The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
ESTABLISHED 1S39
•is?
Reg. U. S. Pat. Office
New
Number 4766
169
Volume
Economists Give
Opinions
Business
the
on
Most of
Board
Conference
trial
marked change in
;
After analyzing historical
panel of National Indus-
ditures and gross
no
see
0. Glenn Saxon expects price de-•
cline, but Bradford Smith holds
opposite view.
for
fol-3>
World
War
would
be
I
But
of
living
Secretary
the Board, presided as Chair¬
:V'..,:.
-v',.':'.■
In
/Forum
Economic
Board's
business
most
"which will be
year,
in dollar and
in
indicators
price
more
Economic
Board
p.
■s
f
\
•
national
George
(Discussion
Economist,
Dun
&
Bradstreet.
Louis
H. Bean, U. S. Department
Agriculture. (Guest).
H.
Davenport, Director,
Division of Economic Develop¬
of
Donald
New York State Depart¬
ment,
ment of Commerce,
Solomon
reau
Fabricant, National Bu¬
R.
Gainsbrugh,
Chief
Economist, National Industrial
Conference Board.
Malcolm
P.
McNair, Professor of
on
page
we
economy,
incidental
and
first
But
let
me
(Continued
tell
con¬
the
you
I
answer
on
page
36)r
'
Newbury read
Statistical
American
the
I
the
At the Other End of the Avenue
be termed—in
has been known for
some
Other communications
time past.
tions
the
made
from
Federal
Price
s
c
i
a
to
Con¬
80th
that sosecurity
1
benefits be
broadened
and
increased,
and that stand¬
and
price
by
controls
other
be
enacted
to
infla¬
combat
President
thev closely rellted 'subject
fpolitical/'
of what the
81st Congress
has become
It
that Mr. Truman is
O.,
Cleveland,
and
that this
add
to
There is,
of
fact must of necessity give him
prestige
enhanced
greatly
quite popular to speak of the fact
now President "in his own right,"
and
power
Truman
substantial truth in this line of
course,
argu¬
:///
expected/ the President
immediate repeal of the
-was
called for
Act and " an
"im¬
provement" in the national farm
program of price supports.
The complete text of the mes¬
sage follows:
■ ; //■ ■
Taft-Hartley
,
Mr.
President,
Mr.
Members of Congress:
I
the
happy
am
81st
•
Speaker.
report to
to
this
Congress that the state of
good. Our nation is
Union is
able
better
leadership.
of
tionary trends.,
As*
meet
the
than
needs
ever
of
before
the
to
American
people and to give them their fair
(Continued
on
page
39)
ment, but, to our way of thinking, not as much as seems
to be
widely supposed.
dent
Truman
last
Dec.
It is true, of course, that Presi¬
year
conducted
continued
"fighting"
a
cam-
State and
36)
page
on
Municipal
1978
1,
re¬
recommenda¬
gress,
personal platform—if such it may
broad outline at least is now before us. It
President Truman's
n
h i
iterated
29, 1948.
Income
R. H. Johnson & Co.
in opinion of Bond Counsel
Established
Bonds
1927
99%
accrued
plus
higher
brackets.
Bonds
July
exempt
new
going to reach, so that you can
Association,
(optional)
Taxes
<fcand
do¬
in our
my
the
of
nature
general
am
43)
Chicago Transit
Authority
Interest
rela¬
need
of
part
*A paper by Mr.
3% %
inter¬
be levied
corporations, estates and individual incomes in the middle
on
lilllis We See It III!
predictions a secondary
own
my
before
Due
un¬
Message, in
which he asked for $4 billion of additional taxes, to
will give him. And, after all,
techniques and better instruments
Congress, though belittled of late years and pushed aside
combined with much wisdom.
so far as the occupants of the White House were able to
I can possibly use my time this
afternoon to the best advantage if
push it aside, is still essential in our scheme of things gov¬
I describe a new approach to the
ernmental, and its cooperation is vital to virtually all of
problem of forecasting and make the lines of action now proposed by the President.
•
(Continued
Harry S. Truman appeared before Congress
addition,
tribution.
of Economic Research.
Martin
President
Jan. 5 and delivered his State of the Union.
on
EDITORIAL
con¬
our
businesses and
individual
Edwin
Leader),
military training.
.
.
Wants universal
broadening of social security.
v,
guests of the Board were:
B.
on
by him to the Congress late this week and early next must
mestic b u s i- be awaited for a full and
precise appraisal of what he de¬
ness affairs. If
mands and expects of Congress in this year of our Lord,
w e
are
to
d. Newbury
chart a safe 1949, but much more was known in advance and certainly
much/more: i^fipw knpv^ atou^t|xat aspect of^tlie current
• /*V|. ■ |v iZi course in our
~
and
our
and"
than
Forum
„
tionships and
obligations,
marked
physical volume."
and
national
The members of The Conference
controls
as
anti-trust laws and
that the experiences of
' >./:/
ditions affect¬
ing
next
measures
under
familiar
anticipate "no marked change" in
the general level of business ac¬
tivity in 1949. The group foresaw
a
"slight
downward
drift"
in
well
on cor¬
incomes in middle and higher brackets,
consumer and bank credit and standby allo¬
President
are
we
new
■
general, the participants in
the
—
Copy
on
repeated.
Board. Clyde L. Rogers,
man.
or
the years
Conference
Industrial
pres-
of the past few years has been
another and on the anticipation—
lowing
the Economists,"
held under the sponsorship of the
National
sort
one
a
cation and price controls. Advocates repeal of Taft-Hartley Act and
reenactment of modified Wagner Act.
Calls for strengthening of
gross
subconscious anticipation
a
latest
the
at
1949
analogy of
on
possibly only
with
"Evening
believe there will be little change from
high level of business activity,
based
econ¬
omists discussed the business out¬
look
as
expen¬
Much of the business forecasting
nation's
the
of
relationship between investment
national product and em¬
ployment. Estimates gross national product for 1949 at around
$260 billion, provided military expenditure and commodity price
levels remain unchanged and enough investment funds are available.
ent
business activity in 1949. Prof.
Twelve
porations, estates, and
national product, industrial economist concludes
there is good reason to
general level of
President asks higher rates
In State of the Union Message,
Electric Corporation
Economic Consultant, Westinghouse
Cents
Truman Asks $4 Billion More Taxes
Prospects in 1949
By FRANK D. NEWBURY *
Business Outlook
Price 30
York, N. Y., Thursday, January 6, 1949
interest
'
INVESTMENT
:
SECURITIES
yielding about 3.76%
Bond
64 Wall
White,Weld&Co.
Members New York Stock
40 Wall
Boiton
Amsterdam
THE NATIONAL CITY BANK
PHILADELPHIA
BOSTON
Troy
Albany
Scranton
Wilkes-Barre
Providence
Woonsocket
Syracuse
Buffalo
Harrisburg
Street, New York 5
Chicago Philadelphia
London
Exchange
Street, New York 5
OF NEW YORK
HART SMITH & CO.
Bell
Washington, D.C.
Buenos Aires
Teletype
Private Wires
Bond Dept. Teletype: NY 1-708
New York
NY
1-395
'
Montreal
NATIONAL BANK
,
Connect
y
Toronto
NATIONAL BANK
EUROPEAN
of INDIA. LIMITED
Bankers
the
to
Head
Branches
26, Bishopsgate,
London, E. C.
in
Subscribed
Paid-Up
Reserve
Bank
Distributors of
India, Burma, Ceylon, Kenva
Kericho, Kenya, and Aden
and
The
Underwriters and
Zanzibar
£2,500,000
conducts
banking
and
every
description
~
i f-'
1899
(Incorporated)
exchange business
also undertaken'
.
Established
of
CLEVELAND
Trusteeship/ and Executorships
New York
...
CITY OF NEW YORK
Central Vermont
COMMON
Invited
Prospectus available upon request
Corporate Securities
OTIS & CO.
.£2,000,000
Fund
FOREIGN SECURITIES
Inquiries
THE
BONDS & STOCKS
Dominion Securities
Capital.«L„£4,000,000
Capital-__-
Municipal
OF
Public Service Co.
in
Office:
Colony,
CANADIAN
and other
Government
Kenya Colony and Uganda
CHASE
HAnover 2-0980
52 WILLIAM ST., N. Y. 5
Springfield
THE
Department
Cincinnati
Chicago
Columbus
Denver
Toledo Buffalo
SUTR0 BROS. & CO.
Est.
Grporatioti
1896
Members New York Stock Exchange
40
120 Broadway, New
Telephone
REctor
Exchange Place, New York 5,N.Y.
York 5
2-7340
IRA HAUPT &CO.
Members
New
System Teletype NY 1-702-3
Stock Exchange
111 Broadway,
WOrth 4-6000
Bell
York
and other Principal
Boston
Exchanges
N. Y. 6
Teletype NY 1-270S
Telephone:
Enterprise 1820
2
COMMERCIAL
THE
(58)
&
FINANCIAL
CHRONICLE
Thursday, January 6, 1949
1949 Federal Tax Outlc
Cities Service 3/77
By ROSWELL MAGILL*
Associated Electric 5/61
•
Alabama
Partner, Cravath, Swaine and Moore
Former Under Secretary of the
Treasury
Central Public Utilities 5^/52
BOUGHT
SOLD
—
—
QUOTED
New York Hanseatic
Corporation
5
120 Broadway, New York
an excess
There has not been
a
out of the last dozen when federal taxes have
year
tax
in>
leaving twenties,
system
1940,
its
after
even
repeal in 1945
with
:—
in
and
'
■■■"". :
..
193D
■:—7
ended
we
figure of $8.4 billion. World
expenditures took us over
a
War II
wake
of $100 billion, and today again we
carry-backs face a budget certainly four times
and carry-for¬ and probably five times as great
a
SCRIP
which
wards
haunt
to
us
this
day.
We could
smile
at
our
memories
the past
\J[C pONNELL & CO.
felt
Members
Stock
Exchange
New
120
York
York
Curb
Exchange
Roswell
be
and
Standard Gas & Elec. Com.
Com.
Elec.
States
Copper Canyon Mining
Gaspe Oil Ventures
Camera
Universal
Reiter-Foster Oil
OIL STOCKS
AND
MINING
STEIN & COMPANY
Members Nat'l Ass'n of Securities Dealers, Inc.
27
William
St., N. Y. C. 5, N. Y.
1 Montgomery
St., Jersey City 2, N. J.
Tel. DIgby 4-2190
Tele.: NY 1-1055
appreciate
ind March
15 of 1949.
Bought
15
and
earning $25,000 a
$2,278 more than
in
year
other
we
form
we,
tax
of
the
as
future?
Bell Tele. LS 186
inertia;
result .of
two
Reporter's
plateau
a
umn
those
read
"Our
how
issues
new
are
—$40
lows
see
the
Government pay its way
defense
$10.6 billion
(2)
Veterans' services and ben¬
(3)
Interest
(4)
International
(5)
Tax
efits
6.6 bilTon
■
the public debt
on
affairs
5.2 billion
4.7 billion
——
refunds
cation
2.3 billion
$29.4
t i
o
(highways,
n,
navigation
Natural
billion
est
!
.
1.3 billion
(atomic
resources
energy,
(10
viaaids,
a
service)
postal
(9)
reclamation,
years
of
going.
billion,
a
,
for¬
service.)
1.1 billion
Agriculture
.687 bill.
federal
down to $35
figure which al¬
budget
a
little
as
it
The
had
been
thirties
times
of
as
before
large
$9
as
war.
expendi¬
billion,
as
$3
large
that
produced
over
a
under
billion, about four times
those
three
of
the
:!:Reprinted from the December
issue of "The Tax Review," pub¬
lished by the Tax Foundation, 30
Rockefeller
1856
Center,
New
York,
N. Y.
or
Total
A.'/ v
:
•
lion
thirties,
of
many
would
us
start with hope and enthusiasm to
few billions from the major
items.
What are the
a
chances
Let
of
anything of the sort?
review
us
the
list of the
ten
major categories of expenditures.
What
will
military
expenditures
$10.6
seem
in
be
billion
naval
and
1950?
They
in fiscal—1948.
to be running at about
The military
is said to want at least $20 billion,
and President Truman has spoken
of $14.5 billion.
haps
$15 billion is per¬
likely figure. European re¬
a
tinue
and
services
in
$6.6
sional
New
York
York
Would
taxes?
be
Commodity
Chicago
Exchange
Board
of
New Orleans Cotton
Cotton
NEW
nothing
for
we
the
fined
always
CHICAGO
DETROIT
GENEVA,
4,
N. Y.
taxation.
in
SWITZERLAND
SECURITIES
target
the
tax
distinguished
at
the end
devise
can
mal
BROADWAY
Telephone BArclay 7-0100
75 Federal
for
Private
and
conditions
SECURITIES
For
an
or
of
Secretaries
of
of
Until
war.
Immediate
to
the
Exchange
A.M.,
profits tax in times of much great¬
er emergency than these.
It
behooves
exercise
tures, and, second, to review
system
very
carefully,
our
tax
that
sure
damaging
business
sential
to
its
the
the
all
of
to
war
by
our
welfare
Treasury,
of
rest
well
We
levied
Peyton
MINING
the fighting
AFRICAN
SECURITIES
be
H.
R.
of
revision
tax
a
IAMB0RN & CO., Inc.
9 9
WALL
SUGAR
Raw—Refined—Liquid
Exports—Imports—Futures
DIgby
Teletvne
NY
1-672
4-2727
business
bill
last
just
before
The
June.
BUY
based
U.
S.
Nevertheless, the bill,
do
deal
great
a
has
no
and
BONDS
in
its
good
in-
adopted.
and
present form
at
Democratic
a
wanted
all.
no
HEAD
OFFICE—Edinburgh
Branches
throughout Scotland
is
tax
3
8 West
49
OFFICES:
Bishopsgate, E. C. 2
Smithfield, E. C. 1
Charing Cross, S. W. 1
Treas¬
Burlington Gardens, W. 1
legisla¬
64 New Bond Street, W. 1
Its
are
most significant
those dealing with
and stock purchase
lations of surplus by corporations.
Both sections
Incorporated by Royal Charter 1727
LONDON
satisfactory, since it embodies
compromises between a
that
Royal Bank of Scotland
it, therefore,
revised and
bill
passed,
if
of
cases,
be
SAVINGS
adjourn¬
bill
stock option
plans; and with the penalty ap¬
plicable to unreasonable accumu¬
NEW YORK 6, N. Y.
STREET
NEW YORK 5, N. Y.
Congress
6712, which passed only
House
ment
session
next
provisions
Exchange and Other Principal Exchanges
at
II.
the
ury
Building, Spokane
Branches
Kellogg, Idaho and Yakima, Wn.
war
Republican Ways and Means Com¬
AND
Underwriters
-
in
too many
OILS
Exchange
Spokane
Dealers
-
come.
The first order of tax
on
of
Brokers
as
business
through the
has
preparation for
at
at
must
our
civilization
that does not
Sp-82
the
of
as
us.
destroying
Congress
taxes
Floor
11:30
CORPORATION
Members Standard Stock
impact is not
not let our enemies win their cok
and
to
Standard securities
or
blocking the very
prosperity which 'is es¬
United States
10:45
Time:
greatest restraint
with respect to any new expendi¬
make
Std.
therefore, first,
us
the
from
Pac.
Orders
on
other hours.
we
excess
Execution of
Quotes call TWX Sp-43
nor¬
business,
only resort
Telephone—
4-2463
NORTHWEST MINING
two
yardstick of
a
Street, Boston
York
WOrth
an
heavy
is that,
during
the
of
New
the
profits, applicable to all sorts
should
to
DAYTON HA1GNEY & CO., Inc.
Treasury urged repeal of the
The
Goodbody & Co.
115
In
world wars, we have not yet suc¬
ceeded
in
devising a law that
works at all fairly; and in each
case
3%$, 1947
par¬
difficulty
experiences with
profits
excess
tion
Members N. Y. Stock
already
increases,
should
Markets For:
INDUSTRIALS
SOUTH
PITTSBURGH
Individual
are
The
two
our
mittee
\
fair
a
England Lime Common
Boston Terminal Co.
agree
popular appeal, and very little ap¬
Certainly it should be possible peal even to businessmen, for it
seeks merely
to prune the Washington payrolls
to correct a long
of relatively small injus¬
to some extent. Perhaps crop sub¬ series
sidies could be cut a bit; and per¬ tices in the law; and by some pro¬
haps other reductions could be visions, to permit some desirable
made. Nevertheless, with the best transactions to go through, which
will in the world it will be very today are blocked by the tax law.
Trade
BRITISH
to
general government.
Inc.
Exchange
time
individuals.
on
offices*
budget must
taxes
tax
branch
Boston Edison
New
profits tax, and profits de¬
by law as excessive are
excess
provided
far
V
corporate
balance.
in
our
Boston & Maine Prior Pfd
relief.
would
us
to
Trading Markets
With an election just
Congress will not be much
ticularly
have
so
wires
Boston Railroad Holding Pfd.
corporate field, there is talk of
the
CANADIAN
Exchange Bldg.
YORK
of
in
interested
$32
CANADIAN
And other Exchanges
N. Y.
Most
or
NY 1-1557
Birmingham, Ala.
about
tax
good
a
Exchange
Mobile, Ala.
Direct
high.
over,
about
Exchange
Exchange,
be
corporate
very
not
Curb
this
Stock
HAnovar 2-0700
New Orleans. La.
re¬
taxes.
new
individual
kept
-
and
will
Maintain American
CANADIAN
Exchange
Cotton
talk of
York
St., New York 4, N. Y.
There
of
revenues
dimensions.
substantial
no
numerous
Members
New
raise
present
be
1948; how much can the
figure be reduced in 1949? With
no
reductions,
the
subtotal
is
billion, and
Members New
25 Broad
Indeed, there is already Congres¬
took
hard to get the budget down very
We
Stock
to
the
can
increase than to diminish. Vet¬
benefits
and
1950 budget does not climb
higher still. If so, we must con¬
.
to
erans'
H. Hentz & Co.
York
Unhappily
if the
will
New
two.
or
luctantly we seem for the time
being to be stuck with a federal
budget of $35 to $40 billion and
Congress will show real restraint
we
'■
per¬
likely that the Presi¬
Congress will add a bil¬
$35,787 billion
-y
Steiner, Rouse & Co!
more
dent
law
good
substantial tax reduction.
no
haps
that the expenditure
recurrent
World War I left in its wake
tures
Established
National
(1)
$15 billion this year.
The tax outlook always depends
the expenditure outlook. Near¬
col¬
see
to
a
2
billions of dollars. It is
increase
for five items:
were
deficits, cer¬ lief? Less perhaps than in 1948, as
business. Mr. Hoffman has suggested, but
On the record, the President and still a
likely $5 billion. Interest
the Budget Director will have real on the debt is a little over
$3
difficulty in keeping the budget billion and is perhaps more likely
week in the
every
ditures
They
on
tainly in
Report"
"Chronicle"
as
account
on
economic
were
of the next few years
to
foreign
payment
an
cooperation.
Of this amount, the major expen¬
or worse
IS
without
's
been
not
———
many
individual
still, have
nothing to anticipate but high¬
Federal
sure
of
slash
/legislation?
ly all the people want to
Be
$3
advance
any
taxes still?
er
KENTUCKY
2,
$36 billion, and
billion was' allotted
over
Can
or
Incorporated
LOUISVILLE
added
an
the
reduction
tax
Kentucky Home Life Bldg.
Long Distance 238-9
June
ended
year
we
detail.
effect,
Since $36 billion is four or five
inequality
has times the federal
expenditures of
foreseeable
the
expect
Have
BOND cb:
spent just
Ohio
individual
an
World Wars, arrived on
1st Floor,
fiscal
it in
Act of 1948 remains in
of tax
m BANKERS
review
30, 1948, the Federal Government
So long as the Rev¬
particular
and
*
the
That
war.
amount in Texas
same
Califorhia.
we
•
In
over
What is the tax outlook for 1949
Sold
to
the
unattractive that
Subtotal v
je given like
treatment; that it is
grossly unfair to tax an individual
been eliminated.
Sold
bound
are
in like circumstances must
payers
that
Standard Oil Ky.
Bought
Jan.
Stock
and
so
the
Presidential veto, legislation de¬
There follow five other lesser
signed to put taxpayers in all the items, ranging from $687 millibn
nates on ine same basis for fed¬
to $2 billion each, which, with the
eral income, estate and gift tax
irst
five
items, comprise near¬
purposes.
In these days of heavy ly all the total expenditures:
eaeral taxes, it is certainly man¬
(6i Social
welfare
$1.9 billion
ifest in theory, though not always
(7) General
government
1.4 billion
carried out in practice, that tax¬
(8) Transport and communi¬
enue
Refining Co.
before
was
prospect is
Last spring
Congress finally enacted,
or
Common
give
can
on
it
as
do not
we
We
fully
more
earning the
Ashland Oil &
would
thanks, however, for one great
gain this year, which all of us will
TRADING MARKETS IN
Central
not.
can
we
tax
brighter,
but
2-7815
REctor
Tel.
we
the
future
Magill
BROADWAY, NEW YORK 5
if
of
assured
that
New
Bought—Sold—Quoted
major item in business calculations. The undistributed profits tax was a feature of the Rev¬
enue Act of 1936, 12 years ago; and the excess
profits tax returned as part of the federal
Teletype NY 1-583
BArclay 7-5660
Louisiana Securities
profits tax is currently impracticable, and tax increases are uncertain and ill-advised,
official looks for revisions in present tax laws to correct inequities. Sees need of re¬
moval of tax penalty applied to unreasonable accumulation of earnings; a
change in methods and
standards of allowances for depreciation, and elimination of double taxation of
corporate dividends.
Holding
former Treasury
are
of the present
an
improvement
law, but both need
(Continued
on
page
35)
TOTAL ASSETS
£153,656,759
Associated
Glyn
Williams
Banks:
Mills
Deacon's
&
Co.
Bank, Ltd.
Volume 169
THE
Number 4765
COMMERCIAL
X
Outlook—Roswell
Magill
Commercial
s
'
'
The
4
1
I turn
6
;
Railroads—Roger Bab son
{
a
11
Unfavorable Factors in Stock Market Discontinued—Demi Witter....
16
c
The ECA—Good
Management—Rev. C. Brown, S.J
on
20
Bad for American Expert Trade—William
or
:Jt
Swingle
arrives, the available
i,v"
will
be sound when
to
seem
nclusions
p
211
they
formulated
are
:|s
when
arrived
The
most,
his
succeeded
to
The
;
$4
Billion
Economists Give View
Business
Leaders
More
Taxes....
Business Outlook
on
Optimistic
Cover
sure
1949 Outlook
on
1; in
light
8
,
logithe;
of
Predicts Lower Trade for 1949.
Municipals*.
wih
10
*
at
Rockford
Tool
Securities
Dealers-Association
Sponsors Visit
Machine
to
IB y
Plant
12
a
Weisman
:
tne
01
\
facts-that would be required for a
well considered forecast are not
Chicago Exchange Reports Increased Business
17
at
Federal Reserve Reports Little
18
Earnings
..i
7
Expansion in Business Loans
Y.
Banking Superintendent
.Securities
Points
Bonds
From
and
Certificates
Agency.....
Called
23
Guaranty Trust Co. Holds New Appraisals of Municipals Needed....
One
25
Unduly Inflationary
First National Bank
York
Holds
Working Capital
Inability of Corporations
Dealers
-
be
continue
for
of
to
restore
of
a
differences
commercial
From
the
12
8
19
Washington Ahead of the News—Carlisle Bargeron
16
14
in
Observations—A. Wilfred May
the
Will
Union
first
he
Our
Reporter
Governments
on
Public
must
13
;...
Securities
28
Salesman's
Corner
of
so
the
center
tistical
The
Drapers'
and,
COMMERCIAL
FINANCIAL
1
Gardens.
Edwards
c/o
WILLIAM
Copyright
B.
Patent Office
DANA
Park Place,
25
REctor
to
WILLIAM
DANA
D.
SEIBERT,
RIGGS,
C.,
Engl¬
25.
York.
1942,
N.
second-class
as
Publisher
Y.,
at
the
under
the
*
"•
office
post
Act
!
Manager
of
corooration
Chicago
city news,
Offices:
3,
111.
news,
bank
S.
(Telephone:
Palle
State
he
address
Will the President
and
were
chose
by
for
Dr.
himself
Weisman
meeting of American Sta¬
Assn.,
Cleveland,
Ohio,
Secretary of Commerce Sawyer,
-of
tone.
Manufacturers
Phillip Carey Mfg.
which
moderate
in
spokesman for the Re¬
A
publicans
Petroleum Ht. & Pr.
could
scarcely
have
business
community
the
given
MARKETS
Southern Production
exceedingly
greater
Kentucky Utilities
Senator
assurance.
O'Mahoney,
the other hand,
who pretends to speak with great
of
assurance
has
in
on
what
the
President
mind, has sounded off
SIEGEL & CO.
on
several occasions in the best New
Deal
£# Broadway, N. Y. 6
fashion, while Jhis colleague
Senator
homa,
Elmer
Thomas
will
who
DIsby 4-2370
be
of
head
Teletype NY 1-1042
Okla¬
of
the
important
agricultural
commit¬
tee, threatens to take us back in
agricultural policy not only to
Henry A. Wallace, but to William
Jennings Bryan.
Business
As
Facing
Readjustment
Stix 8c Co,
regards the facts of current
business,
it
again,
appears
as
it
INVESTMENT SECURITIES
has
appeared on at least three
previous occasions since the end
of the war,
justment
the ascendancy
government, and
probably business also, would be
more
concerned, in the months
immediately ahead, at least, with
deflation than inflation. In spite
of a high level of business ac¬
tivity throughout the last year
(1.948) the momentum of the post¬
war
boom seems to have' spent
most of its force, while most of
the conditions which gave rise to,
and
are
that
and
boom of the
seem now to have
the
last eight years
but
*
Gauley Mountain Coal
Midland
have
responsible
Valley RR Series A
Seaboard Ice 1st 4's
the
of
few
a
Exchange
Gartner Petroleum Pfd.
acute
Victor Fuel Co. 1st 5's
shortages for which the war was
been
Saltex Looms 1st 6's
overcome
production.
The
general trend of prices has been
toward lower; levels for .several
by
STREET
Members St. Louis Stock
corrected.
All
OLIVE
St. Louis I.Mo#
in
the
supported,
been
509
that the forces of read¬
increased
The
distributive
trades
recently in
moving their stocks and in main¬
taining the dollar volumes of a
have
had
difficulty
(Continued
We
St..
0613);
are
on
.
page
George Birkins Company
40 Exchange Place, New York 5
WHitehall 4-8957
Tele. NY
1-1404
46)
The
interested in offerings of !
Public National
&
of
Union
Trust
of
Bank
Company
New
York
in
Other
$25.00
of
$35.00
Countries, $42.00
and
per
Monthly
$25.00
per
Note—On
the
La
ACTIVE
,
High Grade Public Utility and Industrial
Canada.
clearings,
etc.).
135
,
March
Pan-American
Other
—
and
little
been
for example, made a speech at the
convention of the National Asso¬
was
Teletype NY 1-2846
business, but
have
New
Dominion
Bank
Other
HAnover 2-8244
Ad¬
new
-
Febru¬
at
Rates
Subscriptions
in
United
States.
U,
Possessions, Territories
and
Members
1949
Every Thursday (general new-; and ad¬
vertising issue) and every Monday (com¬
plete statistical issue
market cotation
state
to
seems
agreement among them.
Dec. 29, 1948.
per
$38.00
per
year:
per
S.
PREFERRED STOCKS
year.
Analyses
rate
in
year.
Record—Monthly,
(Foreign
Earnings
(Foreign
account
postage extra.)
Record
of
the
Monthly,
postage extra.).
—
fluctuations
0f
made
Publications
Quotation
year.
in
exchange, remittances for for¬
eign subscriptions and advertisements must
be
New
York
Miles
funds.
Shoes, Inc.
year.
•
records,
there
20 Pine Street, New York 5, N. Y.
j:
the
B. Dana
matter
Subscription
President
Business
Thursday, January 6,
public
VM. E. POLLOCK & CO., INC.
Smith.
&
by William
Company
1948
8, 1879.
Y.
9576
HERBERT D. SEIBERT, Editor &
WILLIAM
ary
COMPANY, Publishers
New York 8, N.
2-9570
E.
authority
addresses, or
and
CHRONICLE
Reentered
Reg. U. S.
London,
pre¬
with
ministration toward
months.
43
Weekly
than
:;:An
before
Twice
elections
38
Washington and You
Published
the out¬
national
be
made and implied in his
campaign
addresses, or will he take up a
position no further to the left of
5
Tomorrow's Markets (Walter Whyte Says)..
the
fraternity
on
straight down" the line
Keep
commitments
which
44
The State of Trade and Industry
badly
in
go
20
Securities Now in Registration
November.
again
January?
in
months, ahead.
Railroad Securities
in
particularly sensitive to
the danger of
speculating on what
the major policies of the Admin¬
istration will be in the weeks and
45
Utility Securities
the budget in
taxation, the level
We in the newspaper
21
Prospective Security Offerings.
the State
on
and
as
week
who guessed
come
made
government
surprise
first week
47
speak
elec¬
who
persons
probable attitude of the
What
in his messages
the
5
;
Reporter's Report
the
Truman provided the nation with
news that was
wholly unexpected,
18
News About Banks and Bankers
to
of expenditures and the control of
prices and materials?
President
41
NSTA Notes
of
business.
such matters
7
Activity
the
financial
.
attitude
gress
jf
Sterling"
Mutual Funds
Our
with
return
a
and
will the
President recommend to the Con¬
16
Recommendations
war¬
A second great uncertainty is of
...
Indications of Business
and.
relationships.
........
worse
elements
our
toward
Einzig—"Undervalued
the
necessary
Union
Cover
Trust Certificates
If
as
•
were
normal
Regular Features
Dealer-Broker—Investment
the
at
another
situation
Soviet
Canadian Securities
situation.
markedly for
principal
ment
32
war,
have otherwise commented, on
ciation
longer.
A second set
in order, of
course, if
or
it
the
Bank and Insurance Stocks.
■'<
time economy, while still a third
would follow an amicable adjust¬
Association of Securities
As We See It (Editorial)
-
develop¬
logical if the
international
and
•.....,
to
were
changed
27
Chairman of National
as
-
business
seem
temperature
would
to
of
would
y^ar
26
Decries
high
very
international
war
the
....:
of Boston
a
-
series
i.;>A7
Not
Plough Back Earnings Into Business
Evans Nominated
perplexing- in
ments
cold
New
the
have
the imponder¬
are many,
jhceriain
25
of
in
Uncertainties
National City Bank Sees Elements of Strength in Business Outlook..
Bank
(Dec.
'■There is first of all the highly
.
23
24
Reserve
written
degree.
Government
ITalsey, Stuart & Co. Looks for Stable Bond Market in 1949.;
Federal
is
uncertainties
23
Chile Bonds $20 Million More From U. S.
Haiti
The
ables
22
Shift
to
Private Loans
to
2,6).
this
as
outlook
Spahr Scores Our "Liability Currency"..
N.
hand
not
national
the
several
sumably
Russell
ement,.
gr e
and
peace
since
tions,
17
*
.
all
passed
.
general;
many
Hugh Bullock Says Present Stock Prices Can Stand Against Lower
...
•
j In the two months which-have
they
made.
were
.1
national economy in 1949.
nand
en
*
hope and pray, it may eas¬
ily be the decisive factor in the
which
were
9
have
we
the
facts
Predicts Record Outlook in 1949 of
V.
Railroad Equipment
of business and investment
we
a
%
YORK
answer
course
pre-
Dept.
NEW
"
in the months and years ahead.
c
Securities
STREET,
Telephone: WHitehall 4-6551
to these questions
because obviously
policy of the government is
to
weigh
heavily on the
the
and we'll
Presi¬
the
dictions'
.....'.Cover
Obsolete
WALL
99
is ^important
then, that the
forecaster, can
hope
for
is
that
he
dency in 1945?
us
the trouble.
ren¬
are
seemed
Truman Asks
Come to
curities.
weak and unavailing.
prove
Bob
Hope, is frequently caused by
worry
about unprofitable se¬
and that when decisive down-
measures,
props
'
"
THE PALE FACE
when it isn't the result of
remove
were
at.
Labor's Encroachment
international situa¬
as
dered invalid by developments which could not reasonably have been
seen when the
<$>-
15
Military Government and Foreign Policy—Arthur Thompson, Jr
'
.
clusions which
12
Wliat of 1949?—Hon. Charles Sawyer
AND COMPANY
Forecasting the course of business six months or a year ahead, is
precarious undertaking under the most favorable conditions. Con¬
6
Why Postal Savings?—Frances Quantius
from extreme re-inflationary
1
/f".:''V"'
Inflationary Problem—Seymour Harris..
Spencer Trask & Co.
Members
New
25 Broad
Tel.:
'•
Alhanv
York
Stock
Exchange
Street, New York 4
Members
'
Eo^ton
-
New
Tel.:
Teletype—NY
Glens Falls
York
Curb
Exchange
135 S. La Salle St., Chicago 3
HAnoyer 2-4300
'
-
3
"llCHTfjlSIfHI
tion and government's attitude tov/ard business. Believes postwar
jboom momentum has spent itself and business is already turning
I worse and deflation is at hand.
Predicts government will refrain
4
v.
:
iDr. Weisman cites various vital uncertainties,
3
Policies—W. E. Duncan
Bank
i
(59)
<
By RUSSELL WEISMAN *
2
New Credit Controls in France—M. A. Kriz..,.
Postwar
•
Western Reserve University
Cover
The Business Outlook for 1949—Russell Weisman
The
CHRONICLE
'
The Business Outlook for 1949
Page
Prospects in 1949—Frank D. Newbury
Federal Tax
1949
FINANCIAL
•
I N DEX
Articles and News/
Business
&
'
.
FINancial
2330
on
request
Unterberg & Co.
Members N. Y. Security Dealers Ass'n
61 Broadway, New York 6, N.Y.
Telephone BOwling Green 9-3565
1-5
-
C. E.
available
Schenectady
-
Worcester
Teletype
NY
1-1666
TROY
!>
.AvWnW-nWrtMStffifl'H.
.4
.
CHRONICLE
FINANCIAL
&
COMMERCIAL
THE
(60)
Postwar Commercial
New Credit Controls in France
* *i
*+
»r
By DR. M. A. KRIZ*
■
>
'+.
r
v
m *
t
r
J*
,
V
.
Bank
policy in light of economic and monetary developments in that coun¬
try. Describes recent qualitative and quantitative credit restrictions, and concludes these create a diffi¬
cult dilemma in view of inadequate savings to finance private and public reconstruction and urgent cred¬
it needs of business to meet lax and wage increases. Says aim of French government is not a general
credit contraction but rather temporary stabilization of present credit structure and its eventual expan; Y
sion with increased production.
i
Dr. Kriz analyzes French credit
:
some
feature of the
restored
hew credit
nance,
controls in
France
pose
it also
restrictions on
the further
credit
commercial-bank
are
;
com¬
-
i:;+..+v/
the
can
Bank
of
discount
rates, as may be seen
accompanying table; and
conj unction with these changes,
qualitative credit restrictions
were
(effective
established in three stages.
V-.
+'
•"
v
!
•
■
*'
■
-Rate in force-during-
10-10-47- 1-10-47-
9-6-48-
10-1-48)
1-9-47
10-9-47
9-4-48
9-30-48
1-20-45-
Miroslav A. Kriz
reserves
1%
2 Vz
1%
credit
of
private
to
2Vi
i%
3Vz
3
ing sales2
Other commercial bills2
4
Italy, the third 30-day advances against gov¬
ernment securities of fixed
European country to apply this
instrument of credit control, which
maturity not exceeding 2 yrs.
has also been much discussed in Advances against securities—
after Belgium and
Yet these im¬
the United States.
almost
remained
developments
unnoticed
this
on
of
side
the Atlantic.
;
.
The
to
of this article is
broadly
the
new
purpose
French credit controls.
The
taken must be viewed, how¬
ures
not in isolation, but rather
in the light of France's over-all
economic and financial position.
In the first half of 1948, industrial
production was rising steadily, A
Treasury cash surplus, achieved
by a compulsory loan and other
measures, was exerting deflation¬
ary
pressure,
which was reinorced by the temporary blocking
f 5,000-franc notes and the accu¬
mulation of the franc
counterpart
of the United States Interim Aid.
Prices
and
wages
meanwhile
re¬
mained relatively stable followthg
'he
readjustments at the begin¬
ning of the year. The deflationary
influence exerted by public fi¬
nance during this period was only
partly neutralized by continuing
bank-credit expansion on private
account.
<
third
quarter of 1948 there was a fresh
outbreak
of
inflation,
brought
i
In
during
contrast,
about
partly
by
a
the
in
rise
food
prices decided upon by the gov¬
ernment in August, partly by tRe
exhaustion of the deflationary in¬
fluence exerted by
Under
these
continued
public finance.
circumstances
bank-credit
the
9, 1947, simultaneously
On Jan.
from 1%% to
banks
commercial,
caution in
granting loans and ad¬
especially to refuse
vances, and
credits that
might be used to fi¬
nance
commodity hoarding. Any
advances for amounts exceeding
million
30
francs
million in February
by any bank that would
bring total advances by all banks
to any single enterprise over this
amount, were to be made subject
to
prior authorization
by the
of
Bank
however,
tions,
loans
France.
however,
after
crisis,
a
the
budget for the remainder of the
fiscal year
raising
*The
1948
new
was
revenue
author
is
on
balanced by
cutting
and
the
staff
of
the Federal Reserve Bank of New
York.
Pre
The opinions he
purely personal.
expresses
These
applied
restric¬
only
to
and advances,
the discount
having been
excluded on the ground that the
channels between industry
and
trade should not be obstructed by
limitations on such self-liquidat¬
of commercial paper
ing paper.
On
rise
Oct.
in
•
10,
the
discount
rate
from
the previous re¬
strictions
were
tightened,
the
National Credit Council instruct¬
ing the banks to grant new credits
only where funds were required
that
business
view to cutting down or cancel¬
ing the facilities of customers not
directly engaged in the production
of goods.
Credit for non-produc¬
tive purposes, such as the purchase
of securities or property, was pro¬
hibited.
Finally, the banks were
required to supply the Bank of
France f monthly with a detailed
could
financed
otherwise, as by
reducing stocks, by cutting oper¬
ating expenses, or by transferring
to his business the personal funds
of
statement
vances.
ad¬
and
loans
The maintenance of these
restrictions could, if necessary, be
enforced by a refusal of the Bank
of
France
to
grant
rediscount
facilities.
In contrast to these restrictions,
which applied
only to loans and
those established
on
advances,
Oct. 1,1948
also covered discounts
other than those of "purely commerical"
selective
bills.
Furthermore, the
controls
were
recast,
being in particular made more
comprehensive and more severe.
However, unlike the previous two
when
restrictions
.'V
result.
'
deposit expansion.
assumed
The
is
legislation.
discussed
For
later, it is concluded
a
policy is ineffective
such
otherwise
and
second
be
to
reasons
undesirable.
method
is the
The
traditional
central bank control of total
in
cline
many
that the de¬
importance of bank
since' 1920 had become
by
the
lending
permanent; (2) because the liquid
asset holdings of business and in¬
dividuals were so large at the end
of the war, it was believed that
there
was
little need for borrow¬
ing (3) the widespread participa¬
borrowing involving
method has been used with cau¬ business,
consumers
and
home
tion by the Federal Reserve au¬ buyers; (4) to some extent, the
thorities for fear of its effect on techniques of
making loans to
the
government bond
market. business borrowers has changed.
The chief characteristic of post¬
Therefore,
to
the
extent
that
total savings are inadequate to war
bank lending
has been its
meet the total demand for loans, diffusion throughout the economy.
the only remaining possibility of In terms of percentage increases,
restricting deposit expansion is a the changes have been relatively
sufficient debt retirement by the large but in relation to other ecoTreasury to offset the loan ex¬ nomic
measures,
outstanding
pansion in the commercial banks. loans are not great. This is in
There is nothing novel in this contrast to the experience during
conclusion for the universal ex¬ the years 1919-1920 when loan ex¬
perience of war and postwar years pansion
was
concentrated
in
mercial
bank
that
teaches
This
reserves.
at
times
those
tion in bank
the
business
nation's currency supply
fate of
a
lies
fiscal
in
com¬
policy. It is unfor¬
point has not been
loans
strictions
established
on
1929
when
tunate that this
was
emphasized,
and
reiterated
by
economists and public officials.
The issue has been partly con¬
fused by suggestions for chang¬
tween
ing the structure of bank reserves
accompanied by
rate from
increased
3V2%
on
Vz
on
its
rate
from
2*/2%
loans
December
Discounts
hold
a
prominent
place in the French banking sys¬
tial consideration was to be given tem. Approximately two-thirds of
the aggregate bank-financing of
to
the
credit
applications
of
business has recently been made
branches
of
economic
activity
up of discounts. Yet the French
designated as essential.
In addi¬ authorities are very reluctant to
tion to restricting new loans and, subject discounts to the same re¬
strictions that they have imposed
advances, the banks were required
on loans
and advances lest, as I
to scrutinize existing credits with
have already mentioned, the new
of the individual owner. Preferen¬
merchandise
obstruct
from
the
the
flow
of
1945
Be¬
and
June
1948, the loans of all insured
30,
commercial
banks
increased
as
Amount
31,1945
Change
(millions of dollars)
9,461
+ 8,373
Commercial
Agricultural
Loans for purchasing
1,314
Real
Consumer
3,606
1:
Estate
loans
Other loans
.
of Governors of the
Federal Re¬
System indicate that banks
in all parts of the
participated in this ex¬
pansion.
Borrowers were repre¬
sentative of all types and sizes of
business.
One of the
develop¬
all
sizes
country
ments
in
the
loans which
tion
has
+5,424
field
has
been
of
business
attracted
the
662
+4,051
62
1,181
-
Studies by the Division of Re¬
of
—2,529
2,361
search and Statistics of the Board
serve
—1,981
carrying securities:
To others
On
+
3.164
4,677
or
To brokers and dealers
to
higher than that pre¬
vailing prior to September.
securities.
Outstanding
Sept. 6, the present rate
bills is actually
1%
principal increase
on
Dec.
commercial
of
associated
follows:
in
I
a cut in the
3V2% to 3%. Neverthe¬
less, since the Bank of France had
were
the
were
Oct
largely
with increasing inventories and of
imposed simultaneously with the
rise in the discount rate, the re¬
restrictions
;
all
....
that
to. prevent the expansion
of bank loans through restrictive
a
occasions
1947, along with a
to 2%-%,
1%%
be
political
(raised to 50
1948), or ad¬
vances
essential
September,
1%%, the National
instructed
the
to
exercise
Council
Credit
not
prolonged
first
that
with the rise in the discount rate
for
of
2%
1947
10,
.
found
causing
i%
3y4
and Sept. 30, 1948, the rate for commercial bills
was
split into a lower rate for commercial paper representing actual sales and a
higher rate for the discount of other commercial paper.
Effective Oct. 1, 1948,
a
single discount rate was reestablished for all purposes.
Jan.
expansion
forces
prevailing
in
the
French economy. Toward the end
1%
4+4
months.
three
further accentuated the inflation¬
ary
2Vz
4%
addition, the Bank of France established, effective Oct. 1, 1948, a
than
less
meas¬
ever,
3Vz
4%
special
"purchase rate" for Treasury bills and Credit National acceptances maturing in
1 In
2 Between
analyze
2Vz
they causing, a deterioration in the quality of the
how can they^in' the hope that some formula
.causing a gen
erally inflationary expansion of can be devised for controlling de¬
demand deposits? This paper ana¬ posit expansion without increas¬
lyzes, these, three .effects of post¬ ing interest rates:
These pro¬
war bank lending policies and the
posals are analyzed and found to
proposals to mitigate or eliminate be incapable of accomplishing the
are
debt structure; (3)
be prevented from
•
Commercial bills represent¬
support
business. France has thus become,
goods, etc.; (2)
may
only the third
The Postwar Expansion
question is uniquely related to
of Bank Loans
commercial banking. In the pres¬
ent circumstances, there are three
The revival in commercial bank
methods by which bank loan ex¬ lending has attracted attention for
pansion can be prevented from several reasons: (1) It had been
i%
3
2Vz
be identified in the general discussion of
postwar bank lending policies: (1) Are they the cause of rising prices
in the specific markets affected,, e.g., real estate, consumers durable
ilt is
i%
3+2
3
bills1
Treasury
.
Introduction
Three questions
;
them.;
Discount rate:
3
securities which market will not
discount
France
of France Discount Rates
'
portant
^inflation is responsibility of fiscal policy; Treasury
absorb; interest rate
changes should be used; and, above all, budget must be curtailed.
best be
policy. In the last two years there
have been several changes in the
Prp^pnt vofp
purpose
expansion
cludes present
against the background of
(Per Cent)
for
obtaining
to
of
development
gradual
The
Structure of Bank
selling
government
cash
traced
from the
Restrictions
Credit
Qualitative
from
the
we
here considering.
mercial banks
of
that
French credit controls
in
ments to pre¬
securities
fi¬
to im¬
necessary
of
thus
public
Government
French
the
the imposition
vent
in
balance
a
deemed
special re¬
serve require¬
Having
expenditures.
aspect acular
was
proposals for restricting deposit
expansion, as through restrictive legislation, holding reserves constant, and retiring debt. Discounts alarm over increased bank loans, V
as
being widespread throughout economy, paralleled by similar
loans by other institutions, and not concentrated as in 1920s. Con¬
must retire
<$>-
most
V
University of Rochester
Professor Dunkman discusses chief
history of French banking, quantitative credit controls were established.
first time in the
Lending Policies
By PROFESSOR WILLIAM E. DUNKMAN*
£+" French credit policy recently underwent far-reaching changes. The Bank of France
discount rates were raised; existing qualitative credit controls were reinforced; and for the
The
Thursday, January 6, 1949
atten¬
practice
of
manufac¬
—
found to be popular among
and
medium-sized
small
businesses
of
nearly all types although natural¬
ly the larger amount was made to
the
larger
concerns.
The
im¬
portant
conclusion
from
these
and
other studies is that the
pansion of bank loans is
of
a
ex¬
result
widespread demand arising
a
from all sections of the economy.
The demand for loans, in turn,
is associated with
a postwar boom
initially dependent on bank
borrowing.
This fact
is
often
neglected although it is basic to
the understanding of the effects
Georgia-Pacific Plywood*
Portsmouth Steel
Art Metal Construction
Stromberg-Carlson, Com.
Central-Ill. Pub. Serv.*
Texas Eastern Trans*
*
Prospectus
Bought
—
on.
Sold
Quoted
Goodbody & Co.
Members N. Y. Stock
Exchange and Other Principal Exchanges
115 Broadway, New York
Telephone BArclay 7-0100
Deposit expansion aside, ex¬
panding bank loans have no dif¬
ferent effect upon the debt struc¬
however, Term loans of this type
it is felt in France, is not appli¬
1 Business
Loans
of
Member
cable in the conditions prevailing
Request
—
not
This traditional concept,
American Hardware
Argo Oil
making term-loans. In a study of
loans
Running for a business
outstanding
on
stated period of time, usually 90 Nov. 20,
1946, Albert R. Koch
days,
the
commercial
bill
is estimated that
approximately onenormally
considered
as
selfthird of the total amouht had an
liquidating
and
more
or
less
neutral
in
its monetary effect. initial maturity of over one year.1
turer to the trader.
105 West Adams St.,
Chicago
Teletype NY 1-672
today. True enough, the monetary
authorities must keep the chan¬
nels of trade wide open in an econ¬
omy that has just emerged from a
phase of acute scarcity, but it is
nonetheless
necessary
(Continued
on
to prevent
page
46)
were
Banks,
Koch, Federal Reserve Bulletin,
March, 1947.
Albert R.
*An
man
address
before
the
by
Prof.
Annual
DunkMeeting
of the American Finance Associa¬
tion,
1948.
Cleveland,
Ohio,
Dec.
.
28,
i,
and control of bank loans.
The
ture
Role
of Bank
individual
or
Loans
markets
loans by other institutions.
than
In all
loanis which have in¬
1945, banks are in
competition with other lending
types
of
creased
since
Institutions
i:,
some
of
which
(Cpritjnued on page 30)
hold
(61)
& FINANCIAL CHRONICLE
COMMERCIAL
THE
Number 4766
Volume 169
5
Firm Name Now Is
Steel Production
>;
,
;
The
,
.
Carlo&dings
Commodity Price Index
By A. WILFRED MAY
Index
Food
Price
Auto
and Industry
Production
output the past week
ovei-all industrial
Profits
—
Capitalist Hara-Kiri
And
[the great capitalist classallow themselves to he
ruined, and altogether undone by their own instruments. . . . Per¬
haps it is historically true that no order of society ever perishes
save by its own hand."—Lord Keynes. /
"We [opponents of Socialism] cannot speak our subject any
too well.
And to be honest about it, we ourselves have inspired
about as many anti-enterprise institutions as have our political
"They
work schedules effective in most indus
reflected a noticeable
With holiday-shortened
of Perfume
Protection
Business Failures
J
tries,
BALTIMORE, MD.—The bank¬
ing firm of Mackubin, Legg & Co.,
22
Light
Trade
Retail
Stave of Trade
John C. Legg & Co.
Observations
Electric Output
:
It continued, however, to be moderately above that oi
corresponding week of 1948.
A slight dip in employment was
noted for the week with much of the decline considered of a seasonal
falling off.
the
*
lis
*
sj:
*
1
Tories
is, considered that there were 1,668,286 fewer cars loaded in 1'948
or a drop of 3.7% under the 1947 level.
This includes an estimate foi
the last week in 1948, according to the Association of American Rail¬
roads, which reported a total of 42,833,902 cars loaded for the yeai
ileged.
among
concern
some
loadings
freight
railroad
on
are
Snub
interested,
or
its
peak in 1929, and that the volume was the great¬
peacetime year except that of 1947.
est for any
in carloadings during
Decreases
1948
reported for the fol¬
were
The
%
/Inc.
loadings
reported.
was
y-;'
*
sion
on
Commission, the carriers had asked for an 8%
.'
.'/•
the
petitioning
increase.
interim
,
;
,
.
This
ICC.
the
rates,
temporary
new
means
Saturday, Jan.
8,
the
estimated
to
rate structure will go
new
of the day
and his devotion to the social welfare
into effect on
taxation,
on
international
an
Disclaiming
merits.
Monday, Jan. 10.
or
May
an
return
by
M
k
a c
self-interest
for
his preference
-
of excess profits
Mr. Cortney elaborates his argument on the economic
He basically reasons since all industries have not benefited
Geo.
b i n,
u
George
as
Mac¬
kubin
&
Co.:
it
Today
John
C.
Legg, Jr.
is
the
of
oldest
and
largest in--4
vestment; banking houses in Bal¬
timore. It is
charter member-of
a
Investment
the
and
Stock*
scale, which are well-known to the writer; as
well as because of its exemplification of the narrow viewpoint by the
industrial community.
,,,
additional
$425,000,000 in freight rates on an annual basis, may become effec¬
tive five days after rail traffic associations file new tariffs with
The
Wilfred
A.
ranging from 4% in the West to 6% in the East and South.
amounts
In
*
*
Thursday of last week the Interstate Commerce Commis¬
cleared the way for the railroads to increase their rates by
Late
::
Although President
Truman's Message to
Congress implies postponement of his personal
agitation for reenactment of this ruinous tax leg¬
islation, it will be introduced for the Adminis¬
tration by Representative Dingell. In any event
Mr. Cortney's enthusiastic endorsement of the
tax is highly significant because of this Repre¬
sentative and- intelligent
businessman's states¬
manlike attitudes toward our economic problems
in coke
in the loadings of ore and of 0.5%
'
n
and known
tion
products, 2.3% and miscellaneous freight, 1.9%.
of 4.9%
1899
Philip Cortney, economist and President of Coty,
f:
jf,
a
firm
-
started in
was
one
lowing commodities: livestock, 18.1%; less-than-carload lots of mer¬
chandise, 10.1%; grain and grain products, 9.5%; coal, 3.9%; forest
An increase
founding,
is
immediately hit them, was cited as one of several
examples, of the universal operation of human
nature. This called forth an elaborately reasons
rebuttal in last
week's
"Chronicle" from Mr.
stated that last year's freight traffic was 43%
The Association
50th
nounced.
i
The current behavior of many business leaders in supporting
re-imposition of excess profits taxation which
would not directly harm them, in lieu of an alter¬
native rise in the flat corporate rate which would
above the prewar
the
—
it
under the caption "Not Even the
Santa," was devoted to demonstrating that the self"pocket book," vote is not confined to the underpriv¬
1948.
Jan.
anniversary of
This column of two weeks ago,
*
causing
the rail carriers and well they might when if
truck
of
inroads
Co.,
effective
nature.
The
John
to
name
C. Legg &
\
opponents."—Henry Grady Weaver.
Street,
changed its
Associa¬
Bankers
Joined
the
Exchange
in
New Yor
1916, which
makes it the oldest member hotisc
J
in Baltimore.
In
Mackubin
Mr.
1900
Goodrich
Clem
firm
cessor
rich & Co.
of
and
the
formed
Mackubin,
G.
spcT
Good¬
John C.
Legg, Jr., was
admitted to partnership in 1905.
After the death of Mr. Goodrich,
the firm name was changed tc
•
Mackubin, Legg & Co.
during
1933.
George Mackubin retired
as
a
partner
in
1942,
Auviile
Eager during 1943 and Laurence
M. Simmonds, Jan. 1, 1948, but; all
three
of
these
former
partners
continue their association with the
those that have firm.
J
prevented from keeping those ''fortuitous"
'The present partners are John
gains by reimposing the excess profits tax. As a specific instance he C.
Legg, Jr., Howard E. DeMuth,
cites the position of his own company, a leader in the cosmetics and
Joseph Ward Sener, C.
Gerard
perfumery field:—"Last year more than 60% of the pieces of goods
The Commission said Thursday's boost brings the total accu¬
Morgan, Jr., Walter C. Pohlhaus
my company (Coty, Inc.) put on the market were sold at 1939 prices,
and John C. Legg, III. The firm
mulated increase in freight rate revepue since June, 1946, to $2,900,notwithstanding the fact that production and selling costs went up
is also a member of the Baltimore
000,000 a year, or an overall increase of 52% over prewar freight rates. on an
average of-more than;50% sinfce 1939. Why? Simply because,
Stock
Exchange
and
associate
The additional freight rate increase nationwide will.amount*to not
having inherited any-backlog of demand from the war,-competi¬
member of the fvTew York Curb
$415,000,000, the ICC said.
>
tion in our field was so keen that we could not increase our prices
Exchange. The firm engages in all
To this total should be added about $10,000,000 for increases in to take into account the increase in costs."
The
new
increases
are
to. be superimposed on the present rate
decision
on
the carrier's application for a 13% permanent rate boost.
This
decision probably won't be handed down until the latter half of 1949.
reaches
structure and will remain in effect until the ICC
a
from
so
backlogs "inherited from" the late war, hence
.
should be
benefited
mission
boost for rail carriers, the Com¬
to the freight rate
addition
In
Express Agency
last Thursday also permitted the Railway
on
the schedule of rates now
to increase its rates in the East and South to
West.V/</
in effect in the
Numerous
post-holiday
considerably
clearances
volume of retail sales in the period ended on
Although
retail
stimulated the
Wednesday of last week.
declined' fractionally from the previous
well above that of the corresponding week a year
volume
week's level, it was
the 1947 week did not include two pre-Christmas shopping days
Consumers sought good quality merchandise at moderate to low
ago;
Wholesale
other
In
levels of previous weeks
above the level of the comparable week
punitive "wartime backlog" impost.
Such reasoning by American business out-rationalizes both the
New Deal and Labor leaders' reasoning for the tax. For New Dealer
No. 1—President Truman—even in his "campaign oratory" message
to
Congress last July limited his argument to the desirability of "a
Surely it would at
to
legislate
industries.
was
and
a
any
a
tax correlated with wartime windfall on particular
so immediately after the cessation of hos¬
To have done
merely to have continued the wartime excess profits law,
more justifiable than to re-enact it now.
But its inequity
economic fallacies were even then recognized to be absurd by Mr.
or
much
Truman's then Secretary of the Treasury, Mr. Fred Vinson, who
stocks
reductions.
In
excess-profits tax was necessary during the war, not
a source
of revenue—although the yield has been
large—but rather as a control measure to prevent war profiteering.
"
'
"My thought was,
that of all the taxes on the books
the excess-profits tax is the strongest impediment to reconversion. In the first place, it was a wartime tax.
"I think it is abnormal for a peacetime tax.
"Despite its contribution to the successful operation of a
"The
so
100% FOR WEEK, HIGHEST
'
CAPACITY ON RECORD FOR START OF YEAR
much
as
•
Record
countries
demand.
world
steel
production in the 21 major steel producing
168,000,000 tons during 1948 fell far short of meeting
United States participation in this figure totaled 88,500,000
of
tons of steel
ingots, which
was
short of the demand in this country,
according to "The Iron Age," national metalworking weekly.
For the
for
waiting
1949 steel
consumer,
production
are
Estimates
that 92,000,000 tons of ingots may be
1949 will bring more metals.
produced, the trade paper states. Exports of steel from the United
States were sharply curtailed during 1948 and may be further reduced
in the coming year.
This reduction, plus the increased production,
will mean that the most acute period of the steel shortage in this
country will be over before the end of 1949.
.
'
.
wartime economy, the excess-profits tax
in many instances an inequitable tax.
has been an erratic and
The difficulty is that
calling profits excessive does not make them excessive.
Calling
profits normal does not make them normal.
Normal profits and
Sleiner, Rouse & Go.
c
Steiner, Rouse & Co., 25 Broad
Street.
York
New
City, members
of the New York Stock Exchange,
that Charles L. Benesch
announce
Frederick
and
main
were
Mr.
O.
Wolff, are boW
firm in its
the
with
associated
office
in
Both
York.
New
previously with Ernst & Co.,
Benesch as Manager off the
Syndicate Dept.
Ball, Burge & Kraus
To Admit Four
profits look alike.
There is no chemical reagent to
distinguish them.
The excess-profits tax, to be sure, has a
formula—a
very
complicated formula in its
(Continued
page
on
entirety—for dis-
OHIO.
CLEVELAND,
—
Ball,
Burge & Kraus, Union Commerce
Building,
members
changes,
on
Fred
W.
gele,
James
Russell
Jan.
Hudson,
P.
All
New
Stock "'Ex¬
will
13
Lewis
admit
F. Nae-
Stearns,
A.
and
Treadway to partnership.
have
some
the
of
Cleveland
and
York
excessive
political interest in Washington in steel capacity will mount
If the steel industry is right, and exist¬
ing steel capacity is adequate to take care of this country's long term
needs, it will be showing signs of meeting this shortage before the
end of 1949. But if the government economists are right and there is
a need for 100,000,000 tons plus of capacity for the long pull, another
been
with
the
firm
for
time.
47)
long as the shortage exists.
year
In
Washington, states "The Iron Age," the lines are drawn for
on the basing point system of pricing.
While the steel in¬
battle
dustry abandoned it
men
have indicated
in favor of f.o.b.
a
willingness
to
mill selling last year,
go
back to
it if
a
steei
clear
Pointers
Time Inc.
Kingan & Co.
For
Universal Match Co.
for
of tight steel supply is about all that Congress is expected to
tolerate.
a
.
,
The
so
in¬
asking for its repeal in October, 1945, said:
bookings together with scattered commitments for replacement
STEEL OUTPUT SCHEDULED AT
brake on inflation."
time be most difficult, if not impossible,
Treasury surplus and to provide
but remained moderately
a year ago.
Some Spring
helped to counteract the effects of year-end inventory
the
the demagogically at¬
levy conceived under
a
of
banking business.
terminology of attack on "excess" profits is now seriously
reincarnated
by a leading businessman under the concept of a
volume in the week continued to decline seasonally
the high
words
vestment
"Backlog" Tax
tractive
tilities,
^///
prices.
from
A
for
and
functions
various
the
loading and unloading freight, diversion or reconsignstopping-in-transit to complete loading, bringing the
total additional cost to $425,000,000 a year.
charges for
ment
on
clever, helpful hints
selling securities read
Co.
cut
"Securities
Sales¬
man's Corner," a
McGraw (F. H.) &
regular
the
Bought—Sold—Quoted
legal decision is available.
feature
in Washington on the subject, the magazine notes
have only confirmed that there is a great deal of confusion on bas¬
in
day's,
issue / of
every
Hearings
ing points that must be
obtained.
So far, most
cleared up before judicial wisdom can be
consumers
of
steel
have
been
unable
on
page
34)
-
FREDERIC H. NATCH
Established
tc
separate f.o.b. mill selling of steel and a price increase on steel that
came
along at about the same time. As a package, these made a
*-(Cbntinued
Selling
MEMBERS
63 Wall Street, New
N.
Y.
SECURITY
York 5, N. Y.
CO., INC.
"Chronicle."
1888
DEALERS
ASSOCIATION
Bell Teletype NY 1-897
Thurs¬
the
6
'
(62)
THE COMMERCIAL &. FINANCIAL CHRONICLE
.
The Inflationary
Problem
-1;
HARRIS*
By SEYMOUR E.
Thursday, January 6, 1949
,\Y
S
V" s
'
By ROGER W. BABSON
-
■
.'.A
•
,
Harvard University
Professor of Economics,
|
f
,
,
'
,
In discussing
outlook for the rails, Mr. Babson takes a "bearish"
Harvard economist, holding inflationary forces still continue, contends, unless authorities are prepared' 4 I- attitude. Points out railroads ars losing business to competitors,
;;and high wages of employees and other increased costs, not offset
to introduce strong measures, such as allocations, price controls, and other restraining measures, depend-! / j
ence on fiscal policy will be required to restrain inflationary
forces. Says Congress is not prepared, ■ j h by-higher rates, will make rail carriers more vulnerable to next
depression.
because of banker opposition, to impose forced purchases and immobilization of government secur¬
'
;t
,
:
limited controls
high taxes and less government spending as well as
by banks. Advocates
ities
-
inflationary
i
measures.
anti^
^
|.
as
.
is
countries**
rent price level tended to
surplus and
exports; Mn
of
excess
with
budgetary
a
relying'on
set
net
War
and
-j-
in
clusive,
of
aftermath are,
its
mensurate with
of
tion
of
cash
convertible
of
of
and
into
liquid assets
over
power
This
about
of
war
the
the
Sacrifices
private
economy are
address by
the
Dr. Harris be¬
Meeting of "the
Economic
Association,
American
going
to
in
1938
to
57%
in
This
analysis will not, however,
the
circulation
currency
risen
had
5-6
in
times
Norway
much
as
as
retail prices; and
in 9 other Euro¬
pean
countries inclusive of the
United Kingdom (notes and de¬
posits for the last) the rise in cir¬
current
1945, and net
was
retail
York Affiliates, Inc.
or
ties.
more
times that
these
In
authorities at
inflation
New York
2
prices.
in
succeeded
had
3,
down.
and
coun¬
any
keeping
In other
notably
France,
rate
overt
coun¬
Italy,
Greece, Roumania, Hungary, and
Poland, the rise of prices far out¬
Broker Dealer in Securities
stripped that in circulation.
The
ratio in each case was about- 2
tO 1.2
Announces
opening of
120
The
Broadway, N. Y. 5, N. Y.
>
December 16, 1948
R.
Michael
Victor
Growney
Reid
the
deficiency in¬
herited from the war, the greater
the impatience to catch up, and,
therefore, the stronger the infla¬
larger
tionary pressures. In many counI
E.
tries
of
the
Europe,
shortage of
Manager
j
Associate
I
1 National Income and Expenditure r'
the
United
2 UN:
Teletype NY 1-1613
uation
p.
A
and
Survey of the Economic
Prospects
of
Europe,
Sit¬
1948.
79.
(Continued
.
the
on
the
of
case
Losing
Competitors
to
me,
the
railroads
on
page
1949
,
FIFTIETH
ANNIVERSARY OF THE
the
railroads
the
are
income
bond
of
The railroads
surely are fated tc
surfcr further heavy losses to air¬
32)
V
FOUNDING OF THIS
FIRM
PARTNERS
UNDERSIGNED
some
Before
themselves
to
not
terest.
'
seems
the
further
Current
nesses
and
requests
railroads
are
two
plans
in¬
will
decision
on
always
be
will
the
transportation for
and will always offer
means
of
bulky heavy freight. But for the
sort of traffic they can definitely
retain from their competitors, the
wages
To
railroads
grant
are
overbuilt.
Hence,
"disastrously"
operating
roads,
Reynolds Go. Open
New Southern Bransh
but
deficits
Reynolds & Co., 120 Broadway,
York City, members of the
New York
Stock Exchange, an-
for
New
railroad labor
the future insist on wages
necessitate reduction
omission of many
or^Tsllem, KC^oHice. ChSes
dividends. Rail- iH. Babcock will be resident part-
labor, leagued with labor in
1
ner
at the new office.
Mackubin, Legg & Company
We take
ANNOUNCE
pleasure in announcing that
MR. BENJAMIN F. PEYSER
A
CHANGE
IN
THE
FIRM
NAME
TO
has been admitted to
MR.
John
C. Legg & Company
is
J.
general partnership.
FRANCIS
now
ECKSTEIN
associated with
us.
MR. HOWARD G. PATERSON
JOHN C. LEGG. JR.
-
V
HOWARD
JOSEPH
BALTIMORE.
MO,
r
E.
has withdrawn
DEMUTH
N.
general partner.
_
MORGAN. JR.
WALTER C.
YORK.
as a
W. SENER
C. GERARD
NEW
POHLHAUS
Joseph Janareli & Co.
Y.
INVESTMENT SECURITIES
JANUARY
1,
1949
.
JOHN C. LEGG.
Ill
i'.
120
•
a
long period of deflation appears in
prospect for their junior securi¬
ties, with nationalization a possi¬
bility.
To
OF
road
influences
volume. This
be
hastened by
railroads
us
best
common
cause
the
busi¬
traffic
Supreme Court
Base Point Pricing.
stocks. Railroad
labor will not insist on wages that
all
many
unfavorable
movement
cost
the
and one-half billion
red.
railroad
of
the
would
finances
into the
and
2
author¬
to decentralize in order
markets, reveal
or
more
railroad
cn
dollars annually, enough to plunge
railroad
Nov.
to relocate near sources of
supply,
demand¬
in
conditions.
one
expect
heed
some
pay
of
to
to cut distance to
16 non-operating
changes
hours
advances.
wage
logical
.
railroad labor unions
ing
inclination
high prices and further inflation.
///,/:/,/////; ///////;,:
'/ '///;•i
Recent
Supreme Court Decision
Railroad Labor Greedy
At this time,
an
sufficiently to
"mandate"
with
:
rates
the ICC will
The
f
rail
izing rate boosts that run counter
to Mr. Truman's campaign against
woulc
public's
the
in
be
case
Presidential
proceed more slowly when
guarantee the rails enough .busi¬
to maintain solvency.
This
would
recent
successive
now
to
condi¬
that
manner
a
the
boost
It
t<*
wish
competitive
manipulate
in
but
interest in the
Commission showed
they are not satisfied with higher
for
ever
election, the Interstate Commerce
lines, pipelines, inland' waterways
trucks and busses.
Consequently
rates
than
roads.*
no1
rate increases.
deficits.
eliminate all dividends and
could
they hoped from their
as
vulnerable
more
railroad
presidents
that the railroad industry can't
"lick" its competitors.
This also
that
avoid
to
during the next depression. A de¬
cline of 10%
in gross earnings
high-placed
profiting
Depression
This implies that the carriers will
that
means
Next
point in history the
activity that the railroads
maintain
must
all other forms
but
and
highest
level of
transportation as well. To me.
this is tantamount to admission by
that will
THE
were
Advancing costs have lifted tov
/
of
will in
<
they
Jay Gould and Jim Fiske.
as
offset
will
ON THE
as.
looting/, capitalists—•
Railroads
judge by prece¬
dent,
these
demands
will
be
granted only in part; but that does
not encourage me to recommend
1899
greed today
railroad
vulnerable
as
vulnerable in former times to/the
be
these
Kingdom, 1938 to 1946, Cmd.
7099, 1947, pp. 5-6.
Telephone BArclay 7-9855
just
are
class
a
as
of their hire- as
other industry.
I
nevertheless; that
treasuries
to labor
ness
Branch Office at
a
*
^
in
the most "bearish" or
discouraging symptom of the ill
fate of the railroads is that emi¬
To
tions
Making Up Deficiencies ;
The
;
.:
debt
of
depend-
day,
.
yield the whole explanation, jln
many countries
strong measures, nent leaders in the industry are
were taken to suppress inflation.
urging the Interstate Commerce
Late in
1947, for example, the Commission to regulate not only
tries, the
Squiale,-Buffalo
<•
Railroads
of
Ellicott
to
Open and Suppressed Inflation
culation
1031
to¬
at
each road.
relative
forces.
ary
personal expenditures from 78%.
Cleveland, O., Dec. 29, 1948.
burden
suggest the strength of inflation¬
percentage of na¬
income
tional
Annual
quoted
Roger W. Babson
income <in
war, with - (2) the flow of goods
and services at current prices will
suggested by the- re¬
duction of the
*An
fore
of
the
plus
spending
imposed
sector
laborers in any
such
what they , are
in "the
million
£5,000
employees
as/worthy
leel
one-quarter of
foreigners
to
assets
years.
upon
goods at the cur-
of
Railroad
-•
are
avarice '..of
abnormally
abroad
from
else
or
is
immensely
politically than
powerful
railroad shareholders.
they w i 11 be
income
occurred
shortage
zation,
quoted at lev¬
£4,500
is at least
borrowing
sales
and
cash, the excess
purchasing
flow of wanted
despite
accumula¬
the
1948
million.
current flow
the
With
income.
deficit in
com¬
lo
large outlays out of past income,
associated with abnormally lbw
the main causes of the figure was £300 million. On the
epidemic of inflation. For basis of the latter, it might be
it is war that provided high levels held that the country accumulated
of employment and activity and a deficit on capital account over
corresponding levels of income, the 7 years, 1939-45, of more than
without
providing
supplies
of £3,000 million.
At 1938 prices
consumption
goods
and capital for capital goods, the relevant
purposes
peared, owing
nationali¬
war
industries,
els one-half or
course,
non-military
.disap¬
amouhts
(1) ■> the
of
comparison
lion, whereas in 1938 the positive
current
for
will
stocks,
have
cash, the great¬
inflationary pressures, j A
the
rail¬
common
likely to be spent out Or current
£1,076 milr-
minus
was
road
and substitutes for
er
more
either
certain
cash4
and the larger the growth of
Britain, for example,
capital formation at
the years 1939-45, in¬
non-war
home
Contribution of War
The
.0-■/'■ ciency accumulated during the
two de¬
or
cades
defi¬
Obviously, the greater the
Great
In
the planned economy
controls.
and
supply.
—12%
+6%
in 1939-45.1
other
Oi.e
jiij.
assets from
to
to
1938
between demand
balance
the
and
those
ciples of free enterprise and
destruction
Wartime
deficits; in coun¬
tethered to the prin¬
those with large
tries largely
addition
grow.
further up¬
—
predict mat in
in those suffering from
those "injured", by an
largely untouched; in countries blessed (?) by overemployment and
unemployment; in countries favored by an excess of imports and
lows.
new
phenomenon; in countries ravaged by war, and in those
worldwide
a
friends ask why I do not recommend railroad common
There will, of course, be further periods when railroad stock
prices will rise. The hopes of speculators spring eternal. But every
rise will, in my opinion, be followed sooner or later by descent to
Introduction
Inflation
Many
stocks.
Broadway
Telephone BArclay 7-7668
New York 5, N. Y.
Teletype NY 1-315
Number 4766
169
Volume
ported
it out, can,
specified date, demand recognition of
a
on
From
the News
of
Manage
Lord, Abbelt G'go;
Hughes To New York
of the members to call
CHICAGO,
signing of a petition.
&
The members will now be
important difference.
But here is the
BARGERON
By CARLISLE
Parker To
it up. So you are right
pack where you were—majority rule still determines, •
The same result could be obtained and without the waste of
45 minutes or an hour which it takes for a roll call, through the
majority vote
on
Ahead
the
bill be called up. It then takes
residing officer and move that the
ILL.—Lord, Abbett
Co., announced that Albert R.
Hughes, VicePresident for-
full glare of the radical
Representatives, on the first day ol
propaganda. And they vote in the consciousness that those who op¬
the session, in defenestrating its Rules Committee is being hailed by
the radicals as a great victory for democracy.
More likely, it Will pose the legislation will do nothing to them for voting for it, while
develop to be the ascendancy of mob rule. That, however, is the the; Leftist agitators will crucify them if they vote against it.
on
'The
<
They have got to vote in the
spot.
of democracy.
inmate
•
.
The
.
to
Carlisle
Bargeron
if the
At
•
CHICAGO,
majority of the House really wanted one.
any time, and this was particularly true
uldsen
this well.
South
The
Rules
an
the
Committee
Salle
Street,
the
Chicago
>;.■.■■■ ,-.y.v
firm
ager
for
considered
partners
broker.
floor
to
(Special
The
Financial
Chronicle)
Southern
with
Investment
are
business of
.
7
V '
v
••
'iyj. '
r
■
'
of
and
Rules
members constituting
j ^
■
,
Twelve
under the
or
new
chairmen
it
12
members
order.
the
still
will
new
be
rulers
the
They won't be the same men.
FRANK 0. MAXWELL has been admitted
GOODWIN
of
the
to our
firm
House
in
They will be
of the
The
following will be associated with
Committee having originally re¬
LOS
Division.
pleased to
.
H.
DANIEL WELLS,
associated with
C.
DAVID
SNOW
IIILLS
GEORGE II. BARNES,
Manager
Mgr. Invest. Dept.
PHILIP A. ZIMMERMAN
RONALD A. PAIN
ARTHUR FREEMAN
now
ROGER H. PILE
FRANK E. DRISCOLL
EDWARD G. OTIS
BEVERLY
GILES MONTANYE
Registered Representatives:
HOWARD DAWSON
HUGH IL MURCHISON
that
announce
us as
ANGELES
RAYMOND A. PASSAVANT, JR.
LEE E. ARBOGAST
is
us
Sales Manager, Southern California
as
WILLIS C. BREMNER
MR.
General Partner
as a
charge of the Firm's Trading Account, and
WILLIAM S. WELLS
order, if the Rules Committee has held up a bill
are
*
;
days, the chairman
We
♦
-
the
respective committees along with the Speaker
Majority Leader.
Under the
15
to
&
WALSTON, HOFFMAN
OLIVER B. SCOTT will be associated with
15
of
among
\
"
Committee.
spreading
.
,
late
the
merged
"""ST
was
j,
•
ment
21
associated
MAXWELL, MARSHALL & CO.
deal
Leftists still genuflect.
for
individual
an
Effective December 31, 1948, the
George Norris before whose memory the
They should read what he said in the debates
about taking the power away from one man of-czaristic tempera¬
the .instance
the
has been
Abbett for the past six
us.
PASADENA
THOMAS H. HELLER,
ABEL DeCANT
Manager
WILLIAM H. WOLF
ALEX T. ROBINSON
JOHN I. DEWAR
Frederick L. Free & Co.
NEW
19
Rector Street
New York
SAN
YORK
6, N. Y.
5YILBUR R. WITT1CH,
Telephone: BOwling Green 9-7371
ROGER K. WILLIAMS
DONALD A. DALY
BEACH
LONG
Regret
retired
to
as a
announce
partner.
that
Mr.
The firm
&
GOLKIN
Theodore
name
R.
Young
KEEFE
WqIston,Hoffinon & Goodwin
has
Members
New York Stock
Broadway, New York 6, N. Y.
Telephone WOrth 44100
Teletype NY 1-1658
SECURITIES
INVESTMENT
has been changed to
AAL & GOLKIN
115
Exchange
San Francisco Stock Exchange *
550
SOUTH
BAKERSFIELD
MODESTO
SAN DIEGO
.
SPRING
NEW YORK
.
.
STREET
BEVERLY HILLS
SAN
.
FRANCISCO
•
o
•
ANGELES
LOS
EUREKA
OAKLAND
.
Los Angeles Stock Exchange
New York Curb Exchange (Associate)
FRESNO
•
PASADENA
.
SAN JOSE
.
.
13
o
MADISON
LONG BEACH
•
•
SANTA ANA
RIVERSIDE
.
SAUL GOLKIN
Leased private wire system
•
.
STOCKTON
CLARENCE J. AAL
January 1, 1949
DIEGO
WILBER P. LARRABEE
Syndicate Mgr.
WALTER E.
YOUNG, AAL
Co.,
William B. Inc., Johnston Building. Mr. Wil¬
Neergaard, Royal F. Herdeg, Ben¬ liams has recently been conductjamin L. Prime, and James A. ting his own investment business.
Sebold.
Robert C. Albright will Prior thereto he was with First
Securities Corp.
retire from partnership.
of the municipal department.
would, perhaps, be beneficial to some of the Leftist commen¬
tators who are now writing about the Committee being a dictator¬
ship. to go back and read up on their history
This'ma chin erv was
created to wrest Boss Cannon's p^'er frnp-> him.
U wps
**
and
who
man¬
of
CHARLOTTE, N. C.—Philip T.
Williams has become associated
partnership on Jan.
Mr. Cosgrove has been active
as
time, is man¬
some
It
the
succes¬
Southern Investment Co.
is admitted to
who has been with
-v-
V-
ent
Philip T. Williams With
Warner G.
Cosgrove, Jr., Exchange member,
Stock Exchange.
days of Czar Joe Cannon, it was for him and him alone, to
a member.
He could prevent any legis¬
>with it.
m
as
advance in the "democratic process" when it was created.
by simply refusing to recognize the rpember wanting to
t
the
Chicago office
is
John
G.
Parker
G.
Parker
member of the New York
a
Stock Exchange, when
members
decide whether to recognize
lation
come
105
Other
the
was
& Co.,
Detmer
Mr, Geruldsen,
-
machinery, incidental^/,
La
of
Vice-
elected
17.
of
Through the device of the Rules Committee failing to report
out a bill, the members were prevented from being put at the mercy
of the radical agitators and pressure groups. They were not sincerely
for the legislation that was being bottled up. But the average mem¬
ber of the House, standing for reelection every two years, can't stand
up against the hammering and smearing and propaganda which the
Leftists have developed to such a high point.
In
His
sor
Neergaard, Miller &. Co., 1 Wall
Street, New York City, will be¬
ILL.—Nils S. Ger¬
been
has
President
majority of the members of the House could
Rules Committee, did not fare even
n v e s
years.
have brought
about a vote by the simple expedient of signing a petition. This, they
never did.
My recollection is that the housing petition could never
muster much more than 100 signatures. Legislation a few years back
for the establishment of an FEPC, which got bottled up in the
quite
i
with Lord,
legislation for subsidized housing and Federal aid legislation
which the Committee was blamed for holding up in the 80t,h Con¬
a
f or'
companies.
Heergaard, miller Go.
Mils Geruldsen V-P.
of the
gress,
bution
ager
conservative group on the
it protected the
rank and file members against this agitation.
At
no time did it have the power to prevent a vote
na¬
distri¬
Lord, Abbett
has been that
Committee
New
charge of
tional
John
:
j
the
crime of
-The
Rules
the
York office in
has no way of knowing.
He does
an incessant and vociferous agitation
them.
wants
the
fice, is moving
longer, we are
respondent
know that
in
of
e
Chicago of¬
told, will-a wilful group
leadership group. Invariably the Rules Committee has always acted
on the Rules Committee be able to frustrate the
in accord with the decisions of this group, of which its members
will of the majority. It so happens that the com¬
mittee has never been able to do this. The dear constituted a part.
old "peepul" will now be able to get health aids,
Tn theory the change means little if anything.
Power switches
-subsidized housing and the like and no small
from certain men to others.
But in practice, the power switches to
group of men "serving the selfish interests" will
the; Leftist mobs.
They can put the heat on a Committee chairman
be able to deny them;- As to whether the major¬
ity of the people want these hand-outs,' your cor¬ to call up a bill and then the timid rank and file will vote aye.
No
1 y
m
Committee chairmen have always been in the
respective
r
charge
House of
action of the
>'
•
the
connecting all principal offices
9-3232
LOS ANGELES
SACRAMENTO
.
VAI.LEJO
THE
(64)
j
Business Leaders
COMMERCIAL
Optimistic
&
FINANCIAL
CHRONICLE
1949 Outlook
on
Thursday, January 6, 1949
Dealer-Broker Investment
Symposium of Commerce and Industry Association of New York, Inc., reports
opinions of top executives in foreign trade, manufacturing, textiles, foods, hotels
and electrical appliances.
Recommendations and Literature
It is understood that the
send
to
Leaders of American business and
foreign trade contributing to the annual symposium
of the Commerce and Industry Association of New York, Inc., on the outlook for the New
/ear believe that the brisk pace set by business in the last 12 months will carry over of its
momentum through 1949 and injure continuing prosperity, but much will depend, in their
opinion, on the attitude toward business of tie 81st Congress and the national administra¬
tion.
Of the top executives in the fields of fo :eign trade, manufacturing, building construc¬
tion, banking, foreign travel, aviation, textiles, foods, hotels and electrical appliances, who
participated in the forecast roundup, all are directors or members of" the Association. Here
are
their views
on
Bond Market in
pects
LeVINO,
"Foreign
tions
have
from
traders whose opera¬
with
difficulties
every
met
side during the past
year are hopeful of a better 1949.
