continued

through 1949 and has resulted in
about 33 million births which soon
will have an important influence
school

on

facilities, housing re¬
and
food
require¬
ments;
that some I7V2
million
marriages since 1940 have brought
quirements

families into existence repre¬

new

senting over 40% of all our fami¬
lies; bnd that the educational level
of

adults is

our

now

considerably

higher than in 1940.
All

of

these

are

factors

that

point to increased market poten¬
tials.

In

the

face

of

talk

pression

of living

ferent

in

the

all

the

de¬

Spring of
complaints of high build¬
ing costs, for example, the basic
1949 and

need for

units
of

and better

newer

brought

non-farm

new

started

in

the

housing
dwelling

five

months

July-November, 1949 to

an

all

might be called

time high of 487,100 or 22% above
the same
period of 1948 when

in

400,800 dwellings

war

new

large

a

they have

Market

counting

cars

of

They

defer many purchases entirely or
for
long periods
of time
even

car.

(not

Unfortunately, inflation

people compared to the best pre¬

old.

years

7,500,000 with incomes
no

level

to accept and insist on the

by
those with incomes over
$3,000
(cars now at least 8 years old).
1939

subsistence

could, if necessary, get along and
sustain
life on very much less
than they now buy.
They could

bul

higher

bare

the

purchasing power and the result¬
ing
standard
of
living of our

a

problems

food, shelter and clothing.

$3,000

incomes

$3,000 jumped from 5,703,000
14V2% in 1941 to 23,688,000
47% of all units in 1949.

over

a

group

all

1948

loan shares and U. S. Government

ilies (or consiimer spending units)
have moved up to the level over
in

in

50,400,000

They accounted

by a study
liquid assets of over
$500 in bank deposits, savings and

$188.0

units

in

nation's

of those with

individuals) as of early
according to money income

upward

basis of pre¬

Similar figures on

1948.

families

a

$178.0

spending

This

the

postwar

and single

face the uncertainties, of
new

$176.9
sumer

shifts

families

of

want

2-3.0

of Families

de¬

changes in

6 million additional

60.0

23.0

we

other side

chasing power.
doubly important the psychologi¬
cal
factors
affecting desire and

deferred

the

on

of

$102.0

51.9

ties that have beeh opened by the
shifts upward in income groups of

to

$99.3

living in
must look carefully

mar¬

spending units with inOver $3,000 as of
February,
They represented the top

chased

Goal

23.2

by Income Groups
1950

1949

of

though

reach

soon

The

units.

1950

7.9

Total

Changed Distribution

in

19,000,000 total potential new car
buyers with incomes over

26.6

_

because

$3,000

1948

$37.5

in¬

since

ever

must

cars

for

tentials

Durable

new

owned

1st Half Annual Rate

Services and housing-_

frequently

years,

spending

billions of dollars)

Nondurable goods

heard

three

is satisfied.

688,000

of total

expenditures in 1940 to

PERSONAL CONSUMPTION EXPENDITURES
FOR GOODS AND SERVICES

(in

have

•

31% in 1949.

half of

an

yardsticks.

war

services, including housing rents,

Above 1940

as

Spring of 1947, that the

and 52% in 1940. Expenditures on

Over 1949—Over 2 Yi Times

Market

past

Now

savings.

rent

guide

Car

ing forecasts

ex¬

dispos¬

ings

and

marketing.

New

Consider, for example, the 23,of

for

the

the income distribution of families
should give pause to those mak¬

*

billion level

indi¬

do

saturation

the high level of the

even

standards

of

years

have

possibilities

peacetime,
the

five

by

the

$106.6

billion,

creased

at

almost

experience

the

passed

economy

we

potentials

Example of Increased Potentials

93.4

$100.9

period of

same

A.

$93.8

cated

have

our

or

bite out of increased income that
have progressed only half
way
to the goal of doubling the real

to

Continuing Market

a

that

postwar

Created

developed

mand

$26.5

Provide
Now

Be

be

acceptance of the next

the

on

this purchasing.

educate

Must

services

and taxes have taken such

can

ket for

91.9

Demand

mean

and

aireaay

income.

100.0%

market

and

We

goods represent only 13% of

of

to

50,400,000

ability

our

could

is typi¬
fied by families with $50 per week

The mass of our population al¬
ready lives at standards far above

an

aggressive

$200.0

seller of

fluence

We

point where

exist

1950

economic

goods and services, sav¬
plans or investments to in¬

time

Goal

49.2

as

as

years.

1949

represents
every

physical goods
better quality.

increased

ac¬

1st Half

for

it

opportunity

open

takes

people to

of the huge

1st Half

annual

yond
an

15.0%

higher standard of living. But the

1949. This

over

any

194o

discretion¬

power

than

greater

discretionary

have

power

recognized.

spending

ary

in

potential

living do not take place auto¬
matically with change of income

can

backlog of savings ihat have

for discretionary
saving (billions)-—

increase

represent

of

the -dis¬

1950

spending

1940 level and 6%

after

The market potentialities of this
fourfold

the

on

Changes in habits of standards

dispos¬

income
or

take

markets from two to five times

living costs to maintain 1940
of living for food,
clothing and shelter (billions)--

spending

$3,000

great as before, depending on the
product.

standards

Surplus

to

were

to

in 1949 compared with only
$26.5 billion in 1940, and $93.8 bil¬

Basic

;

1941

$3,000 income

$1,000

expenditure
pattern
of the group into which they moved

available

$75.7

income

personal

the

established

bil¬

$101

goods

for discretionary spending or sav¬

(billions)

taxes

of

costs

about

for

depending on the ex¬
they take on the
living of the income

standard

income

enormously

markets

group

living for food, clothing and shel¬
ter for our whole population. This
lion

families

which

to

standard

applic¬

living

1940

a

of

change

can

and services

69% increase since

a

in^ consumer

1948

:

Per Cent

7,560,000

100.0%

into the next higher
disposable income after

up

potential

the higher tax level and

allowing for

millions

they

This is after taking full ac¬

1948.

count of

these

The
-

4.0%

39,287,000

the

high level of the first half of

does not include

takes

war

9,072,000

33.9

groups of

an
all time high of nearly
$107 billion—over four times the

the1*

30.5

above

7V2%

even

able

in¬

11,967,000
13,311.000

$1,000

tax

past.

consumer

23.0

prewar

the

Discretionary

11,592,000

move

reach

for

21.1

Total

available for

a

Spending Is Four Times 1940

8,306,000

Number

it

yet

nearly double our best
prewar levels in terms of units of

32.0

As

lion in the first half of 1948. With

the next five years.

16,128,000

Per Cent

produce,

43

markets

10.5

the

1949

individuals

have

within

1949-

1,564,000
4,139,000

Under

living in terms of

to

savings.

huge

mature

of

Number

$1,000 to $2,000

to

we

represent

greater than
experience with in

$22.4

savings

UNITS

Over $5,000
$3,000 to $5,000—
$2,000 to $3,000__„

sur¬

or

power

SPENDING

GROUPS

-Income-

total

becomes

INCOME

1941

The remainder after these

living

plus

out

BY

ing

From

had

is

income.

from

classes with approximately half of
all consumer spending units hav¬

ing

prices

standard

of

play

on

are

refund

maturities.

Bond

by

the

to

of the ordinary
be the $2.8

power

of

War I.

increments

in

consumer

World

after

1940

a

(95)

levels without reaching what

excesses. Prewar,
1941, the $25 a week family
typified the American economy.

The

Aoproximately half of the fami¬

marketing
has been

this level and

shown to be at

had

incomes

that

same

ernment

chased

below

year

this

level.

detailed

a

study
of
by families

In

rate

week

almost

double

pur¬

field

in

have

their

the

$25

a

the

standard

of

ing of the $50 per week family in
1941

could

not

be

called

cessive goal or a luxury

an

proven

and

is

high level.

ex¬

standard

marketing men
opportunity.

greatest

a

market of

people
purchasing

152,000,000

high

with

which has

chasing
liv¬

which

We will have in 1950
about

but

family for most items.

Certainly

in detail
very

This leaves the third important
will
to buy—as the

different

buying and consuming at the
of

a

factor—the

income groups showed that fami¬
lies with incomes of $50 a week
were

—

covered

gov¬

items
in

started.

major
factor
in
purchasing power—•

lies in America had incomes above

approximately half

were

second

with
power

standard
of
living
lagged behind that pur¬
a

power.

This then

is the

challenge—for education and sell¬
ing

to

v/ill

raise

create
the

the

demands

that

American standard

of living and keep
high levels.

our

income at

44

THE

(96)

COMMERCIAL

Securities
•

ABC

&

Now

INDICATES

CHRONICLE
I*

FINANCIAL

in

ADDITIONS

Registration
ISSUE

PREVIOUS

SINCE

Columbia Gas System, Inc.

•

Vending Corp., N. Y. City
shares of common stock (par $1).
Price—To be filed by amendment.
Underwriter—Rey¬

representing

nolds &

filed 200,000

27

Co., New York. Proceeds—For new machinery
equipment to expand activities. Expected week of

and

Jan.

16.

Alleghany Corp., Cleveland, O.
19 (letter of notification) 16,500 shares of common
400 shares of series A 5 Vz% cumulative preferred

Dec.
and

stock, both to be sold by Allan P. Kirby, President of
the company, and 500 shares of prior preferred stock to

Wilmington, Del.

be sold by The Allan Corp.,
For

common,

$4

Prices—

share; for series A, $80; and for

per

prior preferred, $85.
Underwriter—Auchincloss, Parker
& Redpath, New York.
American

Bankers

Insurance Co.

Florida

of

(letter of notification) 4,000 shares of class A
stock (par $10) at $35 per share and 6,000 shares of
class B stock at par ($10 each). No underwriter. Pro¬
ceeds to increase capital and enlarge surplus. Office—
.343 N. 2nd Avenue, Miami, Fla.
12

Dec.

Cladmetals Co., Carnegie, Pa.
(letter of notification) 10,000 shares of common
stock (par $1) for account of selling stockholder. Un¬
derwriter—C. S. McKee & Co., Pittsburgh, Pa. Price—
American

Dec.

15

—For

construction.

Commonwealth

Refining Co., Ashland,

Ky.
"
Dec. 15 (letter of notification)
15,000 shares of $1.20
cumulative convertible preferred stock (no par) to be
flold to company employees at $20 each. No underwriter.
Proceeds—To be added to working capital for general

be received at the

company's office, Room 1800, 72 West
Adams Street, Chicago, 111., at or before 10:30 a.m. (CST)
Jan.

on

10.

liam

L.

Uranium Miners Trust,
Salt Lake
City, Utah
Dec. 22 (letter of notification) 400 beneficial units (no
par) to be sold to The Mayflower Co., Salt Lake City,
at $31.25 each.
No underwriter.
Proceeds to buy ma¬
chinery, pay promissory note and for working capital.
A common law trust—not incorporated. Office—522 Felt

Building, Salt Lake City, Utah.
Inc.
debenture bonds, due 1970,
and 110,000 shares of common stock ($1 par).
To be
offered at $1,330 per unit, each unit to consist of $1,000
filed $1,000,1)00 5%

bonds and 110 shares of stock.
a

No underwriter.

