Full text of Commercial and Financial Chronicle : January 7, 1954, Vol. 179, No. 5288

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uMlNISTRAHatf

BUSMEbw

LIBRARY

ESTABLISHED IS39

the Commercial

Reg. U. 8. Pat. Office

Volume 179

Number 5288

New York

Price

7, N. Y., Thursday, January 7, 1954

Cents

Copy

EDITORIAL

The

closely the time approaches when

the so-called Randall Commission must
and file its

Unmasking the Mystery
Of Foreign Trade

We See It

findings, the

members.

The

reasons

are

similar
in character, Mr. Airey makes a plea for freer trade, but
not free trade. Says move toward ultimate goal of free
trade must be carefully thought out through engineering
and economic policy.
Holds our greatest need is for
dearer understanding of the potential of raising living
standards through maximizing interchange of goods and
Pointing out domestic and foreign competition

doubtful it becomes

large majority of its

mot far to seek." This

of legislators and private citizens has been
assigned the task of finding solutions for some

group

of the

most

controversial

issues of

this

questions on which the Republican
divided as it is upon few other matters
the moment, and upon which the Democratic

party is by no means unanimous.

little of real
meaning or else majority and minority reports in
; sharp conflict with each other appear ajJU&ut in¬
evitable as a consequence. In any evehtj it is
scarcely conceivable that these highly "contro¬
which

says very

versial issues will fail to
bitter

debate

even on

arouse

keen and

even

Congressional committees and
Congress itself.

the floor of

The issue

f the tariff.

Since that time there have been protec¬

tionists and free traders (more or less) in each
\ of the major parties. This happens to be an era
\

when few

in public

men

life,

in business for

Continued

page

analyst predicts selective market with an advance
25% in the industrial average by the year-end. Lists?

Market
of

Expects subsequent gradual broadening-out of
advance to include larger market segment
Maintains
there are few issues technically vulnerable to sh^rp price

chips."

Cites market's past

It is not

than

ing until 1960.
Business will be lower in 1954. That is

loom

was

level of

definition, tho decline varies between
shake-down, a correction, a level-

loom

--now

smile.

out

weavers

;

higher in
no

between Senator Douglas and Senator

substantially

On the other hand,

(except the professional pes-

one

speculator in the stock market should
pursue a very conservative course.

should

issues

John Airey

Listening to a recent television de¬
bate on the subject of foreign trade
this discussion.

to. be

1954.

majority opinion hold true, it seems
fairly obvious that the investor or

&vv.;,

recession, a

simists) expects another 1929. Should

work."

history at which

level

business

introduced, which replaced

That is ancient

an unan¬

ling-out, a gentle slide or a consoli¬
dation. Virtually nobody expects the

hand weaving, "because it would put
hand

almost

The forecasts vary from almost the same
business as in 1953 to a 5% to 15% decline. By

imous opinion.

century ago,
as
we know,
that bloody riots oc¬
curred in England when the power
more

and current performance

confirming his expectation of long-term advance last¬

still in full swing.

was

"light blue-

interesting profit possibilities in the

most

Probably one of the most misunderstood subjects to¬
day, as it affects our national interests and betterment,
is foreign trade.
Our current conception of foreign
trade is about at the stage of understanding of two gen¬
erations ago in England on the sup¬
port of labor saving contributed by
improved manufacturing processes..
This statement would not apply quite
so
effectively to the United States
of two generations ago because the
geographic pioneering growth here

which not

only Congress, but both
political parties are most sharply divided* is of
course, the tariff. For decades the two patties, at
least in their public expressions, differed sharply
on this question. The time came, however, when,
Sunder the leadership largely of the late Alfred E.
Smith, the Democratic party officially altered
-1 (not to say abandoned) its traditional position on
;

Members of the New York

declines.

any

Either a report

are

services with other countries.

! other day,

party is

Walston & Co.,
Stock Exchange

General Partner,

significant recommendations which will be satis¬
or even a very

By EDMUND W. TABELL

By JOHN AIREY

complete

ithat this body will be able to formulate really

factory to all

A New Boll Market

concentrate

such

utilities,

defensive

foods,

food

chains, J tobaccos
turned

Malone prompted

out

(w h i c h haven't
well) or on growth

companies that, although they ap¬
to be selling rather high in rela¬

pear

I may, at first, appear to
bear with

saving
better
group

me.

improved designs of

machinery,
tooling for
interests.

be off the track, but please
going to analyze the effect of labor

us,

tion

product, or

the people, and ignore all specific

our

domestic situation and then in

our

until

foreign trade

Continued

page

speculator, it

secondary

pains of progress—the inescapable change; first, purely
in

earnings

present

To the

also going to analyze the growing

dmm,d w* Tab<sI1

divi-

and

dends possess continuing growth potentials which should
result in higher earnings and dividends over a period
of time.

the

and

evident that the cyclical,

appears

marginal

companies should

business pattern improves.

Continued

glance at the Index on page 3 vividly shows the wealth of informa¬
importance to the securities industry, investors and businessmen which
is available in the Thursday "Chronicle" every week throughout the year

be avoided

Some holdings of
on

page

ON THE INSIDE—A
tion of vital

U. S, Government,
State and

Municipal

Established

the Government

Burma,

India,

Protectorate.

Reserve

Capital

30 BROAD

ST., N.Y

banking

THE NATIONAL CITY BANK

£2,281,250

Fund-

£3,675,000

The Bank conducts every
BOND DEPARTMENT

£4,562,500

New

OF NEW YORK

description of

and exchange business.

Trusteeships and Executorships f
also undertaken

Net

LAMB0RN & CO., Inc.
99

WALL
NEW

STREET

T.LWatson&Co.

YORK 5, N. Y.

Teletype: NY 1-708

Active

Dealers,

Markets

Brokers

Bond Department

Exchanges

CHASE

THE
NEW YORK 4,
DETROIT

GENEVA,

Bldg.

N. Y.

PITTSBURGH

BANK

NATIONAL

OF THE CITY OF NEW YORK

SWITZERLAND

CANADIAN

Puget Sound

BONDS & STOCKS

Power & Light Co.

CANADIAN

SECURITIES

50 BROADWAY

Trade

Exchange

Cotton

Maintained

and

Banks

Board
other

Inc.

N. Y. Cotton Exchange

CHICAGO

Bond Dept.

Exchange

Exchange,

Orleans
and,

Exchange

Cotton

York

Chicago

Zanzibar, and Somali-

Authorised Capital-.

Paid-up

company

New

Commodity

Ceylon,

Aden, Kenya, Tanganyika,

Uganda,

land

bank & trust

Pakistan,

Exchange

Stock
Stock

American

26, Bishopsgate,
London, E. C. 2

Branches

York

New

Office:

HAnover 2-3700

Bonds

Members

Kenya Colony and Uganda

Chemical

Municipal

H. Hentz & Co.

ol INDIA. LIMITED
Head

telephone;

1856

NATIONAL BANK
Bankers

Securities

State and

COMMON

Commission Orders Executed On All

NEW YORK 4, N.

sugar

Canadian Exchanges at
CANADIAN

Members N. Y. Stock Exchange
Raw

—

Refined

—

Liquid

American Stock Exchange

Regular Rates

WIRES TO MONTREAL AND

TORONTO

Exports—Imports—Futures

Established 1832

Goodbody & Co.
MEMBERS

NEW

YORK

STOCK

EXCHANGE

Dowtoox Securities
(orporatio?!

BRIDGEPORT

PERTH

AMBOY

request

40 Exchange Place,

New York b, N.Y.

IRA HAUPT & CO.
Members New
and

115 BROADWAY

1 NORTH LA SALLE ST.

NEW YORK

CHICAGO

Teletype NY 1-702-3

WHitehall 4-8161

111

Boston

York Stock Exchcmgs

other Principal Exchanges

Broadway, N. Y. 6

WOrth 4-6000

DIgby 4-2727

upon

DEPARTMENT

Teletype N Y 1-2270-X
DIRECT

Analysis

Teletype NY 1-2708

Telephone: -Enterprise

1820

The Commercial and, Financial Chronicle

(54)

The

position and trade in

Detroit Edison

which, each week, a different group of experts
advisory field from all sections of the country
participate and give their reasons for favoring a particular security*

1969

request

(The articles contained in this forum

they to he regarded,

are

Arkansas Missouri Power

as an

offer

Investors Diversified Services 'A'

With

talk

recession

the

reason to take
position in securities which do
not have as much an appreciable
potential as

the

Puget Sound Power & Light

risk

in¬

volved in pur¬

Southern Utah Power

chase.

,Such

securities

ficult

Corporation
Established
Associate
American

120

BArclay 7-5660

business

indexes

Member

Stock

find

and

1920

York

turn

for
A

that

Rights & Scrip

of
Walter

Leason

the

one

blue chip situations
the
benefit

very

which will
of

few
re¬

spinoff
which makes it a special situation.
Recent
developments
have
a

greatly increased the interest and
appreciation potential of both the

Exchange
Exchange

120 BROADWAY, NEW YORK 5

Tel.

REctor

2-7815

Trading Markets

American Furniture Company

Alabama-Tennessee Natural
Gas

Company

Commonwealth Natural Gas

Company

its

rate

base.

currently

requesting the first rate increase
its history.
Since the current

Dan River Mills

rate of return

Scott, Horner &
Mason, Inc.

tory, it

seems

amount
crease

is almost confisca¬

likely to get the full

the

annual

estimated

(representing 64c

Lynchburg, Va.
Tele. LY 62

rate

in¬

$19 million
share after a

52% tax rate). Hearings have been
held and the matter is now under

LD 33

advisement
mission.

by the Illinois

Com¬

This commission has

cently adopted

re¬

reasonable
attitude toward a fairer rate of
return which makes the company's

Fire Association of Phila.

a more
>

American Dredging Com.

position stronger.

Bethlehem Hotel Units

Leeds & Lippincott Units

Walnut Apts. V.T.C.

Philadelphia Transportation
3-6's

2039

Presum¬

increased.

also

sell

million of

$60

intends

Edison

Commonwealth
to

new

bonds

Members Phila.-Balt.

Stock Exchange

Pennsylvania Bldg., Philadelphia
Teletype

N. Y. Phone

PH 375

COrtlandt 7-6814

Another very favorable factor
is the large increase in generating

% for the rate
usually some¬

of 6% to 6
which

return

I. G. FARBEN
Companies

&
•

by 25.7%. This will enable
the
company
to
save
large
amounts in generation by use of
modern plants and retirement of
old high-cost units. As ar result,
earnings in 1954 should increase
considerably above the $2.34 a

Members

the

unique for a long time.
A buyer at the top of the market
in
1929
would
have
paid
the
equivalent of $48 a share. By 1934
he would have been

even.

he would

Bought—Sold—Quoted

estimates

then

Reclined
in

$100

over

Estimated

Earnings

months

Without

OPPENHEIMER & Co.
Members

New

York

Stock

Exchange

25 Broad St., New York 4, N. Y.
t:

HAnover 2-9766

Tele. NY 1-3222

1951.

wires

Interest

Illinois

branch

our

exempt

from all present

Federal Income

offices

Taxes.

and offer:

own

$113

$100,000

Wilmington,

bottom.

per

Delaware

Cola

After

interest at SVifc

After

interest

very

6 '/a c'/o

2%% Bonds

$0.3G

and

$0.40

0.34

October '1,

Due

1989

turned

was

back by a
Common

variety of factors. Cocato most people the
worst kind of inflation hedge
inflation hedges have been

To Yield

seemed

2.50%

(and interest)

0.38

and

independent

100%

electric

strength

and

100%

gas

utility respectively. The. two stocks
should prove

good defensive hold¬
ings and, in addition, the aggre¬
gate values could work out to a
level of $45 to $50 a share on
present stock within the next two
or

three years by projecting

issues
for
at

are

convertible
basis

the

into

time.

any

recent

The two preferred

developments.

common

particular,

tract

start
to

New

York

City

Author, "The Battle for Investment
Survival"

then

Company

Gas

Call

escalator

the

creased

Coca-Cola's

kept

for

our

Japan
or

write

publications

current

Japanese securities

YAMAICHI
SECURITIES CO., LTD.

earnings

place, there is
second

prices such

phone call

seem

time

less uni¬

than
than

sub¬

nickel

nickel,

Evening

"Saturday

Branches
Bankers

Broadway,N.Y. 6 COrtlandtT-5680

bottle of

upward.

stopped costing

a
or

ride costs

tion

111

Investment

traditional

5c for

versally revised

—the

now

1897

—

OPA.

no more

place,

Coke have been

—a

Office Tokyo

much improved. In the

very

the

Home

Brokers

The outlook for Coca-Cola
seems

Established

with their in¬

pace

sales.

It would

The Coca-Cola

Investment Opportunities

advancing enough

sugar

have not

way

Partner, E. F. Hutton & Company,

since

New

despite

WHitehall 3-2840

Coca-Cola

beneath

Street, New York 4

Telephone

put the clause into effect, and

first

Gordon Graves & Co.
30 Broad

rises. It happens that 1947 was the

wealth Edison

traded

help the

effect, to limit profits when sugar

basis very close to its true money
rate value. Securities of Common¬
are

sugar

and,

pound

the

$1.40 preferred is attractive on a

tend

when

Co.

the

Post"

nickel

years ago.

only

higher-

# masm
5*

BmOSBZ^

ISBI

<
in

■

-MB

a ques¬

the

before

Coca-Cola
owned and the

has

curity, I think

over

Mr.

ranks
among

N. Q-B.

now.

Under

circum¬

Coca-Co 1

dynamic im¬
portance has entered the picture.
On Oct.
19, 1953, the company
announced that it plans to organize
a new company to take over the
operation of gas properties. This
company would be known as the
Northern

Direct

fraction

ended

three years.

factor

NY 1-1557

any con¬

ing 4.85% yield currently, could
increase easily within the next
new

St., New York 4, N. Y. "

Mobile, Ala.

By 1937

ing through the years of 1952 and
1953 in a trading range around its

Assumed Rate of Return

stances, con¬
sidering time,
price and se¬

Exchange
Exchange

New Orleans, La. - Birmingham, Ala.

(NYSE) at this writing, after go¬

price

be derived:

can

amount would be possible. Thus,
the current $1.80 dividend provid¬

Stock

HAnover 2-0790

During all this time Coca-Cola
A rate base of sales have been steadily growing.
indicated. Using Total sales last year doubled those
these ranges and assuming 3x/2% of
1946.
Every indication sug¬
to 4% as an- interest rate on the
gests continued further growth.
new bonds, the following earnings
The market

ahead.

two

York

had

have

postwar construction pro¬

INTERNAL SECURITIES

25 Broad

seems

gram, the investment base would
rise and earnings exceeding this

GERMAN,

New

Members American

has been

The first day of a new year
than-5c coke prices charged by
rarely seems the best day to select
many retail outlets will work back
sideration for additional capital the security one likes best. It is
to
a
revision in contract syrup
investment, a 6% rate of return the most popular day for request¬
would increase allowable earnings ing
forecasts.
prices. If the price of Coca-Cola
to $3.33 a share. By sale of addi¬ My 1954 fore¬
had kept pace with the price of
cast
tional securities as part of its $1.1
suggests
milk, it would be at a fancy figure
breakers
billion

for

Steiner,Rouse&Co.

electric property.

York
Stock
Exchange, Midwest
capacity projected for this year
Stock Exchange and San Fran¬
next—totaling 660,000 kw. By
the end of 1954, generating ca¬ cisco Stock Exchange.
pacity will exceed that at the end
G. M. LOEB

Bought—Sold—Quoted

Hutton

Co., New York City. (Page 2)

and

Sept. 30, 1953.

And Successor

huge profit
of the Northern Illinois Gas Co. with the stock
selling the equiva¬
An additional amount represent¬ lent of $170. This record is spec¬
ing 50% of the net book value tacular for the period covered.
would be in common stock equity. For comparison, that blue chip of
This is equal to $4.22 a share of blue chips,
duPont, did not re¬
Commonwealth Edison
stock at cover to its 1929 high until 1950.
original
cost
and
most
utility
During 1946 Coca-Cola reached
equities generally sell well above its all-time high of $200 a share

of 1951

Samuel K. Phillips & Co.

convertible

and

stock

common

Members

Stock

could

Company—G.

Partner,

popular. Earnings have increased
Since the common stock equity slightly since 1946. The dividend
preferred stocks of Commonwealth
has been higher.
On the other
is a strong 50%, a relatively lib¬
Edison.
This
company
supplies
eral dividend can be inaugurated hand, the price-earnings ratio in
electricity in Chicago and North¬
1946 was almost 30 time*
after about a year of operations to
ern
Illinois and gas outside of
and
by 1951 it was nearer 18
permit the company to accumulate
Chicago. During 1952, about 86%
times earnings. The income j
an earned surplus. A dividend rate
of revenues were derived from
in 1946 was about 2%% and by
of $0.25 to, $0.30 seems reasonable.
sale of electricity and 14% from
1951 nearer 4%%. The real dam¬
This stock therefore may have a
gas. The company is regarded as
age was probably done by the 5c
value of $5 to $6 a share.
one of the best quality stocks in
price per bottle and the unchang¬
Separation of the electric and
the industry.
The common stock
gas divisions is basically a favor¬ ing syrup price. The latter is cur¬
equity is 44% of capitalization
able development. Each of the re¬
rently increased only when sugar
and surplus.
At the present time, the com¬ sulting companies can now seek advances above a price of 7c a
reasonable
rates
in
proceedings
pany is earning only about 4%%
before
the
Illinois
Commission pound. The workings of this con¬

ffipONNELL & CO.
American

of years.

regular cash dividend, which

$120,000,000

ceive

Since 1917.

Loeb,

what above that permitted on an

desirable purchase. More¬

over,

Stock

the

range

wealth Edison
seems

period

Louisiana Securities

stockholders

common

own

ably, this would be in addition tc

stock

Common-

York

son's

Coca-Cola

The

Edi¬

Earnings of the gas utility prop¬

good

reason.

New

Alabama &

Dept.,

Montgomery, Scott & Co., New
City. (Page 2)

largest

Commonwealth

Institutional

York

erty can only be estimated. It is
probably reasonable to assume a

this

sound

Specialists in

nor

book value.

have

down¬

ward

Teletype NY 1-583

Commonwealth Edison—J. Walter

Leason,

be,

the second

would

tributed

continued to

Exchange

Broadway, New

are

becoming in¬
creasingly dif¬

New York Hanseatic

utility in this state. The stock
of this gas company is to be dis¬

over

air, there is little

Metal & Thermit

Week's

Participants and
.

gas

Commonwealth Edison

Kentucky Utilities

intended

not

are

and

Institutional Department,
Montgomery, Scott & Co., N. Y. City
Members New York Stock Exchange

Utility

Eastern Utilities Assoc.

Thursday, January 7, 1954

Their Selections

sell the securities discussed.)

J. WALTER LEASON

Central Indiana Gas
Central Public

in the investment and

When Issued

Prospectus

This

Forum

A continuous forum in

Conv. Deb.,
and Rights

3»/4%

Security I Like Best

high
the

been

management-

same

management

successfully

all the
R.

years

charge

OVER-THE-COUNTER

INDUSTRIAL STOCK INDEX

of its growth.

Woodruff

Atlanta,

Ga., is Chairman of the executive

few attractive

committee. This management has

14-Year Performance of
35 Industrial Stocks

felt that the best interests of Coca-

fresh
chases

for

Cola

pur¬
now.

The Coca-

G. M.Loeb

Company Cola Company, as an investment,

stockholders, which includes

themselves, have been fostered by
Continued

POLDER

page

REQUEST

National Quotation Bureau
Incorporated

46Front Street
on

NewYork4,N.Y.

]

Volume 179

Number 5288

The Commercial and Financial Chronicle

A 1954 Forecast for
And Rail

INDEX

K»»™n

1954—The

By DR. PIERRE R. BRETEY*

—Edmund

substantial rises in
despite absence of institutional interest.
Cites

With

possible exception of
rollover adjustment in 1949,

the
for

the

railroads
n e s s

time

first

face

the

1941

busi-

downward

adjust-

ment.

most

railroad

man-

agements
1954
in

gross

KIPF

rev-

'::mM

10%.

^Mj|JtWM

increases

jSl&gj

Any

increase
pierre R

cost the railroads $30 million

be-

fore Federal income taxes. More-

final

whether

uncertain

settlement

unions

will

with

partake

set"byPthe trainmen
by tne tr inmen,
per

hour

all

the

Nov.

railroad

em-

wage increases.

mvestmentwise

substantial

World

II.

War

(2) A large percentage of railroad industrial costs is

inflexible,
with the result that historically
earnings have declined sharply
when gross revenues contracted.
Notwithstanding this inflexibility,
flexible

railroads achieved

cost

during the
of 1949 and

position

adjustment

developed better expense controls
than exhibited by most industries.
(3)

The

railroads

institutional

189

1929

Jones

Dow

April, 1937;

average

suffered

appraisal

14
16

then, subse-

1945, and to

22-year

new

from

94.97,

maintain

trading markets in
18

.__

225 unlisted

strjking

bonds.

Regular Features

the 1953 top

this

than

eyen

firm

As We

redtal

potential

See It

curj^es

(Editorial)

1953^
jones

Dow

vaiue

markef

seiected

couj^ have

recenf peak
the

Cover

been

Investment

Recommendations

From

St. Louis-San Francisco
Erie

Singer, Bean
& MACKIE, Inc.
HA 2-0270

Observations—A.

Our

Utility

Railroad

—__

.__

Security

Offerings

must carry on I

Brunner

Manufacturing

Corner

and

CROSS

;_.

Security

RED

Registration

Salesman's

The Market

1,771
2,282

_______

Securities

Prospective

1,614
1,648
1,766

Securities

Securities Now

I'tiA

Railway

May_—

Reporter's Report

Public

Our Reporter on Governments

° Grande West. 1>232

c£as*,.ine
Southern Pacific

Wilfred

Your

•_

News About Banks and Bankers

92j

1-1823

Funds

NSTA Notes

Lehigh Valley
J'???
Baltimore & Ohio _________•1,081

Exchange PL, N. Y. 3

Teletype NY 1-1825 & NY

Washington Ahead of the News—Carlisle Bargeron.— 18

Seaboard Air Line

Mutual

437
405
525,
548
570

N. Y., N. H. & H
New York Central
Chgo., Milw & St. Paul
Union Pacific

Free Exchanges—A British View"

Indications of Current Business Activity

■

48
*

Einzig—"Free Trade

Fof Each $100 Invested in
Approximate Market Value
*an#

Southern

Securities

Dealer-Broker

„

the Santa

purchased in

1942) with an investment of $100,
WOuld have appreciated to levels
indicated in the following:

*?f.nv<:F ^

Stocks

Bookshelf

Coming Events in Investment Field

individual

common

Man's

Canadian

averages,

such

railroad

Insurance

Business

se-

the past decade. For,

over
Jan

and

profits made

individual railroad

-n

Bank

You—By Wallace Streete

Copeland Refrigeration
Corp.

The

Security I Like Best

The

State of Trade and Industry

Washington

and

You

Lithium Corp., Inc.

Remington Corporation

For many years we

specialized in

...

It should be noted that the highs

Continued

page

Twice Weekly

PREFERRED STOCKS

1 Drapers' Gardens, London,
land, c/o Edwards & Smith.

COMMERCIAL and

FINANCIAL

WILLIAM B.

DANA COMPANY,

Reentered

Publisher*

TELETYPE N. Y. 1-5

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Thursday, January 7,

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Every

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(general

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Offices:

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news and ad¬
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1954

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Rohr Aircraft

*No column this week.

25 Park

•

stocks and

Published

Albany

Stabilize Commodity Prices

decline

15.15%

The

Philadelphia 3, Pa.

On Dec. 22 the rail average

1953.

A^ccuu™. Washington, d. c„ Dec. 29,

Keyes Fibre Co.

Ilalsey, Stuart & Co. Analyzes 1954 Bond Market

fcigh of 112^.03 reached in January,

by Dr. Bretey before the AnMeeting of The American Statistical

have

Britain's Progress Toward Convertibility Cited by Federal
Reserve Bank of New York

1932, and again in 1938, collapses Nickel Plate
2,880
not
duplicated since-those two Kansas City Southern
4,450
periods.
Missouri-Kansas-Tex. pfd__ 5,700
—-7— l,
St. Louis Southwestern
23.000
A talk
_

BOENNING & CO.

National City Bank Executives Hail Return to Free Markets__

quent to a decline to 19 in 1938,
irregular recovery ensued to

collapse in railroad earnings and Illinois Central
equities both in 1929- Northern Pacific

UN Experts Draft Plan to

1932,

rose

in railroad

nual

Parchment
13

*!•

However, the "adjustment lag period" has consistently been fore- Highest price reached by the Dow
shortened
in recent years,
and
Jones Average in 22 Years •
may be almost entirely eliminated Chicago & North Western-_
$320
through passage of legislation.
Chicago, Rock Isl & Pacific.
366

rollover

Kalamazoo Vegetable

A Forecast of the 1954 Agricultural Situation—Oris V. Wells__

There have been

since

number of

Guarantees—Boris Shishkin

having taken place either

the

delay, by regulatory
authorities in adjusting freight and
passenger rates to higher costs,
particularly following sizable

Grinnell Corp.

a /j

The

such

Southern Advance Bag & Paper

Prices of High Grade Stocks Aided by Institutional Demand
—John M. Templeton

measured by individual price
or
by the Dow Jones

Continuing Interest in

Advice to GI Wives—Roger W. Babson

earn-

average of 20 rail stocks. For instance, after a protracted decline

Laughlin Steel Corp.

have, suffered

1954—Gerhard Colm

The Confused Conceptions of the Guaranteed Wage
—Emerson P. Schmidt

ad-

from

from three major factors.

many

1953

4-6551

Problems of Annual Wage

has

current

most in-

even

estimated

precluded

the

During the past decade the rails

(1)

railroad shares by institutions

five

era

times

stood

V\oyee* the Aliquippa & SouthRailroad,
a
subsidiary
of
Jones

relation

WHitehall

Distributing New Corporate Securities—C. L. Rollins

has

Syfcents P°rtrayal o£ the maior movements
cents
f ^
D
jones average is a

or
or

retroactive

WALL STREET, NEW YORK

Telephone:

ings. However, such avoidance of

the

set

accepted

The Economic Outlook for

equities today
selling at from only four to

the

will, of
n^cessity, be burdensome since every
one
cent per hour increase will

over

securities

In fact,

from

likely.

Hart

changes,

rule
changes and
fringe benefits
wages,

are

Recession—Albert Gailord

—Seymour E. Harris

railroad

vances

Substantial

Unpredictable Machine Tool Outlook—Herbert L. Tigges.-

Slipping Economic Regions and North-South Competition

not

of frwn

enues

railroad

levels

are

-jpjL,

Cobleigh

How to Reverse the

resulted in the market appraising
railroad
equities at abnormally

five

decline

vestment

are

This absence of institutional interest

earnings.

predicting for

Gold—Ira

Obsolete Securities Dept.

Absence of Institutional Interest

hbhlow

today
•

since

obsoletes !

spark restoration to its former high estate.

the

Soggy

working capital, modernization of
controls, maintenance cutbacks, and

mentals, institutional investors will re-enter railroad market
to

WHAT'S YOUR LINE?
Afre,y____Cover
Ours

offsets to adverse factors as ris¬
ing wages and. inadequate freight rates.
Regarding future
course of security prices, predicts, in view of
improved funda¬

—Cover

A 1954 Forecast for Railroad and Rail Equipment Shares
—Pierre R. Bretey

efficient operation—as

Tabell

fixed charges, increase in

budgetary

AMD COMPANY

New Bull'Market

Unmasking the Mystery of Foreign Trade—John

industry's improvement, manifested in reduction of debt and
equipment,

page

Yf S. E.

Railroad investment authority notes past
carrier issues

Beginning of

Lichteqstem

Articles and News

;

Equipment Shares

Railroad Analyst, Baker Weeks & Co., Members N.

•

(55)

York funds.

LOS ANGELES

INC*

The Commercial and Financial Chronicle

(56)

Thursday, January 7, 1954

mines, such as Newlund, have shut trading in a.rangebetween 16 and. speaking, -the more you're buying.
entirely, creating percentage 21% over the ^past/three years. a long-term bet an. a n; increased
losses ihj>rice;of their shares run¬ It's/17 today. Kerr is the Canadian gold price.r Maybe you Will see
the "blue of the night, meet the
ning,- in some cases,, up to 90%; Tiffany; in the gold department.
others such as Paymaster,Noranda,
gold of the day." Gold won't stay
Dome-Mines
'
"
iNormetal,
and
Quemont
were
soggy forever. It's still the world's
Dome Mines, listed on the NYSE, favorite bar.
closed in the last part of 1953 due
down

Soggy Gold
By IRArU. COBLEIGH

-•

"Winning in Wall Street"

Author of

yellow spotlight on whatever prospects

change in the

servation—the
^

world

get-'

ting

off

better.

the

all

gold

evil"

the

root

evil

cause

the peo¬

ple in it
less

be¬

due

gold.

This is proven

by the fact
that

they will

now

for

pay

gold

U. Cobleigh

Ira

less
than

at any

time in 20 years. If this is
happy thought for moralists, it
is, by no means, so cheerful for
gold mining r corporations, their
stockholders, and employees.
Against the official U. S. gold
price, $35 per ounce, which has
persisted without variance for 20

prospect.
But what about that other hope?

would not only, keep the mines
operating (and without subsidies)
but put real, profit -back in- the

greed, mismanagement of

hike in the official gold
un¬

sound.

Why
If

gold

Price Decline?

now

low

the

paid

gold

among

dividends

got aboard the toboggan, and, by
somewhat
expanded
production,
immediate

and

sales,

helped

the

price to hit bottom.

apparently needed
unification
of sales policy

interruption,

and

its

The

All

the

over

now

produces

48%

than Sig-

Coca-Cola's

of Mindamar

Metals, a
property in Nova Scotia, plus

zinc

18.3%

interest

Dome

•L'xploration,

Canada Oil.

interesting

prospecting
wing.

world,

West foreign

tainable.

The

Lower in the price scale is Lake
talking
convertibility as a means Shqre Mines which comes to you
with a slight dividend (10c a share
of restoring monetary order.
In
1953
declaration) and a market
our own 83rd
Congress, you may
expect long and learned discus¬ price lower than in any year since
1942. The immediate profit-fromsions about the wisdom of return
...

recently

may

but

there

in this enterprise, and

discovered

be the basis of

mine

later

ore
body
successful

Lake

on.

shopping lists of solvent
persons on this planet, why is it?
You'd rather think the lower price
today would attract hoarders, par¬
ticularly when they are certain of
getting $35 anytime, at the cash¬
ier's window in Fort Knox.
hoarders
a

seem

little tired.

to have

Well,
gotten just

The world inflation

have

halted,' for the
higher interest. rates, in
countries, suggest that static
carrying of sterile gold "Is now
appears

jtonce;
many

cojstly, if you borrow to do

it; and less profitable than the
ployment of funds

em¬

that interest

returns may be gleaned.

Finally,

with

announce

the admission

general partners of

prelude,
fact

MR. JAMES

WINSOR, JR.

Mr.

D. WINSOR, III

now

average

about

of
an

which, either because of high

grade ore, or exceptional cost

Benjamin Rush, Jr.
as a

sure

rather
gloomy
along
taking note of the

ground,

you

after

Kerr;

and

the U.

you go

should

dividends by theo-

low 100 would seem to me to be
very small.
»

Norwood Vice-Pres.
Of Union Securities
Union
65

Securities

Broadway,

New

Corporation,
York City,

that John K; Norwood,
who has been associated with the
organization since , December,
1951, has been elected > a.; VicePresident.
announces

Krnmm, Lipscomb
New Morion Officers
W.

Morton

Co.

price

bonds, announce the election
Robert R. Krumm
dent and Charles

Haseltine, Gilbert Adds

S.,

(Special to The Financial Chronicle)

MINNEAPOLIS,
A.

th'e

Peterson

has

Minn.
been

staff of

Wilson,

name

has been

of Yarnall & Co.

of this date

Addison

changed to Yarnall, Riddle & Co.

largest
-

The

following general partners

now

South.

constitute this firm

WILLIAM P. COSGROVE

HARRY B. SNYDER
JAMES D. WINSOR, III

Yarnall, Diddle & Co.
1528

WALNUT

lanusrj I, 1954

STREET, PHILADELPHIA 2, PA.

the election of

Francis S. Williams

while only in
is now the

Canadian

producer.

as a

This

will probably show over
350,000 ounces of gold produced
in 1953, and earn a little more
its

dividend

current
on

Director

80c

per

and

Edward F.Willett

the 4,730,301 common

as a

quite fabulous

ore body which
richer as mining
grows deeper.
The company is
uniquely equipped
to I run
its
higher grade ores now, as an off¬
set to higher costs, saving less
economic levels for the happy day
when the price is higher, or lower
cost techniques can be applied.
a

seems

HERBERT V. B. GALLAGER

to announce

15 years,

shares (sole capitalization). It has

JAMES D. WINSOR, JR.

pleased

company

than
ALEXANDER C. YARNALL

which,

business for

are

Vice-President
>

grow

Kerr-Addison
rather

has

shown

amazing market stability,i

F. EBERSTADT & CO. INC.
BROADWAY

January 1,1954

Fritz
to

Haseltine, Gilbert &
Inc., 108 Ninth Street,

con¬

—

added

Kerr-Addison

The firm

Vice-Presi¬

Assistant Vice-President.

down, price-wise, generally

Probably
the
first
company
you'd want to consider is Kerr-

S. Lipscomb as

dividend?

Inc.,

Exchange Place, New York City,
dealers in state and municipal

trols, hold out promise of gain in

limited partner.

good

The risk of the stock breaking be-

string

can

with Giant Yellow Knife
which I should have listed right

retically
increasing
the profit
margins moderately,
Financial position is excellent.

eight-year low, we arrive at the Homestake is the top of the gold
security buyer's
question.
Are
pile.
soggy gold stocks now a buy? Are
The steady low cost producers
there ones that operate in the
black
under present conditions, appear the safest; and the further
and

has withdrawn

this

and

that the Toronto

gold

MR. JAMES D.

represents

be resumed, it is

earnings and

Shore

threat need not

financial

ob¬

its parent and subsidiary bottlers
are perpetual. It is known that
there are conditions under which
they could be revised but the
exact situation has not been dis¬
closed. The stockholder has a
huge potential in the very high
sales per share. It is easy to build
up very large per share potential

not
good

widely

contracts between Coca-Cola and

are

inflationary pres¬
likely that
the company would finally alter
its price views. The syrup price

leading

reserve

the

well known

...

stock

hand,

are

ore

straddle on ^coming events. Any
deflation or depression- could be
met by Coca-Cola in a most excellent manner. On the other
sures

enthralling,

the
and

There

Coca-Cola

half

business

portion

greater

business.

brand in the world

under

company

operating prospects here

about

soft-drink

even

domination

complete

field, with

uran-

you're buying a rather high-cost
convertibility,
if
legally
sanc¬
producer,, handicapped by occabe taken too seriously since last
tioned,
could
be
satisfactorily
sional
rockburst in. operations.
year's Red sales (in the market, arranged without
touching
the
Yet in 1937 the stock sold at 59
not the sunset!) were equal to two
sacred $35 marker.
Others argue
and paid $6. Today it's a rainbow
years
of current production by you can't have convertibility here,
hammer and sickle. If this reason¬
or in
other nations, without im¬ type speculation at 5% but, who
ing is sound, and deployed into portantly augmenting the gold knows, perhaps with a pot of gold
action,, then we may have seen supply; and you can't do that un¬ at the end!
the lowest price for gold in this
less
you
make the price more
Other Prospects
century, and perhaps for many attractive. Some have even talked
more.
of a
Moving down a bit in the price
figure as high as $70 for a
little old ounce.
scale, your speculative zeal might
Impact of Low Gold Price
lead you to inspect MacLeod, an
The
argument is a perennial
interesting item at $1.30, New
Apart from prudent handling of one. My own notion is that there
Dickinson at ,$2;70 and Consoliperipheral sales, the gold pro¬ will, in due course, be converti¬
dated Discovery at $2. These are,
ducers keep hoping for an official bility; and, when it comes, there
of course, risky and depend for
increase in gold prices. This, they will have to .be, a price ipcrease.
their. interest
to. you,
on, the
need.
Gold mining costs are 55- It Won't be as high as $70 but it
sporting blood you
60% labor, and everyone knows might be around $50. But neither qmount of
the price of labor has soared, in convertibility, nor $50 gold, look happen to possess. But if you're
going to buy gold mines, it's bet¬
the past decade especially.
This like a good bet for 1954. Most
ter to get aboard ones with some
rising cost, against an annoyingly countries, however, including our
production or at least some known
static delivery price, has demon¬ own,
do need more monetary
reserves.
These
meekly priced
strably created havoc among gold for foreign balance settle¬
entries qualify in that slight regold digging enterprises.
Many ments, and to assure faith in do¬
mestic currencies. Some fine day quirement; and appear not without hope.
they'll get it by the simple device
■Of .course, if you want to stay
of making the price right!
that the Russiain

its

domestic

Western

There's also

ium

Lake Shore Mines

experts

Security

I Like Best

Higher Gold Price Forecast

monetary

page

background it adds the
diversity of earnings from oil.
Dome is somewhat of a holding
company owning 63% of Sigma
Mines
(which produces
around
80,000 ounces a year), 56% of
Campbell Red Lake, a fine pro- trying to hold the 5c price line,
ducer which only started in 1949 One result has been to
maintain

Continued from

about

Now what is
is

—

all

i—

price by Uncle Sam, would be

favorite

golden

ma;

boost

among the mining nations, no im¬
portant increase in product, and
the "free market" price of
to a gold convertibility, such as
some withholding from the
mar¬
gold has slipped quite badly from
ket, and storage, of current output. provided, in the case of the pound,
a high in
1949 of $70 an ounce to
Protagonists of this theory opine monetary stability and freedom
recent transactions
actually as
that
disastrous
inflation
from
good
management
could from
low as $34.40.
Further, this sag
Waterloo
to
the
beginning of
in the world open price of gold probably restore, quite swiftly, the
"free" price to above
$40; and World War I. Some will say that
would seem to buttress the

upward

without

and

official

through the depression and since,

about

the

years,

argu¬

another

pits, and, more important, bring its
"
light of day the increased sup-;
In Dome you get a solid perstance, back in 1949 South Africa
ply of gold the central bank's of former, a steady payer and a T0<r
started to sell some of its gold
the, world, so sorely need? What* .dividend for -the,currents price of
for industrial and artistic purposes
hope is there for that?- Let's ex-* 14%, plus a lot of future speculaon the free markets of the world.
plore.
I
live glamor from an assortment
This set in motion an unabated
of mineral potentials.
price down-trend. Other nations

ment of those who insist that any

fanciers.

price of gold from today's
paltry $35 an ounce, to a. more
realistic
figure?
A
price
that

What

world?

sales, and a lack of international
cooperation by producers. For in¬

care

for

losses

operating

remitting

in the field contend
that part of the rather heavy de¬
cline in the free price of gold is

world

less

companies will, in logic, con¬
tinue to produce, with only un¬

Experts

then

demands.

wage

aggressive buying of what has

sirable metal in the

exorbitant

meet

etarily, the most durable and de¬

if it's true that

increase seems to be about
5c per hour; and there is certainly
a
strong management inclination
to shut down for good, rather than

proved to be, physically and mon¬

Why? Because
"love

putes have been resolved, the level
of wage

dumping of some $100 million
in Russian gold on the market in
1953 has been most disquieting.
How much more will, or can, the
Russians disgorge?- For how long
will the Muscovite threat frighten

homely New Year's ob¬

Where these labor dis-

to strikes.
~

the

will not be
in
verse,
since I am no poet
aureate, but it will open off with
rather

be for

may

of gold, or improvement in the share
quotations of certain producers.
price

This golden treatise

there

NEW YORK 6, N. Y.

Volume 179

Number 5288

The Commercial and

Financial Chronicle

(57)'-" 5

UN
Steel

The

Production

Electric

Experts Draft

Plan to Stabilize

Output

•

Carloadings

State of Trade

Commodity Price Index
Food

Industry

■

Business Failures

port prepared for United Nations,

of an inter¬
governmental trade stabilization

production showed

commission for

seasonal tapering off

in the holiday-shortened period ended on Wednesday of last week.
It continued to be mildly lower than the comparable level of a

ities, and the
and

insure

While

lay-offs

continued

tries,

some

were

announced by four

spread

lines recalled workers.

number

Layoffs totaling

fluctuations in primary

Aviation said "stretchouts" of defense contracts will idle 1,100

employees at its Columbus, Ohio, plant. General Electric will furlough 250 Friday at its Auburn, N. Y., television parts plant.

..A

Strikes at two major can manufacturers were reprolonged curtailment among canners. Latest reports reveal that claims for unemployment insurance benefits continued to
a

Unemployment
partment
month

Commerce

activities

The

United

for

the

December rise,

number

Steel

producers

curtain

their

the

best

United

tional

steel

raw

representing

20%

1953,

gain

was

1954,

5.8%

would

tons

figure is, of

selling

when

stocks

supplies fall short of demand;
well

flow

systems of compensatory

payments to
of

sharp

money

the. event

fluctuations

primary

capacity of

than December.'
March will

counting

buying

renewed

Union

demands

social

wages.

are

insurance,

expected

higher

•

embrace

and

wages,

higher

emphasis this year will be on

Although

pensions,

articles.

other

same

time

might

EDWARD

First

The

JR.

VOLLMERS

PARTNERS

EFFECTIVE

•

JANUARY

FIRM

195}

•

the

January I, 195£

succeeded to t/e investment

page

lave

laSineSS

dtv.j, d/nc.

^etjSev £$ui/dinp
^Saltifnove

is/lavtj/and

fde/c/dtone: 0¥cr^a, 2A320
and

t/iat

measures

will continue

Iranc/i

Same

office.

"He tale fileaSure in announcing

Corp.

York

will continue lis investment

Vice-Presi¬

For

in Sutro &

the

prior

years

associated
■

past

four

tyfood, C/tird/fci & CSo.

Co., San Francisco.

-4

that

•

Corporation

the

San

"""Francisco and. New ..York offices.

0tnti S/lfeet,

lime,

with The First

Boston

us.

in New

Mr. Harter has been a part¬

will

activities in association

corporate sales depart¬

years,

was

fl'-.

He will be located

t/at

tyft'f/cani eAl/c/c/en

City,

appointment

City.

For

New York

Continued

% avefileaSed to announce //tat we

As¬

ment.

ner

2 Wall Street,

"liquidity."

Corporation,

New

the

Robert L. Harter

THE

the nature and
Actually, the investor mu§t

Street foible of misconceiving
•

York

GENERAL

the important Wall

significance of market

all

advisable

Boston

Broadway,

PETITO

dent in the
AS

ing, possibly, "in reverse"; that is, when observable prevalent misr
conceptions confirm the validity of your detection of disparity be¬
tween value and market price.)
Market-consciousness manifests

Robert Harter With

announces

II.

conditions, in

to do with market

phenomena give no reliable* clue to the long-term
income prospects in relation to the current market price. (Except¬
market

report be

First Boston

WING,

has nothing

MAY—Income

that

adopt in carrying them out.

100

FRANK

practical

WILLIAM

Over
I see how
in achiev¬
example of such consistent suc¬
argument against it.

(2) Should the investor for income be guided by value or
market conditions?
Should he perhaps study both?

it approved

recommendations,

which

ADMISSION

offer

previous letter.

trade.

prepared

THE

in my

cess

undue fluctuations in the terms of

these

ANNOUNCE

you

objective of capital gains

expression of personal pref¬

problem

the

sembly also asked that

CO.

inasmuch

Govern¬

consideration

aspects

Cortese

recommended to

also

were

At the

MORGAN STANLEY &

Incidentally and as a distinctly secondary considera¬

ing capital gains; I gave only one

that

relation

equitable

give serious

annual

page

May

personal preference there can be no argument. Nor do
you can argue against the countless examples of success

the

development

for

income

the

measures

manufactured

security, it is

Continued

such

kept

ments

guaranteed

safe

living expenses, render these
goals attainable.

prices of capital goods and other

likely be some second quarter ordering as. a hedge against"
-

CORTESE—Your statement that the

primary commodity prices would

avowed intention to exert strong pressure for sizable gains, there

consider

they ishould
of

process

In view of the union's

irrelevant.

capacity to bet on the
nor a
widow's need

indefensible must be taken

terms of trade of countries in the

undoubtedly be a factor in the steel market dur¬
ing the first half of the year, since contracts with most producers

possible strike, states this trade paper.

are

international

for

trade,

Labor will

re¬

prices of primary

effect

If tlris is to happen, order books should.
weeks, this trade authority

declares.

will

•

commodities

reflect it during the next few critical

expire; in their entirety on June 30.

•

affecting

ures

But steel people are hopeful that February and

premise, the

that whenever they adopted meas¬

in the next
several weeks to lift the market out of its year-end decline.
It
is expected that-January business will be only slightly better
are

on,

This report of.the Committee of

con-

international

ensure

commodity markets.'

course,

Steelmakers

maintained

erence,

and

con¬

any

tion, it happens that capital appreciation has the habit of auto¬
matically following intelligent selection of issues concentrated on
criteria concerned with the long-term return of capital via income.

weak,

over

use

Experts
on
International Price,
beginning ,of last year
The new capacity
Relations is the outcome of a de-;
the highest in history; the ^industry has es¬
cision of the UN General Assem-i
tablished a new capacity record every year since 1948. ' Steel
industry capacity has increased 32 million tons, or 35% in the'
bly in 1952. The* Assembly then
eight postwar years; since 1940 it has gained almost 43 million
recommended
to Governments
'"
,*•;
.f
'
' ,'r.
I
tons, or 52%, "The Iron Age" observes.
* •'«
w • -U *'.
117*547.470

•

increase of 6,782,940 tons

favor

also

A. Wilfred

from the market when prices are

all-time record for the industry,
output the previous year.
Higher

experts

bility

to 124,330,410 net tons per year at beginning

rose

discuss

•i

buying and withdrawing supplies

close to 112 million

demand, reports this trade weekly.

Capacity

bler's

stability in

basic

almost

that

Neither the millionaire gam¬

for

action

under

event,

any

the individual

has

commission

terms,

circumstances

this

spective

races,

The

capacity made achievement of this record a breeze; actually op¬
erations lagged during the latter half of the year, as production
overtook

hin¬

Among the recommendations of
the experts who met at UN Head¬

whose, report

objective of capital gains is
indefensible... ; ;
•> *

development.

buffer stocks, by which price sta¬

over

and

definition

vesting."; In

primary commodity markets.

States

whole

capital gains?

;the grounds of empirical re¬
sults as well as logic, the

mate¬

raw

trade

economic

and propose

ever,

Production for the year as a

international

bilization

the

metalworking weekly.
year, when a buyers' market will test them sternly.
As the new
year begins, consumers show signs of increasing
their orders,
which would bring the steel market out of its year-end doldrums.
net tons of

for

much manhandled word "in¬

already
been issued, is the setting up of
an
inter-governmental trade sta¬

have just rung down
states "The Iron Age," na¬
Facing them is a more challenging

year

com¬

exporters

well

and

factory
workers "also continued to increase."
Total civilian employment
in mid-December was figured at 60,800,000.
This was 1,200,000 below November, and 1,100,000 less than a year ago.
the

quarters from Sept. 15 to Nov. 9

idle

for importers .of

drance to

Winter cutbacks in

part of the

added,

concept

jobless total early last*
400,000 higher than in November,

was

De-

rials, with consequent dislocation

the

December, 1952, level.

But,

States

for

consequences

at the highest level in 1953.

December.

accounted

said.

were

estimated

This

and 425,000 above the

outdood

rose

1,850,000

department

and

year ago

for income

ceivable

primary

modities,'; Violent changes in such
prices have had serious economic
even

fusion

recommends
overcome
instability

the- prices

fleeted in

exceed the level of

invest

one

MAY—"Investing for capital gains" epitomises

Nations,

measures

Coatesville, Pa. Hercules Powder stated that 475 workers are
to, be dropped this month at the - government-owned '
Radford, Va.,> arsenal; The U. S. Naval Shipyard at Portsmouth,
Va., will also terminate the services of 500 from its payroll Feb 19.
On the other hand, Republic Steel Corp. recalled 125 of its
3,300
idle employees in the Canton-Massillon,
Ohio, district. It was noted >
that labor-management disputes were more numerous than at this

•

(1) Should

committee

report prepared for

United

the

scheduled

year ago.

live-member

experts, in

markets.

Further Lukens Steel Co. disclosed it has let out 200 workers

time

in event of sharp price

money

than 2,500
North Ameri¬

companies and the Navy.

payments

"Flexibility" Versus Value Appraisal

published Dec. 24 elab¬
orating his plea for investor flexibility to profit from fluctua¬
price, as opposed to our plea for concentration on
long-term holding based on value-appraisal, Mr. A. J. Cortese,
market analyst of A. M. Kidder &
Co., closed with three ques¬
tions as summarizing our differences.- For a
final "nailing-down'*
of the discussion, our answers thereto, together with Mr. Cortese's
respective rebuttals, follow:

of buffer stocks

international. flow

indus¬

Market

tions in market

primary commod¬

use

•

In his communication to this column

compensatory

year ago.

can

setting

proposes

•

By A. WILFRED MAY

A five-member committee, in re¬

Production

J
Over-all industrial

Commodity Prices

Index

Price

Auto

and

Retail Trade

...

i
,

'■ y

•

Jfanusrry, /, 1.95A

A**#
*
■<><

5.
>'

+>■

•
;

1
■

*•

*■

(58)

The Commercial and Financial
Chronicle

scribing

off

Unpredictable

machine

"risk

capital." Can

Machine Tool Ontlook

facturer

By HERBERT L. TIGGES

President,

recover

Machine

National

any

the

manu¬

risks

for

cutting metal often renders
chine tool

of most types

seven

of machine tools, Mr. Tigges finds outlook for

the industry unpredictable, because it is still

doubtful whether
Congress will amend the tax laws with respect to depreciation
allowances. Says, to save America from disaster of cumulative
obsolescence, it is imperative that tax laws permit optional
depreciation accounts by corporations.

obsolete

1953

will

the

exceed

fihipments for 1953
at
approximately

for

1952

normal

shipments, h o w-

the

not

could

in overall debut

the

chines
H.

ously

Tigges

for

doubt

now

ing

ever

gradually declinsince, with peace-time

the

year

progressed.

rate of output at the
of

this

Users

While some, still completing defense orders, may have

extent

machine

over

years

obsolescence

machine

cured

know
,

„

w1^ substantially
can

machine
..

be se-

now

of the fore¬

of his

risk

knows

his

pe¬
own

.
„

cause
^he penalty imposed y
present Internal Revenue Departdepreciation

rulings

pre-

obsolescence

that

BAIR

the

Under

5, 10

years,
he chose.

this

the
tax

new

tax

Unlisted

law,

should

in many a
year1.

industry, in spite of im¬
provements in design and aggres¬
selling,
the

growing

lescence

the

will

and

unable

tide

will

obso¬

faced

with

probability of further declinr-

ing sales in 1954.
There

hope

increase in foreign sales.
shortages and nationalistic

Dollar

restrictions

difficult

prefer
tools to
that

continue

for

make

foreign

buyers who
American-built
machine
purchase them.

The fact

country's foreign

our

European
foreign-built

our

that

chine tools

but

aid

are

com¬
ma¬

our

have

buying will continue,
relatively low level. < It

that

the

face

industry will not

the

competition

government surplus bargain sales

and

anything like the extent which
the

was

Company

Most

Members New York Stock Exchange

the1

World War II.

government-owned

machines will be retained in
tional

15 Broad

after

case

na¬

defense

reserve, and only
machines not useful to the defense

Street, New York 5, N. Y.

will

program

pick-up

great
from

sold.

But

can

expected

tool

outlook

factor.
THE

FORMATION

not
OF

And this is

merely

the

tax

major factor

basis

yield

revival

from

solid

million at the
G.

that

ing.

Hart

But few

purport

show

that

will

these forecasts

distinguish
from

validate
are

not

The

wobble,

mere

several months into

fair

setback
and

that

activity

almost

90%

while

worst

only

briefly,

level

can

fortune

greater

and

weakening

can

cope

demand

paper

the

(measuring

dollars1)

for

—

national

in
current
good two-

drop in spending

and

investment

corporation

stocks,

commercial

ing
municipal

Neither

nor

the

powerful elements of
we

"1939

now

fense

bonds

lescence.
mutual

then

more or

sheltered
if

even

built

incentives

with

recession.

the

by Professor Hart
meeting of the Ameri¬
Association, Washington,

C., Dec. 30, 1953.

produce

better index.

ANNOUNCE

im¬

OUR

paper

OFFICES

FROM

•

hoped

and

new

other

york

CHARLES

ing revision of

AND

John W. Bair With

exchange

Burnham &

exchanges

John W.
and

principal

cities

coast

ciated

coast

telephone:

become

Burnham

and

asso¬

Teletype SE
January 4.

1954

1 411

4th

Seattle

Ave.

Bldg.

Wash.

Stock

Exchange.

formerly

lexington

Mr.

manager

Bair

american

was

york
stock

stock

exchange

philadelphia-baltimore

(associate)

stock

the trading

department of the New York of¬
of

Byllesby and Com¬

pany,

9-0210

fice

MARYLAND

members

15 Broad Street, New York

City, members of the New York
3825

Mfad, Miij.er & Co.

Com¬

new

ELiot

STREETS

Company

Bair has

with

pany,
Telephone

CHASE

tax laws.

our

Co., New York

stock

leading

REDWOOD

that

BALTIMORE

members

Congress will give this matter

due consideration in its forthcom¬

111

Private Wire To

McManus

REMOVAL

perative for national progress and
survival.

Joseph

THE

obso¬

upon

Incorporated.

january

1954

But

maintenance

currently in the
more
income-sensitive
fields of clothing,
recreation, and the like, and to invest in
relation to the supply of food and hous¬
ing,
current-dollar
expenditures
is
the

presented

the

major

concerned

are

dollars,"

this

Modernization

funds

the
Direct

can

have,

page

decline here
was
much
smaller, owing to the inelas¬
ticity of supply of food and houseroom.
Given reasonably adequate unemployment
compensation and relief, we can-count
cn
people being reasonably well fed and

annual

rising standard of liv¬
adequate national de¬

final products.

1 In

synchronized, and starting
an
inventory situation that
be shaky if sales sagged
appreciably.

Economic

sustaining

of the drop in gross

Continued

would

recession

sustain

importance.
In
the drop in this type
spending accounted for nearly

from

can

decisive

With

less

before

entitled,

built-in flexibility

jDrolonged
in each

durable-goods sector than
experienced, with timing

thirds of the

with

are

measures

effective

product

scarcely expect such good
to repeat itself. We must

whether

ask

60%

peak

rise of demand for automobiles.

consumer-durable
almost

that

1929-1932,

quarter wer£

held

were

In 1949, con¬
producer-durable

down

were

their

Despite
the
greater
relative
stability of this part of the mar¬
ket, its absolute fluctuations can

1949.

and

sales

will

the

this part of the market for output.

struction

and

that

center

have

confidence

disposable income

postponable outlays—
setback deeper and longer

than

will

But

assume

it.

assume

recession

1951.

we can

may

for

durable goods. Surprises are pos¬
sible in this field, as we saw in

recession

where

stabilization policy is the market
for consumable services and non¬

yet set; and

by the time

the

field

ground

best

refute

Consumer

Expenditure

deep recession in 1954 is already
in the cards. For my
part, I hold
that the private and public deci¬
sions

policy is work¬

Non-Durable

omists, I venture, are convinced
by the forecasts in circulation
which

stabilization

econ¬

users
of
production
equip¬
ment, and to the nation at large.

INC.

quick Eind
any
setback.

all

BLANCHETT, HlNTON & JONES,

prosperity

industry, but
capital goods industries, to

all

remains

the

Rather, we had better assume that
the public is ready to he shown

ap¬

defense, demand.

The major factor in the machine

ANNOUNCING

strong

do not dare

away
by
that public confidence

supposing
in

problem

proaching five
A.

levels;

invading

now

domestic markets.

Certainly
our

those

experience
quickly revive the
that
depression
is

assume

created

adverse

impression

forces

high

trough of 1949.

Prof.

I suspect that

little

present

ment

If, however,

no
change is made with respect to
depreciation allowances, the ma¬

stem

But

and

regard prosperity

normal,

re¬

public's

proportion of

unemploy¬

this

enact

chine tool

Burnham

face

stabili¬

community

must

rather

that

lead to the greatest wave of plant
modernization
our
country
has
seen

1929.

might

must

the

The

who

normal

than

Defense

Trading Department

few

almost

cessive

amendment, I believe it would

is true
our

the

certainly,

Congress, in writing the

it.

t©

business

years,

20 years, as

existence

consumers

equipment An

new

the

kqy characteristics
recession,

policy—and

reaction

m e

stronger

the

zation

re¬

the

t i

Congress

item

the

name

cession. Some-

permit op¬

depreciation.

saying

uncertain

must

—r
*

with

talking about.
begin our answer

must

Among
of

are

off

own

JOHN

And

tax laws to

our

petition

the association of

announce

of recession

upbuilding of

pleased to

The first question to ask
about
anti-recession policy is what kind

that

program has so contributed to the

are

our

America from the disaster

tional

tect

system the purchaser could write

for
^ut they hesitate to buy them be-

ment

is.

imperative

deliveries

reasonable

length

cumulative

amend

support con¬

public works; (4) a truly cyclical farm
(5) some standing arrangement to pro¬
international trading partners
against disastrous dollar
{
pinch in case of recession.

machine

industry is convinced

save

sive

tools

better

and

new

production costs,

year.

companies.

nation's

literally

tools>

end

Backlog varies
greatly, however, with individual

round-th^-

existing in America's metal-

now

esti-

mated

and

working plants is amazing,

that it will be
approximately six months' production at

without
its history,

old;

years

the

The

that

of
are

old.

for defense purposes.
.

over

tools

been

Backlog continued to decline

the

orders, chiefly for replacement,
cushioning the declining demand
_

market
largest in

clock-operation, far older. A large

program.

have

the

will not amend

terms of usage, due to

jyo-

national

Shipments
reached their high point in March
and

whether

bought
for World War II production are

previ-

the

the period

Our

Most of the machine tools

ma-

ordered

rean

defense

placement

comple-

tion

question

riod?

the present tax laws with respect
to depreciation allowances,
The
industry's
potential ,re-

increase

mand

the

recover

a new

risk, he would modernize.

judge the

support program; and

business.

basis.

Congress will

counted for oy
any

some

1954 depends largely upon factors
which at this writing are unpredictable.
Chief among these is

larger

1953

of machine tools
months been on a

types

The outlook for the industry

1952.

are

most

spending through (1) tax relief,

personal income levies

sion of state and local

seeable

over

there¬

soon

markets; (2) longer tax loss-carryback privileges with
accelerated depreciation of
plant and equipment bought dur¬
ing recession; (3) channels of Federal
financing for expan¬

And who is in the best position to

$1,125,000,-

ever,

tool

sumer

metal-working manufac¬

knew

recession for 1954

producer durable goods and building,

to consumer

including reductions

postponed.

turer

and

consumer

stimulation

urges

ma¬
even

may

If the

On the whole, deliveries

The

extensive backlog, others can
give their customers excellent de-

have for

liveries.

$1,300,000,000
by comparison
000

Hart, predicting serious

after in

change, markets may
change. "Take a 20-year chance?
Let's put it off."
So replacement

total,

estimated

are

Dr.

after purchase. Prod¬

years

ucts

capital invested in

tool"1 production

Columbia University

his investment at the rate

Calling attention to return to norma! conditions in deliveries

Machine

By PROF. ALBERT GAILORD HART*

If he is allowed to

of only 5%
a
year, is the
risk
justified? Advance in the art of

Association

Builders

Tool

foresee

ahead?

years

Vice-President, Baker Bros., Inc., Toledo, O.
*

How to Reverse the Recession

tools..--

Money spent for machine tools
is

Thursday, January 7, 1954

20-year write¬

an average

for

exchange

STREET

Volume

179

Number 5288

The Commercial and Financial Chronicle

(59)
•x

government favors the

Slipping Economic Regions
And North-South Competition

regions through tax and
spending policies, or favors these
regions through pricing policies
(farm support programs), and in¬

dynamic economy some regions are bound
rapidly than others, Professor Harris states gov¬

ernment and trade unions have added to

ping regions.

reckoning.

States

industries is

difficulties of the slip¬

concentration
In

classical

sumed

that

suffers

economics, it is
country

as¬

(or region)

problem and put off day of
of labor and capital into new

competitive deteri¬
oration, adjusts to the situation as
balance

its

payments

bead¬

comes

verse.

tend

this

paper

con¬

/hat the

expected ad¬

justments
not take

only

•or

place
after

Committee

may

the

ease

ment

E. Harris

unions

govern¬

capital

towards

On occasion,
relief
and

also,
governmental
spending policies may have simi¬
lar effects. Hence the required ad¬
justments are put off. Thus off¬
setting activities by the Monetary
Authority or the Federal Govern¬
problem
and

the balance of payments

ease

for

inflow

ish

weakened

hamper

scured

Trade

the weakened region.

the
Dr.

securities), that is, through

movement

Britain

process.

capital

the

region

adjustments
late

just

into

Gfreat

twenties

weakness

the

ob¬

Brit¬

situation, and thus interfered

with

adjustments;

and

therefore

often prevent necessary wage ad¬

the competitive position continued

justments;

to deteriorate. This type of inter¬
ference is especially relevant for

put too great

burden

justment process;
of labor and to
tal

too

are

reqtiired

policies

government

and

some

the ad¬

movement

extent capi¬

em¬

ployment.

In writing this paper,
especially aware of the com¬
petition between developed and
I

underdeveloped

regions,

and

notably between North and South,
or,
to a lesser extent, East and
The

classical

theory

assumes

loss of competitive position
in higher relative prices

evident

loss

and

panied by

markets

are

accom¬

rise of imports,

de¬

cline of exports, a loss of gold and
reduced monetary supplies

then
and

hence

sponse

losses

lower

growth

prices.

elsewhere

re¬

and

in old industries, the older

regions

presumably will experi¬
change in their industrial
employment
structure,
with

ence
or

employment

rising in the more
employments and de¬

advanced

industries.