Unfortunately, there are no defi¬
nite indications yet that overseas
markets will be able to develop
the
in
future the
ability to
United States goods they
near
pay for
need and are so anxious to obtain.
"Although most foreign traders
reluctantly
have
to
come
agree
hat export controls are necessary
inder
he
present world conditions,
in which United States
stered
placed a greater burden
exporters during the past year
contin¬
be
the
indication
best
international trade
controls, foreign traders should
urge their congressional represen¬
foundation,
is
that
on
a
to
oppose
one
year
for items in short
"Also
coming
and then
supply.
before
the
President
of the
"Manufacturing
in
agreements should be made
a per¬
at
will be wiped out and before 1949
is finished the days of fat order
present.
'
„
;
"The revised International Trade
Organization Charter, which prob¬
ably will come before the next
of
the
big backlogs
books will, generally speaking, be
pretty well over. If this happens,
manufacturers will begin to sense
real
peril; for high manufactur¬
ing and selling costs have brought
the break-even point so high that
in the case of many companies
of Commerce on a number of oc¬
Congress, also will affect the fu¬
ture of foreign trade.
There is
however, considerable division of
opinion among exporters and im¬
porters on this subject although
casions
Association and
It is hoped
there
is
cline
ment
as
efforts will bear fruit dur¬
basic
principles involved.
jn
.han at any
time during the
situation
This
has
the attention
vo
other
hese
ing
subject
the
/hat
groups.
effective
also
will
'
,
Export
have
consideration
Congress.
"The
"On
coming six months and
the
more
war.
brought
of the Secretary
the
by
trade
been
Control
will
be
probably little disagree¬
desirability of the
to the
the
a
by
the
x
Act
ex¬
pires Feb. 28, 1949, and undoubt¬
edly will be up for extension by
Congress. Administration spokes¬
and;
supply
presently
the
importers.
situation
not" have-established
and
are
more
red,
1949 certainly
or
close
so
MR.
THOMAS
it
to
as
President
"The
of
going to find it more
flattened
of
F. W.
Dodge
construction
out
in
recent
have indicated
"A continued increase in United
they will urge
on
page
Month
the
Club—Cir¬
Street,
Los
Angeles
York
City Bank
19
for
alysis
Stocks—
G. A.
Raynolds Co.
—
An¬
&
Co.,
Eastman, Dillon
Broad
N.
Y. Also
Street,
New
available is
York
5,
detailed
a
analysis of Sprague Electric Co.
First National Bank of the City
Paper
Manufacturer—Data
of New York
on
Boston
interesting 1st mortgage industrial
bond—George Birkins Co., 40 Ex¬
—
Circular
Corporation.
—
100
First
Broad¬
New York 5, N. Y.
way,
change Place, New York 5, N. Y.
Hotels
Railroad
Statler
Company, Inc.—
Circular—S. C. Parker & Co., Inc.,
1031 Ellicott Square,
Buffalo 3,
Equipment Trust Cer¬
tificates—Valuation and
appraisal
1948—Stroud &
N. Y.
Co., Inc., 123 South Broad Street,
Philadelphia, 9, Pa.
York
of
as
Dec.
31,
available
is
a
and
appraisal
Philadelphia Bonds.
City
Maine
of
cial
**
&
Hickey,
49
Street, New York 5, N. Y.
;
42)
-> "
-
'Survey—Outlook
&
Co.,
Inc.,
53
State
Municipal
Notes
Boston 9, Mass.
New
England
Department,
National Bank of Boston, 45
new
First
Milk
Street, Boston 6, Mass.
Northern
f
Television—Leaflet—Shields
&
States
Power
Com¬
Minn.—Special write-up—
A. C. Allyn and Company, Inc.,
100 W. Monroe Street, Chicago 3,
pany,
Co., 44 Wall Street, New York 4,
N.
on
Railroad—Spe¬
analysis—A. G.
and
—Municipal
year—Abraham & Co., 120 Broad¬
way, New York 5, N. Y.
7
.
matter
Wall
•
the
for
Central
report
Outlook—Analy¬ Street,
Railroad
sis—Vilas
is
available
Affiliates, Inc.
valua¬
new
of
Also
Woglom
9
has
months.
&
—
15
in
1948
—
Co., Inc., 70 Pine Street,
York 5, N. Y.
New
14,
indicated
stocks
memorandum
Saxton &
640 South
earnings
special
bulletin—Laird, Bissell & Meeds,
120 Broadway, New York 5, N. Y.
for
£
(Continued
Staats Co.,
Preliminary
,
men
of
Co.—Card
Corp.
boom
Moderate decline in physical vol-
difficult to operate.
Book
cular—Edgerton, Wykoff & Co.,
618 South Spring Street, Los An¬
geles 14, Calif.
•
Devoe
New
Also
S. HOLDEN,
improving,
sources
Sparing
tion
With
an¬
2, Mo.
Bonds—Discussion—
William R.
a
to
Spinning Asso¬
analysis of last
&
Market in 1949—Outlook—Stan¬
Construction
many
rtoryproducjjil exporters whq do
supply
20% de¬
in sales could put them in
prosperous
present a distressing problem."
-
critical year for
exporters
4'
whole,
a
v
is Calif.
general
is
most
Monell
ley Heller & Co., 30 Pine Street,
New York, N. Y.
brisk rate
through 1949, but the probability
that
Forecasts—Memo¬
a
manent
part of our law instead of
requiring periodical renewal as
;■
Fine
Central Arizona Light & Power
Intertype Corp.
principles of reciprocal trade likely to continue at
Berkshire
Co.,
Broadway, New York 6, N. Y.
Municipal
new
Reciprocal Trade Agreements Act.
The
'i
-
MR. NEAL DOW BECKER,
will be renewal of the
Congress
Manufacturing
only
Range
Long
115
as
extension
any
Hentz & Co., 60
Beaver Street, New York 4, N. Y.
on
National
report — Scherck, Richter
Co., Landreth Building, St. Louis
randum—Minsch,
sound
Toronto,
*
nual
.
beyond
leaflets
are
Steel, JFirst
shine Mining.
our
well as that the
ECA Program is bringing results."
West,
,»
American Sugar Refining Com¬
ciates—Brief
large measure on a break in in¬
flationary conditions abroad—will
review
by Congress in the operations of
manner
export licensing has been admin-
and
assure
annual
However, to
interest
tatives
available
Also
Bethlehem
States import trade—dependent in
ued
♦
of
New
York)
Monsanto
Chemical, Richfield Oil and Sun¬
three-year extension to coincide
Plan.
President of Guiterman Co., Inc.
King Street,
Ont., Canada.
Bank
with the duration of the Marshall
GERALD
MR.
80
pany— Study—H.
•5>a
1948 and Pros¬
for
1949—Analysis—Goodbody & Co., 115 Broadway, New
York 6, N. Y.
the outlook for 1949:
Foreign Trade
firms mentioned will be pleased
the following literature: -
interested parties
Y.
Illinois.
Florida Coast
East
Western Canada Oil Industry—
Railway
Data—Charles
Equipment Trust Series K
2%%
King
&
Co.,
Strawbridge & Clothier—Mem¬
61
orandum—H. M. Byllesby & Co.,
Stock Exchange Building, Phila¬
Broadway, New York 6, N. Y.
'i Western
Canadian
edition
vised
of
Oils
delphia 2, Pa.
Re¬
analytical
Also
bro¬
Equipment Trust Certificates
available
(Continued
chure—James Richardson & Sons,
are
memoranda
page
on
11)
(Philadelphia Plan)
To
mature
semi-annually $103,000 on each July 1 and January 1,
July 1, 1949 to January 1, 1959, inclusive
from
To be
guaranteed unconditionally as to par value and dividends by endorsement
by Scott M. Lojtin and John W. Martin, solely as Trustees of the property
of Florida East Coast Railway Company, Debtor, and not individually.
NSTA Notes
•
These
Certificates are to be issued under an Agreement to be dated as of January 1, 1949,
provide for the issuance of $2,060,000 par value of Certificates to be
secured bv new
standard-gauge railroad equipment estimated to cost not less than
which will
The
new
$2,761,846.
Priced
CINCINNATI
to
STOCK
Cincinnati
&
BOND
Stock
&
CLUB
Club
Bond
has
elected
the
following
officers for 1949:
yield 1.50% to 2.95%, according to maturity
Issuance and sale of these
Certificates are subject to approval by the District Court of the United States
for the Southern District of Florida, and the Interstate Commerce Commission. The Offering Circular
may be obtained in tiny State in which this announcement is circulated from only such of the
undersigned and other dealers as may lawfully offer these securities in such State.
00-
21
mW'
HALSEY, STUART &, CO. INC.
R. W. PRESSPRICH
& CO.
OTIS & CO.
<x§f
vJr
FREEMAN & COMPANY
(INCORPORATED)
THE ILLINOIS COMPANY
McMASTER HUTCHINSON
& CO.
Lloyd
Par value and semi-annual dividends (January 1 and July 1) payable in New York
City. Definitive Certificates, with dividend warrants attached, in the denomination of $1,000, registerable as to par
value. Not redeemable prior to maturity. These Certificates are offered when, as and if received by us. Certificates
in temporary or definitive form will be delivered at the office of Halsey, Stuart & Co. Inc., 35 Wall Street, Neto York,
N. Y. The information contained herein has been carefully compiled from sources considered reliable and, while
not guaranteed as to completeness or accuracy, we believe it to be correct as of this date.
To be dated January 1, 1940.
Shepler
Gilbert A. Davis
Harry C. O'Brien
Harry Hudepohl
President—Lloyd W. Shepler, Merrill Lynch, Pierce, Fenner &
Beane, succeeding Jean E. Bennett, J. E. Bennett &
First Vice-President—Gilbert A.
Second Vice-President—Harry
January 6, 1949.
W.
Co.
Davis, Harrison & Co.
C. O'Brien, W. E. Hutton & Co.
Secretary—John Muehlenkamp, Van Lahr, Doll & Isphording.
•
Treasurer—Harry Hudepohl, Westheimer. & Co_
-w
Vv
Campbell & Bobbins
Shober, Hogg, Fordham Arnold, Cassidy & Co.
Formed in Portland
With Sheridan
formed
act as
bins, Inc. The
Building.
underpriced special situations.
Partners
and
S. Leben¬
mann
was
formerly
a
and
Edel¬
Mr.
Capper.
Officers
J. Gilbert
are
Paul
dent
and
Campbell,
phia
Vice-Presi¬
of
issues
new
municipal and
bonds
State
that the mar¬
ever
been
called
upon
to
in
Capper
Co.; he is
a
&
member of the New
Society of Security Analysts
and of the
(Special
to
Security Traders Asso¬
ILL.
has" been
Vincent
staff
105
bers
Julient
of
E.
W.
Shober
&
at
448
the
securities
Arnold,
Richard
and
Co.,
John
E.
Cassidy
Hutzler.
H.
Mr.
are
Mr.
yea
r,"
ards & Co.
the
of
Burton
added
Collins
Chicago
DETROIT,
MICH.
—
X Arthur Warner Adds
Allan A.
(Special
The
to
Weston has become affiliated with
mem¬
George A. McDowell & Co., Buhl
Barber
Ex¬
Building, members of the Detroit
Warner
\
Stock Exchange.
Chronicle)
Financial
MASS.
BOSTON,
Co.,.
David A.
shire Street.
&
Stock
'
,,
George A. McDowell Adds
J.
the
to
,
is
with
now
&
—
Co.,
Inc.,
J.
Arthur
89
Devon¬
says
"became
States
the
for
munici¬
and
palities
the
beginning
of
Louis S. Lebenthal
rehabilitation
of existing facilities and building
.
of
.
<
new
ones
and
necessary
de-
manded by the public and planned
for during the war years.
This
large volume of bonds was ab¬
sorbed
by the investing public
without difficulty and without se¬
verely affecting price levels."
As to the
municipal bond marMr., Lebenthal states:' "The
price level during the year 1948
ket,
.
.
stable
as
was
20
past
as
during the
it "was only
any
and
years,
after the election that
in
crease
.
demand
in yields and
sharp in¬
a drop
a
caused
increase in bond
prices, so that the year-end came
with price levels at their highest
point."
is
"It
added,
an
generally
agreed," he
volume of new
"that the
issues for 1948 will be matched
in
exceeded
I
1949.
believe
or
that
Federal tax exemption for the in¬
dividual
in
tor
and
continue
will
be
major fac¬
investment de¬
a
providing
municipal
for
mand
investor
corporate
to
State
and
that there will be a suf¬
ficient quantity of new issues of
bonds;
bonds
fill
to
the
needs
that
and
the level of
prices and yields will
remain relatively stable."
Arriving
Donald G. C. Sinclair
total
Donald G. C.
Sinclair, associated
Turnure
Lawrence
Co.-
&
& Bonner of New York
since 1933, has joined White, Weld
& Co., 40 Wall Street, New York
Blyth
City, in their Institutional Securi¬
ties Department.
Sinclair
Mr.
born
was
Atlanta
of
started
furniture
a
which
store
and
Vice-President, Trustee
Chairman of the Bond Com¬
mittee
of the
has
in
the
South,
with 47
store
selling
South
the installment plan
on
Carolina.
From
then
on
stores
in
store
after another,
store
must
feature
big chain, RHODES, INC., with headquarters
a
real service
as
better
Rhodes figured he could render
well
as
sell
gave
moderate-income families
furniture, if he
more
well-furnished home while
The
chance to enjoy
a
selling.
still in Atlanta, finds the installment idea is
to
career,
installment
North and South
Tennessee, and gross sales of 20 million dollars a year.
Early in his
always insisting that
ever,
working
with repossession amounting
only 1% of total sales.
Still
aiming at the moderate-income
INC., continues its founder's
a"
paying for it out of income.
plan worked, and in 1882 Rhodes started
today than
group,
RHODES,
policy of expansion and
aggressive selling, and points proudly to its slogan,
"Originator of Installment Plan of Selling Furniture."
a sec¬
President and Trustee
Hospital;
Brooklyn;
Vice-President
and
Brooklyn;
the
of
Caledonian
of the
Trustee
This
Brooklyn Associa¬
tion for
Improving the Condition
of the Poor; and Secretary and
Trustee of both the Berkeley In¬
stitute and
the Brooklyn Insti¬
tute of
Sinclair
Mr.
is
another advertisement
Securities
Corporation
Southern
states.
economic
development
in
the
featuring
Equitable: will
of
the
series
published for
industrial
outstanding
welcome
South
by
more
and
opportunities
supplying
to
capital
than 10
years
commercial
contribute
funds
to
by Equitable
concerns
to
sound
the
in
the
further
enterprises.
Sciences.
Arts &
is
also
member
a
of the Harvard Club of New York,
St.
Andrews
Society,
Montauk
M., and Sky Top
Club of Sky Top, Pa. In Brooklyn
F. & A.
Lodge
NASHVILLE
NEW
DALLAS
H
K N O X VI
YORK
ARTFOR
D
is
member
a
of
the
Health Council, Rotary
nicipal
merce,
Club,
Chamber
of
Committee
of the
and
Hanson
tral Methodist Church.
CHATTANOOGA
G REENSBORO
NEW
M
E
ORLEANS
M
P
H
IS
Securities
Com¬
Rembrandt Club, and the
Finance
Board
Brooklyn
Club, Mu¬
LLE
BIRM INGHAM
he
.
.
AND
Corporation
,
,.
JACKSON. MISS.
Brownlee O. Currey, President.
Official
Place
he
one
each
Carolina, Georgia, Florida, Alabama, Mississippi and
Kings County Sav¬
ings Bank, 539 Eastern Parkway,
furniture
Charleston,
added
since
developed into the largest chain furniture business
tended Harvard Law School.
a
in
in
Brooklyn in 1905 where he at¬
tended public schools. He also at¬
He is
ond
right after the Civil War with
gold watch and $75, Amos G.
one
The
Rhodes
with
in
assets
Arnold
merly partners in Pearson-Rich¬
Leben¬
thal,
R.
and
both for¬
Cassidy were
inves¬
Mr.
Ar¬
Hill
Lloyd
Partners
"The
tor."
—
South
business.
Mr. Hogg were formerly
of
offices
Street to engage in the
Sho¬
Mr.
Chronicle)
Chronicle)
—
Salle Street,
South La
change.
ciation of New York.
Bogan
officers
Financial
The
CHICAGO,
for¬
also
was
Exchange.
Stock
Financial
hands
the
of
place
Mr.
merly with Bittner, Edelmann
York
has
ket
Co.
with
Walnut
1528
Inc.,
The
With Julien Collins
Henry Edelmann &
of
volume
Sheridan
with
Co.,
to
nold, Cassidy & Co. is being formed
become
Inc.
Lebenthal Bittner, Edelmann & Co. and prior
"the year of 1948 was thereto conducted his own invest¬
primarily by the largest ment firm of
Co.,
&
and
Hogg
have
ber and
senior partner of
marked
(Special
LOS ANGELES, CALIF.
Street, members of the Philadel¬
Secretary.
partner in
Fordham
F.
associated
Paul
G.
James
Shober,
Millis
Robbins, President and Treasurer
Edelmann
Henry
are
Milton
W.
firm will have
new
Formed in Los Angeles
Bogan
PHILADELPHIA, PA.—Edward
offices in the U. S. National Bank
also
and
securities
liquidation
likely to exceed figure of 1948,
with continuing stable prices.
&
Broad-
City, to
York
specialists in reorganization, and
volume
of State and local financing is
Louis
with ofnees at 29
New
way,
PORTLAND, ORE. — Effective
Jan. 1 Hemphill, Fenton & Camp¬
bell, Inc. and Holt, Robbins & Co.
merged to form Campbell & Rob-
Capper has - been
&
Edelmann
Louis S, Lebenthal says
to
9
Formed in New York
Output in 1949
Oi Municipals
thal,
(65)
Edelmann & Capper
Predicts Record
According
FINANCIAL CHRONICLE
COMMERCIAL. &
THE
Number 4766
169
Volume
Cen¬
322 UNION STREETV NASHVILLE 3.
^ r
TWO WALL STREET,
NEW YORK 5.
j,
10
Pennsylvania Brevities
Q
this
last
New York 5
Angeles
York and Los
New
7-7835
State Senator H. Jerome
month.
The
120 Broadway
PEnnypacker 5-5976
BArclay
Private Wire System between
Philadelphia,
transportation company
is
asking' that the present 10-cent
straight fare be increased to 13
cents, or three tokens for 35 cents.
The present school and suburban
zone fares would not be changed.
Unless blocked
P.U.C.,
the
the
deferred by
or
fares will
new
effective
become
Philadelphia
right that the car and bus
riders of this city should be sub¬
Bank & Insurance
Co.
Pfd. & Common
my
Phila. Phone
New York Phone
Locust 7-1477
WHitehall 4-2400
Teletype PH 257
support of the proposed in¬
crease, the company, in a public
statement, pointed out the neces¬
fair
return
risen
on
value
the
on
of
Strawbridge & Clothier
John B. Stetson
a
of
material
meeting, the
Club of Philadelphia elected
Bond
Loring
Byllesby & Company
Secretary;
70%
to 132%.
less
costs,
than
ice
Phila. 2
PH 73
,
I"
expansion
:v
..
equipment program, the cost
is nearing a quarter
which
is
further
dollars, is expected
billion
a
of the
new
in service.
tions include
212
and
box
cars
Total
addi¬
566 diesel-electric
locomotives,
coaches,
cars,
during 1949.
equipment is
completed
be
already
As
modest
return
"even a
the
49,000
for
or
to
'
David W. Mc¬
President
Knight, Direc¬
to
the
;
'\' : '•
■■
Stock
118 overnight
sleeping
25 lounge
cars,
2,100
all-room
•
40 dining cars,
special-feature
cars,
300 covered hopper
and 2,000 gondolas.
Philco Plans Expansion
$3,200,000. Construction will take
place at Johnstown, Penna., and
deliveries are scheduled to begin
f
next June 1.
"■
*
*
c2
■' v.-r
'
*
'
declaration
December
stock
to
public
$1.50
the
per
at the
share.
President, stated
had failed to
F. J. Chesterman,
company
the reduced amount
by
$700,000, the difference be¬
about
works
and
our
export position is not expected
greatly,
change
it
was
stated
by Mr. McKnight. Business spend¬
plant and equipment should
and inventory accumula¬
ing
on
be
less
tion
is
not
expected
role
the
to play
that
it
in
did
1948.
Bell
on
again
was
of
rate
even
be
"The prospective lower level of
Pennsylvania private investment and its effect
of
Co.
Telephone
earn
.
new
should
McKnight
W.
increased
net
Telephone Co, of Penna. ;
that
total
construction
David
expansionist
reduced
I
volume
The
maintained by
Reading Company has ordered
steel hopper cars from Beth¬
Steel Corp. at a cost of
common
Ex¬
change.
V
lehem
Bell
&
York
New
common
750
:
G.
members
Co.,
share, com¬
pared with net income of $8,215,649, or $3.87 per common share,
1947.
of
Walker
H.
President of Read¬
ing Corhpany, estimates 1948 net
income at between $10,000,000 and
per
and
partner
Reading Company
$5.50
Re¬
search
'"sfc
#
of
tor
j
R. W. Brown,
in
ac-
year,
cordi#4&<. to
com¬
Pennsylvania Salt.
-
be
below that for
business
on
will
be
mitigated
by
larger expenditures on the part
of Federal, State and local gov¬
ernments which in the third quar¬
ter of 1948 were
ing taken from surplus. Mr. Ches¬
terman commented "the continued
and
services
at
purchasing goods
the
annual
rate
$37.7 billion against $28.7 bil¬
lion for the full year 1947. More¬
of
Corporation's emphasis failure ,to earn the regular divi¬ over, a $3 billion rise in armament
be directed toward dend is disturbing in view of the and at least $1 billion more pub¬
increased production of television large,
amounts *of ne$ capital lic construction in 1949 seems
nity's transit lines.
(
receiving sets, according to Wil¬ which must be attracted ." to the' likely. And consumers may start
liam Balderston, President.
Out¬ business so that the company can to buy more freely again.
Still,
City of Purchase?
put will be stepped up from the finance its extensive construction with a tax increase in prospect it
While the city administration is
less than
200,003 sets manufac¬ program."
is doubtful that a complete bal¬
committeed to fighting the pro¬
tured
in
1948 to approximately
ancing out will be achieved by
posed ipcrease by seeking the aid
Scott Paper Co.
600,000 in the current year. Plans
enlarged government activities.;
of
the
P.U.C., consideration is for
plant expansion call, for the
Excellent sales and earnings
"Nevertheless, the contemplated
being given an alternative plan
of Scott Paper Co. have enabled
expenditure of about $5,000,000.
rate of private and Governmental
proposed by Joseph Sharfsin^ for¬
the company prepay $2,000,000
Goal for the industry for 1949
mer
spending is very high, which is
City Solicitor, who asserts
in bank loans which would have
is estimated at between 1,600,not suggestive of a startling set¬
that, under an existing agreement,
matured in 1952 and 1953, ac¬
000 and 2.000,000 receivers.
It
back in business, but more likely
the
city -could bu,y tne transit
cording to Raymond C. Mateer,
is expected that by year-end 106
an
adjustment
to a
somewhat
company for about $87,000,000. ,v
Executive Vice-President. Com¬
television broadcasting stations
lower plateau of production trade
Through savings in taxes, ac¬
will be in operation in 61 cities.
pany still has $2,000,000 in bank
and incomes. 'Over-demand' may
loans outstanding.
cording
to Sharfsin, the
city
,'V'V ■: ■
sis,
'
❖
be expected to give way to a bal¬
could operate the lines profit¬
anced situation in which compet¬
Lukens Steel Co.
ably without a further fare in¬
Phila.-Baltimore S. E.
itive forces will have greater play.
COATESVILLE—Robt. W. Wolcrease, including payment of a
new
businesses
will
be
The merger of the Philadelphia Fewer
fee to private interests for the
cott, President of Lukens Steel Co.,
and
marginal
concerns
Stock Exchange and the Baltimore started
predicts
that
the demand for
continued operation of the sys¬
Stock Exchange has been unan¬ should experience great difficulty
steel plate is likely to continue
tem. It was also pointed out that
as
will unqualified management.
as heavy in
1949 as in 1948. The imously approved by the boards
further
savings would be
ef¬
of both exchanges. Necessary con¬ Because the cost of living will
Philadelphia ^'Inquirer"
reports
fected
by eliminating
present
stitutional
amendments
will
be decline, real wages, what one's
Mr. Wolcott as saying that he be¬
payments to P.T.C. bond and
lieves
the
spendable income of presented to the respective mem¬ money will buy in terms of goods
shareholders.
berships at an early date.
; [; and services, may be expected to
rise.
Therefore
wage
increases
will become more difficult to se¬
,,]$ tockholders
helped to furnish
'
whose money
the
Philco
in
1949, will
commu-n
,
Cambridge Bldg. 3s 1953
Pittsburgh Hotels 5s 1967
Lehigh Vy. Ry. N. Y. 4i/2s 1950
Phila. Warwick Common
Pittsburgh Railway 5s 1953
Lehigh Valley Coal
1954-64-74
Samuel K. Phillips &
Members
for
inadequate
*
c
*
Some
and
% of
is maintained,
Leo M.
equipment modernization, serv¬
Teletype
5s
E. H. Rollins &
Pennsylvania Railroad
to
of the higher labor
This, it
totally
OFFICE
Telephone
new
will
ness
last
the
of
Assistant
mer
:•'
business
1949 busi¬
general
suggests that
activity
in gen¬
for
outlook
the
J. $10,500,000. If realized, this will
Rambo, Close & Kernel, be
equivalent to between $5 and
Kerner,
of
remain after costs of service are
•
resident partner of
Dillon & Co., as Presi¬
Others elected were: Wil-
S.i Boothby,
lard
that determine
investment factors
chemicals
is Richard L. Davies, for-
'
of
spending.
government
analysis of the chief private
interests.
Dam,
Eastman,
dent.
An
company's
parent
H.
there'll be
says
operation of
foreign
the
assume
the
December
its
At
of
cent of each revenue dollar
met.
RIttenhouse 6-3717
eral,
Co.,
business falling off despite
some
heavier
which will
materials and,
raw
pany
ern
revenue
every
from
result
one
Stock Exchange Bldg.,
and
President
Pennsylvania Railroad's mod¬
which have
and now take 61
sharply
vanced
Warner Company
PHILADELPHIA
export
&
Research.
of G.
partner
»!:
sp
Phila. Bond Club Elects
the
dollar,
according to the company, the
cost
of
thousands
of
supply
items and materials have ad¬
cents
H. M.
Corp.,
import
and
week
McKnight,
and
Walker
Pennsalt
subsidiary,
a
Director
forma¬
the
announced
of
W.
David
Manufacture
Salt
International
investigation of P.T.C.
assets
and
its capital structure,
bondholder,':, investors, plans,
Dolphin, Dol¬
phin & Co., Treasurer, and H.
sity for increased revenue to meet Gates Lloyd, Norbert W. Markus
the higher cost of ^oviding pub¬ and R. ConOver
Miller, members
lic transit service, as well as a of the Board of Governors.
Aside from wages
Recent Memos
Co.
tion
thorough
property which makes that serv¬
ice possible.
'
Trade for 1949
Sons, Vice-President; Raymund
In
Street, Philadelphia 2
Chestnut
In
years.
H.N.NASH&CO.
1421
third increase in rates
less than two
opinion, the move
by the transit company is ex¬
tremely unwise."
a
within the space of
Philadelphia Transportation
ing
not
jected to
Stocks
Pennsylvania
city council to appro¬
priate $100,000 for an investiga¬
tion of Philadelphia Transporta¬
tion Co. Mr. Jaspan contends that
there should be "an independent,
statement adds, "It
The Mayor's
is
PHILADELPHIA—Last
Jaspan
asked
equipment and records."
21.
Jan.
has
*
3-6s 2039,
general business .decline. Lukens
a
Predicts Lowez
possibility of
the
lessen
Steel will continue its long-range
CORPORATION
Philadelphia 2
will
Samuel states that "all the
program of capital additions. Ex¬
forces of the city administration will be thrown in to oppose the
penditures during 1949 are sched¬
contemplated new increase in fare" proposed in a schedule filed uled in excess of $2,500,000.
by Philadelphia Transportation Company with the Pennsylvania
*
*
*
f
Public
Utility
Commission late^
Distributed
St.
high
a
throughout the present year
and for some time ahead and that
Bernard
PHILADELPHIA—Mayor
BUCKLEY SECURITIES
1420 Walnut
at
level
Philadelphia Resists Third Fare Increase
UTILITIES
When
remain
will
consumers
KENTUCKY
Thursday, January 6, 1949
CHRONICLE
FINANCIAL
&
COMMERCIAL
THE
(66)
Stock
Philadelphia
Co.
Exchange
,
Packard
Bldg., Philadelphia 2
N. Y. Phone
Teletype
COrtlandt 7-6814
PH 375
Atlantic
*
Com.
City Elec.
Power Co.
Interstate
Merchants Distilling
Nor.
Com.
Com.
Pub. Serv. Com.
Ind.
Phila. Elec. Co. Common
Richmond
Wks.
Cedar
Com.
particularly in lines where
cure,
*Offered
only
by prospectus
demand has slackened."
Valuations
Bought—Sold—Quoted
and Appraisals
1
1, 1949, the firm
MacKinnon &
Effective Jan.
E. H. Rollins & Sons
Railroad
Incorporated
Equipment Trust Certificates
PEnnypacker 5-0100
1528 Walnut St.,
New
Philadelphia 2
Boston
York
City of Philadelphia Bonds
Chicago
as
Co., Inc., dealers in U. S. Govern¬
ment bonds and municipal securi¬
ties. has been changed to Andrews
&
the
Western
Our. current
of
Pennsylvania
bers
Issues
new
firm
are
Andrews, Henry Grady
of
firm;
old
the
Moser is associated
firm, it
Direct Wire to New
the
Wells, Jr., Dell H. Stevens and
Reginald L. Seligman, all mem¬
both.
Please mention which group — or
New
City.
James A.
publications ivill be sent on request
the
in
Building,
Motors
General
York
offices
same
Members
Trading Department Active in
The new firm will
Wells, Inc.
retain
1948
of December 31,
Donald
of
name
York City
was
William
H.
and
,
'
v
PITTSBURGH 22, PA.
Grant 3900
Bell
System
WHitehall 3-4000
Teletype—PG 473
change, announce that Thomas
AI.LENTOWN
•
PITTSBURGH^
NEW YORK
.
on
Dec.
The firm
SCRANTON
•
L.
Darby has become associated with
the firm in its investment depart¬
Mr.
ment.
Darby
was
formerly
the investment de¬
partment of Dreyfus & Co. ,
manager
of
Reid, McDowell & Frazier
also announced.
16.
SPOKANE, WASH.—Reid, Mc¬
Dowell & Frazier has been
formed
Build-
ness.
PHILADELPHIA 9
61 Broadway
NEW YORK, N. T.
& Co., 52 Wil¬
Street, New York City, mem¬
the New York Stock Ex¬
bers of
Now Bittner & Co.
New York Curb Exch. (Assoc.)
10th Floor, Peoples Bk. Bldg.
Emanuel. Deetjen
liam
with offices in the Peyton
icle"
STROUDIncorporated
& COMPANY
'
Pitts. Stock Exch.
N. Y. Stock Exch.
Emanuel, Reel Jen Go.
Change of the firm's name was
COMPANY
Members
Darby With
with the new
previously reported in the "Chron¬
CHAPLIN
Thomas
LANCASTER
,3nn
mann
York
name
& Pn
Co.,
City,
z»lronrforl
+/v
of Bittner,
Edel-i
T
,
as
Rrnarl
of
StrPPt
Npw
1,
was
Jan.
J?*
Pa
jraruitfis arc
R
MpDnwe'l
vj-uiului ir. uciu,
and Conrad
O
mcdowoj. pxlo ^OnraO U.
Frazier, all formerly with Mur-
80 Broad Street, New j0lifl
ro
Volume
THE; COMMERCIAL
Number 4766
169
Now let us - examine the
vantages and disadvantages
;
Why Postal Savings?
State University
Maintaining circumstances
System
is
Postal Savings
changed since
have
inaugurated which makes questionable its existence
was
justified, Dr. Quantius analyzes origin and growth of postal
savings. Contends bank deposit insurance, combined with 'decline "I
now
of immigrants
postal savings useless
Competitor of private banks. Foresees possibility of loss in operratio in population,1 makes
postal savings system of the United States has
This does not mean that there are no advan¬
outlived its usefulness.
tages
for
a postal savings account, nor,
advantages accruing to the nation; but
rather
i t^
in holding
individual
the
possibly, that there
no
are
that in
means
the
become
a
competitor
ana
that this in itself would be a step
and
portance
in
would
im¬
relative
toward
socialism.
hand
the
degree
On
other
the
General
Postmaster'
that the postal savings
the disadvan¬ system
would help the private
educating people of
tages
of
the banks by
moderate means to habits of thrift
postal savings
and that existing banks already
system to the
had the advantages of established
nation
as
a
higher interest rates,
whole
offset clientele,
the
advan¬ higher limits or no limits on the
size of the deposit, and a close
tages.
=•'<-
of' seriousness
Of
course
it
realized
is
that whenevei
_
Frances
need
one
.
Quant,us
some
w g
This
discussion
strued
is
not
n „
Q
government
has an argument on
one
that
says
,
function,
his .hands.
be
to
argued
any
of
function
whatever type.
Willingness
t
part of the
withdraw
from
the
on
government
to
such activities is
uncommon
an
pnenomenon, however. Many gov¬
ernment
departments
subdivisions
at
the
ized
time
with
ment
that they
the
heads
minded
become
also
and
notorious
are
that
result
their
and
quite
are
organ¬
depart
expansioninterest
vested
in many positions develops.
For purposes of evaluation, let
look briefly into the back
us
of the postal savings sys¬
ground
tem in this
country to observe the
character of the reasons urged for
its. inauguration and the condi
tions surrounding its growth,
v
Postal
savings
systems
were
in
common
the
Europe
United
States
long
before
followed
suit,
but after 40 years of agitation the
United States postal savings sys¬
tem
the
inaugurated in 1910
was
over
protest of the American Bank¬
ers'
Association.
in
pose
to
was
bank
chief
The
pur¬
establishing the system
provide adequate savings
facilities
in
order
to
en¬
habits
of
economy
and
courage
thrift among
the middle and lower
brackets
and
especially
income
the foreign born who were
of the banks.
This, it,
was hoped, would discourage the
hoarding of coins and currency
among
distrustful
at
home.
addition
In
it
was
al¬
leged that in the South and West
in particular existing banking fa
cilities ! were inadequate, poorly
distributed, and unsafe so that
government
participation
was
issue
at
time
the
of
American
the
Association
that
the
government
Distribution of Postal
per
v
v
War
period
I
not send funds
vhen aliens could
This was followed by
a
period of more or less inactiv¬
ity. Then,came a phase of growth
;o
in
a;
Europe.
At
there
present
are
East
North
West
terest.
_
paying.
arranged to avoid ad¬
criticism of the government
was
verse
with
competition with
The postal savings
regard to
the
banks.
rate
has
remained
at 2%,
frozen
limits
on
Then, too, there are no
withdrawals, while de¬
low as $1 are accepted.
paid quarterly.
As to the disadvantages, no ef¬
posits
as
postal savings
departments to establish personal
contact
with
depositors.
This
fort is made by the
that credit references can¬
means
not be obtained.
Also
checking
a
be
must
elsewhere,
held
must
money
obtained from
Furthermore,
other source.
some
there
is
limit on
a
the maximum size of a deposit and
interest is not compounded
auto¬
matically. This means that the de-
have it
justification
any
In
the
and
1939
between
the
outside
of
owned
three-fourths
United
securities.
.15%
is on deposit in banks.
Recently
a
bill to change the 2% interest
rate
accustomed
.1
was
passed
over
to any bill to
maximum balance for
given
ordinary banks. Secondly, in this
day the postal savings depart¬
ments are
competing more di¬
rectly with the banks since the
2%
interest rate during recent
years
has been better in most
than could be obtained else¬
cases
where for a similar deposit.
At
the
same
time
deposits in the
postal savings system are not be¬
ing redeposited with banks.
In
addition only 20% of the postal
depository
savings
in
located
miles
towns
other
of
offices
are
banks.
without
towns
of these
All
are
towns
&
Co.,
111.
,V.\;.
Utah Power & Light—Write for
attention
data
H. Burton—
of R.
Burton
L.
Edward
&
Co.,
South Marin Street, Salt Lake
1, Utah.
"
:: ;,V;
•
v
Winters
,.
cial
there
Corp.—
Analysis—C. E. Unterberg & Co.,
61 Broadway, New York 6, N. Y.
Also available is an analysis of
Miles Shoes, Inc.
Yuba
Gold Fields.
Consolidated
-Analysis—Stone
within 15
Russ
Calif.
& Youngberg,
San Francisco 4,
Building,
;
:: :
most commer¬
savings depart¬
Thirdly, whereas in 1910
no
deposit insurance
was
program,
surance
the
have
banks
ments.
the Federal Deposit In¬
has
Corporation
made
banks as strong as
postal savings departments.
And, finally, it is conceivable that
there may come a day when the
postal savings system Will operate
at
BOSTON, MASS,.—Parker Har¬
become associated with
ordinary
the
a^oss due to
inabilitys to
government
earn
investment
enoughs through
2lA%
if*
•Jfcr1
bonds
and
in
through
rison has
L.
R.
Day
shire Street,
York
and
& Co., Ill Devon¬
members of the New
.Stock
Boston
mature
business
the
under
firm
name
Parker Harrison & Co.
:;je'
guaranteed
crease
to
Today there
Certificates are to be issued under an Agreement dated January 1, 1949 which
provides for the issuance of $6,400,000 aggregate principal amount of certificates
to be secured by new standard-gauge railroad equipment estimated to cost ap¬
proximately $8,034,250.
change the
depositor,
an
MATURITIES
in¬
show
the
number
per
varies
average
1954
2.25
1.80
Jan. 1955
1.90
July 1955
2.30
2.35
1.75
1.50
1.60
2.40
2.425
Jan. 1957
July 1957
Jan. 1958
July 1958
Jan. 1959
2.00
2.45
2.475
2.50
2.50
of
1,000 of the popula¬
greatly as does the
principal per depositor.
depos'tors
tion
that
1954
2.125
2.20
Jan.
July
Jan.
)uly
2.375%
Jan. 1956
July 1956
2.05%
1953
1.40%
Jan.1951
Tuly 1951
Jan.1952
July 1952
Studies of the distribu¬
deposits by geographical
AND YIELDS
1953
July 1949
Jan.1950
July 1950
4,196,517 depositors, the average
principal
per
depositor
being
of
principal and dividends by endorsement
These
approximately
are
payment oj
by Illinois Central Railroad Company
maximum of $5,000.
a
as to
1959, inclusive
a
recommended
has
ment
;
Equipment Trust Certificates
$320,000 semi-annually from July 1, 1949 to January 1,
To be unconditionally
Certificates are subject to authorization by the Interstate Commerce Commission.
Offering Circular may be obtained in any state in which this announcement is circulatedfrom only
such of the undersigned and other dealers as may lawfully offer these securities in such state.
Issuance and sale of these
The
This is shown in the accompany¬
ing table.
HALSEY, STUART & CO. INC.
Average Principal
PRESSPRICH & CO.
$833.41
599.39
A"'—
873.14
R. W.
'
INCORPORATED
L. F. ROTHSCHILD &.
OTIS & CO.
(INCORPORATED)
HORNBLOWER & WEEKS
A. G. BECKER & CO.
pe r TVod itor
CO.
Fl RST OF MICHIGAN CORPORATION
.
FREEMAN &
COMPANY
THE ILLINOIS COMPANY
WM. E. POLLOCK & CO., INC.
1.043.84
;
44
861.57
908.78
31
Report of the Postal Savings System, 1947,
•
811.27
p.
10.
r>itpr1
Tnnuarv
1
1949
finiHvPCertificates
""TJJjlAlP
"
will be
ue
i
nrior to
January 5, 1949
(January 1 and July 1) payable in New York, N. Y. De-registerable as to principal. Not
us. Certificates in definitive form
with dividend warrants attached, in the denomination of $1,000,
maturity. These Certificates are offered when, as and if received by
delivered at the
been
Principal and semi-annual dividends
office of Halsey, Stuart & Co. Inc., 35 Wall Street, New York 5, N. Y. The information contained
iwm spurges, considered reliable and, while not guaranteed as to completeness or
accuracy, we believe it to be correct as of this date.
carefully compiled
.
■
Ex¬
changes^
Mr. Harrison formerly
conducted
his
own
investment
(Philadelphia Plan)
To
160
City
■
Crampton
&
t
*•> i
209
Street, Chicago 4,
which
do
Fuller
A.
South La Salle
have banks. Today
although the Post Office Depart¬
Mountain
of
Time, Incorporated—Analysis—
William
Equipment Trust, Series BB
f",
each. time.
870.14
_
use
Broadway, New York 7, N. Y.
TH'
Committee approval has not been
781.05
_
the
Stromberg-Carlson Co.—Analy¬
sis—Amott, Baker & Co., Inc., 150
or
23
Source:
and
all
the
to
Warner
and
Illinois Central
before the Senate twice
came
and
$5,648,290.33
West South Central
Territorial
States
of
Stetson
B.
Company.
the
deposits; analysis of new accounts,
however, shows that the alien de¬
positors have been replaced by
599.82
_____
con¬
(Continued from page 8)
John
on
$6,400,000
the latest figures available,
the postal savings system holds
depositors' balances of approxi¬
mately $3,428,000,000,
of which
94.16% is invested in government
15
Pacific
Recommendations
ing to
41
______
_
its
place
was
established
chiefly
foreign born, and in 1916,
example, 60% of the total
number of depositors were born
Accord¬
1946.
33
South
for
first
for
up
percentagewise,
the volume of
postal savings accounts advanced
more rapidly than did other types
of savings accounts in the period
Central
South
East
not there
or
system:
While with¬
compounded.
tempting to attract new business.
Yet
studies
show
that,
viewed
45
_
_
Dealer-Broker
changed
have
to whether
as
tinuance.
in at¬
24
_
Central
were
is
Office
institutions, the Post
ings
has not been overly active
13
Atlantic
This
banks
-
of $2,500 at 2% in¬
Compared to other sav¬
1,000 of the Population
Central
North
[Circumstances
Savings Deposits and Average Principal
England
sideration^
to a maximum
Number cf Depositors per
New
that the
Depositor by Geographical Zones
Geographical Division
Middle Atlantic
rate
cover
as
account.
an
classes
an
to
to
as
added impetus.
In 1910
at the inauguration of the
system
the 2% rate was well below the
gave
funds
approxi¬
deposits
postal-savings
disadvantages
are
of
11
deposi¬
operating expenses.
These points deserve serious con¬
well
advantages in maintaining
as
mately 8,000 post offices through¬
out the United States ready to ac¬
cept
as
for the
Also,
thve latfe Twenties followed by Jpq&tor must withdraw and redeincrease in the rate of posit his own interest in orcjeif'to
growth during the two emergensies of the depression and of the
World War II period. -
there
that
well
rapid
zones
Bankers'
World
the
tors
since there was
a lack of faith in the banks, postal
savings
accounts
gained popu¬
larity.
During World War II the
2% interest rate paid on postal
savings was above the rates gen¬
erally paid by the commercial
and mutual savings banks."t This
time.
be borrowed else¬
where, and, in general, miscella¬
neous
banking services must be
during
interest payments
the
account
In
whether
tion
de¬
redeposit
the
arises
;spite of banker opposition
:he postal savings system became
firmly
established
and
experi¬
enced an early period of growth
>;
was
or
not private initiative
furnishing adequate, banking
facilities, and it was the conten¬
be
the
have
of the confidence of
the people in the postal savings
system.
No Federal deposit in¬
surance scheme
was
operating at
because
mately.
tion
was
they would
the name of the gov¬
ernment.
Thus, the private banks
would receive
the funds ulti¬
posited in
$808.47.
needed.
The
where
oanks
time,
not
do
authority to write checks so that
unless the account is opened at
the main post office, inconven¬
ience is experienced. Thus we see
closed. The number of
Interest is
advocating that the gov¬
stay out of business in
general, nor of the banking busi¬
ness ' in
particular.
That is
a
separate
question. ! Instead,
the
viewpoint held here is that the
relatively ! useless
we
any
made at
bffices
post
considerably since the system was
inaugurated,
and
the
question
provided for under which the
government would transfer the
funds it received to the private
con¬
abolish
branch
depositors increased from 466,000
in 1930 tb 25342,000 in 1933 main¬
however.
as
should
were
personal advisory relationship to
the customer.
Also it was pointed
out that an arrangement could be
ernment
government
banks
ly
erating Postal Savings System.
The need for the
drawals may be
ex-:
find
a postal
savings account was the only one
~
who
could
get cash while the
Holiday of the Thirties,
that the depositor with
(67)
ad¬
perienced by the depositors in re¬
cent
times;
Looking backward
as
far as the National Banking
By FRANCES QUANTIUS, PH. D.
Assistant Professor of Economics, Ohio
CHRONICLE
FINANCIAL
&
.
■
1
'
of
12
others in the above table.
all of the banks in
their holdings./
Bank and Insurance Stocks
Thursday, January 6, 1949
CHRONICLE
FINANCIAL
&
COMMERCIAL
THE
(68)
In the case of U. S. Government Securities,
the tabulation showed
considerable decline in
a
,'»>
,-,
•;„>
The
,
liquidation of governments was largely the result of higher
reserve requirements and the demand for a larger volume of loans.
These conditions, along with firmer interest rates on both loans and
investments, enabled banks generally to offset the loss of income as
a result of reduced
earning assets.
The
By H. E. JOHNSON
This Week—Bank Stocks
,
i
,
■
number of stockholders'
a
annual meetings scheduled over
Stock Market Discounted
detailed earnings state¬
complete report on the
will be made at a later date when more complete
various banks is obtainable.
results of last year
information
the
on
By DEAN WITTER
Senior
published operating earnings
Such results compare favorably with previous periods
fairly good indication of what to expect from the reports
Net Op. Earns.
1947
1
1947
1948
v
Trust $5.19 $4.72
3.37
6.50
New York Trust
1.26
1.36
.
City
National
83.99 87.65
Irving Trust
w.
'
Manufacturers
Manhattan. $2.65 $2.06
of
First National
'
:
3.25
6.54
First National Bank, the above figures
do not include profits or losses from security transactions.
Such
profits or losses are usually reported separately and, in some cases,
are charged directly to reserves.
In the case of National City, the
totals include the earnings of City Bank Farmers Trust Company.;
I
With the exception of -the
:./ Of the six banks which have reported operating results, four
higher and two are fractionally lower than for 1947. In view of
the circumstances under which banks have had to operate over the
considered very satisfactory.
; As yet there have been only scattered reports on security profits
However, because of conditions existing within the securi¬
ties market, profits on such transactions are likely to be considerably
smaller than in the past two years. During the peri^I of declining
yields such profits were abnormally high and recent adjustments in
;
this field
considered
are
conditions.
return to more normal
a
earnings figures may show only small varia¬
tions in year to year comparisons, there have been significant changes
in the composition of certain assets and liabilities :pf some of the
institutions. The following table shows three of the principal items
While the operating
the
of condition issued by 12 of
.mww
H;;
leading banks in New York City.
in
statements
31
December
the
Deposits
1947
^U. S. Govt. Securs.
>tȣJl9.f$J~"7
1947
Discounts"
Loans &
V
field.
values
Walston Hoffman Takes
Over Maxwell Marshall
SAN
FRANCISCO,
stocks is inconsist¬
of
not a speculator.
Walston, Hoffman & Goodwin,
I do
factors
fully discounted by the stock
are
are
likelihood of
a
drastic decline
prices such as occurred in 1920 and I know that present
not at all analogous to those of 1929. I think that wages
Frank
O.
be any serious unem¬
trying to feed the world and there will not
ployment as long as our rearmament program continues and
government spending luns at more than $40,000,000,000 per year.
total
One thing is sure, and that is that we can't afford another great
depression, k
;
y.;:
v
■
Apart from my belief that the present value of common stocks
low in relationship to underlying values and earn¬
is inconsistently
money
became available.
$426,782
"$344,706
$360^16
who was
623,056
' ,44.1,902
"484,535
of this
*2L-
1,400,785
1,492,340
425,538
411,395 ;-%590,52fc
Chemical Bank & Trust
1,435,190
1,284,087
560,579
449,401
'#1&567
420,749
772,123
776,079
80,285
79,963
*461,605
508.552
Corn
Exchange
First
National
Irving
523,323
Public
1,034,441
433,579
-959,.611
*
1,072,860
429,049
377,810 "395,088
475,483
2,320,057
605,912
484,036
970,586
1,173,607
4,643,112
4,874,418
1,422,291
1,215,660
1,656,863
2,131,035
642,399
729,182
256,427
241,716
544,925
140,307
124,181
Trust
515,991
National
.:^U7rl9at:i ; 296,112
310,972
248,763
Although all of the banks have been subject to the.same general
factors and have followed the same general trends, thero have been
a
number of
exceptions within the group.
am
an
a
optimist and I am proud of it. I never saw a pessimist
who had any fun living. I believe in the future
success or
capitalistic.
country and I think that it will remain
J
;'
William
.V
Rockford Securities Dealers Association
1,255,329
851,405
1,113,182
Trust..
City
York
New
90,510 "" *3.25,694
110,333
2,451,659
I
718,667
2,223,383
Trust
Manufacturers
National
465,321
2,330,237
Trust
Guaranty
-
Bank of Marfhattan, Chem¬
Sponsors Visit to Machine Tool Plant
with
outstanding as compared
loans
-v.
•
firms
on
and
Long
Maxwell, Marshall & Co. are be¬
ing consolidated with the already
established Walston, Hoffman &
Goodwin offices in those
cities.
Co., partners
Maxwell, Marshall
personnel remaining with the
and
NEW JERSEY
earnings for
Bulletin
firm's
1948
trading
vision.
Members New York Stock Exchange
120 BROADWAY, NEW YORK
Telephone:
Bell
(L.
A.
BArclay
Established
5, N. Y.
R.
1891
H.
N. Y. Phone—REctor 2-4383
WHOLESALE MARKETS IN
-
Shown in the
A. Noyes &
ueyer&co.
INCORPORATED
WHITEHALL
2-O650
3-0782
FRANKLIN
CLEVELAND
LOS
15
Schofie Id Building
SUPERIOR
ANGELES
MICHIGAN
7644
PRIVATE WIRE SYSTEM CONNECTING
<
PHILADELPHIA,
TELEPHONES TO
Providence.
2837
:
:
ST. LOUIS,
Hartford, Enterprise 6011
Enterprise
7008
FRANCISCO
YUKON
4
6-2332
SF-573
NEW YORK, BOSTON, CHICAGO,
LOS ANGELES,
SAN FRANCISCO
Portland, Enterprise 7008
Detroit, Enterprise OUfifi
Heath, Heath & Co.,
of
a
newly devel¬
Hy-Jector, molding machine
thermosetting plastics.
oped
Russ Building
LA-1086
CV-394
CLEVELAND.
14
210 W. Seventh Street
will
Wittich
of
Wilbur
manager
and
continue
in New
as
Pile
ment.
The
merged firm has member¬
ships in the New York, Los An¬
geles and San Francisco stock ex¬
changes and is an associate mem¬
ber of the New York Curb Ex¬
change.
wire
Private
system
connects all principal offices.
»
Rockford.
for
SAN
L.
demonstration
7535
CG-105
NY 1-2875
BS-297
4
221 S. LaSalle Street
67 Wall Street
10 Post Office Square
HUBBARD
CHICAGO
NEW YORK 5
John Arthur, David
Church, Brailsford & Co., Chicago;
photograph are Walter Aim and
Co., Chicago; Garrett
Elgin; J. D. King, A1 Surprise, R. G.
Olson and A. H. Anderson, King, Olson & Surprise, Rockford; George
F. Jilbert and Paul E. Conrads, Paul E. Conrads & Co., Rockford;
Jefferson Hoshor, Adams & Co., Chicago; A. J.. Cavanaugh and Jerome
Marquardt, Wm. A. Fuller & Co., Chicago; Boyd J. Easton, Rockford;
and S. A. Sandeen and James M. Hancock, S. A. Sandeen & Co.,
David
9
office,
gast will be floor trader, Los An¬
geles Stock Exchange, and Ray¬
mond A. Passavant, Jr., will be a
member of the
trading depart¬
BANK and INSURANCE STOCKS
BOSTON
resident
as
syndicate manager. Roger
will be manager of the
research
department,
Southern
California division, Lee E. Arbo-
J.
MArket 3-3430
Teletype—NY 1-1248-49
Gibbs, Manager Trading Dept.)
Wil¬
Southern California di¬
H.
Helier will
Pasadena
York
18 Clinton St., Newark 2, N.
7-3500
the
Rippel & Co.
and
Thomas
continue
J. S.
Laird, Bissell & Meeds
account,
Wells, who will be sales
S.
manager,
request
on
executive
capacities include Oliver B. Scott,
who
will
be
in charge of the
liam
FOR
in
businesses
merged
SECURITIES
BANK STOCKS
and
Pacific
the
The Los Angeles, New
Beach offices of
York City.
Preliminary indicated
19 NEW YORK CITY
.•V \
•
the largest brokerage
of
investment
York
increase by the
an
Wells
S.
;
Coast, Frank O. Maxwell has been
admitted to general partnership in
ROCKFORD, ILL.—The Rockford Securities Dealers Association
the combined firm.
together with investment bankers from Chicago and Northern Illinois
The merger adds three new of¬
and representatives of Rockford banks and firms, were guests of the
in
Southern
California—
Rockford Machine Tool Co. at their plant on Dec. 17 to watch a fices
Beverly Hills, Pasadena and San
Diego—making a total of 17 of¬
fices in California and one in New
National and Irving were all successful in
showing larger deposits than a year ago against a general decline bv
most other banks. At the same time, Bankers Trust showed a small
in
•
effective Dec. 31, thereby forming
one
ical Bank & Trust, First
decline
Oliver B. Scott
Maxwell
going to be artificially sustained and if this is done the value of
everything else must be correspondingly stabilized. There certainly
can't be a very drastic decline in commodity prices as long as we are
are
571,153
Hanover
Mar¬
merged with that
y^-v vyy,-
:
I do not think that there is any
market.
conditions
$455,974
Central
was
CALIF.—
Maxwell,
market values will come into balance with
I think that all of these
1,483,951
_
of
business
The
and
'tive taxation.
1,325,472
Trust
Sandeen, of
Co., was in
thinks that we are rapidly shifting from a seller's
buyer's market and that corporations: are threatened with puni^
a
Manhattan.. $1,180,772 $1,14;0,003
of
Bankers
A.
&
Everj'one
;
to
1947
Bank
S.
present time I think these are out of balance.
1948
1948
:
Mr.
Sandeen
A/
ings, it would seem that sound investment policy would dictate the
investment of a large portion of one's assets in equities when and as
'
(000's Omitted)
•.
through the coming year to study
new
developments in the indus¬
established normal earning power. At the
The stocks of many
good companies can be bought at very much less than book values
which disregard the value of trade names, good will and an estab¬
lished and well organized business.; Book values are usually very
much less than replacement values. Market values in many instances
are only four or five or six times earnings for the last three .years.
underlying
in commodity
for 1948.
Dealers
planning
further meetings of this character
& Co.
common
My viewpoint is that of an investor and
think that in the long run
are
past .year, these results are
value of
is
ently low in relationship to underlying values and earnings.
Per Share
Per Share
Net Op. Earns.
-'1948
Bank
Mr. Witter contends present
follow.
which will
which
shall & Co.
for last year.
and give a
Partner, Dean Witter
Members, New York Stock Exchange
several banks have
Nevertheless,
Association,
sponsored by
was
Securities
charge of arrangements.
Unfavorable Factors in
several weeks, it is expected that
ments will soon be available.
Therefore, a
meeting
Rockford
S.
year.
With
the
trial
Although most of the large New York City banks have published
year-end statements of their condition during the current week, few
of them have as yet issued reports of operating results for the past
the next
machine tools. Mr. Harry B. New¬
ton is President of the company.
This
machine
has
been
com¬
engineered by the Rock¬
Machine Tool Co. after four
pletely
ford
of
experimentation
and
testing and is expected to go into
full
production.
This RockfoH
Hy-Jector molding machine is de¬
signed' to "gicrggsr iCTTOctttm; up
years
to
400%
over
that which can be
employing standard
methods.
Every
step in the molding cycle, from
measuring the powder to ejecting
the finish part is performed au¬
tomatically by this machine.
All
manual operations are eliminated.
obtained
by
equipment
and
Rockford Machine Tool Co. also
is
the
in the
manufacturer
United States of hydraulic
outstanding
Gerald H. MayVilli
G. A. Alberts & Go.
Gerald
J.
G.
the
H.
White
option
come
berts
May,
&
department,
associated
&
formerly with
in charge of
Co.
with
C.
has. be¬
A.
Al¬
Co., 70 Wall Street, New
York City.
Volume
169
Number 4766
FINANCIAL
&
COMMERCIAL
THE
Edward
CHRONICLE
Austin
H. Hentz & Co* in
Forms Own Inv, Firm
The
MASS.—Edward
United Light & Railways on Dec. 27 filed with the SEC a
pro¬
posal to sell 634,667 shares of American Light & Traction at $12 to
its
own
stockholders
for five.
one
reduce the
of
record
Jan.
about
or
on
24, at the rate of
be applied to
The estimated $7,600,000 proceeds would
$12,250,000 bank loan.
The remaining block of stock will
probably be sold sometime in the spring, and United also plans to sell
$25 million bonds. Funds from these sales (and from disposal of
Detroit Edison and Madison Gas &
Electric, received from American)
will be used to retire the
remaining bank loan and the three classes
of
preferred
(around
stock.
Despite these drastic changes,
$3 level) and dividends (about $1.45)
the
share earnings
expected to
are
continue substantially unchanged. The stock sells around 21.
American Light & Traction has now distributed or sold its
entire holdings of Detroit Edison and Madison Gas & Electric. Witfi
cash
from
Nov.
bank
a
11-Dec.
6
will
company
loan, all preferred stock tendered
retired
(no
continue
in
was
.-now
order
court
existence
being
at
33
during
The
Ackley
has
Ackley &
State
W.
become
formed
BOSTON,
United Light & Railways—American Light & Traction
Chronicle)
Financial
W.
York
Edward
H.
Co. with offices at 30
Street,
to
in
engage
a
Cgo*
CHICAGO, ILL.—Ben Jaffe has
-
to
associated
Stock
Hentz &
with
the
Exchange
firm
B.
of
Co., in their Chicago
Mr. Jaffe
formerly
Co.
&
to
-
with Link,
was
a
D.
Stock
ing, to conduct
Gorman & Co.
a
partner in Robinson, Rohrbaugh
a
1
*
"
.
■
•
& Lukens.
•
(Special
to
The
Truglio
staff of
Financial
has
been
Alfred
Chronicle)
COLO.—Nicholas
DENVER,
added
to
1
Alfred A. Stern in NY
With Stone, Moore & Co.
A.
Abraham
F.
Co.,
has
opened
at
York
City, to engage in
National Bank Building.
Blizzard in New Location
Stern, formerly with
&
fices
the
Stone, Moore & Co., U. S.
30
Church
Street,
a
Herbert
of¬
fices
securi¬
ties business.
H.
the
nounce
New
to
new
Chestnut
Blizzard
removal
THE
•
to
sell
CHASE
NATIONAL BANK
in its proposal
Insurance Com¬
sources
Metropolitan Life
pany and
the Mutual Life Insurance
Company—a stockholder group
(said to have "substantial holdings" in Panhandle Eastern
Pipeline),
Allied Chemical &
Dye, and Otis &
OF
Company. Panhandle Eastern
Michigan Consolidated, principal subsidiary of Amer¬
ican Light &
Traction, and hence is a competitor of MichiganWisconsin Pipeline. It has
consistently opposed the pipe line project
supplies
THE
NEW YORK
OF
CITY
gas to
before the Federal Power Commission and
in the courts.
of Allied Chemical was
apparently due
STATEMENT OF CONDITION, DECEMBER 31, 1948
The oppo¬
sition
merely to doubt re¬
garding the ability of American to retire its preferred stock. Otis &
Company opposed the deal as part of their campaign to defend the
practice of competitive bidding.
tThe SEC brushed aside these objections and
RESOURCES
approved the sale
of the bonds.
Cash and Due from Eanks
In its
findings and opinion dated Oct. 28 the Commis¬
approved the initial capital structure of the new
pipe line
company, 75% debt and 25% common stock
equity.- While such a
debt ratio seems high it is in line with
the financing of other pipe
line projects approved
by the Federal Power Commission.
Estimated earnings of the new
pipe line company for 1950-52
were shown
in Appendix B of the SEC release as
follows:
.
$1,415,325,554.27
.
sion
.1950
Gross
Net
Revenues
State and
Operating Income,.
Stock
Municipal Securities
2,723,100
5,429,000
.%[:l
L.
&
4,437,000
275,000
1,158,750
2,317,500
Dividends
\p.;1950
T.
Earnings Equity
Over the
decade
quite
1938-47
steady
•
'&■
195L '—'
.
$1.10
Customers'
-
.
.
-
\
;•
"41
•«
.42
However, due to
terim
V.'-V
'■
v
V:
;'
'
9,198,644.19
•-
»
«
•;-
M
-
•
! ' ;
,
J
*
1
*•
21,345,532.31
7,950,000.00
.
'
}
\
■■
Banking Houses
?
,
.f
.
.
30,232,188.73
.
.84
Other Assets
3,638,048.73
$4,631,471,581.47
and
a
combination
LIABILITIES
of
factors, in¬
sharply, amounting in the 12
earnings in 1948 dropped very
ended Sept. 30 to
only 62c a share compared with $1.73 in
previous 12 months. During 1948 the
company paid six dividends,
four being quarterly distributions of
Detroit Edison stock, one a dis¬
months
,
1,482,834,293.72
Acceptance Liability
Light & Traction's earnings
$1.84.
Parent earnings
$1.61 and the $1.20 dividend rate
$1.40
,
28,772,864.03
American
between
(;i,
'29,644,483.89
120,452,314.28
.
Stock of Federal Reserve Bank
$1.60
.10
fluctuated only between
$1.23 and
remained a fixture.1
1} <•
.
Mortgages
1952
$0.27
Dividends Received by American
remained
.
•1,482,077,657.32
■
<
7,117,800
3,053,400
•
American
.
'
*
Accrued Interest Receivable
Expressed as per share figures on the stock of American Light
& Traction, these figures work out as
follows (assuming .that Amer¬
ican Light continues to
provide all equity capital):
):.Av/.,/A\A ]":f
v;
.
Loans, Discounts and Bankers' Acceptances
1952
739,800
Com.
Obligations
Other Securities
$12,035,300 $20,156,300 $28,690,700
Net Income
Estimated
1951
U» S. Government
Deposits
$4,237,000,105.89
the
tribution
6 5/6
of
cents.
Madison
The
Gas
Detroit
&
Electric, and
Edison
distributions
equalled
the old $1.20 dividend
distribution was worth about
$2.
These
1948
generous
depleted
the
small
maintain
one
rate,
distributions
and
and
the
obviously
cash
a
payment
cash
little
of
Reserve for
G.
Taxes, Interest,
&
E.
relation
to
Acceptances Outstanding
•
•
2,960,000.00
•
10,869,978.67
etc
Other Liabilities
earning power. The management's action in making
disbursement-would seem to indicate a desire to
9,532,215.36
$, 26,404,488.24
Less Amount in Portfolio
cash
the
Payable February 1, 1949
practically
Madison
had
Dividend
2,927,709.99
23,476,778.25'
$1.20 rate.
Earnings in 1949 may improve with better
operating conditions for Michigan Consolidated
Gas; the Company
was badly hurt in 1948
by having to manufacture expensive gas (to
supplement the inadequate supply from Panhandle
Eastern) at a
Reserve for
Contingencies
Capital Funds:
loss of about $6 million.
advantage
This winter the
company may obtain some
pipe line from Detroit to the Austin
Field,
Capital Stock.
.
,
'
.
$111,000,000.00
Surplus.
from the
where gas stored last summer can now
be used to help meet peak
demands during the winter.
The company applied on, Nov. 12 for
an increase in
gas rates for about 30% of its
customers, to be effective
until natural gas is obtained.
.
19,868,923.01
......
.
154,000,000.00
.
.
Undivided Profits
62,763,580.29
•
In 1947 Michigan Consolidated Gas contributed
nearly $3 million
in equity income and
$1,860,000 in dividends to American Light &
Traction (respectively $1.08 and
$0.67 on American Light stock).
The remaining retained
subsidiary, Milwaukee Gas Light, is a much
smaller contributor;
during 1942-46 its comrbon dividend payments
-<!■
were
equivalent to 13 cents
paid in 1947.
was
a
share
on
327,763,580.29
$4,631,471,581.47
United States Government and other securities carried
American's stock, but nothing
'
secure
While American's
public and
earnings may show some moderate improve¬
ment during
1949, particularly if a rate increase is received
by
Michigan during the year, it is a little dubious whether
American
ran cover its $1.20 dividend
rate.
line will begin to bolster
regular
In
1950
some
returns from the
earnings, and by 1952 (if the above
pipe line estimates work out) earnings should
expand sharply. How¬
Standard & Poor's estimated $3.50 a share for
1952
somewhat optimistic.
appears
The stock is
now
around
18.
v-
-V-
,
deposits and for other
Member Federal
pipe
ever,
trust
t.-<"■■■
joH
aifi'V
i
ii
.
at
$308,699,200.00
purposes as
required
Deposit Insurance Corporation
or
Co.
their
at
an¬
of¬
1421
Street, Philadelphia, Pa.
•
from three
&
of
quarters
gas
phase of the program will be obtained through (1) sale of
$66 million 20-year first 3%% bonds to the Metropolitan Life Insur¬
ance
Company and the Mutual Life (to be taken up in several in¬
stalments) and (2) $22 million equity capital provided by American
Light.
Necessary-; funds have been obtained by American from
cash on hand and from sale of
part of its large holdings of Detroit
Edison (the remainder
having been distributed as dividends during
1948).
;
■ '
company met opposition
the big bond issue to the
is
securities busi-;
the first
The
the
Mr. Rohrbaugh was formerly
ness.
required).
natural
a
of
EJxchange,
offices in the Union Trust Build¬
partner
holding
company, controlling Michigan Consolidated Gas,' Milwaukee Gas
Light and the new Michigan-Wisconsin Pipe Line Company.
The complete pipe line
system from Texas and Oklahoma to
Michigan and Wisconsin will ultimately cost about $102 million
(against an original estimate of around $65 million).
Funds for
as
C.—Austih
member
forming Rohrbaugh and Co. with
in Felder & Jaffe and prior there¬
officer of Elwell
formerly
was
Rohrbaugh,
Washington
office, 120 South La Salle Street.
se¬
Rohrbaugh
WASHINGTON,
New
curities business. Mr. Ackley was
an
13
Ben Jaffe Joins
Ackley Forms
Own Firm in Boston
(Special
(69)
are pledged to
permitted by law;
THE
(70)
14
COMMERCIAL
&. FINANCIAL. CHRONICLE
The Corn Exchange Bank Trust
of
Co.
Jan.
News About Banks
3
of
York
branches in
Bay
75th in its
the election to the office of Vice-
to
be
near
opened
erf New
Co.
Trust
that
announces
on
President
CoU.
Slo^n
•
Bankers
14th Street, is
Jan. 7 by the
Union
Souare Savings Bank of
New York. The branch will serve
the residents of the-Stuyvesant
Town area.
R. H. Brownell, Pres¬
ident of the bank, announced that
Albert Sturcke, Secretary, will be
in. charge of the new branch, with
Putnam Browne as his Assistant.
Union Square Savings Bank has
been serving the community itself
since 1867, when it moved to its
present 1 quarters
at 20
Union
Square from 516 Broadway. The
bank was. first incorporated in
First Avenue,
S.
245
at
office
branch
new
the
in its
1.543;948,522 1,510,458,635
1,400,785,092 1,367,452,458
Cash,, and
W.
from
U.
S.
eral
account
reserve
of
as
York, announced
that
30
Joseph
Kenneth
Dec.
discounted "
I
Undiv'ed
the
that
of
adoption
method
the
providing
of
.
by
the
S.
curity
t
Rer.tor K. Fox
A.
del
Bank
Hanover
Trust Company of New
C.
*
R.
Parker,
Jr.
Depart¬
to
York, will
CITY BANK
24,260,705
U.' *S. iGovt.
izes
rank
L_—
profits—
been
with
associated
-Z
and
THE
CHASE
NATIONAL
Walter F., Thomas
Turnbull
A.
j.
'
BANK
A'-,
OF
i
JV--V;
"•
Total
2,330,236,749
2,344.107,496
Cash
Govt,
S.
Govt,
S.
Loans
THE
Municipal Securities
Stock of Federal Reserve Bank
Mortgages
.
Customers'
.
s,
...
.
.
.
.
4,602,996,41':
MANUFACTURERS
•//•/A//
1,415,325,554 1,334,054,54:
>'' A/A.
■,
se-
./A
.
&
disc'ts
1,482,834,294
1,449.812,201
Deposits
profits
62,763,580
P.
MORGAN
1
Cash
60.076,02-
CO., INC.,
&
' ' V:'/v'.
■
*'
NEW YORK
A
Deposits
Cash and
banks
U.
due
President of Rector K. Fox, C. R.
19,412,875
LIABILITIES
TRUST
.
mitnl resources—A
Cash
Interest, etc..
,1,648,135.20
....
and due
S.
Acceptances
on
rity
1,246,085.99
|
Other Liabilities
*
31,'48
-^4
Securities carried at $9,270,142.20 in the above statement
66,937,245
——_
37.944,032
profits—
1,679,226
■
rv'V
■..'
■
MIDLAND
TRUST
NEW
OF
(/■'
-Z
and
.
HERBERT
DAVID G.BAIRD
Vice President, Marsh
JAMES G.
American Machine &
BLAINE, President
YORK
U.
Sept. 30,'48
Govt,
S.
305,594,750 294,716,204
' II.
ED WA R D
of the Hoard,
Corp.'
General Reinsurance
Undivided
Executive Committee
CHARLES II. DIEFENDORF
President, The Marine Trust
Company of Buffalo
4,683,198
#
*
BROTHERS
Dec.
■
HARRIMAN
Secretary
'•
223,152,803
217,738,551
„190,668,755
.
;v
CLOUD
Carrier
Brophy,
Barringer & Brooks
holdings——;
50,535,865
50 007.600
49,136,211
13,925,284
13,905,284
surplus.
,
from
S. WRIGHT
YORK
1,308,223
''
'
1,477,246,545
3,375,886
/
'
"
'' /
■
"
v
*.,
,
V; A-'*v
3,372,200
NEW
23,728,109
24,556,347
7,717,544
7,510,334
10,530,063
Loins & discounts, z
5,989,714
Surp. & undivided
profits
853,482
11,839,252
from
and due
S.
—
—
Govt.
&
mu¬
GRACE
5,753,468
STOCKS
,
,
!'
.•■'
'/
-
143 Liberty Street
Total
'
BANK,
NEW
YORK
Dec/31/48 Sept. 30/48
111,170,456 104,507.390
_—1
99,072,287 93,514,890
resources^.—"
Deposits
Cash
Park Ave. at 46th Street
and
from
due
Kenney & Powell
St., New York 4, N.Y.
Teletype NY 1-528
U.
Govt."'
S.
secu-
and bills .dis-
counted
Surplus
vided
—'
and
A A"
bills
I'J
*
y'Z:A
EXCHANGE
CORN
z A
Z:,
* L, 'V
/•'
■
TRUST
BANK
/
/
•/:.'/Dec.
31/48 Sept; 30/43
819,960,048 800,176J814
-/—A-. .772,123,408 752,547,677
Deposits
Cash
■
U.
S.
secu-
•.
holdings—.
bills dis-
•counted
profits/.'
A'
•'
•
■
,
__L—/A
Undivided
.
252,158,167 237,680,728
'
•/"'
•
461,604,740 460,851,942
A /
' A :;
',?/
' 80.285,297
73,217,002
5,036,864
4,792,204
—
Govt,
rity
A A "
due from
and
/ 'banks
A"
*
*
'//
31,657,224
"ENRY
SCHRODER
A
CORPORATION,
/'./'/ C'„
'
,
61,559,574
52,900,725
due from
7,354,003
5,904,243
42,298,483
__
Govt,
S.
rity
"
A,
$79,879,552 $73,445,074
Deposits'.:.—/—'banks
NEW YORK
/,?i Dec. 31/48 Sept. 30/48
Total resources./..
Cash arid
BANK 'NG
34,834,930
13,501,748
14,266,239
secu¬
holdings—__
Loans and bills dis-
.
45,362,231: 43,346,859
.
,
,.,.
25,533,089
21.832,583
4,219,295
4,142,166
.v.
rnZe.d
Surplus
vided
and
A_.
•
undi¬
profits
3,287,087
3,281,932
undK
profits
.
Total- .resources-;,/_
U.
>
33,648,410
my holdings-*.—
.Loans
365,209,025
415,567,186
*
<£
I...
453,763,340
se-
:''//
'
.
847,383
^
NATIONAL
.
560,799,246
520,865,372
profitsw,?;-10,727,059 ;
10,340,966
Loans and
'
.
YORK
31/48 -Sept. 30,'43
$25,586,292 $26,415,624
.
.
,
Dec.
Total resources..-..
.
COMPANY, NEW YORK
TRUST COMPANY,
CLINTON
and
#
«
«
.
A.
hold'gs
Undiv'ed
;
1,709,900
Z
.
-Z.
1,583,724,456
banks—/ 487,514,147
Govt,
S.
1
WHitehall 3-7220
:
Sept. 30/48
!-■ discounted -/-wZ,
•A
insurance
z
COMPANY
TRUST
&
1,435,190,392 1,324,085,440
/,curity
J.
25 Broad
Ht
31/48
due
and
Loans
.'undivided
—
U.
President, Crum & Forster
Dfyosit Insurance Corporation
BANK
resources-
from
A
18,142,600
<Z'A,/z :'''V ?,<//
banks
Total
Cash
'
and
J. WYATT
110 William Street
sft
r«
Deposits
-.13,804,400
19,672,629
nicipal bd. hold'gs
bank
Curtiss-Wright Corp.
■
Member Federal
15,991,200
;/z
CHEMICAL
:/j; ■> /;,••//
'
secii-
Govt,
holdings^--.
profits
•'
^
-
Battery Place
422,091,915
16,622,900
OF
.
counted
U.
inactive
MAIN OFFICE-120 BROADWAY
17
COMPANY
10,641,206
banks
Vice President,
of the Board,
Marine Trust Co. of Buffalo
128 Chambers Street
.
Surp.
Cash
II. KNOX
HENRY
455,974,434
NEW
NEW, YORK. ;/
Loans and bills dis-
53,359,067
WAMPLER
BURDETTE
Chairman
The
S.
52,849,835
and disct'sA
Corporation
disc'ts
profits
secu¬
Jackson, Nash,
SEYMOUR
Y,;/; - A
Z'T/ZV^./:
rity
President,
G. JACKSON
716,080
TRUST
Deposits
Buffalo, N. Y.
412,013,544
&
33,218,300
•
rity
&
-378,870,250
344,795,970
se¬
*
"34,720,062
from
60,059,969
Govt,
Capital
733,614
*
June(30,'48
■
Loans
.
390,123.248
hold'gs
•
//.zz/'
$38,943,900
187,115,346
banks
.
banks—
Undiv'ed
Y/- -Z
" Dec. 31,'48
;•
U.
Sept/30/48-
Cash and due
Executive Vice President and
President, International Salt Co.
1,287,231",938
1,204,892,688
38,713,394
profits../
banks
31/48
resources—
S.
1,266,915,928
due
Govt,
S.
curity
Lo*t>s
,.
.
.
Sept. 30,'43
31/48
1,180,772,210
—
and
from
59,362,061
Total resources-——$4i>,43d,478
&
A
$
U.
Cash
U.
31,292,575
Deposits
s
,
HARRALS.TENNEY
PAUL II. HUSTED
JOHN
A
COMPANY, NEW YORK
Sullivan & Cromwell
L. FULLER
EDWARD
4,589,717
profits—
BROWN
140,472.812
40,912,898
"
/
YORK
$
resources.
Deposits
..
;
~
•
COMPANY
MANHATTAN
$
Total
Sept. 30/48
j?'/
71,279,810
■
Cash and due
EUSTACE SEL1GMAN
THE
OF
Dec.
secu-/
FULTON
90,162,853
128.527.155 117,620,042
*
Deposits
,
83,051,206
counted
Undivided
Total
BANK
Dec.
holdings
F.POPE
t
43,664.754
secu¬
L ETCIIW O R t H
Executive Committee
"
*
Vice Chairman,
SAMUELS.CONOVER
Chairman,
Govt,
/A
BAYARD
611,254,025
97,836,399
108,706,930
Loans and bills dis¬
Foundry Co,
•.*
TRUST
&
154,983 225
rity holdings—
counted
Kenefick, Cooke, Mitchell,
Bass & Letchworth,
Buffalo
EDGAlt H. BOLES
Chairman
II.LEONARD
.Chairman, Executive Committee,
McLennan, Inc.
'«
50,607,587
319,804,369
rity
436.903,998
571 153,307
54,878.686
disc'ts
profits
YORK
.
from
due
331.239.154
S.
Z1
BANK
Dec. 31,'48
iv
/ ^
banks
Total resources-
U.
V''
-
NEW
Loans and bills dis-
CTOK.S
&
_/—1—— 147,214,223 132,259,'535
Deposits
COMPANY
are
banks
DIKE
OF
resources./—
Total
❖
*
,v
.
36,524,751
1,397,121
Cash and due from
•
Loans
396,394.464
441,901.515
hrld'gs
Undiv'ed
•
COMPANY
Deposits
purposes
439,488,702
se¬
NEW
Cash
pledged
required by law.
-«
banks—
Govt,
S.
curity
A-
■
,
NATIONAL
STERLING
Dec. 31,*48
secure
B.
bills dis¬
counted
MARINE
*
;
24,578,203
8.1,759,647
$
Kardel, Jr.
.;-
28,375,863
305,594,750.19
.
public deposits and for other
liam
from
holdings
Undivided
660,464.92
$331,239,153.51
to
G.
Sept. 30/48
1,523.965.295
Deporifs /^hriA/l 325,471,602 1,323,334,910
Moran, W. A. Johnston, G. Sealv
Sept. 30,'48
secu¬
*
Deposits
U.
Vice-Presidents:
1
„A
Govt,
Loans and
Liability
OF
133,239,094 115,904,705
banks
22,089,717.21'
U.
Provision for Taxes,
COMPANY
165,920.917 147,107,727
Deposits AA,
4,589,717.21 * $
.
Cash;?' indV. due
sistant
19,113,125
NEW YORK
31/43
1 524.962,756
Total- resources.
A.
Newell, Benjamin Spier and Wil¬
12,500,000.00
....
Undivided Profits
nt
TRUST COMPANY,
C. Thompson.
Turnbull and
A;
YORK
Dec.
$ 5,000,000.00
26,633,877
sit
S
from
STATES
NEW
Surplus
BANKERS
The following were appointed As¬
profits—
UNITED
£81.511,934
28,316,109
Dec.
153,818,698 157,123,301
>998,786,738
•
605,911,891
—
profits
Parker, Jr., Walter F. Thomas, J.
*
$331,239,153.51
970,586,261
bills
and
Thompson
178,292,944
discounts
&
Undivided
65,014.94
187,304,814
622,104,419
722,470,035
se¬
hold'gs
*
237,450,540 251,945,524
secu¬
holdings
Loans
C.
A.
2,223,382,873 2,125,898,391
—
discounted
from
__________
Govt,
S.
rity
Govt,
Undiv'ed
543,306,202 557,112,69c
—v
S.
Loans
] v.
Tottil-xeSources__iLf G18,648,847 630,289,467'
664,399.49
Sept. 30/48
2 296,692,498
due
bhnkS—'
curity
Sept* 80,'43
^
V
■—
and
from
/ //
? V
Dec. -31,*43
*"i 7,
1,221,229.90
....
*
V
U.
2,737,187.41
.
Capital
'
Dec. 31/48
Z/.-'"-'.V
$
2,289,778,620
Total resources-
J.
1128,527,154.96
.
COMPANY
TRUST
YORK
NEW
*
72,81-0,547.06
•
65,330,451
<g
4,631,471,581
525,000.00
I
.
.
Acceptances
Accrued Interest Receivable
Other Resources
.
9^7,435,811
66,890,333
Sept. 30,'43-
1,545,408,567
Loans
.2,93.0,48,3.79
.
.;
.
on
1,034,440.981
—
profits
1,432,077,657
83,051,206.01
♦.
.
.
Liability
.....
1,026,486,872
bills
and
Undlv'ed
$108,706,929.95.
......
698,319,091
959,610,638
se¬
holdg's
curity
Obligations.
662.439,641
hold'gs
due
banks—
from
i
banks..
curity
■
4,237,000,106 4,206.943,433
______
and
due
and
discounted
$
resources.
Deposits
U.
