Full text of Commercial and Financial Chronicle : January 8, 1948, Vol. 167, No. 4662

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

*

194b

JAN 9

4

r

ESTABLISHED 1839

Reg. U. S. Pat. Office

Volume

New

Number 4662

167

Tax Cut and Reduced

Price 30 Cents

York, N, Y., Thursday, January 8, 1948

Can the Federal Resezve

Truman

Spending to Come
Speaker of the House of

By DOUGLAS H. BELLEMORE

President, in

Representatives

message on

f

Speaker Martin scores New Deal
spendthrift policy and promises
Republican Congress will cat
Government [ expenditures
and

Dr. Bellemore points out Federal Reserve Board is neglecting its

;

!
n

Says foreign aid
not be such
I'll

Federal

about

talk,

ernment

to

as

should
bankrupt U. S.

program

Gov¬

expenditures and taxes.
"Spendthrift''
describes New

taxes

major responsibility to public by endeavoring to

continue to seek tax reductions.

tions

and there should be

serve

the Treas¬

ury's aim to keep interest rates low. Says Reserve Board wants
more power to control credit, because use of existing
powers, espe¬
cially in open market operations, runs counter to its commitment
to Treasury to bold down interest rates. Argues rise in interest
rates will not adversely affect Treasury in refunding operations
and will not

cause

financial difficulties to banks.

Demo¬

For

some

the two ^

from

been

sources

not

guiding

philosophy as
they traveled
the

k

.

Wants interest

tion, the two
policies/, have

experiment
could

and

posed,; Specif¬
ically,
while

whim, or any
collectivism they

in

dia¬

metrically op¬

State. For any

Board

the

think

taxed

become

of

of, the New Dealers
G overnors
and spent and
of
the
Fed¬
spent. They claim if the govern¬
eral
Reserve
D. H. Bellemore
ment takes
the people's money
System
has
and spends it, the result is not
its anxiety
inflationary, but if the people strongly expressed
over the rapidly expanding credit
spend their own money the result
is inflationary. That is nonsense. structure, it has, at the same time,
its
inability to restrict
The American people know the stated
credit.
The cause of its impo(Continued on page 40)
tency stems from its commitments
to the Treasury Department to
*A statement by Speaker Mar¬
support government bond prices
tin at the Republican Party Rally, and
prevent the yield on govern¬
broadcast over-the Mutual Broad¬ ment
securities from rising. This
casting Co., Jan. 5,1948,
then is the dilemma; to prevent
higher interest rates and corre¬
spondingly lower prices on gov¬
ernment obligations in line with
taxed

,

(Continued

Havana

on page

to offset the estimated

individual

The

levies.

revenue

^expansion of
the Social Se¬

curity

Proand

gram

lifting
mum

Developments in the Government bond market during
month - or two,, particularly: during the *past -two
weeks, will \serye, we must all most ardentlyhope, as a

75

mini¬

wage

to

per

hour.

thei past

pointed reminder of an underlying ^onditioh long existing,
but nonetheless heavy with portentous meaning. That un¬

a

the

Of

cents

[

The

text

of

the President's
message

fol-

fows:

Pr^i-

Mr.

derlying condition is, of course, an interest rate which is dent, Mr.
simply and solely the product of manipulation on a scale Speaker,
members of
never dreamed of
prior to 1933, and an interest rate which,
the 80th Con¬
through the sale of public deficits in astronomical amounts gress: .v /.r
in a "rigged" market, has now imbedded itself in the eco¬
We are here
nomic system directly or indirectly from bottom to top and the state of the
J

.

The portentous meaning

V

of this condition is that

sustained and sincere attempt to

free the
Government bond market must, unless care is taken to
prevent it, place in jeopardy many of our most funda¬
mentally vital financial institutions, to say nothing of
millions of individual citizens throughout the land. The
welfare, almost the very life, of these institutions and
(Continued

on page

unpeg or

AND

President

Truman

■

today to consider
union.

On
this
occasion, above
all
others, the Congress and the Pres¬

ident should concentrate their at¬

tention, not upon party but upon
country;
not
upon
the
things
(Continued

29)

on page

46)

State and

34)

Municipal

MUNICIPAL

R. H. Johnson & Co.

Bonds

■

BONDS

1927

Established

loss of $3,200/000^000 from
also proposed a further

40-cent

any

<

President

A Forceful Reminder!

STATE

ins Go.

as

1''.

from end to end.

wage

In his State of the Union message, delivered in person
to Congress on Jan. 7; President Harry S. Truman proposed
a tax program which would reduce individual income taxes
by allowing a $40 tax reduction by the taxpayer for each
dependent, in addition to present allowances, but which
would provide additional taxes on business corporations so

We See It

As

I

bank-

ruin,

Martin, Jr.

a

postwar infla¬

and
,'ruptcy,
the
police
Hon. J. W.

typic

a

■' ■■■:

..

in

"to

road

/.

far

too

lately,

legislation and raise minimum

Urges compulsory military training.

were

but
the
presence
of

their

general reduction in taxes until it is stopped. '

no

—

apart;

and

spend

reduc¬

additional

r

years

tax,
and
spend,, has

Tax

tax

proposes

Says inflation is nation's major problem ,f

corporations.

on

requirements.

the Federal Reserve Board has tried to serve
It has tried
fulfill its major responsibility to the
crat adminis¬ two masters.
tration, past general public and at the same time answer "Yes" to every request
Until recently, policies generating
and present. of the Treasury Department.
Deal

State of the Union,

Would expand social security

■

rates decontrolled.

'

on

Business

on

lower income groups be offset by $3.2 billions

Chairman, Department of Economics, Boston University
*

Urges Higher

Taxes

By HON. J. W. MARTIN, JR.*

Copy

a

INVESTMENT SECURITIES

Hirsch & Co.

Bond Department

64 Wall Street,

New York 5

Hempen Hew York Stock Exchange
Troy

KAnover 2-0600

Baltimore

Chicago

!,;

Teletype NT 1-210

Cleveland

Albany

OF NEW YORK

Syracuse
Harrisburg

Scranton

William sport

Geneva (Representative)

Buffalo
Dallas

Pittsburgh

London

Members

PHILADELPHIA

BOSTON

and (ther Exchanges

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

THE NATIONAL CITY BANK EAKT SMITH & CO.

Wilkes-Barre

Springfield Woonsocket

*ABC

Vending Corp.
Common

of INDIA, LIMITED
to

the Government in

Underwriters and

Kenya Colony and Uganda
[

Head

Distributors of

Office:

26, Bishopsgate,
London, E. C.

Branches In India,

Burma, Ceylon,

and

Kenya

Colony and Aden and Zanzibar

Subscribed Capital

Paid-Up Capital
.Reserve. Fund.,
The

Bank

conducts

£4,000,000
—£2,000,000

every

description

banking and exchange business
.

Trusteeships and Executorships
sil«

*•

cwdprtpkop




1899

CLEVELAND
New York.
Chicago
Dearer
Columbus Toledo Buffalo

Cincinnati

NATIONAL BANK
OF

Brokerage

THE CITY OF

NEW YORK

Northwest

for Banks, Brokers

Common-A

Established

of

Toronto

Company

Municipal

(Incorporated)

Bond

Montreal

Service

,

OTIS & CO.

HAnover 2-0980

Bell Teletype NY 1-395

New York

*Robertshaw-Fulton Controls

Corporate Securities

£2,300,000

THE CHASE

York Security Dealers Assn.

52 WILLIAM ST., N. Y.
;

Bond Dept. Teletype: NY 1-708

NATIONAL BANK
Bankers

New

>

*

4%%

Prospectus

Conv. Preferred
on

120

New York Stock Exchange

Broadway, New York 5, N. Y.

Hardy & Co.
Members New York Stock Exchange

Members New

York Curb Exchange

30 Broad St.

New York 4

Telephone: REctor 2-8600
Bell

Analysis

and Dealers

upon

request

request

Reynolds & Co.
Members

Utilities

Teletype: NY 1-635

Tel, DIgby 4-7800

Tele. NY 1-733

ira haupt&co.
Members
and

New

York

Stock

REctor 2-3100
Boston

Exchange

other Principal Exchangee

111 Broadway,

N. Y. 6

Teletype NY 1-2708

Telephone: Enterprise 1820

2

We Offer

FINANCIAL; CHRONICLE

&

THE COMMERCIAL

(98)

Thursday, January 8, 1948

Let Life Insurance

'

■f

Amer. Tel. & Tel.
Common Stock

-■•

••

Companies
Satisfy Our Capital Needs!

f*'X

Alabama & >77
Louisiana Securities

By BENJAMIN J. BUTTENWEISER*

,

Partner, Kuhn, Loeb & Co. <

AT NET PRICES

Mr. Buttenweiser notes

Days

Delivery Sellers Option 60

industry's

from investment market.

come

cal, and practical

reasons,

Corporation
I think it

New York 5

Broadway,

120

Teletype NY 1-583

BArclay 7-5660

hooey

(At the outset I would like to
clear that the views

expressed herein are my own and
not necessarily those of the firm

re¬

ferred

his

in

think

of which I am a partner.)
What

Second:

any

where

and

this subject, as

probable means for purveying such
needed
capital under ' present

evaluate

involves

Vanderhoef & Robinson
Members New York Curb Exchange \

SI Nassau Street, New

it,

ica had reached

methods and laws?

con¬

What

Third:

sideration of
its five

and

actual

present

social

and

major

economic

the

are

implications

of

meeting

answers

five

the

to

aid

B. J. Buttenwieser

consequent

•

*

Just to
time, I have jotted down

save you

the five major

really

think

facets of this

are

these sound financial

from

the capital re¬

are

represent

radical

drastic

any

actual

even

or

realities or from
principles and experi¬
to investments?

present

on
a

our

from

'

Mitcliell & Company

re¬

Members Baltimore Stock Exchange

on page

120

Broadway, N. Y. 5

7 7 V

50)

WOrth 2-4230

Bell

talk

of

Jan.

transcript

special

Teletype NY 1-1227

Buttenweiser

Mr.

of

before

Society of Security Analysts,
6,

Fred F. French
Pfd.

&

Investing

Com..

1948.

Gold in the News

Stock

Detroit Int'l Bridge

By HERBERT M. BRATTER

.■;«:/.]'
Exchange
York Curb Exchange

Members

New York Stock

120

1952

opinions

Central States Elec. (Va.)

tfC flONNELL & CO.
New

1956 W.S.

6th Ave. & 4th St. 3-5's

Common

'

offices

London Terrace 3's 1952 W.S.
Sherneth Corp. 5%

ma¬

Bought—Sold—Quoted

■

branch

Alvic Realty 4's 1951

the other foot now. I*
question of are there

^From

N. Y.

as

such

to

or

departure

time-tested

reason¬

NY 1-1557

48th St. Realiz. 4's 1952 W.S.

more

no

excerpts

(Continued

ence

and

had

think

I

cogent

pletely
is not

Would such changes

And Fifth:

v

problem:

What

First:

quirements, present
ably foreseeable?

Co!

Exchange

La.-Birmingham, Ala.

Direct wires

cent writings that the shoe is com¬

require¬

capital

meeting

lines?

problems that are posed.
what I

in

ments along

rather

would

changes

What

its economic

we

represented mental atrophy.
V I think I can show you from

along sound financial lines? -7
Fourth:

that

frontiers.

requirements

capital

facets and try¬

late

Longchamps, Inc.

turity,

not

ing to formu¬

York 5

Telephone COrtlandt 7-4070
Bell System Teletype NY 1-1548

HAnever 2-0700

think, during the TNEC investi¬
gation, that a great many people
preached the doctrine that Amer¬

future

the

I

York Stock

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

thirties, wi h the advent of a new
administration and accentuated, I

are

discussion of

Crompton & Knowles

Members New

capital requirements, present and
reasonably
foreseeable?
It was
not very long ago
early in the

duction.
I

Steinfr. RouseS

Let's consider each of those, one
at a
time.
First:
What are the

make it very

gracious intro¬

Class "A"

said that if he only knew

once,

New Orleans.

your

Chairman

Savoy Plaza

who

greatest novel ever written. He wrote some

I shall speak about equity capital, and, in doing so, try not to make it the

so

to

which

3/6s, 1956

book he would write the

old

same

Savoy Plaza

a

Bought—Sold—Quoted

rising.

are

the late Robert Louis Stevenson

was

what to leave out of

good works,

severe

Strongly recommends that for economic, financial, sociologi¬
life insurance companies be permitted to invest portion of their funds in
equities, under codified safeguards.

going to insurance companies

New York Hanseatic

annual capital requirements, of which $61/2 billions must
drop in savings of individuals, at same time those

enormous

Points out

Mr. Bratter reviews recent

of gold

amount

BROADWAY, NEW YORK 5
Tel. REctor 2-7815

7

Discusses International Monetary

varying premiums.

still sold in black markets at

Fund's difficult situation relating to currency

Frank C. Masterson & Co.

parities and efforts being made to discourage gold specu¬

Established

States Bretton Woods Conference meant to encourage gold sales at nremiu*~
prices. Explains Canada's subsidy plan and reasons for U. S. opposition, and contends payment of
gold mining subsidies does not violate articles of agreement of International Monetary Fund. Sees in¬
creased gold output Mowing to United States.

lation and gold premiums.

OLctual TiYafket a Qu

[

Aspinook Corp.

developments in gold markets throughout world and indicates considerable

1923

York Curb

Members New
WALL ST.

64

Exchange

NEW YORK S

HAnover 2-9470

Teletype NY 1-1140

Aetna Standard Engineering

For those interested in

Artcraft Manufacturing
Baltimore Porcelain Steel
Bates Manufacturing

The metal is

Boston & Maine R.R.

Boston Terminal

DuMont Laboratories

plied

"A"

of

Hood Chemical

buying

International Detrola

tained

visory

Punta Alegre Sugar

Taylor Wharton Iron & Steel 1
Pacific Telecoin

cil's

&Teme<mdCompam}
Dealers Assn. :
37 Wall St., N. Y. 5
Hanover 2-4850
Bell Teletypes—NY 1-1126 & 1127
Members N. Y. Security

1850

12

that the

currencies

the

of

members

coun¬

be¬

to

must

be

par

of

val¬
Fund

expressed

in

on

is traded in at a pre¬
Yet the precarious nature

mium.
Herbert

depend¬

come

M.

Bratter

subsi¬

of the structure of currency

pari¬

ties which the Fund last year for¬

solution mally accepted cannot be wished
problems. away merely by saying that the
Although in most of the world volume of trading in black-mar¬
a whole generation is growing up
ket gold is very limited.
More¬
without ever touching or seeing over, there has been evident in

production

as a

a gold coin, unless in a
museum,
gold is still the basic element in
this country's monetary and credit
structure; and from the standpoint
of external convertibility for all
practical purposes the dollar is

the

would

H. Hentz & Co.
Members

Commodity

The fact

where gold

on

Chicago

place

of their dollar-exchange

Warner & Swasey

York

honored

the

ues

proving

dized gold

Telecoin Corp.

York

agree¬

gold gives a sometimes exagger¬
ated importance to the many un¬
official markets about the world

ent

Merchants Distilling

New

an

reserve

lars.

Coun¬

tries

pfd.

Taca Airways

New

possible; and the soonest that ii
was possible for the executive di¬
rectors to reach an agreement was
when this year the Fund issue<

foreign

United Piece Dye Works

York

of

articles

countries

a

grope for loopholes
Fund's articles of agree¬

tendency
in

member

Fund

some

the

to

they apply to maintenance
of parities.

ment

as

Fund rec¬
gold standard, although it ognized that it would have to take
be closer to the truth to a stand in opposition to the preFrom the outset, the

Exchange

Curb

Exchange

Cotton

members to discourage such

fic.

It

Inc.

Exchange,

Board

of

Trade

pursuant

was

to

States

United

the

as

the

Exchange

And other Exchanges

7'MICHAEL HEANEY, Mgr.

ap¬

biggest "shareholder" had taker
leading role, that the Treasury

-

Members

&

Paper

United

Kingdom 4%

foreign

-

exchange

Minn. & Ont.

Paper

Mines

Canadian

Securities

Department

The trading in gold at

Exchange

Exchange

39 Broadway

New York 6
Teletype NY 1-1610

Digby 4-3122

Active

Trading Market

Allen B. Du Mont

premium

prices has been unwelcome to the
authors
and
supporters
of
the

Troster, Currie & Summers
Members

Fund

agreement not only because
it tends to weaken public confi-

(Continued

on

page

New

'90

York Security

Dealers Ass'n

Teletype—NY 1-376-377-378

25)

Raytheon Manufacturing Co.

DU MONT

I'

$2.40 Conv. Preferred
'

Solar Aircraft Company
■>

MARYLAND

Gaumont-British

90c

Conv.

Preferred

7'

Twin Coach Company
$1.25 Conv. Preferred

Common

..

Scophony, Ltd.
British

Curb

arbitra¬

DRY DOCK

Noranda

Stock

geurs.

Rhodesian Selection

Co.

York

New

Chicago

LABORATORIES "A"

Brown

Mgr.

Asst.

put into effect amended

We Maintain Active Markets in V. S. FUNDS for

Abitibi Pow.

KANE,

Joseph McManus & Co.

regulations governing the re-ex¬
portation of gold sent to this coun¬
try for refining.
The amended
regulations, it is interesting to
note, are decidedly weaker thar
what the Treasury contemplated
at the outset. It proved impossible
to find the power to control the
overseas
commercial activities of
American citizens such as goldand

WALTER

Fund's

a

last month

"

*

traf¬

that

.

.

.

,

*UniversaI Winding Company

'

New Orleans Cotton

Securities

as

peal, in the formulation of which

Exchange

'

soon

as

18 appeal tc

its well-known June

.,

Stock

gold

World

of the

true

is

also

in

mium

/

whose

traffic

dollar

the

on

tendencies for

United Artists Theatre

New

the
Ad¬

Dec.

is

gold

yellow metal, but whose
transactions
and
thinking
are
none
the less reckoned in dol¬
for

statement disap

Time, Inc.
Title Guaranty & Trust

Established

ment

con¬

in

National

Northern New England

This

Fund,

gold
which

be

may

Kirby Lumber

Newmarket Manufacturing

say
that
standard.

threat
of

Curb and Unlisted

to raise dollar balances, and doubtless will continue to

<$>-

'

discontinu¬

ance

U. S. Finishing com. &

one sure way

that
attribute, de¬
spite the im¬

Electric Bd. & Share Stubs
General Aniline & Film

always

possess

3J4-47

Clyde Porcelain Steel

gold there has been no dearth of news in recent weeks and
by which the monetary health of the world is judged.

Gold is the thermometer

months.

Securities
.

BOUGHT

—

SOLD

QUOTED

90c

Conv. Preferred

& Common

Department

*Prospectus on request

N. Y. Cotton Exchange
NEW

YORK

4,

Bldg.

N. Y.

Goodbody & Co.

DETROIT

PITTSBURGH

GENEVA, SWITZERLAND




INCORPORATED

..

-

Reynolds & Co.
Members New York Stock Exchange

Members N. Y. Stock Exchange and Other
CHICAGO

J-G-White 6 Company

115 BROADWAY
Telephone BArclay 7-0100

Principal Exchanges

NEW YORK 6, N. Y.

Teletype NY 1-672

37 WALL

STREET

NEW YORK 5

ESTABLISHED 1890

Tel. HAnover 2-9300

Tele. NY 1-1815

120 Broadway,

Telephone:

New York 5, N. Y.

REctor 2-86C0

Bell Teletype:

NY 1-635

!

THE COMMERCIAL

Volume 167 ' Number 4662

IN D EX

;

„

Spending to Come
—Rep. Joseph W. Martin, Jr

\v

Can Federal Reserve

—Douglas

H.

^

fj} ;

;

Two Masters?

Serve

;

—-.Cover

Bellemore

Let Life Insurance Companies Satisfy Our Capital Needs!

—Benjamin J.

Buttenweiser

:

Factor—E.

G.

vs.

Consumer Credit

of upward trend

;___

ment

or

Griffith
'■

Peace Targets for 1918 and 1950!—Hon. Harold E. Stassen—
Will Stocks Leap This Year!—Maurice S. Benjamin——___
Menace of Communism's Growth—J. E.'LeRossignol
'—

predominant and little will be done by

are

business

increases

Inflation

as

Professor, Harvard University

3

AND COMPANY

Asserting it is time to be alerted for signs of a downturn, Prof.
Slichter enumerates conditions which may bring about business ref 2 cession in 1948.
Says, however, reasons for expecting continuation

The State of Business—Sumner H. Slichter_.____________—

Raising Income Levels

(99)

-

---7r———■>—

_

Gold in the News—Herbert M. Bratter_____________

CHRONICLE

By SUMNER H. SLICHTER
Lamont University

__________—Cover

_

FINANCIAL

Ifhe State of Business

Pa*e

Articles end News,'!.

;

Tax Cut and Reduced

&

to control

inflation.

and holds inflation

l<i-The-Street

govern¬

Foresees third round of

be curbed

can

The Senator Was

■—but
and

wage

us

by controlling credit

is

lacking.

Cautions rising short-term debts
for

6

may

bought

bonds
will

and

the

now

buy them.

stocks

wrong

nobody else but
How

about

your

junk?

expansion and stimulating saving. Attacks policy of supporting goveminent bond prices, but sees
danger of loss of confidence if support

5

he

lay groundwork

99 WALL

STREET, NEW YORK

Telephone: WHitehall

"big bust."

4-6551

How Far Can World Bank Contribute to Marshall Plan?
-

—Ernest H. Weinwurm

:

Lebenthal__r__

7

Im¬

10

Germany's Sorry Outlook—J. Van Galen—_—...

practical, Not Punitive Regulation for Railroads
--Thomas

I.

6

—----

The Outlook for Municipal Bonds—Louis S.

—Earl Bunting
the Import

12

Truman Urges Higher Taxes on Business—-*
Forecasts 1948 Firm Real Estate Prices.

: Is

recession

a

in

1/

business

15

recession

16

C. Haddon____'____._l.__i_

Gap—W.

S

,

be "mild";

will

19,
"moderately

Cover

Traces Effects of Lower Government Bond Prices———-—

11

Four

14

say.

^
14>

-

Philip Murray.—•

William Green Says Labor's 1948 Objective Is Repeal of

F

vC
14

Borrowing Is Not Yet Excessive—
Sees Vast Reservoir of

18

—

<

\

on

of

H.

Slichter

rise

a

index

of

in¬

remained

Significant

and

prices

rl

This

jump

has been

p a

nd ing.
than

more

a

and that

of

the

risen

has

from

in October 1945 to

162

last

• •

1947

but

about

192 in Oc¬

wholesale

prices

39

equip¬
ma¬

;o

postponement of

some

had

year

(2)

about

The shortages of the past
have driveh many prices to

Regular Features

kept the labor force substantially
larger than normal, causing hun¬
dreds of thousands of persons to
postpone retirement and hundreds

winter

(Editorial)

Canadian

:

Cover

.___

Stocks

20

Bookshelf.

t

18

Securities

of thousands of

16

Coming Events in the Investment Field.—
Dealer-Broker Investment Recommendations.
Einzig—Britain's Bad Bargains

Mutual Funds

18

7

News About Banks and Bankers

Our Reporter

24

on

Governments.—.^

Prospective Security Offerings_____
PuWic Utility Securities—
Railroad Securities
'
Real

_I

_

50
8

.12 t

Estate Secnrities____jL__L

__________*

Securities Salesman's Corner—
Securities Now in Registration.
State of Trade and Industry

Walter Whyte

on

1

page

5

•

been

facilitated

by

a

money sup¬
money

outside of banks) during the last
two years and by a rise of about

Two years
for business

is not
to

expand without
the
price' level

recession,. but
usually does not rise
without

the

as

maladjustments

which

advance.

it

on

Hence

much

as

development of
is

hall

the

to

time

-

be

the alert for signs of a down¬
Let us begin the analysis of

Substantially
be

and

—

Twice

for

an

early recession and

see

convincing it is.

Dominion

v

-Reg.
WILLIAM
25

U.

B.

S.

Patent

©ANA COMPANY,

Park Place,

$25.00

New York 8,

Publishers
N.

Y.

REctor 2-9570 to 9576
HERBERT D.
-

Bank

Office

:

V

•

■

SEIBERT, Editor & Publisher

and
per

.

'■!»

D.

RIGGS, Business

Thursday, January 8,

$25.00

and

Other

city news,
Offices:

1948

year.,

135

La

S.

Salle

St.,

Copyright 1948 by William B. Dana
Company
Reentered

25,

as

1942,

Y.,

secondrdass

at

the

under

Subscriptions

in

office

Act

be

made

in

Union,

New

Monthly,

(Foreign postage, extra.)

York

and

$35.00

funds.

CERTIFICATES
Bond &

Mtge. Guar. Co.




are:

bottlenecks

as

grad¬

are

ually eliminated. Industry has had
a difficult time
increasing output
For nearly a year during the lat¬
ter part of 1946 and the first
eight

good start.

CORPORATION

Indeed, the Decem¬

ber

crop report forecasts one of
the largest winter wheat crops in

history.

The livestock population
of the United States is being re¬

If
cereal
supplies rise,
prices may drop substan¬
tially. Such a drop might be con¬
tagious and induce a considerable

52 Wall St.

New York 5,

Tel. HA 2-8080

N.Y.

Tele. NY 1-2425

duced.

cereal

Central Public

Southwest Gas

because the country is spending a
much larger fraction of its income
taxes

food

on

drink

and

Utility 5V2S

Southwest Natural Gas

Producing

Commonwealth

Gas

United Public Utility (Common)

30%

now

as

compared with 25%

As other goods become available
the proportion of incomes
spent
on

food will

'*

drop.

.

*

•

Edward A. Purcell & Co.
Members New York Stock Exchange
Members

(3) The-Federal budget is run¬
ning a large cash surplus. Indeed
unless there

is

a

recession before

the end of the present fiscal year

(Continued

on page

50

New

York

Curb

t

Exchange

Broadway WHitehall 4-8120

Bell

System Teletype NY 1-1919
New York 4, N. Y.

;

30)

S.
of

in

interested in offerings of

B. V. D.

High Grade Public Utility and Industrial

Corp.

PREFERRED STOCKS

.

Analysis available on Request

N. Y. Title & Mtge. Co.

Spencer Trask & Co.

Prudence Co.

Members New York Stock Exchange

Members

U.

are

1

New

year;

We

Lawyers Title & Guar. Co.

March

Members
per

recession in

(1) ;The output of goods will in¬
crease

QUOTED

FIRST COLONY

States is up and the crop has made

Lawyers Mortgage Co.

Newburger, Loeb & Co.

States,

1948

a

extra.)

Note—On account of the fluctuations
in
the rate of
exchange, remittances for. for¬
eign subscriptions and advertisements
must

Febru¬

at

of

1

Rates

United

Territories

Pan-American

matter

post
the

Subscription
Possessions.

—

might bring about

—

than it did before the war—about

The principal conditions which

Record—Monthly,

Record

II.

year.

.

,

(Foreign postage

Earnings

per

.

etc.).

Chicago 3, 111.
(Telephone: State 0613);
Drapers' Gardens, London, E. Ci( Eng¬
land, c/'o Edwards & Smith.

York, N.
I, 1879.

per

year.

SOLD

TITLE COMPANY

I

ary

per

Manager

Every Thursday (general news and ad¬
vertising issue) and every Monday (com¬
plete statistical issue — market quotation
records, corporation news, bank clearings,
state

$38.00

Quotation

year.

Monthly

WILLIAM DANA SEIBERT, President
WILLIAM

Canada,

Other Publications

>.

,

FINANCIAL CHRONICLE

f

of

Countries, $42.00

—

Ar¬

Food prices as a whole are par¬
ticularly vulnerable to contraction

how

Other

the

the state of business by attempting
to build up the strongest possible
case

and

from

BOUGHT

wheat

more

52

9.

Weekly

COMMERCIAL

available

Dumont Electric

postponement of commitments.

_____

Dealers Assn.

WHitehall 3-0272—Teletype NY 1-956

spring than a year ago. Win¬
whea:t acreage in the United

ter

after
Published

This

Members N. Y. Security

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

cereal

turn.

**Not available this week.

The

may

DUNNE & CO.

gentine and Australia this winter

a

long period

a

drop

a

42

Says)___

Washington and You
*See article

-

48
•

will

50%

41

The

Tomorrow's Markets

'

of

which'

followed
by
a
serious
drought. In France, cereal output
in 1947 was scarcely half of nor¬

has

13% in the turnover of money.

**

from

mal.

ply (demand deposits and

:17 .>

Observations—A, Wilfred May.

wom¬

The increase in demand for

growth of 17% in the

45

____

"temporary"

has

goods

9

From Washington Ahead of the News—Carlisle
Bargeron—
Indications of Business Activity—
;

labor

true

force.

8

____l

for

workers to remain in the labor

en

8
;___

demand

Susquehanna Mills

down¬

a

in output.

is particularly
prices.
Western
Europe suffered a combination of
unfavorable conditions which is
not likely to b;e repeated in its
entirety—an exceptionally severe

keen

Warren Brothers "C"

production could easily halt itself
,nd, in conjunction with other

bring

Alegre Sugar

Lea Fabrics

com¬

easily start.

Man's

Punta

until price adjustments
occurred.
Thus the rise in

51.4 million in September 1945 to
58.9 million
in September 1947.

and Insurance

Haytian Corporation

The increase in output could
bring about a spotty weakness in
prices which in turn might cause
some
liquidation of inventories

turn

The

Broadway

System Teletype N. Y. 1-714

be somewhere between 195 and

levels

Business

Bell

200.

conditions,

_r

1908

2-4500—120

it is reasonable to expect the in¬
of industrial production soon

employment by 7.5 million—from

Bank

Established

Members N. Y. Security Dealers Assn.

output, but

Spring Term Courses Opening at N. Y. Institute of Finance— 44":
SEC-Federal Trade Commission Survey Reports Reduction
in Manufacturing Net Income
41

As We See It

J.K.Rice,Jr.&Ca

dex

living 25%* In an attempt
to,, meetv the demand for goods,
civilian

v

Paul Revere Fire Insurance

REctor

Scarcity of steel and other

cost of

increased

,

bottle¬

.

terials will still limit

V

Gibraltar Fire Insurance

overcome

new
•.

City of New York Insurance

en¬

may soon obtain

for

year

ment.

industry ^has

,

that

being

Baltimore American Insurance

at

its huge expenditures

on

have increased about 50% and the
<

38

are

industry

return

a

and

The index of industrial

production

->

indicates

National Liberty Insurance

mitments

tober

>

185.

gain in production, but both have

37

New York Trust Company Looks for Only Small Cut in
Tax Burden Even Under Reduced Budget.

the

1947

production

increased.

*

Gold Refined

;

*

about

pro¬

The expansion has taken the form

22

Werle Nominated Again for Chairman of New York Curb

on

of 1945—busi¬

e x

.

Ore__;_———_—___—

war

ness

Ilalsey, Stuart & Co. Issues Year-End Bond Review.
—23
Northern Trust Co. Sees High Taxes Causing Capital
Shortage 24
Republic of Haiti Bonds Called for Redemption..,.—_______ 35

Exchange

S.

Prof.

21
\

Stress Greater Efficiency and Full Production—

Foreign

since the

tion in the fall

20

New York Commerce and Industry Association Leaders 1

From

—

vilian produc¬

.

;

...

Director of Mint Clarifies Restrictions

o v e r

years

duction to ci¬

19

National City Bank Reviews Problem of Credit Control—

•

o r

from

19

—_—_______

World Bank Sends Survey Mission to Philippines.
First National Bank of Boston Calls General Tax Reduction

Inflationary

not

transit!

___vl6./V:';7' r-.,

Investment Capital for European Recovery.—_—,
ABA Announces Anti-Inflation Program..

of

necks at last

ever

Gordon Rentschler of National City Bank Contends Business
National Foreign Trade Council

did

two

Taft-Hartley Act

months
dustrial

serious"; and couraging has been the rise to 190
11,- "serious." in September and 192 in October.

9

Wages Lag Behind Prices, Says Schwellenbatch_„_i
Inflation Main Problem:

-

imminent?

Seventy-five out of 100
economists recently polled by the F. W. Dodge
Corporation believe
that it is. February and March 1948 were most
frequently mentioned
as the
beginning of the recession. Forty-one of these economists ber.'r
lieve that the*>—
—

Step
—.

Let's Close

■

<

Parkinson.,..——-

New Anti-Inflation Law Is Preliminary

:

,

15 Broad

New

York

St., N.Y. 5

Bell

Teletype

Stock

135 S. La Salle St.,

1-2033

Street, New York 4

Tel.: HAnover 2-4300

Exchange

WHitehall 4-6330
NY

Members New

25 Broad

Curb

Exchange

Chicago 3

Tel.: Andover 4690

Teletype—NY 1-5

..

Albany

^

York

-

Boston

-

Glens

Falls

-

C. E.

Unterberg & Co.

Members N. Y. Security Dealers Ass'n

61 Broadway, New York 6, N. Y.
Telephone BOwling Green 9-3565

Schenectady

-

Worcester

',

Teletype NY 1-1666

4

& FINANCIAL CHRONICLE,

THE COMMERCIAL

(100)

Thursday,. January 8, 1948

1948 and 1950!

vs.
'

t

,

Credit
;

consumer-credit, price levels and rise and fall in
personal incomes, and Concludes level of personal income is fundamental causal factor in creating;
spiral of inflation. Holds since credit levels result from income variations, credit expansion is offset
by increased savings and hence effort to combat prise inflation by credit controls will prove fruitless.
Concludes consumer credit is not significant in Causing changes in trend of incomes and retail sales.
As

again
a-

as

incomes;

credit

of

Consumer

highly

is

so

related

that ef¬

forts

three

There

designed, to control consuiner credit without; the appro¬
priate effort to control savings will

o n s

not

at

are

least

omy

credit

*o the volume of savings

in¬

flationary.

p o r t
of
the,

that the volume

(b)

i

to the extent that those

econ¬

who

save

do not use consumer credits; (c)
that- the; principle
that causes
cosumer
credit expansion is; ap¬

that cohr
credit

sumer

prevent price increases except

is supposed to

parently the expectation of rising
incomes;, hence, credit controls, to'
effective, must come in the
form of controls of personal in¬
them
it
is
come
supposed to be
payments; (d), that con¬
E.
C.
Griffith.
sumer
credit variations usually
inflationary or
follow changes in the trend of
•deflationary
as
the case may be.
For this sales; hence, they appear to be the
reason, it is said controls must result, not the cause, of rising and
be imposed <mi consumer credit, falling Sales volume; (e) that re¬
and thereby the inflationary trend tail price indices normally show
can be controlled and the depres¬
little correspondence to consumer
sion that would otherwise follow credit trends.
7
The years chosen for this analy¬
can be modified.
The. factors that
are
influenced in this way by sis carry us through the period of
changes in consumer credit are:; a business; cycle on which a minor
(a) personal income (which deter¬ cycle is imposed. They end be¬
mines the
demand for goods); fore the full impact of the war
(b) sales (which represent de¬ was felt. In this way the role of
mand); (c) prices (which are the consumer credit can be reviewed
evidence of the volume of demand without the necessity of consider¬
relative to available goods).
ing scarcities that, per se, create
It may be argued that
It is always difficult to weigh inflation.
the influence of a given variable the presence of scarcities in the
in causing an event when the lat¬ present
period distinguishes it
ter is the result of many varia¬ from the era under consideration
bles.
That is the difficulty in¬ and, therefore, places the role of
volved in weighing the role of consumer credit in a different
consumer
credit in
influencing light.
That is true, but it does
personal incomes, sales and prices, not alter the fundamental conclu¬
sion of this paper that consumer
ft is possible, by showing the rela¬

effect, and

through

its

influence

be

on

ments?

is

It

and

!■'

type, of consumer credit

other

influence

an

on

of

will

savings

inflationary
credit

sumer

counteract
of

expansion.

the

tive trends of these variables and

the

adequate

timing of changes in the
variables, to obtain some indica¬
tion

the

of

role

of

of

sayings and

ineffective

be

preventing inflation.

different

variables in
seeks to

control
will

incomes

the absence of

causing the event one
explain.

7

i

•,

v..

1..;

;■

..J,'-1.

...yj;

jXr

Credit and < Personal

Consumer

per¬

Payments—The relations
of consumer credit and personal

sonal income, sales, and cost of
living indices from 1929 to 1941.
It will be shown (a) that changes

payments are important in
finding the answer to these ques¬
tions: (1) Are fluctuations in con¬

credit

consumer

in

to

ncome

credit

sumer

during those
consistently lagged behind

consumer

years

trends

Income

credit

a

cause

of variations

in

personal income payments? If
they are, then credit controls will

changes in personal income pay¬
indicating that consumer
credit trends are normally re¬

tend to

ments,

stabilize incomes and act

preventive in controlling in¬
(2) What is the relation
sults, not causes, of variations in flation.
the ability of buyers to purchase of different types of consumer
goods as measured by the levql credit, to personal income payas

£■

»■

:

..

;

consumer
Credit alone will be termination
to. succeed,
and a
modified for consumers will spend; larger measure of optimism. You
their
savings if credit
is not; can be of major importance in

credit volume then - effective con-;

credit

sumer

controls

can

come;

only through income controls.
If

the

indices

term consumer debt are compared
to the indices of disposable per¬
sonal

income for the years

1941

(cf. Table I),

that

total

credit

showed

variations
able

in

1929-

evident

it is

short-term

consumer

intensive

more ;

trend

than dispos¬
incomes.
This

persona 1

would indicate that if fluctuations
in demand are a function of varia¬
tions

in

purchasing

power

as

represented

by personal income
trends, then short-term consumer

credit intensifies the fluctuations.

conclusion

This
for

it

leaves

little;

means

unanswered

the

of con¬
credit c variations'
as * a

casual- factor

to

the'' fluctuations

of income; it leav&s

making the Republican party in
the

1948

party of hope for the
people, of service to the people,
and of victory with the people in

; November 1948.

short-

total

of

quires

But to do

effect

the

so

re¬

of total and

(Continued

territorial borders of
or

by the

worse,

election
The
our

our country,
borders of an

district.

under

out

world

war or world peace. The primary
objective of America must be to
win and maintain expanding in¬

dividual

freedom

for

ourselves

others without the holo¬

and for

caust of

a

third world

objective

It is

war.

the present Charter with¬
It appears to me that

it is, necessary and essential that
it be called.
In the first
a

instance, it will set
constructive goal out ahead of

all

the

current

America.

of

:

address

*An

^

to.in¬

peoples everywhere. The sum
of
depressed * minds and
helpless attitudes is now a stag¬
gering millstone on the world.
Clearly
the
United
Nations

strengthening. Definitely it

requires

voting method to
single power veto, new
means of developing its own po¬
lice force, new steps toward the
rule of laws in special problems
and in human rights on a world¬
wide level, in the place of the
end

a new

the

domination of

of

Gov.

New York Young

York

New

City,

Detroit Harvester

Art Metal Construction

Durez Plasties

Kendall Co.*

Stromberg-Carlson Com. & Pfd.

& Cltem.

Sold

-

Quoted

\

we

the United Nations.
The Immediate

But

while

strokes

Direct

f HARTFORD l ,phf. 6JH
.

BOSTON^

to

Entcrprlse

105 West Adams St., Chicago
Teletype NY 1-672

LOS

Steps

sketch

in

We

must

the continued

demonstrate

success

of

ANGELES

General Crude

Oil

DuMont Laboratories

Title

crease

pressures! of

of

exports to avoid
impact of world-wide

Guarantee & Trust

to

/

Ward & Co.
Established

1926
,

Members New York




Tele.

NY

f

Security

Jccjtjri

Seligman, Labetkin &> Co.

1-1286-7-3

INCORPORATED

41 Broad Street
Dealers Association

New York

ti

■

.

Following Through With
Vandenberg

REcfor" 2-8700

its

This requires'a ftqtmeasures' 'of

inflationary

supervision

Bought—Sold—Quoted
Broadway', New York 5

free

of limiting of inven¬
prevent hoarding, jiof
economy in the civilian activities
of government, and of a variable
Federal
fiscal
program,* all
to
check booms and avoid depression
busts.
Supplementary action * on
the housing and health and educa¬
tion shortcoming is also indicated.

Electrol, Inc.

Deliveries Accepted in Most of the Principal Cities

120

our

in America with
people's capitalism,

limited powers in government, bf
curbs on excessive credit to der

tories

Foundation Co.

Phone:

broad

imperative need of
setting this target in 1950 before
the world, I do not minimize the
importance of the interim steps.
In fact, the decisions and actions
in the intervening months and
years will in large measure pre¬
scribe the prospects of success of
the major later venture.
*

shortages,

Wires

PHILADELPHIA

and

I

the

too great an

FROM

the situation iri
right for progress in

1950 will be

work of interrelated

Other Principal Exchanges

,

world-wide scope.

a

its
high production and its excellent

request

Members N. Y, Stock Exchange and
Telephone BArclay 7-0100

of absolutq

ground for hope that
measure up to our interim

economy
modern

Goodbody & Co.
.115 Broadway, New York

or

responsibilities,

Stassen

Repub¬
Jan. 5,

on

distribution.

...

men

There is
if

-

American Hardware

*Prospectus on

IJiilisted Securities

man¬

hopes

of

First;

Primary Markets in

dis¬

and

controlled

as

1948.

-

clashes

appointments and failures of par¬
leys and of relationships! It will
serve to emphasize that our ulti¬
mate objectives are for peace and

spire the best that is in the youth

licans,

Bought

called

rewards for all mankind

so

Carey (Philip) Mfg.

;V

vital

be

sovereign states. Certainly atomic
energy must
be inspected and

specific types

FOR

and

can

challenging in its
difficulties and so thrilling in its
an

.f I
,■

noble

veto.

a

needs

overshadowing question of

time is that of future

before

36)

its

Convention

a

total

of the

on page

Such

whose most cherished word is no,
whose outlook is limited by the

unanswered

question

for

progress and freedom of
kind. It will brighten the

variations; and it leaves

unanswered

amending and rewriting the Char¬
strengthening the United

willingness to take issue
within the party with those whose
primary
glance
is
backward,
a

Considering the current state of
the question of the relation of world relationships, and analyzing
specific types of consumer credit the clash and conflict of systems
to income

7 ' "7 ;

.task.

expanded vision of the realties of

if the level of income, determines-

,

ter and

You will bring to the party an

Bird & Son

/v

in

Willingness to Pioneer

It will follow also that!

■■

_

UN Must Be Revised

Nations

An im¬

a

■
-

issues

ings expansion, then the success world conditions, a needed, will¬
efforts
designed; to .control ingness to pioneer, a greater de¬

available.

/<

.

7
*

of

sumer s?

'

icy..,

party

the party.

Harold E. Stassen

portant proposition follows from
this:
namely, if rising: income
bouses credit expansion arid sav¬

question of the relation

■j -'.

.

1

It is the purpose of this paper
to review' the' normal" relation of

in

qf

and

con¬

in

or¬
As the capstone of that policy,
ganizations, I propose that the United States
delegations, .initiate the calling of a major
conventions, United Nations Convention in the
campaig rts year 1950 for the purpose or

incomes?;

tendencies

policy ^

li-

R ep u

and in the

If savings out of personal incomes
rise with consumer credit, then";

the

foreign

1948 and seeks democratic agree¬
ment upon it as a bipartisan pol¬

the

.

savings!out

far-reaching

icy, and enlists general public ap¬
proval for it as an American pol¬

licVn

What js the relation of con-;
credit levels to the annual;
of

ideas with Russia, I believe
it is imperative that our Repub¬
lican party proposes a positive

the,.affairs

sumer

rate

an

——^——

—

and

increasingly
vigorous par¬
ticipation in

.personal 'income

.

credit controls in

America

payments that consumer credit as
a whole does hot.
It may be wise.:
therefore, to; Select the type ,of
credit that should be controlled J
(3)

young

Republicans
throughout

have1

may

the ^

upon

millions of

y

that "one

possible

7'.

seriously and in direct terms the future
program of our Republican party upon the- vital question before our
country, and the effect which the Young Republicans of the nation
might have upon that platform of 1948. I specifically urge upon you,

<£-

of

-

propaganda line. Wants UN charter rewritten.

The implication of this request is that

weapon.

con¬

of

sumer

is

anti-inflation

vol¬

rising

ume

peacetime

a

munist

On Nov. 17 the President asked that

credit control.

"

have

can

I would discuss with you

Government employed a program of
tHese controls be imposed

wartime anti-inflation measure the Federal

a

we

tary position, cut off strategic goods from Russia, and combat Com-

Prof. Griffith analyzes past relationships between

consumer

declares

jieace and prosperity
by 1950 if meanwhile we promote "modern people's capitalism" at
home, back Marshall Plan with Vandenberg, maintain strong mili¬

Washington and Lee University

of Economics,

Professor

By HON. HAROLD.E. STASSEN*

Presidential aspirant

By E. C. GRIFFITH

I

Associate

Inflation Factor

as

,

4, N. Y.

Second:

We

should

•

;

follow

through thoroughly with Senator
Vandenberg on the Marshall Plan
for rebuilding Europ^'r placing it
on a

sound and businesslike

establishing

basis,

proper economic con-

(Continued

on page

37)

Volume 167

Number 4662

%41

■V,' <•'

THE COMMERCIAL

T*7*

'<

<■;.;'". *' ■'•>>
Steel

"r

■•

•"'

■

t1

v.

**

u

.