Thus,

for

example,

textiles lose; machinery and metal
fabrication industries gain.

Despite
the

the

weakened

position

older

region, the required
decline of prices (relative) may
not be forthcoming.
One reason
is

that

the

thority
*A

ican
D.

central

(e.g.,

paper

before

and

Northwest.
A

second

tion

reason

for

rates

wage

work-loads

for

hence

(and

the

banking au¬
Open Market

Professor

Harris

read

Annual

Economic

Meeting of the Amer¬
Association, Washington,

C., Dec. 30, 1953.

failure

the

rise

older

increased

the

South

and

another

factor

that

inter¬

labor and capital to move
the
new
industries or

localities

into

thriving
region. Capital
from region to re¬

the

moves

easily
gion—much more easily than from
country to country; and the fact
that

obstacles

capital

international

movements

much

are

greater than they used to be, tends
to

increase

ments.

move¬

capital and manage¬
easily moved, and
labor

ment

rather
noted

interregional

With

immobile
in

(as

has

been

studies

numerous

the

New

England' economy),
the
tendency is for large surplus labor
supplies to be concentrated in the

That

artificial

restrictions;,

ment

A region nurturing

process.

industries

new

part

can

the

capture

ket of
as we

less

a foreign
capture the mar¬
American industry, and,

risk

agement
does

easily

move

not,

aggravate

and
the

labor

region

man-hour

international

movement of

older

regions contribute to the
diversions. The magnitude

rapid
and

speed

tion

of the

changed direc¬

regional

major competition faced by
industry
is
interre¬
gional, not international. For ex¬
ample (see table below).

Obviously, most sales are at
home. In fact, a large part of all
are within the
region or even

sales

city of production. This is perhaps
true of services than of

even more

trade

about

lower

wages * and

industries.

Bub the

etc.

Here

competition

the

city or region is dis¬
limited. This point is of

tinctly

importance

because

the limited

underlines

within which ad¬

area

justments in

to losses in

response

interregional competitive position
must be

made.

well

remember

nation,

competitive

trade

have

namely,
restrictions
on
which might slow
up
the
adjustment process. It is signifi¬

cant

that

tolerate

government

large

losses

will

foreign
a
short period;
and yet in national
economies, the
government not only
may allow
much
larger losses to regional
competitors

These

over

Committee,

position

the

the
region

concentrated

considerable
of

extent

this

trade

union

imposes

weakened

region the higher
wage rates of higher income areas

(e.g.,

U. A. W.,

C.I. O.),

when

the trade union is

stronger in the
"declining" region than in the
new competitive
region (e.g., Tex¬

the

Hence, large
in
interregional competi¬
tion, say in textiles and shoes, if
they are to be made goods in sub¬

losses

stitute

exports,

made

goods

must largely be
improvements in
"export"
indus¬

discussed

are

manufacturing

the New England

especially

see

15-17.

Agriculture,

forestry,

fisheries

Chs.

Continued

page

(in billions of dollars)

Value
Added by

Products

M'facture

1939

$9.0

1950—

1951___

Exports,
Freight

Mining

Receipts

Total

Exports

tendency

^SOURCE:

last

10-15 years by the
prosperity engendered
part by large public outlays.

$3.8

$4.2

$3.1

7.5%

31.1

89.7

11.8

11.6

144.3

10.1

7.0

35.5

104.7

13.3

12.9

166.4

14.9

8.9

$41.5

Trade

and

President

Tariff Policy in the National Interest: A
Report to the
by the Public Advisory Board for Mutual Security, 1953.

un¬

usual

ment

unwise

policies

contributes

further

invest¬

management
to

the

delay

factor that tends to ag¬

gravate the problem of adjustment
is

public

policy.

Insofar

the

1 Professor

that

De
Vyver has estimated
important
industries
in
11

Southern

states, the percentage of union
relative
to
the
percentage
of

members

employment
dustries

varied

the

nation

for

from

these

in¬

24% in lumber and
basic products, 25% in apparels
<43% in textiles) to 53% in construction
and 62%
in coal, and 117% in tobacco
lumber

manufactures.
Factors
the

the

South,"

Industrial

Scuthern

1951,

rates, for example, from

wage

about

tiles

from

in adjustments.
A third

56%

10%

in cotton tex¬

1890-99

20%

1950

early

1952.

the

growth

ferential.
for

(in

the

differential

third of the total

ential

late

fringe

textiles,

equal
18

194.

dif¬

accounting
to

cents

one-

differ¬

1952), the gains in

relative power costs for the
South,
the artificial advantages given via

December

social security to newer and grow¬

ing regions, with much
employment and lower

Vyveir, "Labor
Development of* the
Journal,

Economic

and

But
should not leave out of account

less

THE

un¬

benefits,

gains

for

as¬

pleasure in announcing that

rise

FROM

THE

FIRM

OF THIS

the

regions

exporting
much, it fails to allow sufficiently

CO.

DATE

CHARLES ROSE

LEO J. GOLDWATER

that costs and prices would

1953

Member

DANIEL COWIN

Stock

ROBERT

(Limited)

Member N.

Exchange
KASTOR

Stock

Exchange

for the vast untapped resources of

RUML

farm

J. C. UNDERHILL

has

January 2, 1954

times

Members of New York Stock Exchange and American Stock
Exchange

high fer¬
(The South

much

from

the

farm

This

the

farms

ARE

PLEASED TO

THE

ANNOUNCE

FORMATION

tends

rates

wage

labor

constant

and

Gartman, Rose & Co.

The

MEMBERS NEW

YORK STOCK EXCHANGE

the

New

Committee
cf

COMPANY

New England EconomyA
Re¬
the President by the Committee
on
the New England Economy,
1951, Ch.
XIII; S. E. Harris, The Economics of New
England, 1952, Parts II and V; Report

by the

farms.

England.)

depress
2

fed

the

movement

port

General Partners

New

admitted to this firm

labor

tility
as

WIESENBERGER

classical

31,

ANNOUNCE THEIR

HETTLEMAN &

the

economics

are

UNDERSIGNED

RETIREMENT

use
of tax systems that dis¬
criminate in favor of industry, the
constant flow of labor from the

These

WALL

TELEPHONE:

Chairman), 1952, Report,

NEW
WHITEHALL

YORK

3-8200

MORTIMER

<S. E. Harris,

pp.

65-69;

Re¬

New England

Textile Report,

GARTMAN

CHARLES ROSE

search Report, pp. 273-284.
3 The

STREET

England Textile Industry by
Appointed by the Conference

New England Governors,

LEO
pp.

Member

GOLDWATER
N.

Stock

Exchange

145-46; The Commonwealth of Massachu¬

Broadway, New York 6, N. Y.

Report on Unemployment Com¬
pensation Benefit Costs in Massachusetts,
1950, p. 29; and "Reconversion in New
England," Monthly Labor Review, July,
setts,

1946,

DANIEL COWIN

pp.

12-13.

$24.5

Workers

turesomeness

Product'®

It is also assumed that
prices
and wages would
ultimately rise
Union, C. I.O.).1 If in the newer industrial
regions,
the required adjustments are not
thus contributing towards a solu¬
made, the region will suffer large tion of the imbalance in
the older
and long spells of unemployment.
regions. Indeed, there is evidence
Any inflexibility or lack of ven- of a
narrowing of the difference
tile

Production and Exports of Movable
Goods, 1939, 1950, 1951 *

depressed areas.' The genuine

the

part

economy.

attract

industries is to avoid

new

ac¬

tries.

problems

length in the Report

manufacturing income in 1952

situation in the older regions has
been concealed to some bxtent in

the

ARTHUR V. TOMASELLI

that

counted for but 31% of all income.
The
major
adjustments in

wage

attract
new
employments. Ulti¬
mately, unemployment may bring

puts

education,

outside

large burden on the
region
threatened
new
by the
competition. Yet this region does
not have the
way out, open to a

Agri¬

for the

ARTHUR

The

American

especially

distor¬

rigidities interfere
with wage adjustments that
might

capi¬

tal, management and ideas often
stimulated by the firms in the

cultural

Again,

new

than

trade; and free

Textile

When

with

rivals but through its policies will
even accelerate the movement.

note

3-6,

and particularly in
harboring the declining
industries.3 That capital and man¬

sumes

were

larg¬

can

South.

ARTHUR

and

market

much greater
speed than

competitor

older regions

farms.

ALVIN

trade are not available to the
ex¬
tent that they are in
international
trade further strains the
adjust¬

the towns

output). These policies are likely
to
prevent adjustments notably

October

We take

delays

adjustments.4

tions.

obtain the required adjustment is
that trade unions prevent a reduc¬

clining in the older less advanced

Still

when

West.
that

policy relating to the South

sluggish to effect the

redeployment

New

interfere with

adjust¬

for

England.2

pressure

system's holdings

the

ment

through
the region

problems

the

market

adjustment

feres with the adaptation to a new
industrial structure, is the failure

ment

the

prices/given

the government in
aggravating the

banks)

reserve

re¬

pumping money into
(e.g., through a redistribution of

costly delays.
Rigidities and
imp erfections

the

The

prices

movable goods. A large part of
later, it is interregional our
that this type of public policy does
services are almost exclusive¬
trade that really counts. In inter¬
not postpone adjustments as sug¬
ly free of interregional competi¬
regional trade, no exchange prob¬
gested above, but adds to the total
tion—medical, local and state gov¬
lems arise; no
possibility of tariff
burden of adjustment.. In various
revisions; and hence large invest¬ ernment, public utilities, domestic
publications, I have discussed in
service,
local transport,
public
ments in
selling may be made with
some
detail the contributions of

slow, with capital and management neglecting
depressed regions.
Emphasizes importance of
of export adjustments on small sector of
economy

out

older region.

rigidities, puts an excessive
burden on price adjustments. Note

too

seek

the

bur¬

all the

extent of

movement

the

through re¬
tariffs), to this extent

quired adjustment in

Asserts large military and other government

outlays have obscured

for

(e.g.,

government adds to the

den

out that in

to grow more

the

competition

regions

duction of

Professor of Economics, Harvard University

the

creases

older

By SEYMOUR E. HARRIS*

Pointing

in¬

newer

dustrial

MARGARET

January

1954

Limited

L. KASTOR

(60)

The Commercial and Financial Chronicle

that

iank Executives Hail Return to Free Markets

policy

money

insofar

Annual

Report to Shareholders of National City Bank,
Howard C. Sheperd, Chairman of the Board, and James S.
Rockefeller, President, find, as year closes, inflationary trends
have been arrested, and money policy is one intended insofar
as it can, to maintain economic
stability. Foresee some de¬
cline in business activity, but hold no major depression evident.

intended,

changed

the

Report

Shareholders
142nd An-

at the

kets

economy

return

during

economy

free

the

market

nearly all parts of the
except agriculture. Pro-

past

Says^he hegmning of the report:
"The
year

1953 has been marked

authorities

heavy

allowed

economic

controls

and

the re-establishment of free

passing

through

been

great,

Recommendations & Literature

the

It is

money

de-

Also

National

the

How

City

that

55th

duction

mar-

and

sales

output

1954.

ventories

tins for next six months—Homer

By Homer Fahrner

James

months, for only $1
for

natural

HOMER

s
S. Rockefeller

^ Qf
mands

FAHRNER

funds

effect

have

raising

their

First New Revised Edition of

."How To Make Profits

the

By W. D. Gann (Noted Forecaster)

and

pressures

market

re-

"Even

will

ness

and

rowing

goods, and
ary

bor-

some

demand

some

for

the

ttyus reduced inflationConversely,

pressures.

subsequent

easing,

time

business

when

coming

<<w

PJ^r

activity and

variety

The

years

alternative

before 1951

when

ing

new

ganization

-useful

'more

correspondent

bank

this

are

ontrols. The
to

have

the

direct

economic

country cannot hope
benefits

offer

412 PAGES

economy, or money of stable pur-

JBIoth

chasing

original

book

Those

vtechniqt
profited

thereby.

followed

rules

and

book

have

this

CAN

published

have

trading

taught

first

was

who

time-tested'

6wn
A

reliable

vmmodi y

guide

book

traders

—

rates

ditions
"As

price
or

all

closes

year

say

/Seen

neither

home

the

and

the

active

market

and

loyalty

all

aiTested

recog-

businessmen,

con-

toothermaintenance
through

their-

overly

stability

and

presented

—

illustrations

EASY

"45

YEARS

Gann

trading
243

WALL
.

are

—

$10.

order.

circular

No.

COMMODITY
METHOD)

Monthly

Ask

for

295

Vanden

Noyes

Hickey, 49

•

♦

Broeck

Theatres,

Also in the

Co., 40

Inc.—Resume—

Exchange

circular

same

are

Place,

resumes

Also

•

Machine

Co.,

208

available is

Corp.

Foundry

South

Co.—Memorandum—David A.

Salle

memorandum

Street, Chicago 4, 111.
Mississippi River Fuel

■■■?.

••

structive leadership."

announce

Spring Street, Los Angeles
Memorandum
Chase
,

Calif.

13,

Kaiser Steel Corp.

National

Bank

the

City

Also

available

New

York—Bulletin—

Laird, Bissell.& Meeds,; 120 Broad way,. New York 5. N. Y;
Continental Oil Co»-T-Memorandum—Smith, Barney &
Co., 14
Wall Street, New York 5, N. Y. v ;
~
,

Delhi Oil

Corp..

Memorandum

—

-^-

Rauscher, Pierce & Co.,

Mercantile Bank Building, Dallas 1, Tex.
Kaiser Steel Corporation—Report-^First -California
300

Company,

Montgomery Street, San Francisco 20, Calif.
Star

Steel

Company

—

Analysis

—

Milwaukee

Company,

207 East

Michigan Street, Milwaukee 2, Wis.
Also available
analysis of Canadian Chemical & Cellulose Company,

Ltd.

Street, New York 5, N. Y.
Minnesota

Power

Light

Company—Report—Kidder,

Pea-

body & Co., 17 Wall Street, New York 5, N. Y.
Oxford Paper Co.—Memorandum—A. C. Allyn & Co., 44 Wall

Street, New York 5, N. Y.
Puget Sound Power & Light Company

— Analysis —H.
Hentz
Co., 60 Beaver Street, New York 4, N. Y.
Riverside Cement Company—Analysis—ask for report T-31—
Lerner & Co., 10 Post Office Square, Boston 9. Mass.

kland

con-

Light

25 Broad

Power

Co.—Memorandum—Hirsch

Co.,

Street, New York 4, N. Y.

Gulf Sulphur Company — Analysis — Bruns, Nordeman
Co., 60 Beaver Street, New York 4, N. Y. i

the installation

Direct Private Wire to

We make

SCHULTZ & CO.

•

good markets in 385

Public

Utility
•

CLEVELAND, OHIO

Natural Gas and
•

remit¬

de¬

Industrial Stocks

B-13.

Daily,

Prices

HARDY & HARDY

(GANN

ESTABLISHED

Weekly,

Members

Publishing

Co.,

Inc.

N. E. 55th St., Miami
37, Fla.

National

Association

request.

BROADWAY

Telephone:

•

your

Dealers,

Teletype:

i
,

Troster, Singer & Co.

Inc.

NEW YORK 4, N. Y.

WHitehall 3-4490

orders & inquiries invited

15)3 2

Securities

methods.

free

Capitol Records, Inc.—Memorandum—Fewel & Co., 453 South

Members Midwest Stock Exchange

Lambert-Gann

L. J.

stock

Enclose

CHARTS

—

book

pleased to
of

STREET—NEW

Latest

tric System.

DETECTOR"

forecasting

Price

with

scriptive

—

and

pages.

tance

TREND

Vilas &

Texas

UNDERSTAND MANNER. $10.

STOCK

progress

through sound practice and

and

.own

enterprise, and to promote
nomic

—

Lynch Corp.—Memorandum—Hemphill, Noyes & Co., 15 Broad

larger view,

prospertfy

412 pages

experience

chart

and

pf trading secrets and wisdom
gathered during 46 years
of
many

services

overseas,

effectiveness
staff.

tribute

seems

easy,

the

"In

raomentumythaf

excessively

business.

helped by the

nize the responsibility of bankers,

con-

that^infl^tionary

have

again

nor

scope

our

have lost their

tight

economic

change.

trends

money

for

move,

the

correct

Forecasting

unless money pol-

icy is free to change, and interest

YOU!

Learn To Do Your

power,

Circular

Copper Corp., Kaiser Aluminum & Chemical
Corp., National Gypsum Company, and New England Elec¬

Lone

broad

free

effort

and

Kennecott

commercial arid

our

—

Broadcasting-Paramount

Oppenheimer,

purpose

or-

Saxton

By Institutions—List of better grade equities
Co., 120 Broadway, New York 5, N. Y.

New York 5, N. Y.

ex-?

our

1954

banking

make

ways

mposition

1!)4».

our

—

American

the

aggressive in seek-

are

increase both

were

Stocks—Tabulation—G.

Industry.

aod building for the

legged is inflation, which leads to

the

0 ren

prices of

securities

future. We

flexible

learned during the

as was

overnment

Favored

American

customers

our

For 1954
Suggested portfolios in current issue of
"Market Pointers"—Francis I. du Pont &
Co., 1 Wall Street,
New York 5, N. Y.
Also in the same issue is an analysis
of the Market Outlook and a short discussion of the
Drug

studying

providing

pect an(j which it is

policy can operate
only through flexible money maroolicy,

which

Outlook For

Stocks

„

quality

and

service

"*.t fhould be understood that

kets.

efficiency,

Inc.,

13-year period—
Front Street, New

—Sutro Bros. &

test

Bureau,

over

Street, New York 5, N. Y.

Stocks

°j?erjf10n:8

own

°ur

stability.

Wall

three-way objective of improving

off,

flexible money

impose

constantly

gives support against deflationary
influences, and
hence
promotes

will

year

Quotation Bureau Averages, both
performance

Utility Common

Railroad

that way

labor.

plus bulle¬

Co., Inc., 70 Pine Street, New York 5, N. Y.

leadership

the
at

needs for money have levelled

The

Public

modest decline in busi-

and

per copy

Fahrner, Moon Road, Corn¬

Bank Stocks—Comparison of 11 largest Phila¬
delphia banks—Stroud & Company, Incorporated, 123 South
Street, Philadelphia 9, Pa.
|

require vigorous effort

agement

ask for free

Broad

to
increase
efficiency,
reduce
unnecessary, costly and dis-*
costs, improve products, and sell at
turbing. However, the tightening
prices which people can pay. The
in the
forepart of the year, when
responsibility for the success of
the markets were
over-crowded, this effort falls alike upon man-

deferment

copy,

Philadelphia

were

caused

3?und

plants. • The
the Fed-

the economy promise to be
substantially as large as in 1953.
Personal buying power is backed
by
a
still-growing
volume
of
liquid savings, and will be reinforced by tax reduction. It seems
plain that money will be available
for
sound
and
worthy
projects.

covery

market

Quotation
York 4, New York.

eral, state and local governments

quently, purchases of government
securities by the Federal Reserve
Banks and a reduction in member
bank reserve requirements eased

and

National

followed. Many have complained
that
these
fluctuations

In Commodities"

used in the National

yield

interest

Security prices were
correspondingly
depressed,
culminating in a sharp decline in
bonds in the late spring. Subse-

Road, Corning, California

generally
plant and

in all sections of the
money

rates

Security Analyst since 1926

defenge

demands

aggregate

market.

Moon

for

per

New York.

major

not

are

Programs

per

Over-the-Counter Index—Folder showing an up-to-date com¬
parison between the listed industrial stocks used in the DowJones Averages and the 35 over-the-counter industrial stocks

equipment expenditure show only
a sma11 shrinkage despite comple-

riowaru

six

commitments
On the other

expected to bring

business decline

evident.

Gann—$10

Monthly Investment Plan—New method of marketing securi¬
ties available to New York Stock
Exchange member firms—
New York Stock
Exchange, 11 Wall Street, New York 5,

in¬

Publishing Co., Inc. 295 Northeast
Street, Miami 37, Fla. Also "45 Years in Wall Street—

ing, Calif.

hand, the conditions which would
be

place

for goods far ahead.

for CAPITAL GAINS

add

Commodities—W.

Managing Accounts For Capital Gains—$1

and

Investment Opportunities in Japan—Circular—Yamaichi Secu¬
rities Co., Ltd., Ill
Broadway, New York 7, N. Y.

lines, and there

inducement

little

Profits

Lambert-Gann

New

The

goods

Make
—

Stock Trend Detector"—$10
descriptive circular B-13.

industries are likely to
some decline in pro¬

key

—

available

copy

experience

bulletins

will be pleased
following literature:

mentioned

are
brief analyses of Chicago, Rock Island
Railroad, Erie Railroad, Seaboard Air Line Rail¬
road and Spokane International
Railroad.

tivity has slowed somewhat, and

markets

our

firms

& Pacific

agreed^that'^business*1"-

erally

MANAGING ACCOUNTS

and

the

Tabulatiomby industries —
Eastman, Dillon & Co., 15 Broad Street, New York 5, N. Y.

services has brought back buyers'

copy,

that

send interested parties the

Common Stocks For Investment

for tde rUrrent year, the ex-

negg

ecutives of
Rank slate'
,! / 1

immense

Your

understood

have

Concerning the outlook of busi-

thp monPtarv

vpar

1952

improvement despite higher
and
expenses.
All
these
trends appear in the operating reports of this bank."

country by the removal of

our

most

«Farlv in fhp

volume

taxes

-f£atfSS?heen^hl?8 °"
the average have been stable.

year.

end

The

1953.

has

some

time savings have risen in

same

the

little

averaged
a
little
higher, and earnings have shown

Meeting on Jan. 7, Howard duction, trade and employment
Sheperd,
Chairman • of
the have set new high records. PerBoard, and James S. Rockefeller, sonal, corporate and government
President of
the
National
City debts have increased; but at the
the

end

banks

Bank of New York, call attention

from

amount

nual

relatively

business
rates

to be presented

Dealer-Broker Investment

"Among banks generally, de¬
posits, loans and investments have

the

Thursday, January 7, 1954

it can, to maintain eco¬

nomic stability.

...

NY 1-960

HA 22400

Members:

Security

Dealers

Association

Trinity Place, New York 6, N. Y.

376

Number 5288

Volume 179

(61)

The Commercial and Financial Chronicle

a narrow
margin to put on the
year's worst performance.
*

THE MARKET... AND YOU

has

been

giving

count of itself
*

good

ac¬

which could be called

Oils,

the most

far.

neglected

group

1953, showed little evidence

changing their way of life
early in the year. All the
optimism normally shown by
new
discoveries was pretty
well cancelled but by the con*
tinuirig glut of products in
storage. What swings individ¬
ual' issues managed were
the 20 most active stocks of in this week's
new
year led off with a rather
trading. There rich, in one session, was able largely meaningless.
*
*
%
spirited price recovery, par¬ the year, the second being isn't anything too prominent to forge ahead widely to a
Canadian
Pacific's
12-point in the textile business to war¬ new high but was cutback
ticularly for those issues that
Steels, while far from spec¬
had suffered most in 1953. loss.
rant undue optimism so what¬ quite hard before the trading tacular,
nevertheless have
Celanese Corp., which has

Another aspect

of the early
year that
By WALLACE STREETE
straight years, was high on isn't overly comforting is a
the list of losing issues of rather
quick disposition to
Some of the glum feelings loss represented some one- 1953. Its loss came to almost take profits. As a barometer
around Wall Street at the turn third of its value 12 months half its value. But Celanese of the market, this could in¬
of the year were dissipated a ago. It was by far the largest has been
showing signs of dicate a lack of confidence on
bit as the first week of the decline sustained by any of some
gingerly accumulation a rather broad scale. Good¬
been in

But

since

the

market

seems

but

anything
complete satisfaction to

Pacific

another

was

Land

Trust

the

issues

the rather sharp dealt harshly with by the in¬
shrinkage in volume injected vesting public last year. It
lost half a hundred points
a note of uncertainty.
*
*
*
which, again, was a rough
anyone,

The majority of market
analysts were on the cautious

one-third

side

particularly

the

isn't

1953

sellers

the

held

since
to

out

the

which it started

value

1953, but it

showing anything

reinvestment demand

downdrift for three

note.

The

final

session

new

this

even
ended. Hiram Walker been doing well despite some
logically be the was also a bit erratic, first of the more pessimistic esti¬
result of a simple calculation. making valiant stab at a new mates of the business outlook
A stock now down to 20 can't' high but backing down when which,
obviously, would be
have too much more to go it couldn't make the grade. reflected
speedily in steel
considering that it sold close Douglas Air was similarly un¬ operating rates. They were
to 60 in 1951 and above 50 in certain in the aircrafts. Movie once the
cyclical of all cycli¬
1952. The best last year was shares,
however, were still cal industries but against this
well short of 40.
popular with some of the in¬ is the final loss of less than
*
*
*
three points for 1953 by U. S.
vesting public.

could

anese

There

nothing decisive
trading to
*
*
*
indicate any pattern for the
Star Performer
tape two minutes late and
new
year. There was plenty
prices heavy. It has been a
The star performer ,of the of evidence of switching'still
long time since the list broke year, as well as the only stock going on, presumably by in¬
off a year on such a dismal
that wound up the period by stitutional investors, not the
Chrysler.

very last minutes and ended
the year's trading with the

markets of the

interest there is in Cel¬

ever

Texas

determined to offer

was

in the first week's

has

Steel

■a

Metals'

which

the

year's
Oddly,
only steel producer

appear

in the 20 most ac¬

was

fifth most active issue.

Change of Pace

early change of pace
was more
popularity for the
coppers and smelting shares
than they have enjoyed in
some
time. Virtually all the

was

tive issues.
[The
article
time

views
do

not

coincide

expressed dn this
necessarily at any
with those of the

doubling in value, was Heal least being such unusual issues in the two groups Chronicle. They are presented as
Silk, largely because of a com¬ blocks as approximately 30,surged forward in the year's those of the author only.]
handful of the years of this
pany
purchase plan. There 000 Niagara Mohawk Power second session and the gains
which erupted in sales of 19,century.
were half a dozen other issues
Rejoins Central Republic
were
substantial. Also perk¬
*
#
*
that added 60% or more to 000, 6,000 and 3,900. Also in
(Special to The Financial Chronicle)
ing up somewhat were the
ST.
this category was 'a single
LOUIS, Mo. —Charles G.
Big Losers Meet
their value, the list including
cigarette shares, particularly Lumaghi has rejoined the staff of
turnover of 12,700 shares of
Reinvestment Demand
after joint plans to get the Central Republic Company, Se¬
New
York
Shipbuilding,
Corning Glass Works which
curity Building. He has recently
Chrysler, which was as Columbia
Pictures, National was enough to topple the issue real facts in the smoking-ver- been with Merrill Lynch, Pierce,
hard hit through 1953 as any
sus-lung-cancer controversy. Fenner & Beahe.
other investment grade issue, Theatres, Visking Corp., Bul- rather markedly. It had been
showed the earmarks of re¬ lard and Consolidated Cigar. hoped that virtually all of
investment demand and did On the other end of the list these year-end chores had al¬
Effective January 1,1954
well, adding as much as a were two issues that lost 60 % ready been accomplished with
couple of points for a couple or more of their value—De- only reinvestment demand to
WAINWRIGHT, RAMSEY & LANCASTER
be handled at this time but
of sessions running. But it has
troit-M i c h i g a n Stove and
that, apparently, wasn't to be.
far more work to do if it is
announce the
change in the firm name to
sj:
sjs
*
United
Wallpaper, the stove
going to erase the better than
Rails Pick Up
$36 trim of last year, which firm nudging out the other by
Wainwright & Ramsey Inc.
seen

upbeat in all but

chronic laggards of
last year's rallies,

Rails,
of

most
PIERCE-CARRISON
announces

formerly

senior

pleasure

charlotte,

now

north

the

dickson

co.,

inc.

carolina

corporate

the

name

firm

national

bank

jacksonville,

Nprfolk & Western made
early appearances on the new
lows list. New York

PIERCE, CARRISON, WULBERN, INC.
barnett

building

Chairman

70 PINE STREET

Townsend Wainwricht

NEW YORK 5, N. Y.

Lincoln E. Caffall

President

WHitehall 4-3540

pierce,
edward

h.
b.

george

Central,

1953

by a
margin, wasn't able "to
much pricewise so far in
Central's

4,084,900 last

carrison

turnover

year,

incidental¬

ly, ran well aheal Of secondplace Parkard's total of 2,934,-

wulbern

Vice President

wide
do

florida

leader of

volume

1954.
c.

Municipal Finance
J. Basil Ramsey

principals:
clyde

fact, they scored the better

percentage gains on the bouyant trading of the first week.
Nevertheless, Lehigh Valley
and

Associated with

under

that

wulbern

vice-president

with

edward

mr.

Consultants

seemed to want to do better.

CORPORATION

are

pleased to

thai

announce

LANG ELLIOTT

JOHN M. TITTLE

700.
*

ROBERT A.WOODS

American

are

pleased to

announce

direct

private wire connections to

white & company
St.

too

But

ard.

far

much

tween

came

the

120

BROADWAY

BOSTON

NEW YORK 5, N. Y.i

PORTLAND, ME.

PHILADELPHIA

have been admitted to

partnership

was

its

buy Tele¬

end

before

holidays and the issue
a bit heavy when left to

own

picked

firm

devices

STEIN ROE & FARNHAM

common
even

in the

final

Investment Counsel

*35

South La Shlle Street
Chicago

sessions. But with the arrival

our

vertibles and the

Eastern Securities, inc.

New York

the auto-maker's
The
arbitraging be¬
the Telephone con¬

issue.

Houston, Texas

HENRY B. THIELBAR

nearly 40

phone

kramer, makris & company

(

Pack¬

behind

costs

times

and

Chicago

total which

2,793,133

wasn't

Louis, Mo.

Telephone which,

despite its relatively high
price was able to be 1953's
third most active stock, rolled

Telephone
in esteem again and

new

year,

January 1, 1954

Broadway

New York

The Commercial and Financial Chronicle

(62)

Thursday, January 7, 1954

Possible Responses to Continued
Downturn

The Economic Outlook for 1954

Business
mild

GERHARD COLM

By DR.

Chief Economist, National

and

continuation of present mild downward trend,
demand and production in 1954 $10 to $15
1953. Cites possible measures to fulfill govern¬

men's

reverse

Concludes in

fears.

be effective in counteracting

The safest "forecasts" are about

the

past..

can

half of
1953 the level of economic activ¬
the second

that

stated

from its all-time
peak of last spring. The Federal

fell

away

Reserve

Index

duction

(1947-49=100,

ity

industrial

pro¬

seasonally

adjusted) reached 137 in May 1953
but had fallen to about 130 by
the

the

end

That is

year.

about 6%.
Production,
employment, and hours of work
are slightly
below that of a year
drop

ago.

ment;

1953

intention

inventories

turn in the
activity al¬
ready implies some suggestions
about the future.
It implies that
.Talking

about

economic

don't expect an early and au¬

tomatic

upturn.

According to the Michigan Re¬
Center, consumers this fall
optimistic about next year's
income and more people than at

were

any

time in the past several years

felt

that

good

intentions

pressed

time to

items." Ex¬
to 1 purchase

buy large household

Future

can

one

step further by

Government's

spending during
the next calendar year has been
pretty much determined by past
action.

Federal

spending for

na¬

tional security in 1954 may be $2
to $3 billion below that of 1953.

State-local spending will probably
continue
to
rise,
particularly

spending for roads, schools and
other

improvements.

government demand

by only $1
business

plant
8%

Hill

equipment

shows

decline in manufacturing in¬

dustry, but only
all
segments of

4% decline in
business taken
including
commercial

together,

trades and utilities.
would

mean

$1 billion.
business

A 4%

drop of

decline

little

over

It is encouraging that

plans such

investment

the

facilities

even

high level

though

defense-related
has

most

expansion

been

completed.

It
is
especially significant that
large spending for modernization
is planned in industries in which

the sale of goods is expected to be
downward.
Trends

tion

residential

Labor

and

merce

These

Nevertheless,

they

suggest

construc¬

the

Com¬

Departments

balance

the present

mild downward trend.
these fragmentary
pieces

When

put

together into a coherent
picture and some decline in per¬
sonal

income allowed

for, it ap¬
pears that aggregate demand and
production in 1954 might be $10
to $15 billion below that of 1953.
order

ployment
tion

maintain

prices)

This

estimate

entries

would

into

21/2 %

the

em¬

needed.

the

labor

the

increase

fact

assumes

usual

force

and

output

per

However, it allows for
that, with the pressure

of the defense program

ing,

ects

some

withdrawals

diminish¬
from

the

additional

nature

could

their

edge

cate

the

This

would

compatible
full

ing

intentions

level
a

indicated by

ment

present buy¬

would

leave i the

level

employment

imply
of

average

three

four

and

unemploy¬
million.

"forecast,"

reflects

present

the

which

does

however,
intentions
not

for

and

take account

many
different ways in
business, consumers, and

government

could

respond

4% decline in 1954

syndicate departments of investment banking houses.

the

tion.

conjecture

These

likely

which

vital

are

factors,

outlined here¬

analyze individually the various
contributing functions involved in

the

ag¬

the

reverse

aggravate

are

downturn

which

will

liqui¬

underwriting.
To
thought in the form of
ism

"you

sell."

have

issue

new

the

put

aphor¬

buy
of

right

securities

must not

areas

lated

which

excessive

been

accumu¬

economic

the

scale

have

sound

that

the

of the

demands

order

mar¬

salable.

liquidation of commitments

writing

house to know the

mar¬

and large expects the current and changing appetite for
government to initiate a recovery various types of securities.
This
program if the downturn should integration of the relationship be¬
ness

continue and become
This

the
requirements of the
corporation issuing securities and

tween

severe.

itself

confidence

would

the

develop.

The

demands

the

the keystone
tribution.

government has already ad¬
justed its monetary and
credit

marketplace

to successful dis¬

conditions.
that

tax

made

also

can

adjustments

promptly.

Change in Method

expect

will

fundamental

not

affecting

the

effective

in other words, the
vestment
and consumer
buying. gathering together of the reservoi?
of funds awaiting investment. Un¬
Except in the field of residential
housing, the initiation or accel¬ der today's circumstances of rela¬
high
individual
income
eration
of
other
programs
re¬ tively
taxes, savings
are
accumulated
quires considerable time.
largely in the hands of fiduciary
Venturing
a
final
appraisal

Semi-annual Appraisals

Equipment Trust Certificates

for

supporting

which
.I

how

know

can

business

in¬

than

likely that the present mild down¬
part

and

will

effects

Philadelphia School District Bonds
as

December 31,

1953

and

Write

for

your copy

the

merchandise

the

ment's

least

year.

is required

price

for

best,

before the

and

reduction
is

very

meantime

country

could

try.

and

that

govern¬

willingness and readiness

to act will be maintained.

now

for

Incorporated

New York

•

Pittsburgh

•

Allentown

•

Lancaster

expansion.
•

Atlantic City

Whatever

lie ahead in the

dealers'

increased

the

attractiveness

problems
debt financing to the corporation

future
prom¬

made

them

chase

•A
.

sell

se¬

the

backbone

the

security issues, formerly
entirely upon small
(retailers) for distribution
investing public. It was

almost

the

then

essential

that

the

syndicate

thoroughly familiar
with the
distributing ability (and
financial responsibility) of a large
manager

number
dealer

smaller

dealers.

The

role

distribution, while
resulting in wider diversification
of
security
holders,
was
also
somewhat

costlier

and

necessarily larger.
forces
tended

have

and

mainly

brokers

often the
laws

wanted

sults.

case,

and

mutual

underwriter

As is

produced

un¬

end

re¬

present

time, the
to a major de¬
the now some¬

over

circumscribed

merly

of
and

tinkering with the

has,

taken

roles
fund

unexpected

the

new

since

restrict such

the

economics

gree,
what

spreads

The

work

stock salesmen.

common

carried

function

out

the

for¬

local

dealer.

Organizing Underwriting
Syndicates
Some understanding of the fore¬

going

broad

economic

forces

order

focus

upon the specific prob¬
currently underwriting a
particular security issue.
If the

lem

lecture

the

banking

issue

substantial

originating investment
house will invite other

underwriting houses to participate
severally in the transaction. This,
the direct result

imposed

upon

the

liabilities

underwriters

the Securities Act of 1933, is done
in order to bring additional un¬

derwriting capital
ditional
bear

abilities

industry. Many large investment
banking houses (wholesalers) em¬
ploying their capital in the pur¬

proposed

ness.

economic

near

the

curities of all kinds to individuals
and
smaller local
institutions

size,

1920s) has caused a
change in the distribution
machinery of the securities busi¬

That is

longer-term outlook is
ising.
'•

may

throughout the
Prior to the "New Deal,"

major

preventing

resumed

PHILADELPHIA

scattered

properly

nomic downturn from

STROUD & COMPANY

dealers

country.

necessary

The changed position of the in¬
an eco¬
dividual saver is the product of a
developing
into a downward spiral and a de¬ variety of causes in addition to
high
individual
income
taxes
pression. It is essential for laying
High corporate income taxes have
the basis for
essential

pay

time

by the issuer.

playing the major

supplying capital to indus¬
The concentration of the sup¬

will

The net effect of the
change in
economic forces has been to limit
the role of the small securities

vestors in the

confidence,

the

are

investor

security

relatively small number of insti¬
tutions (as compared, for example,
to large numbers of individual in¬

make

important

panies, savings banks, pension and
mutual funds, for example. These
institutions, rather than individ¬

uals,

the

given

ply of funds in the hands of this

cost

investment
the

com

role in

pushing the production

impact

sales.

new

Now available for distribution

the

time

some

continue

insurance

personal opinion, it appears most
turn

or,

institutions—life

City of Philadelphia

for

dealers
factor

formation

determining the highest price
believes

1932

marketplace is the historical
change in the method of capital

still

economic

Capital

Formation

However,

security to be

primarily

were

policy to the changing economic

since

the

dealers

ketplace and to advise its buying
department as to the market's

There is also the fact that busi¬

that,

a matter of pric¬
security.
The syndicate
department has this responsibility

ing

dicate

is necessary.

noted

tion and his problem therefore be¬

relied

responsibility of the syn¬
department of the under¬

part in planning

It is the

large

current

ket-place

structure

(spread)

offered at competitive bidding, he
incurs no expenses in this connec¬

fixed

only fit the selling com¬
dated
when
a
longer
lasting
pany's requirements, particularly
downturn is expected.
It is en¬
as
to capital structure, but must
couraging that except for some
also, to a degree, be tailored to

limited

should

investors, is in¬
tegrally related to the other phases
consumers

which encompasses the movement
of
securities from the hands of

predic¬

margin

the eventual underwriter
plays no

supplying of capital to indus¬
try.
The
distributing
function,

cannot

the

available to meet the costs of dis¬
tribution.

comes

underwriters

and',

place

equally

reducing

issues

new

importance

It is difficult to fractionate and

when in the preceding boom spec¬
ulative
overcommitments
have
take

other

some

downward trend.

Business

for

the

under.

the

could

responses

mitigate,

gravate,

but

firm

stress

pricing in successful distri¬
bution, giving little or no weight

would

continuation

subject of

bidding

com¬

consumers,

government

Protagonists of

proper

seen,

mild downward trend may be
be

tend

the

have

How

and

respond

subject

petitive

indi¬

trend

rates.

money

general credit and tax policy will

downturn in activities.

par¬

ticipate in sharing risks of distribution, and describes the con¬
tents of underwriting
agreements, along with the activities of

also indicate

Lists facts that influence under¬

deciding what other investment houses should

general investment market, of the
various types of securities and of

felt.

counteract fears that may

This outlook cannot be accepted
as

down.

business,

of the mag¬

activity about 6% below

full

would

with

employment.

An economic decline

nitude

unemploy¬

writers in

buying intentions.

is,

basically

frictional

concept

dealers has become restricted.

works

would

only possible

trend

mildly

public

economic

basis of present

increase

the

demands of investors for various types of issues.
Holds, because of change in economic forces, along with com¬
petitive bidding, the role in underwriting of small securities
current

in¬

would

initiated, though
some time lag be¬

effects

inventories

ment

ing the requirements of corporations issuing securities with the

present state of knowl¬

our

force, some shortening of
average hours of work, and some

labor

hands of underwriters to investors, stresses impor¬
tance of underwriters
knowing their market-place and integrat¬

responses

there would be

about

cent

full

rise in total produc¬
$10 billion (in re¬

weakness

movement of securi¬

ties from

Finally, the government, in the
of a continuing decline in
Effective
distribution
to
the This appeal of debt
financing was
activity is pledged to adopt meas¬ public of new offerings of corpo¬ further enhanced by the attrac¬
ures designed to reverse the trend.
rate securities is a highly special¬ tion
of
artificially created low
Taxes might be further reduced, ized
sector
of
the
investment money
rates.
These
same
low
thus enlarging purchasing power. banking business.
Distribution is money rates accelerated the with¬
Credit
might be further facili¬ generally the responsibility of the drawal of the individual from the
tated;
in
particular, terms for syndicate department of each un¬ market for fixed income securi¬
home financing could
be eased, derwriting house and, to operate ties. At the same time, competi¬
with considerable effect on con¬ efficiently, this department must tive
bidding for railroad and util¬
struction
activity.
Useful
proj¬ have a broad knowledge of the ity securities was progressively

continuation

gopds at

C. L. ROLLINS*

event

decreases

sector of the econ¬

any

they might be willing to dip into
for the right product at the right
price.
i

fore

foreshadow

surveys

increases

trends and

interpreted by

slight tendency to de¬

manhour.

survey

for investment in

plans

and

total

be down

$2 billion.

McGraw

The

Thus,

may

lay replacements.

are

ascertained.

omy.

surveying present intentions to
buy in the future insofar as they
can

tions

buying by

for

Buying

high level, though compared with
last year there were some indica¬

drastic

Intentions

Present

cur¬

indus¬

several

produc¬

consumer
sumers

tries.

"this

time

the

spending.
Many con¬
hold liquid reserves which

decline
dollars.

business

the

Such

««

Author, in discussing problems involved in

both investment outlays and

Various surveys indicate the pres¬
tail

terms.

market

billion

level,

ent

may

with

offer

attractive
to

one-half

about

this

that

hand, for¬

products; or to reduce
through speeding up mod¬
ernization
of plants and
equip¬

crease

automobiles 'also4 remained

trend

the

from

other

costs

event

any

Securities

in¬

now

tion of new

longer term outlook is promising.

events

market

businessmen

forward

press

easing, including terms
useful

the

ward-looking
decide

than

tended.

the trend, as tax reduction; credit
for home financing; and initiation of
projects of additional public works. Asserts business¬
expectation of government recovery programs can itself
pledge to

Distributing New Corporate

further

the

production in order to reduce

inventories

with aggregate
billion below

with

might curtail further its purchases

Planning Association

Dr. Calm expects

ment's

faced

weakening

distributing
the task

well

ability
hand.

ad¬

Obvi¬

given recently at New York

University in New York City.

ously it would be poor judgment

Volume 179 ..Number 5288

the

run

risk

herent

immobilizing

(63)

The Commercial and Financial Chronicle

—

underwriting risk and is
greater
in
bonds of

best

the

interest

relatively

dissolve the syndicate and

deal by accepting un¬
derwriting participations unduly
large in relation to capital.
In
this connection, conversely it is

lower

each

smaller risk
in a relatively large number
of
underwritings.
Underwriting
houses which are members of a

all

firm's

capital in

un¬

successful

prudent

securities

exchange

total

The percentage of

represented

spread

ties

the Securities Act of

after

and

What facts should influence the

sidered:

Meeting

posed

another

way

ability to distribute to institutions
individuals.

Broadness or extent of dis¬
tribution as related to the
size
(2)

hand.

of the merchandising job in

in relation to size
proposed underwriting partici¬

(3) Capital
of

pations.
underwrit¬

other

involvement

which may
multaneously.

going on si¬

ings

f (5) Specialization

i.e., partic¬
ular interest of a given house in
types of securities such as rail
—

utility issues.

regional character of

i.e., the
given un¬

—

distribution

derwriter's

pared

com¬

particular regional
being un¬

any

appeal of the security
derwritten.
These

whether
actions

points
are
considered
contemplated trans¬
is one of negotiation or
the

competitive bidding.

has

Much

the

about

relationships

underwriting

with

connection

said

been

historical

participations.
The
history
of
previous underwritings of a given
corporation's
securities is
only
significant to the point that it
indicates an underwriting house's
ability
ture.

as an under¬
distributor in the fu¬

perform

writer

and

this

analysis

comprehensive

set forth

factor

opinion

down: by Judge
the recently
suit against

handed

Medina

the

deciding

anti-trust

concluded

certain investment houses.

"Blue

various

the

spelled out in
as

document known

the "Agreement Among

under¬

managing

The

writers."

Under¬

other things, ac¬
right by the other
underwriters of reserving all or

writer is, among

the

corded

part of each house's participation
for volume sales to large institu¬

set

been

up,

several

the

con¬

,and

Offering

im¬

the account.

partners in

The
the

security

the

"Identification

out

Send
ment"

restrictions placed by state
upon investments by insur¬
companies. These limitations

and

preliminary

both

tuses

CHICAGO, 111.

tives

Stein

—

Roe

Four

become

cago

partners in the Chi¬
investment counsel firm on

Record

self, but here we are considering

for

distribution.

require that

se¬

curity be registered in that state
before any securities can be of¬
either

all

certain

classes of investors and that firms

registered with the ap¬

must

propriate state authority to qual¬
ify
as
dealers.
The
syndicate
manager must not only be famil¬
must

the

but

what members of his

know

in any

restrictions

these

with

iar

are

qualified

not

are

given state. He must know

limitations

buying

legal

investors

institutional
While he

well.

guided in these mat¬

memoranda prepared by
counsel, the ultimate responsibil¬

ters

ity is his.

being

bright & Co., and later with Law¬

vertisements and the order of ap¬

rence

Also when and where
are to be placed.
offering

the

tion

with

other

the

group,

price

offering

ministration.

and

Determine

dealer

the

insure

distribution of

a new

orderly

offering and

the
hands of bona fide investors, it is
at times necessary to "stabilize."
To
accomplish this, the under¬
writing
manager
will place a
"syndicate bid" in the market at
the public offering price. In other
words, the market is informed
that the public offering price will
be paid for any of the issued se¬
curities that may be offered in
in

placement

ultimate

served

Both

writer, in anticipation of buying
some securities with the stabiliz¬
ing

bid,

Farnham in

1946.

offering and what portion

to release to

participants severally

Joseph, Mellen, Miliar

for their retail sales.

Estimate

amount

out-of-

Formed in Cleveland

chargeable to the

pocket expenses
account.

CLEVELAND, Ohio
II

On and After the
Make group

Offering Date

Offer securities to selected

sell¬

ing group dealers.
Make

selling

dealers entering

John M. Tittle

Jan.

group

sales

Robert A. Woods

1954,

Sydney

Jr.,

Stein,

Lester I.

Joseph,

has

Officers are

President;

Miller, Chairman of the

Edward

Board;

announced.

subscriptions.

offices

securities business.

Herman

the

new

issue

Mellen

Errors of judgment by
underwriter
in
transactions of this type might
result in a substantial loss to an
otherwise
successful
syndicate
managing

(or selected dealer) agree¬
provide that, if a security
is
purchased by the managing
underwriter in a stabilizing op¬
eration
during the life of the

are

Henry

sary.

This is under

circumstances to be construed as an offering of these securities for sale, or as an
buy, or as a solicitation of an offer to buy, any of such securities.
The offer is made only by means of the Prospectus.

NEW ISSUE

;

offer

the

THE
■■■

ATLANTIC

■

REFINING COMPANY

underwriter

■

'•

■

Twenty-Five Year 3lA% Debentures
Dated

Due January 15, 1979

January 15, 1954

purchased
such particular bond or share of
tions and for sales to other se¬ stock from the syndicate will re¬
curities
dealers.
Some
under¬ fund to the syndicate the amount
writing houses have larger sales of the selling concession. This is
departments and therefore wish done because the selling conces¬
to retain a substantial portion of
sion
who

$55,000,000

ments

dealer

•
.

group

syndicate,

originally

Price

101% and accrued interest

represents compensation for

their
for

underwriting

their

others

can

writer

for

sold

Thus

that the syndicate

seen

must

them

volume sales.

managing under¬

of the

manager

familiar with the

of the
members of his group.
The vol¬
ume sales to large institutions are
internal

known

setup

each

sales and are
made at the public offering price.
The group sales mechanism is a
development which has increased
i in
importance with the corre¬
sponding increase of the institu¬
tional
buying market.
Sales to
dealers are known as
selling
as

group or
are

group

selected dealer sales and

made

price less

at
a

the dealer.
spread

distribution which was not really

the

offering

public

selling concession to
The

size of

the' total

determined by

the in¬

Copies of the Prospectus may be obtained from the undersigned only in those
in which the undersigned may legally offer these securities in compliance
with the securities laivs of the respective States.

accomplished.

content

dealers

retail sales, while
that a major

own

are

portion

participation

Some

offerings

are

"sell outs,"

is, the entire offering is
mediately absorbed; others
that

are

slow; and, of course, some are un¬
successful and the better part of

Smith, Barney & Co.
1,

the issue remains in
hands.

syndicate
manager
comes
inlo
play.
In the second instance he
must know which of the partici¬

has unsold
possible, turn

pants
if

other

members

securities and,
them over to

dealers

cide,

after consultation with

the

should! hold

offering price
in

the

that

the

Harriman

On the other

Ripley & Co.

Merrill

original

Glore, Forgan & Co.

Drexel & Co.

Goldman, Sachs & Co.

Kidder, Peabody & Co.

Lynch, Pierce, Fenner & Beane
Union Securities

January 6, 1954

bal¬

hand, it

Blyth & Co., Inc.

Lehman Brothers

Incorporated

reduction

unsold

Corporation

Eastman, Dillon & Co.

either that

price will insure the effective

distribution
ance.

The First Boston

de¬

members of the group,
he

who

may

still have a demand.

States

im¬

underwriters'
Here top the ability of the

and

B. Thielbar, Lester T. Miller, Vice-Presidents;
Place stabilizing bid in the mar¬ Manager of the New York office;
Myron S. Gelbach Jr., Secretaryket.
John M. Tittle, Account Executive
Treasurer. All were formerly c 1
and Vice-President of The Stein
Over-allot, if considered neces¬
Roe & Farnham Fund, which is T. H. Jones & Co.
The

position.
the

Joseph,

been
Union
Building to engage in

with

Commerce

sales to institutions.

—

Inc.

Miller,

Mellen

initially over-allot
and acquire a short

may

the

for

reserve

The managing under¬

the market.

War II. Each

Stein Roe &

joined

portion of the
group
and

what

Elliott's

Mr.

Navy during World

spread.
issue

Co.
and

parallel-each other. Both
are
graduates
of the
Harvard
Graduate School of Business Ad¬

determine, in consulta¬
members of the

date nears,

Woods'

careers

bidding)

(or

Stern

Mr.

advertisements
As

banking field in 1930,
associated first with Bon-

vestment

the cover

formed

order

ham

of the prospectus and in ad¬

pearance.

University,

firm of John M. Tittle & Co.,

prior to joining Stein Roe & Farn¬
in 1951.
He entered the in¬

comparable securities.

page

in Novem¬

graduate of North¬
headed
his

Mr. Tittle, a
western

Determine which underwriters'
to appear on

establishment

the

architect.

Keep close check on the market

are

has

Stein Roe &

He is the son of the late
Frederick
J.
Thielbar,
Chicago

own

names

since

Farnham

allotments.

only the problems they impose on

Thielbar,

associated with

been

investors.

ber, 1951.

of dealers for

requests

Thomas

Naess,

of its New York office

State¬
and

launched

was

smaller

Thielbar, former partner of

Mr.

execu¬

Farnham

prospec¬

above

the

Fund

New

ChiRoe &

well

Stein

the

1949

needs

meet

dealers.

must, of course, be initially con¬
sidered in planning the issue it¬

states

Farnham

located

now

are

York and St. Paul, as

Stein Roe & Farnam

offered.

ance

Some

original partners who founded
in 1932 are still active.

firm

Offices

Four Partners in

institutional purchasers will

describe

and

states

This brings to

selling

sales and

sales to the members of the

ing has been completed and close

Date
prospec¬

Ana¬

Research

11 the number of
the firm, whose sole
business is supervision of invest¬
underwriting group.
ments
of individuals,
trusts, in¬
Determine when the distribut¬
stitutions'and other organizations.

field

the

Elliott,

Lang

lyst in the Chicago office.

tinuing demand.

formed

group

by the firm; Robert

Woods, Account Executive and
Secretary of the Fund,

Assistant

with

other underwriters having a

follows:

tive large

relationship be¬
participating
underwriters
and
the managing operation. Most agreements among
underwriter of a
given issue is underwriters and many selling
The contractual

tween

has

underwriting

Canvass

Laws"

Sky

laws

its

Underwriting Agreements

role

Laws"

account

(6) Regional interest

issue

sell

ago.

the syndicate depart¬
so-called
"Blue
Sky

fered

Availability^—i.e., degree of

(4)

activi¬

syndicate department

administered

securities

such

place

unable

responsibility

upon

ment

the

and

group

the

unsold

Report group

Syndicate

back

underwriters

offering date determined and

the

outline

the

Prior to the

the

Another

Character of distribution —
in other words, relative ability to
sell bonds, preferred stocks and
common
stocks.
This might be
characterized

Commis¬

Exchange

from

the extent
they apply to the distribution

that

(1)

the

of securities.

con¬

and

particularly

sion,

originating banker (managing un¬
derwriter) today in determining
what other houses should be in¬
vited to share the risk? The fol¬

1933, the Se¬

Exchange Act of 1934

various Rules of the Se¬

the

curities

tal.

of the

Department
short

syndicate department must
be familiar with the provisions of

portion of the unsold balance.
Activities

The

curities and

should

participant to decide for it¬
disposition to make of

what

security.

by the rules of the exchange
to commitments of their capi¬

points

its

inherent

the

ited

lowing

self

the
the

concession is determined
salability of the

selling

also lim¬

are

rating, preferred and com¬

stocks.

mon

Take

all

permit

may

Corporation

Stone & Webster Securities Corporation
White, Weld & Co.

**
V

■

The Commercial and Financial Chronicle

(64)

Thursday, January 7, 1954

In the six

breadwinner's income.

Problems o! Annual

weeks

ending

mid-December,

their

mobility

exaggerated.

has

been

And

Dismissal

greatly

those

praising

compensation

important

means

giving

Wage Guarantees
Director of Research

a pros¬

Holds annual

economy.

be appropriate in

may

guarantees

wage

be greatest in

seems

feasible."

Concludes,
equally over a

wages

,than

been

other

any

reshaped

advance of

labor

given

satisfactory

States,

tween

country, has
the headlong

to
mechanized

work,

use

and

the

end

same

bor

force

same

chanical 'mo¬

1953

population^ in¬

increased

160.5

from

55.6

Yet, in the
of time, the number of
workers
(other than

span

employed

me¬

be¬

rise of 21.6%, During
period, our civilian la¬

63.4 million,

ever-widen¬

ing

Census,

our

the

with

the

from 132 million to

million,

way

1940

creased

technology. As manual

14%.

companied by

family workers and
self-employed)
in
non-agricul¬
tural employment has risen from

steady

32.3

employers,

tive power ac¬

prog-

gress

chine

nology,

tuted

sole

of high employ¬

maintained

this

country

wage

A nation in which

which

wage

insuperable for most workers than

source

in the

cern

vital

out

move

have served

years,

clear

importance

focus

the

and to the economy as

$! stable
It
that

important

duction

living,

and

the

have been

1931

years

paced by far-

active

tenance
3

from

endeavors.

million

armed

The

has

strong

period

from

million.

Last

October

still at the peacetime low of

Yet there

was

plenty
unem¬

was

the way.

Cur¬

The primary source of continu¬
ous

income

wage

employment either in

industry

the economy as

brought about by short-sighted

whole

may

price,

policies.

But,

clining business
cession

depression

rule, de¬

re¬

employer. Antito be truly

measures

the whole

and

They

whole

the

may

econ¬

combination

of public and private

policies, but

one-half

the

increase

may

attributed to the absorption into em¬
ployment of wage and salary workers
unemployed in 1940.
But whether the

made,

gross

importance

even

threat of

the

and

wage

economy

has

re¬

salary

been

enchanced.

activity

stable and the

averted,

large proportion of our employed
workers are subject to seasonal

January.

sub¬

construction

workers

the industries with sharp¬

among

est seasonal fluctuations.2

has

been

mobility

canny

worker in

made

of the

un¬

American

recent

years.
Actually
in the more re¬
period has been of two kinds.

worker mobility

there
of

great

were

workers

1950

panding

Company

both

move¬

World

the defense
of

areas

period
rapidly ex¬

war

possibility

perma¬

nent resettlement in another

munity.
more

ment

there

Second,
or

less

greater

com¬

has

customary

of workers

sonally

areas

been

move¬

employment

op¬

Union referral to jobs
building trades and in certain

metal
room

New

tion

furniture in

Jersey,
center,

Western

the

which
and

territory.

United

well

States.

located

plant in Coal
It

owns

the

largest

Diamond

serve

City,

50%

ten

may

interest

be obtained from

Park

and

living

plant in Trenton,

Illinois, situated to

stock

great! Northeastern

Company which has plants located in Santa Monica

Offering Circular

manufacturers

Bros, has

the

cover

popula¬

the

Lane

Middle

Furniture

Gardena, California.

trades

has

facilitated

this

type of movement. There has qlso
been, of course, the pattern of
seasonal
ers

and

migration of farm work¬
those

agricultural
It

the undersigned.

true

highly seasonal

that

with

atmosphere of confidence

Capper & Co.

ated by
our

UNDERWRITER
Members of the National Association
of Securities Dealers,

And

factory worker laid off

Annual

Wage

The

first

guarantee

known

annual

wage

union-negotiated.

was

leading wall paper manufac¬
turer,
the
National
Wallpaper
Co., and a union which is now
the A. F. of L. Wall Paper Crafts¬

negotiated

men

months
back

guarantee of II

employment

1894.

per

year

Similar guarantees

hard time compet¬

careful

and in

production

planning

notable instances the

some

product of union-management co¬
The cement industry,

ac¬

gener¬

lasting high employment,

workers

have

moved

around

the country more than before. But
Inc.

Telephone: HAnover 2-6525

2 For

analysis of data to 1950, see W.
Woytinsky and Associates "Employ¬
and
Wages in the U. S.";
The
Twentieth Century Fund, 1953.
pp. 336-

ment

341.

initial several years, an impres¬
sive permanence. It continued in

the

resulting
the

heavy

use

fluctuations

plant capacity and

in the number of workers

payroll.

The

workers

lem

urged
for

The

work

the

with

union

employment

cement
pro¬

manage¬

the

and

pattern

the

year-around

stock.

went

prob¬
stable

Much
in

still

remains

done

smoothing out avoidable fluc¬

tuations in employment from one
season to another. Too often sales
and distribution

are

stances

lished

known

plans

1921.

Union

negotiated

some

similar

before

Workers'

The

in¬

estab¬

Brewery

Philadelphia

city-wide agreement
for wage guarantees
shortly after
the wallpaper agreement in 1894.
An
Indianapolis conserve com¬
put

pany

broad

annual

plan in effect in 1917.

wage

There

were

others.
,

to emerge.

There

began

soon

form until 1930.

some

operation.

for example, used to gear its pro¬
duction to the flow of orders with

The recession of 1921 gave new

impetus to annual wage
tees.

the

After extended
A.

Workers

Union

won

guarantee

wage

guaran¬

negotiations,

Ladies'

Garment
annual

from

agreement

practices, buyers'
conventions, piling up of style and

Cleveland garment manufacturers.

model changes and other customs
of the trade enhance instability

cessful

and

employment

would

The

suc¬

general

interesting to recall that

ism

guarantee

wage

vored by

cooperatively

annual

year-around income,, is a, problem
on
which unions are anxious to

and

until

brought it to an end
the midst of the great depres¬
sion of the '30's.

within the reach of workers steady

closely

operation

shutdown

Stabilization of employment, the
first maior step toward bringing

work

agreement continued in

make possible.

fa¬

was

firms noted for paternal¬

and

anti-union

the

crest

bias,

coming
open-shop

the

drive of the '20's.< Of these early
and hardy plans was the Procter
and Gamble Co. plan inaugurated
1923 providing for a 48-week

with management.

in
Dismissal

Pay

A worker while

performing the
duties assigned to him acquires a
vested interest in his job.
Under
management

proper

presence

than

the

and

the

satisfactory
laborrelations, a worker

management

guarantee, and a similar plan in¬
stituted
by the McCormick Co.
of Baltimore.
It

the

intricate

greatest focus.

compensate

him

wage

for

the

does

the

has

stake the
his

of his

course

not

worker has

tual

responsibility

and

part

built up

sense

the enterprise.

between

mu¬

him

Such abrupt

dismissal, without provision for at
a

measure

income

after

ended,

continuity of
employment
has

industrial

makes

society

unstable.
A

ent

number

negotiated
pay.
pay

industries

agreements

for

dis¬

comes

1934

the

regu¬

hearing

fair

re¬

Green

ap¬

before

NRA code

competition

di¬

stabiliza¬

by the

late

William

the

auto

industry, at which he called for
the

introduction

annual

urged

Mr.

wage.

drastic

industry's

guaranteed

Green

revision

notorious

also

the

practice

concentrating new model promo¬
tion, production, and employment
in
one
small
part of the year,
greatly enhancing instability.

Although there
of

progress

was a

great deal

eliminating

some

of the most unstable employment

far

put

employment on a
guaranteed basis and unions gen¬
erally were not in a position to
much

demands.

the

worker

be¬

after

a
specified
eligibility period,
is usually related to the worker's
length of service. Higher senior¬

pearance

President

make

eligible

ity workers

into

attention

employment

highlighted

was

antee

which

probationary

tion

began

broadened
to

instances dismissal

plans have been instituted
for

The
rected

terminal

management's initiative. Dismissal
pay,

em¬

practices, few employers went
unions, in differ¬
trades, have

and

severance,

some

Methods of

production

contributed

employment.

job, destroys the

least

came

ceive greater emphasis.