Dec. 31,'48
"
j
2,797,782,917
Undiv'ed
/
r■
2,784.677,095
Cash
OF NEW YORK
CITY
;
*\,
;;r-
Sept. 30/43
Den-sits
from
''
OFi
G /./,
.
Total resources.
*
*
COMPANY
vV Dec, 31/43
'
U.
*
9,290,935
NEW,-YORK
''A
Central
'
742,383
9,431,201
<.
TRUST
GUARANTY
■
"
'
88,992,215
794,038
Z.
*
Hanover since 1925.
It E S O U It C E S
81,048,716
bills dis¬
Undivided
special¬
trade
96,953,727
•
counted
Commander
of
Latin-American
in
has
19 IK
23,442,125
secu-
rity holdings—
Loans and
the Order of the Sun from the
Peruvian Government. He
Marine Midland Trust
130,485,243
from the President of Colom¬
the
:
due from
banks
:
and
121,180,871
88,162,629
——
Cash and
•
/;//,v"; ;■ Cf
Dec. 31/48 Sept. 30/48
resources-l—
Deposits
City and at Columbia
TRUST COMPANY
YORK
NEW
JTotal
University. He has been decorated
The
36,329,782
i'*
'.V"'-'-'z
Chile, Argentina, Uru¬
guay and Brazil. A native of Ven¬
ezuela, Mr. del Rio was educated
Mexico
1,349,605,149
41.363,989
FARMEES
i
Peru,
in
1,422,290,652
—
^
by many foreign countries and re¬
CONDITION DECEMBER 31,
bills
profits
&r
bia
Loans and Discounts
Sept. 30/48
ip
hold'gs 1,656,863,022 ,1,584,583,351
and
Undiv'ed
,
leave on Jan. 7 for a business trip
of
.„
I"':' '
•
york
se¬
Rio, Vice-Presi¬
of Central
dent
ment, would result in a decreased
need for a general reserve
ac¬
of New York
Govt,
Loans
Daniel
reserves
Treasury
U.
'
against future loan, losses, as per¬
mitted
•
aca
Other Securities
Dec. 31/48
"rv.
..
'
■'•••.
5,004,737,618 4,912,440,813
Deposits •_•/—— 4,643,112,364 4,567,484,131'
Cash
/,
.and' due
/ ' ' ■
"*t ' '*
I.
from
banks— 1,532,119,431 1,547,041-050
cently received the Cross of Boy-
State and
//
••
;t.
•
bank of new
resources.
discounted
profits.
United States Government
';/; <}'),■.
?>/ y-,-*
'
..
Total,
M.
dents.
new
Merchants Clerks.
Cash and Due from Banks
/A
v
425,538,437 A 428,464,013
29,550,435 V 28,104,456
w
—
:
,
to
1848, and until 1905 was known as
the Institution for the Savings of
OF
\r
590,524,777 ' " 560,586,485
,,
•;
profits
s
421,873,079
,y •
Rational/city
Cashiers, Main Office, have beenpromoted to Assistant Vice-Pi esi-
approximately
$10,291,000, to undivided profits,
thereby bringing its capital funds
to
$164,878,000. Mr. Colt added
that the company's directors felt
amounting
31,
count, and that it would therefore
be advisable to add the general
reserve
balance
to
undivided
STATEMENT
448,562,353
Loans?and: .hills
Murray- -and
Rivera,
Assistant
A.
-
:i
hanks—
Govt. ,se-
Dec.
on
due
/y curity hold'gs
Gersten, President of The
of New
has
gen¬
/
Sept. 30/43
:•
Public National Bank & Trust Co.
York,
company
transferred the balance
E. C.
of
trust
and
york
31/48
Total resources.
■
A
bank
new
Deposits
Blake, Assistant Manager, of the
new
branch, which is located at
6629-33 Bay Parkway, Brooklyn.
CAPITALIZATIONS
hanover
company,
announced
Greater
Thomas
area.
has
York
New
Dec.
its
the
central
Hanov.er Bank & Trust
.
of
Sheridan is Manager and John M,
Bankers
and
ETC.
REVISED
of
Central
oh' Co.
announced
branch, the
chain
New
NEW BRANCHES
York
the. opening
Parkway
CONSOLIDATIONS
NEW OFFICERS,
New
Thursday,. January 6, 1949
(Continued
on page
42)
Volume
169
Number 4768
COMMERCIAL
THE
&
FINANCIAL
CHRONICLE
ments for investment in
What of 1949?
By
\
CHARLES SAWYER
HON.
Secretary of» Commerce
yvy
pointing oat present boom
factors,
says
maintain
ing to
inflation is with
as
by
temporary
some
business
that
the
bank credit
on
increased
an
of bond flo¬
use
tations in the capital markets,
As 1948 draws to
close
expenditures.
o
.cltar.
tain
our
in
cer- v——:
critical
Business
of
areas
the
7
t i
a
o
aa;r y
pressures
are
tinuous
c o n
and
——-—y
both
production
anc
Personal
income
$211
billion,
from
1947.
a
approximates
rise
about
of
8%
Disposable' personal
•
about one-tentn higher
total of $174 billion
income was
than tne 194/
strong; in
others
they
are
easing
_n;
the
sell¬
market
ers'
becoming
thing
t h
a
the
of
e-general
is
economy
manifest,
cannot afford
to maintain
a
we
mag¬
nificent indifference to the prob¬
lems of the future.
-
It would be folly to
forget that
the present boom is bolstered
by
some
the
temporary factors.
time
to
plan
Now
is
that
measures
will put
in
individual, income
contrast
to
previous
the advance in consumer
expenditures was moderate
up
about 7% from
1947.
employment
culture about the
all of the increase
cultural
same
employment,
with
worked,
restrain
however,
showed
_
pro-
of
a
period of depression-
aiea
maintain
a
budgetary surplus,
Board index of
Jpdustrigl
re¬
by
Reserve
tion
tures.
in
expendi¬
Economic developments in 1948
were characterized by expansion
production, sales and incomes,
continued rise in prices.
of. goods
national
product,
the market value
and
services,
rose
to
about $253 billion in 1948, accord¬
ing to preliminary estimates. This
figure, an increase of about $21
billion
9%
or
chiefly
the
prices
but
1947
over
higher
also
reflects
average
increase
an
in
in
physical output.
Sustained large business invest¬
ment and
ment
increase
an
expenditures
in
govern¬
major
were
factors in raising the value of the
nation's output. Government de¬
mand took the form
of greater
construction expenditures by Fed¬
eral, State and local governments,
increased foreign aid financed by
the
Federal
Government,
arid
mounting outlays for the military
program.
,
Causes of Rising Prices
„
Among
prices
the
of
causes
rising
large supplies of pur¬
power
in the hands of
were
chasing
consumers,
heavy
commercial
industrial
demands
terials and
to
the
In the case of
raw
ma¬
-
highlights
/
.
National
guished
income
from
to-about
$224
gross
income
rose
as
as
; >
of
\
distin¬
product
rose
billion
from $202
Wages and salary
billion in 1947.
a
result of higher
employment and rising wage rates,
while
corporate
incomes
were
and
proprietors'
augmented
compared
than 600.000
more
metal
manu¬
some
preceding
net
the
with
in
prices during February.
This decline
years.
During
part from
rise in the number of
a
discontinuances and
a
decline
in
the
in part from
number
of
the
second
Allan H.
rates
flow
new
increasing
rose,
income
of
of
the
come
associated
Stock
Courts
&
with
the
Exchange
Co.
the
in
and
office,
52
Broadway.
steel,
con¬
principally
limit
to
output below de¬
Automobiles are the out¬
mand.
(IN
Cash, Gold
{Direct
Due
and
by ad-
.
$1,532,119,431
Obligations
.
.
1,656,863,022
Liability
ances
State
and
ably
affected
by
this
Items
Portfolio
in
Transit
in
8,562,589
Branches
with
26,031,807
12,647,857
.
.
.
.
.
Reserves
1,422,290,652
,
for:
h
•
,
1
■
'
Real Estate Loans and.Securities
Customers' Liability
Acceptances
Stock
for
of
,
,
Unearned Income
7,500,000
Dividend
International
.
.
.
<5,925,327
.....
1,581,831
172,500,000
Undivided Profits
$5,004,737,618
..........
.
Figures of Foreign Branches
1
are as
291,363,989
$5,004,737,618
of December 23, 1948.
States Government Obligations and $043,355
$199,885,739 of Public and Trust Deposits and for other
of
purposes
federal deposit
41,363,989
.
Total
$272,043,209 of United
(member
4,650,000
$ 77,500,000
Surplus
27,686,865
in
21,006,274
.........
Capital
7,000,000
,
Bank Premises
to secure
Other
.
Other Assets
Total
and
Interest, Taxes, Other Accrued
Expenses, etc.
i,
22,194,546
,
Banking Corporation
Discount
,
.
Federal Reserve Bank*
in
Unearned
2,693,232
insurance
other assets
required
or
are
deposited
permitted by law.
corporation)
while
Chairman
grow¬
Chairman
of the Board
YVm. Gage Brady, Jr.
of the Executive Committee
President
W. Randolph Burgess
■
Howard C. Sheperd
downward
textiles
were
$34,594,396
.
80,736,635
Discounts
and
ances
223,270,860
.
Other Securities
Loans
Bills.
and
Less: Own Accept¬
20,800,544
Municipal Securities
and
$4,643,112,364
Accept¬
on
Other Federal
of
Agencies
ing number of industries were ad¬
justed to reduced demands. Not¬
trend
;,
Deposits
Banks
from
Fully Guaranteed)
or
physical output
consisted mainly in significant in¬
capital
goods
industries,
production schedules in a
OMITTED)
DOLLARS ONLY—CENTS
LI ABILITIES
U. S. Government Obi.igations
The advance in
construction
oj December 31, 1948
as
ASSETS
example
among
con¬
sumer goods of a
large backlog of
demand carried over into 1949.
in
oj Condition
Including Domestic and Foreign Branches
standing
creases
Office; 55 Wall Street, New York
Condensed Statement
shoes
and
the soft-goods lines; and
vacuum cleaners, automobile
tires,
among
radios
and
(excluding
receivers) among
durable goods.
the
of
consumer
$17.8
Billion
construction
in place was
$17.8 billion,
fourth higher than in 1947.
number
of
CITY BANK FARMERS TRUST COMPANY
Head
Construction
value
television
Condensed Statement
The
oj Condition
as
oj December 31, 1948
housing units started
one-tenth higher than in 1947
was
Office: 22 William Street, New York
put
one-
reached
(IN
OMITTED)
DOLLARS ONLY—CENTS
the
high.
With crop production establish¬
ing a new record in 1948, the
ASSETS
Cash
and
Due
Banks
from
LIABILITIES
....
$ 24,260,705
Deposits.
$ 88,162,629
,
wholesale price of, farm products
is lower
today than a year ago
when
the
postwar
peak
tablished and there
were
was
es¬
reduced
yields in this country and abnor¬
mally large requirements for Eu¬
rope.
U. S. Government Obligations.
(Direct
Fully Guaranteed)
Obligations
of
but outlays for manufac¬
turing and mining represented a
smaller part of the total than in
Investment
in
inventories
considerably less than
previous
and
.
,
Other Securities
year.
•
and
Advances
Dividend
Stock
in
Bank Premises
Other Assets
Total.'
.
•
•
.
t
•
•
i
•
•
•
Capital
clined from $28 billion in 1947 to
$26 billion in 1948, primarily as a
result of smaller requirements for
customer financing and for addi¬
inventories..'.* Require¬
,
3,027,313
•
•
•
•
•
3,587,041
.
.
Surplus C'".
$10,000,000
.
,
•
,
$121,180,871
10,000,000
....
■ :
v'V
Undivided Profits
2,693,783
•
v
600,000
.
v,;
2,014,994
•
•
•
.
,
.
in the
-
.
9,431,201
,
•
29,431,201
—
Total.
.
$121,180,871
$3,654,388 of United States Government Obligations are deposited to secure
$1,135,779 of Public Deposits and for other purposes required or permitted by law.
Total new capital
requirements
States corporations de¬
of
Securities
Federal Reserve Bank
•
$310,652)
r
794,038
and
•
5,591,935
101,038
Real Estate Loans
....
{Includes Reserve for
1,048,352
Municipal Securities
of United
tions
Rf.sf.rves
Other Federal
Agencies
State
81,048,716
x..
,
crease,
was
.
'
Business spending for new plant
and equipment continued to in¬
1947.
or
.
(member
«rChairman
of the Board
——"w. Randolph Burgess
federal deposit insurance
of
municipal
THE NATIONAL CITY BANK OF NEW YORK
Head
New
firm
bond department of the New York
total
business
Stearns & Co., has be¬
York
third
and
Church, Jr., formerly
with Bear,
quarters industrial production and
prices moved upward and wage
basic
materials,
ex¬
pansion.
Dur¬
Improved crop prospects
resulted in a sharp drop in crop
firms
in the rate of increase resulted in
Loans
Figures for the year are of ne¬
cessity only preliminary estimates;
They. can,, however, be cited in
e
previous
factures, shortages of
tinued
approximately
inflationary trend.
t h
during- 1948,
gain of
record
'
1948.
some
and
labor also contributed
summarizing
summer
level
Joins Courts & Co.
3,900,000
to
Ownership
1925
tial consumers' goods and rehabili¬
of
to
clined.
and
with
heavy postponed require¬
ments, extensive expenditures by
foreign countries both for essen¬
Rising costs
contrast
new
for
buildings, plant, and equipment,
easy
financing terms for new
housing
construction .. combined
tation.
In
postwar years, production of some
durable consumer goods items de¬
1948
;
;
1947.
The
;
tne^ Federal
produc¬
(1935-39=ICO | rose to an esimated 192 as compared with 187
duce the national debt, and exer¬
cise care in expanding
gross
the
during
the
some
Output of goods was moderately
higher tnan A.i 11/4,, wmi p^ssweS
all, in
measures
at
the
decline in the final quarter of the
year.
■■: ■
v.-:;
and
out
prices.
100,000
major part in manufacturing and
trade.
The number
of hours
at
The
production
as
prices flattened
reached
than
agri¬
in 1947,
as
steel, petroleum, auto¬
mobiles, refrigerators; and paper.
Output of commodities as meas-
which
easing of inflation¬
an
Allan H. Church, Jr..
in nonagri-
was
its dangerous
tendencies and to do those things
which cannot be done easily, if
a
in the first quarter.
was
pressures
mulation, and a temporary flat¬
tening in the level of industrial
close to *30 million
persons, an
advance of about 1 lk million over
1947.
With employment in
auction
and
ary
ing that period, there was a taper¬
ing off of consumer purchasing, a
high volume of inventory accu¬
averaged
task
of
uniform
taxes.
peak rates established in the
to
In the final quarter of the year,
there
postwar
prosperity on a stable and
continuing basis. So long as in¬
flation is with
us, the immediate
is
military expenditures.
economic
.years,
Civilian
strength of tne
Sawyer
tion
While
'pas t.
Charles
by
asja result of the mid-1948 reduc¬
wiih
pas¬
closed.
in
this
in
population slackened in 1948,
a sharp
increase during the
early postwar years. • The' total
business population rose by less
after
two
prices.
economyinf 1
——
left
factors
sage
of
the Foreign Assistance
Act, and the prospect of increased
activity, and
gaps
Chief
15
general expansion were reduction
of individual income
taxes,
activity
throughout the
since nearly all of the ad¬
itation
;
ness
in
vances
consumers.
ear¬
in the gross national prod¬
uct occurred after a
period of hes¬
The rate of increase in the busi¬
~
economy
rise
Both
that
brought
the
in line with
principal
were
not
year-
Less New Firms Entering
govern¬
is operating at a high rate.
But what of 1949?
An all-important question confronts us—are we
in a mounting inflationary spiral or have we reached the
ceiling,
and are we facing the prospect of a downturn? The answer is not
yet
a
had
vance
■
ment
the
was
■
ing activity to large business investment and increase in
business.
indicated
population
war
.The
-
and
factors
advances
the level of business
larger extent than in 1947.
financing, there was
much less reliance
immediate task is to
us,
a
(71)
entering
these
lier
"
Irir external
Secretary,
budgetary surplus, reduce National debt and exercise
expanding expend tures. Lays 1948 high level of build¬
in
care
long
so
bolstered
is
however,
high.
New capital requirements were
financed througn internal financ¬
In year-end review of economic situation, the Commerce
in
equipment,
new
firms
plant and
reached a
corporation)
President
Lindsay Bradford
THE
COMMERCIAL
&
FINANCIAL
CHRONICLE
Thursday, January 6, 1949
Military Government and Foreign Policy
CANADIAN BONDS
GOVERNMENT
PROVINCIAL
MUNICIPAL
CORPORATION
canadian stocks
The
Western Canada
Oil Industry
A. E. AMES & CO
INCORPORATED
Information
Available
TWO WALL STREET
NEW YORK 5, N. Y.
Charles King & Co.
Members
WORTH 4-2400
NY
1-1045
61
Toronto Stock Exchange
Broadway, N. Y.
WHitehall 4-8980
Direct wire to Toronto
Volume
169
Number 4766
THE
COMMERCIAL
Says Present Stock Prices Can
Stand Against Lower Earnings
Hugh Bullock, President of investment firm of Calvin Bullock, con¬
tends, because corporate equities are priced low, a considerable
decline in earnings could
In his year-end
ment firm
of Calvin
without reducing stock price level.
occur
1949$—
in
occur
without
fore
un¬
duly affecting
stock prices.
the
"The
"As
face
we
lock
some
"Business is
ord
rec¬
profits.
There
is
Certain of
industries
tinuing to experience
are
Steel,
there
will
soften
demand,
The
imposed.
price
controls
prevent
until
does.
a
decline
in
demand
ful
a
trebled
trillion
are
so
course,
direct
procedure of great bene¬
step
in
central
the
modernization
marketing
place
of
for
proportion
of orders
place.
The
would
con¬
than
earnings
dollar
if
one
services
ef¬
and
cen¬
to
At this time
in
1949
does
not.
seem
probable."
other Mid-West
•.
the year 1948, a year in which the volume of
brokerage and investment transactions has been at a relatively low
of
Stock
140
Broadway
Madison
ment
firms
the
located
in
other
13
LONDON
PARIS
Condensed Statement of
were
of
Michigan, Iowa, Ohio and Indiana.
g o
Stock
Exchange has
increased
pro x
16%
ap¬
imately
over
the
for
the
totals
year 1947. The
total
dollar
volume
of
tranasactions exceeded
$200
>
million.
The share vol¬
Homer
P.
Hargrave
ume
1947
million
of
showed
increase
an
over
approximately
one
shares.
Seventeen
memberships
changed
hands during the year
price range of $3,600 to
$2,000, with the last sale at $2,700.
within
a
This
compares
with
sale of 1947 at $2,000.
17
memberships
from
estates
members
the
were
or
closing
All of these
purchased
from
and have
inactive
gone into the
hands of active member firms lo¬
cated
in
10
cities
and
Only four of these
were
6
states.
memberships
bought by Chicago invest-
at
60th
St.
BRUSSELS
Condition, December 31, 1948
RESOURCES
Cash
on
Hand, in Federal Reserve Bank, and Due from
Banks and Bankers.
U. S. Government
....
.
.
Loans and Bills Purchased
.
.
.
.
.
.
.
.
$
.
....
.
.
Obligations
Acceptances
662,439,640.64
959,610,637.89
1,034,440,980.54
81,990,678.68
.
Other Securities and
on
$
•
.
Stock of Federal Reserve Bank
Credits Granted
•
Obligations
Public Securities
9,000,000.00
10,546,096.20
.
11,490,995.89
.
Accrued Interest and Accounts
Receivable
8,607,897.67
Real Estate Bonds and
Mortgages.
7
.
'
.
.
.
.
.
1,776,646.38
.
.
'
Other Real Estate
.
.
.
.
,
Total Resources
.
.
.
.
.
7**7
.
.
;
VI
#
•
123,412,314.82
4,756,591.78
16,929.41
$2,784,677,095.08
.
i7.
LIABILITIES
Capital
Surplus Fund
.
.
.
i..
■n
Total
r1
•
"
•.
$
.
.
Undivided Profits.
.
,
.
100,000,000.00
200,000,000.00
66,890,333.26
.
.......
Capital Funds
,
$
.
Deposits
Outstanding
Deposits
.
.
.
.
.
19,098,373.37
2,330,236,748.73
.
Acceptances
Less: Own Acceptances Held for
.
.
...
.
.
7
.
.
366,890,333.26
$2,311,138,375.36
.
Treasurer's Checks
$
.
19,885,110.86
11,918,066.65
7,967,044.21
.
.
3,000,000.00
120,297.76
.
Items in Transit with
Foreign Branches
Accounts Payable, Reserve for
Expenses, Taxes, etc.
•
V';:
'
T.
,
72,511,648.68
.......
87,550,013.09
Total Liabilities
firms
dollar volume
a
Ave.
"
•
of
the
berships,
total
172
of
300
of
represent
these
Securities carried
at $102,231,549.56 in the above Statement
required by law, and for other purposes.
located
in
firms
operate
35
Exchange,
stated,
is
cities
Mr.
and
21
Hargrave
excellent
in
financial
condition and has, at the
present
time, $1,290,000 in cash and gov¬
securities, no liabilities,
the budget is balanced.
Two
principal projects, outside
of the ordinary routine stock ex¬
change procedure, have occupied
the attention of the Board of Gov¬
and the staff of the Ex¬
ernors
change this
now an
year,
one
of which is
accomplished fact and has
been in operation several
months;
the other still under
study and re¬
search
The
first
"Clearing
method
having
these
of
of
by
a
whereby
a
WILLIAM
Chairman of the Board
securepublic
L. KLEITZ
President
DIRECTORS
GEORGE G. ALLEN
Director, BritishAmerican Tobacco Company, Limited,
and President, Duke Power Company
WILLIAM
B. BELL
President, American
Cyanamid Company
F. W. CHARSKE
Chairman, Executive
Committee, Union Pacific
J. LUTHER CLEVELAND
W. PALEN
WALTER S. FRANKLIN Executive
JOHN
A. HARTFORD
Anaconda
MORRIS
Copper Mining Company
W. KELLOGG
Chairman of the
P. COOPER
WILLIAM L. KLEITZ
President
Chairman, Executive
Committee, Air Reduction Company, Inc.
WILLIAM
C. POTTER
Retired
GEORGE E. ROOSEVELT
STUART
M. CROCKER
President,
The Columbia Gas System, Inc.
W. DAVIS
of Davis Polk Wardwell
Sunderland & Kiendl
of Roosevelt & Son
EUGENE W. STETSON
-
JOHN
Board,
Kellogg Company
CHARLES S. MUNSON
\
WINTHROP M. CRANE, JR.
President,
Crane & Co., Inc., Dalton, Mass.
Company
Chairman of the Board,
The M. W.
President, The
Presbyterian Hospital in the City of New York
Company
President, The Great
Atlantic & Pacific Tea
CORNELIUS F. KELLEY
Company
Chairman of the Board
Vice-President,
The Pennsylvania Railroad
LEWIS GAWTRY
CONWAY
CHARLES
Railroad
CHARLES E. DUNLAP
was
plan
Mail,"
powers, to
Chairman, Executive
Committee, Illinois Central Railroad Company
THOMAS J. WATSON
President, International
Business Machines Corporation
investigation.
auguration
pledged to qualify for fiduciary
J. LUTHER CLEVELAND
ernment
and
are
in
states.
The
$2,784,677,095.08
.......
member
Chicago, while the remaining 74
are
." 7 7 7 7 7
mem¬
firms as compared with 157 at the
close of business last year.
Ninety-
eight
.
Texas, Missouri,
moneys as
Out
j V
the
which
members
Chicago office
in¬
called
can
is
.
GANO DUNN
a
not
deal
President, BerwindWhite Coal Mining Company
President, The J. G.
White Engineering Corporation
J
r
CHARLES E. WILSON
ROBERT W. WOODRUFF
President, General
Electric Company
Chairman, Executive
Committee, The Coca-Cola Company
Member Federal Deposit Insurance Corporation
Chi¬
Exchange," Mr. Har¬
MADISON AVE. OFFICE
ROCKEFELLER CENTER OFFICE
Rockefeller Plaza at 50th St.
level, both$
c
public
the
MAIN OFFICE
Dividend Payable January 3,1949
exchanges.
Board,
Chi-
of
grave concluded.
securities
$
that during
the
investing
presently listed
Investment
statement made to members of the
Chicago Stock Exchange
at the close of the year, Homer P.
Hargrave, Chairman of the
and
the
members
Guaranty Trust Company of New York
moderate decline in
a
a
share
to
the
cago
FIFTH AVE. OFFICE
Fifth Ave. at 44th St.
for
ing operating methods which, it is
Exchange in the Middle West
Looks for favorable results from consolidation with
the
plans
and improv¬
believed, will provide additional
bring to
pre¬
reported
and
number
the
that
presume
Homer P. Hargrave, Chairman of the
Board, tells members both
share and dollar volume of transactions in 1948 exceeded
In
ideas
new
one central
consolidation,
Bank Premises.
earn¬
Chicago Exchange Reports Increased Business
year's.
other
broadening markets
tral
se¬
curities.
Total
vious
the
flowing into
fected,
a
to
ad¬
"Your Board of Governors and
have
under
consideration
in
very
would
person
more
debt,
supply since be¬
money
of
fecting their price.
"Meanwhile, however, we have
inflationary implications of a
a
this
could
ceilings.
the
quarter of
In
considerable decline in earnings
occur
without unduly af¬
a
because of higher costs
squeeze
and effective price
new
low today in
relation to present earnings, how¬
ever, that even the most thought¬
So profit margins are in for
a
stocks.
common
equities
price
rises
therefore:
ings have always been the major
determinant of price; • Corporate
such events,
But the threat of
will
the
an
interest
Staff
Stock Exchange
expand
of
strength of a broad segment
of security brokers and
dealers.
Exchange
headquar¬
its
improve and
offing.
"Historically,
be raised and heavier
taxes
the
their average level of 1936-39.
weight of the largest inventories
history will be felt.
"Probably, prior to
in
doubled, Dow-Jones indus¬
trial averages are scarcely above
in
wages will
new
Chicago.
markets
They have found
bonds
wages
Compe¬
prices.
probable.
degree of inflation that has taken
place
since
pre-war.
Although
money supply has trebled whole¬
sale commodity prices and factory
will even be enough
the date of this
milestone is far from imminent.
waver.
be
minimum
nection it is important to note
that among all the major elements
in our
economy today common
stocks alone do not reflect the
steel—although
exceeds
a
earnings in influencing the prices
of
that the trend should
spread.
That
distant
day
should
come
tition
ters in
consideration.
should counter the impact of lower
luxury goods. It is logi¬
supply
equal
"Inflationary forces,
cal
"As
a
have
exchanges and
concentration
17
and
any
are
example.
due
sales volume will
into
would
in the vicinity of
par.
event, large government
expenditures for social measures
In
course,
however,
supply will catch up with demand
in many lines. This has
happened
already in coal, lumber, textiles,
shoes, household equipment and
when
changes
which
ernments
con¬
tremendous
demand for their products.
the
availed themselves of this
system
and several others have it under
stiffen, if high-grade longtend to decline, bil¬
lions, if necessary, are probably
the
ready to stabilize long-term gov¬
term
country's most
numerous
the
on
16 of our
firms have
member
for
six
or
ditional
consolidation
of several Midwestern Stock Ex¬
At present,
out-of-town
proposal
five
one
study, is
rates
full
employment.
an
a
active
ex¬
can
"If farm prices are
soft, a great
deal of government
money
is
available for support. If interest
are
reporting
Our defense
for lend-lease is
booming. Cor¬
porations
to
on
of $15 billion; E.C.A. should add
several billion and a billion or so
lows:
the
physically
to
project, and the
present under
war may be
but the sad fact
years away,
counted
fol¬
as
government
penditures, therefore,
thinking
runs
large
war,
of tension exists.
stated,
"our
"In
them
Exchange.
house
The second
at
probability of
•
obviously, is
correspondent
(73)
spending ahead.
1949,"Mr.Bul-
fundamental
Chicago
for
CHRONICLE
on the Exchange with¬
necessity of maintaining a
out the
act
FINANCIAL
fit
to
them, and the Exchange
statement, Hugh Bullock, President of the invest¬
Bullock, expressed the view due to existing in¬ considers it a successful forward
flationary forces and the low current market prices of equities in
relation to earnings, a considerable decline in
corporate profits could
Hugh Bullock
directly
&
'
f
'-'ft
18
.
COMMERCIAL
THE
(74)
&
FINANCIAL
CHRONICLE
Thursday, January 6, 1949
let sentiment, prejudice
decisions in any way.
"(3)
/?NATIONAL
"(4)
NATIONAL
speculator.
&
'Santa Claus' who brings huge profits to the
no
By
the
token—there
same
fearful
who hide their money in
income
120 BROADWAY, NEW YORK 5, N. Y.
is
Santa
no
foolish
for the
low
Claus
paying institutions or securities.
their 'sock'—or put it in
very
business anywhere,
better income through the
medium of good well managed mutual investment funds.
Careful
selection, broad diversification and intelligent management makes
the investment safer—keeps'it safer. It gives the investor a reason¬
able dependable income-r-with freedom from worry.
"This is not to say that people should not speculate
if they
can afford to do
it and -are fully aware of the risk involved. Also,
this is not to say that people who are victims of excessive fear psy¬
chology, should not hide their money in a safe deposit box or put
it in low interest paying building and loan or savings accounts.
"It is every man's privilege to choose what he will do with his
capital or his net income, but it is our sacred obligation as invest¬
ment men to counsel our clients wisely—help them to accomplish a
sound middle of the road INVESTMENT POLICY which will give
"There is
is
it
but
Santa
no
possible
Claus in the investment
obtain
to
safety
and
.
Fund, Ltd.
Dividend Shares, Inc.
Nation-Wide Securities Co.
Prospectuses
them
a
available
or
us
"D. G." Has New Program
CALVIN BULLOCK
Investment
as
President
"For
Data
at all
about
and vertical
specialty funds, makes it possible to
for
program
any
carry
out
a
goods,
of it.'
few
INCORFORAJfD
48 WALL
(OS
resolutions
Year's
New
having
'
,
to
do
with
one's" investment
-
our readers are not in need of New Year's resolutions,
might not-be a bad idea to see how some of tjie following
thoughts fit into-one's investment program for 1949.
"Perhaps
but
STREET, NEW YORK S, N Y.
CHICAGO
ANCfllS
people make New Year's resolutions having to do with
a great deal 'comes
A little.less personal, but by far more practical, might be a
personal affairs and in all probability
account.
it
at the first opportunity have my entire investment
account reviewed by my investment dealer or by someone else who
"(1)
stockholders
to
Business
I will
is qualified to do the job.
"(2) Whatever carefully arrived at decisions as to 'investment
changes' I may make, I will carry out without delay; and I will not
good.
K yston e
and
we
believe that the outlook for business and earnings
There is still a considerable shortage in durable
believe that commodity prices will continue at a
time to
some
We will continue to watch condi¬
come.
carefully and, if they appear to us to be greatly improving,
will increase the aggressive portion of our
portfolio, while, if they
appear to us to be showing signs of deterioration, we will quickly
increase the defensive portion of our portfolio.
This is our
policy
managing
the
company's
investments
Annual report of New York
shows total net assets on that
shares
outstanding
and
Investment
as
balanced
a
year
reflected
the
in
Fund,
disbursements
ordinary
year
dividends
by
New
amounted
York
to
dividends
pleased to
that
announce
$1,980,512
Of
the
Reports Utile Expansion in Business Loans
Federal Reserve Bulletin for December, in analyzing credit
A leading article in the
Bulletin," published by the
serve System, analyzes both
security market during the
cludes that
the
December issue of the "Federal Reserve
Board of Governors of the Federal Re¬
credit developments and the government
third quarter of 1948. The article con¬
"most striking
of ♦>
—•
developments,, large private placements of securhowever, has been the relatively j ities with, and long-term loans
modest expansion in bank loans to
from, insurance companies. These
businesses. Over the postwar pe- investors in turn obtained funds
riod most of the very large growth by selling
government securities
recent
in
bank
credit
business
centrated
loans
has
the
in
been
con-1
half
second
of
to
the
This
Federal
has
for
IN
BONDS
(Series B1-B2-BS-B4)
PREFERRED STOCKS
John G.Parker
(Series K.1-K.2)
will become manager
COMMON STOCKS
(Scries S1-S2-S3-S4)
office effective
:
.
of
our
Chicago
-
January 3, 1949.
same
period
previous
in
years, I
less than one-third that
was
banks
same
®
§
in
New
George
elected
M.
Gregory has been
of Gregory &
Son., Inc., 40
President
Wall Street,
York
New
City, succeed¬
his father,
City!
York
ing
the
less
,;V
Boston 9,
'
1
;
>
■
63 Wall
Co.
&
INCORPORATED v
'
,
'
'
■
Street, New York
Massachusetts
and
*
demand for commer¬
tive, in part
■:
Loud, Abbett
Tlie Keystone Company
of Boston
Congress Street
was
;
Wil¬
late
liam H.
million in October and
November, as compared with over
$600 million last year. Last year
the loan growth in these months
reflected credit extended broadly
to
manufacturers
in
all
major
lines and to the trade, public util¬
ity, service, finance, and construc¬
tion industries. This year the bulk
of
the
loan
expansion at New
York banks was to the petroleum
and
apnarel
industries and
to1
public utilities and retailers. Loans
tosales
finance
companies ■ de¬
■
*
XAI1
J u UVll
ory,
Greg¬
Sr.,
de¬
ceased.
Mr. Gregory
has been as¬
sociated
with
the firm since
it
was
found¬
ed in
1935, re¬
cently as Ex¬
ecutive
George M. Gregory
Vice-
President. Be¬
fore
1935
connected with Kountze
he
Bros.,
prior thereto with Theodore
Prince
& Co.
cial bank credit has been less ac¬
local investment dealer or
50
money
(|6Gb Mi UfSS^OrV iCCSi
(Iff RHIO'ftS'H ft
months in pre¬
businesses expanded
"Business
Prospectus from
your
the
In the third quarter of. supply, like direct business bor1948, this pattern appeared again1 rowings from commercial banks."
to be repeating; although the ex-1.
„
pansion was not as rapid as in the'
mm
g%
q
clined somewhat.
charge of national distribution
Lord, Abbett investment companies. '
Banks,
Reserve
increased
each year.
loans to
moving to.our New York office to
take
develop¬
ments, says most sir,Kim* feature has been modest .expansion in
bank loans to business.
than $100
investing tlieir capital
or
Industry Series of New York Stocks, those into which
placed most new money during the year were Aviation,
Steel, Railroad and Oil Industry Series.
"At
and formerly in charge of the Chicago office
is
1948
During
33% more
investors
Commenting further on banks'
loans, the Reserve Board states:
Vice President of Lord, Abbett &: Co.
INVESTMENT FUNDS
in
Stocks, Inc.
than in 1947.
shown in the
Albert It. Hughes
IFun^s
ended Nov. 30
date of $31,032,167 with
3,725,236
shareholders.
Largest Series was
accounting for $12,387,406 or almost
17,005
of total net assets of the company.
The generally higher level of
was
fund."
New York Stocks
on
Stocks, Inc. for
vious postwar years."
Certificates of Participation in
II,
part:
we
loans
C ustodian
in
we
Subsequently, in October and November, the increase in business
are
Prankard
I.
states
60%
business loans increased nearly $11
billion at banks in leading cities.
We
Harry
Shares, Inc.,
tions
specific
A lot of
own
dispro¬
a
bond.
investor whether his investable capital
Do You Need a'New Year's Resolution?
"
have
not
or
earnings and
is $2,000 or $200,000.
their
do
and
times, but
continues
Major emphasis will be placed on this Personal. Investment
Program by Distributors Group.and .its national representatives pnce
it is felt that the present times call for handling customers' entire
accounts, whether small or large, on an -overall b&sis. At the same \
time, the flexible Group vehicle with 22 'Classes, including horizontal
'
I
stock
one
being we intend to keep the company's portfolio
in common stocks, and appreciationrtype pre¬
bonds, in the industries which we believe will do
well during the next few
years, and about 40% in high-grade bonds
and preferred stocks for capital
stability. We want to be cautious
balanced
mechanics himself.
complete plan and kit embracing a, folder for obtaining
on- the
customer's objectives and a complete form for
adapting this -basic data to a specifically recommended program
for handling the customer's entire account are available.. In addition,
supplementary material in the kit includes three sample programs, a
booklet on "Managing Other People's Money" and essential I data
on specialized mutual funds and other functions in programing.
\ investment
that
sure
any
time
ferred stocks
40%
that is, specific suggestions have been made but the
out the
make
report
American
the
Diversified
Basic
HUGH W. LONG & CO.
annual
of
A; A While Group was originally formed in 1934 .with programing
mind, heretofore the program methods employed have been on an
a
will
"A. B. S." Reports
his
In
informal basis;
in
Now,
1
Dividends Up 33%
Program for its 22 classes of Group Securities.
dealer has had' to work
well.
not
"(6) I will have my account continuously supervised throughout
the year to see that it is kept in line with my investment
objectives.
—Quoted from Vance, Sanders' 'Brevits'."
.
Distributors Croup has announced the launching of its Personal
Established 1894
industries
do, I will see,that I have broad diver¬
only by individual
issues, but by
may
securities,
portionate amount of money in
in
Wholesale Distributor of National Securities Series.
man,
of
high level for
resolve for the new year that we will continue
to recommend moderation to help our clients avoid the excessive risk
of improper speculation as well as the low return suggested by
propaganda based upon fear psychology."—Written by L. L. Moor¬
Investment
sification
.
.
fair and reasonable income with reasonable safety.
"Therefore, let
from
Dealers
effect 'traded down' in
quality, then I
holdings to afford the protection for which the bonds
originally purchased.
"(5) Whatever else I
CORPORATION
Bullock
measure
investments I have in
were
There Is No Santa Claus!
"There is
SECURITIES
my
that the quality of my in¬
see
will revise my
investment dealer, or from
RESEARCH
bond
By HENRY HUNT
request from
upon
-v
savings, plus
of opportunity for growth of principal and in¬
AA
:
A,
A-':A
A
A -A
If in trying to maintain a generous income return on my
prudent
come.1
TRUST FUNDS
your
other emotional influence affect
A
any
vestments affords the kind of protection I want for
my
a
Prospectus
or
I will check my account to
CHICAGO
LOS ANGELES
.
NEW ORLEANS
creased
from
because
as a
result of the in¬
volume of funds obtained
other
sources.
record
Griffiths Partner
Businesses,
In Hal! &
profits,
have been able to finance a great¬
Hall & Co., 70 Pine Street, New
er
portion of their large capital
York City, dealers in state and
expansion programs out of retain¬
ed earnings.
In addition, a sub¬ municipal bonds, announce that
of
high
stantial amount of funds has been
obtained from flotations of secur¬
ities
and
lenders.
loans
Included
from
in
nonbank
these
Company
Richard S. Griffiths has been admitted to general partnership in
the
firm.
Mr.
Griffiths
were! merly with Tilney & Co.
was
for-
Volume
169
Number 4766
THE, COMMERCIAL
CHRONICLE
Erling Hansen Pres.
Paul deGive With
Of Howard Industries.
Dominick & Dominick
The firm
Dr.
Einzig holds, because of currency depreciation in ether coun¬
tries, the sterling exchange rate results in undervaluation of sterling
and prevents Britain from competing for supplies, such as meat,
of
name
Carret, Gam¬
Co., Inc., securities deal¬
ers, has been changed to Bradley,
Gammons
remedy restoration of the
would meet with opposiand Western Europe.
Jan.
*
1,
retain
&
Co.,
the
firm
new
ies
at
The alternative solution would be
to raise the
that
deliver¬
writer
of
years
from
Argentine
advocated by the
was
ago,
this
Professor
and from Eire
article
and
nearly two
recently
more
G.
R.
considerably
Hawtrey, one of
the most prominent British econ¬
omists, has declared himself in
short
favor
have
fallen
the
of
amounts
120,
be
that
Unfortu¬
solution.
of
the
are
Directors of A.
Inc.,
manager for Courts &
ANGELES, CALIF. — The
of Harbison & Gregory,
210 West Seventh Street, member
of
the
Los
Angeles Stock Ex¬
change, has been changed to Har¬
bison & Henderson. R. N. Gregory
firm
C.
J. Douglas
John H.
is considered imprac¬
it would encounter the
opposition in the United
the
Allyn
Casey
John
Riley
as
Henderson
has been
to
partnership
Clarty Harbison.
of
Erling J.
Chairman,
to
President and
assume
the
of Howard
Executive Vice-
President.
G.
mitted
and Co.,
election
as
as
name
Hansen
SUFFERN, N. Y.—Helen Boe is
taining offices in Chicago and in
engaging in
a
from offices
on
Wisconsin.
securities business
Lafayette Avenue.
It is bad enough to have to cope
with the consequences of the un¬
the
dervaluation
Argentine the
government-
Paul
Dr.
port organization has been unable
to purchase from cattle breeders
sufficient
a
its
meet
of
number
liabilities
cattle
arising
of
sterling
its
at
present parity of $4.03. Should the
British Government yield, Amer¬
Einzig
controlled ex¬
to
from
the Anglo-Argentine trade agree¬
ment. This was because domestic
prepared to pay a
higher price than the one
stipulated
in
that
agreement.
When the price was negotiated at
consumers were
much
ican
in
pressure
valuation
position
of
Sterling
even
than it is
would
Britain would be
now.
handicapped in competing for the
purchase of meat and other food
and raw material supplies to an
is unable to bid against .domestic
Argentine buyers of meat.
Nor is tlpis all. Even part of the
exportable supplies
is diverted
from Britain to Western European
countries, owing to
the latter
the fact that
bidding much higherprices than those stipulated in the
Anglo-Argentine pact. They are
in
are
position
a
outbid
to
because their currencies
valued
in
relation
change
rates
France
and
countries
the
Britain.
price
pound.
ex¬
level
in
continental
higher than in
Continental
therefore
are over¬
prevailing
other
is much
Britain
the
to
On the basis of the
buyers
The
is the position
in re¬
spect of Eire. There too, importers
a
same
she
devalue
should
made
to
realize
should
the
full
be
of Condition
centuating
tendency
a
which
is
black
markets
at
fancy
prices,
outbid Britain, and Irish meat de¬
liveries
Britain
to
have
fallen
considerable
a
degree.
is
suffering
valuation
through
of
the
the
trade
fering
through
currencies.
If
is
pound
tional to the handicap
addi¬
of
sterling
hard
to be
were
from
the
sterling
soft currency
affected.
and from
area
countries would be
And
Britain
afford the loss of those
could
ill
imports.
.
would
be
Paul Oote Partner
Herzfeld
&
Stern,
Broad
the
that
A.Cohen
part¬
that
firm
3.
Jan.
on
A
graduate
compete
Cohen
Wil 1 i
a m s
College,
Mr.
equal footing with
other buyers for the limited ex¬
h i
portable
career
an
other
foodstuffs
rials.
The
one
the
of
and
meat
mate¬
raw
situation
meat
is
of
more
regarding the
import
other essential goods.
either
to
the
amounts
already
spent
on
Paul
A.
with whom he
Cohen
was
associated
posi¬
for
same
of
various
In order to
raise
be
British
a
number
of
years.
He
17,989,747.36
10,185,396.83
Oilier Real Estate
Equities
.
'.
.
377,695.40
r
Liability for Acceptances
5,764,166.59
.
6.869.345.71
^2,389,776,620.33
LIABILITIES
Capital
•
Surplus.
.
.
.
.
,
v,
•
•
.
..
.
141,250,000.00
•
.
...
v.
60.000,000.00
Undivided Profits
Reserve for
8.538,607.44
Taxes, Unearned Discount, Interest, etc.
Payable January 3, 1949
.
.
.
Outstanding Acceptances
Liability
After his release from service Mr.
Cohen
became
associated
with
Gimbel
ization
Bros,
he
has
from
which
129,566,108.90
Contingencies
Reserves for
Dividend
$
28,316,108.90
Endorser
as
as
on
Collateral
.
.
;
.
.
.
Acceptances and Foreign Bills
or
.
4,269,196.87
.
1,237,500.00
.
.
.
.
6,274,061.43
.
.
2,722,584.87
in Escrow
13,785,683.10
2.223,382,872.72
>
United States Government and other securities carried
public funds and
trust
deposits and jor other
at
$70,103,806.82
purposes
required
us
organ¬
just resigned. Mr.
Cohen's admission to the firm
pledged
are
or
to secure
permitted by law.
Ill RECTO R SEDWIN J.
BEINECKE
FREDERICK
Chairman, The Sperry & Hutchinson Co.
EDGAR S.
BLOOM
Chairman, Atlantic, Gulf and
IVest Indies
ALVIN G.
OSWALD
KENNETH
Corporation
JOHN T.
DANA
MADDEN
Chairman, Trust Committee
L. A. VAN ROM EL
£
President, National Dairy
Products
Corporation
-
Savings Bank
FLANIGAN
GUY
President, John P. Maguire & Co., Inc.
President, United States Lines Company
C.
R.
GEORGE J.
D. GIBSON
Peabody & Co., Inc.
-vj-
Wright
Corporation
HENRY
PALMER
Director, Cluett
CERLI
President, Gerli & Co., Inc.
W. VAUCHAN
Chairman, Curtiss-
JOHN P. MAGUIRE
of the Board
JOHN \1. FRANKLIN
HARVEY
ERNEST STAUFFEN
MacI-ELLAN
President, Emigrant Industrial
President, Dana Corporation
PAOLINO
F.
City
President, Home Insurance Co.
President, United Biscuit Company
of America
President, George A. Fuller Company
HORACE C.
New York
HAROLD V. SMITH
JOHNSTON
Simpson Thacher & Bartlett
LOU R. CRANDALL
CHARLES A.
L.
-
Chairman, American Home
Products
Vice President
HAROLD C. RICHARD
President, Lambert Company
Steamship Lines
BRUSH
WILLIAM G. RABE
GRETSCH
President, Lincoln Savings Bank
JOHN L. JOHNSTON
C.
Chairman
VON ELM
of the Board
ALBERT N. WILLIAMS
PATTERSON
President, Scranton & Lehigh
President, Weslirighouse
Coal Co.
President
Air Brake
Company
re¬
was
excessive previously reported in the "Chron¬
food subsidies icle" of Dec. 23.
605,911,890.75
,
Banking Houses
signed to join the U. S. Navy in
which he served as a lieutenant.
internal prices or to increase fur¬
ther
Bloomingdale
Bros., In c.,
is
increase the supplies it would
necessary
at
the
less
or
began
business
s
The
sterling.
V"a
Mortgages
Vice-Chairman
and
only
of the instances illustrating
consequences of the
under¬
valuation
tion
a
of
ner
up¬
old
supplies
.
New
became
parity of 4.88
Britain would be in a position to
on
ancles
Loari$, Bills Purchased and Bankers' Acceptances
York Stock
Exchange, an¬
PfSSBSSiliiiSiii
of
to the
17.660,937.62
.
$2,389,776,620.33
30
of
revaluation of sterling.
If
sterling-dollar rate were to be
restored
3,037,500.00
.
K
Deposits
Street, New York City, members
ward
the
*
.
.
Of Herzfeld & Sfern
with
an
Other Securities^
Cash held
general
remedy
4,247,932.98
24,675,711.28
.
Stock of Federal Reserve Bank
devalued further Britian's imports
Britain.
The
Mortgages
Municipal Bonds
that
she is suf¬
lack
bal¬
£34,000,000
State and
722.470,034.85
970,586,260.96
.
U. S. Government Insured F. II. A.
under¬
Paul
adverse
an
some
$
.
.
the handicap under which British
Eire
of
U. S. Government Securities
Accrued Interest and Other Resources
to
What is important to realize
nounce
had
.
living
during the first 10 months of 1948
ance
.
Customers'
considerably short of the quantity
fixed in the trade agreement. This
is one of the main reasons why
close of business December 31, 1943
RESOURCES
Cash and Due from Banks
already affecting the standard of
Western
Europe, who are in
position to sell the 'meat in the
as at
conse¬
quences of such a decision in ac¬
can
meat
secure
supplies
which would find their way to
Britain but for the handicap of an
undervalued currency.
of
Condensed Statement
beginning
overvalued and sterling is grossly
undervalued. As a result Britain
COMPANY
TRUST
be¬
undervalued
more
even
larger extent than she is
of 1948 it corres¬ now. Deliveries from the Argen¬
ponded to the then prevailing tine, Eire and other countries
inland
price in the Argentine. would become even more inade¬
Meanwhile,
however,
inflation quate.
continued in the Argentine un¬
This is one of the reasons why
abated, and inland prices in gen¬ the British Government is unwill¬
eral are much higher than they
ing to devalue sterling. There are
were a year ago. There was no Cor¬
many others. There are^of course,
responding adjustment of the ster¬ weighty. arguments also on the
ling-peso exchange rate, so that other side. ; BuUft is essential that
at. present the
peso
is grossly those who are urging Britain* that
the
Manufacturers
de¬
a
sterling
the
food
would become further
aggravated.
come
favor
of
Head Office: 55 Broad Street, New York City
MORE
THAN
7.".
RANKING
OFFICES
GREATER
IN
NEW
YORK
European Representative Office: 1, Cornhill, London, E. C. 3
Member Federal Reserve
System
•
ad¬
Mc-
Helen Boe in Suffern
Industries, Inc., main¬
Racine,
.
with
.
office of President
--
In
Co.
has withdrawn from the firm and
C. Allyn
announce
Arthur
it
States and in Western Europe.
current year.
has
LOS
CHICAGO, ILL.—The Board of
as
utmost
delivered
during the
Exchange,
deGive
Harbison & Henderson
N.
Elects Officers
ticable,
to
Paul
associated with that firm.
deGive
was
formerly resi¬
dent
Allyn & Go.,
nately,
un¬
dertaken
of
A. G.
exchange value of the
pound. This
that
announce
become
®>-
under-
both
of the New York Stock
Broadway, New York City.
new
firm
LONDON, ENGLAND.—During recent months the consequences
made themselves felt to an in¬ Paul A.
Gammons,
Clifton
creasing extent in Britain. In particular the meat position has come Bradley and Luke L. Benz.
to be affected by it to a considerable degree. It is largely because of
the
partner of Comstock & Co.
as
will
of the undervaluation of sterling have
meat
tire
Dominick &
Dominick, 14 Wall
Street, New York City, members
re¬
Mr.
offices
same
l,j 1949, Erling J. Hansen will
effective
Inc.,
1949. The
Members
sterling
CHICAGO, ILL.—Effective Jan.
&
mons
from soft money nations. Recommends as
old parity of $4.86 to pound, but admits it
valuation of
19
Bradley, Gammons
By PAUL EINZIG
the
(75)
Firm Name Now
Undervalued Sterling
tion in the United States
FINANCIAL
&
Member New York Clearing House Association
•
Member Federal Deposit Insurance
Corporation
20
THE
(76)
COMMERCIAL
FINANCIAL
&
CHRONICLE
Thursday, January 6, 1949
Labor's Encroachment
Securities Salesman's Corner
s
Father
By JOHN DUTTON
heard a Red Cap at Grand Central station
He was being interviewed on one of those
The other day I
ing
the radio.
on
Doakes
Meets
him
and cut
the Public"
I
off
on
a
of opinions of union leaders and business executives on labor's
survey
through expanding area of collective bargaining,
management's freedom is being restricted, without placing responsibility for results on labor unions. Says
union challenge to management, though largely negative and extrinsic, has limited both management's
freedom and flexibility, and sees solution in system of industrial democracy which will release both
As I started to turn the dial
compelled to listen further. There
programs.
suddenly
was
St. Louis University
.
Brown, reporting
encroachments into held of management, points out,
talk¬
"Joe
something in the tone of his voice that encouraged me to hear
Then the things he said began to register.
Here was a fel¬
actually getting a kick out of a job that hardly any
would ever consider even worth discussing. He said he liked
was
unrealized inventive capacities and
more.
capabilities of work force,
low who was
one
people. He didn't see each day as just so many bags to carry,
he related that he met more people in a week than most
Management
on
By REV. LEO C. BROWN, S.J.*
well
as
as
leading to loyalty to the business.
I.
The views of top
labor and business representatives on management's right to manage
sharply contrasted at the President's National Labor-Management, Conference in 1945.
people do in a year. He told how tense and nervous many are when
They had been asked to consider the extent to which industrial disputes can be minimized
they travel, especially when they enter that great sea of human¬
by
full
and
&
:
—:
ity known as Grand Central for the very first time.
He said he
genuine
a ccontracting
about
more
items try to control more of the eco¬
tries to help them relax, to feel at ease and erase their anxieties.
to help
instead
The
man
was
and
sincerely
He
salesman.
a
my
interest because he
spoke
■
the radio.
»
It is entirely
.
b
leaves to management fewer mat¬
la¬
y
-
within the powers of each one of us
to make the
the in¬
However,
herent
right
creases
and
f
o
does
direct
to
the
must
Union
m e m-
of
bers
C
the
Rev. L. C.
Brown, S.J.
responsibilities
of
management
preserved if business and
industry is to be; efficient and pro¬
must be
gressive."
But disagreement ap¬
peared when management tried to
define the right to manage. Labor
would
not
to
agree
a
specification and classification of
the functions and responsibilities
of
management.
They said:
It
would be extremely unwise to
build a fence around the rights
responsibilities
and
ment
the
on
unions
of
hand
one
the
on
manage¬
and the
The
other.
expe¬
of many
rience
by
years shows that
growth'of mutual under¬
standing the responsibilities of
one of the parties today may well
become the joint responsibility of
with the
both parties tomorrow.
firm that described the
textile stock which was selling
well known middle western securities
a
value
below
existed
that
net
in
seasoned
a
quick, that had a substantial
past record of consistent
twice net earn¬
ings, to yield approximately 10 %, without considering extras paid
ipi the past several years. The seasoned securities in industry after
industry that are available today at similar attractive levels, are
only there because people don't have confidence in the future.
When you can buy cash for 80 cents on the dollar, when you can
buy skillful, able, management; when you can buy reserves and
hidden values in plant
and property for absolutely zero, YOU
EVERY
AROUND
ALWAYS
What
NOW.
some
And
BE
for
BARGAINS
NOW
DO
COULD
There
are
a
TO
BUSINESS
FUTURE
AROUND
textiles.
AND THEY
FOR THOSE WHO PASS THEM
give people
change—what a REAL SALES EFFORT
CREATE GOOD WILL AND BUILD UP
opportunity for us to go out and
an
IS
shall
answer
express
our
own
The questions are:
views.
(1) To what extent does the at¬
titude
of top representatives at
National
President's
the
Labor-
Management Conference reflect
thinking of the parties them¬
the
Does
selves?
ments'
rights
and
can
business
unions'
that
think
must
and
and
generally
manage¬
prerogatives
surveyed
be
and
BULLS and BEARS in Wall
Street.
If you are BEAR
can't afford it if you are a secur¬
ESPECIALLY TODAY WITH THE BARGAINS WE
which
management
is
now
sov¬
(2)
As
a
matter of fact,
will
unions continue to encroach upon
ities salesman
Should public policy at¬
tempt to define and limit the
areas of collective bargaining and
HAVE AROUND US.
The Red Cap in Grand Central
.*.
.
we
can
take
a
is an optim¬
in happiness and a healthy outlook on life
lesson from him.
management function?
(3)
the respective
sibilities
Maine Central R. R.
Company
$7.40 divi¬
preferred, which
proposes
a
5%
selling under 60. Stockholders'
committee
ask a $9.25
dividend
dend
rate
on
is
rate.
Our
latest
consistent
railroad
analysis
earning
over
Special
a
illustrates the
of this
period.
power
24-year
report upon
of
unions
i
Incorporated
53 State St., Boston 9, Mass.
LAfayette 3-8344
>
Both
er.
were
predecessor
members
in
the
and
manage¬
Tel. BS 189
.,
these
of
questions
clarified by distinguish¬
ing two types of union challenge
to management control: (1) exten¬
sion of the collective agreement,
may
be
i *
v
-*)
■
i*:* *
9<*
In
management. The following are
responses typical of the large ma¬
jority:
(1) No
union of¬
unions into
responsible
ficial wants to in j ect
management of business. The
direction of an enterprise requires
the
authority and authority cannot be
divided.
Management can't be¬
come a debating society.
(2) Unions have succeeded, in
past, because they left man¬
the
has been and continues to
the
be
ex¬
Up to the present
time the union challenge to man¬
ceedingly
rare.
agement has been a kind of en¬
circlement which, by expanding
the area of collective bargaining,
freedom.
labor's demands
may
be the determining factors
of important business policies, but
management's
narrows
this
In
process
they remain merely external con¬
ditions. The union shares no posi¬
tive
responsibility
deci¬
the
for
function.
union's
on
Should
unemployment
adverse
union
members
will
that
remarks
The
make
to
am
blame union
officials for the result if they had
cooperated with the management.
Union
in
participation
is
ment
about
result of
interviews during
past year divided about equal¬
the
ly among representatives of busi¬
ness and labor and extending from
the midwest to the Atlantic sea¬
The universe of industrial
is not homogeneous
It includes the operators
relationships
or
static.
of
<
good
a
with
manage¬
member¬
shifting.
reflected
widely
di¬
Obviously this
report distorts these
views by
compression and oversimplifica¬
experiences.
r
develop management-mindedness.
officers who become man¬
Union
as
officers.
union
exceptions
Two
statement
should
above
the
to
should.be noted:
think
officials
few
last
don't
agement-minded
that
(1) a
unions
greater control over
have
Typical responses were:
interest
of
interest
of
our
If the
membership re¬
members.
our
quires us to bargain with a com¬
pany about closing down plants,
we will bargain about shut-downs.
(2) The interests of union mem¬
are not limited to wages or
bers
length of the working day or
the hours when work will be per¬
formed. We can't draw a line and
we
will bargain about these
view
that
have
greater con¬
trol of efficiency appears chiefly
should
unions
better
have
which
of
than
those
re¬
of the plants
organized. All
familiar
with
garment
workers' contracts which
unions
ciency.
But
control
much
give the
over
effi¬
similar sentiment
in some large establish¬
appears
ments.
unions
technical
many
have
they
are
us
of
officials
among
sources
(1) We do not want to manage
business. But we must protect the
The
industries.
whole
which
,
III.
say
The participation of union
in management tends to
(4)
officials
sewing ma¬ the efficiency of plants; (2) an¬
changing, growing, other few want unions to partici¬
affect
Views of the individuals pate in decisions which
interviewed
crease.
which
union
the
is
It
tion.
of co¬
program
and
mills
strip
chines.
verse
occur,
ship.
I
represent the
than 200
more
any
or
situation
other
wants to take over your
II.
the
Keep
and you keep man¬
agement efficient.
(3) Union participation or union
cooperation or whatever you may
call it is dangerous for the union.
pressure
operating
sions which result.
things and leave
Unions are just 10 years
period when they had
struggle for existence and rec¬
collective
(3)
from
in
the
to
the
ognition.
*A paper
They first turned
their
obvious interest
of their members in
wages and
working conditions.
It is inevi¬
table that as the unions grow in
attention
by Father Brown be¬
fore the Annual Meeting of the
pany, Incorporated, Chicago, died
American
Economic
Association,
at his home of a heart attack at
Cleveland, O., Dec. 30, 1948.
the age of 66.
ft, .-A V
management's decisions.
general, these same repre¬
sentatives revealed little enthusi¬
asm
for
union
participation in
of
agement free to run the business.
By increasing their demands on
management they made manage¬
ment more efficient. That is really
for business.
is essentially an ex¬
trinsic and negative encroachment
on
management.
The process of
Robert J.
Graf, chairman of the
board of H. M. Byllesby and Com¬
welfare
manifest
will
members
their
accompanied by an in¬
positive responsibility
Such formal partici¬
pation by unions in management
of
crease
bargaining by including
matters
agreement
Robert J. Graf, Dead
its in¬
in
increase
an
gen¬
are
At
a
one
large plant on the
eastern seaboard the local union's
officers
are
troduction
prepared to force in¬
of
union-management
cooperation and sharing of effi¬
ciency earnings.
They are con¬
vinced that operations are waste¬
ful. They think
substantial
that they
can
contributions
make
to
effi¬
ciency. For more than a year they
have been gathering ideas from
workmen about improvements in
operations and recently presented
management with the outline of a
all other things share-the-production plan. The is¬
to
management.
If the interest sue is
likely to be introduced at
of our membership requires us to
the next contract negotiations.
(2) actual participation in man¬
bargain about price policies, we
agement.
The expansion of the
The
second
exception
to
the
will have to bargain about prices.
collective
more
partnership.
where
and
the
Discussion
JACKSON, MISS. —Kingsbury
& Alvis, Lamar Life Building, is
now doing business as a corpora¬
tion. Officers are J. W. Kingsbury,
President and A. L. Alvis, VicePresident and Secretary-Treasur¬
request
A. G. Woglom & Co.
\
Corporation
mean an
fluence is
rights and respon¬
ment?
Now
We
chaos?
the
ist and he U making it pay
execution.
or
will lead
and
minded become a trader, you just
—
largely for¬
only to con¬
By and large, however, labor
Is labor, in- leaders at all levels of authority
general, convinced that collective and in a wide variety of organi¬
bargaining will gradually include zations expect the area of collec¬
more
and more of the areas in tive bargaining gradually to in¬
other
the
fusion
ereign?
ALMOST INCALCULABLE.
agency
arrangement where the union has
citizenship
and
representation
within the business municipality,
board.
DOESN'T COME posted? Does it feel that invasion
these opportunities are available in by one party into the territory of
industries besides the overly depressed
WON'T
BY
DAY.
In this paper we
THAT
OPPORTUNITY
BUYING
A
HAVE
many
be bought today at about
and that could
growth,
management."
she.il ask three
of questions and by way of
into the field of
sets
an
and positive responsibility
with management for policy for¬
mation
conceded that "the functions and
members
union
The
as
uing
i ttee
o m m
business.
uinely
the
increasing interest in a wider area
it
increase
eign to the enterprise.
By
participation
in
manage¬
ment, we mean a situation in
which the union shares a contin¬
manage.
in
interested
agreement,
the
which is external and
ily agreed that
management
which
Unions
welfare.
of
automatically
of
nomic decisions which affect their
union
in¬
over
industry
exercises its control
read¬
was
control
not
conduct
operation
o f
an
enterprise.
It
its
the,
positive responsibility for the
its
management
independently.
when
expanding
by
respon¬
sibilities
in 1948. In fact, if the entire
Management
members
con¬
securities industry could get together on the project we could go cluded that "the labor members
out and actually turn the tide of depression, and the absence of are convinced that the field of
confidence, which has existed among investors for over two years, collective bargaining will, in all
continue to expand
into a wave of confidence. The other day I read a bulletin put out probability,
1949 much better than we had
year
decide
to
ters
bor of
who have allowed their
jobs to become humdrum and monotonous.
Here was a humble
porter who could make something uplifting out of his day's toil.
Then I thought of those few I have met who have made their own
jobs important.
I know some securities men who believe their
work approximates the most highly skilled professions.
Their ap¬
proach to their work is not how much can I take out in money, in
ease, in things, but how much can I PUT INTO MY JOB IN HELP¬
FULNESS TO OTHERS.
These men study their business.
They
plan their selling activities. They follow up their contacts. They
remember the little things—the phone calls—the
service calls—
the letters and notes and clippings about news items of interest to
their customers. They know what is going on in the world, in the
securities markets and they don't talk unless they know what they
are talking about.
These are the men whose earnings in the year
1948, which was favorable for securities men, still produced a siz¬
able income from their efforts. To them, obstacles are problems to
solve, not something to worry about.
Selling it not talking. It is not story telling. It is not know¬
ing thousands of facts and relating them.
It is not just making
ten calls a day—or even 15. It is inner drive.
It is believing. It is
having controlled impetus that coordinates the planning functions
of an orderly, experienced mind with ACTION.
Every new cus¬
tomer you add—every
sale you make—every portfolio you bring
in
for analysis—every
planned campaign you put into effect—
every advertisement you place before
your public- that brings a
favorable reaction toward you is the direct result of POSITIVE,
CREATIVE DRIVE. It is the end result of believing that you have
something worthwhile to offer to another.
I mean that literally.
You cannot belittle your job—think negatively about the future—
or
become
a
pessimist and do anything worthwhile.
Somebody
noticed that Red Cap in Grand Central. They saw he was making
a
career
out of carrying bags.
That is why he was asked to go
on
ceptance
organized
held
with conviction.
thought about the people I have met
I
were
strength
to
and
the
maturity they will
general
conclusion stated earlier,
that union officials do not want to
share in the management of busi¬
ness,
A
is perhaps more significant.
but influential minority
small
of union
officers, especially in the
production industries, are
searching
for
some
means
by
mass
(Continued
on
page
28)
Volume
169
as
Bad
or
unless
By WILLIAM S. SWINGLE*
Looks for
The whole subject is so broad that, even
There
provide payment for purchases
to
gram,
time
will not per¬
tionship
ment
both
of
the
recipient country.
to
our
export
trade,
therefore, is different from many
wartime
operations in that the
temporary
inten¬
current
and
desire
long-
the
and
is
goods
our
export
busi¬
abroad and not from
ness.
Com¬
ment
ment
any
It
political
military
lary
and
Swingle
S.
based.
omitted although it
aid
this
is obvious that
whole
at least
in
the
overall
can
be built
as
up
may
constitute,
can
Department of State. Such selec¬
mitted
to
funds
provide for an effective job but
with
the expenditure of
as
little
tion
of
if
imports,
short-range
competition by the op¬
of
the
program
into beneficiary
(Continued
r
ac¬
on
page
is
basical¬
was
question of self-help or
production in the recipient coun¬
tries but rather a largess given to
feed,
clothe,
and
help
rebuild
ments which stand out and the ef¬
foreseen
no
clarity.
On the other
hand, the influence of ECA is
bringing about continual changes
devastated
in
Bankers Trust Company
purchases largely
some
trade
and
world
economy
countries.
The
pro¬
posal made by Secretary Marshall
was
on
which it is difficult to know what
the ultimate result may be.
to
one
NEW YORK
provide dollars for
in the Western
Hemisphere beyond the amounts
which the European nations could
overall, the dollars sup¬
plied to foreign governments by
ECA, either in the form of grants
or
loans, must provide a corre¬
obtain
sponding increase in American
export business.' The money may
for
not
for
On the
or
necessarily be
spent directly
immediately for shipments to
through their own efforts.
fully realize this con-.
When
we
recovery, dfecide what goods
they need both for substance and
determine
how
supply one to an¬
recovery,
much
they
can
Europe although a large percent¬
age is so utilized.
In off-short
ASSETS
DIRECTORS
vision of dollar aid translated into
With
Executive Vice President
regard to consideration of
to be supplied for
carrying out the European Re¬
covery Program, the requirements
other parts of the world which, were first
brought forward in the
look to the United States as a
report
of
the
Sixteen-Nations
source of supply.
Committee, later checked and re¬
In
undertaking an examination
relationship between the
the
and
ECA
export
our
it is
trade,
worthwhile to understand clearly
the
of
concept
which
the
have
we
in
program
engaged
the
as
vised. The
appropriated
a
trade
tion.
Congress did
generally known
ably
the Marshall
will
within
Plan.
The
European
Recovery
Pro¬
this
aid
more,
no
opera¬
to
China,
and prob¬
more,
ECA
strictly
than to
plan,
essential dollar
re¬
quirements of the Western Euro-y
pean participating nations.
in both its original proposal
authorized by Congress,
envisage a subsidy to
American exporters or a method
cooperation
of getting
Loans and Bills
State and
Chairmnn, The National Sugar
Refining Company
HENRY J. COCHRAN
President, The Franklin Savings Bank
as
did
not
rid of burdensome sur¬
which
might
overhang
American
production.
The
de¬
pluses
mands
for
American
goods
were
greater than we could meet and
we
have
ample
use
here
for
American
production
in
most
commodities,
shipments
rather
that
under
burden
a
so
on
than
a
many
ECA
our
means
of the
represent
production
of
clearing
surpluses.
up
ECA
wherein
the
misconceptions
operations.
lend-lease
It
procurement
our
American
are
to
is
a
program
government
market,
not
enters
buys
up
with
be
basic plan of
self-help, funds
the
and
themselves
among
sources
in
the
This
President
S. SLOAN COLT
Chairman, Union Dime Savings
cover
Convention,
Cleveland,
European
or
obtain from
dollar
or
other
financed through
requirements
for
goods.
chases
of
is,
There
goods and services be¬
restricted
yond
Substitutions
Bank
.
.
22,794,624.31
.
13,617,178.84
Banking Premises
Accrued Interest and Accounts
Customers' Liability on
4,210,581.40
Receivable
Acceptances^.
13,326,029.98
.
$1,524,962,755.74
Chairman, Executive Committee,
vA:
United States Lines Company
LIABILITIES
New
CHARLES D. HILLES
York
WILLIAM H. JACKSON
Partner, J. U. Whitney <t Co.
$30,000,000.00
FRED 1. KENT
President, Council of New York
University
Surplus
WARD MELVILLE
Undivided Profits*.
80,000,000.00
.
164,878,686.24
$
54,878,686,24
.
President. Melville Shoe Corporation
New Jersey
PAUL MOORE
THOMAS A. MORGAN
Chairman, The Sperry Corporation
Dividend
Deposits
Payable January 15, 1949
.
.
1,350,000.00
.
1,325,471,602.36
.»••»•••••••
.-c ■'/ y
/'vl.'"'
■
New Jersey
PHILIP D. REED
Chairman, General Electric Company
Reserve for Taxes,
Accrued Expenses, etc.
4,664,470.30
.
$15,154,264.77
Acceptances Outstanding
'
Less Amount in
GEORGE A. SLOAN
Chairman, Southern Agriculturist
President, The Nutrition Foundation, Inc.
1,151,427.93
Portfolio
14,002,836.84
14,595,160.00
Other Liabilities
Senior Vice President
$1,524,962,755.74
THOMAS J. WATSON. JR.
Vice President, International Business
Machines Corp.
and
JUSTIN R. WHITING
President, The Commonwealth
Southern Corporation
requirements.
wherever
area,
possible,
their
developing
a
dustry
living.
and
a
in
economies
rees¬
and
higher level of .in¬
better standard
of
Profits balance
as
annual report to
been
of the Federal Deposit
Corporation
,
Insurance
.SSJjniTjN
,Torto:.)!5
ul.f
U10
nuoufeniA
of December 31, 19-48, includes
$10,291,828.63 trans¬
thus eliminating the latter account.
*
*
*
*
?;V\
yyyir,yiK:: ;*'
method described in the
carried at $35,090,605.08 have
including $22,362,628.55 of United States Government
Securities in the above statement are
Member
countries
The Undivided
'■
would be utilized by
recipient
*
ferred from General Reserve,
obtained from other than the
tablishing
O., Dec. 28, 1948.
the
a limited area for free
choice of commodities or for pur¬
the
sociation
18,470,816.94
....
therefore,
Rather, it is a financing medium
Mr. Swingle be¬
Marketing As¬
Municipal Securities
JOHN W. HANES
B. A. TOMPKINS
essential
571,153,307.27
Shoe Company
,
uled
ECA,
441,901,515.34
WILLIAM B. GIVEN. JR.
dollar ex¬
change for goods and services be¬
yond what they could supply from
their own diminishing reserves or
can
presently create through ex¬
ports. Under this program, sched¬
dollar
*An address by
purchase
requires
imports,
.
....
Discounted
WILLIAM L. DeBOST
DANIEL E. POMEROY
areas.
supplies, and ships them abroad.
fore the American
to
provided
commodities which
only
There have been
of
line
In
*
Other Securities and Investments
countries cannot finance for trade
gram,
and
.
BUNKER
ELLSWORTH
plan
financing
no
the
.
.
Securities
>
President, American Brake
of
do
the
provide
ECA No Subsidy to Exporters
will
under
deficit
Outside
medium for implementing what is
as
probably
the minimum amount to do
were
439,488,701.66
.
York
which have been
sums
appropriated and
be
New
CORNELIUS N. BLISS
amount
tional purchasing power for mar¬
kets not only in Europe but in
of
U. S. Government
$
.
.
ALEX H. ARDREY
goods and services.
the
Banks
Cash and Due from
other and then, beyond that, look
to the ECA for approval and pro¬
purchases or in any operations
which immediately or eventually
place dollars at the disposal of for¬
eign countries, we create addi¬
CONDITION, DECEMBER 31, 1948
CONDENSED STATEMENT OF
cept, we understand why the re¬
cipient nations initiate the plans
be
carried in accordance with the
stockholders, dated January 20, 1948. Assets
deposited to secure deposits,
deposits, and for other purposes.
ad-;
countries
programs
ly
it
Ameri¬
in sufficient volume to assure
only for the
in order to
and
in view
Further,
products temporarily excluded
from such
carefully
ECA, Congress evidently intended
authorizing
served."
been
eration
In
nations, when
purposes
urged "that shipments of
lead to,
or
not
if
discrimination
immediate
have
greater po¬
a
other exporting
the
area
American goods.
tential buyer of
This
that
of
worth
of
until
Europe
the
basis of
equal competition with producers
temporarily certain of its
markets
export
again. enter
to
markets involved, on the
to sacrifice
being called upon
guarded against by ECA and the
recall the
operation
frequently direct influence. There
are
certain
important develop¬
be
has gotten under
is
be given the
will
producers
opportunity
tion, American business probably
that Ameri¬
countries
ticipating
can
"the
from par¬
participated in several
of one type or an¬
or
other in which there
can
frequently lost sight of
the program
addi¬
that
Up to that time, we op¬
erated
these factors do have indirect and
which
the essential requirements
only
in
assurance
and
The Con¬
production."
obtain
of
use
drains on
recommended
vention
ECA
greater
tary of State Marshall in 1947 on
which
of
limiting dollar
for
not
but,
money
the
unnecessary
American
long-
a
relieve
to
for
original proposal made by Secre¬
William
to
way.
some govern¬
might be well to
covering either the necessity for
ECA
or
its
operation
will
be
fects
as
agency
considerations
with
aid
necessity
has been
here buying goods
shipping them overseas.
and
corol¬
on
the
of
the
in
made
the
of
selection
and
buying country and not by our
government.
Further, the initia¬
tive
for purchases comes
from
be¬
tween
ECA
American
rela-.
range
tionship
for
goods.
and
goods
on
requires
basis
range
ECA
interna¬
of
facilities abroad,
productive
being. Our total aid
under
diversion
stimulate
to
being made elsewhere, at least
sacrifice
might be involved "a
tional trade from normal channels
purchases
the time
there
that
may
while
markets
torical-
self-help and on
The emphasis on
recognized this situation and, in
Declaration, pointed out
adversely
affect shipments of certain Amer¬
ican products in traditional, his¬
program
^re
sential items or for luxury
tional
field for dis¬
a
for
indicated
no
always
the
that
irr tion by Congress to provide funds
Its rela¬ to finance our export of non-es¬
the
is
recent
Thirty-Fifth Na¬
Foreign Trade Convention
The
expenditures to take
first.
of their essential needs
its Final
conceived and made by buyers
mit full treat¬
was
prevent
loss of
permanent
or
agreement as to what constitutes
essentiality but we must realize
<S>-
encetothe
China aid pro¬
action of the
countries in utilizing
dollar
their
the export trade is
our own economy and that of the world at
on this specific aspect and without refer-
phase of the impact of this program on
one
large.
to
recipient
freedom of trade and investment.
more
handled
American export markets.
relationship of the Economic Cooperation Administration and
The
but
stability and
more
carefully
excessive
There
Foreign trade specialist traces history and development of the Economic Cooperation Administration,
particularly as it has affected or may affect U. S. export markets. Says ECA is not a subsidy to export¬
ers and
may even endanger export markets through diversion of shipments into new areas and new chan¬
nels. Sees ECA aiding U. S. Western Hemisphere markets and a force in increasing production of stra¬
tegic materials and other imports into the dollar area, which will, in turn, result in greater American
exports.
be
ly be made of the
care
Foreign Trade Council, Inc.
Executive Vice-President, National
cannot be avoided but these must
changed, valid criticism can hard¬
Export Trade?
Tor American
be required.Therefore,
the
concept of ECA is
may
21
complish the immediate require¬
ments of the program, probably
and drain on our economy
money
The ECA—Good
(77)
FINANCIAL CHRONICLE
&
COMMERCIAL
THE
Number 4766
37)
the
,.r.
22
THE
(78)
Colombia's Plan for
In
on
Refunding Announced
the
of
and
the
been reached on the terms for
issue
bear interest
annum.
dollar bonds in ex¬
new
will
has
agreement
that
nouncing
For each
at
3%
$1,000 principal
surrendered,
change for the old bonds and un¬
paid coupons of the following is¬
7% issues of Department of
ecutive
Antioquia due 1945 and 1957; C.aldas 7y2% due 1946; Cauca Valley
7%% due 1946 and 7% due 1948;
Cundinamarca
6 Vz %
due
1959;
7%
Santander
due
of.Cali 7% due 1947;
due
It
1951 and 6x/2%
is
Medellin 7%
installments
fund
bonds will
the
of
of
this
guarantee,
By
the
that
Vice-
organ-
t i
and
o n
Profess
of
new
or
news
tacks
on
certificates,
United
States
notes, and minor coin. Such cash
is
not
lawful
for
in
reserve
the
Federal Reserve banks; it is sim¬
mone¬
system
again
ply
a
non-reserve
other
for gold
d e e mable
words,
lawful for
Walter E. Spahr
serve
and
money.
The
out
pay
bilities is composed of silver, sil¬
calls
r e
can
ver
cur¬
and
banks
our
b i 1 i t y
tary
excepted).
against their note and deposit lia¬
"lia-
rency"
Reserve
the
cash
reserve
In
asset.
that
money
is
in Federal Re¬
banks
cannot be paid out;
only asset cash that can
the
text of Dr. Spahr's be paid out — relatively a very
small item—is not lawful for re¬
follows:
in
the
Federal
Reserve
Today the United States is run¬ serve
ning on liability currency—on the banks (though, as a Treasury cur¬
liabilities, of the Treasury and rency, it is deemed to be good
banks, particularly Federal Re¬ enough for the people of the
full
statement
United States).
banks.
serve
We have reached this condition
i
.
,
brown brothers harriman
Co.
&
PRIVATE BANKERS
NEW YORK
PHILADELPHIA
BOSTON
a
ASSETS
on
Hand and Due from Banks
.
.
.
.
$ 60,059,968.63
.
.
.
50,535,865.08
State, Municipal and Other Public Securities
,
Other Marketable Securities
Loans'aM Discounts
Customers'
Liability
.
.
40,359,766.97
5,091,595.37
*V'.
.
.
Other Assets
LIABILITIES
Deposits—Time
.
.
..
would
notes
Federal
issued
be
against such reserve and security.
$187,680,789.16
bank notes
Reserve
Federal
.
self-liquidating
of
out
Reserve
.
were
If,
that
on
States
had
system
able,
and
gold
Acceptances
$ 17,875,719,76
Less Held in Portfolio
Reserve for
Expenses,
1,500,000.00
$
2,000,000.00
11,925,283.54
........
13,925,283.54
$223,152,802.94
posal $22,960,691,000.
ratio of 49.4%,
Required by Law $1,600,000 U. S. Government Securities
Pledged to Secure Public Deposits.
PARTNERS
Moreau D. Brown
Complete Facilities
Prescott S. Bush
Commercial Letters
H. D. Pennington
E. R. Harriman
Knight Woqlley
Brokers
.
Limited Partner—\V. A. Harriman
Domestic
.
and
and
.
of
for
Purchase
of
1932,
Federal
David G. Ackerman
Edwin K. Merrill
M. Button Morehouse
Ernest E. Nelson
1933, to Jan. 30,
the
not able to
curity
A ssjslan t Ma nagers
their
Federal
Reserve
since
serve
held
notes
against
can
Federal
William C. Horn
L. J. Newquist
Merritt T. Cooke
John A. Knox
Arthur K. Paddock
Louis C. Farley, Jr.
Herbert Muhlert
William F. Ray
self-liquidating commercial
James Hale, Jr.
Arthur L. Nash
Arthur R. Rowe
and
Laurence W. Simonds
odt domestically.
securities
ernment
the
The
reserves
reserves
instead
cannot
.
Herbert Gray, Auditor
had
tory.
as
Private Bankers and subject to examination and regulation by the
Superintendent of Banks of the State of New York and by the Department of
Banking of the Commonwealth of Pennsylvania. Subject to supervision and ex¬
amination by the Commissioner of Banks of the Commonwealth of Massachusetts.
1
a
Since
reserves
Licensed
a
paper
be
paid
>
banks against their
have
Treasurer
of
of the Federal Re¬
serve
George E. Paul,
J. McElrath, Comptroller
Re¬
all be illiquid gov¬
Robert H. Chamberlin
Thomas
;
-
Reserve
banks
the
in
are
grip of the Treasury; the Treasury
must
respond to the appropria¬
tions of Congress: the majority of
Congress have permitted them¬
selves to be responsive to pressure
groups which have ceased to be
domestic only but now reach to
out
demand
on
This is
a re¬
contrast¬
as
against
their
notes
and
deposits.
The
gold
coin system
would
have
provided the Federal Re¬
serve banks, in gold, with over 100
cash,
times
as
much in asset cash to pay
against their note and deposit
as they were able to pay
the
in
form
of
an
inferior
ities. But when it is suggested
desirable
is
States
to
return
for
to
that
gold
coin
banks
with
over
100
times
cash assets, or a
cash reserve
ratio of 49 4% against their notes
and deposits, there is much excite¬
ment and vigorous protesting and
shaking of heads.