Proceeds

racetrack. Three officers also filed

with respect to voting trust certificates for 290,000 shares

stock, par $1.

common

Bank

Building & Equipment Corp. of America
Dec. 9 (letter of notification) 6,500 shares of captial stock
(following a»two-for-one stock spilt, effective Dec. 20) at
about $7 each.
Underwriter—Scherck, Richter Co., St.
XliOuis.

"

Beverly Gas & Electric Co.
Dec. 20 filed 33,000 shares of capital
to

be

stockholders

offered to

£or each two shares

stock

rate

of

&

Co., Los Angeles, Calif.

held

by

the

New

England

Electric

System

and

Chemical

Dow

Broadway Angels, Inc., New York City
500,000 management shares of 0.1 of

a cent par value,
respectively. Under¬
York.
Proceeds — For

to be sold at 50 cents and 12,5 cents

writer— Hugh J. Devlin, N'ew
working capital. Business—To back theatrical produc¬
tions, distribute tickets and act as an agent for talent.

Canam Mining

Corp., Ltd., Vancouver, B. C.

Aug. 29 filed 1,000,000 shares of no par value common
ntock. Price—800,000 shares to be offered publicly at 80
cents per share; the remainder are registered as "bonus
nhares." Underwriter—Israel

and

Co., New York, N. Y.

!*roceeds—To develop mineral resources.
Statement ef¬
fective Dec. 9. Offering expected in January.
Caribbean

Clothing

Corp.,

Mayaguez,

Puerto

Rico

Dec.

27

ture

bonds,

at

50

—

Co.

share on ratio of one new share for each
shares held. Rights expire Feb. 1, 1950. Employees of
$44.50

due

Proceeds

to

Office—2

Insular

buy

1957,

at

$100

$100,000
each.

of

No

5%

deben¬

underwriter.

machinery and for working capital.
Road, Mayaguez, Puerto Rico.

its subsidiary and associated companies will
opportunity to subscribe. Proceeds—To
added to treasury funds and used for corporate pur¬

company,

be

Underwriter—None.

poses.

Statement effective Dec. 9.

Texas

Sulphur Co., Houston, Tex.
Dec. 21 filed 375,000 shares of capital stock (no par) to
be offered to stockholders at $13.50 per share at the rate
of %ths of a new share for each share held.
[The United
Gas Corp., owner of 74.71% of the outstanding Duval
capital stock, has agreed to purchase at the subscription
price any shares of stock not subscribed for by other
stockholders.] Underwriter — None. Proceeds — To be
used, along with a $2,500,000 bank loan, to provide min¬
ing and milling facilities to mine potash in Eddy
County, N. M.
Eastern

Harness Racing Club, Inc.
(1/9-13)
Oct. 27 filed 1,000,000 shares (5c par) common stock.
Price, $1 each. Underwriter—Tellier & Co., New York,
Proceeds—To purchase, improve and operate the Fort
Steuben Raceway. Expected second week in January.
,

Excelsior Insurance Co. of N.

Y.

(letter of notification) 10,598 shares of common
stock at $8.85 per share together with option, exercisable
on or after April 1, but not later than April 11, 1951, to
same

price, to¬

gether with a further option, exercisable on or after
April 12, but not later than April 22, 1952, to purchase
10,596 additional shares also at $8.85

per

share.

To be

sold for account of Virginia Fire & Marine Insurance Co.
which

owns

31,790 shares of Excelsior stock.

•

Fidelity Fund, Inc., Boston, Mass.
Dec. 29 filed 200,000 shares of capital stock
Underwriters—Paul

H.

Davis

&

Co.,

(par $5).
and The

Chicago,

Crosby Corp., Boston.
•

B.) Fiemons & Sons, Inc., Pueblo, Colo.
(letter of notification) 45,000 shares of common
stock at $1 each.
No underwriter.
Proceeds for oper¬
ating expenses, supplies and equipment.
(R.

Fair

1,

1965.

Inc.

Gity.
Gulf

will

be

used

to

Dillon & Co.

redeem

$2,645,000

15-year 3V2% debentures due Feb. 1, 1959, and $2,000,000
Balance will be used

additional

to

acquire or construct

supermarkets, warehouses,

facilities,

to

•

and to

parking

Boston-

j

Pittsburgh

San Francisco

Private Wires to all offices




Chicago

Cleveland

and

to

provide

equip these facilities.

(The)
29

None.
in

Proceeds—To be credited against amounts spent
purchase of treasury stock in 1949.
Office—3000 W.

Montana Street, Milwaukee, Wis.

(H. P.)

Hood & Sons,

Inc., Charlestown

(Boston)
Dec.

22 (letter of notification) $250,000 of 6% income
debentures, 1990 series. Underwriter—B. B. Piper, Bos¬
ton, Mass. Proceeds—To buy in for retirement 7% de¬

bentures and preferred

stock owned by employees, pro¬
ducers, executives, and holders of the company's com¬
mon stock.
Office—500 Rutherford Avenue, Charlestown
(Boston), Mass.
•

Howard

Johnson

Electrostatics

Electronics

&

Inc.,
Dec.

Pound, Va.
(letter of notification)

23

stock

(par $1)

to

sold

be

Proceeds

writer.

4,080 shares of

to

at

$37.50

pay
development
equipment and for working capital.
•

No

each.

costs,

Inc.
(letter of notification)

buy

Inc., Rochester, N. Y.
200,000 shares of capital stock.
Under¬
writer—George D. B. Bonbright & Co., Rochester, N. Y.
filed

3

Business—Investment company.'
•

Idaho

Dec.
mon

16

Goldfields, Inc., Spokane, Wash.
(letter of notification) 750,000 shares of com¬
share). No under¬

stock to be offered at par (100 a

writer.
Proceeds to be used to prospect, explore and
develop Lode mining claims in Kootenai County, Idaho.
Office—1114 W. Indiana Avenue, Spokane, Wash.

Idaho

Maryland Mines Corp., San Francisco, Cal.
(letter of notification) 14,000 shares of common
at $1.90 per share,
to be sold by Gwendolyn

12

Dec.

stock

MacBoyle, executrix for the Estate of Errol MacBoyle,
Underwriters—E. F. Hutton & Co. and Davies

deceased.
&

Mejia, San Francisco.
Bell Telephone

Nov. 30 filed 389,982

Co.
shares of capital stock (par $100).

Offering—To be offered to stockholders pro rata at $100
share.

a

American

Telephone & Telegraph Co. will

given the right to buy 387,295 of these shares and
remainder

will

be

offered

public stockholders.

be
the

Under¬

writer—None. Proceeds—To pay advances from A. T. & T.
•

Insurance

Co.

of

North

America, Philadelphia

Dec. 30 filed

30,000 shares of capital stock (par $10) to
be offered to employees of the company and its six
affiliated companies under an employees' stock subscrip¬
tion

plan.

No underwriter.

Proceeds for general

porate purposes.
K-W

Oil

cor¬
.

Co., Phoenix, Ariz.

Dec. 28

(letter of notification) $45,000 of 40-acre assign¬
Navajo County, Ariz., at $5,
$10 or $15 an acre, the proceeds to be used to develop
present well and drill an additional well.
No under¬

ments of oil and gas leases in

•

1

Kerr-McGee

Dec.

Oil

Industries,

Inc.

22

(letter of notification) 1,500 shares of common
$1), for Dean Terrill. selling stockholder.
Underwriter—Straus & Blosser, Chicago. Price—$12 per
stock

(par

share.

y»">

■

:

CO

%

,&e<i

York

1

an

unspecified

rfetnberS

Sto

aniWon

Cvo,0*0°

fcOSTO*
Goldfield

under¬
to

Howe Plan Fund,

Jan.

No underwriter.
•

common

Expected

number
of shares to be offered under Profit-Sharing and Em¬
ployees' Savings Plan, each employee participating to
deposit 5% of his gross earnings, but not more than, $250.

Mines, Inc., Phoenix, Ariz.
(letter of notification) 1,498 shares of common
stock at $100 each.
Underwriters—Alfred Strong Lewis,
Dec. 23

working

lots and

Globe-Union,
23

obligations,

Heil Co., Milwaukee, Wis.
(letter of notification) 622 shares of common
stock (no par). Price—$93.88 per share. Underwriter—

Range Oil & Drilling Co., Denver, Colo.
Dec. 29 (letter of notification) 1,702,707 shares of com¬
mon capital stock.
Price—Par (5 cents each).
Under¬
writer—Inter-Mountain Shares, Inc., Denver.
Proceeds
—For drilling of test wells for oil and gas.
Office—711
Security Bldg., Denver.
•

Philadelphia

current

pay

capital.

Front

•

Co., Jacksonville,

Transportation

May 31 filed 620,000 shares of class A participating ($1
par) stock and 270,000 shares (25c par) common stock.
Offering—135,000 shares of common will be offered for
subscription by holders on the basis of one-for-two at
25 cents per share. Underwriters—Names by amendment,
and may include John J. Bergen & Co. and A. M. Kidder
& Co.
Underwriters will buy the remaining
135,000
shares plus unsubscribed shares of the new common.
Offering price of class A $5. Proceeds—To complete
an ocean ferry, to finance dock and terminal facilities,

about Jan. 10.

Dec.

Atlantic

Florida

(1/10)

15-year sinking fund debentures,

Underwriter—Eastman

Proceeds—Proceeds

of notes.

Co.

notification)

writer.

Stores,

Dec. 6 filed $8,000,000

Jan.

Russell, Tonto Basin, Ariz.
surface mining equip¬
Trust Bldg., Phoenix, Ariz.

J.

up to 418 shares of capital
stock (par $10) to be offered at the market.
Proceeds
vHit"go to holders of scrip certificates unexchanged for
full shares.
Underwriter—Mallory, Adee & Co., N. Y.

•

Dec. 22

Food

Union

Dec. 30 (letter of

Illinois

(1/10)

Dec. 21

other

New York

Grand

per

also be given an

due

(letter of notification)

cap¬

175,000 shares of common stock (par $15).
Offered to stockholders of record Dec. 20

purchase 10,596 additional shares at the

Hov. 14 filed 2,000,000 snares (lc par) common stock and

«

Proceeds—F6r working

ital.

(par $25)
shares

bank loans.

•

•

Pasadena, Cal.
Dec. 12
(letter of notification) 200 shares of common
stock (par $1) to be sold at $22 each to Paul W. Heasley
for resale to the public. Underwriter—Hopkins, Harbach

IV2

held, at $30 per share. No under¬
The proceeds will be used to pay off $575,000 of

writer.
notes

the

at

now

iLApectea aoout Jan. 6.