CHRONICLE

.'»■ .y>

V

Electric Output

.;<>

By

Retail Trade

,'

Commodity Price Index

Industry

Business

Failures'

■

by the bulls.
vThe

...•„

aftermath

of »i,Christmas

and

holiday

worked to cut total industrial
below the
high levels of recent weeks.

impending
last

output
.: .\.

•.

of

the

holiday and snow
of the
country impeded travel
industry in general.

sleet

and

Year's

two pens

week. somewhat

were

demand

curtailed be¬

storms in

goods

various sections
and played havoc with business
and
.'

increased number of clearance sales
encouraged consumer
buying last week, .but retail volume in the period was
moderately
below that of the
preceding week and slightly exceeded that of the

corresponding week

a

year

large or widespread as they
favorably.
i!;

Markdowns

ago.

were

scale,
farm
and

est

of

Buyer attendance at the wholesale centres declined
substantially

found

the

labor

market

which

saying
down

of
on

imposing price control.

stoking the boiler
safety valve and everything

prices

the

will

■

-

be

therefore

much

as

24

as

months away.

12

of

so

or

In

to Stand

at

the

products,

it

reports,

is

.

.

Automotive

in

to

cars and

It

trucks from the U. S. and
Canada.

predicted

about 10% below

ahead

up

months

of

of

will

time

in

a

drive

to
a

onward.

reach

United

>

market.<-

>
are

change,

a

seem

some

regarding the stock
T
,•' *
*"

~

.

There is

doubt that leaders

no

business see things from the
mint of view of the bulls.
They
n

lave

budgeted

and

planned ex¬
pansion programs 'for a
big vol¬
ume
of
business
in
the
future

they

orders in hand and their

on

are

future

of

demand.

right, stocks

tive levels.

If

at attrac¬

are

Bearish Predictions from Chartists
:.:o
and Politicians
'

Most
ments

of the bearish pronounce¬

from Wall Street and

come

political

sources

chartists, who

—

other

no

rea¬

son

than that the market goes
up,

and

planners, \yho want

sion

so

they

feel

can

that

take
after

Most

certain

made

are

depres¬

a

over.

the

ad¬

hot be

as

the

last

easy in 1948 as it

was

in

1947, but the market will be there and
ready for energetic cultivation,
says "Electrical

Merchandising,"

In

magazine.

compiling figures on 1947, the publication
states, the editors
repeatedly struck by the fact that the output of all
major ap¬
pliances exceeded the reasonable
anticipations of a year ago.
Few
manufacturers, the paper adds, were even confident that the mate¬
were

rials could be procured for
the very large

disclosed.

totals that the year's end
the economic or political

Without

major obstacles, in
fields, it further notes, there is no reason to believe
that the 1948
volume will be less than that of
1947.

November Incorporations Lowest in Two Years
rate

of

new

business

incorporations

November, according to the

dropped

sharply

in

latest survey by Dun &
Bradstreet, Inc.
7,855 represented the smallest total for
any previous
month during the past two
years.
There was a decline of
1,754, or
18.3%, from the 9,609 recorded in
October, and a decrease of 630, or
7.4%,:below the November 1946 figure of 8,485.
Stock company formations for
all states
during the 11 months
qnding with November numbered 102,479. This was a
The

count

20,443,
riod

a

of

decrease

of

16.6%, under the peak total of 122,922 for the similar

year

ago.

•

y

.

r

If steel firms

are

scheduled to the

ficiaries.

The
new

v

railroads

will

equipment this

consequences

we

feel

that security prices have largely
discounted the extent of their pre¬
dicted recession.

ICC, amount to

IV4

will help the roads

modernization
and

write

of

the

we

when

headlines

labor's

one

of

easy

read

Russia's

and

power

However,

with

con¬

psycho¬
pervaded

logical pessimism that
investment circles. It was

stand

to

the

be¬

record

took

entailing full employment,
incomes

recognize that readjustments
the'making in many

still in

and

business

ac¬

tivity.

The final figures for 1947
will pass all peaks. National pro
duction is 235 billions against 100

Bank

aptly

states:

sence, consumers and
alike are trying to get

gate

"In

es¬

industries

through a
and at a time
the passage is narrowed to

all

when

at

once,

make

room for
foreign aid. Antiinflation action requires
standing

in line, and easing the congestion,
f this is understood
and acted
.

the prospect is for years of

upon

rebuilding and of

progress in lift¬

ing living standards."
We

feel

that stock prices have

discounted

the worst of

our

psy¬

farm

of

our

opin¬
will

progress

question is

our

re¬

peated: Will stocks leap this year?

program.

Freight
high on

are

list for

other

coun¬

;;

only
that

machinery will be in world¬

As

oil

prosperity. In
march

continue, and

wide demand for several
years.
Oil and natural gas face a short¬
age.

the

ion,

billions and

The world food situation is
too well known to realize

Abitibi Power & Paper Co,

result the price of crude
been advanced

a

has

Electrolux Corp,

sharply.

This emphasizes the need for
every
kind of oil and gas

4

>

Noranda Mines

■

equipment.

Labor and material costs

are re¬

labor-saving machinery
office equipment and certain ma¬
chine tOOlS.
.;%>

HART SMITH & GO.
52 WILLIAM ST., N. Y. 5

HAnover 2-0980

-

One automobile year of 3Yz mil¬
cars

Bell

New York

Teletype NY

1-395

Montreal

Toronto

and 1% million trucks is

hardly the answer to that great
industry which could turn out only
war
equipment for five.. years
This business and those

its

accessories will

over

come

scale

furnishing

make

records

the next few years.

With full

infla¬

we

the

bulls that
world recovery would tax all ef¬
forts and resources for years to

come,

We
are

towards their

locomotives

priority

tries.

lion

Throughout all of 1947

tion of prices.

,

Caution Is Healthy

more

than any
other in history. Freight rate in¬
creases, so far authorized by the

and

havior,

at

18

employment, farm in¬
billions

that is still

on

and

a

wage

the increase

HODSON &

the standard of

living is continu
ally increasing for the majority of
our
ures

people.
have

crease over

COMPANY,

Inc.

National income fig¬
an in

steadily shown
the cost of

living.

The

latest official report to the Presi
dent showed that during the en

165

Broadway, New York

of

pe¬

■.

Commonwealth Gas

voluntarily allocate 10

to

15%

more

LAMBORN

Southwest Gas Producing

steel

99

American Maize Products Co.

going to get less steel,
metalworking weekly.
If the industry should decide
to bitterly
oppose a voluntary allo¬
cation program directed
by the government, it will be castigated
are

WALL

&CO.,Inc.
STREET

:

NEW YORK 5, N. Y.

•

and

held

up

recalcitrant

as

at

some

later

date.

Then

if

the

*

(Continued




on

page

43)

SUGAR

possible under
eliminate the fact

Raw—Refined—Liquid

FREDERIC H. HATCH A CO., INC.

with the

steel

industry Thursday of this week: is as mild
existing circumstances. Nevertheless,,it does not

Bought—Sold—Quoted

steel

picture continues tight, as it is bound to do no matter
what happens,
steel firms might
eventually find themselves faced with strict con¬
trols backed by
governmental authority.
;
The plan which the Commerce
Department is to discuss

r

of

cost

advance

in real wages or purchas¬

power.

peace and

order

year

tions

daily

the
an

chological fears and have ignored
Building ma
terials and household
equipment the basic fundamental economic
and furnishings will be
large bene¬ factors that point to a future of

sponsible for the tremendous de¬

understand

ing

in

left

was

record year of 1947.

mand for

to

rise

by the

iving there
of 20%

that

the
Department of
Commerce forecasts a 10 to 20%
increase in construction over the

future

some optimistic fac¬
analyzing their assump¬

industry, the petroleum industry and to freight

thousands of other steel customers
states "The Iron Age," national
qars,

building

extent

RATE HIGHEST SINCE MAY, 1944

agree to

.Id the farm implement

tial

In

tinued

date,

,

S^EL OPERATIONS

bring
many

tors.

our

The

that

will

program

holds in store

records

steady climb from the first quarter
'
) 1

may

an

prosperity to that group for

cars

:

t

Selling electric appliances

we can men¬

Policy report will call for

the

bears

production

the

clearly defined, for

during January and February output would be
justments
figures for December, because materials were
used

1947, but forecast

break

will turn bullish for

Prospects, in 1948

In ithe automotive
industry prospects for 1948 are. relatively
good
states "Ward's Automotive
Reports," which forecasts a total of
5,,,

500,000

inventory,

The arguments for each side

predicts

confined

specific

tion

years.
The construction industry
is scheduled to break new records.
Public works and private residen¬

in

lumber, gypsum board, wire nails and certain iron and
steel items.
However, if the Commerce Department's predictions
hold, con¬
struction in 1948 should exceed
that of 1947 by
approximately $2,122,000,000.
■
' ;
;-y;
.

the

only won't buy off Commu¬

appraisal

Department

more

aircraft

as

materials, which will
$15,000,000,000" in 1948.

prevent activity from going "much above
The bottleneck in scarce

of

money

$15,000,000,000

construction field, the Commerce
tight supply conditions in a few construction

peak

but

offset

City

Industries in Best Position

plant expansion and export boom
have been seen and that
nism

to

than doubled;
and after %ths of the increase was

sizeable

a

1939

business, and

Air

the

oased

Construction Predicted
"

we

not

86,000,000 tons, more than a million tons over the
1947 figure.
Although three million tons capacity each for
ingots, pig iron and
coke are being
added, shortage of scrap and transportation facilities
will prevent full utilization
during the year.

:

for

if

cases

from
more

value in bank¬

some industries where a boom
will begin or continue regardless
of other factors.
The President's

conclusions

made

months

more

period

money wages

companies

that

Steel production in 1948 should hit
close

to

out

are

that from them it does not
too difficult for us to make

come

these

the market, that
high, break-even
points for industry are dangerous

1948

will not

of

In most other

To be

are

forced

right."

1948, say ''Steel's" editors, although some strides
will be
closing the gap. That balance may be as little

~

Maurice S. Benjamin

con-

wages

so

Forecast for

1929; national income tire

and

s u m e r s

then tie

can,

The bulls point, to the unprecedented

recession in sections of our
economy. ' Efforts
cut profits ac¬ by individuals and government to
cordingly,
we
find
that
stock remain cautious and urge restraint
prices are reasonable.is a healthy sign. : The National

States.

all

steel

allow

usual

are crowded into the
leader for each herd, the reasons
given to

a

category.

Most

gross

too

are

as

Many stocks of industries such
railroads, public utilities, and

ruptcy.

pre¬

high

we

as

narrow

toward higher market levels.

progress

for 1948 and

was

would realize

World

every power,
that is just like

And

hard

as

Steel Output of Close to
86,000,000 Tons
Balance between supply and demand in

:

.

power

will go

we

to

III. The
bears say that

is

a

ago.

War

generally adequate with
payrolls steady and at a high mark.
Highly important," too, is the
fact that demand for
most inanufactured
products continues to run
very large with, order
backlogs remaining substantial.
U si Of some
importance last week was the action taken
by President
Truman in finally
affixing his signature to the Republican-sponsored
anti-inflation measure which he stated was
"pitifully inadequate."
Senator Robert A.
Taft, (R.) of Ohio responding to the Presi¬
dent's remark charged Mr.
Truman with "playing politics with
high
prices" and added, "The truth is that the
President has
except the

in¬

vent

a

supply

all

following continuing prosperity forecast

aviation are quoted at l/10th to
l/20th of their market 19 years

ternational ef¬

current stock

As if there

as

great¬

forts

year ago.
Purchasing was largely confined
replacement basis and deliveries were
generally
'reported to be prompt.
;
J■;
Entering upon the New Year several desirable factors
presently
obtain in
permitting it to get off to a good start. Among them is
a

enormous

our

Wholesale volume was somewhat
below that of the
preceding week but slightly exceeded that of th

corresponding week

BENJAMIN

is 196 billions against 82 billions;
but the Dow-Jones stock averages
rare 180 against 383.

huge

for

,V'V,

forecasts

billions in

expenditures

'

their

income

generally not as
responded

consumers

following the Christmas holiday.

to

in

are

dwide,

:-

but

were a year ago

opinion

is

the high wage

*

An

;

made

for

that

worl

have

of bulls and bears.

sustain each

:

Production schedules in a-number olfactories
cause

New

S.

Hence concludes definitely that there will be

Economists

the

MAURICE

Mr. Benjamin asserts current bull and bear
arguments are defined with unusual clarity. Maintains
that irrespective of which
category of analysis is correct, stocks are now cheap, as
they have discounted business recession predicted
by the bears while not

Auto Production

'•

4

Senior Partner, Benjamin, Hill & Co.

•

Food Price Index

and

5

!■'

Carloadings

State of Trade

.

(101)

Will Stocks Leap This Year ?

-f-

-Production "

&; FINANCIAL

,

as

-

Established

"

Exports—Inipotts—Futures

1888

MEMBERS N. Y. SECURITY DEALERS ASSOCIATION

DIgby 4-2727
63 Wall

Street, New York 5, N. Y.

Bell Teletype NY

1-897

J

6

How Far Can World Bank

Growth

Menace of Communism^s

Thursday, January 8, 1948

CHRONICLE

FINANCIAL

&

THE COMMERCIAL

(102)

1

By J. E. LeROSSIGNOL

Administration, University of Nebraska

Dean, College of Business

By ERNEST H. WEINWURM

produce revolution in Europe by force and violence. Sees in recent revival of Comintern an attack on
Marshall Plan by trumping up "imperialistic designs" of United States, but warns it might signify So¬
viet Government believes time is ripe for Communist revolution in Europe.

Mr. Weinwurm estimates World Bank must raise
next four years to meet most

1;

of other member nations.

and suggests that larger

Federation of the Just, a
known

C

o m

munist

The

League.

Congress
asked them to

for

prepare

publication
a
"complete
theoretic

a

1

and

the

before

world."

Since

Commu¬

which
J.

E.

LeRossignoI

was

German

in London

printed

in

written

BOSTON

given

ever

•

to

;

the

-

.

that time the Communist

Manifesto

has

of the civilized

and, like Marx's other great
work, "Capital," has been called
"The Bible of the Working Class."
this extraordinary pamphlet

In

be found, expressed or im¬
plied, all but two of the charac¬
teristic doctrines of Marxism: the
may

economic interpretation

of history,
struggle,
exploitation of the proletariat,

the dialectics of the class
the

subsistence

the

B

&

"law"

the

concentration

Maine

Prior

wages,

of

misery,
capital, the

of

RR.

Preferred

Traded in Round Lots

over

Federal

of

middle

the

trust

to smite
all. the

the theories of value and surplus
value

to ' be

seem

for

lacking,

but

Tele. BS 128

V"

Air Filter

The

Manifesto

first

from

was,

.W.

last, a declaration of revolu^
tlonary expectation and intention.
It begins with these words:, "A
spectre is haunting Europe-r-the
spectre of1 Communism";, and it
ends with this war-cry;;

Stix & Co.

Consider H. Willett

their

views

Varnish

ends

openly

classes

Co.

the

at

Communist

a

whenever

True,

thought

Marx

million dollars the
total amount to be provided by
:the Bank as well as private loans,
unspent credits and aid from other
Western Hemisphere countries.
The

the

in

big task to the young Interna¬
tional Bank was obvious enough;

a

it

/

den

1849

time

our

Light

Marx wrote
Zeitung.
revolu¬

Mountain Fuel

Supply

True, both
communists were

expected.

and

workshops, they rose against the
provisional government, but only

EDWARD L. BURTON

Member oj

ESTABLISHED

Street, Philadelphia 2

Salt i_ake City
BELL

SYSTEM

a

battle in which

10,000

rebels
short¬
lived republic and then the Sec¬
ond
Empire under Louis Napo¬
leon.
In
Germany,
Italy,
and

1, Utah

TELETYPE SU

464

other

Private Wire System between

Philadelphia, New York and Los Angeles

and

of

many

the

countries, the revolutionary

movement

SPOKANE, WASH.

was

petered

soon

NORTHWEST MINING

Botany Mills

SECURITIES

Empire Steel Co.

For
or

Empire Southern Gas

of

Pittsburgh Rys. Co.

Exchange

Std.

A.M.,

Pac.

other

,

Sterling Motor Truck

from

10:45

Time:

Floor

on

to

11:30

Sp-82

hours.

,

at
'

Nazareth Cement

Byllesby & Company

PHILADELPHIA

OFFICE

Telephone

Teletype
PH




of

Brokers

Stock Exchange Bldg. Phila. 2
RIttenhouse 6-3717

Members Standard

73

-

Peyton

Stock Exchange

Spokane

Dealers

-

turn out to be im¬

possible, then the U. S. Treasury
would have to come to the rescue

of

For there is no way

again.

making the size of the capital

|1951.

77,s;7777''7;777-;

Plan

Marshall

are

mainly

the
de¬

signed to keep the European na¬
tions alive
and their industries*

operating

.*

during

four-year

the

the whole European
Outstanding
in
this

for

portant

*

economy.

reconstruction
which

Central

mines

coal

the

of

the most

are

Poland for

loan to

is the

group

productive in

These mines are

Europe.

indispensable for rehabilitation
of the Continent as are those of
the Ruhr and Great Britain. The

as

Bank

International

will- have

to

give serious attention to that ap¬
plication, ' provided Poland guar¬
antees that the coal production
will be distributed in accordance
with economic needs among those
nations which have relied upon
for almost

it

Thus

it

century.3

a

that

evident

becomes

requirements of the
Bank will go far beyond the $3
billion expected by the Paris con¬
the

capital

planners.. As
a
rough
estimate, the assumption shall be
made that the additional require¬

ference

ments will amount

This

lion.

adds

mil¬
total of

to $1,500

up

to

a

$4,500 million to be raised by the
Bank during

to 1951.

the period from 1948

7- 7.,;

'I, '.v.';..'

'

loans
already
granted by the Bank, its total
portfolio would thus amount to
some
$5 billion by the end of
1951. This would certainly be not
Including

the

excessive

an

amount

in

light

the

Bretton Woods
Plan. At that time, it was assumed
that the Bank might well exhaust
the

of

original

its full $8

billion borrowing power
first five years of its

the

within

operations and then would be ablethe field more or less to

to leave

private initiative.
However, the time schedules as
laid out in 1944 have all proved
to

be

optimistic

over

observers

feel

now

and

many

job

the

that

if they shall
be able to buy the materials they
cannot produce themselves, they
will have to rehabilitate and ex¬

assigned to the Bank by the Paris

their industrial
capacity.
This, in turn, will depend upon
the capital equipment to be pro¬
vided for under the Marshall Plan.

termined effort should be made to

transition period. But

pand

M. Dodge, now Pres¬
American Bankers

Mr. Joseph

Engels-

provided by
for food,

Government

S.

U.

be

to

funds

The
the

fuel and raw materials under

Plan

ident

of

the

report

beyond its fund
Yet this' should
time for defeatism; a de¬
go

may

raising capacity.
be

no

the

remove

which

obstructions

prevent full and effective activi¬
ties of the Bank. This will, per¬
haps, involve the need to review
revise some of its policies if1

and

until
recently .it should turn out that new meth-'
continued to plan and hope and,'
ods
may
facilitate its assigned
during the crisis of the middle financial adviser to General Lucius
task,.
'•.
'fifties, they were ready to take Clay in Germany, aptly compared
There are two main sources of
the
lead again.*
In September,? the immediate assistance to be
additional funds the Bank may
1856, Marx wrote in a letter to furnished by the U. S. Govern¬
draw from.
It may increase its
Engels: "This time, moreover, the ment to the equity capital of a
thing is

and

Underwriters

Building, Spokane
Branches at

Kellogg, Idaho and Takima, Wn.

as

European scale nev-; corporation which provides a basis
for long-term borrowing from outand I do not
siders.2
It is at this point that
shall be able to sit here

on a

reached

think

standard securities
corporation

H. M.

the next few years.

Association

er

Warner Company

over

once

in

elsewhere

.

Immediate Execution of Orders

Quotes call TWX Sp-43

and

violent

less

out.

For all of that Marx and

American Box Board

were

persons

taken prisoners. Followed a

1899

160 S. Main Street

New York
Los Angeles
Pittsburgh, Pa/
Hagerstown, Md.
N. Y. Telephone—WHitehall 3-7253

than

more

killed

8c COMPANY

York Curb Exchange

1420 Walnut

anc

be taken in hand."
A gruesome program is a vital and essential
forecast, that, as Marx salutes the part of the European Recovery
uprising of the masses, with its Program; Without it there would
,be no hope of making the Euro¬
lamp-post and its guillotine.
pean nations self-supporting and
But the proletarian revolution
independent of American aid by
did not come in 1848, as Marx and

to be defeated in

York, Philadelphia and

Also

Treasury

If this should

amounts

wrote;

making

and

socialists

BUCKLEY BROTHERS
Angeles Stock Exchanges

he

very active in that year, especially
in France, and in June> fearing
the
suppression of the national

Utah-Idaho Sugar

Request

1850

in

And

Engels had

Amalgamated Sugar

Company

DuMont Laboratories

New

S.

examples of
contingent
hated individuals or public builds equipment ,; program
ings, such deeds must not only be iupon the Bank's ability to make
available the required funds. That
tolerated but their direction must

?

Portsmouth Steel Corporation

Los

U.

the

of

by shifting
share of the burden to an insti¬

comes,

"Far from opposing so-called ex¬

Bell Tele. LS 186

Utah Power &

Members New

already staggering bur¬

the American taxpayer

•

KENTUCKY

PHILADELPHIA

on

the

reduce some¬

effort to

an

was

what

that

Rheinische

Neue

"When

SALT LAKE CITY

Data

assigning such

of

purpose

and

East

projects outside the Mar¬
which are highly im¬

ropean

shall

fully in democratic countries like
a
England and the Unitbd States;
tution expressly organized for the
but, as Engels puts it, "He cer¬
financing of long-term capital intainly never forgot to add that
vestments.
,1.
he hardly expected the English
ruling-classes to submit without a 'p- All the planners assumed, of
;course, that the Bank would be
I'pro-slavery rebellion.'"
able to raise the necessary large
:
In the

Members St. Louis Stock Exchange

Incorporated

Bolt

Ernest H. Weinwurm

mates at $4,100

a good chance of success, ac¬
companied by much violence, as
in
the Reign
of Terror of the
French Revolution
of
1789
and

Near

the

Asia, expect the Bank's assistance
in developing their domestic re¬
sources.
Moreover, there are Eu¬

Presi¬

was

Floor, Kentucky Home Life Bldg.

Buffalo

addition to those participating in
A number
of countries in Latin America, in

of having
"an increasing
portion of the financial needs ol
Europe met by dollar loans from
the International Bank." He esti¬

there

have to take account of the
of many other members in

the 16-nations program,

a n

m

'tance

The proletarians have

proletariat

cesses,

BANKERS BOND

LOUISVILLE 2,

i

The

tionary terror will not be sugar-

Long Distance 238-9

needs

Committee.1

to

aims

and

ever,

a

member of the
a r r

-

Additional Funds'

the

H

for

Ask

Bank,' in determining its
capital requirements will, how¬

City

and

:

reconstruction.

of

Members Will

The

declare

tremble

coated."

1st

of

man-,

Bank

plan

Other

be attained

can

revolution.

STREET

OLIVC

509

St.Louis l.Mo.

m

overall

dent's message
that their
to
Congress
only by the
.also stresses
forcible overthrow of all existing
j the
i m p o r-;/
social conditions.
Let the ruling

They

year

INVESTMENT,SECURITIES

Chair Company

Reliance

Bank will have to be tied into the

Burgess,

National

77'7-7

disdain-

Communists

conceal

been

<$>-

Vice-Chair-

to

"The

has also

This figure

equipment.

<

American Turf Ass'n

Murphy

capital

of

-

own

the revolution might come peace¬
'

purchase

me AuxiUn

oi

istration
pol¬
sake, merely, but chiefly icy.' It h a s
to
change
and
"improve"
the been endorsed
world and, therefore, is ""hand-*
recently by
maid to revolution." ;*: :
vTY- •£ Dr.. Randolph

its

after.

LOUISVILLE

the

revolution-; adopted by the Harriman Committee and thus has been made part

are

ary weapons, for "truth," accord¬
ing to Marx, is not desirable for

ST. LOUIS

American

funds.

The International Bank, according to the report of the 16-nations
Paris Conference, is expected to lend those countries some $3 billion

class,

Street, Boston 10

Tel. HUbbard 2-3790

theories

Marxian

like Samr

used,

-

the classless commonwealth. Only

Walter J. Connolly & Co., Inc.
24

and

nothing to lose but their chains.
production - under - con¬ They have a world to win. Work¬
sumption theory of crises, the col¬ ing men of all countries unite!"
lapse of capitalism, the proletar¬
From these fiery utterances it
ian revolution, the dictatorship of is clear that the writers expected
the proletariat, and. the coming of and desired an armed uprising of
the

&

of

increasing

the

elimination

Boston

theory

economists

in

published

been

all the languages

world

and

weeks

few

a

funds be raised by issuing "junior bonds"

be initially purchased in part by Treasury-administered

presently

were

«weapons

son's jawbone of an ass,
the
Philistines.
Indeed,

the result was

nist, Party,"

those

shortly before the insurrection of
1848, and the first English
translation, by Helen Macfarlane,
appeared in Harney's "Red Re¬
publican" with a note saying that
it
was
"the most revolutionary

June,

the celebrated

of

of

U. S. Treasury.

upon

found in the arsenal of bourgeois

document

"Manifesto

revolution

French

1848. A French trans¬
lation was brought out in Paris
February,

practical
program," and

the

which may

the-S-

as

Faihire of Bank to provide funds, he:;,

additional heavy load

an

$4% billions in

pressing needs under Plan and those

Says present marketing policies of Bank tend to limit its bond sales

revolutionists, came to London to attend the second Congress of the
secret society founded in 1836 by German exiles in Paris and later

Engels, already ardent

would throw

argues,

Friedrich

ago—in November, 1847—Karl Marx and his friend,

One hundred years

•

Contribute to Marshall

77

V

growth of Marxism and Communism over last century, and stresses its aim to

Dean LeRossignoI traces

we

before

spectators much longer

mobilization of
hand."

In

November
"In

is

1848

a

our

.

.

persons

letter

to

the
is at
.

Marx

of

activities of the International

15, 1857, Engels wrote:
said:

'Now

and

in

our

time

it
came—but now it is coming alto(Continued on page 33)
—

a

sense

abroad.

or

a

speech

2 In

an

Economic

address

Club

of

delivered
Detroit,

before

Oct. 27,

the
1947.

"

•

An increase of the

tal
before the New York
American Statistical As¬
sociation,
Nov.
13,
1917, Dr. Burgess,
however, did not indicate how the Bank,
in his opinion, could raise the required
large funds.
1 In

Chapter of the

we

coming'

the

equity capital or it may try to sellmore bonds either in this country-

has

been

3 See also

suggested

This

quarters.

.

•'

Bank's capi¬

would

in

some-

require

Distress,"
former Polish Con¬

"Poland's Economic

by Julius Szygowski,

Chicago, "Commercial and
Financial Chronicle," Nov. 20, 1947.

sul

General

in

(Continued on page 40)

167 ; Number

Volume

THE

4662

COMMERCIAL

FINANCIAL

&

CHRONICLE

that
is, Republican leaders, in
Congress and among the national

The Outlook foi

committeemen and state

on

Municipal Bonds
By LOUIS

S.

LEBENTHAL

Senior Partner, Lebenthal &

yield

notes rise in

Ahead

-

on

Your
blood

issues of

for

mu¬

a

municipal issues

average

years

advanced

steadily until
a top of 1.29%
in

April

1946.

time the trend

until

find

we

them

selling

at the close of

1947

on

a

2.25%

96

a

basis

increasing his power, they would

from Henry and his
would
leave
them
dizzy.
The way Henry would go
after this increasing power while
professing not to want it was truly
amazing.
get

his

i d

o r

^ ;,M

confidence

ability
grown
e a p s

•

y

in

Carlisle Bargeron

hie h.

taken

.within

the

last

few

has

place

weeks.kThe

for this sharp decline are
apparent in the unstable financial
conditions in^
Europe, the infla¬
tionary trend in this country and
reasons

,

the

withdrawal

support

for

of

its

Government

bonds.

in

The
Secretary of the Treasury
•has advocated the removal of
tax

exemption

municipal
time

he

future

on

bonds.

issues

At

of

the
that

recommends

same

those

already issued will continue
exemption.
a

It is

tax

likely that such

program will be pushed
through,
it is
uncomplicated

since

by

isting contracts.
such

In

legislation

ready

outstanding

scarcity value
minish

at

the

those

of

bonds

will

their

as

ex¬

event

al¬

enjoy
ranks

a

di¬

estimated rate of a
dollars a year.
The in¬

-billion

when he was
a

a

-Future

_

bonds,
sold

issues

of

myself it was

tion.

during

t!\e

years

is

a
a

it

the

these

a

of

the

Republicans

who

now

will

they

like Taft. It

seems

Republicans, being
a
and reactionary group,

backward

common

will

confident

a man

the

tnat

he

cause
race

wouldn't

the

as

is utter

of their

man

afraid

he

that

he
of

much

as

have

party

a

might jump

the

and that

is the

the

initial

strength.
His
the regulars,

among

with

more

candidacy,

will

will throw away our "social

the

the

term

is used,

the

characterized
I first

as

always

sighing and

would say, because he was
more

power

men

ime

than

should

the

that

getting

people,

a

his

strength will

extreme

to

Neither

am

"Republicans,"

I

sure

once

did

believe

he is

lace,

radicals

on

But Wal¬

Russia.

rea¬

scuttle

tremendous

a

backward

state

and

of

nance

refer¬

are

they have

combat

to

"military

military
such

menace"

way

The Republicans in Con¬

about

gress are

disgusted

as

as

Frankly,

howevCr,
with

in

them

are

up

against the proposition of

Wendell Willkie should be

cial interests of their party. Those

on

this. He

was

voters who are denied

shoved

the campaign wore on their

worst, suspicions

about

regularity

confirmed.

were

his

expression

in their party because of this set¬

Philadelphia

will find

up

and

party

the

an

outlet in Wallace

Republican leaders know

this.

He

referred

my

We regret to announce

long

"Republicans,"

that

Mr. Louis :N. Singer

steady

has retired from
municipal

We
''

Pleased to Announce that

are

'•

i

f

•'

<

f

•••

'

*t

L

'

<

"

our

firmu

<■

'

I

)'

MR. CARL M. TROTTE

exemp-;

It

formerly

-

of

First

Colony

is

We wish to

Corp.

MANAGER of

$7,000,000,-

000

worth
of-munieipal bonds arescheduled to be issued within the
next five
years.

80%
and

our

us

announce

that

"

of

the

municipal issues

concentrated
York

as

follows: New

has been admitted

TELLIER & COMPANY

Approximately

75%

Mr. James S. Adams

as

SALES DEPARTMENT

^of the projected state issues

;are
'

with

associated

now

42

January 5, 1948

BOwling

as

general partner.

a

Lazard Freres

Broadway,
Green

N.

Y.

New York) January.

9-7946

&

Co.

1,1948,

$2,360,000,000, Pennsylvania
$809,000,000, California $507,000,000,
Ohio
$504,000,000,
Illinois
$410,000,000 Texas $367,000,000.

Announcing the formation of the firm of

Allied Stores Setts

$25,600,080 Notes
r<

.

.

.

WE ARE

'

;V-:

i

1 -f-.f.v

^

-

Allied Stores Corp. has
arranged
loan of $25,000,000 at
3y8% with
two
insurance
companies,
the

OF A

company

sale

of

notes

announced

the

was

of

the

stocks AND bonds

SAN

fund

y'iV'-kf';•'

formerly

bought
and

be

the

Sutter

TELEPHONES: YUKON 6-9Q83

JOSEPH R. NEUHAUS

President

—

GARFIELD 1-7700

Neuhaus & Co.
;

MILTON R. UNDERWOOD

>

Street

.

Miliort R. Underwood & Co.

New'York

•;

>

UNDER THE MANAGEMENT OF

■

Mr. Edward e. Brosius

Vice-President

$10,000,000. The

used

capital, to take

$15,000,000

...

FRANCISCO, CAL.
9

Metropolitan Life

Co.

notes

will

The

arranged through LelH

Life Insurance Co.
funds

6:

20-year sinking

Brothers.

man

Insurance

Jan.

NEW BRANCH OFFICE
AT

,,

,

PLEASED TO ANNOUNCE THE OPENING

:

Underwood, Neuhaus & Co.

a

care

for

working

of large

in¬

PHILIP R. NEUHAUS
v

DANA T. RICHARDSON

Vice-President

t

Vice-President

ventories and receivables.

J.

D.

DUPREE

Georgeson

*

•••

•

••

:

h

,

Samuel Baker
(Special

LOS
uel

F.

to

The

Financial

Opens

Secretary-Treasurer

Baker

is

engaging

in

a

securities business from offices at
639

South

52

wall street

;

Co.

&
■

new york 5, n. y.

Chronicle)

ANGELES, CALIF.—Sam¬

Spring Street.




City National Bank Building • HOUSTON, TEXAS • Beacon 3-8841

January 1, 1948

Bell System Teletypes HO. 1 and 399

the

Republican rank and file but they

they think do not come

on. association

a

as

going along with the large finan¬

down their throat at
as

the

otherwise

The job they

convincing

and

who

is believed,

it

establishment

win

will

The

is also going
to attract Republicans who are be¬

The

to

elected.

will

from

come

would vote Democratic.

when

assume

desire

whom

man

such

eventually really to think it.

by

hesitate

to

with

no

reading this propaganda about

to,

the

every

reflected

as

Congress, seemed

Yet

the

he will, under

circumstances, get the

n6w

nomination.

wished

any one or group

have.

thai

suggest

these

the people wouldn't do this, Henry

against

displeasing to him because it

does

moaning be¬

much power on him. Oh, he

of the many forms

Senator, yet I am not sure that

it is

the people kept pressing so

cause

one

of the damning propaganda
the

got onto Henry when he

Secretary of Agriculture and

was

race

son

is

This

wicked soul.

a

tight

a

him.-

denouncers fand

loudest

like Taft but in

man

they would be afraid to nominate

have

Europe and the continued mainte¬

they

no

talk

wildered and embittered at the
continued pouring of billions into

national

have

I

nucleus, maybe the great bulk of

have

politics.

Republicans, and I

whom

race prom¬

victory if the
of party

find

.

ised to be close, reflects a woeful
ignorance

"minority"
victory and
entirely.

party

grab him

Republicans would

insure

what

being a
than to

This is because
Wallace
also draw Republican votes.

on Dewey's
Taft's.

nor upon

his

nevertheless.

just as is
among the
so-called
advanced thinking elements of the
party.

candidacy
slightest affect

of

They are not as worried
as
the Democrats, of
course, but
they are wrinkling their brows,

strength is

Wallace's

making

out

emotion.

not

rot the

a

can

the

thing that I must be
utterly deaf or blind to is the high
glee of the Republicans.
Those

traces

The fact

with

many

Another

he will go

reason

convention

along,

go

himself oht

Dewey has more strength
the party leaders than Taft

among

into

money

leader

if he became President.
is

rather

This

None of the leaders,
lined up with Taft, is

to

A leader,
National,- would much

or

good

as

Yorker.

Taft.

those

"minority" politics af¬

as

good

livelihoods
people in this country.

be¬

nonsense.

as

even

make

New

Dewey is just
man

choice

As
to
scintillating Presiden¬
Eisenhower,
the
fre¬
as
Eisenhower, be¬ quently expressed contention that

so

nominate

was

gravely

great blow to Dewey

stature

become

people
their darling,
genuine "liberal,"

had

is
interesting to note that:
1913, prior to tax exemption,
^municipal- bonds sold at higher
.prices than securities in the cor¬

Close to

a

State

the

ford

in

porate field.

po¬

victory for the sake of a
victory.
They want a victory in
which they will share.
Something

as

the other hand, will be
the basis of their inherent

on

a

want

take

Taft's,

hear the editors saying

tial

phoniness, and in each instance I
would be pounced upon by his

)f

tell

would

Henry's candidacy, and

and such

quently to call attention to Henry's

on

security rather than tax

just

party

to

enhancement-in value.
■>

not

known

Taft

I had his number.
As long gains" the first time our eyes are ring to
1934, it was my wont fre¬ turned, have always wanted a
leaders,

man,
ago

sheepishly

generally porRepublicans as in high

over

that

articles from

my

voice

clarion

an

evitable result should be

all

Henry

present

:

v

glee
we

fooled, when he

of

he

grin

newspapers

on.

Because

into

it may.

as

the

cause
.

to

run

days

and

liked

The
frav

You
>j
likely to note something of a

now

would

those

me

Be that

has
by
and

ocksureness

I

I

because he knew I was onto him.

oounds.
re

at

and

analytical

w-

.♦

look

with

e.

time

in

Henry

resist

jointing

that

Every

f,; I

when

w

do

that the rank and file of people
do not understand is that
what is

pressure

a

lobby

yield,

half

party

Dewey on their
respective philosophies and per¬
sonalities but being reluctant to

a

points
increase
in
S. Lebenthal

they

the

M y s e 1

repre-

sents

they have just discovered the iniquity
have been becoming increasingly dubious

come

of

can't

awful kick out of the high

an

nefariousness.

basis.

This

Louis

■

seems

suddenly

depth

reversed itself

;

It

But

xp o n

of
that

At

getting

they

have

o

of

series

is

several

seem

the
price of municipal bonds
long

over

The fact is that the party lead¬
ers have no such
feeling as pre¬

him

months.

in next five years.
For

litical

edi¬

our

all

The practical elements of

express

sometimes

Viv' '

tors.

that Henry Wallaee is giving to the Eastern intelli¬

Oh,

Iran,.

ibout

now

new

correspondent

pressure

this

of

nicipals, and predicts around $7
billions of

By CARLISLE BARGERON

gentsia these days.

Foresees likeli¬

new

I

scuttled

ferring

hood of removal of Federal tax

exemption

of the News

aver¬

of

of 1947.

at end

thoughts.

thereupon

was

7

the place.

chairmen,

heard them

never

such

wonder at the wisdom of

Co.

municipals from
1.29% in April, 1946, to 2.25%

age

I have
any

EE

Mr. Lebenthal

(103)

BOSTON

PHILADELPHIA

CHICAGO

REPRESENTATIVES

LOS ANGELES

IN ALL

PRINCIPAL

SAN FRANCISCO

CITIE9

8

Thursday,, January 8, 1948

(104)

BUSINESS BUZZ

Underwood, Neuhaus
Co. Formed in Houston
TEX.—The invest¬
Underwood,

HOUSTON,

ment banking firm of
Neuhaus

has

Co.

&

formed

been

Southern California Edison

by the merger of Milton R. Un¬
& Co. and Neuhaus &

Southern California Edison

derwood

Co.,

has been announced by
Underwood, President

it

Milton
of the

R.

firm.

new

troactive

The merger, re¬

brings

1,

Jan.

to

to¬

in

firms long active

gether two

this field in Houston.

will

Offices

maintained

be

at

National Bank Building.
Officers, in addition to Mr. Under¬
wood, are Joseph Rice Neuhaus,
Philip Ross Neuhaus, and Dana T.

Vice-Presidents, and

Richardson,
X D. Dupree,

The

Secretary-Treasurer.

firm will be active in

new

local corporations, and

financing

the placing of long-term oil loans

against established production. It
will specialize in government, mu¬

nicipal, and unlisted corporate se¬
curities,
Officials say that the

will offer a broader and
complete^ investment bank¬

merger
more

ing service for

growing Houston.

a

Milton R. Underwood, President
of the

firm, has been active

new

in Houston civic affairs since 1928.
A native of New Jersey

and grad¬
University, he

uate of Vanderbilt

spent the 1928-1934 period with a
Itocal bank and insurance company
before establishing his own firm.
He served in the U. S. Army Air

section from
1945. This
he served as Chairman

Corps

procurement

Nevertheless, only $1.70 per share
compared with $2.18 in 1937.<£

The

margin

profit

the

in

6.7%

of

Commerce,

trustee

a

Public Library,

of

the

and Chairman of

the Board of Kinkaid School.

Joseph R.
R.

Neuhaus

Neuhaus

ians,

sons

and Philip

native

are

Houston-

of the late Hugo V. Neu¬

haus. who founded the Neuhaus &
Co. firm in

It is the oldest

1907.

investment banking firm in Texas.

Joseph
ment

R.

Neuhaus

had

invest¬

banking experience in New

York

City following military serv¬
ice in the European theater. Philip
R. Neuhaus was in the investment

business
in
Cleveland
in the C. B. I. theater

banking

after serving

during

the

brothers

Both, Neuhaus

war.

Yale graduates. Dana

are

T. Richardson is

a

former partner

in the investment

banking firm of
Kelly-Richardson,
Chicago, and
has

27

years' experience in the
municipal bond field. He was sta¬
tioned at Ellington Field during
World War II, and decided to lo¬
cate in Houston after completing

danger ofva sharp rate cut at that

reason

in line with the national average

this

for

though
Pacific

Coast

earnings

are

showing was (1) high taxes,
tripled in the period 193944 (and are still running at nearly
double the prewar rate) and (2)
a

6%

return

Current
a

estimated rate base

on

company's system, other than a cost). It is estimated that the com¬
portion in the San Joaquin Valley pany could earn up to $2.75 per
share on its common stock before
area, was operated on a frequency
of 50 cycles, whereas 60-cycle fre¬ reaching a 6% return on the pres¬
quency
had generally been ent rate base; and some $50,000,000 will

adopted. This situation resulted in
inconvenience

considerable
expense

into

or

probably be added to the
under the construction

base

rate

and

program.

to customers who moved
out of the company's ter¬

•

,

Southern California Edison

nor¬

ritory.
Also, 50-cycle equipment mally obtains most of its electric
is in general more expensive and output from hydro-electric plants
difficult to obtain than equipment and also buys a substantial amount

60-cycle operation. of power from the Hoover Dam.
in June, 1945 filed in recent years, however; it has
application with the Public had to draw considerable power
Utilities Commission setting forth from steam plants. V In 1947, with
the facts with respect to the fre- rainfall almost negligible in Calidesigned

for

an

situation,

and

issued

order

the Com-,fornia, it has taken over half its
directing energy at times from steam, which
to change its service has doubtless increased operating

to

60

an

The change-over is

cycles.

year's

will bear
initially the entire direct cost of
adapting its own and its custom¬
ers' electrical equipment to 60cycle operation.
The total cost is

fected

the

orders,

company

charges.

is

operating expenses. $11,000,000
24^ to yield over 6% based on
charged in 1946 and an esti¬
mated
$12 000 000 was probably the $1.50 dividend rate. Dividends
leaving about
*9.000,000 to be charged in 1948
(for
accounting
reasons
the
^mount

The

1947,

for

exceed

may

estimated

this figure).

1947 charge

crediting tax savings)

was

lent to about $2.15 a share

have

been

with

paid since *1910,

the present rate

a

estimated

are

share..

Improved 1948 Background for
Markets—Discussion in

Next

the

year

will

company

requirements
the

new

common

that

this

on

310

a

expenditures

of

EVENTS
In

Investment

the

for

additional

of

(Detroit, Mich.)

1948

Annual

Dinner

of

Exchange

the- Detroii

at

Hotel

the

Feb.

Club

Traders

of

Curtis & Co.,
Building,

Chicago

at

the

character of this financing has not

To the

a

;>

Stocks—

City Bank

Certificates
appraisal—
&
Co., Inc.,
123, South
Street, Philadelphia 9, Pa.

1

u a

Stroud

^

March 5, 1948

New York

sociation

(New York City)

Corp.—

New York.

available

Co.,

and

neering,

are analyses of
Wellman Engi¬

Products

Tennessee

& Chemical.

.Northwest Utilities—Analysis—
Ira

Co., Ill Broadway,

Haupt &

New York

6, N. Y.

Annual

22nd

Dinner
.

and

o n

are

a

valuation

of City of Philadel¬
and price-earnings
ratios and yields on 123 Public
Utility Common Stocks.

a-

~

phia

March

1948

(Toronto,' Ont..

Dinner

of the Toronto

12,

Canada)
Annual
Bond

Traders

Association

Nov.

at

the

15-18, 1948 (Dallas, Tex.)

National

Situation—Analysis

Special

King Edward Hotel.

conver-i

Co.—Detailed

Exploration

111.

of

85-year-old New England com¬
pany with large dividend accumu¬
lation—Raymond & Co., 148 State
Street, Boston 9, Mass.

v;

available is late

Also
tion

informa¬

Du Mont Laboratories and

on

Buffalo Bolt Co.

>

Portsmouth

Master Metal—Cir¬
and stocks
of several low-priced speculative
steel companies—Mercer Hicks &
Co., 150 Broadway, New York 7,
The

the industry

on

N. Y.

'

.

♦

*

available

Also

port

on

is

special

a

Diebold.

Copper

Tube

Industry—De¬
Securities

circular—Aetna

Corp., Ill Broadway, New York 6,
,v. •
' -•

n. y.

Robbins

&

Myers,

Inc.—Anal¬

ysis—Doyle, O'Connor & Co., 135
South La Salle Street,

♦

Alleghany Corporation—Memo¬

re¬

-

Reading Tube Corporation and
tailed

Steel,

Steel—Special Re¬

port—Ward & Co., 120 Broadway,
New York 5, N. Y.
;*
'

the

Security Traders Asso¬
«

Buckley Brothers. 1240 Walnut
Street, Philadelphia 2, Pa.:
;

Bonds

ex-

dilution of share earnings.