The common
argument
is
that
the
reserve
would be inadequate; there would
not be enough to go around. The
fact that the only asset cash that
these banks could pay out was less
than 1/100 as large is not men¬
more
Reserve
banks
issue
promises.
and
As
the
a
of
abuse
of the
is to
irredeem¬
of this system,
consequence
people
do
need
more
the
have lost control
United
the
over
public
States
and
use
They
lost this control when they lost' a
gold coin system and an irredeem¬
purse.
able paper money was thrust upon
them.
If
the
people
of
this
country
could demand redemption of
they
money,
brake
could
the
on
promises to
then
their
put
• a
of
over-issuance
thus regain
control over the public purse.
At
the same time they would free
Congressmen from the pressures
and
pay
vote-delivering
favors at the
seeking
groups
expense
since
payer
of the tax¬
Congressmen
then
could point to the increase in cur¬
redemption, to falling re¬
ratios, and possibly to fall¬
prices as reasons why
they could not acquiesce in further
appropriations.1
rency
serve
ing
United
the
a
system, which would on that date
have provided the Federal Re¬
serve
and
print
able
of
money.
it
the part of these Con¬
that they can easily ob¬
tain the money for their appro¬
priations since all the Treasury
on
1
bond
A
return
should
it
have
should
ciation
act
as
of
an
in
so
a
redeemable
basic
brake
on
currency;
important
our
and
to
currency
benefits:
(1)
further
depre¬
(2)
should
factor
currency
businessmen
commitments
great
a
our
confidence in
enable
to
three
put
in
it
restoring
and therefore
make
perhaps
long
term
encourage
advance in our productive activity,
far as a good currency can ever
contribute
to confidence and
to produc¬
(3) it will permit people en¬
foreign trade to utilize gold
with
the
consequence
th»t private en¬
terprise should be able to open up for¬
eign trade and to go to the four corners
of the world with' a good-, money
that
would enable thexjn to b.py and to piake
investments.
Today
foreign
trade
in
practically all nations of the world is
controlled by governments and govern¬
tion; and
gaged in
"
Gale Willard
Harry L. Wills
William A. Hess
The
the :passagevof.
the Gold Reserve Act of Jap. 30,
1934, they have not been permit¬
ted to pay out the gold certificates tioned. f
mental
institutions.
As a consequence,
held
as
"reserve" against these
This is a phenomenon that has foreign trade is tied in knots. Appar¬
notes.
:
/ received relatively little attention. ently, there is no way to free foreign
trade and to restore foreign currencies
Thus we arrived at a state of It reveals how the people of the to a sound basis until we let
gold flow
affairs in which the collateral se¬ United States have slipped into a freely into and out of this country and
John C West
Joseph C. Lucey
notes
Federal Reserve banks
pay out gold to
1934,
L. Parks Shipley
Joseph R. Kenny
been
our
June 12, 1945, it was final¬
on
redeem
Managers
Howard P. Maeder
Reserve
were
Sale
Edward Abrams
took
we
From March 6,
Securities
and
of
Act
ly made permanent.
Credit
Investment Advisory Service
Jr.
monetary
Glass-Steag&ll
notes,, and,
F. H. Kingsbury,
our
,
Deposit Accounts • Loans • Acc f.ptances
Ray Morris
Louis Curtis
for
Foreign Banking
ThatcherM. Brown Thomas McCanck
means
against
government
securities,
while retaining the same gold re¬
serve
requirements. This "emer¬
gency" measure was renewed year
after year (Feb. 3, 1933, March 6,
1934, March 1, 1937, June 30, 1939,
June 30, 1941, and May 25, 1943)
are
FACILITIES
Stephen Y. Hord
situation.
pay
ed with the less than 0.5% of asset
out
27,
issue
As
have
to
first
In so far as this author has been
step toward the violation of the able to observe, no one has even
principle on which the Federal discussed, much less become ex¬
Reserve notes were built.
As an cited
about, the fact that on Dec.
emergency
measure,
which was 8, 1948, for example, the Federal
not to last beyond one year, the Reserve banks had less than
.5%
Reserve banks were permitted to of
asset cash against their liabil¬
164,573-91
etc
Contingencies
Capital
Surplus
a
simplifying
the
By
Feb.
Accrued Interest,
coin
Federal
liabilities
1
16,894,190.32
reserves
serve
out
of
as
structure.
981,529.44
.
would
required,
United
gold
a
against their demand liabilities,
they would have had at their dis¬
of retiring
bond-secured national bank notes
authorized
2,987,966.01 $190,668,755.17
on
which the
banks
their
the
date,
been
under
Reserve
and
.
reserve
gressmen
ately; provided that the
$223,152,802.94
.
problems inherent
system and
hoarding. Never¬
theless most of the Treasury and
Reserve bank officials, but not all,
seem
disposed
to
defend
this
fractional
ization
ture, and industry.
The
original Federal Reserve
Act, consequently, and appropri¬
1,038,332.17
Deposits—Demand
the
escape
a
against their deposit and note lia¬
bilities was less than half of 1%.
transactions in bommeree, agricul¬
16,931,063.49
.
It is
the fears of gold
Federal Reserve banks' asset c^sn
growing
40,136,211.23
.....
Acceptances
on
to
in
(1908-1911), and
the
investigations
during
the
drafting of the Federal Reserve
Act in 1913 all pointed to the evils
of
a
government
bond-secured
currency
and
recommended
a
paper money secured by gold re¬
serves, to be paid out on demand,
and
by short-term liquid paper
of Condition, December 31, 1948
United States Government Securities
situation.
the
ah easy, but not the proper, way
1900), the National Mone¬
of
tary Commission
Cash
the Federal Re¬
held. $227,781,000 of
affairs
Act
Statement
On Dec. 8, 1948,
satisfied with
in subtle ways, chiefly serve banks
steady loosening of the bonds this non-reserve cash. That is all
of integrity.
they had to pay out against their
Before the Federal Reserve Sys¬ liabilities of $24,238,160,000 in the
tem was established, the Indian¬ form of Federal Reserve notes and
apolis Monetary Commission (in their liabilities of $22,252,387,000 the four corners of the world. This
its report of 1898, which prepared in the form of deposits—liabilities responsiveness to pressure groups
the way for the Gold ^Standard of $46,480,547,000. The ratio of the arises in large part from the real¬
of
by
Business Established 1818
in
our
economic
Nevertheless, we con¬
tinue to hang on to our dope and,
when a proposal is made to rid
ourselves of it, all sorts of pro¬
tests— confused, often irrational,
and generally based upon a variety
of fears, much like those of the
dope fiend—arise. The matter of
integrity as to the fulfillment of
promises is generally pushed to
one side.
We grow silent on that
point; we do not wish to discuss it.
As matters stand, control of the
people's money is in the hands of
the Treasury and Reserve banks.
Since they are not required " to
meet
their liabilities with
good
cash assets they are apparently
areas
structure.
at¬
present
sion.
eral
re¬
his
claimants
now
We like
painful
The only asset cash which Fed¬
York
University,
reason
offer must be registered with the
eign
Economics
New
at
money.
paper
'
employing that de¬
its intoxicating ef¬
fects
although we are showing
some
concern
about
our
high
prices and the various bloated and
their deposits and notes be¬
frozen and nonusable (for¬
came
irredeemable
are
vice.
both
the
z a
proposed
the
We
claims in gold.) Thus reserves of
Federal
Reserve
banks
against
i
be guaranteed by the
Republic of Colombia.
.than
of
new
Securities and Exchange Commis¬
due 1954.
announced
also
Tolima
1948;
Also Municipalities
7% due 1947.
coupons,
Thursday, January 6, 1949
President
bonds in the principal amount oi
$1,200 will be issued. Payment of
principal,
interest
and' sinking
sues:
unpaid
CHRONICLE
Writing in the January issue of "Monetary Notes," published by
on Monetary Policy, Dr. Walter
Spahr, Ex<$>-
E.
amount of old bonds
all
^
the Economists' National Committee
per
with
FINANCIAL
In.."Monetary Notes," Executive Vice-President of the Economists'
National Comrnittee on Monetary
Policy contends because of our
monetary system, people have lost control over use. and abuse
of public purse.
the dollar bonds of certain of the Departments and Municipalities
Republic of Colombia, Dr. Gonzalo Restrepo-Jaramillo, the
Colombian Ambassador at Washington,> and James Grafton Rogers,
President of the Foreign Bond-^
new
bonds will be dated July 1,
holders Protective Council, Inc.,
1948, will mature July 1, 1978,
made a statement on Dec. 31 an¬
of
&
Spahr Scorns Qur'LiabiJityGurreficy''
the resumption' of payment
to inquiries respecting
response
COMMERCIAL
deposits
parallel his¬
12, 1945, these
closely
June
have
been
confined
to
system
are
not
of liability currency and
only accepting it without
much protest
or
concern
actually defending it.
When
permit private traders
use
of
a
good
a
free hand in the
money.
.
Y
,
but are
Correction
people reach a state of
In the "Financial Chronicle" of
affairs in which they are ready to Dec. 31 in
reporting partnership
permit their Treasury and central changes in the firm of Abraham &
banking system to issue promises Co., New York City, it was indi¬
to pay which they are
not re¬ cated
that Robert B. Hollander
quired to redeem in a money hav¬
and Henry B. Gersten were with¬
ing universal acceptability (gold
Mr. Hol¬
Or silver), that nation has slipped drawing from the firm.
into a scheme of things that car¬ lander and Mr. Gersten were re¬
a
gold certificates which cannot be
utilized in payment of the deposits
against which they are ostensibly ries within itself the seeds of a
tiring from partnership in Hettleheld.
(The only exception is in .catastrophe.
Next to war, prob¬
man &
Co., Mr. Gersten to form
the casq of foreign central banks ably no device created by man has
which can exact payment of their caused humanity more suffering Young & Gersten.
Volume
169
N. Y.
Number
4763
THE
COMMERCIAL
in
Banking Superintendent Paints to
bank
CHRONICLE
in
supplying -'savings
facilities without any com¬
mensurate
increase A in
Bell, in annual report reports reduction in government
security holdings of State banks totaled $1.8 billion.
.credit transactions fell, but
offset by
were
for steel mills.
ized
of Chile
Clark, Bodge Co.
mill
Francis
>
W.
Superintendent of Banks, states in his annual report to the Governor admitted
to
expansion
in
commerc
ia 1
previous 12-month period
flected chiefly a sharp
rise
partnership
i
n,
C 1 a r k,
Dodge & Co.,
re¬
61 Wall
Street,
New
in
Y
principally on new
housing units^tAe Superintendent
7ity, members
consumer
explains.
of
credit
of $8
loans
12
in
and
in
the
t h
m o.n
is
s
The
moderate
increase
million in GI mortgage loans
in
contrast-
to
the
o r
Stock
Exchange, it is
greater rise in that type of mort¬
ann o u n c e
Prior
previous year,
lending a year ago. -/AVfV-i,
While deposits remained virtu¬
ally unchanged at $17.8 billion in
in
but new mort¬
commercial
LaFarge
ended
1948
Sept.30,
less
was
than
in
the
gage
in
banks
the
year
reduction
million.
t'-ir j
more.
government
make
taled
$1.8
decline
billion.
Part
this
of
traceable
to sales by
institutions seeking funds to meet
private credit needs. Special fac¬
tors
was
also
were
involved, including
Treasury debt retirement opera¬
tions and higher reserve
require¬
ments for commercial banks that
made
sales
of
The
necessary.
issues
government
latter factor
increase
in
cash
holdings
of commercial banks.
Banking
institutions
in
New
York reflected the progress of the
third
the
of
year
and the efforts
ties
to
postwar
of
moderate
boom
public authori¬
it, the Superin¬
tendent says. Despite the fact that
banks bore the brunt of the
gov¬
ernment's
anti-inflation
control
program, the lending activities of
New York State banks and trust
companies continued to expand in
response to demands generated
by
the high level of business activity,
he said.
All
major types of lending to
individuals and business at com¬
mercial
banks, except loans on
securities, expanded, althougn the
total
gain of $544 million
year
ended Sept.
30
up
Savings
share
in the
tinental
and
capital
a
association
loan
increased
$44
he
served
for
15
Farge
years, part
of which time
market
as
Cor-
tion
p o r a
Francis W. La
.
the corporation and
mil¬
•
postwar
increase
record
of
new
mortgage lending, -amounting tc
$127- million, exceeded the in¬
crease in share capital, the asso¬
ciations
forced to sell
were
Admission
the firm
in
the
of
Mr.
LaFarge
"Chronicle" of Dec.
increase their borrowed funds.
Savings Deposits Increase
Jared C. Aiken With
who
underwent
business for
noticeable
Concern
down;
over
slowing
this slacken¬
ing in deposit expansion has led
to consideration
of higher divi¬
dend
rates
facilities
year
additional
and
has
been
project
in
the
by
in
the
Bank
September
investment
many years was pre¬
the data with
Chile proceeded to organ¬
ize the new steel
company, to en¬
United
gage
execute
States
the
engineers
to
uesigns,
to
detailed
satisfactory
United
loans
business
to
million
much
as
largely
in
of
quarter
commercial
coincided
the
cash
in
This
tbe
first-
the volume
industrial
the
o'
loans
accumulation
record-breaking
which
surplus,
utilized
for
tirement
decline
a
1948.
in
and
with
marked
loans
such
quarter decline
of
about 70% as
earlier, period,
that
in
$500
some
as a result of the
contraction
first
of
only
was
year
of
Treasury
was
chiefly
anti-inflationary
bank-held
debt,
a^d
bank credit largely as a result of
increased financing through the
securities
The
markets.
increase
consumer
of
$112 million in
credit
by institutions
under the supervision of the De¬
partment
was
$33 million less than
during the preceding 12 months.
This slowing down developed, the
report points out, in spite of the
that decontrolled, instalment
loans grew at a more rapid rate
fact
than a year ago, because, of the
negligible gain in single-payment
loans at commercial A banks, the
largest providers o£ ^consumer
credit.
/ >/ ■;./'
';; - -
Expansion
5
of
New
a
City changed their rates, of
paid to depositors.
Higher dividends for savings
banks
should
not
be
adopted at
the expense of appropriate loss re¬
serves, Superintendent Bell points
This
adequate
for
need
.
The
expansion of $920 million
in new mortgage lending at com¬
mercial
and
savings banks and
savings and loan associations was
in contrast to the retarded rate of
growth
credit.
in business and
consumer
This gain of one-third ovei
has
confirmed
judgment
that
sound
a
the
the
of
'A
contracts
for
the
supply
of
raw
financing. These preliminary
gotiations, all of which were
quired
under
Bank's
loan
the
terms
ne¬
re¬
the
of
agreement, could not
Banque Nationale de la Republique d'Haiti, as Fiscal Agent,
sharp- is notifying holders of Republic of
be completed until the latter
part
1947.
In the
of
meantime,
increases
States
in
the
costs
equipment,
of
United
materials,
cessary
inal
Haiti Internal Loan (5%) Series
A
Bonds and Bond Certificates
and
services, together with certain
due
ne¬
modifications in the orig¬
project,
have
resulted
in
,
July
15,
aggregate
1957.
that $227,120
principal
amount
these bonds and bond
a
,'t-i
will
be
at
a
redemption price equivalent
to
100%
is
that
the
will
chase
and
neighborhood of $83 million,
which
lion
estimated
now
investment. required will be
date,
be
bonds
devoted
to
States
the
January 15,
redemption
operation
fund.
and
the
to
Payment
bond
With the
certificates
Fiscal
Agent,
Banque
Export-Import Bank is increasing Prince, Haiti, and at the Head Ofits financing to cover $48
these
million'
purchases in the United
fice of its New York Agent, the
National City Bank of New York.
.PMORGAN & CO.
.J
INCORPORA TED
NEW
ARTHUR M. ANDERSON
YOIilC
Chairman Executive Committee
GEORGE WHITNEY
President
Condensed Statement of Condition December 31, 1948
Executive Vice-President
portfolios
mortgage
ASSETS
repre¬
years.
As a measure of fi¬
nancial
protection, the Banking
has
the
on
basis
of
annual
an
Cash
V ice-President
RA UL C.
Stock
BERNARDS. CARTER
President Morgan & Cie.
sion of Vz of 1 % of portfolio. Such
CHA RLES S. CHEST ON
policy has the object of drawing
periodically from earnings a rea¬
JOHN L. COLLYER
with
occur
the
the economic cycle.
The
problem
of
swings
A-A;
v
Some
both
of
regroupings
occasionally
of
boroughs.
population
for
example, a big housing develop¬
ment
is
completed.
These may
well
afford
the
most
branches
more
tion
in
par t
central
likely result in
any
areas
a
new
existing business rather
any
generating of new
customers for the- savings banks,
•;
yV.
r";.'*
policy of granting additional
offices
primarily to meet the
problems
would
tend
of
crease
bank
of
individual
to
result
overall
operation
the
banks
of
earnings
to
the
in
of
an
in¬
savings
detriment
of the savings
whole," the Superin¬
explains. "It would result
as
tendent
costs
banks
a
on
Letters
of Credit and Acceptances
GALLAGHER
Prepayments
$9,730f)38.23
194,344.06
9,536,594.17
'
$618.648,846.78
Incorporated
DEVEREUN C. JOSEPHS
'
LIABILITIES
President New York
Life
Company
Insurance
Deposits
THOMAS S. LAMONT
Accounts
G US TA V METZMAN
President New York Central
Railroad
.'
$529,709,299.02
Official Checks Outstanding
Vice-President
13,596,903.33
Payable, Reserve for Taxes, etc.
Acceptances Outstanding and Letters of
Credit Issued
A
Company
W. A. MITCHELL
Vice-President
Capital
,
•
Vice-President
$543,306,202.35
' 6,198,830.87
...
t
9,730,938.23
20,000,000.00
.
Surplus
JUNIUS S. MORGAN
20,000,000.00
Undivided
Profits
19,412,875.33
ALFRED P. SLOAN, JR.
-'A:-,'-',
Chairman General Motors
in
:
Liability of Customers
Chairman Morgan & Cie.
would
of
than
1,839,864.85
N. D. JAY
But
redistribu¬
12,405,194.92
3,000,000.00
Less
RALPH W.
when,
branch offices.
and
153,818,697.92
Vice-President
opportunities
some
for additional
for
made
are
>
CHARLES D. DICKEY
tendent states. A static population
coupled with an already well de¬
veloped savings bank system is
of Morgan Gr enfell* 8' Co. Limited
Morgan
Cie. Incorporated)
Banking House
Vice-President
facili¬
exists primarily in Man¬
hattan, and to a slightly lesser ex¬
tent
in Brooklyn, the Superin¬
1,200,000.00
(including Shares
Accrued In terest, Accounts Receivable, etc...
Company
v
•
branch
12,093,141.47
of the Federal Reserve Bank
Loans and, Bills Purchased
II. P. DAVISON
in
ties today
characteristic
■
237,450,539.70
Municipal Bonds and Notes
President The B. F. Goodrich
sonable contribution toward losses
which
$187,304,813.75
from Bank's
Other Bonds and Securities
Incorporated
a
Hand and Due
State and
.
1 nvestmcut Corporation
provi¬
on
United States Government Securities
CABOT
President State Street
recommended
generally to the savings banks: the
establishment of mortgage reserves
'
■
war
Department
-
I. C. R. AT KIN
■
$618,648,846.78
Corporation
E.
TAPPAN STANNARD
President Kennecott
United States Government securities carried at $26,960,178.15 in the above
statement arc pledged to qualify for
fiduciary powers, to secure
Copper Corporation
public monies
THOMSON
JAMES L.
as
required by law, and for other purposes.
Chairman Finance
Committee Hartford Fire
Insurance
Company
Member Federal Reserve
JOHN S. ZINSSER
Member Federal
Chairman Sharp & Dohme Inc.
...
•
>
•
•
-
Hi
w
biift
Oil '
K
-•
-
-■
will
Nationale
HENRY C. ALEXANDER
bank
the
of' the
the de la Republique d'Haiti, Port-au-
authorization,
'
particular emphasis by reason of
of
be made at the Head Office of the
materials,
equipment, and services.
supplemental
pur¬
on
of the principal amount
through
sinking
United
of
redeemed
interest
approximately $60 mil¬
Chairman
operat¬
of
certificates
substantial upward revision of the
v.'-A
•
de¬
velopment for Chile.
.
R. C. LUFFING WELL
orig¬
project
economic
DIRECTORS
A'-A
of
respect to costs and
materials and to arrange for local
'
establishing
out
reserves
"A
f .
A review
management services, to conclude
of
ing earnings has been brought into
he said.
Mortgage
Lending
markets
inal
funds.
branch
dividend
re¬
in business demand fo1
Chilean
represents
States
United
defrayed
from
of
from
-
"i*
sented by loans made in the post¬
was
the
credits
suppliers. The balance of
the dollar costs and all of the local
costs in Chile are being
solution.
a
This development was due chiefly
to the fact that the increase in
of
in
Corpora$4
additional
an
States
tion
the substantial portion of savings
that
for
1945.
Fomento
secured
During the
number of banks in New
as
slightly
before.
below
Chile
has
Thereafter, the Fomento Corpora¬
of
viously with Morgan, & Co.
York
out.
authorized
in the
.
quarter of 1948 the rate of growth
States.
tion
million
original credit of $28 million
this
It
LOS ANGELES, CALIF.—Jared
Notwithstanding a lessened rate C. Aiken has become associated
of growth, deposits in mutual sav¬
with- Dempsey-Tegeler & Co., 210
ings banks passed the $10 billion
Mr. Aiken
mark during the year. In the third West Seventh Street.
a
An
was
total
Dempsey Tegeler & Co.
-
at
Concepcion,
near
total estimated cost of the plant.
16.
some
of their government securities and
Bay
by<$>
Pacifico
Chile.
to
previosuly reported
was
del
analyst for
Vice-Presi¬
as
dent of its affiliate, Capital Adlion, or 11%, slightly below the
minstration, Ltd.
gain of a year ago. Because their
was
primarily responsible for the $870
million
Treasury deposits now
only about 3% of all
deposits in these institutions.
security
holdings of the various
types of banking organizations to¬
was
with Tri-Con-
million,
in
Mr.
associated
about
«■>
The
firm
1946,
ended
was
construction
Acero
San Vicente
secure
join¬
mand
$900
than
more
Elliott V. Bell
to
d.
to
the
ing
last Sept. 30, private de¬
deposits declined $243 mil¬
lion
and
private time deposits
continued to rise, gaining $101
lending,
gage
amounting
k
New
York
nine-fold
the
under
now
Compania
been
general
loans*
FHA
ment,
has
LaFarge
Legis-^
me
Export-Import Bank has author¬
additional credit of $20 million to the Fomento Corporation
to assist in
financing the purchase of United States equip¬
materials, and services required for completion of the steel
an
LaFarge Partner in
Banking Department's supervision, Elliott V. Bell, New York State
me
Agency
The Board of Directors of the
A shift from government securities into private loans of various
laiure.
,
23
Export-Import Bank supplements original credit of $28 million to
the Fomento Corporation of Chile to finance equipment
purchases
Consumer
kinds and into cash dominated operations in 1948 at institutions under
and the
1
v nience."
mortgage lending.
new
(79)
Chile Gets $20 Million More From U. S.
savings
bank deposits or in public conve¬
Elliott V.
the
FINANCIAL
increase in cost of overhead
involved
From Government Securities to Private Loans
■'l
an
&
System
Deposit Insurance Corporation
24
THE
(80)
COMMERCIAL
Halsey, Stuart & Co. Inc., in year-end survey, see continuing avail¬
ability of investment funds and support of government bonds at
present levels, but with diminished supply of investment offerings.
Total financing in 1948 exceeded $8% billion, bulk representing
stable
reasonably
and
possibly
strengthen in 1949, Halsey, Stuart & Co. Inc. have announced in the
firm's annual year-end bond survey.
An expected lessening in the issuance of municipal and industrial
offerings,
a
continuing supply of—
available
funds
purposes,
prices
of
securities
investment
for
time
in
and the likelihood that
will
be
shortages has been satisfied
industries
of
number
and
of plant expansion
have been completed or moder¬
ated, with a resultant decrease in
government
long-term
a
—
many programs
supported near
ties, in
In
Halsey, Stuart said,
total corporate,
municipal and for¬
eign financing was more than $8.5
billions, of which about $8 billions
side, with
represented
extension
these
any
new
figures
$850
Both of
money.
totals
exceeded
since
year
1929.
millions
in
Only about
represented
stock
financing.
Enormous borrowing took place
in the industrial
field, most of it
from
industry and
(2)
as
The
"During the
nation's economy
period of stress.
a
year
it became obvi¬
that the Marshall Plan would
forestall
tinued
the
need
OF
-
<t
'
t-
r
to
*
RESOURCES
European
recovery
.
.
.
State and Municipal Securities
Other Securities
,
♦
.
.
.
Banking Houses
.
248,763,322.39
.
.
13,665,300.34
.
.
.
.
140,306,959.85
....
Customers' Liability for Acceptances.
Stock of the Federal Reserve Bank
'
.
.
•
•
•
.
.
.
•
•
1,238,258.38
avoid
tures
660,000.00
•
•
•
•
•
It
is
366,948.35
•
12,375,000.00
•
9,315,653.06
Payable Jan. 3,1949
$31,315,653.06
275,000.00
......
Unearned Discount
745,844.21
Reserved for Interest,Taxes,
Less: Own in Portfolio
Deposits....
•
•
•
Contingencies
2,166,652.76
.
•
•
•
individual
to
cost
his
authorizes
h i
s
of
what he de¬
government
government
or
to
that
"the
accumulation
1,538,023.45
350,520.40
t
•••••••
of
life
insurance
accounted
billions
for
of
companies
alone
approximately $3.4
purchases and
bond
515,990,583.05
well
as
the
as
.
.
partially-exempts,
The bank obligations, tax-
.
being bought by both the
are
coming strongly fuom mid-west and Pacific Coast
secur¬
areas.
.
.
.
WORLD BANK BONDS IN DEMAND
The
World
Bank
previous investment
securities
regaining
be
well
as
their
these
investors.
non-bank
as
of
some
buying in
.
.
.
being acquired by certain deposit institutions because
are
substantial yield that
than nine years to run.
tutions that
to
appear
because there is good
by commercial banks
The 214s
of the
bonds
merit,
can
.
.
is
available for
The 3s
.
the longer maturity.
use
issue
an
that has less
being bought by those insti¬
are
.
.
.
Non-bank investors as well as some of the commercial banks
have been buyers of the longer maturing World Bank issue.
Both of these securities are looked
upon now
as being
more
attractive
COURSE
than
maturities of corporate
comparable
bonds.
.
.
.
OF GOVERNMENTS IN 1948
The year 1948 showed the eligible taxables made some progress
on
the up side, with the last three maturities making the most
prog¬
ress.
The record is
.
.
.
as
follows:
Eligible Taxable Bonds
12-31-47 Closing
Price Range
Bid
Price
-Issue
7o
27o
x
12-31-48 Closing
Price
Yield
Bid
Yield
Change
Chge.
Low
Yield
Price
%
32nds
%
100.12
100.12
1.01
—24.0
—.16
High
1948
6-15-49/51
101.4
1.17
101.10
9-15-49/51
101.4
1.29
101.12
100.17
100.17
1.14
—19.0
—.15
12-15-49/51
101.8
1.31
101.16
100.21
100.22
1.20
—18.0
—.11
2%
3-15-50/52
101.14
1.32
101.20
100.25
100.25
1.28
—21.0
—.04
2 7o
9-15-50/52
101.15
1.44
101.23
100.29
101.00
1.36
—15.0
—.08
100.11
1.36
100.21
100.3
100.8
1.34
3.0
—.02
17* 7o
12-15-50
27o
9-15-51/53
101.12
1.60
101.29
101.2
101.8
1.50
27c
12-15-51/55
101.12
1.62
101.29
100.29
101.10
1.52
1.71
103.25
102.16
—
2
i/a%
3-15-52/54
103.4
2 7o
6-15-52/54
101.8
6-15-52/55
102.4
.101.4
•;
12-15-52/54
272 7c
.3-15-56/58
2 7* 7c
27z7o
-
1.74
;
.
102.28
101.00
101.11
1.58
101.22
102.1
—.10
2.0
—
1.55'
102.00
102.27
1.69
-
4.0
—.10
—
1.62
8.0
—.16
3.0
—.11
3.0
—.12
—
4
—
1.75 r
102;1
100.31
101.12
1.62
4
8.0
102.24
2.13
104.29
102.23
103.27
1.91
4
1.3
9-15-56/59
101.8
2.08
103.12
101.7
102.10
1.92
4
1.2
—.16
9-15-67/72
101.0
2.43
103.1
101.00
101.29
2.37
4 29.0
—.06
The
"i
s*
partially-exempts
«,
were
among
ment issue in 1948 and the results
tion
were
on
the
favored
more
shown by the
as
•
—.13
•
—.22
govern¬
following tabula¬
the constructive side:
12-31-47
Price Range
Tax Free
Price
-Issue———
*
Closing
Bid
Yield 7c
12-31-48 Closing
Price
Yield
Bid
Tax Free
Chge.
Chge.
Low
Price
Yield 7c
32nds
1948
High
7c
3 7b 7c
12-15-49/52
103.28
.91
103.30
102.2
102.2
.74
—1.26
—.17
2 7a 7c
12-15-49/53
102.20
.93
102.15
101.14
101.14
.77
—1.6
—.16
27^7o
9-15-50/52
103.10
1.03
103.20
102.15
102.15
2 7* 7o
6-15-51/54
104.26
1.10
105.5
103.23
103.28
3 7o
.85
v
.27
—.18
.30
—.14
.30
—.17
—8.00
—.17
—
.96
—
9-15-51/55
105.26
1.14
106.8
104.23
104.28
.97
12-15-51/53
103.14
1.14
104.5
102.24
103.6
.97
27c
6-15-53/55
102.14
1.29
104.12
102.13
103.16
1.01
+ 1.2
—.28
6-15-54/56
103.24
1.37
105,30
103.14
104.28
1.11
+ 1.4
—.26
2% 7c
3-15-55/60
106.10
1.63
109.18
106.12
108.8
1.25
+ 1.30
—.38
2 7* 7c
9-15-56/59
106.04
1.68
110.6
106.4
108.28
1.29
+ 2.24
—.39
2% 7o
6-15-58/63
107.04
1.71
110.18
106.10
109.0
1.46
+ 1.28
—.25
27*70
12-15-60/65
108.00
1.74
111.00
106.24
109.20
1.57
+ 1.20
—.17
2 7*7c
The
restricted
obligations, ended the
side with minor price
All
ended.
year
.
.
were
Results
.
on
the buoyant
improvement being shown in each issue.
these securities
of
1948
year
—
.
.
.
selling above support prices, when the
were as
follows:
U
.•>*'. V.
v
<
Restricted Taxable Bonds
Price Range
12-31-47 Closing
Bid
-Issue
Price
r—
Yield
7c
Yield
Change
Chge.
7c
Bid
Low
High
Price
Yield
32nds
12-31-48 Closing
1948
Price
rM
2 7*7o
6-15-59/62
100.00
2.25
100.22
100.00
100.5
2.22
; +
5.o
—.03
27*7c
12-15-59/62
100.00
2.25
100.22
100.00
100.5
2.22
+
5.0
—.03
272 7c
6-15-62/67
'2.39
102.29
101.8
101.27
2.34
+ 19.0
—.05
272 7c
12-15-63/68
101.00
2.42
101.30
101.00
101.15
2.38
+15.0
—.04
2 72 7c
6-15-64/69
100.24
2.44
101.18
100.24
101.3
2.40
+ 11.0
—.04
through liquidation of
government bonds, but insurance
company investments still showed
a
net
increase of approximately
$3.5
billions
during
the
nine
months," it went on.
■>
272 7c
12-15-64/69
100.24
2.44
101.16
100.24
101.00
2.42
+
8.0
—.02
2 72 7c
3-15-65/70
100.24
2.45
101.15
100.24
100.31
2.42
+
7.0
—.03
2 72 7c
3-15-66/71
100.16
2.46
101.14
100.16
100.27
2.43
+ 11.0
—.03
272 7c
6-15-67/72
100.8
2.47
100.30
100.8
100.15
2.46
+
70
—.01
2 72 7c
12-15-67/72
100.8
2.48
100.30
100.8
100.15
2.47
+
7.0
—.01
was
Debt
held by life
companies, it said, are
estimated at close to $50 bil¬
lions,
public and trust deposits, and for other
permitted by law.
grow
obligations
and the
rapidly.
total continues to
Marketable
government
1948 aggregated
than
from
three
years
partially-exempt bonds.
since
the
ONACOCK, VA.
ties
■
•...
is
engaging
—
business.
tM^Kst
a
in
Harvey L.
a
Mr. Burton
securi¬
was
...
It has been
Treasury has offered marketable
due
or
callable securities mainly
.
.
.
This policy has
sharply increased the floating debt, which is not always a good pro¬
FEDERAL DEPOSIT INSURANCE CORPORATION
Burton
list during
the
$6,422,000,000 consisting of $4,177,000,000 of taxable
bonds and $2,245,000,000 of
more
bonds eliminated
bonds, because they have retired
Harvey Burton Opens
FEDERAL RESERVE SYSTEM
Throughout Greater New York
101.8
through the issuance of short-term obligations.
MEMBER: N. V. CLEARING HOUSE ASSOCIATION
an
Savings
"Part of this ac¬
reinvestment of funds
are'pledged to
25 Offices Located
with
.
close to $2.5 billions of mortgages,
now
or
.
.
the survey said.
insurance
required
market,
evidence.
along with the smaller insurance companies have been fairly
1948,
received
$554,211,185.03
purposes as
much in
very
2 7* 7c
the
from
measure
United States Government Securities carried at $10,778,954.47
secure
still
tivity
3,995,560.86
$3,704,676.21
......
Other Liabilities
each
In the first nine months of
Undivided Profits
Acceptances.
for
folios, representing the savings of
millions of policy holders, could
have an important effect on the
entire economic system."
$9,625,000.00
•
guard against extrava¬
usually bred by inflation.
such huge amounts of debt securi¬
ties in insurance company port¬
22,000,000.00
Dividend
and
time
said
•
expendi¬
Pointing out that the demand
for corporate bonds and to an in¬
creasing
extent
for
municipal
bonds is coming largely from in¬
stitutional buyers, Halsey, Stuart
LIABILITIES
•
unnecessary
spend."
$554,211,185.03
Capital
taking securities out of the
Eligible Partially-Exempts
2,223,019.58
•
'
Surplus
all
mands
i
.
Accrued Interest Receivable
.
is
maturities
constructive
.The New Year in¬
.
burden, there
1,154,144.42
•
,
ities
27c
higher taxes with ef¬
extending far beyond the
gances
.
.
of
the
on
.
large and small institutions, with the demand for the latter
ministration, states and munici¬
palities to make every effort to
6,623,206.93
;
.
demand
is urgent need for the Federal ad¬
.
Loans and Discounts
ables
pay¬
$139,210,024.79
.
,
continues
tax burden itself.
,
U. S. Government Securities
market
sizable buyers of all of the tap issues.
rearma¬
even
"To soften the tax
Cash and Due from Banks
Other Assets
be
fects
v
banks
bond
firm-to-buoyant tone in evidence.
2 7*70
perhaps the rearming of
Western Europe by American dol¬
lars and goods, will place a dis¬
tressing load on this country's
economy. A consequence is likely
December 31,1948
I
al¬
ment and
STATEMENT]
CONDITION
its
for
ments, coupled with U. S.
CONDENSED
house
ternative— rearmament," it said.
"We must face the fact that con¬
Office, 37 Broad Street
vestment
a
2%
underwriting
be facing
may
not
Main
Governments
on
2%
big
warned that the
ous
government
double taxation which taxes
dividend."
a
The
relief
the same dollar when earned by a
corporation and when distributed
of NEW YORK
Reporter
By JOHN T. CHIPPENDALE, JR.
1948,
American
AND TRUST COMPANY
Our
opinion the long-term
approximately 2V2% seems
likely to continue."
our
rate of
present levels were cited by the
through private placement; but
company as factors supporting its the demand for funds to do these much of the money for expansion
and improvement came from cor¬
prediction of a stable over-all jobs."
Heal estate mortgage financing porate
market.
earnings and reserves, the
"The supply of investment of¬ should continue in large volume, survey
pointed out.
There was
The rail¬ little stock financing. Of approxi¬
ferings in 1949 may be expected the survey continued.
to show an over-all decline from roads undoubtedly will need more mately $2.5 billions of
publicly of¬
volumes
registered in the first financing, it- said, but offerings fered new financing, about 80%
will be inconsequential unless a was
postwar years," the survey said.
represented by bonds and
"Continuation by the utilities of sudden improvement occurs in the 20% by stocks.
t
their
huge expansion programs promptness with which rate in¬
"While part of the
needed equity
will create a need for additional creases are granted to offse.t wage
was
provided by retained corpo¬
financing in this field, and utility increases. Rail equipment financ¬ rate
earnings," it continued, "it
offerings should remain at a high ing, however, may be expected to becomes obvious that there was—
level.
Municipals, too, will be a continue at a volume limited only and is—a need for additional
source of substantial offerings, al¬
by the availability of materials.
equity financing to retain a proper
though there is a probability that
"There
has
been
much
talk
relationship between
ownership
the volume will not come up to about
a
lowering of prices at and debt. It is apparent that to
record totals of 1947 and 1948. All which
the
monetary authorities effect this equity financing, two
expectations point to a lessening support the market for govern¬ things are
necessary, (1) greater
in industrial offerings, since the ment
securities," the survey point¬ confidence on the part of the in¬
pent-up demand created by war- ed out. "There are many compli- vestor in the future welfare of
The Public National Bank
Thursday, January 6, 1949
problem, and
in rates for the short-term securi¬
*
money.
remain
should
prices
CHRONICLE
while it is possible that some fur¬
ther adjustments
may take place
'
Bond
FINANCIAL
cated aspects to this
Looks for Stable Bond Market
new
&
in
partner in Jenks, Kirk-
cedure to follow.
of
government
increase in
ketable
the
.
.
.
The year 1949 brings with it sizable
bonds,
which
floating debt.
obligation? will
should
be
not
refunded
,
:
an
It is hoped that longer-term mar¬
...
be used to take care of at
this year's bond maturities.
maturities
through
-
,
;
.
^
least
a
part of
Volume
169
Number 4766
COMMERCIAL
THE
to
Sees Elements of
Strength in Business
✓
liquidation is setting in.
FINANCIAL
fected
by
trends.
or
cult to
Says business structure is supported by
roughly
economic
is
and
diffi¬
taxation to
total
inevitable and salutary.
"It would
dence
that
be
hard
evi¬
find
to
active
an
deflation
heralded previous periods of liqui¬
dation and depression. On the con¬
or
trary,
liquidation is setting in," says the
"Monthly Bank Letter." "In many
assets
and very
redeemable
of
source
important lines backlogs
are still heavy.
Buyers
still crying for more steel and
orders
are
term
be
the
government
would
fill
the
By all signs the
least the
producers
cars
to
they
more
which
will want
signifies
that
they
materials and take
more
slack which
up
at
1949 all the
make; and they plan
than they did in
can
make
1948,
of
lower-priced automobiles
will be able to sell in
develop from
may
other buyers.
"Uncertainty is expressed about
the outlook for business expendi¬
tures on plant and equipment. But
a
made by the Department
survey
of
Commerce
the
and
Securities
and
1949
hands
took
in
paid
of the influence of the win¬
cause
ter
construction.
on
increase
of
$220
But
million
the first quarter of
over
gets the year off to
State
and
local
it is
a
or
an
5%
1948, and
good start.
governments
are
virtually certain to do more build¬
ing than last year.
"The export outlook is for a
continuation of shipments around
the current level of about
billion
a
of
bonds
and
are
$7.6 billion
out,
and
will
This
and
the
it
money
off government
business setback.
no
In the
first half of 1949 it is doubtful that
the cash surplus will be as much
one-third
as
The
of
difference
the
in
1948
part
figure.
is
lower
taxes, in part larger Treasury ex¬
penditures, of which the arm¬
ament orders
of
the
in
business
transactions,
considerable
side.
This
is
what
people
think
of
fect their feelings.
"On one aspect of
prevail in 1949
of the
over
be
may
greater part
a
than in any year
since
began.
Such
a
change, although it implies a test
economy
the
war
It
altogether
some
correct
seems
case
to
a
a
to
year ago,
net
worth
cause
of
say, as was the
that ratios of debt
are
in
not
general
There
concern.
is
no
limits
of
within
gives
no
large
It
indicator,
consideration
of
amounts
is
Under
the
to
new
present
it
as
>
is
pressed
by inflation.
desirable
that
of the fever which has char¬
acterized business at times during
gauge
debt
of
the
relative
present
under
burden
place
factors
while
are
so
the
supporting
strong."
"The broad change
position
of
growing dependence
of local
the
task
in the
due
revenues
v
com*-
to
the
forms
complicated
on new
taxation has
of
appraising municipal
credit.
Several convenient yard¬
sticks of long-established usage
in
this field
their
former
come
almost
have
lost
priations
were
based
conditions
ditions,
enue
with
often
property-tax
ratio
a
can
seldom
criterion
of
be
as
over-all
Moseley & Co., 14 Wall
Street, New7 York City, members
Exchange,
announce the appointment of Ger¬
municipal
capita, which can be
per
with
relative
reasonable
as
of the New York Stock
ac¬
ald
indicator
an
amount of
income
ment.
basic wealth. Total municipal rev¬
total
them,
available
revenues
to
meet
v
enue
third
credit
per
functions, and hence of
capita,
connection
.
.
"A
indicator
that
needs re-examination in the
light
with
considered
the
amount
debt
per capita, provides a
significant measure of the
of recent trends is the amount of
burden
debt per capita.
than
the
Brewster
Mr.
as
manager
Brewster
with the firm for
realized
maining tax
mates
of
from
sources
their
on
some
no
clue
revenue
the
re¬
pared long in advance,
often
of
this figure is rather indefinite
under
any
conditions, because
Bear, Stearns & Co., New York
debt
Stock
per-capita debt
Exchange
members,
installation
the
nounce
"The
problems
new
the
from
it
current
vate wire to
arising
tendencies
in
Dallas
on
Trust Company
ESTABLISHED
1853
REPORT OF CONDITION
At the Close of Business,
•a? L.-ns
December 31,1948
O
ASSETS'
Cash in Vaults and Due from Banks
.
$252,158,166.83
.
.
.
,
U. S. Government Securities
461,604,740.42
State, Municipal and Public Securities
Federal Reserve Bank Stock
12,574,873.40
1,200,000.00
......
Other Securities
849,940.00
Loans and Discounts
Real Estate
Customers'
49
80,285,296.75
Mortgages
Liability on Acceptances
Banking Houses
.
.
Other Assets
710,593.92
.
.
725,319.47
.
7,705,776.64
•.
Accrued Income Receivable
1,866,582.42
......
278,758.04
.
$819,960,047.89
LIABILITIES
Capital (750,000 Shares of $20 Par Value)
.
.
.
.
.
.
.
.
.
.
.
$15,000,000.00
...
.
.
25,000,000.00
.
.
.
.
.
5,036,864,11
•
$45,036,864.11
Expenses, etc
1,681,082.81
.
.
$ 1,775,439.46
,
.
•
.
.
.
•
*
.
.
.
'.
.
656,746.76
•
.
.
.
«
U. S. Securities
pledged to secure deposits and for other
required by law .........
BOARD
ROBERT A. DRYSDALE
«
1,118,692.70
772,123,408.27
«
OF
purposes as
$18,426,810.89
DIRECTORS
RALPH PETERS, JR.
'<■ President
HERBERT J. STURSBERG
JOHN. IE PHIPPS
Senior Partner
JOHN R. McWILLIAM
Treasurer, Livingston Worsted
Drysdale & Company
Mills, Inc.
DUNHAM B. SHERER
Chairman
Executive Vice President
fcDMUND Q. TROWBRIDGE
C. WALTER NICHOLS
GEORGE DOUBLEDAY
President, A. II. Bull & Co.,
Inc.
BRUNSON S.
'■*
Chairman, Ingersoil-Rand
cally than heretofore with
a
view
McCUTCHEN
SIDNEY A. KIRKMAN
Consulting Engineer
Company
HENRY A. PATTEN
Vice President
WILLIAM G. HOLLOWAY
■:
JAMES A. FULTON
Chairman, W. R. Grace &
.
The Corn
.•Jt.'i"'
oT
AlV'i
President, Home Life Insur•
Company
,
accurate indication of whether the
E. MYRON BULL
Chairman, Nichols Engineer¬
ing & Research Corporation
which
budgets of expenditure are based.
Revenue accounts, therefore, must
now
be scrutinized more criti-
of
a
an¬
pri¬
Rupe & Son*
Dallas, Texas.
Corn Exchange Bank
pre¬
levy
municipality usually furnished a ready and reasonably
been
v
and the esti¬
yield,
has
time.
instal Texas Wire
more
$819,960,047.89
as
of
in
of
figure alone.
The significance
W.
the firm's municipal bond depart¬
gov¬
ernmental
requirements to the
Moseley Dept.
S.
Memorandum:
financial
to the relation between
In
F.
conditions,
rev¬
relied
actually
a
F. S.
(Includes $11,372,183.35 U. S. Deposits)
producing considerably
intended purposes in many cases.
of
-
Brewster To Head
past.
would be the ratio of interest and
Deposits
less than half of the total income
needed to balance
budgets, this
valueless
prewar
years,
for example,
the ratio of current tax collections
to the total real-estate tax
recent
contributed to support local
Less: Held in Portfolio
from the levy. Under present con¬
operations, for it provides
their
in
total
is useful
curacy,
of the
the
Acceptances Outstanding
derived
was
enough of
significance to be¬
for
increase
altered
of
ascertained
of
Reserve for Taxes,
A leading article in the current issue of "The
Guaranty Survey,"
published by the Guaranty Trust Company of New York and entitled
"Municipal Finances in a Period of Inflation," calls attention to recent
developments in state and local finances, in which changes from pre¬
war
conditions
point
to
new<S>
methods of selection and appraisal city was meeting its
budgeted ex¬
of municipal securities. Comment¬ penses, because the
great bulk of
ing on the situation, the "Survey" income on which expense appro¬
'V;
in
and
amount
revenue
Surplus
Appraisals of Municipals Needed
•
proportional
these
tion, and that adjustments should
take
ap¬
dif¬
period of uninflated prices
and costs."
1948 should pass out of the situa¬
Guaranty Trust Company of New York points out current tendencies
in state and municipal debt, due to inflated
prices and costs, require
different methods of selection and appraisal by investors in munici¬
pal securities. Sees municipal financial problems becoming com¬
plex and difficult.
states:
the
revenue
Undivided Profits
Holds New
prewar
capacity to carry debt loads;
relatively low rates of in¬
terest on municipal borrowing at
reason¬
accuracy.
less reliable
the
the outlook
agreement
a
and personal debts rose
during the year, but it
able
income
and government policies
unpredictable'events will af¬
ture is the
porate
available
future,
and
of
quite
and the
expenditures, in which
psychology, or the will to spend,
enters largely. The influential fac¬
hard
further
methods
selection
consumer
tor
mu¬
tax¬
and
ferent from those used during the
the
the
question of inventory changes and
people
supporting influence of
strong financial situation. Cor¬
roughly
need
and
on
purchase under ECA
through November had then been
shipped. The percentage of indus¬ of weaker enterprises, is inevit¬
trial goods, compared to agricul¬ able and
salutary. It will promote
tural products, in the authoriza¬
efficiency in the economic organ¬
tions continues to rise.
ization and give some relief to the
"Underneath the business struc¬
as
to
but investors in municipal
securities
praisal
condi¬
altered
concern
administrators
payers,
in the national average per
stated the debt burden in terms of
siderable
will
balance
reached. It is that buyers' markets
and
competitive conditions will
thorized for
filling
the general rise in
illustrated by the in¬
debt;
lower than
7%
the
are
fact
the
is rising rapidly.
matter of
nicipal
capita to 2.3 times the 1940 fig¬
ure,
with the implication of a
leaves open
general
of
the Marshall plan
shipments. Only about 40% of the
$2.2 billion of American goods au¬
the
a
war,
expendi¬
dollars
influence
crease
formerly of con¬
importance, because it
that the
seem
low
a month, or very little be¬
it, because of the stabilizing
inflated
to
and
only
tions
about
the
25
particular
of
municipal
reaching various in¬
government
no
incomes,
valuations.
tures, construction and the export
surplus, and the plus change in
show
due
costs
Not
in
deferred needs for capital im¬
provements;
was
possible minus change
1948
either
debt
increase
still
before
view
visible evidence.
are
"To many it will
net
of
while
meas¬
amortization
than
more
banking system.
deflationary, although it
was
ratio
assessed
substantial
and
State
of
are
in
that
usefulness of accepted
further impaired
construction
that often supplement the prop¬
into
erty-tax levy.
A more accurate
taking
debt held in the
caused
and
the
accurately
finance
importance
been
municipal
money
used
pay
This
a
of
rate
government
more
debt
now a
The
people,
principally to
from
would be expected be¬
cash, short-
less away from them. In the first
half of 1948 the Federal
Treasury
lirst quarter of 1949 at $4,390 mil¬
lion. This is a drop from the $5,010 million in the fourth quarter
as
the
pouring out
dustries
1948,
liquid
securities
savings
strength.
of
Exchange Commission, which
in the past has proved a reliable
indicator, places the total for the
of
the form of
government
"In
demand for the latter should ease,
the
void by purchases for its stockpile.
unprecedented
savings has risen.
of the non-ferrous metals. If
more
the
in
ed
has
by
January "Monthly Bank Letter" of the National City Bank
"The
changed composition of
of New York contains a short review of
general business conditions
as indicated by developments
through 1948 and prospects for 1949, municipal revenues has made it
and concludes, despite
complexity of present situation, there are necessary also to revise estab¬
lished ideas as to what constitutes
signs of stability and strength and V
a supportable ratio between fund¬
that adjustments now taking place money
stringency, such as has
are
The
norms
re-
be
cannot
ured.
enue.
The
local
varies widely among communities
dependence
property
capita or
capacity, which
quickly af¬
precisely but may
gauged by the ratio
be
wealth per
on
debt-supporting
adverse
This
depends
(81)
tax' sources
measure
of
sound financial situation.
CHRONICLE
ascertaining the degree of de¬
pendence on various
that are liable to be
National City Bank of New York, in discussion of
prospective devei-l
opments, holds it is hard to find evidence that active deflation
&
ance
Exchange Safe Deposit Company
57 of the 75 branches located
fcu-tvh.'js
lAntvq
J.Bi.
p
operates
Company
vaults in
throughout the City of New York.
.
.
Memtfpr Federal Deposit Insurance Corporation. : "
,
26
(82)
Holds
THE
COMMERCIAL
Working Capital Expansion Not Unduly
Inflationary
Federal Reserve Bank, of New
York, in review of developments,
points out postwar expansion of corporate working capital came
chiefly froin need of funds to restore business to normal peacetime
channels and that financing of large inventories and trade receiv¬
ables has been inflationary only to moderate degree.
The January issue of the "Monthly Review of
Credit and Busi¬
Conditions," published b,y the Federal Reserve Bank of New
an analysis of the working capital position of Amer¬
ican business corporations with a view to
determining the extent
that
enlarged
inventories
and$>
——
credit expansion through heavier fact that
the
Treasury had finess
York, contains
volume
receivables
of
have
con¬
nanced
&
FINANCIAL
borrowings from the banks, (3) an required. About three-fourths of
in trade payables, and, these sales were made during the
security issues (4) long-term borrowings, sales of first postwar year, when tne Treas¬
seemed remote. Within two short securities in the capital market, ury retired larg& amounts of ma¬
years (in fact within the very next .and,
most
important,
retained turing or called issues with funds
year), however, it was ^ocesSary earnings and other internal funds which had been raised through the
deed, toward
prospects for
mercial
for
loans
the
an
close
of
increase in
1945,
com¬
to
current
increase
and
(designated "all other sources" in
sale of government
The very large volume of
non-bank investors in the Victory
liquid
assets
the accompanying table).
On the whole, it appears that
the financing of enlarged inven¬
business
to
seek
proved insufficient
heavy needs for work¬
to meet the
Uses
Sources
and
of
Chemical,
bank
ASSETS
Cash and Due from Banks.
_
U. S. Government
ObligationsState, Municipal and Public Securities '
Other Bonds and Investments
Loans and Discounts
:
Other Real Estateon
93,176,481.95
4,728,361.77
560,799,245.74
522,259.85
2,231,316.17
15,099,478.07.
Banking Houses
Credits Granted
$ 487,514,146.62
415,567,186.28
Acceptances-
Accrued Interest and Accounts
Receivable
3,110,818.40
'975,161.35
Other Assets—
$1;583,724,456.20
LIABILITIES
Capital StockSurplus
Undivided Profits-
;
$25,000,000.00
75,000,000.00
10,727,058.94 $ ■ 110,727,058.94
(In
Dividend
portfolio)
Deposits
Increase
cash
in
2,887,408.78
13,044,140.29
1,435,190,391.55
Securities carried at $49,240,837.48 in the
_
__
_
__
prices which followed the
of
Reduction
in
in
Decrease
_
1___
acute demand
0.0
0.0
_
—
-
0.0
1.5
_
2.5
0.0
0.0
~
Government
liabilities—
0.0
0.0
0.3
0.0
12.9
4.7
30.0
0.3
0.0
0.2
0.2
~
_
cash
in
__
____
_
—
.
6.2
1.5
0.1
0.0
8.5
0.8
0.7
0.0
other
in
Increase
assets
in
bank
and
trade
Increase in
taxes
due
Federal
Increase
other
tAll
in
liabilities
debt
_
5.2
_
0.2
0.0
0.0
■k.
0.3
sources
4.6
other than
column show
12.2
4.7
30.0
banks and insurance companies.
changes in asset or liability items for the 2VL:-year
net
period and are not summations of the items in
tRetained profits,
issues.
the preceding columns.
increases in reserves, long-term loans, and sales of new security
V*
:
'
■
Securities and Exchange Commission.
Source:
More
3.5
12.9
.
corporations
tData in this
4.1
17.0
other
Total
^All
1.1
0.8
7.7
0.0
2.1
0.0
—
_
4.0
0.0
—
Government-.——
_
A
than
one-fourth
of
the
the increase in the volume of cor¬
porate trade receivables financed
by a rise in corporate trade pay¬
expansion of notes and accounts ables)2 resulted in a larger vol¬
ume
of
sales
being carried on
payable. Unfortunately, no break¬
down
between
short-term
bank without any change in the money
supply, thus causing the velocity
borrowings and indebtedness to
suppliers is available. However, it or turnover of money to increase
is known that business loans of somewhat. The extension of trade
the banks rose sharply in 1946 and credit by corporations to individ¬
1947 and accounted for a sizable uals and unincorporated business
postwar needs for working capital
funds
obtained through the
were
part of the total expansion of cor¬
has tended
to reduce the need of
porate payables, which amounted
the
groups
to
outside
$7.7 billion in the period under
review.
loans
was
more
The
decline
in
business
during the first half of 1948
largely
seasonal.
Probably
than half the postwar ex¬
pansion of corporate payables was
indebtedness
to
suppliers.
Cor¬
porate trade receivables expanded
much more than corporate trade
payables, however, so that credit
extended by corporations to indi¬
viduals and unincorporated busi¬
ness increased substantially.
This
total accounts receivable
payable (almost al¬
of receivables) represents
extended by corporations to indi¬
ference between
and
total
accounts
an excess
credit
business or
indebtedness of the former to the latter.
and
unincornorated
latter
for additional
financing, including bank
However, such outside fi¬
nancing may not otherwise have
been
available, in. whole or in
part, to small business and others.
Equity
funds
and
long-term
borrowing » (including
retained
earnings, other internal funds set
loans.
aside in various reserves, and
proceeds of
new
the
security issues in
the capital market) provided most
of the remaining working capital
In the 2% years ended in
mid-1948,
$12.2 billion of new
working capital;' were
received
from theser sources by American
corporations.;
In
addition,
of
course, a substantial part of cor¬
porations' internal funds and of
the proceeds of their security is¬
needs.
sues
was
used
to finance the
precedented
expansion
and equipment.
of
un¬
plant
and
shortages of supply, the latter
resulting in part from the pres¬
ence
of
production bottlenecks.
Since one concern's selling price
is another's cost, a rise in prices
to
tends
become
Total Current Assets of U. S.
Corporations*
(December 31, 1945 and June 30, 1948)
cumulative
throughout the various stages of
production and distribution. Thus
the need for additional working
capital arose from the price ele¬
ment as well as from the physical
ABSOLUTE
AMOUNTS
PERCENTAGE DISTRIBUTION
was
Per
cer>t
100
Other
^8
Notes &
accumulation of inventories.
How
>
^
Accts. Rec.
80
this growth of work¬
foregoing
statement are deposited to secure public funds
and for other purposes required by law.
without
comes
making
60
Inventories
goods
available for immediate consump¬
tion. The inflationary significance
40
of the
growth of working capital
depends, however, on the manner
in which the larger working capi¬
tal needs have been financed.
the
funds
tors,
in
come
no
the
process
are
that
extent
the
U.S. Govt.
mm Securities
To
Cash
from nonbank inves¬
incomes isi generated
inventory accumulation
except when idle balances
war
needs
for
of
expanding
In the
Mi
additional
new
activated.
DEC. 31,
1945
main, post¬
American
JUNE 30,
1948
DEC.
31,
1945
I
JUNE 30>
1948
business
working capital
have been met through (1) the
sale of government security hold¬
ings,
(2)
increased
short-term
•'
•'
—
Liquidation of Government securities-
viduals
as
16.7
Decrease
industrial materials reflected wage
well
12.4
2.4
.
0.7
0.5
5.8
SOURCES—
ways
as
0.0
1.2
5.9
17.0
Federal
due
taxes
other
Total
Decrease
price controls raised
inventory costs. " Higher prices of
increases
0.0
6.0
8.5
_
customer financing
Increase in
Inventory accumulation
Repayment of bank and trade debt
of1948J
of 1948
1947
1946
The very process of inventory
accumulation, of course, tends to
be inflationary since it creates in¬
$1,583,724,456.20
upsurge
removal
16,672,485.68
Payable January 3,1949
held in
distribution, working
1946-
first half
First half
USES—
ing capital financed, and did the
methods of financing used con¬
tribute to the process of inflation?
4,098,963.18
2,866,416.56
L
Acceptances Outstanding $19,559,894.46
(Less own acceptances
Other Liabilities
of
;
.
billions of dollars)
capital was required to meet the together with the rise in intercor¬
steadily rising cost of goods and porate indebtedness (that part of
services. Three rounds of postwar
2 In
the
data
for
all
corporations,
wage increases raised the cash re¬ intercorporate
accounts
receivable and
quirements for payrolls, while the payable are necessarily equal; the dif¬
1,125,000.00
Reserve forContingencies
Reserves for Taxes, Expenses, etc.
channels
Capital Funds of-Business
Working
New
Corporations*
-
of business, December 31, 1948
securities
liquidated did
ing capital and other funds that tories and corporate trade receiv¬
developed after the war. In the ables has been inflationary to a not find their way into bank port¬
moderate degree only.
folios. However, Government War
aggregate,
business corporations
As shown
except banks and insurance com¬ in the accompanying table, cor¬ Loan deposits which might other¬
panies increased their total cur¬ porate sales of government securi¬
wise ha^e lain idle were put into
rent
assets to $118.4 billion on ties ($8.5 billion in the 2Vz years
more active use.as a result of such
June 30, 1948, a gain of over 20% ended June 30, 1948)
accounted
from the 1945 year-end total. The for over a fourth of the total funds liquidation.
trends.
At the close
Thus, it is probable that
Loan drive.
the bulk of the Treasury
which corporations
inflationary
CONDENSED STATEMENT OF CONDITION
obligations to
additional
funds.
a large part of the wartime
increase in working capital came
working capital needs of industry.
primarily in inventories and re¬
These liquid assets,
amounting to ceivables,
the
two
components
Concerning this topic, the $42.8 billion, were sufficient to
which had grown least during the
(CMonthly Review" states:
pay off all but $3.4 billion of total
war.
In the 2V2-year period cor¬
Despite their exceptionally corporate obligations due within
porations added $16.7 billion to
liquid position at the end of the one year. Inventories and accounts
their inventories—$8.5 billion in
war and the retention since then
receivable,
while
considerably 1946 and $5.8 billion in 1947. Ac¬
of large
amounts from current above the 1939 figures, were un¬
cording to preliminary indications,
earnings, American business cor¬ usually low in relation to total
nearly $5 billion more was added
porations have had to seek un¬ working capital.
in 1948 ($2.4 billion in the first
precedented amounts of working
Working balances of 1,122 cor¬ six months). Between the end of
capital funds from
banks
and porations which are registered on
1945 and June 30, 1948, customer
from institutional and other in¬ national
security exchanges and financing rose $12.4
billion, prac¬
vestors
during
the
past
three for which there is a break-down
tically all of which was in the
years.
by industry showed no significant first two
years.
At the end of the war, corpo¬ deviation,
industry by industry,
The postwar expansion of work¬
rate enterprises in the aggregate from
working capital patterns, of
ing capital stemmed principally
probably:enjoyed the most liquid all business corporations, other from the need for
funds to re¬
financial V position
in
history. than such deviations as are char¬
orient production and distribution
Working capital1 of all business acteristic of the operations of in¬ into normal
peacetime channels
corporations (exclusive of banks dividual industries. For the most after several
years of military pro¬
and insurance companies) totaled part, at the end of 1945 each of
duction. During the reconversion
$97.8 billion at the end of 1945, the major industries showed sub¬
period certain industries required
exceeding current liabilities by stantial accumulations of liquid additional cash because
sales were
$51.6 billion. Cash on hand and assets, a low level of inventories low and
expenditures compara¬
in the banks plus government se¬
and receivables, and a wide mar¬
tively high. Inventories increased
curity holdings comprised 44% of gin of quick assets over liabilities. at all levels of the
productive and
total quick assets, reflecting in
With industry in such strong
distributive system. Since the na¬
large part limited investment op¬ financial condition, it appeared as tional
output was no longer di¬
portunities during the war and the though a very considerable expan¬ rected
preponderantly toward
sion of business activity could be
1 The
meeting the needs of a
sum
tbtal
of
current
single
assets,
financed with funds on hand and
sometimes known as gross working capi¬
buyer (the Federal Government)
with retained current profits.
tal.
In- with known requirements and de¬
livery schedules, a peacetime va¬
riety and balance in sticks had to
be
reestablished,
and
depleted
"pipelines" had to be filled. As
priva,t£hbuyers, ^unlike the Federal
V
Government, did not make pay¬
ments
in; advance
of
delivery,
credit
to
customers
expanded
sharply.
Financing of American
export
trade
gradually
shifted
back to private channels, although
TRUST COMPANY
the government still plays a very
Founded 1824
"
v
important role in this field.
u
On top of these needs for funds
165 Broadway, New York
.
arising from the return to peace¬
time patterns of production and
tributed
Thursday, January 6, 1949
CHRONICLE
*
All U. S. corporations except banks and insurance
Securities and Exchange Commission.
Source:
companies.
20
Volume
169
;.t Although:
cannot
be
Number
a
clear-cut.svanswor-
:
given,
it
appears
cor¬
porate
been
working balances has not
one
of
the main factors
First National
fought
for further expansion of working
;
Bank of Boston
FINANCIAL
CHRONICLE
battle for survival is being
the financial front, and it is time to take siock of effects
on
of trends toward
What is the present position of
industry with respect to working
capital and what are the prospects
In
&
ex¬
erting inflationary pressures on
the
pricing system during the
postwar years.
capital needs?
COMMERCIAL
Inability ofCorporaticnstrPlough
:
Back Earnings Into Business Decried
that
the whole the increase in
on
THE
4766
says
heavy government spending and mounting taxes.
"Unsound fiscal policies not only threateh our form of Govern¬
ment but also
imperil our national security," says The First National
Bank of Bbston in its current "New England Letter." Continuing, the
Bank says, "Heavy corporate taxes are diverting funds that should be
(83)
something for nothing had at last
been found.
Along with this for¬
mula there developed a national
theory that we need"not worry
about the debt since we
one
another.
But
Lee
Higginson Corp.
CHICAGO, ILL.
faced
are
we
Win. S. Hunter With
it to
owe
27
'
—
William S.
become
has
Hunter
with the startling fact that these
associated
staggering outlays of public funds
have brought us into the danger
zone.
Taxes of all kinds currently
take
has
than one-fourth of
more
tional
income.
shown
Past
that
na¬
experience
whenever
taxes
absorb more than 25% of national
back into business to<£
■
;•
* .;.
expenditures made, corporations provide for the estimated $50 bil¬ ily, as compared with $390 per income over a period, the strain is
have actually added $700 million lion capital expenditures needed family in 1929.
Moreover, the so great on the economy as to
to their holdings of cash since the to restore a healthy and vigorous Federal Government has invaded cause a drastic change in govern¬
end of 1945 (an increase of 3%). economy,
our
cihef bulwark of many tax fields originally belong¬ ment."
The 'liquidation
of
government strength in the last war. It is vital ing to state and local governments,
security holdings has continued, that this strength be unimpaired and now absorbs about threebut on a sharply diminished scale. in view of the tense international fourths of all taxes collected in
Thus, de§.ipte a 40% decline in situation.- The Communist strat¬ the country.
spite of the large volume of ploughed
securities
government
end
of
assets
1945,
still
corporate
totaled
the
since
$35
liquid
billion
on
•
according to the Hoover Com¬
"The government maintains the
mission on the Reorganization of
largest financial institution in the
s
egy,
the Executive Branch of the Gov¬
June 30, 1948, when they account¬
ed for 30% of total working capi¬
tal. Current assets are still more
ernment, is to win its victory by
forcing this country to spend it¬
self into bankruptcy. In the face
than twice quick liabilities. They of this knowledge, the military
should provide an ample cushion leaders
have, according to the
against the contingency of sub¬ Hoover Commission,
no sense
stantial .lpsses through shrinkage of cost consciousness or general
pf. inventpry values. /
realization of conservation of our
/v
While- it .is Apparent that in the resources.
.'
aggregate corporate working cap¬
"With the nation placed in such
ital is ample and liquidity high,
a
perilous position, from within
the position of individual indus¬ the
country by pressure groups
tries and of individual enterprises and
from without by. an aggressor
is not uniformly favorable. For bent on world
conquest, it is to be
the 1,122 large corporations regis¬
hoped that the Administration in
tered op national security ex¬ submitting its budget for the com¬
changes, it appears that ample ing fiscal year will be mindful of
working capital margins prevail in the crucial test confronting our
all of the major industries and
fiscal policies. The battle for sur¬
.
.
.
.
..
that
liquidity remains high (ex¬ vival is being fought
the finan¬
cept among trade corporations and cial front. With stakes so high, no
sales finance and personal loan item of the budget, except inter¬
companies, where there is less est on the public debt is 'un¬
need for liquidity). This is not ne¬ touchable.'
Extravagance and
cessarily ttfue for the smaller cor¬ waste of public funds are a men¬
on
world.
It
has
about
45
lending
Fiftieth Anniversary
For Jas. Oliphant Go.
Jas.
H.
Oliphant
&
>
Co.,
City,
61
the Federal Government.
tinuing
NEW HAVEN,
Bodell
that, it has launched upon a pro¬
In 1898, Jas. H. Oliphant & Co.
designed eventually to pro¬ became one of the 382
member
tect all of the people against the
the
York
New
"To carry out the role of pater¬
half century
later, they
are one
Street to act
With
the
buyers' markets in
of
return
and
more
more
industries and the continuation of
selective price
which has become such
a
accumulation
of
inventories
financing.
Officers
has
Bank
"The two
Thomas A. Edison, Inc., of West
Jersey,
have
an¬
the
nounced
election
of
Henry G.
Riter, 3rd, ef¬
fective1 Jan. 1,
1949, as Chair¬
of
man
E
the
ecutive
x
Commit tee.
Mr.
Riter has
been
direc¬
a
tor of thecom-
since
pany
His other
porate
cor¬
affili¬
ations include
those of senior
'
partnerof
Riter
&
ment
banking
man
Co.,
New
of the Board
the
York
firm,
Copperweld
invest¬
Chair¬
and
of Directors of
Steel
Co.
of
Glasjspo.rt, pa., and Warren, Ohio.
'Mr.
man
Rifer has served
of
the
Board
Chair¬
as
of
with
Governors
of
the
Bond
Club
of
New
Yor£.
Henry Krieger & Co. Opens
Henry
Krieger
has
are
funda¬
Krieger and
Co.
formed
.
with
of¬
n
vants become the masters.
This is
the invariable record of all
DOW
WALTER
Trustee,
'providing
for
the
American life." The government is
the
largest employer in the land.
Federal
civilian
employees now
exceed 2.1 million, and with the
addition of state and local govern¬
more
about
the
total aggre¬
than 6 million
one-tenth
employed.
the
W.
ASSETS
Emigrant Industrial
GRAHAM
B.
Other Securities
BORDEN
President,
Borden
GEORGE
Mills,
Inc.
W.
HARRY
H.
I.
Colpitts
CAESAR
of
persons,
the
total
In the last two
number
of
govern¬
employees has increased by
100%, while the population of the
entire country has shown a gain
only 20%. The payrolls of gov¬
ernment workers aggregate over
$14 billion, or about $350 for every
of
President,
Savings
Bank of the City of New York
F.
ABBOT
.
.
.
5,870,165.34
12,291,593.72
455,974,434.05
....
Mortgages
.
.
.
27,847,468.78
.
3,442,217.83
.
11,326,682.64
Acceptances
.
6,718,302.32
.
Other Assets
Liability of Others
390,123,248.43
344,795,970.36
.
.........
Customers' Liability for
CATHARINE
Dollar
,
.
.
.
Banking Houses Owned
A. Caesar & Co.
M.
,
$
.
Loans and Discounts
Other Real Estate"
BURPEE
&
.
F.H.A. Insured Mortgages
BROWNLEE
F,
U. S. Government Obligations.
Other Public Securities
BLAINE
Vice-Chairman
C.
of Condition
Cash and Due from Banks and Bankers
BENNETT
coun¬
a. consequence, of
a .pro¬
longed depression*- two wars, and
pressure groups, the government
has become gargantua-like, with
tremendous
powers
extending
over
practically all segments of
gates
is
December 31, 1948
Savings Bank
ROBERT
number
manager
Palmer.
Condensed Statement
people.'
or
as
BECKER
H.
Coverdale
employees
firm
department
BAKER
I
tries that have embarked upon a
ment
new
trading
1799
President, Intertype
Corporation
JAMES
family in the land. The annual
of
government in
fices at 115 Broadway, New York expenditures
this country for the
1948 fiscal
City, to engage in the securities
year were almost $55 billion, or an
business.
average of $1,330 for every fam¬
Henry
NEAL
liberty and democracy leads the
people into bondage, and the ser¬
decades
President
STEWART
Chairman
JOHN
ment
and
J.
objectives
of
Williams, Inc. Associated with
Manhattan Company
DIRECTORS
collected from
control. Unless
checked, this system of control in¬
evitably creates a Frankenstein
bureaucracy that saps the vitality
of the country, and while march¬
ing forward under the banner of
ties
Inc.,
Chartered
Or,
government
program
&
the
instrument for
mentally incompatible as govern¬
ment
aid
is inseparably
linked
of N^tionaT Association of Securi¬
Dealers,
an
"As
,Oct. 1, 1946.
Henry G. Riter, 3rd
become
dent and Treasurer. All were pre¬
viously officers of Day, Stoddard
world
two
fought to defend?
ple through funds
the people?
Thomas Edison Inc.
New
it
of the
2,645,236.30
on
Bills Sold Endorsed
5,880,608.22
$1,266,915,927.99
GOODHUE
Retired
WILLIAM
V.
GRIFFIN
LIABILITIES
Chairman,
Brady Security &
Realty Corporation
LAWRENCE
C.
MARSHALL
Capital (2,000,000 shares)
Surplus
.
$20,000,000.00
*
President
Undivided Profits
HENRY
President,
States Marine
L.
.
J.
...........
Company
MURRAY,
66,622,900.09
600,000.00
Certified and Official Checks
WILLIAM
16,622,900.09 $
200,000.00
Deposits
Baking
30,000,000.00
Year End Dividend Payable January 3,1949
MORRISON
President,
General
.
Quarterly Dividend Payable January 3,1949
Corporation
GEORGE
.
MERCER
D.
.
...
JR.
President and Chairman,
1,127,930,087.78
52,842,122.61
FRANK
& Robbins,
President,
8,369,484.15
4,470,725.14
Inc.
RUSSELL
F.
Acceptances Outstanding
Other
McKesson
Cerro de Pasco
Liabilities, Reserve for Taxes, etc.
Bills Sold With Our Endorsement
.
.
5,880,608.22
Copper Corporation
FREDERICK
Webster,
$1,266,915,927.99
SHEFFIELD
Sheffield & Horan
Of the above assets $83,405,856.59 are pledged
PHILIP
YOUNG
,•
•
•
Dean, Columbia University
School of
Business,^
,
;
to secure public deposits and for
other purposes ; and certain of the above deposits are preferred as provided by law.
Member Federal Reserve System
stocks.
W.
NEW YORK, N.Y.
the bestowal of gifts upon the peo¬
Rifer Elected By
Orange,
and. which
were
insurance
Avery
are
dominat¬
a
ing influence and touches all seg¬
of our daily
lives.
Is it
wars
and
Barnes,
President; David W. Bodell, VicePresident and Secretary; and R.
Schuyler
Goodwin,
Vice-Presi¬
for the past decade
ments
founded
bank
and
of
have
declines, it appears
serving the purpose of maintaining
likely that there will be some fur¬ law and
order, and fostering and
ther
lessening of demands for
protecting
the
traditions
and
working capital funds for the fur¬
ideals upon which the nation was
ther
and for customer
brokers and deal¬
railroad, public utility, in¬
dustrial and municipal securities
pow¬ 36 of these firms still doing busi¬
and a half ness under the
same
name.
In
glamorized public spending
and
under
sugar-coated slogans 1909, the firm opened its branch
have hypnotized the people into office in Chicago and this is one
believing that the vast outpouring of five of the 27 branches of New
porations. ace
to our national defense.
We of
money was evidence of great
The
York Stock Exchange houses now
expansion
of
corporate should not risk placing further
wealth and the key to abundance,
working capital was most rapid strain on our narrow margin of
ease, and security, and that the operating in that city under the
during 1946 and 1947. Preliminary safety and endangering our sol¬
long-looked for formula of getting same firm name.
data for 1948 indicate considerable
vency, which is the last prop of
reduction
in
additional working Western civilization.
capital needs, reflecting the fill¬
"As we come to the end of an¬
ing of "pipelines" and the les¬
other year it is timely to take
sened impact of price increases on
stock of the trend of government
inventories.
as
in
ers
nalism, the administration in
er
CONN.—Barnes,
Goodwin, Inc. has been
&
formed with offices at 257 Church
Stock
Exchange. It is interesting that
to the grave.'
....
Formed in New Haven
gram
of
...
Barnes Bodell Goodwin
partnership," and Alfred
.
firms
\
Sons, Inc.
tion, the government supports the L. Norris, both of whom died
Seven of the present
prices of Federal bonds and major years ago.
farm crops, and finances a large partners
have
been
associated
part of the export trade. Beyond with the firm over 25 years.
vicissitudes of life from the 'crade
William S. Hunter
'
; ' '
ing department. Mr. Hunter was
formerly with E. H. Rollins &
of the rural mortgages are held by
In addi¬
,
Lee
Higginson Corp., 231
South La Salle Street, in the trad¬
Jas. H. Oliphant, whose name has
since been carried on in the con¬
third of the urban and one-fourth
A
,
with
agencies,
with
aggregate
loans Broadway, New York
are
outstanding in excess of $10 bil¬ celebrating their Fiftieth Anni¬
lion,- or more than 40% as much as versary. Donald D: Graham, who
the aggregate loans of all the re¬ became a partner in 1919, has been
porting member banks of the Fed¬ With the firm since its beginning.
eral Reserve System. About one- The partners at that time were
Member Federal Deposit Insurance Corporation
of the
Hale
23
(84)
THE
r
COMMERCIAL
&
FINANCIAL
CHRONICLE
Thursday, January 6, 1949
Labor's Encroachment
(Continued from
20)
which unions may
participate im¬
mediately and directly in deci¬
sions
A
lot
of good
has
news
been
wasted
rail market
the
on
in the
past few months. 'Numerous year-end dividends, increased dividend
rates, and extra distributions have been largely, if not entirely,
ignored. No attention has been paid to the generally high rate of
current
earnings
the
over
interim
this
securities
freight
enthusiasm
in
continuing excellent traffic prospects
at least. The final blow to the bulls
year
when
came
increase
rate
the
the
to
nor
of
course
railroad
on
the
even
failed
closing days of
granting of a generous
generate any speculative
in the opening session
to
1948
or
As measured by the Dow-Jenes average, the rail stock market
improved somewhat during the past year. The gain, however, was
nominal.
As
of the
close
of the
market
Dec.
on
31, 1948, the Dow-
rail average stood at 52.86.
A year earlier it had been at
As usual, the performance? of individual stocks varied widely.
52.48.
"Taking
list of 52 rail stocks, including speculative preferreds, on
the New York Stock Exchange 27 were up in 1948 and 25 were
down.
Of the 27 that/ were up during the period, six showed net
gains for the year of a point or less. ; Of the 25 that were down,
eight showed losses of a point or less.' There were 21 that showed
a
than nominal gains and 17 that showed significant declines.
By far the most spectacular performance was that of Central
Railroad of New Jersey which advanced from 7)4 to 33 V2 during
the year, a rise of 362%. - This was naturally a
special situation
with the price movement further influenced by the thinness of the
more
market for the particular issue.
New
ern
which
had
There
common
respectively.
were
net
for the
others in
is
wholly inadequate to cope with
many • basic
economic problems.
They point out that neither local
unions
nor
vidual
control
which
each
their
local
union
each
and
is somewhat in the
company
po¬
building. The market
product is determined by
for
the
the
cost
the
of
plasterer,
building; but
controls only
who
the
his
has no control
over the cost of the
edifice, which
is a joint product of many factors.
Because they lack control over the
own
rate,
wage
cqst of the final product each of
tlie many co-factors, in his
ed bargain, may decide as
his
action had
own
the
cost.
At
isolat¬
though
effect upon
no
its
cumulative
were
year
the
stock
method
of
result
the
of
bargains
isolated
run
may
the interests of all the
bargainers.
-
stocks
wel¬
sition of the plasterer with respect
counter to
six
elements
common
to the whole
independent
the
real
Chicago Great West¬
63.4% and 55.3%,
side
up
group that
more than 40% in price,
They were Chicago Great West¬
preferred, Denver & Rio Grande Western common and Bangor
While
indi¬
any
important
over
affect
advanced
common.
of
management
enterprises have
ern
Aroostook
indus¬
rail
the
on
and
common
gains
three
whole
best, the present
bargaining
merely
keeps unions at the fringes of
basic problems; at its worst, the
Next in line
York, Chicago & St. Louis
affect
tries. They point out that the pres¬
ent system of collective
bargaining
fare:
of 1949.
Jones
which
page
mentioned
above
by
far
the
that
is both
ing
a
and
social be¬
"whole man"
and
person
the
that
a
to work.
They realize that
job must yield both personal
comes
the
and social satisfaction to the whole
They
man.
coming to look
experts about
are
workmen
upon
their
own
effort
to
jobs.
as
There is increased
tap the
inventive
knowledge
capacities
of
and
these
ex-
industrial relationships
complex and varied, the views
management, and by
in ownership. One such
manager said: "Labor pays for the
mistakes
of
management.
Why
profits,
in
degrees
shouldn't
it
have
a
voice
in
de¬
termining
policies?"
Some
of
these companies had independent
unions; some had unions with in¬
affiliations.
ternational
In
all
emphasis was on employee
participation rather than union
cases
rts and to let them share in the
participation.
But all the man¬
in this group to whom I
spoke were careful to point out
sharp line between the union and that this emphasis did not, mean
their
employees.
For them the union exclusion. They recognize
union is a foreigner within' the that successful employee partici¬
gates. Employees are part of the pation must have its channel of
family. While striving to develop expression and means of repre¬
or improve two-way
communica¬ sentation, and that the employees
tion with employees, these exec¬ must be left completely free to*
utives try to make it a strictly choose whatever means or agency
family affair.
The union is not of representation they wish, Any
merely ignored; it is deliberately attempt to introduce conflict be¬
and studiously bypassed.
tween the employee and his union
Other executives are convinced would destroy the complete con¬
that the union must be fitted into fidence
which
is
necessary
for
planning of their work. However,
business executives draw
many
successful communication
any
tem.
sys¬
They
formed
When
keep the union in¬
about changes in policy.
possible, they give it ad¬
notice about
vance
new
processes
machinery, changes in produc¬
or
tion schedules, and shifts of oper¬
ation from one plant to another.
inating
agers
a
They seek the union's aid in elim¬
Because
best
Management
on
agement people that the workman
waste,
successful cooperation.
I
do
want to
not
stood.