Tom

Office—1018 Title &

ment.

Consolidated Engineering Corp.,

Duval

Baltimore Trotting Races,

de-

and

Proceeds—To install mill and buy

Dec.

Proceeds—To

New York.

Co.,

vciup liii.inug properties.

Offering

Associated

&

Burton

#

of

*

,

stock,

Nov. 4 filed

will be used to build

.

Inc.
(by amendment) 800,000 shares (no par) com¬
Price—$1.25 per share. Underwriter—Wil¬

mon

corporate purposes.

15

Edison

Co., Chicago (1/10/50)
Dec. 13 filed $49,000,000 sinking fund debentures, to be
dated Oct. 1, 1949, and mature April 1, 1999. Under¬
writers—Names to be determined by competitive bid¬
ding. Probable bidders: Halsey, Stuart & Co. Inc.; The
First Boston Corp.; Glore, Forgan & Co. Proceeds—For
construction, additions, etc. to property.
The sinking
fund on new debentures will provide for ratable retire¬
ment of the entire issue by maturity.
Bids—Bids will

Nov. 17

Co., Chicago
♦Nov. 21 (letter of notification)
10,000 shares ($2 par)
•common stock.
Price, market (about 10%). Underwriter
—H. M. Byllesby & Co., Chicago.
To reimburse cor¬
porate treasury for expenses in connection with pur¬
chase of additional property.

Dec.

304,998 shares of common stock (no par),
unsubscribed portion of 1,345,300 shares

Consolidated Caribou Silver Mines,

American-Marietta

&

filed

May 24, 1949. Underwriters—Names
to
be
determined by
competitive bidding.
Probable
bidders:
The First Boston Corp.; Merrill Lynch, Pierce,
Fenner & Beane; Halse.y, Stuart & Co. Inc.;
Kidder,
Peabody & Co.; Lehman Brothers; Goldman, Sachs &
Co. and Union Securities Corp. (jointly); Morgan, Stan¬
ley & Co.; Shields & Co. and R. W. Pressprich & Co.
(jointly); Blyth & Co. and W. C. Langley & Co. (jointly).
Bids expected toward the end of January, 1950. Proceeds

^Expected at market.

Ashland Oil

28

Dec.

Ariz.,

Mesa,

offered stockholders

Dec.

1950

Thursday, January 5,

.

••

£ v' -*-1'

Volume

$4 and $5 per share.

tween

ceeds—For

NEW ISSUE CALENDAR

FINANCIAL

&

COMMERCIAL

THE

Number 4870

171

CHRONICLE

Underwriter—None.

Pro¬

Michigan Associated Telephone Co., Lafayette,
Indiana

cumulative preferred stock
filed by amendment. Under¬
writers—Paine, Webber, Jackson & Curtis and Stone &
Webster Securities Corp.
Proceeds—To pay a $2,444,197
demand note held by General Telephone Corp., its parent,
which had been issued to redeem outstanding 6% cum¬
ulative preferred stock held by same company. Offering

Dec. 30 filed 50,000 shares of

(EST)__Equip. Trust Ctl's.

noon

1950
Racing Club, Inc

10:30

Co.

Edison

Lawrence Gas & Electric

Co.,

noon

Finance

Seaboard

11,

Southern Pacific Co., noon

(EST)__Equip. Tr. Ctfs.

12,

1950

Equip. Tr. Ctfs.

January
Middle

South

Minute

Maid

Common

Corp., 11 a.m. (EST)

in

a.m.'

(EST)

January 25,

Bonds

Tel-Aviv,
writer—Coffin,

American
11:30

11

a.m.

offering

Corp,, Wilmington, Del., and

1950
(EST)___;

Dec.

Common

Betz

Co.,

&

a

Philadelphia.

textile plant in Israel.

Under¬
Price, par.
Business—

Minneapolis, Minn.
$40,000 of debentures at

principal

amount,

proceeds to reduce bank loans.
Bldg., Minneapolis,

the

National-Soo Line

First

Minn.
Lakeland

Marine

Lake

Inc.,

Base,

Hopatcong,

New Jersey

v

notification) $75,000 10-year 6% deben¬
1960, and 7,500 shares of common stock
Price—$1,000 per unit (consisting of $1,000

tures due Jan. 1,

(par 20c.).
of

debentures

interest

accrued

shares

100

and

of

Jan.

from

debentures

on

common

1.

Under¬

writer—Pulis, Dowling &, Co., New York City.

Proceeds
—$45,000 to be used to purchase for cash the property
of Lakeland Marine Base, Lake Hopatcong, N. J.; and
the

balance

used

Lawrence

working capital.

for

(Mass.)

Gas &

Electric Co.

(1/10)

filed $2,750,000

1

the

balance

ceived at the company's

Mass.,

to

up

Lorain

Bids—Bids

construction.

for

12

noon

(Ohio)

will

be

re¬

office, 441 Stuart Street, Boston,

(EST)

on

New

June

Jersey Power & Light Co.
filed 20,000 shares ($100 par) cumulative

9

ferred

Underwriters—Names

stock.

Jan. 10.

Louisville

Soy

Products

Corp.,

Louisville,

Ky.

(letter of notification) 3,000 shares of prior pre¬
stock

32,500 shares of preferred
stock (par $10), to be issued in exchange for outstand¬
ing securities and claims under reorganization and re¬
capitalization.
No underwriter.
Office—2400 S. Brook
Street, Louisville, Ky.

ferred

•

Lowell
30

(par $25)

Electric

filed

and

shares
bank

55,819

Proceeds—To

Underwriter—None.

held.

loans, for construction

and to

im¬

provements.
•

15 filed

$40,000,000 of gen. mtge. bonds, due Jan. 1,
Underwriters—Names to be determined by com¬

1980.

petitive
Co.

Inc.;

bidding.
Morgan

The First Boston

Indemnity Co.,

Cincinnati

Dec. 16

Probable bidders—Halsey, Stuart &
Stanley & Co.; Kuhn, Loeb & Co.;

Corp.

Buffalo

stock

New

(par $5)

underwriter.
Marchant

Bids expected 11:30 a.m. (EST)

Niagara Electric

Central New

Corp.,

Proceeds to
Valve

increase

capital and surplus.

Nev.
Dec. 5 (letter of notification) 100,000 shares of 7% par¬
ticipating preference stock (par $3). No underwriter.
Proceeds—For new machinery and plating, new models,
Corp.,

Reno,

inventory and working capital.

Office—319 S. Virginia

Drexel
$75

at

&

each

Co.,
pluu

$3.50 preference stock not sur¬
exchange.
Business—Pharmaceu¬

any

the

Carolina

Due

Co.,

Columbia^.

and

refunding mortgage

Underwriter—Names by
a
like
amount
of

amendment,

redeem

outstanding

Underwriter—Names by amendment

1979.

Due

Gas

&

$22,200,000 first

1979.

Proceeds—To

bonds.

Electric

Carolina

filed

22

(probably Halsey, Stuart & Co. Inc.; Kidder, Peabody
Co.; The First Boston Corp.; Union Securities Corp.).
Expected in January.
•

Southwestern Public Service

Dec.

share

new.

shares of

168,729

offered

be

to

filed

30

each
an

Co., Dallas, Texas.
stock (par $1)

common

stockholders

common

for

To be named in

at

the

shares held.

eight

of

rate

one

Underwriter—

amendment, along with offering price,
Dillon, Read & Co. Inc. Pro¬

Traditional underwriter is

and

to

of additions and improvements
bank borrowings for these purposes.

construction

repay

Teco, Inc., Chicago
21 filed 100,000 shares

Nov.

for

shares

($10

par)

stock,

common

be offered

to

are

holders ot«'

to

stock in Zenith Radio Corp. at rate of one share

common

each

Underwriter—None.

five held.

Proceeds—Fos

working capital and the promotion of Zenith's "Phonedevice, whereby television users could pay sx
special fee for costly television programs by calling the
telephone company and asking to be plugged in.

vision"

®

Trimfcot Co.,

Dec.

21

(letter

Farmington, Mo.
notification)' $200,000

of

promissory notes (convertible into
the

on

basis

of

United

share

one

Proceeds

Trimfoot Terrace,
Gas

for

for

of

$20

working

4%

stock,

common

each

3-year

capital.

$1,

par

of notes).

No

Office—

Farmington, Mo.

Corp.

(1/24)

Dec. 21 filed $25,000,000 of first mortgage and collateral
trust

it

series

bonds,

Names to
is

due

be determined

York, the surviving company, changed its name to

The Niagara Falls Power Co. will be

Niagara Mohawk.
its direct

subsidiary.

the

construction

and

to

Proceeds—To repay $38,500,000 of
1948 and 1949 in connection with

program

finance in part

of the constituent companies

the company's construction pro¬

000,000 in 1950 in addition to the $70,000,000 of expendi¬
tures
since
1947.
On
Dec, 30 the New York
P. S.
Commission authorized
or

the

to ask for bids 011

company

before Jan. 24.

Nu-Strut
20

Dec.

stock

Flexible

Piston

(letter of notification)

1,000 shares of common

Proceeds—For

par).

(no

underwriter.

Medina, O.

Co.,

working

Office—West Liberty Street,

capital.
No
Medina, O.

Jan.

1,

1970.

Underwriters—

by competitive bidding. Bids,
at 11:30 a.m. (EST) on

(1/10)
filed 100,000 shares of $4.40 cumulative preferred

Dec. 21

(no

par

others

and

Lighting Corp.

to

value),
be

Underwriter—Blyth & Co., Inc.
b.y amendment. Proceeds—To

named

part of outstanding bank loans.

made

on

or

about Jan.

10.

Offering—To be

•

bonds, 4% series due 1962, to be issued by United
Co., its subsidiary, and for general cor¬

gage

Gas Pipe Line

porate purposes.
United

Dec. 8 (letter of

notification) 8,000 shares of 5% cumula¬

tive

preferred stock (par $20) and 40,000 shares of com¬
mon stock (par 10 cents)
and 18,000 common stock pur¬
chase warrants to purchase a iike number of common
shares. Underwriter—Raymond V. Edwards, Massapequa,
L.

I., N. Y. Price—$30.66 per unit, each unit consisting of
share of preferred and five shares of common stock.
additional

<.

States

Fidelity

& Guaranty

27

filed

of capital stock

300,000 shares

holders at the rate of

one

(par $10).,
Offering—To stock¬

share for each 3%

shares

now

held.

Underwriters—Alex.
Brown
&
Sons, John C.
Legg & Co., Stein Bros. & Boyce, and Baker, Watts &
Co., all of Baltimore.
Proceeds—For additional capital

and

surplus.

Upper Peninsula Power Co.
Sept. 28. 1948 filed 154,000 shares of

common stock (par
Underwriters—SEC has granted exemption from
competitive bidding. An investment banking group man¬
aged by Kidder, Peabody & Co.; Merrill Lynch, Pierce,
Fenner & Beane, and Paine, Webber, Jackson & Curtio,
may be underwriters. Proceeds—Will go to selling stock¬

$9.

holders.