Oil

analysis—Comstock ' &
Co., 231
South La Salle Street, Chicago 4,

and appraisal

Security Dealers As¬

the Waldorf Astoria.

t i

available

Also

Federal Water & Gas

111.

Chicago 3,

■

randum—Vilas & Hickey, 49 Wall

Southern Production

Also

available

Railroad

New York 5

Trenton

Street, New York 5, N. Y.

Exchange

is

a

leaflet

Developments

of

of

the

Chemical

Co.—Memo¬

randum—A. H. Vogel & Co., Pe¬
nobscot Building,

Detroit 26, Mich.

Week.

Utica

Postley & Co.

Gilbert J.

,




Inc.,
Chi¬

Railroad Equipment
—V

Broad

Salle Hotel.

in connection with future

Buenos Aires

Motors

Portsmouth Steel Corp.—Data—

(Chicago, 111.)

3, 1948

Mid-Winter Dinner of the Bond

Central Illinois Public Service

Amsterdam

Graham-Paige

Analysis—Seligman, Lubetkin &
Co., 41 Broad Street, New York 4,

meeting of

Preliminary comparison of 1947
earnings—Laird, Bissell & Meeds,
120 Broadway, New York 5, N. Y.

cular

London

\

>

Statler.

tent that common stock might be

Philadelphia Providence

at

Trade

of

4, 111.

cago

Field

Obviously the company will not ciation Convention.

Chicago

Y.

Also

Rubin—Re¬

P.

address

Clement,

Board

years

financing, but the

yet been determined;

14,

Stock

sion of the 4.48% preference stock.

Boston

32

partners and representatives

New.York
Jan.

Some similar dilution might occur

40 Wall Street,

Inc.,

Bros.,

Edward

by

the

^ '♦

Members New York Stock

the

Broadwa^, New York 4, N. Y.

prints

COMING

La

during

issued there would be sortie tem-

White,Weld&Co.

to

"Geared

News"—Strauss

1948

It is

stock.

*947-9 will require some $90,000,-

porary

of

Inc.—

around

preferred stock,-which was
early in December, and

on

issue

....

have outstanding $20,000,000

4.88%

Security
current

Looking Forward—Forecast for

(after

equiva¬
so that

at

Street, New York 5, N. Y.

Laboratories,

Memorandum—Hayden; Stone &
Co., 25 Broad Street, New York 4,

Foundation

have

charge

15

years.

before this extra cost
approximated $4.09i
In 1947 earnings before the special
$4

Co.,

in effect for five

earnings

would

&

Mont

Du

Companies—A

Voorhis

N.

currently selling around

to

charged

Insurance

The

was

100

Common Stock

Fire

likely that norrpal future earnings
approach the $3 le^el.

■

But

/

Broad

stock

charged

by ^ special

following literature:

af¬

be

also

review—Kalb

Sum

be

will

send interested parties the

to

ating and capital costs, it appears

may

will

earnings

firms mentioned will be pleased

It is understood that the

allowing for increased oper¬

even

estimated at $35,000,000, of which

$32,000,000

Recommendations and Literature

»

have been abnormal ones and next

Commission's

the

to

t-v;y

•<

Dealer-Broker Investment

Summarizing, the past two years

pleted by the close of 1948.
Pursuant

/yf-;> • /'.;

expenses.' < v..

expected to be substantially com¬

construction

<r'

"By the way—when did YOU last take a bath?"

The company

estimated

'

the

for

section.

substantially below

(plant account has been substan¬
tially written down to original

change-over in customers' elec¬
Prior to 1946, the

tric equipment.

>hare

Company

high

relatively

which

stock will be equivalent to

Natural Gas

This seems rather unlikely.

time?

ended

poor

dividend

Western

1949.

Residential rates at 3.180 are about

September.
The principal

issued

his military service.

common

potential earning
Is there any

full

until

power

last

the company

director of the Houston Chamber

16.4%

months

12

its

realize

common

of each dollar of revenues in 1937
to

quency
mission

a

for

dropped from

past year^
of the big-gifts division of the Red

ftmd-raising campaigns.,; He is

reported on the

was

stock

May, 1942 to August,

Cross and of the Community Chest

of the best growth areas

one

In the 12 months ended Sept. 30, 1947, gross revenues
$81,000,000 compared with $42,000,000 a decade earlier.

stockholders

918 City

serves

in the country.
exceeded

29 BROADWAY,
Direct

NEW YORK 6, N. Y.

Wire to

Chicago

B.

—C.

V.

E.

D.

Corporation—Analysis

Unterberg

&

Co/,

Broadway, New York 6, N. Y.

61

Inc.

—

&

Mohawk Cotton Milh^

Circular

Investing

Co.,

—

Mohawk Valley

Inc., 238

Street, Utica 2, N. Y.

Genesee

Volume 167

Number 4662

THE COMMERCIAL

Britain's Bad

Bargains

By PAUL EINZIG

LONDON, ENGLAND.—We on this side find it difficult to under¬
stand how British negotiators of international
agreements have been
able to acquire and maintain in the United States a
reputation for
Machiavellian skill in safeguarding the interests of their
.

country.

Whether

t

repu

this

tio

a

these

n

deserved

was

&

expensive

concessions

he

certainly been

months

in

not

or

past,

the

it

unde^-

served
cent

has

in

at

years,

rate

any

far

bark

re¬

evident

Indeed", it
be

Dr. Paul

Einzig

got the worst
practically every

on

occasion since

1944.

long series of bad bargains,

of which the Anglo-Russian Trade

Agreement on Dec. 27,' 1947, is
the latest, began with the Bretton
Woods Agreement,
Lord Keynes,
who
was
probably the* greatest
economist

of

certainly

the

Britain
tune

has

of

generation,

our

worst

was

negotiator

had

ever

being

the

misfor¬

represented

by

at

international economic discussions.

He accepted many onerous condi¬
tions in return for the notorious
"scarce

clause"

currency

which Britain

entitled

to

to

was

under

of the agreement that British rub¬

ber-producing
interests
pointed
to their complacent Govern¬
ment that in practice this arrange¬
out

ment

national

has

scarce.

It

than

death, in Sep¬

meeting of the Inter¬

Monetary Fund, that it
that, for tech¬
arising from the

been disclosed

nical

Act, dollars could never be
clared to be scarce within

de¬

the

of natural

tiators

December, 1945, Lord Keynes
to

agreed

lated

the

unilateral

restoration of

iso¬

and

the

converti¬

bility of sterling, without stipu¬
lating
that
it
should
only
be
applied for the benefit of coun¬
tries

which

provide similar

con¬

vertibility facilities. Throughout
the subsequent negotiations about
the ihfefpretation of the
meaning
of convertibility, the British
nego¬
tiators

have

failed

to

insist

on

the
most
elementary safeguards
against the abuse of convertibility.
This

how Mr. Dalton earned

was

reputation

of

being a Santa
Claus who supplies every
country
with

dollars

without

asking

for

anything in return.
The

ain's
and

funding Brit¬
India, Egypt
concluded during the

debts

Iraq,

to

of

summer

the

the 25%

las

henceforth
the

rather

imports

American

succeeded

basis

be

to

of

calculated

that

total

a

in¬

cludes not only natural and syn
thetic rubber but also reclaimed

is

Anglo-Russian

series

to

be

June,

1947,

trade

the

pact

latest

in

bad

of

bargains.
In
Harold Wilson:

Mr.

then Junior Minister in

charge of
trade matters, broke off
negotiations with the Soviet Gov¬

foreign

as1 the latter's terms
considered unacceptable. Six

ernment,
were

months

Board

later, as President of the
of Trade, he returned to

Moscow to conclude
less

an

agreement

satisfactory

terms.

conceded.

While in June, the Soviet Union
offered to export to Britain 1,000,000 tons of grain, the amount un¬

dertaken in December
tons

only;

750,000
price
was

was

the

and

rather higher than it would have
been sift fnoriths earlier.
In re¬

turn, Britain has agreed to export
to Russia equipments and other
manufactures
of a
kind which
could

easily have been exported

to many a hard
currency country.

British
valid

Constitution

the

on

the

under which

agreements

moment

Government

bad

affixes

the
its

become

insist

not

cause.

of

the

interests

on

drastic

a

commor

He released for the benefit
three countries very
large

amounts

available

conversion

ain,

the

of

for

immediate

expenditure in Brit¬
far more than Britain could
or

conceivably
•conditions.?

afford
And

in

in

existing

return

for

Continuing, Mr. Matthews

a

facilities
'

ready

Business

na¬
even

"For

the

past

18

lihood.
cork

Bounced
the

on

like

around

and

sea

pro¬

V-

Peck's

like

should

that
come

squeaks

and

1948 and far beyond
supply the absolutely essentia
physical structure these matter:

in protest to those armchair
omists on
its distant

demand—a

expected

it

to

show

pionship form from the
—without

ing

even

econ¬

"As

cham¬

word 'Go!'

which

records

began
now

to

to

It did not in

made.

be

The

to

to

immune

be

be

of

such
to

strength

cost.
A
2V2-year wage-freeze agree¬

Building

months

higher
total

as

Market prices

high marriage

will
to

continue

home

Jan.

at

are

1,

1948

not

new

to

bound
reason

by

their

most

(1) booming new construction,
(2) the increasing inability
unwillingness of many families

are

30

and

levels—

or

substantially

to

make

the

cash

outlay and

sume

building cost than they

were

tion necessary under
present con¬

*

the heavy long-term
obliga¬

ditions."

*

:

.

This

announcement

these

is neither

an

shares.

The

offer

to

sell,

nor

a

solicitation of offers to buy any
of

offering is made only by Prospectus.

1,000,000 Shares

-

remains
For

terms.

Common Stock

this

of

the

t(Par Value $1.00

per

share)

government would cast their vote

favor

matter

the

of

how

bad

strongly

of

treaties,
.

they

no

may

them.

American Cladmetals
A

PENNSYLVANIA

Company

CORPORATION

.

Amott, Baker & Co.

Offering Price: $1.50 Per Share

INCORPORATED

REAL ESTATE

Copies of the Prospectus

Wholesaler and Retailer
of
'

STOCKS & BONDS

Investment Securities
*

Bought—Sold,—Quoted

Our

Trading

and

bank

stocks, title

r

"

.

*'

1-1942




,.1-'

'

•

T

'

-sr

-

company

and

participation certificates.

,,

,

may

be obtained from the undersigned.

'*

'

•

.

•

'

;

'

,

.

Mercer Hicks & Company
150

150 BROADWAY

Boston

•

UNDERWRITER

SIEGEL & CO.
DIgby 4-2370

•

Department

specializes in real estate bonds

NEW YORK 7, N. Y.

Philadelphia

as¬

upon

.

being defeated

supporters

in

"Chief factors however,
pointing
a
cyclical peak in real estate

signature

government

scarce

to overall impact

as

Dec. 31."

on

for

a

continue low, the trend is
turning upward and banks are
tightening up On appraisals.

Employers
York, effect¬

wages

and
be

will

Trades

of

to

ownership.

question
living costs and real

not affect their valid¬

Df the government

the

n

conditions be¬

estate
prices are forcing many
people to forego home ownership
plans. Also, while mortgage rates

Jan. 1, 1948, but still at this
Waiting in incomplete form and
unsigned, has for its purpose the

which levels

cor^

stimulus

ive

be¬

whatever

controls, and
birth rates

building

Association of New

great doubt, cost-wise, a thing of

lieved

as

new

Rental space will remain
1948. But there is little

of

stabilization

now

strings will need
adventuresome at

Council of Greater New York and

The period of

past, the building boom is
genuinely underway and is

bit

stable.

more

of

contingency

that current

the

another,
come

to

willingness

a

shade

dewllings are thus un¬
to advance much further
in 1948, Rising
rents, even under

purse
as

to
a

likely

Building and Construction Trades

cannot be
down in the

expected

come

for

ment between the members of the

(2) building costs, being almost
totally the reflection of wages in

foreseeable future.

community
speculators

contractors themselves.

new

en¬

greatest all-time anticipated ex¬
penditure for construction in 1948;

or

and

contractors

allowances

component

and. the forecasters and
economists must concede (1) the

form

of

up

and

been removed from the local scene
is the uncertainty of the site labor

new

growl with less

increasing labor ef^

ficiency,

"Thelmost recent cloud to have

in

then

made

become

the

thusiasm

one

builders

trolling the

challenged,
industry is going

decontrol—but

materials will rise
further, this
will be offset by a smoother flow'
of
materials,

This is *to say that the people con¬

the first two, three or four months

growlers

is

home

always* when

so

les

build

industry builds for others? not
itself, except for that part

for

an

outsiders, do

no

war

program.

tion

usual

the construction

than the

It should be kept ir
mind, however, that the construc¬

(opportunity at
reorganization
and
training period. ,r. :
,V \
the

challenges of

consequence

periphery

who

"Total building costs are ex¬
pected
to
level
out
this
year.
While hourly wage rates and some

to

groans

their

price.

struction in

from its innards

up

Older-type
are already losing somei
scarcity value and will
gradually depreciate further in
of

ever before to
the tremen¬
dous job which is ahead for con¬

boy and
Little Lord
Fauntleroy it is small
wonder

near-ternv r. factors.

dwellings

than

bad

The hous¬

considerable, and should be¬
taken only after careful consider- •
ation of
longer-range as well asf

pro¬

and other equally basic considera¬
tions point with more firmnes

a

states:

are

unemployment,

capacity, wages and sal¬
aries, increased birth rate, housinr

alternately

also

ing shortage is much greater than
during the earlier period. Never¬
theless, the risks involved in buy¬
ing or building at the present time

duction

the

years

early in

Warning of a
period, United

later

a

Service

opinion of the Service.

.

"Studies of

appear

"The real estate situation is
less
vulnerable than in 1920 in the

prices

to

began to

change at

phys

now

,r-

With little prospect of lower
in the near
future, majiy
people are going ahead with plans
to buy or build."

But

which

.

ical

duce.

building industry, except for 194213 and the
past six months, has
offered but scant
hope of prosper¬
ity to those pursuing it for a live¬

ity, and, in the most unlikely event

ALL

NY

support

1948

adjusted, for higher

long¬

costs

far overtaxes the present produc¬
tive capacity of all national

states:

ACTIVE MARKETS

Teletype

when

of
'

British

without requiring rati¬
by
Parliament.
Even
though the agreements may be
debated, the outcome of the de¬

disapprove

35) Broadway, N. Y. 6

tional income in

time.

warns

Acqording to this

v

them,

bates does

did

to

Busi¬

1947.

with gear,

Harbor

trying

that

ness

importantly greater

Pearl

at

are

United

"Real estate prices in most areas
should hold relatively firm
during
1048. Continued
general inflation
has largely eliminated the weak¬

-

the

Responsibility for Britain's
bargains
lies
largely with

ton

the

(6) the control period (April 1946july 1947); (7) the free market
readjustment period (July 1947 tc
date).
*• .••

after

the Soviet

fication

in

job-done-nothing-to-do perioc

Britain demanded
Government was

by

than
we

(1944-45); (5) the postwar awakaning (August 1945-April ■
1946);

to make the grade.
the opinion of

1947, were grossly dis
advantageous to Britain both ir
principle and in detail. Mr. Dal¬

scaling down of the debt incurrec

;he

not

economy

risks.

statement:

speak, with plant, structure
facilities, capable, productionwise, of supporting a peacetime

the

glorious
(1942-4oj;

accomplishments

er-term

to

so

the

market in 1948 but

construction

war

of

Service of Boston, Mass. like¬
wise predicts a firm real estate

and

most

v

The reduction of interest and
cap¬
ital of the Russian war debt to

now

building

industry to its

Myron L. Matthews
1

why

release

ness

industry, second in impor¬
only to agriculture, should

emerged from the

program

treated

considered

the

(2)

war-fear

zooming

reason

A

plod forward and upward without
important or prolonged hesitation
at any point lies in the funda¬
mental
necessity for plant and
structure
beyond anything
this
country has yet experienced.
We

(1939-4041);
(3)
the

nego¬

in

stipulating
synthetic rubber

of

international

agreements
war

American

that

on

reduce

to

by
(1)
post-1929

war

an

tance

era

rubber, for the simple

that

reason

on. even

meaning of the clause.

a

increase

reasons

terms of the Bretton Woods Final

In

tend

was

the occasion of

on

will

"The
as

recovery

33

compelled to buy. It was not
until the publication of the text

The

after his

1947,

from

are

discriminatory

lars should become
until

reduce

•rubber.

and
exchange restrictions
against the United States if dol¬

tember,

to

f

o

(1937-38),
the

Colonies, in
undertaking by the

an

to 25% the proportion of synthetic
rubber which American industries

trade

not

the

British

States

supposed to be

apply

the London

the

recessionary measures may
be experienced in other industries
come the second half of
1948.

successively

as

Imperial Preference in rela¬

United

Britain has

The

operation

—

rective

economic laws

result of the blunder

a

return for

say that in
the
economic

bargain

as

the

and

unnatural

dealt

tion

no

exaggeration

of the

the

re¬

duce

to

sphere

natural

committed at the Geneva Confer¬
ence.
There Britain agreed to re¬

concerned.

would

both from

incompetence
of
British
negotiators
became
particularly

negotiations

and downs •>

ups

em¬

negotiations to

9

.

The

cial and trade
are

Treasury had to

fresh

(105)

Forecasts 1948 Firm Real Estate Prices

the agreements.

new

as

finan¬

as

the

on

CHRONICLE

Myron L. Matthews, of Dow Service, Inc., predicts active market and firm
prices in year ahead, with
building costs leveling off. Similar view expressed by United Business
Service, Inc.
According to Myron L. Matthews, of the Dow Service, Inc., "Now that
many of the
uncertainties have been swept
away, the building industry looks to 1948 as the
year offering
the greatest possibilities since 1938. In this
decade the
industry has had its most violent

only obtained provisional consent
for 'the
blocking of the large
amounts of Indian and
Egyptian
sterling balances; within six

grossly

FINANCIAL

Broadway, New York 7, N. Y.
DIgby

January 6, 1948

9-4224

A

McDonnell & Go.

& Co., members of
York .'Stock Exchange,

New

.

j

subsidiary

*

H. G. Montgomery

;

1

i

of 3% sinking

OIL EXPLORATION

crude

company

River" Oil

Wichita

in

Texas,

Field,

Rangely

and

Oklahoma,

be->

Corporation,

holdings

their

of

cause

Colorado.
Full
•'

details' available to

Approximate Price $5

Com stock & Co.
CHICAGO 4, ILL.
Dearbbrn 1501

Salle St.

t''

Teletype CG 955

'*

•.

■

y

providing investment dealers with at¬
tractive issues for their clients. Main¬

department of our
in no way with
them exclusively.
Correspondence invited.
^
retail

no

compete

but

serve

FLOYD D. CFRF
120 South La Salle

CO.

Street

Chicago

Bowser
Common

Central Paper
Common

Detroit Harvester
Common

Portsmouth Steel

William

one

New

York

Chicago
Member

Stock Exchange
Stock Exchange
New York Curb

Chicago 8, HI.
Tele. CG 650-651

135 South La Salle St.,

Tel. ANDover 5700

Merchants

Common

A group

by

W.

offering

of Baltimore are

*

and 100,000 shares of com¬
stock
(par 10
cents) of
Americana Furniture, Inc. (an
! Ark a n s a s corporation). The

was

j stock is offered in units
t

preferred

of

share

of one

and

one;

jv

be used to pay

for Kernersville,

plant, for improvements
and for working capital.

of investment bankers,
Loewi & Co., Mil¬

C.,

<= ' '

f\ V,.

si- '>* ' !i!''

-

'

Corp. had total sales of more
than $47,000,009, according to 1
official estimates. This was an
increase
of
about
$11,000,000

1946, the Previous record
when sales totaled $36,000,000, including nearly $1Q»0.00,000 in military equipment.
Ross D. Siragusa, President of

1

over

!

year,

»

j the corporation, stated that sales
in 194$ arc expected, to exceed
$75,006,000
added

as

television is being

week

this

the

to

com¬

pany's radio and appliance operations.
'
'

'

'#

#•

Ht

j share of common stock at $5.10
? per unit. The net proceeds will

insur¬

sjt

sit

Breaking all records, Admiral

100,000 shares of 6% cumulative
preferred stock (par
mon

com¬

the net working capital was
increased during the year ended
Nov. 1, 1947 by $1,904,708.

Chicago,

of New
Schaefer

the

Consolidated

;

net

,

.

•

of

income

Standard Gas & Electric Co. and
subsidiaries for the
12
months
ended Sept. 30,

1947 amounted to

$5,194,693, compared with $4,848,-

/-

Distilling

working capital, etc..
' ',4

"V;

AI

4

,..

-

j 4

$27

Co., which had been
North American

Editor, "Algemecn

a

Collins

Co.,

&

Mullgney,

Co., F. S. Yantis

also

owned by

Light & Power

Mason, Moran & Co. and

Rqss

1

Copeland $ Ken¬

AMSTERDAM, HOLLAND,—The former German

of

the

,

A

Chicago,

the I
the

public offering of 50,000 shares ;
of
American
Box
Board
C9.;

Cleveland

:

- j

*

*

stock

common

per

;

/

at $21

share, the pet proceeds

which

-

(par $1)

are

to be used to pay

:

of]
fqri

supplier! branches of administratipn were
finished delegated to German authorities.
still not; All this, however, did not increase

products,
this , would
mean
that a healthy ecpnomy the confidence of the average
could be built up fn Western German in allied government and
Europe, because this traffic wouldj thus his willingness to cooperate

the| with it, especially economically.
West European border teri On the contrary, it has become
ritories cannot thrive with a hin-t clearly noticeable that this .will¬
terland partly sealed off by ap ingness has waned, that the tend¬
iron curtain and partly an ecd- ency is rather to obstruct Allied
measures.
One does not get( the
nomie backwater.?: ; A>-...../
impression from ijhe elected rep¬

not be economic and because

small

Municipals

Economic
side

Tele. CG




ZIPPIN

&

COMPANY

Specialists in Foreign Securities
208 S. La Salle St., Chicago
Telephone Randolph 4696

1*56

4, Illinois
Teletype CG 451

aid

from

the

other

lead

and

they

Germans' Increasing

not

of

American

production

people

really have the coiffidepce of the people; certainly
not in economic matters.
that

if it is to have real;effect
to economic recovery
to a continual giving

and

Regarding NEW PLAN Furnished on Request

resentatives of the German

of the Atlantic, must there¬

fore,

Governments ""

Subsidy Would Be

Ineffective

away

CHICAGO 4

Reich, with its

supplant Germany as a
coal, half-finished and

of

American

V

ITALIAN

Stock

208 So. La Salle St;

.

rich economic resources, is

Julien

participated on Dec. 18 to
extent of 6,000 shares in

Electric
Illuminating Co. at 101,08 and
interest. The net proceeds are
intended to be used principally
1982

*

,

Paul H. Davis & Co.,

pub¬
first
mortgagee bonds, 3% series due

Stock

York Stock Exchange

negli- r

\gibtle: States both workers and industrialists are losipg all confiV: deuce in the Military Government.
Dr. Schacht in interview with
author stated exports aud general recovery must be based on pria
vate initiative, without any manifestation of CQllectivism.

following: A. G.
Becker & Co. Inc., the Illinois
Co., Farwell, Chapman & Co.,

dall, Inc., all of Chicago,
licly
offered $20,000,099

;

Principal Exchanges

Cermany has become so bad

recently, that chances of her genuine economic recovery are

Co., were the

& Co,, Inc.

Trading Markets—

FAROLL & COMPANY

Handclsblad" of Amsterdam :

Dutch publicist asserts situation in

share

per

-

,

of 710,500
shares of $10 per value common
stock of Northern Natural Gas
at

By J. VAN GALEN

/A'yW'.v; "A;/;

;
bank¬
ers of this State participating
on Dec. 17 In the public offering
•

Ipvestmln^

Among the

»f

\ . v - : -' f

indispensable to European recovery; it is
an indispensable link.
Without an industrial production which—as
$4,Collins & Co." This issue was
before the war—was capable of supplying surrounding countries
000,006 of Central Maine Power
oversubscribed.
sufficiently with necessary goods f'
Co. $y4% first and general mort¬
Germany now? When the present
in the form of capital goods, halfgage bonds,
series P, due Nov
The
Wacker-Wabash Corp., finished and finished products, writer visited Germany about a
1,, 19,77 at 102-91 and accrued in¬
the 16 countries that drew up at year
ago he noticed a certain
terest, the net proceeds to be used owner of the Pure Oil Building,
to reduce outstanding indebted¬ Chicago, on Jan. 1, 1948 paid to Faris a program of needs will resentment among the Germans
the holders of its 5% mortgage in¬ pever
be able—even with the against the Allied administration,
ness to the First National Bank of
powerful
aid
from
the which, in their view; either could
Boston
incurred -since
Sept- I, come bonds interest amounting to most
United
States-^-to
recover
and not or would not restore matters;
1947, the proceeds of which were !%% for the six months ended
31>. 1947, "which compares build up a sound ecpnomy. The people were convinced that they
used for the purchase or construc¬ Ocf.
could do things better themselves.
tion of property.
a ; '
v',-" with payments of-i 1/2% each on Marshall Plan will then be noth-^
Jan. 1 and July 1, last yea?.
ing more than an extension of Sinep then, the Germans have
4
si!
4
For the half year ended Oct. 31- the subsidy economy now being been given a greater share in the
On the following day, Dec. 11,
net
operating
income
totaled pursued in Germany, and which, administration, especially by the
an
underwriting syndicate
$422,758,
while
net
income if the United States, wants to keep Americans, The "Laender" be¬
headed by Halsey. Stuart & Co,
amounted to $129,042 before de¬ it up, will' require increasingly came autonomous; an economic
Inc.,
and including, among
preciation available for interest larger amounts year by year.; cpuncil wa£ installed capable of
others, Bacon, Whipple & Co.,
and sinking fund payments on the Even if one. proceeds from the; being elected by the parliaments
the
Illinois Company, Julien
5% mortgage income bonds.
assumption that the U. S. could of the "Laender," various other

Information

Phone Andover 1430

Inc.

of

assets

'

increase

substantial

a

fixed

pany,

,,.

..

the

others,

among

,; ;;;; •

^

and other

Cou,

Herbert

:

of

Despite
in

Wis.,

waukee,

3U%

Standard Silica Corp.

Member New

Co.

&

$5)

becomes

larger

;* ' i. i'

■

.

held.

each share of $30 par stock

! eonvertible

consolidation,

of Chicago's
companies.

headed

Corporates
Common

i

N.

Co.,

Halsey, Stuart & Co. Inc.
on
Dec. 10 publlely offered

Corporation
.

ance

and

& Co.

.

As a result

company

..% *

•

Gearhart .&

-York

trading on the

'

and Patterson,

Common

Members

Bankers

the

among

<Sp

Blair

property.

&

straus & blosser
Associate

Co.

of the most recent

1, 1977,
at 101.93% and interest. The net
proceeds will be used to pay for
additions and
betterments to

'

Common

Metals Distintegrating

Members

merger

a

Life Insurance

others,
fhf Illi¬
nois, Co- and MuilanPy, Ross &
Cou, also of Chicago, on Dec. 18
publicly offered! $6,0(MMMM) of
Central Power
Light Co. (pf
including,

and

specialize exclusively in under¬
writing and distribution of securities,

we

1947,

.

the basis of

on

of $10 par stock for

The Cudahy Packing Co.
re¬ 841 for the corresponding period
and
including,
ended Sept. 30, 1946. For the first
Holley, Dayton & ported for the fiscal year ended
nine months of the calendar year
Nov. 1, 1947 total sales of $572,Gernon
and
Straus & Blosser,
1947, consolidated net income to-,
both of Chicago, on Dec. 18 pub¬ 1737,202, the largest in its.history.
This
represents an increase of taled $3,953,372, compared with
;were available for trading on this
licly offered an issue of 12o,000
Exchange. This compares with 318 shares of $1 par value common 63,7% over the $349,901,504 sales $4,281,639 for the nine months
issues of 266 companies as of Jan. stock of Wisconsin Central Air¬ reported for the preceding fiscal
ended Sept. 30, 1946.
lines, Inc. at $4 per share. The net year. - Net income for the 1947
1, 1947. '
:av\
.
■
proceeds are to be used to pay off
A syndicate headed by Halsey,
short-term notes, to purchase and
convert
Stuart & Co. Inc., of Chicago,
aircraft, for additional

Serving Invest nent Dealers

dealers,

r

Life & Casualty

completed with the Westminster

$164,528,114, as against $336,717,772 in the full year of 1946.
At
the close of 1947 a total of 321 is¬
sues of securities of 269 companies

We

own,

has approved a merger.,

May,

per

Comstock

Bankers' assets up to over

In

'■ ■'' ■"'

Texas)
first
mortgage
bonds, series B, due Oct.

taining

■

'

>

investment dealers.. '.

231 So.

'•

P. Parkinson, of
Department of In¬

v

General.
Co. This brings

a net of $16,394,739,
share, in the 1946

with

continues
in
strong financial position, and its
Working capital during the year
ended Nov. 1, 1947 increased $25,605,285. •
■
,
;

$7,000,000, and premium income
for 1947 will exceed $5,000,000.

previously out-

*

••'!!!

v

,

Chicago, with the

Co.,

Chicago Stock Exchange in the 11
months ended Nov. 30, 1947 was

majpr oil

shpuld materially benefit
and
its
affiliate,

companies
this

with

.

;:

$2.77-

-

fiscal .year.
•"
The
company

N.

Illinois

the

the $1,300,009

Dollar volume of

and

oil price increase

agreements

ctrillipg

>

*

4

■

Life Insurance

indebtedness.

long-term

Common Stock

'

'

,

of the Bankers

results in

i

■

surance,

standing, the current financing
a total of $5,500,000 of

f

COMPANY

-

Director

fund debentures

due Oct. 15, 1960

"

the

company,

Including

sions.

•

,

.

through LehUian Brothers, New York.
The
proceeds have been added to
Aldens working capital to finance expanding operations in
both the catalog and retail; divi-

surance

I

Recent

improvements., N'o
will be involved.

in¬

196& had been sold to an

the opening of a

or

property additions ana
underwriting

to pay for

*

Robert W, Jackson, president
of Aliens, Inc. on Dec. 10 an¬
nounced that a new $4,200,000
issue of 3%
15-year sinking
fund debentures, due Nov. 1,

three shares

compares

proceeds to be used

share, the net

1947

in

split-up

$22,334,977,
after provision for
high cost additions to fixed assets,
or equal to $3.77 per share,, which

.

and Exchange Commission cover¬
ing 13,999 shares of its common
stock to. be offered at $12.75 pei

reimburse the
for monies heretofore
expended for expansion purposes.

Detroit
office in the Buhl Building under
the
management of Harold G.
Montgomery. Mr. Montgomery was
formerly with Smith, Hague & Co.

was

,

earnings from all operations were

Telephone
Co.
Chicago,, on Dec. 19 filed a letter
of notification with the Securities

company

announce

This

and State income taxes.

*

*

*

Southeastern

balance partially to

*

■'

•l

preferred stock (par $25)

$26.25 per share and accrued
dividends. The net proceeds are
to be used (1) to retire $16,000,000 of bank loans, and
(2), the
at

.

&

equal fo $4.32 per share on the
Paper ,Co.
■<-,...
An underwriting syndicate headed by The First Boston Corpo¬ ?.v.' .A '
'is~
present outstanding.l,.54;2,T;ii cpmration, apd including, among others,^ Harris Hell & Co. (Inc.), A: C.
i»,,-Swift" & Co. sales for the53 mon shares, after preferred div¬
Allyn & Co. Inc., Central Republic Co. (Inc.), Bacon, Whipple & Co.?
Weeks ended Nov. 1,1947 reached idend requirements. For the pre-1
William Blair & Co., Julien Collins & Co. and The Illinois Company,'
ceding fiscal year, net amounted;
an all-time peak of $2,248,766,63.4,
on Dec; 10 publicly offered an is-3>
—r
■
1 a 71% increase over the $1,308,- to $6,720,585, or $4.06 per share on
sue of 800,000 shares
of Southern,
to finance current and proposed.
same
num.h£r °f common
364,155 sales reported for the 52 the
property additions.
California Edison Co. 4.88% cu¬
The common^ stock was
weeks ended Oct. 26, 1946.
Net shares.
mulative

#

Pulp

American

totaled $7,121,707, after all
changes and provision for Federal;
year

f

McDonnell
the

^improvements to plants and to
make loans to its wholly -owned

Opens

Branch in Detroit

Thursday, January 8, 1948;

FINANCIAL CHRONICLE

THE COMMERCIAL. &

19

,

The

Lack of

Confidence

reason

for

this increased
is probably tl^e

surplus without Europe's doing
anything in return, find its com¬

lack of confidence

plement in a regeneration of the

tion and the poo?

European economic structure in
which Germany occupies its nat¬

nomic improvement. The writer
was in Germany wt1611 the "New

ural

worsening of the

place.

What

is

the

situation

like

in

-

economic situa¬
prospects of eco¬

(Cpntihued pn page 42)

Volume

167

Number

4662

THE COMMERCIAL

Traces Effects of

&

FINANCIAL

In Attendance at

Lower Govt. Bond Prices

CHRONICLE

(107)

11

Floyd D. Gerf Christmas Party

Monthly Review of Federal Re¬
Bank

serve

of

New

Reserve System

York

says

prepared to
make larger purchases than de¬
was

veloped. Holds redemptions and
sales

of short-term

issues

more

thaR offset Federal Reserve
pur-

*•_:

■

chases.

..." The

,

January

'

-

issue

of

.."Monthly Review" of the
Reserve

alyzes

Bank

the

market
Dec.

of

in

prices

New

York

the

on

abrupt

.the

an¬

money

action

Federal

on

Reserve

lowering the "support"
long-term government

of

V bond

the

of

24

Board

of

impact

the

Federal

issues.

According

the

to

"Review":

"The abrupt reduction in

.••;}

port prices

;

jthe market and
\

flh which

v

sup-

surprise to
period followed

came

as

"

a

a

the selling of Treasury

bonds by banks and other invest¬

increased considerably, partly
consequence of confusion as

ors
as

a

to the
its

of the action and
implications.
In
the

purpose

future

period from Dec. 26 to 30, inclu¬
sive, Reserve Bank holdings of
Treasury bonds increased by $970
millions' (reflecting deliveries of
'securities

purchased

through; 29).
chases

These

made; it

Reserve

Dee.

-on

large

evident

System

Andrews, Francis I. du Pant & Co., Chicago; Franklin B.
Schmick, Straus & Blosser, Chicago; unidentified;: and Floyd D. Cerf,
President, Floyd D. Cerf Company Inc., Chicago

William

F.

G. Ross, Peat, Marwick &
Mitchell, Certified Public
Accountants, Chicago; Floyd D. Cerf; Fred E. Busbey, Congressman
from Illinois, and head of Fred E. Busbey & Co., Chicago;
Floyd D.

Cerf,

24

.

,

r

Jr.,

Vice-President

and

Syndicate

Manager,

Floyd D. Cerf Company Inc.

V

.

pur¬

that

the

prepared

was

Lucius

to

buy Treasury bonds freely at the
new prices.
At the same time the
amount of securities offered to the

System in this period was not so
large as had been rumored in the

market, and it

noted that the

was

increase in Reserve Bank

holdings
directly comparable with

not

was

the increases in preceding weeks
"

purchases for Treasury invest-

as
•

ment

accounts

"during

this

were

latest

suspended

week.

In

the

last few days of the month the

j

;> volume of Treasury bonds offered
for

sale

and

more

in-the

market

transactions

declined

were

clear-

ed by the market without recourse
to the Federal Reserve Banks. In

t

>

.

addition

there

S

to

selling

induced

by

market uncertainty and anticipation of future needs for funds,
were

also

substantial

sales

commercial banks—reflecting,

py

at .' least
;v- losses'

in

to';

the

partoffset

taking of
profits ' taken'

.

earlier in the year, in order to re¬
duce income tax liabilities.
Sales

by

other large institutional in¬
vestors appeared to be smaller in

Floyd

the closing days of December than
before

the

prices,
'■

"It

lowering

-

of
.

support
;v\'

..

is

important, under present
circumstances, of course, that over

a

period these Reserve Bank

chases of

pur¬

Treasury bonds be .offset
or redemption of other

by the sale

Government securities
funds

serve

the market

the

first

tem's

may

unnecessarily.

five

weeks

market

tions

in

that

so

re¬

not be put into
of

During
Sys¬

the

stabilizing

medium

and/

opera¬

long-term

Treasury bonds, from Nov. 12 to
Dec.
more

17, purchases of bonds were
than offset by sales and re¬

demptions of short-term issues, so
that the' System's total holdings
showed

net

a

$4Q0 millions.

'

of

about

Christmas, however, bond pur¬
chases by the Reserve Banks were
only partly offset by sales of
short-term
a

securities,

heavy drain

caused
•

reduction

In the week before

ments

by
and

as

corporation
the

there

bank

on

final

was

reserves,

tax

heavy

mands for currency for the

D.

CHICAGO, ILL.—That traditional institution in La Salle and
Streets, the Christmas party, was not so much in evidence at

the end of 1947 as it has been in some other
years, but there were
still plenty of these year-end get-togethers. One of the
largest was
that
given
by Floyd D.
Cerf,'<£
—
—

President and Treasurer of Floyd
D.
Cerf
Co., Inc.
of
Chicago,
which
most

active

than

La

during 1947

seven

Salle

erably
chases

amounts

accumulated
of

de¬
holi¬

by

increase

in

Lacquer
and

Cerf;

Bror

Mr.

Street

of the

room

G.

greeted

Peterson,

Secretary; Floyd D. Cerf, Jr.,
dicate

arid

manager,

Baird,
Doing

.

Chicago
a

strictly

syn¬

Clifford

the Cerf organization works
one

largest retail dis¬

groups

in the

country.

Central Public Utility

accounts

on

on

pag& 44)




(Special

of

also

were

guests.

to

The

Nation's

•

.

discharged
function of

Shatz

is

with

Fenner

retail

dollars

the; vital

Merrill

&

Beane,

essential to the

TRADING MARKETS

Tucker

1

.

CHICAGO

Class

i

Tel.

State

9868

Corp.

&

Co.

securities

Inc. is engaging in
offices

business from

Altorfer Brothers Company
*Arcady Farms Milling Company
Booth Fisheries Corporation

Company

Packing Company

Snap On Tools Corporation
United

Common

Dearborn 5600

Elevator Company

Uarco, Incorporated

Co.

Printers

•

BOUGHT

Publishers, Incorporated

—

SOLD

QUOTED

Prospectus Available

axxauxn«®comesny
Incorporated

Chicago 4

Tele. CG 146

&

'Viking Pump Company

*

Members of Chicago Stock Exchange

Tel.

&

Rockford Machine Tool Company

William A. Fuller & Co.

CG 95

a

Chronicle)

IND.—Stark,

MaeWhyte Company

—

"A"

209 S. La Salle Street
.

Wetzel

Lynch,
Circle

Colorado Milling

-

4

Financial

Foote Brothers Gear & Machine Corporation
Gisholt Machine Company

Lear Inc.

Railway

*

The

INDUSTRIAL COMMON STOCKS

economic

Stock

Salle Street

to

at 725 Gradner Lane.

Common

La

(Special

INDIANAPOLIS,

Tower.

supplying millions of

of capital

pos¬

Stark, Wetzel & Co. Opens

security deal¬

Nutrine Candy

S.

made

largest produc¬

run¬

growth and stability of American

Chicago, North Shore &

208

has

people.

Chronicle)

Hart Carter

Brailsford & Go.

which
world's

tion machine and most
prosperous

public

INDIANAPOLIS, IND.—Sydnor

who, the firm declares, have

;;

Common

Financial

Rath

5Vj>s, 1952

Milwaukee

corporate

the

ning advertisements in tribute to

—

Jan.

2, the greater part of which will
(Continued

Officials

Floyd D. Cerf Co. is also

reserves

to be temporary, how¬
ever, as the Treasury issued a call
for the
payment by depositary
banks of about $500 millions from
War Loan

attended.

Corporation
Income

of

With Merrill Lynch Firm

Pierce,

may prove

their

system

L.

-

sible

representatives

Milwaukee, St. Louis, Min¬
cities

financing

new

investing public,

thereby perpetuating the Ameri¬
can

leading Chicago banks and large

ers,

busi¬

business—just good

fraternity,

securities to the

corporations

the

with

tributing

ern

J.

wholesale

no

industry through the sale of

"no

neapolis and other Middle West¬

representative;

ness,

of the

speeches,

read

cheer." In addition to the La Salle

from

attended

were

invitations

from

Monday, Dec. 29, at

House

reserves.

bank

houses

The

More

guests

consid¬

substantial

additional

Street

r

Floyd D. Cerf, Jr., Vice-President and Syndicate Manager, Floyd D.
Cerf Company Inc., Chicago; Glen Pierce, Western Union, Chicago;
Ralph Chapin, Fahnestock & Co., Chicago

pay-

short of the large pur¬
of
bonds, and
member

banks

The

were

underwriters.

the plush Red
Palmer

of the

was one

hundred

the function

Again in the last week
December, sales of Treasury

bills and certificates

Henry Lindsey, Fred E. Busbey-& Co., Chicago;
Tucker, President, Tucker Corporation, Chicago

Wall

day trade.
of

Cerf;

Preston

Chicago.

New York

Boston

Milwaukee

Minneapolis

Omaha

12

*,

H

' w\ 1 f.U'

.''

t#'ijk»V

T 'l' '•

Thursday, January 8, 1948

CHRONICLE

FINANCIAL

&

THE COMMERCIAL

'

t

(108)

Vo'Jr!"

."

r>i;;r>i.& >iAI0i) 3,'MiMOO

•

Practical; Not Punitive Regulation for Railroads
...

..

a

as

single group, the

market action of railroad stocks

confiscation. Cites theory of "fair return on fair value" in railroad and public utility rate
regulation, and says present problem is permitting adequate rates which will enable earners to meet"
increasing costs and leave enough to finance-improvements. Pleads for constructive legislation.
property

,

At the end of 1946 .the
51.13. During the year
high, based on closing prices,

last year was, to say the least, inconclusive.
Dow-Jones index of railroad stocks stood at

wide range, with a
low of 41.16. At the$>

it fluctuated over a

of 53.42 and a

^

~

,

*

?7

Even in their

-

the index stood
at 51.13. Thus, for the full period
of 1947 there was a net gain in
the averages of only 1.35 points or
2.6%. Looking at the market in
terms of averages, however, pre¬
sents a completely distorted pic¬
ture.
A portfolio is made up of
individual issues, not of averages,
and as usual individual securities

registered a loss of 28.9%- and

market

Also, Chicago Great West¬
ern common, with a dip of 15.8%,
was not so badly hit as the pre¬
ferred
which
declined
24.2%
There
were
two
instances,
St.
Louis-San Francisco and Seaboard

end

last year

of

displayed widely varying

'u:y

patterns..

:/■. .*» *

.

modest
net change in the averages during
the year just ended, there were
wide fluctuation in individual se¬
curities. Substantial profits were
possible on both the long and the
short side of the market. Out of
a representative list of 44 railroad
stocks listed on the New York
Stock Exchange tihcluding specu¬
lative preferred issues) 15 showed
net price gains for the year and
29 showed declines. Only two of
While there was only a

the

Line

stocks—Atlantic Coast

and

Northern

Pacific which de¬
less than 2 %—showed as

clined

year

did the averages.

as

15 stocks that

Of the

the

during

changes

net

narrow

advanced

while
the common was in third place
with a rise of 32.6% Illinois Cen¬
tral Was also among the leaders
on the up side.
That road's pre¬
ferred came second on the entire
list, being 38% higher at the end
of the year than at the Close of
1946.
The common ranked "sixth
net gain of 48.9%

a

The two
completing the
group that advanced more than
20%, were Union Pacific common,
up
26.4%, and Gulf, Mobile >&
Ohio
preferred, up 24.1%. The
Gulf, Mobile & Ohio common did
not do so well as the senior equity
despite the initiation of dividends.
It was up only 6.4% for the year.
Of the 29 individual stocks that
showed declines^oie^the; full year
1947, only six Md net changes of
less than 10%.
Aside from At¬
lantic Coast Line and Northern
Pacific, which changed only nom¬
inally, this group included such
investment issues as Santa Fe,
with

a

rise

of

23.9%.

other leaders, and

Reading, and Virginian common
stocks. The sixth stock was Erie

only

declined

which

preferred

issues that
declined more than 10%. Of these
14 were down more than
20%,
and
three
suffered declines of
There were 23

3.9%.

more

which

of

than 30%.

J*

charges

formed

•

from

e

cline of 23.3% for the common.

The

railroad

stocks

last

year

there

or

speculating based. blindly
''The rails are
Selectivity based on

prospects of the individual
company is still the answer to a
sound investment policy."
-v/J.
and

William M. Erb With
Brothers &

Orvis

Curb

:

Exchange

and

issues

the widest
covered,

was

CO*

registered

representative.

recently a partner in Pell &
.'V '
f
& \
„

J. D.

while

29.7%.

Falling

between the

two

Katy stocks were Chicago, Mil¬
waukee, St. Paul & Pacific com¬
down 33.3%, and Chicago &
Eastern
Illinois
class A
stock,
down 30.6%. Other leaders in the

mon,

decline were Pennsylvania which

Guaranteed Stocks

Opens Offices in M. Y.
Topping, Roswell H
Harriman and Stewart R. Terrill
announce
formation of the co¬
James

D.

partnership of J. D. Topping &
Co., to conduct a brokerage busi¬
in state, municipal and other
tax exempt bonds. The new firm
will maintain offices at One Wall
ness

Street, New York City.