The
welcome
be
managers
misunder¬
who would
increase of labor par¬
an
ticipation in management prob¬
ably employ no more than 1% of
all employees in manufacturing,
but
they are important because
represent within the ranks
of management a group which in¬
sists that production is a coopera¬
tive process and that successful
cooperation requires the elimina¬
they
absenteeism, and
inefficiency.
They
en¬
progress during the desultory year just
courage joint discussion of mutual
ended.
Missouri-Kansas-Texas and Denver & Rio Grande Western fered considerably from industry problems beyond the scope of the
preferred stocks and the common stocks of Erie and Kansas City to industry. Several proposed in¬ contract. Theoretically, the union's tion of all artificial barriers be¬
Southern were all about a third
higher at the end of the year than dustry councils but no two de¬ function in such discussions is tween the rights and responsibil¬
they had been at the 1947 close. The low priced Chicago & Eastern scribed them in exactly the same advisory.
of
management
and, the
But the line between ities
Illinois "A" stock was up more than 20% and St. Louis-San Fran¬ way. Some conceived them as de¬ consultation and
participation is rights and responsibilities of labor.,
cisco common was not far behind.
vices through which the unions indistinct.
If the discussions are
V.
performers in the group,
able
make
to
On the
a
decline
there
quite
were
were
few
a
others
were
down
side, Chesapeake & Ohio led the procession with
43% to 31 % or 28.4%. Another stock giving a poor
from
performance
of
was Virginian, off 18.4% from 36% to 30.
The extent
market's selectivity is highlighted by the fact that the com¬
stock of the other Pocahontas
road, Norfolk & Western, was
the
mon
slightly, from 26 to 27, during the
up
nificant
that
acting last
the
two
year
roads
hardly
can
be
did
have
hot
Aside
52
debt
traced
roads inasmuch
to
do
from
any
the
larger roads,
and
were
&
Ohio,
was
sig¬
appears
the poorest
among
it necessary
Minneapolis,
St.
Baltimore
&
Paul
Ohio
&
Western, which road
slightly.
up
there
much as 20%.
as
It
few that found
very
financing,
new
Chesapeake
Louis
stocks
stock of the Norfolk &
stocks that declined
St.
period.
same
financing in 1948. Action of these stocks
any general pessimism toward
the coal
to
the
as
whose
two of the
were
to resort to new term
only two of the
Minneapolis &
Ste. Marie.
Among
were
They
Sault
were
Northern Pacific and
New York Central were off from
15% to 19%. That dividends have
little market significance is indicated
by the fact that Northern
common,
Pacific
increased its dividend declaration by 50%
Y. Central resumed dividends after
having paid
N.
Once again
securities
year
while
reasonably be considered as a single group. They
subject to different traffic, expense and earnings
individually
are
last
nothing in 1947.
it has been convincingly demonstrated that railroad
not
can
influences and these
the specific stocks.
in
turn
reflected
are
in
the
market
Regardless of what the current
action
of
has in store
i'or the market as a whole, there can be little
question but that
when the final prices are posted
selectivity will again pay off.
FULTON
COMPANY
149
BROADWAY
year
NEW
•
-
RESOURCES
Cash
on
Vault
Deposit
in
Federal
Deposit
in
other
Reserve
Bank
of
U.
S.
Government
State
and
Federal
Other
Secured
of
440,244.03
19,672.623.97)
York
Stock
12oi000.00
;
Loans
Real
Real
and
3,357,197.87
by
Bills
Collateral
Estate
Accrued
(Branch
Interest
:
1,308,223.11
Receivable
Estate Bonds and
and
'727,415.41
Mortgages
81,736.53
Office)
Other
50,000.00
Resources
decisions. Others
want national
collective
could
bargain¬
ing, by which they mean joint
meetings at which labor, manage¬
ment,
and
the
farmers
could
achieve
of agreement about
areas
national
economic
problems.
In
general, these officials seem to be
suggesting a two-level union ac¬
tivity. In addition to normal col¬
lective
bargaining at plant levels,
they want collective policy deter¬
mination
at
the
inter-industry
seeking
industry
are
some mechanism by which
members
can
participate
union
immediately and
fectively in the control
more
sions
even
or
They
level.
and
welfare
forces which
of
ef¬
of deci¬
more
affect
the
union members.
iv.
and
hours, job ten¬
conditions.
In all
wages,
job
:
168.757.31
Dividend
No.
Reserved
for
Capital
Surplus
177
Payable January
3,
1949____
30,000.00
Taxes, Expenses and Contingencies———
Profits
management
should
be
un¬
————*—;~L
1,375.885.58
5,375,885.58
$40.435.478.46
BOARD
Charles
S.
McVeigh
Chairman of the Board
OF
DIRECTORS
Edmund
P.
Rogers
Arthur J.
Honorary Chairman
Stanley A. Sweet
Stephen C. Clark
Charles Scribner
O'Donnell
Charles S. Brown
Frederick
Russell
Newbold
E.
Iselin
Townsend
Member
Irvin
Federal
Reserve System
V. Cruikshank
Morris
President
S25J11w \ ^°rd
Henry W. Bull
De
Coursey Fales
Likewise, practically all execu¬
of
large ^corporations and
executives
of
small
pation by
ment.
the
"The
union
in
local labor
corpo¬
partici¬
manage¬
officials,"
they say, "would be the men most
likely to engage in any participa¬
tion program. By and large, such
men are
largely uninformed about
in
management techniques.
They
and Federal Deposit
Stillman
S.
Moseley, Jr.
Morris
Insurance
■
pol¬
icy formation or its execution.
They would introduce elements of
discord
and delay,
Their objec¬
generally would be opposed
to those- of
management."
However, if we speak of infor¬
mal
participation
by
labor
in
management, attitudes of execu¬
tives, even of large corporations,
differed widely. Many executives
have
Charles J. Nourse
Walter N.
tablished.
"Why
One
should
union
few
fight
said:
with
the
the selection of super¬
over
visory
executive
I
personnel?
For
the pas!
question
of promotions strictly up to the
stewards' committee of the plant.
I have accepted every nomination
they made and all were excellent."
Another said: "Recently we had
to
curtail
operations.
The fact
four years I have put the
was
usu
obvious1 to
as
the
men
as
to
In working out revised sched¬
ules,
called the stewards'
we
mittee into consultation.
they
suggested
com¬
The plan
better
than
It had the
added advantage of being accept¬
was
had thought of.
any we
,
Corporation
been influenced directly or
indirectly by the wartime success
qf ; labojji-mapagement committees
and
and
.by; the; studies of Elton Mayo
similar
writers.
growing realization
There
among
is
a
man¬
want
share in management.
any
union
the
to
because
in¬
it
left free to
direct
enterprise. The
majority of man¬
overwhelming
agement people, for their part, are
ready to resist further encroach¬
ment upon the management func-.
tion.
If we look merely at the
expressions of representatives, we
conclude that the present
division
of
responsibilities
bebetween union and management
would change but slowly, if at all.
might
However, if
ics
of
we
look at the dynam¬
collective
bargaining,ik that
conclusion is wholly unwarranted.
Labor
unions are ready in the
pursuit
of
members
the interests of their
expand the area of
bargaining.
They are
increasingly conscious
to
collective
becoming
corporated their ideas of fair work
that the
distribution."
be confined to
studies,
uses
and
its
other,
another plant a
makes
the
time
At
official
union
management
rarely
right of review. At an¬
union has practically
the
both
union
over
Penalties
sanctions.
In
tives
tives
2,000.000.00
___________
_
309,530.41
—
$2,000,000.00 ''
—
__________
Undivided
$34,720,062.47
_____
—
of '5
levels
organizations this informal partic¬ They are sincere in their state¬
ipation by the union is well es¬ ments that management must be
by management, but union recom¬
mendations are normally followed.
could contribute little toward
LIABILITIES
Depositors
lower
complete control
industrial economics and unskilled
$40.435,478.46
Due
the
At
able
Conversations with management
rations oppose any formal
4,308,312.77
New
industries
common
most
Securities
Loans
JS30,313,835.46
Bonds
Reserve Bank
related
fettered.
I.
Banks
Securities
Municipal
,
several
arrive at
that
9,696,840.30
on
that
504,122.161
New
York
Cash
of one industry not pointless, the union's argu¬
In
reflecting upon the inter¬
jointly discuss problems of ments influence decisions.
How views with labor and
management
industry. Others thought of great the influence is may go
representatives, impressions rather
them as arrangements by which
unrecognized by management it¬ than
logical
conclusions result.
the unions and managements of self.
*
'
Very few
labor representatives
could
sions is not established, they feel
:>.I
$
——
general
dif¬
matter
matters not subject to contract, or
in which review of initial deci¬
AVE.
Condensed Statement, December 31% 1948
in
this
on
and managements
ure,
(Bet. 77th & 78th Sts.)
.
men
gaining to
YORK
MADF.SON
labor
represenatives yielded less easily
summarized responses. In general,
they would limit collective bar¬
TRUST
OF
(Singer Building)
Cash
are
of
worthwhile
cases
imposed
just mentioned the
its
owes
disciplinary
are
influence
less
bargaining strength than to
to
con¬
sistent good judgment, ;
We said earlier that practically
all
executives
tions
and
of
most
large organiza¬
executives
of
interests of labor cannot
and working
fixing wages, hours,
conditions. They are
becoming more interested in a
wide variety of management poli¬
cies.
This widening interest, will
inevitably tend to expansion of the
area of
collective bargaining. As
this external pressure grows, man¬
agement, partly in defense of its
sovereignty, will strive to con¬
vince
unions
that employees' in¬
fully considered in the
formulation of its policies.. This
terests
are
lead
will
contacts
increased
to
with
unions
pansion of the
informal
and
an
ex¬
in which the
advisory position.
to
any
formal
participation in While participation in management
management by unions.
Excep¬ through the device of consultation
tions
among
smaller companies is wholly informal, it will become
are of some importance.
A small increasingly more effective par¬
smaller organizations are opposed
companies
also major
whose
stock¬
formal
and organized employee partici¬
pation in management.
In fact,
some
companies with successful
profit-sharing or employee-par¬
ticipation plans insist that labormanagement cooperation is not
only their larger objective, it is a
prime condition and essential ex¬
planation of the success which
they
enjoy.
Cooperation,
they
maintain,
cannot
be
achieved
through an arbitrary division of
rights, interests, or authority; it
requires a far-reaching employee
participation — participation
in
minority
of
managers
are
holders
are
not opposed to
union
holds
area
an
ticipation.
'
Moreover, there exists in many
organizations a wide variety of
arrangements
by which ' unions
now
exert
considerable
influence
management decisions. These
arrangements are giving an in¬
upon
creasing number of union repre¬
sentatives both knowledge of and
sympathy towards management's
problems.
As
their
experience
grows, union representatives will
be
able to make
increasingly im¬
portant contributions.
hand,
habit
and
On the
custom
will
one
of
itself tend to formalize the union's
participation. On the other hand,
the development of labor
repre-
about
when
value
attempt to appraise the
contributions of the
we
and more skilled in the problems
of
will
business
•of
informed
better
sentatives
make
the
economic
manage¬
factors., We
plicated
malizing
well-established infor¬
participation.
Further, more top union leaders
are becoming convinced that they
introduce
units
contribution
a
to
determination
the
make
of
in
policies
use
com¬
marginal?...analysis
ment less apprehensive about for¬
mal
have
COMMERCIAL
THE
Number 4766
169
Volume
and
homogenous
marginal
be
identified
which
cannot
the
production line.
In the
final product the contributions of
the factors are always indistin¬
on
Cooperation begins at
guishable.
dock of the factory
is
which affect individual industries
the receiving
and
and continues until the product
relationships between indus¬
delivered to the
When¬
consumer.
&
FINANCIAL
CHRONICLE
the enterprise will continue. When
its stake in
particular enterprise
a
to be endangered, a bank,
union, may insist upon par¬
ticipation in the actual govern¬
which
of
the
business.
a
effort of the
Rarely
bank to protect
and
upon
the rights of enterprise. Yet the
is much less an immediate
bank
industrial society
union.
the
is
than
the
of
member
By
to grow, some means
for
ceases, production ceases. Produc¬
tion requires the continuing as¬
sociation and constant
of
will be found
giving it effective expression.
VI.
these
If
reflect
in
correctly
impressions
tendencies and
the
trends
relations,
labor-management
for public concern?
Should public policy attempt to
arrest their development by de¬
they
are
cause
what are the rights and
responsibilities which belong to
management?
Should limits be
set to collective bargaining? ,
y
Affirmative responses to these
questions reflect
two
types of
thinking: (1) considerations which
from
drawn
convic¬
ethical
factors.
factor
one
cooperation
business
A
enter¬
is an industrial society; a
of related industrial enter¬
prises is an industrial munici¬
pality.
prise
group
The
fining
are
all
of
of
to govern any society
in any one element of
is
difficult
is inherent
that society
The
defend.
to
right
that the
proposition
ar¬
rangements which give ownership
exclusive
direction
of
enterprise
fundamentally contractual and
are
of the domestic
grew out
economy
the
of
the attempt
unreasonableness
injustice.
or
Perhaps it is somewhat late to
be
public
whether
asking
limits
the
fix
should
policy
of
labor's
encroachment upon the traditional
functions
of
decisions
are
management.
Social
not changed
are
The union has been made
by Federal law an official instru¬
of the public
ment
policy of col¬
lective
bargaining.
Up
to
the
present the union challenge to
management
has ' been
largely
past.
The name of our
concrete
negative and extrinsic. By regu¬
business
experience.
Many
of science (oikonomia) reminds us lating more matters by contract it
those
who
argue
affirmatively that the household about which has limited both management's
from an ethical viewpoint identify Aristotle wrote was the unit of freedom and
flexibility. The im¬
management with ownership or production as well as consump¬ portant question is whether a bet¬
with the interests of ownership, tion. Throughout large segments ter social result would be obtained
tions,
reactions
(2)
to
industry it remained the unit
production until well into the
past century.
The structures of
of
of
ownership to determine the poli¬
cies of an enterprise. They tend
to reduce the employer-employee
of
exchange.
The relationship between a rail¬
road company and its employees,
for
example,
is
considered
in
society
assert
and
an
inherent
relationship to barter
about the
same
right
or
fashion
the
as
re¬
the company
and a passenger. For service, the
company
pays
the
employees
money; for money, the company
gives the passenger service. The
two relations are equally transient
and equally complete.
lationship
between
When the
comparison is put in
such simple terms, it is obviously
a caricature of the employer-em¬
ployee relationship.
A business
enterprise is a continuing asso¬
domestic
and domestic
identical, and the
production rested with
economy
were
control
of
head
the
of
household.
the
The
statute law' of master and servant,
its
control by
the
corresponding
subservience
of
the
employee,
grew out of this domestic econ¬
omy
with its familial relation¬
ships.
It preserved many of the
correlative obligations of jamulaemphasis
employer and
of
freedom
the
the
of
restricted
it
feudalism;
the
While
of
of
interests
owners,
management, and of employees
may
times
at
they
diverge,
nevertheless joined in
a
are
common
purpose.
A business enterprise
exists because it performs a ser¬
community. Whether
the fact, is recognized or not, re¬
vice for the
sponsibility
that
service
ployees'
How
this
as
performance
for
is
as
of
much the em¬
it is the management's.
seriously the public regards
jcommon responsibility be¬
apparent when a work-
comes
stoppage
which
occurs
in
an
industry
(vitally affects the public
welfare.
Production itself is essentially a
cooperative effort. Labor, no mat¬
ter
how skilled,
produces little
without
complicated
machines
made available by investors. The
*
best, locomotive
engineer trans¬
ports little without his locomotive.
The investors with their machines
helpless without the
of the work force.
The engine will not go far with¬
out a competent hand at the throt¬
tle.
The
cooperative nature of
equally
cooperation
are
production
is
only
emphasized
occur
itself
of
holders
a
is
the
The capital
ment.
would
a
business.
not
placed
with
control
stockholders.
unreasonable
If
would
rapid
officials
those
The
ods.
by
dictating
under
which
its
the
gives the ordi¬
workman—the whole man
who comes to work—opportunity
for that fuller participation on the
nary
job,
which will
realized
inventive
YORK
Statement
and
social change,
been, does not
Most local labor
of
extremely
experience,
a
b
o
There
is
no
that their
but
from
reason
the
for
ranks.
believing
selection exhausted
all
potential
executive ability.
The
widening of opportunity
labor to participate either in
the formulation
in
the
execu¬
policies
would
or
business
of
develop among labor representa¬
tives better information about and
sympathy toward as well as ex¬
perience in dealing with a wider
range of business policies.
It
is
unquestionably
management
as
a
true that
function
re¬
quires unified authority. If labor's
participation is viewed as creating
or
union,
requiring joint councils which
engage
at
all
in debate
levels
of
on
bor's
deci¬
authority
only chaos would result.
con¬
Cash in Vault and with Banks
Demand Loans
'
■w-'
-ft-
.
.
.
.
Brokers, Secured".
to
U. S. Government Securities
.
,
.
V
.
.
1 33,648,409.79
1,130,000.00
45,362,231.22
4,207,271.98
.
.
.
.
State, Municipal and other Public. Securities
Loans and Discounts
Customers'
25,533,088.76
.
Stock of Federal Reserve Bank
180,000.00
.
Liability for Acceptances
.
.
.
.
.
.
.
Accrued Interest and Other Assets
.
.
LIABILITIES
,
Capital Stock
Surplus
.,,.
805,514:08
303,940.07
.
i
$3,000,00.0.00
.
.
Undivided Profits
; .
.
.
•
.
Acceptances
Reserve for
iT.
.
.
it
7,2.19,294.61
3,243,091.62
.......
Les3 Own Acceptances in
-,
99,072,287.10
3,278,388.59
.
Certified and Cashier's Checks Outstanding
/
V ; u
3,000,000.00 .
1,219,294.61 $
.
.....
Deposits*
Portfolio
1,010,169.04
2,232,922.58
590,316.56
Contingencies, Interest, Expenses, etc.
$111,170,455.90
♦Includes U. S. Government
Deposits aggregating $2,366,834.05
DIRECTORS
C. R. Black,
C. R.
Hugh
President,
Black, Jr., Corporation
J. Chisholm
The Cuban-American
President, Oxford Paper Co.
Robert
Sugar Company
F. G. Kingsley
Chairman of the Board,
Mercantile Stores Company, Inc.
J. Cuddihy
VicC'President and Treasurer,
Funk
Wagnalls Company
Clark H. Minor
Chairman, Executive Committee,
Chester R. Dewey
International General Electric
Co., Inc.
President
David Dows
New York
Vicc-Prcsidcnt
General Foods Corporation
Robert E. Dwyer
Executive Vice-President,
Anaconda
.
William M. Robbins
Harold
Copper Mining Company
w. r. Grace
John C. Griswold
Co.
President,
Pan Americap'Gracc Airways, Inc.
President
Griswold and
J. Roig
Vice-Chairman,
Company, Incorporated
1
James H. Sharp
Cletus Keating
Kirlin, Campbell, Hickox
Vice-President
Keating
Frank C. Walker
D. C. Keefe
,
President,
|
Chairman, Executive Committee,
Ingersoll-Rand Company
Comcrford Theatres, Inc.
But la¬
responsibility -for business
It might consist of some
tation in the choice
David M. Keiser
Jr.
President
The Grace
jfepreseftman¬
name
has been identified with domestic and
banking and
decisions need not take! this form.
conditions
•
RESOURCES
par¬
gradual
tion
'
-•#
itself of
responsibility
r's
recruited
for
of Condition, December 31, 1948
process
very
1
selves
the busi¬
association with
to the individual
incompatible with,
re¬
might develop talents which, be¬
cause now latent, are wholly
un¬
suspected. It is ' obviously true
that many managers were them¬
sions
ness
is
OF NEW YORK
would
in which labor's
areas
would
a
loyalty
abrupt
officials
men
are
widening
nothing
upon
af¬
con¬
$111,170,455.90
an
ticipation in management would
normally originate. They know or
have ready access to information
about plant operations and meth¬
have
external and
and
HANOVER SQUARE, NEW
most of them are well informed in
^f a business to which it
an
But
business
limited
common
funds, but, like
can
class
GRACE NATIONAL BANK
nature,
unprepared
has
that way.
occur
ment
influence
of
release the un¬
capacities and
underutilized
capabilities of the
work force, and which gives te
bitrary barriers to the respective the organized work force an op¬
rights and functions of manage¬ portunity to participate more di¬
ment on the one hand and * labor rectly and to assume more im¬
on the Other might be futile and
mediately responsibilities for the
unsound.
Equally futile and un¬ enterprise and for its relations te
sound are attempts carefully to the economy.
by
tomorrow
be
it
as
bank, like a union, theoreti¬
cally has no part in the govern¬
exert
but
union
unqualified.
A
can
necessity
democracy which
are
It has been more
rapid in that thirty than in the
previous century. Effort to arrest
this development by erecting ar¬
representa¬
thinking of
local
them
governing the business in which
they invest.
it
very
Labor
which
make
devised which would
give bondholders and preferred
stockholders some participation in
tractual
responsi¬
asso¬
sponsible for business decisions,
it is obviously true that most of
be
lends its
and
Unions
loyalty to the union. We can tryto create a system of industrial
the past ten years than in the
their
would destroy that unity
essential to authority and
are
we
change
assuming that
contractual
relationships
might
in
the
labor.
enterprise
previous thirty.
execution.
in
other
in
shifting and evolving.
The change has been more rapid
differ from those of exist¬
which is
a
is
Labor-management relations
(2) The manage¬
management,
presence
be
the
There
in¬
all
changing,
attempting
to
participate
only would have objectives
ing
Contrac¬
concerned,
all
to
to
of
flict by acting as though interest
Conceivably a
union's
participation
might
be
equally constructive.
qualify, them-to make bus¬
function, by its
which
tual relationships, apparently sat¬
isfactory
firm
sugges¬
concerned.
the
which
training
and
indivisible.
is
tives
by
bondholders, pre¬
ferred
stockholders,
common
stockholders, or banks. The bond¬
holders and preferred stockhold¬
ers normally have no voice in.the
of
bilities
respect¬
closest
have
iness decisions.
ment
supplied
direction
who
experience
arrange¬
which makes
beneficial
the interests
tween
to
be highly constructive
with enterprises, lack
ciation
em¬
business possible may
modern
highly
terests
by erecting an arbitrary wall be¬
resentatives, especially those local
stock¬
common
contractual
strong and
a
decisions.
officials
phasizes the fact that the present
control of industry by the repre¬
sentatives
and
may
their
We can recognize the phi¬
a
immediately in busi¬
This
opinion is
supported by two types of think¬
ing: (1) By and large, labor rep¬
But today
practice
is
There
ness
of industry.
Business
tions
people
capable
directors
his
fit
continuing
participate
in the structure of the gov¬
ernment
assume
an
may
of
to
We can, however, try to
body of opinion which says
that labor cannot in any real sense
quitting the master, and the free¬
dom of the master in discharging
the servant.
boards
boy
able
in
servant
and
prise.
and
nominates
dynamic
than we can
more
losophy of class conflict whatever
its source.
Management can as¬
sert the necessity of class conflict
enterprise, its par¬
be equally selfish
equally narrow and equally
damaging.
But
when
a
bank
ticipation
any
insist upon the basically coopera¬
tive and social aspects of enter¬
its
protects
We>
business.
of
on
after the break¬
tus for centuries
down
immediate
bank
a
re¬
forced.
responsibility for the decisions of
business—by permitting labor in
some way to participate
immedi¬
ately and directly in the decisions
-
with
the house¬
hold is merely the unit of con¬
ciation in which many interests—
the interests of labor, the inter¬ sumption. Modern productive so¬
ests of management, the interests ciety was long ago stripped of all
of the elements of famulatus. The
of the investor, and the interests
of
the
community—are
inter¬ responsibility which management
admits for the welfare of em¬
twined.
If a society may be de¬
has no relationship to
fined as a stable union of two ployees
the paternalism of the domestic
or
more
persons for a common
economy.
In fact, it is an extra¬
purpose attainable by cooperative
legal responsibility. Law obliges
activity, then a business enter¬
management to seek only the in¬
prise is a society. Employees nor¬
terests of; the> stockholders. Labor
mally expect to be associated with
now is not a domestic or appren¬
an enterprise for long and indefi¬
tice within i the»household or an
nite periods of time.
Insofar as
occasional journeyman employed
circumstances permit, they regard
by a village master. It is a mature
the enterprise as their company;
and organized partner in produc¬
they certainly regard the jobs as
tion.
It rivals management both
their property.
Part of their feel¬
in economic and political power.
ing against strikebreakers is re¬
The change in the structure of the
sentment
against
intrusion
on
economy has perhaps made it not
their jobs, and the public sym¬
only right but even inevitable that
pathy which strikers are able to
some
corresponding change will
evoke is an indication that the
public itself recognizes the con¬
tinuing nature of the employment
relationship.
by permitting labor to
more
When
interests in
not easily reversible;
social institutions
by fiat.
such.
industrial
be
growing
a
trousers.
but there is nothing in the nature
of things that requires it to be
encroachment
analogy,
of labor to safeguard
its interests in the enterprise can¬
not be challenged on the grounds
the cooperation
shrink
outlook, selfish in purpose
wholly destructive in result;
unreasonable
will
prefabricate
structures
in
row
its interests been challenged as an
ever
As this conviction continues
tries.
lationships
cannot
of management.
Labor
participation in management in
this, or any form, might be nar¬
has
into which
moulds
broader
the
policies
a
ment
formulates
29
blueprint the forms and shape the
agement personnel; it* might con¬
sist of representation in the group
appears
like
(85)
MEMBER
FEDERAL
commerce
DEPOSIT
for almost
international
a century.
INSURANCE
CORPORATION
30
COMMERCIAL
THE
(86)
securities of business
and industry held by lire insur¬
ance companies increased by $2,563,000,000. The latter figures also
any
to regulate bank loans
in order to improve the quality of
the debt structure or to influence
proposal
prices
lenders
prices
who
clear
timate
reference
by
the
of
to
ture
cer¬
of
sources
funds
in
18%
$27,000,000,000 of new funds used
each
year
came
from internal
sources.
It
is
significant { that
The
financing
Dec.
portant
after
months
10
the
of
far
so
real
the
concerned
the
as
es¬
but
was
little
in
increase
time
than
more
deposits of
individuals, partnerships and cor¬
porations. Why is the investment
of time deposits of
commercial
in
banks
security
During
1946.
Yet
$5,424,000,000 between
1945 and June 30, 1948,
31,
which
real
estate
loans
any
detrimental to the economy
than a similar investment by sav¬
more
issues became relatively more im¬
first
are
increased
$2,-
increased by
through
in recent years of real
loans.
banks
$1,881,000,000.3. Both this and the
Federal
Reserve
study indicate
that
has
tate loans of all commercial banks
business and industry held by
insurance companies
Much
markets.
estate
securities of
life
the
is true of other loans
same
said
been
1947, only 2% were thus obtained.
study indicates that the
business loans of weekly reporting
member banks increased during
and
internal
from
ings banks, savings and loan
asso¬
ciations
the
1948, business
Developments
com¬
life
or
insurance
Fintince, Federal
Reserve
19483
The
third
expansion
f-W'i
Monthly Letter, National City Bank,
::
field
which
attention is that of
rowing.
November, 1948.
few banks
a
this field.
of
bank
has
loan
attracted
consumer
There has been
bor¬
an
un-
from
WILLIAM
CHESTER A.
CARL J.
J.
WASON, Jr.,
ALLEN, Vice-Pres.
ALBERT
I.
TABOR, Secretary
WILLIAM N. BOYLE, Asst.
President
LAMBRECHT, Asst. Ssc'v
WILLIAM TUNIS, Comptroller
Sec'y
the
at
of
total
of
end
consumer
Quality
the
of
Structure
Debt
It is clear from the foregoing
analysis of the role of bank loans,
that any concern for the quality
debt
the
of
occasioned
structure
expansion
the
by
of
loans
bank
must extend to all lenders.
have been warned
Banks
by supervisory
agencies and the American Bank¬
specula¬
tive
loans, to avoid the over-ex¬
of
tension
avoid
credit
consumer
of
and
real
es¬
Regulation W has been
re¬
over-appraisal
tate.
vived by
curb consumer loans. Al¬
advice and some regula¬
assist
in improving
lending practices, the soundness of
a
loan is fundamentally the re¬
sponsibility of the lender and the
though
tion
may
borrower who
At
easier to
payment
practices.
app),y where a downa
maturity is in¬
or
Even such regulation may
volved.
be
unsound
best, regulations can have
limited effectiveness. They
only
are
the immediate
are
from
sufferers
largely formal.
For example,
appraised
of
60%
value does
appraisal or
not control either the
the
in
It
borrower.
no
way
as¬
that- only
borrowers who
ability to repay the re¬
sulting obligations will get into
debt.
Further, whatever loan re¬
quirements may be set by regulalation, there is no assurance that
sures
the
have
individual borrower will
installment
more
than he can
loans
con¬
carry and un¬
business
and
to
not touched at all.
are
necessarily
is
not
uhless every
so
have
to
maximum
a
by regulation.
have
lenders
further
a
re¬
sponsibility which is related to
general economic effects of
lending policies. This is the re¬
sponsibility to use their loan pol¬
icies in the interest of economic
the
A period of laxity fol¬
a sudden change to firm¬
stability.
lowed by
to
is
avoided.
be
evidence
that
The
now.
actions
is
There
policies
such
undergoing
even
change
a
effects
may
of
such
particularly serious in
markets
customarily
patronized
by borrowers such as housing and
STATEMENT
the close
are
Specific Markets
oj business, December 31, 1948
It
Cash
on
Cash
in
U.
S.
$1,359,719.57
Banks
11,968,334.29
Y.
_L_
State
and
Other
Stocks
Due
7,336,209.84
796,444.15
Real
Other
Reserves
11. 700.05
Discount
for
3. 599.72
Taxes,
Expenses and Con¬
Time_
Purchased
Unearned
804, 774.79
44,397, 279.03
Certified
824,793.19
:1
Bonds and Mortgages
Loans on
Collateral,
Demand and
7,500, 000.00
Depositors
Checks
6,884,942.18
__J
$500, 000.00
Undivided Profits-
22,447,590.85
Bonds
i
Surplus
City
Bonds
Bills
Capital
Government
Bonds
N.
LIABILITIES
Hand-.,
360,914.89
tingencies
1,033,495.65
Estate
Official
585,000.00
Assets
676, 697.21
Checks
Outstanding
313,956.15
$53,971,400.76
77 349.96
this
is
$53,971,400.76
In
the
The Kings
County Trust Company offers to its depositors every facility and
accommodation known to modern banking,
if you are not already availing
yourself of the advantages offered by this institution, the Kings County Trust
to have you open
an
account.
first
those
who
who
FEDERAL DEPOSIT
INSURANCE
CORPORATION
effect
place
borrojw
borrow
from banks,
from
other
who do not
possible for
rising prices not to be associated
with borrowing.
The farm real
estate market is a good example.
Although the price of farm prod¬
borrow
■
■ii
.
■*.
and
'I
farm
It
is
lands
have
risen,
r.Hh V<
4 See,■*'Federal
vember, 1948.
L
those
all.
at
and
ucts
MEMBER
potential
markets are
made by three groups of buyers;
lenders,
KINGS COUNTY TRUST COMPANY
in
the
interest
of
reduction
So
favor
It
ones.
would
between
cient
not
distinguish
progressive or effi¬
others.
Furthermore,
the
and
is
ings
is
plow back
can
making
the
earn¬
offef-
and
those
who
-
j
this
point,
.I
to
We
bank
:
do
~
summarize the discussion
loan
have concluded;
policies in tire
postwar period- have had no dif¬
ferent
effect
present
the
on
economy,
different
rto
or
problems
restrictive
Reserve
Bulletin,
No¬
credit
sound
as
dictate, than
of
a
policy
larger
could
borrowers
num¬
regulation
in
prosperous
than in depression.
This
times
effect
agencies.
period of-loan expansion. To
extent
that /regulations
can
minimum
quality' standards
for specific, types of debt, they
may be helpful. This is especially
true when large amounts of funds
seeking loans tend to reduce loan
standards.
Such
apply
regulations
uniformly
all
to
market. Reg¬
same
ulation, however, is not likely to
be completely successful because
all phases of debt cannot be cov.t
ered.
Fundamentally,
then,
the
soundness of the debt structure is
the
responsibility of lenders
borrowers.
the
meet
of other
set
lenders in the
Thirdly, the quantitative effects
regulation on demand are
very uncertain.
If the regulation
of
lending practices is only as
ber
loans
eco¬
resources
of loan
would
the
is always necessary to bear- in
the quality of debts during
It
should
which borrows.
one
from
than
more
any
nomic allocation of
the
that
assurance
no
which
and-
.
The effect of loan expansion
prices
is
tempts
indeterminate
to
secure
on.
and
at¬
effects
price
could be
partially offset by alter¬ through
loan, regulation
will
ing the regulation with the times. probably meet with failure.
While this might seem to be the
correct
policy,
its implementa¬ Effect of Bank LOans on Deposits
tion is confronted by two diffi¬
We
must
conclude, therefore,
culties; (1), a hesitation to in¬ that the chief cause for concern
crease the severity of the regula¬
over bank lending
policies is their ,
tion when necessary, (2) the dif¬ effect on deposits. Aside from the
ficulty
of
setting
appropriate face that bank deposits can in-,
terms.
The
FHA regulation
of crease as a result of increasing
.
.
home
first
stimulate home
to
as
It is reasonable to assume
buying.
that
set
so
the
During the 1930s terms
difficulty.
were
illustrates
loans
this
loans, commercial banking is only
a part of the mechanism
through
which savings are made available
to
borrowers.
loans
When
the
demand
had the desired
result. However, the terms were
not
altered
during the postwar
boom although many admonitions
were
given against over-lending
and overrappraising.
for
-The
This has come as a sur¬
prise to many who were sure that
savings practically always exceed
change
second
difficulty vis
illus¬
trated
by margin "requirements on
loans.
We may-assume
that a 75% margin is higher than
necessary for a conservative loan.
But, by what means has it been
security
that
determined
.75%
is
.
the
"right" margin and what price
change would be caused by drop¬
ping the requirement to 50%?
One can only wonder how agri¬
cultural prices would be affected
by the adoption of the proposal
to
set
margin
requirements in
commodity
necessary
order
in
of
,
of
commercial banks
play
important
roles, effective
quantitative
restrictions
would
apply to all lenders. The
cases of real estate, consumer and
business loans are in this cate¬
have to
The total of consumer loans
not be limited by restrict¬
ing only. bank loans,
for personal
companies- or sales finance
companies could meet the demand
by obtaining funds through the
sale of debentures. To the extent
that these were bought by com¬
loan
the
be
result would
expansion of
in the first place.
Or
banks,
same
as,
the
an
again, savings banks, life insur¬
ance companies, savings and loan
associations, etc. could meet the
demand for real estate loans by
selling government securities. To
the extent that these were bought
by
commercial
on
the
real
be
the
same
banks, the effect
market would
if the banks had
estate
as
made the loans
Over-all
in the first place.
quantitative restriction
loans,.market by market, would
pose serious questions: (1)
What
loan total will accomplish the de¬
of
sired price
effect in each market?
How is this total to be allo¬
cated to lenders?
(3) How is it
to
be
allocated
to
borrowers?
(2)
Rather
supply
a
the
loan
total
postwar
demand
the,
years,
has
exceeded
,
savings.
the demand for loans ill the modern
t
economy.
It
pointed out above that in
these
circumstances,
deposits
could be prevented from
rising
by three methods: (1) By control
of loan expansion;
(2) by hold¬
ing total bank reserves constant;
(3) in the special circumstances
of the postwar years, by a retire¬
was
of
ment
sufficient
a
v
,
of
amount
The
other than
could
during
efficacy
the
estimate
to
loan regulations as a means
influencing specific markets.
gory.
the
of
given level of inter¬
est rates, rates will rise, deposits
expand, or both. It is evident that,
public
Finally, in markets where lend¬
ers
exceeds
savings at
markets.
It is only
to ask these questions
bank loans
of
lodns on
specific
prices which
has led to the currently popular
proposal to limit loans in order
to control prices.
In addition to
the
limitations of
loan
regula¬
tion discussed
above, there are
additional
aspects
of regulation
for the sake of price effect which
make such regulation undesirable
and probably unsuccessful.
those
Company will be glad
a
mercial
Controlling Loans to Control
RESOURCES
as
„
automobiles.
at
market
a
there
June, 1948.4
Controlling Loans to Improve the
be
JOHN V.
from
borrow
To
that
prices
on
borrowed.
Secondly, it is difficult to jus¬
tify the exclusion of borrowers
firm
some
RICHARD C. CUMBERS, Asst. Sec'y
LEONARD D. O'BRIEN, Asst.
Sec'y
\
MEHLDAU, Vice-Pres.
35%
46%
to
1945
credit in
ness
OFFICERS
is
must
not.
can
money
effect
same
which
of
the
of consumer loans out¬
standing in all insured commercial
Thus,
the larger questions of lending
policy remain the responsibility of
banks and other agencies.
804,000.00
that
other
the virtue
any
Hence,
portion
All
.
i In
reduced,
words, non-borrowed
have the
actually,
loans,
*
bor-
example,
restriction
would
existing firms over new
borrow.
a
loan limit set
7,500,000.00
Farm
been
by
In the field of business loans,
This is
500,000.00
rowets.
have
caused
been
least have
all.
borrower
Capital .....$
have
at
ing
the
possibility
of
greater '
equity as between buyers who
for
consumers
BROOKLYN 1, N. Y.
no
suggestion
proposals
that
combined to raise the pro¬
mand
tracts
342, 344 and 346 FULTON STREET
these
been
present
mind
secured
Company
has
among
in a specific demand.
long as the terms of credit are
sound, the field should be open to
to
reason
after the war
undertake
Undivided Profits
has
there
Thursday, January 6, 1949
wider interest by
banks and increased consumer de¬
little
the
Surplus
It
the limitation of real estate loans
panies?
in
Business
Bulletin, June,
war
had ventured
been only
since
1936,
for
example,
that
legislation in New York State
made this type of loan possible.
During the war, individuals had
only
into
to
2 Recent
outbreak of the
ers' Association to curtail
other
and
Another
249,000,000
or
sources.
liquid assets but in
the first 10 months of 1947 by
funds
borrowed
obtained
funds
during 1946, when the postwar
expansion was just starting, 24%
of the funds were obtained by a
in
other
than
experiments^with
business by banks.
Prior to the
deben¬
the
open market is
quality than a loan
directly by a bank or an in¬
surance
company?
Or why is a
bank loan of more significance in
raising prices of scarce materials
tively. Approximately 60% of the
reduction
in
better
of
1947 respec¬
and
materials.
of
made
accounted for 10
1946
sold
ture
business to expand fixed
working capital in loans.2
Security issues
to
prices
evolution
struc¬
debt
How is one to know that a
used by
and
the
or
determining
the
of
loans
bank
that
part in
a
soundness
the
For example, an es¬
tain studies.
evident
is
It
21-year
a
of
type
banks
play only
of bank loans may be
The role
compa¬
suppliers of business funds
reversed between 1947 and
1948.
as
by those who do.
as
made
borrow
to
need
not
insurance
and
CHRONICLE
first
the
this
as
was
banks. Further,
as
banks
nies
also affected by buyers
are
do
well
well
as
indicate that the relative position
of
non-bank
consider
must
while
000,
for
and
structure
debt
the
banks, increased by $584,000,-
ber
quality
the
in
deterioration
any
of
responsibility
have
Weekly reporting mem¬
of
loans
larger amounts of specialized debt
than
do
the
banks.
Hence all
lenders
Policies
4)
from page
of
mination
from
(Continued
FINANCIAL
precedented growth in personal
Iqans by banks. This is the cul¬
Postwar Commercial
Bank Lending
&
than
attempt
to
answer
those who prefer
dictatorial, to a free economy
would find direct price control,
these questions,
a
rationing
and
allocation
more
simple. The latter program would
loan
debt
equate
to
total
new :*
demand
and new savings.
undesirability of the first
policy has beCn discussed above.
If undertaken, it should be ap¬
plied to all lenders. Specific re-»
striction of bank loans might bear
especially heavily on those bor¬
most
whom
for
rowers
logical
These
chiefly
are
of
concerns
size/
■"
-
banks
the
funds.
"
.
local
business
and small
medium
'-'n;-!
.
are
of
source
.
'
' k'r'i
-k
The Federal Reserve authorities
have
held
ing
the
on
second
policy
pursued without
increase
an
cost
that
be
cannot
the
Hoping that
in
the
caus¬
interest
debt.
government
a
change in
the
re¬
structure
might make pos¬
sible the accomplishment of both
objectives (i.e., restraint of de¬
posit
expansion
without
rising
interest rates)
several proposals
serve
have
been
are
will
made
officials
serve
by Federal
others.
and
not likely to be
be
The
Shown
Re¬
These
successful,
later.
third'
without causing
The
,
as
policy, then is the
only one.which holds the possibil¬
ity of restraining deposit growth
rates.-
•
a
rise in interest
has been
.
,
Treasury
partially successful in accomplish¬
ing this objective during the post¬
war years.
Between Dec. 31, 1945
and June 30,
1948, the govern¬
ment securities
held by all in¬
sured commercial banks decreased
Most of this
by $25,422,000,001).
reduction, $21,688,000,000, Was ac¬
complished by a reduction of war
j
loan account in commercial banks
which represented un-needed
de¬
posits acquired by the Treasury in
the last
war
government
loan drive.
retired
-
Since
bank
•
one
held
-
1
Volume
Number 4766
169
THE
COMMERCIAL
debt by a
whether
banks
20%
Fundamental to all three pro¬
larger amount than the
in war loan deposits, posals
is the question whether
loan expansion cap be curtailed
enabled to
acquire
additional assets totaling $3,734,- without rising interest rates.
If
000,000 without increasing depos¬ the demand for loans exceeds the
its. However, loans and securities supply of savings so that the total
other than those of the United demand can be satisfied only by
States Government increased by an expansion of bank
deposits,
$15,407,000,000. Some of this in¬ any method of restricting this ex¬
crease represented the investment
pansion through reserve manipu¬
were
additional
of
time
capital funds
in
crease
deposits
and
that the net in¬
deposits other
so
demand
United
than
States
Government
$7,272,000,000.
was
what
To
lem
extent
further
a
in¬
in deposits will be a prob¬
crease
is
There
uncertain.
that
the
during
ceased
is
trend
upward
latter half of
The outlook for government
1948.
finance
that
suggests however
it
certain that further retire¬
is not
ment of Federal debt will be pos¬
sible in the next year.
lation will
rise
Yet, should
interest rates to
cause
rise.
This
could
avoided
be
only by direct control of loans as
discussed in the first part of this
paper.
But a general rationing of
is
loans
high price to
bank deposit stability.
a
for
pay
Also fundamental to all reserve
some
the
evidence
proposals is the question:
"Can
the government
securities market
be insulated against rising interest
in
rates
markets?"
other
is
It
quite probable that interest rates
could be fixed on any government
bonds
which
are
frozen
in
the
of
current
to
meet
the
and
Reserve
Structure
,
That
'.
by
this
is
so
able issues which
not frozen
were
be
can
shown
analysis of the relation of
bank lending to reserves.
which the
ernment
bond
the
to
amount
determined
It must first be made clear that
increased
'
•
•
not
demand
creased
for
a
simple
The
loans.
the
strict
are
prevent them may cause
or
hardship to borrowers.
If total current savings are
at least equal to total current de¬
unnecessary
•
loans
de¬
is
be those which banks
especially experienced and
equipped to make, or borrowers
may find banks more convenient
or
otherwise preferable.
To re¬
■
of
mands
ing
satisfaction
through deposit expansion
prevented; interest rates on
private debt would rise.
Other
lenders seeking to employ their
resources
more profitably would
sell any unfrozen government se¬
curities whose yields would re¬
spond to the general market.
should
It
be
that
noted
be
to
•
borrowers,
the
ibility of interest rates is essential
accomplish such redistribution.
Hence deposit expansion becomes
a
problem only when total bor¬
rowing demand exceeds current
savings.
That there was any need for an
expansion in the nation's money
on reserve
cpunting
creation through redis-
borrowing at Federal
or
full
increment
The Federal Reserve decides that
bank
deposits must increase by
$100 in order to stabilize govern¬
ment
bond
prices.
banks
The
buy
Federal
$100 of gov¬
thus increas¬
securities,
ing bank deposits and
$100.
At this point
by
banks
reserves
the
would have $80 of excess reserves
if
a
20%
ratio were
required.
Critics of fractional reserve re¬
be
now
that
bank
Had
during
the
restrained
trol,
;
con¬
financial
recent
would
expansion
been
deposit
postwar years
through reserve
have
history
considerably
been
supply after December, 1945, can different. While the full effects
hardly be defended. Demand de¬ of such a policy cannot be pre¬
posits adjusted, plus currency out- dicted or reconstructed, ex post
side of banks, nearly doubled be¬ facto, they prdf|ably would not
tween June, 1942. and the end of have been so serious as to cause
i
Rather
than being stabil¬
high level, to say
nothing of a possible contraction,
government
bond
market."
At
least, a less dogmatic attitude dur¬
the
ing
1945.
this
al
ized
'
supply increased by
another 10% during the next two
money
years.
Federal
Reserve
officials
have
'
maintained
that
they have been
powerless to prevent this increase
without causing a rise in interest
rates
on
government securities.
This being so, there was only one
.'. method by which the deposit rise
could have been prevented. This
was
through additional debt re; tirement by the Treasury a's has
been concluded above.
However,
the issue has been clouded
by
'
1
assertions
that
the
loan
and
.
could
commercial
the;
structure.
bank
reserve
•
Three separate but inter-related
ideas have been associated with
V
recent
to change the
reserve structure of commercial
banks: (1) by freezing government
'
proposals
securities
be
•
the*
banks,
by increasing
required re¬
denied; (2)
percentage of
can
.
commercial
in
to additional reserve funds
access
to
deposits, multiple deposit
expansion can be prevented; (3)
by separating the deposits and
serves
loan
functions
of
commercial
banks, the Federal Reserve banks
will
have
a
more
certain
bottom
to
out
drop
of
the
early postwar years to¬
ward the -yields on government
securities would have permitted
the
experimentation earlier in
period to learn what could be
accomplished. The risks involved
in reserve control could only have
some
the
been
avoided
retirements
It
is
through
of
adequate
government
that
fortunate
some
debt.
funds
were
available to the Treasury for
debt
retirement.
The
effects
of
fiscal policy are more gentle
they
are
spread
since
throughout the
whereas reserve control
de¬ •operates with full force on loan
be pre¬
vented
without
rising
interest
rates (at least on government securites) through an alteration of
expausion
posit
"the
control
economy
markets only.
.
$400.
The
automatic.
if there
occur
expansion
If there is
a
is
not
total de¬
$500 in loans, then the
first
assumption
rect
and
the
the Federal
above
is
additional
for loans is not
incor¬
demand
$ 100 but $500, and
simply faces
Reserve
different problem.
Multiple Deposit Expansion
problem of deposit control
has been confused by the claim
that a fractional reserve system
results in multiple deposit expan¬
sion.
Hence proposals have been
advanced to raise reserve require¬
ment on demand deposits even to
100%, to reduce the multiple ex¬
pansion. This confusion has been
unfortunate, for the percentage
reserve requirement has no bear¬
ing upon the amount of deposit
expansion. The amount of deposit
expansion depends upon the loan
demand and the willingness of the
Federal Reserve banks to permit
the banks to meet iti. jo'./-'"---',;
The
arithmetic
is
simple.
If
the banks
over
bank loans expand and
ter
sell
deposits. To obtain this lat¬
result, it has been suggested
that
raised
reserve
to
requirements
100%.
be
government- bonds, deposit
expansion can be avoided by Fed¬
eral Reserve refusal to purchase
of demand support by ex¬
tremely liquid positions.
v
The unique aspect of bank lend¬
ing is its effect on deposits. Post¬
expansion following a doub¬
ling of the money supply during
the war, has been considered in¬
flationary.
Vigorous efforts to
control
this
expansion
through
war
by
want—satisfaction,
and
comes
influenced
are
of
prices.
their
in¬
Borrowers
control
oanks
are
of
savings
as
is reduced.
in
a
demand for goods
loans decline
a
If
re¬
$80 to absorb them.
The
banks, having $80 of excess re¬
and
serves
no
will
mand,
additional loan de¬
purchase
the,
$80
of
be the
to
seen
creation
amount
(inflation)
the
market.
This
to
bond
turn
ratio.
reserve
One
Hundred
reserve
deposits.
sition
to
The
restore
system,
in
are
loans
a
Bank loan
of
cess
Under
the
lending
been
are
also
be
tion
were
in bank
during postwar years has
attracted wide attention. Concern
been
tain
that
expressed
have
markets.
However,
cer¬
kets
tent
are
and
as
loans
not different from other loans
not
are
to market
highly
as
was
concentrated
true of
interest
securities
will
not
rates,
which
absorb.
interest
that
struc¬
do
not
the
To
mar¬
the
From present
indications, it ap¬
that the problem of deposit
expansion may continue to plague
the
economy. . Economists
will
pears
have
opportunity to render a
focusing the at¬
an
useful service by
tention of the public on the Fed¬
eral budget as
the chief monetary
BROOKLYN TRUST
COMPANY
Cent
Reserves
policy cannot be dis¬
facing the funda¬
question of divorcing de¬
posits from loans. The proposal to
MAIN
100%
has
reserves,
177
OFFICE:
NEW YORK
Montague Street
■
OFFICE:
26 Broad Street
•
Brooklyn 2, N. Y.
this
New York 4, N. Y.
purpose..
Although
such
requirement
a
to accomplish
appears
the
Condensed Statement of Condition, December
31, 1948
purpose
of
making changes in the money
supply independent of changes in
bank loans, it would, in fact, not
eliminate any fundamental bank¬
ing or monetary problem. As in¬
dicated
above,
given
increase
an
in the demand for loans, the fun¬
damental question facing the cen¬
tral
banking authorities is the
RESOURCES
Cash
on
Hand and due from Federal
Reserve
U.
S.
State
Bank
and
Other Banks
$73,785,996.21
Government Securities
and
125,719,975.35
Municipal Bonds
5,957,850.32
Other Securities
2,272,634.66
amount of such loan demand to be
Loans and
met
Bonds and Mortgages
by
The
an
expansion of deposits.
ratio simply deter¬
reserve
mines
the
amount
needed
reserves
to
level
of deposits.
ment
of
100%
complished
of
support
any
If the require¬
reserves
Bank
increased
were
ac¬
Bills Purchased
32,947,796.65
1,000.00
2,500,000.00
Other Real Estate
1,000.00
Customers' Liability on Acceptances
7,217.65
Other Resources
659,161.63
by
freezing govern¬
securities
in. the
banks,
commercial
banks would
banks
serve
lending
serve
'
Buildings
$243,852,632.47
become
LIABILITIES
branch offices for the Federal Re¬
for
which
any
the
Federal
banks decided to
Some
advocates
increased
of
Re¬
permits
the
100%
plan
emphasize its sup¬
posed benefits during a period of
recession.
In their view, it is a
reserve
defect
of
the
monetary
system
that the money supply (bank de¬
posits) decrease in recession. The
Capital
$8,200,000.00
Surplus
5,800,000.00
Undivided Profits
Reserve for
1,734,047.57
Contingencies
Dividend payable
856,692.27
January 3, 1949
205,000.00
Deposits
226,292,997.19
Acceptances Outstanding
7,217.65
Reserves for Taxes, Expenses, etc.
756,677.79
contraction of deposits is believed
to aggravate the depression, prin¬
cipally through
in
prices.
$243,852,632.47
resulting decline
Deposit contraction, it
a
United
except by action
reserves
central
5 For
use
a
of
more
detailed
J.
Government
$20,634,865.32
and
Member
discussion of the
as
bank
Willison
Bank
securities
Brooke
Secondary Reserve Requirements, Journal
of Finance.
at
for
other
One of the Oldest Trust
government
see
deposits
t
and
are
State
and
pledged
purposes,
Municipal bonds
to
secure
required
as
public
by
law.
of the
bank.
reserves,
States
carried
is held, could not occur with 100%
"w„,
New
York
Federal
Clearing
House
Companies in the United States
Deposit
ex¬
rgte
changes
will assist in accomplishing this
purpose, they should be used.
secur¬
ity loans during the latter '20s.
They are related to a general
postwar boom one aspect of which
is rising prices caused by back-
mental
require
retire
careful
studies reveal that the increase in
bank loans has been widespread
bank
reserve
responsibility of fiscal policy. The
Treasury must be in a position to
these
over-stimulated
would
almost to the
ing an increased loan demand b,y
expanding deposits.
It is found
that the problem is as difficult
to cope with under one set of re¬
serve requirements as another.
We must conclude, then, that in¬
flation in the present era is a
loans
loans
It
unless regula¬
deal with the major issue of meet¬
Conclusion
has
inequitable to
extended
in
creases
ac¬
markets.
increase
be
Alterations in the
tions of all buyers. Borrowers are
after all only a part of national
substantial
to
ineffective
ture, while holding the possibility
ofr insulating
some
government
securities
against
general
in¬
it makes little difference whether
M or V declines, the
important
A
retirement
point of rationing loans.
money.
Similarly, if
savings bank loan repayments ex¬
ceed
new
loans, cash balances
will increase, In technical terms,
change is in the attitude and
and
borrowers.
and
also
ex¬
would
found
banks
100%
in
structure
government debt.
Direct control of bank loans has
their
to
repayments
new
of
inactivate
without
cussed
ris¬
avoid
expansion, alteration of the
reserve
po¬
original amount if borrowers
forthcoming.
system, loan
of loan
so
ratio is
reserve
-
Per
to
re¬
Reserve
deposit
government
in
effort
an
been
Federal
necessary
depends
the loan demand and not on
upon
the
of
the
have been found in direct control
bank
fractional
is,
sell
in
has
reserves
by
similarly influenced. If total bor¬ ing interest rates on government
rowing declines, repayments in¬ securities.
Other possibilities of
crease
or
both, the effectiveness controlling the deposit increase
Returning, then, to the $80 of
throughout the economy and has
reserves
created
by the been
paralleled by increases in
original purchase of $100 of se¬ similar
types of loans by other
curities, it is only necessary for institutions. That
the Federal Reserve banks to
of
jected
excess
ment
The
state
additional demand for loans
an
mand for
a
deposits
to $500.
expanded
stabilize
Reserve banks.
sumers
31
logs
They are, determined
by decisions to spend or not to
spend in many fields by many
buyers. Business buyers are in¬
raised and the banks
that $100 is the
of loan demand.
suppose
assets
to
*
been
effective
in
preventing reserve securities offered by the Federal
and deposit expansion, the freez-- Reserve, thus retaining only suf¬
sold by banks will find their way ing of government securities in ficient reserves to. meet^hei re¬
into hands other than those
of commercial banks would have to quirements for the $100 increase
the Federal Reserve banks. Flex¬ be supplemented by restrictions in deposits. The problem, thus, is
of
mands
de¬
termined.
Further,
of
and
and
simply de¬
so
will
government securities equal to a
prescribed percentage of deposits
would fix the interest rate on only
amount
an
prices,
not
are
in order to make loans to business.
is
hold
must
has
"right." Let us
suppose that insurance companies
sell $100 of government securities
of
banks
types of loans which are increas¬
may
which
be
commercial But this will only
bank lending per se,
automatically increase
deposits. If reserves are held con- those securities which are frozen
stant, the banks will dispose of provided that the same type of
other assets (government securi- security was not held by others.
ties) in order to meet the in¬ If the regulation were effective
need
to
stable, de¬
easily be held
can
can
Hence,
that
ex¬
market
posit expansion
quirements -assert
rates.
de¬
Federal Reserve
interest
requirement
loan
pansion in order to keep the gov¬
would follow the general trend in
an
adequate
are
current
feels must be met by deposit
ernment
Lending
savings
Unfortunately
pressions
.
mand
also required to replace
Bank
are
(87)
mands, the government securities
will be bought by others without fluenced
by a
complex inter¬
pressure on yields.
y
V relation of costs and prices as
If, however, there is a loan de¬ well as government policies. Con¬
the
.
difference
no
requirements
)UH «»
CHRONICLE
If the total amount
total
Reserve
maturing
obligations by equal amounts of
new issues.
Sales or redemptions
would have to be entirely at gov¬
ernment discretion. Any market¬
makes
reserve
hands of present holders who are
prevention of further deposit
expansion without rising interest
rates
can
only be accomplished
through fiscal policy.
FINANCIAL
100%.
or
loan demand continue to increase
•
\t
the bonds:
reduction
&
w»M ifr»l!vUta«H I
Insurance
Association
and
Corporation,
Federal
Reserve
System
32
COMMERCIAL
THE
(88)
Evans Nominated
as
product in
about
Chairman of National
In the
firm
A A'
Clement
of
Company, Inc. Present
Chairman of NASD is L.. Ray¬
&
&
mick
for
nominated
officers
Vice-Chairmen, G. M.
1949 follow:
joining the Security Sales Cor¬
poration of Atlanta. He later be¬
associated
came
Chicago.
Co.,
Other
McCor-
of Kebbon,
Billett
mond
Phillips, of Caldwell, Phillips Co.,
St.
Paul;
John J. Sullivan, of
Bosworth, Sullivan & Company,
~
~
~
business
by
——
securities
vestment
with
1924,
office
of
Trust
he joined the Atlanta
Hibernia
the
Company of New Orleans,
becoming manager.
Three
later he went with the
Hoye, of
Co., New Haven.
Charles W. Scran ton &
Wallace H. Ful¬
ton, Washington, was nominated
Fourth National Bank of
Election
place at
take
meeting of the Board
a
Jan.
Governors
of
will
officers
of
17-18^ at Sea
Island, Ga.
/-
.,
retiring Governors of the Associa¬
Walter E.
follows:
tion,
Kistner,
•Chairman, A. C. Allyn and Com¬
Raymond Bil¬
Chicago; L.
pany,
Kebbon,. McCormick
lett,
Chicago;4
Boynton,
F.
Herbert
& Co.,
organized and managed the
bond department.
Through con¬
solidation, that bank became the
First
Rex
&
Dallas;
Son,
The
Rupe
Herrick,
Harlan
Lathrop-Hawk-Herrick Com¬
Wichita; Robert C. Kirch-
pany,
Kirchofer
ofer,
and
Raleigh;
Pacific
Los
Dallas
Cromwell,
Arnold,
&
Joseph
Company
L.
Inc.,
Ryons,
California,
of
Angeles.
native of Augusta,
Ga., served in the Marine Corps
World
he
I.
War
entered
After
Georgia
Technology.
the
war
School
of
Upon his graduation
he became identified with the in¬
The
February,
Clement
of housing,
ambitious
investment
In Great Britain,"the
spawned
result of
coalesced with a vigor¬
expansion, was far
from disastrous on the price level,
and in part because of the meas¬
ures
taken to restrain consumption.
And
in the totalitarian states, it
possible to contend with in¬
flation
despite
the large invest¬
ment programs, first, by keeping
consumption down through comprehensive controls, and second,
by dealing with the residue of
cash
excess
by
war,
other
bequeathed
monetary
countries
where
not
acquiesced
yet
ary
effects
were
In
sole
a
He became Presi¬
is
Georgia
lumbus
Atlanta
and
Chi
Tech
a
Phi
Inc.;
member of
a
Piedmont
Capital
City
Driving
Club
Tree Country
No.
9
He is
Commit¬
and
for two
a
has
been
has
terms.
been
He
has
economic
support of free people
throughout the entire world.3
War and
Postwar Patterns
Spending
.
of
/
for
time
more
export,
so
to
our
people and our government, both
executive
well
and
legislative,
criticized
be
at
carry
on
many
huge
the
for
had
country, the government
rely on borrowing to a
to
time
as
degree.
Thus, in the
ending June 30, 1945, the
Federal Government spent
$323
billion and raised $133 billion, or
42'%, from taxes. ; At the end of
the war, the commercial and re¬
years
.
banks held
serve
$107 billion
government
securities,
40%
amount
of
the
in
our
expansion
business
transactions,
sion
residential
of
our
lion:
our
rehabilitation,
public-works
military
our
government
program,
establishment
our
and
huge
our
20%
of the
disposable
In the 2V2
years ending June 30,
1948, the
public saved but $26 billion of a
disposable
personal
income of
of
taxes, $33 billion from relatively
non-inflationary sales of public
standing and
2xpansion of
the
accompanying
bank deposits ac¬
for the growth of liquid as¬
stant
were
to remain
a
con¬
threat in the years 1946-49.
the end of 1939 to the end
From
Df 1945,
liquid assets belonging to
from
and
$6 to
business
$225 billion,
rose
$160
or
surance
from
the
companies, etc., increased
$22
to
$80
amount
level
billion
1939 to 1944.
years
as¬
government, foreigners, in¬
of
but
by
the
1945
in
the
It is clear that
and
were
inflationary pressures.6
is to examine
Nation's Budget.
the
made
for
a
grown
ending June 30, 1948, con¬
receipts exceeded their
expenditures by $29.4 billion, and
government receipts were $14 bil¬
lion in excess of their expendi¬
tures.
These surpluses (i.e., de¬
flationary
factors)
were
more
than matched by excesses of ex¬
penditures on business and inter¬
sumers'
national account: deficits
for
accounted
busi¬
on
billion
(excess of expenditures over in¬
ness
of
$29.8
available for investment out
undistributed
profits
and
serves), and $15.7 billion
surplus only by
Ponsi-like method
transferring $3 billion from
surplus to the ECA Trust
the 1948
Fund for 1949.
Actually, the esti¬
mated change for fiscal year 1949
relation to the results for the
in
first
6
months
1948
is
a
of
calendar
reduction
$6 billion and
of
of
year
receipts of
rise of payments
a
$5 billion and, therefore^a
re¬
duction in the contribution of the
Federal
Government
toward
checking inflation of $11 billion.6
depend
tures
1950, much will
how much expendi¬
upon
rise
for
armaments, ERP,
social legislation, and upon
yield of new tax measures.
and
the
Should 1949 be
of balance,
even one of
a
year
(let us assume)
declining prices, then the imme¬
diate
inflationary threat would
be over; and the
Treasury with
or
increased
an
tribute
deficit
toward
would
stopping
con¬
de¬
any
risen
price
by
but
allowance
in
the
re¬
of
1948.
large
combination
A
volume
of
investment
of
(running at the rate of $37 billion
the first half of 1948), a high
to
consume,
a
low
propensity to save, and the large
to
foreign account tended
balance only at a high
value of GNP.
on
bring
money
a
These
inflationary pressures
following?
are
evident in the
From 1945 to First Half of 1948:
Per Cent
1.
Rise of consumers' price index-
2.
Rise
3.
Decline
of gross
dex
4.
of
of
Insured
Deposits
*Dec.
32
national product-
Federal
Reserve
was
deficit
a
1947-
of
interna¬
on
tional
account (the equivalent of
corresponding supply of sav¬
ings), the anticipated deficit for
a
1948
is
but
decline
is
£250
an
million.
This
inflationary factor
to the extent of
£400 million and
roughly balances the rise
the
of
government surplus for the fiscal
ending March 31,
year
1949.
In
the calendar year 1947, gross capi¬
tal formation amounted to £ 2,020
million,
of
which
£675
accounted for
were
million
by borrowing
abroad and sales of assets abroad.
Domestic
sources of
savings had *
large enough to offset £441
million of
negative savings by
public authorities and £ 1,345 mil¬
lion of domestic savings required
for investment (£2,020—£675)? i
to be
It is clear that the peculiar situ¬
ation arising from the
aftermath
part
accounts
and its
war
for
large
a
of the
inflationary develop¬
Savings are inadequate
ments.4
given the budgetary situation, the
of
excess
imports, and the invest¬
ment programs in Western Europe;
and in the light of the heavy in¬
vestment
and
they
foreign
aid
pro¬
inadequate in the
United States despite a substantial
budgetary surplus of about $15
gram,
are
billion in 2 y* postwar years.
Problems: the Budget,
Savings and Investments
16
$ Billion
all
—11.3
1948.
spite
a
assets
in
and
deposits
of
banks.
In
2i/2 years, the government
off about $25 billion of se¬
curities,
matched
by
a
corre¬
sponding decline in the holdings
of government securities by all
banks.
But loans of all banks
ac¬
tually increased by $14.7 billion,
or by about 50%.
Government fiscal policy in the
1946-48 contributed toward
years
the
of
inflationary
economies
with
an
ex¬
cessive task of replenishing busi¬
and
ness
consumer
replacing
inventories.,
plant
and
destroyed
equipment
and
making up for
other deficiencies resulting from
the war.
On top of all of this,
the failure of the world to return
to
peaceful status imposes large
a
additional
burdens
Three and
omy.
the
end
for
example,
about
a
the
of
war,,
have
10% -of
the
on
econ¬
half years after
the
to
their
British,
consume
income
for
military purposes and the United
States, inclusive of ERP, about
10%.
....
' v??'v' -
.
Under conditions of
flation
is
serious
a
governments
strong
unless
prepared to take
But
Western
are
Europe and the United States
not
ready
trolled
to
are
a
con¬
which
might
yield price stability despite these
pressures on the economy.
Nor
they prepared to impose the
fiscal
and
monetary
policies
which
will
adjust demand for
consumption and private invest¬
are
the
to
resources
requirements
international position.
given
the
The
is
result
erally is
the
available,
of their
there
that
gen¬
of investment
of savings and net
excess
an
sum
import surplus, and hence infla¬
tionary pressure for Europe; and
an
investment
of
excess
and
States.
where
Even
the
budgetary situation is in balance
United
Kingdom) or
a
surplus
(e.g., the United States) inflation¬
ary pressures continue.
It is in¬
deed symptomatic of the new eco¬
the
(e.g.,
where
nomics
has
there
that
we
been
understand
now
why
substantial
inflations
are
compatible with a balanced or
even
surplus
account
for
the
by the private
the
The emphasis is upon
changes
economy,
jointly.
might easily have paid off $10-$15
billion additional of debt in these
dom, the budget situation in 19471948 was under control, but infla¬
2V2
tion continued despite recourse to
thus have moder¬
and
4
Treasury
A,
pp.
1-17,
the
and
New
Inflation
and
Bulletin,
controls.
48,
and
December,
my
Economics,
the
National
p.
Debt
and
120,
American
1948.
my
Economy.
24i.:
Survey
5
1946,
of Current
Business, July,
i9; Inflation and the American
p.
Economy,
pp.
96,
In
na-
7
Income, Supo'ement to Surr
of Current Business, July, 1947, p. 19
Figures' in
last
few
paragraphs:
'Federal
Reserve
Bulletin,
Octobe".
IP7"*
3 Joint Economic
1277-'i
Report: Report of the
Rational Income, p. 19; The
Joint
Committee
in
the
January
1948
Etortomic
Report of the President, JanuEconomic Report of the Pr°sident, Sen-*' 'ary,-' 1948,;fp;*92; Mid-Year
Report of the
ate Report No. 135S, May, 1948, p. 3.
i f ivsiuenc, .»uiy, 1948, p. 62. v
«
-
„
dom
were
1947-48,
estimated
i
*
r
*
-«a' '*
billion
£3.44
and
re¬
ceipts £3.84 billion, and for 19481949 the
budget calls for revenue
of
£3.76
and
expenditures of
£2.97
billion.
Yet
from
Sep¬
tember,
105.
6 National
1947
to
June,
1948,
the
cost of
living in the United King¬
by 9%. Even the large
for 1948-49 may not be
enough to ward off inflation; for
dom
rose
surplus
ary
pressures
investment
1948,
*
to
the
once
domestic
peters
program
out
and recovery in
its
Europe is well on
continuance of the
A
way.
present
state
of political uncer¬
tainty in itself makes an impor¬
tant contribution towards the sup-
y
port of inflationary pressures.
On balance, the following fac¬
tors are likely to strengthen in¬
flationary forces over the next
generation:
tance
the
increased
impor¬
of government in economic
life; the growing influence of
cial
interest
labor,
spe¬
inclusive
groups,
of
agriculture,
and business;
development of tech¬
for expanding monetary
the further
niques
supplies.
First,
let
consider
us
With
ment.
the
govern¬
increased
'
played by government, the
ment
importance of govern¬
results
from
the
unstable
and
military
political, economic,
situation.
Its task
increasingly is
to
mobilize
at
work, and thus to
tribution.
keep them
resources,
demand
mum
role
pres¬
markets tends to increase:
on
in part the
and
This
assure
mini¬
equitable dis¬
is
world-wide
a
appraisal applying in varying de¬
grees to all countries.
Total government
are
much
a
national
in
expenditures
larger
income
earlier
they
Thus
years.
of
part
than
about
4%
of
national
the
were
in
United States tax collections
the
were
income
in
1860, 6.5% in 1913, 11.6% in 1928,
and fluctuated around 25% in the
last few years?6 Perhaps the most
useful comparison for recent
years
is that of gross national
product
and
government
purchases
of
goods and services—other government
,
t;
expenditures,
duplication
and notably
expenditures
by
of
government at various levels, and
payments are excluded.
It should be observed that in 1947
transfer
total
Federal
expenditures
were
$41.5 billion.
Gross
National
Purchases
»
pp.
of Current
Business, October,
8-9.
y
A
•?
**
.
.* «
t* »• '1
4
3
and
Goods
Government
and
Services
'
1929
V
2.
Gross Natl.
Govt,
3.
is
49),
the
clear
K.:
pp.
vey
28.0
8.2
14.5
12.1
that
p.
79;
Outlook,
U. K.:
21,
and
p.
14;
Britain's
1948,
Expenditures
1947,
(1948-
A Survey of
Prospects of
An Economic Sur-
7344,
Service;
June
and
Statement
U. N.:
Situation
for 1948, Cmd.
Kingdom,
government
much larger part
a
4-5, 46-47;
Information
Income
13.1
Financial
Economic
Europe,
231.6
8.47
(1)
spending plays
9 U.
1947
90.4
serv.__
Per cent (2) to
It
1939
103.8
Prod.
purchases of
goods &
p.
of
4;
'
British
Economic
National
the
United
Cmd.
7371, pp. 18-19.
10 Kuznets, "National Income and Tax¬
•
1942,
years.
r
Product
of
(In billions of dollars)
able
8 Survev
»
But
insti¬
tend
inflation, and are
likely to strengthen the inflation¬
In Sweden and the United King¬
the rise of prices.
that
outlays by the Treasury and
government
years
long-run
about
ex¬
port balance over savings in the
United
bring
Activities:
also
are
tutional
sure
support
economy
Government
a.
there
,
1946-48, in¬
threat
measures.
ment enacted two unfortunate tax
The
major
in the attempt to burden overem-
ployed
Treasury.
bills.
the
the
Long-Run Institutional Factors
diffi¬
of the years 1946-48 lies
fight against inflation, though
the net gains would have been
much larger had not the govern¬
reduction
immediate
Undoubtedly,
pressures
over
a signifi¬
prices occurred de¬
reduction in the earning
rise
the
explanation
—13.0
It is well to note that
cant
culties.
ment
IVz
__:
31, 1945 to June 30,
Consider
in¬
production (unadj.)
commercial banks:*
Loans and investments,
were
gross
there
£675 million in
For the fiscal year
on
in
by about
consumers'
rise
of
a
of the
use
expenditures in the United King¬
had
if
the
basis; and this is
into
converted
the V-k
In
years
other
excessive at the going price
even
Govern¬
whereas
Short-Run
25%? Money and close substitutes
level
Federal
(not cash)
ary
tion of the
ated
cash
esti¬
cline.
about
or
the
of
$400 billion, or 6%-%. Here is an
important part of the explana¬
vev
support of veterans' education and
private in*
?'?;■"?
almost
or
.outstanding.
about $44 billion came from
200%;
expan¬
housing,
of
income of the period.
(in 1944),
the government required $99 bil¬
liquid assets had
of
to
of addi¬
'
:•
■
In the years 1941-45, personal
savings were about $125 billion,
At the peak of the war
to
those
reduction
a
pletion.3
P.
represented
of
out
substantial
5
so
trying
same
programs
may
billion
for the year
resources
drains
In this
sets of
devoting
relative
1943
propensity
idly with her housing program in¬
of
Thus
vestment; $77 billion went for
war;
$28 billion for additional
consumption; and $4 billion for
additional depreciation
and de¬
a
billion, and in addition liquid
stead
of
latest
deficit of $1.5 billion on a budget¬
to
49.1%
to
1939
the
in
1943,
of which $94 billion were out of
additional output and $15 billion
half
6)
page
criticized for proceeding too rap¬
production
the
inter¬
been serving as a member of the national account (excess of invest¬
Whereas
the
accounts
ooard of,,governors of .the NASD. ments).
were balanced at $203.7 billion in
1946,
the
relevant
figure
was
$231.6 billion in 1947, and $246.5
billion (annual rate) in -the first
sets which
trying to do
England
tional
paid
Resources
in
yields $109
these
the inflation¬
are
estimate
1939
come
District
Chairman
and
Club.
member of the NASD
tee
a
Fraternity—Georgia
Chapter,
Peach
Co¬
Georgia Tech Alum¬
Foundation, and
the
the
Company
Laundries,
trustee of the
ni
of
Company,
Transportation
GNP
counts
Another approach
Director
a
Marble
individuals
as
Co.,
of
Unfortunately,
mates for fiscal year 1949 suggest
a
virtual
balancing in the ac¬
gross
compared
investment
sumption continued to rise.
securities, and $22 billion from in¬
says:
"Just
&
domestic
Thursday, January 6, 1949
ment. The budget shows a surplus
of $1.4 billion; actually there is a
1944; and private gross capital
formation from 12.3% in 1939 to
0.9. in 1944; nevertheless, con¬
flationary sales to banks.
This
rise of government securities out¬
in¬
serious.
on
we
Evans
and,
consump¬
developments,
69.6%
large
As the Joint Economic
too much.
Report
con¬
country, there is also
our
danger that
A.
Evans
Mr.
count
Pressure
capacity until
1932, when he formed
its
in
low level,
a
in
vestment programs,
In
weak
were
reduce
sumption further from
and
the
France),
(e.g.,
dare
by
purges.
governments
did
and
company
that
the American
years,
1940-45 of $59 billion seems large.
Indeed, consumption expenditures
in
this
country
declined from
formed in May, 1941.
was
export
was
in
Inc., when that corporation
pany,
program,
ous,
trans-
was
trust
dent of Clement A. Evans & Com¬
ambitious investment
an
its
and
Inflationary Problem
inclusive
programs.
the
proprietorship.
(Continued from
capital,
Atlanta
business"
of
served
and
of
Mr. Evans became Vice-
Georgia.
Club,
Mr. Evans, a
in
National
investment
Laird, Bissel & Meeds, New York;
W.
Atlanta
and
President
all
nominating committee,
The
&
Bank
years
Director.
British
dollars of
1939
improved
standards
private
an
In
later
Executive
in
Atlanta.
Denver; and Treasurer, Wilbur G.
1
Robin¬
the
Corporation
son-Humphrey
war
economy
WASHINGTON, D. C.—Nomination of Clement A. Evans, At¬
lanta, as Chairman of the Board of Governors of the National Asso¬
ciation of Securities Dealers, Inc., has been announced at the offices
of the Association here.
Mr. Evans is President of the investment
CHRONICLE
90%.4
tion
banking
FINANCIAL
tional
Association of Securities Dealers
Evans
&
Capacity," A. E. A. ProceedingsJ
p.
63, and my estimates for later
v
-
■>
,
t
Volume
169
in the economic life
try than
in the
ernment
coun¬
der the Monnet Plan in 1947 sub¬
gov¬
of the
20's.
stantially failed to meet even its
minimum goals in coal, steel, ce¬
Total
expenditures
much
rose
than tne item
"purchases of
goods and services" would sug¬
gest: totals are up by more than
more
4
demand
riods
over
taken
contribution
good
and
together
notably
to
bad
is
increasingly
in
spenders.
is
the
evident, for example, in
importance of in¬
increasing importance.
contention that the
neutralize
increased
inflationary
come
automatically to
Thus here
cause
and corporate income taxes.
is a comparison of ef¬
fective rates of individual income
taxes
under
1913
Revenue
Acts
$5,000
0.2
0.6
1936_I
1.0
1 3.4
:1945„
11.8
18.6
Adapted
ruary,
$10,000 $100,000 $5,000,000
from
1947,
2.5
32.0 1
75.8
"Treasury Bulletin," Feb¬
country;
Policy: A
stitutional
by
ment
sulting from
1946,
by about $40
rose
this
increase,
direct
sive principle.
relies
fairly
.rates and
heavy
labor
progres¬
In
made
the
large
war
gains
increased
of
education, social security,
subsidies,- large payments
military personnel, and the like,
over-all rise
tend
ment.
discourage invest¬
should
be
observed,
It
however,
that
sumption
tends
vestment;
rise
any
to
of
expenditures
part for investment.
In
through
European
investment or by
allocation of economic
resources is very
important
of
18%
in
1938.13
in
of
adverse
vestments.
hourly earnings for bitumin¬
coal.)
Yet the
consumers' prices and hourly
goods
corresponding,, rise
of
by a
spending
will
little
do
to
to take account of the demand as¬
pects
of rising
supplies.
Hence,
in
what is required is an increase
of
supplies not matched by a corre¬
sponding demand.
Thus a reduc¬
years
tion in the interruptions to work
effect
will
program
unprecedented annual rate of $37
billion.
Heavy corporation, in¬
Conservation
would
measures
but
these
ment
and
economy
also
be
helpful;
come,
and
possibly
require
might
govern¬
profits
tax,
controls
not
particularly
peacetimes; or else a
or foreign
aid program, which would be in¬
compatible with security policy;
An
allocation
program
directed
to assuring essential uses might
well make deficient supplies serve
the
in armament
nation
tiveness.
would
available
and
with
increased
The
resulting
essential
be
regulating demand.
ing the allocation
automobiles
would
available for
ucts
and
mand
steel
make
for
steel
essential prod¬
more
might
for
Thus reduc¬
of
curtail
the
automobiles.
tunately, the net effects
de¬
Unfor¬
may
not
be
allocate
duce
automobiles
a
Furthermore,
culty that
mobiles
into
over
This
scarce
to
control
attack
major
is
on
effective
with
labor,
or
the
will
An
attempt
to
restrain
the
banking system by open-market
operations or a large rise in re->
serve
requirements
will
bring
about higher interest rates and a
v
spill
-
markets.
problem of
demand, the
inflation.
Ob¬
of
cumulative decline in government
contribution
which
securities.
Investors
in
govern¬
ment securities tend to sell with a
significant drop, and even if ulti¬
mately interested in holding pub¬
lic securities, will, frequently sell,
awaiting minimum prices to re¬
purchase.
With a national debt
of $250 billion and with the coun¬
try facing an international crisis,
the government cannot risk a de¬
moralization ,of the bond market;
and particularly since about $50
billion of refunding overhangs the
market within a year, and about
$95 billion in five years. Govern¬
ment's responsibilities are too se¬
of
keep
or
pro
fessional
profits under control
an important contribu¬
moderating inflation.
tion to
include
mand.
the
policies
These
auto¬
on
all
sociated
tools.
was
in
the
inflationary.
In practice, the largest contri¬
bution,;, will, have; to be .made by
fiscal policy.
Economies of pub¬
lic
expenditures, consistent with
objectives of policy, and a
high level of taxation are sepecially important.
A strong case
can be made out for heavy taxes
rious to countenance an excessive¬
on low-income groups, since they
ly uncertain cost of new money.
account
for the largest part
of We may add that the qualitative
total consumption; but since anti- monetary controls—e.g., limits on
inflationary policy is but one facet mortgage and consumer financing
of policy, the correct policy from —are still available. the
U1C
In view of the restraints put
viewpoint Ui stability will
Vicwyuuil
of CUW....J
have to .yield to some extent to upon monetary policy by the large
broad
and
higher
to
(Continued on page 34)
prices;
stimulate
increases.
wage
wages,
prices
"TU~~'
Higher
wages rates tended to'raise
1939 to
1945, and 1945 to
STATEMENT AS OF DECEMBER 31, 1948
1948
-Hourly EarningsClass I
Consumers'
Bitum.
Prices
half
of
Based
half of
on
1945__
to
labor
to
inflationary
of
10
political
strength
price
point
enabled
control
extent
in
to
war
only
great
farmers
of
them
and
is
the
to
atrophy
to
measures
port' programs in
the
pressures
It
years.
to
It
add
not respon¬
was
necessary
which
continue
some
sup¬
11
for
Actually,
farmers
to
up
the
Survey of Current Business, October,
1948,
16-18; Treasury Bulletin, Octo¬
pp.
ber, 1948, p. 1; Midyear Economic Report
<oi the President,
July, 1948, pp. 57-58;
and Tax Foundation, Facts and
Figures
Government Finance, 1944, p, 13.
My National Debt and the New Eco¬
nomics, *pp* 203, 218-219.
on
12
•
.
13
My
European
■«
Recovery
■}
Program,
1948, p. 298.
14 General Commission for'the Modern¬
ization
and
the
of
t
15 S. E.
ican
16
from
on
Plan:;
Second
the Achievements
Modernization
Plan, 1948,
i
p.
and
13.
Average
an
relation
Equipment
Harris, Inflation and the
Economy, Chs.- 19-22.
of
this
amounts
rates
and
measure
far
the
49
'29
Railroads
LIABILITIES
RESOURCES
Trade
.44
-
Cash & Due from Banks
.