Consolidated

Corp.

will

sell

Electric

120,000

&

Gas

Co.

and

Middle

34,000

shares and

sharep,

respectively.
•

Webster-Chicago Corp.

Dec.
to

29

be

—F.

filed

sold

125,000 shares of

by

Rudolph

F.

(1/20-25)
common

Blash,

stock

President,

Price—To be filed by amendment.

Eberstadt

(par $1),

and

Mru,

Underwriters*

&

Co., Inc., New York, and Shillinglaw,
Bolger & Co., Chicago.
Business—Automatic changers

Offering—Expected between Jan. 20 and 25.
•

Minerals & Petroleum, Inc., Salt Lakt;
City, Utah
Dec. 27 (letter of notification) 50,000 shares of common
Western

each.

No underwriter.

Street, Reno, Nev.

one

stock at $1

•

To retire bank loans for new equipment and

operating capital.

working capital. Office—170 Washington Street.

Proceeds to provide
Office—412 Atlas Building, Salt Lake

City, Utah.

(The)

Dec.

22

mon

Mayflower Co., Salt Lake City, Utah

stock

No

(par

underwriter.

Stock Exchange
•

500,000 shares of com¬
sold at 10 cents per share.
Proceeds for general funds.
Office—

(letter of notification)
10)

to be

Building, Salt Lake City, Utah.

(J. W.)

Mays, Inc., Brooklyn, N. Y.
Dec. 30 (letter of notification) 10,000 shares of class A
stock
(par $1), to be offered employees.
Price—Be¬




•

Saginaw Gold & Copper Mines,

Beliingham, Wash.
(letter of notification)

Dec. 21

stock

Inc.,

1,000,000 shares of com¬

(par 10), to be offered at 25 cents per share.
No underwriter.
Proceeds to buy a 90-ton crusher and
mon

other

mining equipment.

1

Co.,

Baltimore
Dec.

Price—To be filed by amendment.

Blash.

Royal Crown Beverage Co. of Poughkeepsie, Inc.

opened

at 2 Rector Street, New York.
Probable Bid¬
Halsey, Stuart & Co. Inc.; Dillon, Read & Co. Inc.;
The First Boston' Corp.; Harriman, Ripley & Co. and
Goldman, Sachs & Co. (jointly); Equitable Securities
Corp. Proceeds—To purchase $18,000,000 of first mort¬

West

Pacific

be

25

This program is expected to require about $43,-

gram.

will

expected

York

Corp. and New York Power & Light Corp. Central

repay

10,000 shares of common
to be offered at $27.50 per share.
No

(letter of notification)

South

Corporation—On Jan. 5 succeeded to merger

17.

Jan.

stock

Manufacturers & Merchants

(1/17)

Niagara Mohawk Power Corp.
Dec.

repay

make further

under

redeem

ders:

•

Lowell, Mass.

Light Corp.,

shares of capital stock (par $25).
Offering—To be offered at $35 per share to common
stockholders at the rate of one new share for each three

Dec.

Sons, Baltimore, and

Underwriters

ticals.

Jan.

bank loans obtained in

•

&

Proceeds—To

dividends

rendered

year.

of

Telephone Co.

accrued

for, construction of additions and betterments sub¬
sequent to April 30, 1949.
Sale deferred until later thin

Ohio.

Dec. 22

pre¬

determined

made

on

of notification)

(letter

be

reimbursement of payments

payment of the cost of, or in

Power

29

to

through competitive bidding. Probable bidders: Kidder,
Peabody & Co.; Smith, Barney & Co.; W. C. Langley &
Proceeds—Will be applied to the

3,489 shares (no par)
common stock.
Price, $20 each. No underwriter. To par¬
tially reimburse the company's treasury for additions to
property made in 1948. Office: 203 Ninth Street, Lorain,
Nov.

Brown

Philadelphia.

underwriter.

Co.; Lehman Brothers.

of series A first mortgage bonds,
due Dec. 1, 1979.
Underwriter — To be determined by
competitive bidding. Probable bidders: Halsey, Stuart &
Co. Inc.; The First Boston Corp.; Carl M. Loeb, Rhoades
& Co.; Otis & Co.; Coffin & Burr. Proceeds—To redeem
$1,500,000 3V8% series A first mortgage bonds, due 1968,
at 102% %, to repay $1,000,000 notes held by banks and
Dec.

(letter, of, notification) 6,000 shares of 5V2%
prior preferred stock (par $50)".
Underwriter—Piper.
Jaffray & Hopwood, Minneapolis.
Proceeds — To pay
outstanding bank loans.
,19

plus

stock)

Murphy & Co., St. Paul, Minn.

A.)

(A.
Dec.

Dec. 30 (letter of

—Alex.

shares for

new

Offer expires Jan. 19.

ones.

Offering—These

(letter of notification)

28

Office—900

•

each four old

ceeds—For

Monarch Lumber Co.,

•

April 10,
Utah Fuel Co.,

the

Cotton textile's.

Debentures

(EST)

of

shares ($5 par) capital stock.

Proceeds—To build

Telephone & Telegraph Co.

a.m.

10%

Israel

Dec. 7 filed 500,000

1950

January 31,

be

to

Groves, Corp., which will operate these
properties.
Expected Jan. 17 or 18.

Moller-Dee Textile

—Equip. Tr. Ctfs.

Indiana Harbor Belt RR

stock, series A, at rate of three

erence

bonds.

(par 100),

to be sold for account of

are

commission

grove

1950

11:30

Corp.
(1/17-18)
shares of common stock

Minute Maid

orange

1 Qi«A

24

Janiiafv

United Gas Corp.,

(1/10)

Sharp & Dohme, Inc., Philadelphia, Pa. (1/20)
9 filed 171,815 shares of cumulative preference
stock
(no
par).
Offering—Offered
in exchange for
229,085% shares of $3.50 cumulative convertible pref¬

South

price.
Underwriters—Paine, Webber, Jackson & Curtis
and White, Weld & Co.
Proceeds (from sale of 200,000
shares)—To be used to repay $2,000,000 bank loan nego¬
tiated to purchase six orange groves, and for investment

Preferred
Common

—

Inc.;

and 80,000 shares by J. H. Whitney & Co.,
Price—To be supplied by amendment, the

underwriting

1950

Sharp & Dohme, Inc
Webster-Chicago Corp

Co., Los Ar.geles

convertible preferred stock,
cumulative
(no par).
Underwriter—The First Boston
Corp.
Proceeds—To increase working capital, reduce
bank loan, invest in subsidiaries. Expected Jan. 10.

continue construction pro¬

can

shares

200,000

York.

New

Bonds
January 20,

which

the company

1950

(CST)

Seaboard Finance

Dec. 7 filed 120,000 shares of

Nov.

Maid

Minute

of

Chicago, Rock Island & Pacific RR.
Noon

writer—None.

Tentative date of offering is Jan. 17.

Dec. 28 filed 280,000

HBonds
Common

Niagara Mohawk Power Corp

January 18,

that these subsidiaries

•

.Common

Corp._____

Phoenix Silk

so

grams.

Utilities, Inc

Co.

&

Read

subsidiaries, viz: Arkansas Power & Light Co., Louisiana
Power & Light Co. and Mississippi Power & Light Co.,

1950

17,

January

Dillon,

bidders:

Probable

Equitable Securities Corp. (jointly). Proceeds—To make
common
stock investments totaling $13,000,000 in three

1950

Western Maryland Ry

shares

common

"employees' stock purchase plan
for 1950."
Price—Not to exceed market price on ex¬
changes.
Proceeds—For corporate purposes.
Under¬

Dec.

Kidder, Peabocly & Co. and Merrill Lynch, Pierce, Fenner & Beane
(jointly); The First Boston Corp.; Lehman
Brothers, Blyth & Co., Inc.; Union Securities Corp. and

Preferred

Co

January

(1/17)

filed

21

bidding.

Equip. Trust Ctfs.
Preferred

Corp

Inc.

Utilities,

640,000 shares of common stock (no par).
Underwriters—Names to be determined by competitive
Dec.

RR.

(CST)__

Pacific Lighting

South

Middle

Debentures
(EST).-Bonds

Stores, Inc

Missouri-Kansas-Texas
Noon

Common

Co. of N. Y

Excelsior Insurance

Paper Co., Chester, Pa.
an
unspecified number of

filed

30

—Expected in January.

Debentures

(CST)

a.m.

Food Fair

Common

1950

January 10,
Commonwealth

Scott

Price—To be

$50).

(par

January 9,
Harness

Eastern

•

Dec.

working capital.

45

to be offered under the
•

1950

January 5,

Pennsylvania RR.,

(97)

Younker

^

Brothers, Inc., Des Moines, la.

Nov. 4 (letter of
to be sold at

&

notification) 1,000 shares (no par) stock,

$27.50 each. Underwriter—T. C. Henderson

Co., Des Moines.

Proceeds—To selling stockholder.

Continued

on

page

46

46

(98)

THE

Continued from page 45

COMMERCIAL

•

Laclede
On

and

Dec. 30 announced it is anticipated that long-term securi¬

ties may be issued during 1950 to refinance $600,000 4%
promissory notes held by United Gas Improvement Co.,
the parent.

Telephone &

Telegraph Co.
a third offering to em¬
ployees of the company and its subsidiaries of up to
2,800,000 shares at a price of $20 per share less than
the market price when payment is completed, but not
more than $150 nor less than $100 per share.
Dec. 21 directors voted to make

(1/31)
Dec. 21 the directors authorized a new issue of $200,000,000 debentures to be offered at competitive bidding.
It
is expected that they will be dated Feb. 1, 1950 and
mature Feb. 1, 1971, that a registration statement will be
filed with the SEC early in January and that bids will
be opened at 11:30 a.m., Jan. 31.
Probable bidders—
Morgan, Stanley & Co.; Mellon Securities Corp.; Halsey,
Stuart & Co. Inc. and First Boston Corp. (jointly). Pro¬
ceeds will be used to provide funds for extensions, addi¬
tions and improvements to plant of the Bell System com¬
panies and for general corporate purposes.
Ashland

Telephone

Oil

Telegraph

&

Co.

&

Refining Co.
Dec. 29 announced company intends to sell approximately
30,000 shares of S5 preferred stock (no par) and $15,000,000 3 % sinking fund debentures in near future. An addi¬
tional 20,000 shares of $5 preferred stock will be sold at

time by selling stockholders.

same

probably between

Price—The preferred

$97 and $102 per share, and the de¬
100% and 103% of principal amount.

bentures between

Underwriter—A. G. Becker & Co. Inc.
sale

of

stock, $1,883,747

will be

Proceeds—From

used to reimburse

the

companys' treasury for the cost of Aetna Oil Co. stock

purchased

by

Ashland

Nov.

on

23,

1949,

and

the

bal¬

ance added to working capital.
From sale, of debentures,
approximately $10,709,500 will be used to prepay out¬
standing indebtedness of Ashland and its subsidiaries,

of

Aetna

and

Freedom-Valvoline

of

Oil

Co.

and

the

balance added to Ashland's general funds.