He is a part of
Whether his skills

His

that

evils

larizing

creative.

himself

depression

the

instability

to the enterprise

simple, his are
human skills; they are creative in
the same sense that all production
is

the

that

performance

more
mere

enterprise.

are

with

was

1930's

ployment

prescribed duties.

missal

processing.

cessible transportation and in the

25 Broad St., New York 4, N. Y.

older

sea¬

portunities.

OFFERING PRICE $1.50 PER SHARE
of

con¬

that January

Abrupt severance from employ¬
ment, without any regard to the

one

fact

busy month for miners.

the

perhaps

COMMON STOCK

unem¬

of steady work at better pay and

(A New Jersey Corporation)

Company

clerk

defense employ¬
ment where there was a promise

199,800 Shares

Bros.

contributes
Much

since

Diamond

retail

solation in

likely to be laid off
Between a third and

War II and

ISSUE

per

are

ments

SPECULATION

value 50c

worker

use.

Perspective

and

ployed in January finds little

output

business

recession is

First,

Diamond Bros.

industries

opportunities
for
inter¬
changeable employment are ex¬
tremely
limited.
A
garment

ings in unit costs which steadier

cent

different

Guaranteed

troughs

employ¬

while preventing substantial sav¬

But

net

basis, the evidence is dear that the
in

seasonal

un¬

hardly be effective

can

employed in August may be un¬
employed in February. Food in¬
dustries, apparel, coal mining are

lative

variation

such

future

proper

gain wider acceptance

collective bargaining with respect
to all types of employment.

it is, and with

given positive support by the

they
less

one-half

earners

presence

for

skill

should

trades,

cannot be

must involve

effective

individual firm

particular

activity and

unemployment

prevented
or

investment

inventory,

other

stantially

ment

dropped out of the labor force,
becoming reliant on the primary

presented by Mr. Shishkin
before the annual meeting of the Indus¬
trial
Relations
Research
Association,
Washington,, D. C., Dec. 28, 1953.

peaks

whether in

community,
the form of misguided

tial numbers of secondary bread¬
in the family, who have

Nearly

and

duction

December

considerable

actions of the business

winners

paper

par

A general decline in

employment.

ployed in trade establishments in

comparison

NEW

productive

unemployment or intermittent
layoffs. A million workers em¬

part-time, temporary
supplementary jobs have dis¬

ex¬

tion.

placed from employment substan¬

JFFERED

are

tailments in

least

become

12.8

community, to the family, to
worker himself, and even to

the

the employer.
Even in the

in June has

spiral ends in priva¬

community

Employment

t.en-^ar

ployment

main¬

income

and

expectation, in contrast to
only 400,000 men under arms in

income.

savings

remains relatively

normal

1940.

problem

through 1940, unemployment

1.2 million.

idleness

forces

of wage

con¬

of evidence that increased

million

6.5

some

shifted

If the

national government.

was

our

ago,

been

main

before

hood to fewer people. Of the num¬
ber unemployed and seeking work
13

is the

the

long

the downward

over

society. Agricul¬
ture, qapable of producing more
>vith fewer hands, provides liveli¬

have

has been at the annual average of
9.9 million, ranging from 7.7

pro¬

standard

reaching changes in the economic
structure of

with

the

hausted, installment purchases are
repossessed, the car is sold and

omy.

recognize
made during

technology, in
in

and

buying power must

itself

Wage Income and

strides

rapid

these years in

predominant
income

wage-

worker

whole of

continuity

income.

wage

-is

the

than

and expanding econ¬

prosperous

omy.

earner

significance

before to the maintenance of

since 1940, during which the prob¬
lem of finding a job was far less

labor

steady con¬
income has ac¬

greater

ever

Thirteen years

■

civilian

that

means

quired

livelihood.

ment

the

tinuity

Shishkin

Boris

family

entire

dangers to

To put it an¬
in 1940 workers
and salaries consti¬

wages

62%

This

source

million,

force, today they represent 76%.*

become

the

are

dangers

—

se¬

were later put into effect
by sev¬
unemployed worker ing with youngsters pouring out eral other wall paper manufactur¬
of schools and pouncing on every ing firms.
is normally eligible to receive un¬
1
/
This plan's history reflects in
employment compensation, after a job opportunity.
In the past 20 years consider¬ part some of the typical
waiting period, if he meets the
experi¬
able
progress
hasbeen
made, ence with guarantees. In common
increasingly severe eligibility re¬
especially in ^manufacturing, but with most later plans, it was mod¬
quirements.-But the; average un¬
also in coHstructioir, in reducing ified on several
employment-benefit amount
Is
occasions, being
some
less than $23 per week.
times
and
This* is seasonal'fluctuations in employ¬ liberalized at
In factory production em¬
not enough to feed a family of ment.
tightened at others. Along- with
four, to say nothing about rent ployment stabilization has been this adaptability it showed, as did
and other necessities.
It will not successfully achieved as the result most plans which survived, their

49%.

earning

wages

have

48.1

other way, while

Ameri¬

most
cans

million

increase

ma¬

tech¬

the

mobility

economic

(October)

has

jobs

who

and

work, loss of
catastrophic.

overlook

measure

The newly

one.

According

whose

are

would

of unemployment

to cover periods

year

increasing

temporary

other

for

the

mobility, limited

general in the particu¬
community, with no prospect

layoffs
lar

be most

seem to

real and immediate

workers

the

bring

guarantee plan which merely divides

is not
Life in the United

where they

areas

of their wage in¬

brink of economic distress.

but states "It is notable that resistance to annual wage guaran¬
tees

their

primary breadwinners in the fam¬
ily, the sudden cut-off from the
source
of livelihood is likely to

industries and unsuitable in others,

some

not

are

income

Many

that

realized

very

number

an¬

wage

and expanding

perous

steady continuity of

unem¬

not recession-proof and

were

for

84%.

over

have

problem to them.
As
layoffs hit

employment,

significance in the maintenance of

has acquired greater

curity to the worker, of maintain¬
ing his dignity and preserving his

640,000,

workers

come

Mr. Shishkin reviews efforts in U. S. to stabilize

excessive

claims

that continuity

along with experience in adopting systems of guaranteed
Points out

usually

than

number

jobs

By BORIS SHISIIKIN*

American Federation of Labor

nual wages.

least

ployment compensation rose more

the "dynamism" of our labor force

the

may

thus be entitled

compensation running
period of several months.

over

Prior

headway with

the

guar¬

1930's, the estab¬

lishment of annual wage guaran¬
tees was discussed and, in some

instances,
adopted
against
the
background of almost complete
absence

affirmative

the

community

tion

reduce

action

through

by
legisla¬

the hazard of

Continued

eco-

page

Volume 179

Number 5288

The Commercial and Financial Chronicle

(65)
I

•

liability

The Confused

Conceptions

The

Of the Guaranteed Wage
Research

workers,

dynamic

and therefore

economy

written

Hormel

Plan

for

Advice to GI Wives
By ROGER W. BABSON

and,

Many words
praise of the

guarantee

that

is subject to constant change,

now

must

this

prefer steady jobs

Mr. Babson gives advice to wives of service

may

put

plans,

were

frustrated

position.

near

hence. Urges re¬
parking lot in city or, if
they contemplate land for farming, to buy near an
agricultural

All

Should

a year or more

turning soldiers to buy land

pace-

exponents

bank stocks.

halos

teed wage

statesmanship
suddenly, without ade- many are wondering what their
quate
notice,
to
vaporize
into husbands are to do after discharge,
nothingness?
:
Certainly,
were
ciiP^ACcfnl ■■■■■■■■I,':
nnnT uioif i*n_
These
don't wait unplans
were
successful
til
partly because under them man¬
your man

surrounding these plans and

this

plans and inability of unions to get legislation to
uphold their demands, have induced some labor leaders to press
for "guaranteed wages" as form of
supplementary unemploy-

Let me start 1954 by writing to
be the many servicemen's wives. So

economic

allowed

experiment station. Recommends purchase of merchandise and

the

progress,

points out prevailing confusion of concepts as to
what constitutes a guaranteed wage. Says
guaranteed plans
vary widely, and because of employers1 difficulties with guaran¬

regarding
a small

men

opportunities exist for starting

says

business which may not exist

words

be rewritten.

some

jobs, and

new

these plans in an embarrassed and

have conflict between security and economic

them

the idea.

setting

Dr. Schmidt, in stating though employers

the

mote

marks

still circulating a
strip explaining the advan¬

tages

Chamber of Commerce of the U. S.

for

CIO

without qualification endorsing it.
Unionists are encouraged to pro¬

By EMERSON P. SCHMIDT*
Economic

which

death and destruction!1
film

Director of

thing than anyone
neighborhood

L think that

appeal to

else

his

piece of land will

returning soldiers.

many

incidentally, the best buy in
xi.

every

•

community

is that adjoining or
parking lot. If you and
husband came from a farm

near

Reviews union. demands for

agement and workers cooperated

gets

in making them work. Under the
Hormel Plan, for example, weekly

£ore ^ou ancl
hediSeussi the

and want to go back to the same

earnings were made more nearly
equal and guaranteed for. a year,

future. Why

However, unless

by relinquishing overtime in peak

ment benefits.

this

weeks. Now, UAW says, "We will
have none ? of this." Under
Hormel's Plan, Procter and Gamble s and others success was

your

achieved by shifting workers from

guarantees,

wage

and

concludes, if a guaranteed wage is to be a. supplement to
unemployment compensation, legal administrative barriers and

duplications should be removed.
If

what

follows

appears

deal

issues

with

questions

and

induced.

which

are

the

em¬

ployer.

Em¬

the

operate

the

term

valued

machines

Emerson

slack

limits,

the

coverage

Schmidt

ceptions?
|

Continuous

productive

perided

sub-

income

source

the

ex¬

guarantee

sus-

acts"

under

___

ing,

very
letter to

Roger

content

indicate that you can
family on a very small

plot, provided your husband has
some
"job on the side" to get

spending

Have

money.

column

recent

drafted,

was

better

near.schools, stores, and a church,
scientific agricultural ex-

hus-

when

w. Babson

know farm-

Latest

periments

had

you

of good lar d located

acre

fee(j your

If your

wonderful,

this " is

had

you

wfth

enclosing

band

extended

the

features,

plans

which

workable,

are

ventions

Waves of Guaranteed

Some

Wage Demands
For

and

20 years, successive
demands have

neany

guaranteed

wage

been

made.

union

demand

Every
for

major

new

the guaranteed

has set off a spate of articles,

wage

fire,
trans-

repetitious

barren

and

him back. I wonder, however, if
your husband will be content to

state

you

"New

read
In-

Discoveries"?

New

and

new

are

while

Station.

Buy Merchandise and Bank

born to work for others

will

U. S. Agricultural Experi-

ment

be a mere cog in a big wheel
again after he returns? Men differ.

roundly denounced.

God,

ments, etc.?

other

farm,

this message
from me.

the

subject

etc.

pamphlets, speeches, conferences
strikes among suppliers or
and panels like this one here toportation agencies, boycotts, war day. For the most part, this outand defense mobilization require- pouring has been monotonously

wages benefits the worker, the employer, and
all members of the community.

The typical worker has

How
what

the

are

these

now

made

Is work

Under

What

length

your

home,

only to regular workers or those the chances are that his former Those
contemplating
land
for
with a year or more of seniority, employer will be proud to take farming should buy adjoining a

flow
define the

guaranteed?

whom?

departments,

guarantee

to
Can we evaluate

precisely.

busy

oe-

devote

him

Some plans were made workable

wage

inability

circumstances?

employment at good

stantial

eco-

administrative

guaranteed

our

much?

and

wasteful.

and

income

employment
men

important

that which is indefinable?

Un¬

resources.

raises

Many of the endless arguments
3bout

from

are

most

This

organi¬

zation

pri¬

not

But

resources

wages"

supplementary

Evaluation Without Definition?

The hu¬

man

nomic,
legal
questions.

year-round

"guaranteed

form

ing.

basis and pro¬
vide
steady

jobs.

leaders

vate unemployment benefits to be
gained through collective bargain¬

ployers prefer
a

labor

some

for

press

of concern

•

plans, and the unions' difficulties
in
getting state legislatures to
meet fully
their demands, have

on
the critical side, it should be
kept in mind that my instructions
were

hack
.

almost

happier doing so;
will do better in

there

some men

several

are

Stocks

community

every

stores."

"chain

chains, or
variety chains, such as the "5
Some prefer large cities; while cents to $5" kind. Ask your local
others like small cities and towns, banker to tell you which of these
Don't try to make your soldier
your town has its stock listed
boy over into someone else. Try on the New York Stock Exchange,
to find out what he likes best, for guy a few shares. This might even
what he is best fitted—and then help your husband in getting a
mm mane good.
job with one of these growing
a

little

business

nnnartnniii**

They

may

grocery

themselves,

merchandising concerns,
Perhaps before buying a chain

i^rvwh^r

vpporiuniues uverywnere

icttas. The Government report,
envelope. His well- vary widely.
"Guaranteed Wages," commonly
being and that of his family are companies and
plants,
further- called the Latimer Report, growdependent upon a steady flow of more, are subjected to a wide inS out of the steel union demands
paychecks.
"
r,
•
/ range of forces affecting the de- in 1943 to the War Labor Board,
A dynamic free economy is subgree of stability and
instability, was published in 1947, and did

offices, rundown

ject to constant change.

gas stations, etc. As an illustration,

plans and programs
Different industries,

guaranteed

than his pay

extent there is

some

conflict between

due

the

ployer at the

gains

expense

one

of his

com-

pessimism, unwise or inadequate
contracyclical monetary and fiscal

policy, the rhythm of the

seasons

inventions and technological

new

changes, strikes,

defense

war,

mo-

bilization and other factors. There
are
many types
employment.

causes

un-

Hardships from unpreventable
unemployment may be mitigated
through personal thrift, unem¬
ployment compensation
lic relief.

But

these

and

pub¬

power

overcome or

of management

market demand

between

vary

All of the

cussion

con-

offset employment

instability
and

zero

may

100%.

foregoing makes disthe

exercise in

rates among

guaranteed

wage

disputatious foren-

Vaporized

confusing

precipitate
among

the private guarantee of wages?

Even

reversals

them.

^be

For

50%

regular

State

wages.

from

time to

full-time

legislatures

have

time expanded

cov-

raised the weekly bene-

erage and

fit and duration of benefits.

field

Relations

Re-

nomic

...

statesmanship

Nunn-Eush,
Gamble.

and

The

Procter

CIO

o'ten

and

led,

joined in, the praise.

These plans

the

CIO

and

few

members

many

marching together

were

merited

employers have experiwith

private

guaranteed

arm

Some of them report good

wages.

arm,

spread

makes-a

widely.

and

It has been

to
,

nondurable

The

certain

the

particularly
180 degree

existing

the

UAW

full-time

guaranteed wage or work

are

needs of their

plan
f

contains
,

told,

real estate right now> and it may help your
vacant husband get started right to have
a f6w shares of local bank stock
automobile an(j
kn0w the men who run the
bank.

Soldiers

been over-

have

who

coming home with better
id^as than when they left- Many
are

seas

and

are

defined

of his employees

employment
months."

for

The

breath of

Continued
1 The

extreme

positions

unit

NEW ISSUE

50,000 SHARES

three

this def-

page

are

Saaty Fuel Injector Corporation

found

Common Stock

"Progress Report of Guaranteed Annual
Wage Preparations," UAW-CIO, Dec. 67, 1953.
Whether this report and par¬
ticularly
i t s
class-conscious
vitriolic
language represents the views of union
members may be doubted by some.
Busi¬
nessmen are pictured in terms of Marxian

Business:

analysis. They

Isiand,

and

made

and

the

are
be

quoted out of context

the

workingman.

enemy

Should

this

society

Par Value $1.00 per share

the

EVery

fea-

"totally unaccept-

Non assessable

—

Price $5.00
SAATY

FUEL

INJECTOR

the

manufactures

BURETORS

trucks

located

CORP.,

Fuel

Meteor

automobiles,

Injector

and

Providence,

REPLACES

WHICH

through
official
union
spokesmen
the
things which Communists would like to

Dealers

are

invited

The financing

participate with

Offering Circular
"

concession of 40^ per share.

of this issue has been arranged through the
may

undersigned.

be obtained from-—
^

•

Underwriter

highest government
and union offices' statements that slavery
our

"sS^Ubor^* PVoiisiLft*o7 th^^TaU-

d'AVIGDOR CO.

*•

Members,

Hartley Act.
2 "Guaranteed Wages," Report to the
President by the Advisory Board, office

National
New

Members

Association
York

of Securities

Security

Dealers

Dealers, Inc.

Association

-Li-

*An address by Mr. Schmidt before the

American
dustrial

Economic
Relations

Association

Research

and

In-

Association,

Washington, D. C., Dec. 28, 1953.

COITIDanV
'■

plants,

Wm-nw

Timr-

many

.Furthermore,

were

initiated "in
-.

••

-*•

OnerOUS,

nonunion
*>•

burdensome

War
5

Mobilization and Reconversion,
Printing Office, Wash$2.00, January, 1947,
the
Latimer
report,

v.uca

Government

ingtdtf, 25, D. C.
commonly
called
IS

Uvuot

Accurate.

Rhode
CAR¬

tractors.

docu-

"ould ,enab'e. lh,e Communists to "prove"

national meetings

"shrouds don't have

anyone remember,
pockets,

any one

"un¬

a wage or

least

for

who knows more about

to Ruote at tbe H-O and other inter-

tures which

all

group

opportunities

Sood

guaran¬

ou^economic ^ysttmflust aHhTyV"^

"meet

members."
one

tees

as one

employer

wage
,

plans,

which

"None

turn.

guaranteed

experienced by

adopting
.

annual

goods industries,

difficulties

employers

con-

service

and

der

WorL^Vi^tnaky' iri"' Kremlin,"

better world.

Now, with inadequate notice the
CIO

largely

results. But the movement has not

fined

to speak, building

security and

worker*in"a planTThhl

Hormel,

this report moneys
approach—the
Small' stores

members

years

Industrial

new

guaranteed wage plan

the

are

Employees covered by unemployment compensation (UC) have search
Association have been
a wage guarantee.
This guarantee studying and publicly praising in
typically runs for about five to oral and written word the ecoweekly benefit of

well to

Therefore,

developed

just°one
was accomplished by defining the

them.

Halos

what merit is there in the idea of

dustries.

garages,

It established, perhaps for a long consider the closed
time, the practical difficulty or, sales • agencies. To buy one of
indeed, the impossibility ^of the these
now,
properly
located,
traditional
guaranteed
annual where a family can live on the
wage in many businesses and in- property;
may
be like finding

spite of the interlocking directo¬

substitutes for productive
steady employment at satisfactory
wages. As a further forward step,

six months at

vacant stores, closed

it would

stock,

few shares of stock in your
jocai bank. Banks are doing well

buy

quate

„

come up with several new ideas. 2

store

.
are realizing that the only things
lunchrooms, worthwhile for a family or a nasics, often unpleasant. A CIO of- idea of supplementing the legis- where the owner can live upstairs tion are: (1) good land; (2) good
ficial recently said, "I wish I knew lative guaranteed wage (UC) with «r adjoining, are now for sale babies; (3)
good education; and
what the CIO plan is." This con- the private guaranteed wage.
cheap. They will be in demand (4) good character.
fusion and frustration extends far
Employers
had
experimented again some day. No one will get
I trust that fathers and mothers,
with guaranteed wage plans for rich-in such a place; but it gives as Well as wives and sweethearts,
beyond the CIO.
50 years.
In fact, recent pronouncements
Yet Latimer was able independence and assures work wm
encourage
these | sensible
from the CIO
from its officials, to report only a few plans cover- .to alL the family. The same applies ideas. Parents, especially, should
from its member unions and from
ing some 61,000 workers. Even so, to scores of little businesses, from belp
their
young
people
get
their
officials, have
moved
in his count included numerous plans barber shops to repair shops of started right when they return,
all
directions simultaneously—in which covered less than 1% of the au kinds. There will
always be But begin to plan for them NOW;
an

ade¬

not

are

still

em-

petitors, to shifts in free consumer
choice, waves of optimism and

matters

fusing, the

security and economic progress,
Interruptions of employment may
be

make

Opportunities exist today which
may not exist a year or more
hence. I see them everywhere—

'$3 Wall Street, New York

'
.

5, N. Y.

WHitehatl 4-34C&y

.•

(-36)

The Commercial and Financial Chronicle

JOHN

bond

yields has increased from
119% for the 68 years ending with
1938 to 193% at present. In fact,
during these latest 15 years com¬
mon stock
yields have been very
frequently more than twice as
high as the yields on high grade

TEMPLETON

President, Templeton, Dobbrow & Vance, Inc.
,

bonds.

New York City

paid for stock issues that

favored

surance

vestors.

is fear of

disparity between good quality stocks and
issues

may

stocks

comes

results

run

continue, because most

new

proving quality

banks.
New

flowing into

rice

)

than

have had

others.

Stocks

wide

which

ranging

long record of stability
in prices, earnings and dividends
a

are

referred to

high-qual-

i t y

trust

large

ing

Between

1951

this

2,
M.

John

re¬

Templeton

di¬

trends of
high-quality stocks compared with
the general list of stocks. This is
in

vergence

the

price

unusual,
and
deserves
careful
study. In the long run, shares of
small

and

chosen

stocks

The

suit.

silent

Mutual

sometimes
trusts,

investment

invest¬

been

of investments

the

greatest

may

another

and

The

cautious.

has been the widespread expecta¬
tion
of
a
recession
in
general

whether, the

wider.

little

for

Industries,
Chemical

Allied

Kid

recently.

Because 4he

kind of stocks

prices

have

been

supply

.L.:

Amerada

American

increased

14.3%, whereas

Stand¬

ard & Poor's Index of Low-Priced

Stocks

decreased

33.7%

during

the period referred to above. The

been

hands of life insurance companies,
banks
and
similar
institutions.

the

which

high-

mostly

are

grade stocks of large corporations,
increased 3.5%, whereas the gen¬
eral

New

level
York

creased

all

stocks

Stock

11.4%.

Exchange

For

the

sampling how much

eral

have
first

list

stocks

studied
100

the

common

the

de¬

purpose

the

gen¬

funds

chase

available
bonds

for

have

the

been

pur¬

and

would be

chosen

listed

list,

which

Colortype

Crystal

American

Hide

causes

for the

change in the ratio

cate that in the 68 years
to
1938
the
yields of

be stable and out of the shares of

companies, whose
suffer

from 1870

earnings

temporarily during

eral business recession.

common

might
a

gen¬

con¬

fear

but

by
be

can

the

its

business

nature

influence

temporary.

recession

the fear

ipation of recovery.
of

fears

Offering Circular

humanity

and

stantly

decrease;
investors are

changing.

trend

Securities—.

67
9
47%

Prod.

Ice

—

23%

1650

Newport St.

Denver 7, Colo.

Phones: FR. 3353, FR. 0119

that

general
are

the

con¬

other

end in sight' for

.16%
21%
12%

American

Radiator

Safety
Seating

American

Shipbuilding

——-—

Razor

—1

American

Smelting

American

Snuff

American

Steel

American

Stores

17 %
10%
"24%

65'A
53
42%

American

Sumatra

American

Tel.

American
American

Viscose

American

Water

American

Woolen

Zinc

Anaconda

Wire

35%

6%
49

23%
163%
77%

—

152Va

Prichard

Oil

—

Oil

Associated

Atchison,

Dry

Coast

Atlantic

Gulf

only will the investments already
made through institutions
remain,

Atlantic

also

there

increase

likely

especially

the

—27

14%

—10

157%

—

65%

37%

—44

+11

15%

—63

27%
50%
45%

13%
31 %
48%

—51

29%.
43%
25Va
32

31
58

30%
32%

40%

48%

45 %

8%
2%

18'A
6%

9%
3%

—37
+

3
—45

—

—49

■—47

34%
34 %

48%

56%

16%

17%

'25%

10
27%

26%

—

11%
18'A

"18%

11%

—37

—15

11%

22'A

—38
\

—20

—16

+2
+

—41
3

25%

58%

31%

104%
30%

98%

25%

77%
23'A

123%

Fe
—

P.R.—

West

55%
42%

85%

Santa

Electric
Line

30%

23%
24%

83%

92%

+22

114

99%

57%

—42

Refining

great

+35
—36

7%
50%

32%

Investment

Topeka
City

but

+1
—26

19%

Refining——
Goods

Atlant'c

38
28%
47%

13%

greater institu¬
investments. Not

toward

—

59%

Cork

Associated

15
1
•—10
38

-1

23%
43
30'1

60
-

Carpet

Ashland

51%
12%

Industries

Arvin

Constable

Artloom

27%
8%

__—

...

—

Armstrong

42%

11%

Indies—..

+19
38
18

57%

—

Products

Steel

13%

—

Archer-Daniels-Midland
Armco

Armour

35%

15%
158%
63%
67'A
8%

34%
64

—

Copper
W.

29%
55%

Smelting——

Glass—

Anderson

11 %

46%

—

Clayton

10%

———

,—

Anderson

Andes

& Cable

Hocking

37%
38

13%
73%

Tobacco

Lead

16%
42'A
25%

8%
*24%
48
"49

37
25%

—

Tel

Copper

Anchor

Chef)

Works

34%
35%
16%

47%

Tobacco

—^—:

Sugar Refining

(Magic

+ 23
+11
30
+10

7 /2
40%
21%
13%
7

—I'.

Stove

13%
7
'
31 %
21%
12%

•

American

14
-33

19%
11
41%

& Rig.—

American

+22

19
20.2
16

...——

Foundries

51
+25

17%

18%

American

+16
+ 14
— 4
13
—31
+ 23
1
22
—45

23
13%

17%
"29%
14%

News

American

6
11

•

21 A
19%
20%

15%
18%

—

11
20

19Va

Gas

American

24%

Metals—...—

Molasses

Natural

46%
6%
37
6%

—38

32%
59,2
3/a
46 A

59%

—

19%
"32%

Fdry

Products

Metal

Arnold

na¬

24%

American

27%
48
3
36%

25'A

__,T.—

Co.

American

47%
6%
29 %
17 A

—.—

American

*57/2

12%

—22%
1
67%

Steamship

Leather——-

Atlantic

tionalization
FRED W. MILLER & CO.

antic¬

It is the

anticipations

hand, there is
the

does

may

if it does occur,

and

depres¬
long while;

this

regarded
expected

not occur,

Stock, With Warrant

UNDERWRITERS

Phone KE. 5244

Tiling—.—-——

28%
6%
26

Electric

Anaconda
a

21
41

58%
8%
33%

...

American

be expected during the next

full business cycle.

ture

Bldg.

———

...

Lines

Home

28%
*65%

——_

Metal

Offering Price lc Per Share

2, Colo.

—

Machine

URANIUM, INC.

Denham

—-—-—,

Hawaiian

likely then to look ahead in

Denver

22
49,4
32/8
8
28%
13 %

American

security

sion has endured for

632

Chicle

Machine

The

COMPANY

49
22,a

Chain

American

may

KAMP and

42%
19 A

Car

—

American

22,500,000 Shares

35%

32 /a

43%
16%

American

_!-•

Gas

tion to the average earnings which

Send for

37 %

Can

American

some

Common

30%

50%
22%

American

Export

siderable extent a recession has
high stocks averaged 5.0% whereas the
quality, some medium quality and average return was 4.2% on high already been discounted in*.the
stock
market.
Shares
of
grade bonds and 4.8%' on prime
many
some low quality stocks, is shown
companies and companies
commercial paper for this same small
below. It shows that in this short
period.
Now high grade
bonds operating in cyclical industries are
now
space
of time there have been yield
selling at prices which are
3.1%
and
common
stocks
low not only in relation to
pros¬
perity earnings but also in rela¬

UTE

37/4
5
39/4

American

stock yields. The excellent studies
of the Cowles Commission indi¬

are

6'A
*29/8

funds into the shares of companies
whose earnings are expected to

between bond yields and common

stocks,

42 Va

—

Locomotive

these

3%
31%

American

fore

for

169%

Investment

funds

available

155

34%

Radio—

International

time the

exchange.
This
naturally
includes

Shoe
&

American

same

sources

14%

44 Va

Corp.

Brake

Cable

American

other

11%

Foundry—.:
49%
&
CabTe
...—34%

Bosch

American

55%

17%

American

148%

75%

15/4
9%

There¬

from

the

+31
44
+12

19%
15'A

European

than mild.

559 a
1%
19%

1%
16%

20%
17%

Encaustic

"42%
3%
17%

.Note

American

that

42%

American

thought

56%
5%
19%

■

12%

analysts and
common
stocks have been small. many of the larger investors whom
they influence have been shifting
This situation has been one of the

while at the

alphabetically, which

have

some

49%

59%

American

recession.

opinion has been widespread
among investment analysts that a
mild depression would begin
soon;

large,

declined,
record

years,

'13
+10

44/a
42%

63
15%

Distilling

business

—19
—26
8

51/a
38%

235

American

The

invested only in mortgages, bonds
and preferred
stocks.
Therefore

stocks,

general

27
38%

*49%

—

dur¬

especially

17%

41%

——!

•—

Sugar
Cyanamid

has

75%
21%
36%

—37
1®
— 2

41 /a
40

——

American

stocks

1°

-—32

—14

61%
52%

...——

by the fear

augmented,

ing the last two
of

Until recent years such funds were

Dow-Jones Index of 30 industrial

classes

2%
50

*56%

Chemical

American

The divergence in trends for the
different

the

8%
62
17%
24%
35%

78%

American

25%

19%
3%
31 /o
9
74%

3%
22%

17
3

23%
37

Leather

Bank

37a

—

Company

American

Effects of the Depression Fear

—17

5%
52 Va

the
mer.

23%

Dye„

Airlines

time when the prices of

very

28%

Cement

Agric.

dium grade and risky stocks have
shown a declining trend.

22%

—

Ltd.

American

—15

——

Portland

American

bid

43 %

limited, the

—17

Amalgamated Sugar

stock prices

11%

Amalgamated

standing influence

*20%

Stores

Aluminum

—39.

62 %

Steel—.——

Inc.

Mills

Allied

out¬

24%

:—

Allied

This

the

33%
41

27%

24%

27 %

rations.

been

25%

—'-5
—21
—17

—,——

Corp.
Ludlum

Alpha

has

—21

5*4
22

19%

Inc.

Aluminium

45%

31%

Allied

small list of

57%

7
31%

*27%

Equipment——,—

Allen

naturally

39%

3%
20%

—

Reduction

Alleghany

Oct. 17, 1951
to Dec. 2, 1953

43 '/2

r-——

__L:

Allis-Chalmerg'

large accumu¬

lation of investment funds

—

Aldens,

'k Change

Price

Alaska-Juneau

this

Price

Oct. 17 Dec. 2
1951
1953

35%

Corp-

Affiliated1 Gas
Air

Low
Price

64 %

Admiral

When selecting common
a

Stocks Alphabetically

33%

Express

Adams-Millis

stock

elude a few high grade common
stocks in their investment funds

Common

—

Addressograph-Multigraph

Allegheny

are

and

for institutions and trustees to in-

——

—

Steel

Adams

bond

between

difterence

yields. After a
while this led to a general trend
yields

five

Laboratories

Br.ll

Acme

funds

the

medium

among

It is enlightening to

that the

1953

ACF

of trus-

grade
notice
disparity showed up first

yjg^g

stocks.

High

high grade
large and famous corpo¬

this

^er

1951-53

Poor's Index of High-Grade Stocks

last

the

Hundred

One

not have the position

selling for

now

for

Furthermore,

buying better bargains and bet-

Hold.

earnings

age

stocks of

By institutionalization we mean
that a larger than usual propor¬

un-

than 20 times aver-

top

tees, when they see the great de¬
parity now existing, may begin to
sail their top grade stocks to the
trustees and use the proceeds for

spread will grow still
grade stock line

Carbide

Union
a

influence

total

high

flow into

and
shares of obscure companies have tion of the total new money avail¬
fared as well as, and perhaps bet¬ able for investment is coming in
ter .than, top-quality stocks.
Ac¬ through
insurance
companies,
cordingly, the rising prices for trust funds, pension funds, profit-high-quality
stocks
coincident .sharing funds, mutual investment
with declining prices for other funds and various other institu¬
stocks generally in
the last 25 tions.
months is noteworthy.
One of the earliest influences of
To
be
specific,
Standard
& this nature was the
companies

young

stocks, practically all of the funds

business.

afield.

Spread

get.
of

gradually to look further
those who

irustees

whether the
spread will remain wide is important for investors;
but even
more important is the question of

who manage these in¬

men

stitutional

cause

question

can

quantity

grade stocks may encourage even

this

continue to be

disparity

limited

The

by past standards.

the

Will

The

Abbott

gence might continue. One cause
has been the institutionalization

above,

disparity increase? In
a divergence like this
self correcting.
Nat-

the

great

greater

the spread may

the

called

have

find stocks but still the
how long the diver¬
purpose is great.
we

higher

Stock—

Perhaps

alphabeti¬

normally

urally there is some limit to how

high

the

is the rapid rise of pension funds
and
profit sharing funds in the

Index

divergence,

clues

1953 there has

markable

100

changed to
(where

stocks.

Average has fared
a
general list

than

The

for

ways

tends

now than forthe trend toward
institutionalization will continue,-

of High-Grade
last two years. Over a billion dol¬
Stocks.has fared better than the
lars a year is now flowing into
Index of Low-Priced Stocks by a
these funds and
the rate is in¬
full 43%.
creasing.
Only a part of such
By examining .the causes for funds is used to
buy - common

ture.

been

Stock

better

cally.

na¬

Dec.

The Dow-Jones In-r

of stocks.

this

some

ele-

discussed

factors

usually wide

been

funds

investing
cornmorj stocks for more than
30
years
but
the
quantity
of
money
coming in through this
source is now vastly greater.
Col¬
leges and other public endowment
funds are shifting gradually into
a
higher proportion of common

whereas

Will

Because

Thirty of

this

price-earnings ratio for
low grade stocks. Because of the
is

funds,

the

spread

agreement

ment

de¬

period of about 25 months

prices.

14.9%

indus¬

17,

63%.

been

dustrial

a non-

Oct.

and

stocks, increased,

stock

and

these

great

unusual, and perhaps
unique in the history of American

com¬

cyclical

This

panies operat¬
tries of

52%

clines

has

are usu¬

famous

increases

70 decreased in price.

ally the shares
of

high

with

than

ing for only three times earnings,

and

ratio
is

stocks

run

called

•

important

ments in the study

merly.

same

investment media) to
be
invested
partly in common
stocks; and many other states have

•'

stocks.

These

variations

most

stocks.

common

the

trust

subject

stock price movements.

stable

the

have

York

followed
are

been

permit

come

common

Some stocks

January 7, 1954

between

ratio;

price-earnings

Thursday^,

selling for less than seven times
average earnings for those years,
Some low grade stocks are sell-

general
relation

earnings

and

permis¬
granted to savings
long last the laws of

recently
has

sion

Concludes best longfrom searching out stocks of im¬
stocks which are real bargains. Lists 100

likely to

have

companies

their assets in

from institutional investors.

are

Life in¬

stocks.

common

granted permission to invest part

speculative

money

price

the

The

stocks.

higher in
than is the

earnings

grade

surance

general business recession. Holds the unusual wide

with

case

years, whereas a medium grade
stock like U. S. Plywood is now

to sell

earnings

relation

price-earnings

chase of

demand for these shares by in¬
companies, pension funds and other institutional in¬
Says another element in the strength of these shares

been normal for
long
record
of

has become available for the pur¬

trustee investments,

increas¬

always
with

ing amount of institutional money

being

calls attention to the growing

are

has

stocks

stable

one

In recent years an ever

Investment analyst, in pointing out premium prices are

The ratio of stock yields to

6.0%.

Prices oi High Grade Stocks
Aided by Insftifutional Demand

—47

+27

+30

Atlas

Corp.

36%
30%

Atlas

Powder

44%

31 %

39%

34 Va

28%

17%

—39

—23

Atlas

Tack

Austin,

10%

Nichols

25%
28%

"29%
25%

28%
29

—

+12
—14

-•
,

field

i.—.

profit-sharing funds and

pension funds.

Average

41.8

—

"Adjusted

for

split

stock

dividend

over

27.6
10 9%

—11.4

Volume 179

Number 5288

rather than only bonds.

It is nat¬

ural and proper

acting

for

men

fiduciaries to be cautious;
far they have been

chase

only

stocks.

grade

top

develop

gradual

and so

willing to

pur¬

common

However, there

well

may

trend

toward

seeking much greater values and

situation

Another

which

Meeting
Held on Impending
Mackinac Bridge Issue
Public

certain stocks previously regarded
as medium may gradually come to
be

regarded

ample,

top grade.

the

Minnesota

For

Mining

ex¬

1935-44

years

regarded

was

medium grade and the priceearnings ratio averaged oniy 11.

Now

this

ings

regarded

its

price
earn¬

reported.

ever

highest

23 times the

over

Street

top grade and

many

stock

Wall

use

offering of

Authority
will

lic

$79,800,000

also

1994,

was

the

Bankers Club,

New

York

expected
uary

The

City.

The

offering

about Jan¬

the

awarded

the

firms

law

Mitchell

Miller,

Wiesenberger Co.

Admits Three Partners

Paddock & Stone.

and

Dec.

Mackinac

bonds due Jan; 1,

Canfield,

Arthur

public
is

offering

planned

of
this

meeting had been called by
Corp., which to¬

Firm Name Now

Wainwright & Ramsey
Wainwright,

the

Information

Meeting, in addition to
tatives of the group
members

the

represen¬

co-managers,

State

organization's

changed

cers

will

Chairman;

Basil

Caffall,

Ramsey,

Townsend

President;

Wain¬

The offi¬

wright & Ramsey, Inc.

thority and representatives of the

Bridge

the

1954,

will

name

wright,

Mackinac

Lan¬

caster, 70 Pine Street, New York
City,
consultants
on
municipal
announce
that, effective

Au¬

Michigan

finance
Jan.

Ramsey

Wain¬

Lincoln

(67)^.15

nationwide

$20,000,000

bonds

Present

were

14.

Union Securities

Pershing,

time.

120 Broadway,

be made

engineering firms of D. B. Steinand Coverdale & Colpitts and

man

the Bridge

The co-managers

revenue

but

these

bridge

bonds, series A, due Jan.

Wednesday

Authority series B, 5%%

Bridge

revenue

held

bridge

participate in the pending pub¬
offering of $79,800,000 Mack¬

1994,

were

issue

Information Meeting of un¬

inac Bridge Authority 4%

and which

Dec.

Cq.,

and Stifel,
Inc.
were

Wiesenberger

Underhill

were

admitted

iTue

chips

within

(Special

to The

Chronicle)

Financial

CHICAGO, 111.
Turgrimson has

Charles D.
become associ¬

—

ated

with Eastman,

135

South

Dillon & Co.,

Salle

Street.

few

certain

under

course,

the

cir¬

prices

low

grade stocks increase much faster
than

the

prices of high
grade
stocks, sometimes many times as
fast.

For
example,
Norfolk
Western, which was regarded
a top grade stock in
1941, sold
low as 44% in that year and

available

now

&•
as
as

40%;

whereas
the price of St. Louis-Southwest¬
ern,

low grade stock, increased

from

IV2

that

The

present.
Pacific

time

price

preferred,

222

another

low

grade stock, increased from

40%.
the
will

Conditions

Missouri

which

% to

lead

popularity of low grade stocks
occur
again some time; but

this

does

not

probable in

appear

the next few years.

Finally, it is worth noting that
really long-term investor will
better

fare

with
all

low

selects

stocks

price-earnings ratios, if

other

factors

example,

equal.

For

purchased

now

are

stock

for 20 times average future earn¬

ings

will

ten

efit

form
net

accumulate

during the
$500 for the ben¬

years

the

dividends

worth)

for

vested; whereas
at

now

benefit
20

ten

times

each

the

in¬

$1,000

stock purchased

will

future

aver¬

accumulate

$1,429 for the

years

the

increased

times

seven

earnings

age

the

(either

owner

owner.

you

earnings for the

pay

a company with a steady earn¬
ing power, you may actually be
taking more risk than if you pay

only

times earnings for the

seven

shares of

power

company

subject

whose earning
fluctuations.

To get the maximum combination
of

safety,

income

and

canital

growth, investors should seek to
buy stocks at low prices in rela¬
tion to

normal

earning

THAT'S A TRANSISTOR,
vacuum

tubes

can

do and

invented at Bell Telephone Laboratories. This tiny electronic
more

besides. Though little larger

than

coffee bean, it

can

device

can

many

things that

amplify electric signals 100,000 times.

power.

Conclusions
It

stocks

for

normal

to sell

high

grade

for

higher prices in
relation to earnings than medium
grade stocks.
The disparity has

She's Holding

Five-year-old Granddaddy

increased
25

remarkably in the last
months.
The unusually wide

disparity
most

flowing into
of institutions. For
the

reasons

self-limiting.
favor

good

Investors

tees should be

fair

mium

Best

and

not

good
in

come

stocks

which

not

but
trus¬

pay

excessive

for

stocks

are

quality

the

long

should

stocks;

willing to

results

likely to

disparity

quality

those investors who

because

money

stocks by way
several

continue

may

new

only
pre¬

ST.

are

from searching out

are

real

bargain?

The

LOUIS,

Financial

Newhard,
Olive

New

only

many

promising off¬

spring. All of the growing uses of this
tiny electronic device stem from its in¬
vention at Bell

invention

exciting possibilities in te-

article in the Science

tury, the electronic tube

a cen¬

has changed

equipment for defense,
television

our

lives may

The Bell

System, in accordance with

its established
its

inventions

reasonable

Fabulous

be equally potent."

policy of making all of
available to others

terms,

has-licensed

forty

sets,

well

radios,

computing machines,

hearing aids and electronic apparatus.

the world. The effect of the transistor

lephony and in other fields. A recent is¬
sue of The Reader's Digest calls it "The
Midget" and reprints these

News Letter: "In less than half

Telephone Laboratories.

Seldom has there been

with such

words from

One of the first
in

telephony

uses

of the Transistor

in the

was

new

equipment which enables
custonkrs to dial

electronic

telephone

Long Distance calls

from coast to coast.
We

can

already

sec

the time when it

companies to make and, sell transistors.

will

many

other improvements in

These include makers of advanced

both Local and

Long Distance service.

bring

Eugene M.

—

Cook

Co., Fourth

Streets, members of the

York

announced

Chronicle)

Mo.

was

but it is already the daddy

granddaddy of

improving quality and

Reese has been added to the staff
of

and

stocks.
run

Newhard, Cook Adds
(Special

The Transistor

five years ago

and

Midwest

Exchanges.

Stock

BELL

TELEPHONE

SYSTEM

LOCAL

...

TO SERVE

NATIONWIDE

.,.

formerly with Smith Barney

was

years.

cumstances

With Eastman, Dillon Co.

slang, there are a good
red chips now which may

become

Com¬

general partnership in the firm.

& Co.

Vice-President.

Broadway, > New York
City, members of the New York
Stock
Exchange, announce that
effective
Jan.
2,
Alvin
Ruml,
Arthur V. Tomaselli, and Arthur
61

pany,

derwriters who have been invited
to

co-manage

offering group.

4% bonds set for Jan. 14

de¬

close study is the fact that

gether with Allen &
Allyn and Co., Inc.,
N i c 0 1 a u s
&
Co.,
awarded the bonds by

Information

greater yields than can be found
among most top grade stocks.

serves

The\ Commercial and Financial Chronicle

THE COMMUNITY.

TO SERVE THE NATION.

The Commercial and Financial Chronicle

(68)

Thursday, January 7, 1954

be greatly different from the Fall

A Forecast of the 1954

of 1953.

rather

ness.

Agricultural Situation
Agricultural

Administrator,

Marketing

U. S. Department of

Agriculture

prefacing his remarks by pointing out the limitations and
in forecasting agricultural situation, Mr. Wells
predicts both business and agriculture conditions in general
difficulties

The opening lines of the leading
statement used at the recent An¬
nual

Agricultural

Outlook

Con¬

ference (Oct. 26) ran as follows:
"No marked

change in the
domestic

de¬

mand for food

other ag-

and
i

c u

u r a

products

ap¬

likely in

pears
1954

com¬

pared with the
current

year.

foreign
takings of
farm

States

products,
sharply

while

which

next year or so.
farm

Supplies of most

First, we assume normal weath¬ The fact
knowing always that varying mercial

weather conditions

ally

arfect

yields

could

considerable extent not only

Second,

have

come

to how cold

government.

Acreage re¬
likely
to
bring

are

^mailer | wheat and cotton
1954

and

price

crops

support

pro¬

Here it

seems

but one choice—that

is, to

moving toward

are

have

assume

gradual

nevertheless the defense program
will go forward during the com¬

impact of large supplies on farm
prices.
With prospective condi¬

be gradual.

demand

and

supply for
1954 approxi¬

f^rm products in
mately the same
of

average

farmers

fevels.

1953,

the

received

prices

may, hold
near
current
With cost rates to farmers

stabilizing, the cost-price squeeze
agriculture is not likely to be
intensified significantly in 1954."

guard against being overlyby
the
immediate

influenced
short-run

situation.

ments with

worked

those

and

have

velopments that

prefaced by a statement
only why such forecasts
but also

to not

as
are

made

the basis for arriving at

the

were

reason

knowing full well that there
whole series of short-term

constant

and

difficult

business

skills, that each farmer

businessman
better

Federal Reserve Board's

industrial

production

index

own

can

for
iic

of the chief

one

doing

our

rea^

outlook

casting work within the U. S.

Department
been

Agriculture

hat it offers

way

and

has

of the best

one

discussing with farmers

others

the

helpful

can

farmers

and

Eberstadt Co. Elects

ward
dent

Director

Willett
F.

and

Wil¬

Ed¬

Vice-Presi¬

Eberstadt

about

that

from

its

businessmen

ment,

recent

are

Co., Inc.,

-.'mal work in the economic

(

erst'hd,

what

F.ur~imce

amic

already

climate.

ter

such

the

eco-

briefest

are:

defense

However,

down-drift

some

and

just
to

return

farm

in
a

expected
prices
normal

conditions,

eco¬

must
necessarily
the basis of probabili¬

anyone

uncertain

the

else

future

as
can

how

be.

with

between

businesses and
dition

increasing

where

sales

con¬

votume

de¬

pended upon ability to offpr desir¬
able

ple

peo¬

Anyone wanting to take the
timistic view

can

also find

op¬

a num¬

short-run

factors, actual
prospective, which also sup¬
port that view.
It appears that

and

personal

income

taxes

going to be reduced. We
high-level employment

do
and

are

have
a

and

corporation

considerable volume of

con¬

savings.
State and local
fact
that
farm
plans
must
be spending for roads, schools, and
other forms of public investment,
worked out in advance
some¬
are likely to
times several
show some increase
months, sometimes
a
»
year or two, sometimes several in 1954, etc.
same

time,

however,

years.

and

businessmen

handling
agricultural
products,
Congressmen, government
offi*A
the

Adding it all

summary

Luncheon

28,

of talk

Meeting

by
of

Mr. Wells at
the American

A--ociation, Washington, D. C..

1953.

up,

those of

Bureau

conclusion
■umer

Fall

last

Agricultural

October
that

the

disposable
1954

came

flow

income

Eco¬

the
con-

622,338,695

575,688,623

17,266,269

NEW

Total

EXCHANGE

Cash

was

discounts

Undividel

profits—

BANK

TRUST

741,704,070

holdings

Cash

215,578,840
profits6,388,443
♦

and

due

Loans

60.675,256

discounts

258.764,563

281,763,488

profits—

12,517,723

12,304,643

6,317,236

MARINE

Rose,

resources

Cash

Bleda,

formerly

Assistant

elected

was

Ames

Secretary,

due from

and

Loans

115,012,181

100,99.3,708

discounts

195,780,557

198,525,641

profits—

6,354.517

6,255,237

Undivided

and

Rudolph, formerly As¬

Secretary,

THE

STERLING

Assistant

Comptroller.'

Assistant

Edward

Secretaries,

Deposits
Cash

resources-

and

36,483,219

discts.

2,368,582,461

2,269.411.871

profits

72,966,329

71,458,823

TRUST

CO.,

Dec. 31/53

was

announced

Eberstadt,

Ferdinand

Chairman

and

Presi¬

Mr.

Williams

dent of the Eberstadt

joined

Executive
Director
Mr.

Undivided

1932.

Vice-President

Chemical

Willett,

and

retired

from

1931 to 1934.

Univer¬

sity.

Immediately prior to
suming his association with
last

August

at Smith

Professor

College.

Research

Navy
and

he
of

Total

Secretary James
two

years

Consultant

later

the

resources-

Deposits
Cash
from

curity

Forrestal
Com¬

the

ijvould probably not

O'Neil

and

partnership.

Charles

10,010,853

9,299,679

47,844,211

52,271,048

discounts

20.865.393

13.252,196

profits—

2,504,552

4,257,210

882,219,593

TRUST

CO.,

758,266,535

833,048,305

1,008,844,796

29,279,761

Cash

BANK

U. S.

due

Cash

and

from

TRUST

31, '53

Sept. 30, '53

Cash
,

1,687,491,336

U. S.

591,062,560

512,132,460

452,734,761

discts.

773,596,172
18,126,175

due

NEW

Loans

Undivid.

1,842,154, 414

1,653,460,866
1,473,977,161

TRUST

CO., NEW YORK

Cash
.

holdgs.

572,229 541

483,737,487

Undivid.

discts.

795,434, 240

684.256,246
19,615,974

Lorns

22,220, 580

due

banks—
Govt,

curity

se¬

1,323,864,572 1,242,853,739

and

from

Sept. 30, '53

resourced 1,487,396,547 1,397,195,224

Deposits

$
Total

402,868,658

profits

1,010,211
i

484,286, 064

Govt,

curity

9,076,932

1,098,086

undi¬

YORK

Sept. 30, *53

due

banks—

irom

9,710,033

discounts

and

profits

Dec. 31, '53
,

1,656,719, ,012

and

8,143,524
11,788,510

security

19,031,005

vided

29,163,251

from

12,368.200

Govt,

Loans

YORK

Sept. 30/53

8,528,626

Surplus

BANK

NEW

30,730,269

and

726,577,110

profits

CO.,

banks

442,415.869

resources-

$33,134,994 $31,548,094

holdings

Cash

TRUST

resources

Deposits

1,872,038,475

se¬

Deposits

3,256,141

Dec. 31/53

2,006,636,863

HANOVER

8,692,585

1,402,743

profits
*

Total

Dec. 31, '53

Total

10,585,486

discounts

COMPANY,

YORK

holdgs.

28.999,070

security

due

banks—
Govt,

9,808,629

45,281.078

Govt,

Loans

1,816,211,892

Deposits

42,045,101

from

13,023,288

Undivided

$
resources-

$48,304,668

63,150,798

and

27,291,408

YORK

Sept. 30/53

Deposits

750,865,790

917,612,832

NEW

$69,808,030

holdings

Dec.

Total

Stock

Peelor

resources

CLINTON

THE

James

Dec. 31/53
Total

IRVING

PITTSBURGH, Pa — Arthurs,
Lestrange & Co., Frick Building,
admitted

from

security

banks

NEW

(.estrange

have

2.806,785,378

discts.

CHEMICAL

Staff

Hoover

69,436,926

Sept. 30, '53

se¬

Admits Partner S

Exchange,

due

SCHRODER

YORK

2,937,112,690

was

then

was

Midwest

and

Undivided

the
as

99,482,006

72,805,175

Govt,

Loans

103,370.414

resources

holdings

due

Loans

the

11,642,343

profits

Undivid.

11,789.641

holdgs.

oans

curity

members

6,159,160

banks—
Govt,

Undivid.

mission.

Arthurs

6,054,557

CORP.,

Sept. 30/53

Total

Cash

BANKING

YORK
Dec. 31/53

U. S.

2,699,398,711 2,573,862,235

and

Economics

the

86,970,773,

re¬

served

In 1946, he

Assistant

SCHRODER
NEW

65,674,729

Dec. 31, '53

Associate

1,162,569

bonks

NEW

firm

43,714,845

980,286

organization in
1934 to study for his doctorate in
Princeton

42,994.491

profits—

MANUFACTURERS TRUST COMPANY,

Inc.

the

discounts

HENRY

25,147,133

profits—

known

and Author, was Sec¬
Treasurer and a Director

of the firm from

69,605,745

Economist

retary,

46.119,181

also

Fund,

well

Loans

secu¬

discounts.

firm, which

Vice-Presi¬

32,900,978

45,556.381

Deposits

holdings

Loans

39,984,818

Undivided

34,728,092

Govt,

rity

from

security

holdings

from

banks
U.

dent.

114,409.955

123,164,288

98,914,696
due

due

132,509,162

136,091,352

resources

and

Govt,

Sept. 30/53

Cash

YORK

Dec. 31/52

FARMERS

Deposits

NEW

117,771,112

banks

1,566,920,094

31/53

139,867,701

resources

U. S.

Wilietc
Total

BANK

Deposits
Cash

City,

Total

se¬

1,539,876,061

CITY BANK

1,377,387

Dec.

1,484,190,123 1,384,298,290

60,855,949

1,409,686

profits-

holdgs.

52,301,726

discounts

GRACE NATIONAL

5,897,819,619

41,490,465

6,049, 021.071

32,332,121

53.241,508

Sept. 30, *53

due

banks

Govt,

Loans

from

due

Govt, security

BANK

5,538/
214,433 5,388,818,951

Undivid.

141.226,378

YORK

31, '53

Sept. 30/53

138,814,038 130,996,048

banks

TJ. S.

Loans

CITY

YORK

NEW

149,512.917

resources

holdings

NATIONAL

Dec. 31/53
Total

and

Hickey Assistant

BANK

NATIONAL

William

Tabert and William M. Ryan were
made

COMPANY

elected

was

144,526,732

security

TRUST

sistant

175,814,093

Govt,

holdings

Secre¬

458,932,009

458,719,376 418,274,035

banks

U. S.

Vice-President;

formerly

Vice-President and Secretary, was
named

CO.

Sept. 30/53

500.385.658

Deposits

TRUST

Dec. 31/53
Total

Cordt

YORK

NEW

Bank,

that

curity

York

MIDLAND

Brancroft, President
Savings

122,517,413

91,222,015

Undivided

New York, announced on Dec. 31

from

New

153,737,410

holdings

191,367,359

508,963,371

security

the 'Excelsior

Sept. 30/53

from

;

Govt,

THE

Francis

AND

YORK

490,903,236 453,646,737

banks

334,146,182 339,710,120
discounts

NEW

546,341,168

resources

U. S.

security

Undivided

Deposits

236,598,915 216,653,700

Govt,

BANK

NATIONAL

$
Total

from

due

14,052,089

Sept. 30/53

774,712,761

and

Cash

Broadway,

14,352,161

Dec. 31/53

banks

327,213.800 357,647,179

CO.

TRUST

796,766,585

Deposits

PUBLIC

THE

CO.

YORK

U. S.

169,922,633

security

holdings

Presi¬

.830,021,173

resources

Cash

175,151,335

215.044,675

from

due

Govt,

Loans

Vice

022,711,537

202,285,252

and

U. S.

711,132,143

678,684,363

banks

the

Dec. 31/53
Total

Deposits

Sept. 30/53

773.727,082

♦

CORN

Total

i^uward

COMPANY,

YORK

resources

Deposits

York, Rob¬

S. Williams

TRUST

Dec. 31/53

dent.

Dec

Francis

YORK

16,574,663

meet¬

Assistant

us re-

soonsible for this kind of work in

the

nomics

S*atis*i~al
Dec.

sumer

—

Farmers

appointed

economics

at prices which
willing to pay.

goods
were

discts.

profits

Undivid.

THE

Branch,

Commodore

THE

com-

individual

return to

289,857,694

Undivided

352,347,596

324,376,950

se¬

NEW

directors

Manager

are

1953.

398,538,094

holdgs.

Lowell,

that

are

expenditures,

than in

1954

ber

American fafmers know bet¬
than

the

to
our

future

proceed
ties.

understands,

Any discussion of the

nomic

this

sure

relating
analyses of

form, these

(I)

-ideas

y'val

f ii'wcasts
:

Bank's

peak,

all likely to be somewhat smaller

netition

We always endeavor to get our
f~rm -udiences to realize and un-

ert

Auditor.

increasing¬

indications

current

Loans

Sec¬

due

banks—
Govt,

curity

District.

Trust Company, New

Martin

The election of Francis

year

the

and

from
U.

1,298,606,987 1,179,550,886

—

factors

field.

board

tary,

Williams i Willed
liams

Cash

ing of The Corn Exchange Bank

analysis

forecasting have been and
very

businessmen,

from

Reserve
*

despite the

affecting condition on the agricultural front
pricr- production, markets, farm
as the effects of World War II and
reb'r-s. etc.—that is, that it is an
the succeeding world food crisis
excellent
device
for
developing wore off, so have we been expect¬
interest
and
carrying
forward
ing some leveling off in business
e

Federal

ond

else.

automobile sales, business invest¬

-'dience that

Council

1,435,342,124 1,311,673,687

resources-

Deposits

the member of the Federal

Sept. 30,'53

York,

the

COMPANY,

YORK

•*

down

change.

to this

1954

New

during

serve

Advisory

Loans

their

anyone

going to be
attention—that the

that

say

in the end make

can

decisions

fact that I think economic

and

ly cautious about inventories, and

can

Incorporated,

Y.,

are

watched for should certain factors

In fact, I

Co.

manage¬

MANHATTAN

THE

Henry C. Alex¬

de¬

Dec. 31,'53

ander, President of J. P. Morgan

are

called

BANK

the
New

Total

this,

say

conclusions, with appropriate
consideration of alternative de¬
velopments
which
should
be

for

why

change.

these should always of
r

calls

Bank

York has selected

com¬

Agriculture

NEW

mid-October

seen

f*r

state¬

started

about

should

The

which

out

Any set of forecasts or estimates
£>f the future situation such as
course

that

application of the most ingenious

(2)
Anyone
endeavoring
to
analyze economic trends must alwavs

directors

Reserve

handling

products

favorite
title
when discussing outlook materials
ing year about as now scheduled, still is "Every Man His Own Fore¬
which means that although there caster."
may be some reduction in. defense

expenditures, such reductions will

Bankers

and

adopt.

ment of most businesses

easing of world tensions but that be

grams will continue to cushion the

tions

board

manage¬

ment

conclusion

some

over con¬

remains

marketing
large part will be held

The

the

to farm

areas.

still

farming

I well realize this and

areas,

practically

may

operations than

strictions
in

materi¬

returns

and

OFFICERS, ETC.

Federal

alternatives

er,

BRANCHES

CAPITALIZATIONS

income in

wheat

and

how hot the foreign situation may

of the current

but

by the

cotton

be.

expected

are

may

the end

sales and farm

large in 1954. Carryover
increase further by

continue

year,

in cash

products

stocks

pre¬

which

between farms but also

from other recent years, appear to
be at a level sustainable over the

NEW

REVISED

should understand.

siderable

season

CONSOLIDATIONS

indicated, it also means
there is a good chance that

are

reduced in the

Wells

News About Banks

some

I have

already

the

others

and

1952-53

Oris

also
think
that
the
cost-price
constantly
faced with the necessity of en¬ squeeze on farmers and the kind
of business situation which we see
deavoring to decide what the most
ahead will result in some reduc¬
probable course of events may be.
tion in both farm production and
Any estimate of future probabili¬
farm family living costs in 1954.
ties, then, means we should decide
(3) Finally, in endeavoring to
on
and frankly state certain as¬
discuss farm prices, farm income,
sumptions as to what we believe
and farm commodity situations in
most probable.
general terms, it is always neces¬
In considering the agricultural
sary to remember that each farm¬
outlook for 1954, there are two
er or each business
handling farm
major
assumptions
which
we
products must interpret these gen¬
know could vary materially dur¬
eral trends in terms of his own
ing the coming year and which situation
and
the

cials,

Also,

United

busi¬

softness

including farmers, will
be able to buy the same bill of
goods at somewhat lower prices
or
at
least better goods at the
same prices.
Although we realize that acre¬
age
allotments
and
marketing
quotas can mean some reduction

Service,

will follow pretty much the same pattern
vailed in the Fall of 1953.

leveling off

downturn

means

consumers,

After

in 1954

means

individual situations and

that

By ORIS V. WELLS*

This

than

395,600,967

371,230,602

se¬

holdgs.

373,250,363

325,579,030

discts.

607,671,482

591,532,591

profits

17,513,424

Continued

18,328,407

page

J?"

Number 5288

Volume 179

...

(69)

The Commercial and Financial Chronicle

James

Free Tiade

Yarnall, Biddle & Co.

Free

New Firm Name

Exchanges—A British View

solved
firm

By PAUL EINZIG

name

Walnut

bility is

a supreme

been

free trade should be delayed.

and

Stock

Jr.

Philadelphiahas

free
are

exchange
alter¬

not

opinion

It has

now

become fashionable to preach

that,

seems

to have turned.

same

time announcement

after all,

convertibility is the

su¬

They preme end for the sake of which
together— it would be worth while to delay
at any rate somewhat the return to free trade.
they did be¬ The change may be accounted for

the

fore

war.

Whenever

the

fact

months

that

Britain

NEW

the

Area has in fact made

impelled

progress

restrict

for¬

eign exchange
dealing it

ally
Dr. Paul Jhinzig

usu¬

felt

pelled

versa.

States

and

For

our

placed countries which can afford
both at the

to have

time.

same

restrictions

tain

well

other hand, a
are

foreign trade

exchanges.

On the

number of countries
with the dilemma

confronted

choosing between relaxing their
and

restrictions

trade

their

ain is

exchange restrictions. Brit¬
one of these countries.

It is
need

relaxing

only since recently that the

Until

two

to be realized.

come

it was

ago

year

the

between

choose

freedoms has

widely

return to free

nearly
that

the

ex¬

balance

payments

problem could be solved by sim¬
ply

returning

free

exchanges

Paris

firm.

was

V.
President,
Logan

the

continue

company.

Wulbern

has

Pierce, Carrison, Wul¬
of Jacksonville, Fla.
Pratt, Assistant Vicehas been elevated to

organization.