(Includes United States Deposits $4,118,847,84)
103,754,752.15
.
$182,485,020.40
President,"
July,
1948,
86,
pp.
supply and
demand
situation, not the inter¬
ference of government. Prices re¬
ceived
first
and the
to
205%
were
half
of
1948
117,
52%
or
Business also
of the
ing
in
rose
1939;
from
77
(1910-14zrl00.)17
has to share
are
reservations)
a
claims
—
for
that
in¬
prices, not a
theory
nevertheless, the high
orthodox
profits of business
two
stimulus
were
19,370,285.35
Demand Loans
to
investments
trade
higher wages.
taxes
.
$ 5,687,500.00
.
10,312,500.00
(par $20.00)
76,581,810.55*
Surplus
.
.
16,000,000.00
2,920,821.22
Banking Houses
Customers' Liability under Acceptances
720,993.39
....
Other Resources
Undivided Profits
2,557,030.87
18,557,030.87
511,684.77
Accrued Interest Receivable
39,621.39
........
Reserves
2,021,823.23
.
>
$282,630,237.07
$282,630,237.07
and
♦Reserve in the amount of
$1,288,699.43 has been deducted from the total Book Value of Loans.
unions
seeking
Corporate profits be¬
were
$5.4
billion
$29.8 billion in 1936-39 and
respectively; after taxes the
and
1947,
respec¬
tive figures were $4.1 billion
and
billion. Income of unincor¬
porated business and in the
1936-39
rose
to
from
pro¬
National Bank
$6.5 billion in
$232 billion in 1947.18
17 Midyear
Economic
Report,
July
*947,, p. 95. UV
'•••:<
JC18 Survey
of Current Business, July
1948,18.;t
•>"v
x
«
142,187.50
$ 3,468,086.42
Acceptances Executed ...
Less: Acceptances Held in Portfolio
2,744,812.59
Capital Stock
49,911,909.07
played in supporting the
of
.
723,273.83
5,058,983.00
Bills Discounted
Payable January 3,1949
reasons:
oosition
$18.1
21,610,918.48
........
Time Collateral Loans
inflation¬
important
the part
fore
15,954,004.79
.......
part
result of
the
cause—as
the
Other Securities.
496,674.57
Taxes, Interest, etc
Reserve for Dividend
responsibility. Even grant¬
(with
ary
3,416,280.56
State, County & Municipal Securities
higher in the
than
parity ratio
1,580,504.64
Unearned Discount
92.
Accrued
present has been the
$259,108,736.43
Deposits
$ 78,730,268.25
....
U. S. Government Securities
30
inflation.
stem drom
of
over-time;^ from
in .the importance of Ivigh^ and
low paying occupations; and the tike:
..
27
Wholesale
32
fessions
earnings
are
measure
for studying
wage'
in
Amer¬
<
hourly
ideal
Fluctuations
-varying
changes
<.
Equipment
Half-Yearly Report-
,
40
comes
peace.
major explanation of higher
prices
Coal
62
Report of the
Business:
necessary
alone
last
Steam
Mfg.
first
Economic
sible for the
the
I
1947.
and
1
scarcely
that
1945
"Midyear
Farmers
c.
to
1948-.-
'Second
Is
1939
29
32
Percentage rise from
Percentage rise from
,
.jv:
vt;
**
jjq
rmii
M
*
OJ
^9
Established 1858
.•
E R
*>j"
■;
!jand Trust Company
Philadelphia
■U.,'
EE D' E Wto L
DEPOSIT
*
especially fiscal policy, and ade¬
quate control of supply and de¬
policies which pre¬
clude wage increases not justified
by rises in productivity to be as¬
viously,
'
diffi¬
the
saved
housing
other
leads
over-all
there
money
and
intro¬
and
of
measure
as
ployment of monetary policy as
a.
vigorous anti-inflationary pol¬
It is not, however, the only
icy.
barrier.
Earlier attempts to use
monetary policy to contain infla¬
tion have not been particularly
successful: instead of roasting the
pig, the house may be burnt down.
A policy of restraint once intro¬
duced continues far beyond the
desired point: consider the expe¬
riences of 1920, 1929, and
1937.
Furthermore, we now have at our
disposal much more precise and
ot
manner
a
re^
policy.
regards monetary pol¬
icy.
The large national debt is
the greatest barrier to the em¬
Now
markets,
would
a
tax and allocation
attack
supplies
for
also
tion, will necessarily play
duced role, the restraint on in¬
vestment will have to stem from
effec¬
increased
make
excess
an
discourage de¬
mand
and
depress
investment.
Since monetary policy, the tra¬
ditional means of curbing infla¬
popular in
reduction
•
will
""A~
in-,
un-
net
movements
wage
1939-48
re-
on
clear
check inflation. Businessmen who
Indeed, the
effects
it is well to be
tax
investments, which in the first
half of 1948 were running at the
J
for
Thus, the French
But
matched
and
ous
even
1947 were
reduction
sures.
vigorous
is
of
will make
far there will result
of inflationary pres¬
so
that, the provision of more
real
compared
as
more
yields to equity
judgment.
of income is saved.
farm incomes and business
a
on
(Note, however, the large rise in
1947, used
product
1947,
disappointments
llected
of
gross
investment in
with
countries,
pressures
their
as
of
also contribute to the containment
investors,
re¬
part of the gains achieved in war.^
significant. Five
ERP
under the
27%
encom¬
both supply
'
direct
or
of
Insofar
down-grading and
living, predicted in 1945 that the return
though probably matched by a of the economy to private entercorresponding increase in basic I prise would assure a rise of outwage
rates, eliminated a small put and hence lower prices, failed
countries the contribution of
gov¬
ernment
to
investment
either
control
attack
treatment
demand.
the rapid rise in the cost of
in
productivity generally might! help
a
33
if not matched by a corresponding
rise of wage rates or if a sub¬
stantial part of the resulting rise
goods are made available to satis¬
fy the demand of consumers and
asso¬
forced
adequate
passes
overtime
in¬
are
savings,
with
part
are
spending and the like,
kept prices from rising.
In the
postwar period the reduction of
and, furthermore, that
government
in
straints
con¬
stimulate
increased
as
ciated
to
worse,
policy.
and
"inequities."^ Their gains were
so large
as they seemed; for
only
Undoubtedly heavy
taxes
matters
make
An
not
an
a
strong reasons for nurturing such
the rise in real wages was in part
fictitious: it could be sustained
the effect will be
in spending.
future, the country
comprehensive
and
near
-
will
an
to
the
integrated anti - inflationary
policy.
That
the
institutional
changes strengthen these forces
over the years and that a worsen¬
ing of the international situation
a
farm
the
requires
well
and through the elimination
pay,
further,
Despite the improved prospects
increased importance of overtime
progressive
nance
matter
price control.
Similarly, allocation of lumber
may
require licensing of home
building and
similar measures.
for
period
through
rise in
employment, a
working week, up-grading,
the
the proceeds to fi¬
uses
inflation.
to
stability
anti-inflationary unless sup¬
plementary measures are taken to
re¬
the spread of trade
greatly in re¬
cent years.
Few can dispute the
large gains made by labor in re¬
cent years, nor their contribution
direct taxes
on
power
deterio¬
not
duced through strikes, demand is
not cut correspondingly. A rise of
of government.
fluence has grown
As the government
increasingly
with
the
on
bargaining
situation
(89)
inflationary
forces may well be contained in
1949, despite the reduced support
rate
social
Government will make even
larger contributions toward keep¬
ing demand up as its expenditures
are
in
Should the in¬
rearmament.
ternational
unionism, high employment and
security, labor's political in¬
on
individuals and corpo¬
rations accounted for about threequarters.12
increasingly
and
likely to have
long-run inflationary effects is
the position
of labor.
Favored
by government and an improve¬
Federal receipts
taxes
$11 billion less to the antiinflationary program in the fiscal
year
1949 than in the first six
months
(annual rate)
of 1948;
and there is always the possibility
of an acceleration of European aid
in¬
second
con¬
tribute
factor
1938, income, inheritance, and cor¬
poration taxes accounted for 28%.
In the fiscal
years 1939 to
of
1949
by inflationary effects of reduced
yields in periods of depression.
Labor
1948, although preliminary
for the first quarter of
are
not reassuring. Indeed,
the government promises to
tax
b.
its savings as it
did in
This net defla¬
revenue.
than
more
figures
effect in periods of ex¬
uberance will happily be matched
'
In 1902,
property taxes and con¬
sumption taxes accounted for 98%
of all taxes in this
billion;
much
tionary
85.5
A-7.
p.
of
sources
it is unlikely
fact,
that business will invest nearly as
a
6.8
62.3
.
extent, be¬
some
system is one that
than that in vogue in 1938
fortiori in 1913. As income
rises, the yield of income and cor¬
poration
taxes
increases
even
more;
and they are the major
Net Income
—
Act
tax
In
1949.
for
better
or
1945, married persons—2
dependents:
.1913
the
pressures
responds to rising incomes much
from
to
.Revenue
Policy
1947, the respective rises had been
19% and 26%, respectively.
The
threat
of
agricultural surpluses
and the pressure of large outputs
in soft-goods industries were al¬
ready apparent; and on top of
that, there were signs of a slow¬
ing down of investment programs
magnitude and pattern of govern¬
ment taxation and spending will
intensify inflationary pressures.
In periods of inflation, however,
the
government
will
tend
to
transfers
non-spenders "to
This
Anti-Inflationary
It is then my
be greater than in the
past: it not
more but its activities
Irom
CHRONICLE
FINANCIAL
By the latter part of 1948, there
were signs of a weakening of the
development
resource
as
becomes of
pe¬
likely to
only spends
result
&
ment, agricultural machinery, and inflationary
pressures.
From
transport.14 In the United States January to August, 1948, consumer
there will also be a tendency to
prices
rose
by but 3%%
and
increase public investments, and wholesale
prices by but 2Vz%. In
times.11
Government's
COMMERCIAL
THE
Number 4766
INSURANCE
CORPORATION
34
(90)
THE COMMERCIAL
The
dwell on debt policy temporarily.
Despite the usual predictions, the
government
in
proved
1946.
2.19%,
from
and
low
a
1946,
the
of
rate
averaged
with
in
2.57%
long-
on
bonds
compared
as
1944
im¬
market
Rates
taxable
term
in
bond-
in
2.09
to
rose
2.48%
But
1945.
March,
in
2.45%
billion to $21.6 bil¬
lion. In a sense, they contributed
greatly, however, to the depres¬
sion of short-term issues, for their
holdings of bills and certificates
declined from $20.1 billion to $2.0
announced
prices
on
largely neutralized
by the liquidation of these issues
out of surplus cash or
receipts.
They are not prepared to remove
all
supports of
the
short-term
were
August, 1948. (Actually, the mar¬
ket was fairly stabilized in 1948,
for the yield of taxable bonds was market. Reserve banks sustained
2.45% in January, a low of 2.41% the long-term market by raising
in June, and 2.45% in September.)
their portfolio of other public is¬
As might be expected, short-term sues from $2.6 to $9.6 billion.
rates rose more than long-term.
No better evidence of the im¬
The
3-month
Treasury Bill potence of the monetary author¬
yielded .375% in 1945 and 1946, ity is to be had than
by an exam¬
.604%
in 1947 and 1.09%
in Sep¬
tember, 1948; the 9-12 month cer¬
tificate, .81% and .82% in 1945
and
in
1946, .88% in 1947 and 1.18%
September, 1948; the 3-5 year
bonds, 1.18% and 1.16%
taxable
in
1945
and
is
and
1.69%
1946,
secret that
no
serve
plumped
rates
on
ing
securities,
rise
a
higher
in
short-
would
compensate for
requirements and
reserve
would
1947
1948. It
even
short-term
rates
higher
in
the Federal Re¬
for
contending that
term
1.32%
in September,
deter
banks from
speculative
and
It is
term
a
securi¬
smaller part
of the national debt. From Febru¬
1946, when the national debt
ary,
reached
its
peak,
to
September,
1948, the Treasury bills outstand¬
ing declined by $4.4 billion, or
26%; certificates by $19.1 billion,
or
46%; notes by $8.3 billion, or
43%; and Treasury marketable
bonds by $9.6 billion, or but 8<&.
Non-marketable
issues
U. S. savings bonds)
(largely
actually'Tose
by $3.8 billion, or 7%, and special
issues by $10.3
billion; or 49%.
Treasury bills, certificates and
notes, which had accounted for
24%
of
all
interest-bearing debt
February, 1946, had fallen to
in
but 18% in
As
the
balances
to
trated
the
September, 1948.
government
used
the
on
banks
which
held
outstanding
Treasury
bills and certificates. In the
period
February, 1946 to August, 1948,
the commercial banks' portfolio of
government securities declined
by
$28.5 billion, or more than 30%.
The only other
large changes were
a reduction of
$7.1
billion,
or one-
quarter, by other corporations and
associations, a decline of $2.2 bil¬
lion, or one-tenth, by insurance
companies, and a rise of $8.5 bil¬
lion, or 30%, for U. S. government
agencies and trust, funds. In
short,
the net decline for all issues
out¬
standing
was
matched
responding reduction
commercial
by
a
cor¬
of issues
by
banks; and substantial
net sales by business and
financial
institutions, inclusive
companies,
were
In
the
offset
by
large
ending June,
1948, selected savings institutions
acquired $8.6 billion of new as¬
sets; but they had to dispose of
year
$2.2 billion of government securi¬
ties to achieve this goal.29
Perhaps
the
major
support
given by the market, exclusive
of
the
excess
Federal Reserve
credit
of
$1.7
the inflow of cash to govern¬
ment
agencies and trust funds
Clarke
&
Co., 17
East 42nd Street, New York City,
Stock
that
they
taking in
general
ner
Bates
E.
ce-
President
D i
old
also
Vi
a
of
e
i
e
s
E.
Bates
McKee ■/
*
a
he
was
vestments
at
their
net
of
effect
actions
$1.1
of
all
the
on
ber banks
billion.
relevent
a
trans¬
of
reserves
was
the
But
mem¬
gain of $3.7 bil¬
need of
ket
in
banks
serve
of
protecting the bond
resulted
mar¬
Federal
Re¬
cash
into
the
mar¬
period when gold inflows
added $2.8 billion, to reserves, and
when the general situation called
for
a
anti-inflationary
The rise of
could
be
measures.
relatively
a
cumstances.
Similar
officer
Branch
conclusions
stem
since
1937.
Prior
in charge of in¬
Forty-Second
turn from the United States
as
for
landing
Mediterranean, he
Assistant
Vice-President
business
new
class
School of
a
member of
of
the
he will
from
study y,of a somewhat longer
period, 1945 to June,'1948. In this
period, member' bank
reserves
a
continue
to
seem
$700 million. The
to be
two
of but
alterna¬
tive policies. The first is to allow
the bond market gradually to find
free
level, with attendant dan¬
gerous
effects on the prices of
government securities, the rate of
a
interest, and the like. How serious
effects might be is suggested
the
the
by
when
experience
of
late
fear of succesive
a
resulted
in
second
large
1947,
declines
sales.21
out
way
seems
5ffdrs
to
holders
of
of
dollar
The
to
be
lic of Peru
six
bonds
31, 1949.
approximately
tutions. In this manner, the mone¬
tary authorities could regain some
contend
with
inflation without jeopardiz¬
ing the Federal bond market.22
Report
of
Joint
Committee
on
the
Economic Report, on Hieh Prices of
Consumer Goods, 1948, pp. 42-43.
22 Governor Eccles has
presented this
position
sions.
on
the
effectively
Cf.
Hearings
Economic
cies, 1948,
pp.
numerous
on
of
Joint
Report,
on
sued
of
as
have been
Hanover
of
bonds
sinking fund
Under the offers,
$25,000,000 of the
been is¬
Dec.
30, 1948. Funds
deposited with Central
Bank
and
Trust
Com¬
paying agent, for the, Jan.
1, 1949, interest payment on the
dollar bonds of 1947, at the rate of
1% per
From Jan. 1,1949
annum.
until Jan. 1, 1951, interest will ac¬
crue at the rate of 1 %'%.
Follow¬
ing
are
the issues of bonds to be
ternal
Peru
gold
National
sinking
secured
bonds, 1927;
Loan, 6% ex¬
fund
gold bonds,
series; Province
of Callao, Peru, guaranteed and
secured sinking fund 7%% gold
bonds; Peruvian National Loan,
6%
external sinking fund gold
bonds,
second
series
(sterling
bonds), and Honorable Provincial
Council of. Lima Municipal Loan
first
and
second
of 1911 due
1965.
F.
Harry Simon Now With
Newburger, Loeb Go.
Co.
an¬
gerleider & Co., has joined their
organization as Registered Rep¬
resentative at the firm's main of¬
The net contribution of the Fed¬
Reserve
banks
declined
ILL.—On Dec. 31,
Skinner,
Assistant
Manager,' Bond Department, the
Northern Trust Co., - retired after
45 years of service.
Mr. Skin¬
ner
is
F.
a
member
of
the
Bank's
Mr.
Skinner
worked
graph operator for the
Topeka and Santa' Fe
as
a
19 Hearings
of
House
Banking
and
Currency
Committee
on
S.
Res.
157
(Inflation
Control),
1948, pp.
181-82,
187,
20
With Shearson, Hammill
p.
91.
ager
the
WORKING HOURS
United States
the
was
result
of four
or
and
the
Canada
;
previous •
:
:
^ ;
four and
a
day operations and closing of most Chevrolet assemblies for
changeover.
the
similar
period
a
ago
year
1941, 76,690 units.
output consisted of
week's
62,321
65,573
was
units
v
and
and
17,398 trucks
1,224 trucks in Canaan.
cars
United States and 2,036 cars and
BUSINESS
FAILURES
Commercial
and
UPTREND
CONTINUES
UNABATED
industrial failures increased to
day week ended Dec.
30 from
116
in
128
the preceding
in
the
week,
holi¬
Dun
&
:
Bradstreet, Inc., reports. This was the highest since Feb. 12 and
considerably exceeded the 58 and 30 which occurred in 1947 and
1946 respectively.
Casualties were about two-thirds of the 1939
total for the
Retail
week.
same
failures
twice the number
lower
were
for
the
week
but
were
more
than
Manufacturing, wholesaling, construc¬
tion and commercial services were higher the past week with the
sharpest relative upswings from the 1947 level appearing in wholea
year ago.
salipg and construction.
FOOD
PRICE INDEX
.
The
Dun
CLOSES
YEAR'S
wholesale
Bradstreet
&
AT
food
LOW POINT
price index fell 2 cents
on Dec. 28, duplicating
in
the final week
the
year's low recorded two weeks previous/The current index is,/
fact, at the lowest level since June 10, 1947, when it registered
in
$6.12.
a
It
The
record
a
1948
to
stand
with $7.24
compares
on
at
$6.21
the corresponding date
a
;
year ago,
weekly average of the index for the
all-time high of $6.82, a rise of 4.0%
1948 established
above the 1947 aver-
year
"
This year's average of $6.82 was more than double the
and was 37.5% above the post World War I high
$4.96 recorded in 1919.
■
/
'
age
1941
of
of
drop of 14.2%.
of $6.56.
level of $3.01,
(
COMMODITY
There
PRICE
mild
SHOWS
INDEX
MILD
UPWARD
TREND
of the leading agricultural
the Dun & Bradstreet daily
commodity price index edged slightly higher during the
period. The index figure closed at 269.53 on Dec. 28, against 268.61
a week earlier and compared with 301.48 on the like date a year ago.
was
commodities
a
in
the
recovery
past
week
in
some
and
wholesale
erally
maintained
a
;
slackening in demand, grain markets gen- /
the past week.
•
firm undertone during
Cash wheat trading
Cash
Shearson, Hammill & Co., 522
Avenue, New York City,
York
Stock
a
corn
week
proved with ample-Tain and
Domestic
Assistant
Man¬
for
Butter
*
Harry Mitchell has been elected
a
Directory of, ,the. First Guardian
b^D>, 20 Pine Street
Qo01,ri+ipc
New York
City.
.
\
declined
raw
sugar
v
of
3,812,161
:/
rather
sharply at
;
•
cocoa
light
>.
"//
midweek
but
recovered / /;
-
/,
in late trading under, a^more active demand..
There was a steadier undertone in the
the sharp losses recorded in recent week,
beans
in- this
country
for
the
year
to
•>' -'
.
y
date
.
,,
bags, as compared with 4,138,995 bags.in -the cor¬
responding period last yem/Receipts 'of
atively
slow./ Bookings of all
market turned stronger, buoyed by brighter con-
market following
totaled
very
and
sumption prospects for 1949.
Arrivals
Named Director
;
remained
business
all of the early losses
The
blanketing :a large part of the :;;/
family flours were-'confined mostly to small >/
immediate or nearby shipment.. Export flour demand was
somewhat better.
!
snow
...
flour
lots
was
elected
'
light with the CCC the principal buy-
was
prices were stronger;, receipts fell off sharply from /
ago.
Government buying of cash corn remained'
a low level.
Oats developed independent firmness in the latter part
of the week. Weather and crop conditions were reported much im-//r
ers.
those of
Railroad
in 1929.
Fifth
Exchange, is announced.
trucks in
and
cars
The decline last week
types of bakery
promoted to the
Department as a salesman
was
uptown office of
New
'
•
;
dropped to 82,979 units from 94,668 (revised) units
week, according to "Ward's Automotive Reports."
cocoa
members of the
of
Atchison
The association of Ernest Ober-
194.
Ibid.,
CHANGEOVERS AND CURTAILED
Production
tele¬
before
Bond
the
:
below the similar
////;'/
winter wheat belt.
pension plan.'
and
humer with
decrease of 18,728 cars, or 3.0%
a
AUTO OUTPUT CUT BY FACTORY CLOSINGS FOR MODEL
CHICAGO,
partment he
the
week in 1947 but
period in 1946.
Skinner Retires
City.
of
•
an
Despite seasonal
M.
the Federal Reserve.
large.
For example, in the period May,
1946 to August, 1948, the portfolio
•.
/
*'
fice, 15 Broad Street, New York
not
1947 WEEK
occa¬
used to purchase public
securities,
and bolstering of the market by
was
:
19.3% below the preceding week this year. It however repre¬
increase of 9,885 cars, or 1.6% under the corresponding
cars, or
sented
7%
joining the Bank's staff in
1903.
After holding various cler¬
ical positions in the Banking De¬
eral Reserve banks
was
revenue freight for the week ended Dec. 25, 1948,
Christmas holiday, totaled 609,239 cars,
according to
the Association of American Railroads. This was a decrease of
145,306
Committee
&
according
of
Loadings of
or
of
fund
Melvin
Loeb
kwh.,
decrease
a
pany,
Credit Poli¬
19-21, 35-37.
Newburger,
was
built in the
dollar bonds of 1947 has
sinking
Cf.
5,470,000,000
This
in the like week of
of 1947, due Jan. 1,
been extended until
Dec.
Peruvian
21
I
which included
This
issues
external
have
1997,
secondary reserves of banks
and possibly other financial insti¬
as
to
ENDED JAN.
CARLOADINGS LOWER IN WEEK BUT 1.6% ABOVE
and
—e.g., immobilization of securities
freedom
WEEK
th£ Republic of Peru
of
Republic
of
FURTHER IN
preceding week which
Output in
Exchange Offer
fer of securities to Reserve banks
element
^~
.
half
exchanged:
directed
at
Institute.
model
Peru Extends Bond
against the of¬
measures
/
:
——
dollar
There
'
-.
and 601,989,000 kwh or 12.4% higher than the
figure reported for
i;he week ended Jan. 3, 1947. It was also
896,193,000 kwh. in excess
of the output reported for the corresponding period two
years ago.
special¬
in circulation of
disposed
f
,
>
average week
to the Edison
38,240,000 kwh. below
revised to 5,508,240,000 kwh.
ize at Richard W. Clarke Co.
sterling loans, to
exchange such bonds for Repub¬
Reserve
100.0%.
was
1,281,210 tons for the
one year ago and
revision)
output, in the
the
by $4 billion as a result
largely of an inflow of gold ($4
billion) and a decline of money
rose
Federal
to
Electric
Graduate
Banking where he ma¬
investments in which
in
field
in
that
at
V/:;',/:/,y"
McKee is
second
jored
Navy,
craft in
the
has been an
branch.
Mr.
re¬
operations of¬
ficer
of
has
and
and, since his
where he served
charge
,
in¬
under these cir¬
measure
Farmers Trust Co.
requirements
reserve
only
nocuous
has been associated with the City
pumping $1.7 billion
additional
ket, in
the
National City Bank of New
York, France, in 1932, Mr. McKee
Street
*..
The amount of electrical energy distributed by the electric
light
and power industry lor the week ended Jan/1 was estimated
(sub¬
ject
graduate of Yale and Cambridge,
England.
Since his return from
an
capacity
'ELECTRIC OUTPUT EASED
Clarke
Corp. Mr. McK
,
percentage rate of operation is based on the 1948 capacity ■'"!
and is subject to revision when the 1949 capacity is computed.
Richard
W.
Monday
on
The
and
tor
r e c
the
the indicated rate
in 1940, highest prewar year.
to the war,
market
up
This week's operating rate is equivalent to 1,802,500 tons of
steel ingots and castings compared to 1,753,800 tons a week
ago,
1,802,500 tons a month ago and 1,708,600 tons, or 94.8% of the
McKee,
will
be
a
as
part¬
1 949.
vho
A month ago
of Jan.
as
1,
are
been
deprived the
lined
"
.
steel, concludes "The Iron Age," and he
in opposition to mill selling to steel.
the
eral
banks
therefore
-
of
user
having J4% of
steel-making capacity of the industry will be 100.0% of capacity for the week beginning Jan. 3, 1949, as against 97.3% in the
preceding week, representing an increase of 2.7 points, or 2.8%.
Ex¬
Bank
Reserve
the
Industiy
5)
page
The American Iron and Steel Institute announced
of this week the operating rate of steel companies
the New York
Actually, the Treasury by
increasing its cash with the Fed¬
serves.
deal for
poor
has
(Continued from
members of
of
was
W.
tne
ordinary budg¬ nounce that Harry Simon, retir¬
etary receipts over expenditures, ing from the partnership of Un^
Richard
billion and an inflow of gold of
$2.8 billion accounted for $4.5 bil¬
lion
potential rise of bank re¬
of insurance
purchases by government agencies
and trust funds, and
by a small
rise of portfolios held
by individ¬
uals.
of
$1 billion of assets in this period.
Treasury surpluses
debt,.it largely concen¬
major
figures
over
the 15 months ending Sep¬
tember, 1948. In" this period, a rise
cash
and
repay
bank
only by $200 million, for reserve
requirements were raised. But the
relevant
much
Reserve
lion. Indeed, excess reserves rose
interesting that the shortrose
sharply despite
became
of
inflationary
rates
the fact that the
ties
ination
expand¬
loans.19
r
change, have
billion; but the adverse effects
$22.7
Thursday, January 6, 1949
The State of Trade and
Admits McKee
(Continued from page 33)
from
CHRONICLE
Richard Clarke Co.
Inflationary Problem
Federal debt, it would be well to
FINANCIAL
&
during the week
prices weakened: somewhat
live hogs
were compar-
and -prices •.rose -moderately^Gattte..);^
in - late trading following early steadi-V
>
Volume 169
Number 4765
1
THE
&
COMMERCIAL
FINANCIAL
CHRONICLE
(91)
35
lUJi.umfn
Lard
ness.
t
pects 'of
prices fell to the lowest levels of the
year
under
pros-
sharp-increase in the Spring pig crop of 1949. ! "// "T,
crulmess ruled in leading ; cotton
markets.
Trading
lacked feature .and prices moved in a narrow range, closing slightly
higher than a week ago. ;
//
' '
• /V
1949 Federal Tax Outlook
a
Seasonal
-
.
A late spurt in prices was 'attributed to foreign
r
M;:-
,,i^vrvL\t'JP^.!(lsh;''.ahcl- German -.accounts.
fixations
on
'-'/•*
Easiness in the early-part of the week reflected indications of
ine parity price for the staple-this month, and
(Continued from page 2)
more
improvement still. *AS To
the first, the law shouu provide
-.simply and directly that an indi¬
vidual
from
;./a : sjzabJedeclmeln
the
realize
not
purchase
of
income
stock
or
earnings.
.that
urge
tions
to
Now
should
ers
one
would
corpora¬
be
perfectly free so
earnings that sur¬
accumulate
taxes
no
closely-held
their wealthy sharehold¬
avoided.
On the other
on
are
tages
from
iron out.
excessive
ihe
'
free
choose
to
cult
ket
money
valuer of the
amendment
stock.
would
Such
not
an
actually
today,
not
the
rule.
corporations have found
depreciation
rates
all assets
on
having a life of more
five years. Legislation
result has been
rec¬
Since
ommended, but Congress is slow
it diffi¬ to adopt it.
Satisfactory results
impossible to raise equity
in the market, they have
been forced to retain
earnings for
or
be obtained without
can
islation
if
Internal
the
leg¬
new
Commissioner
Revenue
of
will
simply
fh^ridk'
there was- very chttle activity noted
in free wools. Pidces for;temtory wools remained;firm in the west-' cost the Treasury any revenue, needed improvements and expan¬ order his agents to give real ef¬
for it is pretty clear that the pres¬ sion. On the other
-'h ern States t)nt trading was at a slower pace than in recent weeks.
hand, internal fect to the wording of the pres¬
Foreign wool markets closed on a firm basis but little activity is ent rulings have completely stop¬ revenue agents have long been in¬ ent law—"a reasonable allowance
structed by the Bureau to
ped stock option and stock pur¬
expected until after the holiday season.
apply a for the exhaustion, wear and tear
-
.
,
tion
effected or the
optioh granted at a price not sub¬
stantially less than the fair mar¬
Quietness prevailed, inhe Boston raw wooL market during the
pre-holiday week just ended//A fair volume of government owned
.
is
purchase
soon
Treasury would not
be likely to lose seriously in the
long run
if businessmen
were
,
197,530 baies/with;to'taLentries'Tor-The; season to that date of 3,587,320' bales,:
dhd a net stock, alter repossessions, of 3,584,362 bales.
rates
The
/continued uncertainties' over-1 Congressional farm price legislation. warrants, whether from his em¬ hand, cases of tax avoidance of' than, say,
Loan1 entries • of cotton.:for the week ended Dec. 16 were placed at ployer or others, provided that this sort are probable the excep¬ to secure that
i
.
does
of
wools;chaiiged
neece
.
:
(
•
chase
RETAIL AND WHOLESALE TRADE
,
MAINTAINED
LEVEL OJF LIKE WEEK OF 1947,
.
ABOVE
the
week
it
will
adopted, however/ is at best
debatable, since its utility will be
thought to be for highly paid cor¬
porate executives. It- can be used
•
rLast minute "shopping: in the two' days preceding Christmas and
extensive^post-hpliday Clearance sales helped--Tp boost total retail
■'■/// volume in the period ended on; Wednesday-^/last week. Volume
for
Whether
contracts.
be
to
the
great
advantage
to
the
fractionally below that of 'tile preceding week, young corporate officer growing
but was considerably above-that of the comparable 1947 week which up, but Congress may not fully
'■■■
did not include any pre-Christmas shopping days, according to Dun realize that.
& Bradstreet, Inc., in its current summary of trade.
Some
of the
questions raised
by the provisions governing the
/;/>'.^w^ r iMarkdowns weie' large compared with those of a year ago
penalty on unreasonable corpo¬
: >^:VV.and consumer response was very favorable.
Shoppers continued
.
was
.
.*
.
,
L*':
*
.
•'*!
in
continued
a
gabardine suits and tissue faille dresses were in
large demand. Women's furs, aided by extensive price reductions,
sold moderately well.
Men's sportswear and - furnishings were in
;
t steady demand:
y
'
ished
to
is that
have been quick
we
modernize
plant and machin¬
Our factories
ery.
are
more
com¬
pletely mechanized than those of
<
*
-
business civilization has flour¬
our
large sales volume of Winter clothing and rainwear.
Women's taiioied
i
other
any
country.
that we
One
;
result
Stimulated-by late shopping for Christmas table needs, retail
has been
can
produce
;
food volume in the period ended on Wednesday of last week rose
better goods cheaper Than our
-; / "slightly* above
that' of the preceding week and appreciably above
;
that of the comparable 1947 week. Nuts, assorted fruits and chocolates neighbors, at the same time than
we can pay far higher
wages than
'/
sold well.
Baked goods were in large demand.
The volume of poul<■'
try, fruits and Vegetables compared favorably with that of a week they do. Thus, it has become true
that our people, as a whole, can
r'
J
enjoy a notably higher standard
Retail -purchases of consumer ^durables declined slightly
the past week. although some price reductions helped to. main-, „ of; living than those of any other
land.
•
y-
.
of thumb that a
corporation
should distribute 70% of its earn-
igns,v unless
can
reasons
special
it
for
demonstrate
retention
earnings.
One \ result
conferences
betweer\
is
of
annual
corporate
executives
and their lawyers to
try to determine whether the cor¬
(including
reasonable allowance
a
for obsolescence)."
That wording
surely permits the
agent
company's deprecia¬
stand, unless they
are
away
out of line; and cer¬
tainly at least a 50% margin over
to
allow
tion
revenue
the
rates
to
generally
approved rates should
regarded as reasonable.
The
porate needs will probably be re¬
garded as adequate by a revenue
be
agent examining the books two or
three years later. It is
impossible
to
determine
so
speculative
a
here
result of
a
reasonable policy
more
would
be
saving in time
not
only
great
a
wasted in fu¬
now
tile
he highly conscious of both price and quality.
rate
accumulations
are
funda¬
controversies, but a great as¬
mental in character and involve question, and the usual practice is surance to corporations that the
Numerous year-end promotions: and clearance sales last week
broader issues than the applica¬ to cut the corporate program for American policy of replacing old
that of/a*year
tion of the particular penalty. We modernization* and improvement, machines with improved new ma¬
ago, although volume was" slightly' below the preceding webtCS? level.
are told that or.e
will
be
of the reasons in order to permit it to distribute chines
.facilitated, not
Cold weather eariy in the week a;nd rainy weather later was reflected
to
;
;
■-
rule
-
•
"
tain volume
Such
moderately,above
house
furnishings
the level of
as
draperies
tions'-is that
The
•
;
-
1 "t
..
The corollary of these
and curtains sold well..
consumer;, demand
for appliances and furniture
decreased
slightly in the week.
: :
' ■**"
/,'
V:. '
'
♦
Retail volume for the country in the period ended on Wednes.
f
^
a year ago.
proposi¬
investment
our
per
worker in plant and machinery is
higher Than
dividends than
more
and
directors
wise.
the
honestly
officers
think
is
In this
manner, the officers
and
directors
that
much
hope
to
purchase
Insurance; against the
possibility of
damaging internal
a
revenue
agent's report.
Recent
litigation has shown that such a
report may not only cost the
poration*
Section
the
the
102;
severe
it
may
cor¬
penalty of
also subject
directors
individually
tc
damage suits by stockholders and
possibly to adverse judgments.
The large publicly-owned cor¬
poration has little to fear from
1
':■/'/"/■/.'"/■. /
Finally, we have double taxa¬
tion of corporate dividends, while
have only a
we
income,
ary
other
on
tainly there is
ing one form
while
single tax
sal¬
on
bond interest,
on
forms
of
income.
fairness in tax¬
no
of
all
others
more
or
Cer¬
equity
income
twice
bear
only one
tax.
Moreover,
on
the
basic
premises I have outlined—the need
for
ment—the
capital invest¬
provisions
are
they discourage
tax
plainly bad, for
by a double tax the flow of funds
into equity securities, particularly
102, for it can almost al¬ the
equity .securities of small en¬
pressing needs for
Section
ways/show
funds
hindered.
for
development (and
terprises.
Nearly
all
responsible
ex¬
that, of any.^other
organizations and writers -have
pansion. The penalty is more apt
advocated that the double t&x be
country. Moreover, if we are to
to
be
asserted
against smaller
continue to advance industrially,
eliminated, but the reform has
it is likely that that investment enterprises trying to grow; enter¬ not
,
.
;
.
day of last week
year
Regional
•
y
f
v
.
.
was
estimated to be from 7 to
above that of
11%
a
ago.
estimates
exceeded
those
of
a
year
ago
East and
Southwest 5 to 9,
vA
South 3 to 7, Northwest and Pacific
■'
f.Coast 8 to
12.
.
;•//////''/^
yet been accomplished.
It
prises whose stock is closely held
forms
no
part of H. R.
it has in because
6712,
they are relatively un¬
decades.
There is, theremainly
because
the
immediate
known, and public" financing is loss of revenue
Tore.- a continuing and increasing
would be substan¬
costly
and
impossible.
Small
demand for new capital to be in¬
tial, and that argument has been
business is generally
forced to
vested not merely in new busi¬
regarded as conclusive.
produce and to accumulate- its
nesses here and abroad, but in the
In my judgment, the unfairness
own
capital. Granted that there
improvement of our old busi¬
of the tax law in this respect, and
must be a penalty for
improper
nesses.
-*
its unwisdom, are so patent that
t
J accumulation, the Commissioner
Where is this capital to come should have
the
reform
should
be
carried
to prove his case in
from?
High
surtaxes
prevent this instance as he must if he as¬ through at the earliest 'date that
the budget can stand the cost. We
much saving by middle class and serts
other
penalties.
Business
well-to-do
people. The day of should not be left so vulnerable can stand heavy taxes better than
great .fortunes is probably over. to the assertion of a
unjust ones, particularly unjust
penalty by a
ones that
Many serious writers have called revenue agent who
operate to hinder and
really knows
will
the
by
following percentages; New England and Middle West 11 to 15y
;
steadily increase,
as
past
•
/3/// Despite scattered commitments for replacement stocks and some
V Spring bookings, wholesale order volume in the past week declined
*
\
;
'
;
v
•
seasonally from the level of the. previous week.
slightly exceeded that of the corresponding week
Wholesale volume
Buyer
-attendance at- riaajor,wholesale centers decreased moderately for the
week, although the number of buyers was estimated to be about twice
that in the comparable 1947- week.
a year ago.
,
Department store sales
i
on
a
country-wide basis,
.
as
taken from
the Federal Reserve Board's index for the week ended Dec.
V
•
25, 1948,
This
;
compared with no change recorded in the preceding week. For the attention to statistics bringing out very little about business at
all,
Tour weeks :ended:Dec. 25r lQ48,- sales increased by 4% and for The the dearth of new capital forma¬ but whose
assertion now enjoys a
tion.
In
year to date increased by 5%.
large part, businesses presumption of correctness.
\
have had to accumulate their own
Retail trade here in New York the past week suffered a In the second place, the Treas¬
new capital.
It has not been pos¬
; post-Christmas decline in sales .with total volume falling below
ury has followed for years a rigid
sible for some time readily to ob¬
the 1947 period.
'
'
'
and niggardly policy on
depreci¬
tain new. equity money from the
rAccording to the sFederal Reserve Board's index, department
ation, inspired in large part by a
market.
store sales in-New York City for the weekly period to Dec. 25, 1948,
Congressional threat of restric¬
Our federal tax laws have been tive legislation in 1934. Rates de¬
advanced by *'48% from the same period last year.
In the preceding
r
week a decline of 3% was registered over the similar week of 1947. designed
almost
exclusively
to termined by the company's own
f
For the four:weeks ended: Dec. 25, 1948, a rise of 3%:-was recorded raise as much revenue as possible officers are not entitled even to a
with as few loopholes as possible. presumption of
/over that of last year and for the
year to date volume increased
correctness, and
In recent years, the Congress and are
frequently questoned and re¬
the Treasury have labored with duced.
This policy would have
r.*Th$; large increases shown for this week reflect in part the fact that :'n 1948
particular diligence to this end. been more damaging had Con¬
islmas fell em Saturday and the week therefore included five days of heavy
Much less/attention has been paid gress not provided
pr*-Christmas shopping-.as> compared with three days in 1947 when Christmas
liberally for
fell 'on.-Thursday..
,4 '-f.v?
to the long-run effects of income amortization Of war facilities dur¬
■
showed an increase of *32%
•
from the like period of last year.
.
,
,
-
-
.
-
<
•
<
to
dam
the
small and
flow
new
of capital
enterprises.
into
The
adoption of these three
changes, whatever may happen, to
tax
rates, would have a most
helpful effect on our economy.
To flourish, business need ask no
favors from
government, but it
must have
forward.
fair chance to
a
move
The tax toll must not be
heavy as to stop the traffic,
and the toll gate must be wide
enough to permit vehicles to pass
through.
What I
have
recom¬
so
mended
ened,
is
that
the
gate be wid¬
though
even
mains unchanged.
the
tplL
The traffic
re¬
can
the last war.
It
operates then increase and the taxgatherer
especially badly today, when re¬ will gain,
The main advantage
31.'
placement costs are far above the
will be that the people of this na¬
Interest of the late F. Malcolm during/^e/War, a majority in¬ original or tax cost of depreciable
i
,
;
Minor in Pyne, Kendall & Hollis- terest in corporate incomes, indi¬ items.
For' obvious reasons, the tion and their children will con-,,
The New York Stock Exchange
vidual citizens are still heavily in¬ damaging effects are more serious tinue to get more goods at better
ter ceased Dec. 27.
:;//
"has announced the following firm
small
Ira Richards, member of the Ex¬ terested in their own enterprises. to
corporations / than
to prices../
);/•/'
changes:'
.v
change, withdrew from partner¬ Ip any event, both parties have a large.
//;/ .;/'v'y
Francis F. Patton retired from
ship in Richards, Heffernan & tremendous stake in the preserva¬
We are told that one reason for
A. G. Becker & Co., Dec. 31. ^
Simpson Installs Wire
tion ' and prosperity of industry. the reluctance of British
Benedict, Dec. 31. /,
tax; provisions
.A
Kebbon, McCormick &
NewYorkStock Exchange
Co., Dec.
*
.
Weekly FirmvGhanges
p
on
the economy. ing
While the United States Treasury
is a- T>^rtner ^ with a large and,
-
,
•
f
''
'
;
.
Willem
from
;*•
"
;
•;;
.
*
Dec.
Van
Bendix,
Marie
31..
Fred E. Koechlein retired from
withdrew
Luitw^iler
&
-
Co., Smith, Barney & Co., Dec. 31.
ship in Butler, Wick & Co., Dec. 31.
Charles Fellowes
.
-
Gordon
re¬
tired from Fahnestock & Co., Dec.
si;
'
Carlos
•
Irving H.. Isaac withdrew,
from
GimKerrat ^ SfHwaad-Jan. 3.
John
C.
Marshall retired
,:
from
;
>
Maisonpierre,
for more
than 30 years in the banking busi¬
ness in Brussels,
Beligum, has be¬
.
come
:
.
Maisonpierre With
Herbert E. Stern & Co.
associated
with
Herbert
provisions that work against tions to replace obsolete machin¬
great ends must be cor¬ ery is the absence of adequate de¬
rected, and they should be cor¬ preciation provisions in the Brit¬
rected
in
times
of
prosperity, ish income tax law. Certainly, we
these:
;>;7.
/" Philip Wick, Jr., member, of the Carlos
exchange, retired Irom r.partner-
corpora¬
Tax
E
when any adverse
uf. .changes
be
the
can
borne.
;
;■
revenue
.
.
readily
more
■
/
effect
■■
..
Three provisions of the income
law work in the wrong di¬
tax
rection,
and
should
be
changed
Stern &
before
York
is done.' The first; is -the penalty
on the
unYfeasonable/aecumulation
Co., 30 -Pine Street, New
City, members of the New
York Stock Exchange.
,1
more
permanent
damage
do
not
want
stagnation
our
past
drift
to
over
into
similar
here, for
success
we know
has been due in
large part to our willingness to
adopt promptly new methods and
new machinery.
Depreciation rates
should
they
be
are,
retained
any
once
in
adopted
force..
temporary
If
advan¬
DENVER, COLO. —B. E. Simp¬
son
& Company, California Build¬
ing, has installed
a
private wire to
Troster, Currie & Summers, New
York
City,
Trubee,
and through them to
Collins
&
Co.,
Buffalo;
Gottron, Russell & Co., Cleveland;
George A. McDowell and Co., De¬
troit;
Pa.;
Young
and
St. Louis.
&
Co.,
Pittsburgh,
Fusz-Schmelzle
&
Co.,
30
&
COMMERCIAL
THE
(92)
CHRONICLE
FINANCIAL
Thursday, January 6, 1949
over
As We See It
-
<
(Continued from first page)
•
■
Roosevelt.
Appearances May Mislead
Yet it would be
quite possible to be misled by appear¬
Very few, if any, of the members of the new Con¬
gress came into office "on the coat tails" of the President
as was so often true of the
campaigns when President Roose¬
ances.
the
general rule
the ticket."
Democratic
was
headed
that the President this time
It could in
a
ticket.
sense
Democratic
Congress
the
contrary the
ran "behind
be said with truth that the
President "rode back into office"
<a
On
the tide that swept
on
in
although, of course, President
Truman did his part in
inducing the change in Congress.
More than one Democratic member of the 81st
Congress
will, in all probability, take a good deal of the current talk
about a mandate from the people exclusively for President
Truman and his own rather personal
platform with several
grains of salt.
1 V:-vi.
There is,
of
—
ernment
The President is said to be counting
heavily
the Vice-President-elect and upon such stalwarts
an effec¬
operandi with Congress, but the mere fact
that he has such representatives, if such they may be
called, at the other end of Pennsylvania Avenue guaran¬
tees precisely nothing. It became evident long before the
80th Congress was chosen that President Truman had
much to learn about working effectively with Congress.
Has he learned since his early days as a successor to
President Roosevelt? If he has not, and presently finds
it necessary to develop some sort of scapegoat for the
shortcomings of his Administration, he will discover that
more
difficult this time since Democrats
majority in Congress. Even Roosevelt did not
so
>;
the
other individuals
which
are more
lican party.
the
"conservative" than many in the
President will hold
or
a
some
of them at
patronage club, but in
ments do not
,
months to
rate,
many
already regard themselves
beyond the pale,
v
as more or
less
degree at least
will be inclined toward
hostility as the result of all the
things the President has had to say about the 80th Congress,
many of whose members will still be on Capitol Hill and
many of whose members were quite active in some of the
some
The Country's Salvation
problem
in a sense, and in a
degree, be the country's salvation. More time must elapse
before it can be definitely ascertained
precisely how much
pressure the President is able to bring on this new Congress,
may
but it would appear
that some of the President's extreme
proposals, constituting what is now being termed a "new
Deal,"
likely to have rather hard sledding in Con¬
are
One sometimes suspects that the President would, in
certain
instances, not be too displeased if such turns out to
be the case, but however that
may
to
run
into real difficulties in
the 81st
the
measures
commonly said to be
the "new New Deal."
he
be he is apparently likely
undertaking to drive through
Congress anything in the nature of
In
some
necessary
instances it .may
could not get the desired measures
program
than
turned out to be of
some
are
a
more
through
moderate
a
measure
all
to
in
19432
the worst
this
forecasting
consideration
of
,
.
emerge.
nonsense
issues
which
ment
spending
income
the initiating
activity and in¬
no
and has become well estab¬
if his
the
ten
I.
is
years.
Investment Funds
(Millions
in
Gross
—
of
mainly
the
excess
of
exports
Prosperous Years
'A-'f.,
regime
Amount
;
:.
V
Funds to
-%\
Amount
Total
$20,693
$16,577
80.1
$4,116
19.9
,
G.N.P.
funds and their
value
relationship to the
product. It
the national
of
will be noted that in each of these
years investment was
large and in the neighborhood of
prosperous
20%
of
national
gross
is
product.
significant relationship.
a
It shows
how the American people
their spending be¬
divided
consumption
ment—about
20%
and
for
invest¬
investment
and 80% for current consumption.
24%.
v
.
is
significant that this ratio
changed so little over the
despite the depression, the
changed attitudes toward govern¬
ment
responsibilities
nomic
19.9
and
71.1
4.665
28.9
16,167
17.9
70.3
6,116
29.7
-20,608
20.5
of the
213,429
31,130
75.8
41,054
19.2
77.7
22.3
50,118
eco¬
war
increased responsibilities
fairs.
38,929
9,924
11,189
24.2
231,636
in the
field, and despite the
the
11,502
14,492
21.6
*1
II. Investment
Funds
(Millions
—
of
and private business supplied the
Per Cent
v
Product
Amount
€k
In
Funds to
Total
Amount
%,■
$3,611
-
other 80%.
Investment
Funds
—Government—
Private
National
77.4
G.N.P.
$4,666
\
ences
8.1
$58,340
$1,055
22.6
55,760
1,456
31.0
3,240
68.9
4,696
8.4
1933—
55,760
1,456
31.0
3,240
68.9
4,696
8.4
1934__.
64,868
3,236
43.8
4,148
1935
72,193
6,092
60.9
3,917
1937——
90,213
11,502
71.1
4,665
III.
(Millions of
7.384
56.2
39.1
,
28.9
<
13.9
17.9
—
would have been smaller
not
foreign
expenditures.
Dollars)
National
-Private
Total
G.N.P.
Product
Amount
°k
Amount
$100,477
$14,492
70.3
$6,116
29.7
$20,608
20.5
125,294
1940-..
18,335
54.5
15,290
45.5
33,625
26.8
9,123
83.0
53,560
159,623
~V
1945..
212,23}
rrrfrrj
tr«^rrt
,
62,691
96.4
65,037
63,673
93.7
67,969
32.0
14.2
46,944
85.8
54,750
25.6
tfuJrvnt Business,Supplement, July, 1947
.if>'♦
'
-
•
>
and July,
a
rough
taining
,
1948.
and
in¬
military
ex¬
government
may
measure
of
be taken
their re¬
high
level
of
national
income and employment.
The di-
-><5ion
.
aid
were we
greatly
spective responsibilities for main¬
33.8
6.3
...
r-m
as
33.6
44,437
3.6
4,2967,806
i
Sources6f>
.ut
.
17.0
2,346
192,573
"1944
c!c
so
penditure
between
and private agencies
Funds to
—Government-
to
This division of investment
Investment
Funds
Investment
compelled
crease
War Years
—
agencies supplied 22%
private agencies nearly. 78%
and
the
government's
share
and
11.4
10,009
16,167
1947, despite all the influ¬
I just mentioned, the gov¬
ernment
Per Cent
Gross
Year-
.
Investment Funds
government, agencies
1929,
supplied 20% of investment funds
Depression Years
Dollars)
Investment
Gross
United States in world af¬
;
In
1933
i(|
r,v
years
Investment
—Government—
.
1932
;;!
.
its
figures in the exhibit of
expenditures give a
complete picture of investment-
90,213
.
def¬
teach
These
100,477
Year—
,
can
investment
1946——
It also carries serious
and
The Prosperous Years
1937—,—.-__
same
brief look
a
ha&
Funds
Investment
——Private——
Product
$103,828
take
all
are
Dollars)
National
1929—
to
investment
categories
investment
Per Cent
1
in¬
They
lessons.
own
It
Year—
proportions
past
and
A second interesting point is the
of
in¬ ^division between private invest¬
cluded: all forms of private con¬ ment and public investment. For
struction, p r o d u c e rs' durable these five years, private invest¬
equipment, changes in inventory ment was about 76% of the total
and net foreign investment, which and government investment. was
familiar
four
private
spending in income and em¬
ployment theory has been devel¬
over
information.
characteristics
tween
results
change in private investment.
The
is
ment
oped
definition
income
expenditures
during each of these three periods
because each period has its own
have
new
national
propose
total
income but does not produce off¬
by no means
The significance of invest¬
lished
I
at
This
,
This
under¬
to
need
happened to total
years
appearing for sale on, do¬
spending for
production that provides personal
goods
as
of
1940—-—
Truman
jobs—we
these
1947.1
initely New Dealish.
sult
importance of invest¬
formation
new.
well be that
greatly, at least, the controthe
The
force in business
that these New Dealers de¬
brand
national
setting consumer goods.
ment.
so
of the
gross
product, but that does not re¬
in
corresponding consumer
and
New Forecasting Approach
in
For my pur¬
review of expenditures for invest¬
to complete
and nonsense, often all in the
which need not involve too
;
the
mestic markets., ft is
often, with President and Congress
a
deadlock, nothing at all can be done. It is therefore
be ardently hoped that the more sensible elements
Congress will stand immovably firm against at least
versial
in
new
is
the
of serious depression;
and years of illusion of prosperity
during the war.
no
This forecasting approach that I
mand, but that somehow President and Congress can
keep on sufficiently good terms to carry forward to com¬
pletion the really necessary work of the nation during
the next two years. There is plenty of it to be done
■
is
method
understand
over
the
years,
as
shown by our national income sta¬
ity;
have presumed to call "new," and
which I wish to present to you,
is a comprehensive and inclusive
situation is
often
too
dangers because
in
(Continued from first page)
cluded
situation of this sort that the worst
conglomerations of
sense
to
are
investment
house
pose,
I include as "investment'
spending all spending that is in¬
unsatisfactory at best.
It is unsatisfactory because constructive action
is really
needed, and it is unsatisfactory because it is out of a
good and bad,
we
clude years of peacetime prosper¬
forecasts, is a complex of
assumptions and opinions, some of
I
will
present before
I
inclined to believe it to be.
But this sort of
and
product figures of the past 18 or
19 years, we have a rich store¬
nition of investment.
full list of
even
important, in¬
expenditures for
equipment. In this
tistics.
'
like all
come
gress.
is
military
million
Prospects in 1949
What
pur¬
latter
the
s
If
startling conclusions government investment along with
private investment to obtain a
to present concerning the business
more comprehensive and accurate
prpspects
fox4 the. coming ^12
months. My opinion—for what it picture of total investriient spending.
may be worth—is that we have no
reason to look for a major change
The second feature of this ap¬
in the current levels of general proach that I believe is new—and
business activity, national income, that follows directly from the in¬
employment or prices—either up clusion of government investment
or down.
Of course, this opinion, in the picture—is a broader defi¬
A
1
But the President's
this
The
amazing postwar level of national
product
and
employment—with
gross national product exceeding
$250 billion, and more than 60
finish.
campaign characterized with
acerbity.
New
Business
other
business.
over-all
come
'
<
construction
and
procedure provides an
picture of the forces
working for higher or lower levels
of business activity.
way
which
acts which the President in his
public
and
cludes
facilities
In
have
I
^
At any rate, it is evident enough that for several reasons,
President Truman has a real problem oh his hands in deal¬
ing with the 81st Congress, which in
'
come.
forecasting
part of
second
works)
from
item,
his party of
follow him blindly.
relax and pay attention to what I
really wish to tell you.
well be doubted whether these ele¬
may
chases
community will watch with interest, and
anxiety, developments in this situation during the
little
no
Repub¬
any
of
(public
stand what has
variety. There are various
within the Democratic party
groups
Over these,
instances it
|
or
mainly
The business
predisposed against the very naDeal, whether it be of the
Roosevelt
This
government purchases consists
well when he undertook to "purge"
members who would not
ture of much of the New
or
procedure.
in
are
gov¬
purchases is included in
tant change from usual
tive modus
the
Truman
Mr.
Rayburn and Senator Lucas to help work out
out
But much of it is also
i,
.
-
government investment spending.
This is possibly the most impor¬
upon
as
this is
.*■
Spending
Only this second part of
toward the President.
in the national
legislature. In a strict sense of the term
hardly an "element" or "bloc" at all, but it is held
together on many matters by a number of bonds, one
of which is a predisposition against President Truman.
Government Investment and
The major
goodwill among Congressional members he lost last year
change that results
from this new definition affects
in his
campaign against the 80th Congress. This campaign
government investment. Govern¬
was, of course, ostensibly against a Congress dominated by
ment
expenditures that are in¬
the Republican party, but the fact is that Congress was cluded in
gross national product
able to do a number of the things that the President did may be divided into two
major
not like only because of the acts of large elements of the classes: (1) purchases of services,
principally compensation of em¬
President's own party.
Very few, if any,' of these latter
ployees; and (2) net purchases of
have been retired.. They, generally speaking, are,still in
goods from the business and for¬
Washington, and since they are human one must suppose eign sectors of the national econ¬
that they have not remained unaffected in their feelings omy.
it is much
first of all the Southern element
course,
One of the first things that the President has to do is
try to recapture the respect and if possible some of the
to
paign against what appeared to be hopeless odds—:and
won.
lie was througnout "of the earth, earthy."
The
American people, moreover, love a winner. All this adds
to his present standing and, in a sense, to his popularity.
He, in all these respects, is without question a more
formidable political figure than he was when he was
serving out the unexpired term of the late President
velt
imports
in
foreign trade
through private trade channels.
The First Task
7
a
was
78-22 in
80-20
in
1929;
it, was
1947, despite unusual de-.
Volume
for
mand
THE COMMERCIAL
Number 4766
169
additional
which
government
approval
available—
is
record
was
This statement is not to be taken
as
the
$50 billion, as I have shown.
Investment spending in 1948 can
be estimated from the preliminary
expenditure.
disapproval of gov¬
or
&
FINANCIAL
figure for 1947. And
national
gross
on
product
would be about $260
few
cent
per
this basis,
in 1949
billion,
larger
CHRONICLE
than
or
a
1948.
spending to provide em¬ figures for the first three quar¬ Employment will continue above
60 million jobs, and we will con¬
ployment. It is merely a state¬ ters. The total of the three cate¬
ment of facts that are not gen¬ gories of private domestic invest¬ tinue to have a tight labor mar¬
ment
..." ;,
construction,
producers' ket.: '
erally known. ;
Any forecast of this kind is
It may be noted, however, that durable equipment and inventories
these figures refer to spending for —is estimated to increase $7.5 bil¬ based on a large number of as¬
sumptions, some of which I have
investment
only — not
to
total lion over 1947.
couraged
,
Net foreign
spending.
Government spending
for employment and relief during
the
1930's
was
largely
very
the
imports
from
relatively
ineffective except for
relief of suffering. Government
spending for investment, which is
used
in
this
analysis,
usually
confidence.
to
Spending
for
smaller
a
exports
a
ments.
con¬
of commercial
excess
imports, but also to
over
considerable increase in govern¬
ment
increases
and
—
about
grants to foreign govern¬
Notwithstanding this de¬
Several others should
mentioned.
be considered.
I
will
probably decline
$9 billion in 1947 to
only about $2 billion in 1948. This
very considerable decline is due
for
increased consumption; not for in¬
vestment, and, consequently, was
stimulates business
investment—mainly
of private exports over
excess
assuming
am
there
in
change
material
no
business
v *
A third reason is the support of
farm prices by the government.
All of these factors—large gov¬
Depression Years
Now
consider
the
years. From 1929 to 1932 and
1933,
private investment almost disap¬
peared, Contrary to popular im¬
pressions, total government in¬
vestment
increased
very
little
from
1932—before
the
of
the
Roosevelt
Domestic
offset
investment
the
decline
..
.
.
.
investment in
estimated
be
can
•
,
Total government
1948
in¬
expected to more than
in net foreign
are
investment.
from
pre¬
liminary
figures to exceed »the
1947 figure of $11 billion by $6
billion,"" making 1948 government
investment $17 billion.
beginning
administrations
to the relatively prosperous
year of 1937. State and local gov¬
—up
ernment
with, roughly, $39 billion in
1947.
creases
investment
Total
investment declined and
is
1948
for
debt, large
government
expenditures and farm price sup¬
contain the
port
seeds
future
of
danger, but over the next few
at least, they will work for
greater stability of business.
Of course, I don't know what is
going to happen in 1949—a state
years,
T
-
'
1
"!
v
■
'/
fourth
a
round
is
creases
to
in¬
rate
of wage
likely
unil
cause
tion
of in¬
1948, will
profits ol
incorporated and unincorporated
business, depreciation allowances
plus special reserves for replace¬
ment of fixed assets, institutional
found.' Major
be
sources
vestment
funds, as in
large retained
the
be
channels
made
available
expansion
or
duction,
loans.
business
V ;.
markets
and
improvement
be
must
where
on
pro¬
exercised
from
traditional
they have been
competitive qual¬
basis.
Arbitrarily
a
price
selection
are
permanent elimination
established
ments
■
i"j It is also assumed that there
will be
major change in Fed¬
no
eral Reserve credit
relatively small.
Nevertheless, in
the basis of these
exclusion
and
im¬
of
of
American
exporters
in
advertising, sales, distribution and
service
expenditures.
In
this
careful
appraisal of
money
mates,
the country has moved
appreciably in 1948 toward a war
economy,
with the government
furnishing 30% of total invest¬
ment, instead of the customary
peacetime ratio of 20%.
1932, govern¬
agencies supplied 77% of
total investment and private agen¬
cies
only 23%—a complete, re¬
versal
of the
perous
times. But total investment
ratio of
more
pros¬
was
only 8% of gross national
product—less than one-half the
ratio
during
more
Estimates for 1949
With
prosperous
these
foundation,
years.
and
War Years
The
in
time
war
is
From
al¬
the
I
ment to the Federal Government.
production,
investment
investment.
creased
of
one-third
product.
was
spondingly for
believe
not
either
these
of
of
for
small
some
in
increase
these
expenditures
Inventories
of
the
Personal
reduced
1949 over 1948.
small item in
a
investment
current
pic¬
ture, and may increase one billion
corre¬
well-known
total
in
are
Total
domestic
private
invest¬
in
hind
1949
in 1948.
as
our
postwar prosperity is
Net foreign investment •—
found:., in these expenditures for
through private trade channels—
investment—private and govern¬
may stay as it was during the sec¬
ment. For the new high levels of
'
em¬
All
ployment, experience shows that
we
to
need
about 20%
spend
we
uct
at
we
need
expenditures
lion level.
when
1929
in
are
no
ment in 1929 dollars
was
were
we
billion
$20
We
sufficient
a
get
now
with
on
What
us:
answer
are
the
rea¬
sonable
con¬
maintained
then;
at
the
1948
can
level,
of $20
can
hand,
there
If,
on
with
+ $20
billion,
or
which
the other
are
be estimated at $39 billion
is
$2.5
We have
but
it.
<
Total
Estimates for 1948
investment
1947—the
latest
only
mate
'
year
moved
a
for1
of the
end
for the
war
despite the concern
they did cause in 1946 and 1947.
same
reason,
disregarded soft goods
industries
because
their
major
fluctuations do not
initiate the
have
I
busi¬
$59
billion
billion
—
more
of
a
little farther—
little—toward
a
war
of the total.
This esti¬
investment exoenditures.
it will be noted,
is 20% over the
and, if
necessary,
disregarded the behavior
stock
market prices because
I have
of
prices have moved contrary
fluctuations of business
stock
to
the
since
ever
There
more
one
point
that
We have
virtual capacity produc¬
and
employment
for two
and this forecast anticipates
another year of full production.
years,
of capacity
production is unusual, to say the
least, and it is natural that busi¬
nessmen
should be careful of a
Such
the Foreign Assistance Act, it was
clearly the intention of Congress,
supplemented by official state¬
of
ments
in investment
spending does come
the tense inter¬
situation, this does no
—and in view of
appear
imminent—there
number
of
are
a
good reasons for be¬
lieving it will be slow and mod¬
erate. There is a little reason to
the
fear
same
collapse that
1920-21
or
kind
we
of
business
went through in
1929-32.
first
'n The
operations.'. Obviously, the com¬
plete use of private trade chan¬
nels would exclude all operations
by the governments, involved and,
_
in the extreme
that
mean
have to
application, would
all
be
the
and
transactions
would
between the producer
foreign
have
and
consumer
be
to
handled
by
organizations. How¬
stipulation in the law,
-may
have, been; the
to .coverage both here
non-official
the
ever,
whatever
intent
,
as
abroad, nevertheless is bind¬
ing only on our domestic opera¬
tion. It does not preclude foreign
governments'
of official agen¬
use
cies, semi-official syndicates ' of
private importers, or some similar
style of organization.
sure
I
ernment
who
men
policy decisions
have
to make
may count on lit¬
tle change from the present high
level of business during 1949, and
this stability will continue until
is
there
clear
evidence
of
ma¬
a
terial drop in the combined spend¬
ing of business
for
investment
and
government
purposes.
reasons
if
radically different nature of
the money and credit
situation
that exists today. In 1920 and 1929
much the larger part of the money
supply was based on private debt;
80%
of total debt was private
debt. Today less than half of the
total debt is private debt.
these ratios
lies in the greater stability of gov¬
ernment debt in the event of bus¬
iness decline. A decline in busi¬
activity leads to a reduction
debt and money sup¬
ply. A decline in business activity
ness
private
apt to cause
government
debt to increase.
In
this
connection it should
that
noted
it has
been, and
be
con¬
tinues to be, the. official policy of
the United States Government, as
by
State
confirmed
and
discourage
the
the
ment missions
ments
here.
of
by ECA, to
Department
of
use
procure¬
by foreign govern¬
As
matter
a
second Reason
A
t
o
t
a
is
the
of
rec¬
government investment to
spending for investment is not dis¬
in
total
ing
procurement
which
have
been
of mid-October includ¬
as
off-shore
purchases, freight
shipments from the United
through government agen¬
cies, American private exporters,
had participated to the extent oi
and
States
about 28%
of the total trade
au¬
thorized.
However,
this
figure
early stages of the op¬
eration and could be misleading
as
far as the: utilization of pri¬
vate .enterprise for purchases in
the United States
itself. Up to
October 15, a survey of the Na¬
tional Foreign Trade Council in¬
dicated slightly less than 60% of
the
covers
purchases
States
in
made
the •; United
going through private
were
Information
exporters,
is
not
available to indicate what
portion
of this consisted of private trade
here supplying private importers
and how much
of
up
made
was
private American exports
agencies of foreign gov¬
to official
ernments.
stantial
Furthermore,
portion
of
sub¬
a
the
procure¬
ment in the
early stages has been
for agricultural products such as
wheat; on these, as indicated, the
Department of Agriculture and
the Commodity Credit Corpora¬
tion
for
domestic
have been
given
a
policy
virtual
reasons,,
monop¬
oly."
'
:
V
Questions have been raised
the
to
participation
as
private
of
foreign importers., ECA agree;rnents and authorizations are made
with
sovereign
foreign
govern¬
and the internal policy in
foreign country is the deter¬
mining factor in what private or
government agencies abroad han¬
dle
imports.
The
influence
of
ments
any
ECA has apparently been, toward
the utilization of private' chan¬
far
nels
as
with
its operations in the
possible,
as
in
line
United
States.
Effects of ECA
Hemisphere
on
Trade
One of the important effects of
ECA operations on American ex¬
port business is apparently not
fully recognized, namely, the ef¬
fect
of
purchases
made
under
ECA
authorizations
other
than
the
Western
the
Hemisphere,
Latin-America.
those
of
dealing
remaining
with
part
the
for
few
a
selected
commodities. In the operations of
reference to
the
dollar
tions.
from'
been
antly
The
are
the
United
handled
States
preponder¬
through private channels.
arrangements for payment
either
ducers
direct
to
or,
letters of credit
cial banks.
grains,
tober
it
the
through
In the
was
that
returned
with
case
of
these
in
as
shore
purchases,
from
strong
for
for
ment
President, this order was re¬
scinded, apparently through the
Commodity
of
the
Agriculture.
The
Credit
Corporation
will continue its handling of such
shipments
through
In
trade
which
private
other
are
the
has
exporters,
it
of
through
amount
is
mierest-
the
large
a
of
needed
volume
goods and services
the
United
States
traditionally
American
cedure
government
movert
over
good
exporters.
in
what
markets
For ex¬
ample, while a shipment to Can¬
ada paid for through normal pro¬
any
analyzing
totaling
half billion dollars in the Western
the
of
the basis of their opera¬
Yet, there is
dollar, defi¬
ciency. Not only have these off¬
private channels but
subsequently, on authorization of
recommendations
the
These dollars are utilized in pay¬
to
Department
with
be
certain
would
tie
Oc¬
by
commer¬
announced
even
close
Hemisphere, reduced the burden
of furnishing commodities which
are in tight supply in the United
States, but of equal importance,
they
have provided
dollars to
other countries in the Hemisphere.
pro¬
large 'extent,
a
and
United States, desire to utilize the
of
have
the
with
Canada
Many countries
Hemisphere, be¬
Western
of
cause
ECA
to date, with the exception
grains and foodstuffs, ship¬
countries
off-shore
has been drastically reduced, with
most
in
United
States, or
purchases.
This is particularly important in
so-called
special
larger
1. ip.yest/ngnt,,oyernment
issued
ord, the number of such missions
channels.
ratio of
billion
$2
»
ments
of 'these
the
more
pro¬
and normal channels of
expressed
However, whenever the decline
national
ECA, that private
commerce, trade and transporta¬
tion jycre ,to be used tQ
tfyq ipaximum
extent practicable in these
period
long
a
coming collapse.
is
of ECA operations
interest to American ex¬
porters
is
the
participation of
private enterprise; In authorizing
and
1939.
is
should receive attention.
of
phase
of great
would
ness.
with government invest¬
ment 34%
spending .in
full
only
than the estimated figure for 1948.
economy,
v
since the
The significance of
billion for 1949.
—may
prospects for a
material drop in investment, there
will be a material drop in busi¬
ness
activity and all that goes
«
the
Thus, total investment expen¬
ditures—private and government
1949 business
the current levels.
the
purchases from the business sec¬
tor of $2 or $3 billion. Instead of
expenditures
of
$17
billion
in
1948, there might be expenditures
predict safely that
activity, income and
employment will be maintained at
we
of
is
crease
another":
If investment expenditures
are
any,,,
ex¬
existing "cold
throughout 1949, and an in¬
in
over-all
government
war"
the prospects for total
are
assumption
tinuance
investment spending in 1949?
be
complete reversal of Soviet pol¬
the
question
that
Yankee fashion by asking
What
of pos¬
anything from
basis for either of these
treme assumptions, the most
business prospects for 1949?
will
bounds
assume
any
can
length because
relatively small.They
at
could have been disregarded ever
approach
icy in the direction of peace to a
fighting war. In the absence of
>
question before
I
we
sibility to
reasonably full em¬
for about 46 million
ployment
workers.
business
purchases from
It is within the
invest¬
maintain
to
1949,
to consider gov¬
come
we
the largest
question mark in this guessing
game because it includes expendi¬
tures for foreign aid and for mili¬
tary equipment and facilities.
bil¬
longer the
billion nation that
$100
in
We
'
When
$55-60
around
it
ernment
are
maintain investment
to
most reasonable
to the size of private in¬
1948.
gross national prod¬
above the $250 billion,
or
they
inventory
discussed
not
have
tion
the
and
spending in ,1949 is to
slightly less than 1948:
$39 billion against $39.5 billion in
maintain
to
changes in private
vestment
1947, with gross national product
-of about $230 billion, we spent $50
If
I
enjoyed
make
we spent $20 billion for
public and private investment. In
for investment.
these
guess as
billion,
billion
of
am
many others.
But I
believe that businessmen and gov¬
abroad
One
curement
changes
other,
national product for invest¬
ment purposes. In 1929, with gross
national product of roughly $100
gross
are
activity.
investment just about offset each
of
of initiat¬
results and
of changes in business
that
factors
and
about $2 billion.
ond half of 1948:
postwar national income and
this
of
advantage
ing factors, and its disregard of
many
minor, irrelevant factors
ment will then be about the same
The strong, substantial force be¬
connection
ECA operations
ECA and Private Enterprise
invest¬
ment spending approach to fore¬
casting problems is its concentra¬
One
maior fluctuations of general
in 1949.
rea¬
sons.
the
of
ditions.
producers'
expenditures,
private investment has
reached its cyclical peak. I look
government
investment in¬
Total
consumption
95%
and
was
around
to
national
gross
about
do
kinds
years of maximum
total
of
behavior of pri¬
equipment
size
supply and its inherent of legislative authority, will be
stability are counted on to pre¬ required to prevent permanent
vent
any * sudden
deflationary injury to America overseas trade.
change in money and credit con¬
not causes
the past
durable
sibility for income and employ¬
war
a
erect another
can
dependable structure
construction
vate
most complete transfer of respon¬
During the two
we
as
estimates.
outstanding feature of in¬
vestment
less
policies during
existing
The
1949.
tion on the whole area
estimates
1948
I
with
authorizations
equipment
for
exports
our
ity
mainte¬
of .industrial
care
to prevent
of
the
and
savings and the conversion
of ports by recipient countries may
long-term government bonds intc in effect confiscate 'the invest¬
therefore, estimated at $56.5 bil¬
lion (1947 was $50 billion).
On
ment
that
ignorance
'■
of trade names."
nance
Where funds and
assumption is that suf¬
for investment will
A major
Federal Government expenditures
of
an
investment nature
were
unofficial esti¬
of
share
BLS
ficient funds
pared
depression
ernment
labor costs to increase.
in
"
ECA—Good or Bad for Export Trade?
estimated at $39.5 billion, as com¬
these directions,
be
declining
37
all-commodity price level. Some
reduction in farm prices will be
offset by some increases in manu¬
(Continued from page 21)
factured goods prices. Production
ing to note of the approximately
per man-hour should increase, but preservation of existing distribu¬
foreign investment, total
private investment in 1948 can be
cline
sumption is much less effective in
will
the
by
activity.
ernment
—
(93)
might not appear to have
relationship to
theless
ECA^ never¬
the substantial amount of
dollars provided to Canada
(Continued
on
page
makes
38)
38 * (94)
THE
Pollyanna ■stuff.
Markets
Whyte
Says—
do
By WALTER WHYTE ■
Market
is
previously
time
particularly
of
some
take
to
have
effect
an
stock
*
on
prices to the same extent that
if many people believe a
thing
dis¬
President's program.
counted
Now
I "am in¬
boys on
Broadway call
"making a
buck," and in following the
elusive buck, ev6n a devalu¬
ated one, I have no time for
mass
fears or hopes.
I will
grant that these mass opinions
•
terested in what the
Tomorrow's
Walter
COMMERCIAL
action,
and act
it the results will
on
reflect such action.
But
once
the
being written Tues¬
day night in the midst of all
sorts
of
bogey-man stories
will rise to the surface.
All
this
it
is
around and
in his State of the Union
message to Congress. In com¬ pick up.
mon with
many other people, sounded
giving any spe- agricultural products or raw ma¬ the expansion of our export trade
terials because undoubtedly the and the
ability to hold it at levels
points.: I still
-far- above
the
most
optimistic
prefer to stay away from spe¬ very limited' amount of dollars
available would have been used vision
of
prewar
days,
even
cific
buying levels because for the sustenance of the people though-necessarily below the
fig¬
they may look silly by the and for raw materials to employ ures of the war and immediate
time you read this. I, how¬ labor. Many exporters now ship¬ postwar years and the unrealistic
buying
.
ever, think that such issues as
Paramount, Loew's, R. K. O.,
and Warner have
are1
now
buy.;, The same
thing is true for other amuse¬
it will say.
tion
A few weeks ago I
off
the market
on
ac¬
the
flash-flash stuff.
so-called
cheap
But outside
that, I haven't any idea
what* the President will call
for.
,v'
[The
(Continued
it
possible
volume
and heard
the
on
the radio
to
access
and newspapers,
alarmed as many
I am not as
others seem
to be about the future of busi¬
the
and
Before
I
stock
market.
further, let
me
say that when I refer to
the "future,".I am not taking
any long range view.
I am
simply referring t6* the itt&fgo
any
ket for the, next week
week after.
the
or
Beyond that I will
have to leave to others.
'
the. market
are
go
the
market
must
pected that the
have
news
ex¬
would
not be too
did not
bullish, and still it
break wide open.
In
fact the chances
are
that the
first
break, right after the
election, was the break that
not
only reflected the fears of
stockholders, but also antici¬
pated whatever action might
be taken by the Democratic
administration.
to
not
am
keep
up
somebody
given to whistling
morale.
my
else
pass
and
article
time
of
United
I let
out
the
Pacific Coast
of
business
clearly pointed
pated
large
dol¬
Exchange (Associate)
San Francisco Stock Exchange
Chicago Board of Trade
Street
COrtlandt 7-4150
New York 5,
N. Y.
Teletype NY 1-928
Private Wires to Principal Offices
San
Francisco—Santa
Barbara
Monterey—O'-'and—Sacramento
Fresno
loans
to
various
indi¬
percentage are
for industrial
machinery, trans¬
portation equipment, and other
services of this char¬
be'- supplied as American
exports -when translated into ef¬
the
short-range,
much of
authorizations ■; were
early
purchases
the
by
the
pick-up
previously
of
with
made
prospect of utilizing in many
restricted
cases
By
dollar
-
fective and workable plans for in¬
dustrial \ development. This
part
of the program has only recent¬
ly been made effective and, as yet,
has
not
had
its
impact
upon
American
been
translated
has
nor
into
it
American
export sales.
transferring the burden of
purchases to ECA grants, it
possible to free the equiva¬
Long-Range
In
Effects
funds
could
but which
have
been
made
subsequently could not
country
portant,
States
F's,
an^ .ahio because ot^k&ty
purchase cheaper in other
kets.
Dollar
mar¬
income, hopefully
Argentina, is not
expected
by
available.
There
decline
has
been
a
imports and
greatly restricted
serious stoppage of
a
dollar payments.
The
fur¬
in
the
parts
of
effect
and
the
the
States
many
produce
the
main
for
source
agricul¬
goods, in the
postwar
and
years
presently, this dollar short¬
even
undoubtedly
age
to
both
tural and industrial
continued
can
in
Further, with the
as
production,
immediate
unbalanced
world
dollar balances.
United
of
failure
causes
dislocations
and world trade.
to
serious
Ameri¬
This will be
intensified if the economies of in¬
dustrial
the
war
countries
destroyed
by
not be revived and if
can
non-industrial
countries
can
increase
their potential as
pliers in the world markets.
not
loans and investments. For
and
far
as
long-range
as
the
United
States and the world at large are
concerned, production must be in¬
and
can
markets
developed.
be
loans
stimulated by grants
the intervening
is the case with ECA,
during
as
more
basically
work toward
vate
a
we
should
climate where pri¬
investment, both by investors
of
and
an
international
opment of the economies of
tries
throughout
the
coun¬
world
and
living stand¬
ards, and lead to the creation of
expanding and permanent market.
To
of
survey
the
emphasis
again the' operations
ECA,
and their effect on
it would be well to
export trade,
consider the matter both from the
short-range
and
point of view.
the
and
fuel^
to
seems
be
shifting to
which
the
the
up
econo¬
ECA has said that with the
an¬
of
local
not
be
con¬
tremendous
currencies
can
be utilized to
economies
of
develop
of the
well as that
many
colonial possessions as
of
Europe itself.1
They should
production Of stra¬
tegic materials and other imports
lead
to
into
into
build
must
represent
and should
available
to
the
the
dollar
long
area
will
run,
which,
be
in
translated
greater
expenditures
for
American goods as increased dol¬
lars become available.
increase
agricultural
in
fuel
than
of
the
European
production
stocks from
United
and
States,
rise
other
sources
Western
Europe's abnormal dependence on
these supplies from overseas will
diminish.
However,
with - Eu¬
rope's great manufacturing areas
normally requiring large imports
of
food
tion
its
it
for
its working popula¬
petroleum products for
and
industries
is
There will be many "changes in
commodities shipped both to Eu¬
and
rope
world.
be
other
their
new
of
markets
transportation,
that
continued
but the
the
and
in
in
production - to
requirements of for¬
eign markets. Some products
disappear or be gradually
in
•
abilities
proven
developing new
changing
their
meet the
parts
-
exporters may
to continue to
depended upon
utilize
duced
im¬
to
American
and
obvious
to
look
for
watchful that American in¬
are protected for the
long
very
terests
but
run
without
restricting
or
channelizing our overseas business
within
pattern necessarily of the
past or the present. Changes and
adaptations must be brought about
a
to meet conditions
the
they Will exist
as
world.
There
are
exporters, based
no
Ameri¬
that
their
on
rec¬
ord, cannot make the adaptations
necessary to maintain their posi¬
tion
in the world market.
The United States is
a
/
'
,
.
engaged-in
great experiment involving the
rehabilitation of
virtually
an
tire continent.'We have our
cal
for
reasons
difficult
a
embarking
task
-and
en¬
politi¬
on
such,
these
are
widely known and approved.
economic
be,'
reasons
Our
and should
are,
equally
compelling.
Apart
political and
military problems, the task is and
from the existence of
will
to
be
see
difficult;
We
have
whether the United
yet
States
will hold fast to its determination
whether the
and
European
coun¬
tries will carry through their ob¬
'
ticipated
able
be
greater" stability and freedom*of
trade and investment. We should be
Europe alone but rather
amounts
the
may
re¬
export movements
ultimate result should be
our
jective of
cooperative effort to
a
restore the economy of Europe to
a
balanced
sonable
steps
position within
period of time.
appear
a
rea¬
The first
good, but the multi¬
plicity of problems to be faced not
only by
but by Europe, and the
us
other nations of the world, which
are
all concerned in this matter,
such
as
will challenge the
clear thinking and deter¬
of all
peoples and of
business everywhere.
are
courage,
mination
ports of these commodities will be
substantial.
areas
As'
Europe and other
regain
their
Military Government and Foreign Policy
productive
power, many of these imports will
be made from, non-dollar sources
and
will
be
financed
itself.
by
Europe
;
American
producers
complained that the assist¬
ance
help
has
program
to
been
of
little
them
as they have. been
identify any direct or¬
However, some of this un¬
doubtedly will change as attention
unable
to
ders.
is
directed
to
more
goods,
building
Also, producers
industrial
materials,
will
etc.
benefit
Europe is able to meet its
as
emer¬
needs from local sources,
thereby
freeing
exchange , for
more normal
products and for an
expending economy.