Chicago, Rock Island & Pacific RR.

The

First

Boston

Lone

Dec.

13

Star

Steel

announced

Co.,

plans

company

used

(1/18)

toward

redeem

Power

on

April

&

Light Co.
Dec. 24 company reported planning sale, probably in
May, of $8,500,000 bonds, for new money. Probable
bidders; Halsey, Stuart & Co. Inc.; Equitable Securities
Corp.; Lehman Brothers; Salomon Bros. & Hutzler; First
Boston Corp.; Union Securities Corp.; Kidder, Peabody
& Co.; Blyth & Co., Inc.; Merrill
Lynch, Pierce, Fenner
& Beane

in

15

new

Power

reported
money

&

Light Co.

company

in

raise $12,000,000

expects to

1950-1951 to finance in part its con¬

struction program. McGregor Smith, President, disclosed
that no plans have been completed to date on what form

the

new
financing will take, although the company
expects to improve its current equity position, which is
38.6% of capital. Probable bidders for common stock:

corporate

Registration

purposes.

with

SEC

Corp.; Dillon, Read & Co. Inc.; Smith,
Barney & Co. and Blyth & Co., Inc.; Lehman Brothers;
Union Securities Corp.; Merrill Lynch,
Pierce, Fenner
& Beane.

Harbor

Belt

RR.

Dec. 15 company reported to be

planning the issuance of

equipment trust certificates. Probable bid¬
Halsey, Stuart & Co. Inc.; Salomon Bros. & Hutzler;
Harriman Ripley & Co., Inc. and Lehman
Brothers
(jointly); Harris, Hall & Co. (Inc.). Expected about
ders:

Jan. 25.

26

Public

Metropolitan Edison Co.
preferred stock, probably in February, to help fi¬
its
1950
construction
program.
The company
expects to offer $7,000,000 in bonds and $3,000,000 in
preferred stock. The bond and preferred stock offerings
nance

to be sold at competitive bidding.
Probable bidders:
Drexel & Co.; Harriman Ripley & Co. and Union Securi¬
ties Corp.
(jointly); Carl M. Loeb,

Rhqades & Co.;
Halsey, Stuart & Co. Inc. (bonds); Kidder, Peabody &
Co. (bonds); White, Weld & Co.
(bonds); Smith, Barney
& Co. and Goldman, Sachs & Co.
(jointly on pfd.);
Glore, Forgan & Co. and W. C. Langley & Co. (jointly

that

corporation plans to issue and
sell early in 1950 $5,000,000 of preferred
stock, the net^

proceeds to

for construction costs, etc. Probable bid-'
ders:
A. C. Allyn & Co.; Harriman
Ripley & Co. and
Merrill Lynch, Pierce, Fenner & Beane
(jointly); Kidder,
pay

Peabody & Co. and Blyth & Co. (jointly); Equitable Se¬
curities Corp.
•

Kansas

Jan.

24

Gas

&

Electric

stockholders

will

Co.

consider

issuance of 200,000
(par $100), with a 4J/2% to 5%
dividend, to be issued in exchange for existing 7% and
$6 preferred stocks on a share-for-share basis, with 7%

shares of preferred stock

preferred

stockholders

also receiving $5 per share in
stock not issued in exchange will
be sold to underwriters and the proceeds used to
redeem
old preferred issues.
Traditional underwriter—Union
Securities Corp.
If competitive by
cash.

New preferred

negotiation,

following will have
riman

"the

Union Securities Corp.; Har¬
Blyth & Co., Inc. and The First

groups:

Ripley & Co.;
Boston Corp. (jointly).
Other probable bidders: Halsey,
Stuart & Cor Inc.; Kidder, Peabody & Co.; Smith,
Barney
& Co.; W. C. Langley & Co.; Lehman Brothers.




Pennsylvania

Stockholders

Feb.

on

will

21

consider

increasing the
authorized preferred stock from 185,000 shares to
215,000
shares.
•

Missouri-Kansas-Texas

RR.

(1/10)

Company will receive bids by noon (CST) Jan. 10 at
its
office, Room
1506, Railway Exchange Bldg., St.
Louis 1, Mo., on its proposed offering of
$1,650,000 equip¬
ment trust certificates, series 1950, to be dated Feb.
1,
1950, and to mature in 30 equal semi-annual instalments.
Probable

bidders:

Halsey, Stuart & Co. Inc.; Harris,
& Co. (Inc.); Salomon Bros. &
Hutzler; Harriman
Ripley & Co., Inc. and Lehman Brothers (jointly).
Montana

Power

issue in

a

few months

securities, which may
possibly some addi¬
tional common stock. Financing of $10,000,000 or more
in bonds may be undertaken in May.
The proceeds are
to be used for expansion and extension of its
gas and
include

bonds and

new

debentures and

electric lines.

Probable bidders for bonds: Halsey, Stuart
Inc.; Blyth & Co., Inc.; Union Securities Corp.;
Merrill Lynch, Pierce, Fenner &
Beane; Smith, Barney
& Co.; First Boston Corp.
&

Co.

•

Stockholders of record Jan. 10, 1950, are to be offered
rights to subscribe to 500,000 shares of capital stock at
$1.25 per share, on the basis of one share for each four
shares
who

held.

which

prescribed.
will

Rights will expire Jan. 28.

Stockholders

resident in the United States will receive share

are

warrants

be

they

transfer

may

sell

or

within

time

Co.

Offering is being underwritten.
Proceeds
development and other corporate pur¬

Boston

Corp.; White, Weld & Co.

Northern Natural Gas Co.
Nov. 28 reported company contemplates sale of between

$30,000,000 and $35,000,000

•

Co.

3

Gas

shares

par

$25,

Commission

the

The

company

of

Boston

Corp.;

4.80%

the

to

Co.
proposes

to

issue

and

sell

redeemable first preferred
approval of California P. U.
Price, dividend rate and

SEC.

will be determined prior to the time
Traditional underwriter: Blyth & Co.,
-

3

also announced

to offer

common

tional shares of
of this

expects early this year
stockholders the right to purchase addi¬

offering

Pacific

company

common

are

Power

stock, but the time and amount

yet to be determined.
&

Light Co.

Dec. 24 reported that company's tentative plans call for

funding of $9,000,000 bank loans, probably in March. On
Sept. 15 it Was said plans to do some permanent financ¬
ing of approximately $7,000,000 through the sale of
additional

first

mortgage

bonds

to

retire

outstanding
notes and to finance its construction program had been
postponed to about May 1, 1950.
Probable bidders:
Halsey, Stuart & Co. Inc.; Kidder, Peabody & Co.; W. C.
Langley & Co. and The First Boston Corp. (jointly);
Union

Securities

Dec.

Telephone & Telegraph Co.

15 company announced

holders

the

right

to

a plan to offer to its stock¬
subscribe for 814,694 additional

on

will receive bids at or
Jan. 5.at its office at

Silk

of Alien Property, Department of Justice,
120
Broadway, New York, N. Y., on or before 11 a.m. (EST)

Jan.- 17.

on

The

will

stock

■

sold

be

citizens.

*

Seaboard

Air

Line

■

only to

American

1

!

"

■

RR.

Dec.

9 reported that company has under consideration
refunding of its long-term first mortgage 4% bonds
involving not less than $30,000,000. Probable bidders include Halsey, Stuart & Co. Inc.; Kuhn, Loeb & Co.; Leh¬
man
Brothers; First Boston Corp.; Harriman Ripley &
the

„

Co.,'jointly.
Southern
Dec.

19

California

reported

Gas

company

Co.

i

.

issue and sell approxi¬

may

mately $20,000,000 of bonds, probably in May. Probable
bidders: Halsey, Stuart & Co.
Inc.; Blyth & Co., Inc.;
Lehman Brothers; Harris Hall & Co. (Inc.); White, Weld
& Co.; Merrill Lynch, Pierce, Fenner &
Beane; the First
Boston Corp.; Shields & Co.; Kidder, Peabody & Co.
Southern

Pacific

Co.
(1/11)
has issued invitations for bids
by 12 o'clock noon (EST) on Jan. 11
offices at Room 2117, 165 Broadway, New York 6,
for
$13,530,000
equipment
trust
certificates,
DD, to mature in 15 equal annual instalments of
The

,

to

be

at

company

its

received

each, and to be secured by

costing

not

less

than

N. Y.,
series

$902,-

railroad equipment
Probable bidders:

new

$18,040,000.

Halsey, Stuart & Co. Inc.; Harriman, Ripley & Co. Inc.
and Lehman Brothers (jointly); Salomon Bros. & Hutz¬
ler; Harris, Hall & Co. (Inc.); The First Boston Corp.
®

Southwestern

Dec.

fund

some

Public

Service

Co.

10

reported company plans to sell about $2,500,000
of debentures and is said to be
considering plans to re¬
of its

privately-held indebtedness. Traditional

underwriter, Dillon, Read & Co. Inc.
Texas

Electric

Service

Co.

19

reported may offer 100,000 shares of new pre^
ferred stock. Expected to be sold
competitively, possibly
in

April.

Probable bidders may include W. C. Langley
Glore, Forgan & Co. (jointly); Union Securi¬
ties Corp.; Hemphill, Noyes, Graham, Parsons & Co. and
& Co. and

Drexel

& Co. (jointly);. Harriman,
Ripley & Co.; Blyth
Co., Inc.; Lehman Brothers; Kidder, Peabody & Co,;
Smith, Barney & Co.

&

Texas
28

Electric

reported

bonds early in

Service

Co.

plans sale

of $8,000,000 of
1950, the proceeds to be used to finance
company

the company's construction program.

Additional financ¬

ing also is anticipated in the first half of 1950 by other
subsidiaries

of

Texas

Utilities

Co.

Probable

bidders:

Halsey, Stuart & Co. Inc.; The First Boston Corp.; Blyth
Co., Inc., Kidder, Peabody & Co. and Smith, Barney
& Co.,
and Merrill Lynch, Pierce, Fenner & Beane
(jointly); Union Securities Corp., White, Weld & Co., and
Glore, Forgan & Co. (jointly); Carl M. Loeb, Rhoades &
Co.; Drexel & Co. and Hemphill, Noyes, Graham, Par¬

&

& Co. (jointly); Lehman
Brothers;
Hutzler; Harriman, Ripley & Co.

sons

&

Texas-Illinois
Dec.

5

it

Natural Gas

Salomon Bros.

Pipeline Co.

announced
company plans to
mile pipeline, which it is estimated will
was

build
cost

a

be¬

tween $140,000,000 and $150,000,000. James F. Oates,
Jr.,
Chairman of Peoples Gas Light .& Coke
Co., stated fi¬
nancing of the new project would probably consist of
75%

debt and 25% stock.
If bonds are sold at
petitive bidding, Halsey, Stuart & Co. Inc. head
Texas
Dec.