;

Finch, Wilson & Co., 120 Broad¬
New York City, members of
the New York Stock Exchange,
announce
that
Stephen
Baker
joined the investment
of the firm.
Mr. Finch is the son of Henry L.

Finch has

securities department

Finch, senior partner of the firm,
and grandson of Stephen Baker,
longtime president and chairman
of the board of the Bank of the
Manhattan Co. After graduating
from
Yale
University in
1946,
Mr.
Finch was associated with
Noyes & Co.
During
he served with the
76th and 30th Infantry Divisions

SAN

25 Broad

Street

New York 4,

N. Y,

Telephone BOwling Green 9-6400
V

Teletype NY

1-1063




rates

"affected

like

property

of

case

by "public

interest."
Of course, we have
expanded the field of property
and
private initiative which is
affected by public interest, and
these now include clearly what
known

are

public utilities and

as

the
and charges of the rail¬
can

regulate

regulation

that

provided

the

property, Vand

"taken" when the

regulation

does

not permit the owner to realize
a reasonable return on the value
his

is, of course, a matter for
the courts to decide and changes

return

FRANCISCO,> CALIF.—

Georgeson

&

Co.

announce

opening of a new branch
9

changed

with

job

If those

effective, should be constructive;
not repressive.
V:
■ "IS■'7
■

Commission

conditions.

Miller & Co.

,

should be invalid. If the constitu¬

Four Partners

tion guarantees even

property af¬
public interest against
Government
taking, which in¬
cludes Government regulation not
allowing a fair return, then why

fected by a

railroads

the

don't

constitutional

their

demand

rights

>.

get

and

higher rates?
That's what the
and

public utilities
the telephone companies do,

and

generally the regulatory bod¬
the courts; and

without resort to
it is generally

accepted that if the

regulatory bodies did not' create
rates to give the telephone and

properties

utility
the

return,

such rates

or

inadequate.

>:

-

,

fair

-f, ft

'Jbetween

the

and

railroads

a

courts would upset
regulations as were

difference

The

What is a fair

property.

public

they were still running rampant,
doing the things that brought on
the 'restrictive legislation of an¬
other era?
Their regulation, now

interpretation of an Act of
Congress, then that interpretation

is public

property

private

to

superb

a

great benefit of the coun¬
Why treat them now as if

try.

ies in those fields create the rates

railroads. :

not amount to a "taking" of

of

Act

by

have

to the

the Act of Congress
to be invalid.

fixed by the

are

regu¬

invalid.

be

fixed

are

under

subject
done

earn

the

railroads

in its

the

utility

public

telephone companies is that
the latter are almost always geo¬

and

graphical monopolies. There is no
competition in the same territory,
as
there most definitely is with
If

railroads.

the

railroad

one

in

CLEVELAND,
Miller

&

Building,
Stock

OHIO—Hayden,

Co., Union Commerce
members of Cleveland

Exchange, is announcing
as general
partners of

admission

Dana F. Baxter,

Harrison C. Frost, *!

Jr., Morgan C. Penn and Elbridge
S, Warner.
Dana

ciated

;

,

•

v

Baxter has been

F.

with

asso¬

Hayden, Miller since

graduation from Miami Univer¬
sity in 1930. During World War
attained

II, he

Atlantic
a

the

Pacific

and

of

rank

USNR,

Commander,

Lt.

in

serving

He is

areas.

member of the Cleveland Cham¬

ber

of

Commerce, Bond

Club of

Cleveland, and Army-Navy Post
54, American Legion.

No.

Harrison C. Frost, Jr. graduated
from

East

High School and from

Harvard

College and became

sociated

with

as¬

Hayden, Miller in
During World War II he
was
a
major with the Ninth Air
Force in Germany, acting as liai¬
son officer for French, Belgian and
1928.;

territory charged rates
.British forces., He was decorated
: on
lation is a question fq^ thq^ourts, ;/\vhich gave it a fair
three times with the French Croix
property, its rates mrgnt well
and
during the '-pasl-- 50 years
de Guerre, once with the Luxem¬
;be so much higher than another
there have been various .theories
bourg Croix de Guerre, and once
for
the "determination -of'.fair1 competing line that the business with fhe United States Bronze
would go to the other road.
value
for
regulatory
purposes.
a

given

"

Sutter

Street under

the

office at

the man¬

agement of Edward E. Brosius.

He is President of the Har¬

Star.

origi¬
depreciated annually for

Sometimes it has been the
cost

nal

and tear.

wear

Sometimes repro¬

cost, that is,
what it
would presently cost to " produce
the
property regulated.
In the
case
of the railroads, the Inter¬
state Commerce Commission un¬
duction

authority of

der

Congress spent

and millions of dol¬
valuing the railroads for rate
years

many

lars

and from time to time
brought down to date, presently
values all of the Class I railroads
in the country at about $21 bil¬
ago

years

lions.

-

railroads

The

themselves

dis¬

pute this valuation and assert that
their book valuations show thqt

should he valued
billions.
But there is apparently no dis¬
puting the fact that the value of

their
at

property

little more than $22

a

property on which the

the

roads

are

a

fair
least $21 billions, / If

entitled to earn a

is at

return

rail¬

5V&%-» that means
railroads should
current net annual income

fair return is

that

the

have

a

Class

I

$1,150,000,000.

of

and have not been

They are not
for years earn¬

anything like that sum an¬
nually. The net income of all the
Class I railroads in the year 1946
ing

overseas.

Georgeson & Co. Opens
Branch Under E. Brosius
CPARANTEED RAILROAD STOCKS-BONDS

the

business

or

way,

World War II,

Special Securities

con-

making purposes. That valution,
substantially
completed ./ a few

Hemphill,

Bonds

rates

seem

by

should

body

those

would

of

The

control

-

Topping & Go. "'

Stephen Baker Finch on
decline of Staff of Finch, Wilson Co.

35.7%,

If

enforced

rates

latory

But it
Mr. Erb has been in the financial has never been held by the courts
that a return of less than 5%%
community for more
than 40
years during which time he has would be a fair return.
been identified with several lead¬
Likewise,
the
value
of the
ing Stock Exchanged houses, i He property which is subject to regu¬
a

■.

its preferred was fourth from the
bottom of the list with a loss of

the

permit them to

and

management

Commission

the
constitutionally
guaranteed fair
return? ' If they can show .that,

t

does

leading commodity exchanges, an¬
nounce
that William M. Erb has
become associated with the firm
as

not

do

Commerce

of Congress,

emergency

some

in

or

war

services

Street, New York City, members
Exchange,
York

in

except

roads

of the New York Stock

New

Interstate

other

transportation. That is the present
duty of the rate making bodies.

into

go

driving
their
competing

without

develop

business to

court and
show that the rates fixed by the

stitutional

Government

14, Wall

Co.,

Parkinson

I.

the

Orvis Bros. & Co.

railroads

due

V-T—guarantees

interpretation of the problems

an

n

the

the roads to live and

will enable

not

private property and its use have
always been interpreted to mean
that prices and charges for serv¬
ices could not be fixed by law

the opinion that

on

e

m

a

affected

a

are

and these
T.

again stresses the fact that
can be no successful invest¬

once

ing

of the indi¬

performance

vidual

n

property

on

compensation,

in the case of
the preferred was

in contrast with a de¬

10.7%

up

r

Gov-

without

marked

where

Frisco

taking

the

~,by

declined. The divergence was par¬

ticularly

and

State, private
property is
protected

the preferreds
the common stock

and

up

our

con-

return

public interest, the railroads
receiving that constitu¬
tional rate of return. Why cannot

stitutions,

Line,' where

were

Under

Federal

above.

Air

-

constitutions guaranteeing

our
fair

by

written

mentioned

stock

A

class

the

f

somewhat better than

24.4%, did

regu¬

lated.

Chicago & Eastern Il¬
common,
with a drop of

linois

be

not

road.

same

or

prices could

junior equity out-per¬
the senior equity of the

poorest over-all perform¬
ance
was
that of the MissouriKansas-Texas. Its common stock
the

an

or

where the

The

registered

miller

a

only two instances

There were

early days English and American Common Law controlled the charges
by public interest, typical instances being inns and mills. The charges
inn-keeper were subject to control by law centuries ago though other

of business affected

in first place on the

was

list with

common

declined 27.8% during the year.

attractive."

■:

during 1947 nine were up more
than
10%.
Nickel Plate stocks
made the best showing. The pre¬
ferred

Pacific

Western

'

Society of the U. S.

growth of business regulation in the light of constitutional guarantee against :

Insurance executive traces
Viewed

V';r;

THOMAS I. PARKINSON*

By

President, The Equitable Life Assurance

'

was

$620,000,000, including $170,refund of excess income

500,000
taxes

paid in previous years.

Now, one may ask

why, under

Parkinson
released by the Continental Press
Syndicate, Brightwaters, N. Y.
statement of Mr.

at

established

an

have to

be

equal level for

all competing roads and also with

consideration

-some

for

the

fact

that other modes of transportation

competition with the rail¬

in

are

must

It

roads.

be

trucks,

busses,

The problem presented by

tation.

competitive transportation rates is
the reason for the difficulty in
complying with the constitutional
guarantee of adequate rates to
give a fair return on the value
of the railroad property..
In the

early days of regulation
we empha¬

and services

of rates

sized lower charges in the interest
of shippers; now we must con¬
sider

adequate

rates which will

enable carriers to meet increasing
costs of wages and operation and

to

leave enough

pay

for

or

finance

improvements " and
betterments
required to provide safety' and
efficient

Modern equip¬

service.

vard Club of Cleveland, Secretary

of the Troop A

ment, heavier rails, signal systems

Fund.

Morgan C. Penn, whose home
in Columbus, graduated from
Ohio
State
University in 1926,
later being associated with Fifth-

is

grade crossings cost money. Either
those who use the railroads must

paid

for all of this, or it must be

for in some way by all of

whether

us

not.

or

we

Vercoe

joined
1944.

all

,

the

ICC

now

has

to fix rates of practically

carriers

possible,
fair

&

Co.

for

with

and

Columbus.

Miller &

Hayden,
He

Co.

of

Co.

He

in

out-*
dodr editor for the Columbus Dis¬
was

seven years

patch. Mr. Penn is a member of
the Young Businessmen's Club of

Columbus, and a trustee of
Bexley Conservation Club.

the

Elbridge S. Warner received a
degree from Cornell University in

1917, and served as an ensign in
World

War

He has been with

I.

Hayden, Miller since 1920.
President

Cleveland,
1st

of
a

the

Bond

He is

Club

of

member of Troop A,

Cleveland

Cavalry,

and

of

Army-Navy Post No.

54, Ameri¬

is

Secretary-

can

He

Legion.

Treasurer

and

a

director

Commodore Hotel, and a
of the Alcazar Hotel.

is also

a

of

the

director

Mr. Warner

member of the Cleveland

.

Fortunately
power

uso-the railroads

Securities

Third

and the elimination of curves and

pay

Veterans' Associa¬

tion,
a
trustee
of the Phyllis
Wheatley Association,
and was
captain of the investment bankers
team of the Cleveland Community

remembered

pipelines,
waterways, and airplanes are all
engaged in competitive transpor¬
that

railroads.
*A

railroads

the

of

case

is that rates in the

result

The

and

competing
Therefore

though

with

it

is

the
now

difficult, to fix

adequate

rates

which

Chamber
Other

of

Commerce.'

partners of Hayden, Mil-

ler & Co. are Otto Miller, Daniel
W.

M.

Myers, John S. Fleek, Arthur
Newton,

Theodore

Galen

Thoburn.

-

Miller

and

Volume

Number 4662

167

THE COMMERCIAL

,

&

FINANCIAL

Why not have a

CHRONICLE

(109)

through
train instead of merely
coast-to-coas

"through sleeping cars"? Passengers could be spared all that
stalling in Chicago—and save hours of traveling time.

A word to the

public:

'

;>W-

It is

an

I'hrht'i 'f

hr'hJhy. *.r PP.-.P

:

unusual circumstance when the

of

owners

.

largest
business must present their ideas

a

to the management

of in

: >.

•

•

•

•

■

.

a

in the public press instead
Directors' meeting....

But though the C&O is now the
largest owner
of the New York Central, our officers may not
sit on its Board of Directors, nor
may the C&O

have any voice in the Central's
affairs, until the

wheels

of. the Interstate Commerce Com

grind out

an

approval.

It appears now

v

to win. Meanwhile

•

s

.

that this may take months
we

are

mendations in this way.

making
What

our

you

recom¬

will find

here is merely a sample of the kind
of think¬

ing the C&O

would like to contribute

to the

Central—in the interest of the railroad and
of

the traveler.

you

hpr.ikri'

1

~

To the New York Central ;
:C"

v-

■

-5'':

«

Knowing

V

,■

?

&'■'

,,

_

' tf.

sincere mterest in improving
urges your imme¬
diate consideration of a through coast-to-coast
passenger

your

service, the C&O

Transcontinental passengers must still twiddle their thumbs
for three to six hours at Chicago!

train.
It is

badly needed. It is perfectly practical.

There is every evidence that it would

pay.v

Why should American businessmen have

to

lose thousands of man-hours every year sit¬

ting it out in the railroad yards at Chicago?
The coast-to-coast traveler is
what is called
service is

that he

now

given

"through service." But that

more a

phrase than

a

The

airplanes

through Chicago without
travel through Chicago
by bus witfr less delay than with the present
so-called "through
sleeping-cars"! Why should
layovers. You

the train traveler be the
only one penalized?
Why should the railroads give the airlines a
strong and unnecessary advantage—in the

The C&O, whose appeal to the public won
ago,

through service two

still believes that through

years

passengers are

not
Jp
V

'
.

y:
•*'&'
I

:

-1

a

being well served. Why shouldn't we have
through train, by arrangement with a western

road, that would

through Chicago with no
more delay than other
through trains have at
Kansas City, Washington or New York?




go

The

Angeles

or

he should. And he must

spend three to six
marking time in Chicago before his

hours

train leaves for the Coast.

Travel from west to

east is

even

through sleeping

worse.

car,

leave Los Angeles at

the

noon,

arrive in

Is it Practical?

longer has to change cars, but his
trip is still interrupted by several hours of

waiting around at Chicago. He has the option
killing the time in the city or wasting it
staring at freight cars in a switching yard.

bound from New York to Los

San Francisco must leave hours earlier than

passenger must

fact. It is true

of

car

Aboard the fastest

competition for coast-to-coast passengers?

no

the first steps in

go

can even

until

Chicago at noon—then hang around
Century time at 5 o'clock. Surely the

Central and
When the C&O first urged
through service,
other railroads objected that there wouldn't
be

enough demand to support it. There is

on

average more than

$50,000

a year

waste of time.

from

Why not Do it Now ?
The C&O

it,

train.

tage

:v-.;V-

you

Today the traveler in

a

through sleeping

this improvement.

a great competitive advan¬
other railroads servicing the coast-

traveler.

Both

the

Central's

tomers and its stockholders would

Chesapeake & Ohio Railway
Terminal Tower, Cleveland 1, Ohio

urges

would gain

over

.■

to-coast
;

strongly

We believe that if the Central would initiate

sleeping car tickets alone. There is clearly
enough demand to justify a transcontinentalr

a western road could
get together,
through train to avoid all this needless

so

great a demand today that the through
sleepers at Chicago represent the most profit¬
able sleeping-car business in the
country! These
cars

a

win!

cus¬

13

14

FINANCIAL

&

THE COMMERCIAL

(110)

Wages Lag Behind Pikes: Schwellenbach
down. Holdslf

New Year's statement says prices and excessive profits must come
collective bargaining must be strengthened and improved.

Labor Secretary in

free

Secretary of Labor Lewis B. Schwellenbach released on Jan. 1, a New Year's state¬
expressed the view that despite wage increases, workers have lost ground
far as their standard of living is concerned, and that the best solution to the problem of

Green Says Labor's 1948 Objective
Is Repeal oi Taft-Hartley Act
AFL President

r

Political

ment in which he
so

but also the

give the Pres¬

economy,

ident

more

author¬

have their real wages

statement fol¬

rather than have

most

that

important do¬

the

facing
in

1948,

m

ity

is

e,

stabilize our economy
at high levels of employment and
production, and, thus insure a con¬
tinued and more widespread pros¬
perity. ; V/'Vlf

'

'7

V

"The wage earners

which
ers

uted

than 15 million work¬

more
now

are

of our coun¬
movement of

labor

the

a

greatly

part have contrib¬

1947 made possible
achievement of the 'impos¬

sible'—60 million

welfare

general

the

protect

price competition under
these conditions,
and that until
there is real price competition the

1948

by monopolistic practices — will
less by themselves. >

plenty

ened

and

have

opposed to an economy

as

to peace so rapidly
and^smoothly that by the begin¬
year most of the prob¬
physical reconversion were
safely out of the way.

ning of last
lems of

.

be expected

;V
during

constructive

its

improved if

to

are

we

competitive

free,

truly

a

in this country."

economy

Inflation Main Problem: Murray
Philip Murray, President of the CIO, issued on New Year's Day
the following brief statement:
^
*"The United States and its people during 1948 must make deci¬
sions which will

demands

the

were

based

and

wage

moderate, equitable
the

need

offset

to

in real wages

loss

workers

lifting

on

round'

of

suffered

price

which the
following the

starting

controls

in

June, 1947. New contracts were
negotiated with a substantial drop
in lost time from strikes

com¬

as

make

greatly affect the future welfare of the entire world.

must

"We

'second

"Labor's

a

the

gen¬

world

make

effort to

uine

our

attempt

should

we

democratic

own

of

the

ciently tjaan it has ever

war-torn

in the

nations abroad

they

become

„

.

is thq

—

we

in the internal
affairs

heartedly

1947.

countries

civilian

must do with¬

produc¬

Nevertheless, the inflation¬
ary rise in the cost of living can¬
celled out wage increases to the
extent that there

was

little, if

out

meddling

which

of

do

On the contrary, those in the low¬

omy—an

est

wages

or

income brackets and

rela¬

on

give

by

forces

the

burdened
the

"In

order

check this

to

erosive

process, which endangers not only
the welfare of individual workers,

by
of

needs

face

our

own

econ¬

"In

our

of

the estab¬

real

own

"The

those

and

needs

overseas

efforts

to

democracy

who

further

and
continuing

advantage
of the
specialr
benefits conferred upon it by the

peace,

our

time.

•

Green

William

in

dealing s with

economic

problems will

success

Congress of Industrial Or¬

to^ speed
other

the

our

nations

lasting

throughout

peace

country

own

the

along

and

road

and prosperity."

a" matter of record only, and ho public offering

present

"It appears likely, from

that employment wil"
continue at a high level next year
This will be the best insurance

conditions,

against any possible recession seting in. With a peak demand for
the- products of farm and factory
certain,
and
with
shortages of

commodities unslaked, la¬
bor, industry, and the farmers will
be faced with responsibility for
many

reaching

new

production records.

The. needs of the American people
end our commitments for foreign

uation

in 1948. The price sit¬
rapidly getting out 0'

is

nand.

"It

Wages,

usual, are losinj

as

against run¬

inevitable that some

seeihs

(orm of Government

regulation

0

which enter intc
of living—especially food
clothing, and rent—will have tc
be instituted in 1948 to keep in-

the price of items

to

rlation within bounds.

The Amer¬

ican Federation of Labor does not

controls

relish the return of price

selective

We would

otherwise.

or

prefer a free economy in which
competition would keep prices
down to reasonable levels.
But

is

"That

why

now

or¬

to get out the vote

ganizing

for

takes

immediate

an

che national elections of 1948. The

protection of j the

Political League for this purpose.

hope and determinamembers of organ¬
ized labor and their families and
"It is

our

that the

:ion

that

omthe

But

law

serves

to

only those who wish to
fight labor instead of cooperating
It

serves

.■

;\y:-r

'•

•

■•'

■

". v,

y

■7.

Jv

V;, Vyy...y • •

■ ;

v

y../^y.

:7'

f
'

\

'If \ 7Y;77'.Y:

y

:

to promote in¬

Already its provisions have
to
a
breakdown of

Act and

program of
and
social

which will enact a
progressive economic
legislation, necessary
\

.

nation's welfare.

for the

this category

"In

effective

I fear even worse conse¬

in 1948.

know

servers are

7777

LEHMAN BROTHERS

Taft-Hartley

been

success

strikes

fewer

time

than

casual

at

an

of the Social
lifting of the
minimum
wage
standard to at
least 750 an hourj-and the inau-\
guration
of
Federal
insurance
against the costs of medical care.
ment and expansion

system,

Security

"In

opinion

our

the

people

of

the United States have not yet be¬
gun

that

will

under

They

confer upon them.

never
a

enjoy these advantages
repressive government

the past. We
promise of the
through leadership

which looks only to
can

the

achieve

only

which looks to the future and sees
that

boon not only
great wealth
people of our country."

promise

as

a

for those who possess
but for all

E. B. Vinson With

DeHaven & Townsend
B. Vinson has become

; Egerton
associated

firm

with
&'

investment

the

DeHaven

of

Crouter

Townsend,

&

Bodine,

Broad

30

Street, New York City, as manager
of the institutional, bond depart¬
ment.

Mr.

eleven
was a

bond.

&

years

Co.

and

handled

has

Vinson-

business

for

the past
prior thereto
for

member of the staff of "The

ob¬

beginning to think that

the

a

many

Act has

because there are

in

at this
periods in

progress

similar

Beer & Co. to Admit Dick
ATLANTA,

Dick,

Jr.

will

GA.

—

Jackson

become

a

P.

partner

in the New York Stock Exchange

past years. However they do not
that a large number of

firm of Beer & Co. and will make

contracts just
before the Taft-Hartley Act went

Atlanta

realize

January 6, 1948.




*

unions signed

new

■

improve¬

Wall Street Journal."

that

maybe

includes

law,

housing

Hallgarten

;'"I

.

the American

Labor

of

Federation

institutional

quences

are

we

repeal the Taft-Hart¬

which will

ley

long-standing peaceful labor-man¬
agement relations-in important in¬

>

endeavor

certain of electing a new Congress

<

encourage

with it.

this

in

we

any

infamous

"That

to the polls next Novem¬
If we can suc¬

go

in full force.

future

undertake its

the Taft-Hartley Act.

ber

can

preservation of the
system itself, to

half-way.

f-.nd

life

enterprise

dustries.
;

and

Educational

Labor's

formed

for the

consuming pub¬

attempt to bring
about intelligent, constructive, and
decent
labor-management coop¬
eration. will be handicapped by

financing has been arranged privately through the undersigned.

,

-

American Federation of Labor has

contributed

■

are

for the

turn

better it will be necessary

peace.

,.

we

to realize the full advantages ;
modern production miracles
the free American way ' of

dustrial warfare rather than labor

J

Taft-

imposed upon us .by the
Hartley Act indefinitely.

and

economic crisis

unless the, present

fear

31, 1967

after

won

were

of struggle. We cannot
tolerate the oppressive conditions
hard years

ceed

management

Corporation

which

standards

friends will respond to our pleas

responsibilitytoward increasing
production. To attain this goal we
are
more
than willing • to meet

$25,000,000

This

unions

the

and

workers

relief,, make increased production
en inescapable duty.
"Inflation constitutes the ch-ie'

"Labor is ready to

beingpnade of this security.

3 Vs% Notes due December

accord

•

clamp Government brakes
uncontrolled price spiral.

Allied Stores

a

Taft-Hartley Act and proceeds to
fair treatment to the na-«

in

progress

as

ake

lic and for the

is

whole resolves not to y.

dustry

free

This advertisement appears as

in¬

exults may be chaotic unless

prosper¬

ity," lasting

che cost

ganizations during
the coming
year will do everything it can to
put into operation the legislative
and economic machinery needed

hunger and privation.

cause

more

many

.

badly strained
of inflation and

our

before
passed.

greatly determine the world-wide
role we can play.: >•.*;
ff'lx

economy

far as their standard of
living was concerned.
so

Philip Murray

everything
can to protect

tively fixed incomes actually lost
ground

"Our

must

"We

any

we

real

—

weeks have

domestic

living

in

to

aid.

standards for millions of workers.

gain,

the

we

for

.

ground in the race
away inflation.

tion, profits and weekly earnings
were the highest in history during

"Employment,

at t-iey cannot continue their
ong-s.anding
contractual
relaionships on the same basis be-;
cause of the Taft-Hartley law. The
.

ican people

ing power of our people and lead¬
ing us toward the brink of a de¬
pression. It is a problem we must
tackle—realistically and whole¬

pared with the year before.

long well together will discover

the

most pressing
problem confronting the United
States. It is sapping the purchas¬

self-

this

and

lay

threat to the progress of the Amerr

functioned

f

p&st./. v

"Inflation

can

supporting

to

form

government function more effi¬

rehabilitate

so

mplcyers wno have been getting

tion's

to

economy

,

can

continue

to

of

"continue

"At that time many

,

to

in 1948.
unions and

.iia'tion of these contracts

"Our
chief
progressive influence on our
which represent them.
of life.
Free unions have .task in 1948 will be to oust the
^Organized labor does not relish
been and will continue to be one present
stand-pat Congress anc
the prospect of having to depend
elect a new one which will be
cf the symbols and living expres¬
sions of democracy.
Free collec¬ more responsive to the needs o. upon the largesse of big business
'to protect economic and working
tive bargaining must be strength¬ the American people.

not become

of

text

state¬

way

prices of items in short supply—
of items whose prices are fixed

must

the

and

or

we

responsible,.representative Gov¬
"Labor

real

terms

of

lishment f of

ernment.

"It is evident that we can have

in

complete

contracts are

eilect ana these

xempt from the law's provisions.
The blow-off will come at the ex-

The

necessary
conduct that

"Both the

gap from war

'

will

economic

for

rules

other

or

emergency

remain scarce and
supply despite every ef¬
increase their production.

"Whim

people."

lit j

groundwork

we

fort to

think

American

the

make

strengthening it,; when

jobs.

productive labors and
the constructive programs of the
nation's workers helped bridge the
«.

of

through the. democratic processes

conditions

the

to

which in June,
the

dom

endangering the free¬
our economy,
but rather

not

are

responsive to

present stand-pat Congress and elect a new one more
the
needs
of

"L a b 0 r
hopes in 1948

We

of

no

in his New Year's Day statement, launched a new attack on the TaftHartley Act and asserted the chief task in 1948 "will be to oust the

ment follows:

ri-se and goods

L. B. Schwellenbach

take the steps

and

in this country
and, at the same time, free.

^

Also asks for liberalized social

security system

;

strong

basis to exert
prices continue to

where

can

we

and

organization of Labor's Education

purpose.

Green, President of the American Federation of Labor,

keep our economy

opinion, legisla¬

my

that

confident

am

in short

to

necessary to

try

increase
wiped out by.

money

be

permanent prosperity
economic security for all.

to have

"I

on an emergency

control

this

at

seen

far

as

and

increased by
living
costs

tion giving the President author¬

be fore¬

as can

t i

prices is, in

States

United

will

soon

a

are

higher prices.
The best solution
to
the' problem
of inflationary

task

mestic

lowered

of

means

lows:

"The

enough.

and prices.
"Workers,"mganized and unor¬
ganized, I am sure, would rather

the

of

scarcity, that alone is not
Prices
and
excessive
profits must come down, real price
competition be restored and real
wages increased for many if we
of

whole

our

must bring about a
equitable balance between

wages

ity to control
prices. The
text

security of

we

announces

League for this

William

inflationary
prices is to

Thursday, January 8, 1948

CHRONICLE

his

headquarters

pany

of

at

the

firm's

office in the Trust Com¬

Georgia Building.'

•:

//.'••

Volume

167

....

J. '

.

Number 4$62

\

..V' ' 1..

.•

aM: ,..1

COMMERCIAL

.' THE

,

,

"»

&

*

.

*

FINANCIAL

•

;

CHRONICLE

(Ill)

^

New AntMnflaiioh Law Is
fey teAftt

felJNTiNfe^;-,•' j
President saVs priorities and inventory control should t
permitted to Jedpardiafe ahti-fruSt taWs. Wants cOhgressiohal'.}

be

;

study of fundamentals of price situation.

•■>-

v

*

CINCINNATI,

Truman

signed

Republican-sponsored

the

liminary

6'—-

step

the

in

fight

against

^

•
.

acted

in

with

to

p o n s e

Zuckerman,

public demand

members of the

for

Exchange,

definite

action.
be

It is to

"of

hoped that

•when

the

1441

Con-

with

•

gress- ' re-con-

L.

the

venes

,•

•

question

f

o

the

mid town

office

Maltz

Brooks

is

the

&

other

bank examiner.

a

More
and

grade

bonds

a

at.

period of five

During
White

the

&

C.

Daniels

ing,

dealers

in

high-grade

Ohio

Mr.

in

published

J.

year,

placed

The

A.

repre¬

Cleveland
addition

Daniels in Marietta

is

a

of

Ohio

book

a

he

has

t

in

the

throughout
Each

year

to

cities

the

investors

United

the firm

i

exam-

d

e

n

Earl

ratings for the bonds of Ohio

own

of

cities,

fur-

tricts.

counties

and

attack

Bunting

these

basic

a

causes

more

effectively.
"The

section

of

the

act

which

deals with priority allocation and
'inventory control of scarce corf"

-

modifies
"the

which

cost

basically affect
living or industria

of

production
'mitted

should

to

toward

be

not

jeopardize

relaxation

of

per-

or
any

wo1

k

proper

.enforcement
of
the
anti-trus.
; laws.
"
"We believe that competition is
the mainspring of the
free, com¬
petitive enterprise system, and aLways haVe opposed monopolistic
-

practices, 'whether in the hands of
business, • labor a or government.
'Monopolistic practices a»e not ih
accord

With

the

principles

of

a

free economy, with or without the
-sanction
of
any
governmed!

agency.
"We hope that Congress wil1
a realistic
investigation 61
-the whole priee end income struc¬
-conduct

ture.

When

table,

we

and

into

facts-

are

en

the

efforts

to

resolve

the

public

public servants will

our

port

the

believe that

the

sup¬

facts

effective program for con¬
structive solutions —and we be¬
an

lieve

that

such

parallel the

a

will

program

recommended by
industry after careful study of the
one

fundamentals
tion.

of

the

price

situa¬

v)

-•

"A sound program for attacking
-the
basic
causes
of inflation is

charted in industry's 12-point
pro¬

which places emphasis on
bringing production up into a bet¬

gram,
:

ter

balance

with

supply, through the
ductivity of a free economy.
money

;

"This

.

tion

calls for

program

of government

taxes,

and

for

ment of the

unit

production

costs

and

of

to

*•

>.

It urge3
its ef¬

setting

aside

requirements

and

of

After

be

of

the

"'

,

of

Depart¬

of

years

devised

leading

U.
-

_

,

S.

of

tobacco

supplying American cigarette

irew

paper

research,

processes^

industry

to make Over

to

a

Ecusta upset

and established

replace

the

all

demands

available

during the

paper

Wage increases with¬
corresponding ""increases- in
productivity.
•
*

to

parts of the world, and is expanding its facili¬

com¬

tradition,
new

a

to

include

manufacture

monopoly

specialties.

typo

of

flax

text

papers,

each day

a

new

cash

crop

to the farmers

in

the

manufacture

of

as a raw

cigarette

paper.

The
4

Without Ecusta,

would not have been

-V

quantities large enough

advertisement

given

7:

y

of America by developing seed-flax straw
material

war in

""

Ecusta has

held

I

billion cigarettes.

high quality cigarette

further

manu¬

paper

Bible papers, air mail papers, and other thin paper

Ecusta produces enough cigarette paper

featherbedding

and cessation

paper

Another

•for

v

.

by France before World War II.

recommends the

all

In addition to

lower

business

cigarettes for the armed forces, let alone

ever-expanding civilian needs.

ties

of unnecessary ie"individual
produc¬

of

to make

the

production the gigantic paper mills which

dividends.

strictidris

tivity
rules,

full

panies.

through

and

Treasury

"The program

of

PAPER

today Supply the $15,000,000 annual cigarette

retire¬

ment pressure to distribute 70% of
as

mountains

ECUSTA

facturers, Ecusta is shipping its cigarette

plow back earn¬
ings into expanded production, by

profits

the

in

Carolina,

^CORPORATION has pioneered and brought

to

elimination

that

FOREST,

North

pro¬

reduc¬

svstematic

public debt.

•encouraged

PISGAH

western

spending and

management to redouble
forts to bring down prices

increased

T

A

ijL

tremendous

our

Company has .also provided employment for

and

raised

the

living

workers, establishing
American

standards

upon

industry.

a

v

of

thousands

high plane this
/

i

of

new

s

out

1

"Also;; it

urges

retirement

of

Southern

government bonds held by banks,
With the proceeds of a new
longterm

government

bond

issue

ern

industrial

industries,

is

in

the

series

developments.

ready

to

do

its

by Equitable Securities

Equithble
part

in

has

helped

supplying

to

Corporation
finance

others

with

featuring

many

South¬

capital

funds.

at¬

tractive

to
individual
investors,
discouragement of inflation¬
ary bank 'credit expansion by let¬
ting interest rates seek their own

NASHVILLE

and

'levels,
ination.

free
In

that

emergency

A

to

modify or eliminate
other controls."
*




v

A

f

S

meesrplha.ni

re¬

price and
,

L

BIRMINGHAM

goods, purchased in the

most economical markets, and that
aided foreign nations be required

L

KNOXVILLE

of government dom¬
foreiga aid, the NAM

recommends
lief be in

D

f
'

■

V

V

I

1.

T

J

¥

/"■' >

I 'I

1

1

▲

/V

"■""k-

*

I—1 I

fTV ■

J 1

*

^

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\

NEW YORK
HARTFORD

1

GREENSBORO

,1H

J W

CHATTANOOGA

Securities Corporation jackIon
BROWN LEE O.

>

322 UNION

l

STREET, NASHVILLE 3, TENN.

school
•

national,
policy will be evolved which will
■

that

and

States.

publishes its

"more

thoroughly,

of

counties

and

inflation

o

"An

given considerable

guide

a

as

leading

will be

•

Co., has

entitled

"

•

municipal

Analysis of Municipal Bonds," in

bonds

Toledo,

Columbus.

and

£

past
have

Co.

sentatives
A.

years.

cele¬

J. Austin White, who is head of

data

Ohio, for

firm

anniversary and

the firm of J. A. White &

which

Bank, Caldwell,

tenth

of' Ohio
school dis¬

the

subdivisions.

Director of the Farmers and Mer¬

Louis

;

as

of

bonds
and

year

during most of its ten years it has
been active in underwriting high-

with the

Department

underwriting

chants

associate

manager at this office.

period of nine

a

recently, he has been Cashier

formerly

Co.

Banking

Ohio,

Manager

was

Peoples Banking & Trust

Marietta, from 1922 to 1931

State

Co.,"

firm's

is

associated

was

years, he was associated

Associate

He

He

Ohio.

Subsequently, for

f

as

H.

its

Co. of

basic

causes

•

&

The firm is active

brated

In

with the

York Stock

New

Broadway.
J.

Smith

complete.

Last

ers

f.i 7,..f

.

more

tricts.

Mr. Daniels

Marietta, Ohio.

OHIO — d.
A.
White & Co., Union Central Build- widely known amongst the bank¬

associated

now

of the program of the
firm to make its coverage of Ohio

counties

-

xe-

•

s

?v "

•

Harry Spitzer is

therance

Cities,

|

..."

...

en¬

associated

now

a. pre¬

%

that

announce

is

Southeastern "Ohio

as

in

With Zuckerman, Smith Go.)
:

in¬

flation

them

in

antl-inflation- bill;

;•>' "The anti-inflation bill signed by the President today .is

bonds,

Daniels

C.

Representative, with headquarters

Earl
Bunting, President of the National Association of Manu¬
facturers, issued the following statement on Dec. 30, 1947, after Presi-:
dent

A.

with

Stiff of J. A. White

NAM retiring
hot

municipal

A, G. Daniels Jains -''

Preliminary Step

15

J

i

CURREY, president
TWO WALL STREET, NEW YORK 5,

N. Y.

dis¬
.

316

&, FINANCIAL

THE COMMERCIAL

(112)

the protection of

ensure

the exist¬

courage

Unlike

the

U.

Woods

Bretton

cur¬

schemes which so far have
only to throw good money
to the support of bad, the institu¬
served

tion of

Realization south of the border of the tremendous potentialities
enormous wealth of natural resources has come somewhat
a pleasant shock, especially to the farsighted few

j

v't Of Canada's

the nature of

;in

vwho were beginning to view with growing unease the rapid dissipa¬
tion of the readily available nat¬
flow into industrial channels, both
ural riches of this country.
A

frontier

this

country and Canada have a
formidable
preliminary task to

challenges
;the initiative of the world's most
new

now

In order to stimulate
adequate
stream of private

accomplish.

energetic and resourceful minds,
Which happily can operate from a

an

country where, unlike elsewhere,

capital from this country the

still alive.
This new vast field for profitable
endeavor, moreover, is not situ¬

isting

in

ated

is

enterprise

.private

.Africa

wilds

the

ada, must be broadened and sta¬
bilized. This is an urgent require¬
ment
in
the
interests
of /both

American

South

the

or

entry of foreign capital into Can¬

darkest

of

In effect it is almost mi¬
raculously to be found on this
country's 4,000-mile northern bor¬
der—a border in name only. Also
rthe land beyond this uniquely ac¬
cessible frontier is peopled by a
vfriendly nation whose way of life
•and ideals are amazingly similar
jungle.

?to those prevailing
(international line.
Until recently

south of

only to discourage the

serves

now

ex¬

which

investment channel

countries.

Canada, embarrassed
the present time by pressing
exchange difficulties, is not in a
position to undertake alone a fi¬
nancial task of this magnitude.
The collaboration of this country
at

therefore

is

essential

tablishment

the

of

the

for

tered

Federal

Reserve

au¬

thorities in
of
at

discontinuing support
government bond market

the

high premiums, led to

a

decline

in the internal section of the

mar¬

ket: at the current

high yields the
internal
Dominions
appear
in¬
creasingly attractive. The exter¬
nals were relatively unaffected bv
this develooment but the turnover
was

negligible^Stocks commenced

the

New

Year

Oils

with

Western

fore.

Base metal issues

firm

but

the

exceptions

note,

strong

a

on

to

the

were

also

again

with

dull

were

and

minor
reac¬

Holds Business
In

Borrowing Not Yet Excessive

Gordon S. Rentschler, Chairman of
National City Bank, says business debts in relation to stockholders' equity have not advanced too far, but rising tendency
"will need careful watching." Ascribes stagnation in stock market
stockholders,

report to

In the

the increase in
loans

conclusion

by
con¬

in

rela¬

which

their

We are reviewing this
problem continuously with our
customers.
'

cerns

tion

to

equity
is not

the

of

commencement

greatest

era.

the

now

is

ing."
part

Canadian

.

borr owing
from banks is ascribed by the Na¬
tional City Bank officials to the

stagnation in the securities mar¬
kets, which have not been able to
absorb

needed

;

According to the report:
"Since

recent

Washington
on

activity

funds.

panies

number

of

seek
com¬

in

a strong cash
position, but
have had to reconvert and

plants, carry highpriced inventory and receivables,

high wages, and buy new ma¬
chinery to meet unprecedented
pay

J

•

;

from

markets.

•>. /;>/:■

CORPORATION

"Normally

home

foreign

/v0.;a!

a

been met from

CANADIAN STOCKS

and

substantial part of
requirements might have

these

the sale of

equity
of infla¬

securities, but in spite
tionary tendencies the open

mar¬

ket

been

for

such

stagnant

and

securities

unable

has

to

absorb

anything like the required amount
of

new

issues.
to

course

A. E. AMES & CO.
INCORPORATED

and

NEW YORK 5,

N. Y.

banks.

the




companies

of

of

nearly

war¬

individuals

to¬

gether with liquidation by foreign
holders.
*

the

supply

not

now

in

excess

of the kind

should

be

of

of funds

used

for

th^se

purposes.

i;

large

increase of business
to

equity

money

debt

has not

to

our

the

I

take a lesson

demand, or (2) to
a
past that
lessons.' /;L

is

with

rich

future,

People must

In

,

Out

and

of

Trade

Foreign

*

be

told

our

For

unpreced¬

that

ented flow

foreign trade
operations cut blindly across the
path of world commerce. We were
in and we were out of' foreign

of

means

nothing,

with

bal¬

idea

with

Our

pursuit

people

before

the

money

than

bubble

it

Does

that the

today
than
be let

who may

and

harder

when

ever

we

to

get

an

headed.

were

anything to you

mean

it

difficult

more

the

needed nobody.
ever

to

came

of

headlines

The

near¬

famine

was

news¬

our

papers.

We

were
a
busy people, occu¬
in making this country the
most highly industrialized in the

pied

world—we

didn't

learn about

before

bursts.

country of Colombia has

made

now

more

eco¬

our

who

we
we

in

danger to

the
earning

book

down

sat

ever

us,

to where

as

est

W. C. Haddon

mixed up with

of

of

history

a

but

ex¬

kinds

Few

our

During those days we were quite
impressed with our myth of selfsufficiency. Everybody needed us,

this year of a

$16 billion

years

trade.

un¬

less it is

foreign trade.

it

have

just a convenient
overproduction?

time

to

Wasn't
to dump

way

our

Ever since 1900 when

to

began

we

Does it sound unusual that coun¬

booming our production, the value
of the goods we
sold to other

try A is making private arrange¬

countries has always been greater

ments with

than

foreign exchange licenses?

secure

country B for

an

ex¬

change of each other's; sufplus-L
outsiders not wanted?
What in¬
ference

do

from the
requisitioning
U. S. securities owned by her na¬
you

draw

action of France in

tionals?

it has

before

taken

a

good post¬

personal loans and in loans to
war breath.1
;
h'
,
finance companies, which in turn
v
The world
is running out of
are making instalment loans; but
the
amounts I* involved
are
not dollars and it is losing economic
large in relation to the aggregate. stability; When: this happens the
"In the last quarter of the year; world has a habit of following
the lines cf least resistance.
It
as a result of a change in Federal
Reserve and Treasury policies as leans toward depression, even as
lean
toward
a
rabble
Well as the increasing, demand for people
funds for business uses, interest rouser who knows how to secure
"living space" or a "share of the
rates rose — a wholesome change
which was overdue. Over a period world's goods for everybody." ;,
higher rates will improve bank
earnings, but the immediate effect
is a decline in the market value
of securities held."

trade, and

our

balanced trade is

a

from

in

increases

in

balance

Ot¬

Why is China discourag¬
ing imports with new exchange
in our
policies? You don't need • to be
loans are directly related to the
an expert to piece such items to¬
production
and
distribution
of
gether/ By anybody's hand they
goods, including notably petro¬
mean more tariffs, quotas, restric¬
leum and its productdepartment
tions, embargoes, every other kin<J
stores; drugs, chemicals, and glass;
of restriction having the single
food stuffs; machinery, and public
purpose of throttling world trade
utilities. There is some increase
"The

Dollars

are

given power by our

by> the

facilities,

production

of goods we are able to

amount

by. the

and

produce

amount of

goods we are able to sell. Every
businessman knows how impor¬

the

of

value

the

goods

imported. Between 1914, when

we
we

first emerged as a creditor

nation,
and 1933, when we were on the
verge
of becoming a bankrupt
nation, we exported some $90 bil¬
lion in goods and imported some
$66 billion.
Would

it

was

the

anyone not agree that
bit foolish for us, during

a

20's

to

export something like
$10 billion in our goods for which
we insisted on being paid in dol¬
lars rather than in goods? Wasn't
it

as foolish when we con¬
exporting billions of dol¬
in useful goods during the

just

tinued
lars
30's

in

ously

exchange for gold labori¬

South Africa,
to
Ken¬
then reburied in the

dug

transported

arid

tucky,

in

up

solemnly

ground?
All of

remember the Smoot-

us

Hawley

but

tariffs

don't recall that

tariffs

went

a

perhaps -we

year

into

after these

effect

France

quota system; that
in 1931 Britain went off the gold

inaugurated
standard

a

later adopted

and

tariff

protection. The world was run¬
ning out of
dollars then, too.
Debtor nations were frozen out of

^

Director of Canadian Bank
Arscott, C.B.E., President
of The Canadian Bank of Com¬
E.

A.

that the Hon.
John Hart of Victoria, B. C., has
been
elected
a
director of the
announces

merce,

tired

who recently re¬
Premier of British Colum¬

Mr. Hart,

bank.

as

bia, has had

a

long and distin¬

guished career in financial and
public life.
He is President of
Gillespie, Hart & Co., Ltd., Vic¬
toria. one of the oldest investment
concerns

in Canada.

He

was

Min¬

ister of Finance of British Colum¬

bia

1917

from

from

riod

1933

to

1924

and

again

to

1947, the latter pe¬
including 15 years also as

Premier of the Province.

it

tant

that

is

prosperous,

puts up

a

Business,"
his

own

his

customers are

for when a customer
sign reading "Out of
the key is turned in

door.

Customers

can

^

only two ways: They must have
an/opportunity to earn dollars by
selling
their
services or their
products. If they cannot do either
they cannot buy. Unfortunately,
this
simple
analogy is seldom
applied

in

foreign trading.