In this con¬
gency
nection
it
should
though
it
looked,
that
not
be
realized, al¬
frequently
over¬
is
the
assistance
designed to finance the
was
move¬
ment of commodities which would
not have
sure
moved, but rather to
that
the
minimum
of
as¬
im¬
ports to bring about European
covery be made Available.
re¬
amount
particularly
exports
into
J from
the
Europe,
United
States, would certainly have been
lower.
Enforced cuts would have
long-range ! b°en made
for
manufactured
the
goods
will
be
just that much
difficult and expensive for
her.
the
we
recently
we
Western
new
Zone
introduced
currency,
expression to the depre¬
gave
that had been taking place
ciation
besides, maybe because of the in¬
creased
production
has
that
oc¬
curred
plus the aid we are send¬
ing, establishing a currency with
some
temporary • stability,
thus
making looting more difficult and
a
settlement of the
reparations
question necessary to the Russians
and maybe to the French.
There
had to be, of course, a basis of
exchange of the old currency for
the new.
Therefore, we had to
keep the Russians out of our zone,
otherwise there
might have been
currency into our
zone. "Notice the Russians charge
us
with being the "first to stop
a
flood
of
old
traffic between the
that
the
out
cause
of
in
for
and
not
in
which
only
and examine traf¬
This
Berlin.
to
sell
was
in
worthless
we
would
goods
us
wanted, which they
part
first
be¬
reactions
Berlin
when
the
to
we
and
our
that
English
traffic
into
stopped,- particularly
was
new
it
tried
force
to
into
currency
of
some
in that
use
city
a
without giving the Russians
supply of it. .All of this should
have
been
known
before
act¬
we
ed; if it wasn't, our financial or¬
ganization
dossn't
understand
money—of maybe'the
out of hand.
Army got
■
Organizing the Western Zone
Let
consider
us
events
that
series
a
of
interesting but1 to
utterly stupid and im¬
possible
of
understanding.
In
early July, General Clay knew
are
the writer
.
the Germans wouldn't back the
Western State
new-
yet he went ahead
with it after accusing the German
leaders of deserting
July
the
German
mally
announced-
looked
like
we
him. In midleaders infor¬
this
had
and
it
crisis
a
in
they feared Berliners might; Berlin on our hands. The. basis of
prefer
most
Notice
zones.
Russians
wanted to stop
fic
good currency. That the Russians
didn't want, and it was as a result
of this crisis and
When
also
Without this
assistance, the to¬
tal
(Continued from page 16)
machine
more
Various
have
analysis, trade can
only be
brought into
balance,
other than by gold
movements, by
shipment of goods and services
both
fertilizer
to
must look at the picture for the
entire world.
Counterpart funds,
the movement of industrial goods
and services which must be made
sup¬
In the final
permanent
food,
Thbse have gorte forward in sub¬
stantial quantities and now the
world
trade
the movement of the three
on
mies of the participating nations.
.]
unquestionably is
faced with a dollar shortage and,
more
important, with inconver¬
tibility of currencies.
This dollar
shortage is not the cause but
of
sis
In its early
area.
stages,
necessary to place empha¬
it was.
to
other
the dollar
be effected due to surpluses which
had accumulated in the
United
or, - more
im¬
release
equivalent
purchases within
to
for
negotiated
concept of ECA is carparticipating
snould
we'
can
surveying the long-range ef¬
on American
exports,
fect of ECA
chases
ly
the
grounds for fearing
the high prices demanded by
Argentina at a time when pur¬
factors, chief¬
agreements
-
nations'do their part in self-help,
in
reserves.
these
was
production
If
we
number of
a
the improvement of
York Stock Exchange
New York Curb
the
On
-
ri^ forward and the
of
bil-
a
goods, and
page 37)
on
bilateral
with
the. purposes of these loans
cates that a large
dollars
cipient
materialized. This is
character, will stimulate the devel¬
Members
allo¬
participating countries. Survey of
iion
consideration
but
Schwabacher & Co.
1
as
have been
,
participating countries as a
basis for ECA envisaged this and,
in fact, call for it."
' ' _r_-~
fined
due to
abroad
14 Wall
iney are presented
of the author only.]
funds
This includes almost
hard currency reserves of the re¬
period,
Exchanges
the
lent dollars either to stabilize the
or
on
up
expenditure' of
lars has not
This
Securities
ECA
through
the situation which has developed
in Argentina where
the
antici¬
creased
New
not
characterized
Hemisphere
trade,
Coast
value
of influence
is also
a
Pacific
do
Whyte
expressed in this
necessarily at any
with those of the
coincide
those
the
type
and by
Orders Executed
maintain
Western
rather
down still further.
Yet, in the past few weeks,
I
The
on
ther
Yesterday (Monday) and to¬
day the market went down.
If the message, awaited with
bated breath, is as drastic as
many people seem to believe,
chances
to help
States-Canadian trade.
do millions of others
who have
views
of
cated.,
ECA—Good or Bad for Export Trade?
But because I know what I
have read
■
acter to
of
as
Thursday.
—Walter
Chronicle,
of
ping at levels of 1946 and 1947, or trade of that period.
even below
that, could easily have
Over the period of ECA opera¬
completely cut out of the tions, if continued in the present
European .-market.Therefore, if concept,'"financial
stability ought,
is well to note that ECA has made to* be : attained - in
participating
it possible for
European nations countries abroad and, what is even
to import non-ECA
products by more important, once this stability
reducing the need to divert ex¬ has been
reached, convertibility
change for the essentials which of currencies
cam
be ; brought
have been covered
by ECA au¬ about. - With -convertibility and
thorizations.
the opportunity to conduct and
Much of the early operations pay for multilateral
trade, we can
of ECA were on-the
grant basis look for the lowering of trade
but announcements have
just re¬ barriers and- arbitrary import, ex¬
cently been made that practically port, and financial controls. The
been
all
More next
look
to
what you can
see
good level to buy
a
them at.
I, too, have heard
radio commentator with his
will
a
stocks/ Other favorites
ment
inside information about what
the
discounted
for the foreseeable-future and
period of
a
time
say
I too have read the so-called
while
Thursday, January 6, 1949
stocks without
-cific
would be
that
means
the market is in
about what the President will storm,
ness
CHRONICLE
—
This is
air,
FINANCIAL
the initial rush is ovef the include
Avco, American Air¬
regards
to
solid groundwork—call it in¬
lines, and T. W. A. Current
lower-priced
trinsic value or whatever
prices, or a point or so lower,
as
stocks.
a
&
were
they I which Western German State had
paying ! evaporated and
currency,
but
for in
new
pay
look
very
we
foolish
were
going to
arguing
State that didn't exist.
for
Today
a
we
Volume
Number 4766
169
knew that while
Clay was in this
the
German
leaders
agreed to the Western German
State only if modifications were
•made in the laws;: establishing it.
Had this been accepted we would
have been responsible for the well
country
.
of
being
this
-German
had
,
.
state,
leaders
any.real
cculd
the
as
not
have
responsibility, they
continually
black¬
have
mailed
and
would
.
us-for'
and
more
more
and money.
General Clay
quite properly refused the modi¬
power
fications but because the
rency was
had
to
new cur¬
already being issued he
the
order
Germans
again attempt to establish
stitution
for.
Western
a
to
con¬
a
German
State, thereby risking war with
Russia,...whereas he should have
stopped the issuing of the cur¬
rency
until a fuller debate on
our
Middle Europeon policy had
been held in this country.
Russia is worried by this Western
German State because, in order to
keep a stable value for the new
currency, we must either strictly
-
limit the amount in circulation
allow Germany
far larger
a
or
cur-
rent production while allotting a
far greater proportion of Marshall
,
Plan
*
aid.
Our
Military
COMMERCIAL
THE
pressure that will be con¬
stantly at work to increase the
supply of Western Marks, namely,
the cost of the occupying armies,
more
Military Government, and the in¬
creasing expenses of the local
civilian government. We may pay
the principal
costs,, of our own
army by purchasing'the necessary
before
retreat
and supply the Western
European nations with the weap¬
many
materials
raw
and
some
sooner
American
will ask for
particularly if he
taxpayer
accounting,
an
realizes that the other
ever
the
later
or
occu¬
pying countries are living off the
country.
It is extremely doubt¬
ful
that
these
other
occupying
countries will pay for the cost of
occupation
out
of
their
own
budgets.
It is true that German
will
taxes
probably be high but
people are responsible to a
foreign military government it is
a
popular thing to find ways to
circumvent it and penalities for
being caught at this have to be
extremely heavy
which causes
when
much friction
and
hard
feeling.
pres¬
hold
to
tion
in
will
that
ground
check- the
arise
by
addition
In
pressures
from
to
be
for the planting
discontent
of
dissatisfac¬
fertile
of seeds
Russian
agents
these
internal
to
there will also be those
external
If,
sources.
'
instance,
tion in
maintain*
we
Berlin, and if
the Russians
can
our
for
posi¬
at present
as
be successful in
Government,
or,
if
charged to Western Germany, a
serious charge against her depleted
economy and hence detrimental to
confidence
the
in
new
currency.
The
Russians, the Czechs,
the
Poles and the Yugoslavs also fear
any increase in German .produc¬
tion
because
Germans
another
of
their
the
and
of
fear
the
possibility
of
invasion of their country
continuing The Eastern Mark as
the legal tender currency within
that city,
we
will probably be
by these people at some future
time; therefore the logical conclu¬
forced to sell them Western Marks
sion
to
obtain
the
to continue
In
currency
our
fact
necessary
operations in that
is
that
if
are
we
to
have
in Europe yet attain the in¬
production necessary for
peace
creased
peace.
The
the
Russians
are
now
in
Western
,
Low
zone.
prices
are
also going to
attract buyers from
other countries, most of whom will
nations
be
victorious
Gerr
over
German
ernment
was
problem
Military Gov¬
pushing
in
wrong
just to establish some
stability to the currency it had
previously issued.
one
Parliamentary
debate
and therefore subject to
bipartisian agreement on for¬
eign affairs.
The split in au¬
thority between the State Depart¬
ment's responsibility for Western
Europe and the Defense Depart¬
ment's responsibility for Middle
Europe is the result of certain
the
dented
we
The French people know
that
time,
these currencies
of
some
still
are
in
ation of the
land,
nation
on
subject to strict exchange regulations and it is more than possible
with
Saar
the
j" of
annex¬
and the Rhine-
can
and
States
become
most
the continent,
providing,
of course,
are
dreds
of
Marshall
millions
Plan
man
nations
of
and
dollars
of
Mr. Hoff¬
is
pean
aid
courageously
evolving
plans to have the Western Euro¬
the time
self-supporting
by
aid is due to termi¬
our
nate, General Clay apparently has
an
unfortunate habit of bearing
down
the
on
French
whenever
they
make
suggestions
which
might help us achieve the desired
end.
Recently
at1 a meeting at
Bavarians, probably
with
French
backing, proposed
that rather than a strong federa¬
Chiemsee the
of
German
States
there
a
large
loose confederation with
degree
of
autonomy
re¬
served for the individual states. If
the
confederation
was
primarily
to assist in economic matters and
the
political
the
and
states
power
it
would
our
of these currencies which it won't
be able to use, but against
it
will
have
which
Marks
issued
when
which
Western
entering
the
cause an infla¬
tionary pressure, particularly as
production will have been ex¬
ported.
The Allied Nations prob¬
ably will not allow Western Ger-
monetary stream
the
to
export her che^p goods
they would compete with
their exports, particularly if they
many
where
able
are
an
to
export
lish
automobiles
States,
at
the
as
to
may
so
to
she will be
mercy
wb»t
of
i.e.. Eng-
the
more
these
fo^ig^
acquire.
with
even
overvalued currency,
United
or
less
countries
exchange
she
Finally there is
one
that their economy and
manpower are not in the mean¬
combinations
similar
Teutonic
of
relatively
groups,
thereby
maybe making possible the inclu¬
subject to a heavy drain by sion of. Austria in the plan.
If
military necessity, and the poli¬ these states could establish their
ticians have the courage to act own currencies and
operate with¬
properly.
The realization of this in modest budgets so as to keep
goal by France would be the best their currencies stable communism
protection from
communism
could have,
Europe and America
possible
with
than
patible with French public opin¬
without
are
a
reasonable
receive
solu¬
ion
and
would
tion of the German problem com¬
but
time
that
necessary
its
to
fulfill¬
ment.
If
to
local
a
setback.
a
operate
police
central
the
police
latter
impossible for
small
forces
a
it
It
states
rather
force
is
is
anc
almost
dictator to seize
control
the
Western
problem
Germany
of
to
allowing
become
powerful in its own right is so
serious, what would we have to do
of a country.
In time i
probably would also be possible
to allow these
states militias sim¬
foremost
the
the nations
among
in
world
the
search
prosperity the world has
ever
\
for
But, great as our progress has
been, we still have a long way to
the go.
American people have been creat¬
Our Shortcomings
ing a society which offers new op¬
As we look around the country,•
portunities for every man to en¬
many of our shortcomings stand,
joy his share of the satisfactions
the
last
16
years
out
of life.
this society we are conserv¬
ative about the values and prin¬
ciples which
cherish.
we
But
in
bold
We
In
relief.
suffering
are
from
exces¬
sively high prices.
Our production is still not large
we
;
forward-looking in protecting enough to satisfy our demands.
those values and principles and in
Our minimum wages are far too
extending their benefits. We have low.
are
rejected
the
that
fortunes
the
discredited
of
theory
the
should
ileged
few.
nation
be in the hands of
We
have
priv¬
a
abandoned
the "trickle down" concept of na¬
tional prosperity. Instead, we be¬
lieve
that
dation
economic
our
should rest
on
system
and that
The
wealth should
election
recent
the
American
vor
of
want
this
to
The
go
people
be
in
fa
of society
improving it.
American
cided
that
shows
are
and
Our farmers still face, an uncer¬
tain future, And too many of them
lack the benefits of our modern
civilization.
Some
are
that
poverty is just
as
and just as unnecessary
preventable disease. We have
pledged our common resources to
one another in the hazards
struggles of individual life.
We believe that no unfair preju¬
help
natural
our
resources
'.
t
„
acutely short of elec¬
tric power, although the means for
developing such power are abun¬
are
dant.
living
million
in
families
are
still
slums
and
firetraps.
Three million families share their
homes with others.
s
Our
as
and
of
still being wasted.
Five
people have de
wasteful
dice
losing ground
growing monopoly.
We
kind
on
Small business is
to
democratic foun¬
a
created for the benefit of all.
health
is
far
behind
the
of medical science. Prop¬
er
medical care is so expensive
that it is out of reach of the great
majority of our citizens.
progress
artificial distinction should
or
Our schools, in many localities,
American from an educa¬ are utterly inadequate.
health or from
Our democratic ideals are often
a
job that he is capable of per¬
thwarted by prejudice and intoler¬
forming.
bar any
tion
from good
or
ance.
Increasing
Responsibilities of
V. Bach of: these shortcoming is
also kn opportunity—an opportu¬
Government
;
nity > for the Congress and the
The attainment of this kind of
President to work for the good of
society demands the best efforts the
people.
V- \
6f every citizen in every walk of
Our first great, opportunity is
life, and it imposes increasing res¬
to protect
our
economy
against
ponsibilities on the government.
-
the evils of "boom
The
or
bust."
must
work
industry, labor and the farm¬
Task of Free Enterprise
ers in keeping our economy run¬
This objective /cannot
be at¬
ning at full speed. The govern¬
ment must see that every Ameri¬ tained by government alone.
In¬
can has a chance to obtain his fair
deed, the greater part of the task
share
of
our
increasing abund¬ must be performed by individual
government
with
These
ance.
hand
t
a
is
During
be
time
Military Government will
wind up with a considerable sum
.
United
they
dominant
that
.
om\
evolved with regard to economics
Europe.
a
Denartment
which
undoubtedly
disadvantage. JW^ile
wooing France with hun¬
to
the
economy
to
in the last war, and they
going to want Western Marks
for
their
currencies,
some
of
which are still very much over¬
valued, particularly the English
pound.
Not only is this true but
foster
reform
the
and also
to
power
budget and the
the
and
Defense
prosperous
given
action have
their government almost unprece¬
are
.
and
largely left to
be possible
that
the
question
of
security
would be largely answered and a
higher standard of living and in¬
creased production could be al¬
lowed the peoples of these various
states.
It is quite possible that
they might even become sovereign
in their own right providing, of
course, that proper groupings are
Recently the French people by
many
■
pre¬
theoretical, they
growing every
day. As Mr. Walter Lippman has
ably pointed
out America
has
never
had any Middle European
policy decided by great public
the old
that
possession of a fair amount of
Western Marks with which they
can
supply their agents in the
,
herein
as
not
are
actual
are
it
,
plan will be faced
problems
sented
formed
the
(Continued from first page)
of
solution
of
Truman Asks $4 Billion More Taxes
youth will be subject to mili¬
service and an increasing
possibility of a shooting war, in
which we will not be able to rely
too confidently on the support of
our
present allies.
tion
must be found and
State
.
tary
Europe to live, a new and different
we
Military Govern¬
Department, operating under a
policy formulated by public de¬
bate, has been making Middle Eu¬
ropean Policy.
can
already have
had to indulge in one operation
of this sort for a fairly substantial
amount of marks and reports have
zone.
his
ment and not the American
seen.
acts
American
and he* and
est
of
for;, /the
a
It
problem
inflation
West to make
or
of
with additional strain and Ameri¬
in Europe would create a "serious
of
oattleground
chance in the pursuit of happiness.
Department
these
either East
::or
39
consump¬
and industrial
,
.
the
and
while also
restricting the amount
of local currency our soldiers may
acquire; but they must be allowed
(95)
Middle Europe.
ons needed for their rearmament
Unfortunately this plan will prob¬
so as to alleviate their
fear, or we ably not receive arty further con¬
could
make
Western
Germany sideration as General Clay seems
produce for these countries and to be wedded to Pan-Germanism
we supply her with the
necessary
Army against a book charge
against the Western German state
supplies here and sending them to
our
Govern-
start concentration camps
sures or
*
CHRONICLE
If the Military Government in
supply Germany finds these pressures
of
the • new
currency
limited for issuing more currency stronger agreements between some of our
seems
to the writer to be quite
than it is able to combat, internal governmental
officials, and the
poor.
In the first place a limited prices will rise and trouble ensue Middle European policy is simply
amount
of
currency
makes for with labor unless some compen¬ the sum of the opinions and de¬
low prices and low wages 'so the
sating forces can be put in opera¬ sires of certain Army and civilian
pressure will constantly be on the
tion.
The two compensating fac¬ authorities operating in that zone
German officials to secure higher
and therefore subject to local pres¬
tors that would be of the most
prices and wages: therefore they use are increased production that sure and their own understand¬
must constantly argue with Mili¬
will be for internal use and con¬ able human desire to see affairs
tary
Government
officia^ for sumption, and requests for more in their immediate vicinity oper¬
more currency. As the present of¬
aid
from
the
United
States
of ating
with
efficiency
without
ficials of our Military Government
America.
Increased
production fully realizing the international
have violated the first principle means more
inherent
in
their
machinery and more implications
of their profession, they, not the
transportation, hence a stronger actions.
German officials, having become
country, and no French Govern¬
Another Split in Responsibility
the responsible representatives of ment that
would conspnt to that
the Western German people and —unless France is
protected by a
In conclusion it would be wise
directly subject to pressure from large American Army, in being, to consider one more
factor in this
them though not in possession of on the
continent—would last 24 split
responsibility of the State
their loyalty, they must gradually
hours.
A large American Army
either
-
FINANCIAL
tion goods needed to keep the
people working.
In any case the
American taxpayer will be the
loser,
the
American
economy
ment's ability to keep the
*
&
responsibilities
go
in hand.
of
we
have
a
fair distribution
opportunity and a widespread
of the products of
consumption
factories and farms.
our
Our
under
enterprise.
1 We cannot maintain prosperity
unless
efforts
ent
only
government has undertaken
system
of free
prosperity, and increase it,
if free enterprise and free
government work together to that
end!
*
to meet these responsibilities.
our
We can keep our pres¬
/-''/''
We cannot afford to float along
carelessly on
til
it
a postwar boom un¬
collapses.
And it is not
enough merely to prepare to
pub¬
weather a recession if it comes.
highways, hy¬
Instead, government and business
droelectric
power
projects, soil
must work together constantly to
conservation and reclamation. We
achieve more and more jobs and
have estabilshed a system of so¬
more and more production—which
cial security.
We have enacted
mean more
and more prosperity
laws protecting the rights and the
for all the people.
welfare of our working people and
The
business
the income of our farmers.
These
cycle
is
manFederal
policies have paid for made; and men of good will, work¬
We have made tremendous
investments
lic
in
themselves many times over. They
have
strengthened
foundations
ideals.
of
the
our
So far
democratic
it should
Without
them, our present
prosperity would be impossible.
Reinforced by these policies, our
private
enterprise
system
has
new
heights of produc¬
reached
tion.
Since the boom year of 1929,
while
cur population has increased
by only 20%, our agricultural pro¬
duction
has
and
industrial production has
our
increased
out
far
wealth
ever
increased
75%.
more
per
We
goods
by
are
45%,
turning
and
worker than
done before.
ing together,
material
we
more
have
as
can
smooth it out.
business is concerned,
plan for steady, vigorous
expansion—seeking always to in¬
crease
and
and
its output, lower its prices,
avoid the vices of monopoly
restriction. So long as busi¬
does this, it will be contrib¬
uting to continued prosperity, and
ness
it will have the help and encour¬
agement of the government.
The Employment Act of 1946
pledges the government to use all
its resources to promote maximum
employment, production and pur¬
chasing power.
This means that
the government is firmly com¬
confounded
forming
a
group
of
countries
—
at home mitted to protect business and the
in
order
to
maintain
our
own
which while unable to mount an and abroad
who predicted the
people against the dangers of re¬
prestige and the value of the new attack individually could quite- downfall of American capitalism.
cession and
against the evils of
Western
German
marks
yet conceivably in combination put up The American people, going their
This means
that the
satisfy our allies? We could keep a tough battle in defense of their own way, confident in their own inflation.
a very big American army in Ger¬
homes, thus making it unattractive ^powers, have achieved the great¬
(Continued on page 40)
ilar
to
that
of
Switzerland, thus
This
has
the gloomy prophets
progress
—
40
COMMERCIAL
THE
(96)
&
FINANCIAL
and encourage the
Tiuman Asks $4 Billion More Taxes
must adapt its plans
policies to meet changing cir¬
and
Prosperity
the
present time,
pros¬
our
perity is threatened by inflation¬
at a number of criti¬
cal points in the economy.
The
government must be in a position
to take effective action at these
ary pressures
the
Congress enact
the
public interest.
Department of Labor should
rebuilt and strengthened and
be
following purposes:
units
the power to control bank
credit.
and
levels
economy
at
high
further require that the
fixed
wage
to
by
least
at
minimum
should be
law
75
cents
an
to hour,'
authority
grant
to
our
maintenance
its
raised
Second,
belonging
probably
The health of
First, to continue the power to
control consumer credit and en¬
regulate speculation on the com¬
modity exchanges.
If
is
/
enterprise
free
our
to
be
economy
healthy,
and
strong
.
we
of
forces
Third, to continue export con¬
trol authority and to provide ade¬
quate machinery for its enforce¬
must
ment.
opportunity to grow and prosper.
:'1
V
Fourth, to continue the prior¬
ities and allocation authority in
*
_
:
transportation.
the field of
Fifth, to authorize priorities and
"
for
allocations
in
materials
key
short supply.
reinvigorate
competition.
this
the
.We
;
business
small
must
the
assure
freedom
and
we
should
anti-trust laws by
closing those loopholes that per¬
mit monopolistic mergers and con¬
To
purpose,
strengthen
our
solidations.
'
Wants
1
Improvement of Farm
.
rent control,
Seventh, to provide standby au1
thority
for
price, ceilings
impose
to
which
"commodities
^scarce
basically affect essential industrial
production
the cost of living,
or
and to limit
unjustified wage ad¬
which would, force a
an established price ceil-
justments
•
break in
ing. "
v
-
—
Eighth,
"
>■,"
authorize
an
imme¬
Our
Program
national,
.
should
study
program
improved—not only in
be
the 'interest
furthermore to authorize the
con¬
ly
action
if
fails to meet
by
private
needs.
our
economic
The
industry
which
report,
I
of
Public power
carried
to
consuming
where
necessary
Broadened Social Security
The government has still
opportunities—to
standard
These
of
help
living of
raise
opportunities
lie
social security,
fields
the
citizens.
our
the
in
of
health,
education, housing and civil rights.
The
present
the
of
coverage
low:
too
are
workers
One-third
our
Those
covered.
not
are
of
who receive old age and survivors
insurance
benefits receive
of
payment
erage
av¬
an
only
$25
a
month.
Many others who cannot
because they are physically
work
disabled
left to
are
the
o;'
mercy
charity. We should expand oui
security program, both as
the
should
be
*
just
else.'
Farm
good
as
as
any¬
"Y/y'r
••
•
price supports
are an
es¬
duction to
to
consumer
promote
demands and
land
good
Our
use.
price support legislation must -be
adapted to these objectives. The
authority of the Commodity Cred¬
it
provide
space
for
to
ade¬
crops
restored.
be
to
size
benefits
of
of
extent
and
against the economic
hazards due to unemployment, ole
age, sickness, and disability.:
coverage,
In
country.
is
it
ours,
nation
a
rich
as
shocking
a
fact
as
that
millions
medical
lack
We
.care.
are
adequate
system of prepaid medical insur¬
which
ance
American
will
to
enable
afford
care.
good medical
1;
It is
every
reduction
in
the
national
services
to
our
portion should
from
re¬
gift taxes. Con¬
given to rais¬
ing personal income tax rates in
the wise management of
upon
land,
estate
come
and
sideration should be
the middle and upper brackets.
If
Repeal
of Taft-Hartley
want
we
to
keep
running
omy
must be sure
in
that
our
high
gear,
to
the
we
every group
the incentive to make its full
tribution
Act
econ¬
has
con¬
national welfare.
At present the working men and
women of the nation are unfairly
discriminated against by a statute
that abridges their rights, curtails
constructive
their
efforts,
and
hampers our system of free collec¬
tive bargaining.
That statute is
the
labor-management relations
act of 1947, sometimes called the
Taft-Hartley Act.
not
The
Wagner act should
be
re-
However,
provements,
which
mended to the
ago
are
strikes
I
im¬
recom¬
Congress two
needed.
and
certain
years
Jurisdictional
unjustifiable second¬
and
mineral
dynamic
present
the task of conservation
lock
to
up
today,
to
vestments which
our
resources,
make
are
in¬
the
necessary
to
support our progress in the future
would be false economy.
stitution.
I
stand
river basins.
I
teachers,
ries
low
to
teachers, or to hold
have.
not
are
teachers'
because
too
are
these
All
sala¬
attract
the
school
new
we
ones
problems
will become much more acute as
a
result
of
in
crease
the
the
tremendous
in
enrollment
in
schools
the
in¬
our
next
partmental status.
be
taken
prove
by the Congress to
the
St.
and power
Lawrence
ap¬
seaway
project.
must
adopt
a
program
for
the planned use of the petroleum
under the sea, which are
—and must remain—vested in the
Federal
extend
Government.
our
servation.
ests
on
a
programs
We
must
of soil con^
We must place our for¬
sustained
yield
basis,
these
The
world today looks to us for
leadership because we have so
largely realized, within our bor¬
ders, those benefits of democracy
for which most of the
peoples
of the world
an
us.
one.
It
easy
complications,
and
strong opposition
be
selfish
I
has
there
from
interests.
hope
for
cooperation from
from labor, and from
business.
Every segment of our
population and every individual
farmers,
has
right
a
government
to
They have
a
the
Congress
will
work
in
ation with
fare
as
of
closest
cooper¬
objective—the wel¬
people of this nation
whole.
a
In
that
his
right to expect that
and the President
the
one
the
from
expect
fair deal.
a
the
I
months
shall
be
ahead
able
to
I
know
cooperate
with this Congress.
I
confident that the Divine
am
has
guided
to
us
this
time of fateful responsibility
and
glorious opportunity will not.
desert
us
With
now.
that help
from
shall be able to
■
Foreign Policy
Almighty
humbly
every
turning
national
life, we
perform the great
tasks which He
yearning.
are
before
task
Power-which
Our domestic programs are the
foundation of our foreign policy.
We
now
God
which
point
in
have
we
acknowledged
at
our
following a foreign pol¬
icy which is the outward expres¬
sets before us*
are
sion
of
the
The
Shortage
Housing
We
profess.
an
continues
immediate step,
the Congress should enact the pro¬
low-rent public hous¬
visions for
ing, slum clearance, farm housing,
and housing research which I have
recommended.
The
of low-rent public hous¬
repeatedly
number
ing units provided for in the leg¬
islation should
be
increased to
1,000,000 units in the next seven
Even this number of units
not begin to meet our need
for new housing.
years.
will
Most of the houses
have
be
to
we
need will
built
government
is
now
en¬
gaged in a campaign to induce
all segments of the building in¬
dustry to concentrate on the pro¬
duction of lower priced housing.
Additional
age
such
legislation to encour¬
housing will be sub¬
are
allocate
short supply and to
materials
in
impose price
such materials-'could
be usejf: ifJ found'mecessar^',4 to
channel
materials into holmes
ceilingsvon
Colby With
F, L. Punam & Co.
■
(Special
to
The
Financial
Chronicle)
r
BOSTON, MASS. — Gerald S.
Colby has become associated with
-
sion;/'
The heart of
peace.
and
Our
of
foreign policy
supporting a
our
' We
are
organization to keep peace
world economic policy to
prosperity for mankind.
a
create
guiding star is the principle
international
cooperation.
To
this concept we have made a na¬
anything
as
profound
as
in history.
we
have pledged
and
our
re¬
hono£.
our
Until a system of world security
is established upon which we can
safely rely,
we
cannot escape the
burden of creating and
maintain¬
ing armed forces sufficient to de¬
ter
agression. We have made great
Gerald S. Colby
F.
L.
Putnam
&
effective
versal
During the
sion I
policy.
occasion to ask
consider several
field of foreign
Congress to
the
in
of this ses¬
course
shall have
measures
At this time; I recommend
restore the reciprocal
agreements act to full effec¬
tiveness, and extend it for three
that'/
we
We should also open
doors to displaced persons
unfair
It
our
without
investment
f
be
all nations that
clear
we
by
are
now
to
not seek¬
ing to freeze the status quo. We
have no intention of preserving
the injustices of the past.
We
welcome
the
efforts
constructive
being made by many nations to
achieve a better life for their citi¬
In
Haisey, Stuart Offers
Illinois Central
the European
Recovery
Equips.
A
group
headed
by
Haisey,
Stuart & Co. Inc. won the award
Jan.
4 of $6,400,000 Illinois Cen¬
equipment trust, Series BB,.
21/4% equipment trust certificates,
maturing $320,000 semi-annually
July 1, 1949 to Jan. 1, 1959, in¬
tral
clusive.
discrimination.
should
zens.
77
Street, members of the
Boston Stock Exchange. Mr. Colby
was formerly with Sherman Gleason &
Co., Inc. and prior thereto
training is essential to the
security of the United States.
the
Inc.,
Co.,
Franklin
in the last year in the
organization
of
our
armed
forces, but further im¬
conducted
his
own
provements in our national secur¬
business in Boston.
ity legislation are necessary. Uni¬
progress
Issued
under
the
Phila¬
delphia
were
the
plan,
the
certificates
immediately reoffered
by
group, subject to
Interstate
Commerce Commission authoriza¬
tion, at prices to yield from 1.40%
to 2.50%, according to maturity.
Proceeds will
vide for not
be
cost,
estimated
new
standard
at
-
issued
to
pro¬
than 80% of the
more
$8,034,250, of
railroad
gauge
neighbor
equipment consisting of 1,750 50policy and in the United Nations,
ton hopper cars.
we
have
begun to batter down
Program,
those
the
cial
in
good
our
block
the so¬
national walls which
economic growth and
of
advancement
the
peoples
of the world.
We believe that if
we
hold reso¬
lutely to this course, the prin¬
ciple of international cooperation
will eventually command the ap¬
proval even of those
are
now
seeking
nations which
weaken or
to
subvert it.
We
era
stand at the
which
or
of
members of
the
offering
Pressprich &
Co.; A. G. Becker & Co. Inc.;;
Hornblower & Weeks; Otis & Co.;
L. F. Rothschild & Co.; First of
Michigan Corp.; Freeman & Co.;
The Illinois Co.; and Wm.E. Pol¬
lock & Co., Inc.
were
R.
W.
Hill, Thompson in
New Quarters
nounce
the
catas¬
ecutive
and
terrible
trophe for ourselves and all man¬
The strength
Other
group
opening of an
either great
mean
can
achievement
The authority which I have re¬
to
Gerald
we
kind.
mitted.
quested,
faith
doing what we
can to
encourage free states and
free peoples throughout the world,
to aid the suffering and afflicted
in foreign lands, and to strengthen
democratic nations against aggres¬
years.
As
to be acute.
democratic
trade
The housing shortage
The
again recommend that action
behind
squarely
proposals.
To it
children
our
a
by private en¬
terprise, without public subsidy.
We must push forward with the By producing too few rental units
development of our rivers
for and too large a proportion of highpower, irrigation, navigation, and priced houses, the building indus¬
?lood control. We should apply the try is rapidly pricing itself out of
lessons of our Tennessee Valley the market. Building costs must
experience to our other great be lowered.
reserves
enacted.
our
our
develop and improve them.
Failure,
We
That act should be repealed.
In
economy,
is
forest
water,
wealth.
but to
Asks
may assume the leadership
discharge
the
obligations
clearly placed upon it by the Con¬
the
not
many
and
sources
farms. Rural electrification should
be pushed forward.
And in con¬
which now stands at $252
sidering
legislation
relating
to
billion.
I
recommend, therefore,
housing,
education,
health
and
that the Congress enact new tax
social security, special attention
legislation to bring in an addition¬
should be given to rural problems.
al $4 billion of government reve¬
Our growing population and the
nue.
This should come principal¬
ly from additional corporate taxes. expansion of our economy depend
vised
ment
re¬
of
ceiving
elementary
debt,
A
Congress.
goocj, education. Millions
of "them are in overcrowded, ob¬
solete buildings. We are short ol
lions
•
and
the 81st
They should be enacted
to
repeat
now
tional commitment
;y.;
equally shocking that mil¬
few years.
I cannot repeat too
for farm prosper¬
ity should also seek to expand strongly my desire for prompt
Asks More Taxes
the domestic market for agricul¬ Federal financial aid to the States
One of the most important fac¬ tural products, particularly among to help them operate and main¬
tors in maintaining prosperity is low
income groups, and to
in¬ tain their school systems.
the government's fiscal policy. At crease and stabilize
The governmental agency which
foreign mar¬
this time, it is essential not only kets.
now administers the programs of
* '
'
that the Federal budget be bal¬
We should give special atten¬ health, education and social se¬
anced, but also that there be a tion to
extending modern con¬ curity should be given full de¬
.sizable
I
in order that the Federal Govern¬
of
short
Our program
veniences
The civil rights pro¬
made to the 80th Con¬
I
gress,
.
is
is
will
government.
world
where
promise
is among the highest purposes of
is
©mmendations.
surplus to reduce in¬
flationary pressures, and permit a
fulfillment of this
*
It
v
social
We
remedy
these
shortages
parity of income for agriculture. Moreover, we need—and we mus'
Standards of living on the farm have
without further delay — e
should
substantial
and to the whole world.
must
production and
is
and
The
social
security law is altogether
inadequate, and benefit payments
faith
That
promise of equal
equal
opportunities
which the founders of our repub¬
lic proclaimed to their country¬
men
betterment of mankind the world
over.
This
embodied in the
posals
other
at
can
V."
\
institutions.
rights
doctors, hospitals, and nurses.
nomic
rec-
be
by public transmission lines
areas
life
earners
force behind our
faith in our dem¬
driving
ocratic
family
-1
progress is our
be abundant farm
ly, will discuss in detail the eco¬
background for these
should
avail¬
for
wage
J '
The
public
directly
are
afford.
tens ,of
Corporation
quate
storage
shall submit to the Congress short¬
undertakings
these
of
Thursday, January 6, 1949
large enough
prices which
farmers, but
for the lasting prosperity of the
whole nation.
Our goals should
of
struction of such facilities direct¬
•
farm
the ^adequacy -of
sential part of our program to
production facilities for materials achieve
these ends.
Price sup¬
in critically short supply, such as
ports should be used to prevent
steel; and, if found necessary, to
farm price declines which are out
authorize
government loans for
of line with general pried levels,
the expansion of production facil¬
to facilitate adjustments in pro¬
ities to relieve such shortages, and
diate
•
■'j j/j
•
to
Y
.VY-/
T
/v.
benefits
sure
We must spare no effort to raise
the general level of health in this
'
Sixth, to extend and strengthen
the
make
must
we
able to the people.
The
that within that department should be
legislation for placed in it.
the
this
*
to provide elec¬
dangering our democratic free- tricity at the lowest possible rates.
Irrigation
waters
should
serve
dooms, means should be provided
for settling or preventing strikes family farms and not land specu¬
lators.
in
vital industries whicn affect
those
danger spots.
To that end, I recommend
large
arising out of the in¬
issues
terpretation of existing contracts
should be prevented. Without en¬
Inflationary Pressures Threaten
At
boycotts should be prohibited.
The use of economic force to de¬
ary
cide
cumstances.
In* all
development of
of vital minerals.
sources
that
(Continued from page 39 )
government
new
CHRONICLE
our
nation must
continue to be used in the interest
Hill, Thompson & Co., Inc., an¬
removal
of
their
ex¬
underwriting offices
to new and larger quarters at 70'
Wall Street, New York City. Tele¬
phone
number
of
these
new
of¬
fices will be WHitehall 4-4540.
The
all our people rather than a
Trading Department will
privileged few. It must continue continue at 120 Broadway, New
to
be
used
unselfishly in the York
City,
telephone
REctor
struggle for world peace and the 2-2020.
of
Volume
169
Number 4766
THE
COMMERCIAL
following statistical tabulations
shown in first column
are
steel
STEEL
operations
cover
production and other figures for the latest week or month available (dates
or month ended on that date, or, in cases of
quotations, are as of that date) :
Jan.
Bteel
ingots
■
and castings
(net
I
tons)
Year
Month
Week
Ago
';•>
9
■■,
Previous
Week
INSTITUTE:
(percent of capacity)
Equivalent to—
,
Latest
AMERICAN
Ago
9
1,802,500
(M
gas
Natural
1,708,60.
1,802,500
1,753,800
Crude
output—daily average (bbls. of 42 gallons each)
runs
to stills—daily
average (bbls.)
Gasoline
output
Dec. 25
Dec. 25
(bbls.)
Dec. 25
Kerosene output (bbls.)
Gas oil and distillate fuel oil output (bbls.)
(
Residual
fuel
oil
output
I
5,695,000
5,721,000
5,54j,UO
17,902,000
'•
17,317,000
17,013,00
2,537,000
2,630,000
2,334,00
Dec. 25
7,776,000
7,539,000
7,476,000
7,041,00
9,121,000
9,053,000
9,477,000
100,286,000
98,225,000
93,802,000
24,306,000
25,342,000
26,569,000
16,293,00.
Dec. 25
79,271,000
81,071,000
85,151,000
86,181,000
87,217,000
86,192,000
51.896.001
OF
AMERICAN
IN
*$587,633
$607,677
*286,318
350,878
*215,929
168,519
79,931
*85,386
88,280
$1,559
*$1,705
$1,432
1,176
*1,263
600
*650
328
*33i;
*113
112
DEPT.
*115
93
38
*36
■13
74
*79
74
103
*103
58
28
*27
13
(M therms)
AREAS
OF
(three
All
OF
THE
U.
S.
LABOR —Month
000's
of
omitted):
building construction
New
residential
New
nonresidential
Additions,
BUILDING
alterations,
Dec. 25
609.239
754,545
723,090
599,35
590,534
Dec. 25
666,197
661,165
641,54
etc
CONSTRUCTION—U. S.
Private
freight loaded (number of cars)
Revenue freight rec'd from connections (number of
cars)
109,269
223,067
therms)
(M therms)
URBAN
S.
Total mew
RAILROADS:
Revenue
189,777
84,268
$577,508
(M
sales
gas
LABOR—Month
ASSOCIATION
165,546
91,704
of
DEPT.
OF
November (in millions):
construction
~
construction
Residential building (noni'armi
Nonresidential building (nonfarm)__
Industrial
CIVIL
ENGINEERING
CONSTRUCTION
ENGINEERING
Commercial
NEWS-
RECORD:
U.
construction
S.
Private
Dec. 30
State
and
31,688,000
111,832,000
287,841,000
$54,364,00
26,057,00
46,412,000
61,403,000
74,488,000
28,307,00
35,451,000
50,204,000
63,023,000
23,611,00
10,961,000
11,199,000
11,465,000
4,696,00
municipal-
Federal
!
$362,329,000
Dec. 30
construction
$173,235,000
Dec. 30
construction
Public
$78,100,000
—Dec. 30
Other
COAL OUTPUT
Bituminous
(U.
coal
Pennsylvania
Beehive
S. BUREAU OF MINES);
and
coke
—
(tons)
10,130,000
940,000
1,039,000
748,00
*141,000
151,300
107,90
139,700
utilities
STORE
TEM—1935-39
.
SALES
INDEX- -FEDERAL
RESERVE
39
226
17
-25
•
*243
119
34
■
.
30
55
*60
53
139
149
116
'383
*442
291
l
construction
-
building
3
4
8
107
106
50
Nonresidential
building (other than mili¬
tary or naval facilities)
SYS-
AVERAGE=H)()
19
32
Residential
DEPARTMENT
9
*39
22
construction
*26
*11
39
Telephone and telegraph
Other public utilities.,
Public
136
11
Institutional
Remaining types
8,400,00
967,000
Dec. 25
*11,315,000
630
287
;,,»V
25
and
Railroad
8,492,000
Dec. 25
„
,
■____
Hospital
,
Dec. 25
(tons)—
building
Educational
Public
f
lignite (tons)
anthracite
nonresidential
Religious
Farnl
1,141
'
"
Warehouses, office and loft buildings
Stores, restaurants and garages
;
.
Total
Ago
2,388,005
2,088,959
50.324.00
Dec. 25
2,128,632
191,544
274,110
sales
gas
October
91,269,00
Dec. 25
TION
—U.
9,698,00
Dec. 25
.
2,378,446
Year
BUILDING CONSTRUCTION PERMIT VALUA¬
terminals, in transit and in pipe lines—
Finished and unfinished gasoline (bbls.) at
Kerosene (bbls.) at
'
Gas oil and distillate fuel oil (bbls.) at
Residual fuel oil (bbls.) at
I
2,542,000
Dec. 25
(bbls.)
Btocks at refineries, at bulk
.
5,285,44
•5,617,050
5,645,150
18,175,000
Dec. 25
'
,
5,640,750
115,784,000
Month
2,463,358
therms)
Mixed gas sales
oil
Crude
j
PETROLEUM INSTITUTE:
month
Previous
2,746,606
ASSOCIATION—For
Month
113
GAS
November:
Total
..
Jan.
of
94.;
100.0
97.3
100.0
Manufactured
AMERICAN
41
either for the week
Latest
IRON AND
Indicated
(97)
Indications of Business Current Activity
The
AMERICAN
CHRONICLE
FINANCIAL
&
Dec. 25
471
35
347
*576
Industrial
1
2
60
58
Hospital and institutional
25
24
8
All
21
22
13
*12
19
Educational
;
29
'
EDISON
ELECTRIC INSTITUTE:
Electric
output
(in
000
kwb.)
Jan.
1
$5,470,000
5,645,686
*5,508,240
4,868,011
other nonresidential
Military and naval facilities
11
Highways
FAILURES
(COMMERCIAL
AND
INDUSTRIAL)—DUN
&
Sewer
BRADDec. 30
128
126
116
135
water
and
Miscellaneous
58
All
DRON AGE
COMPOSITE
Finished
steel
Pig iron
,
Bcrap
(per
other
lb.)
.Dec. 28
(per gross ton)
(per gross ton)
3.75628c
3.75628c
.Dec. 28
$46.82
$46.82
.Dec. 28
steel
$43.00
3.75628c
$43.00
♦3.19541c
$46.82
$37.98
$43.00
.
$40.00
COKE
(BUREAU
Production
Oven
(net
coke
Beehive
METAL PRICES
(E.
&
M.
J.
COPPER
I
.Dec. 29
23.200c
23.200c
23.200c
21.200c
29
23.425c
23.425c
23.425c
21.5501
29
,
Lead
1
Zinc
(St. Louis) at
(East St. Louis)
103.000c
103.000c
21.500c
21.500c
21.500c
21.300c
21.300c
21.300c
14.800i
.Dec. 29
at
103.000c
.Dec. 29
.Dec. 29
17.500c
17.500c
17.500C
10.500c
94.000(
♦
-
,
15.000c
U.
S.
BOND
PRICES
DAILY
-Tan.
.
4
Aa
A
(,
Railroad
.Jan.
100.97
100.86
100.Of
112.00
111.81
111.25
110.U
118.00
117.60
116.80
115.2<
116.22
116.02
115.24
113.7(
4
;an.
101.04
4
4
corporate
I
110.70
110.52
109.97
109.42
4
104.14
103.97
103.47
103.13
4:«:;
107.27
107.09
106.39
104.48
.Jan.
4
112.75
112.37
111.62
.Jan.
Group—————Public Utilities Group
■
YIELD DAILY
——
__
4
116.41
116.22
115.82
;
6.242.100
*5,965,654
5,682,500
607,429
*622,314
559,600
1,588,627
tons)
of month
(net tons)
For
—
Month
of
*1,474,305
1.151.101
Nov.:
2,000 lbs.)
of
58.151
2,000
In
U.
S.
A.
(tons
Refined copper
of
—
112,580
106,232'
76,371
.*.« *'■
2,000 lbs.)
stocks at end of period
97,525
.
-
PRODUCTION
BOARD
U.
S.
CULTURE
CROP
—
DEPARTMENT
Report
—
issued
thousands): 7
Corn, all
AGRI¬
OF
Dec.
17
(in
3,650,548
1,288,406
2,383,970
Winter
990,098
1,068,048
All
298,308
299,138
.
Wheat, all
spring
Durum
2.43
2.43
2.44
2.45
3.06
3.07
3.10
3.16
4
2.75
2.77
2.81
2.89
Aa
4
2.84
2.85
2.89
2.97
A
.Jan.
3.13
4
3.14
3.17
3.20
4
3.50
3.51
4
3.32
3.33
3.37
3.48
4
3.02
3.04
3.08
3.05
4
Group.
Other
spring
2.83
2.84
2.86
2.93
■^:v3.54<-
3.56
•
\\
Rye
^
Buckwheat
:
254,810
1,199,422
317,037
26,388
281,185
394.0
396.6
400.5
450.1
7,334
52,533
40,530
81,170
78,259
Popcorn
293,160
102,325
Sorghums
131,644
96,016
Flaxseed
Rice
:
for grain
Sorghums for forage
Sorghums for silage
Cotton,
7,616
ASSOCIATION—WHOLESALE
COMMOD
3,448
14,937
11,857
6,036
lint
4,681
Hay,
all
99,846
wild
12,848
Red
GROUPS—1935-39=100:
clover
Alsike
1
227.3
1
190.6
189.6
1
244.9
245.9
206.8
4'
-
Sweelclover
280.V
Lespedeza
250.8
278.(
Timothy
seed
305.5
305.7
304.2
341.9
Sudan
210.8
208.7
211.7*
305.3
248.4
250.8
258.1
269.1
1
239.6
239.9
242.3
223.5
Soybeans for beans
1
172.1
171.2
172.4
179.5
1
195.2
195.3
195.5
220.6
Peanuts
1
190.6
190.6
190.6
160.1
Velvetbeans
seed
grass
for
*
^
225.9
236.3
Potatoes
149.5
150.3
156.4
Sweetpotatoes
142.8
142.8
142.9
135.9
Tobacco
150.8
150.8
150.1
141.8
Sorgo
155.2
155.2
*153.9
134.5
Sugarcane for sugar and
1
217.1
*217.1
219.7
226.7
Sugarcane sirup
Sugar beets
Percentage
l
of
activity—_—_
OIL, PAINT AND
150,890
114,444
194,508
183,311
126,659
87
—
96
89
71
285,601
323,781
338,720
406,738
,
sirup
_Dec. 31
142.0
143.1
149.4
PRICES
NEW
SERIES—U.
1926=100:
S.
DEPT.
OF
LABOR—
Dec. 28
•f) 163.5 1
173.6
Dec. 28
163.8
152.5
-
165.1
164.5
179.4
199.0
174.1
177.0
179.2
152.8
"153.4
146.7
Dec. 28
145.6
145.7
147.0
149.4
Dec. 28
Metals
136.9
136.9
136.8
127.7
Dec. 28
173.8
173.8
173.8
200.3
201.8
203.2
132.8
133.3
.Dec. 28
170.9
170.1
134.5
137.5
.Dec. 28
171.8
248.2
221.4
218.3
.Dec. 28
228.7
227.8
237.3
(12
(3
(2
(3
than
(5
to
revision.
202
—
states)
(3
78
198
123
94
118,900
114,380
56,250
dried
states)
(4
:
70
171
'
dried
Oranges
173
250
states)
Grapefruit
3,024
217
states)
states)
other
Lemons
82,270
35,312
2,998
^
total
61,630
states)
—
__
states)
12,870
13,100
(Calif.)
922
(5
118,639
67
53
states)
(5
Pecans
Tung nuts
790
153,812
Cranberries
states)
EDISON
193.7
207.3
INSTITUTE:
ELECTRIC
Kilowatt-hour
of
sales
October
to
ultimate
(000's
(
consumers—
October
*
245.4
20,510,530
omitted)
ultimate customers—month
20,539,207
18,655,776
$367,712,000
40,389,677
$366,155,300
40,167,801
$328,208,600
38,077,298
6,413
*6,686
7,873
of
.
238.4
192.5
233.1
250.3
400,000
barrels
of
foreign crude
runs.
Number
NEW
'
65,749
total
Cherries
50,098
113,041
26,399
Peaches, total
Revenue from
.Dec. 28
tEstimated— Sub'ject
34-
49,819
90,288
commercial crop
month
Special indexes—
figure.
2,039
30
192.6
Dec. 28
Grains
305
1,445
151.9
Dec. 28
-♦Revised
229
.__—
Prunes,
177.6
v
177.4
12,504
i
Prunes,
Dec. 28
5,297
20,270
9,418
Hops
Apples,
Plums
:
9,845
13,790
sirup
Apricots
WHOLESALE
2,109,581
6,309
sugar
Maple
Grapes,
144.6
407
55,746
7,625
seed
Broomcorn
Pears,
1926-36
—
_
155,499
174,319
—
at
DRUG REPORTER PRICE INDEX
AVERAGE=100
139,128
25
——
25
_Dec. 25
Unfilled orders (tons)
—
389,048
1,897,926
225.8
149.0
445,850
49,806
225.8
Maple
(tons)
(tons)
2,182,395
350
,
1
received
3,466
2,268,110
threshed
1
Production
183,558
3,416
and
1
Orders
6,513
220,201
1
NATIONAL PAPERBOARD ASSOCIATION:
17,218
3,584
l
1
21,540
20,833
peas
picked
1,589
23,800
Beans, dry edible
Peas, dry field :
149,760
424
1
574
241,560
seed
1
_Jan.
375
533
seed
Cowpeas
1,262
,
388
;
seed
1
v;
13,479
*—1,700
1,774
1
seed
242.3
102,765
990
clover
231.9
226.8
.
6,078
4,549
Alfalfa seed
BY
25,975
6,324
____
Hay,
4
FERTILIZER
44,328
253,566
Cottonseed
INDEX
1,367,186
44,742
Barley
4
Aaa
ITY
66,622
REPORTING
1,491,752
'
NATIONAL
:•*>
(tons
lbs.)
2,000
72,534
101,436
100,005
lbs.)
*81,474
V 102,779
89,756
(tons
AVERAGES:
4
Railroad
(tons of
Refined
114.46
.Jan.
.Jan.
t
*6,587,968
5,789,002
tons)
(net
Deliveries to customers—
112.19
Baa
MOODY'S BOND
6,396,431
tons)
(net
coke
INSTITUTE
Crude
CROP
4
Average
Aaa
t
12
10
AVERAGES:
Bonds
Govt.
41
16
32
Copper production in U. S. A.—
of
MOODY'S
*67
•
MINES)—Month of Nov.:
QUOTATIONS):
Domestic refinery at
61
15
Oven coke stocks at end
Electrolytic copper—
,
*10
enterprises.
development
and
OF
113
47
8
service
public
PRICES:
180
43
public
Conservation
'
,
V
*
■
of
ultimate customers
BUSINESS
BRADSTREET,
at
Oct. 31—_
INCORPORATION—DUN...&
INC.—Month
of Nov._l_-_
42
(98)
COMMERCIAL
THE
&
FINANCIAL
Thursday, January 6, 1949
CHRONICLE
since before the war,
Business Leaders Optimistic on
(Continued from page 8)
oi new building Is the general expectation for 1949. Declines
in private residential- and nonres¬
idential building may be partially
offset
by increased, activity in
schools, hospitals and other public
buildings.
6
Increased volume of
heavy engineering construction is
expected.
"A moderate setback of the
an¬
ticipated character might go far
stabilizing
toward
costs to
construction
degree that would per¬
mit later increase of the industry's
a
It could represent the
operations.
transition
from
the
infla¬
recent
tionary boom to a sustained eco¬
nomic expansion.
"The
amount
future
of
being
have
economic
controls
are
widely discussed; all will
bearing on future construc¬
a
trips.
As the necessity
exchange control decreases it
is anticipated that larger numbers
creasing
number
ber
of
students
traveling both to and from Latin
America
further
country
they
be faced this coming
They should be able to meet
may
the demands
lend
is
of
industry without
unless their power tc
difficulty
curtailed
by
restrictive
regulations.
"While
it
cannot
that interest
be
expected
will rise
rates
very
much while present conditions in
1949, international travel
must be viewed within the frame¬
the
of
banks
intensely
are
cooperating
with
other and with the governfaient in such ways as may be nec¬
to further sound financial
developments,
and
protect
our
essary
"Under the leadership
of the
American Bankers Association, the
banks of the country have kept
in close touch with developing
should
conditions,
be
toward
they
and
do
to
solving
problems
year
able
their
financial
arise during the
1949."
'
-
Foreign Travel
MR.
JOSEPH
President
of
"Travel
States
pected
high
P.
.«
GRACE, JR.,
to
Grace
the
&
Latin America
to
continue
of
pace
the
postwar years.
at
is
the
ex¬
same
two
previous
Some increase in
touristy and pleasure travel 'may
be anticipated as more conducted
tours
special cruises are of¬
fered, but the bulk of travel will
originate from business and pro¬
and
fessional
sources.
"Broad
tion,
plans
of
industrializa¬
hydroelectrification,
highway
a n d
building construc¬
being carried out by
and
tion,
now
many
of the Latin American
tries,
coun¬
expected to provide
number of travelers to
and from the United States.
a
{
may be
large
"Faster schedules^ better planes,
and better service may be ex¬
pected to increase somewhat the
volume of air travel.
Backlogs
continue
travel
large for water surface
over
certain routes and will
make it necessary to keep reser¬
over these
vation lists for travel
routes
throughout all of 1949.
"Northbound
tourist
travel
change control regulations affect
the ability of the potential trav¬
eler to obtain the exchange neces-
costs
force
the added cost—and
The
should
"We
con¬
we
services
feel
reasonably sure that
require little adjustment
in either employment op the use
of our greatly
expanded facilities
federal
The
foreseeabl^Change in
conditions. Our jpwn post¬
recession
particularly in that local
state spending should offset
and
to
a
in
business
degree
any
possible decline
spending next year.""
government
next few years to at
least $2,500,-
G.
W.
the European Recovery Program.
Treasurer
&
has
closed
a
marked
year
demand and
supply, and
of
"Meanwhile
and
Company
a
stabil¬
relation¬
the
programs
improvement,
of
renovation
modernization
which
cotton cloth in 1947
was
exceeded
recently has
been
have
sult
that
re¬
shortages have been
depleted shelves have
overcome,
restocked
and
has caused the index to rise but
these
ex¬
pensive items would seem to in¬
dicate that the peak has been
been
in
the throes
of
doing
now reaching
exception of
where
prices
are
counted
Undivided
"The
great
many
firms in the food industry
have
already
been
through
the
Total
COMMERCIAL NATIONAL
TRUST COMPANY
BANK
Deposits
183.677,530
and
due
S.
from
231,093,541
261,644.151 259,002,683
holdings
counted
88,461,78'
176,976.836
162,06% 493
9,711.451
—
Undivided
52,635,38c
96.525.536
9,362,112
profits—
secu¬
rity holdings
Loans and bills dis-
14,077,136
13,921,904
:
;
.
.
.
Total
:Jt
:i;
■/
Total
TRUST
BROOKLYN,
■
,
$
243.852.632
revenues
due
232.538.45?
U.
Govt,
S.
65,440,479
V
secu-
•,%
bills dis-
counted
Dec. 31,'48
1,734.048
Total
COUNTY TRUST COMPANY
BROOKLYN,
Surp.
78,730,268
Govt,
Loans
47,914,055
1,359,720
due
Govt,
S.
rity
44,397,279
and
S.
U.
Sept. 30 '4?
discounts
&
*
Ijs
22,447,591
23,636,290
1.454,411
2,180,559
804,775
702,604
profits—
Dec. 31,'48
At
N. Y.
Cash
,S.
T.
Dawson
Trust Co. of Providence,
succeed Everett S.
will take
institution's
incident
meeting
ginia at Richmond,
Robert
by
R. I., to
M.
to
vote
on
an
"Journal,"
has
increasing
funds into
flow
-of
FRANK
of the
L
,
ANDREWS,
material
*
.
*
Joint announcement
on
,
■■
was
Dec. 30 by George C.
•
made
Crossley,
President of. TheProspect National
Bank* and Caleb S. Green, Presi¬
Trenton Banking Co.,
dent^ The
both of Trenton* N.
J., of the
the
ap¬
dividend.
The
in¬
of
to
par
the declaration
to
to the
an
effect
to
Advices from
share.
lent
»
indicated
the
$20
the
state that in effect this is
«
v
.
„
bank
equiva¬
of
a
20%
new
capital
of the bank will stand at.
$1,800,$1,500,-
stock
000 instead of the present
000j according to Mr. Berkeley, if
the amendment is approved. The
$300,000
he the
in
increase
result
undivided
of
a
capital will
transfer from
of the two institutions,
subject to approval by the State
and Federal supervisory authori¬
The present
outstanding to¬
taling. 90,000 will not be changed
—only the par value moving up
from $16% to $20 per share. As
a
proval by the -boards of directors
of both banks of a plan for the
merger
and
the
stockholders.
Prospect Bank would operate
Hotel New Yorker
sufficient
*
'■
a
member of the
board since last January.
v
der
anc
labor available for the first time
the
Banking
but
"With
a
was
amendment
ties
government
commercial channels."
Hotels
Pr°«.
and
Vice-
value
shares from $16%
bank's
Vice-President at Industrial
1941
Va., sent out
that stockholders would be asked
moderate rates of loom and
since
the
Berkeley,
tary of the board, it
of
28,
in
a
an¬
of
14
President of the bank and Secre¬
crease
and
the
to
Jan.
on
Brown, says the
been Treasurer
spindle operation, an ample sup¬
ply of cotton from the largest
crop in recent years, an abundant
*
stockholders of The Bank of Vir¬
elected
Dec.
4,557,832
profits—
notices
In
board
on
70.742,634
5,045.851
dis¬
#
Hartwell, who
announced
directors
51,497,202
67,797,173
bills
Undivided
other duties at the
over
the
bank,
47,740,539
59,085,762
with
Vice-President of Industrial
First
&
nual
was
55,295,390
counted
❖
Brown
from
secu¬
holdings—
Loans
gold watches by the bank.
*
due
—
Govt,
rity
Brooklyn,
presented
were
194,004,072 182,556,845
and
banks
U.
luncheon held in their
a
both
honor
of
$
211,346,088
222,292.241
resources
Deposits
of service with the Lin¬
Bank
Sept. 30,'48
s
Total
Raymond I. Bundrick and John
Deinhardt recently completed
Savings
..
TRUST
COMPANY, PHILADELPHIA, PA.
*
*
coln
sis
FIDELITY-PHILADELPHIA
rity holdings
25 years
12,785,974
12.869.531
profits
secu¬
counted
G.
97,875,403
82,035,805
undivided
&
Loans and bills dis¬
Undivided
71,135,094
103,754,752
76,581,811
secu¬
holdings—..
1,267,699
from
banks
U.
from
b'"~k"
Y.
' $53,971,401 $57,501.5^5
resources
Cash
N.
Dec. 31.'48
due
274,569,322
259,103,736 250,488,876
—
and
Ca.ih
$
282,630,237
resources
Deposits
*
•
Sept. 30,'48
S
1,846,756
profits—
Deposits
PHH.ADELPHIA
COMPANY,
28.814.681
:!:
Total
15,383,506
*
EXCHANGE NATIONAL BANK AND
TRUST
125,904,89?
25,277,841
15,457,936
____
<■
32,947.797
KINGS
funds
63,066,856
24,368,524
discounts
&
CORN
V
rity holdings— 125,719,975
Undivided
63,494.250
*
73,785,996
■
29,241,097
31,120,827
—
Capital
' :■ \
from
hjluings
Loans
$
133,454,085
secu-
from
banks
Loans and
due
Govt,
l-.vy
226,292,997 215,020,332
and
and
S.
$
.
117,035,307 116,885,524
banks
U.
,
Sept. 30,*48
133.620,143
.-;:■
resources
Cash
s
Deposits
Cash
COMPANY
N1 Y.
Dec. 31,'43 Sept.730,'48
y
OF
PA.
Dec. 31.'48
;
—
COMPANY
PHILADELPHIA,
53,797,055
undi¬
and
TRUST
PROVIDENT
.
48,039,194
profits
1
231,752,903
secu¬
Loans and bills dis¬
173,878,803
62,501,680
Govt,
due
Govt,
S.
rity
from
banks
U.
$
211,824,189 201,818,959
resources—.
Cash
U.
Mr.
year
$
656.777,741 640,521,642
banks
Sept. 30,'48
$
Total
and
Cash
NEW YORK
OF
Dec. 31,'48
L——
Deposits
AND
"Journal."
new
Sept. 30,'48
724,289,495 708,212,526
resources
with
MR.
a
Dec. 31,'48
:j:
charter
level with
few items,
becoming sta¬
of
lis
bank's
the
BANK
PA.
$
«
Providence
a
management
profits__
NATIONAL
PHILADELPHIA,
the
"Entering
more
PHILADELPHIA
Loans and bills dis¬
to
a
bilized.
secu¬
according
reached, and that there should be labor supply, an economical and
a
marked reduction in prices.
stable price structure, and no un"In my opinion, there will be wieldly
stocks
overhanging - its
no
wide-open break but rather market, the industry looks for¬
ward to continued high demand
a
gradual readjustment to prices
and employment resulting from
more comparable to those of com¬
modities in other industries. Each permanent popularity of its wares
industry will experience its own the maintained high purchasing
readjustment. The food industry power of its consumers and the
this for the last two years and is
due from
Govt,
rity holdings
been
scarce
commodities
8
consumers
amply supplied with
supply and are goods of prewar quality or better.
selling above their proper price In the process of overtaking de¬
level.
When a food product is mand,
excited
competition
be¬
selling at three to five times its tween buyers has lessened, infla¬
prewar level it is obvious that it tion has been retarded, and
ab¬
is out of proportion to actual cost. normal prices have eased off to
This kind of pricing on a few of more stable levels.
the
and
S.
have
been
few commodities
for
8,972,325
YORK
NEW
Sept. 30,'4?
'
The food index until
outlook
9,315,G53
AND
554,211,185 538,826,345
banks
nor¬
during most of 1948 with the
future
163.035.922
OF
BANK
515,990,583 500,895,067
a
"Contrary to the belief of many,
food prices have for the past two
years been on a downward trend.
food
THE
140,306,960
resources
BROOKLYN
sweeping the industry since
V-J Day have proceeded apace,
although some symptoms such as
nearer
deliveries
of -machinery
Foods
may indicate that this movement
has passed its peak and is return¬
MR. FRANCIS L. WHITMARSH,
ing to normal proportions.
President of Francis H. Leggett
"The record peacetime output of
principal
136,041,366
212,036,694
COMPANY
Deposits
U.
Jersey doing busi¬
original name and
139,210,025
NATIONAL
Dec. 31,*48
of
by
'
-7
248,763,322
PUBLIC
TRUST
Cash
New
under its
Deposits
Industry
•
charter, was founded in
1804.
According to its latest published
figures of June 30, 1948. total as¬
sets were $42,759,281.
As of the
same
date,
Prospect
National
Bank's
assets
were
$6,118,913.
Prospect
National
Bank
was
founded in 1926 by Mr. Crossley.
*
THE
Total
in
bank
6,627,966
2,625,975
ness
profits
Inc.
Co.,
CottofT Textile
plant
a
have
in
7,359,570
2,627,890
undi¬
and
vided
*"•
"The
dollar that otherwise
to be given away to
foreign countries by the United
States taxpayer."
has
Surplus
K
Hesslein
Each of those dollars can take the
are
18,799,321
Loans and bills dis¬
WALKER,
and
President
ization
annually
a
9,174,170
19,784,414
secu-
•T:
MR.
competitive
if proper steps
are
taken by our government to ships on a basis approaching
mal peacetime conditions.
develop foreign travel as part of
the
Govt,
vided
high rate
of
employment
and
amicable
employerleft production,
some $900j000,000 in the hands of
employee relations, a rise to the
friendly foreign countries. That highest wage rates in its history,
a
sum
bridging of the gap between
can be increased within the
the
S.
rity holdings
Surplus
Textiles
"In 1948, American tourists
because
con¬
are
Crossley and Garrett S. Boetsma,
President and Vice-President, re¬
spectively, of the Prospect, and
that there would be no change in
the
other
operating officers or
staff of Prospect.
The Trenton
Banking
Company,
the
oldest
30,192,552
10,429,479
pay
place of
sales
"But with continuing increases
in costs of supplies, machines and
labor, I am of the opinion that
the peak of earning has definitely been passed."
from
counted
$500.
still
U.
be
at airports and docks.
Customs
exemptions on goods brought back
for personal* use or as gifts should
be increased from $400 to at least
risen
33,232,080
and due
banks
to meet any
business
should
Cash
are
will
reasonable rents for
used by its border services
would
dollar
as
cerned.
COMPANY,
$
remaining wartime 15% nuisance
tax. on travel abroad should be
repealed.
Special overtime fees
customs
insofar
$38,413,031 $35,325,802
resources
Deposits
is likely to be cutbacks and
unemployment.
for
ments should be eliminated.
for
ap¬
proaching its maximum produc¬
strength, it seems safe to
augur that the hotel, industry will
continue to hold the line in 1949
tion
YORK
counted
where
point
expansion, in war planning now
seeigs to have
travel must be preceded by cer¬ been
sufficiently accurate for us
tain steps aimed at simplifying to face
the realities of a competi¬
foreign travel and reducing its tive market with
confidence, and
costs. Issuance of passports should that is all
anyone can ask.
be simplified
and decentralized.
"As to the general business out¬
Visas and other secondary docu¬
look, we foresee no basis for a
hoped
Total
swer
short¬
in foreign countries.
"The
just
is
still handicaped by persistent dol¬
lar
shortages in many of the
Latin - American countries.
Ex¬
dollar
the
TRUST
NEW
about at that point now—the an¬
are
critical
the
not
(Continued from page 14)
SCHRODER
buying will refuse to ab¬
sorb
As
U. S. citizens. The pur¬
these programs is to help
Co.
United
material
and
to
we
&
W. R.
between
and
part
such
as may
Plan.
preparing
encourage
foreign
governments
000,000
economy.
financial
Marshall
part of that plan our own and for¬
space
in
1949
prices
"In
is to be hoped that they may be
high enough to enable the banks
to maintain a proper profit, nec¬
essary for safety purposes in the
interest of the country.
we
in
sumer
ended.
lerican
labor
American
Pan
feel certain we can
last year's rate oi
by stepping Up
sales activities. Should higher
our
World Airways System
work
still
News About Banks and Bankers
WILSON,
approximate
business
MR. JUAN T. TRIPPE,
of
E.
fourth round of wage
other outside inter¬
a
or
ferences,
r
the government bond market con¬
tinue to prevail, nevertheless, it
isted
increases
Aviation
ages
are
in excellent condition to meet any
financial
problems with which
year.
"Barring
travel."
President
C.
President of General Electric Co.
A
antici¬
year.
be
may
pated during 1949 in this class of
relieve
Director, Bankers Trust Co.
of the
last
increased
increase
pose of
FRED I. KENT,
banks
MR.
travel by
Banking
"The
| Electrical Appliances
student exchanges
programs
DR.
in¬
an
scholarship
the num¬
and professors
business
with
and
events
of
and
eign
tion activity."
of
analyzing
"Convention
and
trade
pretherefore, I believe the year 1941
bring satisfactory results al¬ bookings for 1949 at this date
would seem to indicate a substanthough there may not be the ex¬
tial increase over the past year,
traordinarily large profits that
With the nation playing an inwere enjoyed in previous years."
^
stimulus
the
"Under
program
of re¬
and
modernization.
will
country en route to
Europe.
American
current
.
| °! .Fajin
a
SSJ
vlsl* the United States or stop
over in this
in
large part conditioned by the kind
of legislation
produced by the
81st Congress.
Housing legisla¬
tion, government spending, taxa¬
and
those planning hona fide com-
mercial
invest¬
ment in new facilities will be
tion
?oUirs usu?"y are made available
for
its
on
their costs habilitation
structure and have
put in the The new year will find the in¬
necessary efficiencies to make it dustry geared to a program far
possible to operate at a smaller more efficient in both service and
comfort than at any time in the
reasonable profit in view of con¬
ditions. In the majority of cases, past.
of
process
for tourist travel, although
I sary
ume
1949 Outlook
world's
the
role in shaping
large
cpeasingly
the hotel in¬
dustry will be continuing in 1949
it
of
The
after
the
charter
Co.
was
emphasized
to
be
supervised
un¬
Trenton
merger,
that
operation of the hank would
tinue
The
by
the
con-
profits.
number of shares
result
of
the
expected
action
by the
stockholders, the total
capital of the bank will be: par
capital $1,800,000, surplus $1,500,-
0.00, and the undivided profits
ac?-
] count will stand at approximately
Mr. I $450,000,
making
a
total of $3,-
Volume
169
Number 4766
THE
COMMERCIAL
&
FINANCIAL
CHRONICLE
(99)
750,000,;:,the cash reserves ic£ the S. Bell, Executive VicerPresident
being $1,750,000 in addition, of The Union National Bank of
lishments
bank
or
total
a
capital and
$5,500,000.
count of
»S
George
*
reserve
ac¬
*
C.
Brainard, President
Manager of the Addressograph — Multigraph
Corp.,
Cleveland, has been redesignated
General
and
Chairman of the Board of
Direc¬
tors of the Federal Reserve Bank
of
Cleveland
for
1949
by
the
pointed
Federal
the
Stock Yards. Co.,
has been desig¬
nated Deputy Chairman for the
present, year.., Mr. ,Baker succeeds
Reynold E. Klages, .President of
.
System.
Governors
Roger
the
Governors
of
as Deputy
The Board
has
appointed Leo
L. Rummell, Dean of the College
of Agriculture of Ohio State Uni¬
versity",
Class C Director of the
as
Cleveland
Reserve
Bank
'
for-
St.
W.
of
the
and
year,
182
of
the
for
will
George
B.
Edwin
1949.
Helena
Bank, Minneapolis, to the
Advisory Council for the
The Kroger Co., Cincinnati, have
coming year. The bank's directors
been appointed to the Cincinnati
also
rehamed
E.
D;
MacHaffie,
branch board, and Spears Turley,
President of the State Publishing
Vice-President and Trust Officer
Company,
Helena,
Mont.,
and
o'f the State National Bank & Theodore
Jacobs, President of the
Trust Co. of Richmond, Ky., has
First
National
Bank,
Missoula,
been reappointed to that board,
Mont., to two-year terms as direc¬
all for terms ending Dec. 31, 1951.
tors of the Helena branch.
A
Paul G. Blazer, Chairman of the 7
'•-'V-V
' *
*
*
'
•;
: - ■
Board of the Ashland, Ky., Oil &
Refining Co., has been designated
Chairman of the Cincinnati
board for
1949.
Albert H.
orancn
Burch-
field
Jr., President and General
Manager of the Joseph Horne Co.,
Pittsburgh, has been reappointed
a
director
man
the
of
and
the
designated Chair¬
board
of
directors of
Pittsburgh branch.
Jones
the
cf
Montford
Department
of
Frank L.
made
burgh branch board and Laurence
expect
ably
the
at
Dec.
14
meeting of
$255 billion for the first-half
the year and about $260 billion
say,
of
for
the
"As
to
to
Manager,
W.
H.
Oliver;
to
J.
W.
R.
Munson,- W.
H.
they will be pretty stable,
at about the present level, with
the consumer price index at 174
first-half
the
of
dex
Business
tion. But the elements of extreme
S.
were
before the elec¬
vulnerability are not present, and
numerous
supporting factors are
Rukeyser, Economic
Commentator,
International
present which would likely check
News Service.
the
O. Glenn Saxon, Professor of Eco¬
Slade, Economist.
Bradford
B.
Smith,
Economist,
United States Steel Corporation.
Edwin B. George Believes Boom
Leveling
Off-^-Mr. George be¬
"maladjustments will
that "general ac¬
tivity will remain high." He told
lieves
and
members of the Economic
that
"if
anyone
that
the
boom
wishes to
Forum
argue
is
leveling off, I
will freely concede it. The rates
of increase in the money supply
in
and
the
different
kinds
of
credit, and in wages and total
compensation of employees, are
all moderating."
a more
general mix of trends adding up
to whatever remains of
our
net up¬
ward pressure. Some prices will go
to
others
and
go up, barring
will
continue
selective inter¬
vention by the government. Slug¬
gish
prices
not
get
its
tail
be¬
not
only
serious
but
are
bound
we
have
to
industrial
also
repercussions,
developments will
such
probably hasten the time when
we
actually get into a shooting
war."
He
added
that,' "I
somewhere in
to
see
erated
ing.
we
of
will
an
the latter half of 1949."
-
Rufus
along
is
with
drop
a
that
in
that
begin
decline
consumer
that
volatile
and
1948,
and
not
too
burdensome
other."-.
and the lower level of
Mr.
George added that, in his
opinion, consumers' prices would
down
v
in
1949,
"especially in
second-half of the year."
Malcolm McNair Sees Possibil¬
ity of Recession—In summarizing
his
views
Malcolm
that
we
on
the
a
Automo¬
is
still
im¬
an
for
automobiles,
especially in the Chevrolet-Ply¬
mouth-Ford range. The demand
for the more expensive cars has
apparently weakened some, but
even
in
the
case
of the
more
ex¬
such as Buick and
for example, dealers
report unfilled orders running up
to
a
year or
18 months. Even after
liberal
discount
for
pretty
duplication and the possibility of
the purchaser changing his mind,
the outlook still is good for the
coming year in automobiles.
a
Mr. Tucker went
"there will be
for
the
to say
on
more
of
a
administration
support
w e a
k-
that
tendency
to
try
industries
to
by
pumping
purchasing % power intb
the economy. If they defer the
necessary
adjustments in those
industries which need it first, the
time will come when they will
all need readjustment at once and
then we will have real trouble."
Smith
to
about
Rufus S. Tucker
for
be
increased.
I
billion
$14
O.
Glenn
Saxon
Expects Price
Than
Downward
Price
Trend in 1949 Likely—In
viewing
monetary policy,
in the
;
figure of $226 billion
a
of
and
day of retribution,
that
1949,
therefore,
is
more
likely to be another year of boom
than one of significant recession
in over-all prices, production and
employment."
income
the
for
sec¬
1949, and about $256
billion for gross national product.
Personal
income
will
be
about
$222 billion."
Halsey Stuart Offers
Decline—"My
guess," Mr. Saxon
said, "is that 1948 will turn out
to be the peak year of wholesale
commodity prices and cost of liv¬
ing. We are going to see a decline
from here on, despite the various
controls and supports that will be
placed on many individual items,
especially agricultural products."
Fla. East Coast
Equip.
Halsey, Stuart & Co. Inc. head¬
ed
a
that
group
Jan.
of
5
the
won
award
$2,060,000 Florida East
Coast
Railway
Series
K,
equipment
2%%
trust
equipment trust
due $103,000 semi¬
continued by stating
"we certificates,
inevitably going to have lower annually July 1, 1949 to Jan. 1,
prices
for
food,
clothing,
and 1959, inclusive.
The certificates,
many other • cost of • living items. ts&ied
under
thetrvPhiladelphia
Cotton and wool and other things
will likewise go down. As a result, plan, were re-offered, subject to
He
are
least
at
1949,
say,
by the second-half of
the cost of living will be,
10% below the level that we
reachedt in
which, I think
peak for
1948,
will
be
many
Interstate
the
all-time
The
to
of
the
cost
of
living in¬
possible that the Chinese
situation may drain more from us
than I anticipate, but even that
may be offset by other economies
or by contractions
jin the velocity
of our money turnover. Left alone
with
not
much
too
inter¬
ference,
wholesale
commodity
prices will decline steadily to a
level of 20% (in two years) be¬
low their postwar peaks of 1947-
to
yield
2.95%, according to
will
provide for not
the
actual
$2,761,846, of
railroad
six
branch line
tric
road freight
included
Otis
The
Mast-er
consisting
of
4,500 H. P. Diesel-elec¬
locomotives.
members
&' Co.;
at
switching locomotives
four
Co.;
than 75%
estimated
Diesel-electric
P.
and
group
issued
standard-gauge
new
H.
be
more
cost,
equipment
1,500
/Other
v
•
certificates
dex. It is
and
Commission
prices
maturity.
Mr. Saxon summarized his view
In
at
from 1.50% to
by saying, "I expect little change
in industrial production, a rela¬
tively small decline in national
income, a 10% decline in farm in¬
come,
a
substantial
decline in
wholesale prices, and a moderate
decline
Commerce
authorization,
"years."
&
of the
R.
W.
Co.;
Illinois
Hutchinson
offering
Pressprich
Freeman
Co.;
&
&
Mc-
and
Co.
MacDonald Governor of
1948."
Bradford Smith Thinks Upward
Rather
set
national
ond-half
the
pone
cars,
Oldsmobile,
Martin R.
Gainsbrugh Sees Con¬
Demand
sumer
Scene
ness
Dominating Busi¬
Mr.
Gainsbrugh
optimis¬
tically when he said "my predic¬
tion for
1949—and it is purely
personal and in no way a Con¬
ference Board viewpoint—is/ the
viewed the
same
it
as
1947.
I
—
1949
was
N. A. S. D. District
KANSAS
erick
H.
outlook
for
1948
CITY, MO.
MacDonald,
—
Fred¬
Burke
and
MacDonald, has been appointed
a
recession
than I
and taxes will
erally
of this stable
exhibit
more
gen¬
tendencies."
be
as
much
as
level
of
production
prices,
may
Mr.
upward
than
downward
added
that
"while
index, Mr.
reserving the right to
anticipations
in
reverse my
event
of
suf¬
a
Bean said "I guessed the produc¬
tion
index for
1948
would." be
ficient change in monetary
policy,
about 200. It fell
I
as
about
six
or
short of that by
seven
points.
not
about
sumer
demand
the
for
and
postwar
in
national
remainder
changed
the
effective
which
a
con¬
scene.
I
further increase
income
of
my
dominates
business
would look for
our
in
the
national
and
ac¬
take
the
counts, except that I
certain about the
I
Smith
10% lower in 1949."
As to the production
have
views
a
in 1949. It is therefore
possible that farm income, in view
position
that
the
would
settle
5%
as a
for
most
would
am
course
for
plus
not
too
of prices.
or
minus
reasonable range for 1949
business
personally
indicators, and
Governor of the National Associa¬
sign."
Donald
H.
on
In¬
of the
Na¬
Davenport
dividual
1949, I would again'forecast it at
Administration
tional
about 200. This would correspond
abandoning its easy-money poli¬
expects
to
cies,
earnings in manufacturing estab¬
a
gross
national
product
For
of,
will
seek
will
thereby
balk
to
at
post¬
F. H. MacDonald
stress the plus
situation stands today the present
1949
outlook,
McNair "stated,
"I feel
are
considerably more
likely to have
there
demand
the government's
carry-over
be
the
on
spending and increased consumer
saving, I think we might witness •Mr..Smith estimated the 1949 out¬
look by saying "if the Federal
a
fairly
considerable
readjust¬
Reserve Board, in
collaboration
ment.";, '
; 1" ;
with
the
Treasury Department,
Bean Anticipates Lower Farm
abandons
its
inflation-feeding
Income in 1949
Louis H. Bean,
artificially
easy-money
policy,
viewing the farm situation, fore¬ then
the boom will be over. If, on
cast -that "we may see some de¬
the other hand, it persists in its
crease
in
livestock
prices, and
easy-money policy, then I think
probably some strengthening in
1949 will
be
another year like
grain prices if we have a re¬
those behind us in which prices,
versal of the
record
output in
wages, production, dollar income
prices
would, if left to themselves, con¬
tinue to gravitate toward
each
the
Tucker
Bradford B.
accel¬
decline in business spend¬
If
there
expect
1949
effects
the
second-half
—
V ; "There will probably be
down,
recession
a
its legs, and crawl back
into the doghouse. If it does, then
that
continue"
should
somewhat
prices will be
slightly under that of last year.