THE NATIONAL CITY BANK OF NEW YORK
Head

Office: 55 Wall Street, New York
57 Branches Overseas

Statement

oj Condition

of December 31, 1953

this

so urgent; liberal opinion is
concentrating on the removal
exchange restrictions.

the

for

committed

government,
the

removal

LIABILITIES

ASSETS

now

Cash, Gold

Due

and

Banks

from

U. S. Government Obligations

the

$1,484,190,123

Deposits

1,539,876,061

Liability

16,714,882

463,780,518

ances

trade

restrictions.

Obligations

November

the greater part of the restrictions

imports

from

the

European

State

removed, in
spite of the existence of a large
British
to the

debit

allowances

balance

have

increased.

dollars

were

kets. As from

trade.

Discounts

and

Customers' Liability
y Acceptances

Stock

mar¬

September, 1954, the

Cotton

Some

Exchange

Ministers

cials have their doubts

and

were

Expenses,
Dividend

7,000,000

....

Other

22,550,166

...

44,127,021

3,750,000

(7,500,000 Shares—$20 Par)
Surplus

4,261,105

........

$150,000,000

5,631,898

Total

etc

.........

Capital

32,881,838
Branches

Undivided Profits

170,000,000

$6,049,021,671

Total

$6,049,021,671

Figures of Overseas Branches

are as

392,966,329

72,966,329

of December 2.1.

$352,723,093 of United States Government Obligations and $17,827,600 of other assets are pledged
to secure Public and Trust

Deposits and for other

purpcses

required

permitted by law.

(member federal deposit insurance corporation)

Chairman

Vice-Chairman

President

of the Board

Howard C. Sheperd

of the Board

Richard S. Perkins

James S. Rockefeller

CITY BANK FARMERS TRUST COMPANY
Head

having decided to face such losses,
and allowing things to work them¬
Britain could not possibly afford
selves out for the best.
at present to put up with addi¬
In 1953 the influx of gold slowed
tional losses through restoring the
down, however, before a suffi¬ convertibility of sterling.
ciently
large quantity of gold
Possibly if the progress toward
could be accumulated to make it
trade

and

Interest, Taxes, Other Accrued

9,600,000

Other Assets

16,897,800

for:

Unearned Discount

28,222,379

with

30,515,922

?T3r8,030

Unearned Income

Transit

Portfolio

Foreign Central Banks

offi¬

the sub¬

ject. But most of them agree that,

free

294,007

International

Bank Premises

$52,873,952

(In Foreign Currencies)

for

Banking Corporation

Items

Reserves

Securities.

Federal Reserve Bank

Ownership

Bills

2,368,582,461

.....

and

ances

Due

87,986,399

Real Estate Loans

Accept¬

Less. Own Accept¬

result of international

operations in the commodity
Liverpool

Municipal Securities

and

Loans
<

concessions

restored, in
possibility of losing

the

exchange

been

these

commodities

spite

Other Securities

relation

made, free dealings in vari¬

were
ous

tourists'

before

Even

was

European Payments Union.

Furthermore,

Other Federal

Agencies

$5,538,214,433

Office: 22 William Street, New York

Affiliate of The National City Bank of New York
administration of trust functions

Statement

of Condition

for

separate

of December 31, 1953

reversed

safe to face the initial
through a reimposition of import
-pressure
that convertibility was
cuts
and
discriminatory quotas,
expected to produce on sterling.
through the suspension of free
Those in favor of returning to
dealings in metals and other com¬
freedom
at the earliest possible
modities, and through the defer¬
moment began to lose their over¬
ment of the reopening of the Liv¬
dose of self-assurance. They grad¬
erpool Cotton Exchange, official
ually came to the conclusion that
opinion might change in favor
this country could ill afford just
of an early convertibility.
Such
now to return to both freedoms at
a
course
is inconceivable, how¬
the same time, and that the choice
ever.
It would be opposed even
was
between restoring converti¬
by the advocates of early con¬
bility while defending the con¬
vertibility. It seems that the Gov¬
vertible
pound with the aid of
ernment, having come down on
import
restrictions or relaxing
the side of free trade in prefer¬
import restrictions while continu¬
ence
to free exchanges, will re¬
ing to seek safety in inconverti¬
main consistent, in spite of the
bility.
inconsistency of economists and
Until quite recently the view
financial
editors
who,
having
that free trade is more important
urged the Government to adopt
than
free exchange prevailed its
present course, are now urging
among
liberal economists.
This it to change its
policy.
was
only natural, for, after all,
exchanges are merely the means
Merrill Lynch Adds
to the ends of foreign trade.
To
restrict the volume of imports for
(Special to The Financial Chronicle)
appear

the sake of

being able to free the

exchanges does
the

means

for

appear

the

to mistake

end.

Accord¬

ingly the government was urged
to

remove

quotas

and

discrimi¬

LIABILITIES

ASSETS
Cash

and

Due from Banks

U. S. Government

....

Obligations

Obligations of Other

,°

$ 34,728,092

State

and

2,467,673

Securities

Federal Reserve Bank

....

$ 10,000,000

Surplus

....

10,000 000
i

600,000

2,590,557

.......

....

Capital

6,054,557

.....

11,789,641

Undivided Profits

$136,091,352

Total

'U2.462.C96 of United States Government Obligations are pledged
Public Deposits and for other purposes required or permitted by
(member federal deposit insurance

Chairman

31,789,641

2,930,343

Other Assets

Total

Advances

Bank Premises

5,387,015

(Includes Reserve for Dividend $375,639)

15,819,707

.......

Municipal Securities

Real Estate Loans and
Stock

$ 98,914,696

Reserves

Federal

1,294,677

Other Securities
Loans

Deposits

69,605,745

Agencies

of the Board

Vice-Chairman

$136,091,352

to secure
law.

corporation)
President

of the Board

Richard S. Perkins

Lindsay Bradford

Howard/C. Sheperd

KANSAS CITY, Mo.—Lowell E.
Williams
with
ner

has

Merrill

become

affiliated

We shall be

glad to send
of

Lynch, Pierce Fen-

& Beane, 1003 Walnut Street.

complete

copy

of the 1953 "Report to Shareholders

New York and CityBank Farmers Trust

Company to

re¬

Vice-President of the R. S. Dick¬
son

69 Branches in Greater New York

an¬

Inc.,

bern,

Orleans

will

Bigger

the firm of

Reserve

Senior Vice-President
is becoming associated with

and

of Atlanta.

Bank

Mr.

Edward

New

President,

director

signed

Mr. Paris

Federal

the

branch

by R. S. Dickson, Chair¬
trie investment banking

man

has

Manager

nounced

—

Earl

department.

Manager

will
be reopened.
The Government is
changes would necessarily bring
fully prepared to envisage some
free trade. The "dash to freedom"
losses of dollars through foreign
school meant to have both at the
dealings on the Cotton Exchange,
same time.
Its adherents assumed
but is willing to pay the price
that once convertibility of ster¬
within reason for the sake of re¬
ling was restored all would be
well also in the sphere of trade. storing free international trade.
Opinion within the Government
During the second half of 1952 is
by no means unanimous about
the increase of the Sterling Area
the
question
whether
Britain
gold reserve gave rise to a wave
could really afford to lose dollars
of optimism, and the government
through these steps toward free
accepted the point
view
assumed that

Bigger

formerly Vice-President and

was

they are relatively moderate.
reason, the removal of
trade restrictions no longer seems

many

La.

Dickson

other countries can
Payments Union
afford neither, they have to main¬
great

that

bond

the

now

strict foreign

has been advanced to succeed Mr.

Hibernia Building,

joined their firm

Cosgrove, James D. Win¬

restrictions.

trade

—
R. A.
President
Company, In¬
corporated and J. Murrey Atkins

CHARLOTTE, N.
Bigger has retired

Co.

few months ago those re¬
strictions
appeared formidable,

re¬

few other favorably

While

im¬

trade,
and
days, however,
free trade and free exchange no
longer complete each other, ex¬
cept in the case of the United
vice

quantitative

Co.,

announce

Gallager and James D. Win¬

Sterling

removal

appreciable

towards the

ORLEANS,

Hecht

3rd.

recent

during

and

country felt

Biddle

R. S. Hecht & Co.

Winsor,

Winsor, III,

Jr., Harry B. Snyder, Herbert

V. B.
sor,

Atkins Succeeds Him

the

founded

who

Earl P. Paris With

natives.
go

Pres. of R. S. Dickson

of R.

was

The

direct descendants of

are

Thomas

Yarnall, Biddle & Co. of

James

and

liam
sor,

1953.

1764.

general
partners
in
the
firm.
Benjamin
Rush, Jr. has
with¬
LONDON, Eng. —The title of nations, even at the cost of main¬ drawn as a limited partner.
The following general partners
this article would have appeared taining exchange restrictions.
now constitute Yarnall, Biddle &
utterly absurd to the prewar gen¬
During the last few weeks the
Co.: Alexander C. Yarnall, Wil¬
eration.
Surely, they would say, tide of British

expert

the

Biddle,

firm

easing of exchange controls.

free trade and

Bigger Retires

partner

Exchanges,

the admission of James D.

recent

Winsors
John

the

to Yarnall, Biddle
effective Jan. 1, 1954. At

made by

Says British Government is

committed to removal of trade restrictions, and cites

1528

members

general

changed

Co.,

the

objective, for sake of which the return to

of Yarnall & Co.,

Street,

Baltimore

grated, Dr. Einzig states it has now become fashionable for
British economists to preach that return to sterling converti¬

The

York

New

Holding free trade and free exchanges are not necessarily inte¬

—

Pa.

was

James D. Win¬

of
Biddle, Whelen & Co. which dis¬
3rd

sor,

PHILADELPHIA,

Jr.

Winsor,

senior partner and

of The National City Ba.nk

anyone

who requests it.

The Commercial and Financial Chronicle

(70)

they support the President

Washington

Ahead

BARGERON

undoubtedly been worse nonsense but it is doubt¬

been so saturated with worse nonsense
than that about the Democrats' cooperation with the Eisenhower

end because (1) Attorney Gen¬
with having

Administration having come to an

Truman

charged

istration

will

charges he was a spy, and (2) be¬

Governor Dewey

recently made a speech
saying the. citizenry should consider Truman's
name
synonomous with death in Korea and
rottenness in government.
These alleged in¬
stances of recklessness on the part of two high
Republican moguls, we have been repeatedly
informed by the pundits, broke up a happy re¬
lationship between Eisenhower and the Demo¬
crats which augured well for the future of the

Carlisle

Bargeron

ing

the slightest.

measures

There will

will

cooperation with the President at

session of Congress was not

find

Democrats could

of the

measures

same

afford to

afford

not

resist.

sort at this session and you

The explanation will be that the

siastically than the Republicans.

cannot

sense

supporting them, certainly more enthu¬

the Democrats

particular measures

cooperation in the

It was a, case of the President propos¬

the

which

will be of such a type that the Democrats
But you can rest assured that whether

oppose.

shaping

are

have been living under this
have returned to power.
crats should succeed in pushing through any such
the Administration would get the credit for it and
The Republicans

since they were supposed to

counts advances toward

STATEMENT OF CONDITION

of business Decerhber 31, 1953

Cash and Due from Banks.

Federal

"Monthly Review"

freer system

591,062,559.72

452,734,761.17

Obligations-

134,526,520.42

Other Bonds and Investments

5,832,801.03

Loans

773,596,172.16

Banking Houses Owned

1,500,783.49
37,111,303.90

Acceptances-

Accrued Interest and Accounts

trading nations and

some¬

inter¬

organizations in building

freer

and

None

economy.

stable

world

these

condi¬

tions admits of easy

automatic

fulfillment,

but the recent de¬
velopments provide some ground
for

Given

encouragement.

continuation

policies
and

within

growing

the

prospect

area

of cooper¬

world's

there

nations,

the

domestic

sterling

measure

the

among

trading

sound

major
fair

continuing
British
progress toward the objectives of
sterling convertibility and the
moval

discriminatory

re¬

trade

barriers."

Morgan Stanley Co.
Admits Three Partners
Morgan Stanley & Co., 2 Wall
Street, New York City, have an¬
nounced the admission of William

re¬

of trade and payments

Reserve

over

international payments.

Bank

extensive

"Britan's
the

progress

easing of controls

national

trade and

over

inter¬

payments may

Business

and

have

payments

created

in the position of
the principal exchange
markets, have provided a greater
degree of freedom and flexibility

payments

prospect" of continuing ad¬
vance toward the goal of sterling
convertibility and removal of dis¬

sterling

criminating trade barriers.
Improvements in
the

economy

two

relax

reflected

official

international

over

the

been

steps during the past

many
or

have

British

movement

year

controls

and

payments

goods in inter¬

and

the British economy, and have

led to

a strengthening of Britain's
position in international trade and-

finance.
far

Secondly,

taken

have

the

measures

helped

set

the stage for a gradual restoration
of

freer

trade

and

payments, in¬

national

Receivable

5,821,952.76

Other Assets

4,450,007.92
$2,006,636,862.57

trade, the Bank's public cluding;'eventually, the converti¬
points out. The London bility of sterling into all other
foreign exchange market has been currencies, which is the stated
cation

reopened, various
trols

Capital Stock-

—

Surplus-

131,066,174.78
5,223,336.51

resumed

imports

dollar countries.

from

non¬

These steps have

the risk of being overlooked,

run

being

etc..

40,439,141.78
1,966,373.02

Expenses,

Acceptances Outstanding (Net)

The freer flow of trade has been

10,332,944.37

—

1,397,000.00

Other Liabilities

1,816,211,892.11

$2,006,636,862.57

enhanced by easier access to, and

wider

dealings

change,
trade

statement are

been

inadequately appre¬
ciated, because they were small
individually and spread over a
long period.

Payable January 1, 1954-

Securities carried

con¬

private

removed

Reserve for Contingencies
Reserves for Taxes,

has

exchange

relaxed,

commodity markets,
and quotas have been enlarged or

$27,940,000.00
18,126,174.78

been

trading

85,000,000.00

Undivided Profits

have

number

LIABILITIES

$82,542,554.04 in the foregoing
to secure public funds

deposited

for other purposes required by law.

barriers

crease

and

while
the

has

foreign

ex¬

lowering
tended

economic

practical

broadened

in,
the

of
in¬

significance

advantages

operations in

the

the for¬

eign exchange market, the Bank
explained. Thus the trends toward

aim of Britain and the other Com¬

this

monwealth

countries.

standpoint,

the recent liberaliza¬
have helped not

tion

From

the necessary
technical foundation, but also to

only

provide

furnish

valuable

perience

body

guide

for

of ex¬
further

progress.

for

"Moreover, the possibilities
further

advance

should

Britan's

minimized.

not

recent

Member Federal Deposit Insurance Corporation

concluding its survey of the
changes in Britain's pay¬

recent
ments

situation,

Review" states:

,the

"Monthly

Mr.

Voilmers

Ewing,

firm's

of
has

son

founders,

one

the

been

asso¬

ciated with Morgan Stanley since
1940.

Prior to that, he spent five

with J. I. Case Company.
During the war he served in the
U. S. Air Force, attaining the rank

years

of Major.
Mr. Petito joined Morgan Stan¬

the

and

higher

world

price

sterling

exchange markets have

greatly strengthened the position
of

as
a,n
international
These favorable pay¬
ments and exchange developments
have made it more feasible, on

sterling

currency.

the

tended to reinforce each other.

Edward

current-account trans-1 ley in 1937 and has been with the
firm since then, except for five
actions, the reduction in sterling
balances held
outside the area, years of military service. He was
pluses

cant relaxations of controls. Fur¬

payments have

Petito and
general
partners, effective Jan. 1, 1954.
H.

sur¬

goods and

money

Voilmers

fcdward

tl.

Ewing, Jr., Frank A.

measures

liberalizing the movement of both
Charter Member 'New York Clearing House Association
Member Federal Reserve System

all

by removal of discriminating trade barriers and

"fair

State, Municipal and Public Securities.

and

national

Conditions," thus be said to have served two
an increase of almost $700 million
broad purposes: First, the decon-*
in Britain's gold and dollar re¬
trol measures themselves, in con*'*
serves
and encouraging progress junction with generally favorable
toward a freer system of trade
developments in the balance of

Credit

and

Deposits

countries, and the cooperation

pal

Progress Toward Convertibility

Federal Reserve Bank of New York's

New- York reports in the January
issue of its "Monthly Review of

ASSETS

Dividend

markets,

high levels of

COMPANY

Broadway, New York

production

economic activity in other princi¬

which would benefit the Republicans next November, set¬
whether the country is Republican or Demo¬
cratic, conservative or liberal, and negative the voice of the
"liberals" and pinks in our national affairs.

in Great Britain

Founded 1824

Customers' Liability

develop¬

international

power

the question of

The

U. S. Government

greater

the maintenance of

gress

relaxing of controls

At the close

toward

the

area,

export and greater competitive

may

entirely different impression of the two political parties in Con¬

CONDENSED

ment
for

the Republicans can easily show a united front on and
something on which the Democrats will get a thorough licking.
The next few months may, in fact, show the country holding an

Chemical Bank

165

throughout the sterling
of economic

directing

thing

tle

pay¬

prog¬

depends upon the continued
of non-inflationary do¬
mestic
policies
in
Britain
and

shadow ever
If the Demo¬
tax reduction
if they didn't

mind it is

reserves.

pursuit

propriations for the military. Their theme is to be that the Re¬
publicans are scuttling security for economy, putting the dollar
ahead of defense. This, indeed, seems to be the main service they
my

adverse in¬

balance

monetary

fundamentally, further

ation

the

ress

most likely to stump their toes

"loyal opposition."

position, since

the

and

ments

pro¬

progress

payments

be conditioned by

course,

external

fluence

though, I think, is their plan to go all out against the President's
military program. They plan to fight the reduction of our armed
forces in Korea and in Europe.
They plan to fight for more ap¬

intend to offer as the

British

ally tend to exert

nobody would get any credit for it.
Where the cocky Democrats are

pace

removal of restrictions may initi¬

seriously considering something on this order shows
they are not the sagacious politicians they are reputed to be as
contrasted with the Republicans' reputation for political stupid¬

Britain's

TRUST

ain's

hopelul of what the future

con¬

balance

the rate of improvements in Brit¬

are

ity.

even

,the Republicans.
the last

things

its

payments.

will, of

only do the Republican leaders now exhibit a
party unity, they feel a need of building up

Not

for

toward freer jtrade and

But the President and his close

be highly

said to

the surprise of the session
from the Democrats trying to out-do the President in

they

benefits

"The

How long this feeling will govern

is hard to tell.

are

show

the world economy, with

President's

generally acceptable to them and less palatable to the
Republicans generally. In this respect they are likely to come
forward with a bigger tax cut such, for example, as an increase
in exemptions for dependents from $600 to $700 or $800. The fact

What
happened was that a man running for the Presidency on the Re¬
publican ticket was elected to the White House but a general Re¬
publican Administration is far from being in power. The Demo¬
crats are still quite vocal, they are apparently more vocal than

the word in

of the

posals

publican in November, 1952 as has been generally assumed.

Democratic

of the nature

man,

come

pundits should be so widely cir¬
the country and accepted, is evidence of the

so-called

bring.

political balance between the Republicans and Democrats in Con¬
gress.
It has been a mistake to assume that the country went Re¬

The

because

their President, to build him up as a great leader
who cracks the whip and makes the legislators do his bidding. As
to how long this will last I feel less certain than I do about their
longing to present a united party.

will now result in much evil.
The obvious suggestion
is that Dewey and
Brownell should be repudiated by the Admin¬
istration and the Republicans as a whole.
That such propaganda as this from the
over

cards,

measures

family

longing
their

and

Washington

them, how long it will hold them in line on unpalatable Admin¬

had reported

culated

the

going to hang separately.

are

official

country

efficiency and improve its position

Brown-

that a picture similar to that of the last session will be
presented—of his getting the necessary support from the Demo¬
crats and of appearing to be at odds with his own party.
But
moving against this situation is a yearning on the part of the
Republicans to get along. They are going to swallow a lot to
accomplish this. They are a worried folk and apparently quite
chastened from their long visit at home.
They have returned to
Washington with a feeling that if they don't hang together they

promoted Harry Dexter White after the FBI
cause

sequent

ful if the country has ever

Brownell

by either Dewey

program,

of the News

By CARLISLE

eral

particular piece of legislation

ell's attack.

From

There has

on a

him will not be influenced

oppose

Thursdaj", January 7, 1954

...

whole,

thermore,
of

such

have

undertake

the longer-run
decontrol

signifi¬

effects

measures

Lieutenant-Colonel at

time

separation from the U. S.
Army in 1945.
Mr.

engineering

Columbia

School

for

Morgan

degree

University
Mines,

and Chemistry

been

received

Voilmers

chemical

Stanley

asociated

his

the

Engineering

in 1922.

He joined

1945,

with

implemented,
or
may
be taken in the future Cyanamid Company
should enhance Britain's economic prior thereto.
^
already

the

his

having

American

been

immediately

Volume 179

Number 5288

The Commercial and Financial Chronicle

(71)

Rollins

The Bond Market in

continued,

survey

1954

that

there

pointing out
only four mort¬

were

In annual

offerings during the year, all
refunding issues, and totaling $56

ment

New Branch for

million.

Chicago

and

Sons.

gage

year-end review, Halsey, Stuart & Co. Inc., invest¬
banking house, forecasts some decline in corporate offer¬

probability of lower interest rates and higher bond prices.
a relatively high volume of
capital expenditure in 1954

over

Predicts

record

billion

annual

year-end
in

market

supply

1954

bond

continued

full

state

tax-exempt

survey,

nation's

the

for

forecasts

bond

and

municipal issues, some decline in
over-all corporate offerings, large

refundings of government obliga¬
addition

tions

deficit

new

money

financing by the Treasury
half, the likelihood of

in the last

much

stable

interest

rates

prices than prevailed in
1953, and the probability of lower

and bond

rates and higher

prices.

"The nation's over-all economic

activity still is in high gear as we
enter the new year, but some of
the hills are getting steeper and
segments of the economy are

some

shifting
a

preparing to shift into
gear," the Halsey, Stuart

lower

will

forecast states. "The economy

continue to roll, and well, but not

it has
years."

the extraordinary speed

sustained through many
In the industrial

field, according
capital expenditures
in
1954 may be relatively high,
although
somewhat
under
the
peak level of 1953. However, it
pointed out, the volume of new
corporate bond issues may decline
to a greater degree as industrial
demands for new capital contract.
to the survey,

railroads

the

approach

com¬

plete dieselization, borrowing for
equipment undoubtedly will
financing,

new

decline further. Utility

maintain

could

however,

with electrical utilities

years,

projections

calling for expenditures of close
$4V2 billion and the telephone in¬
dustry still trying to catch up with

public depnand for new facilities.
In the gas utilities field, forecasts
indicate
1954

reduction of about 30%

expenditures for produc-

probably put emphasis

the

maintenance

and

storage.

State and

said

municipal issues will
in sizable volume,
Stuart,
although

market
Halsey,

"whether
record

will

1954

breaking

offerings

exempt

for

tax-

anybody's

guess." The company pointed out
nation's

the

that

vember

last

voters

approved

No¬

90%

over

money

'
con¬

reflecting
save

money when he feels uncertainty
in the general business outlook.

Much of today's savings takes the
form of debt reduction or is in
committed money, such as that

paid

into

pension
tional

insurance

funds,

policies
the

and

recipients

lower

credit

expected
factor

these

demands

to be

amounts

mous," the

involved

survey

enor¬

are

continued. "The

short-term

cited

year

indi¬

rates

effective

January 1 seemingly would lower

the. value of these issues' tax
exemption, its actual effects will
be nominal. The good yields of
state and municipal bonds will
continue

highly attractive to cer¬
tain investors, as will their taxexempt status and their proved
stability."
The
see

ahead probably will
slackening of the na¬

year

some

tion's economic pace.
art

Halsey, Stu¬

predicted. "Indications

housing

starts

will

that

are

less

than

the levels of recent years and the

office.

native

to fall far below

raised
in

but did contribute about $500 mil¬

years,

tions

city

has been

since

1924

during

the

old

S,ydonia

The

Chance

become affiliated

his

where

Mrs. Masterson

the

last

Foreman

Bank

Financial

FRANCISCO,

such well known organiza¬
as

(Special

SAN

Kane, born and

Cedar Rapids,

Talbot,

519

Dempsey-Tegeler
Schwabacher & Co.

CHASE

BANK

NATIONAL

Treasury
financing a budg¬
etary deficit and with heavy debt
faced with

was

maturities

which

would

have

OF THE

OF NEW YORK

CITY

be refunded."

Money became tighter and in¬
terest

rates

gradually edged

STATEMENT OF CONDITION, DECEMBER 31, 1933

up¬

ward

during the first quarter, the
survey
related.
Following
the
Treasury's April offering of its
first long-term bond issue since
1945, distribution of which "could
hardly be termed successful," the
market

broke

for

and

government

bonds

substantial declines

mid-April to mid-June the

market

uncertain

was

and

disor¬

ganized.

Obligations

State, Municipal and Other Securities

Mortgages

Loans

Market confidence

during the
eral

U. S. Government

prices for both corporate and taxexempt
securities
took
place.
From

RESOURCES

Cash and Due from Banks

summer,

Reserve

market

restored

was

after the Fed¬

banks

purchases

began
of

Accrued Interest Receivable.

open

Treasury

Customers'

Acceptance Liability

bills and Federal Reserve authori¬

ties reduced the
of

reserve

member

require¬

banks.

Long-

bond prices improved. "The
Treasury's August and September
refundings were highly success¬
ful," said the survey. "These devel¬

opments

change

and

bond

exempt

the

LIABILITIES

Deposits

average of cor¬

prices

June

97.10

Other Assets

mar¬

ket by a rapid upward
adjustment
in prices. Reflecting this

Banking Houses

reflected in the mid-

were

which

had

average

yeilds

Foreign Funds Borrowed

increased

drew

year

was

had

Reserves—Taxes and

Expenses

tax-

moved

Other Liabilities

....

from 3.06% to 2.56%."
The
survey
pointed
corporate spending for
and

equipment in

approached

out

that

new

plant

probably
$28 billion,

but that "from summer
on, easing
tendencies in some industrial con¬

struction

and

financing

became

apparent."
Utilities

financing

year, bolstered

during the
by substantial of¬

ferings in the fourth quarter, un¬
doubtedly ibrought 1953's utility
stock and

Acceptances Outstanding
Less: In

1953

record

bond total

Portfolio

•

$11

•

Capital Funds:
Capital Stock.

(7,400,000 Shares—$15 Par)

Surplus.

Undivided Profits

close to the

demand for mortgage money cor¬

$3.4 billion of 1952, Halsey, Stuart

respondingly

Industry's

said.

for

stock accounted for about 40%
the
1953
offerings,

over-all

lower.

expenditures

plant

and equipment are likely to con¬
tinue high, but off somewhat from
1953's peak. A softening of general

business activity, already evident
in some fields, should result in a
lower
and

demand

for

both

installment credit.

fort

cline,

offset

Federal

the

business
In

economic

fiscal

ef¬
de¬

authorities

and

"Preferred

most

cases

and

common

maintaining
improving the

satisfactory equity back of the
utility debt structure," the com¬
pany

United States Government and other securities carried
to secure

public and

trust

deposits and for other purposes

$388,389,298.00

were pledged
required or permitted by law.

added.

Railroad

equipment

financing

aggregated some $240 million in
public offerings, down somewhat
from the $270 million of

1952, the

Member Federal Deposit Insurance

Corporation

Calif.—

California
was

sur¬

halt devaluation of the dollar.
The problem was further
compli¬
cated by the fact that the

Chronicle.*

has

with Hannaford

are

THE

•

Masterson

BANKING

inflationary

Joins Hannaford Talbot

Rapids,

the investment business

lion to the

total.

with
Man¬

Cedar

new

Mr.

represented,

early predictions,

a
problem child
the doorstep of a new
Administration that was pledged

92.97

vidual income tax

Iowa

issue, usurping
position held by bonus bonds
in preceding years. U. S.
Housing
Authority bond volume continued

potentials "were

bond

reduction

of their

ager

volume and size of

activity and high credit
demands in late 1952 carried over
into 1953, and their

better,

the

association

economic

porate

"While

the

them, of Edward H. Kane

changes in the financial markets,

for the

munities.

to prominence in both

announce

of sharp variations in bond
prices
and interest rates. A high level of

deposited

known^, in

Iowa.

Chicago

abrupt

population

com¬

revenue

invest¬

September and October bond

expanding

billion.

Iowa—First

Company

important

backlog of need for school, high¬
way, sewer, water and other mu¬
nicipal
facilities
continues
to
mount with the nation's growing

and

rose

school

1952's

$4.4

RAPIDS,

Securities

funds

Looking back at 1953, the
vey

ments

and

widely

and

banks

the

institu¬

term

financing
is being discussed in several states

bonds

Kane

ment market."

the polls.

turnpike

and

pass

CEDAR

undoubtedly will continue to pro¬
vide • the
principal market for
corporate
offerings. Because of

amount of the bonds submitted at

"Additional

record

the

the individual's inclination to

another

year

easy

upon

"Individual savings should
tinue at a high level,

tion, transmission and distribution

market conditions.

ex¬

of recent

the volume

ceed

will

Highway
Halsey, Stuart & Co. Inc., in its

Mr.

banking and insurance circles in

breaking year
for tax-exempt issues, with state
and municipal offerings totaling

ings, but full supply of tax-exempt state and municipal issues,
along with large refundings of U. S. government obligations.
Sees

was

First Securities

Street.

formerly with
&

Co.

and

The Commercial and Financial Chronicle

(72)

Thursday, January 7, 1954

special situations in the specula¬
tive group that did well.
All told
of

out

there

the

price last

five

were

that

far

year.

stocks

advanced

the

Public

Utility Securities

best

performer was Minneapolis & St.
LvOuis

with

By OWEN ELY

gain of 27.3%, fol¬

lowed

by Western Maryland 2nd
preferred up 16.9%. The latter

Market in 1953

The Rail Securities

naturally influenced

was

Measured

The railroads have just finished
a

highly

nues

New

successful
at

were

ficiency

year.
Reve¬
peak.
operating ef¬

all-time

for

records

Despite
apparent almost universal be¬

of business Dec.

established. Net in¬
come
may
have been at a new
record high — if not, it was cer¬

the

together there

move

year

1942

set

the

when

tax

considerably less

was

the

sixth

the

war

year

individual

Taking

For

usual,

stocks

rail

1953.

list of 58 railroad com¬
and speculative pre-

stocks

mon

was, as

wide variation in the movement

burden

onerous.

successive

31, 1953.

lief that railroad securities always

tainly close to the previous peak

million

Dow-Jones

the

close of 1952 to 94.03 at t.*e ciose

were

$901.7

railroad stocks last year
declined 15.5%, from 111.27 at the
average

than $1,000

listed

ferreds

capital

the

New

York

stock recapitalization progress.
is

new

creases

and

widespread.
the

larger

memory

were

stocks

market

stock

some

55.8%.

the present day
were

advance of 27.3%

For the first time in

investor-there
dividends.

extras

last

fered

With all of ihis back¬

Exchange, price movements
year ranged all the way from
There

were

last year.

the
.

total

that out-performed

and

wider

stocks

declines

Dow-Jones average. On

ground rail stocks did not do well

decline

that

than

the
suf¬
the

the whole

better

grade stocks a^ted the
although there were some

best

that

quite

tion of

held

also

well

New Haven

registered

amounted

less

service.

were

roads

miscellaneous.

and

year

but /

another

declined

The

aver¬

Of this

The best stock in thifc group
Southern

was

five

steam

stations

generating

and

five

The second unit at St. Clair Power Plant, cur¬

totals 780,000 kilowatts will have been installed during the
years-'- <
■'*
'
>,
• \V-

The company

justing for the two-for-one split*
dipped only 2.1%, or less than a
point. Chicago & Eastern Illinois

industries

additions

Line

Construction

also

experienced
declines of less than 3%.
Others

still has

huge construction program under way
and the expansion of automotive and re¬

defense needs

meet

lated

Class "A" stock and Seaboard Air
common

(small

and light) and 4%

past five

which, ad¬

common

power

rently going into service, has an estimated capability of 158,000
kilowatts, raising total system capability to 2,195,000 kilowatts.

less " than ** the "15.5% ~ drop

age.

has

company

small hydro units.

10%

registered by the Dow- Jones

(large

The

U. S. average.

whose

than

'/■-

the

whose

eight

Total

proportion of industrial power seems to be
relatively small considering the highly industrialized character of
area.
Residential rates average 2.92c per kwh., slightly above
the U. S. average, while average usage is 2,481 kwh., above the

stocks declined less than 10% last

stocks

of 7,587

37% residential, 28% commercial

revenues are

light and power), 31% industrial

each instance.
There

area

outside Detroit.

areas

Electric

these

than

extensive industrial and farm

& Hartford common,

gains

three

Company
electricity to

approximate $192 million. The company disposed of its
gas business in 1951 but steam heating service accounts for about
3%
of
revenues,
and there is a negligible amount of w;ater

Central of Georgia preferred and
Denver & Rio Grande Western.
The

serves

revenues

having

well,

Company

miles in southeastern Michigan, with an estimated popula¬
3,771,000; this includes the City of Detroit and environs as

square

stock

common

company

shown a de¬
cline
of only
4.1%
during the
year.
Other stocks showing ad¬
vances last year were New York,

Stock

million was spent for
improvements, including
equipment.
Dividend
in¬

notable that the

Detroit Edison
Detroit Edison

the

company

its

Gross

area.

approximated

$280

expenditures

million

the

dufing 1953 has continued at

five

for

property
1948-52.

years

heavy rate, and the

expects to spend about $71 million in 1954.

The St. Clair

with declines running to less than

steam

10% were, in the order named,
Santa Fe common, Katy preferred,

each, the first of which went into commercial servicd last August
in November. The remaining two units are sched¬
for service in July and November, 1954.
Preliminary work
has also begun on the new River Rouge plant which will have two

Pacific.

For

the

credits in the

GRACE NATIONAL BANK
OF NEW YORK

and

ferred

the

sounder

New

Haven

of Condition, December 31, 1953

"special

the

other

end

the

speculative, that marked
declines

than

common

traded

was
.

Brokers, Secured

$ 39,984,817.94

•

1,890,000.00

....

U. S. Government Securities

45,556,380.70

State, Municipal and other Public Securities
Loans and Discounts

Customers'1

Stock of Federal Reserve Bank

6,665,297.13

42,094,491.25

240,000.00

Liability for Acceptances

Accrued Interest and Other Assets.

.
.

2,009,719.07

526,994.98
$139,867,701.07

Capital Stock
Surplus
.

apolis,

Certified and Cashier's Checks Outstanding

8,980,285.72

cago

North

42.7%)

addition

from

these

that registered

than

40%,

that

The

wide

32.0%.

tion

2,251,337 96

•Northern

1,372,525.64
$139,867,701.07

and

Baltimore

With

the

ulative

cific

oil

spec¬

Nov.

excessive

Company

tional

H.^Oehlert, Jr.

Hardy &

General Foods

Robert E. Dwyer

Corporation

specialists,

Anaconda Copper Mining Company

J. Roig

President

Griswold and Company, Incorporated

President, International Division

Cletus Keating

Schultz

1930

James H. Sharp
Merck if Co., Inc.

and

market

seems

two

and

years

income from the stock, there is

the

common

narrow

may

when the

stock for-ihe 12 months ended

It appears possible that, due to future

share.

installed

being

(plus

with Canada)

other

factors

earnings will

such

continue

Eventually, earnings might be diluted

result of conversion of the

opinion, to

dividend rate

was

July, 1953 to $1.60.

new

increase in earnings

the

in¬

much

seems

likely, in

increased in

1952

from $1.20

to $1.40,

If the trend of earnings remains fa¬

established

and

the

dilution

future

despite

possible

that

some

further

from

debenture

increase in
or

the

three

conversion,
dividend

Frank C.

Chairman of the Board

Walker

Chairman, Executive Committee.

Company, Inc.

•

Comcrford Theatres, Inc.

years.

DETROIT

stocks

Midwest

EDISON

COMPANY

Revenues

general
Year

1953

(Millions)

Common Stock Recordt

Earned

Dividend

Approx. Range

Eric Goldsmith With

banking and
FEDERAL

commerce

DEFOSIT

for almost

century.

INSURANCE

CORPORATION

$2.00*

$1.50$

30%-24

172.6

1.71

1.40

25Vs-23

164.3

1.68

1.20

23%-21%

1950

Stock

$191.8*

1952

150.8

2.18

1.20

134.6

1.73

1.20

23%-20

-21%

Carl M. Loeb, Rhoades

1948

120.2

1.49

1.20

21%-20

Eric

become

1947

106.8

1.59

1.15

-20%

Loeb,

1946

90.8

1.52

1.09

M>-20%

Goldsmith

associated
has been identified with domestic and international

rate

1949

F. G. Kingsley

Airways, Inc.

debentures, it is

than offset such dilution.

might be forthcoming over the next two

Shea

Pan American-Grace

Ingersoll-Rand Company

MEMBER

only about half

though hardly at the rapid rate of gain in 1953 when net

vorable

1932,
of

President

name

earnings

capacity

The

Exchange.
Andrew B.

D. C. Keefe

Mercantile Stores

for

will

The firm of L.

Co.,

bonds

realized

1951

Kirlin, Campbell if Keating

The Grace

installation

specializing

member

over-the-counter

Cleveland, Ohio.

W. R. Grace 6? Co.

If the

interchange

and

direct wire to L. J. Schultz & Co.,

Director

John C. Griswold

the Stock

stock at 29.

common

income

interest

estimated, but the interim

Broadway,

established
the

announce

President

Harold

Hardy, 11

New York City,

Vice-President

)

cannot

value

the

potential dividend

were

the writer's

To L J. Schullz & Go.

William M. Robbins

(exclusive of the

They have been selling recently

crease,

Hardy 8 Hardy Wira

President

David Dows

this

increased 21%.

Company

by Moody's Service, which

power

Vice-President
The Coca-Cola

rated A

ex-rights).

goes

against

The offer¬

savings in operating costs which may result from the large addi¬

potentialities

The remaining 24 stocks,
numerous
to
mention
sepa¬

20c

Chester R. Dewey

the

Pa¬

International General Electric
Co., Inc.

President

are

fiverpoint. discount {this discount

stock

29.9% to 16.0%.

Former Prescient

George E. Clark

rately, had declines running from

Clark H. Minor'

protection

immediately convertible they would be worth about

meantime

about

1952.

too

with

and

when-issued basis around 111, with the subscrip¬

since

but

much

common.

Northern

the

116

were

since

Northern

from

debentures

rights).

Valley

all highly

are

situations.

suffered

speculation
in

DIRECTORS

Ohio

execution

Pacific these

•Includes U. S. Government Deposits aggregating $3,403,963.61.

Lehigh

interest

rights around 7/16ths and the

bonds

order,

they were Boston & Maine pre¬
ferred, Chicago & Eastern Illinois
common, Central of New Jersey,
Pacific,

new

Exchange on

six

9,492,439-43

and

described in the prospectus dated Dec. 30.

conversion

drops,

beginning Feb. 1, 1956

has estimated their conversion value around 100

five

were

$100 bond) with adjustment

ing is not being underwritten.

declines of

there

showed

39.0%

dividends

accrued

dilution,

promi¬
the large losers last

among

debentures will be convertible

new

also

were

117,771,112.32

Reserve for Contingencies, Interest, Expense, etc.

The Adams Express

for

common

(down 45.0%) and Chicago, In¬
dianapolis & Louisville "B" stock

(down

and

into stock at 25 (four shares for each

Chi¬

common.

Western

2,249,590.88

J. Chisholm

These

Marie

Less Own

President, Oxford Paper Co.

4,500,928.84

Hugh

Acceptances

Acceptances in Portfolio

St. Paul & Pacific

others

Paul

and Chicago, Milwaukee,

common,

980,285.72

Deposits*

St.

stocks

4,000,000.00

Undivided Profits

the

year-end)
with a drop of
55.8%. The other two were Minne¬

year.

$4,000,000.00

when-issued

(it

1952

nent
LIABILITIES

new

that

interconnected with the Hydro-Electric
future interchange of power with

now

comparatively little equity financing
in recent years, l-for-10 subscription offerings having been made
in November, 1949 and March, 1951. Supplementing these sales, the
company issued convertible debentures in 1948, which have now
been very largely converted into stock (about $3 million deben¬
tures
are
outstanding).
Recently the company announced an
offering of $43,358,000 new convertible debenture 3Vis due 1969.

The

was

Ontario,

Detroit Edison has done

price

50%.

■

scale

Boston & Maine

RESOURCES

The company

Canada should prove advantageous, under variable load conditions
for the two areas.
'

three stocks, all highly

were

$73,100,000.

Commission

situation"

poorest performance

Cash in Vault and with Banks

pre¬

speculative category.
there

Demand Loans

generators of about 245,000 kilowatts each, scheduled for operation
in April and November, 1956. Total cost of this
plant is estimated

this

part

the 1

150,000 kilowatts

uled

industry, with Katy

preferred

HANOVER SQUARE, NEW YORK

Statement

most

represents

for four generators of

and the second

Union Pacific, New Haven pre¬
ferred, Rock Island, and Western

group

plant is designed

with

Rhoades

Carl

has

New

York

Co., 42 Wall Street,
City, members of the

New

York

Stock

Goldsmith
ner

was

Exchange.

formerly

in Bendix & Co.

85.2

1945
1944

Mr.

part¬

1.13

1.09

83.5

1.18

1.09

23%-19%

19%-16%

*12 months ended! Nov. 30.

^Present

rate

$1.60.

f Ad justed for 10% stock dividend in May
.

1947.
J

Volume 179

Number 5288

Continued from

The Commercial and Financial Chronicle

matter, wish to be labeled protectionist.

lose

this

The fact

good

opportunity to get more to pass them by. All
clear enough in the representations which have

E. J. Muller and Austin K. Neftel

Terms

Frederick

making converti¬
those necessary to a successful
the necessary conditions very

are

deal

highly controversial or are so bedeviled
with politics that the Commission will almost of necessity
find itself faced with extremely difficult problems in com-

•

really significant conclusions-or making any
In this world of ours today,
frequently sink into relative insignificance in con¬
multifarious

the

which bear in

rectly

upon

restrictions

important degree either directly

yesterday to
con¬
term

Chairman

the

Place

Such

wonder

statement

will, doubtless,

come as a

Britain

convert

often

come

them into

mean

the

other

same

John

among

well

balanced

free

that

City Bond Club

and

stock

Minneapolis,
P resident;

Paul

Reilly;

son

for

two

"A"

Class

Strain

Robert

Nominated

Barney & Co.,
5

Smith

Hart

three year

terms
were:

Ha l.

Co.; I. W. Burnham, II,

ham

Carl

Mathey

Merrill

Burn-

e c r

Kail

Lynch, Pierce,

Fenner &

Beane, James E. Kingel, Juran &
Moody, Inc., St. Paul, governors.

Co.; Martin Le Boutillier,

DIRECTORS

J. P. MORGAN & CO.
INCORPORATED

NEW
Chairman

Condensed Statement of Condition December Zl, I95Z
IIEXRY C. ALEXANDER
-

ASSETS

ARTHUR M. ANDERSON
:

Vice-Chairman

C. R. ATKIN

Cosh

Hand and. Dim

State and

$197,683,850.66

from Banks

238,456,672.69

President State Street

Federal Reserve Bank.

Other Bonds arid Securities

•

45,430,634.78

Municipal Bonds and Notes

Stock of the

PAUL C. CABOT
Investment Corporation

United Stales Governm ent Securities

Vice-President

1,650,000.00

{including Shares

of Morgan

BERNARD S. CARTER
President Morqait & Cie.

Incorporated

Grervfell

Co:

and

Limited

Morgan $ Cie. Incorporated)

9210,376.19

Loans and Bills Purchased

285,688,826.34

JOHN L.

situa¬

COLLYER

Chairman and President
Tlic li. P. Goodrich Company

intercourse

Accrued Interest, Accounts Receivable, etc...

4,375,696/A

Banking House.

CHARLES S. CUES TON

whole

YORK

GEOItCE WHITNEY

President

3,000,000.00

Liability of Customers

letters

11.894,134.99

of Credit and Acceptances

$797,390,19229

II. P. DAVISON

pro¬

Senior Vice-President

hindrance.

LIABILITIES

■

RICHARD R. DEUPREE

Just

Dream

Chairman The Procter & Gamble

Company

Deposits: U. S. Government

Such is the dream of many

CHARLES D. DICKEY
Chairman Executive Committee

N. D.JAY

own

economy

upon

Incorporated

this rock that the London Economic Conference of
was

What has
as

DEVEREUX C. JOSEPHS.
Chairman Nero York Life
Insurance Company

TIIOMAS S. LAMONT

been said

President Continental Oil

are

working of subh, a/standard.
tude

essential to the successful

rqeasure to

lack (of knowl¬

edge of the benefits that must ultimately acCrug tcPall

States

Government

in the above statement
to secure

public monies

are

securities carried at $37,811.075.28
pledficd to qualify for fiduciary powers,
required by law, and for othcr 'purposes.

Member Federal Reserve System

Corporation

ALFRED P. SLOAN, JR.

Corporation
JAMES L. THOMSON

un¬

The prevalence of this atti¬

apparently is due. in lafge

13,633,263.15

"$797,390 292.29

Vice-President

aboye" applies with equal force

^things which

Profits

JUNIUS S. MORGAN

dertake those

30,000,000.00

Undivided

Member Federal Deposit Insurance

manipulation.

elsewhere £eem>eady and willing to

25,000,000.00

Surplus

Company
GUSTAY METZMAN

Chairman General Motors

nor

12208,974.64

Capilal-^-250,000 Shares

United

1933

gay^tan&ard. The truth of the matter,
unfortunMfm^, is that neither the people of

country

6,977255.61

Acceptances Outstanding and Letters of

Vice-Chairman
L. F. McCOLLUM

the world to the

this

22,000.000.00

Payable, Reserve for Taxes, etc....

11. C. LEFFING WELL

regards the return of the/United States and the rest of

and most

Accounts

Senior Vice-President

international freedom along side

of domestic economic control

$687,570,698.89

Credit Issued

wrecked, and this hazard to navigation still lies ahead
avii

of all those who dream of

28,481,111.15

Payable

Chairman Morqan & Cie.

national basis in
the interest of full employment, endless prosperity, and
eternally rising prices at home, or engage in monetary
manipulation and inflationary public finance with an
eye single to domestic affairs? And who, even among the
most visionary, would suggest that the world seriously
embark upon an effort to set up a centralized organiza¬
tion to manage the economy of the world?
It was upon
managing their

Official Checks Outstanding
Bills

$ 24,854,445,29
634,235,142.45

All Other

of the planners and the
economic managers of the times—and it is obviously a
pleasant dream. But how can it be made a reality if each
or
any of the important nations of the world insist upon

MORGAN

CIE. INCORPORATED

If Place Yendome. Paris, France

Piiiahce Committee
Hartford Eire Insurance Co.
'

JOHNS. ZINSSER

Vice-Chair man March & Co., Inc.

MORGAN

eta ry-

Treasurer;
Fred Goth,
Irving J. Rice
6 Co., St. Paul,
William
Ritt,

Walin, Joseph

governors

"B"
rvai

Curtis,

C. Joas, Smith,

year

governors

Mr'Manus & Co.

Class

dent; Kenneth

& Co. and Frank L.

also nomi¬

Mat-

Paine,

Webber, Jack¬

Dyer;

Ralph

h e,

Lafferty & Co.;
Weiner, J. A. Lud¬
Named

Co.
as

s c

were:

1933,

8,
as

Vice -Presi¬

terms

since

Kali, First Na-,
tional Bank of

Samuel

specialist

Feb.

F.
Dates

Dyer,

Mr. Mann, an exchange member

MINNEAPOLIS, Minn. — The
of Twin City Bond Club has elected
the following new officers: Carl J.

the

terms

Landsberg;

Lafl'erty,

jviat

currencies.

all the important nations of the world could

ceed without let

low

was

one

Joseph

board:

Mortimer

Elects New Officers

surprise,

which the

economic

ing

James

tive terms.

helps to lay a basis for "multilateral" trade and invest¬
operations.
It would bring such a blessing, of
course, only if these conversions of one currency into
another could be effected at reasonably stable and pre¬

Twin

Class "A" members of the govern¬

ment

tion

Curb

year

Exchange

Moffatt

thing for all

therefore, be

three

for

and

Thus the event toward

election

annual

names

nated and elected to four consecu¬

freeing of these international relationships is
desirable,, so the reasoning runs, because it lays a basis,

dictable rates.

the

Hoffman

& Finn.

The slate, presented to exchange
for offices to be filled

Vjd;. T^e

late Fred

liberal creation is directed would,

ance

members

announcement

Mann

important currencies of the world, that is, an abandon¬
ment of currency and exchange restrictions generally.
Such

Co., and John J. Miles, Jr., Adri-

market's trading floor.

McCormick,

gold or any other metallic standard. It is frequently
employed with reference to pounds sterling — and in this
case
merely means freedom on the part of owners of bal¬
now

ac¬

University, he became

by Edward T.

ensu¬

year,

cording
•

bility"—a word to conjure with in this day and time.
"Convertibility" as used today has no reference, of course,

It has

Market

the

ing

perhaps as a shock to many "liberals" who probably re¬
gard themselves as ardent advocates of "forward looking"
international programs. Yet it seems to us that the facts
warrent the view expressed.
Take this term "converti¬

ances

Trinity

often

Chariman

committee

page

York

New

ham

so
with

secutive

misunderstanding, yes, even
outright ignorance, is not a more formidable obstacle to
the benefits of international trade than any tradition of
protectionism or any desire on the part of American
producers to escape competition from abroad. It some¬
times appears to us that the cause of greater freedom
and greater rationality in international economic dealings
suffers more from its friends than from those who frankly
would close our borders and proceed henceforth upon a
basis of more or less complete self-sufficiency.
.

old

the first specialist's clerks

for
:

the

mem-

f his fourth

out the world.

his nomination

indi¬
the accessibility of foreign markets through¬
an

was

Chairman in 1951.

He entered Wall Street

ber

;C honored

interferences

and

1948,

ciiange

any

his first term

William

Winter,

since

Mann, Board Chairman

definite recommendations.

trast

Governor

the American Stock

tariffs

donk, L. A. Mathey & Co.; Joseph

Market
(American
Stock
Ex¬
Exchange change
predecessor) in 1925, and
and a former page
boy on that in
1928, following receipt of a
market, became the second ex- B.A. from St. John's
College, Ford-

likewise either

ing to

and

boy

John J.

Roth

which also includes: Garry Onder-

Vice-Chairman in 1950 and served

Receives New Slate

give consideration to a- great
Many of these other issues are

tariffs.

than

nominating

McGarry; James Gilligan, Gilligan, Will & Co.; Theodore A.

broad that it must

gratuity

American Stock Exch.

Yet the terms of reference of the Randall Commission

the

different?

of Reference

the

trustees

fund.

are to
are

nominated to three year

were

terms

been filed with the Commission.
Broad

Delafield; and Harold
Rousselot, Orvis Bros. & Co.

bility feasible as they
return to gold—and

Delafield &

luctant to permit the rise of conditions

many

convertible gold coin

Many, if not most of those who are most actively
engaged in promoting "convertibility" oppose any thought
of a return to a
gold standard, but are they not as re¬

who wish
of their present protection and who would

none

permit

standard.

remains, however, that there are
to

(73)

peoples through the mechanism of

first page

We See It

As
that

GRENFELL

CO. LIMITED

28, Great Winchester Street, London E. C. 2, England

(74)

The Commercial and Financial Chronicle

Continued

jrom

concern

page

the,

over

possible layoffs.

April,

Problems of Annual

the

1945,

Wage Guarantees
insecurity

through

legislation.

tremely

limited

American

the

,'»s

iment

and

works

is limited to interstate commerce,

measures,

permanent

proposals

ex¬

public

various

stabilization

exempting from overtime

employ-

schemes

pay

re¬

considered

quirements employers who enter
into an agreement with a union

concrete

taken

were

during the '20's, no
legislation" was
ever
in Congress until after

semi-an¬
nual or annual basis. This provi¬
sion, despite some liberalization

the 1929 crash.
In

1932

tax

Wisconsin law placed

guarantee work on

mitted

tax

those

who

from

es¬

seasonal

guarantee plans were put into ef¬
fect in Wisconsin, but all were
sion feature

modified to

was

form with the Federal

since

guarantee

con¬

it forces

savings

insurance

sation

Various

law.

for

time

worked

not

out

legislative provisions pur¬
porting to encourage wage guar¬

of their

antees

were

adopted by six other

brought

States

but

without

porarily diverted attention from
problems of employment insecur¬
ity. As early as in 1943, however,

any

The

appre¬

ciable results.
A

provision

was

included in the

Fair Labor Standards Act of 1938,

there

earnings.
upturn
in
employment
own

anew

for

that

guarantee,

wage

the steel

industry, was taken to the War
Board, and although the
denied

Board

the

ground

subject

required more
it recommended to Presi¬
that such

Roosevelt

undertaken

the

study

extent

which

usually

work

such

compensation

weekly,
basis.

sponsored

increased

this
study

Government-

difference from
economic

stances

other

and

an¬

There

where

real

basis

are

AND TRUST

pressed
but

with

meantime,

COMPANY

only

helped

of NEW YORK

is usually stated

This doesn't

pensation

year.

practice

the

has

ance

with it

however, that

will

who

in annual

carry

throughout the

retirement.
has

been

top

executive

relatively fair

assur¬

basis

CONDENSED

his

tenure and compensation.

expansion. of

pension

and

welfare

plans

and

behefits.

Bargaining Problems

CONDITION

vey

December 31, 1953

1952

the

Bureau

unsuitable in
L.

RESOURCES

pointed
no

has

Meany

out,

guarantee

his

al¬

employer,

.......

U. S. Government Securities
State and

91,222,015.29

Municipal Securities

Other Securities

28,466,937.82
3,559,517.92

warehouses

St.

Mortgages

Liability for Acceptances

Stock of the Federal Reserve Bank

258,764,563.47

3,226,397.96

3,127,478.21

901,500.00

Banking Houses

2,274,621.87

press

and
is preparing
the demand for them.

With

the

been

is
a

wage

workers.
or

$13,234,375.00

Surplus

16,815,625.00

Extra

12,517,722.79

There has been considerable

$42,567,722.79

189,062.50

Acceptances

Contingencies

6,177,340.44

$4,246,162.15

Less: Own in Portfolio
Other Liabilities.

978,920.96

•

Deposits

3,267,241.19
882,667.90

•

490,903,235.73

$546,341,168.26
Untied Slates Government Securities carried at

$15,811,465.20

are

pledged to

and for other purposes as

public and trust deposits,
required or permitted by law.

secure

MEMBER: N.Y. CLEARING HOUSE ASSOCIATION
FEDERAL

RESERVE

SYSTEM

FEDERAL DEPOSIT INSURANCE CORPORATION
i

25 Offices Located

has

Wage

economy

Throughout Greater New York

trial
rate

indus-

Where

employment.

most

piece-

and incentive systems are

effect, they

are

still

anchored

in
to

ex¬

and

uneconomical.

and

construction

un¬

The

building

workers

have

since concentrated their efforts

the

methods

annual

wage

guarantees

un-

the

sea¬

suited.
An

attempt

bridge

sonal

gap

wage

guarantees may or may not

in employment through

successful,

depending

nual

the

place compensation

week¬

For example, A. F. of L.

Amalgamated
Meat
Cutters • in
Philadelphia had an early success
in negotiating a guaranteed
36hour week.
Many other unions
at

various

times

have

plan¬

the

tain

have

being paid for

wage

the

automobile

industry advanced by the A. F. of
in

the

1934

was

manufacturers
ment

lay

most

down

and financing,
production ac¬
We argued that, if an

their

company

finances the

also

able

employment of workers
It

for

of materials, machinery, and
plant on the annual basis, it

should
nual

auto

materials

scheduling

use

entirely on

that

ahead plans for the procure¬

year

the

based

proposition

schedule.

than

the

guarantee

wage

some disposi¬
management's part to con¬

a wage guarantee, there are
likely to be major differences over

character of the guar¬

Management will naturally
minimize

potential

costs.

Unions

will

have

weigh the
types of
light of the goal
employment stability.

acceptability

various

restrictions in the
of

greater

without

washing

least

away its value
worthwhile start.

Allowance
the

fact

should

that

for

made

conscientious

and

imaginative re-evaluation of
isting practices should Head
some

stabilizing

help

reduce

ex¬

innovations

possible

to
of

expense

the
restrictions,
how
proportion of workers, if
any, should be excluded from cov¬
erage?
The answer is ail-impor¬

notable

that

large

tant.

plan

may

offers
it

the

only to the portion

force already enjoy¬
stability.
Management

work

tends

to restrict the guarantee to
that percentage of the work force
which has been retained in the

most depressed period in the com¬

pany's

history.

restricted

does

guarantee

little

than

acknowledge the existing stabil¬
ity—and it provides neither aid
to the large number unprotected
against layoffs nor added incen¬
tive for management to provide
greater work stability than in the
past.
A guarantee so

stability for
force

limited provides

part of the work

one

only at the price of aggra¬
insecurity of the remain¬

vating

ing workers.
Other
are

guaranteed
ments
not

areas

and

the

made

available.

possible

limita¬

the amount of work to be
size

when

Some

pay¬

work

unions

favorably disposed to

ternative

restriction

limit the

are

al¬

financial liability

which

would

of the
specific cents-perpayment to a guarantee trust

employer to
hour

fund.

Management
clause to

excuse

requirements
ages

also

may

seek

result

short¬

certain

The problem of
is to avoid

un¬

negotiators

drafting

it from guarantee

when -work

the

are

ion

the work

ing

emergencies.

seems

liberal

protection

necessary

confined

the

resistance, to

how

matter

,be otherwise, it hardly

an¬

place
on

negotiated annual wage guarantees

assurance

annual

the kind

escape

the

clause

wide that it deprives the guaran¬
tee of value when the workers
need it,, most.'

workers

large

They con¬
important phase

sider

rather than the rule.
trial

Assuming there is
tion

the greatest in the areas of
providing
for
wage be
guarantees
covering
weekly, employment where they seem to
monthly or longer periods. These, be most feasible. It is interesting
however, have been the exception also that while several large cor¬

them

approach.

tion

contracts

Most indus¬

the

variety

layoff
mentioned,

already

effect
number of companies.

an¬

The proposal for the guaranteed

automobile

business

basis.

been

ly basis.

where

ning for production is

cordingly.

by industrial workers

are

previously

ity.

undertaken

were

the amount of work performed by
the hour. Repeated attempts have

made

plans,

der the best conditions

"Hourly-rated" employ¬

predominate

Among

safeguards, dismissal

such

trade unions

businesses

Payment

Another

the relation of guarantees to other
of
worker
protection

means

turnover, from more efficient use
Of capacity permitted by regular¬
ized production, and from such
other
by-products
as
improved
employee morale and productiv¬

ly basis.

567,187.50

1,975,772.71

Reserved for Interest,Taxes,

the

better

over
a
period oT a guarantee. And there must be
with arrangements designed taken into account that any ex¬
to
establish an annual
basis
of pense will also be offset by econ¬
compensation in building and con¬ omies gained from reduced labor

annual

ees

Unearned Discount

there

outlook,

and

bargaining.
bargaining problem is

perimentation

that the bulk of the wage earners
receive compensation on an hour¬

$378,125.00

........

uncertainty

involved

collective

years

hos¬

heavily rely¬
ing on the availability of qualified
labor, it is indeed an anachronism

January 4, 1954:

Korean

renewed union interest in

Methods

30,050,000.00
....

problems

informed

cas¬

annual

nature of the plan, the amount of
the
annual
wage.
In most in¬
stances, the activity of unions em¬ financing allocated to it, and the
adequacy of reserve funds. The
phasizing
it
is
in
preparatory
feasibility of the guarantee plans
stages.
is the greatest in industries and

LIABILITIES
.......

halt

and

employment

$546,341,168.26

sugar

tilities

Regular

firms;

guarantees

This

fu¬

designed
to
refining companies in
Philadelphia.
The
CIO
Steel- strengthen the construction sea¬
s workers
have kept alive the de- son, to make work possible under
adverse weather conditions, and
j mand for guarantees, but these
otherwise to lengthen the span oi
were
dropped in the 1952 agree¬
employment during
the
ment.
The UAW-CIO has placed gainful
They generally regard the
foremost emphasis on the wage year.
with

352,206.02

Dividends Payable

the

708,519.71

Other Assets

Undivided Profits

and

guarantees

Accrued Interest Receivable

Capital.'.

other

and

Louis

negotiated by A. F. of L. affiliates
..........

F. H. A. Insured Loans and

Customers'

.....

...........

Loans and Discounts

$153,737,409.99

what

They will have to determine how
ill- far a guarantee may be qualified

the

assurance

Cash and Due from Banks

some industries and
others. As the A. F.