19

Utilities

reported

to

400,000 shares of

com¬

group.

Co.

be

money in a few months

seeking about $8,000,000 new
through additional sale of about

common

stock.

Probable bidders:
Blyth
Co., Inc.; and The First Boston Corp.
(jointly); Leh¬
man
Brothers; Dillon, Read & Co. Inc.; Union Securities
Corp.: Merrill Lynch, Pierce, Fenner & Beane and Kid¬
&

der, Peabody & Co. (jointly); First
Rauscher, Pierce & Co. and Dallas
(jointly).
•

Utah

The

Fuel

referee

Co.

Southwest
Union

Corp

Trust

•

Co

(4/10)

will

offer at public auction at
11 a.m. on
April 10 all of the 100,000 outstanding shares c/f stock of
this corporation at the
Guaranty Trust Co. of New York
140 Broadway, New York.
Business—Mining of coal in
Utah

and

Colorado and

manufacturing of coke in

Utah

and sale of said products.

Western
Dec.
ance
or

Pacific

(EST)

noon

office

Corp.;

Equitable Securities Corp. and
Salomon Bros. & Hutzler (jointly); Blyth &
Co., Inc.;
White, Weld & Co. and Harris, Hall & Co. (Inc.)
(jointly); Carl M. Loeb, Rhoades & Co.

(1/5)
company

.

prices

offering.

Inc.
Jan.

Kidder,

o'clock

Corp., Allentown, Pa. (1/17)
Dec. 28 the Attorney-General of the U. S. invited bids
for the purchase, as an entirety, of 1,358 shares of capital
stock (par $1 each). All bids must be presented at the

1,400

subject

and

First

Electric

&

announced

1,500,000

stock,

debentures early in the

RR.

announced the
12

Phoenix

Probable bidders: Halsey, Stuart & Co. Inc.;

year.

Pacific

Jan.

new

for

American

Inc.; Salomon Bros. & Hutzler; Harriman Ripley &
and Lehman Brothers (jointly); Harris, Hall &
(Inc.); First Boston Corp.
-.
-

Nov.

Jersey Bell Telephone Co.
Company filed Dec. 8 with the New Jersey State Board
of Public Utility
Commissioners a plan for financing
$65,000,000 of construction.
Company proposes to sell
$50,000,000 in common stock and $15,000,000 in long-term
bonds to meet plant and installation costs.
Probable
bidders for bonds: Halsey, Stuart & Co. Inc.: Morgan
Stanley & Co.; Kuhn, Loeb & Co.; Shields & Co.; First

share

one

Co. Inc.

used for

poses.

new

15

Dec.

Negus Mines, Ltd.

of

1811, Broad Street Station Bldg., Phila. 4, Pa., for
$10,620,000 equipment trust certificates, series Y, to be
dated Jan. 1, 1950 and to mature $708,000 annually on
Jan. 1, 1951-1965.
Probable bidders: Halsey, Stuart &

000

Co.

rate

preferred held.

or

Room

pfd.).

on

the

at

common

& Telegraph Co. owns 3,003,584 shares, or
90.34%, of the 3,324,604 common shares outstanding, and
640,957, or 78.17%, of the 620,000 6% preferred shares.
Proceeds will be used to retire bank loans and to provide
for additional expansion, additions and improvements.

are

of

Service Co.

announced

this

and

redemption
Iowa

early

Nov. 30 reported company plans to sell additional bonds

Blyth & Co., Inc.;
Peabody & Co.

(1/25)

$1,800,000

Oct.

expected

month.

The First Boston

Indiana

Proceeds—

To retire present indebtedness, finance the construction
of a cast iron pressure pipe plant, and for other

New

(jointly); Harriman, Ripley & Co.

Florida
Dec.

sell

stockholders of rights to subscribe for 592,185 additional
common stock.
Underwriters—Dallas Rupe &

approximately $22,000,000 in

be

and

Hall

1, 1980, the net
paying off $25,760,000 of
1, next, approximately
$33,400,000 of general mortgage 4J/2% convertible income
bonds, series A, due Jan. 1, 2019. To be offered at com¬
petitive bidding.
Probable bidders: Halsey, Stuart &
Co. Inc.; Kuhn, Loeb & Co.; Morgan, Stanley & Co.;
Lehman Brothers and Bear, Stearns & Co. (jointly).
The
bank loan was made to redeem on Jan. 1, 1950, $25,760,000
first mortgage series A 4s, due Jan. 1, 1994.
Bids—Bids
will be received at the company's office, Room 1015,
139 West Van Buren Street, Chicago, 111., at or before
12 o'clock noon (CST) on Jan. 18.
Dallas

issue

shares of

000,000 first mortgage bonds, due Jan.
to

to

stock

common

Telephone

before

$5,000,000 10-year first mortgage bonds and to raise an
additional $2,000,000 through the issuance to
present

proceeds

to

Texas

of

each six shares of

Dec.

Dallas,

Dec. 20 reported the company may

and

a

(jointly); Harriman Ripley & Co.

Dec. 20 company asked ICC for aythority to issue $55,-

notes

authorizing

Son, Dallas, and Straus & Blosser, Chicago.

American

•

consider

(par $25)
of company to Laclede Gas Co.

name

bidders:

Thursday, January 5, 1950

shares

will

Corp. and Blyth &
Co., Inc. (jointly); Smith, Barney & Co. and Goldman,
Sachs & Co. (jointly); Lehman Brothers, Merrill
Lynch,
Pierce, Fenner & Beane and Reinholdt & Gardner
•

American

CHRONICLE

Light Co.

stockholders

changing

on

Probable

AIlentown-Bethlehem Gas Co.

Gas

26

FINANCIAL

issue of 480,000 shares of preferred stock

new

Prospective Offerings
•

Jan.

&

■Co.

Maryland Ry.

(1/12)

14 company was reported to be
planning the
of about $2,450,000 equipment trust

about

issu¬

certificates

Jan.

12.

Probable

bidders:

on

Halsey, Stuart &

Inc.; Harris, Hall & Co. (Inc.); Salomon Bros. &
Hutzler; Harriman Ripley & Co. and Lehman Brothers
(jointly); Lee Higginson Corp.

ntinued

from

5

page

by

modicum

a

of effort

material is deemed

The

Broad

Impact

the

on

would be
photography and

uine
In

equity capital to the

its
of

ere

has already far transcended

Exemplifying

finance.

porate

the

concept

pervading

company

nagements and their public relations agents is the following recent
tement

by the stockholder relations official of

companies:

gest

confined

t

"Distribution

stockholders

to

the

of

alone.

It

annual

modern

reaches

of the nation's

one

is

report

institu-

educational

libraries, thought leaders, legislators and government officials,
rough the press and radio—and in some recent cases, television—
impact is carried to the public at large. The annual report of

ns,

for

$2,750,000 of

has

its

Utility

genesis

in

the

stockholder's
dislike

of

foibles—in

his

toward

lethargy

data of

company

to stockholders

"quantitative"

a

stockholder fault is

such

The

resulting

constitutes

and

unnecessarily catered to by com¬

management's over-consciousness of public relations.

attention

judgments.
ancing

jazzing-up

the

reports

of

disservice

a

from

to

Dillion

is

affirmatively

harmful

the

of markets,

and hinders

of

the

the

of private

flow

federally-regulated

equity

submission

of

capital.

company

information, relevant factual data must be submitted directly to the
The

public-relations

"promotional"

material

be

can

statistical

infor¬

first

step thereto.

Effort should be concentrated on enc'ouraging the desire and
promoting the ability to absorb and understand this kind of material,
in lieu

of dishing out sugar-coated palliatives.

The

pink-pill technique cannot be

which

the

with

the

of

owners

business

ferred

would

The

increasingly evident."
officials (seconded by Wilma Soss and
r
cohorts) feel that their women shareholders must not suffer
m
the inclusion of technical terminology.
"That last reading
some

company

a

ely

to
No

.de

this comprises too unwieldy

wean

the basis of three

last

less

than

audience.

fulfill the obligation of
complete and voluminous
Exchange Commission and
last column were readily

catering to so
data required

can

and

preferred

The

ket

corporate

seems

noted

cited

in

our

to

do

of the

First

a

mar¬

bit

of

present

net't

the

average

concrete

v

circumstances

impossible to start booming
stockholder to digest the SEC-filed documents, week.

financial

information

management.^

5

whereunder

.*

is

distributed

be

must

it

him

to

by

-

id

again

financing
less

early

next

potential" start¬

100,000

to

the

Toe

On

larger
wedge itself in meantime

a

should

Edison

Co.'s

Prospects
least

shares

now

three

will

responsibility for the sugar-coating practices should
the shareholder, and how much on managements
their public relations protagonists, is still open to question.

Magnavox
garded

as

Co.,

which

tenders for

The big

use

was

re¬

destined for distribu¬

the

to

properties.
The sinking
provides for ratable retire

fund

rntiy

undertaken

On the other hand
ition

after

at the

.■en

the

General

by

a

its

among

stockholders,

questionnaire circulated by that

contest

consumer

Motors

last

November

elicited

pub-

same

opinion

some

that

level there is revulsion against over-reporting

The

•'iter
(idern

trend

is

tarts

t

poi

President

of

consultations

a

to

waste

should

a

public

utilities

stockholders

we

are

company

convinced

reported:
that

the

of

money

nothing

istorical purposes and

...

more

that

as

we

far

as

convinced that the

are

than

statistical

a

stockholder relations

.

head

of

are

a

stockholders
to

feel

that

we

attempt to oversimplify

And from

to retire

the

to

company

Sharp

funds

&

Dohme,

in

engaged

a

similar

operation

involving

as

well

the head of

as

for

struction

a

Dividend No. 182
•

business

.

.

would

our

be

annual report presentation.

large textile

company:

•

•

•

quarterly

of

•

»

A

•

dividend of fifty cents (50c) per
share
011
all
the
outstanding
stock
of
the
Company has
been
declared
payable January
20, 1950 to stockholders of record at the close
January

6,

OTTO W.

1950.

STRAUSS, Treasurer.

COMPANIA

Notice

acquisition

con¬

or

of

new

of

cumulative

pre-

Pacific

Lighting

with

out

100,000

SITUATIONS

Corp.

is

shares

to

stockholders

closing

for

effect

All

who

record

have

dividends

advise

their

office—Room

mailed

Y.
to

Nos.
1
and
2
are
requested to
present address
to the company
3505,
120
Broadway,
New
York
Copies of the annual report will
holders of bearer certificates on

request.
Compania

with clientele

Wide experience and numer¬

Will
ous

R.

contacts. Box Mil, Com¬

permit

or

Street

new

MORRELL

dividend

and

CO.