Without support from the defense
and
foreign-aid
programs,
a
weaker situation could develop in
tween
(Guest).
Rufus S. Tucker, Economist, Gen¬
eral Motors Corporation.
is
such'
perhaps by the end of 1949. Busi¬
ness
nomics, Yale University.
Helen
of
course
and
second-half. The in¬
wholesale
pensive
thought
Merryle
as¬
tive Outlook for 1949—Mr. Tucker
Opinions
we
I
sume
Rogholt,
F. Town ley.
prices,
consumer
lower in the
(Continued from first page)
'
year
for
Assistant Managers, B. P. Mitchell,
1949
But
in which it would
be worth while, at the end of the
first-quarter, to 'stop, look and
listen' for new developments."
a
ident, C. C. Pearson; to Assistant
Vice-Presidents, H. V. Grice, H. G.
House,
F. " S.
Huber, .Rudolph
Ostengaard, Fred G. Tanner, Jr.;
Marketing, Graduate School of
Har¬
second-half.
could be
King, President, Cali¬
On The Business Outlook
Administration,
University.
taxes
be
"I
Merryle S. Rukeyser Dr. O. Glenn Saxon
mense
vard
the
last-half of 1949."
stated
Economists five
for
Personal
would say that profits will prob¬
the board of directors: Vice-Pres¬
Fi¬
University of Pittsburgh,
has been appointed to the Pitts¬
nance,
196
Federal
fornia Bank, Los Angeles, has an¬
nounced the following promotions
Industrial
probably
"Corporate profits after taxes
probably be less, since
I
tional
University, Oxford, O.,
Joseph B. Hall, President of
1949.
will
will
reappointment by the
bank's directors of Henry E. Atwood, President of the First Na¬
and
52
of
billion."
time the bank
of- Miami
1949."
ond-half of 1949 should show per¬
sonal savings down to about $9
appoint¬
three-year term- ending Dec. 31,
1951. Ernest H. Hahne, President
of
employment
million
by the
savings
will
probably be dipped into as in¬
creases
bring prices above the
earnings of individuals. The sec¬
Richardson, Helena,
announced
to
about
same
price
slowly to about
drop
slightly in the first-half and rise
above present levels to a figure
Dr.
Mont.
At the
rise
of
succeed R. B.
Consumers'
second-half
production
Prof. M. P. McNair
MartinR.Gainsbrugh
Louis H. Bean
two-year term to
a
the
of
bank's
Dr.- McCain's
.
is
ment
168.3.
second-half
A> McCain, President of
University of Montana, to the
branch.
in
Deputy
appointed
and
"Nonagricultural
James
board
at
for. vhe
as
board
level;
go up more slowly. The
will be about 172 for the
indexes will rise
Paul, as
Cochran,;
D.
Mountain, Mich.,
years on the
board, and
and
Chairman
coming
Chairman for 10 years.
today
of
Board
present
second-half of next year. It stands
on
redesignated
Shepard,
Chairman
Iron
The
also
B.
the Columbus, O., Auto Parts Co.,
who
has
served
more
than
12
.
of Minne¬
announced
to
average
1,
Board
Union
bank
the
three-year term beginning
1949, was made by the
a
Association, and Chairman Reserve
Cleveland
Bank
tinue
reap¬
of
Board of Governors of the Federal
Yards
of
Director
their
words, to $56 and $58, respec¬
tively. Wholesale prices will con¬
Mr. Miller's appointment
of
the
above
another $2 for the
average of the
second-half of next
year; in other
*
C
Reserve
apolis,
Jan.
Stock
Class
Dec. 31.
for
American
sj:
sity of Minnesota, has been
Reserve System.
Albert Z. Baker,
sit
Paul E. Miller, Director of
Agri¬
cultural Extension at the Univer¬
Board of Governors of the Federal
President of the
7
will continue to rise,
$2 by the middle of next year
say
Pittsburgh, has been reappointed
to the Pittsburgh branch board.
■
43
Components
Economy—Mr.
that
Davenport
"average
weekly
tion of Securities Dealers, Inc. for
the
Missouri,
homa
lan
rick
district.
Kansas
He
and
succeeds
Okla¬
Har¬
Herrick, Lathrop-Hawk-Her-
Co., Wichita.
^iSfttffUMnu rwrtdwi' mt*m
44
Affiliated
(1/10-14)
Inc.
Equipment,
Gas
-
40,000 shares of $3 cumulative preferred
stock (par $50) with non-detachable warrants for com¬
mon
stock, and 1,000,000 shares common stock (par
Dec.
filed
6
Underwriter—Reynolds & Co., New York.- Purpose
—To purchase all of the assets of three subsidiaries of
Dresser Industries, Inc., viz: Bryant Heater Co., Cleve¬
$1).
Monrovia, Calif,
Calif. [Affiliated
will obtain an additional $4,000,000 the private sale of
15-year 3%% notes to insurance companies.] Expected
land; Dav & Night Manufacturing Co.,
and Payne Furnace Co., Beverly Hills,
next week.
N. Y.
Dec. 15 (letter of notification) ,1,767 shares of capital
stock (no par) of which 1,000 shares will be offered
publicly at $100 per share and the underwriter will
receive one share for each 10 shares sold and an option
for five years at $100 per share on two shares for each
Air
York.
Corporate purposes.
Price,
American
5
(par
Underwriter—Berrien Securities, Inc.,
par.
Benton Harbor,
©
v/
;
(letter of notification) 500 preferred shares
Dec. 31
$100).
/
Gas Light Co.
(Mich.)
Albion
Jan.
Underwriter—Burnham & Co., New
sold.
shares
three
•
Commuting, Inc., White Plains,
filed
Mich.
Box
;
•
Grand Rapids, Mich.
Board Co.,
15-year 414%
$5,400,000
convertible sink¬
ing fund debentures. Underwriter—Paine, Webber, Jack¬
son & Curtis.
Proceeds—To pay off a long-term obliga¬
tion and to pay
for part of the costs involved in a pro¬
to improve and expand a pulp and paper
gram
American
Steel
&
mill.
Proceeds
Price—$8 per share.
In¬
working capital.
indebtedness and for
retire
definite.
Argus, Inc., Ann Arbor, Mich.
,Nov. 1 filed 115,315 shares ($10 par)
convertible preferred stock.* Offering
each 314 shares
of common stock held.
With each share of preferred
purchased company will issue a purchase warrant en¬
titling the holder to buy 80/100 of a share of the com¬
pany's ($1 par) common stock on or before Dec. 31, 1950.
Underwriters—Leason & Co., Inc., and First Securities
Co., Chicago. Proceeds—For working capital.
stock
•
purchase, warrant for
and
Insulating Boards Corp. of
Badad
Mew
Palestine.
York
City,
'
Jan. 4 filed 57,144 shares of 5% cumulative ($21 par)
convertible preferred stock and 57,144 shares (no par)
comomn A stock, to be sold in units of eight
shares of
each class at $169 per unit. No underwriting. Proceeds
-—To buy equipment and set up plant ready for operation.
•
Bethlehem
Stee!
of
and its subsidiaries.
Expected after Jan. 19 depending on
')1
.
«v vu-.;
h
•
Dec.
,
;•./
,
Bethlehem
30 filed
Steel
.//', 1v
v..
v vr*f*.'.vv
■'
...
'
Corp.
(1/19)
..r.
sinking fund bonds, series K,'due 1979.
•
$ •} v
Bond
Fund
of
30-year
Underwriters—
Proceeds—
corporation and its subsidiaries.
Boston,
Inc.
Dec. 27 filed 100,000 shares capital stock
offered %t market.
Underwriter—Vance,
Boston.
(par $1), to be
8
1—Batkin & Co., New York.. To repair and renovate mine
of company and to exercise option to purchase processing
and
move
and
erect
such
mill
stock.
of
Gulf
3.50%
series,
common
stock;
to subscribe for
subject to the fore¬
right
and
Stock
will
the
on
be
not
foregoing
underwritten.
basis.
Any
scribed for by stockholders will be disposed
to be determined after the close of the
an
(debentures); Stone & Webster Securities Corp.
(both); Lehman Brothers' (debentures); Merrill Lynch;
White, Weld & Co. (jointly
on debentures); Merrill Lynch, Pierce, Fenner & Beane
and Lehman Brothers (jointly on stock); Salomon Bros.
& Hutzler and Union Securities Corp. (jointly on deben¬
tures). Proceeds—For general corporate purposes, in¬
cluding the payment of present short-term notes of $6,000,000 and the financing of a,portion of its 1949 con¬
struction costs. Bids—Bids for the purchase of the de¬
bentures and bids for the purchase of such number of
whole shares of common stock as will yield an aggre¬
Pierce Fenner & Beane and
of in a man¬
subscription
gate price to the company of $4,500,000, will be received
on
the
company's
•property and for working capital.
Cenco Corp.,
New York, N. Y.
Dec. 23 filed $846,400 5%, 10-year debentures and 846,400
shares ($1 par) common stock. Offering—These securi¬
ties were sold by the company last September to 135
persons. This is an offer of recession, permitting original
purchases to cancel their subscriptions and receive the
amount paid, as the SEC has decided the transaction was
;not exempt from the registration requirements of the
»
Securities Act of 1933.
by the company at the office of Irving Trust Co., 1
common
•
29
writer.
Edison Co. of
Consolidated
New York,
•
27
Dec.
•
t
(letter
bonds. /*No
isting indebtedness.
Co., inc., Oklahoma City, Qkla.
(letter of notification) 150,000 shares ($1 par)
stock.
Price, par. No underwriter.
For main¬
29
common
taining the oil company, drilling and development work.
Indiana
Eastern
/
Telephone
Co.,
Winchester,
stock.
Price—$1
and
employees. Prior to Feb. 1 underwriter will buy any
stock for subscribed for.
For further additions to plant
and for additional working capital.
•
Portable Building
West Chicago, III.
Economy
Mfg.
21
and
common
$135,000 10-year 5% income debentures.
To acquire certain assets of Economy
underwriter.
Portable
Housing Co.
Erndale
Dec.
Mines
filed
14
Co.,
Ltd., Toronto, Canada
first mortgage bonds
$100,000 5-year 6%
(convertible into common shares at rate of four shares
dollar, or at a price of 25 cents per share). Under¬
Corp., N. Y.
(1/12)'
100,000 shares of capital
Underwriter—Charles W.
N. J.
For development of
share.
Newark,
Hoteievision,
*
1
Long Island City, N. Y.
Inc.,
Nov. 3 filed 160,000 shares
derwriter
—
Price—$3
per
a
($1 par) class A stock.
Un¬
Cantor, Fitzgerald & Co., Inc., New York.
share.
Proceeds—To develop, exploit and
television innovation. Expected early in Jan.
*
7 Humphryes
Dec.
& Sons,
rett
Manufacturing Co., Mansfield, O.
(letter of notification 5 4,500 shares ($10 par)
Price—$22 per share. Underwriter—Robert Gar¬
20
stock.
Baltimore, Md.
:v
Idaho-Montana Pulp & Paper Co., Poison, Mont,
Nov. 23
mon
Co.,
(letter of notification) 2,700 shares ($25 par)
6% noncumulative preferred stock, 6,750 shares ($10 par)
No
&
per
mining properties.
Dec; 16
(letter of notification) 3,000 shares of 5% cumu¬
stock (par $100). *; Price, par. i Under¬
writer—City Securities Corp., Indianapolis, Ind. Offering
—Stock being offered by company to its stockholders
*•
,
(letter of notification)
27
Dec.
distribute
V;;'
Indiana
'
Norwood Lake Gold Mines
Warshoff
Crarier Gil
of
Hayward Milling Co., Glendale, Ore.
27 (letter of notification) $297,000 2% unsecured
underwriter.
For working capital and ex¬
Dec.
—To pay
©
Gas Co.
notification) • $14,000 first mortgage
sinking fund 5% bonds, due Aug. 1, 1960. Underwriter—.
Braun, Monroe & Co., Milwaukee, Wis.
For working
capital.
;
:'.f4
Inc.
$40,000,000 of short-term notes and reimburse
the treasury for outlays made to acquire property and
for construction. Bids tentatively expected to be opened
Jan, 25.
<
1
(Minn.)
Hastings
Dec.
(1/25)
29 filed $50,000,000 first and refunding mortgage
bonds, series E, due Jan. 1, 1979.
Underwriters—Names
to be determined through competitive bidding.
Prob¬
able bidders: -Halsey-rStuart & Co. Inc. aftd The First
Boston Corp. (jointly); Morgan Stanley & Co.
Proceeds
V
capital.
$150,000 first mortgage
of common stock.
No under¬
To purchase land and construct office building.
shares
1,500
Mich.
of common
Charles E.
Bailey & Co., Detroit.
To pay current liabilities, pur¬
chase property, building and equipment and for working
of notification)
(letter
and
(EST), Jan. 11.
am.
Inc., St. Charles,
Oct. 27 (letter of notification) 125,000 shares
stock (par $1).
Price, par.
Underwriter —
Community Building Corp., Juneau, Alaska
bonds
stock at 11:30
Harwill,
short-term notes payable to First
National Bank, Boston,, the proceeds of which were used
for the acquisition of property, construction, completion
and extension of facilities, and other lawful purposes.
outstanding
Wall
(EST) for the bonds and the.
St., New York, 11:00 a.m.
in the solicitation of subscriptions for the proposed
issue.
Proceeds—The net proceeds are to be used to
ager
Dec.
(1/11)
Inc.
Company proposes to enter into a contract with
investment banker or security dealer to act as man¬
reduce
Co.
filed
9
petitive bidding. Probable bidders: Halsey, Stuart & Co.
Underwriting—
shares not sub¬
ner
Utilities
States
competitive bidding of $15,000,000 20-year
debentures and 350,000 shares of common stock (no par).
Underwriters—Names to be determined through com¬
Dec.
England Public Service Co., owner of 77.8% of
presently outstanding common stock, has waived its pre¬
emptive right to subscribe for 232,076 of the 303,330
shares of common stock to be issued, on condition that
such shares be made available for subscription by all
stockholders
Grover
on
New
Dec.
Mining Co., Tonopah, Nev.
(letter of notification) 1,500,000 shares (5c par)
common stock.
Price—20 cents per share.
Underwriter
:mill
common
/
Company, Detroit, Mich.
Dei. 31 (letter of notification) 1,994 shares of common
stock. Price—$30 per share. No underwriter. To build
additional warehouse space and purchase new machinery.
going rights and subject to allocation, the right to sub¬
scribe for any number of shares of common stock which
any stockholder'of the applicant may desire to purchase.
Sanders & Co.,
Proceeds—For investment.
Bradshaw
Oct.
par)
($10
shares
lative preferred
Kuhn, Loeb & Co. and Smith, Barney & Co.
•
bank loans.
•
:.
r
$50,000,000 consolidated mortgage
For construction costs of
Mines, Inc., Denver, Colo.
notification) 150,000 shares of common
stock. Price—$2. Underwriter—John R. Marple & Co.,
Westfield, N. J. For development construction and pay
Front Range
Nov. 29 (letter of
common,
share
Dec.
market conditions.
*
of
preferred,
one
30 filed 627,960 shares of common stock (no par).
Underwriters—Kuhn, Loeb & Co. and Smith, Barney
& Co.
Proceeds—For construction costs of corporation
1
acquire capital to operate insurance company.
(
the following basis: For each two
right to subscribe for one share of
common; for each share of 6% preferred, right to sub¬
scribe for one share of common; for each two shares
mately 30 days
shares
Dec.
'
303,330
stock.
mon
Offering—Company proposes to offer the stock to its
stockholders for subscription for a period of approxi¬
(1/19)
Corp.
filed
(letter of notification) 1,667 shares (no par) com¬
Price—$150 per share. No underwriter. To
Jan. 3
Central Maine Power Co.
Nov.- 1
Friendly Fidelity Casualty Co., Memphis, Tenn,
•
31, 1948, filed $10,000,000 first mortgage bonds, se¬
ries C, due 1979.
Underwriter—Names to be determined
through competitive bidding. Probable bidders: Halsey,
Stuart & Co. Inc., The First Boston Corp., Salomon Bros.
& Hutzler, Lehman Bros., Kuhn,
Loeb & Co., Glore,
Forgan & Co., Blyth & Co., Inc., Kidder, Peabody & Co.,
Smith, Barney & Co., and Merrill Lynch, Pierce, Finner
& Beane (jointly.)
Proceeds—For construction.
514% cumulative
— To be offered
Initially for sale to stockholders at the rate of one pre¬
ferred
ISSUE
Dec.
.
'Sept. 21 filed 200,000 shares ($2 par) convertible class A
itock. Underwriters—Herrick, Waddell & Reed, Inc. and
—To
PREVIOUS
Service Co.
period.
Pump Corp.
Sills, Minton & Co., Inc.
Public
Illinois
Centra!
Thursday, January 6, 1949
CHRONICLE
Registration
SINCE
ADDITIONS
INDICATES
•
in
Now
Securities
•
&.i FINANCIAL
COMMERCIAL
THE
(100)
(by amendment) 258,675 shares ($10 par) com¬
Underwriter — Tom G. Taylor & Co., Mis¬
stock.
soula, Mont. Price—$10 per share. Proceeds—To erect
operate a bleached sulphate pulp mill with a 200ton per day capacity.
and
•
Insurance Exchange
Building Corp., Chicago
shares ($10 par) common stock to
be offered for sale by five selling stockholders.
Underr
writer—Central Republic
Co. of Chicago will under¬
write all but 41,500 shares of the offering.
Dec.
30
filed
82,500
Jersey Central Power &
Light Co.
(1/25)1
to
writer—James
T.
Proceeds—To pay
DeWitt
Co.,
New
York.
Price—95.
off, in part or in full, outstanding in¬
debtedness and for general working capital.
•
Falcon
Dec. 30
A
Mines
Corp., Locust Valley,
N. Y.
(letter cf notification) 7,500 shares common class
and
22,500 shares common class B. Price—$10 per
underwriting. Development of mining prop¬
No
share.
22 filed
$3,500,000 first mortgage bonds, due 1978.
Underwriters—Names to be determined through compet¬
itive bidding.
Probable bidders: Halsey, Stuart & Co.
Inc.; Harriman Ripley & Co.; Glore, Forgan & Co.; Mer¬
rill Lynch, Pierce, Fenner & Beane; The First Boston
Dec.
Corp., Salompn Bros. & Hutzler; Otis & Co. Proceeds—
For construction or improvement of new facilities and
betterments of existing facilities. Expected about Jan. 25.
erties.
Ferro
Enamel
Corp.,
Cleveland,
Ohio (1/13)
Offering—
Sept. 17 filed 69.590 common shares ($1 par).
r
Offered for subscriptioh by stockholders of record Dec. 29
at
Corporate
and Public
$16.75 per snare in ratio of one
each four shares held. Rights expire
additional share for
Jan. 12. Underwriter
—Merrill
Lynch, Pierce, Fenner & Beane. Proceeds—
Company and subsidiaries will use the funds for general
?ico
corporate purposes.
Financing
eoutv
•
Dec.
par)
Foremost
Dairies, Inc., Jacksonville, Fla.
(letter of notification) about 16,000 shares (20G
common and about 4,500 shares of 6%
preferred.
Price, market.
•
New York
Boston
Pittsburgh
Chicago
Dec.
Private Wires to
Offices in other Principal Cities
Net"
24
No underwriter.
Forming Machine Co.
Brook, N. J.
20
of America,
Mem
BROKERS
i
nd Bodorl
York
Sto
ckg°
CHV
Inc.,
Bound
(letter of notification) 400 shares of common
Price—$100 per share. No underwriting.
Working capital.
UNDERWRITERS
,,,
stock ($1 par).
v
v
- *
Bo
STO*
THE
Number 4766
Volume 169
COMMERCIAL
&
FINANCIAL
CHRONICLE
Calif.; G. Brashears & Co., and First California Co., Los
Angeles, Calif./
.
•
* ';
"V
NEW ISSUE CALENDAR
January
10,
Affiliated Gas Equipment, Inc
Koppers Co.
•
be
12,
Ocean Downs
•
January
Rohm &
13,
Racing Association, Inc.,
Baltimore, Md. (1/12)
Dec. 16 filed $600,000 6% income debentures due Jan. 1,
1974, and 60,000 shares (500 par) common. Offering—To
be offered in units of $100 of debentures and 10 shares
1949
of stock.
Underwriters—Harrison & Co.; Bioren & Co.,
Philadelphia; C. T. Williams & Co., Inc., Baltimore, and
Woodcock, McLear & Co., Philadelphia. Proceeds—To
construct a racing plant.
17,
1949
Common
Haas Co., 3:30 p.m.
•
1949
(EST)___
19,
_______
January 20,
Nashville Chattanooga &
24,
'
January
25,
1949
1949
Jan, 4 filed
fund.
of
Fund
for
the Diversification,
Safe-Keeping of
New York, N. Y.
varying prices based
derlying securities.
upon
interest
will
be
offered
fluctuating values of the
•
Mid-States
Jan.
5 filed
vertible
•
un¬
balance
common.
•
Mississippi Power & Light Co. (1/18)
Nov. 30 filed $7,500,000 first mortgage bonds, due 1979.
Underwriters—Names to be determined through com¬
petitive bidding. Probable bidders: Halsey, Stuart & Co.
Inc.; The First Boston Corp.; Glore, Forgan & Co.; Equit¬
able Securities Corp. and Shields & Co. (jointly). Pro¬
ceeds—To finance in part company's construction pro¬
gram
and other corporate purposes. Expected about
Jan. 18.
»,
V''-"'-.
l"
Mississippi River Fuel Corp. (1/11)
21 filed 146,700 shares of common stock.
Under¬
writer— Union Securities Corp.
Proceeds — To selling
Dec.
stockholders.
ard
Oil
Co.
These shares
(New
Jersey)
were
in
of investment houses headed by
Firms in the group
purchased from Stand¬
July 1948 by a group
Union Securities Corp.
of selling stockholders, in addition to
Union Securities Corp., are Kuhn, Loeb & Co., Stone &
Webster Securities Corp., White, Weld & Co., A. C. Allyn
and
Co., Inc., Equitable Securities Corp., John W. Clarke,
Inc., Dewar, Robertson & Pancoast, and Walker, Austin
& Waggener. Business—Corporation, which was organ¬
ized in 1928, owns and operates a natural gas pipeline
system
extending from
northern
Louisiana
to the
Greater St. Louis area. Of the remaining 508,520 shares
of common stock outstanding, all but 3,320 shares are
owned by United Gas Corp., Columbian Carbon Co. and
United Carbon Co. Expected about Jaif. 11.
•
Monarch Marking System Co., Dayton, O.
Dec. 27 (letter of notification) 30,000 shares of 6% cumu¬
lative preferred stock ($25 par).
Price, par.
writer.
For current, business and permanent
in additional capital.
-
No under¬
investment
National Tuna Clippers, Inc., San Diego, Calif.
Nov. 30 (letter of
notification) 30,000 shares ($10 par)
6% cumulative preferred stock, nonassessable and nonconvertible. Price, par. Foi^generaL corporate purposes.
Underwriters—Buckley Brothers; Hope & Co., San Diego,
,
15,816
market,
in units
28
same
price ($16)
as
of
Service
the
one
share each.
Underwriting—
Co.
of
Indiana, Inc. (1/24)
Dec. 21 filed $12,000,000 first mortgage bonds, series H,
due
1979.
Underwriters
—
Names
to
be
determined
competitive bidding. Probable bidders: Blyth
& Co., Inc.; Halsey, Stuart & Co. Inc.; The First Boston
Corp.v Harriman Ripley & Co.; Glore, Forgan & Co.;
through
Merrill
Lynch, Pierce, Fenner & Beane; Kidder, Peabody & Co., and White, Weld & Co. (jointly). Proceeds—
For construction costs.
public Service
Dec.
*
28
ferred
filed
Expected about Jan. 24.
Co.
of
New
re¬
Proceeds—For
shares ($100 par) cumulative pre¬
Underwriter—Allen & Co., New York.
construction
and
to
increase
general
funds.
•
Cleveland, O.
(letter of notification) 12,500 shares (500 par)
common.
Price—$7 per share. No underwriter.
To pay
29
current
accounts, meet payrolls and other costs and
ex¬
Reliance Mutual Life Insurance Co. of III.
28
stock.
crease
(letter
of
Price—$25
surplus.
notification)
per
share.
4,000
shares
of
No underwriter.
V
capital
To in¬
Plywood & Timber Co., Everett,
Washington
Nov. 17 filed 271,025 shares ($1 par) common stock, of
which 105,000 shares are to be offered by company, and
166,025 shares by 15 selling stockholders. Underwriter—
Blyth & Co., Inc. Proceeds—To company from the sale
of the 105,000 shares will be added to working capital,
except about $275,000 may be advanced to a new sub¬
sidiary to be used by it in making part payment of the
option purchase price of one-half of the stock of Conifer
Timber Co., Fortson, Wash.
Indefinitely postponed.
Rockland
Light & Power Co., Nyack, N. Y.
$7,500,000 first mortgage bonds, series C,
due 1978. Underwriting—Names will be determined by
competitive bidding.
Probable bidders: Halsey, Stuart
Dec.
Enemy-
Bids—Bids
purchase of stocks will be received at Department
of Justice, Office of Alien
Property, 120 Broadway, New
York, up to 3:30 p.m. (EST) Jan. 17.
for
•
Seven
Consolidated
Gold Mines,
Inc., Seattle,
Wash.
Dec.
24
(letter of notification)
assessable
writing.
common
1,500,000 shares of non- '
(par 100). Price, par. No under¬
stock
To discharge
loan and maintain
a
mine.
a
Southern Indiana Gas & Electric Co.
20 filed 600,000 shares
(no par) common
stock
owned by the Commonwealth & Southern
Corp. and 75,000 additional shares of stock for the benefit of the com¬
Underwriter
pany.
—
Smith, Barney & Co.
Price, by
Proceeds—Commonwealth will use its pro-
amendment.
ceeds to reduce indebtedness and
Southern Indiana will
its proceeds for property additions and
betterments.
use
Expected this month.
•
Southern Natural
,
Jan.
3
(letter
stock
common
Gas Co., Birmingham, Ala.notification) .9,419 shares ($7.50 par)
of
which will
Birmingham Gas Co.
share of Southern
two shares of
be
offered to
common
stock
Natural's stock in
Birmingham's ($2 par)
at
each
the
holder of
rate
of
one
exchange for each
common stock.
No
underwriter.
,
Oct.
Southern Oil Corp., Jackson, Miss.
8 filed 1,500,000 shares of common stock
(par lc)
1,350,000 shares will be sold by company and
150,000 shares by W. G. Nelson Exploration Co. Price—
$1 per share. Underwriter—J. J. Le Done Co.; Petroleum
Equities Corp., New York. Proceeds—For working cap¬
<
of which
ital and general corporate
purposes.
Southern
Dec.
16
filed
Union Gas
Co., Dallas, Tex.
107,430
shares ($1 par) common stock.
Offering—To be made to holders of outstanding stock of
record
Jan.
held, plus the privilege of subscribing for addi¬
3,
on
basis
of
one
new
share
for
each
19
tional shares not purchased by other stockholders. Under¬
writing—None.
ments.
•
Proceeds—For
construction
better¬
and
-
.
,
Specialty
Food Products, Inc., Pasco, Wash.
(letter of notification) 75,000 shares of preferred
(par $1); and 75,000 shares of common (par 100). Price,
par for each class. No underwriter. To build two plants,
Dec. 27
Taylor Food Co., Raleigh, N. C.
17 (letter of notification) 17,000 shares
($1 par)
common
stock, of which 7,000 shares would be sold at
Dec.
$1.12y2 and 10,000 shares at $1
Griffin
&
Vaden,
working capital.
•
Inc.,
share. Underwriter—
per
Raleigh,
N.
C.
For
additional
Timken-Detroit
Dec.
27
par)
Axle Co., Detroit
notification) up to 1,000 shares ($5
stock.
Price, at market. No underwriter.
(letter
common
Mrs.
of
Tucker's
Foods,
Inc., Sherman, Texas
Nov. 26 filed 200,000 shares of common stock
(par $2.50)
of which 80,000 will be sold by the
company and 120,000
shares by certain stockholders.
Underwriter—Rauscher,
Co., Inc., Dallas, Texas.' Proceeds—For general
corporate purposes.
/
•
Tung-Sol
Dec.
Lamp Works Inc.
(letter of notification) 9,704 shares of
31
common
All of this stock will be offered to
employees in
for their demand promissory notes.
,/
/:
return
,
•
Union
Dec.
30
Light, Heat & Power Co., Cincinnati
filed $5,000,000 first mortgage bonds.
Under¬
writers—Names
to
be
determined
through competitive
30
Probable bidders: Halsey, Stuart & Co. Inc.;
W/E. Hutton & Co.
Proceeds—For prepayment of first
mortgage bonds owned by parent, Cincinnati Gas &
Electric
Co., and for construction.
•
Robinson
•
pending suit for
a
bidding.
penses.
•
preferred
included in the registration but they are not
being offered at this time because of
stock.
Radio Systems, Inc.,
Dec.
(1/17)
cumulative
Pierce &
Mexico
15,000
stock.
,
4%
return of these shares under the
Trading with the
Act. Registration statement effective Dec. 13.
,
(letter
Public
shares of
shares
approximately the
Process
Dec.
'•'//
the
Engineering Inc., Somerville, Mass.
of notification) 1,000 shares (no par)
common stock.
Price—$50 per share.
No underwriter.
For general corporate purposes.
Manufacturing Co., Detroit, Mich.
(letter of notification) 2,260 shares ($1 par)
Price—$4.25 per share. Underwriter—George
'
offered
Dec.
presently operates includes Michigan, Ohio
;
customers at
By amendment.
Proceeds—For purchase of equipment
and working capital.
will be used for expansion and additional
•.,
their
Playboy Motor Car Corp., Tonawanda, N. Y.
29 filed 1,000,000 shares of class A 20-cent prefer¬
ential dividend series ($3 par), common stock and 1,000,000 shares of class B (50 par) com. stock. Offering—To
be
Co.
($3 par) 7% cumulative con¬
stock. Underwriter—Green¬
A. McDowell & Co.
now
resell to
Dec.
Miller
20
intend to
of
•
■
and Indiana.
Dec.
per
price paid by dealers.
working capital. Business—Company, through its sub¬
sidiary, is engaged in the retailing of household equip¬
ment, furnishings, and. specialties, on the budget plan,
principally through sales agents, The territory in which
the company
(letter
which is
field, Lax & Co., Inc. Proceeds—Of the proceeds, it is
the present intention to retire an indebtedness of the
company's wholly owned subsidiary, Modern Atlas Corp.
The
filed
45
stock, series "A" (par $100) and 197,697 shares of com¬
mon
(par $20). Offering being proposed by U. S. Attor¬
ney General, Office of Alien Property Custodian. Under¬
writers—Names to be determined
through competitive
bidding. Probable bidders include Kuhn, Loeb & Co.;
Lehman Brothers, and Glore, Forgan & Co.
(jointly);
Kidder, Peabojly & Co., and Drexel & Co. (jointly); A. G.
Becker & Co., and Union Securities Corp.
(jointly). An
additional 5,410 shares of preferred and
67,627 shares oi
stockholder
a
10
Dairy Products Co., Inc.
notification) 550 shares of common
stock.
The stock is being purchased by Stroud & Con¬
ine.; Butcher & Sherrerd and Glover & MacGregor, Inc.,
Equipment
preferred
of
1.
31
who
98,750 shares
callable
behalf
on
10,000 options at
and
Philadelphia
Dec.
at
Koppers Co., Inc., Pittsburgh, Pa. (1/10-14)
Dec. 15 filed 400,000 shares ($10 par) common. Under¬
writer—The First Boston Corp. Proceeds—To retire the
balance of the company's 4% purchase money mortgage
bond and to pay the balance of the purchase price on a
blast furnace and'coke plant/ Part will be used to ex¬
pand plants and reduce indebtedness. Expected Jan. 11
depending on market conditions.
offered
be
share
March
and
beneficial
to
at $3
share.
Under¬
writer—Willis E. Burnside & Co., Inc., New York.
For
working capital and payment of taxes. Expected about
1,000,000 shares of beneficial interest in the
Shares
/>
3
shares
Bonds
per
Investments,
Ramsey,
Pepsi-Cola Bottling Co. of Washington, D. C.
Dec. 21 (letter of notification) 31,500 shares (100 par)
common
stock to be sold to public at $3 per share;
40,000 shares to be offered to trade accounts; 27,500
27,^1949
Maywood Chemical Works, 1:30p.m. (EST)__Stocks
Supervision
Corp.,
collateral trust bonds, series D
January
Knickerbocker
Products
Dec.
Bonds
>
2
Oct.
•
Pennsylvania & Southern Gas Co. ■-///,.
22
(letter of notification) $25,000 first lien and
(non-convertible). Price,
par.
Underwriter—Bioren & Co., Philadelphia.
Reim¬
burse treasury for advances to subsidiaries.
1949
Bonds
•
•
(letter of notification) 29,000 shares of capital
(par $10). Price, par. Underwriter—Charles W.
Warshoff & Co., Newark. Expansion of sales territory.
Bonds
•
;
stock
Jersey Central Power & Light Co
15,
of
Paper Associated
Jan.
Consolidated Edison Co. of N. Y., Inc.__
February
Monongahela Power Co
(letter
N. J.
Equip. Trust Ctfs.
January
^
•
1949
Public Service Co. of Indiana Inc
31
Co., New York.
1949
.Bonds and Common
St. Louis RR
Electric
Corp., Chicago, III.
notification) 3,100 shares ($1 par)
common stock.
Price—$4 per share, for 1,800 shares and
$3% for 1,300 shares. Underwriter—Townsend, Graff &
—_
/January
Bethlehem Steel Corp.
Oxford
Dec.
Stocks
January IB, 1949
Mississippi Power & Light Co
.Bonds
Pennsylvania RR., noon (EST)___Equip. Trust Ctfs.
/
Rohm & Haas Co., Philadelphia, Pa.
,
Dec.
common are
Ocean Downs
Mines Corp
January
Corp
.New
Stages, Inc., New York
(letter of notification) 6,991 shares of voting
profit-participating stock (par $10) and 5,000 shares of
non-voting stock (par $10). Price, par. No underwriting.
To present hew plays and revivals, etc.
Racing Ass'n Inc.__Debs. & Common
Enamel
Underwriter—John G. Nesbett &
Proceeds—For investment. ; •
Jan. >4
St. Louis Brownsville & Mexico Ry._-Eqp. Tr. Ctfs.
Ferro
(par $1), to
offered at market.
Co., Inc.
Capital Stock
International Great Northern Ry._ .Equip. Tr. Ctfs.
Horwood Lake Gold
Fund, Inc., New York
filed 30,000 shares of capital stock
27
Dec.
1949
Preferred & Com.
Common
January 11, 1949
Chicago Burlington & Quincy RR.,
Noon (CST)_„*
Equip. Trust Ctfs.
Gulf States Utilities Co., 11 a.m. (EST).
Bonds
Gulf States Utilities Co., 11:30 a. m (EST).Common
Mississippi River Fuel Co
Common
January
Nesbett
(101)
filed
& Co.
Inc., Harriman Ripley & Co., Merrill Lynch, Pierce,
Fenner & Beane and Kidder, Peabody & Co. (jointly).
Proceeds—For construction and the .retirement of bank
borrowings.
>
,
•
Rocky Mountain Casualty Co., Denver, Col.
Dec. 29 (letter of notification) 24,700 shares of 8% cumu¬
Union Trusteed Funds, Inc., New York
Dec. 28 filed 300,000 Union Bond Fund
shares, to be
offered at market (approximately
$5,511,000) also 2,509
Union
Bond Fund A shares, 5,000 Union Bond Fund
shares, 7,500 Union Preferred Stock Fund shares and
5,G00 Union Common Stock Fund shares, the above se¬
O
curities
of
be
on
Abbett &
reserved
net
asset
for
conversion
value
basis.
of
classes
other
Underwriter—Lord,
Co., Inc.
United States Television Mfg.
Corp., New York
Dec.
23
(letter
(par 500).
stock
Willis
capital.
E.
of
notification) 1,000 shares common
Price—$2.25 per share.
Underwriter-
Burnside
,
-
&
Co.,
.
Inc.,
;
New
York.
Working
,
United Utilities & Specialty Corp.
Oct. 15
(by amendment) 125,000 shares of common stock
(par $1) and 33,000 stock purchase warrants (to be sold
to underwriter at 10 cents
each). Underwriters—George
Cooley & Co., Inc., Albany, N. Y., and others to be
named by amendment.
Price, market.
Proceeds—To
repay bank loans, working capital, etc.
•'
R.
•
lative
participating preferred at $10 per package, con¬
sisting of one share and one attached profit-sharing
agreement offered to subscribers for the 300 shares of
8% cumulative preferred.
No underwriter.
To set up
casualty insurance company with proper reserve.
to
stock
Dec.
Universal Business Machine Corp.,
Connecticut
31
(letter of notification)
Middletown,
,
23,400 shares of class A
common
(par $10).
Price, par.
No underwriter.
For
purchase of machinery and materials to start production.
(Continued
on
page 46)
-
I,
m^wsmt
*1 m en m- v* »i*** <w*
\
■■
46
•'••■
■
THE
(102)
•
>■-.
(Continued from page 45)
«
•
Venezuela
Syndicate,
Morgan
3
.
stock
n older s.
filed
7
.
.;
Waukesha
Dec.
Motor Co.
(Wis.)
stock ($5 par).
200,000 shares of common
.<
First Boston
New York
Inc.,
Stanley & Co.; Halsey* Stuart & Co. Inc.; The
Corp.; White, Weld & Co.
Lehman
Brothers
(jointly).
•
j;
.
<
to stockholders of record January 3
new for each two shares held at $10 per
Underwriting—Company
will pay fees to selected investment dealers for securing
the exercise of subscription warrants. Robert W. Baird
& Co. Inc. will be dealer-manager. Proceeds—To carry
possible increase of accounts receivable and inventories
and to provide for plant improvement.
(2/15)
^
directors approved a financing plan for its
construction
program.
A total of $6,000,000 of
paring to register a new issue of national governmentguaranteed bonds intended to be exchanged for out¬
standing obligations of certain of thd Republic's depart¬
ments and municipalities.
The bonds are to be dated
July 1, 1948, and will mature July 1, 1978.- They will
bear interest of 3%. For each $1,000 of'old bonds sur¬
rendered with all unpaid coupons, new bonds in the
amount of $1,200 will be issued.
The exchange offer is to apply to the Antioquia 7s of
1945 and 1947, the Caldas 7V2S of 1946, the Cauca Valley
7V£ss of 1946 and 1948, the Cundinamarca 6V2S of 1959,
rate of
one
Western Carolina
•
22
Dec.
•
Rights expire Jan. 24.
share.
Franklin, N. C.
($50 par)
No underwriter. To retire
Telephone Co.,
Price, par.
capital stock.
1,406 shares
of notification)
(letter
short-term bank loans.
Phosphate & Talc Co., Seattle,, Wash.
Western
•
the Santander 7s of
(letter of notification) 20,000 shares of common
stock ($1 par) and 10,000 shares of ($5 par) preferred.
To be sold in units of two shares of class A and one
27
Dec
•
preferred at $7 per unit. No underwriter. To secure
manufacturing plant and for working capital.
a
Wichman
•
Cebu City, Philippine Islands
Jan. 5 filed 2,000,000 shares of voting capital stock, one
Co.,
Webster
Co. of Pa.
filed with the Pennsylvania Utility Com¬
application for authority to issue $25,000,000
Jan. 3 company
an
25-year debentures on a
®
on
about
or
Feb.
Nashville
f
Dec.
13
.15.
reported
Pennsylvania
RR.
tificates,
Northern
series
V,
instalments
dated
of
®:
St. Louis Brownsville & Mexico Ry.
abuse of the commercial bill
as
would enable manufac¬
any
credit
in
controls
The
France.
that they have been
turers and traders to obtain access gradually accentuated and extend¬
to banking credit that was other¬ ed points to the conclusion that
French
authorities have
wise denied them by the restric¬ the
deemed it necessary to make them
tions on loans and advances.
more
effective.
But the clearest
Yet even now "purely commer¬
indication of the difficulties of
cial" bill discounts are not subject
to
prior
authorization
by the controlling credit solely through
Bank of France. A distinction is qualitative means is the fact that
the authorities have now imposed
made between bills of a commer¬
such
maturity of
the actual
delivery of merchandise as at¬
tested by the supporting invoices,
cial
the
character,
which
corresponds
"financial"
and
not be linked
to
bills, which
clearly with
ical movement
a
quantitative credit controls in a
banking system that thus far has
been
exempt from.any
serve
Feb.
On
cial
annually Jan.
Halsey, Stuart & Co.
t/Inc.; Salomon Bros. & Hutzler; Harris, Hall & Co. (Iric);
Harriman Ripley & Co. and Lehman Brothers
(jointly).
15,
1950-1959.
Probable
minimum liquidity of
a
goods, and are
60% of their liabilities. This rule
thus, aS a matter of fact, disguised
loans.
The distinction is rather was motivated largely by consid¬
subtle, and it is not possible for
the
outsider
can
be
to
know
whether
it
implemented in practice.1
the discounting of
"purely commercial" bills, those
containing a guarantee or a re¬
discount undertaking
by public
or semi-public credit-institutions
are
likewise exempt from prior
authorization
by
the
Bank
of
France.
Documentary
credit
is
from
Apart
also excluded.
Not
only
V
,
were
.
discounts other
than
"purely commercial" ones
subject to prior authoriza¬
tion by the Bank of France, as had
been loans and advances, "out the
qualitative
credit regulations
were recast. In principle, banking
credit is reserved for enterprises
made
that
produce essential equipment
consumption goods under tech¬
or
nical conditions offering prospects
of
a
reduction of costs. Enterprises-
producing less essential goods can
obtain credit accommodation only
if
erations
sound
of
banking
prac¬
tice; and in no way implied that
the banks should hold any speci¬
proportion of Treasury bills,
fied
rediscountable
since
bills
also
are
commercial
considered
to
be
the
Actually,
liquid.2
measure
however,
increased
somewhat the
control of the Bank of France and
the
National
Credit
Council
by
limiting the amount of credit given
to business through overdraft ad¬
vances
and
medium and longterm loans alike.
On Oct. 1,
1948, the French com¬
mercial banks were called upon to
maintain in their
portfolios
a spe¬
cified minimum of Treasury bills
and
other
public
securities, such
acceptances of the Credit Na¬
tional, a semi-government institu¬
tion financing French economic
reconstruction/ These regulations
as
the
commercial
banks
pro¬
vided that:
(a) The commercial banks were
keep in their portfolios in the
of Treasury bills
at least
95% of the amounts of such se¬
to
form
lative credit such
curities
can
exnort
a
etc.
■
>
or
personal in¬
against
advances
vestment,
advances for
as
security purchases
gold,
>
other
tion must be prevented if- Franceis to attain a. somewhat less
pre¬
ments since
any
(c)
the
On
below
level
the
minimum
paper
of
At this distance it is exceeding¬
ly difficult to form
the
to
1
effects
Although
commercial
( Agence
5,
at
instructions
have
heen
E'onominue
1948*. it is
this
the
banks
of
judgment as
the qualitative
a
to
the
published
et Financiere, Oct.
difficult to interpret them
distance.
.
should
a
fall
such
in
the
figure
comit-
for
that
their
Since
Treasury bill hold¬
ings have been frozen as a result
minimum
these
likely to be
diate, in view
the
of
the
fact
that
a
further credit restrictions at
time when it
the
for
means
and
financing
immediate
it
not
decline
new
tax
Whatever
i; repercussions,
be
may
granted that the
will
having to find
increases.
wage
the;
was
a
with
taken
for
credit policy
new
aim- at
credit
general
a
concomitant
economic
in
activity, but
that
they
held
on
Sept.
30, 1948.
(b) In the event that outstand¬
ing commitments at any bank
of these regulations,
acceptable
liquid assets included cash
and bank balances, Treasury bills, bills
2 For
the
purpose
of
Bank
France
only
detailed study
on
its present position.
Informal
rediscount ceilings were report¬
edly established earlier this year;
like
the
maintenance
I
have
dis¬
inspired
by considerations of sound bank¬
ing practice, aimed primarily at
protecting depositors in smaller
banks against undue expansion of
these banks, rather than by a de¬
ure,
more
instrument of
has
read
in
and
curtailed'
been
recent
heard
weeks
and
of
layoffs
production
sched¬
ules than at any time since Pearl
Harbor.
Thus the judgment seems
taken
turn for the
a
last few months.
worse
justi¬
in the
But v/hat of the
What is the business out¬
future?
a
few paragraphs
back,
on three previous occasions
since the end of the war it has ap¬
peared,. as it now appears, at least
to me, that deflation was at hand
and a decline in employment and
in
industrial
table.
activity
in
But
each
was inevi¬
instance the
employment and of industrial ac¬
tivity
newspaper
has
thus
rediscounts,
on
but
comments point to the
likelihood that the present volume
of rediscounts by each bank will
taken
as
a
basis
for
ceilings.
Should this be so, the banks would
have no other choice but to reject
undue demands for rediscounts.
France
On
faces
the
Conclusions
a
of
eventual
pro¬
The economic merits of
individual
projects, and the eco¬
capacity of the country to
nomic
provide
the
the
real,
that
resources
realization
of these projects
requires, will under present cir¬
cumstances be the governing con-
'
sideration rather than the particu-
>
lar
method
of
art
of
has
acquired
financing; but the
central
banking in France
more
in
and
Bases
public
'
Their
is based
(1)
1949
as
it
was
in
1946,
1948.
to
the
of
General
upon
Optimism
future
the following con¬
optimism
ders and of
months.
on
some
sharp industrial re¬
of
the
That large backlogs
credit
Yet,
of
judgment
siderations:
reconstruction, there is bound to
be continuous pressure for bank
expansion.
the
to avoid
action
,
one
and
is
sustain the
economy
for
many
'
control, the ultimate implications
of which cannot
yet be judged.
from page
(2)
committed
a
*
3)
r
?-
That the Administration
to
the
maintenance
is
of
high level of industrial activity
and that it will expand public ex¬
penditures in
a
measure
sufficient
to
compensate for any decline in
private
and
business
spending
that may occur.
(3)
That business and industry
will
be
stimulated
in
1949
as
in
1948 and earlier postwar years
by
high level of exports stemming
foreign aid program.. "/
(4)
That
committed
the
cies
the Administration
to
the
agricultural
which
continuance
and
have
labor
is
of
poli¬
played such
an
important role in the accelerated
business and industrial
activity of
the postwar period.
(5)
That
new
and
additional
will be designed by the gov¬
ernment
to
prevent
a
serious
props
business decline.
",'
.
respect to the first of
these points it is in order to point
out
that
unfilled
orders
in
the
past have failed to prevent sharp
business
reactions
the
major factors affecting
other
when
once
business have turned unfavorable.
Industrialists who have been
complete cycles of ac¬
tivity from depression back to de¬
pression
know
to
their
that backlogs of orders
sorrow
disappear,
as if by
magic, when scarcities
of or¬ longer exist and prices start
buying power remain
.
instruments of
new
With
recorded.
;
" re-
with
passu
through
;
difficult dilem¬
private
It
were
competent observers that this bit
of history will again be repeated
and that it will be possible once
1947
hand, since cur¬
savings are likely to be in¬
adequate to finance the require¬
of less than three-month maturity),
negotiable government securities, and ne¬
gotiable private securities (the last up
to a maximum of
5% of the total shortliabilities).
its
pari
from the
As I observed
far
information
No
ments
term
duction.
a
look for 1949?
been made public as to the actual
new
rent
paper
temporary stabilteapresent-day credit
and
expansion
fied that the business weather has
readjustment which had seemed
virtually
certain,
was
pushed
back and new peaks of prices, of
a
credit policy..
ma:
a
the
structure
ago,
minimum-liquidity
which
cussed earlier, they were
sire to devise
'(Continued
and while total unem¬
ployment remains at a high fig¬
year
within
the latter will fix for
of
by public and semi-public credit
institutions, commercial bills rediscountable at the Bank of France (three-name
issued
at
of
The Business Outlook for 1949
old
each institution
be
rather
tiion
new
limits that
but
imme¬
severe and
bidders:
requirements,
are; limited
deposits; and of
deposits they must
maintain 20% in Treasury bills,
while a part of the remaining 80%
will, of necessity, be kept in liquid
form.
Their potential lending has
thus bsen substantially reduced.
Finally, under the new regula¬
tions,
commercial
banks
may
have recourse to rediscounting at
lending
The
French business had not expected
the commercial banks
their
balance,
credit controls
new
is
contraction,
day.
in
economic
impact of the
however,
to be reduced by 80%
reduction
from
Preliminary
Quantitative Credit Controls
if
hand,
Sept. 30, the
of Treasury
portfolio
was
the
ments
other
commitments
bank's
of
that date.
hand, further cerdit infla¬
limitations
for
large part of
must system¬
atically abstain from any specu¬
they
their output. Banks
accounts, current ac¬
and miscellaneous credi¬
should exceed at any/time
the level prevailing on Sept. 30,
the bank's minimum portfolio of
Treasury paper was to be in¬
creased by an amount correspond¬
ing to 20% of the rise in commit¬
of
11, 1948, the commer¬
were
instructed
to
banks
maintain
of
legal re¬
reouirements.
can¬
phys¬
fact
very
(1/12)
Bids for the purchase of
$1,870,000 equipment trust cer¬
tificates will be received up to Jan. 12. Certificates are
to be dated Jan. 15, 1949 and will mature
counts,
carious
Nov. 1,1948, and due in 15
$531,000 from Nov. 1, 1949-1963,
Station, Philadelphia, up to noon (EST) Jan. 18. Prob¬
able bidders: Halsey, Stuart & Co.
Inc.; The First Boston
Corp.; Harriman Ripley & Co. and Lehman Brothers
/ (jointly); Salomon Bros. & Hutzler.
preferred stockholders will vote on a proposed
loan of $10,000,000, the-net proceeds to be
as follows: $8,900,000 to retire present bank loans,
and the balance added to working capital.
,
,
„
will be received by company at Room
1811, Broad Street
used
tors)
(1/18)
Bids for the purchase of $7,965,000 equipment trust cer¬
Corp.; Halsey, Stuart & Co. Inc.; Stone &
Great
•
..
• ;
Liquid Carbonic Corp.
•,
(1/20)
of $4,329,000
sale
to 15 years.
Probable bidders:
Halsey/ Stuart &
Inc., Harriman Ripley & Co. and. Lehman Brothers
(jointly); Salomon Bros. & Hutzler; Harris, Hall & Co.
(Inc.). Expected about Jan. 20.
'
/ - ./ - -
long-term
/
the
Co.
(checking
(Continued from page 4)
plans
company
in: 1
Securities Corp.
New Credit Controls in France
.J.
.•••*.
;
v
Chattanooga & St. Louis RR.
equipment trust certificates, series E, maturing serially
Co.
told the FPC it will sell its proposed
Jan. 28,
competitive basis. Proceeds will
applied to the payment of advances from the Ameri¬
can
Telephone & Telegraph Co. for expenditures on
additions and improvements to plant. Probable bidders:
be
West
(parent). Probable bidders: Halsey,
Inc.; Merrill Lynch, Pierce, Fenner & Beane
and Hallgarten 3c Co.
(jointly); Harriman Ripley & Co.
and Lazard Freres (jointly)
; Blyth & Co., Inc. and Gold¬
man, Sachs & Co.
(jointly); Kidder, Peabody- & Co.;
Glore, Forgan & Co.; Lehman Brothers, Salomon Bros.
& Hutzler. The present plan is to
open bids for the bonds
Stuart & Co.
Ry. (1/12)
Bids for the purchase of $1,870,000 equipment trust cer¬
tificates will be received up to Jan. 12. Certificates will
be dated Jan. 15, 1945 and will mature Jan. 15, 19501959. Probable bidders: Halsey, Stuart & Co. Inc., Sal¬
omon Bros &
Hutzler, Harris, Hall & Co. (Inc.), Har¬
riman Ripley & Co. and Lehman Brothers (jointly).
Prospective Offerings
mission
approximately $1,000,000; is to be obtained by the
sale of additional common stock of the
company to
Electric Co.
1948, the Tolima 7s of 1947; the Cali
International
new
Penn
annual
•
Bell Telephone
•
Power
company
Boston
First
(U. S. cur¬
rency). Underwriter—F. T. Andrews & Co. Proceeds—
Tq provide funds for plant construction, diamond drill¬
ing, exploration and repayment of loans.
value. Price—25 cents per share
centavo par
30
1949
mortgage bonds is. to be sold through competitiye bidding
>
$40,000,000 first mortgage 30-year bonds through com¬
petitive bidding. Company's original plan was to place
the new
bonds privately with institutional
investors.
Possible
bidders include: Morgan Stanley & Co.; The
Mindanao Development
Philippine
Duke
Dec.
5
V and
7s of 1947 and the Medellin 7S of 1951 and 6V2s of 1954.
share
Monongahela Power Co^
■
Jan.
Colombia, Republic of
-'/-'T.:*"
Dec. 30 it was stated the Republic of Colombia' is pre¬
Offering—Offered
at
Thursday, January 6, 1949
j
Maywood Chemical Works (N. J.) (1/27) v ;
Bids for the purchase of 6,930J/4 common shares (no par),
y56,562V5 shares of participating preferred stock (no par)
•
Chicago Burlington & Quincy RR. (1/11). *'T""
and 8,081 shares of cumulative preferred stock
(no par),
Company will receive bids up to noon (CST) for the
constituting 23:10%, 29.28% and 32.85%, respectively, of
purcnase of $3,210,000 equipment trust certificates to be
1 the stocks, will be received
up to 1:30 p.m. (EST) Jan. 27
dated Jan. 1, 1949 and due in 30 equal semi-annual in¬
at office of Alien Property, 120 Broadway, New York.
stallments July 1, 1949-Jan. 1, 1964.
Probable bidders:
The company itself has formally agreed to submit a bid
Halsey, Stuart & Co. Inc., Harris, Hall & Co. (Inc.),
of $847,500 for the stock.
%
~
'
Salomon Bros. & Hutzler, Harriman Ripley & Co. and
;
(letter of notification) 32,000 shares of common
Price, market (about $2.75). Moore, Leonard &
Lynch may act as brokers in .selling the stock on the
New York Curb Exchange.
Proceeds to selling stotk-
Jan.
CHRONICLE
FINANCIAL
&
COMMERCIAL
no
to
soften.
Savings Dissipated
As regards the backlogs of
buy-
1
/Volume 169 \Number 4766
power, it is in order to point
that, however substantial they
ing
1
out
THE
institutional
and
ernments
COMMERCIAL
con¬
provided, will continue at a high
level; it may be higher in 1949
important
part o'f their past ac¬
cumulations
many
and
have
future income,
Moving
also, in
mortgaged
heavily
cases,
Y'y/V:'y:'~
*
above we
confronted with what may be
are
2
to No.
on
the
$64 question
of the coming
year: How far can government by
increased expenditures sustain a
high level of business activity?
My own impression is to believe
that if government finances
by taxation
wisely
by borrowing from
the public, the increase in public
or
expenditures must be accompa¬
nied
by a decrease in private
spending Y and
investment
of
comparable proportions, and that
additional
production and em¬
ployment results. If, on the other
hand, the government finances
through the sale of its securities
no
to
the
commercial
banks, it is
to create new doubts and
likely
uncertainties
.
vestors
,
fluence
natural
the
in
by added spending to
brevity
points
3
and
4
is
may be bracketed.
It
doubtless true that the foreign aid
•given
which
under
program,
the
away
at the
billion a year since
7%
has been
the
So
economy.
The
by
most
these
the
war,
sustaining influence in
a
maintenance
prices
have
we
products of our
rate of close to
industry
.
also
has
the
of
high agricultural
government, subsidy.
that
be
can
said
for
prices and the
high break-even point that cur¬
rently prevails in many indus¬
tries, the dark black of today may
easily become the deep red of to¬
morrow.
Thus
in
1949
industrial
of reducing their costs
improving their products
services. They will resist the
of
and
demand
for
the
increases,
wage
fourth
in
the fear
In
sumer.
likely
the
they are
strikes; and
precipitate
to
other labor troubles.
and of individuals faced with
me,
which
them.
from
accrue
measures
and policies that
be designed to support busi¬
if they should be
would
reasonable
necessary.
assume
that
to
involve
the
tion of credit controls of
and another and very
relaxa¬
kind
one
possibly the
resumption of large open market
operations by the Federal Reserve
Banks.
sees
deflation period of 1920 and 1921,
as well as close similarities with
the
violent
reaction
takes,
of
1937
count the
and
publicized
correction
is
probability of
a
to
modest
activity and
the permanent stabilization of the
economy at a level only moder¬
ately below the Speaks of the last
three years. When the turn comes,
I
•
Extreme Reinflation Unlikely
More
extreme
measures
inflationary
possible and con¬
are
sistent with
the traditions of the
Administration
but
will
the early
party,
adopted in
hardly
be
future.
An Administration which
recently
as
convinced
No.
six months ago
as
that
inflation
domestic
1
nation could not
,
at this time to
in
the
the
the
of
consistently turn
broad
a
inflation^
of the kind that
ary program
tried
was
problem
i
was
early
was
middle
and
1930s.
Finally,
few observations and
a
conclusions
regarding
able
of
course
the
prob¬
business events in
1949.
I am of the opinion that a re¬
adjustment of fairly substantial
proportions in the national economy
is overdue and cannot be
long averted/except by war.
.
,
I
base
fact,
conclusion
on
the
what I believe to be a
that most
of the
forces
or
fact,
which
the
this
have
boom
been
of
the
support of
last three
the
have spent themselves,
years
Most of
the acute scarcities for which the
war was responsible have
been
/eliminated.
Demand and supply
have been
brought, or are rapidly
being brought, into equilibrium,
and quite as
important, the easy
money, upon which the boom has
fed, has
out.
run
"There will
be
good
industrial
wartime
our
to
fearful that the props that
been, and will be, designed
perpetuate the boom will prove
weak and unavailing.
am
was
there
There
will
be
in
1948
less
j.• struction, what with
change»that
mortgage
has
1949
1947.
private
con-
the
come
market.
struction by state
in
and
marked
over
Public
the
de¬
mar¬
generally ex¬
an
early
and dis¬
tributing activities is indicated by
place.
as
around
ful
market
will
week
bankers
of business
yield
little
beyond
in
They
are
holding
regional
meetings with distributors /and
having company officials explain
the
of
equipment trust issues by
a
smattering of
municipal offerings.
However,
January
could
quite substantial month
prove a
by
prospective
which
offer¬
simmering and
awaiting the proper back-drop
by way of conditions in the
are
of
But that formula is
up prices on these scarce items is
Production and more production is
scarcity.
To this end, elimination of the repressive influence of
excess-profits tax will make a real contribution."1
the
How much
unrealistic
more
and
unsound, then, would be the
attempt 3% years after V-J Day, under our economy of part short¬
ages and part overproduction, of price deflation
steadily pervading
'he vestigial inflation, to
justify a tax arithmetically calculated on
the
the assumption that it will neutralize backlog
on
war.
to
the
market
month,
dozen
a
which
before
most
siz¬
could
the
them
of
end
for
the account of public
utility com¬
panies and accordingly, with one
two exceptions, destined for
competitive bidding.
or
These range all the Way from
Jersey Central Power & Light
Co.'s
projected
000
of
issue
30-year
bonds,
to
Co.
New
of
of
first
$3,500-
mortgage
Consolidated
York's
Edison
$50,000,000
first and refunders which would
have a similar maturity.
But
In-Flationary
because
such
production
severe
which
is
taxation
the
prevents
the
expansion of plant and
against shortages and in¬
antidote
surest
flation; and because of its compulsion toward widespread corporate
extravagance with "20 to 30 cent dollars."
Let
the
work
of
appear
assured
apply
off
earlier
their
businessman,
irrespective
of
his
0
self-interest,
defend
a
further
expansion—through either
capital markets
survival
of
the
or
corporate
use
of internal funds—and hence
on
the
structures
independent of the state. Let all
immediately affected
realize
that a punitive tax on
efficiency, progressiveness, and growth,
must have the anti-social effect either of
freezing the disparities
between growing and the
already-arrived corporations, or else (if the
levy is confined to the large companies) of leading to the
unemploy¬
businessmen
—
not
only
those
ment of their workers and the
—
gradual divestment of the savings of
their millions of small stockholders.
Rather than hearkening with
pleasure
(temporary) exemption
About
200
Should
tration
stage
all
because
over their own possible
size, let those businessmen not
of
among those to be included in a "soak-the-rich" tax target instead
try
to realize that the large companies have in
the main set the highest
standard of wages, established the
highest working conditions, and
have,
as in the automobile and railroad industries,
supported small
businesses by purchases of their goods and services.
Let the
businessman, in lieu of thinking in terms of a
bits
and
undertakings,
of
ample
chance
selling talents
in
throughout the week in
the Britishers other than the 250 who have
not been
stripped to less
£5,000 annual net income, must be dipping into their
capital.)
the businessman re&lize the factor of
Administrative diffi¬
culties, not per se but because the only way of avoiding them is to
devise a-statute which includes
major inequities. Since the wartime
statute's repeal in 1945 we have been left in
a wake of
carry-backs
and carry-forwards which are still
plaguing the Revenue Depart¬
or
deals
materialize
ferings,
it
is
standing,
the businesses
the
Treasury
concerned.
has
To
recently
settle
relief
enlarged
the
cases
Other Major Prospects
could reach
week,
week,
into
actual
possible
that
-v' *
..
*';v '/.;• ^. V'/'/A
Lastly, the ironic nature of businessmen's
preference for the
ex¬
profits tax as the lesser of two
evils, must be pointed out;
namely, that if i^were to be enacted first, the not-too-distant
future
cess
would
levy.
see
In
them
our
of alternative
burdened
with
both
a
flat
rate
rise
and
an
excess
present political status, affirmative choice Of the lesser
destructions, only hastens the infliction of them all.
to
up
in
Hearings before the Committee on Finance, U. S.
Senate, 79th
First Session, on H. R. 4309, October, 1945, pp. 23-25.
Con¬
States
Utilities
Co. which will have $15,000,000 of
20-year debentures and a maxi¬
mum of
280,000 shares of common
stock
for bids, this particular
up
next Tuesday.
one
The
vice
list
Co.
includes Public
of
Indiana
Ser¬
with
$12,-
000,000 of first mortgage bonds; Y
Central
Illinois Public
Service
Co. which is seeking $10,000,000
through
mortgage
new
Kentucky
Utilities
bonds;
Co.
with
a
$10,000,000 bond issue; Rockland
Light
Power
&
sell $7,500,000
Co.
seeking
to
bonds, and Union
Light, Heat & Power Co., which
will
raise
$5,000,000
via
the
mortgage bond route.
Bringing
and
a
in the background
up
probable starter at any time
conditipns
above
sue
the
$200,000,000
the
to
list
fund
face
and
is
de¬
$40,000,000
in
company
of
its
a
position
treasury for
struction.
will market
as
part of its plans
for meeting the provisions of the
//
DIVIDEND NOTICES
AMERICAN
CAN
COMMON
On December 28, 1948
COMPANY
STOCK
a
•
quarterly dividend of
per share was declared on the
Common Stock of this Company, payable Feb¬
ruary
15, 1949 to Stockholders of record
close
of
business
books will remain
January
open.
to
JOHN
MORRELL
counting
for
$40,000,000 in
an
A
Duke
on
new
emission
of
&
CO.
dividend of Thirty-
30-year first
on
for
holders of record
shown
on
January 8,1949,
the hooks of the
Ottumwa, Iowa.
as
Company.
George A. Morrell, Vice Pres. & Treas.
DIVIDEND
Koppers Co.'s big equity
ready
the capital stock of
paid January 29, 1949, to stock¬
MMAeu
If Market Is Right
be
One-Half
John Morrell & Co. will
he
being formed.
and
Cents ($0.375) per share
mortgage bonds. It had been the
will
Transfer
Checks will be mailed.
Seven
groups are
1949.
the
DIVIDEND NO. 78
are
Co.
20,
at
EDMUND HOFFMAN, Secretary.
.
Bankers
ture
stock which
outlays
made for acquisitions and con¬
Power
common
Commonwealth & Southern Corp.
short-term borowings and place
repay
right, is the 675,000
seventy-five cents
heads
signed
are
January,
Consolidated Edison's big is¬
NOTICE
ven¬
market
The
Board of Directors
has declared
SITUATION
today the fol¬
lowing dividends:
WANTED
ar/
$1.25
share for the first
upon the $5
per
quarter
of 1949
Preferred Stock, payable March
TRADER
15,
1949
record
ness
AVAILABLE
stockholders of
to
the
at
close
of
busi¬
February 15, 1949.
$1.00
per
share
upon
the
Common Stock, payable March
25 years in the Wall Street
district,
trading
in
Utility and Industrial
ities.
Box
Park
Public
secur¬
Married; 44 years old.
M16,
Financial
New
gress,
Gulf
are
of¬
of
Y.
starting next
the following
mostly
new
amount.
its affiliated Excess Profits'
Administrative Council and has extended
its life for another two
years. Theoretically a new peacetime law will
be Administratively feasible if it uses the
prewar bases which have
already been established for all but about 1,000 corporations. Actu¬
ally, however, the only kind of statute that would be Administra¬
tively feasible would be one that would perpetuate all the
previous
inequities and additionally generate a host of new ones.
market
but
Sight
still out¬
membership
offer¬
actual
Among the other issues which
in
now
financing
a
and
the
in
ing.
despite the slow start, could foot
Let
ment
for
been
Utility Holding Company Act.
Millions In
"backlog company's intention to place the
tax," realize that, peacetime excess profits taxation really constitutes issue
privately, but there have
a capital
levy against corporations and their shareholders. (In Great
been rumblings that the Federal
Britain it is immaterial whether or not the
Cripps "Only once" formal
Power Commission may order it
capital levy is continued; the same effect is brought about
by per¬
manent excessive income tax rates which
force dissaving.
Some of up for competing bids and so
than
at
progress
regis¬
well along toward that
corporate
the national welfare by
pointing out the ruinous effect of
rise in tax rates on long-term
corporate
the
meetings
have
Electric Co.
to
pieces
the
businessman, large and small defend the nation's eco¬
by pointing out that excess profits taxation is not antiinflationary, but strongly pro-inflationary. This is so, of course,
fact
points
year-end
the next few weeks.
nomic welfare
of
purposes
In
various
shares of Southern Indiana Gas &
to
Not De-
and
Accordingly, bankers and their
distributing
organizations
who
an
opportunity over the
have had
It must be remembered that any extraordinary
profits derivable
war are already prevented
by Vincent-Trammell and
contract renegotiation provisions.
Let
about
are
undertakings
come
aims
company.
the
hand¬
a
the railroads and
able
5)
page
reportedly busy laying the
preparation
current
investment
way
the
.
The
There
con¬
gov¬
dormant,
ings
savings to bid
the
remove
ISource:
and local
was
issue
new
pected this week, but
revival of underwriting
judging
the key.
deal less
construction
than
ket
corporate
to
"Clearly, the repeal of the excess-profits tax will stimulate
production.
Today we are starved for new houses, new cars,
new
radios, and the like.
The best defense against the use of
;Y:-v"Y/Yv'Y.Y--Y
.
a
The
dis¬
industrial
in
big
common
groundwork.
discussions
1938.
the
form
disposition
my
decline
little
but
Whatever
tinguishing normal and excessive profits.:
seriously defective.
the
,.
will : be, in order.
many parallels with the
Observations
obviously impossible to
judgment on new govern¬
they
';
One
this
shares of
na¬
presently
or
on
an indicated value
of $12,000,000 at current
prices,
are
is not pos¬
precise
is
ness,
It is
|
it
the
Monday
stock, with
that preceded
from the next
ment
.
reason
forecast
next
handling
400,000
one,
seasoned market.
last
may
;
to
Bankers
/
have
Large numbers of corporations
earnings
It
:
that
process,
from
pass
,
of
unlike the first, second and third,
it cannot be passed on to the con¬
increased
efits
*
round
For that
one
from
is
opening of subscription books-
pe¬
ture of the correction that is now,
problem
and
proportion to the temporary ben¬
■
execu¬
it.
tives will be confronted with the
and policies, it
is that they merely
push back the inevitable day of
reckoning
and
probably
entail
long-term costs which are out of
measures
seems, to
•
never
sible
of
the
it
47
indicated that only the'
proper setting marketwise is re¬
quired to open the way for
early
boom, like the latest
follows
closely the
little
deflation
of
readjustment, will fail.
pattern of the
cor¬
above
.
war,
(Continued from
For
of
The latest
in¬
economy.
rect.
.
severity and duration
riod
time
and
Thus a larger or a
smaller number, depending on the
to
and
any
invariably true in periods of
Corporate profits almost inev¬
itably will decline. What with a
aggravate the forces of reaction it
seeks
sustaining
is
as
in the minds of in-
industrialists
and
(103)
readjustments.
substantial
-
CHRONICLE
the
than in any one of the three pre¬
vious years and thus be the most
•.
FINANCIAL
clining incomes are likely to feel
pinch of high fixed charges,
struction of many kinds, for much
of which
the
funds have been
be, they are for the most part
no
longer at the disposal of low
income
and
marginal
buyers.
These groups,
according to the
records, have already consumed a
may
&
Commercial
Chronicle,
Placd,
York.
New
York
&
15,
1949
record
at
to
stockholders of
the close
'of business
February 15, 1949.
The Goodyear Tire & Rubber Co.
By W. D. Shilts, Secretary
Akron, Ohio, January 3, 1949.
2 5
The
8,
Greatest
Name
in Rubber
■$
48
THE
(104)
COMMERCIAL
&
FINANCIAL
CHRONICLE
Thursday, January 6, 1949
whether
pressure,
BUSINESS BUZZ
White House
ing
from
from
or
the
large vot¬
groups.
What
man,
have
for
Behind-the-Scene Interpretations
from the Nation's
is important to Mr. Tru¬
it is pointed out, is that he
must
on...
And You
Capital
business
leaders
the
the
one
instrument
a
meeting with ariy six of the most experienced, seasoned leaders on
Capitol Hill of both parties to ask for a completely anonymous "guess¬
timate" of the.leaders as to whatS>
pronounced
about the reply they
would get:
it will be
*
tjc
ourselves.
know
don't
we
but
Never,
uncertainties
a
Congress.
We don't know
what the President really
did
hardly,
face
yet
more
wants.
,We don't know how suc¬
cessful
the
will
President
in
be
getting what he wants..; We don't
know what part the minority will
play.
Those
certainties.
the political
are
Add
un¬
these
to
two
other uncertainties. We don't know
what
the
of business may
course
revolutionize
well
business will
of
course
be and the
the
legislative
outlook,
depending
upon
what
happens. Then there is the everpresent uncertainty of the Rus¬
sians and what they will do.
*
•
less controversial
then
all
call
in
them
decide
to
and
what
of
loaf they could have instead of
been
virtually annulled.
One of the final uncertainties
will do.
So far
leaders
can
as
the Republi¬
concerned, their
are
private disposition is to remain
anti-New
a
hand,
a
*
Deal.
at
On
of
many
scared
tion,
*
to
is what the Republican minority
whole loaf.
*
is oblivious
tee's traditional veto power which,
in light of this week's action, has
them
tell
be
bail Mr. Truman out
possible to maintain the Commit¬
issues for
quarter
the
is
would
observers note, Mr. Truman should
have extended all the covert aid
three months, and
or
which
country's economy
and his political backing. Accord¬
ingly
the professional
political
political manage¬
ment
could
perhaps handle the
Congress so as to avoid any too
serious conflicts. Time, or the ab¬
sence
of time, is on the Presi¬
dent's side.
There just isn't time
to pass everything this year the
President has promised. Mr. Tru¬
man could keep the boys busy on
the first two
requested.
the fate of the
astuteness in
some
to
he
Committee
unless he
enacted
Despite the batch of conflicting,
broad promises, a President with
an
cam¬
getting enacted many of the
things he cannot afford to have
civil
on
in
not
of
rights.
as
Rules.
available
ers' split on the latter is not as
Congress will do that is good or
ill for business in
1949, this is
"We would like to tell you,
Congress
But
completely off-the-record
to hold
will
paign promises.
It is. out of the
question for Mr. Truman to blame
the Congress.
The voters gave
committee of the country's most sub¬
a
were
he
blame"
to
one
that
1949 be able to meet all his
him
WASHINGTON, D. C.—If
stantial
"some
fact
the
the
other
members,
"to
expected
are
the
the
November
elec¬
vote
as
individuals." By that it is meant
i'
V
"If
had
we
to
forecast
any¬
early in the game, we
would be inclined to think that
thing
.
Mr.
so
Truman's
of
mastery
his
Congressional following is like¬
ly to range from ineffective to '
impotent, offering the prospect
of
chaotic
generally
a
but
have
we
session,
preliminary
only
■signs of that."
Despite the fact that Mr. Tru¬
legislative problem calls
for astute political management,
the fact is that the overwhelming
that
man's
eral" and
majority of persons on Capitol
Hill, even though they are not yet
to say so for publication,
buy Mr. Truman's merchandise
convinced that Mr. Truman is
Senators in opposing, albeit un¬
tr.at
the
own
action of
The
"lib¬
wavering GOP mem¬
than
rather
going to blunder hopelessly in his
the 81st Congress.
is safer
political skins to
Republican ideas.
a dozen minority
successful,
"Mr.
Senator Taft's
ership is
fact, the unanimity of this as
*
*
*
' yet
unquotable
expectation,
is
That, in a nutshell, is the con¬ just about as complete as was the
before Nov. 2, that
sensus
of informed legislators at expectation
President Truman would be de¬
the opening of the first session of
\ '
feared
their
for
relations with
In
is
bers will decide that it
ready
are
it
manifestation of that
a
lead¬
opening trend.
Blooper is in charge of delinquent accounts."
■
the 81st Congress.
It will be
>;
the President really
He has told everybody
wants.
he
is
going to live up to his many
conflicting, and grandiose prom¬
ises to the special pressure groups.
There will be much reading of the
annual message,
and of the forth¬
Budget and
"Economic
coming
Report"
read
messages, to attempt
therein an interpretation
President's
the
Some
time before it is
some
what
known
feated in the national election.
wishes,
to
of
particu¬
larly to deduce that he is not as
hot for something or other as was
expected. Nevertheless, the pres¬
sure
groups to whom the Presi¬
dent during his campaign made
these promises are rather vocally
"represented on Capitol Hill, and
may be expected to react against
any
apparent unenthusiasm - on
the part of the President with a
demand for action.
will
ident
Truman
make
good
that Pres¬
cannot
possibly
all his promises.
on
It is explained that
he to
were
push civil rights vigorously, as
he
has
promised to do, he will
all but drive the Southern Dem¬
ocrats into rebellion. If the lat¬
ter
into rebellion, Mr. Tru¬
go
man's
Capitol
majority
Democrats will turn
1
nority.
into
of
a
mi-
The farm organizations
at recent meetings have made it
clear that they do not
cozen
the
removing
restraints
upon
union labor action. At the
the
time
farm
groups
enthusiastic
price
about
control,
ly predict privately that "before
supports.
Thus there
conflicts
President's
farmer
believe
are
that
the
between
a
the
number who
potential
White
row
and
House
Congress already is covertly un¬
der way, and
with
will mount in fury
week.
each
$
of the un-American
Committee, which, de¬
barrages of state¬
ments directed against the com¬
mittee,
has been popular with
Congress.
The late Mr. Roose¬
spite
all
the
the
hated
un-American
tivities Committee
Mr.
Truman.
unsuccessful
was
committee
much
agree
the
gress
Mr.
in
of
than
Roosevelt
getting
off.
killed
members
the
However
Congress
may
with the criticisms made of
committee's
resent
even more
Yet
Ac¬
the
operations,
inference
that
they
"Con¬
when it investigates is just
head-line
hunting whereas when
the Department of Justice investi¬
gates,
it
is
only
promoting
jus¬
tice."
;"..
.
*
❖
proportion of its school
royalties on oil
revenues
from
with
leases
state
on
the granting of such
lands, and
would also
resultant
mean
royalties
tens of millions
to Louisiana as well.
This practi¬
forces all the Texas and
Louisiana
delegations
to
fight
cally
issue.
this
on
the
members
also
It
Congress
of
from those two states in
ward
position.
take
the
awk¬
an
to
try
to
get
Finally,
that
there
in
the
reducing
of the
and
labor
split
on
with
passed,
throttle
legislation.
Committee is
more
dent Truman.
many
portant business. The Rules Com¬
mittee is a parliamentary device
which exists for the very purpose
of
"popular"
strangling
tion which
of
deal
create
bitterness
great
a
toward
have to vote for if
legislation
with California and
other
states
joining
the
fight
against the White House.
As
one
move
illustration of how this
works
Speaker
out,
mittee
hole
the
White House,
a
even
to
comes
a
control
opponents
of
tide
of
Ray-
Federal
oil.
lands
wants, to seeing how he
get
along with Congress, toseeing what groups line up with
whom.
The outlook, of course, is
can
for
left-wing legislation and
expenditures than would
more
higher
have
been
Congress.
before it
mate
will
how
with
case
may
be
Mr.
Rayburn will be
lation,
a
a
chief
possible to esti¬
radical
and
upon
not only to
will
have
Speaker
to
ac¬
(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
the "Chronicle's" own views.)
vqte,
Trading Markets:
Ralston Steel Car
the
by
time there was
a
the
first
recession. The
to
bail
committees
feel they do
Spokane Portland Cement
could easily get
House
exists
legislative
over
persons
LERNER & CO.
out
Investment Securities
which
not have sufficient
10 Post Office
Square, Boston 9, Mass.
Telephone Hubbard 1990
to
withstand
Teletype BS 69
heavy
de¬
Rayburn
get what the White
Teletype—NY 1-971
other
FOREIGN
SECURITIES
Underwriting Offices to
70 WALL STREET,
NEW YORK 5
The Trading Department
120
will continue at
BROADWAY, NEW YORK 5
Telephone: REctor 2-2020
SPECIALISTS
50 Broad Ftrool
the removal of their Executive and
Telephone: WHitehall 4-4540
HAUL MARKS & f!0. INC.
ex¬
Riverside Cement A & B
all
for
60 years of age
passed
courage
Truman
how
pensive the new Congress will
tually turn out to be.
in the House.
pend
GOP
Federal pension of $200
month
Mr. Truman's
spokesman
a
be some weeks
Oregon Portland Cement
demagogic
All Issues
New Deal nature
Now York 4, N. Y.
AFFILIATE: CARL MARKS & CO. Inc. CHICAGO
if the Southern-
the
It
legis¬
committee
nounced
maneuver,
primarily devoted
to seeing what Mr.
tough enough to pigeon¬
popular
burn of Texas is one of the pro¬
FOREIGN SECURITIES
———.—
generally,
legisla¬
majority of members
a
announce
civil
periments of
"traffic
cop" to clear the track for neces¬
sary
legislation
and keep
the
House program ordered for im¬
Firm Trading Markets
Admin¬
issues
a
prospects
be
bill
However the fight
out, it will
comes
will
Hill, Thompson & Co., Inc.
among
rights, especially on
its pro-labor stand, and on ex¬
Rules
The
than
as
representa¬
the
authority
broad
but
v/hich they privately pray
it was three years
'will never come to a vote.
ago,
it will have a tough time
In the absence of a Rules Com¬
hurdling a second veto by Presi¬
is
between the
supporters
to
House Rules Committee to
the
a
tried
stay
the hand of those who succeeded
ting
Even if such
signs
no
legislative
as
concerned, the immediate few
weeks
to
were
President
the
feel that they
in the states.
far
So
are
Truman
It is up to them to
initiative
vestthe control of tidelands oil
HAnover 2-0050
Labor
arise two
much
as
possible.
as
Congress to approve a law
Mr.
*:
Second of the Truman pre-session
blunders
in
his
relations
trouble
of
out
President
keep
to
over
granting of leases for the de¬
velopment of the tidelands oil.
Texas gains a very substantial
puts
signs of what is called the
President's "ineptness" in dealing
with Congress already are noted.
One cf them was his post-election
Activities
control
sjs
$
Some
lambasting
Federal
the
the
in
passed
generally
the
Truman
Southern Democrats will
to
istration
than
There
gress.
with Con¬
row
a
establish
stand¬
even
which
potential
:
will be in
man
to
have
higher and higher official price
tend
cautious¬
wants
but
and instead lean toward
wants,
tives.
more
House
House,
Congress, it is pointed out
Capitol, was his having the
Department of Justice institute a
suit against Louisiana and Texas
same
made it clear that they are un-
by
of
the end of the session" Mr. Tru¬
,
get higher and higher wages by
Truman
couple
a
months." Others
to
the idea of encouraging labor to
"in
Congress.
velt
It is Capitol dogma
that Mr.
say
get his wires crossed with
with
at the
!l
v
@FedFRASER