President

has

obtainable,
large-scale housing proj¬
ects. Despite these
f found that less than
conditions, the
1% contained
annual wage guarantee provisions. staggering of the crews from the
foundation digger to the painter,
<' A
number
of
additional
plans
the steady movement of
! have recently been negotiated, the yith
each skill to the next successive
| most notable being those obtained
stage, proved to be impractical
by the A. F. of L. Teamsters at
f Labor Statistics of some 2,600 col¬
lective
bargaining agreements

tailoring standards

agreement

provisions

Annual wage guarantees
may

antee- plans

few

tend to restrict and trim guarantee

Today, the existing wage guar¬ struction. Some of these experi¬
ments carried out with active sup¬
cover
only a small
fraction of wage earners.
A sur¬ port of building and construction

STATEMENT

an¬

good individual fit.

antee.

wartime

broad

situation, but

lack of definitive patterns will no
doubt encourage industrial study

continued

Since that time there
a

negotiated
health

com¬

In corporate

annual

makes

pay

salary of government em¬
ployees,
executives
and
some

problems of worker disability and

Main Office, 37 Broad Street

widely agreed that

to fit" the individual

The

for¬

nual guarantee should be "tailored

against layoffs.

period.

pay

brought

plan

union proposal.

the

wage

shift

vigorously denounce it

the
as

It is

initiative in the past,

own

now

when

the

and

unions highly irregular, unstable
the ual forms of employment

success.

thus

between

compensation

length of the

day

one

There

experi¬ guarantees are obviously imprac¬
stabilization ticable and have not been sought
emphasis on the by unions.

the,

with

ence

number

scant

in¬

employed

ture

The Public National Bank

very

many

volume
of
business
tial advance in collectively bar¬
gained wage guarantees. General equipped to underwrite
demands for such guarantees were

not

clerk,

correlation

ready

substan¬

was
employed
during that week.

who

any

run

the standpoint of

alyses published during this time

bring about

may

the week, may be paid only
portion of the weekly salary if

they
ward

by
a

their

white-collar

security

substantial.

did

not

notice

Thursday, January 7, 1954

bi-weekly, or monthly there are
practice, however, the and little

appropriate in

However,

work

perform

workers and government
employ¬
ees,

guarantees be
unemployment

insurance.

case

the assurance,

with

termination.

the

terms.

that

hours

upon

little

others

coordinated

called

wage

mended

by World War II tem¬

arose

stabilizing employment and
regularizing production.
The resulting monumental study
by Murray W.j Latimer, brought
out by the Office of War Mobili¬
zation and Reconversion in early
1947, favored adoption of wage
guarantee
plans,
and
recom¬

by workers and provides compen¬

minor

demands

the

with
of

number

are

merit

serve

stabilizing

contributing

and

they

wage

Labor

mine

The FLSA

relates more closely to
the so-called constant wage type
of plans than the genuine annual

unemploy-

La¬

actual

guarantees could serve as a means

provision

discontinued when the tax remis¬

means

special com¬
mission. The President thereupon
initiated such a study to deter¬

industries, taking advan¬

tage of the provision.

industries

some

the CIO Steelworkers

employers with only a few
mostly in the highly

tablished employment guarantees.
Vith this
inducement, 96 wage

One
annual

dent

dozen firms,

the

Federation

income

study,

has failed to bring for¬
any
substantial
response

ward

Green

valuably to general economic sta¬
bility.

that

1949,

employers for an unem¬
ployment benefit fund, but re¬

wage

such

While

President

workable

establishing minimum
rates
of
pay
and overtime requirements
for workers whose
employment

workers

bor, stressed that the annual
could

nomic

hardships of
article in

Another problem
tion.

Who

will

eligibility?

is administra¬

decide

questions
Experience under

porations, including General Elec¬
and General Motors, experi¬

the unemployment insurance

tric

gram

mented with the annual guarantee

strictive

has

demonstrated
administration

pro¬

that
of

re¬

eligi-

Volume 179

Number 5288

bility rules
plan's

greatly undercut
Union participa¬

can

value.

tion in administration may be necnot

are

advantages of
dissipated.

ecessary

assure

Shall

guaranteed.

apply
work

guarantee

employee's

the

regular

he be transferred to

may

work?
If he may be
transferred, is he to be paid his
other

any

normal
a

wage

he be paid

may

lower rate of pay if the transfer

It is

lower-paid work?
that

see

easy

policy which stresses

indiscriminate

transfers

could

quickly wipe out long-established
union

standards.

work

Louis S. Tiemann, who has been

bank¬
ing firm of Brown Brothers Harriman

This

raises

which

squarely

requires

Unions

must

that

recognize

does

plan

not

commercial

and

extending

community
entered

Tiemann

upon

his

with

the

business

career

firm

1888

Carleton

Moffatt

shipping
and
commission
chants
dealing principally

—

was

his

associates

former

firm

present

the

Brothers

Brown

Tiemann

Mr.

Calif.

office

The

—

Midwest Exchange

Sacra¬

CHICAGO,

mento, Calif., has been announced
bers

the

York

New

Stock

following

fornia,

opening

Bakersfield.

closely
office last
Others

the

Federal

Reserve

Act,

outstanding authority

mercial

letters

and

com¬

ship:

seph, Mellen & Miller, Inc., Cleve¬
land,

the
month

major cities

Ohio.

F. Schoen Transferred

in Los

are

domestic offices, with

member¬

Mellen, Jr., Jo¬

Edward J.

Hirsch
Fred
of

has

the New York area, and others

credit.

tains

Midwest Stock

Exchange has elected to

Ex¬

Francis I. du Pont & Co. main¬

this country following adoption of

Member

111.—The Executive

of the

Committee

by Francis I. du Pont & Co., mem¬

closely iden¬
Angeles, San Francisco, Pasadena
tified
with
the
development of
and Beverly Hills.
the dollar acceptance market in

with

until

was

mer¬

partner in that firm
1916 when he

1900

SACRAMENTO,
opening

change and other leading security
with the latter as Vice-President
and commodity exchanges.
This
until 1930 when he joined some
is the firm's sixth office in Cali¬

Far East.

from

was

Harriman & Co.

the past 65 years.

Mr.

Exchange National Bank

merged
with the Irving
Trust
Company, Mr. Tiemann continued

II.

opened since World War

Opens New Branch

Schoen,
firm's

the

been

olfice

Co.

7th

Avenue

transferred

that

announce

Associate Manager
to

office,

the main-

Street,

Broad

New

abroad. York City.

here and

the

Some

guar¬

well
existing work¬

cutback in

execu¬

can

Eighteen of its offices have been

F. I. du Pont & Co.

the

as a wage

provisions might
a

senior

December 31 after

the

organize

automatically

worthwhile.

make

antee
mean

banking
over

emphasis.

labeling of

mere

guarantee

problem

Co.

career

Standards

tive retired

Bank

Bank of Boston. When the Ameri¬

associated with the private

the
Protection of Work

Exchange

foreign department. Subsequently
he also organized the foreign de¬
partment of the Second National

prosperity.

Tiemann Retires

question concerns the
work which would be

American

tain lasting

A related

type

the

National

plan

joined

throughout the economy and main¬

stability

employment

23,

(75)

Financial Chronicle

The Commercial and

very

ing standards.

Governmentally administered doses of inflation or "reflation"
in

effort to prevent

shorten the inevitable reaction

guarantee plan which in ef¬
fect merely divides wages equally
over

year

employment
is

not

but

rather

pay¬

one

week

earned

week,

weeks

deferring

wages

surance

advance

guarantee

diminution

another

unemployment

satisfactory

standards.
ment

periods

cover

and

without

specific

work,

temporarily alleviate the symptoms but cannot be expected

may

to cure

the ailment. The

wage

as¬

number

history was the
in

depression
most

one

wage-

•

forced-savings policy.

which government tried

strenuously to combat with inflationary injections.
'

only

G-V-A;

longest and most disastrous

From THE GUARANTY

SURVEY

Similarly, plans which provide
for guarantee of wages which fluc¬
tuate
with
the company's
sales
volume

can

gerous

because

exceedingly dan¬
they permit an
of reasonable
and

undermining

dependable wages.
In

striving

contribution

which

140

annual

an t

Madison Ave.

ROCKEFELLER CENTER OFFICE

MADISON AVE. OFFICE

Fifth Ave.,at 44th' St.

Broadway

60th St.

Rockefeller Plaza

BRUSSELS

PARIS

LONDON

nec¬

stability,

mindful

ever

real

very

make* to

can

employment

essary

ions musUbe

FIFTH AVE. OFFICE

MAIN OFFICE

the

for

guarantee

wage

Guaranty Tf rust Compan

un¬

the

danger, that
come

a guarantee may be¬
end :in itself rather than

one

stability.
tees

J. LUTHER CLEVELAND
•'
Chairman oj the Board

achieving f greater
Annual wage guaran¬

should

not

negotiated

proportion

their

value
abandoning hard-

at the risk of

union

won

and

wage

other

of Condition, December 31, 1953

WILLIAM L. KLEITZ
President

likely

Condensed Statement
-

«.

RESOURCES

THOMAS P. JERMAN

the price of concessions far out of

means

Vice-President

Cash

ALFRED R. THOMAS
Vice-President

Hand, in Federal Reserve Bank, and Due from

Banks and Bankers

678,498,137.81

em¬

ployment standards.

U. S. Government

DIRECTORS

Obligations

742,993,429.92

•

The

Role

Wage '.Guarantees in

the

We have

guarantees

Economy

that annual wage

seen

Chairman
of the Board, Duke Power Company
f

GEORGE G. ALLEN

J. LUTHER CLEVELAND
Chairman
of the Board

a%j(evice dor en¬
hancing the worker's security suit¬
able in some types of employment
and inappropriate in others.
It is

W. PALEN CONWAY

clearly only one of the forms of
private action which can enhance

1,405,297,410.79

Loans and Bills Purchased

Public Securities .......$

Stock of Federal Reserve Bank

36,891,804.20

WINTHROP M.CRANE, JR.

are

employment stability and worker
security. It is not a panacea for

eliminating
caused

clical

income

by either

insecurity

seasonal

cy¬

fluctuations.

Unemployment

compensation

the proper merns of providing the

CHARLES

Other Securities and

P. COO PI R
President,
The Presbyterian Hospital
in the City of New York

Chairman of the Board,
Crane & Co., Inc.,

Chairman

STUART M. CROCKER

of the Board,

JOHN W.DAVIS
of Davis Polk
Wardwell Sunderland & Kiendl

President,
Mining

CHARLES E. DUNLAP

with

their

makes

highly
unem¬

ployment

insurance

adequate.

The vicious merit

rat¬

ing provisions forced by large

in¬

porations into general

acceptance

has

unfair

brought about

load

distribution

uneven

the

and
cost

The Pennsylvania

President,
Railroad Company

Annual wage guarantees are not
a

substitute for

While

surance.

quite

can

ment

unemployment in¬
wage

supple¬

A worker must be
ment

law

benefits

through
cence

under

matter

the

paid unemploy¬

the

employer's

exercised

national

right and not
the

benefi¬

employer's

JONES
Chairman
of the Board, Cities Service Company

CORNELIUS F. KELLEY
Chairman
of the Board,
Anaconda Copper Mining Company

President

WILLIAM L. KLEITZ

Chairman

CHARLES S. MUNSON

of the Board,
Air Reduction Company, Inc.

the

cern

must

same

way,

annual

not

divert

unions'

wage

them

con¬

the

fundamental

ing

problem of develop¬
combination of public and

private

policies

which

alone

can

...........

$2,972,598,720.64

8,228,033-93

Total Resources

LIABILITIES

Capital

$100,000,000.00

•

Surplus Fund

200,000,000.00

........

Total

90,884,015.32

Capital Funds

President,

CARROL M. SHANKS

The Prudential Insurance Company

EUGENE W. STETSON

of America

Chairman,

Executive Committee,

Illinois Central Railroad Company

KENNETH C. TOWE
President,
American Cyan amid Company.

Chairman
of the Board, International

THOMAS J. WATSON

Business Machines

390,884,015.32

2,520,952,092.61

Foreign Funds Borrowed
Less: Own

1,050,000.00

Acceptances

$ 21,057,238.34

Acceptances Held for

2,426,362.5 5

Investment

18,6 30,87 5.79
m

of Roosevelt & Son

Deposits

GEORGE E. ROOSEVELT

Dividend

Payable January 15, 1954:

3,750,000.00

Regular
Items in Transit with

Reserve for

2,500,000.00

Extra

Foreign Branches

Expenses and Taxes

¥•

555,355.42

23,713,552.38
10,562,829.12

59,712,612.71

..........

$2,972,598,720.64

Other Liabilities
Total Liabilities

Corporation

Trustee,

CHARLES E. WILSON

Securities carried

$143,178,545-18 in the above statement

are

pledged

qualify for

The Ford Foundation

fiduciary powers, to secure public moneys as

guarantees
from

137,581,708.19

WILLIAM C. POTTER

choice.
In

5,504,281.12

W. ALTON

compensa¬

tion, they should not impair the
(unemployment insurance system.

14,263,824.36

Bank Premises

guarantees

appropriately

unemployment

Undivided Profits

employers.

among

Mortgages

Company

cor¬

pitifully

Receivable

Real Estate Bonds and

The Berwind-Wbite Coal

LEWIS GAWTRY

standards

16,848,254.10

The Columbia Gas System, Inc.

plicity of unemployment
systems

•

Acceptances

Dalton, Mass.

WALTER S, FRANKLIN

variable

55,073,544.41

Accrued Interest and Accounts

minimum of economic
security to workers subjected to
unemployment. The present multi¬
compen¬

Obligations

necessary

sation

Credits Granted

9,000,000.00

ROBERT W. WOODRUFF
Chairman, Executive

Committee,

The Coca-Cola Company

required by law, and for other

Member Federal Deposit Insurance Corporation

purposes.

-5-

-7

I
3

<y>

«>
-t

e-t

C-*

-4

*»

TNYSIFnaectodaxmernwrksl YNTFiBuraoanennrwdskkdt MBCSsavchiunkigts dSYfetophoasaoerscruikit,yShutPblcor?»cre.
presnt Savings for New Insurace

Efxreommpt Ifnveostmrn Staothneedsr ASctttehoapoaebelef Superinotdf

Interest

Yield

certain

Legal

Price 2.20% 2.25
or

$61,05 0

*T\•r-,"-'.. ofNew
"

State

(S1Hoea%urnsiadnl)g

bJ1ealeno5auswch,ry

Is ue

Yield

YCROAPOIRENUTILCPEDESNSS

MATURI ES,

1954

J1an5ua,ry

Dated

'/2 2i/j 2'/2 2i/2

197 -78 1979 1980-81 1982-83

Due

22.!6/02%%,

2'/2%

1976

$1,2450

4%,

New

Rate

2.30 2.35 2.40

binteaoerdse)

(Ac rued

Rate

Due

Yield

Rate

Due

1.75% 1.80
4%

1.85 1.90 2.00

1966 1967 1968 1969 1970

1.10%
4%

1.20 1.25 1.35 1.40

1956 1957 1958 1959 I960

2
C

V
c

<T»

h-»

a
o

r—i

«—d

-4

Co.

&
Day

»w

Incorp ated

ipayle bonds

ha$a1iJ(1naJtsenm5ru5-sdull)yr BMCttahahmnouhpnetkfy. fbt1ooe,raxeno0cghaisgfrld i$$nde1tn5eo0m,r,itsfs Rbbienogmcinsoettvdrarsdy ttoheoxldpeenfsr.
New

100

2.55% 100 2.65%

@
2.60

2'/2 2'/2

parinncpdal

$50, .
and

kBufalo Co. Corpatin
DlbAGhgoyBepofrinadtvs. CM'hpkfyACPSBHL&raeudlsoetmznpbic.hrg,CTMCNaoonrumhmftucppseyyWKAHkb6lw.,S&ocranildans[."HPCIAohumtepyf WB&CJoiulmalipenrsyHSayoden, '
SPcohmlidet,,
Co.

Incorpated

CMACThalmon.BCH&SvuisgkyTfmA.IncorpatedCkEh, ompany
CWkeiogol.d

Incorp ated

2.60

W&Cohmipteany

R&PJGoabrek.ts

NdFICkFUTCWurEHaionPdnuou.mctsnpi.ls.tatnyy*ew.ark i,.:"•%.
'5j».. jV-— BSBCATSomatalwrobmeunnripscskefkadtnyy
maturiy. ItCniheebdnftxrestphwlafprvaccieamdcdsig WNY\o'ejsotfwrnk. Incorpated
nreooftd.
waiashnuasonuefdeinyvdoj,vc,l ? D&CBkCIBeWCnR&lvryooodicntthh..e.,s Corpatin TCS&CWocrhamuewnapsobddatnn.yr
SintJ1Tapaihtanec9topreeu5tdurrs,4s,ybbdohobsOnhuemgclfg,l
ICBRC&KPC&TMooielmdaahropnbuiisr.nsn.,rey,tyECSEqoeHsNucpt&uitramiatbyilpsnkl,FSM&CTPBhSoahsdieoee.n.ldys•GCB&CRkLiFbRAemyotpn.lsa.cnil Co. WBTCGakCocrahumnordovsepkidbagt.nyy

Caity denomiatn

Prinacnipadl York

focaorumpotn

Chas.

Albany
of

1986-8 1989- 1 19 2-93 19 4-98

•

••

CsM.MC&aork. omercial

2.00 2.05 2.10 2.15

National

The

2'/2 21/2 2Vl 2'/2

1972 1973 1974 1975

thoefir
d19us-2e04
AlIioscrtkw.
Boaonferdresd
NBationkl CCJ&o..
taohpteifn dhaeartlet,
invoerrdse

the

Bond

%
I

State

1.55 1.60 1.65 1.70

above

The

Red mable, payment

York

New
of

Co. PNBautibonlickl

M&ort n

Incorpated

,ncorp at^

WNCinsto-Sa.lem,

Incorpated

Michgan

Chase Halgarten
The

1962 1963 1964 1965

Laurence

The

First

Co. Trust SC&teaorn.s MCTeorrcmuansptialteny VanIC&Inngoecn. BC&ecoke.r LR&hooaedebs, HB&Laanelainhs, E&Andlerisso J71a9n5u4,r.y
Louis

St.

L&eo b
Kuhn, CB&aimaeh nckl

Incorpated

Bear,

J.
B.

G.
A.

M.
Carl

Green,

York,
New

•4

IS#

(78)

Continued

Record keeping can help you to
do

Securities Salesman's Corner

business, what
find

the retail securities business

average.

their larger
or

before

efforts

they

international scale.

of profit per sale—this is
Some men have a very low

good.

ana¬

make

tory income.

They know

profitable

what their sales problems are1 and

firm.

they plan accordingly.

sale

know

what

their

They also

salesmen

are

satisfac¬

This business is less
them

your

and

capable of accomplishing and the
ferent media that must be used to

average

gross

per

bring about maximum acceptance

sion

of their product.
If
you
look upon your own
market and
your
own
prospect

here

analyze
in

the

1953

work

You

light

same

results

that

will

WEAK

sisted

Check

These

are

reason.

did

you

tacts,
weak,
on

justify your total
try apd discover the

too

not

If so,

gross.

few

make

or you

valuable

their

most

the

often?

that
who

mail, telephone, and

"glass eggs" tha,t could not be
If you have kept a rec¬

Blanchett, Hinton &
Jones, Inc. Formed

sales

made,

whether

This

made
more

compari¬

calls

will

you

how

ness

did

ades.

SEATTLE, Wash. — Frederic J.
Blanchett, Donald W. Hinton, and
E. Jones, announce the for¬
mation
of
Blanchett, Hinton &

average

can

The

average

transaction the higher

find

you

sale.

that

you

each

your earn¬

Possibly
had

you

ther

funds,

competitor vbecause

suggested them to his
He

increased

thousand

his

dollars

income
a

never

year

several

dis¬

cussing this phase of his business

Jack

Jones

Banks

when
ston

his

that firm

Co.

post

the

sold

out

Seattle

•

$ 7,780.108.23

14,252,715.85

Municipal Securities

10,402 997 81

8^04.71

Stocks

818,602.20

Mortgages

10,865,938.49

Building

565,000.00

Other Assets

376,312.42

$54,594,828.06

Capital

office

iiUrV VYO

Undivided Profits

Reserve

unearned Discount

Reserves for Taxes and
Expenses

500,000.00

7,500,000.00
967.024.43

510,937.28
23 355 65
87 109 64

45,006,401:06
$54,594,828.06

exPei]diture of

new diesel power-

hav.e enabled the industry to
maintain a high degree of. earninS Power despite increases in
wa£e rates and in wholesale prices

new

1—I

160

478.9

698.1

179

'438.2

sons

213

692.9

Hinton

Chairman

No. 1.
of

Mr.

Mr. Jones

the

National

112

110

Security Traders

ciation

course

last

conjunction

Public
than

with

Schools,

600

people

with

the

Bruce

and

for

Co.

the

Co.

over

new

Harold

the

and

which

attended

Yoe,

&
in

Co.

William

charge

the

The

new

wire

the

Baird

then,

portation

ratio

ficient

30%.

change and other principal ex¬
changes. This wire system links

history.

ing

miles

are

now

Canada.

rigid,

•

BALTIMORE,

Md.

—

John

securities business.

of $4.65 million and $10.74

average

million

respectively in the 30's.
displaying
extraordinary

have

that for

period

the

trans-

a
In fact, trans-

are

now

ef-

below

freight train hour,
highest in the industry's
=

railroad

there

costs

•

are

reason

•

relatively
to

have

been

cent

years.

controlling costs, the
to
expand
its
maintenance expenditures so that
during the war period such expenditures
rose
to
around
$17
million
tively,
those

began

cent

believe

especially ' as they
relatively- high in reAn ^extreme illustra-

million

$22

and

respec-

to levels approximating

the

late

1920

they

years

re-

risen

far

have

above those levels, to a new peak
averaging better than $19 million

and
$26
million r espectively,
which suggests a condition com-

seems

per

downward,

Hartz has opened offices at 2905
North Charles Street to conduct a

way

nance

period,

that the industry is in a position
to
adjust its maintenance costs

John P. Hartz Opens

of $14 million, and mainteof equipment of 822 million in the 20's, the Reading reduced such expenditures to an
of

40% in

Admitting that a-.large portion

cities

throughout the United States and
.1

As compared with aver-,

age expenditures for maintenance

parable
a
sharp
place if

|again stood at

railroads

ton

dealers

Additionally, most operatstatistics, particularly gross

Manus & Co. of New
York, mem¬
of the New York Stock Ex¬

satisfactory 35.9%.
portation ratiosi of the

bers

together

ratios

such

steadily declined
12-months

latest
.

rose to

immediate'* postwar

Since

firm's

firm will join the pri¬
system of Joseph Mc-

increase

of Class
I railroads,
during the late 30's aver-

30%, subsequently

with

department,
and
Mrs.
Jennings, Assistant Secre¬

rapid

restored

aged 37.5%, and which during the
war
period declined to around

formerly

efficiency
been

ratios

which

well

the

has

immediately

tion

Williston,
Conrad, Bruce
years, is join¬

organization

railroad

following the
of World War I. Transporta-

end

predecessor

tary, will head the accounting de¬
partment.
vate

operating

railroads

costs

trading
Alice

that

most

capacity,

Walston
will

to 1940.

company

'*'•

decline in gross revenues is that
of the Reading in the period 1929

After

Outlook

virtually

following

organizations

the

secu-

agree that individproperties are in the best
physical condition in their history

Ochsner, who has been

associated

ual

Spring.

Arthur

question—What

managements

Securities Dealers,
sponsored an investment

Seattle
more

Asso¬

which

an-

difficult, yet all

Current

Today

158
<

ability

and
was
Chairman
in 1953 of the Seattle Educational

151

Bulletin

of this moment?

14L"'

249

longer term outlook for rail
rities

142
141

253

attention to the

our

of the

important

District

past officer

turn

now
swer

having

99
103

824.5

Reserve

132 '

115

236

925.0

(est.)

-103

'114

104

,195

783.6

of railroad securities vis-a-vis the

been

79
,96

153

$$87.1

majority of industrial equities, inmembers of the District Commit¬ eluding those groups most favored
by institutional investors, we may
tee of the National
and

1940=100
Freight Rates
Ton Mile

All Consolidated*

Wage-Rates

$ Million

Federal

have

N D I C E S

Wholesale Prices

Hourly

Railroads

is indicated

;1947-49=100

1940=100

Earnings

Having attempted to give reafor the superior performance

authorities/.This

hy theffollowing table:

Class I

1953

Wal¬

Walston

Net

1948_

Manager, of

three 'principals

executive

hillion since V-J Day

Primarily for

tory

1947

September of 1953, to join
the new organization. *
■'

ing
LIABILITIES

arism^
sol?ie

al-

refunded since mid-

1946-

Co. in

1,447,648.35

Discounts

One further itern- need
be
stressed in reciting the progress
made by the industry over the
Pa.st decade. Cumulative benefits

•

1950, and -resigned

Resident

Committee of the National
;

-Already fixed charges have de-

Association

31, 1953

are

bonds sold

All

high with them.

funds

cars, and with noh-equipobligations being automatically reduced by the operation of. far greater than freight rate insinking funds on such railroad creases obtained from the
regula-

your

clients.

own

wor^ing

requirements.

the next

and-

power

in the 1930's they were equivalent to but four months of such

ment

If you are

Close of Business December

Deposits...

new

Class

almost $1.5 bil-

now

freight

some

Other Securities

General

the

present

the

assets

are

eqUjvaient to
years
current
lixed charge requirements, where¬

obligations

with
over

'30's,

depression

Such

jion

over

of capital expendi-

years

for

tures

municipals, mutual
syndicate, trading,
and

listed items?

U. S. Government Securities

Bank

coincidental

several

was

ASSETS

Loans and

Class

from

equipment

off

.most .certain decline

served

and

the

dec-

And be it noted, still furimprovement will be rec-

orded
run

How much of your busi¬

STATEMENT OF CONDITION

Bonds

declined

current

rayr0ads

wmi

ment.

Securities Dealers, both Mr. Blan¬

State and

debt

has

two

$200 minion through_

the

ne^

equipment obligations which are
self-liquidating from cash generated from depreciation of equip-

chett

Cash and Due from

past

and

QUt

in
011 m., ?i
-+ifSS,
fo u'li1-011 curren?y» the form of
.^th almos£
$3 billion now in

Jack

Association of

At The

the

Total

carriers

occasional

make

you

192Q,

wi.Dj.wo^n^ ^apitalthe
of
million throughout

only $500

...

Where

money?

much in

much

195420

provement

stocks from

show

ings will be in 1954.
will

show

not your ratio

*ic

answering,the first of these

position.

financial

dustry's
•

has experienced a substantial lm-

Jones, Inc., to do a general busi¬
doing too ness in
investment securities and
particular field and
of sales
commercial
paper,
with
head¬
not enough in another, possibly
to calls was satisfactory.. If
you
quarters in the 1411—4th Avenue
have not done this you will at you could increase your income
Building.
least know the number of sales by adding some more profitable
Mr. Blanchett has been
asso¬
types of securities. I once knew
that you completed—this
is the
ciated with the predecessor or¬
a
good salesman who overlooked
first step in the analysis of
your
ganization
of
J.
R. • Williston,
the possibility of profit in ^han¬
1953 results.
Bruce & Co. and
Conrad, Bruce
dling local securities where there &
How much gross commissions
Co. since 1914, and Mr. Hinton
was
a
long profit. He had quite since
did you produce? Divide
1921. Mr. Jones was Presi¬
your to¬ a few
customers who were buying
tal "gross" by the total sales
dent of
made.
Hartley, Rogers & Co.
local issues and bank
son

securi-

two questions it should be emphasized that financially, the industry

is a loss of productive sales ef¬
maybe
ficiency somewhere that should be
enough con¬ corrected.

hatched.

railroad

Accompanying the decrease

Industry's Improvement

it.

personal visit. If you have to con¬
tinually break new ground there

was

'30s.
debt and fixed charges has come
a marked improvement in the in-

ties?

are

followed

for

debt for

service the industry's

most years during the depression

will

shot

profitable

are
can

outlook

term

valuable

FACTS

indicate the

not

equities enjoy such startling appreciation and what is the longer

in the

If the latter, possibly you
not following up your custom¬

those

spent too much time

ord of contacts

bought

single

have

show

con¬

clientele

investors

sports

transactions?

or more

most

questions may
now
be
properly asked—Why did railroad

sales,

prospecting

your

can

customers

the

results

Two

ers
properly, or you may not be
wearing well with them. The only

Items

had too few sales,

you

many,

time

one

indi¬

to around $450 million

then

so,

of your business

building

you

clients

too

If
that

$700 million in

clined from

above

buyers?

How many sales did you make
in 1953?
Count the actual sales,

possibly

commis¬

An analysis
situation.

the

many

regular

be specific.

spot

twice, three times,
Are

you can build up your
weak points. This will
bring bet¬
ter results in 1954 if you follow

Let

sale.

per,

weak

disclose

How

strong—and

through.

How much

year's
productive.

new

find out where you were
and
where
you
were

can

earned

average

1930
currently,
Such charges now absorb only 4%
of gross revenues as contrasted
with from 15% to 18% required

the individual issues mentioned.

league. Sales organizations al¬

How many customers repeated?

accomplished

the

your

maximum appreciation of each of

dis¬

the

the team,

men—and

strengthened in 1954.

also

you can

world

the

pick

player
so

Equipment Shares

of each security did not of neceslished by the averages so that the

take

concerning

analysis

they

Possibly you could use
larger accounts in order to

bring

And Rail

may

you can

will

facts

firm.

income.
some

in dif¬

vidual salesman's value to his

their

week

proper

was

proportions of advertising

list in the

You

sity coincide with the highs estab-

some

$50, then by bringing it
to $100, you can double your

spend

cover.

They have to make too

sales to produce

many

national

then

page

A 1954 Forecast for Railroad

you

of increasing your

efficiency,

from

Thursday, January 7, 1954

you

sold, and

you

way

how good you were.

average

markets

surprised with what

Successful sales organizations in
other lines of endeavor than in

few hours going back over 1953's
results and see for yourself just

Facts.

job.

selling

kpow where you obtained your

selling

By JOHN DUTTON

Plan 1954

better

can

lyze

The Commercial and Financial Chronicle

the

reasonable
of

railroad

1954,

managements

imitate

the

Reading

the

past

can

now

the

two

ades and pursue a flexible
tenance program.

it
in

experience*

over

lake

expect
decline

10%

^revenues

where

can

Therefore,

necessary.

event

gross

1920s,

contraction

dec-

main-

opportunity for contraction

expenditures

parable

somewhat

cut

back

corn-

main-

tenance is afforded through budgetary controls.
In the 20's and

30's, budgetary controls were relatively unknown. Today railroad
managements have the accounting
tools for closely adjusting expenditures

tion

fluctuations

revenues.

the

excellent

experience

Ohio.

gross

illustra-

contrast

Baltito

tion of adjustment of maintenance

series

expenditures in "a period of sharp

million each in the early part of

monthly

deficits

Volume 179

Number 5288
■

1938,

year

business'

which

The Commercialdond Financial

general

suffering

was

contraction

severe

Chronicle

from

inventories,

This

enues.
our

cutbacks and

is'^mewhat less than

ations

projections of a 24% de¬
in the higher of our two

own

cline

earnings of Baltimore & Ohio in

estimates.

June,

^Likewise

tal

recent

business

day

that

volume

steel

strike

1938

controls

ironing

the

equal

severity.

application

ligent

during

was

Intel¬

budgetary

out

extreme

of railroad earnings
long be ignored by insti¬

tutional

investors,

railroad

cate,

provided

managements

all

dupli¬
liquidating
the over-all

the

over

can

entire

phase

of the cycle,
results achieved by the Baltimore
& Ohio in the

ried

of the

relatively brief

1952

pe-

steel strike.

Parenthetically,
emphasized
that

should

through

bud¬

getary controls, through improve¬
of

ment

which
and

service
be

can

$600 and $700 million, dependent
upon the severity of the business

the

have all expressed confidence

adjustment facing

til

net

that

earnings*^ their

the

ICC

the

tllis

conclude

numerous

address

especially

Fla., earlier in De¬

cember, when he, Mr. Wm. White,

factors, I would

pessimistic" note,

large

Convention

IBA

stated,

railroads dye" now entitled to be
regarded sj&marty other industries
with
overall
results
sensitively

that

feel

greater

and

general optimism about the

railroads

...

justified by the

realities of the situation."
At
am

the

time,

same

mindful

that

for

however,
the

upward trend in railroad equities

upon

adjusting

tions.

changing

confidently

budgetary^-controls,

condi¬

expect

continuance

that inaugurated in 1942,
of

maintenance

purpose

the

one

may

dynamic

well

such

market

the

leg in the

road

railroad

credit

and

(Special

the face of admitted obstacles will
at least

provide the needed build¬

ing stone for erection of
ture to

Pen¬

SAN'

State

non-profitable
part

drains

Commissions

carriers

are

trains,

minimizing

all

the

experienced

play

with

the New

York and

Stock

that

financial

by most

NEW

Last

(1952)

year

when

'fjf;

STATEMENT OF CONDITION,

ASSETS

cal climate

was becoming increas¬
favorable to railroads.
It
was
expected that the so-called
"rate-lag" bill, allowing railroads

Cash and Due from Banks

U. S. Government Insured

DIRECTORS

;

ingly

adjust

creased

rates

days

that

freight

similar bill

will

and

at this

pass

that

because

F.H.A.

Commerce

three

new

appointed
and

two

within

the

past

members

new

the

control

there

Class

tained

Mortgages

Banking Houses
Customers'

levels

well

the

above

14,647,542

for

the

entire

1.954

year

HIRAM A. MATHEWS

Pulp and Paper Company
Senior Vice President

DON G. MITCHELL

Chairman,

ROY W. MOORE

(esti¬

Capital Stoek(5,000,000 shares—$10par) $
Surplus

railroad

earnings are probably not
likely to decline below $700 mil¬

lion

with

compared

mated S925 million

the

Federal
decline

earnings

Total

1953. Were

average

dividend

the

Since

railroads

Other

equities most
the period

tion

are

low

and

areas

selec¬

located

the

Payable January 2,1954

the

6,630,417
$1,487,396,547

buttressed

predictions of

the

optimistic

numerous

The

chief

%■£

1954

of the Board
Chief Executive Officer of

are

pledged

other

are

stated at amortized cost.

to secure

purposes

deposits oj public

'■

rev¬

ft-

%
S

MEMBER

FEDERAL

DEPOSIT

INSURANCE

President,
Francis II.

required by law.

V A

pos¬

FRANCIS L. WIIITMARSII

-V

■

gross

E. SMITH

United States Rubber Co.

has

decline

ROCKWELL

former Chairman

of the

Greenwich, Conn.

I,'.

railroad

executive

those of 1953, in the face of
sible

Oj these, $57,750,602

monies and for

leading Eastern rail¬
tentatively projected
earnings at 16%% less than

one

Company

Manufacturing Corporation

New York, N.

■

roads

United Slates Tobacco

JACOB L. REISS
President,

WILLIAM J. WARDALL

growth

seeming¬

are

Pennsylvania Co.

J. WHITNEY PETERSON
President,

and

country.

These conclusions

New York &

LeROY A. PETERSEN

HERBERT

Other Liabilities

United States Government Securities

presidents.

2,000,000

24,269,704

with

Optimistic Official Predictions

Company

President,

FLETCHER

transportation
in

The American News

in Portfolio

situated

raliroads

Dry Cinger Ale, Inc.

Honorary Chairman,

Reiss

envisage. Equi-

and

wage

ratios

favorably

those

8,118,430

Expenses

Acceptances: Less Amount

sharply

continued

1,323,864,572

Dividend

tivity is necessary in singling out
in

122,513,424

individual

varied

Day,

Reserve for Taxes and

disbursements.

fortunes

have

V-J

since

...

S600
million, the latter
equivalent to almost twice

current

Canada

MICHAEL A. MORRISSEY

President, Otis Elevator Company

net

around

being

Capital Accounts

Deposits

190,

maintained

17,513,424

......

President,

PETER S. PAINE

Board index

still expect Class I

would

Reserve

50,000,000
55,000,000

Undivided Profits

esti¬

Sylvania Electric Products Inc.

LIABILITIES

1953—235,
monthly peak 243 in March, with
preliminary for October — 232)

President, West Virginia

$1,487,396,547

for

average

LUKE, JR.

4,951,733

for

Deering Milliken & Co., Inc.
DAVID L.

Other Assets

index of industrial produc¬
decline to an average of 215

mated

Company

Vice President,

22,937,260

Acceptances Outstanding

tion

HARVEY, JR.

President,
The Flintkote

HAROLD A. HATCH

those

PHILIP F. CRAY

I. J.

main¬

30's.

Chairman,

4,603,125

Real Estate

it, should the Federal Reserve1

see

607,671,482

....

Liability

Board

3,150,000

believe

can

WARD

Honorary Chairman

Senior Vice President

First

expenditures

reason

earnings

28,830,717

Bristol-Myers Company

year

likelihood

every

established

31,753,358

;

closely with rail¬

•

.......

Loans and Discounts

road operations than heretofore.
Because

;

IIENRY P. BRISTOL

before; that the railroads may be
to coordinate their truck

better

year,

the

of the Board

RICHARD II. WEST

Stock in Federal Reserve Bank

allowed

operations

the

Commission,
having been

members

Chairman

373,250,363

;

less

changed composition of the Inter¬
state

Mortgages

Other Securities

ses¬

WILLIAM N. ENSTROM

IIARRY E.

395,600,967

President

pass

Congress.
a

U. S. Government Securities

in¬

days—would

session

remain hooeful that

sion

within

since

—

DECEMBER 31, 1953

speak¬

ing before this group in Chicago,
it was pointed out that the politi¬

period

YORE

riers in their passenger ooerations
since the end of World War II.

high

CORPORATION

Chronicle)

Calif.—
now

affili¬

Co.,

San

407

Francisco

Exchanges. He was previ¬
ously with Davies & Co.

because

pK!;$

car¬

Financial

Sutro

'■ArV*

!.y. 1

to¬

Montgomery Street, members of

con¬

the industry.
confident

The

'■"ST

abandon

former

Roberto S. Martires is
ated

struc¬

establish investment

arising from a new Railway
Express contract and greater lib¬
by

its

FRANCISCO,

rates

erality

road

Joins Sutro & Co.

again in 1941.
Perhaps a
performance in 1954 in

nominal proportions. Higher mail
and
parcel
post
rates,
higher

permitting

long

estate.

marketwise,
is
that
equities will be spared
liquidating waves such as en¬
gulfed all issues alike both in 1938,

demand

the

'JPiiSi.

basis)

pur¬

rela¬

ward ultimate restoration of rail¬

seg¬

measured

when this

but

(as measured under

out-of-pocket

Such

does make its appearance, it may
serve to spark another major

reasonably
well be that

near-term,

fidence

a new group

investors must be found.

again reenter

well

over

once

market.

may

decision,

un¬

investors

expect

railroad

tively long period of market in¬

secu¬

Accordingly,

institutional

scale

the

chases

favorable

the strengthened
ability of individual managements
dependent

portion of the

enter the market

the best

the

in Hollywood,

are

segment
liberal as in

formula, and of slightly

$300 million

over

views

investors will

other major

markets.

these

improved fundamentals em¬
phasized herein that after a lapse
15 years or more, institutional

million

$600

admittedly

near-term" adverse
not

the

rities

President of New York Central in

well in 1954.

So despitd

I might say

us.

railroad

addressing

railroads wouldTiold up

longer profitable,
the railroads may yet
succeed in
reducing passenger losses of over
are

that
respective
relatively

of the

profitably developed

abandonment

ments

segments

find

Central,
Louisville
&
Nashville and Chesapeake & Ohio,

fluctuations
cannot

since V-J

where yields

Illinois

though contraction

expenditures made

of the Class I railroads at between

$550,000

even

$9 billion of capi-r

some

sion funds, life insurance com¬
panies,
savings
banks,
mutual
funds, all of these require liberal
yields. In fact, these institutions
can

and in July of that year exceeded

million,

cumulative

Day, will maintain 1954 earnings

presidents of such im¬
portant railroads as the Santa Fe,

efficient operr

resulting from

benefits of

weeks the

exceeded

1952,

(79)

Leggelt & Company

(80)

The Commercial and Financial Chronicle

Co.

The

same

he became

year

1954

Thursday, Januaiy 7,

Continued from first page

member of the Los Angeles Stock

Bank and Insurance Stocks

Exchange. He later served for 17
years

the

of the

President

JOHNSON

Board

Exchange, and
in

1926,

Directors

Unmasking the Mystery
Of Foreign Trade

elected

was

which

ca¬

pacity he served until 1932.

This Week

—

Bank Stocks

1905 Mr. Jardine opened

Los
Initial

1953 earnings
throughout the country

reports

banks

have

been

favorable.
In
operating profits

very

instances

most

reached

records

new

considerably above

and

the

were

levels

recent years.

major institutions

have

published operating reports
to the present time.
Others

have released

the

only

other

statements

instances

condition

Dec. 31, 1953 are available.

from

ever,

such

How¬

information

pattern of earnings
mined.

the

be deter¬

can

Among
reporting

the

showed

favorable

larger

institutions

operating

earnings.

The'

all

results,

gain

net
factor

dominant

contributing to this improvement
was a
sharp increase in interest
loans.

This

loan
the

volume
rate

such

result

higher

and

from

earned

some

higher, even though the to¬
tal of such investments averaged
lower for the period. Once again
this was primarily the result of
better

level

interest

rates

obtainable during the year. Also
number of banks reported siz¬

able

gains

income

from

trust

and service functions.

all, the gain in gross earn¬
ings for the year was substantial.

Operating

the

trend

creased.

expenses,
following
of
recent
years,
in¬

Wages

flected

salaries

and

payments

interest

re¬

and

time

in-

deposits

spite of the gain,

earnings

before

taxes

however,

instances

tions reduced the impact but with
few exceptions the tax bill ab¬
sorbed a large part
in operating results.,
Even

so,

practically

the

tabulation

operating

earnings

below

increases

recoveries

are

figures. In

ating results

included

not

published
can

also

and

sults.

indicated

towards

not yet available,
the indicated profits are shown.
The banks outside of New York

report earnings which

not

are

en¬

tirely comparable with the other
totals

they
after

figure

are

351

South

can

seen

lation,

however,
comparisons
on

its

Mam

the tabu¬

from

practically all
a
year-to-year

favorable.

are

York

City:

1953

Bank

New

Bankers

$2.52

31.76

YorK__

1952

$2.70

Manhattan

29.24

Tiust_„

Chemical

4.17

National

t3.60

Exchange

First

3.97

t3.98

Bank

Corn

Guaranty

5.25

22.53

t4.30

t4.79

t7.42

Hanover Bank

4.71

23.75

Trust

16.99

Irving Trust

Morgan,
New

5.81

"Includes

9.01

Bank

Mr. Jardine remained

America

_v—

2.31

7.12

(Chicago)

16.85

16.49

J. E. Jardine With
SAN"

FRANCISCO,
Earle
Jardine,

California

Calif.

—

dean

investment

his

the

Committee,
held

until

liam

is
with

men,

50th

year

William

Staats

the

elected

was

the

Association

1925

was

and

served

member

Conduct

until

the

Committee

Now
it is well understood
suppose
that the
idea
saving devices bettei which occurred to the woufd-be
the standard of living of the na¬ Montana manufacturer
occurred
tion, but it is also recognized that in Puteaux, France. Imagine that
growing pains occur in making this Frenchman made the same

Today,

that

labor

that many device, and ignore, for the time
gainfully em¬ being, the fact that his wages are
ployed
in
making
automobiles probably a third of ours. He would
than were "disemployed" making name
the device
"Dynamique,
carriages.
It is vaguely sensed, and that is the only difference. He
also finds that he can sell in the
too, that a century ago most of
transitions.

know

people

are

labor

was

human

needed

fur¬

17%

are

What

progress.

A Case in Point

let

Now

suppose

manu¬

Detroit has developed

facturer in

re¬

In these cases, however, the

gadget named "Static" and en¬ Effects of Foreign Trade Same as
joys $1,000,000 a—year in sales
in Domestic Trade
and
also
furnishes employment
Identical with domestic compe¬
for 200 people.
tition, however, $500,000 a year is
Now
again let us suppose a
released for the consuming public
man
in Billings, Mont., who has
with
which
to
purchase other

Jardine

with

prominently
Southern

many

Memorial

Hospital Executive

admired
proves

goods.

mere

change

employ¬

and

fewer in Detroit

ment of 200

net na¬
of 100 peo¬

100 more in Billings, or a

tional disemployment

Newport Harbor Yacht
be spent or saved.
If spent, em¬
Stock Exchange Club of
will be increased in
Los Angeles, Valley Hunt Club, ployment
other unrelated activities. If saved,
Athenaeum, Senior Warden of the
it may find its way into invest¬
Church of Our Saviour (Episco¬
ments or into housing, or if left in
pal).
•
■
•
<
•
>
the bank, it will furnish a mort¬
Club,

creates

d'Avigdor Co., New York City,
offering 50,000 shares of com¬
mon stock (par $1)
of Saaty Fuel
by Injector Corp. at $5 per share "as
of a
speculation."

employment.-

the

security

this year are

transactions

apparent.

Jonn

| Last

year— 1952
banks were

major

jardine

narie

most of the

—

able

show

with

the

tremendous

financial

fixtures, $20,000; (5) engineering
profits on security transactions. growth of California and
many of and
tooling of V-Eight cylinder
The decline"1 in the bond market its
largest industrial, public util¬
na
1953
caused
large losses for ity, real estate, school and civic model, $25,000; (6) and the re¬
mainder for working capital.
•all banks and because of the tax
enterprises.

position,

was

establish losses.
•did

advantageous to
This many banks

attempt

reduce

the

impact of taxes. In

so doing, how¬
security losses incurred

the

ever,

lowered

the

level

earnings

New

York

ceived

his

pressed

1893

Request

''\

his

His

| Laird, BisseSi & Meeds

dena
of

Members New York Stock
Exchange

Members American Stock
Exchange
'

Telephone:

;
:

it,

Bell

1-1248-49

Gibbs, Manager Trading Dept.)
Specialists in Bank Stocks

there
and

re¬

early

favorably that he
following year to
livq. On Sept.
14,

married

Mary C. Peck,
pioneer California

had

three

sons,
J.
Douglas Jar¬
Jardine, and one

Jardine,

Jr.,

late

Mrs.

ganized

■

with

was

the

in,

witl}

President

Pasadena

William
and

year was elected a

and director of

the

29,

trucks and tractors.

producing

400

month

per

It is

these

presently
injectors

assembly and
inspection basis, and plans to in¬
crease this output up to 2,500 units
per month. The product has been
tested
on

the

both

road

the

for

laboratory and

over

five

years.

Banks and

as¬

following

Vice-President,

William R. Staats

designs.
There is also another effect this

with

identical,

cases

reserva¬

world

ac¬

than

dollars

spent for American goods or serv¬

ices, then it could be harmful..

net

in any

temporary

disem¬ that

other country in the world,
can undersell most things

manufactured

set, the total standard of living is
increased because more total goods

where

services

The

two

one

If the rest of the

tion.

cumulated

ployment is offset, or partly off¬

and

these

that

submit

I
are

are

being produced

point could

that

made

volume

in spite of
more
for labor,
because
higher degree of tooling..
Our

benefits

economy

consumers

can

any¬

paying
of the

else,

because

buy certain mate¬

rial from Puteaux for $500,000 less
than

they

buy

can

domestically.

$500,000 with a some¬
what retarded return, possibly, of
the $500,000 that went to Puteaux.

They

save

If the return of the dollars is "re¬

tarded,"

it is

example of the

same

growing pains

point where the recent G.M. labor

ment

that

signed by the
and the union, says:

mestic improvement operation.

contract,
"T h

annual

company

provided herein recog¬
nizes that a continuing improve¬
ment in the standard of living
employees

depends

upon

fer

business

Puteaux will

our

do¬

foreign la¬
the trans¬

It is evident that

readjust¬

What about "cheap"

improvement bor?

factor

noticed

Detroit

from

caused

solely by

the fact that the Puteaux producer
is able and willing to sell his gadg¬

technological
progress,
better et for
only $500,000 to the Ameri¬
tools, methods, processes and can
public instead of for the $1,equipment, and a cooperative
000,000 domestic cost.
attitude on the part of all par¬
At one extreme, consider that
ties in such progress. It further
recognizes the principle that to the Puteaux employer has slave
produce

amount
sound

economic

the

with

same

effort

human

and

social

ob¬

labor (rather fanciful for France!)

but^extremely poor tooling equip¬
ment.

Or, at the

other

extreme,

Company

the formation of Banks and Com¬
pany

with

wholesale

funds.
a

offices

New York

distributors

Mr.

Banks

Wall

City, to act
of

was

tooling than that used by "Static."

one

Is Formed in NYC

Street,

consider that

That is real progress.

Morton M. Banks has announced

and

Staats

improved

jective." (Emphasis supplied).

Pasa¬

1904 Mr. Jardine became

sociated

or¬

places carburetors in automobiles,

Orange Growers Association,

which

Sept.

was

1948 in Rhode
Island for the development of the
Meteor
Fuel Injector which
re¬

business activities in Pasa¬
commenced

Saaty corporation

Andrew

Manager during 1902 and 1903.

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

Teletype—NY

and

J. Post of Connecticut.

dena

712© BROADWAY,

the

dine, Vincent
daughter, the

City

education

daughter of
family, and
Earle

Bulletin

Dec. 7, 1871

A visit to California in 1892 im¬

Pasadena

| of the City of New York

The

business training.

returned

The Chase National Bank

born

was

of la¬

use

some man

enough

Corp. Common Stock

devices

Production
volume1 generated
who wants to
house, but has only half here to meet our domestic con¬
cash.. In
any
case,
it sumption is so much greater than

gage to
build a

d'Avigdor Co. Offers
Saafy Fuel Injeetor

in the domestic

was

bor-saving

transaction might have.
It could
ple.
decrease foreign aid to France by
However, the consumers of the
$500,000. This in turn would de¬
nation, that is all of us, spend
crease
domestic
taxes,
and
so
$500,000 less yearly for the pur¬
$500,000 would be available for
chase
of
"Dynamic" instead of
"Static." This $500,000 will either increasing our standard of living.

impact

As be¬

effects?

the

are

fore, 200 are disemployed in De¬
troit and 200 in the nation instead
of the former. 100 disemployed.

"Dynamic," by cutting the price
half, would certainly increase
the firm.
The net proceeds are to be used the sales volume somewhat, but
During
his for the following purposes in the that fact can be ignored because
50 years in
order set forth: (1) Inventory in¬ it is not necessary in this analysis.
business he
The preceding example is far
crease, $17,000; (2) advance tool¬
has
been
ing, $25,000; (3) to retire $24,100 more readily acceptable now than
closely bank loan; (4) hew plant installa¬ it was a
generation ago. In fact,
identified
tion,
equipment,
furniture
and we have even progressed to the

profits

one-half the price
at a satisfactory

United States at

Now less than of "Static" and
employed.
That is profit to him.

nish adequate food.

Los

partners

ployment may ensue due to in¬
creased sales of other products.

this gadget "Static," im¬
goods and services and $500,000
its construction by change has
gone to Puteaux, France, in¬
of
design
using
less material,
California financial interests.
stead of to Montana. The $500,000
makes better tooling for his fab¬
is no good to this Frenchman ex¬
Upon the retirement of Mr. Staats
ricating processes and finds he
in 1928, Mr. Jardine was elected
cept for the purpose of buying
can
sell it at just half the price.
to the Board of Directors of the
American products, either by him
He names the gadget "Dynamic."
Union Oil Company of California
or someone else to whom he sells
What
happens?
The Detroit the dollars for francs. He must
which office he still holds. Other
"Static" activity folds up and 200
sell these dollars for francs in or¬
directorships now or previously
held are:
Pacific Finance Com¬ people are disemployed. The Mon¬ der to maintain his own payroll.
tana "Dynamic" organization em¬
When the dollars come back to the
pany, Pacific Mutual Life Insur¬
ploys 100 people, because half the United States to pay for exports
ance Company, Goodyear Tire
&
Rubber Co. of Calif., Consolidated people can produce the same by us, the circle is closed again, as
Mr.

identified

the

Angeles

lack thereof.

I.B.A. from 1925 to 1927.

was

Co.,

Bankers

Business

his

California

,C 1

Board of Governors of the Invest¬

Janu¬

Oct. 15, 1951, when he
general partner in Wil¬

Jardine

ment

Co.

honor

given

Executive

positions

corporation.

Mr.

testimonial

ary

Chair¬

Directors

the

which

Staats

ism,

parallel¬

the

operations—tracing

partner¬
ship succeeding to the business of

dinner

1947

made

was

Board

Chairman

and

Presi¬

until

Angeles,

Staats for 50 Years

celebrating

man

firm
he

filiations:

John

time

and
religious life of the com¬
munity, having the following af¬
Society
of
Colonial
Wars, California Club, Sons of the
Revolution, Bond
Club
of
Los

2.10

7,94

National

the

which

Committee and many others.
He has been active on the social

Illinois Nat'l

Continental

dent
'

ton

Trust,

earnings.

New York:

Outside

into

moved

building at its present
location, 640 South Spring Street.

corporation,
caiiiornia
Consumers Corporation, Hunting¬

20.13

Farmers

active busi¬

Steel

8.70

t3.64

21.66

City

tlndicatcd

3.83

4.17
t4.15

Trust-

First

tl7.91

Trust-;

National

5.31

tl9.65

City—.

York

Public

Trust

1.63

1,73

Manufacturers

illness^fprced Mr.

1921 the firm

own

1928.

Operating Earnings
New

ness.

retire from

generally a net
America
and other,

reserves

adjustments.

been

improved

oper¬

are

determined, the trend has

been

when

1920

Staats

became

where

cases

operating

have

large

throughout the country are
when they have been re¬
ported. Security profits or losses

earnings with the gains varying
ground 5(% and and 10%.
For
th^se institutions where

fohdition^ statements

the

banks

the

able

were

the

shown

gain

all

ac¬

determined by changes

banking institutions
report

the

and

ments.

stantially higher. As with earn¬
ings, taxes reflected the record

yolume of business. In some cases
large losses on security transac¬

Co.

elected President of the firm

was

banks

in book values and dividend pay¬

sub¬

were

all

conspicuous in

were

also helped account for the larger
expenses.

profits

for the level of indicated

earnings

Bank

larger

•Creased

but

"National

affect

security holdings

maintained and in

cases

the

undivided

not

number

basis

from

well

equally

average

increase

return

loans.

Income
was

the

was

combination of

did

these

•

tions

preliminary figures

press.

Staats

and, in turn, the indicated earn¬ Street, which was then the heart
of the city's financial district. He
ings for the year. Such transac¬

counted

Not all of the

transferred

the

Angeles office of William

mutual

formerly

partner in Banks and Hoicombe.

the

believe

that

Can

would

any¬

have

highways of the present day if

picks and shovels had

been

used

instead of tractors and bulldozers?

the

pay

and

still

facts

lie

treme
I

made

ple above

the

latter

higher

he has much

case

have

might

than

profit.

between

cases,

wages

better

these

but it has

even

Detroit

The true
two
no

ex¬

influ¬

"Dynamic" exam¬ ence on our decision to
buy do¬
as possible, cre¬
mestically.
of the
In the television debate between
"Static."
In
actual

vivid

ating total disemployment
organization

practice, in

ganization,

ihultiple; product' or¬
only ' partial
disem¬

Senators Douglas and Maione, the

plea

was

iiiade that tariffs be kept

Volume 179

Number 5288

imports

ence

equal

labor

differ¬

the

.The Commercial and Financial Chronicle

costs.

use

principle, the earlier
enjoy either a shortened
or
a
higher standard
living with the present work
can

week

work

Twofold Plausibility of the Plea
The

plausibility

this plea is

twofold:

Imports due to lower labor
might completely close our

(1)
costs

producing activities in some one
particular product. (This did actu¬

ally

To say that we must not replace

"Static" by "Dynamique" is a case
of

sacrificing the maximum wel¬

fare

some

entire

our

suming

domestic

for the

group

interest

one

con¬

benefit

sound

last

sentence

needs

necessary

lived

war-

free world.

not,

type

through

imports

magnitude, permit
manufacturing facilities, skills
know-how, ta decrease to a
or

point which would be potentially
injurious to us in a state of war.
In

thinking the problem through
though, we can be rather flex¬
ible.

After all,

for four

years

got along, and not too badly, with
relatively few new automobiles
and

(2)

We might be so flooded
foreign products that we

with
would

come

economic

near

standstill and

ship out all our gold.
is to reach approxiequality between exports
imports for maximum eco¬

The

ideal

mate

and

nomic health. The greater the vol¬
of

ume

each,

concerned.
to go in

the

better

have

for

long

increasing imports

such approximate

The

current

proposal

all
way

to get

equality.

"Trade

needs

Ricardo,

demonstrated

Aid"

the

mis¬

econo¬

could

pletely

stride, but it is certainly dan¬
make major changes by

than

the

able.

would

free

Trade

require

that

the
like¬

consuming

welfare

depends

would

public,
the

upon

low

which

prices

com¬

and

near

economic

domestic

ac¬

greatest need in the present

period is for a clearer and widerspread understanding of the po¬
tential

betterment

standard

our

average

living,

There is really no
in

the

ask

thought

new

foregoing

discus¬
beyond the principles enun¬
long ago by Ricardo and

sion

ciated

others.

It is merely an attempt at
digestible presentation for

limitations out¬

wider circle of readers.

The

over-all

advantages, to our
in • the maximizing of
foreign trade is not a mystery.

brought about by differ¬
climate, richer natural re¬

economy

better methods of
manufacture, or cheaper labor,
does
not
affect
our
problem.
sources,

Tariffs

should

not

by alleged differences in
in

groping

Buffalo Bond Club

governed

Elects Officers

labor

toward

our

BUFFALO, N. Y.

maximum economic welfare.

Club
Our

domestic

have

improvements
been
free from

always

Buffalo

following

new

—

has

The Bond

elected

the

officers:

President: Chester O. Gale, Trubee, Collins & Co.; Vice-President:
W. Douglas Hopkins, HaMlin &
Lunt; Secretary: Charles H. AUg-

legislative control. However,

been under government

Last,

and-

work

involved

and.

complex

under

the

following

purely imaginary
simplier circumstances.

but

Our domestic technological im¬

provements are, on the whole, rel¬

atively steady

the

and services with other countries.

magnitude

but

important,
is

trade

the

fact

great deterrent to

economic

our

the

benefit

trade

action

beginning of

through

has,

our

from

economy,

sperger,
First
National ' Bank;
control,
Treasurer: Homer Berryman, Ma¬
advisedly so—particularly
the early stages.
We-have rine -Trust Company; Governors:

;

,i "

lagged seriously in reducing this

control

war.

thinking, for the nation
whole, that it merits.

content

inter-,

costs

Our

factor

are

lined in this discussion. Whether
ent

our

within

fic

interest

not

are

analysis.

foreign

outline, but the
involved are the same

principles

but

this

that

difficult

Regard

lower

done,

were

serious economic dis¬

action

policy.

own,

buying things from
abroad solely more
cheaply than
we can buy them
domestically,

should not be

given to any speci¬
or
interests, but the

tive

our

r o a

economic change

this
an

turbance.

The

economic

and

-a

and that of
other peoples incidentally, through
maximizing interchange of goods

unforeseeable
cause

care¬

tivity.

com¬

economies. do

fully thought through engineering

entire

trade

ultimate

the

toward

move

maximum
Freer

into

Even

could

ested

The

rates

our

this

cases

Labor

governmental fiat..

goal of free trade must be

in both

work

motivation should be the welfare

would still be

Corp., Edward Cornelius, Stevens^

summarize:

Our

Currently, there is

representatives

The

give to this subject the objec¬

same

identical

mechanism

Cornelius

gratify-;

national stand¬
ard of living is increased both
by domestic technological im¬
provement and by foreign trade.
average

Douglas Howard, Niagara Share

Co.,

Roy iW.

Inc.,

ing awakening to these circum¬

Doolittle, Jr., Doolittle & Co., N1

stances.

Michael

Let

hope that

our

Reiser, Hugh Johnson &

Co., Jack C. Reukauf, Trubee, Coir

Washington

lins

Co.

by year. Each
gives rise to small
growing pains, but is beneficial in
the end, and we are continuosly
going through these operations.
year

improvement

"To

use
poetic license, suppose
technological improvements

our

continue

the

future

the

past, but by government fiat they
must be put on the shelf and not
into

1964.

year

Bankers Trust company

operation until the

Also

for

assume,

the

•as

purpose

that

does

thought pattern,

not

devices

the

deter

development

ous

higher standard of
result of trading suit¬

for

NEW YORK

continu¬

labor

future

that

%i
•V-*'

saving

ill*.

■

r'li.'i

benefit.

able goods.

CONDENSED STATEMENT OF CONDITION, DECEMBER 31, 1953

simply.

mutually benefit and

have
a

taken

in¬

plea for free trade,
plea for freer trade.

majority

can

the

group

detriment

for

move

and

improvements

Economist, Granted, this is
quite an assump¬
a century
tion, but it helps clarify the point

each

Plea

it is

in internal domes¬

occur

bination

un-

mies

living

for the

living

This is not

benefit.

tic

than

that any two separate

ago

admitted

Not

much

impassioned attention than it has
received to date, particularly in
Congressional circles.
David

the

with

nation.

other "essentials."

many

often

protection

terests

standard

fallacies

These

sincerity,

guided

plausibility to

wise, and this is highly improb¬

must

of such

lends

promulgated

utmost

one

qualification, which would not be

and

fallacies.

many

but

The

and

confuses

be¬

jars of gradual' changes which in¬
evitably

gerous to

Tne necessary monetary mech¬
anism which we have to use in
the actual operation complicates,

of in¬

group

national

havior.

our

week.

This is certainly, not eco¬

terests.

nomically

are

"Static.")

remove

this

(81)

Our working force is composed
of

a
great number of groups of
different skills and abilities, vary¬

ASSETS
'

ing greatly in type and size, and
principle is precisely these are
continuously changing
in the following fairy
through the years. The new pat¬
permitted in a fairy tale,
tern

Ricardo's
the

same

tale.

the

figures

simplify

Dick.

two

multitudinous

carpentry
so

and

speaking of the

work

and

clear

products used
limit activity

will

the

by
to

bricklaying,
fundamental

principle involved.
Tom

and

Dick

accustomed

are

to
building houses, and each is
good at both carpentry and brick¬

laying.
each

They

other

just equal to
doing carpentry

are

work, but Tom's output in brick¬
laying is phenomenal, being twice
that of Dick's.
Each
for

intends
The

use.

build

house

constructions

identical, thereby producing
of

omy
mate

cooperation.

that

are

econ¬

They

each

esti¬

house needs
hours of carpentry effort and
of

Dick, but Tom
job with

can

bricklaying

400

do his

only

200

hours of work.
If

each

Tom
Dick

builds

will
will

his

own

600

spend

the

house,

hours

and

spend 800 hours of ef¬

fort.

bricklaying

job

both

houses, but 100 hours only of his
own
house's carpentry.
He will
have spent 500 hours in labor in¬
stead of 600.

Further,
his
300

suppose

entire

work.

that Dick does

carpentry

hours

Tom's

Then

Dick

work, plus
carpentry

will

have

put

in 700 hours of work only instead
of 800.

That
which

The

is
is

mutual

Hll'.

period, the

year

the

into

the

nomic

work

principle
everyone's

benefit in foreign trade.

more we,

as a

nation, make

during

10-

1964,

year

skills

and

great

would

disemployment.

eco¬

many

result

the

bring a balance in this situation
would require several years. This
change in distribution of skills
the number

attracted

thereto

takes place
our

relatively smoothly in
ordinary operation.