NO. 82

of Twelve

One-Half

Cents

($0,125) per share on
the capital stock of
John Morrell & Co.

trader

contacts.

will

be

paid

stockholders

fair

1950,

position plus 65% commission
basis. Box D 1229, Commercial

mercial & Financial Chron¬

&

DIVIDEND

take

to

man

Salitrera Anglo-Chilena
GRAHAM, President.

due

of

as

January

30,

1950,

to

of record

shown

on

January 12,
the hooks of the

Company.
Ottumwa, Iowa. George A. Morrell, Vice Pres. & Treat.

& Financial

icle,

25

York

Chronicle, 25 Park
Place, New York 8.

8, N. Y.

Park

Place,

New

"Annual reports

good."

LIQUIDATION NOTICES
First

The
ocated

Bank

of

OTIS

Winsted.

ELEVATOR

at

lecticut,

TRADER-SALESMAN

National

Winsted, in the State of Conis closing its affairs. All creditors

the
association
are
therefore
hereby
to present claims for payment to
•,h£ undersigned at said bank.

COMPANY

jf

lotified

The

Adult-Nursery Dual-Report Compromise

The compromise has been

Thoroughly

suggested, and is being tried, of hav-

two kinds of report per company—one for the adults and one
nursery—through either two sections of a single report or

g

the

r
o

separate

mailed

roportion

on

of

reports.

In

request

after

requests

for

cases

where

distribution

the
of

the former has

full

the
been

"technical"

simple

report

the
small,

report,

remarkably

event, while it is the best stop-gap available, the dual-report
chnique, like the single qualitative ("baloney") report, caters to
nd takes advantage of the stockholder foibles.

a

any

experienced

in

CLARENCE

Listed & Unlisted
is

looking

with

firm

private

for
that

Securities,
Dated

opportunity
can

placements.

December 9,

The

Hurlbut

ocated

S

at

National

Winsted,

in

Bank

the




of

Winsted,

State

of

Con¬

necticut, Is closing its affairs. All creditors

1222, Commercial & Financial

Chronicle,

if

association

the

lotified

25

New York 8.

Park

Common Dividend No. 169
A dividend of $1.00 per
the

1949.

Place,

he

to

present

are

therefore

claims

for

hereby

payment

to

undersigned at said bank.

I

EDWARD

F.

McARDLE,

Liquidating Agent.

Far better would be the

confining of the semi-annual and annual
eports to concrete factual information about operations; and entirely

BUNNELL,

no

par

share on
value Common Stock

has been declared, payable JanU'

handle

Box

H.

Liquidating Agent.

•Dated

December 9.

1949.

of

may

of Coupon No.
3 through the
The Commercial National Bank
Company of
New
York, 46
Wall
City 5, N. Y.
registered
share
certificates
not received copies of annual reports

A

desires

certificates

New York
holders
of

WANTED

house

December 20th date

meeting.

share

bearer

TRADER
Unlisted

3

Agent,

Trust

Street,

or

of

JOHN

TRADER AVA'LABLE

No.

collection

Paying
and

of

shareholders

Holders

be

WANTED
HELP

ANGLO-CHILENA

Dividend

At the ordinary General Shareholders Meet¬
ing of the company held in Santiago, Chile, on
December 29,
1949, it was resolved to comple¬
ment
the interim dividend paid in i June
1949
by a further payment of U. S. $0.25 per share

City 4, N.

of additional markets,

SALITRERA

(Anglo-Chilean Nitrate Corporation)

warehouses, etc.

171,815

shares

was

ave
gone from one extreme (too little information) to the other
illustrated company history and too detailed
information). I suspect
me
are
designed to win 'Oscars'!
Let's get back to a happy
edium which can become a pattern that could be followed in bad
ears

issues and will provide

be used

existing stock.

Meanwhile,

large publishing company said: "After

we

SUPERHEATER, INC.

con-

sampling
insulting their intelliAs
result, we put out an informative, dignified report which, we have
ason to believe, gets excellent
readership."

ur

ence

to

for

-yned they should be effected through the quarterly report which
ust be very brief and printed in rather large
type
incidentally,
-e seldom issue one of these quarterly reports without dozens of
mments 'Here's something we can read and understand and not
zzed up with a lot of charts and pictures.'"
The

ceeds

annual

presentation

Secretary.

COMBUSTION ENGINEERING-

Another

comprehensive multi-colored reports replete with

be

Checks will be mailed.

open.

tion chiefly in the mid-west.

Inc.,

large

with

record at

January 19, 1950. Transfer

HORACE

the mail-order catalogues.

quarterly dividend

a

EDMUND HOFFMAN,

this

Chicago utility will

COMPANY

to Stockholders of

the close of business

.i-.

ment of the whole issue by matur
operation, but one in ity.
which
an
exchange offer gave
hich showed that only 56% of the respondents were sufficiently
Other Issues
Same Day
forested in the operating review section of the report, and 61% in existing holders prior rights was
that involving 211,380 shares
Unless
the
schedule
of
changes
e
financial review, to read them; while 80% said they like the
three
new cumulative preferred stock of
other
smaller
issues
are
uteres and want' them continued
(The photographs in "Fortune"
Northern Indiana Public Service slated for marketing on the same
ayazine being a more expensive treat).
Co.
day.
Food Fair Stores, Inc., tops
it must be realized however, that the foible is being validated
list
with
an
$8,000,000 of
Present preferred holders were this
nihily high places. For example, in its Annual Reports Contest the
sinking fund debentures.
a
share-for-share
ex¬
Tft&ncial World" give weighting of 40% to the makeup components offered
This negotiated deal will pro¬
change, with underwriters stand¬
pictures, charts and typography.
ing by to take any unexchanged
vide
for
retirement
of
two
Signs of Consumer Resistance
stock
for
public
offering*
pro¬
smaller

The existence of the anti-statistics foible is confirmed by a survey

de¬

was

sources.

STOCK

27, 1949

books will remain

in

be

oner-*-v.

of

December

February 15, 1950

at

the proceeds from this flotation to

cumulative

par

in

pro¬

of seventy-five cents per share was declared on
the Common Stock of this Company, payable

investment

banking delegations
field with

that

are

sizable

finance construction and additions

$1

bonds

than

money

first

AMERICAN

Line

con¬

A

via

should

the

ended

war

CAN

vertible preference stock of the

to

the

it

was

DIVIDEND NOTICES

indications, and unless
negotiated undertaking

the

week's

included

class

Divided Responsibility for the Babying

'attributed

This
ers

Row much

1949

outstanding issue.

Commonwealth

bhir*"'relations literature would be satisfactory in the reports going market, but there was every indi¬
the shareholders—as a not-too-serious addendum. But cation that the big guns would
the

But

COMMON

rtctly to
<der

that

since

$700,000,000

some

1948.

bor¬

$1,203,224,-

shares

new

by the Stock creeping before it starts walking
accessible and in the new year.
The current $49,000,000 of new sinking func
debentures, due up for bids next
see
a
reprehensible to the non-professional investor—which they are not week was scheduled to
of
stock
issues
reach Tuesday.
they, could be relied on for the financial information, and the handful

a-hanges

in

with the corporation using
proceeds of such shares to retire¬
ment

issue

new

destined

that

whole

a

veloped from equity

From all

the

If

Securities

year,

stock

from the simplicity-bottle!

single document
l

a

the

of financial infants

group

a

as

duced

to holders

$3.50

in

Here, too, underwriters stooc
by to take up any unexchanged

Report

ly of the Little Woman."
Su

offered

existing

be

fairly

a

bankers

total of about

464

for each four old shares.

Reporter's

fuge of the Canadian male—the good, dry annual report—is rapidly
coming a thing of the past," recently opined the Montreal "Daily
ar." "Like everything else, the annual report is becoming the prop-

U

be

on

Our

blic generally, is

Again,

to

the

such

will

suggest

for

utilities

rowed

year

of

the

with

and

of

naturally

which

is in every sense of the word a public document. That the
nual report is recognized by management as an important channel

forecast.

portion

direction.

be

effective!

Securities and

on a

money

that

current

sought via the investment market

mation

admittedly
leaves
many
intangibles unsolved in invest
ment-appraisal, the objective factual data compose the indispensable

of

the

Commission

busy period

distributed separately at different times.
While even the most meticulously-composed

for

substantial

new

$3.9
expansion
plant, with ap¬

to

slated

are

to

$750,000,000

quarter, based

A

close

for

year

additions

xchange

utilities

spend

this

proximately

From the communal viewpoint, this accentuates unbal¬

Irrespective

electric

to

amount

shareholder, in diverting his
elements contributing to investment

genuine

series A first

new

Financing Ahead

and

expected
and

But
pany

Gas

ay

communication

47

mortgage bonds.

fault of sugar-coating of reports distributed

shareholders.

economy.

reporting

state

purpose.

*

Conclusions
The

disadvantages

the
painlessly easing shareholders into the serious elements of
present

si:

nature.

Economy

entailed in
sugar-coating stopgap technique. By these standards, placing a
mium on expensive lithography and color, competitive advantage
creating investor acceptability is given to the large companies,
t only does their wealth, but the greater number of stockholders
'ucing the cost-per-unit, accentuate this. This further aggravates
r
evergrowing blue chip-itis, from which our markets are suf•ing and which, in displacing investment geared to appraisal of
siness
value, is another obstacle to the furnishing of really
affirmative

other

several

are

(99)

appropriate for that separate and distinct

his investment and his

There

CHRONICLE

*

by management,

valuable to stockholders than the pretty
illustrations.

more

ored

FINANCIAL

40%
separately at other times of the year permitting the public relations
preferred and
Lawrence
department or outside agency to send out whatever promotional Gas & Electric Co. will open bids

Observations
•omplished

&

COMMERCIAL

THE

Number 4870

171

lume

ary

28,

1950, to stockholders of

record at the close of business

on

January 6, 1950.
Checks will be mailed.
Bruce H. Wallace, Treasurer

New York, December 28, 1949.