Too

given to the
reasons for our imports being in
ratio to our exports.
Everybody
is more or
less convinced that
little

high

attention

export

is

levels means

more

credits

withdrawn from
Germany and the Nazi movement
got* an unintentional but never¬
suddenly

were

effective boost.

theless

Tariffs

be prosperous in

Short-term

market.

the

and

of '30s

Collapse

n

Today it is obvious that two of
the causes contributing to world
collapse in the 30's were: (1) the
incredible tariff policies, of the
States and other nations;

United
and
the

(2)

the

world

tional

to

complete
create

machinery

stimulate

For
one

failure of

an

by

interna¬

to

which

financial and economic

cooperation.
many

,

years

we

/

,

have been

of the "have" nations—one of

powerful elements in world
Naturally, any mistakes we
made
were
greatly
magnified.

jobs but they fail to realize that
such high levels must be main¬
tained
in
all countries if true

the

Co., members New
York Stock Exchange, announce
the installation of a direct tele-

prosperity is to exist in any coun¬

Now,

try.

many

ohone connection with Newburger

try has come to a time
sion.
And this is what

Marx Wire to
;

&

Marx

Co.

also

Newburger

&

in Philadelphia. The firm
direct wire connections

has

observation, been car¬ with its office in Birmingham,
point of endangering Alabama, and to correspondents in
position of many business Chicago and Detroit.

yet, in
ried

are

The stagnation in the

taxation

"The
NY-1-1045

Hence the large re¬

insurance

continuation

relative
RECTOR 2-7231

the

security markets reflects, in part,
time

TWO WALL STREET

business

borrowing for the first

are

demands
;

.

A

to

rehabilitate

MUNICIPAL
.

customers

in many years. At the con¬
clusion of the war most companies

they

PROVINCIAL

.

high and rising
levels has forced

time

were

'

at

wage

business

new

.

in

atten¬

The present high volume of busi¬

our

....

focused

bank loans, some comment
their character seems in order.

price and

GOVERNMENT

discussions

have

on

ness

CANADIAN BONDS

fi¬

capital

new

nancing.

tion

However, before the riches of
this gigantic treasure-house can

business

Gordon S. Rentschler

economic

world.

A large
of cur¬

rent

sidered by close observers of the

fully exploited. This two million
square-mile geological freak of
nature, the edges of which have
so far only been
scratched, con¬
stitutes the greatest remaining reServe of economic resources in the

needs

careful watch¬

con¬

her greatest wealth—the fabulous
Pre-Cambrian Shield—would be

ex¬

tendency

a

that

Canada's

scene,
that
Canada's
destiny would not be
fully attained until the source of

capital
yet

cessive, but "it

set for

It has long been

tendency which
watching. There
question whether projected pro¬
grams for capital expenditure by

is

business

resources

is

but is a
will need careful

firms,

d it

c r e

is ur¬
future
economic welfare of this country.
stage

bank

of

use

of virgin natural
gently necessary

the

the

over

past year,- the

ment of Canada's unrivaled wealth

Thus

the

to

States must learn that

our

and

ever

1947 Annual

policy of dynamic develop¬

for

time

.are

Report to Stockholders of the National City
Bank, Gordon S. Rentschler, Chairman of the Board, together with
W. Randolph Burgess, Vice-Chairman, and W. Gage Brady, Jr., the
President, discussed the rising trend of business borrowing, but noted
that
despite

/however, the breakdown of the
/time - honored
and
convenient
ijj. S.-British-Canadian economic
/triangle impels the Dominion to
/find a more permanent foundation
.on which to shape
her economic
destinies.
Likewise on this side
geographic and economic consid¬
the

in

learn

must

we

war

achieve

down

cooperation during the war, in the
/approach towards the adoption of
i3a common economic policy. Now,

to

to

peace

~;

basic facts about

some

surest way

nomy," to

wartime taxation.

to

use

world

cne

all

/from the more or less enforced

lead

as

port figure is
-

unprecedented outflow of exports will

our

supply and demand,
it applies to international commerce. If we intend to

another

avert

mad

•jcountry, there had been a natural
diffidence on both sides,
apart

a

especially

anced

tionary.

could

us

the people of the United

imports.

pendency of Great Britain and not
a
sovereign nation in her own
right. Although U. S. capital had
^constituted a great factor in the
^economic
development
of
the

that

All of

exports

golds

Canada had been

/considered here as a colonial de¬

erations

Haddon, contending

Points out tariffs were cause of economic
collapse of the 30's and attacks present tariff laws. Says idea of
free and unrestricted trade is not a myth and holds greatest hope
of Marshall Plan is our willingness to accept goods in payment of
credits. Reveals work of Westinghouse Import Department.

;,.;v //-^/\'■:V.':/\;;;jthe

v.'"

C'

ing greater imports.

During the week the action of
Bank of Canada, paralleling
of

Import Gap

HADDON

nothing, unless balanced by imports, urges measures to relieve
dollar shortages and eliminate exchange restrictions by encourag¬

the

that

C.

mean

pool could prove to be the start¬

es¬

jointly adminis¬
exchange fund which would
a

Mr.

ing point of a constructive ap¬
proach to the solution
of the
world's monetary and economic
iHs.

W.

Representative, Westinghouse Electric International Co., Pittsburgh

U. S.-Canadian currency

a

By

■

..

rency

By WILLIAM J. McKAY

Let's Close the

S. investor and also en¬
the entry of fresh, capital.

ing

Thursday, January 8/1948

CHRONICLE

We must realize that

this

coun¬

of deci¬
it

must

(1) to chase this $16 bil¬
lion export figure as far as it goes
decide:

that it, in turn, is being
chased by the law of supply and

and forget

trade.

with regard to
materials,
we
are
rapidly becoming a "have not"
nation, but our production poten¬
tial is greater than ever before,
so
we, can
less afford to make
especially
raw

many

mistakes today because our
in the world is greater

stature

(Continued on page 44)

Volume'167

Number 4662

THE COMMERCIAL

&

FINANCIAL

CHRONICLE

announcement added that the new

; FULTON

News About Banks

antee's

low-cost

■,

Total

"personalized"

'?

*

*

NEW BRANCHES

NEW

Bankers

and

OFFICERS, ETC.

COMMERCIAL

TRUST

NATIONAL

CO.

OF

BANK

NEW

AND

U.

YORK

Cash

CITY

BANK

OF

NEW

YORK

IRVING

TRUST

CO.

OF

NEW

YORK

$35,680,300
30,005,700

&

24,498,463

profits

47,436,008

Total

572,033

3,357,471

banks

1,645,600

———

227,800,1)30

3,340,900

62,282,868

55,187,277
140,505,378

&

secur-

bills

counted

Undivided

-

226,649,871

•

—"

holdings— 135,187,151

ity
Loans

—...

OF

Sept. 30, M7

resources—$24$,25%317 $244,115,886

Deposits

U. S. Govt,

dis¬

CO.

Y.

Dec^jl, '47

21,997,400

——

N.

17

'

7,822,400

secur¬

bills

TRUST

BROOKLYN,

Cash and due from

Surplus and undiv.

-

73,655,172

Govt,

BROOKLYN

Oct. 6,'47

9,494,374

counted

and due from

banks

THE

34,546,274

holdings—

Loans

Total

NATIONAL

S.

ity

V
Dec. 31, '47
Sept. 30, '47
resources
$239,988,260 $217,985,458
Deposits ——213,755,621
191,680,466

CAPITALIZATIONS

YORK

$40,243,734

banks

REVISED

NEW

Cash and due from

'

*

OF

Dec. 31,'47

;

resources—

Deposits

checking account charges.
•

CO.

;

plan does not affect Title Guar¬

CONSOLIDATIONS

(113)

TRUST

dis¬

—36,149,329
profits.

34,967,653

1,678,940

'

*

*

1,859,070

*

-

v

Dec. 31, '47

Dec. 31. '47
Sept. 30,'47
Tot. resources_$5,203,284,028 $4,957,416,117
Deposits
4,874,418,234
4,622,164,738

Tot.

Cash

Cash

from

U.

S.

due

banks-

Govt,

curity

1,443,283,803

it-

U.

Loans and bills

discounted

Undiv;

2,183,146,029
>•'<
1,144,278,147

,

1,215,660,245

—

protits-

30,115,614

38,260,503

——

and

from

1,208,876,854

.

hldgs. 2,131,035,234

resources-$l;203,350,157 $1,159,267,873
1,072,859,755
1,030,192, b59

Deposits

„

and

S.

due

discounted

profits

*

U.

S.

Govt,

ity

secur¬

&

bills

109,009,851

;

counted

>'

■

&

GUARANTY

'! 1,227,878
8,500,994

*

.

TRUST

*

CO.

U.

S.

Deposits
Cash

2,451,659,287

and

from

U. S.

Govt,

curity
Loans

2,475,101,407

611,948,578

528,013,047

due

banks-

'r

se-

hldgs.

-

1,255,329,289
851,404,579
60,666,666
*

\

CHASE

789,353,139

NATIONAL BANK
Dec. 31,

U.

NEW

Cash

and

from

U. S.

due

-

banks,

Govt,

■

OF

NEW

-V.

banks

S,

Total

YORK

Cash

U.

27,201,431

Loans

&

bills

counted

43,948,557

22,169.941

22.991,305

898,737

1,043,692

profits.

This is under

circumstances

no

solicitation of

an

1,997,223,842

hldgs.

2,105,781,600

Cash

discounted

bills

&

1,324,264,034

1,196,651,000

U.

profits

211,024,776

—
'

BANKERS

*

*

TRUST

208,289,200

&

Not

CO.

OF

NEW

YORK

Sept. 30, '47
resources_$l,666,993,442 $1,573,355,231
Deposits
1,483,951,180
1,393,338,536

Cash

and

from
U. S.

INC.,

NEW

THE

325,136,334

bills

330,943,128
558,311,249

Cash

discounted
Undiv.

PUBLIC

40,749,244

profits-

592,512,863

U.

38,913,064

*

CHEMICAL
OF

NEW

&

TRUST

CO.

CO.

OF

BANK

NEW

on

8,076,700

page

38)

as an
offering of these securities for sale, or as an offer to buy, or
of such securities. The offer is made only by means of the Prospectus.

as a

The Detroit Edison Company
Capital Stock
$20 Par Value

Price $20.50 per

share

'

Sept. 30, '47

$550,757,489

514,263,481

Copies of the Prospectus may be obtained from any of the several under¬
only in States in which such underwriters are qualified to act as

109,901,883

holdings— 310,972,476

S.

278,950,382

Govt,

ity

dealers in securities and in which such

dis¬

124,180,874
7,838,860

#

resources_$l,413,980,108 $1,321,804,300
Deposits
1,284,087,036
1,195,134,163

may

fpffally be distributed.

7,503,280

*

7

*

MIDLAND

Tot.

Prospectus

142,562,973

profits.

MARINE

writers

secur¬

bills

&

Undivided

Sept. 30, '47

8,141,079

(Continued

1,631,800

450,000 Shares

AND

YORK

127,685,625

—

YORK

Dec. 31, '47

.

and due from

Loans

❖

BANK

profits

January 7,1948

$

NATIONAL

counted

THE

15,643,600

18,811,023

ij:

resources—$581,799,399
Deposits
544,924,963
banks

623,056,031

2,212,300

Surplus and undiv.

13,435,060

146,169,971

18,881,529

—

__

1,241,557

dis¬

—

dis¬

Total

Loans and bills

bills

345,235,996

profits.

TRUST

484,535,416

.

&

counted

25,547,400

dis¬

1,643,775

167,944,220

121,739,920

&

Undivided

474,988,192

se-

hldgs.

Loans

13,459,400

25,537,092

secur¬

YORK

173,553,561

Dec. 31, '47

banks-

Govt,

holdings

secur¬

dud

Govt,

curity

S.

ity

'

:

76,654,837

sfs

Tot.

45,622,100

14,362,907

New Issue

a

626,627,093

25,798,494

CO.

counted

Dec. 31, '47

,9,565,400

.

46,869,616

——

YORK

Sept. 30,'47

26,745,731

holdings

Loans

*

9,059,162

secur¬

bills

profits

any

and due from

ity

&

Oct. 6, '47

$54,942,700

banks

$793,575,213

90,509,727

S. Govt,

Surpl. & undiv.

Govt,

TRUST

CO.

The First Boston

OF

Corporation

NEW YORK

_

Cash

and

from

U. S.

banks-

Govt,

curity

Dec. 31, '47

due
Total

394,152,052

310,334,308

se¬

420,748,658

463,008,401

449,400,552

Undiv.

__

398,194,912

U.

profits-

8,149,917
❖

7,811,083

9

S.

&

Manufatturers Trust Co. of

New

York on Jan. 5 opened a new
branch office at 322 Eighth Ave¬
nue, corner of 26th Street, New

York, the premises formerly oc¬
cupied by the Pennsylvania Ex¬
change Bank. With the addition
of this

office, Manufacturers

new

Trust Co. has 76 complete
banking
offices throughout Greater New

York.
fice

In

is

charge of this

Edward

William J.

J.

Cubberly

new

Colbert
as

of¬

Surplus

*

*

MANUFACTURERS

BROTHERS

U.

S.

&

OF

v

Sept.

3d,

'47

counted

61,404,302
13,825,284

13,845,284

*

*

STATES

'Vf?;

*

716,527,698

582,126,444

Cash

hldgs. 1,173,607,277

1,139,511,194

se¬

NEW

COMPANY

YORK

—

126,635,618

120,030,271

S.

29,645,812..

Govt,

discounted

__

484,035,604

&

bills

counted

Undivided

32,143,694

—

profits.

*

^

CENTRAL
i

HANOVER

COMPANY

OF

34,441,370
2,817,802

1,272,879

AND

NEW

YORK

TRUST

Sept. 30, '47
;
Dec. 31, '47
resources-$l,630,727,884 $1,560,143;422
Deposits
1,492,339,863
1,422,676,350
Tot.

——

Cash

and

from
U. S.

Govt,

discounted

718,666,657

653,113,546

—

411,395,076

416,046,058

26,523,256

THE
.

MANHATTAN

COMPANY

arid

from

U. S.

due

banks-

Govt,

curity

365,643,523

281,258,833

360,915,918

371,785,555

se¬

hides.

Loans and bills

discounted
Undiv.

are

Jan.

.

2.

patterned
service

based

The

—

profits-

on

bank's

the > modern

charge policies outlined by

sociation.

In

an

429,810,380

14,487,235

14,123,292




:V.

.

i<•,

out

that

checking

it

had

account

not

adjusted

charges

since

Fahey, Clark & Co.

Johnston, Lemon & Co.

Reynolds & Co.
*

/.*

'

;

Farwell, Chapman & Co.

Kebbon, McCormick & Co.

Sills, Minton & Company

'Tr-i

Ilirsch & Co.

McDonald & Company

v

Stern Brothers & Co.

Incorporated

Li;

;

Stroud &

S;:'

Dittmar &

Company

Incorporated

Company

Copley & Company

Glover & MacGregor, Inc.

J. M. Dain & Company

Harold E. Wood &

Newhard, Cook & Co.

Francis I. duPont & Co.

F. S. Smithers & Co.

Company

Bioren & Co.

Merrill, Turben & Co.

Wheelock & Cummins, Inc.

Yarnall & Co.

,

.

Clement A. Evans &
Incorporated

Hallowcll, Sulzberger & Co.

>

Company

;

•

Townsend, Dabney and Tyson

H. F. Boynton & Co., Inc.

;

Company

Brush, Slocumh & Co.

Chace, Whiteside, Warren & Sears
Incorporated

.

Hannaford & Talbot

Jenks, Kirkland & Co.

)

Johnston, Lane, Space and Co., Inc.
Peters, Writer & Christensen, Inc.

Kirkpatrick-Pettis Company
;

Stix & Co.

Miller, Kenower & Company

Sutro & Co.

Walter &

Amott, Baker & Co.
Incorporated

W. L.

•'

Lyons & Co.

C. C. Collings and Company, Inc.
;

;;

•

.

- -

-

S. K. Cunningham & Co., Inc.
;■

,

Perrin, West & Winslow, Inc.

Company

.•

..."

.•

The Robinson-Humphrey Company

1943.

"Current greatly
increased,
operating and servicing costs can
no

426,782,104

Company

announcement to

customers, Title Guarantee point¬
ed

Bacon, Whipple & Co.

actual unit

earnings of accounts,

after

OF NEW YORK

Dec. 31, '47
Sept. 30, '47
resources_$l,216,579,777 $1,142,110,049
Deposits1,140,003,114
1,068,100,769

Stifel, Nicolaus & Company

its

the New York State
Bankers As¬

*

Tot.

Cash,

rates

Maynard H. Murch & Co.

Incorporated

C. S. Ashmun

effective

The Milwaukee Company

Granhery, Marache & Lord

Company of California

Julien Collins &

ule

24,681,079

*

OF

Pacific

Green, Ellis & Anderson

costs and the
x

Corporation

regular checking account charges
and put in operation a new sched¬

393,202,598

profits-

BANK

Co; of New York has revised

new

407,107,962

se¬

hldgs.

Loans and bills

Undiv.

The First Cleveland

due

banks-

curity

The Title Guarantee and Trust

❖
BANK

Equitable Securities Corporation

Newburger & Company

21,075,452

Tucker, Anthony & Co.

62,199,987

dis¬

478,137,330

22,565,101

profits..

Dick & Merle-Smith

secur¬

holdings

Loans

36,650,650

77,146,629

—

Loans and bills

Undiv.

Schoellkopf, Hutton & Pomeroy, Inc.

and due from

banks
U.

TRUST

Dec. 31, *47
Sept. 30, '47
resources—$157,809,983 $152,902,599

Total

ity

due

Govt,

curity

72,200,107

dis¬

Capital & surplus-

Deposits

——

U. S.

53,513,485

58,423,412

bills

DrexeJ & Co.

(Incorporated)

secur¬

holdings

Dean Witter & Co.

Republic Company

Incorporated

CO.

55,645,258

—

Govt,

ity
Loans

X, C. Allyii and Company

Sept. 30, *47

66,417,238

—

OF

CO.

resources_$2,468,436,353 $2,299,713,391
Deposits
2,320,056,667
2,153,427,086
banks-

&

A. M. Kidder & Co.

231,602,633

——

Cash and due from

Tot.

and

HARRIMAN

resources—$252,601,393 $262,480,901
Deposits
222,668,177

with

1

from

16,564,800

Hemphill, Noyes & Co.

*

Dec. 31, '47'

*

Dec. 31, '47

*

his assist¬

TRUST

NEW YORK

Cash

pndiv.

Total

UNITED

-: ;

84,712,000

16,452,671

BROWN

Blair & Co., Inc.

140,081,100

*,/.

ant.
<

84,712,200
dis¬

profits

banks

Hallgarten & Co.

White, Weld & Co.

Incorporated

—

&

71,850,900

127,246,789

bills

counted

E. H. Rollins & Sons

'

secur¬

holdings

Loans

Goldman, Sachs & Co.

Hornblower & Weeks

114,029,628

Govt,

ity

'

Glore, Forgan & Co.

...

and due from

banks

Loans and bills
discounted

resources—$342,231,569 $305,620,900
317,852,064
267,520,300

Deposits
Cash

hldgs.

Oct. 6, '47

longer

bank," the

be

absorbed

statement

by

said.

the
The

Edward Lowber Stokes & Co.

OF

Cash and due from

U.

holdings

31, '47

dis¬

profits.

banks

__

7,473,000

CO.

Y.

be construed

to

offer to buy,

—

curity

7,544,018

N.

$56,287,091

Surplus and undiv.
!.»

Total

Loans and bills

35,502,900

counted

Dec. 31, '47'
Sept. 30, '47
resources—$665,619,430 $706,320,349
Deposits
591,244,511
633,671,778

1,038,445,800

S.

ity

resources—

Deposits

$38,265,100

32,937,964

and due from

Loans

dis¬

—

Undivided

19,561,669

47,429,708

secur¬

Oct. 6, '47

$36,630,195

...

banks

secur-

MORGAN

1,225,791,684

se¬

resources—

Deposits

78,138,181

—

Govt,

'■

P.

NEW

TRUST

Dec.

V
Total

Sept. 30, '47
$90,709,331

ity holdings—_

;.'V

YORK

Dec. 31, '47

148,348,719

.

J.

NEW

2,380,631

,

^COUNTY

BROOKLYN,

OF

468,130,704

-

Undivided

Tot.

resources_$4,856,452,421 $4,618,192,500
Deposits j— 4,477,562,450
4,117,720,400

BANK

counted

YORK

Oct. 6,'47

.

#

86,488,752

resources

8,271,140

136,079,998

-

Govt,

ity

*

'47
$100,632,488

Deposits

*

holdings--— 433,578,760

S.

Loans

OF

47

63,892,753

3,592,843
:;c

Cash and due from

59,046,425

'

'•*

*

^

.

2,584,995

>/•

CO.

dis¬

profits,,

NATIONAL

banks

—

profits-

profits..

TRUST

213,323,403

Dec. 31,'47'
Total resources—$764,161,719
Deposits
591,578,153

bills

and

discounted

Undiv.

1,407,618,356

UNDERWRITERS

524,438,509

9j(

FIRST

"

;

79,963,291

bills

&

Undivided

resources-$2,848,543,557 $2,869,596,711

Tot.

-

Total

CO.

508,552,309

counted

YORK

NEW

Sept. 30, '47

secur-

holdings

Loans

OF

Dec. 31, '47

46,436,922

dis-

Dec. 31,

U.

214,445,596

Govt,

ity

TRUST

YORK

,

banks

8,615,927

profits-

-

Undivided

KINGS

117,885,474

52,361,694

bills

Cash and due from

BANK

NEW

Cash and due from

:

1,209,888

Undivided

;

107,752,302

{

dis-

64,681,957

*

Dec.. 31,'47
Sept. 30,'47
$828,082,587 $827,819,087
*—
782,204,170
782,641,524

resources

Deposits

holdings—

Loans

Total

*

EXCHANGE

#

27,856,823

&

320,671,403

64,481,000
*

OF

109,110,619

holdings—.-

counted

GRACE NATIONAL BANK OF

i"•

377,810,121

—

—

26,526,044

secur¬

#

—

CORN

ity
Loans

Govt,

537,804,370

Surpl. & undiv,

Cash and due from
—

260,982,619

4"?5,482,936

Dec. 31,

banks

320,749,465

S.

se¬

hldgs.

Loans and bills

'47
Sept. 30, '47
Total resources—$150,847,466 $151,286,871
Deposits
118,155,374
118,579,746

U.

„

banks-,.

Govt,

curity

City Bank Farmers Trust Co.—

_

Sept. 30,'47

Walter Stokes & Company

Webster & Gibson

U

&

THE COMMERCIAL

:(114)

FINANCIAL

.

CHRONICLE

Thursday, January 8r 1948

)
Forecast
w

.

Business

...
■

i

>

•'

''

v'

for '48

(3) Outlook for utility securities

National Securities & Research
^(4)..Outlook for" industrial se-*
Corporation has published' a 16- Chrities;'v V?
page pamphlet called" -'The 1948
In addition to discussing pfbb-?j
Forecast," copies of 1 which?" are able earnings trends among dif-i
available on request,1 "Printed in ferent
industries, the pamphlet es-tfour parts, it discusses:
5
;
timates per
share earnings for*:
{ {1 > General economic outlook
(2) Outlook for railroad secur¬ 1947 and 1948 on a long list of •
ities
/vi.y:..
:
leading common stocks,; >
!

•»?.'/1..

.

-

,-j

,V" v:'v'"?:By HENRY HUNT Y.!,,'/^
Cover the Waterfront"

-

.

.

f

.!

High

A- Harper

Prices —F.

—

Study of the causes of inflation—
Foundation for Economic Educa¬

tion,
Inc., Irvington-on-Hudson,
N* Y.—Paper—50c {reduced rates
for quantity, orders).. •.

With the exception of government, municipal, and AAA bonds*
tfie mutual fuhd investor can today obtain a diversified interest in
Virtually every other elass of securities through a single, investment,
In addition to "balanced," diversified common stock and /'fully ad¬
ministered"

the"industry's^-;—***-4—■

funds,

Sees Vast Reservoir of Private Investment
'A'";''}..; t'i

: 1 Hugh "T *
1
' _1""
're'~
ajnd "
W. Long also offer in¬

the following:
th

vestors

—

*

National

j
Medium

(Special

The Financial

to

Railroad

feCOTTSBURG, IND.—The

]

,

Couple

!

t".

■

.

...

.

Stocks

A

.

...

.

.

Medium to Low-Grade

Street.

Speculative, including non-div¬

-

idend

payers

•.

with

,,.

.

Harvard Professor Predicts

"These Things

Seemed

tant," published b,y

Medium Grade

vestments

••' ;

ocity

Prospectus I

.

your

upon

request from

SECURITIES

NATIONAL

RESEARCH

' /

&

Automobile
>

CORPORATION

Aviation

Building

I—=====

^

Electrical

v

♦

•

Insurance Stocks

Leverage Investing Cos.
Machinery *

Manhattan

'

Oil

■

-

.

Equipment

Steel

be scarce—def-f

than

scarcer

in

a

Will stimulate the' further

Tobacco

larger

sion

of

business

suggest
with

expan-;

and " consumer

credit

about further

which, in turn, will bring
price increases; (5)
a good prospect that Con-*
portfolio consisting solely of the
stocks comprising the Dow-Jbnes gress will reduce taxes, increasing
Industrials—with no management the amount of money available to
buy goods and accentuating the
fee, of course.
/
- 1
'
rise in prices,'The rise in "prices
National Securities & Research
Corporation has the most widely will, of course, increase the de^
mand for a 3rd round of wage in-*
diversified offerings of any spon¬
creases. Thus, the more that Con¬
sor, its current list of funds in¬
cluding three balanced funds, l0 gress reduces taxes,- the greater
As

INC.

deter¬

the

added starter, we

an

formation

of

fund

a

a

There is

.

Prospectus from your Investment Dealer or

HUGHW. LONG & CO.
'n(0*>qrauc>

43

Nfcw york

srftttr.

wau

s. n y.

one fully admin¬
istered,'two bond funds, one pre¬
ferred stock, three common stock

industry groups,

funds

for ' appreciation

designed

will be the

The

income.

Co. of Boston,

Keystone

demand for wage in¬

creases."

Ugh!

V;;

-

°

-

Once upon a

opportunities and two for above
average %

ment

American

of

private funds

in)^capital facilities in European
countries "would go the energiz-*
ing
managerial
and
technical
skills of which these countries are
so

greatly in need if they are to
anything like the eco¬

achieve

administration of the aid program
be carried on by a Government

.

gricultural machinery, the Coun-,
cil

recommended, should be fi-t
mainly through private
channels.. ■:
(
/;
*
;
;
"Where conditions are such that

nanced

inancing

of

products

purchases
be

cannot

of; such
obtained

througn private, channels, the Ex¬

port-Import Bank should partici¬
pate jointly with private capital.
cases where financing of such

In

purchases is desirable but cannot
be provided either through pri¬
vate channels or jointly by private

capital

Export-Import

the

and

Bank, the Bank should furnish the
necessary funds."
Foodstuffs, fuels)- fertilizers and
other

products necessary to sus¬
tain life and improve productive
ing. corporate savings, raising in¬
efficiency of the people of aiddividual incomes and adding to icy-forming functions and over-all
receiving countries, the Council
inflationary pressures;
(4)
The direction of the program must be noted, will have "to be provided
rising prices which will naturally exercised by Government officials by governmental funds. »
result from the above conditions
responsible for the conduct; of bur
"However, the Government

Railroad

Bond Fund

will

will continue to disburse

•

Public Utility
Railroad

which

elements

proportion of their incomes in the
form of dividends, thereby reduce

Metals

Merchandising*.

European Recovery * Program, the
Council said that with the invest¬

spreads throughout the economy, nomic progress and high standards
This means that the. shortage of of living which have been attained
foodstuffs will be accompanied by in this country."
;
rising incomes; (3) Corporations ; ] The Council recommended that

Equipment

Food

of

'47; (2)
Wages will continue to rise as the
3rd
round
of
wage
increases

Chemical

conditions

to me to be the princi-*

seem

initely

if

elsewhere

"The follow-*

follows:

as

of foodstuffs will

Bank Stock

110 BROADWAY, NEW YORK 5. N. Y.

Slichter

and

created which will encourage
the investment of such capital."
In stating -its position on the

the first half of 1948: (1) Supplies

y,;,;

;

Foreign Trade Council in a statement issued tby
its board of directors, dated Dec, 19, 1947, and released on Jan. 2,
1948, called attention to an existing "vast reservoir"; of private
investment Capital "that can be tapped for industrial development
and expansion in European coun-'
—•
' ■
' v"'—.
are

mine the course of business during

'>•/—'- *

r-Agricultural

Harvard

ing
pal

- »

Groups

Industry

investment dealer, or from :X

^Vel¬

>" 2'- :

-

-

National

.

Chicago,

of

The

tries

Impor¬

Selected In-»

Company

Professor

quotes
Market

for

.private funds.

is reminiscent pi
George Bernard Shaw's sound ad¬
vice, "Never strike a child except
in anger," * , ;;!y"
1

.

Speculative

after

struck each
to; kill.j,j'.

intent

Investment Grade

Low-Priced'

who

above

The

A

Common Stocks

_

"'

female

and

male

:

/

•

wedlock .have never

;l

Medium to Good Grade

Main

&

/ "

'

Preferred

:

Happily Married

a

.

!

other

Corp. is
securities business
Wardell

Definition of

v.

Mediuxn to Low. Grade

Chronicle)

Scottsburg Development

engaging in a
from olfices at

Bonds
Highi Grade

to

"

-private funds in

.

Scottsburg Development

Fbfeign Trade Council holds

investment of American
capital facilities would furnish the ; energizing
managerial v and technical skills needed by European countries.
Wants aid program administered by government corporation super¬
vised by government officials, but with participation of American

'

wide range of chdiee.

a

Vli':

r

w?'
" " "J
'
^
*
1
""
aterfrOnt coverage now includes

time,

an

Indian met a mermaid;

Distributors Group, remark

American
His only

"How?"

was,

corporation created especially for
the purpose/but stated that pol¬

international
scribed

relations, as pre¬
the Constitution! - and

by

laws of Congress. .• - r
"The executive direction of such

should, if at all possible, endeavor
to obtain compensation-in some
for-all

form

such

products

sup¬

plied by this countrv.

a.corporation should be placed in
a
Board of Directors, a majority

States

of whom are selected with Senate

cies

confirmation from representatives

Such currency should, under con¬

"If necessary to do so, the

should

of

United

the curren¬

accept

countries.

aid-receiving

of American business who possess

ditions approved by the country
experience, judgment, man¬ whose currency is involved, beagerial ability and technical know- invested or otherwise utilized for
how necessary for attainment of
the production in the territory of ?
the maximum benefits of the for¬ such
country of products needed
eign aid program.
This adminis¬ by such country ot* which it can 4
trative corporation
should have use in exchange for needed prod¬
full
representation' in
policy- ucts of other countries or for bal- •
forming procedure and should co¬ ancing its international accounts.
ordinate, under Presidential di¬
"In so far as possible, currencies
rective, the operations of other
so
held
by the United
States
Government departments and
should be utilized for the creation
agendes specifically related to the or
expansion of facilities for the
aid program."
production of strategic or critical
The Government, it was sug¬ materials needed
by this country.
gested, might consider the provi¬ Many of the products acquired in
sion of some form of guarantee to this
way
by the United States
American firms taking part in the should be stockpiled in this coun¬
program, "perhaps on the basis of try under conditions which will
joint participation in such guaran¬ prevent disruption of domestic

the

t

r

.

We

are

pleased to

announce

that

tistodian

tee" if this action becomes neces¬

Albert R. Hughes

sary to

j;

ment

is

INVESTMENT FUNDS

■

\

joining

our

organization

private investment
industrial develop?
rehabilitation of nations

iii~ the
or

under the aid program.

Vice-President and Director

Long-range

.

raw

investing their capital

»

as

capital

of
^

BONDS
•

PREFERRED STOCKS

i

*

'

'

COMMON STOCKS

by

A. R.

Hughes ic Co., 120 South La Salle Street, '
Chicago, will be continued-by us at that.
address under the direction of Mr.

Hughes.

.y

'

TLe

of Boston

with

.

RUSSELL BERG FUND
'

*\

inc.

_

Boston 9,

Nordeman
Street, New

Catacchio

have

and

Morton

associated

become

the

company

as

registered

representatives in its Worth Street
office

.

find

Frank

B.

A'Hearn

as

registered representative
in its
Beaver;Street office. Serving the
textile ? business
since 1923, the
firm offers executives in that field

Prospectus

.

63 Wall
-

on

Request

/

CHICAGO

.Massachusetts




;

J

investment

Street,. New York 4
LOS

ANGELES

manager and underwriter

complete secu¬
well as cloth,
yarn and raw cotton divisions.
Bruns,
Nordeman
has issued

Russell, Berg & Company :

from

X'":/

a

tile

Investment

75 Federal

A January 2, 1948

the facilities of

rities department as

INCORPORATED

Counsel

.

'

1

f

& Co.; 60
Beaver
York ' City,
stock, i commodity
and
textile
brokerage firm
which recently
marked its 25th year of service
to
the
trade,
announces
that
Bruns,

Globus

..

Congress Street

Adds Three to Staff

,

Keystone Company
50

,

rv

local investment dealer or
...

prices."

Brans, Nordeman Go.

Dominick

Prospectus from

•

your

or

.

J

(Series S1-$2-53-jS4)

.<■

!

K1-K2) :v ; v-Tv

and special types
as mining and

equipment such

.w

">
-

i

4.

The business heretofore conducted

(Series B1-B2-B3-B4)

i

.'

materials including fibers and

mineral products,

; (Series

;

'

equipment,

.

IN

marketing channels

participation

American

funds

•>

Certificates of Participation in

'

of

formerly>President of A. R. Hughes*& Co.

; v.

the

secure

telephone

Street, Boston
liberty

955o

-

time to time

charts

on

tex¬

prices which have been wide¬
ly used. Marking the firm's 25th
birthday, a chart of "i00 Years of

Cotton Prices" is being distributed
to

the trade

and

public.

;

'OVt"

.1.»

Volume

107

.?

t

rTHE COMMERCIAL

Number 4662

> I'

&

FINANCIAL CHRONICLE
(115)

ABA Announces AHti-lnflation
Program
Its

ditional farm land at high
prices.

j

:

For

M; Dodge* releases

President*

■

The nation's banks have
an; anti-inflation program of' their own
is about to be put into
effect, it was announced on Jan. 5 by!
Joseph M. Dodge, President 'of the American Bankers
Association!
It is a plan for
voluntary action on the part of the 15,000 banks to

Which

1V avoid

>

sive

infla¬

or

in¬
in the'

creases

omy

credit.

tionwide

camj
ill

-

stress

the im

w

portance
the

v

the

like

bank£ will

leadership in

the

ties in

realization

a

Of

ers

the part

on

credit

and

of lend¬

the

of

users

credit that loans should
be sought
and made

only for the production
acquisition of food and such
goods and services as will add

and

to

the supply side of the
supply and
demand equation.
In

Mr.
the

pointed out that bank credit
been the

inflation.
bank

of the

cause

"While

the

of

the' deposit and
of the
banking
out

of

the

volume-of

line

now

tion to

the

increase

production

of

or

prices

wages,

in

and

and

we

have

im-

an

fundamental

obliga¬

that it does not get out
of line," Mr.
Dodge declared. "In
recognition of that obligation, the
see

American

Bankers

Association

and

its members will
engage in
nationwide program this winter

to impress upon
bankers, business
people, and others the importance
the

wise and
credit under the

ditions that

proper

use

inflationary

now

Outline

of

con¬

exist."

of

That in the months

ahead, comfnodity

immediately
inventory

and

loans which are
designed to with¬
hold
essential
goods
from
the
normal market channels in
antici¬
pation of price rises should not
be made.
That
sential

and

be

determin¬

Mr.

tion which

can

be postponed

building supplies and

labor

uiitil

are

in

greater abundance should be dis¬
couraged.
That banks shotild give
priority
loans to those borrowers who

.turn

out

the

Services'/ needed
abroad now,

supplies
at

home

in order that the

and
and
ma¬

chinery Tor the production of es¬
sential goods may be kept func¬

tioning at maximum levels.1
! That there should be a
greatly
intensified drive to sell Treasury
pavings Bonds to the public and
to promote other forms of
savings,
SUCh

savings accounts in banks,
as a means of
absorbing some of
the surplus money in the spending
as

stream

Which

would

otherwise

Continue to compete for the goods
and services in short supply.
*

; The program

will be carried out

through printed educational

mate¬

rial, and activated through meet¬
ings of bankers and business men
throughout the country.
,

"In

a

nation

as

large




as

the

the

of

of
real

•

•

.

months^ ago, * it

use of bank credit
is an important factor
in restrain¬
ing inflation and also iii maintain¬
ing our present high volume of

easy

Urban
-

"Thd proper

production.

Urged all

rowers

sent

of the

to

them

gested

schedule

a

terms

of

of

sug-»

its

City on
adopted

Oct.

1947,

sound

policies
is

need

for

■■

their

communities

not

only

of

economic

national

and

of

conditions

local,

restraints

and

caution

be

con¬

depended

their

lending

policies in the light of these pres¬
ent-day conditions and to spread
the

gospel

stricted

of

chants,

the

sound

of credit

use

to

in

and
the

manufacturers,,

common

The
now

anti-inflationaryv

and

their

Whom

stake in the

re¬

mer¬

the
com¬

have

d

fight against

the

Association.

after

and

ing national needs.
it carried out

Early

tionwide
meet

Mobilizing to Put Plan Into Effect
Organized
of the
cal

consisting

state, county and other lo¬

bankers

mobilized to
effect.
will

banking,

associations, will be
put the program into

Beginning

be

on

Jan. 23, there

a

cross-country tour of
officials
to
the
principal

ABA

dustry,

na¬

war

goods

na¬

the

the

end, it carried out a similar
stimulate the interest
making loans for. re¬
conversion. y The experience thus
turned

to

serve

creases

is

war

now

another

their

own

meetings in
only will

states.

Not

meetings be held at the state level,
but also at the local levels
through
the

county

bankers

associations

and other local groups,
reach
all
the
banks,

first

sectional

of

including

areas.

the

Will

be

on Jan. 23,
last in New York on Feb.

Other

cities

ABA

dent,
White

order

To

letter

a

the

first

results."

study economic and financial

& Co.,

hand

and

formerly

was

the

to

members

Chicago

an¬

the

election
of

and

Arthur

a

a

India

was

a

Sacco

the

Mr.

Lund,

States

on

agricultural

Marketing

spent

several

East,

and

States De¬

as

the

a

Specialist.
in

years

during

the

He

the

Far
he

war

commodity expert for

Foreign

Economic

many
years.
He
was
for¬

Arthur C. Sacco

of

eco¬

Ad¬

with

ity on La Salle
Street
for

United

came to the International

identi¬

trading activ¬

During

author

announcement

is hot

merly

pany of Chicago as a member
the board of directors.

is also announced that
John
P. Noonan has
joined Sacco in the
operation of the new department.
In

addition,

and

Lee

William A.

included

now

sales

Miller

in

Detmer

personnel.

they may
their

use

to impress upon the
and other

men

communities

credit

should

be

idea

that

right now
only for such purposes as will aid
the production of essential
goods
not

for

which

purposes

contribute to

Company

First Mortgage Bonds, Series
B, $%%

people in

the

used

Dated September 1,1947

Due

September .!, 1977

Price 102.365% and accrued interest

will

inflation.

The

program is in
line with
other
anti-inflation
programs
which the American
Bankers As¬
sociation has been

conducting in

The

special
time.

fields of credit for some
It has been a leader in the

Prospectus

may be obtained in any State in which this
of the undersigned and other dealers as
may

announcement

lawfully offer these

is circulated
from

only such

securities in such State.

movement to

protect the country
from the
dangers of a farm land
price inflation such as followed
World War I.
For several
years,

it has been issuing
regular bulle¬
tins

to

banks

to

formed

about

the

land

prices

tirging them
ers

and

from
from

and

keep

them

trend, in
as

a

in¬

farm

means

of

to

discourage farm¬
borrowing excessively
mortgaging presently

owned farms in order

to

buy ad¬

HALSEY, STUART
CENTRAL REPUBLIC COMPANY
(incorporated)

OTIS

&, CO.
(incorporated)

GREGORY &, SON
incorporated

January 8, 1948

HALLGARTEN

R. W. PRESSPRICH

THE

& CO.

& CO.

ILLINOIS COMPANY

INC.

&. CO.

HORNBLOWER & WEEKS
L. F. ROTHSCHILD

WM. E. POLLOCK &.

&

are

Co.'s
*

$10,000,000

Central Illinois Public Service

Jones

Simmons, Jr.

implement the program, the

business

of

It

offer to sell or a solicitation of an offit to buy these securities«
offering if mdde only by the ProspectU'sl

named.

con¬

nected with First Securities
Com¬

an

This

has;

been

special repre¬
of

unlisted

fied

Special

'

This

CL

trading
de¬
partment. Mr.-

and
20.

as

vice-president

finan¬

United

Bank from the United

both

the

Co.,
Ex¬

nounce

of

partment of Agriculture where he

served

borrowers

&

Stock

change,

Foreign Economic Admin¬

nomics,

gram
in the American Bankers' Associa¬
tion to combat any
on

was

in

istration.

am

tendency

he

war

States

Mr.

glad to know of the pro¬
which you have undertaken

Chicago

CHICAGO, ILL.—Detmer

develop¬

countries

economic

several books

Truman

written- to

or

positive

beneficial

new

with

sentative

pro¬

Dodge in which he endorsed the
plan in the following language:
"I

culative loans" and asserted
"that
with the cooperation of the
bank¬
ers
of the
country, the program
will succeed in
obtaining

in

ABA will
arrange
for speakers
and will supply to banks
advertis¬
ing and other information which

and

at

financial

member

Assistant

Snyder

itinerary in¬
clude: Chicago; Kansas City; Den¬
ver; San Francisco; Los
Angeles;
Dallas; New Orleans; Atlanta;
Washington, D. C., and Boston in
on

in

Canada,

visit of ABA Presi¬
Joseph M. Dodge\ to the

released

voluntary step in the direction of
controlling inflationary arid spe¬

Mr.
Beecroft,
a
naturalized
American citizen born in
Toronto,

announcement of

President

Secretary of

on Jan. 5 also issued
statement in which he described
the
program
"as an
aggressive

cial affairs.

a

House,

Snyder,

cerned

national

anti-inflationary

and

W.

Treasury,

a

cross-country

conferences

Columbus, Ohio,
the

the

John
the

Sacco;
in
charge of their

the part of bankers

in order to

and

Secretary of the Interior.

gram,

this

It is vitally

important to the country."

being

in bank credit.

Following the

in

success

establishing close- contact with
officials of member countries con¬

by preventing, through vol¬
untary
action,
inflationary in¬

Endorsed by Truman and

every

fellow

your

undertaking.

of

program to
of banks in

need

attendance with the program and
its application. These leaders-will
then organize similar

informed

economic
ments

the

members

present

ancl

you

policy of keeping

itself

banks to promote the sale of War
As the war approached

in

wish

Beimer

structure.

Bonds.

gained

|

"I

Arthur Sacco V.-P. of

The Philippine Government has
not applied
to the International
Bank for a loan.-The
sending of
a
fact-finding mission is in accord
with the Bank's

produc¬

Likewise, it set up a
machinery among

giving

resources

which will be
helpful to them in
the years ahead.

to

agriculture, in¬
facilities, and

transport

financial

to help banks
problems involved in
loans for the raising'of
for

substantial

Survey Mission to Philippines

program

and

centers of the nation for the
pur¬
pose of presenting the program to

banking leaders; also the bank
supervisory authorities. These will
be all-day
conferences designed
to thoroughly familiarize those in

of Philippine

vey

in the

similar

the

making
food

a

of

have assisted in

pfeopld

At the invitation of the
Philippine Government, the Interna¬
tional Bank for
Reconstruction and
Development is sending a small
fact-finding mission to study economic and financial
conditions in
the Republic of the
Philippines. The mission consists of Eric A.
Beecrott, of the Bank's Loan De-<$
partment and J. Thomsen Lund of
ministration
the
and
Board
of
its Research
Department. It left Economic Warfare.
Washington Jan. 1, 1948, and will
arrive in the
Philippines approxi¬
mately Jan. 9, for a general sur¬

both

to
help the
system in meet¬

a

our

iite

war

as

"these

programs

conditions.

activities
its tech¬

In

war,

tion.

inflation."

the

sale

Institution seftds staff members

nique, it will follow methods used
successfully in programs during
banks to act

easily be¬

World Bank Sends

program

anti-inflationary

the

efforts to stimulate
savings during1
I urge them to contihtte arid expand this effdrt.

re¬

being initiated is another step

in

and

properties.

disastrous.

Such

for

of

formulate

to

of

inflation

volvey abnormal risks
banks and borrowers.

the

use

present-day

ditions require.
"The banks will
upon

of

the

on

both

stimulate

in
can

or

this

savings bonds and in their other

overexpansion of business.
loans

of

Treasury in pushing the

in

.