The

mere

interference
tions

foolish

with

internal

government

think

such

opera¬

seems

too

But

by government fiat, all exist¬
international interchange of

goods

restrictions

removed

were

instance, all our generatingequipment, which is not

station
a

production

mass

could

operation,

possibly be purchased

economically

from

the

in¬

dustrialized of the European econ¬
omies. Similarly, our own domes¬
tic

automobile

appliance
all

and

eng

countries
that

for
a

•

987,808,042.68;''
Ti

j'l

•.

46,032,646.16' "

Municipal Securities

Other Securities and Investments

BUNKER

ELLSWORTH

16,011,223.29

....

Banking Premises

President,

American National Hot frost

14,182,290.93
1

President

S. SLOAN COLT

Accrued Interest and Accounts Receivable

7,033,917.67

Cullman Pros. Inc.
WILLIAM

JOHN

Customers'

Liability

Acceptances

25,358,556.64

—r

B. GIVEN

Chairman.
American llrake Shoe Company

W. HANES

y.iiv.'

HOWARD S. CULLMAN

1.62
$2,133,918,388,oz,oijih

Chairman.

•

Executive ami Finance Committee,
United States Lines Company

>fi

■

Vice President

ORIE R. KELLY

LIABILITIES

FRED I. KENT

Chairman.

Council of New

York University
t ii:> I

Capital ($10 par value)

LEWIS A. LAPHAM
Executive Vice President,
Crace Line, Inc.

hi
*

105,000,000.00

Surplus

WARD MELVILLE

30,512,000.00

Undivided Profits

GEORGE G. MONTGOMERY
Chairman, Finance Committee

44,253,260.63

V
.

k t

'dj:

179,765,260.63

Vice

President,
Castle tt Cooke, Limited

Dividend

Payable January 15,1*954

1,678,160.00

New Jersey

PAUL MOORE

THOMAS A. MORGAN

New

1,907,575,991.08

Deposits

York

Reserve for Taxes,

JOHN M. OLIN
President, Olin Industries, Inc.

DANIEL E. POMEROY

Accrued Expenses, etc.

Acceptances Outstanding

New Jersey

B. EARL PUCKETT
Chairman of the Board,
Allied Starts Cor [Miration

2,938,385.34

26,922,199.71
2,255,547.10

Other Liabilities

Chairman. General Electric Company

WILLIAM T. TAYLOR

15,721,230.10

$29,860,585.05

Less Amount in Portfolio

PHILIP D. REED

B. A. TOMPKINS

President, Melville Shoe Corporation

and

$2,133,918,388.62

Vict President

Senior Vice Presvlcnt

very

Securities in the above statement

THOMAS J. WATSON, JR.
Pnsotcut,
International Business Machines Corporation

annual report to

all

their

JUSTIN R. WHITING

would

are

carried in accordance with the method described in the

stockholders for the year'1953- Assets carried at $142,058,490.57 have been

to secure

deposits, including $57,119,220 85 of United States Government deposits,
and for other purposes.

Chairman of the Hoard,
Consumers Power

activity

deposited
Com/nay

standstill, with result-,
and shortages of

excessess

called

abroad,

for.

Our economic
and

and

kit r«

505,189,924.57

•

kitchen

industries could

other

Vice President

possibly monopolize the market in
facilities

-f*

•

;

JAMES C. BRADY
President,
lirutin Security it Polity Corporation
JOHN M. BUDINGER

at one swoop.

For

State and

this

about.

principle would be at work

same

if,

concept

Senior Vice President

•

532,301,786.68

Training

and

Loans

•

FRANCIS S. BAER

other

hand, there would be correspond¬
ing shortages in other groups of
other skills and abilities.

ALEX H. ARDRF.Y
Exef.utive Vice President

result.

excess

abilities

which

groups,

major

would

....

U. S. Government Securities

changes

necessary

dislocation

There would

skills

naked

attempted to be compressed

were

ing

Cash and Due from Banks
DIRECTORS

accumulation

come

They have each saved 100 hours
of labor.

would

1964

of these many groups

Now suppose that Tom does the

entire

of 10 years of
changes.
If, instead of having had a grad¬
ual change in the types and skills

400

hours of bricklaying effort in the
case

required

normal

economies,

individuals:! !Tom

Instead

man,

exaggerated

arithmetic.

two

are

the

Instead
have

•

health, both here
based

tinuation of somewhere

con¬

near

full

basis,

the

MEMBER

employment.

this

>0-F

THE

FEDERAL

DEPOSIT

INSURANCE

CORPORATION

The Commercial and Financial Chronicle

(82)

Continued

Our

trustee to fill

John L. Cooper as a

by the retire¬

the vacancy caused

ment

Mer¬

rill

Griswold.

Mr.

Griswold

maintaining

his association
with the Trust

Chairman

a s

Adviso¬

its

Board. The

trustees
the

are

operating
of

managers

the company.

Mr.

Cooper

joined

Mas¬

sachusetts
in

1947

research

work

with

the

and there and which has
character, there is a very constructive
attitude around concerning the future trend of quotations of Treas¬
filling which has been witnessed here
been

Bankers

Trust Company in New York City.
A native of Pittsburgh, Pa.,
he

graduated from Yale University in
1935 and recently was a member
of the Advanced Management
Program at the Harvard Graduate
School of Business Administration.

Money market specialists point out that with the
trend of business downward, there will be further ease in the
A continuation of the current policy which has
plus a modest amount of accel¬
eration should not be unfavorable as far as the future quotations
markets.

money

been towards lower interest rates

of Treasury issues are
that

must

Loring New

government bonds that are still selling at a
discount continue to go into strong hands, with some of the inter¬

shied

mediates being

According

Witt

nancial

Organization,
York

100

City,

fi¬

and

stockholder

relations

was

nounced

Lower Interest Rates

Administration

there is considerable question among
market followers whether or not changes in money market
be

sure,

sociated
firm

t i

1952.

that

Stanton

was

Loring

have

offset effect upon those that are responsible for the down¬

with

the

investment

Co.

During the Korean
he

service
served

was

in
as

the

recalled to
U.

active

Navy

and

flag secretary and aide

to Admiral Oscar C.

emer¬

Badger, USN.

graduate

University.

Harvard
*

first

the member

development that

major

banks would

have.

for by

looked

Open market operations

are

expected to continue to be a stabilizing force as far as the money
markets are concerned, with Federal most likely to supply needed

P. S. TREASURE

the

for

extremely

bear

and

issues
this

Heavy Refunding Schedule

STATE

In the not very distant future

during

continue

into

decline

been

some

talk that these two

point.

and

statistical

how they are

15, 2V4S amounting to $8,114,-,

in the

definite but

very

main, to favor

lower

level

prices

Carleton

associated

CHICAGO 4

BOSTON 9

ST 2-9490

HA 6-6463

Mr.
years

tors
was

stock

1954.

Technical Approach

Air

No matter

a very

helpful tool

industrial

firm

the

its

Heeseler

been

has

for

Service,

prior

several

which

Absorbs Middendorf

ceeded to the investment business
of

Middendorf

too

Force

served

the

Army

during World War II.

de¬

had

average

moved

rapid

large
sues

and, in 1945-1946, a
number of speculative is¬
were over-exploited. A cor¬
needed

was

the

and

dropped from 213

160.

By late 1948, the technical pattern
indicated that the second phase,
of

one

decline, had

largely

been

completed despite the fact that,

today, most business forecasts in¬
dicated

decline.

Technical work

suggested that the next important
move

in the market would

ward

higher

be to¬

that the
phase of the long term ad¬
vance
should carry to about the
levels and

250 level in the Dow-Jones indus¬
trials

the

early 1950s.
.After
irregularity,
the

further

some

market

advance

started

from

the

June, 1949 and reach¬
ed a high of 295 early in 1953."
Actually the action of the aver¬
ages in the past three years has
not

been concentrated

tion

approach

that the

the technical

market

uninformed

action.

opinion i

of charts

use

Lay
believes

graphs is

accurately portrayed the ac¬
of the average stock.
Most
highs in 1951

stocks reached their
when

the

stock

think

ket

this

true.

There

method, fundamental

Dow-Jones

the

industrial

approximately 265.

average was

mainly related to the shorter term
swings of the market. I do not

holder

rather

than

averages,

the

average

the stock

mar¬

have been in

technical,
can
succeed in continuously
forecasting
short
term
market

bear market for about three years.
Since January, 1951, the market

movements.

justment.

that

costs

Even if it

involved

would

could, the

most

has

undergone

a piecemeal read¬
The steels reached their

likely
its findings.
However,
study of supply and demand fac¬
tors, when coupled with an analy¬

highs in January, 1951, and have

tical

distillers

invalidate

declined 33%. The textiles reach¬

statistical

approach,

can

be of inestimable value in select¬

ing favorable equities for longer
term
investment or speculation.
More and more, professional in¬
vestors are using the technical ap¬
proach as a check against their

statistical

find-

their

highs in February,

1951,
40%; the
highs in
October, 1951, and declined over
30%; the coppers reached their
high in January, 1952, and have
and have declined almost

reached

their

declined

33%; the oils reached
highs from March to July,
1952, and have declined 25%. The
farm
equipment issues reached
their highs in October, 1952, and
their

1,500 graphs to check
my
technical
opinions.
These
graphs relate mainly, .to the price

have declined

and

declined almost 20%.

use

over

volume

action

securities listed

of* individual

rails which

recently

the New York

Stock

30%.

Even the

January of 1953, have

1951,

over

reached their high as

technical work in¬

Exchange or tfye American
Stock Exchange. A* study of these
graphs combined ;Wit'h an evalua¬

dicated that the market, as far as
most stocks were concerned, had
reached

tion

mercial

such

internal

clines,

rharket

action

volume, adyances and de¬
highs and lows and

new

has

and

selling strength

individual

pre¬

issues

the general market.

What

does

the

market

technical

The Present

Analysis

ap¬

show

Financial

("Com¬
Chronicle,"

correct

the

period

temporarily

bought condition.
been

read¬

over¬

This correction

taking place for

three

with the majority of issues
working lower regardless of the

years

relative

firmness

stock market

the

various

averages.

At the start of 1953, the read¬
justment had not yet been com¬
pleted. An analysis of the price

Indication

Before

that

temporary top

March 8, 1951) and needed
justment or consolidation

other factors gives h fairly defin¬
ite indication of whether the buy¬

attempting; to
answer
question, it' might be advis¬

able to review the last five years
or
so
of market action.
In late

action

war-postwar-inflation advance
to
that which
occurred

similar

individual

pleted their

were

There

from 1914 to 1929

1,400

com¬

upward

over

stocks led to the conclusion
while quite a few issues had

1948, I ventured the opinion that,
1942, the stdck f market had
started
a
long < term
uptrend.
("Commercial & Financial Chron¬

the

Middendorf

Building

the firm.

stated

menced at the

Co.

Inc., Balti¬ War I.
and that they will continue advance

Keyser

dorf,
He

correction

uptrend, there

number

that

consolidation before
move

were

was

also

and

were a

needed

that,

larger

additional

important
indicated.

relatively large

number

of issues that still had
vulnerable patterns and indicated
the probability, of sharply lower

but, because the
Wood, Struthers & Co., 20 Pine uptrend had started-from a com¬ levels. All of this led to
the con¬
Street, New York City, members paratively lower price level, it clusion that
price action in 1953
of the New York Stock Exchange, would most
would be highly selective with in¬
likely last longer than
announce
that
they have suc¬ the 15-year advance that com¬ dividual issues
having private bull

more,

with Moody's Inves¬

phases,

two

from 96 to 213). This advance was

icle," Sept. 9, 1948.) It would be

Wood, Struthers Co.

Heeseler has become

with

five

and

By 1948, the market had under¬
the first advancing phase
from 1942 to 1946 (the Dow-Jones

market analyst or market
technician, most of my work has
a

associated with C. J. Devine

Co.

single operation.

which is indicated is

municipal bond department.
ST., NEW YORK 5

refunding operation.

White, Weld & Co., 40 Wall
Street, NeW York City, members
of
principal security and com¬
modity exchanges, announce that
E.

45 Milk St

appear,

somewhat

common

Perhaps another
viewpoint might shed some fur¬
ther light on the picture.

There has

handled, and they will be handled successfully, a

White, Weld & Co.

231 So. La Salle St*

view¬

The conclusions arrived at

not

are

maturities, aggregating nearly $13

E. C. Heeseler With

WHitehall 3-1200

will

least

gone

rection

advance

cline.

market

equity prices regard¬
less of quality?
This subject
has been pretty
thoroughly explored both from an
economic

ac¬

at the moment?

favorable money market

15 BROAD

1954?

consist
three

Will

period.

proach

in any

& Co.

individual

unfavorable busi¬
prospects result in a general

ness

the Treasury must be looking at

billion, would be taken care of in

INCORPORATED

action

relatively

dominant

000,000 and the March 15, l%s totaling $4,675,000,000.

Aubrey G. Lanston

that

rather sizable ones, with the Feb.

SECURITIES

diverse

markets

the refunding of maturities and the year 1954 starts off with two

MUNICIPAL

the

type of selective market

well

and

than

mediate term declines. Long term
advances of this nature usually

ing

securities to those that must have them for investment purposes.

•

rather

profes¬

ofAbe^wiarket since February, 1951
and the simultaneous bull marketjs

mgs.

certain
money market specialists is a change in reserve requirements.
This does not mean that there might not be other developments
in the money market ahead of this one. There could be a lowering
of the prime rate at any time because there have been rather
heavy rumblings from time to time about when and why it would
be pushed off its high perch.
In addition, the rediscount rate
might be moved down but again this would not have the signifi¬
cance in the money market that a change in reserve requirements
The

investor

of- the

general public and it has worked
out very well over the past two
or
three years. It has accounted

fundamental

Change in Reserve Requirements Likely

banking firm of Tucker, Anthony

gency

trend in business.

for

years

chance

it is not possible / for the powers
how far or how little the decline

Therefore, it is the opinion of many money market
specialists that easier money conditions are to be expected in the
not too distant future in order to set in motion forces that might

Previ¬

four

take

of the

might be.

since

associated

down.

predicted that the course

debatable point,

is' the

decline

ously he

1954 will be down and, although the extent

of business in

exec-

v e

evident that when there is

From the best available sources it is

with

account

as a whole. Nonetheless, it is
turn-down or danger of a turn¬

conditions

down in business conditions the trend of interest rates is also

as¬

Conklin

the

of interest rates is sufficient to have an

course

very

Loring

when it comes to those that are responsible for the
policy of the nation and in particular the trend of
interest rates. It has been indicated by those that are in authority
that the money markets will be used to modify the trend of eco¬
nomic conditions if and when it should become necessary to take

lin.,
been

and

concerned

influence upon economic

Mr.

monetary

opinion

but,

Long-Term Action

the

action.

sional

Expected

attitude

especially

the

been

retained

160 level in

one

far

The

though the present

DeWitt Conk¬

has

era"

it most certainly looks
is, then there must be a definite change

growth

companies
in the
main, liquidity should be stressed
in speculative situations.
This has
should

the monetary authorities.

the inflation threat is over, and

conditions and the

how little it might be.
modest decline is taking

very

1954, most certainly heralds the en,d of the "inflationary

money

an¬

that

years

many

such

counsel,
it

is showing

data

which has plagued

New

the

course

by the nation as a whole. The decreases which
are being reported by certain key industries,
together with pre¬
dictions such as an "Orthodox Recession" for the United States

Conklin

the

place in certain industries which is not an unexpected develop¬
ment in light of the boom conditions which have been enjoyed
for

Loring has been ad¬

Broadway,

specialists

market

money

siderable disagreement as to how great or

Statistical

speculative

the

government market in 1954 will be determined in no small meas¬
ure by the trend of business conditions in the country.
It seems
as
though a large number of economists are of the opinion that
some kind of a let-down in business is in the making, with con¬

partnership in the De-

A New Bull Market

tion

Money Market in 1954

When

mitted

from because of their vulnerability in

away

coming refundings.

Conklin Partner
Stanton D.

The large amount of refunding
is not a negative factor in

concerned.

this year likewise

done

the money market.
The long-term

Stanton

mainly technical in

obligations.

ury

previous experience in investment

1954—The Beginning of

Despite the sharp rise which took place in prices of govern¬
end, the much desired backing and

In¬

member of its research staff after

Governments

ment securities near the year

Trust

vestors

John L. Cooper

By JOHN T. CHIPPENDALE, JR.

appointment

the

announces

Reporter

Trust

Investors

Massachusetts

Thursday, January 7, 1954

from jij;st page

Cooper Trustee of
Mass. Investors Trust

vestment

the

will

William

continue

activities

peak,
1929

Midden¬

his

in¬

association

with Wood, Struthers & Co.

beginning of World

projected"., the

stock

branch of likely be

The announcement also

that

Jr.

office
a?

le£st*j|960. At the

prices.; .would

most

considerably above the

highs.

line and would be;

and

bear

markets

their

own

but the general market would not

get

far in either direction
("Commercial & Finnacial Chron¬
icle," Jan. 1, 1953). For this rea¬
very

son,

I projected

straight

row

range for the Dow-Jones in¬

such

course,

advance would not bein

present

|nterrupted by

number of rather drastic inter¬

dustrial

average

high of 300 and

relatively

for 1953

nar¬

with

low of 250.

The

Volume 179

Number 5288

.* The Commercial and Financial Chronicle

(83)

actual

Allegheny Ludlum Steel

intra-day high and low was

sively Vice-President, Executive
Vice-President, and Senior Vice-

has been

Bucyrus Erie

President.

Pierce

Chain Belt

Director

Deere & Co.

ecutive

Committee

Joy Manufacturing
Mead Corp.

municipal

ment

National-'Qypsum

pany,

Allis

295.06 and 254.36.

Great Selectivity Ahead
In 1954, technical indications are

that the market will again be very
selective.

Again there are a con¬

siderable

number

that

issues

to be in an untrend. Again

appear

there

considerable

are

that

issues

upward

important

Shamrocfc -Oil
Western

move

Yale

in¬

dicated. But—and this is the most

important change—there are rela¬
tively
few
issues
that
appear
technically

vulnerable

sharp

price declines. That is why I find
it difficult to visualize

market

issues have

1954. Most

downside

the

reached

about

real bear

ob¬

outlined by their 1951That is why I expressed
opinion, after the Dow-Jones
industrial
average
had reached
the September low of 254.36 that

Auto

Gas

has

not

also

been

member of

the

and

Southeast.

seem

appre¬

and

also

the
lina

ciation in the marginal or specula¬
tive issues.
There will be out¬

now

standing exceptions of

Mr.

Ex¬

formation

closely

also

and

Council.

municipalities

most issues of this

hands

tired

but

course,

type

holders

who

may

Dickson

Company, Inc., Mr.

Wulbern

than

vulnerable

any time in the past two
("Commercial & Financial
Chronicle," Oct. 8, 1953).

years

rallied

market

The

the

from

low to a December
high of 285.20. The advance was
led by the high grade issues.
At
the year end, the industrials were
at 280.90 or some 15 points below
September

the

1953 high.
There
not be some further
irregularity.
It is possible that
the market might again decline to
January,
or

may

the

about

level.

265

this

it will most likely

pens,

the

may

first

months

six

hap¬

occur

the

year

opinion, will be the
last opportunity to buy selected
common stocks at the very favor¬
in

and,

able

price-to-earnings and price-

available.

year,

that

ratios

to-dividend

now

are

opinion, the market

that

will start a selective advance

could

the industrial aver¬
about 325 by the end of

willing to sell them on any
price rise. Until there is
enough of a speculative public

following to absorb this overhead
supply, there is apparently little
chance
move

for

this

type

issue

appreciably higher.

public

1954.

all
common
stocks will share in the
advance.
There
are
many
that
will do little or nothing marketwise.

not

does

This

Quite

1953.

has

the

Gulf

appointed

associated

Carrison

with

for
to

the

investor

hold,

and

stock

common

equities
ultimately benefit from

A. M.

Insurance

the

quality but

From

seems

technical

price

Fitzpatrick Opens

ties

Tex.—L.

engaging in

change.

Manhattan

level.

NEW

approach, there'
of

Company

YORK, N. Y.

major decline in the stock market
in

1954.

The chances rather favor

BANKING

FOII

NATION'S

TIIK

include

gradually broaden out to
larger segment of thei

CONDENSED

STATEMENT

CONDITION

market.

December

Pierce, Garrison,

Wulburn, Inc. Formed
JACKSONVILLE, Fla.
C.

Pierce

and

—

George

Qlyde
Carri-

principalis of Pierce-Carrison

son,

31, 1953

ASSETS

■

Cash and Due from Banks and Bankers

,..

U. S. Government Obligations

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

Public and

Other

Mortgages

398,538,094.21

....

324,376,949.81

•

23,936,445.84

14,349,714.76

Securities

Loans and Discounts

622,338,695.26

Other Real Estate Mortgages

9,520,153.28

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

Banking Houses Owned

•"

Customers'

10,328,806.72

Liability for Acceptances

•

15,536,074.85

Other Assets

Liability of Others

The better grade

the
will

2,233,806.16

price gains

their

$27,500,000.00
50,000,000.00

Undivided

profits

17,266,269.47

94,766,269.47

Dividend Payable January 2, 1954

1,168,750.00

Deposits

their

before

Surplus

excellent

some

consolidation

and

Capital (Par $10.00)

this

However,

14,183,383.23

.......

$1,435,342,124.12

be in need of some rest

may

Bills Sold Endorsed

LIABILITIES

the recent months

over

1949,

continue

action.

has shown

group

since

bulwarks

undoubtedly

favorable

and

investment and
which have been

issues,

market

1,298,606,987.12

main advance is resumed later in

Acceptances Outstanding

the

Other Liabilities, Reserve for Taxes, etc

proper

this

Even

year.

group,

is of prime

selection

1700

SINCE

IftUSINESS

rise of about 25% from current
levels by the end of the year. This
will be the start of an advance
a

that will

16,707,299.41

9,909,434.89

Bills Sold with Our Endorsement

im¬

14,183,383.23

$1,435,342,124.12

portance.
The most interesting profit pos¬
Of the above

sibilities

the "light

might be described

blue

compose

chips."

These

the

type of equities just a bit below
the

quality

classified
I

this

group

few

five

They

sfell

are

Technically,

on a

they

appear

50% payout.

have

position to

these
of
.

areas

been

riod
as

the

sues

out

further

are

need

They could be-

possible candidates for

stitutional

accumulation

advance

without

consolidation.

come

investment

over

in¬
pe¬

Edw^k

Wulbern

Corporatior&announce
ward

Senior

V^Mlbern,

Dickson

Charlotte,

Ed¬
J. STEWART BAKER

formerly

<&^Company,
NpfC., has

associated
firm

DIRECTORS
that

Viceroy President of R. S.

and

a£

Lps

Inc.,

now

member

th^t the

known

firm will

Pierce,

become
the

Mr.

Wulbern has had wide ex¬
in ^investment banking

perience

supply of higher grade is¬

circles

gradually diminshes.
examples of "light blue

chips" follow:

throughout
the
United
States,
having
been
associated
with R. S. Dickson & Company
for more than 14 years and in
that association

becoming

Chairman

Chairman, Intertype

Corporation
ELLIOTT V.

BELL

succes¬

Committee, McGraw-Hill

Publishing Co., Inc.
WALTER H.

JAMES F. BROWNLEE

J. II. Whitney & Co.

NEAL DOW BECKER

Chairman, Executive

now

Carrison,

Wulbern, Ih£., with its principal
offices in "£he Barnett National
Bank Building.

their quality improves and

few

Member Federal Deposit Insurance Corporation

mar-

available

patterns for several years and
in

eight times earnings to

yield 7% to 9%

what

Member Federal Reserve System

are

excep¬

tions, they have done little
ketwise.

assets

"businessmen's risks."

but, with

ago

invest¬

They might also be

attention

drew

year

of the

grade

ment issues.

$95,370,075.06

pledged to secure public
deposits and fof other purposes; and certain of the deposits are
preferred as provided by law. Assets are shown at book value, and
where reserves have been set up, after deducting such reserves.
U. S. Government Obligations in the amount of $27,538,125.00 are
loaned to customers against collateral.

what

appear

BENNETT

GEORGE

Coverdalc &

BURPEE

Colpitis

HARRY I. CAESAR
//. A. Caesar & Co.

ROBERT M. CATHARINE

President, Dollar Savings
Bank

of the City of New York

GRAHAM

BLAINE

Vice-Chairman,
JOHN C. BORDEN

President, Borden Mills, Inc.

LAWRENCE C.

F. ABBOT GOODHUE
Trustee
WILLIAM V.

MARSHALL

President
HENRY D. MERCER

Chairman, States Marine

Corporation
GEORGE L. MORRISON

President,
General

Baking Company

WILLIAM J. MURRAY, JR.

Chairman,
McKesson &

Trustee, Emigrant Industrial

Savings Hank

Arthur

Investment

Fitz¬ Company, 141 West Jackson Bou¬
securi¬ levard has acquired a member¬
business from offices at 107 ship in the New York Stock Ex¬

patrick

con¬

little likelihood

as¬

Exchange

Bank of the

who

long term growth of the
country. This, as always, will re¬
quire careful selection not only as

Mr.

Krensky Now

CHICAGO, 111. —
Krensky,
Republic

Corporation Frances Drive.

buy, the
that will

tinued

1954.

1949, having previously been

Member of NY

LONGVIEW,

the

no
immediate signs of
developing.
In the main, 1954 should be a

year

sociated with Barr Brothers & Co.

Investment and Growth Issues

growth

this

good

Urell

Urell joined the Smithers firm in

are

continues

Manager

ment, effective Jan.

controlling

Life

been

Exchange,

William

the firm's municipal bond depart¬

recently identified
of the principal under¬
houses in the purchase

that

announces

come

there

Favorable Action Concentrated in
i.

of the New York Stock

speculation
may
again
into the market, but

again

year-end but the de¬

counties.

Dept.

of-vulnerability does not ap¬
to be as great as in 1952 or

pear

and

Smithers

Broad

that

mean

few will be selling

lower at the
gree

Pierce

was

carry

age

the

during

time

Some

re¬

L. G.

bond department of the Guaranty
Trust Company of New York.

less

the

Company.

was

with

Co., vl Wall
Street, New York City, members

very

Prior to his association with

in the

are

stock

Advisory Commit¬

minor

market

was

and distribution of the

member of the North Caro¬

1952 tops.

the

tee.

lina Securities

jectives
the

one

writing

1930.

identified

has been

organizers of the South Caro¬
Municipal

F. S. Smithers
F.

depression days,
being the refunding agent, or fis¬
cal agent, for a number of Florida

the

one

building of Florida's credit from

Municipal Council

Director,

William Urell Heals

Corporation,

the depth of the

Wulbern
of

Carrison

handling
investment
securities,
particularly municipals, since its

Com¬

Chairman

been

active, first as Clyde C.
Corporation and then as

Pierce

Manager
depart¬

bond

Dickson

North Carolina

great chance of wide

any

the

has

Supply

Towne

there does

and

the

At this stage of the market
pat¬

tern,

Inc., which company has
been
recognized as one of the
largest investment banking firms

Sylvania Electric

need

before

Chalmers

Penn-Djxie Cement

number

appear

consolidation

further

Robbins, Inc.

FRANK F. RUSSELL

Chairman, Cerro de Pasco
GRIFFIN

Chairman, Brady Security &
Realty Corporation

Corporation
FREDERICK SHEFFIELD
Webster

Sheffield & Chrystie

The Commercial and Financial Chronicle

(84)

ClVMVI1Vt/Y
£
m
Aftn

amVJJAIrMii

petition is refevant but the limits
of
adaptability
are determined
largely by the resources available,
•Contract construction (5%),
wholesale and retail trade (17%),
services (9%), finance, insurance
and real estate (9%), transporta-

Only as population and
income are redistributed will the
services be redistributed. They are

communication and
government
government enterprises
(12%)—these all have elements of
regional competition but, to a con-

terregional competition.6

income.

The location of seven indus-

accounting
value added

for

°s

46%

the

determined to

substantiaj degree by the need of

materials

not determinants, being near me raw mateimis.
Substantial parts of wholesale
(3) The other five industries
trade and of insurance are ex- (textiles,
itlthf;
amples of services subject to in- printing and publish

determinates,

(5%),

and leather products, instruments

public utilities (3%),

fnd*e*ated P™"cts) accounting

and

tor
/0 or value aaaea were industries wmcn mignt oe locajea
largely independently ot tne
proximity to tne sources ot tne
raw materials.
tne last group would especially
be subject to pressures tor any adjustments that have to be made.
Dispite tne obstacles, there is

Here is a listing of various empayments on the basis of variations for seven regions in the percentage of income for each emsiderable extent, they are neces- ployment in 1949 as a percentage
sarily localized. An estimate of the 0f the region's income (wages and
approximately 40 items included farm) accruing to each employin the employments listed in this ment. The employment listed first

paragraph and accounting for 60% ]s the one with the greatest range
of all income suggests that only —e.g., the total of the percentages
about 10% of all income and cor- below 100 and above 100 for the
responding employments included
here are largely subject, to inter-

The presumption is that where variations
are small (e.g., bottom three employments and even possibly the
fourth and fifth from the bottom)
regions divide the employregions are a maximum.6

regional competition. Thus for retail trade, public utilities, transportation, telephone services, most
(education, religion, cin-

services

private households), local ments roughly in accordance with
government, and a large
.
,
.
part of Federal Government, the income and there is little p ay
location of activities for the most interregional competition.
ema,

and state

evidence that slowly adjustments
are made. ihus, though New England was at one time a high-wage
area, this is no longer true. Ihe
eiiect ot the continued pressure
°n her balance ot payments has

^ee[J a tendency tor New England

most

regions profit; and in insisting rapidly,
upon

minimum wage rates tend

It is generally assumed that the
older lndustrial region yields its
industries to its newer rivals, and
9?;n moves on to more advanced
industries. Insofar as the older in-

or about 4% of the additional jobs in these industries in

In this same period, the region
had lost 200,000 jobs in textiles
and shoes. From 1947 to 1952,
New England lost no less than
61,000, or 22%, of its textile jobs.

dustries do not require much But the region gained 25,000, or
capital per worker, are widely 2%, in all jobs in industry. The
dlsPersed (wide dispersal points major gains were in transportato strong possibilities of growth tion equipment (28,000) and elec¬
0f an industry in underdeveloped trical machinery (26,000).11
regions), and require skills that
Possibly the difficulty of makcan be transmitted without great ing adjustments is suggested by
difficulty, the underdeveloped re- the fact that wages in service ingjons wm nurture them. The as- dustries in New England are besumption is that New England and low the national average. In the
the Middle Atlantic States aban- six service employments, accountdon or iose in tobacco, textiles, ing for almost one-half of the nashoes and leather, and concentrate tion's payrolls, New England's
more on chemicals, machinery, annual salary-wage per employee
metal fabrication, etc. But it is was but 98% of the national avernot always clear that the move- age. The figures for the Middle
ment is in the desired direction. East, Central and Far West were
New England's gains have been 106.1, 104.6, and ' 111.4%, respecin part jn the neWer and high tively; for the; Southeast and
wage, high productivity indus- Southwest, 79.6 and 87.5%, retries, but frequently at wage rates spectively.
much below the national level. It
Differences in annual wages are

„aiSturiLh^waS^'are is. significant that

even as the re- influenced also b.y the proportion

manuracturing, ner wages are gion has moved towards the high- of high earnings industries. It
lower than in any other region in \y productive industries, her rela- will be noted that the high-wagethe country but the South; and in tive wages have fallen. Even the regions are also those with a large

TheSou^X ex" ^e™nt +towards tertiaJ7 ^rv- proportion ofa high proportion inearnings of
South, ror ex lce) industries may reflect the dustries and
low

Total Max. Range,

lower than the

Total

Lowest to

Deviation

manu-

to raw materials (and to to deprive the newer industrial the nation, a proportion much besome extent to proximity to mar- regions of a small part of the low
the region's" 9-10% of all
kets) accounted for 35% of the advantage of plentiful supplies of manufacturing jobs. The figures,
value added in 1951.
labor.19
point to difficulties in adjusting,

of the national

tion

added 162,000 jobs in the 10

access

4/lrWMil

ernment, through its various poli-

From 1919 to 1947, new England

cies, raises the general.income, all facturing industries growing

^on predominantly determined by

■.■a11

account for but 9% part are determined by the presincome. Here com- ent distribution of population and

mining

was

follows:

O) Seven industries with loca-

nlATihaSnillH I*AMDAfltlAlt

*11111 llllllll
and

■1/1

manufacturing employment

KAfVlAftC

fflHAYfllf1

■vWilwillIV

example, in 1951, the distribution however, that insofar as the gov-,

Thursday, January 7, 1954«

Continued from page 7

Highest Region

ample,

lyou,

average

hourly

labor pressing for employ-

excess

low earnings industries.

(The Far-

"J ■
with^i
nJent
iow-wage department West is an exception. Here inade?1.4b as compared with $1.38 in stores) rather than a sign of ad- quate supplies of labor relative-

Agriculture and mining

495

227

Construction and manufacturing

Services—finance, insurance, real estate

Government

200
137
128

82
49
61

Tradp

New England wages were higher
than the national average only in Proportion of Proprietors'Net Income Plus Gross Wages and Salaries.

textiles <9%>products

ortat

—

Allnon-commo".^

SOURCE:

from

Calculated
States

Economy,

materials

the

indication

areas

Where the: percentage Of:l

by regions. Above the study
on
income accruing to

employment as a percentage
region s share of the na"k°n s wage and farm income for
1949. Then we compare for each
the

encing difficulties in textiles and

y.ane^ generally, e.g., t a p
- three Weak soft industries—textion, the explanation may well be tiles, apparel, and leather and
region the percentage of incomes that
leather products—and in the eight
-earned by different employments rather than
interregional comp - strong growing industries.
the

nations

hfeorme10Thus in^the u\°ationeexplai?nTaniow\Drc
income. Thus in the ulation explains a low i
opo

regions

1952,

the

trade

and

Hourly wages,
Newisnguim

transportation
Eng and and Cen a

of the country, for of employment in

of in

percentage

average

income

service

New

States, and large distances explain

to the

total income payments
only from 24.1 to 28.0%
(the U. S. average was 25.6). In

region's

relative employment in

high

- 3 weak

Agriculture

Government

Manufacturing

(Income)

(Income Payments)

(Payrolls)

fi7

strong

1.49

ICQ

9J,

TToC+

source:

census

of Manufactures,

1947,

wbirh

tpnH

2~0

tbp

nrirps:

and

trade

figures

agricultural products and the East
importers; and that the

heavy

East and Central States are heavy

exporters of manufactured goods,

Interregional competition prevails

oo~q
*

agriculture—

(i.e., New England) has 6% of the

income and 10% of manufacturing

extent

33.7"
30.7"

manufacturing

from the farms to the city fac-

the

low

ploited

take

movement

advantage

and

wages

natural

unex-

resources.

towards

But.

equal-

Insofar as higher employ- lackis of resources ignorance, for
incomes ity
slowed up by required by

from the changed

Scontribution

the

structure>

shoulJd

not

lar2G

reHieher

incomes explained by more workers
attracted
to
textiles
from

migration, by other non-econoirdcfactors tending to keep people

wpJ ^rn

whprp

mentfoned elrewhere^

the

laree

naturTincreasJoAnulation ?n
atiractea to textiles trom natural increase of population in
greatlv to solve New England's Sons YFrom
t^icwq'
?rnuiJLc p>„4 ;ncr,fQr
hicrh
^
(^rom 1^40 to J1949, the net
^

income
in

nrpnQG
_

refiects

relative

rnc+c
iivinfyN

nrp<3Q1irp

Priaii7atinn

In? ^l^f^Gahfor1^^
i! California and frorn 31
20% for Nevada^ Florida, An-

i„h,r

th^

'fc

+hA

thp

nmpp«

L,.c. J0na'o*.11!
^r°^ W+

habnnp nf

ordfr
primarily
•

SETtS,SS^Si
suffers: tJiey buy more and sell major losses
je

^
is

were

fArkansas

in 10 Southern.
22%'

Mkci^in-

some

importance

pi> ?

and fJve Northwestern

sg^cultural states (notably thet-^ot38)-

gions, incomes tend to be low
compared to the national level,
(In the Far West, however, the
scarcity of labor, and perhaps rich
natural resources, account for high

Northeast relative to the national
figure has declined by about 20%.
The gains for the South have beeru

labor incomes and high

industrialized regions. (The much
larger rise of Federal outlays in
the South and Far West than in
region (i.e., the Northwest) has New England is to be stressed.)
but 5.04% of the income and Hence, when confronted with the
20.3% agricultural income, it will adverse balance of payments, pubbe a large exporter of agricultural lie measures, instead of offsetting,
products; and when a region tend to compound the difficulties.

Western and Southern cotton,

some

e.g.,

policy)

suggest that the so much to natural conditions, is
Northwest
(and incidentally the much
more
difficult than
for
Southeast) are heavy exporters of manufacturing products. When a

and

48.3
25.8

(through tax favors) in the newly

"j
d

These

mining,

31.6
36.7

policy). Moreover, the government, through its tax and spendPolicies, contributes towards
cheap power, increased research
facilities, improvement of plant

106

20 3

Smifbpacf
pLi
g

gas,

Central West35.3
33.8

and to depress the prices of prod- examine the movements of inuc^s so^d
(international trade come. In the underdeveloped re-

'•

imnrri'

TNJnrthpa^t

rai^P

food and raw materials imported

NnrthwpJt"
Ma

and

comes

towards adjustment for older

J™1?11 t®nQ 10 iaise .irJe PHCes OI

12 5

ntral

power

47.5
22.5

rise of income would result in
large part from the movement

•

(agricultural

llr-a/n

transportation,

trade,

49.0
22.2

to those of the older regions. Tne

ment

1Q6%

t r a n s p o r t a ti o n in the South, I, p. 52. and Annual Surveys of Manufac:
Northwest, and Far West. Dif- tures, Preliminary, Nov. 13, 1951 and Dec.
construction, the range was from ferences in the proportion of serv- 6> 1951<
3.4%
(New
England)
to 5.0% ice income may also reflect variaBut, as has beeh said earlier,
(Southeast). Here the differences tions in spending patterns in part: adjustments are made more difare explained largely by the slow
the rich Northeast spends more ficult by various governmental
advance of New England and the on services than the poor South, policies. For example, as the older
rapid industrial growth of the
For agriculture,
government, region is confronted with these
South—not by the South selling and manufacturing, the minimum problems of finding substitute em» OB.,
„s™
pi.™., «.

'"Wholesale

Relative to U.S. tories.
wages —result

$L2g

varied

East

also suggest why 5 highest earnings industries* 42.5
has been experi- 4 lowest earnings industries! 27.8

figures might
New England

accruing to particular em- gh
and alsQ
nQt
gaining as
1 State and local government, services, farming, miscellaneous? manu ac ur ng*
ployments does not vary much much ag migM be expected in
——
from region to region, it may be chemicals.8
source. Regional Trends, p. 12.
assumed that competition js disQn tbe basjs 0f census figUres,
As the newer industrial regions developing regions: in part betinctly limited In some ins
>
I
have
calculated
for
1950
a
grow, it might be expected that
cause workers migrate from the
where pe cen age o
py
weighted average of wages in the their incomes would rise relatively low income regions and capital

each

seven

Derived from High and from Low Earnings Industries, by Regions
Middle

a"d Cl3y
f1"

StOIiGj

and glass products (2%). These

the United
_

relevant

factor.) 12

come

based

„T1

gions.

competition in given by the disof various types of incomes

Regional Trends

A16C1

tribution

1953. p. 71.
„

«ew Engiana. ui tne lo inaustries vance into higher paying indus- to demand must be

for which figures were available, tries.

In some recent postwar years, the
Federal Government drew net

In general, over a period of 204
years the per capita income of the-

capita

about 30%; of the Western agri-

incomes despite the fact that the
region is still underdeveloped.)
It would be expected that incomes
would rise in the low income and

cultural and mining states, about
20%M The great industrial states^
of .the Midwest have roughly
maintained their relative position.
Advances of the South rest upon=

per

industrialization, the improved poof tw° of the pioneers in the field sition of agriculture, and migraHoovfr held that^oweJ wi£U°ar?JS H°?; of the Western agricultural
10 Here we should note the disagree-

necessary

condition

(/or

for

the South's states, on improved prices for
£,atTal ma!;- fafm and ^,ining Products and

payrolls, it obviously will be a 5^outc
billion annually (about Agrkuiturarcommittee1, stZdy 'of^Agri- U1Sa?
relative losses of
dairy products, but adjustments heavy exporter of manufactured *'° °t the regions income) out of cultural and Economic Problems of the . e Northeast are the result of the
through
increased
output
and products.
New England.6 It should be added, Cotton Belt, soth Congress, p. 688; Re- improved status of agriculture
sales of agricultural products, tied
If a manufacturing region loses ~Tc,nSus of Manufactures, 1947, t, P.
Jh'
heavily in exports, its loses must 52; and Annual Survey of Manufactures,
Economy of the South, 1949, pp.
industrial gams of Other
5 Survey
of Current Business, July, bp rpponnpd larpplv in mannfar
Preliminary, Nov. 13, 1951 and Dec. 6, 48"49regions. 1 nat the 1 ar West ha&
1953, p. 16.
rec°upea largely in manutac- 1951
.
n Census
of Manufactures Reports, lost ground relatively in per ca6Based*
on
materials
in
Regional tures, With SOme help from serv9 Cf. my Economics of New England,
1947, and 1952 Annual Survey
Trends in the
United States Economy,
ices
Yet
even
in
mannfnrhivpc
1952 fPart
and Report of the New °f Manufactures,^ Release New England
13 For the facts about migration, see
p. 71.
nianuiaciures England Governors' Committee on the States, Nov. 18, 1953.
Regional Trends in the United States
there are segments where adjust- Textile Industry, 1952, Report, Sections
12 U. S. Department of Commerce, Re- Economy, 1951, pp. 6-7.
.7 Figures from Survey of Current Bust19 ant* 19> and Research Report, Chs. 15 gional Trends in the United States Econi4 Survey of Current Business, August^
or

Middle West and New England

iS^e^tadustrialMim^ntW

Aug. 1953, p. 9.

ments

are

not

easily made.

rr>

For

and

19.

Imy,

1951,

13.

i952, PP. n, 16, 17.

Volume 179

Number 5288

The Commercial and Financial Chronicle

(85)

pita
of

income is mainly the* result" three weak to the eight strong in-

the

vast

in-migration.

From

1930 to 1950, the population
Far West rose by 77%, as

dustries

follows: New Eng-

was as

of the

land—83;
Middle
Atlantic—62;
com- East
North
Central—10;
West
pared with 23% for the country, North Central—40; South Atlantic
14% for New England, and 24% —204;
East
South
Central—89;
tor the South.15 That the percent- West South Central—32; Mountain
age of national per capita incomes —12; Pacific—19.
in 1951 was still only 83, 63, and
An examination of these figures
82%

nation's

the

for

three

Southern regions suggests both the
effects

natural

in-

in population in the South,

creases

the

substantial

continued

importance of low

income

gions

agriculture in these
and the persistence of

come

differences

re-

in-

not

adequately
industrialization
or

treated

by
migration.

Relative
the

are

movement

result

velopments.

incomes
de-

numerous

Regions with indus-

tries that tend to grow gain more
than other regions. Their incomes
will

rise

For

more.

example,

have compared the percentage
national

manufacturing

suggests
which

that

the

eight

economy

industries

are

would

lose ground, the Central
(especially the East North
Central) would gain heavily. The
position of the South would be

states

especially
region

vulnerable.

nevertheless

That

this

continues

here

mean

industries
the

the

position

the

growth industries in

lessor Hanna showed that the in-

dustry mix pulls production wages

*n
South Atlantic States down
of leather) with eight
relatively from the national average by 12%
strong industries, and notably in and her wa^e rates depress them
prosperous times and in a military by 9%, below the national level;
(chemicals

-economy

and

allied

rubber

products, primary metal
industries, fabricated metal, machinery ' [both
electrical
and
other], transportation equipment,

manufacturing were added in
the years 1939 to 1947. The three

fer

1947

1953

(June

of the nation's

and

eight

thriving

(listed earlier)

experi¬

gain of 89,000 jobs.

major gains

were

The

not in manufac¬

in other non-agricul¬

but

employments, and notably in

government

(84,000),

trade

19 Calculated

from

standard

Regional

Trends,

The price

large

population

reduced

relative

living, reflecting the
relatively low productivity of the
region.
'/
" ■

percentage

the region's em¬

England from 1947

has

been

differences
tinued
and

noted

persist.

that

Indeed,

movements

labor

lower income

greatly
But

reduce

out,

facturing in 1947
the

differentials.

the

in the

effect may well be that
regions not favored by rich
S.

national

ance

the

working

the

was

ex¬

manu¬

25%

below

wage

level; but if allow¬

made

were

ences

for

the

structure

differ¬

indus¬

tries, annual Wages in the South

In the South, for

ample, the annual

regions should

the

population

population.

con¬

management and capital into

the

government, the proportion ot

the

income

(60,-

lib-lib.

well

may

1953.

20 U.

pp.

as a

leather

and

the

clines in population.

maintaining

weak

At present the high income re¬
gions are those with a large pro¬
manufacturing (absolute portion of high wage
employments?
in
depression
and
relative
in and those with
high wage rates for
booms), the older region turns identical employments. Other fac¬
more to
tertiary industries—note tors are also
important—e.g:, the
the rise of 84,000 jobs in govern¬
contribution of property
income,
ment for New

industries

the

losses in

gained);

enced

goods industries,

(apparels

ployment. But of course the de¬
veloped region tends to lose more
and gain less.
Confronted with

manufacturing, textiles lost 52,000,

31,000

able managers, skillful
workers, etc., the result would be
large relative, if not absolute, de¬

strong industries

—measured either

June), New England added 290,000
jobs. Manufacturing accounted for
92,000, or almost one-third.
In
and the three soft

losses

resources,

most regions, de¬
underdeveloped, suf¬

relative

and gains in the

jobs; the eight growing industries
(listed earlier), for 219,000 new
jobs.19

finance

summary,

veloped

important soft industries (textiles,
apparels, leather and leather prod¬
ucts) accounted for a loss of 2,000

tural

interesting study, Pro-

new

From

(29,6o65,

000), services
(27,000) 20

jobs. Thus,
in New England, 299,000 new jobs

turing

country.)

the distribution of

gain is explained by the fact that
her
position is strong competitively within the industries losing
ground in the nation.
(By weak

amanufacturing industries (textiles,
apparels and leather and products

strong and growing, the Northeast

employ-

ment in three soft and rather weak

ing economic structure is given by

S., New England Re¬
gional Office, Employment in New England, 1939-1953, Tables C-l C-7.

Continued

page

the corresponding figures for New
England are 2.3 and 2.4%. But in

the

Atlantic

Middle

and

East

North Central these yariables pull
wages up.16

instruments and related). Accord-

MANUFACTURERS

Over the years 1899 to 1951, the

ing to the last Census (1947), the
proportion of employment in the

three "weak" industries have lost
ground relatively speaking:

TRUST

COMPANY

%of Employment
1891)

1939

1951

28.5

20.7

19.4

4.6

6.6

7.5

8.6

24.0

Textiles, apparels and shoes...
Chemicals, petroleum and rubber

33.1

Primary metals
Metals, machy., instruments, etc. (5 major industries)
...

Condensed Statement

of Condition December 31, 1953

RESOURCES
SOURCE:

•

Census

Manufactures,

1947,

II,

various

and

pages;

1951

Survey of Manufactures, Advance Report, Series MAS 5/24, March 11, 1953,

In order to

assess

the

situation,

it is necessary to take account not

Cash and Due from Banks

small number of jobs involved. In
the Far West, the percentage gains

only

and

but
-

the

percentage

the

weak

industries at present
changes over recent

strong
net

years.

were also frequently of large proportions and for some industries
of
significance.
(Transportation
equipment, 83; leather and leather

Thus, of the percentage of the
nation's factory jobs, the largest

products, 77; primary metals, 50;
e*c-) The gains
the Central

relative

States were notable

two

New
•

losses

between

the

last

Censuses, 1939 to 1947)
England
(19%),
and

were

Middle

East

and

instruments

the

(28) and chemicals (12). But in
its important transportation equip-

Southeast

the

ment, its percentage of the U. S.

gains,
the
and the Far West

jobs was down by; 14%; and it
*os*: ln S0L ^ g°°ds industries. Its

It is interesting that in these
years the
Southeast lost ground
relatively in all manufacturing.

U. S. Government Securities

the

largest

19).

For

1947

1951, New England's

share of

the nation's factory employment dropped further by 6%,
the Middle Atlantic States by
4%,
and East North Central by
1%;
but the South Atlantic gained 3%,

the

West

South

Central

the Pacific States

What is also

As against changes in the percentage
of
the
nation's
jobs
(above), we might examine the
changes in the percentage of employment within the New England
region (1939 to 1947).
T

Leather and leather products 30%

19%."

interesting is that

Textiles

in the years 1939-47 textile losses
in New
England were

Apparel

roughly
equal percentagewise to all losses
(a percentage of U. S. total); and
in

rubber

that, from 1947 to 1951, New England's percentage of all
factory
employment declined by 7%; and
of textiles by

East

the

to 1947
in

15%.

large

primary

gain

textiles

from

Stock of Federal Reserve Bank

4,511,700.00

Other Securities

28,084,495.54

Loans, Bills Purchased and Bankers'Acceptances

(27%) and

metals

(11); in texAlso most signifi-

from

1939

1947

(still in

percentage of U.
S. total) was but
10%; in transportation equipment and apparels,
each 35; but in
petroleum, 31, tobacco, 28, paper and leather and
leather

products, each 21. In other

words, the Southern advance
on

wide

lute

were

relative

(300%
still

front, though in abso-

number

gains

in textiles.

largest
Very large

gains for the

Regional
Trends,

16 F. A. Hanna,

Per

nomtc

the

Southwest

ufacturing Wages
in

jobs

transportation)
unimportant because

was

were

the

64.

"Contributions of Manto Regional Differences

Inp0^e^'Q^e,,ieu, of Eco"
Statistics, Feb. 1951, pp. 18-28.

17 U.

Census,... Annual
p. 16.

Survey

Manufactures, 1951,
I

of
J

917,612,832.12

....

Mortgages

14,434,348.73

Banking Houses
Customers'

14,918,335.67

....

13,537,850.23

—

Liability for Acceptances

...

Accrued Interest and Other Resources

7,484,154.94

$2,933,112,690.41
LIABILITIES

Capital

.........

$ 50,390,000.00

Surplus

100,000,000.00

Undivided Profits

29,279,761.30

Reserves for Taxes, Unearned

Discount, Interest,

etc.

179,669,761.30
21,903,581.72

,;A

Payable January 15, 1954

1,889,625.00

Outstanding Acceptances

Liability

Endorser

13,985,931.63

Acceptances and Foreign Bills

14,629,344.74

.......

2,699,398,711.05

Other Liabilities
.

•

Electrical machinery
2
^^mery

1,635,734.97

—

metals

—
T

Deposits

$2,933,112,690.41
United States Government and Other Securities carried

secure

of Manufactures,

(All figures calculated from U. S. Census

public funds and trust deposits and for other

$141,426,848.42

purposes as

required

are

pledged

permitted by law.

1947.)
Ill HECTORS

...

Middle Atlantic States,

i?SSeS/o^fr^ 1IV tobacco
i'
anC!

1939

the fact that the South-

was

east's

losses

in tobacco

were

tiles, only 2%.
cant

In the Middle

81,410,689.37
135,850,386.05

Major Gains
,

and
instruments, the
England losses were much Fabricated
larger than in textiles. But note Chemicals

New

Mortgages

State, Municipal and Public Securities

Dividend

Major Losses

9%; and

882,219,593.02
833,048,304.74

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

concentration in the growing hard
industries increased further,"

(5%);

Southwest (24)

Annual

leather goods (24), food (14), and
aPParel (10). The major gams
™e0rxe ln1 non-electrical machinery
.(63> electrical machinery (62),
instruments (40), transportation
equipment (25).

edwin j. beinecke

john m. franklin

Chairman, The Sperry & Hutchinson Co
clinton r.

Black, jr.

President, C. R. Black, Jr. Corporation

This

the

tries

general

pattern

growing relatively in the

tion and losses
dustries.

Gains in the indus-

Even

na-

in the weaker inin

the

South

At-

tered, in machinery and transportation equipment. But gains were

also large
industries dependent
°"
materials-lumber, paper,
GXC.

Another indication of the chang18 Calculated
116.

from

Regional Trends,

william c.

Director, Phillips Petroleum Company

Products Corporation

oswald

kenneth

johnston

New

Chairman, National Dairy
Products Corporation

President

madden

henry c. von elm

President, Emigrant Industrial

Chairman, Dana Corporation

City

l. a. van bom el

Company of America

charles a. dana

York

richard

President, Home Insurance Co.

President, George A. Fuller Company

horace c. flanican

harold v. smith

maclellan

president, United Biscuit
lou r. cranda.ll

Trust Committee

harold

Simpson Tliacher & Bartlett

clouch

Administrative Vice-President

rare

Chairman

john l. johnston

c. brush

patterson

President, Scranton & Lehigh Coal Co.

President, Gerli & Co., Inc.

Chairman, American Home

Director, Cluett Peabody & Co., Inc.

paolino cerli

Steamship Co.

charles

C. r. palmer

john cemmell, jr.

john t.

lantic, textiles declined as a percentage of the region's employment by 15%, leather by 25%.
Large relative gains were regis-

CilGmiCSlS, StOIlG. giSSS,

alytn

Triborough Bridge and Tunnel Authority

ceorce j.

Director, New York and Cuba

Mclaughlin

Vice Chairman

Company

Clyde Estates

edgar s. bloom

Mail

ceorce v.

President, United States
Lines

most regions.

Honorary Chairman

Savings Bank

ceorce c.

john p. maguire

walker

President

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

Electric Bond and Share Co.

Head Office: 55 Broad Street, New York

City

MORE TIIAN 100 BANKIXG OFFICES IN GREATER NEW YORK
Member Federal Deposit Insurance

Corporation

The Commercial and Financial Chronicle

(86)

Continued

Government

from page 33

finance, industry, and real estate,

Slipping Economic Regions
And North-South Competition
below the

would be only 10%

miscellaneous

and

employments, mining, and trade
especially gained; transportation,

tional level.21

services

and

pecially

lost

Obviously,

agriculture have es¬
ground
relatively.

with

regions

heavy

these "declining"
employments tend to lose ground
added per worker., But an exami- relatively.
nation of the table below does not
Economic changes in the last 20

na-

employment in

goods industries are the most productive. Hence regions with large

close correspondence be- years point to the kind of adjustthese variables. Compare, ments that have to be made. The
lor example, the figures for the regions suffering losses in their
Far West and the Central States, major
industries
offset
these
Value added is 14% higher for losses to some extent by captur-

employment in durable goods ina high value

the former in 1947 and percentage
of durables 13% less.
^

Concentration

below.

reveal

industries ^is
noted

durable

the

general,

tween

in the figures

also evident

dustries tend to have

ing part of the additional employin the growing industries.
~

ment
*

Value Added

Percentage
Durables

United

States...

(U.S.

Durables

100)

New England...

31.5

81.3

41.6

38.7

103.5

46.7

Far

104.8

59.4

East

West

SOURCE:

113.2

-36.5

28.8

Central
South

68.6

33.0

80.2

120.6

57.9

119.3

51.2

the United

States

1951,

Economy,

83,

pp.

especially
dangerous (67% of the employment
in
eight major industries
closely related
to
the military
economy as compared
with 34%
New

England and 28%

Atlantic

Middle

More-

States).

tne

employment in these eight
strong industries relative to three
weak industries was eight times
as
high in the Central States as
over,

in New England.

Regional

much

their

losses

ex-

advanced

industries

Under this

England,

84.

(e.g.,

tex¬

New

pressure,

example, .will

for

its employment

in¬

in tertiary

the

loss

markets to another
be telescoped into a

relatively brief time. But whereas
marked

penetration

foreign country

•

with

period

the

ensuing

hard-

also

New,

important

industrially

and

relatively

ground

since

Northwest.

dustries

for

100

in-

......

But the

100

were

migration

non-commodity producing

large gains in

die East in that order.

above (U. S.= 100): in the three

former instances and

lumber

land's

and

England obtains 4.09% of its

but 88% of the national

age),

and

miscellaneous

aver-

(96

were

for

ment in

jyaliie added ana 101 for relative
wages).

Summary

New Eng-

small indeed.

and

from

Value added per employee gives
an indication of
wages to be
expected.
For example, a high

but

value added per wdrker may be
*explained by large investments in
capital and large outlays for ad-

56.60%

these industries
high value for

these

are

v„

than others; and in the
process to capture some of the industries of the older regions. All

that

ask is

can

the

transitions be eased as
much as possible; and above all
that they should not be made

industries

with a high per capita income; but
the high ; income Central States

these

states

income

(e.g.,

New

but

46.22%

"difficult.

Unfortunately,

an<L to

government

Central

States,

lesser

ex-

research,
cial

nhancp
Change,
and salaries plus- net income of 1949
1929 to 1949
proprietors, to total_____i.
ioo
0
Agriculture (prop, income plus wages & salaries)
10 62
.86
Wages and salaries: tMining
2 08
.69
{Construction
:
»

wages

—Middle East—>■

Change,
1949

—

1949

Change,

1929 to 1949

!_"""!"!"

,_i

Above four commodity
producing industries

TTrade

1949

tTransportation
tPower

and

gas

''State

government

and local

estate

""" "

4.49

—1.77

4.55

1.28

these

33.59

2.77

23.01

3.77

factures

and

.11

48.86

—2.11

43.40

.28

47.66

—2.80

food and

raw

3.19

15.66

nine

17.42
4.84

IIIIIIII"

non-commodity

♦Lowest

2.03
.20

.99

—

18.66

2.40

.18

—

producing

earnings industries

—1.20

6.60

—3.52

1.18

—.16

1.04

.21

order to

1(63

.10

1.13

.25

4.65

face of

—2.21

2.80

1.50

—1.43

4.22

5.47

3.18

4.09

1.96

5.57

3.12

.30

6.89

.45

6.29

.38

6.65

.46

.86

9.41

.12

9.92

.72

8.19

—1.32

*4
—

retail, medium earnings.

—

.83

—

8.30

1.61

—1.80

2.11

—2.24

1.57

—1.14

.12

51.14

2.11

56.60

.27

52.34

2.80

earnings industries.

Wholesale:

high

the

services

populated

manu-

pay

for

they

are

areas.

materials if

export they must, in the

competition, cut prices

new

relatively and eventually wages,
or (what is difficult in view of the
great advantages of the underdeveloped regions with special ac-

5.17

—1.85

{Medium

.48

—

52.62

tHigh earnings industries.

survive

6.59'

1.16

195

industries

.39

rela-

and

regions must export

.01

—

.21

949

♦Miscellaneous
Above

2.30

2.58

mate-

in agriculture is
nation's

3.17

—

—1.74

raw

to '

vania, etc.) but 26%, suggests that

.14

the

have

(New York, Pennsyl-

.31

35a

_!!!,

governments

Services

of the

—1.91

.02

IIIIZI

31%

Middle East

—7.68

143

{Finance, industry and real
{Federal

17.70

but

.15

{Communications

.29

—

4.22

6'54

2.74

that

England's

tive employment

1929 to 1949

100

41.16

,7"^

.37

—

.40

—

30.00
47 39

3.33

100

clear

regions

New

1.84

—

4^9

'(-Manufacturing

That

ices.

farm

100

rials by exporting goods and serv-

% Points

Change,

1929 to 1949-

-—-South East

% Points

well

industrial

for their food and

pay
*

Gross

194^, and Changes in great'

Percentage Points, 1929 to 1949

ternative

to construction

cess

earnings;

Adapted from Regional Trends.

Relative Importance of
Major Industries in the Regional and National
Economies, 1949, and

less;

% Points

of most mod-

wages

and

salaries

war:

plus

net

income

«•*•—i

i:?3
524

tManufactiudne
Above torn

1949

Changes in

•

'75

Change,
1949

°14
z i?

7:8
4'25

T02

-71

Change,

T 79

3 88

1949

-If

2.58

6.31

art-liW
53.77
2JB
U1?
-leg

commodity pVoZucing iiidustriesZZ:

38.75

find

•

1929 to 1949

! 05
z:
1.58 y
-M

these

made

but

{Communications

SarST realVstatiZZZZZZZ
"lervices"^

ZZZ

60vernments

7|
Hn

'{«

7:2
Ho

2.8

£g

.04

5.97

6.2

•Miscellaneous""!""Above

nine

ineclumi^'earmng^'"S'

SOURCE:

52.56

1.75

earnings industries.

46.22

Z2.2

from

very

La¬
Henry
.

that

adjustments

are

reduction

preg°n and Southwest Wash-

ington

wages

-27

~Mo

sis
i

5|o

10-40

~2 22

6L25

_2.04

high earnings;

veloped
the

regions—in part because
surplus labor supplies

large

not
of

and

responsible

ford,
according to
word from
Henry J. Zilka, resident partner
°f J- R- Williston, Bruce and Cornpany.

Officers of the new firm are Mr.
Zilka, President; Arthur W.
Smither, Vice-President and Present Manager of the Salem office
of J. R. Williston, Bruce and Gompany; E. H. Greene, Vice-President and George Geist, Jr., Secretary-Treasurer, both of Portland. A staff of 38 persons of
the five offices, is joining with the
new firm
as
principals or .-employees.
'
Mr. Zilka is a present member
of the National Board of Gover-

adjustments

the

alone

high

older

re-

•

the

nors

Association

Investment

Bankers

America.

of 'the Portland
and former Chairman

President

past

club

the Investment Bankers Asso-

ciation of the Northwest.
tered
Bruce

years.

land

for

President

many

He has managed the Portand

Williston,

Company

partner for the past year.
W.

1918,

office

Bruce

en-

joined Conrad
Company in 1930 and

and

Vice

was

business

investment

the

Portland

Smither

was

resident
Arthur

associated

with

banking in Salem for ma"y years,
He was formerly Vice-President
of Conrad
Bruce and
Company
and Manager of their
1933.