48

COMMERCIAL

THE

(100)

CHRONICLE

FINANCIAL

&

Production Credit Corp.,

BUSINESS BUZZ

the

jTjLIwhaL

Only

11f » niAT'l.. BftNK

wf fh'ME

WASHINGTON, D. C.—Among
legislative

JL IrM>

It

appear.

avoided

observers

possibly

could

if

be

disposition to advise
industries subject to wartime ex¬

demand

was

cise tax

to

temper their
optimism that these taxes will be
this year, despite the appar¬
ent rush of Congress and the Ad¬

$500 million
deficit

•cut

probably

Some

will be made,

perhaps not as widely
reports would indicate.

ex¬

handed.

as

but

press

cise tax rate which is entitled to

for the

war-time

a

looking

abolition.

or

tive

politically popular subject.
the other hand, translating
this popularity into action—final

&

On

jects

itself. The more re¬
conservatives, count¬
ing many of the advocates of
excise t&x reduction, will, when
the final throw comes, be pretty
to

worsen

to

already

an

it

for

up

lowered / excises,
particularly in
un election year, and might even
ehove it through the Senate

as

a

rider to the oleo tax repealer.
sober

second

will

thought

when they try to get around

figuring

where

out

to

the

fill

in
-excise tax revenue. This will lead
to the advocacy of all kinds of
fiscal
tricks,
from
proposing
taxes that will not raise much
revenue down to reviving the old
scheme of Rep. Mills to require
occasioned

corporations to

by the drop

all their in¬

pay

liability in six months,
to avoid a deficit or nearly avoid
tax

come

&

deficit in just one fiscal year.
Almost any

substitute source

In

no

Administration,

fruited

every

tax

regularly as a cat
kittens, has been constantly
adding to the objects of excise
taxation. Many people think that
the 3 per cent freight transporta¬
tion tax, for instance, is a "war
rate," but it actually was enacted
early in the defense program.
Hence

industries

many

taxes

they

there
tax

levied

were

war,

furs,

should
the

on

the

cut,

that since

during

luggage,

stiff

toilet

commu¬

handed

objects of excise taxation, has
offsetting liabilities approaching
if not greater than the benefits
to be gained by certain war¬
time excise tax rate reduction.

tax reduction is strictly limited,

in

However,

the fiscal morals

Capitol Hill
shabbier

election

an

are

of the boys on

always

little

a

non-election

in

than

year,

and it is possible they will
hit on something that superfi¬
cially sounds good, and will clear
years,

en

tax

excise

bill

reduction

for

the President.
This leads right into the hig¬

hest obstacle of all, the possibil¬
ity of a Presidential veto IF
compensating tax boosts are not
enacted. It must be borne in
mind that the President wants
to be

on

the popular side of fa¬

it

is

in

*

of

some

and has indicated
to lend

more.

no

who

one

for

could

the

excise

big

very

will

session

taxes

offers

the

world for

most

fight of the new
be
of
economy

spending and high taxes.
President, while fighting

versus

The

to

the

death

tailment

ing

of

programs

counts for
in

the

a

against

any

the

elections,

the

the Re¬

entire Con¬
for
tihe

necessary,

big

not

unbalanced

bud¬

An

excise

tax

redaction

without compensating or offset¬

It

fied.

veto
of

is not beyortd the
possibility, it would




vitreous

be

in

its

that

useful.

adapta¬

the

be

sale

continued, and the
be diversi¬

operations
other

is

not

sold,

to

it

RFC,

watch

is

may be expected in
future to foreclose on the

near

which is in arrears in
to the government

company,

its

payment

agency.

made

to

sentiment

to get

all

by

for

RFC,

has

of the RFC's loans to the

prefab

manufacturer. RFC may be ex¬

to

in

come

The

first

$15 million,
pecuiiaar

for

more

which

loan,
then

empowered
the

existing

to

finally

had

to

make

White

when

the

make
House

loan

pressure

applied.

duction around Feb.

tirely

new

resume

pro¬

of its "en¬

1

car" after a shutdown
since Oct. 21,

which has prevailed
it is

predicted. The "entirely

car" will be the

new

new

line of Kais¬

the financing of which was
granted by RFC, $34.4 million for
working capital and tools and
equipment, and $10 million for
wholesaling.
The
new
Kaiser
ers,

light

car,

into

production

however, will not come

after the regular

for

three

credit
to

dozen

associa¬
loose

cut

government

capital,

they don't have to.

1933

and

regional
tahzed

1934

the

Farm

all-government-capi-

Production

whose

porations

Credit

job

some

time

line, which will

Lewis D. Gilbert

Cor¬

to

was

capitalize farmer "cooperative"
production credit associations

meetings,

and

supervise

them

after

they

The

capitalized

government

these farmer-borrowers—who get
their loanable money from an¬
other

group

of government insti¬

tutions, the Federal Intermediate
Credit banks—to

give them oper¬
ating capital. In all they got some
$90 million of Federal capital, of
which, 16 years later, they still

a

$23.5 million.
get

on

Company" at the
School for Social Research,

66 West Twelfth Street, on Thurs¬
day, Jan. 5 at 5:20 p.m. Mr. Gil¬
bert is guest lecturer in the series,
"The Investors Today" given by
A. Wilfred May, economist and

Executive Editor of the "Commer¬

Financial Chronicle."

cial and

Cement Stocks:

loan through
"must" invest

a

farmer

speak

Personal Contact Between Stocks-

New

launched.

were

will

"Direct

holders and the

To

will

that

decided

their

cars.

.He

Credit Administration set up 12

SH

Sis

auto

news

have

In

held
*

Kaiser

small

companies'

convertible

four-door

*

production

because

a

Wilson Wy-

RFC

as

some

made under

was

statute

"direct"

was

IS

from

this

on

of

att. one-time Housing Expediter,
to

It

Texas

money

critical

turned

now

well

as

*

Congressional senti¬

going,

loan.

models,

kind of hous¬

any

their

grow!"

include two-door and

risking

federal

more

almost

ment

Lustron

was

and

more

ing

it

tions

Whereas, when the first loan
was

a

PCA

in

the

Riverside Cement

PCA's capital, a sum equal to 5%
of his loan therefrom. However,

Spokane Portland Cement

the farmer-borrower doesn't have

Oregon Portland Cement

to

put

up

capital, but

the cold

cash

for

the

add it to the loan,
so that if he actually wants a loan
of $100, he borrows $105, $5 of
which goes into the PCA capital.
Then
after he repays the $105
loan, he may get back the $5 capi¬
tal (unless PCA capital were im¬
paired).
To

can

Coplay Cement Mfg.
Glens Falls Portland Cement

LERNER & CO.
Investment

10 Post Office

Securities

Squire, Boston 9, Mass.

Telephone HCbbard 2-1990

get the money to repay the

Teletype BS 69

fab

house

and

also

a

FOREIGN SECURITIES

the

Carl

president
There

sale,

a

require

is

NEW

however,

reaching
G.

of
little

of

would
a
deal

Strandlund,
the
the
corporation.
present optimism

that Strandlund will deal with

prospective,

All Issues

5

70

FOREIGN SECURITIES

cor-

Office*

STREET

Trading Department

SPECIALISTS.

120

50 Broad Street

New York 4, N. Y.

AFFILIATE: CARL MARKS & CO. Inc. CHICAGO

hand, if the

WALL

Tel. WHitehall 4-4540

re¬

identity has not been made

Executive & Underwriting

r.ARL marks & r.o- me.

purchasers,

public.
On the other

YORK

new

products.
Such

Hill, Thompson & Co., Inc.

Firm Trading Markets

pre¬

other

Teletype—NY 1-971

IIAnover 2-0050

words, the plant

would continue to make

trump than excise tax reduction,
a

a

would

possible

In

whose

realm

the

of

proxy,

at

production of the Lustron house

ported

co

which

confined

is

tax boosts would provide
President with a higher

ting
the

in

by

could be made on a basis where

with

get.

the

bility to enameling panels for the
prefabricated Lustron home.

might

must attempt to blame

resulting

is

in

modern

steel, and the equip¬
versatility. It
for making any kind

surface

enamel

plant's

he

pcration

here

anticipated,

facilities

utmost

product

which

upon

Democratic victory

or

is

of the spend¬

Congressional

publicans,
gress,
if

cur¬

its

putting vitreous enamel

be used

can

It
passes,

use

enameling of steel,
[fc is asserted that the equipment
in
the
plant—the
plant
itself
being a War Assets property—

of

over

"I'm

"minority

t4Lt\

loans to prefab producers. RFC

vitreous

bis total fiscal stand.

ment

determination

thing which could happen,
it was reported, is the possible
sale of the Lustron plant to some

of

excite¬

a

One

ment

of

tt.

•

♦

in which RFC has
$37 million in loans,

Lustron,

sunk

voring or not opposing excise
tax cuts, but at the same time
lie has a far greater stake in
flurry

*

••

Congressional critiicism

on

the

sentation,

pected

Something will be doing, per¬
haps within a few weeks, in the
way of a move to settle the future

coatings

After

of falling from

danger

overweight.

today.

widely known
stock¬
No. 1" through his repre¬

stockholders
'-kZ-w <> f4"

in

1944. It will be difficult to limit

at

relationship

America's

holder

prepara¬

effective

boosts

a

jewelry,

as

tions, light bulbs, and
nications, which were
such

up

receive

to

same

the

right

he

line

are

their

the eligible and desirable bene¬

a

as

has

going to think

discuss

Lewis D. Gilbert,

new

a

Management

New School

which

with

year

ficiaries, and unless the excise

as

Will

almost

bill

on

Versus Stockholders

"war

subjects of taxation
just tax boosts. The

new

were

Roosevelt

these

were

case

higher

such

revenue,

Gilbert

passenger transpor¬

corporation income tax, or other

©f

the "Chronicle's" own views.)

prep¬

tation.

They

the boys will

whoop

cations, and

rates"

outlook.

At first, of course,

Jbe* inclined

holes

taxes

whiskey, wine, beer,
electric light bulbs, telephone,
telegraph, and radio communi¬

position

The

additional

dues, fur, luggage, toilet

budgetary

(This column is intended to re¬

flect the "behind the scene" inter¬
pretation from the nation's Capital
and may or may not coincide with

admissions, cabarets, club

these

crimp

arations,

sponsible

come

of

were

mighty durable

One of these is the budgetary

hesitant

tough and seriously
the FCA system.
get

posed to be temporary. The ob¬

barriers.

general expenses of gov¬
might

ernment. In time Congress

April 1, 1944, which Con¬
gress itself in the law styled,
"war rates, and which were sup¬

action which will become law—is

various

FCA's

ex¬

the excises has been proved to be

l?ad

but !

all

has

,

covetously
toward
pools of gov¬
ernment capital, swiping back
a
little here and a little there

just what is

over

Technically, there i§ a group
of increases, all enacted effec¬

some

Congress

.

,

forgotten about FCA, and both
it and the Treasury have been

peanuts.

doubt, however, that
reducing wartime rates on some of

with

this

on

encouraging the PCA's to

In

Another great obstacle is the
possibility of a log-rolling match

There is no

beset

earnings,j

get out of debt to the government, however, the Farm Credit
Administration is being fore¬

added to the

or so

of

out

earnings

reduction

ministration to favor them.
.cuts

is

for

great

so

been,

have

capital
so

including

government capital.

reduction that another

boosts

tax

do

to

even

ACCOUNT

him¬

President

the

cise

a

in

government

self concluded that the political

is

that,

the PCC, or government
few of the 116 associations,
all have paid off their

a

which

WATCH youfi
there

upori|

leaving

voluntarily

to repay

/fl f) /f

able

seasoned

however^

rely

to

$5 capital in the PCA, giving the,
PCA capital funds which it uses

Washington...
from the Nation's Capital

had

has

PCA

farmers

Behind-the-Scene Interpretations

5, 195Q

Thursday, January

——

BROADWAY

Tel. REctor 2-2020