There

-.'

said

food

"I
appreciate the cooperation
which the bankers have
given the

bank

which

-part:7;

in

effect

come

ABA

on

bor¬

materials* in

Atlantic

„

and

alike must be
kept aware
dangers arising from bank

goods,
The

the

resolution

a

lending

1,

in

bankers

merely to in¬
the demand for
goods and
not the
supply, or for any form of
speculation in new

similar terms'.

convention

But

credit which is used

Since Nov. 1, the
banks, al-j
mosLwfthout exception, have beeri
At

for

19

recent years.

crease

keep

basis.

or

credit must be
sound
productive

available

down-payments

and maturities which would
this -type of credit on a

Bank

purposes.

and

1,

of -the

through printed material but also
through meetings for the discus¬

the

mortgage loans for non-es¬
building or for construc¬

Five

y

has

Dodge explained. "For that rea-f garding loans that might be used
for excessive and
speculative in¬
son," he said, "the Association will
ventory accumulation, for over¬
carry its program of information
spending by individuals, or for
to its 15,000 member institutions

The

The

program announced b,y Mr.
Dodge will emphasize generally:

to

would

.inflationary,"

those in the rural

Ptogram

in

bank credit
unwisely, under
prfeSetit conditions.
use

banks to get ready for the
expira¬
tion of Regulation W control
over
consumer
credit on Nov.

officers of the state bankers asso¬
ciations and other representative;

the

prevailing," he said.

"Nevertheless,
"portant

line with

capital structure
system, nor is it

with

high levels
costs

out of

unwisdom

tionwide

has

amount

the

it

year,

attention

estate field/

attempt

section

generally
munities, all of

outstanding has in¬
steadily in the
recent

months, it is not

tan

is

country

present

credit

creased

of

a

to

policies

it following these

Detroit, Bank, Detroit, Mich.,

not

a

to

for

given

in

public

making the announcement,
Dodge, who is President of

econ¬

ours,

certain type of loan

bank credit that

arousing a consciousness of
growing inflation problem and

the

made

kinds

assume

their communi¬

yardstick
a

sion

Under

the

in

these.

/

program,

use

credit

times
Joseph M. Dodge

f

o

wise

of

¬

an

as

which

ing whether

na-i

paign,

extension

useful

a

program,

a

>

principle, fof

credit

Thd

which will be
carried -out

through

diversified

as

would not be practical
to lay down a single

bank

of

—:

United States and with

tion ary
use

1

excesexces¬ •>

a

the

banks

mortgage loans for non-fessential building; and tO intensify
drive to sell Tfreastify
Savings bonds. jDenies bank credit is cause
j
of present inflation.
Program endorsed by Pres; fTriiniari arid f
-M /.w..:
Secjr. Snyder;
"I- "
■

than

calling

credit

pone

'

mbrb

been,

outline of program to curb
loans for spetttlatldii in fcoriimoditiesarid
essential £oodi; to post¬

to

& CO.

CO., INC.

!A

■

20.

(116)

\yr,

Thursday,; January 8, 1948

CHRONICLE

FINANCIAL

&

THE COMMERCIAL

sagged, with an occasional rallyj fate may be as high as..2% by
JJ
early April, 1947; this '.Bid-summer. v.:;.
'
was followed by a relatively rapicj
The
down-trend
in
deposits,

Commerce

to 107.35 in

Bank

ana

insurance stocks
DEUSEN

By E. A. VAN

has

^

rally of bank stocks moved the daily inde;
26 to 37.9 on Dec. 31. This
year-end close compares with 44.3 on Dec. 31, 1946; thus, over the
year, bank stocks declined 14.4%.
Industrial stocks, on the othei
hand, as measured by the Dow Jones Averages, moved from 177.2C
to 181.16, a gain of 2.2%.
Y-Y'YIndividually, there was wide variation among the bank stocks.
Corn Exchange declining only 2.6% while Guaranty Trust declined
23.0% and First National, 22.7%, The movements of 17 leading New'
York City stocks, from Dec. 31, 1946 to Dec. 31, 1947, are shown in
A moderate year-end

Banker from 30.4 on Dec,

of the American

table.

the accompanying

12-31-47

Bank

cf New

Bankers

Central

30
380
45 %•
106V2
40 %
-YY
47%
45% j
20%
56%

York

Trust

Hanover

Chase National

Trust-—

Chemical Bank &

Commercial

Continental

Exchange

Corn

___

S.

36%

—10.5
—11.6

41

Trust

'

—10.4

16%

—19.9

55%

2.6

—23.0

49%

—17.7

46%

41

—12.1

87%

—14 0

39%

—12.6 -Y

101 %
______r
45% :•
; 755

'

105.91

•

Earning assets
change during the

eral Reserve Member

——

*

banks indicate:

Dec.

10

105.1';

Dec.

20

105.0;

23

105.05

Dec.
Dec.

24

104.0?

31

.103.71

Dec.

ported.

governments will be sup¬
However, it ;s understoo

authorities wil
rot permit "in the near or fore¬
seeable future" government bond:
o
drop further in view of their
the

money

■>

Ui S. GOVERNMENTS
DateDec.

31, 1947—
Dec. 31, 1946

-

r__.

on,long-term govern
securities. In other words;

nent

12-31-47—

13.014

11,702

Commercial
Total Loans &
& Agric. Total Investments

4,043

753

388

1,096
" 544

20,440

* 6,280
7,076

20,002
It will be observed that although total holdings of government
obligations are 10% lower than a year ago, the major decline has
been in the short term, low interest categories, which are down
29.6%, while holdings of bonds are down only 4.2%.
Total loans are up substantially from a year ago, but the gain
has been principally in commercial borrowings which have increased
32%, while loans to brokers and dealers, and for the purchase or

12-31-46—.

,

5,336

934

262

carrying of securities are lower..
With
the
general firming of interest- rates that developed
throughout 1947, government bonds and other bonds concurrently
went off.
The Dow Jones bond indices over the 12-month period
show the following changes:
■

High!
Rails i

Date—

•v> 2nd

:

I Rails

n

3» ft Mi
40

U. S.

Utilities

trials

Bonds

Govts.

Indus¬

Public

Grade

Grade

12-31-46__

92.47

107.73

104.04

103.76

107.32

12-31-47-

100.61

85.62

101.06

99.67

96.74

103.71

their extreme

Applications

,,,

YYY'f 'YYY ; .Or
-/
■

V;

^ec.

27, 1945
26, 1946

*une 12,
Dec.

1947

____

31, 1947

*Peak.

he

_,v—

price

the Office of International Trade..
The OIT will put

the final stamp
on licenses processed
commodity divisions, but
will no longer do the actual procossing, once the reorganization is

of

completed and announced.

hough rallying in the last fev
operating earnings moderifely below those of 1945, mainh
due to higher operating costs; de
oS ts
expanding from the lo\
mint
of mid-year;
holdings of
government securities 10°A
lower; loans to business

moving

Lynch,
Pierce,
Fenner
&
Beane, Buhl Building,' following
graduation from the firm's invest¬
ment

measured by the Dow Jones Index, reached
high on Jan. 26, 1946 at 110.22, thereafter they slowly
as

It is un¬

thereby protected.

in gen¬

derstood that these banks,

eral, carry their governments at
par and, in many cases, have ad¬
ditional

set

reserves

Y.Y'Y

.

.

Y'

1

agains;

up
•

Y Yields on Treasury bills, since
the unpegging of the fixed %%
rate have moved rapidly upwards;
and at the last reported sale in

0.951%

1947, on Dec. 26, averaged

order, some
important interest

chronological

the

of

more

resident partner,

rront.

The recent issue of the

on
as

and Letter":

meet

"

relief

"Tax

with
most

under

•

,

.

would

conditions would

highly desirable.

-

<s>—•—

and

favor,

popular

'

doubt

no

be

But a general

rampant
inflationary period would be most
untimely as it would not only
curtail or prevent Federal debt
tax

reduction

during

a

retirement but also would

release

to

Dec.

1%%.

rate

increased

from

com¬

ernment

:

the market place

means

Royal Bank of Scotland
Incorporated by

Royal Charter 1727

-r

WHOLESALE MARKETS IN

HEAD

OFFICE—Edinburgh

where the Gov¬
with private

competes

enterprise for materials and labor.
The Administration should cham¬

expansion
of bank loans as an inflationary
factor, the "New England Letter"
states:

•

'

*

"During this year, according to
estimates made by the Industrial

Committee of the In¬
vestment Bankers Association, the
Securities

INSURANCE STOCKS

Branches

throughout Scotland

banks will have

LONDON OFFICES:
3 Bishopsgale,

GEYER & CO.

ness

W. t

NY 1-2875

SAN FRANCISCO 4

BOSTON 9

CHICAGO 4

LOS ANGELES 14

10 Post Office Square

231 S. LaSalle Street

210 West Seventh Street

HUbbard 2-0650

FRAnklin 7535

Michigan 2837

YUkon 6-2332

BS-297

CG-105

LA-1086

SF-573

Russ

TOTAL ASSETS

Building

NEW YORK, BOSTON, CHICAGO,

LOUIS, LOS ANGELES, SAN FRANCISjCO
TELEPHONES TO: Hartford, Enterprise 6011
Portland, Enterprise 7008
Providence, Enterprise 7008
Detroit, Enterprise 6066

about the same

obtained for this purpose

Charing Cross, S. W. I

64 New Bond Street,

£141,823,667

new

securities.

"There is a
Associated

Banks:

Deacon's
..

,

Bank, Ltd.
*

;

growing scarcity of

capital funds to meet the heavy
neeas of
business enterprise rur

-

Glyn Mills & Co.
Williams

billion

capital requirements,

amount as was
from the
capital markets. While some of
these loans were made on a term
basis, many were of a temporary
nature in anticipation of future
profits or pending more favorable
developments for the flotation of
or

E. C. /

Burlington Gardens, W. /

Wall Street

provided to busi¬

enterprise around $3.4

of funds for

E. C. 2

8 West Smithfield,
49

INCORPORATED




the estab¬
"purpose-f-

earnings and from
individuals.
Toward

from company

of

savings

this end, Section 102 of the Inter¬
na! Revenue Code should be re¬

substance .of

The

pealed.

that

is

section

.

this
is

corporation

a

half

much

as

as

current

re¬

placement costs. In consequence,
many
corporations today are in
reality paying a portion of their
wages, taxes, and dividends out of
capital instead of out of earnings.
The
tax
should
be
revised in

Commenting on the

SYSTEM CONNECTING:

but should cpme frona
lished sources for this

one

in the
daily press.; pion the cause of Governmental
However,, the trend is clear. Of economy and thus stand ready to
particular significance is the last match the sacrifices it asks the
item referring to prime risks, for, people to make in foregoing, tax
it is believed by some that this relief at this time." ■ ■ -yY ''iYY'/YYY

WIRE

primary function is to pro¬

vide short-term credit to business,

reduction in Federal

retirement. The
expenditures
would also lessen the pressure in

prime

publicized

PRIVATE

banks

be used for debt

Trust:

3—Bankers

plete, and merely represents la
scattering of items that have been

CLEVELAND, PHILADELPHIA, ST.

whose

the

by

.

This list is by no

WHITEHALL 3-0782

:——

furnished

not be

subject to a penalty tax if it rq-jeration of inflationary forces. In¬ tains an 'unreasonable' accumula¬
ers' loans between %% and %%
stead of cutting taxes- now, im¬ tion of earnings in the business.
Aug. 8—Bankers Trust Co. and
mediate preparations should be The burden of proof is on the
Chemical Bank & Trust: increased
corporation and any distribution
made for the overhauling of the
dealers' loans secured by shortentire tax structure by placing it of dividends aggregating less than
term governments from
%% to
on
a
more
equitable basis and 70% of net earnings is viewed
1%,.
.
1
with suspicion by the Treasury.
Aug. 26—Chase National, Manu¬ providing real incentives for work
and for risk taking.
A new tax This provision was adopted dur¬
facturers Trust, and National City:
ing Ythe 1930's under the theory
measure should be in readiness to
increased rates on bankers' ac¬
be put into operation in the event that increased spending by con¬
ceptances by % % and %%.
of a business let-down, at which sumers would help bring about a
Oct. 9—Chase National: loans to
time a -tax reduction would, be a revival in business. Whatever may
brokers ,and dealers aga.nst se¬
stimulatingi and constructive! in¬ have, been
curities other than government is¬
fluence. Yt! -.=■
•'. ' /wi •: ";.i
flyi
'•! measure in a period pi depresr
sues raised from<!%
to 1%%*
sion, they certainly- do not apply
;
"In conjunction with the post¬
Nov. 26—Guaranty Trust: loans
in a period of inflation.
to brokers and dealers
secured ponement of a tax reduction, the
"Furthermore,
the
Treasury's
Government should be called up¬
by government bonds increased
allowance for depreciation should
on to curtail sharply Federal ex¬
from 1% to 1 % %.
penditures
which
are
running be substantially liberalized. At
Nov. 27—Bankers Trust: loans
these
allowances Y are
nearly five times the rate of the present,
to brokers and dealers secured by
prewar
period.' Any economies based upon original costs which
government bonds increased from effected in this connection should in most instances are only about

1%% to i%%.

67

National

monthly publication of the First

"New England Letter," in a discussion on the curbs
inflation, takes a stand against general tax reduction at this time
enhancing inflationary trends.. According to the "New Eng-

Bank of Boston,

last year, were as

commercial

NEW YORK 5:

•

Galls General Tax Reducficn Inflationary

banks
funds that would be used to bid
follows:
V;;
Aug. 7—National City Bank: in¬ up prices of goods in insufficient
creased rate on brokers' anj Deal¬ supply, with the resultant accel¬

changes announced by the

;

BANK and

training schpol, according %a>

announcement by Cyrus H. King*

broar

a

Jr.

Roney,

rill

substan-

on

up

MICH.—Paul Rich-

and, Edward C.

mond

have become associated with Mer¬

larger; total loans and inestmenfs 2.2% lower; and inter¬

permit its bonds to droo b«
This is of importance to
New York City and; other banx.^
which are large holders, for the:

1%

}

Y

,

With Merrill Lynch Co.
DETROIT,

aily

rates

the

bank

of

lays;

est

approval

by

1947 cn^e-l witl
stocks lower

year

licenses
Depart¬

the

which
will be expanded
by the transfer of personnel from

fLow.

the

export
in

for this purpose

*27,408,892
26 843,190
21,983.639
f20,934 580
21,818,593

13, 1945

lec.

for

handled

be

ment's commodity divisions,

Demand Deposit:
>
($000)
/

-

Date—

lec.

will

'/Yv

Total

■

powers,

the Department

of

,

110.78

Governments,

control

amended exports
a reorganization
is under wajrr

and

extended

well as by the weekly

as

connection

Department's

presumably wiL

Government

In

Securities Misc.

& Dealers

now-being'-.re¬

figures reported by the New York
Clearing House, as follows: < Y'

low par.

($000,000)-

Brokers
Date—

Total

,

-LOANS

2Y2% in¬

a

rate

them.

($000,000)
:
Bills, Ctfs. & Notes Bonds
y
3,021'Y9,993
:
■; I
2,128 ■'
V 9,574

105.17

WASHINGTON—In
with the Commerce

not

—14.0%
of New York City banks underwent considerable
year, as the following reported figures for Fedr
17

OF

:::::::

1

Dec.

are

AVERAGE

;;

106.51

Nfov.

the

—lb.4

630

106.72

1

terest

—15.7

—

I™III•"

2

Dct.

ntention to maintain

16%

191/8

3ept.

hat

264

,j.

-

106.72

which

—22.7

J

Trust

Public National
U.

—13.8

—

106.66

2

Aug.

sharp break from Tec. 2'
24 marks the decision of
;he Federal Reserve & Treasury
uithorities to lower the level a

6.6

91%
41%

leased,

■

The

—13.8

1,295

.j/
Trust

C.ty

York

—

—

•,>;

<

947-

fuly

"o

60

Irving Trust

New

39

1,675

;

Guaranty Trust

National

355
;

343

First National

Manufacturers

—14.2%

■

follows:

as

by

statements

dition

Reorganization

years

to be reversing as
1947 year-end con¬

appears

indicated

two

about

started

which
ago,

Thus

Change

25%

12-31-46
of

been

Dec.

%

—Asked Prices

Manhattan..-..

Bank

Since then their course

day bills.

This Week—Bank Stocks

;

the end of June;,
Treasury's "un¬
freezing" of its %% rate on 90-

drop to 106.65 by
just prior to the

Department

I

replacement and expansion. These
funds for the most part should

keeping with the times, and pro¬
visions should be made for indusr
tryi-to plough back into business
rhlore of its earnings which in the

is

constituted ! what

have

past

money."J);. ^
important source of

known as the 'seed

"Another

capital funds in the past was the
savings of' those in the higher
income

groups.

This source? has

largely dried up because

of virtu¬

confiscatory taxation, Run¬
ning as high as 90% of net in¬
come.
Tax laws should be revised
ally

provide for a maximum tq^c on
; income
of not more
than
50%.
The double tax.' bn
dividends should be repealed in

to

individual

order to
for

provide more incentives
In other words,

risk-taking.

steps
taken

should be immediately
to make possible the build¬

ing up of a
savings that
inflationary

rowings-and

reservoir of capital
would reduce the
pressure

from

bor¬

help place business

enterprise in a strong position
nieet

the1

ahead."

trying

l' '

tasks

to
lie

that
-

;

Volume

THE COMMERCIAL

Number 4662

167

New

Reviews Problem of Credit Control
January "Monthly Bank Letter'* of National City Bank of New

Congressional hearings on proposals
regarding present credit situation. Sees Eccles' ' special reserve"

>

Rollin

'

; The January issue of the "Monthly Bank Letter" of the National
City Bank 61 New York contains a review and analysis of the testi¬

>-V

;
M.

McConnell

retired

three

questions:

*

*not

(1) To what extent is the

cur¬

distant

too

future.'

This

Louis

i

;

Fagan
on

&

&

which date the firm

'/

solved.,

,

would have the effect of discour¬

dis¬

was

of

expansion

bank

credit

member - banks

aging

Irom

bor¬

responsible for inflation and ris¬ rowing from the Federal Reserve
ing prices.
" T Banks against Short-term govern¬
(2) To what extent are existing ments."
•

monetary and credit

quate for controlling further
pansion of bank credit.

ex¬

the request
ernors

for

require

Federal

additional

commercial

carry,

credit

short-

government securities up to

maximum

mand

time

of

deposits
or

After

posals

25%
and

against
10%

contained

as

in

de¬

against

savings deposits.
outlining the vaiious
the

testi¬

of Chairman Eccles of the

mony

the

views and testimony

of

Secretary of the Treasury Snyder,
President Allen Sproul of the New
York

Federal

Edward

p.

the

Bank, and

Brown, President of
Advisory Council and

the Federal

of

Reserve

Fiist

National

of

Bank:

Chicago, the National City Bank
concludes:

r

"From all this batting back and
forth of ideas the broad pattern
of

monetary and fiscal program
be seen emerging along the
following lines:
ul. The special reserve proposal
a

may

•

is

interest

tell

can

advances

rates.

short-term

in

6'.

Regulation W might be

empowering

Reserve Board to
of'instalment

"Much

of

as

ii

of

the

resuihe

credit:

re¬

Federal
control

this program

is

now

tWr

people

,

i

Michael J. Meehan Dies

.

ings.

the

banks

on

1937,

M. J.

Until

he

was

Meehan

his

&

retirement

principal

a

ot

Co.

of

adequate rates of return

their

CHASE

NATIONAL BANK
OF THE

CITY OF NEW YORK

The bond
out

(

on

w-»

STATEMENT OF CONDITION, DECEMBER 31, 1947

of

million

of

Resources

dol¬

lars of paper profits on the books
of financial institutions. However,

Cash and Due from Banks

tion

of

bank despite
the loss of paper profits unless or
until
the
depreciated securities

date

par

the

on

is

and the
System, market

not

.

' •1

•

,

Municipal Securities

•

.

1,997,223,842.42
72,143,547.2 6

%

.....

159,297,385.27

1,324,264,033.92

.

.

.

.

.

•

9,400,461.83

•

•

11,692,930,77

.

.

.

.

.

considered

.

.

•

13,491,128.15

Customers'Acceptance Liability

.

Stock of Federal Reserve Bank

<ofrthenCurrency

appreciation

.

Mortgages

with

Reserve

•

arc

will

the
accounting
practices prescribed by the Comp¬

troller

•

1,225,791,684.00

•

Accrued Interest Receivable

by the
fully amortized. In

be

accordance

at which they

♦

•

Loans, Discounts and Bankers' Acceptances

The government

books

♦

Other Securities

securities will be paid when they
mature
or
are
called, and any
carried

♦

State and

the average

have to be sold.

«

U^S. Government Obligations.

mostly
governments
and
other
high-grade issues, largely shortterm, .the decline itself does not
seriously affect the capital posi¬

....

.

7,950,000.00
'Vb.--'. •:

,m /

Banking'Houses

•'}»'

.

Other Assets

a

.-

.

31.,101,354,61

bonds to raise funds to meet with-

its

90-day

Treasury

bill

maturities, most of which are held
by bank investors, while the Fedeial Reserve Banks have tendered
£340

million

of

maturing certifi¬
cates for cash redemption.
"This program of retiring bankheld debt is expected to be greatly
-accelerated during the first three
months
of
1948, when the tax
s

revenues

are

expected

to

attain

^record-breaking proportions. From
these

revenues

it

has

been

esti¬

mated that the public debt may be
cut j down as much as $7 billion.

This will be

a deflationary factor,
extent that bank holdings
o| .government securities and bank
deposits are reduced thereby.

to

the

;v\,aShort-term

interest rates have
been allowed to rise
gradually, as
indicated/by an advance in the

90-day Treasury bill rate from %
of

1%

last

Summer to

0.95%

to¬

day, and in the
cate rate from

\lk°Io
Jan.

on

the

one-year, certifi¬
7/8 of 1% in July to
latest issue dated

1.

Eccles in the
mony

market

or

If

quires

the

the

diawals

course

of his

of .'any

to take

or

of

demands

meet

without

longer-term

discount rate would be advamced-from 1/to iy4'% in. the




Capital Stock.

.

Surplus.

their

.

.

.

Undivided Profits

•.

.

•

4,096,053.21

.

.

$111,000,000.00

.

154,ood,000.00

.'

57,024,776.27

Nevertheless, these develop¬
ments, plus the fact that the au¬

322,024.776.27

thorities have vast power to apply
further

sion

braking

on

credit expan¬

Dividend

the need arises, have made

as

banks

Payable February 2, 1948

much more cautious
in making intermediate-term
cap¬

Reserve for

ital loans. Many banks feel that
they have all the term loans they

Reserve-for Taxes, Interest, etc.

want.

Deposits

very

Insurance

being
the

more

of real

area

ered

companies are
"choosy." Except in
estate loans

by

government guarantees
marginal borrowers are
likely to be pushed back. Ratios

loans

.

of debt to

tinized
are

equity are being scru¬
closely/ Borrowers

2,960,000.00

.

.

v

.

...

.

.

Other Liabilities

♦

.

'.

/

«

■

.

.

.

9,703,411.26

.

.

4,477,562,449.92

$ 20,347,254.88
4,963,529.20

15,383,725.68

>.

11.051,699.75

......

.

.

more

being

pare

.

17,766,358.56

Less Amount in Portfolio

to

.

Contingencies

Acceptances Outstanding

cov¬

asked

down

often

more

requirements,
and
some
programs
for capital
outlays have been "held in abey¬

ance.

At

ment

e r e

the
d i

$4,856,452,421.44

to

their

same

time

t-granting

govern¬

agencies

United States Government and other securities carried
secure

public and

trust

deposits and for other

at

purposes as

$267;760,220.00

required

or

are pledged to
permitted by law.

have been instructed to hold their
a

minimum.

'•/

All this shows that the
present
powers

are

what

is

effective,

powers

those

>

needed

but

is

not

additional

willingness

already at hand:1

Member Federal Deposit Insurance Corporation

and ' that

-

serve

.

Capital Funds:

probable

selling

issues.

.

LIABILITIES

loss to that bank in making
sale.,; Many banks, of course,
hold adequate amounts of shortto

.

t, 856,452,421.44

the

securities

.

of

care

real

term

.

these

legiti¬
mate demands of customers, the
market
depreciation becomes a

testi¬

stated that the Federal Re-

depreciation a
position re¬

bank's

sale

operations to

"Accompanying this firming in
open-market
rates, Chairman

'!

price drop has wiped

hundreds

to

use

I

■*

I

in¬

America, died

resources.

continuing its policy of using sur¬
plus revenues and funds from the

of

of

an

heart attack at the age of 72.

a

ment securities in order to obtain

loss.

net

Association

ers

shift out of shorter-term govern¬
more

I

treasurer of the Investment Bank¬

in

Kneath,

to

profit

savings bonds to retire
debt, with consequent
extinguishment of bank deposits.
During the past two months the
Treasury has retired $600 million

Watkin William

vestment banker at his retirement
in 1930 and a former
secretary-

time has

same

pressure

7*7

Meehan, former Wall
Street broker, died at the age of
fifty-six after being stricken with

sav¬

in short-tejm in¬

The rise

terest rates at the
eased

new

.

Watkin Kneath Dead

:

Michael J.

THE

returns available

spondingly, the

from the investment of

Plans are being made
initiating a savings bond drive
early this year. The Treasury is

of

manager of the for-^

terest rates have served corrective

under way.

sale

as

department. ^ -j

eign

M

gen¬

for

bank-held

their firm

that

course,

purposes.^ The cost of borrowing
has
been
increased
and, corre¬

Federal

"

30.

yet.* There is,

than

greater

call

•

.lit

George W.

erally realize. The drop in bond
prices and the related rise in in¬

21/2%.
stored

Dec. 30, his interest in the firm
ceasing as of Dec. 31.

bond market, are having an effect

price above

"4.

Walter G. de Berg, limited part¬
In Halladay & Co., died on

«r

Dec.

.

however, reason. to believe that
the steps already taken, together
with
the
repercussions in
the

The long-term rate for gov¬
ernment credit is to be held at
"3.

v

how effec¬
outlined by

ex¬

Cotton

pneumonia.

.]']

the late

on

an

and

rnmm——I■

•

of

as

/■'"'"V"

ner

Interest

retired

Stock

restraining
likely to be? ;

is,

answer

one

these

Co.

York

for

expansion

The

no

program

of

v

28.

since bank holdings of bonds are

shelved/

"2. Inflation is to be fought in
the financial field mainly by driv¬
ing to increase sales of savings
bonds, by continuing the retire¬
ment
of
inflationary bank-held
government debt out of Treasury
surpluses and proceeds of savings
bond
sales, and by permitting
:

moderate

-

much
pro¬

Federal Reserve Board, together
with

the

is

authorities

present

light

developments,

tive
the

to

banks

and/or

recent

the

in

Viewed

to

supplementary

reserves,
in
cash

reserves

Reserve

powers

above

and

over

lawful

term

the

foreign
be,
the

will

program

Bank states:

by the Board of Gov¬

of

system

f

overall

The merits and demerits of

:

a

As to how effective the

ade¬

powers

Dec.

&

New

Exchanges, announce that Philipp
Frenkel, formerly with Josephthal
&
Co.; is now; associated with

•

Margaret J. Goodbody, limited
partner in Goodbody & Co., died
on

Lynch,, Pierce, Fenner
Beane, cased on Dec. 31. : • :

change member firm

i

rent

of

Merrill

Vose

Dept. Mgr.

Steiner, Rouse & Co., 25 Broad
Street, New York City, members

Interest of the late Clarence I.
Jones, limited partner, in the firm

;

21

For Steiner, Rouse Co.

David f Craven retired ? from
partnership in Laird & Co. on
31:v*';■/

of

P.

Kaplan,/ partner in
Co., died on Dec. 30,

Frenkel

'Dec.

from partnership in Baker, Weeks
& Harden on Dec. 31.
(

mony of high government officials and bankers as to what should
be done about the
present credit position. According to the Bank,
tne discussion centeied
mainly on ^
—^
~4—

j

following firm

changes:,'

(117)

C&rpenter and of the Estate of
John A. Hance in Jesup & Lamont
ceased as of Dec. 31.
v

Yori^ Stock Exchange

has announced the

'Vr.

'

CHRONICLE

The New York Stock Exchange

York summarizes results of

;."-J.:"r:'v\;"■' proposal shelved.

FINANCIAL

Weekly Firm Changes

'

;

&

>

'■

22

THE

(118)

COMMERCIAL,

tising Company, the Keeler Mbrris

Monsanto Chemical

Printing Company and ( Gardner
Advertising Company, all of St.

Appoints Two/

Louis.

ST. LOUIS, MO.—The appoint¬
ment of Howard A. Marple as di¬
of

newly

the

Chemical

Company

an¬

was

OHIO —Charles
nounced here on Jan. 1 by William M. Baxter, who has just completed
M. Rand, President. Marple, who a comprehensive training course
has been with the company since in investments, has become asso¬
1937, served as editor of Monsanto ciated with Ball, Burge & Kraus.Magazine for many years. He has Union Commerce Building, mem¬
been active in industrial publica¬ bers of the New York and Cleve¬
tion

ac¬

an

as

■

Mr. Baxter is a

having

Associations,

Ohio

Bar

been

graduated

employed by the Federal Adver¬

in

and

Cleveland

the

of

member

appointed assistant director.
Gardner, who attended Princeton
University, has been with Mon¬
santo since 1943. Formerly he was.

was

ers

Foreign Travel—"Foreign travel
from
the
United
States
should

tion materials in 1948.
7

law

the

from

aft Yale, following service

school

the Air Forces.

ciation of New

j,
*

York, Inc.
S p e a

king

»
'

for

»

versed

-,

«

"

With

the

of

.the

of

the
M.

Allan

'-Full

production

keystone

"If

.

the

"

•

crisis

and

its

through

the

implant

democracy to

is

'
to

current
seeds

of

of totalitarian ideologies that seek

of Condition, December 31, 1947

■

.

.

.T

Other Assets.

.

op

to

66,417,238.43

.

Securities

,

.

Acceptances

.

.

.

enable the countries of Europe to

1,291,102.45

rebuild their economic structures.
7

Reserve.for

Capital
Surplus

.

.

>/.

»

It

.

is

imperative,
peo¬

own

provide the necessities to keep

costs

have

the

manu¬

become so
point

break-even
to

level where

a

relatively small recession in vol¬

a

resistance (or consumer in¬

sumer

ability to buy) that would invite
disaster."—Mr. Neal

President

of

services by
air have been made
dur.ng the past year,.
passenger

by

available

spirals.

13,845,283-54'

7
inflationary
production
and

Full

ment and labor but of all the peo¬

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

ple of America."Our

banking

structures

and

sound.

are

Becker,

Intertype .Corpora¬

Construction

—

"Most construc¬

tion materials should
in

1948.

For many

petitive

selling

pricing

,

cently

will

of them

com¬

competitive

and

be

many

ricated metal products.
"Since

the

tightened

dollar

restrictions

spending

countries.

upward

every

and

costs

construction

step

in

tends

to price
projects out of

market, the possibility of fur¬

ther

construction

must be counted

as

increases

cost
a

factor which

on

foreign

by most

V

■.

.

"Commercial

:

from

travel, both to and
United
States, should

the

continue

increase

to

the

under

stimulus of extensive programs

of

industrialization, hydrq-electrification and highway and
building.,
construction now under way in
Latin

American countries, and of
the rehabilitation work made pos¬
sible by emergency loans and pos¬

sibly the additional distribution of
Marshall Plan funds for European "

recovery."—Joseph P. Grace, Jr.,'
President of W. R. Grace* & Com¬
pany.

?

Railroads—"Over

•

a long period
the trend of gross earn¬

of years

ings of the railroads of the coun¬
try has been closely related to the
level

of

national

ipcome.

While!

rational income since the close of
the war has been maintained at a

high level which promises to con¬
tinue through 1948, net'earnings
of

the

railroads

have

viewed with serious

"The railroads

be plentiful

in order. How¬
key materials will
continue to be in tight supply. This
condition is particularly likely to
prevail with respect to many fab¬
ever,

create

combating shortages. Toward that
end, the effort calls for complete
cooperation not alone of manage¬

$252,601,393.23

ices, available will permit better
selection pf trips within budget
requirements where necessary. On
the other hand, recreational travel
to the United States for some time
to come will be limited by re-?

the

as

are

backbone

in

been

diminishing ratio which

some

i|s feet. 7

Dow

tion.

prices

on

greater efficiency in production to
lessen costs are the only means of

/://y/:.n
As

balance.

"Shortages

2,000,000.00
: V.

is the fact that

that

ing in addition to getting Europe

1,500,000.00.

.

But
the situation like a

over

facturing
high

substantial

generally

profits satisfactory.

dark-cloud

b^ck

14,438,910.90

11,843,285.54'

.•

result, stabilization of our
here at home is in

therefore, that the American
ple adopt a program of their

149,021.57
.

$

the

hanging

the wheels of home industry turn¬

etc

Contingencies*.

.

and

is

.

1,253,064 47

Expenses,

a

economy

the

'

Accrued Interest,

"As

to

Less Held in Portfolio.

quan-r

materials and machinery to

own

G.-y: $ 15,691,975..37

.

requires

abro'hd pf vast

yaw

1,732,247.82 .$222,668,177-22.

>

.

business

tities not only of foodstuffs, but of

$220,935,929'.40 '

;

,

effective

program

14,931,802.82

LIABILITIES

.

pledged

for European recov¬
To make

program

the shipment

$252,60i,393.23'

Deposits—Demand
Deposits—Time ;

is

States

58,423,411.96

.

.....

.

United

and rehabilitation.

that

4,683,825-50
.......

Acceptances

a

ery

51,208,753.93

•

Other Marketable Securities

Customers'Liability

"The

55,645,258.14•

United States Government Securities

State, Municipal and Other Public

LeVino, presi¬
dent-of Guiterman Company, Inc.

to crush liberty in the Continental ume of sales would put many a
countries, then the American peo¬ manufacturer in the red. Another
ple must resolve nt>w to exert round of wage increases followed
every effort to bring about greater
by the inevitable round of price
production.
•
rises might bring about a con¬

ASSETS

Hand and Due from Banks.

cri¬

trade."—Mr. Gerald

the weeds has been elevated

overcome

of the

one

as

• /
Manufacturing — ."In manufac¬
only turing, the present-day volume of

{

nation

prices

/

,

American

the

§ep3 Europe

PHILADELPHIA

"

;

which optimism and

based".

be

PRIVATE BANKERS

-

is

continuing prosperity in 1948 cap

BROWN BROTHERS HARRIMAM & CO.

BOSTON

qn

of

teria, will further impede and
complicate:" the normal flow of

Pope

University, declared /

York

controls, which by Qpngrpsinclude the

use

/
of the Finance Committee of Npw

\

•

and

sional action musj; now

Boston

is

.export

•

competent personnel to administer

di¬

-

in connection

controls.

ficulties of obtaining adequate and

a

-

its thinking

re¬

Allan

*S:

and Chairman

-

apparently

Pope, Pres¬

*

Corporation

Business Established 1^18

has

Export
licensing was difficult enough dur¬
ing wartime but the increased difr

industry
e r a 11 y,

rector

,

7 /

but for the most part the smaller sliljL large and the increased serv/;
"Congress

Inh
~

§f

commerce

and

First

.

and

.ea

producers and suppliers as well."

•

Association,

Loans and Discounts

7 :'' "

-

who

on

,

as a result/offerings of spe-r
opinion of leaders of 'American, business and foreign trade con¬ jcial cruises and planned tours will
tributing to the annual symposium on the outlook for the New Year be considerably increasdjcl iq 1948.
Althpug.i continuing world-wide
made
public
——
—
inflation and rising costs may be
ment
by the Com¬
and/ distribution, thereby
a dampening in'luence on demand
merce and In¬
eliminating not only the normai
for pleasure travel,. b^cJUogs are
dustry Asso¬
foreign trade distribution channels

ident

Cash

; J

'Company.

Additional

■-/'

JTu}l prodqctipn and gfeater efficiency in. production, permitting
in
costs, will insure continuing prosperity in 1948, in the

Colonel

Statement

Trust

continue, in heavy volume in 1948.

reduction

M.

NEW YORK

production .-credits.!'—

Dr. Fred I. Kent, Director, Bank¬

'

g e n

•

bankers

free

.

of St. Louis

Gardner

Allan

Exchanges,

count executive.

vertising.
R.

Stock

land

of Monsanto's trade ad¬

States

needs ^for

be controlled *
in the
to meet the

can

leave

to

as

United

-

Pope says more production is keystone for continuGerald LeVinp *pes threat to foreign traders in
proposed administration of European Recovery Program, while
Thomas S. Holden of F. W. Dodge Corp. predicts more construc¬

CLEVELAND,

1944, was

since

and,

circles

manager

so

ing prosperity.

Ball, Burge & Kraus

vertising department of Monsanto

political forces

Col. Allan M.

Charles Baxter Now With

ad¬

created

Thursday, January 8, 1948

CHRONICLE

N. Y. Commerce & Industry Association Leaders
Stress Greater Efficiency and Full Production

.

rector

FINANCIAL

&

must

concern.

a

be
;

indispensable

of

the

nation's

transportation system.
the

Following
imposed upon

strain

severe

them

during the
imperative
that

war

it is

years,

they

be

com¬

pletely modernized.

This calls for
vast outlay of capital which will

a

be available only if investors can
be attracted by the prospect of a

fqir return upon their investment.

fnGiven an adequate return on
the capital invested in the indus¬
try

—

that

a

return

comparable with

prevailing in other industries

tend to retard large construc¬

—the

railroads

tion volume increases in 1948. The

carry

out

prospect of tight supply of many

in order.

equalled

<

modernization,

may

are

prepared

to

vgst

program
of
embracing
tech¬
components of building and engi¬ nological developments in jnany
neering structures also warns that directions, that will give the coun¬
conservative volume estimates ape try transportation neyer before

business

"In

Our system

opinion,

our

these

factors

a

and

prepare

eventualities

for

it

I

the

of the future."—Mr.

G.

Metzman, President, New York
Central System.

>.

,

Thatcher M. Brown

Ray Morris

'

Loans 'Acceptances *

Curtis',

of

Credit

H. D. Pennington
Brokers

Knight Wcolley

E. R. EIarriman

for
of

Purchase

and

Sale

Securities

Investment Advisory Service

Limited Partner—W. A. EIarriman

prosperity iq the New Year
fulfilling the hopes for the
future of the people in war-torn
countries abroad rest entirely on

accumulated

and

situation combines the character¬

have

istics of expanded activity to meet

determination

teristics of

can

Foreign Banking
Deposit Accounts

Commercial Letters

Louis

'

reference

ican

Complete Facilities for Domestic 'and

Thomas McCance

Prescott s. Bush

of free private enterprise and our

f

FACILITIES

*

Stephen Y. Hord

American way of life are sound.
The chances for continuing Amer¬

the

PARTNERS
Moreau D. Brown

will be the determining ones with

people to put forth their ut¬

tinuously high rate of employment
at wage rates exceeding any here¬
tofore paid by the mills, for re-,
markably
harmonious
relations

most to do the

Managers

*

*

L. Parks Shipley

Howard P.. Maeder

David G. Ackerman

Edwi.n K. Merrih,

Dqnald. K. Walker

Joseph R. Kenny

M. Dutton Morehouse

John c. West

F. H. Kingsbury, Jr.

Ernest E. Nelson

Gale Willard

.

.."

•; '

Robert H.

.

k

All but

Cijamberlin

Merritt t. Cqoke

Louis C. Farley,

Assistant Managers

n

Jr.

James Hale, Jr.
VYilllau A. Hess

Arthur K. Paddock

William CI Horn

John A. Knox
Thomas

///>

J.- Mc-Elrath

—Mr.

Richard Plait

.

William F. Ray

Herbert Muijlert

Arthur R. %»we

Arthur L. Nash

Laurence W. Simonds

are

The

needs.

an

Thomas

dent of F. W.

job ahead."

one

rather

present

inflationary boom."
S. Holden, Presi¬
Dodge Corporation.

"The
business
of
banking in 1948 is going to be in¬
fluenced by developments having
to do with controls that may be
Banking

placed

—

banking

upon

operations

through the Federal Reserve Sys¬
and
through legislation, if

directors of

Textiles—"Our operations in the
cotton textile

industry during 1947

been noteworthy for

between

employees and

a

con¬

manage¬

ments, for absence of serious labor
difficulties, for high operating and
production rates ever striving tq
overtake

seemingly

a

insatiable
for
widespread overhauling and reno¬
demand

vation

for

of

our

products,

plant

our

equipment,
high prosperity
"While
certain
controls. that being shared not pply with our
have been under discussion that employees but also with tlje cot¬
ton farmers in tjhe form of thethe availability of dollar exchange could be made effective would in¬
bigljest cotton prices in a quarter /
overseas
with
practically every terfere with profits/which ^VQuld
century.
,■■'/ /,' /.'-C ■' /://
country having exchange control. make it difficult for thq banks,
Dollar balances will be used, al¬ yet it is the effect upqn the econ¬
"The mills are entering the New Year at the same peak levels of
most entirely for essential imports.
omy of the country that would be

the Association.
'

Ameri¬

struction, banking, fpreign travel,
railroads, textiles, foods and hotels
participated in the forecast round¬
up.

Harry L. Wills
'

the

volume

expanded needs with the charac¬

Top executives in the fields of
foreign trade, manufacturing, con¬

Edward Abrams

Joseph C. Lucey

of

1948

to

than the still enormous volume of

Their views:

ForeignV Trade — "Exports
through trade .channels during the
coming year will be governed ;by

tem

;

any.

,

and for continued

/ ;:/// -//.

,

_

George E. Paul, Treasurer

Charles S. Carlson,

Comptroller 7-

•

- -

production and employment with
their reasonable indicatiqn pf being able
own judgment in things having to
to maintain them for some months
do
with
banking practice
and to come if comparisons of sales,
most unfortunate, if bankers were

"One of the chief threats to forr

.Arthur B. Smith, Auditor

not

eign traders in this country is the
as Private Bankers and subject to examination and regulation by the
Superintendent of Banks of the State of New York ^nd by the Department of
Banking of the Commonwealth of Pennsylvania. Subject to supervision and ex¬
amination by the Commissioner of Banks of the Commonwealth of Massachusetts.

Licensed




manner

in which it has been pro¬

posed to administer the European
Recovery Program.
If the ideas
in

certain

government circles are

carried out aid goods

dled

will be han¬

through government

procure-

left

in

position

to

production, unfilled orders and in-

operation.
.

*

"It is to be hoped,

therefore, for

the benefit of business and indus¬

try

and

government

mm

=

use

itself,

that

ventories
"While
near

are

trustworthy guides.

looking forward to the

future

as

a

period of contin-

<

?

Volume

167

Number 4662

THE, COMMERCIAL & FINANCIAL CHRONICLE
(im

ued

high

prosperity in the in¬ | sive action and good hard work." pendent on
temporary financing
rehabilitation; programs '—Mr. Prartcis L- Whitmarsh, Pres¬ or
private
placement, 1 pending
ploughing profits back into plant ident, Francis H. Leggett & Co,
such time as market conditions
will continue
widespread, not only
warrant equity financing."
Hotels—"The metropolitan hotel
to remedy war exhaustion but also
Interest rates
will
be
field anticipates 'another banner
deter¬
to prepare the industry's
plant for business
mined
largely
by
government
year with all present in¬
the highly competitive conditions
security
dications
prices,
Stuart
Halsey,
pointing to continued
whicii are fpreseep for the future."
declared. "After being pegged dur¬
capacity patronage.
—Mr. John K.
Whitaker, Presi¬
ing the war, short-term govern¬
"At the same time, our feeling
dent, Neuss, Hesslein & Co., Inc.
ment interest rates were allowed
is that the pressure of the last
to rise in 1947 and, after a
r". Foods—"Business prospects in
period

Andrew S. Messick

Willis Robert Joins

Company in Chicago

.

Wheelock & Cummins

CHICAGO,

ILL.

Stewart-Messick
formed

with

Jackson

&

offices

Boulevard

the

securities

are

Andrew

Andrew
Co. is being

fo.od .business

1948;

whether

profit from
its

the

bright

are

a

business

will

it

depend

for
will

abili.y to do the right thing at
right time.
1948 will be a
of decisions.

year

"Mourning labor costs, less re¬
sults per
man-hour, higher inven¬
tory values, higher expenses, big¬
ger costs in transportation, ware-r
house and office, are
just a few
subjects-

which

business

study in order that it

both

hotel

public is

upon

in

concerned.

"Employment

t

considr

shortages

have

in most cases, and

gradual

,

price

reduction,

at

to

141

port levels for medium and longgovernment
bonds
were
lowered substantially on Dec. 24,"

Survey

resultant
the

pointed

break

out.

service

reor¬

rant the

are

once

more

These conditions

war¬

opportunity for hotels to
with

effective?-

prewar

Mr.

—.

Frank

L.

in
Partners

engage

business.

interest

Yerident, Hotel New Yorker. '

that

total

bond

1947

and

the

nation's

markets

billion.

stock

nancing and little

The

volume

1947

of

total

in¬

the

demand

for

surprisingly
the

on

new

little

rate

money

influence

capital market

terest

the

or

structures

in-

on

until

the

end

year

still

lacked

sta¬

bility," the Survey 'said.
•

Close

rate

policy.

With

'•

mination

of

interest

the

to

$2.5

billion

the

of-

were

State

offered

period—more

largest

amount

ever

marketed in any
year, the Survey
pointed out. "If the bonus issues
and the larger revenue
issues

deducted,

the

were

'

remainder—issues
for school and
municipal improve¬
ments and the like—alone
would
constitute

sizable

.a

ume," Haley,

year's

Stuart

vol¬

continued.