He has

the Salem office

liston,
the

Rruce

pas3

and

Salem office

been Manager

of J. R. Wil-

Company

for

year,

Smither

unions

for

operate in the same

continue to

tend to depress wages.

Government

Bruce

Conrad

office locations in Portland, Van-*
couver, Salem, Eugene and Med-

formerly

Company. On Jan. 2,

since

Williston,

1954, this new organization-, acQuired all of the Oregon assets
He ^ormer company ^and* will

quate alternative markets for de-

incomes

^ru,ce

developed regions to provide ade-

Company,

aIiCt

-if*

Nor

rise sufficiently in the

Smither

ilt

England.

Arthur

Z.ixa

6 09
5L35

evidence

very

and prices

costs

and
Company, a new
Oregon corporation, will take over
the compIete investment services
1

New

iMedium earnings industries. ^Wholesale:

Regional Trends.

would

import

Smither

-iSS
'18

are

Adapted

this

states

and

Formed in Portland

7:2
112

t fs
—

industrial

agriculture

but

,23

7:2
Hn
S

7 03

non-commodflFFoductarindiitrTei

retail:

-!$
-(?4

employ-

slowly and with
long
periods
of
unemployment
(obscured to some extent recently
by government spending policies),
Evidence of some adjustment is
found, for example, in the large
relative

j^szrzzzzzzzpzzzzz

Failing here, they

alternative

There

some

% Points

1929 to 1949

industrialize) reduce
a relative rise

of productivity.
ments.

Far West-

% Points

1929 to 1949-

To 83

North West

Change,

1929 to 1949

exports.

costly readjustment.

use

costs through

must

% Points

Change,
Gross

Bond

plants and

unit

Percentage Points, 1929 to 1949
Central—-—

sources

West

return

of newest techniques, and their fanatical deter-

ern

South West

employment
to yield al-

have

course,

mination

SOURCE:

area

would

pricing policies, through its tariff
policies (cutting tariffs on manu¬
factured goods and raising them
on, a g r i d u 11 u r a 1 products) —

Relative Importance of Major Industries
in the Regional and National Economies*.

the

which

offer of spe¬
through its farm

favors,

—New England—

power,

tax

.0Uillys TVe,

Points

metals,
metals,

for

4.23;

employment
in these
industries;
and
the
compared with an-' South's percentage, with low in-

and

States

5.57;
but
the
Southeast, 8.30, and the Far West,
7.82), but even as older regions
were
losing ground, the Federal
Government, through outlays on

—.United States—

tobacco,

Central

ma-

through all of these the governtent, trade unions have made the
ment was accelerating the losses
adjustments "much more difficult
of the developed regions and putministration as
than they need he. New England
ting too great a burden on the adother region. With such
large out- comes, is higher than New Eng- has especially Suffered as a re¬
lays, the wage received relative to land's. Gains in non-commodity suit; but the 'interests of the Mid- justment process.
Trade unions, insofar as they
value added may well be less than" producing
employments do
not die Atlantic States and the Cenwere strong in
the developed rein another region.
necessarily accrue to the high in- tral
States
are
also
involved.
gions and weak elsewhere, and
In a table below, we
Large military and other govern-,.
present the come regions
thus tended to keep wag^s up in
percentage of income (wage and
<3> Note the lal'Se Sains in Fed" me,nt
obs^red ,tfie the Northeast and Middle West
foiling +
•
lWdse1ana eral employment, and particularly extent of the adjustment problem and allowed them to fall relativefarm) falling to various employfor the underdeveloped
regions.
.
.
M
21 Regional Trends, p. 87.
ly in the South had effects similar
inents in 1949 and the
change in 1 (4) In these 20 years, Federal
.22 Ibid., calculated from pp. 118-119.
to government.
"
have

textiles,
the

Middle '"Atlantic,

economy,^ some
bound to grow more

rapidly

employment in
also combines a

higher

ernment;

Conclusions

dynamic

regions

non-commodity producing

East

for

easy

substitute

jor income from the Federal Gov¬

industries (61.25); and the Middle that the older regions

indus-

tne*>

(2) The Far West, with the
highest per capita income, also has
highest percentage of employ-

products (103, though value added
was

gains

find

and

peacetime

it would not be

England

government

in.
large substantial relative gains in

in the Southdustries. Wages in New England in
east, Southwest, Central, and Mid.five of the 19 industries

the

New England must seek offsets

and

20 years have been

above

into the low-income states

money

less than 100 (U. S.= 100) in 16 inand

has

dustries. And in contrast-to these of.the Southeast and the agricul-

Southwest

the

materials

raw

Hence,

economy

the last 20 years, by pouring

over

two other great industrial regions, tural Northwest, slowed up the
A

markets.

aggravate the regional adjustment

problem.
Not only

Central States, and of small signif
icance

location

Middle

short

England, the Middle East, and the

•

industries; and even in manufacturing, a large part is tied to the

market

over a

of employment in secondary in-

96% of the national
average. For 19 industries in New
England, value
r
addecjl per employee in the United States was

A large part of the employregion is in domestic

omy.

ment of the

the way is open for New
England, the Northeast and the

structure of employments in

and of wages,

allow

would

government

1929 in industry, New England
does not increase the prpQortion

manufactures

to be concentrated

small part of the region's econ-

limited

industry
region may

Hence

(1) Manufacturing is especially
important relative to the national

all

ments have

machinery, etc. In the body of-this
paper, I have tried to show how

trade.

value

added for

regions,

national

gaining

87% of the national average,

towns

language, institutions, etc., do
not hamper trade as they do inter-

more,

table,

was

depressed

for

What

Tariffs,

industries; but in contrast to the ships, the United States Govern
Middle East and Central States, ment has gone out of its way to

management do not seek out

the

But perhaps even more important
js the fact that the export adjust¬

tiles and shoes, or the Middle East

change restrictions and differences

percentage points from 1929 to
1949. In the space available, I can
only stress a few features of this

and

employments and exports for tex-

trade.

expected, wage
rates check reasonably well with
value added per employee.
For
New England in 1947 the average

might

into

altogether too
slow, and in part because capital

New

trade

move-

capital

crease

industries

new

The

and

important in dollar value than in-

tiles).

Regional Trends

labor

ternational

less

are

large in some of the
In the devel¬
oping regions, one will find also
that the gains are relatively larger
in many industries besides the less

102.2

industries

growing industries.

87.4

Middle

East

unstable

states, where
heavy and

gions lose industries.
ment

will often be

100)

100.0

51.8

100.0

43.8

concentration

tries.

Value Added

Percentage

the

relatively than their
stake in all manufacturing indus¬

J !)4 7

-i fo¬

extent

some

ized Middle Western
the

their

that

found

gains in all manufacturing indus¬

1939 and 1947

Worker, by Regions,

off

put

The importance
military outlays is especially
great for the heavily industrial-

Thursday, January 7, 1954

tries

Percentage of Employment in Durable Industries and Value Added
Per Production

will

But

and

day of reckoning.

and

Company

-w&rcontinue the investment sery-

ices

developed over the past 20
by the preceding companies

years

Volume 179

for

this

"We

Number 5288

area,"

have

The Commercial and Financial Chronicle

stated.

Zilka

Mr.

$41,617,000. Net in¬
period, after all
charges, was $33,010,000. For the
year 1952 the company reported
gross operating income of $602,805,000;
income
before interest
and
debt
discount,
$52,554,000;
Public
offering of $55,000,000 interest and discount, $1,360,000;
Atlantic
Refining
Co.
25-year and net income $40,476,000.
3%% debentures, dated Jan. 15,
The debentures will be redeem¬

participating firms

Our present research de¬

partment will be continued,

inprogramming,
service

clients."

The

Smither

prise

and

the

Alder

Zilka,

Company, Inc.

entire

the Woodlark

eighth

1954

com¬

Building, 813 S. W.

bentures

Lothrop, Sr.,
Manager research department; P.
A.
Kosterman, Manager trading

The

Walter

1979

was

priced at

will

annual

retire

101%

commencing, in

have

1959

50%

the

sufficient

the

issue

Net proceeds from the financing
will be added to the general funds
of

Cozad,
Joseph F. Barbagelata, C. Gordon
Childs, John David Zilka, Edward

The

Such

Atlantic

funds

other

will

things,

short-term

Refining

for

used,

Co.

among

repayment

bank

Oregon Building with Arthur W.

loans, for ac¬
quisition and development of ad¬
ditional crude oil production and
for expansion*-and improvement

Smither.

First

Harold

Smither, Assistant Sec¬

Hagen
Salem

Frank

and

offices

retary;

Vice

Ralph

bank loans in the amount of $46,-

and

000,000
all

the Tiffany

Bales

tional

Medford

Manager.

Wash,, offices

couver,

of¬

Washington

Lothrop.

Street

Jr.

are

with

1953

the

are

the

nounces

Securities,
Inc.,
New York City

the installation of

Elected Directors
Joseph Scribner and H. R. Hosick
Charles

Laurence
Wall

Carter

Reinholdt

has

that

York

New

Exchanges, have
Charles

PALM

New

South

209

gen¬

rier

with

Transportation

common

BEACH,
&

Co.,

York

Fla.

the

members

Stock

Exchange

about

were

Ohio

Jerseyof

area

$85,000,000
will

partner in the

firm

banking

the
have

dent
of

the

Potter Bank

Trust Co.

city.-

same

that

amount

ap¬

during

BANK

1954.

Income

White Salmon, Wash.

for

the

available

nine

for

months

interest

ended

Sept.

COMPANY

TRUST

NEW

Gartman, Rose & Go. Opens in New York

YORK

established 1853

Report of Condition
At the Close of Business,

•

December 31,1953

Board of
Directors,

Assets

•

ROBERT

Cash in .Vaults and Due. from Banks

U. S. Government Securities

Slate,

$236,598,914.95

.....

Municipal and Public Securities

Federal

Reserve

Bank

Stock

....

Other Securities

Loans and Discounts
Real

Estate

Customers'
48

Mortgages

Liability

Banking Houses

Accrued

Income

Other Assets
Left

right: Leo J. Goldwater,

.......

849,940.00

215,578,839.91

Street. New York

the

firm

new

Goldwater

partner.
&

man

City,

and

was

Daniel

Cowin.

Dec.

many

Exchange,

w?jf$h offices at 1 Wall

The principals in
Gartman, Carles Rose, Leo J.
Margaret Li Ijastor is a limited

31.

•

associated

years

general partner
with Josephthal

rftired

Newburger from

when

joine
customers' man. For a year, beginning in*
of Emanuel & Co.'s investment departrfte

ager

tleman

1939-1944

Goldwater &

Co. from

Co., Inc., and

was

Presi

partner

has been

artment

of Hilson

Wertheim

937, he
and

During the period 1946Frank & Ogden, Goldwater^
Leo J. Goldwater.
In Janua

Hettleman & Co.

t and

iii|

1944-1946.

proprietor

J.
,

BRIJNSON

1949,

.Mr. Cowin spent four years in the Navy a

upon

analyst.

Man-

1950.

at Hettleman &

firm

January,

Haupt &
1950 he became

Co.

and

was

joined

Exchange,
his release,

Co.'-Jmd

managed that

Research Department

named^a general partner

1952.

director of

—

McCUTCHEN

WILLIAM

Engineer
HOLLOWAY

Chairman, W. R. Grace & Co.
HERBERT

STL'RSBERG

Treasurer,

The

Livingston

Worsted Mills, Inc.

Capital

$15,000,000.00

(750,000 Shares of $20 Par Value)

Surplus

President

30,000,000.00

Undivided Profits
Reserve

JOHN R. McWILLIAM

for Taxes,

Acceptances
Outstanding

6,388,443.47

Expenses, etc.

ALICE

2,763,196.65

$ 3,271,469.18

Vice

LOW

President

President, Nichols Engineer¬

•

2,114,696.46

1,156,772.72
774,712,760.63
$830,021,173.47

DONALD
First

Vice

LOWRY
President

Ingersoll-Rand Company
FRANK A. SHERER
Senior Vice President

WILLARD A. KIGGINS, JR.

Memorandum:

HERRICK
First

ing & Research Corporation

(Includes $18,141,451.45 U. S. Deposits)

CRAWFORD
Trustee

CHARLES W. NICHOLS, JR.
.

Less: Held in

Portfolio

Estates

$51,388,443.47

joined Het-

194&|he organized the

Funds Department of Ira

department until
the

Co.

Ii:T*IIIPPS

Consulting

395,605.85

Goldwater &

tock

joined Abraham & Co.

was

he was a partFrank and sole

member of the New Yo

Manager

was

and

PETERS,

Retired

2,238,185.57

...

Deposits
Mr. Goldwater

in Goldwater,

Mutual

firm,

new

1938.

From

L. J.

ner

1927-1933,

from Hettle-

irikh'e
&"|Co.

partner of that firm since 1943.
Mr. Rose was Manager of the securities d'c

RALPH

Gartman, Rose & Co.,

Messrs. Rose, Cowin and Goldwater
Co.

Mr. Gartman, who is a
for

CHmrmanffiichols Engineer¬
ing & Research Corporation

Rose, Mortimer J.

announced Jan.

Mortimer

are

EDMUND. Q. TROWBRIDGE

Liabilities
members of the New York Stock

C. WALTER NICHOLS

JOHN

Gartman, Daniel Cowin
The formation of the securities firm

Chairman

1,350,000.00

$830,021,173.47

Charles

Qrysdale & Company
DUNHAM B. SIIERERv

1,044,490.84

Receivable
.

Partner„

7,525,254.70

Acceptances
.

29,838,880.20

DRYSDALE

Senior

334,146,131.98

454,879.47

Securities

for other purposes as

pledged to sepurc deposits and
required by law ....

The Corn Exchange

President, A. II. Bull

$47,955,393.75

Steamship Co.

Safe Deposit Company operates vaults in

60 of the 78 branches located
Member Federal

burgh, and Mr. Hosick is Presi¬

EXCHANGE

CORN

and,

the

States.

of
the
consolidated

stated,

company

Pitts¬

M. Singer, Dean & Scribner of Pitts¬

opened their 15th all-year round
Florida office in Palm Beach.

Jefferson Avenue.

York-New

New

Pennslyvania

.investment

—

motor car¬

headquarters

burgh, Pa., Operating 12 terminals

United

partner in the firm.

Kidder

Gardner,

Lines, Inc.,

Directors

elected

been

Zin¬

M.
as

Continental

Mr. Scribner is

Mo. —Ruth E.
staff

and

New Kidder Branch

Chronicle)

the

City,

York

graf has been admitted

Financial

joined

the

Co.,

Marks

have

Zingraf

New

Stock

announced

Joins Reinholdt Gardner

proceeds

American

eral

SPRINGFIELD,

Street,

members

Exchange.

to The

120
an¬

Louis, Mo., members of the Mid¬

(Special

the

Company, which is with¬
drawing from the municipal bond
business.,
I

private wire to White & Company,
Mississippi Valley Building,
St.
west Stock

Jones &

direct

bonds.

succeed

municipal bond business of T. H.

To White in St. Louis
Eastern

municipal
The

state,

will

op¬

at
to

Eastern Securities Wire

Broadway,

revenue

firm

new

prices
ranging from 104y4%
100%,
plus accrued interest, depending
upon the date of redemption.

expected

debentures.

its

ancL

proximately

George C. Gladden represents the
company

company

for properties, plant
equipment
(excluding dry
drillingv^osts) approximated
$370,000,000 during the last six
years.
Capital expenditures
in

representative.

sale .of

the

to conduct
investment
business

Building,

specializing
and public

sinking fund at 101%,
They also

redeemable

Bank

general

subsidiaries

1010

Fred

the

from

tion

City

accrued interest.
to

are

& Co. with offices in the National

hole

Van¬

repaid

plus

Own Investment Go.
CLEVELAND, Ohio—Joseph A.
-Overton is forming J. A. Overton

and

Building with Rich¬

Watson

most of-which

company

located in the U. S. Na¬

Bank

ard

associates.

are

Laurence Marks Co.

Capitalexpenditures

Richard Langton and Bruce

fices

currently outstanding,

are';

from

Building with Jack Danby, Man¬
ager;

principals.

are

refining,
transportation
and
marketing facilities.
Short-term

President;

Smither

Henry A. Willecke
Eugene offices

Johnson.

located at 203

are

able for the

J. A. Overton Forms

sinking fund

maturity.

Zilka, Sales Manager; Merton R.
DeLong. Arthur S. Olsen, John
Moffett,

15,

debentures

benefit of

department; Derele Swails, assist¬
ant
trading
department; H. D.
Christianson, Cashier; James H.

Jan.

were

yield 3.19%.

Fred

are

due

yesterday (Jan. 6) by an
underwriting
group
headed
by
Smith, Barney & Co.
The de¬

Principals here in
Zilka, Smither, Greene

Geist

and

made

floor

Street.

addition to
and

offices

Portland

Zingraf Partner in

the

Go. 314% Debentures

with

estate
planning
as part of our

funds

mutual

and

was

for

come

Offer Atlantic Ref.

throughout the United States and
Canada.

(87)

30, 1953,

Smith, .Barney Group

direct wire

established

service with 22

throughout the City of New York

Deposit Insurance Corporation

)

The Commercial and Financial Chronicle

(88)

•Cnntimierl
^onunuea

irnm

131

onap

jrum w

oversold

weapon.
gfm

Cflncemions
w
if

IaaJ

observations

tlf6 %jl23i 311166 CI
many

Obviously, the slow rate of

benefit

report

Employers, nevertheless, would

ex-

The UAW,
asked

it?

the

and

anri

has

"built-in"

bitterness

demands a curious

Tbe

combination of.

payments from the time they ac(1) Pay-as-you-go individual
seniority. The guarantee employer responsibility for the
should assure protection against guarantee so "that every layoff

guaranteed

antitrust provisions.

from

dustry

guaran-

quire
a

full

year

of layoff for all eligible will immediately be reflected on
the corporation's books in terms
of increased costs"
[Experience

workers and for shorter periods
on
a
graduated basis for those

hostility

who

exnerience

toward

the other hand, ing its similarity to the NRA
virtually codes in 1933 which exempted in-

employment

teed

Thursday, January 7, 1954

guarantees

"All workers should be

similarity of

payments

for

without limit in these words:

providing employers with an incentive to stabilize operations, his

thp1 truarant^

lnrp

annual wage.

hundreds of words.

contracyclical
a "bul-

unemployment insurance and the
private guaranteed wage, both as

W3(f6

to
thp

l„

spelled out by

was

sPite of Latimer's repeated

YA7

g\§

111
Vl
inition

wark," why not build

.■

^tflllCPO
VvlliUwCtt

fflGk

■

AIIV

5 But if it is such

have

not

the

mini-

annual

wage

worked

rating!!

nr
8

Plans-were

relaHvelv

on-

niwhi«5ive nflvfltfrnSnnnrt

productive

fa—-—«

pmnlovmp'nt

„

Power

edly

pro-

reduce the size of the

and

reserves

to spread

required
the risks

frnm

prosperity

«•!(.

^Ztir.7
P

ay?ffs

importance

Latimer

found

widely.

that

instability

The outlays for

fully guaranteed annual

•dustnes would have involved proJhibitive costs. In 1938 for several

In a single iron or
plant the costs would have

222% of the payroll.

steel

operation for

been

In other

may now

fhp

TIA

been

decade

there

W;rTo

some

tribution

I...

the

of major

risks

No . doubt there is some reason

annual wage

(Italics
hp

are

pay-

however

hedging

nv'

program

should-

furtfrnT^aViind
*or regular, full-time, year-round
employment for all their seniority
workers and to provide regular
fo™iar

un-

inpnmp tn

added.)
aPPOmnlishpd

integrating
with

m.arantee

f°r such

complicated adminis-

pri-

the

nublie

the

by appearing to presume
there are three separate
sources of funds (or,, four mcluding UC) that can be tapped. But
ultimately all costs would come
out of payroll contributions—unless the latter» "proper distribucosts
that

tion of the risks of maj°r Huctuations

...

levies

personal

"Guarantee payments should be incomes.
inteSrated with state unemployThe

UAW

Board
and

improvement

the

laws»

Since employers already finance
7

:•

and

business

with

of the Joint

respect

should

independently
niucyciiucmiy

,Ildue

eligibility

di^ualifications

made

further-

demands

more? that decisions

state

Double Rules and Bureaus

compensation
benefits so
employers can reduce their

Uabilities by effectively working
toward the

thnsp spninritv u/nrlfprc

economy

general taxation. This, under our
curi- tax system, would mean further
•

Then we come to a bit of
ous loglc:

mcnt

the

over

whole" were to be financed by

rating

that

now

employed."

sud-

Provide the strongest practical

more,

suddenly realized that

was

had

experience

guaranteed wage

line of ap-

new

Now,

arguments

reappraise their attitude.

All of this disillusionment drove

more.

toward

While

into the

guarafteeTuC^

Supplementing Unemployment
Compensation
Latimer

control.

these

vatp

titude

XSThSS PinnT thfe C°StS n°Uld pr0ach' AUh<Th
been
100 %
of payrolls
compensation laws
tiave

all

swept into the wastebasket. Some

do not have time
examine the argument further,

others wh0 have accePted this at"

today' in spite of its

in
the durable and heavy goods inwage

all

wages

ments should be made to workers trativeandfinancingapproach.lt
for whom management fails to opens the door
for expanding

which individual employers have

denly,

year-round

For 15 years most labor leaders
have had nothing good to say provide work, in amounts sufabout experience rating. They ficient to insure take-home pay
have argued that unemployment adequate to maintain the living
is a national problem requiring standards which the worker and
national action,1 and one over his family enjoyed )while fully
little

y im~ a6le-4 Here>

tee

economy.

a(jded rigidity of the guaranteed

argument,

same

wage
misht niake depressions
and underemployment more prob-

W3S

this

used

annual

Thf

fJt

avoidable overhead cost would home pay:
stabilize or help stabilize our
"Guaranteed

np#vfpH

„

Jhey of labor costs into conver- virtaally all demands full UAW ^tuaUons over the economy as
now argue that the a non- nevertheless workers, the take- a whole.
sion

vanced. In spite of its surface
nf dii !vL
plausibility, this view has not
*inn with hnwnLr ! ehnrf hnt f°und defenders among experts in
rfppn dlnrpqln
in
10^7
in
cycle theory. No recognized econlY,fnwi " Vtill <rio«T ornist has found it possible to asrfihhpr
norXtnJ 7nH nthlr sign any substantial validity to
«2wvfe LrtrinL anrl pthore
whpvp
this argument, and some, on the
aMar^lf+Pp!i
contrary, have concluded that the

varied

guaranteed

„

Purchasing

sustained

assure

fhirtnatinnc

ab°ve'

through the maintenance of purceasing power is commonlyi ad-

afimAr

es^hlhihmpnf<;

'The

—

experience-rating grounds, as al- plan, therefore, must provide

That the guaranteed wage will

vZthZnnr*

Maintaining

ver^States°proved stoilarly'un-

fhp

the sDrine of

this time "we mean business" and
"we don't want to hear,-a year

productive of results. Correspond-

to the qUOtatl°nS tectum for both low and high of abnormal unemployment over
■
seniority workers and for all those the widest possible area of the
And all major union demands in between. economy,
possibly interindustry
from now, that employers first from professional labor leaders
in spite of Latimer's recogni- arrangements or a final levy on
have to study the matter."
.
for the private guaranteed wage tion of the limitation on the ca- the general taxpayer. The Dec. 6
in the last two years have repeat- pacity of the employer to guaran- UAW report requests 'proper dis-

ufand (c?T of the SoSerurftv Act of lW—bo?h
'Serened to 'foster enarantecd
Hal

•

ALoin

d\Ypae® ufntovisTorM Sec SwSSSdtiiat fady

tion 1602

waee

treatment

decisions
ucciaiyxia

of
ul

jstable plants the costs would h
from

run

100

Again,
It

drove

this

nearly 200%.

disappointing.

was

| Latimer to the idea

of
„

rigidly limiting private guarantee
outlays and of promoting supplements to unemployment compenvation, but the name
guaranteed

structure?

gerated the impotence of the

ployer in overcoming

Thus, Latimer said:

types

some

Even

em-

difficult

under-

bickering and

stand is this statement:

wiH

.unemployment such as seasonal
"The higher state unemployand ?tber short-run. Now the new ment compensation benefits are
v/Bge
was retained.
The limitatjaiiy those involved in extending r^Y.9la
gross^y exaggerates the raised, the greater the number of
restrichons
were
dean(j; increasing unemployment in- ability of employers to take action weeks for which they are paid,
v gned
to make the guaranteed
surance benefits; for neither with
wbidi will overcome depressions an(j the fewer the unjust excuses
pai?fa^ble to employ- respect to emphasis on employ- ?nd assure continuity of jobs, or for disqualifying workers from
crs and
tjie public.
ment stability nor with respect to
income, or both. This type of ex- eligibility for benefits, the lower
«The

problems
inherent
in
guaranteeing wages are substan-„

have

dispute.

Employers

support two sets

bureaus—one public and one pri¬
vate to administer the two systerns.

•

Our own recent

data

fluctuations of production

workers

able)

study included

(not

heretofore

avail-

machinery

cline
est
a

companies

tndustnes)

median

,company

(along with

show

that

suffered

the

de-

fra*&,its highest to its low-

monlh^f 56%. And this

period ?gifi very

high,

•

was

perhaps

abnormally high, prosperity.
wu

basic differences between the two

bon is confusing to employers. It

wage

approaches."

<»f Latimer did not make

greater

impression

on
those concerned
guaranteed wage in the

the

idle, workers

and
he

(Page 6 of Report.)

emphasize

Pivate

tween

there

are

this analogy

guaranteed

be-

•

wages

to say:

"^Umes

•

■

said

tbp

fhp

whereas unemployment
«mnhaci7Pc
nnrne

This

when

the

distinction

miaht

first

under

not

^is

si?ht

years after publication of
report remains
a
mystery.
Perhaps the Latimer findings were
ignored' beca^ise of the subsequent

prosperlty.

Perhaps

this

neglect

•

tpnahlp'

anopar

Again, he stressed the analogy
*n these words:

jfepetitious, it has

unemployment

guarantee

cases

sible

employment

waee

Meany explained that in

"In terms of the intent of those
who framed the existing institution

annual

where

might

market

demand

in the United States, however, it
ly organized, obscure, ambiguous, would be incorrect to say that un-

building for stock" during slack
times is possible. He took almost
the identical position which was

contradictions
structure

and

the

awkward.

sentence

Any

pro-

fessor who wants to punish a student need only assign him to

insurance was any
less aimed at providing work, in-

expressed in the National Cham-

stead of

ber's

are wage

study

this report. Perhaps the economic
studies by Professors Hansen and

pay

for idle time, than

guarantees."

Speaking
compensation
i,,.
.
.

I f

startling statement that,

"the guaranteed annual

gie bulwark against

the p vpuacu
proposed

idea
med

of
ui

wage,

and

supplement^
supplement-

«!!

a period
v

was-

.^
Wdb
in£_unemployment compensation thoroughly sold on it - perhaps

erFc0,1,0,T,'cs( °L the Guaranteed
M?£
Stamuer ®f cCo^nl,erce of the
2;
Ar YLa*h,"£ton e, D. c., 35 pages,
A

4 For careful examination of this

iiu

combined

-would

cost.

cou?eT sf??ra.! othf
?frabout UC costs, or what objectivity have
UC and
private

This

would

guarantee

depend

the

^ jdi®ei"p,0,yed f^onomic

December, 1945,

870;

'guarantee.

It would

Mins

won

eolleX?bargain"ng to state rep?
resentatW«i Sict to intimidah„™ rtire^v T indirict
hv
^ents oTthe
ls
v

corpora

pensation benefits, and mdependJoint uoaras, employers win nave

ent

determinations

joint

Boards

made by the

pmnlovers

will

have

^beiT|-. ^ the worker is held in-

codetermmation

eligible to

receive

his unemploy-

Another matter that bothers
emPloyers is the codetermination
?pproach of the CIO. The UAW
in its annuai convention in 1953
demanded joint administration of
tbe guaranteed wage funds.

ment compensation

In supporting this approach the
idcas and language of the CIO
1951 Codetermination Resolution
ir}voked- This called for

ployers will take quite a different
view from that they now hold
with respect to the terms and administration of the disqualifica-

benefit

from

the state on some flimsy, unreasonable basis, the employer will
have to bear the full cost of the
guarantee. Under those circumstances,

can

expect that

em-

1953 a..1
may

wage or wage sup(Alcoa
negotiations

-v

'
B

Pressure of competitive forces and

avajjabie

for work

an-

5 This

Jt the^^teriSses 'unf^^the me

uves 01 tPe enterprises under ttie

avanaD1c ior worK.
fhis* modestv of eonrse' free markets, war and mobiliza(c) Be actively seeking work
^MS modesty, 01 COUrse,
ftprnaprj,,
pfp
TTnflPr +hi«;
(in about half Of the states).
temporary.
,llOn OemandS, etC. Under UllS ap
V

plements

n°ted for their.

come to similar concluparticularly: Rita Ricardo, "AnWaffe Guaranteed Plans," American

or sales,
prerequisite to anv

the guaranteed

sions. See
nual

was a

stations which must be placed

argu-

ment see: A. d. h. Kaplan, "The Guarantee of Annual Wages," Chapter vil.

ire4\ot

almost

30int umon control of prices, pro- tion provisions of the state laws."
duction levels, rates and nature
To qualify for UC benefits a
While this makes sense
some
of caP*taI investment, rates and worker must have been in covered
other labor leaders are moving mature of technological changes, employment for a specified period
aU ove* the lot. The United Steel J*1?;512.6 and ^ location of indus- and earned a specified amount.
Workers' Union has done enough trial Plants. and a number of other
Furthermore, he must:
k to recognize the seve?e lim- matters now decided by Uie judg(a) Be registered for employboth-

all.out

recurrence

like 1929-35.". He
c

shown that the prior sta-

was

Its existence constitutes the largest sinof

,inwisp to entrust

are

thp'Hnmination

pnt i0hhv;sts

guar-

be costless*1*

pamphlet, "The Eco- 1

bilization of production,

the

made

Samuelson, included as Appen•dices, disillusioned exponents of

recent

nomics of the Guaranteed Wage "

unemployment

Latimer

ra«es

..nnlr

m^na„y

under

are

legislatures

state

resolution in 1953 advanced the a strong incentive to work for
private guarantee demand as a relaxation of the vicious disqualiprimary weapon in getting exten- fication provisions now present in
sion and increases in state UC some of the state laws and adminbenefits.
istrative decisions made under

pos-

stable and predictable and where

internal

m9nv

rnmniIfAiv
f

aeencies

wouia ue cosiiebs.
Indeed, the UAW
convention

antee would

some

insurance

many

the UC tax and, therefore,

far enough then the private

1953.)

traceable to
the
unreadable
character of the report. It is
poor-

our economic system to

Guaranteed

a BUdMiueeu annual wage
certain types of business
there are millions of workers with
corporations that couldn't possibly
oiake such a guarantee." (U. S.
News and World Report," Nov. 6,
.

in-

is nerfnrmed

work

Pay

have

insurance

navment

thumb
hi

it mean that the union figures that
employers do not know that they

wnrk

seven

"the

t,Th
..

guaranteed

be to the corporations."

"We have not Pressed that de- they will joyously urge expansion g " ,,
,Pf„
,
mand- We may come to it some of UC benefit levels and duraWith integration ol guarantee
day . . . it's almost an impossibil- tion? And if such expansion goes payments and unemployment com-

pm_

nrnvi<:inn

the

the °ther ha"d' Stated:

„uarantee o? wa^es is to he dis-'
Snfniiqhpfj frnrrf linemnlnvmpnt
in„fir„nr.p hpf.fliKp
fnrmZ.
nha_:7P„

•

that

cost

Geo.rge Meany, President of the
American Federation of Labor, on

unemployment compensation,

went

the

low opinion

the state UC agencies:

inakes it difficult to discern what
£>oes this mean that the union
a ?,r iea?.e^ 0r
r advlsers believes that greatly improved and
do belleve'D .,
expanded UC is costless? Or, does

Why the disappointing findings

with

wju

paying

the two prosperous years

lending December, 1952.3 The data
for a small sample of
agricultural,
other

aggeration and reversal of posi-

The UAW has

does

not

mean

that

are

proach industry-wide and even
interindustry cartel-like arrange-

alsO

must

not

have

turned

down "suitable work" and he must

Volume 179

Number 5288

The Commercial and Financial Chronicle

(89)
leaving his last employer
his unemployment.

for

problem

This guaranteed wage
system
(UC) has been successful and been spent
made

the

because

work

state

legislatures have kept the benefits
at a level such that a worker with
work

benefits

its

author

avail¬

was

able.

the combined UC
and the private guaranteed wage
suppose

full wages, or 3A full
demanded by the United

equaled
wages as

Steel

Workers'

tions

with

in negotia¬

union
in

Alcoa

1953,

serious

problems could arise. Re-employ¬
after layoffs would be re¬
tarded. If full or nearly full take-

ment

home

prevent

older

what

provided

from

worker

found

that

most

popular claims of widespread chis¬

quit his job voluntarily and
the

leave

market.

labor

have

ac¬

un¬

that

farmers

plained

others

and

com¬

labor

study sheds little
more

take

exaggerated.7

were

Unfortunately,

his

or no light on the
important economic problem

the

relation

levels

and

between

benefit

incentives.

work

circles

some

merely to raise this
question is enough to cause some
to
rise in
indignation with the

epithet, "So
workers

are

elers?"

think

you

American

not

and

malingerers, but

notorious bargain hunters.!'

Before

endorse

the

idea

been

made

supplementary private

antees.

Such

condition

hard to foresee.

State

guar¬

not

Unemployment

Compensa¬

State UC employer contributions
1945 have
averaged under

and

payrolls ($3,000),
they were 1.45%.8

1952

benefits themselves

anteed

wage

worker's

guar¬

level

required

look for any

is ."suitable

What

unions

lives

The

claim that it means
"near where he

may

his

"at

work?"

trade,"

wants to live,"

"near the

line," "at his highest rate of

bus

pay," etc. But if he does not want
to work because of the high idle-

ticularly those with dependents'
benefits, UC frequently approaches
or

exceeds

has

100%

been

length

the

of wages.

relation

What

between

of unemployment and

benefit-wage ratio? What has
the experience

tions

and

the

been

of benefit exhaus¬

(1)

effective return

time pay, he can refuse job after the labor market, (2) promptness
of
re-employment
(a)
through
job on scores of grounds of unE. S. and (b) without aid of E. S.?
suitability. Or, when interview¬
ing an employer to whom he has Many states having no legal pro¬
vision
that
a
been referred he can readily con¬
beneficiary must
"be actively
seeking employment"
vey to him his lack of interest in

and

employer

that

for

working

employer will hire an unwill¬

have found it
necessary, neverthe¬

less,

make

the

apply

this

law

—

currently,

the

cost

made
of

that

expect

50% of regular weekly wages

over

and

duration

with

five

benefits

mentation

enough

exhaust

10%

in
in

Before

law,

rights

their

Act,

September,

1950,

December,

haustions

tions

Claims
Rico

50,521

31,499

62.3

York—

New

1,099,531
170,528

84,832
4,156
937,432

7.7
2.4
10.4

Wisconsin

8,994,142

States—
Bill

unemployment

1944,

$20 per

week

*GI

1944

% of Ex-

Exhaus-

Initial

All

the

private

viduals
ered

allowances

to 52 weeks.

Under the 1952 law the exhaus¬

figures
have been
33.6%,
11.2% and 3.5%, respectively.

tion

rable
out

3.2

Readjustment Act

1952

United

labor
the

14,

similar.

% of Ex-

compa¬

through¬

(These figures do not in¬

work

not

pay

find

high combined UC and

nection

1,009

92,194

10,350

3 5
11.2

Cumulative
Oct.

14,

unless

(starting

1952

1953.

Due

could

claimant
he

first

had

through
duration, no

date)

26-week

have

his rights
prior to the

exhausted
payment

April; hence the first payments as
of the close of April are shown.
close

Abuse of

version
cussed.

Many state legislative and
York

New

had

open

several Florida offices to check on

A series of articles
(Baltimore) on this

beneficiaries.
in "The Sun"

Now, ,if
guaran¬

is established, many of

Sometimes

exhaustion

quate duration.

argued

a high
of inade¬

that

is evidence

This is not necessarily so.

union

thousands

But

purposes

one

instead

from

laid

when

its

market, it
not require too much in¬
genuity on their part to rearrange
their plans and actions so as to
qualify, especially under the UAW
insistence

covering

short-

even

And,

if,

wages

benefits

off.

could

this

administer

members,

members

the

way

all

management and would
no

legal

other

are

full

paid to

idle-time, how

agreement,
take

some

home

workers

can we in

good

bar millions of these
in-and-out workers from equal or
proportionate benefits if they

change
that

their

they

are

minds

and

decide

in the labor market?

7 "The
ment

Problem of Abuse in
Unemploy¬
Benefits,"
Joseph
M.
Becker,
University" Press, New York,

1953.
This is the first general extended
study of abuses and contains much use¬
ful information.

employees
basis, there

plications
could

with

success

of the Hormel Plan

paying overtime under Sec¬
(b)

(2) of the Fair Labor
Act.

costs

Hormel

1949

the

Act

The

duplications

material

was

made

and

sound

slightly

avoid.

pare

alt

Employers have

stabilize

and

effects

responsibility to

can

guarantee

relatively little.

it would

Insecurity is something

from

Standards

and

have

strive

case,

work incentives.

is due primarily to the exemption

tion

any

lead to many administrative com¬

State UC.

The

doing it and

of them merit exploration.
State UC is
illegal. If it is a good idea^

supplementing

strated, and in

into

run

conflicts

ways

employers should help tqireipove
the legal barriers.
That it is a
good idea has not been demon¬

union

the fund

many

now

are

itself, would not have to consult

what

their

they

operations

help their employees in &
and

practical way to

pre¬

for the rainy day.

NATIONAL BANK
AND TRUST COMPANY

CONDENSED

nor¬

covered

sta'

of the stated

DECEMBER

1953

31,

$33,467,735.64

Cash and Due from Banks

by-

supplementing UC
private
guarantees

his legal State

reserve

wage

tle

him

qualify for the

If he

sense.

2,701,536.50

Banking Houses
Customers'Liability
a/c Acceptances

zero

Accrued

dips into his State

Other

Income Receivable...

131,832.0

'^ ^
' ;

661,278.65

Assets

$210,034,961.71 r

TOTAL ASSETS

sires to do so, would
wisdom
of
a
UC

out

State

incentive

liabilities

Acceptances Executed

under

occur

...

60,995.91

3,750,000.00

-—$25 Par)

Surplus

5,250,000.00

Undivided Profits

em¬

2,752,625.53

Capital (150,000 shares

ployment, keep his eye on costs,
instead Of being misled by dip¬
ping into several different funds
would

j-'.;;

.•

a/c Customers

maxi¬

:.K

$193,872,296.08

Reserves, Taxes, etc.....

sees

stabilize

funds.

Deposits

Then he knows what the cost will

be, and this will give him

;

de¬

question the

guarantee
non-UC

private wage guarantee

mum

60,995.91

;

he must promptly replace

The employer, if he must enter

270,000.00

Federal Reserve Bank Stock

rate,
a
guarantee
supplement would make lit¬

reserve,

it.

...

20,766,787.23
32,026,620.16

Mortgages

F. H. A. Mortgages

en¬

34,821,863.54

First

experience rating such as Wiscon¬
once the employer has built
up

30,994,810.34

Loans and Discounts

sin,

54,131,50^14

Municipal and Other Securities

assets

should be examined critically. In
States which have
thorough-going

4,349,044.19/

TOTAL LIABILITIES

•

$210,034,961.71

supple¬

Friction and confusion

would be minimized and the

sense¬

less

duplication of administrative
agencies
would
be
avoided
as

RAYMOND

PETERSON

Chairman of the Board

BENJAMIN P. RIAL

President

would the dual standards of bene¬

fits, eligibility, etc.
Most

union

nearly

commit¬

U. S. Government Bonds

term employees.

full

more.

pay

continuous

some

are

source—the

one

the

Other Plans

idea

mentation.

would

union proposals.

some

=>-■■

The

labor

formalize

combined outlays may be large.

—as

the

could

hire

many

from

Thus, even if the private guaran¬
tee outlays were kept
modest, the

cept
to

would

added

any

without

and

quickly

security

cost;

worthwhile

workers

how

but

find

•A

ac¬

offered

NATIONAL BANK i

it would

out which

many

AND TRUST COMPANY

workers,
OF

industry by industry and plant by
plant, would in
a

wage

financed by employers at
say 100
per

PATERSON

secret vote favor

supplementary guaranteed

Columbia

rate

2.7%

This is

qualify for the benefits.
inherently tenuous con¬

during the recon¬
conscience
was ^widely
dis¬

period

administrative investigations were
made.

fort

for

these people may make every ef¬

3.3

per
week up to 26 weeks.
total
of first payments from

the

make

worth their while to remain stead¬

155

$26

ments

contribu¬

current

4,710

April,

payrolls.

the

York—

provides

maximum

fit

Having

Readjustment Act of 1952

Some

want

pressure

finance

type

33.6

Veterans

bility.
they

way,

steady work,

1,247

sThe

are

great progress in ironing out sea¬
sonal and other short-run insta¬

com¬

to set up its own
thoroughly democratic
collecting this modest sum

fund

contribution

withdrew

(,.,

reserves

large number of persons, perhaps
10
to
20
million, do not want

tions

—

supplement.
Rather, he might prefer simply to
dig into his working capital and

Exhaus-

States

place

may

above

able

voluntary shifts between
jobs, nor layoffs for lack of work.)
But they do suggest that a
very

3.711

Wisconsin

the

en-

clude

Puerto P^o-

All

raise

one

American employers have made

...

First

haustions

Actually,

ultimately generate

from

and

The figures for 1953

teed wage

to October, 1953, incl.)*

1952

indi-f

drain

States

force

number

1952.

Payments
New

wages,

million

ily in the labor market.
Exhaustions Under Veterans

(October

that

study: of

new

guarantee

the

month

inclusive)*

Readjustment

Puerto

see

employers allocate^ lot

Furthermore,

Unemployment Allowances
to

lose

Exhaustions Under Veterans

(1944

nature to

time to make

accompanying table.6

the

human

need

against about they should first study the work¬
the United States and ings and procedures under
the
Wisconsin as shown in state UC system.

the

2.4%

not

powerful

about

From 1944 to 1950, 62% of
remained unemployed long

under

does

these will become important ques¬
tions, and for the "doubting Thom¬

wages.

them

One

in Puerto Rico ases," a reading of Father Becker's
equal to book is recommended.

ment Act, veterans

received

Readjust¬

Veterans

the

tees.

exceed faith in

not to

six months.

Under

supplemented by private guaran¬

the

of therm

some

maximum

for

War II, and
helpful.

were

An alternative would be

getting other
employers to finance part of his
unemployment. Thus, the supple¬

rate

of 100 an

sum

World

It is argued that
hour is a modest

fund, each employer may tend to

mal

form of

agreements

experi¬
rating and where, therefore,

ence

tion

important

sense

enter

savings plans, or joint
savings plans, were tried before

the employer can shift
part of his
UC cost to the general UC reserve

clearly understood this matter and
have aimed at benefit levels not

appear

additional

the opposite could occur. In States
that do not have effective

and

much

the

modest.

requirement after a
ing employee. So long as unem¬
time for continued benefit
pay¬
ployment benefits are at moder¬
ments.
•
•*
/;
ate levels this is not a major prob¬
All these questions will become
lem.
The state legislatures have
a

pulsory saving.

guarantee

Workers'

unemploy¬

"supple¬

supplemented
a
rather heavy
"supplement"! i
By tying the private guarantee
in with UC and
making it a re¬
quirement that both be paid con¬
that

subsequent

practical

or
wage
advances during
slack periods merit considerations

The proposal that the
employer
be required to set
aside, say, 100
an hour in a
private trust fund to

finance

modification
more

plan

tion?

will

Thus the new "supplement" would
cost about 500% of what is to be

guarantee

per¬

they vote them¬
hour wage reduc¬

per

benefits

tions that is surcharged with emo¬
tion. Under
many state laws, par¬

(demand in Alcoa case).

100

"suitable" job offers, but he should
not

and it should not be limited to
unionized workers, as it is now.
Other plans such' as the "loan""

the of¬

executive

below

of human nature and human

rela¬

selves

security

and

Would

fall

should be required to accept other

suppose

sonnel.

needs

reasonable

employer, and then paying out the

he is laid off and
collects the combined high bene¬
fit.
The
unions
agree
that he
Or,

<■

same

Thus
the
private guarantees supplementing* ment" them.
private
guarantee would be a supplement
UC we badly need more light
(and
less heat) on the relation between to a supplement.
A contribution
of about 10 cents
UC levels and work
per hour is fre¬
incentives.
Here we are dealing with a
mentioned — about
6%.
phase quently

qualify for benefits.

about the

earnings

certain

are

supplements.

considerable seniority and
steady
over the years
already have

fice, salaried

But since only four or
companies operate under it,

make

jobs

1.50% of covered
UC

less rigid.
five

employees with

demand.

since

current 100 per hour
wage in¬
crease, or if they understood that
such sequestration of funds
would
retard
subsequent wage
raises.
The older regular
a

ment is in

tion Is Wage "Supplementation"

malingerers and chis-

nation

had

in legalizing
the simultaneous collection of UC

When confronted with the

we are

few weeks later by simply chang¬

ing his mind about work, he could

leaders

shortages while
many were collecting double un¬
employment benefits. State legis¬
latures might consider that a mis¬

saying, "Don't give it to the fellow dubious legislative proposals in
low seniority; I'll take the 1945 Senator Arthur Vandenberg
benefit."
"
-:
helped to put this point in better
If he wanted to do so, a worker perspective • by
saying, "We are
even

labor

the state legislatures of

M. Becker has due niggardliness in UC benefit
studying abuse in UC formulae. Suppose that at some
and has some
things to say which future date after many employers
are
highly relevant for any em¬ have adopted a private wage guar¬
ployer who is considering UC sup¬ antee supplement, it were found

with

could

Some
cused

eling, malingering and fraud

But

the

years

family reponsibility could not af¬ plements.
ford

for

won

Pulitzer prize.
Father Joseph

hour, if the alternative

CLIFTON

POMPTON

New

8 In

paid

1952

was

and

the

about

1.45%

average

1.07%
on

UC contribution
on

taxable

total

Jersey

were

MEMBER FEDERAL DEPOSIT
rate

LAKES

wages

INSURANCE CORPORATION

•

■

The Commercial and Financial Chronicle

(90)

Continued

from

index represents the

The

page

of 31

foods in

general

total of the prices per pound

sum

general trend of food prices at the wholesale level.

The State oi Trade and
that

doubtful

guaranteed

any

annual

Industry

concessions

wage

can

negotiated, it concludes.

Scheduled at 75% of Capacity This Week

Steel Output
The year

just starting to unfold should bring the second best

metalvvorking, says "Steel/' the weekly magazine of
metalworking. That's the belief expressed in a poll "Steel" made
in

year

among more

than 5,000 top executives.

Volume of sales would total $124

billion, only 2% below the
record $126.6 billion rung up in 1953, it states.
Never before has the steel industry been in such a good po¬

ever—approxi¬
mately 120 million net tons of steel for ingots and castings, com¬
pared with 117.5 million tons a year ago, declares this trade
sition to fulfill demand.

Its capacity is the largest

Wholesale Commodity

Following Pre-Holiday Dullness the Week Before

Miller

Colo.,

the

recent

weeks,-4he daily
wholesale commodity price index, compiled by Dun & Brad^teet,
Inc., turned upward last week to close at 273.55 on Dec. 29.
This
contrasted with 271.94 a week earlier, and with 280.61 on the cor¬
responding date last year.
downward

trend

with

oats

the

steel

industry has caught

with and

over¬

demand, it's possible the steelmaking capacity may be cut
down from its record high of around 120 million tons.
At least
5 million tons of this capacity, and perhaps as much as 10 million
tons, represent marginal high-cost facilities which can be operated
only in time of peak demand, Bennett S. Chappie Jr., Assistant
Executive Vice-President of the commercial division, U. S. Steel
Corp., estimates.

Some of this high-cost capacity has been kept

until the latter part of 1953. How
much will be eliminated? Early in 1953, Joseph L. Block, Execu¬
tive Vice-President, Inland Steel Co., predicted that obsolete ca¬

free

wheat

the

reflected

result of

Trade

equipment and other general cor¬

very

Holiday

growing and for some time we'll have a defense
program. These suggest the long-range trend of steel needs will
be upward, it concludes.
living

are

American

The

Iron

announced

Institute

Steel

and

that the

96.1% of the steelmaking
of 75% of

operating rate of steel companies having

dullness

against 50,200,000

purposes.

incorporated
1953, with
its statutory office at 602 First
National Bank Bldg., Denver 2,
Colo.
It was organized to engage
in the business of exploring, min¬

the

duction

order

backlogs

ing

the

mills.

Export

trade

minerals.
The

flour

for

the

prices

current

producing

continued

upward

aided

movement,

reach

high

new

asking

prices

from

44,660

this time

stocks

week

reported at 54,935

were

cocoa

and comparing with

earlier,

bags,

45,122

record
in

high levels.

bags at

markets

capacity for the entire industry will be at an average

strike.

workers'

capacity for the week beginning Jan. 4, 1954, equivalent to 1,788,000 tons of ingots and steel for castings.
This is the first time the industry's ingot production rate is

refined

The demand for the

continuing

the

Utah-

partly in the Mon¬

ticello

District, San Juan County,

Utah,

and

partly

the

North

Slick Rock Uranium District, San

dock

the

and

the

astraddle

Colorado line,
•

steady
in East¬

product

threat of

Colo.,

County,

Miguel

sustained

was

County,

third

The domestic raw sugar market was

quiet trading.

ern

the

San
Utah; one in the
Uravan Mineral Belt, South Slick
Rock
Uranium
District, San

from
and

One

Uranium District,

Monticello

year ago.

Reflecting the higher prices prevailing Qh coffee for shipment
producing countries, the New York market for both Brazilian
Colombian coffees remained firm with prices touching new

groups

ground.

situated

these leases

Juan

Warehouse

leased

three

uranium-producing

ground

result of the tightening world supply picture.

areas as a

properties

corporation's

consist

continued very quiet.
Cocoa

Oct. 1,

marketing uranium ores
as
any
other ores and

and
well

the

was

company

Colorado

domestic flour market,
with sales restricted to scattered small lots despite a steady re¬
prevailed

work, for ac¬
additional uranium
properties,: for

vanadium

and

on the Chicago Board
Daily average purchases during the

holiday week totaled 47,100,000 bushels,
previous week and 36,400,000 a year ago.

be used
testing and

drilling,

exploratory

quisition

impoundings under the loan.

quite active.

was

(one cent per share).

for

pay

other

decreasing supply '.of

steadily

stock of Ute Uranium,

par

The

intact only because it was needed

pacity that would be dismantled in the United States in the next
two years would not exceed 1 million tons.
Any reduction in capacity probably would be only temporary,
notes this trade journal.
The country's population and standard

porate
wheat

issue of 22,500,000 shares

The net proceeds are to

light.
Strength in

Co., both of Denver,
offering "as a specula¬

common

Inc.

Corn advanced in sympathy

receipts in the cash market continued to run

&
are

tion"

Leading grain markets were generally firmer the past week,
featured by a late spurt in oats prices, influenced largely by the
Presidenial proclamation over the week-end limiting imports of
oats, other than those from Canada.

Kamp & Co., Inc., and Fred W.

Trading in grain and soybean futures
that

Now

Stock at 1 c

Price Index Rises Moderately

Reversing

weekly.
taken

Thursday, January 7, 1954

Ute Uranium Common

and its chief function is to show the

use

Miguel County, Colo.

lated

the basis of the new weekly capacity rate of 2,384,549
Last week the rate was 75.7% (actual), yielding 1,706,000

figured
tons.

tons.

Year-end

the

month

86.7% and pro¬
the actual weekly production was

ago

duction 1,955,000 tons. A year ago

the rate

was

98.2% of capa¬
based on annual

placed at 2,213,000 tons and the operating rate was
The percentage

city.

figures for last year are

capacity of 117,547,470 tons as of Jan. 1, 1953.

Mildly Upward in Latest Week

Electric Output Turns

The amount of electric energy

distributed by the electric light

mild upturn from that of the preceding week.

pervaded the

under

spot

increase of 26,255,000 kwh.
above that of the preceding week, and an increase of 486,845,000

6.3% (preliminary), over the comparable
1,051,380,000 kwh. over the like week in 1951.

kwh.,

Car

week

1952

Loadings Decline 22.2% in Christmas Week

Loadings

freight

revenue

the

for

week

ended

Dec.

26,

1953, decreased 137,454 cars, or 22.2% below the preceding week
to the holiday, according to the Association of American

due

Railroads.

Loadings totaled 480,978 cars, a decrease of 39,722 cars, or
7.6% below the corresponding 1952 week, and a decrease of 21,030 cars or 4.2% below the corresponding 1951 week.

U.S. Auto Output
in
Automobile

below

had

crop

been

3,700,000 bales,

raw

market

cotton

over-estimated

and

against

season

private

forecast

might

.as

earlier prediction of about 3,000,000

into the government 1953 loan stock
during the week ended Dec. 18 were reported at 296,172 bales,
compared with 376,400 the previous week and 403,300 two weeks
ago.
For the season to date total loan entries were listed at
5,159,839 bales, as compared with 802,581 bales to the same date
last year.

the

output

the

for

Total

latest

dropped

week

industry

turned

out

65,315

cars

last

67,308 (revised) in the previous week.
week,

the

agency

ended

week, compared
A year ago the

there

reported,

were

18,903

trucks

Decline to Second
Holiday Week

31, from 162 in the preceding week, according to Dun
Bradstreet, Inc.
Despite the holiday decline, casualties yrere
considerably heavier than in the comparable weeks of 1952 and
the prewar

occurred

level, failures

were

respectively.
only one-half

Continuing below
as numerous as

1939.

The total dollar volume

Casualties involving liabilities of
$5,000 or more dipped
slightly to 130 from 139 last week, but remained higher than a
year ago when 78 concerns succumbed in this size group.
A dip
also appeared among small failures, those involving liabilities
under $5,000, which were off to 20 from 23 in the previous week
yet exceeded the 11 recorded in the similar week of 1952.
Ten of
the failing concerns had liabilities in excess of $100,000, as against
20 in the preceding week.

Wholesale Food Price Index Rises to New 1953 High
Last Week
over

in the Dun & Bradstreet wholesale food price

the past two months lifted

high for the

year

and

the

the Dec. 29 figure to $6.81,

highest

point

touched

were

sales were moderately above a
sharply below the preceding week.

Clearance
sults

were

promotions

were

heavily

year

advertised

generally favorable.

most

substantial

although

ago

and

the

price reductions

stock

share "as
It

women's coats and suits which had been slow all

Co.

Bros.

(par 50 cents)

speculation."

contemplated that the net

proceeds of this financing will be
used to replenish working capi¬
tal which was diminished by the

season.

The call

(111.)

City

Coal

the

plant and the cost of bringing that
plant into production.
Diamond

Jan.

Bros.

Co.,

New

organized on
engaged in the

corporation

Jersey
2,

1947,

manufacture of upholstered Jiving

suites, odd chairs and sofas,

room

divans, convertible sofas and beds.
It has a plant in Trenton, _N. J.,
and in Coal City, 111., and also
owns
a
50%
stock interest
in
Lane

Furniture

plants

located

Park
has

which

Co.,

Monica and Gardena,

Santa

Calif..

Newburger Installs
Wire to New York

re¬

found in

common

at $1.50 per

PHILADELPHIA, Pa.

to be

were

issue of 199,800 shares

Diamond

New-

—

burger & Co., 1342 Walnut Street,
members of the New York and

for

Philadelphia-Baltimore Stock Ex¬
changes, announces that it has es¬

dressy items of clothing was greater than atlthe same time
year ago.
Casual clothes and sportswear were the: best selling

tablished

items among men's wear.

Trading activity among wholesalers

came

virtual stand¬

still

as
a
result of the holiday season in the period ended on
Wednesday of the previous week.
Total trading was moderately

the

year-ago

niture markets opened.

Department
from

the

store

Federal

country-wide

basis

taken

Board's

index, for the week ended
Dec. 26,* 1953, increased 12% above the level of the-preceding
week. In the previous week, Dec. 19, 1953, a decrease of 1% was
reported from that of the similar week of 1952.: For. Jhe four
ended

Dec.

1953, no change was reported.
For the
period of Jan. 1 to Dec. 26, 1953, department store sales registered
an increase of 2%
above the corresponding period, of 1952.
Retail

customary

trade

26,

volume

downward

tion

trend

New

York

the

last

followed

week

the

period,

but

post-Christmas

according to reports, it held close to the like period

a year

department and that of Burnham
&

year

heavy

increases shown for this week, reflect in part-the fact that this

Christmas

fell

on
Friday
shopping
Thursday.

pre-Christmas

Christmas fell

and
as

the week therefore included four days of
compared with three days.Jast year wheri"'~

Reilly, and that Stanley

Jeffries

was

with

associated

in this connection.

them

Mr. Jef¬

formerly with Charles A.

Taggart & Co.
The

facilities

this

wire

are

available to other securities deal¬
ers

the

Philadelphia

execution

for

area

orders

the

Over-the-Counter market.
I

Calvin Gatch Joins
G. H. Walker & Co.

store

♦The large

Co., under the managership of

John

ago.

According to the Federal Reserve Board's index department
sales in New York City for the weekly period ended Dec.
26,* 1953, registered an increase of 19% from the like period of
last year.
In the preceding week Dec. 19, 1953,. a decrease of
3% was reported from that of the similar week of 1952, while for
the four weeks ended Dec. 26, 1953, no change was reported.
For the period Jan. 1 to Dec. 26, 1953, a decrease of 1% was
registered from that of the 1952 period.
>
v

private wire connec¬
its unlisted trading

between

fries

sales

Reserve

since

Sept. 4, 1951 when it stood at $6.82.
The current number repre¬
sents a gain of 1.3% over last week's $6.72, and is 10.6% higher
than the $6.16 of a year ago.

esti¬

was

Bradstreet, Inc., to be from 3 to 7% higher than
at the same time a year ago.
Regional estimates '.varied from
the comparable 1952 level by the following percentages:
New
England, South and Pacific Coast -f 4 to -f8; East dnd Southwest
-F2 to -J-6; Midwest -f 3 to +7 and Northwest -f 1 to ,-f 5.

new

;

of retail trade in the Week,

mated by Dun &

weeks

A steady rise

in ihe period

ago

period.
The order level was expected to
increase markedly in January when the Spring apparel and fur¬

126

year

the early part of the week.

ended Dec.

and

con¬

below

Commercial and industrial failures dipped to 150 in the week

moderately above

was

week

Co., New York, are

Business Failures Carry-Over

when

offering

How¬

day of holiday buying this year,

Wednesday of the preceding week.
Many stores closed
for the three day weekend and on Monday the traditional postChristmas clearances commenced.
Because of the .holiday-short¬
ened week, the majority of the retailers featured night openings

slightly

country, as against 17,951 in the previous week and
21,589 in the like 1952 week.

index

spending

sumer

made in this

1951

sharply from the preceding

dipped

extra

one

Apparel

weekly production was 79,125.
Last

sales

because of

ever,

The

with

retail

the end of the Christmas shopping season was observed.

they

previous week, according to "Ward's Automotive Re¬

Diamond Bros. Stock
Capper

purchase

Tra^fe Volume Falls Sharply in Post-Christmas Week

Continues to Dip

Holiday-Shortened Week

Capper & Co. Offer

that

high

Entries of the staple

bales.

ports."

stimu-

demand

reports that the Indian cot-r

were

exports of United States cotton this

current figure represents an

The

sharply

power

resents

and

dullness

Lending support to the market

industry for the week ended Saturday, Jan. 2, 1954,
was
estimated at 8,200,000,000 kwh., according to
the Edison
Electric Institute. The foregoing is a preliminary figure and rep¬
and

advanced

past week although prices developed a somewhat firmer tone.

ton

For the like week

Lara

by the Department of Agriculture report indicating a drop
of 9% in the 1953 Fall pig crop as compared with a ?'edr ago.

(Special

The

Financial

Gatch
with

has
G.

Forsyth
was

Jones
a

Boulevard.-

Co.

associated

become

Walker

formerly
&

Chronicle)

Mo. —Calvin F.

CLAYTON,

with

and

Co.,

8820

Mr. ; Gatch
Edward

in the

past was

principal of Gatch Bros., Jordan

& McKinney.-

•

Volume 179

Number 5288

Commercial and, Financial The
Chronicle

(91)

The

] ndicaiions of Current
Business

Activity

week
Lateat

AMERICAN

IRON

steel

Indicated

INSTITUTE:

STEEL

AND

operations

Jan. 10

Week

(percent of capacity)

following statistical tabulations

latest week

month available.

month ended
Month

Week

H75.0

and castings

ingots

PETROLEUM

AMERICAN

oil

Crude
42

and

98.2

output

Distillate

fuel

(bbL.

average

oil

and

Kerosene

Dec. 26

(bbls.)

6,252,800

Revenue

CIVIL

at—

117,011,000

6,918,000

7,083,000

24,084,000

24,788,000

2,505,000

10,967,000

8,171,000

Private

of cars)

CONSTRUCTION

156,030,000

153,586,000

149,842,000

COAL

32,389,000

35,901,000

foreign

133,222,000

102,897,000

49,810,000

49,975,000

50,908,000

48,662,000

<_——

(U.

coal

480,978

618,432

596,230

520,700

518,935

586,824

595,280

UNITED

Beehive

coke

STORE

ELECTRIC

Electric

SALES

Finished

steel

(per

Pig

(per

gross

iron

METAL

PRICES

Electrolytic

Straits
Lead

(E.

(St.

21,383,000

Dec. 26

6,515,000

*8,300,000

7,420,000

6,600,000

Dec. 26

499,000

516,000

475,000

48,000

*61,500

63,800

91,100

—Dec. 26

109

Jan.

163

234

133

—

DUN

18,200,000

*8,173,745

8,582,459

7,713,155

150

162

202

4.634c

—

Group
Group

$56.59

$55.26

YIELD DAILY

$33.83

$42.00

Other

29.700c

29.675c

29.700c

——

28.975c

28.925c

84.750c

84.250c

13.500c

14.750c

Sorghum grain

111.25

110.88

110.52

113.31

108.16

103.16

107.80

112.00

106.21

105.86

108.88

Jan.

100.16

100.00

100.32

103.97

104.14

103.80

106.74

107.98

106.21

106.56

107.98

108.16

112.37

—..Jan.

2.72

2.73

2.83

Jan.

3.37

3.39

3.20

—Jan.

3.10

3.12

3.14

2.99

uJan.'

3.27

3.38

2.77

3.27

3.29

3.06

3.40

3.23

3.74

3.75

3.73

3.51

3.50

3.52

3.35

3.36

3.38

3.20

3.28

3.27

3.04

Jan.

412.7

413.4

406.2

409.9

145.118

241,648

235,824

J342.725
1299,914

Dec. 26

periodj
REPORTER PRlbE

192,667

$66

313,963

—_

at end

212,033

200,597

—Dec. 26
.Dec. 26Dec. 26

371,487

374,435

$478,354

INDEX—
106.83

106.92

107.38

Dec. 31

100

AND

SPECIALISTS

SECURITIES

Odd-lot sales by dealers
Number of orders

108.50

short

sales__

Customers'

—

other

sales

total sales—-

840,614

$31,713,691

656,509

$32,173,637

$28,402,039

$37,137,351

28,670

Customers'

other
____

28,531

26,500

22,550

32,634

846,235

781,875

658,403

928,636

4,915

4,982

7,388

4,283

776,893

651,015

924,353

$30,885,477

$30,113,115

$24,528,354

$36,512,464

by dealers—

ROUND-LOT

359,783

SALES

THE

STOCK

MEMBERS

268,370

234,700

359,783

216,600

223,610

226,710

266,671

TRANSACTIONS

Other

Dec. 12

263,540

334,630

249,620

240,290

——Dec. 12

7,058,190

8,551,500

5,874,440

9,974,940

7,321,730

8,886,130

6,124,060

10,215,230

Dec

.....

TRANSACTIONS

FOR

ACCOUNT

BERS. EXCEPT ODD-LOT DEALERS AND
Transactions

SPECIALISTS:

Other

750,450

896,470

550,940

119,230

147,950

143,090

573,370

759,360

123,930
450,660

763,640

692,600

907,310

574,590

906,730

-Dec. 12

the

floor-

199,260

-Dec. 12

6,700

15,700

-Dec. 12

sales

163,410

281,040

-Dec. 12

Other

157.590

261.970

314,900

11,000

9,800

117.840

263.820

164,290

277,670

128,840

273,620

-Dec. 12

300,960

338,750

272,065

358,200

-Dec. 12

56,050

62,300

20,300

39,550

-Dec. 12

211,510

319,195

191,970

342,149

-Dec. 12

267,560

381,495

212,270

381,699

-Dec. 12

Other

transactions

initiated

off the

floor-

transactions for account of members—

1,250,670

1,516,260

986,415

1,684,280

181,980

225,950

155,230

192,440

-Dec. 12

942,470

1,340,525

760,470

1,369,609

-Dec. 12

1,124,450

1,566,475

915,700

1,562,049

-Dec. 12
-Dec. 12

Other

WHOLESALE
LABOR

PRICES,

—

(1947-49

NEW
=

SERIES

—

DEPT.

-Dec. 29

110.6

110.1

109.6

(tons)

41,803

41,752

61,263

94,064

92,489

63,894

62,560

29,135

30,947

2,749

3,164

225
240

230
*

218

214

177

(tons)
(3 States)

146

61
137

;

(tons)

124,885

(boxes)

States)

(tons)

79
35

(tons)

124,580

43,160

(boxes)^

13,000

(boxes)

38,360
12,590

1,230

804

184,962

147,946

(pounds)

132

10,098

9,496

6,545

(tons)

125

(tons)

States)

1,209

173,065

States)

6,664

vegetables—

fresh

For

processing,

market, 28
11

(tons)

crops

(tons)

crops

SALES—SECOND

STORE

RESERVE

DISTRICT,
OF

BANK

FED¬

FEDERAL
1947-1949

—

Average 100—Month of November:
Sales

(average monthly), unadjusted

121

116

Sales

(average daily), unadjusted

129

110

127

(average daily), seasonally

102

104

•101

132

130

•131

115

116

•114

$1,953,000

$1,952,000

$1,682,000

LIFE

INSURANCE

adjusted—
:

LIFE

PURCHASES

INSURANCE

—

119

INSTITUTE

Month

—

Nov.

omitted):

(000's

Ordinary
Industrial

549,000

562,000

508,000

Group

540,000

394,000

404,000

$3,042,000

$2,908,000

$2,594,000

$1,653,714

Total

NEW

YORK

STOCK

EXCHANGE—As

firms

carrying

Total customers'

Cash
Total

Market value

listed

WINTER

RYE

95.0

101.1

ING

103.2

TURE—As

86.9

112.8

Dec.

DEPT.

•672,031

705,539

115,428,148

117,362,782

94,571,815

100,550,940

156,181
1,200,890

*128,008

162,981

•1,120,963

934,315

32,333

REPORT¬

AGRICUL¬

78%

67%

750,140,000

877,511,000

94.0

114.6

CONDITION—CROP

BOARD

338,754

682,244

96,506,418

other collateral

•293,403

117,477,562

bonds

borrowings on U. S. Govt, issues—

♦$1,640,883
*30,980

$1,346,515

31,159
298,108

Market value of listed shares

104.2

87.0

accounts—

of customers' free credit balances—

95.4

114.4

margin

debit balances..-

net

hand and in banks in U. S

104.4

91.6

Nov.

Credit extended to customers

97.0

114.5

(000's omitted):

Member

105.6

-Dec. 29

figure,
lilncludes 670,000 barrels of foreign crude runs.
§Based on new annual capacity of 124,330,410 tons
1954, as against the Jan. 1, 1953 basis of 117,547,470 tons. tPreliminary figur'e. $Eleven days ended Dec. 31,1952.

2,641

(tons)

Walnuts

-Dec. 29

*Revised

92,584

(bushels)

States)

(Calif.)

-Dec. 29

of Jan. 1,

159

1,654

(tong)

Member borrowings

Commodity Group—

126

64,102

States)

6,005

1,254

(barrels)

Member

100):

Processed

10,169

12,029

Other

Total round-lot

7,605

11,557

2,595

5,650

1,011,180

-Dec. 12

2,254,512

7,525

(tons)

Commercial

2,045,875

29,065

(Calif.)

Pecans

28,532

States)

Cranberries

159

349,098

33,464

7,957

;

1.703

370,856

(tons)

Stocks, unadjusted
Stocks, seasonally adjusted

-Dec. 12

initiated

seed

—

States)

1,371,600

—

Sales

MEM¬

specialists in stocks in which registered—

Other transactions

Oranges

1,427,155

16,235

33,974

other than dried

Grapefruit

298,052

2,046,037
2,739

dried

Lemons

2,610

252,276

373,711

States)

3,347

128 '

(pounds)

(Calif.)

31,790

17,557

1,574,250

and

States)

RESERVE

Total sales
ROUND-LOT

(pounds)

(gallons)

States)

Avacados

262,341

(bushels)

ERAL

sales

threshed

Prunes,

Olives

3,350
1,964

(tons)

13,217
43,760

126,905

18,114

(bushels)

DEPARTMENT

(SHARES):

—

63,667
24,695

YORK

NEW

Total Round-lot sales—

Short sales

98,707

(bushels)

sugar

For
,

180,326

12,432
35,585

commercial crop

Tung nuts
304,640

—

10,827

83,237

(tons)

6,190

104,345

12,477

133,226

Sugarcane sirup (gallons)
Sugar beets (tons)

(12

3,821

15,139

105,563

—

(pounds)

(bushels)
Sweetpotatoes (bushels)
(pounds)
Sorgo sirup (gallons)

Plurns

16,093

105,300

(pounds)

Tobacco

„
—

ROUND-LOT

234,700

268,370

dealers—

STOCK

AND

ACCOUNT

—

sales

purchases

304,640

16,437

(pounds)

Peanuts picked and
Velvetbeans Jtons)

Apricots

4,358
.

12,216

peas

(pounds)

83,024

5,906

;

Potatoes

Hops

268,134

109,022

dry field (bags)
:
Soybeans for beans (bushels)___

sugar

48,107

308,428

Peas,

Maple

52,628

6,170

(pounds)
Timothy seed (pounds)
Beans, dry edible (bags)

Maple sirup

30,174

52,529

Lespedeza seed

Cowpeas for

3,205

39,011

6,718

seed

Almonds

sales

shares—Total

EXCHANGE

Number of shares—

FOR

125

sales

TOTAL

32,759

200

sales__

Other

22,750

137

841,320

short

Round-lot

26,697

139

—

Customers'

Short sales

16,046

Prunes,

—

Number of shares—Total sales

28,426

720,666

(customers' sales)—

Customers'

Number

22,229

24,184

750,883

Number of orders—Customers'

sales

17,452

36,813

seed

Cherries

24,661

[

Pears

Odd-lot purchases by dealers

Round-lot

17,998

__I

(pounds)—

Sweetclover

Grapes

—

value

237,476

1,260,127
226,014

(tons)

seed

clover

Peaches

STOCK

COMMISSION:

EXCHANGE

(customers' purchases)-

Dollar value

seed

clover

Alsike

Apples,

Number of shares

Dollar

1,205,106

(tons)

Broomcorn

STOCK TRANSACTIONS FOR ODD-LOT ACCOUNT OF ODD-

—

216,906

273,058

■

3,193

(bushels)

forage

Sugarcane for

—

(tons)

ASSOCIATION:

——

Red

109.42

——1—Jan.

(tons)

DEALERS

22,493

271,476

241,015

Hay, all (tons)
Hay, wild (tons)
Alfalfa

239,399

13,424

;

(pounds)

Cottonseed

284,900

12,967

silage (tons).
Cotton, lint (bales)

109.42

INDEX.

activity

EXCHANGE

1,059,558

291,025

Sorghum

Jan.

OIL, TAINT AND DRUG

LOT

3,279,403
1,298,957

878,331

12.500c

Jan.

PAPERBOARD

1,163,231

877,511

(bushels)

(bags)

14.550c

106.04

Group
Group

AVERAGE

3,180,430

1,168,536
___

(bushels)

10.000c

106.04

Utilities

1949

3,176,615

(bushels)

13.300c

Jan.

COMMODITY

Rice

14,045,857

AGRICULTURE—

1,216,416

10.000c

106.39

——

—_——

(bushels)

13.300c

Jan.

orders

126.1

REPORTING

spring

10.000c

;

Unfilled

*129.6

96.13

—

Percentage

131.5

15,150,632
CROP

—

(bushels).

13.300c

95.30

—

(tons)

$575,000

(in thousands):

Popcorn

96.83

___

—-

Production

$535,000

(bushels)

Flaxseed

121.500c

13.500c

84.000c

—Jan.
—Jan.
Jan.

Orders received

spring

Rye
Buckwheat

35.025c

96.83

——--—

—i

NATIONAL

$253,000

(bushels)
(bushels)

24.200c

29.250c

AVERAGES:

corporate

MOODY'S

$553,000

YORK—

omitted)

DEPT.

Durum

$30.00

Public

All

$30.17

Jan.

—

U. S, Government Bonds

Industrials

NEW

(DEPT. OF COMMERCE)—

(bushels)

4.376c

Jan.
Jan-

——

—

Group

(bushels)

4.632c

...

Utilities

Railroad

BANK

(bushels)

all

4.634c

.Jan.

———

Baa

$232,000

(000's
.

(000's

Dec.

all

Sorghum

Baa

—

Wheat,

AVERAGES:

—

Dec. 30

DAILY

Average
Aaa

November

Dec. 30

•

—

at—

PRICES

BOND

Dec.

$56.59

Dec. 30
Dec. 30

MOODY'S

OUTSTANDING—FED¬

PRODUCTION

Corn,

Dec. 30
Dec. 30

«■

Industrials

Nov.

CROP

Oats

Aaa

Public

BOARD

Dec. 29
Dec. 29
Dec. 29

Louis)

Group

PAPER

COTTON GINNING

QUOTATIONS):

corporate

Railroad

6,741

THE

& BRADSTREET, INC.—
(1947*1949=100)—Month of November

at—

St.

Month

—

RESERVE

Winter

Government Bonds

Average

146

Dec. 31

INDUSTRIAL)

at—

Louis)

8,267

$582,000

BRA.DSTREET,

Barley

York)

BOND

7,269

(NEW)

November

CONSUMER PURCHASES OF COMMODITIES-

Jan.

U. S.

101,955,000

INDEX—FEDERAL RESERVE

AND

30,631,000

$478,463,000

DUN

—

34,103,000

$516,722,000

496,000

j——

ton)!

York)

"East

80,572,000

11,908,000

PRICES:

(New

( New

Zinc

105,655,000

37,016,000

ERAL

copper—

tin

Lead

117,563,000

125,313,000

11,917,000

—

ton)

refinery

MOODY'S

162,329,000

89,087,000

lb.)

Domestic refinery

Export

101,004,000

—

(per gross

shipped between

40,739,000

STATES—DUN

COMMERCIAL

83,083,000

Dec. 31

kwh.)

000

COMPOSITE

Scrap steel

64,191,000

$185,038,000

OF MINES):

(tons)

AVERAGE

(COMMERCIAL

AGE

52,193,000

$294,411,000
176,848,000

—Dec. 31

(tons)

BRADSTREET, INC
IRON

$226,520,000

INSTITUTE:

(in

output

FAILURES

and

15,847,000
46,206,000
29,243,000

587,045

—^ec. 26

lignite

SYSTEM—1947-49

$153,197,000

Dec. 31

(tons)—

DEPARTMENT

EDISON

stored

55,708,000

123,302,000

CASH DIVIDENDS—PUBLICLY REPORTED BY
U. S. CORPORATIONS — U. S. DEPT.
OF

•

—Dec. 31

——

BUREAU

and

49,032,000

$233,234,000

$534,100,000

COMMERCE

———

—

Pennsylvania anthracite

47,417,000

11,912,000

countries

INC.—Month

ENGINEERING

—

;

Bituminous

credits

$226,662,000
144,720,000
10,052,000
45,477,000

139,188,000

—IIII—II
IIIIII
.II~

BUSINESS INCORPORATIONS

28,628,000

.123,444,000

(no", of cars)__Dec. 26

and municipal.

OUTPUT

goods

$245,812,000

III IIII ~™

134,425,000

30,251,000

117,231,000

Dec. 31

Public construction
State

30:

:
—

omitted)

Federal

Nov.

Ago

BANK

RAILROADS:

(number

construction

Year

Month

8,653,000

Dec. 26

construction

YORK—As

OUT¬

RESERVE

exchange

Based

3,111,000

10,587,000

8,281,000

Dollar

NEWS-RECORD:
Total

NEW

ACCEPTANCES

FEDERAL

—

Total

-Dec!

freight received from connections

ENGINEERING

2,543,000

10,220,000

Dec. 26

AMERICAN

2,521,000

9,952,000
8,702,000

Dec. 26

DOLLAR

Domestic shipments
Domestic warehouse

24,023,000

Dec. 26

—

(bbls.)

freight loaded

Revenue

(bbls.)

oil

fuel

ASSOCIATION

gasoline

oil

fuel

Residual

unfinished

6,227,300

25,192,000

Dec'26
Dec! 26
Dec! 26
Dec

6,248,100

6,594,200
7,077,000

Dec. 26

„

(bbls.)—
(bbls.)

output
output

(bbls.)

Distillate

2,213,000

Exports

Stocks; at refineries, bulk terminals, in transit, in pipe lines—
Finished

1,955,000

(bbls.)

oil

Residual fuel
-

*1,706,000

of that date:

are as

Month

BANKER'S

Imports

output—daily

gallons each)

Kerosene

111,788,000

of quotations,

cases

Ago

86.7

INSTITUTE:

Crude runs to stills—daily average
Gasoline output (bbls.)
•

Jan. 10

or,

either for the

are

Latest

STANDING

(net tons)—

condensate

Dates shown in first column

that date,

Equivalent to—
Steel

production and other jFigure* for the

cover

Year

Ago

*75.7

WINTER

WHEAT

PORTING

PRODUCTION—CROP

BOARD

CULTURE—As

Dec.

DEPT.

RE¬

OF AGRI¬

(bushels)

' ,r

"fa *

**♦».

*4tv*

The Commercial and Financial Chronicle

(02)

Continued

from

larly if

J§|

page

decline of demand

values

ried

existing

down while

leaving building costs
high and dry, a recession origi¬
nating in housing or elsewhere
might produce quite a refractory
the incentives continuously ade¬ depression in building.
In automobiles\ and appliances,
quate to yield a full-employment
we seem quite definitely to have
volume of purchases.
worked
through the postwar
On the side of monetary policy,
backlog of demand,
and lower
it
is
almost universally agreed
sales seem to be forecast by in¬

How to Reverse the Recession
it

that

likely
are

measures

policy
linr*V the

new

needed to

this market to Joiner less
of aJZy
urop in
gross
national PWjct. But if the re¬
in

fall

half

than

cession

\'s

either

deep

pro-

£**Sged, discretionary policy should
be

able

better this mark con¬

siderably.

discretionary
policy, we
case primarily abate¬
ments in taxes—withheld income
By

in this

mean

commodity taxes, perhaps
Social Security contributions.
If
Congress can be persuaded to de¬
cide in advance what pattern of
taxes,

tax cuts to

port

adopt in order to sup¬

consumer

quick

markets,

that in

recession the authorities

avoid putting

must

general pres¬

and consumer
credit. Since existing debtors have
business

sure

to be

fulfill

kept under some pressure to
individual contracts, how¬

Federal

hold that in recession the

proposed expenditures
levying taxes for,
I Reserve should aim to "saturate
would urge that abatements in the economy with liquidity," and
auch permanently-accepted levies avoid any measures that reduce
For my part, I would
as
the personal income tax or liquidity.
hold that it was sound policy to
Social Security contributions be

roads

into

sources

re¬

and

parking

If production of these
more highly season¬

facilities.)

items is to be

worth

are

could put

net contraction of
loans may result if new borrowers al, as seems likely, we will have
to enlarge our standard for the
do
not
come
forward; and the
authorities may not be able to average level of unemployment in
peak years. Besides, if we have a
turn off all pressure for liquida¬
wider "seasonal business cycle,"
tion. It might be a useful precau¬
an
unlucky combination of the
tion to design arrangements for
seasonal
downturn
in
durables
some sort of general slowdown of

and

of whether

ever,

some

ever,

on the depth
timing of the cut. To preserve amortization under existing con¬
the anti-inflationary strength of tracts (especially mortgages), for
the tax system for future needs, use in a recession. On the side of
debt management, some
and to preserve the healthy test public

^decision is feasible

(The sagging of demand
autos might be eased, how¬

dustry.
for

other

with

make
tion

our

recessive

factors

If the drive for

tumn.
wage

expresses

to prevent

seasonal

may

general business situa¬
vulnerable

forces

the

au¬

annual

that work

the restoration of sharp

fluctuations

this

sec¬

tor, economists interested in

eco¬

nomic

stabilization

must

The

car¬

houses

of sympathy.

feel

Left

lays.

authorities

view

needs

public

postponable out¬

themselves, local
apt to follow a

are

pattern.

visible

the

local

of decentralized

cycle-reinforcing

sympton of success on this side
would be the appearance of nega¬
tive inventory-accumulation

timism

ures

growth

fig¬

early in the recession.

ing of

Postponable Expenditures
our

tures

are

postponable

expendi¬

consumer

durables

durables, pro¬
and' construction

harder to influence.

define

avoids

monetary policy that
setting up deterrents to

purchase; and item by item,
can

think of ways

positive incentives.
^

made

within

business,

might
sharply reduce the proportion of
young couples in a financial con¬
dition
once.
seems

set

ity,
but
elasticity.
to

housekeeping at

The market for houseroom
to have little price-elastic¬

five

considerable, incomeIf unemployment rose
six

held there for

million,

say,

and

effective.2

increased

the

period of loss-carryback under the
corporate income tax, many a
company

could be

sure

of avail¬

ability

of past profits to absorb
accelerated depreciation. With a
substantial

carryback

(say

three years), announcement of ac¬
celerated depreciation on invest¬
ments

create
vest

eould

year

powerful incentive to in¬
and finance partly out

now

tax

were

the current

refunds if current

weak.

Such

profits

combination,

generate the crucial 3% to 5% of
vacancies
fairly
rapidly.
How
much this market would
respond
to stimulation (after the

vigorous
pumping carried on ever since the
reliable way of making war) seems uncertain.
Particu¬

incidentally, would

give

firm

basis for bank credit.
2 This

suggestion arises from a paper
Richard
Goode
and
discussion
by

Richard

Musgrave, at a recent profes¬
gathering; though I am not sure
either of them would take responsibility
for the consequences I draw.
sional

Unless

keep

our

in face of

suc¬

policy should

learn

can

psychological balance
uncertainty, we are not

schools, highways and
facilities, the idea of a

What

should

this

worry

date

late

cen¬

that

face

the

public works" has un¬
usually strong appeal at present.
But
the
necessary
linkage be¬
tween local needs and plans and

well-developed plans for meeting
one.
In fact, if we took at face

national

quarters about the sacredness of

timing and financing has

yet to be forged.
Over all this area,

the problem
is much illumined by the availa¬
bility of intentions data. The

yearly

quarterly

and
series

merce

SEC-Com-

business

invest¬

ment and the

yearly Federal Re¬
serve-Michigan
series
on
con¬
durables

and

housing —
though not yet fully tested—are
already of proven usefulness. If
sumer

rumored

the Federal Reserve-

Michigan studies

be put

can

basis in

quarterly
score

1954,

will

further gain in our ability

to size up

the coming year. And
I take it we can hope that current
studies

the

Council

Advisers will

nomic

the

least put

to having

way

Eco¬

com¬

parable intentions series on pub¬

that

have

got where we

prospect

the

value

far

from

automatic.

intensified

Smithies,

outlay-cuts
of

case

National

and

Measures

for

Full

Employment (U. N. sales no. 1949,
II. A. ,3), pp. 94-99;
J. W. Angell, G. D. A. MacDougall,
Javier Marquez, Hla Myint and T. W,
Swan, Measures for International Eco¬
nomic Stability
(U. N. sales no. 1951,
II. A. 2), pp. 17-26;
And the December 1953
erence

to be

supplied.

tax-increases

and

slump.

It is hard to be¬

lieve, though, that these measures
have

would

when

the

supporters

many

pinch

came.

Three types of preparations for

possible

slump
need
to
be
(1) There is at least some

pushed.

for

room

forestalling measures.
since the war goes
to bear out Professor

Experience
some

way

Hansen's

contention

American

economy

inflation-

can

flationary side.
a

war or

and his inference that
afford to err on the in¬

scare,

policy

the

that

proof in the absence of
war

If (for example)

moderate expansion of highway
school construction in 1954

and

proves

for

unnecessary

business, it

support

probably do

can

little economic damage. (2) There
is still some room for improving
out automatic stabilizers

espe¬

—

the international side, I
suspect. (3) Above all, it is urgent
to make at least a good start on
cially

setting up standby measures. After
a
generation of talk, a practical
start
on
the public-works-shelf
idea would

scarcely be premature.

Planning of effective market-sup¬
porting tax cuts, loss carry-backs,
temporary acceleration of depre¬

ciation, etc., is in order. The whole
international side of the stabiliza¬
tion

problem needs careful recon¬

sideration in this country.
So long as

these urgent jobs re¬

main, economists cannot yield to
the suggestion that we avoid talk
of

a possible recession for fear of
damaging "confidence." To sus¬
tain confidence by assurances that

there is

danger,
in

learned

have

should

1930-1931,

is to

The way. to mobilize

risk disaster.

the
to

powerful forces of confidence
help limit and reverse a reces¬
earn confidence by hav¬

sion is to

ing an adequate substantive policy
for dealing with recessions.

Joseph Fee Joins
1
Dodger & Cox
SAN FRANCISCO, Calif.— Jo¬
seph M. Fee has become associ¬
ated as a Security Analyst with
the investment management firm
of Dodge & Cox,

Mills Tower. Mr.

Fee has been

Security Analyst

with Dean

Witter

past

years

three

for the

Co.

served

and

the Pacific with the Navy
the

war.

Yale

during

graduate

University and the Harvard

Graduate School of Business Ad¬

ministration.

Ralph Sommers Opens
to The

Financial

LA GRANGE,
Sommers

111.

Chronicle)

—

engaging

Ralph M.

secu¬

rities business from offices at 132

South Park Road.

ously

with

was

previ¬

Byllesby

and

Company, Incorporated.

Walter Greer Benton

Clark, Nicholas Kaldor, Arthur
Pierre Uri and E. R. Walker,
International

of the automatic stabilizers in the

See:
M.

many

Farm

import restrictions on
products
competing
with those under
price supports. I recently heard an in¬
ternationally-minded American business¬
man
propose
seriously that our future
trade agreements should all provide for
intensification of our protective arrange¬
ments any time our GNP
sagged by as
much as 5%!
to

are

policy implies that a recession would lead
to
dumping of some American products
and

declarations

without

Federal budget, by making drastic

(Special
is

recession

nearly-balanced budget, we would
have to say that we planned to
deprive ourselves of the benefit

by accident than by design,

3 This

J.
a

on
pur¬
restricted

recession.

year, even a re¬
duced level of construction could

period (a* procedure which would
Jdsk a complete
collapse of busi¬
ness and political
morality), we
have

any

short of

But

strengthen

handing out subsidies

chases

can

serious compound¬

promotions

economy of decentralized

decisions,
ducer

for

Any serious
unemployment, with
corresponding slowdown of

the

housing, however, there

room

much where

very

us.

tury.

op¬

put

adapted to life in the present

long-run

are

backlog

to standard rates

plication,
however,
is
a
more
lic works.
temporary—to revert take advantage of a recession to rapid
absorption of new workers
fund
short-term
into long-term
presently, unless
into other industries.
International Problems
there is definite reason to pro¬ debt. The relatively mild adverse
The demand for industrial and
effect on liquidity could readily
The most ominous side of the
long the abatement.
railway plant and equipment is
be offset by keeping banks com¬
American business prospect is the
There is every reason
a very doubtful sector. There seem
to be¬
fortably furnished with excess re¬
danger of international disruption
to be indications that more and
lieve that such tax cuts will be
serves, while reshaping the debt
from an American slump. Our im¬
effective.
Remember
that
the
more of the defense facilities set
structure to give monetary policy
ports are cycle-sensitive. This im¬
problem here is to help consumers more
up
since 1950 are being trans¬
grip in future booms.
resist a cut in consumption stand¬
ferred to general business pur¬ plies also that a slump will tend
to hit our exporters, since our
Going over to a sector-by-sec¬
ards.
Suppose a rough rule of
poses, and that the defense boom
tor examination of ways to en¬
trading partners have a rather
thumb that tax cuts for this pur¬
of
1950-1953{ may
have antici¬
courage postponable expenditures,
prompt adjustment of purchases
pose should aim to hold level the
pated
many
later
investment
the only sector that seems to offer
to sales. More important, the out¬
flow of disposable income.
Since
needs.
Some
of
the
intentions
no cause for worry is public util¬
side world may find intolerably
the losses of income in a recession
data
now
available
suggest- a
ities
intense the backlash of what we
(that is, power and tele¬
would probably be rather concen¬
noticeable slackening of business
trated, most households — with phone'; railways are another mat¬ investment in the second half of feel as a rather mild domestic
fluctuation.
The
experience of
such
types
of
income-loss
as ter). Here there still seems to be
1954. On the other hand, I gather
a
substantial postwar backlog—a
1948-1949 is particularly discon¬
elimination of overtime, slow col¬
that comparable data a year ago
lack of adequate margins for peak
certing when we remember that
lections on receivables, and the
gave the same suggestion for 1953.
loads and emergencies, and per¬
it came during the expansion of
like—could and presumably would
We may be observing in these in¬
an
American aid
program
that
maintain spending. Among those haps a widespread postponement
tentions
data
only a tendency
of building.
took special account of balancewith a net loss of disposable in¬
to fill in the detail of investment
The housing sector I find cryp¬
come, those with volatile profit in¬
plans less completely beyond the of-payments difficulties. The po¬
litical consequences of unconcern
On
comes
would
general
principles,
it nearest six
probably not cut tic.
months, in view of
on our part could be devastating.
non-durable spending much unless Would seem likely that a build¬
shortened
delivery
dates
for
The most
successful domestic
ahedme stayed down—particular¬
ing boom would put a larger share
equipment.
the
nation's
resources
into
stabilization program I can visual¬
ly if government policy included of
The main remedies that catch
an effective floor under farm in¬
ize still leaves room for fluctua¬
housing than would be needed in
interest here are tax gadgets. It
come.
Most of the cut in such a long-term continuous prosper¬
tions sharper than that of 1948could be that the termination of
1950. While foreign monetary re¬
spending
would
probably
be ity. Postwar policy has been to
excess
profits taxation has sus¬
treat
among those hit by layoffs, who
housing as an emergency tained
serves
have
been
strengthened
activity in late 1953, by
sector—implying the need for an
obviously could not be compen¬
since then, it is doubtful that the
giving an incentive to pull for¬
sated by cuts in taxes on the in¬ eventual
cutback, which might
outside world could simply ride
ward outlays in that ill-defined
come they did not earn.
come suddenly enough to involve
out an American recession.
The
but important category—"capital
As long ago
In short, under a successful sta¬ a serious recession.
least that should be asked is se¬
outlays charged to current ex¬
bilization policy, the trough in dis¬ as 1950, the stock of housing units
pense."
Accelerated depreciation curity against American responses
had caught up with the number of
posable income and non-durable
is often recommended as a stim¬ to recession that would accentuate
family units, and almost every¬
spending should be much more
ulus. But there is danger that the foreign effects.3 We owe it to our
shallow than that in Gross Na¬ body marriageable seemed to be
timing of the results may be per¬ trading partners to give serious
Yet, in the last three
tional Product. As a rough gauge married.
to
the
proposals
verse.
In a period when future consideration
of success, I would suggest that years, an almost unabated boom
brought forth by the successive
level of construction has not gen¬ profits seem secure (and when a
the fall in consumers' non-durable
of
Experts at the
stimulus is consequently not much Committees
erated any noticeable number of
spending (excise taxes, etc., sub-,
United Nations.4 Some coipbinavacancies. Remembering that we needed), this incentive may be
tracted out) should be less than
tion of the suggested measures to
strong, as in 1951-1952. But ac¬
are drawing near the time when
a quarter of the fall in currentcelerated depreciation could prove provide special dollar funds in a
dollar Gross National Product, and the upswing of births after the
recession, strengthen dollar earn¬
a trap if after the investment was
in no case greater than 5% of the Great Depression will be reflect¬
ed in a two-decade upswing in the made the company lacked profits ing power, make the International
jpre-recession spending level.
If
to charge the investment against. Monetary Fund stronger and more
tuna standard could be met, there number of young woipen reaching
In a
period of doubtful profit flexible, and provide dollar fi¬
the age for marriage, and that
would
be
substantial
gains in
nancing for buffer stocks seems
with the growing size of
other
family prospects, the attempt to acceler¬
sectors. Consumer-durable
ate
investment
by accelerating urgent.
■pending would gain a substantial our existing housing units tend to
support. Above all, involuntary be cramped, I am no longer so depreciation might misfire, and
General Stabilization Strategy
create an incentive to postpone
inventory accumulation of con¬ sure that a downward adjustment
The mere fact that we are in a
investment till future profit was
of the scale of house Construction
sumer
non-durables
would
be
more secure.
Here a combination state of shaky prosperity should
allied out, turning off one of the will be called for.
of
tax
gadgets might be more not worry us too much. Admitting
most powerful recessive iprces. A
Even with more
enacted

Thursday, January 7, 1954

cessful stabilization

for

parking
"shelf

The im¬

one

decisions about

good deal

problem

works is also

Walter
away
attack.

Greer

Jan.

Benton

following

Until

his

the railroad

partment

heart

retirement

December he had
of

passed
a

been

bond

Wood,

Manager

trading de-1
Struthers

reporter—ref¬
Co.

•

llttiill—

Volume 179

Number 5288

The Commercial and Financial Chronicle

(93)
I

Continued jrom page 16

THE

' < I:

/•;( '.(M

PHILADELPHIA

tf't

•

NATIONAL

PHILADELPHIA,

Deposits
Cash

due

and

co.

Dec.

new

3i,-53

york

Sept. 30,'53

Total

resources.

and

from

Loans

678,498,138

90,884,015

trust

resources-

•

co.,

new
>c->

Sept. 30,

532,301,787

Loans

discts.

profits

CO.

cw
Sept. 30, 53

197,683,851

208,797,035

security

brothers

co.,

york

Two executives of Harris Trust

Sept. 30/53

58,455,044
45,879,229

52,432,408
49,596,774

14,325.284

14,305,284

bank

new

c/>n

resources-

Vice-Presidents

Sept. 30, *53

5,562,461,665 5,553,147,257
5,062,087,048 5,046,752,211

Deposits
due

1'478'274'159 1.386,732,289

«:

hoidgs.

926,919,119 1,110,553,447
2,393,667,410 2,378,254,477
prof,«
52,321,381
53,374,599

discts.

undivid.

kings

county

jkust company,

3i,'53 .June 30/53
$54,594,828 $53,343,733

resources—

SSTlSd

due from

banks

43'809 591

7,780,108

8,471,087

securifcy
„r,„oa

diwwn'is

Undivided

10n,i69>85

profits—

967,024

B85.714

*
,

The Banking Department of the
State of New York gave
approval
on

Dec. 29 to the Hempstead Bank

Hempstead, N. Y.

increase

its

capital stock from $600,006, consisting of 60,000 shares of the par
of $10, per share to
$720,000, consisting of 72,000 shares of

same

par

value.

the

bank's

the

Plan

providing for the
of
Syosset, New

Mr.

Merger

York

into

the

will

Bank

received...-eight shares for
each share of Bank of
Syosset.

the senior officer in

Chicago,

Trust

1920

joined

and

ne*t

stockholders

Mr-

Lloyd.

month.

Baylis,

Syosset

the

other

Lloyd

head

pa,.[ment
1929

the

Mr.

resources

ceed

institu-

Vice-Presi-

officers

and

em-

Hempstead Bank.
Barker, President ot

result of the merger

the

largest
York

state

City.

is the

Bank

York

outside

commercial

and

Trust

xrust

Louis

council

National

24.

National

Committee

Hotel

Security

Sherman

executive sessions

Meeting of NSTA

retired
BOND TRADERS CLUB OF CHICAGO

pension plan on

according to

The Bond Traders Club of

Wil¬

Lambert W.

bank

Chicago will hold its
25, at the Furniture Club.

the

Fork

Company, Matti-

annual mid-

ket
on
Tuesday of next week
$100,000,000 of new U. S. dollar

Hol-

who

Our

1918.

has

been

his 50th service

public
been

and
in

tax

the

December

meet-

Mr.
made

has

Bredehoft

the bank since

officer

the

auditing

de¬

Griffith

Harris

Trust

Jan

bank

officers

are-

S!",.
dent;

tasinpw

The

the

Holland

Andrew

new

Presi

Whipple,

Vice-

The American National Bank &
Trust

Company of Mobile, Ala.
increased its common capital stock
effective
to

Dec.

$600,000

serve

the

Trust

Mr.

bank

by the sale of

has

National

its

from

effective

Moreover,
investor

Dec.

™

Plans

for

Yazoo

City,

common

capi-

22.

were

with

Frank

continue

recently
President of

King,

Calif.

division

announced

California

Los

Bank,

Work

January

expected

with

start

for sometime in

slated

July.

1948

McMillan,

Dumper and Paul W.
representatives

the bank's Investment Depart-

Buys

Tur^r,

City,

brokers

sugar

and

ment securities dealers.

has

been with

invest-

Mr. Buys

ber of years:

following

(Special

ST.
n«•

num-

Assistant Cash-

Floyd

Hunter,

D.
C.

Assistant

The

Financial

LOUIS, Mo.

Mertens,

—

Secretary, John S.

Wangelin, Arthur T. Wellman;
Golden.

ice Co

first

Jr.

...

now

with

„

Fusz-

Schmelzle & Co., Boatmen s Bank

given

against

(Special

The

Financial

mtmptam

Maurice Moore is associated with

Counsel, John R. Thomas

Darst

Company,

mortgage, 30-year bonds

by" underwriting on its projected
Offering of 527,830 shares of additional

common

first

stock

which

wiu

stockholders

"rights."

bidding

each

other.

COMING
EVENTS
In

Investment

Field

.Vear.

thai
So that today this so-called
„

re-

^an*

(New York City)

Advertising in Action Confer-

leveled out with the vanguard of ence at the Waldorf-Astoria HoteL

^early'a"s
comers

behavior of priees.

the

Off

Good

Ja„

the

further

reception which
greeted
yesterday's offering
of
$55,000,000 of Atlantic Refining

debentures.
314%

this

interest
mature

rated

issue,

priced at 101 for

rate

within

been

Associa-

Jan. 23-25, 1954 (Chicago, 111.)
National Security Traders Asso-

ciation

time

meeting

officers

and

members of council at the Hotel
Sherman,
j

after

1954

(chicag0,

'
^ * '
Bond Traders Club of Chicago

indicated

mid-winter meeting at the Furni-

the

opening of the books.
Bank

Securities

tion.

Club*

ture
* "
/
i
Jan. 29, 1954 (Baltimore, Md.)

compietely sold out

brief

Philadelphia

offering attracted widespread interest and was reported
have

22> 1954 (Philadelphiaj Pa.)

triple

The

Dealers

confirmation

brigk

scheduled

Security

Annual meeting and election ot

Reports of substantial amounts
neecje(j

York

Association 28th annual dinner at
the Biltmore Hotel,

Start

0£ money seeking investment
than

22' 1954 <New York City>
New

do-

Baltimore Security Traders

As-

sociation Annual Mid-Winter Dinner

Bonds

at the Lord

Feb. 26, 1954

Baltimore Hotel.

(Philadelphia, Pa. )

103

big issue, outside the
corporate field, which is reported

building

Chronicle)

bida

Purchases in advance of the end of

World

With Thomas Darst Co.
wit

wiu open

Qn Wednesday, Ohio Edison Co.
wjjj consider tenders for a "stand-

Another

WILMINGTON,

of Indiana

investing

yield of 3.19% to maturity.

William

which will provide funds for
payment of bank loans and for new

Rather the tendency is to spread

was

Chronicle)

sufficient

business

new

o covei jor its offering of $25,000,000

walk.

not

are

Elwood, Stock Exchange.

Dunhill, Martin J. Morrison, Fred

the latter bank -was approved

dying

organized

Carrying

Bayard

Sheldon, F. Bradley Thomas, Jr.;
as

Large

Cashier.

ier, Norman Barker, Jr., Arthur Building, members of the Midwest
Dilling,

pretty much to

the firm for many

With Fusz-Schmelzle

promises
of

The following day Public Serv-

securities has been slowed

acquire

years,

a11 of whom have been in
a

buying—the erstwhile rush to

and

the bank's employee for

operations

the change in the complexion of
the basic investor—institutions of
i?n®. 95
01 another rather than
l? !
5 1?w d0.
bulk o£
the

general partnership in Farr &
Co., 120 Wall Street, New York

week
way

wrecks of the new year. But with construction,

Partner

President Mark A. Brown also
the

the

first mortgage bonds of theAppalachian Electric Power Co.

buying made itself felt strongly in the first two

John C. Buys has been admitted

comes out.

new

is now- disposed

ing their buying through January
February depending

years as

ment.

with the

and well into

Farr & Go. Admits

given
Norville
A.

Brooks Corwine, C. J. Hambleton, Jr., Hiram F. Bright; also

positions

the

decidedly

November and the late

se-

York

,,!/!/

meantime

become

Years ago such

Ahgeles,

completion

according to
it, in

position to note

keep underwriters and their diRtributing dealers comfortably

that

assume

investment demand is pretty much

were

the

necus.

groups

with Harris Trust.

Marvin

Next
in

such orders over a longer period,
an^ as a matter of fact, such
quarters for Caii- groups are usually in position to
La
Brea-Wilshire anticipate their needs by making

new

and

prices

modern

Bank's

division

in
has

Pj
ins

$150,000 to $300,-

fornia

been

trustee

board

New

Bank

stock

Promotions to the office of As-

stock.

new

stock dividend The De ta

Street

1922,

will

curities analysis

William

$700,-

„

Department,

career

the

$500,000
dividend

inquiry,

Busy Week Ahead

of Wilshire Boulevard and Detroit

and will continue in that position,

stock

first

Norby has spent his entire

business

from

further increased it to

and

them.
offer¬

yield of 3.45%,

vvhat U was a decadc or tw0 back busy'
what with curlent hish tax >cvels
On Monday banking groups will
and the double tax on dividends, be competing for $20,000,000 ot

of the market and

...

the issue

markets.

safe to

seems

Carshierdent; J' T' Theobald' more'famUiar

Office

since

investment

indicating wide distribution when

current

the pressure of such demand is not

one-story
building art the northwest corner

division,

loan

which

even

developing from institutions wide¬
ly scattered around the country

weighty factor in influencing the
trend

1924.

But it

a commer-

1947 and is serving in

cial

was

Current

perhaps slightly smaller volume
has at mid-year,, is undoubtedly
a

with

been

1934., He

demand

surprises

say

build-up

3.50%.

those

of the year, and in

season

advance

proportions

ing basis to give

notary

authority,

bank's

partment since

Reinvestment
at this

anniversary.

Atkisson, who is

The

attaining

Current reports indicate

Report

of¬

April, at the bank's an¬
25-year
dinner,
he
was
awarded a gold whtch honoring

000

at: its

Reporter's

directors

ing. All were, formerly Assistant
Vice-Presidents.

securities.

dealers

nual

tal

Assistant Trust

Hollocher

Chicago, by the bank's board of

tuck, New York under the title of
om*

Auditor,

Harris Trust and Savings Bank,

Gregg

North

Winter meeting on Jan.

bank's

1920.

Miss, increased

L-

the

Fielden

are

Assistant

Bredehoft, Wendell

C. Griffith, and William C. Norby
were appointed Vice-Presidents of

men,

New

McDonnell,

ficial

Merger of The Peo-

into

the

pies National Bank of Greenport,
New

Chicago mid-Winter meeting at

ficer of First National Bank since

announced the appointment to of-

County, he said.

Plan

been

ex-

would

making

bank

De-

has

the

Organized in 1887, it

oldest

Nassau

bank

000

Department.

Bank, announced

$30,000,000,

Trust

Heath,

officer

that

members

the Furniture Club in the
evening.

with the

Hempstead

Mark A. Brown, Harris Trust
President,
has
announced
that
william 0 Heath, Vice-President,
has been named to succeed Lynn

Wolf,

Walter G.

1953,

Center

Vice-President

charge of the bank's trust department, joined the Harris Trust as
a Trust Officer in 1929.

ployees of the bank will continue

the

re-elected to this position at the
annual
meeting
of the
banks

AuBuchon,

Leslie

tion, will remain

He has

js anticipated 'that he will be

stead

and

1903; Earle B. Barnard, Assistant
Auditor, who has been with the
bank since 1910, and Basil Atkisson, whose service record began

Mr.

as a member of the bank s
of directors since 1949, and

sistant Vice-President

Harris
named

was

The Syosset office will be
operated as a branch of the
Hemp-

dent

relinquish

jje became head of the bank's

Stockhoklers oi;,the Hempstead

President

St.

three

Mr.

Pritchard

the banking department. A native

merger of Bank

Hempstead Bank.

Bank.

pension

Vice-President

On Dec. 31 the Department also

approved

members

Sunday, Jan

joined the First National staff in

nrn(,ram

value

the

and

associated with Harris Trust since

Dec.

Loans

Lloyd

Lynn

Richard
E.
Pritchard,
retired
on Dec. 31 in accordance with the

the

york

$ ;■

Total

Chicag0> I1L>

board

curity

The

served

Dec. 3i, *53

s0mGov"t

31,

locher,

1841459,'950

national

city

Loans

31/53

from

surplus

and

Bank

Dec.

of Dec. 21.

Vice-President in 1939.

discounts

chase

veteran

under the bank's

E#,Ch«St"'

217 943 959

holdings

°f

u.sanGovT7ecu7iiy 59'440'8l6/ 47.935,556
Capital and

Three

tional

Na-

and

will be held at the Sherman at 10:30
a.m.
Monday, Jan. 25; to
which any association member will be
welcome.
The group will
attend the Bond Traders Club of

:j:

Company,

203,026,084

Deposits

First

The

234,811,308

resources

due

Dec. 24.

auditing department of First Na¬

Trust

and

"O"/' ,Ba"k

his duties

harriman

Dec.

Cash

Pa.,

provisions of
238,456,673

new

Total

Beaver

Beaver,

Company

797,390,192 776,442,037

stock effective

new

INCORPORATED,

187,945,497
Loans
&
discounts 285,688,826 307,391,829
Undivided profits—
13,633,263
12,826,033

3,917,277

officers

Association, Inc., will convene at the
Chicago on Saturday, Jan. 23, 1954 and join in

President.

holdings

and

by sale of

charter and title of Beaver Trust

banks

the

4,349,044

000

42,115,077

ca?randd"u7Trom 687,570,699 691,102,760

Loans

55,546,082
30,019,545

The

Traders

44,253,261

Dec.

cash

34,821,864

NATIONAL SECURITY TRADERS
ASSOCIATION

National

Des Moines, Iowa was in¬
creased from $2,500,000 to $3,000,-

liam

NEWT^r^n"tt
31,53

Total

54,131,501

security

stock

Moines

Bank,

Rochester, Pa., merged under the

resources

brown

36,358,339

piofits__

15,992,308

capital

common

343,555,517
977.003,580

u. s. Govt,

Undivided

Notes

Iowa-Des

987,808,043

MORGAN

Total

the

193,872,296 195,387,389

—

667,871,138

505,189,925

The

Jan. 5/53
$

holdings
Loans & discounts

The

banks—

"ourltHowi".

due

and

Undivid.

york
on

16,546,815

33,467,736

U.S. Govt,

■

2,133,918,389 2,099,821,579
1,907,575,991 1,875,502,811

Deposits

•

...

210,859,431

banks

*•

rw
Dec. 31,

from

90,648,418

;•

Cash

Dec. 31/53

profits—

TRUST

210,034,962

Total resources
Deposits
Cash and due from

.....

181,554,523 177,593,327
315,437,456 321,260,683

TRitcT

bankers

a*rn

security

discounts

Undivided

KAxtK

PATERSON,

753,481,245

709,113,931
1,405,297,410 1,426,501,500

profits

Total

VATlnvAT

COMPANY,

NSTA

289,440,691 252,185,051

Govt,

holdings

sjc

FIK»T NATIONAL BANK AND

742,993,429

discts.

se-

holdgs.

Undivid.

banks—

.U.S.

Loans

due

Govt,

curity

31, by the Banking Depart-

ment of the State of New York.

2,972,598,720 3,112,349,233
2,520,952,092 2.667,722,896

Deposits
Cash

Dec.

from

banks

trust

Sept. 30/53

886,249,009 853,643,119
803,515,380 760,254,894

resources

guaranty

*■*

BANK,

Total

,$)

PA.

Dec. 31/53

'News About Banks and Bankers

dinner at the Ben Franklin Hotel.

up a

heavy volume of in-

Investment

Traders

Association

Philadelphia annual midwinter

Quiry, is the impending .offering
projected
Bank

for

the

International

Reconstruction and De-

velopment (World Bank).

South Fifth^ Street;^* This institution is slated to

May 7, 1954 (New York City)

Security Traders Association ol
New

mar-

York

annual

Waldorf-Astoria.

dinner

the

(94)

(--ut

U-/IU-

MlU/tLtm

i^iirunicie

—

C
classes, reports net assets Of $54,387,746 on Nov. 30, 1953, the com¬
pany's fiscal year end. This com¬
pares with $58,544,045 12 months

A MUTUAL INVESTMENT FUND

Mutual Funds

NATIONAL

The

By ROBERT R. RICH
NET ASSETS

WRITE FOR

of Diversified

Growth Stock Fund, sponsored by

Hugh W. Long and Company, Inc.,

FREE INFORMATION

totaled $8,811,514 on Nov. 30 last,
the
end of
the
company's first

FOLDER AND

PROSPECTUS

year

value

per

operation.
Net
assets
share was $7.23, com-

dollar

1953

cilities

services.

TOTAL

NET

assets

PERSONAL

PROGRESS
Investors

the

Net

Trust

appointment

assets per

$11.12,

year

the vacancy caused
ment

Merrill

Griswold

Ijiiifg

Griswold.

maintaining

sociation with the Trust

*v-

V. '

its

man

;/
'

by the retire¬

trustees

agers

Mr.

his

Chair¬

Advisory Board.
the

are

of the

as¬

operating

The
man¬

company.

Mr. Cooper joined Massachusetts
ber

mem¬

staff

research

its

as a

after

research

with

work

the

Bankers

1935

and

recently

was

ber of the Advanced

ate

WAll

11
GENTLEMEN: At
me a

Gradu¬

Adminis¬

Business

$7.18

The

dends

The
had
Nome.

months

four initial

totaled

Fund

cents

fiscal

share.

year-end

lion

1952.

over

Other

are

where

in securities of

scientific

re¬

technological
develop¬
other
special factors
give promise of better than aver¬
age growth over a period of time.

search,

Chemical

resented

and

23%

drug stocks rep¬
of

net

assets

and

Canadian securities

Management places
sis

ing

eystone

current

"Over the

past two years," the

report states,
Canadian
moved

spite

"the^ American and

stock

have

markets

divergent

the

empha¬

Growth

are

the

The

select¬

trends.

De¬

rapid growth of
economy, the Mon¬
Exchange Industrial
Index has declined 17.5%, while
Industrial

8%.

advanced

stock

this

emphasis

common

Index

In the opinion

management,

justifies

Canadian

investment at this

held

Diver¬

Fund

average

re¬

cents

aspects
ratio

the

mination

prices.

noticed

ever

decline

security

There is, of course, a well-

correlation, the tendency
having been, since 1929, for the
low points in the orders-inventory
ratio to precede low points in in¬
dustrial stock prices
by one to
three months, as shown b.y the
following table: *
CYCLICAL

LOW

SINCE

POINTS

1929

Ratio of Orders

Industrial

To Inventories

Stack Prices

May 1932

January

April-May
low

Mar.

194IL_

not

the

1940*

widespread

fear

considerably
there was

Q#rman

correspondent

goes

SAYLES

Inc.,

say:

Managers

Mu¬

would

& Co.,
Loomis-Sayles

Fund, Inc., report that as of

Dec.
were

30, 1953, the
$32,448,824

with

assets of

same

date

Fund's

$29,678,227

year

assets

compared

the

reached

by this ratio would be the
harbinger of a lower level of bus¬
iness
ers,

work

ago.

Loomis-Sayles

Mu¬

the

while
off

prices are
playing^pheir role

capable of

882,235 against 775,448

barometer

were

Dec.

30,

1952,

increase

14%.

GROUP SECURITIES, Inc.,
embraces

funds

five

and

single

which

mutual

general

industry

■

possible that
they might have declined in antic¬
ipation of this lowSlevel in your

orders-invent|ries

new

and

that

when

reached

1938

and

index;

index

low

unusually

indicating
be

that

had

point,

and

1949, it might
relationship which

obvious

retailers

and

distributors

"which

would

stimulate unusual sales efforts and

Bond Fund
OF

"
'

.''

price cutting

Organization and the shares of your
Funds,'
D-82 '

■
■

■

forerunner

re¬

inventory
level

received

higher

orders that would be

your
ten

favorable

their part to

level, which would in turn be the

BOSTON,

describing

store

Please send pe prospectuses

past.
Whether this is favorable or un¬
favorable

tion.

Addreu..

City

Massachusetts Investors
Growth Stock Fund

merely

believe

against it. We
is worth pointing out,

argue

however, that the present decline
in the ratio, although it has car¬
the
1940

the

bottom,

1932

and

sincerthe

There

until

thus

far

upturn except
rise

the

such

later, make reall.y substantial re¬
adjustments.
'
We

inclined to

are

kind

believe that

inventory readjust¬
(more substantial than any-,

thing that has occurred thus far)
be necessary before we can
that the low point ini the

sure

orders-inventory
ratio ; has
ac-'
tually been reached, although the?
main object of our discussion of
this
interesting
question
is
to
point out that there are actuallydifferences

marked

rather

some

between

the

economic

general

situation

today
and
those that
have prevailed at the cyclical low

1938

and

we|e considerably

themselves

Manufacturers

be of two minds

pear

basic

Westinghouse

problem.

Electric Corporation, for example,"

that it has achieved

says

Several other
the other hand,"
that
they are>

by reducing prices.
manufacturers,
have

announced

curtailing

production

and

One

in interpreting
the
orders-inventory
figures is
the lag between the figures and
the time when they are available.
difficulty

latest

Department

of
figure

all-inclusive

tail inventories in the

for

example,
the

Oct.

than

more
a

billion

M'i.

Since
tive

billion,

dollars

almost

the

course

reported a rathersharp reduction in dealers' stocks
of

passenger

cars

owing

October

able),

were

times

to
a

past,

may

be obtained

from investment
The
200

Parker

dealers

111

variation.

Prospectus

BOSTON

Corporation

Berkeley St., Boston, Mass.
FOUNDED

A Balanced Investment Fund

STREET

NEW
6i

DEVONSHIRE

YORK

Broadway

CHICAGO
120

South LaSalle Street

LOS
2io West

upon request

ANGELES

Seventh Street

rd,

1925

New York

->*

Abbhtt & Co.

Chicago
-

•

—

Atlanta

—

■

sales

avail¬

only a few:
allowing for

exceeded

the

fac¬

rather

car

(latest

Business Shares

VANCE, SANDERS & COMPANY

then, however, "Automo¬

American
Investment Fund

that'

slightly-

was

News" has

seasonal

A prospectus
relating to the shares of any of these separate
investment funds
may be obtained from authorized dealers or

re-:

automotive;

showed

total

Com¬
on

year.

ther|; is an upturn, which,

for||h infinitesimal

laying

off employees.

i$T basis for be¬ tory curtailment and to
low^oint has been satisfactory level of new

the|e has been

sharp'

increase in sales of television sets

October.

ap-'

this,

Canada General Fund

Prospectus

and

1940,

1938.

1932,

1949.

INVESTORS

A Mutual

mo¬

(especially
with some;
types of defense business likely to
continue
at
a
high level) that
only a minor inventory adjust¬
ment will be required.
Or it may
be unfavorable if it means that,

1949

isfcot necessarily

level,

lieving that 'a.
reached

doWn

ratio

bottoms

lower.

Century Silares Trust

achieved

mentum

group,

analysis

ried

has

merce

see

and

A/doiton fj'un d

interesting ques-;
favorable if it
that business ac¬

tivity

nothing wrong with this
and
its
conclusion
on

prepared

State.

may

means

The

manufacturers."

IMassachusetts Investors r.Trust

general principles and we are not

Name

much

are

than they \vere at
important cyclical low points in
the orders-inventory-ratio in the
today

still
of a points

busiqjess conditions,

■

STSe

themselves

ventories

higher

I wondered if it wafe

would

inventories.

If, however, stock

tual Fund outstanding on Dec. 30,

1953,

part of manufactur¬

distribute^ and retailers
excessive

prices,

indeed in¬

and

activity,

will

victory.

"On the surface, of course, it
appear that the low points

LOOMIS,
tual

business

Our

stock

industrial

ment

1942^ when
a

The general

present decline.

levels

some

stocks reduced.

accompa¬

were

general business activity than

the

recovery

orders-inventory

sharper declines in the in-,
stock price averages and

dustrial

this

cyclical

the

moreover,

nied by

be destroyed

brief

reached

April,

1949

timing

appear

averages

level

June

the

declines

ratio,

Forecasting

Most

mand and must now, or sooner or.

1938

1949.June

significance

point does

by the fact that after

SO Congress Street, Boston 9, Mass.

$11,315,887,

producers have overestimated de-:

June 1932

1938___

Jan.-Feb.-Mar.

lower

holdings

Keystone Company

Shares',

Steel

was

assets

defined

industrial

common

have

t inquires

e n

orders to inventories and the cul¬

as¬

BOND, PREFERRED AND

The

net

correlation between exceptionally
low points in the ratio of new

in¬

and

device for stock

forecasting:

whether

the proportion of

year,

orders-inventories

correspon

such

COMMON STOCK FUNDS

decline

with

the

in Canadian equities was

sets

asset

Company,

useful

"The

In the second half of the Fund's

fiscal

Department

in the
following study, analyzes several

Dow-Jones

the

Axe

Stock

companies

Stock

Canadian

the

treal

about

sified

Custodian Fund

6%.

income

investments.

whose

tained

pas¬

production, 31%
in
petroleum
27%
in
production,
residential housing starts and 13%
in steel ingot production. *
car

Nov. 30 last, oil and gas 21%, elec¬
tronics and instrumentation 20%

leading

gains quoted include 34% in

creased

shareholders.

7,050

ments

rapid

development, the report estimates
a
gross national product of $24
billion for 1953, a gain of $1 bil¬

quarterly divi¬

the

Investments

City

its

time."

companies

Address.

six

earlier.

obligation please send
Canadian Fund,

with

pared

Research

Canadian

the

continued

greater

„

prospectus on

has

Bt)£lock
?J JnewyorkJ J

$11.64

The

market

that

evidence

has

tration.

STREET

School

mem¬

Management

Program at the Harvard

ONE

^IC'AiVIN

with

earlier.

economy

previous experience in investment

trust Company in New York City.
A native of Pittsburgh, Pa., he
graduated from Yale University

share amounted to

compared

senger

Investors Trust in 1947

Among the classes reporting an

re¬

As Used For Market

Fund, managed by Calvin Bullock,
totaled
$24,013,592 on Nov.' 30,

John L. Cooper as a trustee to fill

announces

Fund

The Orders-Inventories Ratio

Canadian

with $22,368,551 12 months earlier.

Massachusetts

Utility Shares reported

gains for the year.

net asset

earn¬

their common stocks for
financing expansion of their fa¬

CORPORATION

Established 19 30

classes, Electronics and
Equipment, Food,- To¬

bacco and

1953, its fiscal year-end, compared

120 Broadway, New York 5, New York

Stock

assets

net

$7,094,781,
compared with $5,023,730. Among

NATIONAL SECURITIES &
RESEARCH

Common

ports

of each

out

ings

Electrical

earlier.

SECURITIES
SERIES

industry

Los Angclex

.Volume 179

Number 5288

The Commercial and Financial Chronicle

(95)
compared with $13,585,588

year

ago;w

'-v

The

■

report,

completion

which

the

twentieth

year,

this

type

.known

company's

comments

the

for

time

formed.

that

had

company

America

years
.was

the

marks

but

the

The

seven

company

substantial

in assets over the period
noted, with respect both to the

company
and
the
industry
of
•which it is one of the older units.

Commenting
report
years

states, "In retrospect
1953 and 1954 will be

membered,
riod

believe,

characteristically
to

economy

peace

war¬

further

than in 1952.
vested

•look

business

ad¬

forward

of good

1954

business with

we
year

increas¬

ingly firm foundation."

creasing

Net

new

in¬

money

Bullock,

the

Nov.
of

number

Putman

shareholders increased to

25,300

net

from

assets

Fund

21,500

tions

ex¬

ago.

^ssets

Investors

and

fmanaged

by In¬
Services, Inc.,
were
$13,p$2,610 ,at the close of
the
fund'sijik^l year ended Nov.
30, an increase Jf $1,353,114 for
the 12 months,
Recording to the

'53

wrey^relatively

The

changes made
to adjust
an&$jfengthen the port¬
folio of
boiiiff$|il preferred stocks

thirteen

and

payable

quarterly dividend of

one-half

cents

per

January 21,1954, to share¬

holders of record
h. k.

of Dec.

31, 1953.

Bradford, President

the

$.42

per

compared with
$.415
share in the previous
year.
fund

chased
which

fiscal

will

also

over a

sacrifice

'53

per

market

tend

levels,
improve

period of time with

quality, and

con-

in¬

value

NEWS

Express

Company

its

as¬

stock

common

Dec. 31, 1953 is estimated at $37.08
per share on 1,321,980 shares out¬
standing compared with $41.07 at
Dec. 31, 1952 on 1,329,880 shares
then outstanding/ Its
holding of
American International Corpora¬
tion, a majority-owned subsidiary,

included

both

net

asset

value

dates.

inclusive.

maturing

through

1998

announced

asset

value

stock at Dec.
at

$23.39

today
of

that

its

the

common

31, 1953 is estimated
share

per

938,000

shares outstanding compared with
$26.49 at Dec. 31, 1952 on the 939,-

outstanding.

primarily based

with

value

its

common

stock at Dec. 31, 1953 is
estimated
at $22.51 per share

The

bonds

request

from your investment dealer

Distributors

Group,lncorporated

63 Wall Street, New York
5, N. Y.

•

owner

variety of factors, to

some

the
on

capital

your

the

estimated

method:—capitalizing
get

you

fair

interest

any

nually—perhaps

less,

earning power, and

Retirement

Program
a

new

scribing a carefully worked
out, pre-packaged, bal¬
anced retirement program,

combining dollar annuities
with equity securities. It
how

business

even

small

profit by the
tax advantages of a quali¬
fied retirement plan.
your

can

free

copy,

mail

this

advertisement with your personal
or

business card.

price existing at the termination of
long-term amortization period.
In the case of
growth companies (making certain that the
situation's growth is not behind rather
than
amortization

eliminated, relying

its

Kidder, Peabody & Go.
Founded 1865

Exchange

Uptown Office 10E.45thSt.,N.Y* 17
CF

MUrray Hill 2-7190

fully realized

elements

ahead), the moneycan
be reduced, and in some cases
capitalizing the current dividend at

that

uncertain

such

value

forecasting

approach
(as

also

involves

future

earningthat this

etc.);

power,

Full text of Commercial and Financial Chronicle : January 7, 1954, Vol. 179, No. 5288

FRASER