Noting that production of elec¬
tricity and gas in 1947 reached the
highest levels of all time, the
Survey asserted that "new gen¬
erating

capacity is

quired

and

the

urgently

re¬

privately owned
projected a

power companies have

1947-'51 program estimated to
in¬
crease

by more than 25% the
present plant account, at an esti¬
mated cost of $5 billion.
utilities also need new

The gas

plant, and

their:, program may
require $1
billion. The telephone
companies
are
striving to meet unparal¬
leled demands for
service.
still

Going

into

1948

there

unsatisfied

f

is

estimated

an

demand

\

for

over

2,000,000 telephones.
"There

ening

in

public

is

compared

in

1946.

with

The

about

1947

$2

the

of

movement

of

slack¬

a

toward

utilities

in

the

United States," it continued.
"While private
operation still has

antagonists,
for

sure

schemes
than

it is

Rail

of

some

hoped

that

ill-conceived
will

passive

bonds

were

pres¬

social

encounter

public

them

more

opposition."

down

in

1947

despite the improved physical and
financial

to

serving in
with Hal¬

Chicago.

The

Financial

deter¬

rates."

—William

Chronicle)

COLO.—Warner

business

Eighteenth

MARTHA'S VINEYARD, MASS.

from

in

in.

M.

offices

at

Wigley is engaging
business

Vineyard Haven.

securi¬

a

R.

securities

a

522

connected

was

Street.

In

the

with J.

S.

Co.

(in

Cash

•

C-

Agencies

State

t

condition

of

the




rail-

its views

on

Acceptances

of December 31, 1947

as

/

■-

dollars only—cents

.

.

,

»■

.

.

$1,443,283,803

.

and

.

v\.

.

Ownership

:

,-. :v

2,131,035,234
:

.

80,775,281

"Items

Other Assets
Total

2,819,263

•

Reserves

•
■

.

with

.

,

,

.

Bank.,

.

.

for.:

.

Unearned Income

-

25,033,128

Other

.

.

.

5,673,264

.

Interest, Taxes, Other Accrued
Expenses, etc.
Dividend

Surplus

Undivided Profits

Figures of Foreign Branches

•

are

;

Total

,

as

.

,.

(member

23,393,788

.

$ 77,500,000

^

2,454,110

$5,203,284,028

...

4,650,000

Capital

2,977,704

:

.

W

.

..

162,500,006

.

30,115,614

,••

270,115,634
$5,203,284,028

.........

of December 23, 1947

$251,123,478 of United States (Government
Obligations and $3,330,105 'of either
to secure
$207,922,739 of Public rand Trust Deposits and for other
purposes required

V-

;

7,000,000

.

■*

.

and

7,200,000

f

.

....

8,427,813

«

.

v

.

Branches
,

Portfolio

Unearned Discount

22,309,381

S

v>

28,491,252

Transit

in

$33,460,941

.

1,215,660,245

.

of

.

Bills.

•

Bank Premises
..

ances in

,

International
Banking Corporation

$23,605,4/9)

Accept¬

Less: Own Accept¬

'

•

on

ances and

231,062,937

,

.

for

Loan Deposit

28,214,818
'•'

.

Securities

and

$4,874,418,234

','„• Liability

'

.

.

Deposits

"

(Includes United States War

Bankers';

Federal Reserve

in

«

.

.v.

.

omitted)
LIABILITIES

.

Acceptances
Stock

federal deposit insurance

assets
or

are
deposited
permitted by law.

corporation)

future

Halsey, Stuart & Co.
said that "it appears there will be
dearth of high-grade invest¬
in

.

Customers'Liability

Chairman

of the B< ard

Gordon S. Rentsc

no

offerings-

.

^e'al Estate Loans

markets,

ment

...

Loans, Discounts,

...

was

•

Banks

Municipal Securities

and

Other Securities

were

:

from

rv

banks," "the Survey noted.
"A
large volume of financing also
was arranged
privately, as well as

•

Due

and

U. S. Government Obligations •:
(Direct or Fully
Guaranteed) /
Obligations of Other Federal

,

■

but a fraction of what it had been
in the Preceding year, amounting
to about $220 million as compared
with over a billion in 1946.

up

of Condition

ASSETS

stocks.

Refunding, said the Survey,

Summing

Office: 55 Wall Street, New York."

Including Domestic and Foreign Branches

billion

offerings

about 55% bonds and 45%

Vice-Chairman of the Board
W. Randolph Burgess

iler

President
Wm. Gage

Brady, Jr.

the

coming
year.
The prospect for offerings
of secondary classifications
and
stocks, however, is uncertain; for
these
the

are

CITY BANK FARMERS TRUST
COMPANY

directly dependent on
industry and the

fortunes of

outlook for
"In

the

business profits.
government

Head

field,

Office: 22 William Street, New York

*'

^

re¬

funding will continue. However,
assuming a pay-as-you-go pro¬
is set up to meet the Mar¬
Plan
requirements,
little
new-money financing seems likely
gram

Condensed Statement

shall

with

the

further

possible

exception

offerings of World

(in

of

Bank

"The

i....

electricity,

gas

and

tele¬

phone utilities will require
large
amounts of capital, and their
ord

of

earnings- stability

,4.

rec¬

should

continuing

enlargement

' of

municipal facilities will create

financing that

/

estate

The

upward

mortgage

trend

in

,

(Direct

Due

Banks

from

.

.

.

$ 26,526,044

Deposits

and

.

7

.-•••.

.

and

.

,

Advances

Real Estate Loans
.:

Stock

in

,

.

and

.

.

.

Total

,

.

.

,

.

,

.

.

.

5,412,049
*

.

.

\

.

.

.

.

.

.

.

.

;.
.

;.

J. j.

.

.

,

,

.

„

101,037

1,209,888
1,206,018

?

,

,

114,500
,

".

(Includes Reserve
Dividend

of

.

4,076,165

.
•

,

Capital

.

.

.

.

Surplus

.

.

.

.

.

.

,

.

Undivided Profits

$10,000,000
10,000,000

8,615,927

Total

.

ably will persist.
"In

the railroad

consequential

■

$310,621)

2,459,211

$150,847,466

.

for

600,000

3,131,463.

$118,155,374

.

Loan Deposit $2,092,73.9)
Reserves

_

.

.

Securities

.

Other Real Estate
Other Assets

„•

1,077,405

.

Federal Reserve Bank^

Bank Premises
■

.,.

Municipal Securities<■.

Other Securities

omitted)

(Includes United States War

or

Agencies v

1947

LIABILITIES

Fully Guaranteed). i.'
109,009,851
Obligations of Other Federal

Loans

-

real

financing prob¬

and

State
•"

well exceed

the 1947 volume of
$2.5 bil¬

even

lion.

would

Cash

^

a

necessity for State and municipal

of December 31,

as

dollars only—cents

U. S. Government Obligations

make it easy for them to
fill their

requirements. Soldier bonus needs

of Condition

ASSETS

bonds.

and

evidence

ownership

powerful,

to

Condensed Statement

•:

refunding.

industry."

•12-month"

far

(Special

DENVER,

Head

1

28,615,927
$150,847,466

$7,847,839 of United States Government Obligations are
deposited to secure the
Lmteu States War Loan
Deposit and fpr other purposes required or permitted by law.

field, the only

financing in sight is

(member

federal deposit insurance

corporation)

that required for the
purchase of
new

equipment.,

"Other

.

industrial

V

Chairman
;

enterprises

probably will remain largely de-

of the Board

Gordon S. Kentschler

He

was

■.

field, publicly
offered financing for,*new
money
aggregated about $1.7 billion as

by

municipal bonds
.the

Prior

S. Navy he

sey, Stuart & Co. Inc. in

Evenson in Denver

ties

in

Street.

Wigley Opens

na¬

$4.6
increased

than double the 1946
volume and

its

a

Salle

Bros. & Co.

$50 billion

over

factor

under an
arrangement whereby
insurance companies built or ac¬
quired plants and leased them to

and

in

body & Co.
the U.

Mr.

partner in Lamson

a

dominating

Treasury Department's changed
policy on short-term interest rates
| "Peak operations in many inbegan to take effect.- Thereafter,! dustrial lines created a
necessity
prices declined substantially and for
sizable
borrowings vfrom
at

the

busi¬

Chicago.

Evenson is- engaging

In the industrial

.largest State issues
ever,
offered,
the
Illinois
and
Michigan veterans' bonds.
had

was

In

in

was

La

formerly manager of the
municipal
department
for
the
Chicago, office of Kidder, Pea-

from

rose

equalled

about

preceding. year's

This

Britton.

Cummins, Inc.,

South

was

money

.

,

135

L.

associated

Andrews,

1946 to

offerings in
$8.6

J.

is in United States savings
bonds,
government policy will remain a

The
Halsey,
Stuart
Survey,-^
compiled, annually to set forth the roads,
said-Halsey, Stuart. Aside
company's • views
on
the
past from equipment trust offerings
—A
year's bond markets and project '
aggregating close to $240 million,
rits opinions for the coming
no
year,' there 'was
new-^money
fi¬

cluded

W.

Messick

Chronicle)

ILL.—Willis

has

become
with Wheelock &

prices of bonds upon government

$6.7 billion in 1947, largely through an
..volume of State and municipal issues and
telephone offerings, Halsey,
Stuart & Co.,
Ihc., has revealed in its Year-End Survey for 1947.

.'the

Roberts

THE NATIONAL CITY BANK OF
NEW YORK
new

New-money financing in

noted

Fischer

continuing reliance of market

standing, of which

,

West

S.

for himself in

ness

of

financing in 1947 at $6.7 billion, represent- ;
ing largely State and municipal and telephone offerings. Sees
future interest rates determined
largely by government security
prices, and looks forward to large volume of new financing, esp&-.,
cially by utilities, when money conditions are more stabilized. :

billion in

Mr.

"The

evidence

was

and

past

tional debt of $257 billion still out¬

available.

should

lock,

term

the

CHICAGO,

Messick, H. L.
Messick, A. C. Fischer, R. E. Pol¬

sup¬

ficient

period of cautious yet aggres-

Estimates

>

be

of

certain materials necessary for ef¬

less."

-

the

Difficulties

will

space

been overcome

operate

a

and

as

erably lessened, although bookings
will remain at capacity.

changing conditions.
be

far

so

management

convention

ganize and readjust itself to meet
1948

off

ease

obtaining rooms, exhibition and

must

can

will

years

(Special to The Financial

—

,

lew

the

23

-

dustry,.

President
Lindsay. Bradford

from

past he

Barr &

24-

The January

.

tff the Northern

.nent, and they would be more in¬
to put money into equity
securities. Both of these factors

Causing Capital Shortage

Sees High Taxes

abnormal impact of enlarged Federal Government activities on the
present economic situation, particularly in the field of heavy taxation
and lsfrge buying of agricultural
Commodities for export. Accord¬ in the higher brackets, the gov¬
ing to the bulletin:
"
-f ernment is siphoning off a large
"In wartime the activities of

volume of funds that would other¬

the

cessity play

affairs

economic

for' the

financing

be
of

capital expenditures. These heavy
taxes are a direct cause of what

country.

the

of

and / hence

saved

available

major role in the

a

be

wise

Federal Government must of ne¬

During the depression years of the
1930's, the government played an
increasing peacetime role. Now

to be a developing short¬
of funds to finance continued
capital expenditures on the pres¬
for the first time in modern eco¬
If
nomic history, government activ-. ent scale, referred to above.
income taxes
were
inties are a major influence dur¬ corporate
appears

age

lower, corporations would be able
to finance a larger part of their
needs out of retained earnings. If

period of boom prosperity.
This influence shows itself in two

ing

a

primary directions.
"In

den

maintaining

of income

tions and

..

Y

individuals, particularly

were

reduce the

would

entering a period during which, for
monetary ' authorities are in an '
excellent position to curtail the credit base. . . . The extent and the
vigorousness of this operation will have an important influence upon
what takes place in the government securities markets. . Y; Return
i'low of currency should be sizable While the inflow of gold will na
doubt continue to be large enough to have an effect upon the credit
base, unless offset as in the past. . .
Also the banks have substantial
cash balances that most likely will be seeking a home and it may not
j"

a

is in the

boom

,
of agricultural exports to
supply desperate needs in foreign
:ountries is not here questioned.

agricultural export pro¬

the

ment

been

all go into loans.

.

\

.

important factor in cur¬

On the other hand, income tax payments will be heavy on Jan.
for farm commodities,
in the 15, with others due on March 15. > . . Cash resources of the Treasury
in the demands will be large and if used to retire issues held by the Federal Reserve
of labor for higher Wages, and
Banks—which are very sizable in February certificates, bpt more
finally in the rise of prices of moderate in the March issue—there could be a noticeable effect upon
non-agricultural goods.
A. v.. excess reserves of the system.
v Redemption of Central Bank hold¬

rent prices

hence in food prices, hetice

cost of living and

.

that

ichieved

although

base.

in-

economic

at

balance

v-V'.YYz-YY";Y'Y-Y Y

Y' ■'/YYY'Y
on

not'only offset the
contract the credit

March 15 will reduce the

/

prices, the need for greatly
•xpanded bank credit and the
consequent rise in money incomes
•elative to physical
output are
md

for

concern

future.

the

are

action*of/the

commercial banks im meeting a

...

reserve

up

loan trend,

i

balances, that could be used to carry on the inflationary
then a large part of the deflationary action of the money

a

the.
that; ;
make Whether the long- or short-

create reserve balances still Tests with
member banks and this Is a thorn* in the side'of the powers
The

essential to achieve

balance in

to

ability

,

.

being "pegged'*^

economy.

•"

fairs

DECEMBER 31, 1947

;

with

and

sound currency.

in

realizable

economic

in

interference

cal

CONDITION,

af¬

'/

provision for a
This condition is

.

this

country

Cash and Due from Banks

:

.

484,535,415.87

.

.

623,056,031.15

Municipal Securities.

Banking Premises

.

.#

.

.

.

.

Dmy

And

Accrued Interest and Accounts
Receivable

..

6,62 3,496.92

•

..

Customers'

Liability

Acceptances
Cash

on

were

I

.

*

Deposited Against Bonds

Borrowed

7,297,745.94

.

so

$1,666,993,441.59

\

.

.

Surplus

.

.

-

t

(

z

i

General Reserves

.

.

.

.

.

150,749,244.11

$

14,609,945.84

.

Deposits

.

.

hand,

one

other.

1,350,000.00

1,483,951,180.26

3,890,655.94

$ 10,570,858.95
! 2,403,304.06

8,167,554.89

Liability Under Bonds Borrowed

2,342,565.00

Other Liabilities.

1,932,295.55

.

.

•

*

cannot

fully

per¬

New theories

rate

of

incentive

to

interest, both
save and on

borrowers.

.

$1,666,993,441,59

press

year

opens

;

.

.

y

.

■ .■ •-

.>

. ."
'
'
'''
.:'Y'YI-:-

"

v

.

^r-;;/Z - •'
rates apparently "repegged," but
reserves

over

in order to limit the

balances?

...

is likely to be a
"Special Reserves" as

in some quarters that there

concerted

more

.

formerly, will not the monetary author¬

for greater control

It is believed
much

.

conclude that short-term rates

can

of the member banks to create reserve

power

drive

proposed by Mr. Eccles,

to put over

in the near future.

.

.

.

,

Y

opinion. . . . One is, will
the authorities and Congress be willing to go along with measures
that could be deflationary in an election year? . . . The other is that
'

however, two provisos to this

There are,

fairly sizable reaction
.
. If this 1
should be the case there will be no immediate need for power to limit
the creation of excess reserves in order to halt the inflationary loan

some

economic' authorities

could

take place in

trend..

...

v

^;/

rV.

BANKS READY
In

with the
of; the business and fi¬

new

believe that a

business in the not distant future.

V-uf uY:ZY:.Z-*'»{{>

7

the event the

'

■

5

/Z1-,

;

'

'

uptrend in loans should

continue and political

it is being pointed out that*

considerations are not paramount,

the

much better chance to put "Special,
It is being noted that the con-V
ity of the Treasury and monetary
authorities
to
ride
two
horses vulsive shock in the government securities markets of "Special Re-^
culling in opposite directions— serves," ' that is, the shift from longs into shorts in order to meet
price inflation on the one hand
the proposed new reserve requirements, is now largely a thing:of
and a low interest rate structure
the past.
Y',. _Y-'Y.• VY -; Y :
on the other.
It is quite possible
Banks have gone from longs into shorts, and there would not that" before
many
months have
have to be too much additional liquidation of the more distant
passed the question will be re¬
maturities in order for them to be in a position to meet larger
solved, not by any conscious ac¬
reserve requirements in the form of short-term Treasuries. . . V/
tion
of the authorities,
but by
nancial World focused on the abil¬

Less Amount

in Portfolio

and

of the

the

attention

f

inflation on the
old
economics,

entertained concerning the ef¬

are

on

Acceptances
i

-

the

■

CONTROLS?%x•...:...• /,•

higher yield basis than

ities

heavy

by

,.

refunding operations.

these obligations for

With both short- and long-term

quite

this function.

form

"The

Outstanding

is

.

a

much "on the hook.

also pretty

a

on

supposed to equalize the demand
for
and the supply of
savings.
Now the interest rate is artificially

fect

Taxes, Accrued

Expenses, etc.

■\i

or

In

use

y..

large

by

controlled

'

Payable January 2, 1948

Reserve for

and

the ones they own will be stable.

...

MORE

changes in the interest rate were

80,000,000.00

Undivided Profits 40,749,244.11

-Dividend

are

dissavings.
The tipping of the scales in either
direction leads to deflation, on the

.w:/• ' V<

$30,000,000.00

.

it

with short-

holders of redeem¬
of the governments they will get

rate

the

believe

thought that

position to

incentives that sav¬

diminished

now

taxes

//LIABILITIES

time

Refunding of due or callable issues

.

probably

was

evident
that
capital
expenditures
are
tending to exceed savings, which
present

are

Capital

it

ment.

2,342,565.00

YAY

for
/

ings tended to.exceed new invest¬
On the other hand, at the

'

.

Y/Z■ •'/•/;/:

not

expenditures
repressed through lack of
or

.

higher rate would be available in the'
distant future, the maturing securities would be turned ink
cash.
As for long-term securities the Treasury is in noIf they

capital

confidence

.

Therefore it seems that one

1930's

that

reserves?

securities

savings.

the

"In

true

method of credit con¬
member banks to create

able

will be fully financed from,
will in turn fully utilize, the

lational

curtail the power of the

obligations will be successful only as long as

pending and saving that the capi¬
tal needs of an expanding econ-

13,921,871.44

Other Securities and Investments.

afford to have fluctuating

large as ours, can we

as

order to

in exchange for

division of income between

17,754,600.69

,

.

a

debt

term

the wants and desires of
public. The third condition is

•;uch

a

in

excess

prodthat

mgage

he

...

dropping government security prices as a

trol

acts and to develop new ones

36,473,522.09

.

"With

and

private enterprise, with both the
ncentives and
the "know-how"
improve old

from the commercial banks.

DANGEROUS

foreign lands. The second
a vigorous expanding

constantly to

Loans and Bills Discounted
State and

474,988,192.49

.

U. S. Government Securities

until

this power away

even

condition is

$

.

.

in many

'

..

institutions can , ;
exercise control over the initiation of reserve baW
the money managers devise ways and means to take/'

continue to
ances,

though it appears far from present
ASSET S

*

'YY"'Y Y'Y YY V'YY-YYY Y

might be offset.

managers

a free enterprise
be.
; What difference does it
term rate is protected as. long as one of them is
The first is a stable
government with minimum politi¬ *Yby the authorities? . . . This means that member

such

credit squeeze

important in what is accomplished by the money manager.
If the member./banks continue to sell Treasuries in order to build

will be

"Broadly speaking, three basic
conditions

The

*'

?

>ymptoms of imbalance and maU
Adjustment and * give cause for

CONDENSED STATEMENT OF

outstand¬

will not have too great an effect upon
the credit picture/ because only small amounts of the 2s and 2%s
are
held by theA Central Banks. % *. . Reserve requirements in
New .York City and Chicago might also be increased, jv YY';:/: Y<-:>
ing high coupon i|ebt, but

The inflation of costs

hose levels.

■"-YW

* "Z

v

.

Redemptions of bonds

high level of employproduction, we have not

ichieved

>

have

we

a

nent and

..

ings* of. Treasury bills might be large enough to
currency return .apjJ gold inflow
but also/to

"The record of the past year

YORK

.

TREASURY RESOURCES

Economic Balance

Bankers Trust Company

months, "the

three

next

have

exports

agricultural
an

the

,

sponsored by the govern¬
has had wide repercussions.

gram as

Large

The money markets are how

about

sity

Yet

1

By JOHN T. CHIPPENDALE, JR.

1

in which Fed¬
activity is play¬

major lole in the present
purchase and filancing of agricultural commodL
des for export. The basic neces¬

ing

•

ReporterjonGovernments

"The other way

eral Government

licates

NEW

Our

busi¬

need ;for

'•

to borrow.

ness

hi*

Y

*

taxes

would have
large funds available for invest-

lower, f individuals

corpora¬

on

income

individual

heavy bur¬

a

taxes

,'

clined

monthly bulletin
attention to the

issue of ^"Business Comment," the
Trust Company of Chicago, calls

Thursday, January 8,11948

CHRONICLE

FINANCIAL

&

THE COMMERCIAL

(120)

that be probably haveS a
Reserves" over than in the past.

powers

.

.

.

...

.

Securities in the above statement are

carried in accordance with

the method described in the annual report to

stockholders, dated

$29,033,406.00 have been
deposits, including $17,925,905.32 of United
deposits, and for other purpose's.

January 14,-1947. Assets carried at

deposited to

secure

States Government

Member

of the Federal Deposit Insurance Corporation




other uncertainties.

One of these

:s the ability of

business to finance
further
large-scale
fixed
and
working capital needs, bearing in
mind

fi¬

considerations of sound

nancial prudence.

The other un¬

certainty is the ability of a large
of the public to continue

sectioh

constantly higher prices,
of goods large enough
utilize fully our greatly ex¬

to buy, at
a

to

volume

panded capacity."

,

.

-

*

A :1

THE PRICE

LEVEL

Prices of long

YyY" ■■■:'Yv

; '

eligible governments are now down

to levels that

while the some- A
would, not only •
keep that rate stable without official help, but it would also assure
the refunding of maturing obligations with near-term maturities. .
The ability of the member banks to create reserve balances would
be curtailed by higher reserve requirements.'h, . This would in turn

the monetary

authorities are in a position to support,

what enlarged

demand for shorts for reserve purposes

affect the trend of loans.

/ r..

•

Volume 167

&

THE COMMERCIAL

Number 4662

FINANCIAL

CHRONICLE

1

(121)

sell gold from or to the
tary authorities of another

or

in the News
i

(Continued
dence

in

from

various

pari¬

currency

.,

7

•

j

*

*

i"

.

.

■

^ i rv

.

the

2)

page

ties—that is, in the official rates
of exchange the Fund is intended
to
maintain—but
also
because

,

pon-commital interim reply, which
have

plight

interpreted

been

as

prices tend to make goldmining interests dissatisfied with

giving Fund members a green
light in the matter. This occurred
after the Fund's gopf pronounce¬

th£ present official price of gold.

ment of

such

If those

interests

should

succeed

ip bringing about increases in the
official, price of gold in various
countries, it will only result in the
United

States

ultimately

having
to .buy increased amounts of gold,
which in this time of inflation
not

needed

Treasury.
world

better

very

as

off

would

whole

a

if

foreign

materials

and

by the
Washington
logically—that

Official

thinks—and
the

are

wanted*

or

.

be

manpower

to

devoted

.were

producing something more imme¬
diately needed by the people than

gold.

more

With

..;

this

background

interest*

to

news

gold,

on

review
'

;

it

of

is

recent

some

"

•

YY

to

the

its

members

belief

evi¬

the

that

Fund

would meet with considerable

in

cess

its gold

suc¬

Blackmarket quotations for gold rose in
various

program:-

markets

and

regulations

Mexico,

the

gold
promulgated * in

were

new

Philippines, the
United
States, United Kingdom
and elsewhere. On the other hand,

monetary
world

ing,

>

conditions

about

the

-

generally deteriorat¬

were

it is not possible without

so

information than the writer

more

to state with any certi¬

possesses

tude

that

of gold

the

apparent

supplies

ket to dry up

on

tendency
the black mar¬

is attributable pri¬

marily to the Fund's activities and
pressure.
' ' Y--Y;
;Y:/The "Neue Zuricher Zeitung"
(Sept. 29) attributed the rise in
black-market

gold

prices since
mid-1947 only partly to the Fund's
efforts.
tioned

The

with

phasis the

Swiss

paper

least

at

men¬

equal

em¬

scarcity of the dol¬

new

lar and the suspension of the con¬

vertibility
which

of

sterling in August,

strengthened

tioned

the

gold

Also, it

hoarding tendency.

men¬

the growing fear of cur¬
depreciation. ' The
article

rency

cited

the

following increases in
black-market gold prices between

mid-July and the second half of
September:
gold a sovereigns
in
Paris rose from 3,250 francs to
4,300; in Rome, from 8,800 lire to

9,^00; in Brussels, from 700 francs
800; in Lisbon, from 340 escudos
to 400; in
Alexandria, from 463
piasters to 517.7
V

to

Another

article

in

the

same

(Sept. 27) reported the
blasting of hopes that a really free
market could be
established, cit¬
ing the deterioration of the forign exchange position of Sweden
newspaper

and

Argentina

and

saying: "In
fettering gold deals, the Interna¬
tional Monetary Fund admits ex¬
isting parities can be maintained
only artificially." The article was
pessimistic

about

the" Marshall

Plan's ability to outweigh the in¬
flation

forces

That

loose abroad.

it will

take

more

than

a

letter from the Fund to stamp out
the illegal markets in gold, the
examples cited below indicate. '
.'y Xi V

•

7-

-

\

v.;

' .yy

•

-a•

■

%

•;

Apparent Ambiguity in Fund
....

a"*'-' 1

Articles

7 The
that

Fund's

;

articles* of

member

shall

agree¬

buy

gold

at a price above par- value plus
the prescribed margin, or sell gold
at a

the

price below
prescribed

par

than,

face

to sell

ing the matter.Y'Y TV-.;,,...7 v.'.:4
The example of Latin American

paining

countries ' freely

gold destined

selling

for the black

mar¬

and elsewhere to demand

equiva¬

transactions

at

value

being Cfinanced

were

creasingly

than

more

in

par

in¬
sterling,

pounds

with

the result that the pound in
effect became available at a dis¬

in

plain

contravention

proclaimed

of

do

value minus

not

kets with gold at premium prices,
made

pn

Conference sheet
alternative
proposals

It

as

the delegates
The sheet reads in
follows: 5
' '
Obligations
of
Meinber

"IX.

Countries.v'"
"l; Not
which

a

to sell

<

•

to

'*v

buy gold

exceed

[sic]

at

a

v

"Section

2.

'A.-—

price
agreed

Gold

Based on Parity

convert

into

.

eliminate

the

gold and to scotch
general

traffic

It*

,

devaluation

of

American

its

dollar

gold

while-the

balances

free
world.

the

on

Fund's

translated from

as

an

are

.

.

throughout

It is

that

gruous

claims

article pub-

.

to

the

be

(Continued

*

on

page

inquiry of the Fund




as

to

Manufacturers

a

line against breaches of
discipline,
lest its authority be damaged ir¬

7

• .>

^
v'-

..

V-L

'

*

;■*»•■■■

Condensed, Statement

the Fund is

far

so

its

Nor is that the only

of weakness.

Have

is known

unable to enforce

policy there.
area

as

Executive

\

:

Directors

Over¬

ruled Bretton Woods
Conference?

9ne

authority

points
and

out

on
the
the reason

that

Lebanon

ignore

the

Fund
Syria
Fund's

•' rvY

'

yr

'■<:

■

■* •*-.

v

«■'. /

sr

..

J

..

of Condition

reparably. But. as of this writing,
the Fund's wishes are
being quite
openly
flouted
by
Syria
and

Lebanon, and

COMPANY

TRUST
■

London (June 28), to remark that
the Fund must take a vigorous

V.

Y;

close of business December 31, 1917

as at

RESOURCES

Cash and Due from

Bapks

.

,

U. S. Government Securities.

.

Municipal Bonds

»

Other Securities

.

.

■■;£>

;

3,226,973.93

Mortgages

.

Stock of Federal Reserve Bank

1,173,607,276.55

...

.

U. S. Government Insured F. 11. A.

Slate and

$ 716,527,697.93

.

.

,

.

.

.

.

.

,

;r;. y.

.

;

.

27,296,037.43

..

.•

.

.

3,037,500.00
22,035,108.68

.
'

'

Loans, Bills Purchased and Bankers' Acceptances'

484,035,603.66
'

June request is that the Fund has
in the articles of
agreement no
power to enforce that request if
a

In

member chooses to
disregard it.
the case of the French bonus

for

colonial

gold production (re¬
ferred to elsewhere
herein),France
chose

to

obey

*

the

Fund.

Mortgages

.

Banking Houses

/

.

.

14,063,769.90

.

10,243,576.73

Y

Qther Real Estate Equities.

.

233,980.73

•

.

•

Customers'Liability for Acceptances

.

,

,

give the Fund
only
a
face-saving
change
in
Canada's gold program.
One of the Bretton Woods dele¬
me

that it

the in¬

was

tention of that 1944 Conference to

permit and
bers

of

even

encourage mem¬
Fund to sell gold at

the

premium prices

and

that, there¬
fore, the above cited language of
Article IV was purposely so word¬
ed; on the theory that official
sales of gold were a good instru¬
ment for combating a gold black
market.

It is

recalled, moreover,
that the U. S. Treasury, for
one,
during the war sold gold at pre¬
mium prices in India,
Iran, Iraq,
and Egypt, keeping at least
part of
the

profit

for

c

i

1

a

7,641,834.15

f2,468,4B6,353.U
UIABILffIES

Capital

$4-1,250,000.00

Surplus

;

Undivided Profits
Reserve for

Dividend

Is

not

history of the

then

the

war.

Fund's

letter

to its members last June and its
evident displeasure with Canada's
decision to go ahead with a

gold
subsidy at variance with
the language of the Fund's arti¬
mining
cles

of
U.

S.

abroad?

And

Government

since

selling
can

agreement?

gold

1944,
at

has

reversed

when

premium

Today, it is said,

state for

sure

not

it

was

prices
no

one

what the Bret¬

ton Woods Conference intended
as
to gold sales, not even
by examing the minutes of the Committee
which handled that clause.

represented at
Bretton Woods were then
engaged
in selling- gold at
premium prices

.

.

.......

Contingencies

.

.

.

.;

60,000,000.00

.

22,565,100.78

.

•

Payable January 2, 1948

10,110,272.44

.

•

.

5,990,230.70

1,237,500.00-

.'.;

....

.

123,815,100.78

-

.

Outstanding Acceptances
Liability as Endorser on Acceptances and Foreign Rills
Deposits

v.

.

.

.

7,068,246.35

.

.

158,336.00
2,320,056,666.84

.

$2,468,436,353.11
United States Government and other securities carried
to

U. S. Government

secure

funds and

trust

$49,957,969.94

at

pledged
Deposits of $12,390,127.86 and other public

IVar Loan

deposits, and for other

purposes

as

required

are

permitted by law.

or

1)1 RECTOR S-

subsequently

scandalous chapter in

a

the financial

.

.

Reserves for Taxes, Unearned Discount, Interest, - etc.-

itself.

corruption

made that

6,486,993.42

Accrued Interest and Qther Resources.....

Also, the
United
States
supplied gold to
China for public sale. Chinese off i

-

Now

Canada chooses to

gates tells

•

.'

.

BEINECKE '

EDWIN J.

S.

BLOOM

OSWALD L.

J

■

Chairman, American Home
Products

<

KENNETH

Corporation "'yJ

JOHN T.

DANA

JOHN

President, United States Lines Company

P.

G.

11.

7.

76

PATTERSON

'

'

"

IN

C.

VON

ELM

>

Chairman of the Board
ALBERT N. WILLIAMS

President, IVestinghouse
Air Brake Company

:

Head Office: 55 Broad Street, New York
OFFICES

Corporation
VAUGHAN

Corporation
HENRY

President, Scran ton & Lehigh

BANKING

W.

President, Curtiss- Wright

PALMER

Coal Co.

.

BOMEL

President, National Dairy
Products

MAGUIRE

GEORGE J.

1). GIBSON

President

SMITH

Chairman, Trust Committee

GUY

President, Cluelt Peabody & Co., Inc.

-

President, Gerli & Co., Inc.
HARVEY

MADDEN

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

JOHN M. FRANKLIN
GFRLI

"

.

L. A. VAN

Savings Banlf

of the Board

City

V.

ERNEST STAUFFEN

MacLELLAN

President, Emigrant Industrial

HORACE C. FLANIGAN•;

"

RICHARD

President, Home Insurance Co,1

of America

President, Dana\ Corporation

PAOLINO

HAROLD

JOHNSTON

F.

G.

Hew York

President, United, BisCuit'Company

President, George A. Fuller Company

Vice-Chairman

HAROLD

-

Simpson Timelier «Sr Rartlctt

LOU R. GRAND ALL

CHARLES A.

Y

President, Lambert, Company

ICesf Indies Steamship Lines
BRDSH

Vice President

President, Lincoln.Savings Bank
JOHN L. JOHNSTON

Chairman, Atlantic, Gulf and
ALVIN G.

WILLIAM G. RABE

FREDERICK CRETSCH

Y

Chairman, The Sperry & Hutchinson Co.
EDGAR

GREATER

City ]

NEJ>V

YORK

European Representative Ofiice: 1, Cornhill, London, E. C. 3
Member Federal Reserve

System

«

Member New York Clearing House Association

more

reestablishment of

market

in
a

the

"certainly incon¬
Fund, which
working for the
monetary stability of poor coun¬
efforts tries, adopts a policy which im-

be

comments

shall buy

others

favor of' the

at

making a profit by in¬
directly feeding the world's gold
black * markets.
The
following

Purchases

member

currencies impended,
The Fund's
statement prompted the "Statist,"

by

.

in

that

rumors

Has

f
"After lecturing on charity —
withput practicing it
the Fund

the United

expected to

was

"illicit"

.

torted balance of payments? Has
taken any steps to back up
Silver, which the last few months
has dropped 30% of its vhlue?
I

Fund, asking cooperation of all
members " became "* unavoidable.

Thereby the Fund

,

it

$35
an
ounce—it was too much of a good
thing for the Mexican authorities

Prices.

"No member country

pretty,

very

us?

the Monetary Fund
concerned "itself
with
our
dis¬

were

representations.

time

• •

i

parity,

peso

made

sounds

about

chance

any

that,, when

authorities

what

.

.

7

but

govern¬

"

this

United 1 States

to

..

.

"All

Washington that—since goes further when it comes to
is supporting gold sales at prices above' mone¬
Mexico through loans and other¬ tary parity
The Fund's thesis
wise, and since, under U. S, Treas¬ is sustained by only one Single
ury
policy, Mexico can at any government in the whole world,
the

agreed parity by more
prescribed margin.

.

.

recalled

the

eliminate

to

felt in

was

of its currency by more
prescribed margin and not
gold at a price which falls

"Alternative A

-7"

>

be

its

States

below the

than

continues:

requested
is leaking
.l* Y 7";

still

gold

Mexican

than

a

the

the

efforts

trade in gold at premium prices,

Selling gold to the public at more

'1 "'•*

.

will

the

before

this point.

part

taken

has

are therefore of in¬
article, discussing the

The

Fund's

the

purposes-of

margin."
The
The
specifically state first report of that
Committee's
that a member may not' sell gold
rapporteur, Prof. Robert Mosse of
at above par,. Because of this lack
France, was reportedly thrown out
of clarity, Peru, one of the Latin as incorrect.
But, in view of the
American
countries
which
has fact that the United
States and
supplied the world's black mar¬ other governments
articles

containing
which were

Mpxico.-The

Steps. But
abroad.

mimeographed

parity

lent benefits. Moreover, since gold

ment

In

my files of Bretton Woods
Conference
material
I
find
a

v

than

has caused mining
Canada, South Africa

Evidence

terest.

A Mexican Viewpoint

/

Consider

interests

in

very

Additional

kets naturally

the

(IV, Sec. 2) clearly provide
"no

less

in effect,

gold do¬
mestically at a premium." At this
writing the Fund is still ponder¬

itself
ment

content

a

yalue;

-

likely that the final
language of Article IV was in¬
tended to
permit gold sales at
premia, ' ■Y
seems

Mexico City,

prices which vary from the
agreed parity of its currency by
more than a prescribed
margin."

L.7HfYY";;- Fund, the June statement of the

Request Y

letter

denced

with

the

The initial reactions in foreign
gold black markets to the Fund's
June

What

Peru
wants to do is to issue gold coins

count

Reaction Abroad to Fund's

June.

last

it

lished in August in "La Nacion,"

mem¬

ber at

;

.

permissibility ;of such gold
sales and, reportedly, received a

mone-

25

•

Member Federal Deposit Insurance Corporation

26)

2f6

THE COMMERCIAL &

(122)

FINANCIAL

CHRONICLE
tended to

Gold in the News
18 request to suppress the illegal
(Continued from page; 25)
pbverishes the poorest and en¬ trade jn gold, it claims that it is
unable to patrol its thousands of
riches the richest.
The gold
s6'
eagerly desired by central miles of coastline. There is more
banks flows* freely in the coun¬ than a suspicion in Washington
.

.

.

tries which

.

that Manila did not welcome the

from

excluded

were

In the

light of such views it is
surprising
to
learn
that
Mexican gold statuettes have de¬
veloped a strange export market
hot

Let

primarily.
A i Philippine
goldmining official is quoted (New
York "Herald-Tribune;" Oct. 26,

Far East.

take

us

rdent

look for

a

the

at
Pacific.

other

mo¬

a

1947)

saying that practically
the whole August output of his
mine, 5,800 ozs., was sold to local
Chinese at $47 an oz. "for jewelry
and
other
domestic
purposes."

the

of

side

Philippine Coastline Favors
Smuggling
While

the

Philippine

as

Most of this is presumed to have

Govern¬

found

its way to China. The ar-r
tide front Manila then reported:

ment in

its July 19 gold export
prohibition! of the Fund's June

"It
1 Not

all gold exports were banned
the July order, Washington Post and
N. Vi Herald-Tribune. Aug. 3, 1947. The

letter _paper- on
most

the

,

free

market.

mines

market

That

to

still comply with the letter of re-

The

•

gold

statutory

the

accept

price for their product if it can

stopped by the British Government
July 24, 1947,

.

anxious to force the

means

July 17 reported 'that
Philippine gold was being sold on

London

be suspected that the

may

Philippine Government is by no

Was
oh

of

the

Monetary

Fund

to

discourage exports."
The premium price is regarded
in the Philippines as an incentive
■

to

of

rehabilitation

the

mines,

Which before the war constituted

'

-

v

J://'.; i

Marine Midland Trust'Company
■New* York /

ducer.

*

;:7;

V'..:

up

the Swiss source

That Switzerland stayed out of
World Fund is attributed to

How

the

the fact that membership would
have obliged the, country to sell
Swiss francs for gold as often as
it became necessary to help Fund
members. At the time the Fund

So much for the

Traffic Is

Gold
•>'

Traffic

Currency
"

,

<

How the traffjc in gold at pre¬
mium prices was at the same time
a

channel

for

obtaining

currencies at discounts

certain

was

macto;

.

was

organized; this

Would

have

clearer by the above authority in:

describing the trade in India. Thus:
"Beginning with about August or
arid
September, 1946, Bombay emerged
so created
an inflation problem.
as
a major market for
imported •
7 Tangier a Haven for Capital
gold.
Here again conversion of1
resulted in
in

an

unwelcome increase

Switzerland's

gold

stock

operate profitably, Philip¬
Tangier appears to be a haven
pine mines need a price of $50 to
for European-owned gold and hard
$55 an oz,, according to the "Fair
currencies, The New York "Her¬
Eastern Economic Review" of May
ald-Tribune" reported on Nov. 3,
/, 1947.
.
..
To

trading center;
China trade."

black-market gold.2

of

Fund's pressure. At any rate, gold the second largest element in the
continues to be sold in Manila'by country's economy, the ; Philip¬
auction, at premium prices, to pines being moreover the world5 s
Philippine and Chi n e s e buyers sixth largest prewar gold pro¬

Brettoh Woods."

ih the

quest

dry

Thursday, January 8, 1948

£

was

the basis of the business;

The French and
well known.

hicle

for

Belgian deals

are

Gold became a ve¬

various

countries

that

gold sola possessed some cash dollars and
desired to acquire cash sterling at
m
Smuggling From South Africa
Tangier comes from Portugal.
substantial discounts. At the same
A little picture of the world American gold jewelry sells in
,time England in effect repaid part
gold smuggling: trade! as.lseem in Tangier at the equivalent of $45 of
her
indebtedness
to
India'
South Africa is contained in an per ounce of gold, which doesn't
through the acquisition of rupees
article in the Johannesburg Sun¬ sound too expensive if it is really
at a discount. In India the sale of;
day "Times" of Aug. 3, 1947. The jewelry. ,& Mexican 50-peso gold bullion to the
public had an anticoins change hands in that African
paper reports that a gold antiinflationary etrect.
smuggling squad is now working city at the equivalent of $55 an
"Whether the activation of dor¬
ounce.
This compares with the
full time in Durban,
in which
mant sterling balances was a wise
Mexican
Government's
selling
port gold smuggling had reached
move
from
England's point of
price equal to $39.76 for these
"alarming
proportions."
Rand
view remains to be seen. Another
coins.3
gold is constantly being smuggled
question is whether, but for the
out, according to the newspaper,
France Offered Premium
opportunity of obtaining sterling
the
smuggling rings
operating
at
a
large
discount,
Belgium,
i Last May France offered a pre¬
right at the mines. Gold is manu¬
France, etc., would have repaid
mium for gold produced in its
factured
into
cigarette
cases,
their indebtedness to England in
ornaments, jewelry and the like. colonies, although France was a hard currency or gold.
With a large colony of Indians in member of the Fund at the time.
"In
March, 1947, the Indian
South Africa there is considerable According to "La Vie Francaise"
Government prohibited the fur-,
of Aug. 1, 1947, the premium was
-ravel between the two countries.
ther importation of gold.
Since:
Reportedly one Indian recently insufficient to keep colonial gold that time Hong Kong has again
Was caught smuggling out gold in out of the world black markets.
become the major gold market.
In any case, the French premium
jam tins. In the shipment every
There are other markets in the
other can of jam contained gold. is reported at the Fund to have Near East
(Beirut, Cairo, etc.).
been
dropped.
Apparently "La
The
Undoubtedly some of the gold
Sunday
"Times"
quotes
Vie Francaise" took a jaundiced
seamen as saying that smuggling
shipped there Was resold in that
View of the; Fund's desires, for it
area/ but part was reshipped to
gold out of South Africa, is "dead commented:
"American and BritFar Eastern markets—at first In¬
easy," but getting the metal into
sh authorities themselves seem to
the UK is difficult. In the case of
dia, and more recently China."
want to ignore realities and to try
the United States the sailors re¬
to curb them."
; .■
Where Gold Black Market Gets ;
port there is no advantage to them
Supply
v
in smuggling gold into the coun¬
Situation Described By Gold
Commenting on the sources of
try, evidently because it is too
•!; Arbitrageur
supply of the gold black markets;
hard to find a market forjlt. at a
For an inside view of the recent the
effects
of
the
Treasury's
premium.
The Johannesburg
private world traffic in gold the amended
export regulations in
paper reports South African gold
writer sought the opinion of an
particular and of the gold traffie
smuggling has as its main destina¬
tions India, Egypt, Greece, Yugo¬ excellently informed trader, who, in general, my informant stated:
from his vantage point, traced the : "The trade in
gold at premium
slavia and Italy,
In the latter
developments of the past two years prices has been fed by newlycountry,
where
most
of
the as
follows.
mined gold of foreign origin re¬
smuggled gold is taken — accord¬
"The postwar gold market de¬ fined in the United States; for a
ing to the article — customs offi¬
cials
actually bid against each veloped into an international ar¬ period, Mexican 'centenario' coins
and bullion; and gold stored in
other for the
illegal gold and bitrage market during the first
half of 1946. At first the greatest the UK and Canada by ridn-resioffer as much as £25 an ounce. ^
activity was in the Chiha market, dents. PfesumiaSly^^\tneinb'eijs Of
Switzerland and the Gold- Market primarily
in ' Hongkong.
Some the World Fund; have stopped the
business also took place in Manila, exportation of gold at premium
For a long time Switzerland had
presumably
also
for
ultimate prices, but latterly gold buddhas
more gold and cash dollars than
transfer to China. The Hong Kong originating
in
Me x i c o
have
it wanted. Gold, therefore, was
market was conducted in Hong reached
Far
Eastern
markets,
freely obtainable by Swiss citi¬
Kong dollars per Hong Kong tael. while substantial quantities of 22zens, for in this way the Govern¬
Foreign gold was remelted into karat gold are being shipped from
ment encouraged the sterilization
tael bars. The Hong Kong dollars, Engl and, which permits the; exof the inflow without cost to it¬
the indirect equivalent of sterling; port presumably because it in¬
self and minimized the inflation
were traded at a fluctuating dis¬
volves semi-fabricated gold.
•
of the currency.
In June, 1947;
count against the official U. S. dol¬
"Foreign-mined gold refined in
Switzerland also sterilized gold by
lar/sterling crossrate. There was the U. S- A. remains exportable
selling Treasury certificates and
rIso an active U. S. dollar/sterling under the
recently promulgated
putting aside the proceeds. United market in
Shanghai.
r.:.;
U. S. Treasury regulations. The
States paper currency, being re¬
The
Hong Kong Government new regulations will undoubtedly
fused at the central bank, sells
reduce somewhat the re-export of
legally at a discount when com¬ eventually prohibited the impor¬
tation of gold into the Crown Col¬ foreign gold from this country,
pared with checks and drafts on
the United States, Cash dollars in ony, but for a while authorized but, unless the governments of the
Switzerland are called "finance trans-shipment via Hong Kong, producing countries prohibit pre¬
mium sales, the major portion
dollars."
Because of these and
to Macao.
In effect nothing was
will' continue to be shipped to
other circumstances Switzerland
changed except for a somewhat premium markets. The new regu¬
for a long time was an important
greater / expenseand increased lations will: regulate only the
source
of supply for the world
hazard.
In
the
end
the Hong conduct of Americans, not how¬
ever the flow of the major part
gold black markets. "Finance dol¬
kong Government prohibited even of the: gold; profits 'hitherto
lars," sold at a discount for Swiss
trans-shipment to Macao. The ac¬ earned
by Americans Willi be
francs,, could thus be indirectly tivities of the Macao market were transferred to
foreign account.
converted into gold coins by the
then transferred—as far as the
Advantages Seen in Gold Traffic
delivery of the Swiss francs to
physical movement of the gold
{
"The premium gold market is
the commercial banks of the coun¬
was
concerned—^-to Manila, later
merely a Symptom of instability
try. The cost of gold so obtained to
Bangkok, and "most recently to of currencies and lack *of con-,
for finance dollars was in tpie
Saigon; No direct plane" connec¬ fidence in the general economic)
that

much

the

of

bar

.

.

STATEMENT OF CONDITION DECEMBER 31,

1917

ItESOU IS C ES

Cash and Due from Banks-

;

State and

Municipal Securities

.

Slock of Federal Reserve Bank
Other Securities

.

.

Loans alkl Discounts

.

.

.

.

2,753,946.15
525,000.00

.

.

4,935,793.46

.

127,246,788.92

'■>

.

.

.84,712,200.00
.

.

.

...

.

.
.

.

■

Mortgages'

>

.

Customers'

Liability

.

.

,

.

.

V ■656,312.91
.

.

,

.

.

6,777,335.82

.

Acceptances

on

Accrued Interest Receivable
Other Resources

.

.

.

...

$114,029,627.53

.

United Slates Government Obligations.

.

,

540,298.40

.

54,266.03

.

$342,231,569.22
:
LI AIHLI TI E S

lus

.

.

.!'V!

12,500,000.00

.

...

Undivided Profits

3,952,671.41

$ 21,452,671.41

Provision for Taxes, Interest; etc..

Liability

on

Acceptances

O.lher Liabilities

Deposits

.

.

.,

..

.

1,744,420.04
,

.

.676,130.33

.

506,283.03

........

.

......

.

ft"

•m

5,000,000.00

$

.

:'V •:

,

317,852,064.41

.

'yr.

,

$342,231,569.22
Securities curried
are

at

$7,405,000.00in. the above statement
secure public

pledged to

deposits and for

other purposes required .by luu>*

.

.

,

.

-

.

.

DIItECTOllS

bavid

c.

baird

EDWARD II. LETCHWORTII

Vice President, Marsh &
Mclennan, lnc,t
V
"

Kenefick, Cooke, Mitchell,

V

Bass & l.etch wotth,

,•

james c. blaine, President

New York

edo. Alt It. boles
Chairman of the Board,
General lleinsnrauce

Vice Chairman,

;

,v

Executive Committee

«•

:

•

v"

JOSEPH P. ROUT1I

.

Chairman, Executive Committee,

.

Chairman and President,

«

: The Pittston

President,.The Murine Trust

>

Company
S ELI CM AN

EUSTACE

'

Sullivan & Cromwell

Company of Buffalo
edward l. fuller

HAMPDEN E. TENEK

'

President, International Salt Co.

.

P>

PAUL It. DUSTED

Honorary Chairman oj the Board,
Irving Savings Bank

IIARRAL S. TENNEY

Buffalo, N. Y.

Executive Pice President and

john c.jackson

4

;

Secretary

«

Jackson, fash, Brophy,
Barringer & Brooks

CLOUD WA MP IE It

President,
Carrier

seymour h.knox
Chairman of the Board;
The Marine Trust Co.

of Buffalo

Vice President,

BROADWAY

110 William Street
°

' :

Member Federal

'

.—

Since Switzerland is not
ber

•

-

*

^

.

Park

at 46th




-v

World

the

of

Fund,

a mem¬

no

obligation

to

it

to

Macao,

henfce

however,

Kong,

re-

Hong

remained

the

was

comply

with the Fund's June 18 letter to
:,

Street

Deposit Insurance Corporation

members
in

this

.ri:'v

referred

article;

Switzerland

of

to

but

elsewhere

in

August,

stopped selling gold

suspension
convertibility of sterling had

coins,
.v

exist

,

'143 Liberty Street

>

Ave,

,'

tions

shipment from these ports.

under

MAIN OFFICE-120
Battery Place

Curtiss-Wright Corp.

Crum & Forster

Foundry Co,

>

March.

'

IIENRY J. WYATT
Executive Vice President,

Chairman» Executive Committee,
American Machine &

neighborhood of $42 an ounce in

Corporation

BURDETTE S. WRIGHT

herbert h. leonard

17

-

City

BAYAIM) F. POPE

charles ii. diefendorf

128 Chambers Street

'

.

Corp,

samuel s. conover

,

'

Buffalo

FRANK A. McKOWNE

started

after

Britain's

a run on-

Swiss gold. - This

Already in March the Swiss National
had stopped-licensing gold bar ex¬
except where in the national in¬
terest.
Illegal exports, of course, were
riot eliminated' by. the'decision;
- />[■
>

2

political situation. The many
restrictions will not end the mar¬
and

ket. They may drive the price
higher if supplies fall off, but by
attacking the symptom they will
not cure the disease;
:
/

Bank

"The most serious feature

ports)

I For articles
see

-

on

"The statist'.'

.

Switzerland arid. rold.
(London)

of Macrh 22

and
"Sept. 9, 1947; "Financial Times,"
3; "Economist/' Sept; 13;' N, Y.
"Times," March 10, Sept. 1, Sept.- 44.

Sept.

of

dollars,

3 Price

reported

in.

N.' Y/

Herald-'!

needed

for

the; pur¬

food, clothing and raw
materials. But would "the dollars
be available for this purpose even
chase

-

'

is the

diversion tb1 the purchase of gold

if no

of

gold were shipped? In Qhin|i
U; S. • dollar! bills are;

gold1 and

Volume

Number 4662

167

THE COMMERCIAL

The;. lowering
to 25% in

being hoarded. XL S. dollars from
remittances and illegal
exports clear through Hong Kong.

request -by

Undoubtedly

Board.

substantial portion

a

of

ratio

emigrant

the

The

-

1945

the reserve
followed a

Federal

our

for

FINANCIAL

nationals?

own

plied.—HMB]

Reserve

arguments

&

Mr. White:

[Italics

CHRONICLE

sup¬

v

the

Miss Sumner: On that
point, is
were given at length in
that only 5 years? - v; :
•
would the 1944annual report of the
Mr. White:
remain in the next best thing— Board
No; that would be
(pp. 58-60).
During the
the dollar.
v.'''
Should currency sta¬ war, when exports were mostly permanent. ' \ ■ : '
bility return to China, a large por¬ on lend-lease and imports on a
.j
Gold-Mining Subsidies Take
tion of these funds (a recent esti¬ cash
basis, the country was losing
'■
vVaried Forms
1
mate is that approximately U. S. igold while liabilities of the Re¬
In the matter of gold-mining
$2,000,000
clear
through
Hong serve Banks were increasing. The
as
Canada
has
just
Kong daily) would become avail¬ reserve ratio had declined from subsidies,
there are various
able to the Chinese economy and 91% at the end of 1941 to 49% at demonstrated,
Direct
supplement American funds placed the end of 1944. Latterly there ways of skinning a cat.

the Chinese

of

their

find

funds which

into

way

lowering

now

gold

■

.

at China's

"To

disposal.

the

dollars

lhat

transferred to hoarded

are

definitely
the

pre¬

the

(largely Latin American); more¬
the gold if sold to the U. S.
Treasury would have created new
money here."
Gold Sterilization Necessary Here

Since this country is struggling
with

reserve

reason

the

*

over,

a

the

terchangeable, there is no good
to again differentiate in

$35 represents addi¬
purchasing
power
by
gold-producing countries
over

tional

'

heavy gold inflow, so
ratio
early in
December again stood at 48.7%.
Since deposits and notes are in¬

hoarded

gold the transaction is
advantageous, because
mium

has been

~-

•

that

extent

ratio

reserve

each.

for

NAC

Expresses
-•

,;

v

V

•"-

Displeasure

; '

•

'■

■

The statement issued

t

Decem¬

on

ber 12 by Secretary of the Treas¬

Government's

Canada's

over

dis¬

proposed

embarrassment.

fund

directly sterilizing
the inflow, because it is not the
nation's policy to cease buying
gold.
According
to
Chairman
Marriner

Eccles

of

the

Federal

Reserve

Board, the budget sur¬
plus in effect is sterlizing the
gold inflow, dollar for dollar. Ob¬
viously some more direct policy is

is

gold

a

mined.

ore

mining is sometimes assisted

by exemption from restrictions
applying to other businesses. Gov¬

h^ive

by

helped

qXpediting

mining machinery
co

just

name

as

one

in

many

'imports

of

South Africa,
example, did

even

which

American

an

of

of
of

.he

pleasure

It is clear that the

means

ton

tional Advisory Council evidences

behalf of the Na¬

on

is using

and

price

per

during the war. There is
probably no gold-mining country

Snyder

ury

Jnited

ways

the

vases

gold subsidy.

Treasury has been studying

to

.

*

,'

an
"inflationary condition,
addition to the gold stock is

the

lated

Gold

ernments

any

Hence

payments per ounce are the most
obvious method. Less directly re¬

payment

States

to

bring

countries

gold

subsidies.

view

The

United

other

on

minimize

to

that, the

the World

pressure

resort

NAC

to

adds

"would

States

with

displeasure any ten¬
dency for countries to become de¬
pendent on subsidized gold pro¬
duction

as

solution to the prob¬

a

does

not

assist

one

w^y

other
mining countries
pointers on public roads as
to

That is correct.

its

(123)

mining.

several

Tax relief is

a'

few

used

Colombia and Southern Rhodesia,
Colombia has provision for pub¬

licly-financed

housing

for

gold¬

workers.

'

Preferential

rail,

rates

quently found in this

fre¬

are

hemisphere,

however. During the war Latin
American embassies in Washing¬

ton] were especially active in se¬
curing
gold-mining
machinery
supplies for their nationals. In
Lation

some

American

gold

mines

their

product

countries

allowed

are

at

sell

to

in

premium

prices
terms of local
currency.
Ni¬
caragua, has. given its gold indus¬
try considerable aid, since'gold is'
an
important factor in the coun¬
try's

balance

of

payments.

ducers.

The

has

government

Portuguese East Africa.
;3outh

African

Also, the

Government

has

helped the industry by removing
restrictions on "workers brought in
from tropical
Africa, contingent
upon
air-conditioning
of
the

,

,

from
Britain
that the British would

■about

that much

which

$400,000,000

would

have

mean

to

send

us

to the detriment of their

gold

position

and the aggravation of our prob¬
lem of unwanted gold.
"By re¬

leasing the $400,000,000," Wolcott
explains, "we
obligation to

relieved of the

are

Such

do.

to

unfamiliar

with

persons

the

firm

buying gold from any
ber of the Fund might open
cease

in such

in

ques¬

.

be required

event

lar in New York at

As

■

Ratio'

•

• •

ment,' because

part of the Republican an¬
to
the inflation challenge

swer

Congressional, leaders
restore

the

25%

in

note

gold

decided

ratio

reserve

Federal Reserve

of

is

President < /:

to im¬

a

discount

the

United

"

Woods

■
,

During

a

;

^ ' Mice-President V;

•

»

'.

Vice-President

v.

•

,<

[

*

:

;

will not absorb all the "free gold"
certificates now held, but more

President Morgan & Cic.

,

important—it

are

lending.
:

commercial

be

not

restricted

,o

-

•

On December 3

••

the

banks

their

in

V
Reserve

Banks held $21,418,000,000 of gold
certificate
eral

Total

reserves.

Reserye notes

Fed¬

in circulation

$24,706,000 000 and deposits,
$19,280,000,000;
Thus, -gold cer¬

were

tificates

in

excess

of

(now

reserve

re¬

agreement.
of

the

Incorporated

,

Company

'

y .v;i

would

excess

$4,787,000,000
Some

of

on

12

the

still have

been

December
Reserve

*

3.

Banks

be pinched by"1 the new re¬
quirements. They would face the

ing

demands
Reserve

of

for

refusing

to

additional

notes/

which

meet




in. the

the

some

:

comes

that

citizens

.

some

the

of

our

RA'LPD

i

of

own

Today

we own

in Fort Knox.

gold only by proxy
We hold warehouse*

certificates (banknotes), but these
warehouse certificates do not en¬
title

to

us

demand

delivery

There is the danger of
gold ultimately losing its attrac¬
tion to

the Western

individual loses

gold.

public if the

his

contact

gold

(Continued

on

we

to

on

28)

page

i

.

;.

w

.J.

■«

v

"• .V

,

^ >

'

'

'

'

'

from Banles

$1/3,553^61.13

'SecitpUiesCp^AYmvy *325,136,333.83
.....*

14,419,011.57

.

...

'

.

13,635,293.49
121,739,919.64

2,185,922.95

•

3,000,000.00
»

'

Prepayments...........
.

'

'

.

'

•

10,74$,386.92

^'479,920.00

,

'

1

$665,619,429.53

4

Wy&iLLAGHER
"

liabilities

Incorporated

Deposits...............

Vice-President
G US TA V

METZMAN)

$556,676279.06

—

Official Checks Outstanding

THOMAS S, LAMONT

34,568.232.30

$591,244.511.36

Accounts

President New York Central

Railroad

stock

that

Company

Payable, Reserve for Taxes, etc.... *

Acceptances Outstanding and Lettcrs-of

/

(Credit Issued

IK A. MITCHELL
Vice-President

' ■ ; ■

v

"

Vice-President

•

-y

.v.. t.....

r

'4264,082.12

Surplus.
'■ C

ALFRED P. SLOAN, JR.

11229,306.92

,.f

20,000,000.00
.

20,000,000.00

.,

Undivided Profits.

' 18,881229.13

Chairman General Motors

we

-L

Capital.

JUNIUS S:MORGAN

$665,619,429.53

Corporation

mining of gold,
our

V

E.

ac¬

In other words,

would do what

was

gold

necessary

production

here by rsubsidy or even
price to

TAP PAN STANNA RD
President Kennccott

Copper Corporation

""'

buying and selling of

vour

> '

king House

"

if we found

the international market.

increase

•

Municipal Bond6 and Notes.

Vice-Chairman Morgan &■ Cie.

course

United States Government securities carried at $16,8*6,454.00 in the above
stutcmetil

JAMES L. THOMSON

No; that has only to

Mr. Monroney:

Less

■

•*;•••

Chairman Finance

*

■

arc pledged to qualify for fiduciary pmvers, to secure
public-monies as required by law, and for other purposes. •?

Committee Hartford Fire
A'-yi Insurance Company 'yM

JOHN S. ZINSSER
-

'

v;

Chairman Sharp & Dolime Inc..

Member Federal Reserve

Member Federal

with

should not be surprised
if at the present time the Amer¬
ican public would
appear as a
buyer of gold if permitted by law.
Instead of a flight from the dollar
I

"

that interfere with

do with the

Hand and Due

on

a*

the goods.

N.D.JAY

•;

gold-min¬

cumulation of gold stock?
Mr. White:

'

ex¬

extreme

only

may

.-

Vice-President

,

marginal mining of gold

subsidize

i'#.

*

4

Vice-President

agreement.

...

Cash

the

of gold

Liability of Customers on Letters
of Credit and Acceptances
$1.1,229,306.92

CHARLES D. DICKEY

permissible
The

were

Fund

increase

would

,

was

articles

that domestic

subsidies

should

hardly

conceivable,; or selling some " of
their government securities, yvhich
would raise new problems

the

Later,

[ Mr. Monroney:

Federal

is

staff),

following is from the hearings:

may

alternatives

Fund's

by

Bernstein

M.

Banking and Cur¬
Committee's hearings on the

under

to

the

Similar

-v

whereby by
the U. S. government <
monetary gold bullionThe raison d'etre for gold is it#
value
as
a
storage of
wealth.
law

ASSETS '

Ban

*

a

.

circles

result

"

H. P. DAVISON

House

testified

$10,422,000,000.

were

the

monetization

Accrued Interest, Accounts Receivable, etc..

JOHN L. COLLYER
President The B. F. Goodrich

'

White, then with the Treasury,

ry

With i the 25% reserve replaced
by the 40% and 35% requirements,

•

metal

proposal

Loans and Bills Purchased.

"CHARLES S. CHEST ON'

Bretton Woods program Mr. Har¬

in

quirement

the

on

permitted

rency

12

From

-

YORK

'Morgan $ Cie. Incorporated)..

"

that domestic subsidies do not af¬
fect the exchanges and therefore

will

V'

'Stock 'offtho jPfidejfqMftewrpe ''JBajiJiX '<.•*;i IfZffljOOO.QO
Oth er Bonds and Securities (including Shares
.of- Morgan Gr enfell '$• Co. Limited and

.

BERNARD S. CARTER

at

Bretton Woods in 1944 the writer
asked
Secretary Morgenthau

assistant," E.

'/:-r .v.t-V

State and
,

Investment Corporation

'

'

conference

thau's

Board—the

Advance
Idea

..

Condensed Statement of Condition December 31, 1947

United States Government

Vice-President

PAUL C. CABOT

deflationary in any way. For the
system as a whole the new ratios

at> the

Circles

\

•

,

claimed

Metal

'■

M-i

7. C. R. AT KIN

.

suc¬

seeking

>

...

*

deposit
liabilities—to
domestic
subsidies
of
40% in gold certificates against whether
outstanding notes and 35% against gold mining were permissible un¬
deposits. Reserve Board officials der the Fund agreement. The an¬
do not regard
this proposal as swer,,, supplied by Mr. Morgen-

is

organized propaganda
higher price for gold.

HENRY C. ALEXANDER

States

Conference'

press

NEW

ARTHUR M. ANDERSON

are

Gold Subsidies at the Bretton

to

and

campaign by silver hoarders

ceeded, and the Committee for the
Nation demonstrated the power ojg*

tent

„

.

..

President State Street

the

against

a

the

lows:

Representative Howard Buffet!
(R.,
Neb.)
recently
announced
that legislation will be introduced
providing for the resumption of
a gold-coin standard in the United
States.
Mr,..; Buffett feels
that
the country has a gold stock large
enough to permit the citizens the
luxury of putting some of their
savings into idle gold, if they wish

Vv

buying gold from Canada.

Banks—presently

certificates

at

in

an organized#
nationalization"
premium. We have
1930's how much £

the

"The predicament in which we

V..',

GEOR GE WHITNEY

permitted under the Fund agree¬

/

gold

seen

for

R. C. LEFFING WELL

•

Reserve.

of

1NCORPORA TED

Chairman

.

re-*

time in the future of

campaign

Chairman Executive Committee

.

exchange controls? At pres¬
dealings in the Canadian dol¬

ent

'

f

.

pose

Republican Proposal to Raise

disadvantage of

suming the issuance of gold coin#
might be the encouragement some*1

J. P. MORGAN & CO.

asked is: Would the United States

pear that the convertibility clause
of the loan agreement, abandoned
r:;

.

One possible

the
government without
neces¬
sarily having coinage resumed. A
correspondent writes me as fol¬

Minting Proposed

THOMAS IK LAMONT

of

gokt

opposite

DIRECTORS

mem¬

sorao

hoardsr

privately-owned

place

interpretation of the ar¬
accept that much
If the reasoning seems ticles of agreement of the Fund
"strained, it is a corollary of our bearing on exchange control. A
gold policy. ' It would hardly ap¬ question the -writer has heard

..

of

gold holds in the thinking

gold."

August, is being reimplemented

in

are

make this country's
policy on such matters. Inciden¬
tally, for the United States to

01

enabled the government to add
t#
the credit base with the

of those who

tions

by Britain.

now

private

shall find ourselves is td

Gold-Coin

.

the

ing

and other Treasuries.*

lem of arriving at and maintain¬
ing equilibrium in their balances
of international, payments.", In an
mines.
called for.
effort to stave off subsidy de¬
Mention might be made of the
mands from American gold min¬ j
Incidentally, the embarrassment
Since the government
South African Government's mo¬ to do so.
ing interest, the NAC says "there
of gold riches was used by: the
has to sterilize inflowing gold as
nopoly of dynamite.
•ire no grounds whicn would jus¬
Treasury
in obtaining informal
Gold mining is also subsidized an anti-inflationary measure, one
Congressional leaders' agreement tify instituting a subsidy to en¬
through government financing of way or another, there is no doubt
to the release early this month of courage the production of gold in
technical research and on-the-job
this country."
the
4 At
the
International
$400,000,000 of the British
Conference
of
training. Another help given in Economic Services held at
Persons
unfamiliar
with
the
loan " impounded
Pcntigny,
by
Secretary
some countries is the construction
France, September, 1938, a paper' by F.
Snyder in August. The argument subject might interpret the NAC's
of railroad spurs to mining areas. W. Paish, Causes of Changes in Gold
given the legislators, Representa¬ statement a^ a threat to cease
Members of the Congress from the Supply, discussed the main classes of
Government
a'd
to
tive Wolcott has
gold
mining.
Cf.
disclosed, was Duying gold from countries sub¬
Rocky Mountain states can give "Economica," November 1938.
that the continued withholding of sidizing the metal, as Canada is
.

uie

into

be*'
allowed'to buy gold bullion from

vIn times of depression the big¬
gest subsidy to gold mining, of

ar¬

ranged for labor imports, dealing
directly with the Government of

tunc

gold

standpoint, jus#
during the depression the call-*

as

novel

or

heavier taxes, so as to make pos¬
sible operation by marginal
pro¬

*

be beneficial from the immediate national

in

mining
another. course, is the maintenance of ai
South Africa
employs various unlimited fixed-price market for
devices.; The richer mines bear the yellow metal at the American

industry

our

would

effect.

.j'" In general Latin America does
not go in for direct gold subsidies.

and

of

in

countries, including Aus¬
Belgian Congo, Canada,

tralia,

mine

mis

aid

an

27

System'

■

■

Deposit Insurance Corporation

•

I

28

THE COMMERCIAL

(124)

&

FINANCIAL

CHRONICLE

ilar

Gold in the News
only in part
islation. The

(Continued from page 27)

through the purchase of stocks or
cpmmodities

goods,

sumer

funds might
The de¬

excess

find their way into gold.

flationary effect need not be

sire of the American

If the government

because

(permissive

public
legislation) it could
tier the price.
the

easily

con-

billions

of

He holds

that 'the

United

States

is

stored

and

hole"

turned

where

into

it

wheat

and

fuel

the

Washington "Evening Star"
The speech, perhaps hot

for

the

American

poor,

reports.

out

of the problem of gold is the re¬
luctance of Switzerland to accept

it in settlement of her

Switzerland is afraid of

balances.

the

by further
Extension to

American

inflationary force of the in¬

flux

of

much capital

so

small country.

into the

Is it the first sig¬

nal ih the breakdown of gold as

ership of gold in the State could
have serious long-range repercus¬

international

The value of gold depends

currency

when the

countries with the strongest

two

10

%

AND TRUST COMPANY

country

v

,

;

whose

sub¬

Yugoslavia
Poland :rwV "■

China /

Dominican Rep.
Greece

delivered by

The

"

Italy
Syria

/:

'

""

'
vyLebanon V X/;

in

Furid' has

at

set

certain

re¬

delivering

itories.

gold to.its depos¬
Such gold must be in bars

least

0.995

fine

approximately
members

and

400

deliver

weighing
If

ounces.

gold

deviating
from
these
requirements, they
must pay in gold an
amount,: de¬
termined by the Fund, equivalent

two

were

States.

transfers

are

The

toward the United

two

•

transfers

were

occasioned by1 the provision in the
Articles of Agreement that at least
4Q% of' the Fund's gold should
held

be

initially ...in

deposi¬

the

tories designated by the members

having the 2nd, 3rd, 4th and' 5th largest" quotas.
As' the Articles,
read, the requirement holds oitiy
,

of the start of the Fund's

as

ations, and is

o^er-^

longer binding.:

no

The exact language reads:

to the cost of converting such gold
into bars of the required
weight

Administration

"Ihitv^
ally, at least one-half of the hold¬
ings of the Fund . X ." must be
held in the country with the larg¬
est quota. In the Committee which
drafted the language at Bretton

and fineness.

Secondly, the assay
recognized by the depos¬
itory in question. Thirdly, mem¬

Woods there

reports

must be

cussion

over

comma

after

bers must bear all

finally decided to leave the lan¬

Stevenson

When

not

the

V

Museum.

National

\r

;

he

of

step

with

the

for, according to
Ottawa, the Amer¬
Treasury used the same ex¬
pression in its efforts to dissuade
from

ican

panada from subsidizing gold
duction.

t ;

.

World Fund's Report
In

the

pro¬

•/

Fund's

on

Report

Audit

on

.

charges of the
depository for taking the gold into
custody. - X-.i;
During the

on

the date

guage a

.

held

Banaue

de

of fine

France

'

England.....

to

least."
:

put
ft

•

-.1 v

J

Total

;

5.94

2.04

35.3Q

21,782

56.72

*38,409

Federal Reserve Bank of New York.

<?•

of total

2,283 ,;

13,558

;

;

Percent

ounces

785
-

a

was

f <>

■

Thousands

>

Reserve Bank of India
Bank of

"at

bit ambiguous.

men¬

tioned, 17 had paid their subscrip¬
tions in full, and in doing so each
had paid gold of a dollar value
equivalent"to at least 25% of its

whether

follows:

as

Xj Depository—

.

considerable dis¬

was

On June 30 the Fund's gold was

ended June 30,

Audit

for the year ended June 30 there
are several references to gold.
Of
the 44 members

year

-

respective quota. Ten other mem¬
bers had paid their subscriptions
in full while making in gold a

t.'r

;

members

as

quirements to be met by members

"the

far

•

movements

should approve.

The

soon

taken

the

help to solve the problem.
"One of the interesting phases

Brazil

as

that

<

Uruguay W

out of

the only movements of

scriptions were npt yet due at the
time of the audit were:
' V ' -

of

has paid heavily for the "useless
gold" and proposes that it : be

is

the rest of the world of the Amer¬
ican system of monopolizing own¬

sions.

Americans, Representative
(R., Wis.)
advocates.

Stevenson

gold,"

increase

dollars.

needy

.-■■■X
speaks of "useless
Wisconsin Republican

hard-currency coiintries instead
by their governments would

prepared

was

payment

Congress

,

The stock of gold at Fort Knox
should be turned into supplies for

in

this

indications

Representative Stevenson's Plan

Mr.'

of

States has a large

present
will

artificial

was

of

stake in gold. For our gold stock
$22 billion worth of goods and
services have been sold, mainly
to foreign countries, and accord¬

tq

the

an

exchange relationship for gold?"

|he purchase of gold by nationals

gold at substantial premiums over
the $35 price are being made. This
may be an indication of the popu¬
lar attitude- ■,;> j:'Ty' '; •
j;X

amount

in

substitute

note,

complete

the

flation,' cannot be reconciled with
the selfish interests of dollar-poor
nations. Here again it seems that

of 1934; gold in its natural state
be freely held by the public.
I understand that sales of such

ing

more

currencies

demand

Fund gold
aggregating
4,857,242 ounces from the New
York
depository to the London
depository. In these casek, it is'
learned,; there was no physical
shipment, since prevailing gold

to

mining of gold, which adds to in¬ inappropriately,

may

"The United

be

than

employed

usefully
Act

Reserve

could

that 'labor

heard

"

Gold

the

government

its own gold purchases
pf the inflationary dan¬

The argument occasionally

gers.

'

"Under

limit

to

i|romd reserve the right to sell
to

the indi¬

important to buy food and cloth¬
ing than to sterlize money in gold
cannot be reconciled with the de¬

tjie private holding of gold bullion
gold

of

.

em¬

phasized.
I am not necessarily
advocating convertibility of currehcy, but merely suggesting thaf
he permitted.

desire

vidual, especially the Oriental, to
store his wealth in gold is also a
major factor.
"The approach frequently found
in official circles that it is more

durable and con¬

or

American leg¬

upon

Thursday, January 8, 1948

100.00

:

'•-Discrepancy in summation due to abbreviation of items.

provisional payment equal to 10%
Among various amendments and are now held by the Greek public
of their gold and dollar holdings
additions to the Fund's Rules and about 7,500,000 sovereigns.
"
as reported to the Fupd.
"In each Regulations adopted by the Exec¬
case," reads the report, "this pro¬ utive Directors between Feb. 7 and Argentina Asks Gold Redistribuvisional gold payment
is sub¬ Aug. i4 are several relating to jyynion
/ X-p-U.:ject to possible adjustment." The gold. One is a technical amend¬
At the Havapa ITO Conference
10
members which
have made ment
(D-2) relating to gold pay¬ Argentina through' its represfenta-.
such
provisional gold payments ment when a member's quota is tive Diego Luis Molinari,' is re¬
are:
y/;:;:-:, :'\'/\u':' ;/■
increased.
The Executive Board ported as blaming the concentra¬
tion of most of the world's gold at
may reduce the proportion of the
Chile
Ethiopia
increase to be paid in gold.
A Ft. Knox for present world trade
Costa Rica
France
new'
and
as 'proposing
section
an
(F-4)
authorizes troubles
Czechoslovakia
India
transactions of members in gold international monetary conference
Denmark
Luxembourg
within 4/4 of 1 % of parity, ex¬ tq correct the situation. Argentina
Egypt
;;
United Kingdom
clusive of certain charges speci¬ seems to share the recently-ex¬
In
Peru's
case,
the auditors fied in the section. Under another pressed ideas of Britain's Foreign
doubtfully noted that payment of newX section
(1-8),' "When any Secretary Bevin. The latter's pro¬
subscription was made in full, the member offers gold to the Fund
posal that the United States , di¬
gold portion being equivalent to
pursuant to Article V,! Section vide up the' gold chips it has ac¬
10% of Peru's' gold and dollar 6
(a), the Fund "shall'levy a charge cumulated seems to have had in
holdings as reported to the Fund.
(unless in particular cases it de¬ mind a feature of the Paris Report
Subsequent letters from Mr. Gqtt cides otherwise) to cover the esti¬ on the
Marshall Plan calling'forto Chancellor Hugh Dalton mak^
mated costs that would
be in¬ the United States to strengthen
clear that this payment by Peru
curred by the Fund if it used the European currency reserves with
has been accepted - by the Fund
gold so acquired to purchase the a few billions of American gold.
a& definitive.
\
'( • currency it has sold."
Apparently Iraq paid no part of
Conclusion
its subscription in gold, the. audi¬
Greece Resumes
Gold Sales
!
Gold continues to play its tradi-'
tors reporting: "The subscription
Early in December the Greek tional role as a settler of inter¬
of another member, Iraq, was paid
national trade balances.
Thanks
irt full but exclusively in national Government, with the approval of
the United States aid mission, ar¬ largely to American official pol¬
currency" and securities.
On the
icy,/ as expressed through: '*the,
basis of information supplied by ranged to resume the sale of gold
Congress, the yellow metal still is
the Fund, it is understood that the sovereigns as an anti-inflationary
measure.
According to the New generally used in governmental
executive directors have approved
York "Times" correspondent, "the monetary bookkeeping every¬
the payment of
Iraq as final."
where.
The
deterioration
and
rocketing price of gold was begin¬
Managing Director Gutt, however,
destruction of currency values at¬
states" that
final
acceptance
of ning to threaten the fiscal basis of tendant
upon
the necessities of
the United States aid program."
Iraq's subscription has not yet
war
and
the ineffectiveness
of
been approved, in a letter of Aug. During the previous four months,
many
governments in times of
15 to Hugh Dalton, then Chair¬ the price of the gold sovereign had
risen from
150,000 drachmas to peace have caused people in trou¬
man of the Board pf Governors.
bled areas to flee more and more
In
calculating
the
members' 198,000 with commodity prices fol¬ from inflated paper to the tangi-'
lowing along. An interesting detail
gold payments the Fund counts
valuable, portable, durable
of the new policy is that the Fed¬ ble,
as such payments of U. S. dollars.
and concealable store of wealth
eral Reserve Bank of New York is
At the time of the audit; June
which is called gold.
To those
to supply Greece gold sovereigns
30, there were unpaid balancfef
who can get it gold offers a re¬
in exchange for French and Italian
on the
subscriptions of 15 mem¬
assuring, if often illicit, refuge
bers.
In the cases of five mem¬ gold coins, since the Greek public
from
unpleasant realities.
Such
will pay more for sovereigns. This
bers the balances were due and
"swapping" of gold by the two persons are willing to pay a pre¬
payable, the other 10 being not
mium for escape, and so long as
central banks will involve no loss
diie until a par value is estab¬
there are others who have gold to
of gold to the United States.
It
lished."
"Explanations" given in
sell and who see no harm in meet-'
the auditors'report about the five is reported that earlier efforts of
delinquents follows: Bolivia was Greece to arrange similar swaps ing that demand, the World Fqnd
with the United Kingdom, Egypt
will have a problem on its hands.,
awaiting approval by its Congress
and India were fruitless.
of "the international instrument
...

0/ NEW YORK.

■

Main Office, 37 Broad Street

.

STATEMENT

CONDENSED

.

CONDITION

OF

December 31,

1947.

RESOURCES
Cash and Due from Banks

State and

$127,685,624.53

,T.

•

•

•

•

•

•

•

.

.

.

•

•

.

.

U. S. Government Securities

•

.

.

Municipal Securities

310,972,475.50
7,794,976.81

Other Securities

5,380,493.50

,

,

loans and Discounts

Customers'

Liability for Acceptances.

Stock of the Federal Reserve

Bank

•

♦

♦

1,440,339.26

.

♦

124,180,873.98

?

1,217,464.33

Accrued Interest Receivable
Other Assets

♦

660,000.00
2,207,994.41

Banking Houses

♦

•

I

t

•

•

i

•

259,156.71

•>

#

$581,799,399.03

LIABILITIES

Capital

rv~.-.

.

•

.-.$ 9,625,000.00

.

12,375,000.00

Surplus.
!

Undivided Profits

•

^

•

«

•

22,000,000.00
7,838,859.67

$29,838,859.67

Dividend Payable Jan. 2,1948
Unearned Discount

275,000.00
583,454.93

...

•

Reserved) for Interest,Taxes, Contingencies
.

.

f

Less: Own in Portfolio

.

2,354,123.75

4,162,609.87

$4,040,524.61

Acceptances....

JOther Liabilities
Deposits.

.

......

#v. '

'«

■

1,686,400.86
328,110.90

•

544,924,962.80

.

$581,799,399.03
Securities carried at

$6,040,984.74

are

pledged to

which
secure

(J. S. Government War Loan Deposits of $2,945,392.95 and

other

/

concerned."

public and trust deposits, and for other purposes
required or permitted by law.

troublesome
matter

"is

view."

For

had

no

very

correspondence,
currently
Panama

the

under

the

re¬
report

satisfactory explanation.

subscription in July, 1947, by
v

26 Offices Located Throughout Greater New York \




has

Turkey "completed payment of its

FEDERAL RESERVE SYSTEM

FEDERAL DEPOSIT INSURANCE CORPORATION

With Honduras, with

Fund

as

offers
MEMBER: N. Y. CLEARING HOUSE ASSOCIATION;

the

liyery

of

a

non-negotiable, nop-

interest bearing
the

amount

dp-

of

1 The

public's

Greek

taste

for

sovereigns, reflected in its willing¬
ness

to pay

for them more than

twice what the Bank
will

the

war

ment's

by

lira."

the

Co., Inc., 123 South Broad Street,

action

in

2,000,000

Venezuela, which delivered a sim¬

brought in
coins.'

Philadelphia

PHILADELPHIA, PA.—Blair &

supporting

movement with

gold

sovereigns.

demand note for The Germans also, it is reported,
78,250,000

Blair in

the British Govern¬

Greek resistance
about

of England

stimulated during

was,

pay,

an

equal amount of the

It is estimated that there

announces

that

Robson L.

Greer

has become associated with them.
Mr.

Greer formerly was

with the

Philadelphia office of F. S. Moseey

& Co.

Volume

the heart of

our

(125)

CHRONICLE

FINANCIAL

THE COMMERCIAL

Number 4662

167

economic

system

heavily: involved in

aire

R. C, Schmerfz & Go.

Government;bonds.;;:'*;VJ ■'v':'/
•■;/

<-/;/' ' '(Continued fro

n

'''/"/" V,'
institutions—upon which, of course,
the livelihood of many individuals depends—acquired
Most of these

//

first page)

these individuals depends upon the ability of the politi¬
cal authorities to continue indefinitely to "rig" a market ;?

these deficits of the national Government at
above any

well-recognized as resting upon uncertain foundations, or else upon the willingness of these authorities

now

to take whatever

if without

nomic system

prohibitive destruction in the

in general.

These

;

1

course.

where the markets

rigged in the

were

It is

than

more

sense

a

formed

case

it was thought necessary. The
of the past decadeMd a half, by its
very nature, created a superfluity of funds which could
not well fail to bid up available investment media to
levels not warranted by the basic economics of the situ¬
ation then existing. What is more, attacks upon busi¬
ness were for so long so severe—and still are, for that
the

/

market whenever

"

are

not

facts and it is

never

PA.—R.
C.
has been

Inc.

the

as successor

to the invests

Union

Schmertz and the late William HI

Phillips.

;

/

,

Officers

of

the

new

L.

R.

Titus,

Landser, Secretary and Assistant
Treasurer.:
/ /' *

C.B. Ruch Asst. Treas.
For Win. E. Pollock Co.
Clarence
sistant
lock

&

Ruch
of

Co., Inc.,

New York

the

B.

treasurer

firm

City.

as

Is

now

Wm.

E.

20 Pine

cashier.

time before the confidence of investors in Government

REPORT OF CONDITION

and then later from the sudden "pulling of the ■//■
plug" in the bond market on the day before Christmas. ■

Business, December 31, 1947

f ago,

ASSETS
'

i.W'

Only
But

-j

•

even

a

can

It likewise remains to be

devise

a

seen

'

•

.

■'-■■■■

•

'I-

■

...... •

;

;

.

$214,445,596.39

./

($21,812,302.30 pledged to secure
and for other purposes as required

508,552,309.09

deposits
by law.)

Federal Reserve Bank Stock

1,200,00000

State, Municipal and Public Securities
Other Securities

.

First

.

.

Mortgages

.

•

•

49

Banking Houses

.

•

•

v

•

^

.

Other Assets

•

■

%■■■!■

#•.;> •

•

.

•

•

•

•

.

•

•

•

.

879,940.00

.

•

.

; 79,963,291.35

1,590,775.05

•

•

•

;

•

480,268.52

•

7,804,601.60

2,274,906.94

»•«••«••••

•

■,

.

'•

•

•

Accrued Income Receivable

same

•

Acceptances

on

.

.

»:V' t

.

•

.

•

Customers'Liability

technique which will sustain the present highly

10,602,955.21

•

Loans and Discounts

whether the authorities

artificial market for Government bonds without at the

.*.•••••

U* S. Government Securities

full recovery

will and, in the circumstances,
could mean only a postponement of the day when a reckon¬
ing has to be made. The market remains the most "rigged"
affair ever known in this country at all events, and as time
passes, if business continues to develop as we all hope it will,
and particularly if it continues to suffer from the
present
handicaps in financing itself with its own earnings, the
Treasury must face increasing, competition from other bor¬
rowers
ready to pay much more for the funds entrusted to
them.

'

•

Cash in Vaults and Due from Banks

Postponement

*

:«

•

■§.

•

•

•

•

•

•

287,942 57

•

time

enlarging the money supply and thus further encourag¬
ing inflation — which, of course, in its turn greatly enlarges

$828,082,586/72

the burden of those who would

keep interest rates artificially
complicated by the need
to contract the existing
supply of money.
Recent events should at least have revealed, if
revelation of the sort was necessary, just how muddle- Z:
low.

LIABILITIES

The whole matter is further

headed

officialdom

authorities

paign

and

can

the

be.

Surplus

a

*

//.

•

•

•

♦.

•

.

/

;

•

:

•

Expenses, etc.;

25,000,000.00

•

,

•

.

•

•

.

.

3,592,842.62 $ 43.592,842.62

.

.

♦

./•

•

#/•

•

.

Deposits-.
/

»

•

.

.

.

....

v

♦

.

.

$828,082,586.72
BOARD
*

"confidence in the competency of those who undertake

lit

'

ROBERT A. DRYSDALE
Senior Partner

President

The

commercial banks of the

country have large funds invested
in Government obligations — a moderate portion of them,
long term. Savings banks, insurance companies, building and

other institutions close to

"■

4//
/•.

PH1PPS

/HERBERT' I STURSRERG
I
Tieasunr, Livingston Worsted

JOHN R. McWILLIAM

/'resident, Capital C.itV Broad¬
Corp Tallahassee Ela,

Chairman

casting

Chairman, Nichols Engineer'
ing & Research Cor vorutwn

Retired

set tituc

Vice Piesident

-

' i

E. MYRON BULL

/'resident, A. II. Bull & Co.,

.

inc.

BRTJN.SON S. M< GU I CHEN
GEORGE DOUBLEDAY.

E

,

EDMUND (J. IROWBHJDGE
•

been-wholly without profit if
they do not suggest that we can not by any stretch of the
imagination afford to delay longer in eradicating this situa¬
tion from the economic
system. This excission would, of
course, be a difficult, possibly painful and certainly delicate
operation. Skill of the first order would be required. De¬
termination and understanding of the fundamentals of good

DIRECTORS

Mills, Inc.
JOHN H

C. WALTER NTCITOT.S

" Recent events will have

OF

TETEBfe,.JR.

Drysdale & Company
DUNHAM B. SHERER




RALPH

»

:to manage the financial affairs of the; country, includ¬
ing^ of course, the monetary and banking system.

and loan associations and many

645,308.91
782,204,169.61

(Includes $6,124,958.69 U. S. Deposits)

short-term

government and sound economics would be essential.

1,640,265.58

...

448,267 63

•

•

..

$ 1,093,576 54

....

Lessons of Experience

/

•

Less: Held in Portfolio

was

issues, meanwhile avoiding the making of
"further loans to business.
Precisely what it has accom¬
plished is far from clear, or, for that matter, what the
■:«
/authorities thought it could 01* ought to accomplish. At
/ ; any rate, the affair can
scarcely serve to strengthen
/r

•

•

Acceptances Outstanding

cam-

launched which seemed ;to have something
halting bank purchases of;long-term obliga¬
tions, and persuading these institutions to return to

*

•

Reserve for Taxes,

to do with

'

.

Undivided Profits

With the Federal Reserve

Treasury at loggerheads,

$ 15,000,000.00

Capital

Consulting Engineer

"

SIDNl Y A. KIRKMAN
Retired

Chairman, Ingersolt-Rund

Company
J A AILS A. FULTON

WILLIAM C. HOLLOW AY

HENRY A. PATTEN
Vice President

Chairman, W'. R
->

•

.;

Company

Crate &

"

Company

The Corn Exchange Safe
56 of the 74

Deposit Company operates vaults in
branches located throughout the City of New York.

United Stales Savings Bonds are on
Member Federal

>

/'resident, Home Life Insur¬
ance

sale at all offices.

Deposit Insurance Corporation.

as¬

Pol¬

Street

He has been witii

I Trust Company

At the Close of

am

Schmertz, Jr., and S. J.
Vice-Presidents; and S. «F.

Corn {Exchange Bank

obligations will fully recover from the shock it has suf¬
fered from, first, the "open mouth" policy of some weeks

firm

R. C. Schmertz, president; D. W.
Yealy, Vice-President and Treas¬
urer;
Arthur Batty, Vice-Presi¬
dent
and
Assistant
Secretary;

pleasant facts to contemplate, but they
well to turn away from facts merely
.because they are not pleasant. It may or may not prove
possible to evade the issue for a considerable period of time,
It may be that the insurance companies, savings banks and
matter—that the normal demand for funds character¬
others holding large blocks of long-term Government obliga¬
istic of a growing and healthy economy failed to appear.
tions will presently accept as a fact the alleged ability of
It would obviously be neither fair nor wise to oblige in¬
the Treasury > and the Federal/Reserve to determine and
vestors in Government bonds to take all the losses inci;
give effect'to any levelvof prides they decide upon. They /• dent to a correction of this underlying situation.
>
/
But means of avoiding such results have been suggested
may presently become quite,convinced that these author¬ /
ities really intend indefinitely to fix the yield on these from time to time, and doubtless there are others.
Gut ol
issues at the current official level. In such an event they them a way could without doubt be fashioned for a feasible
presumably would not be inclined to flood the market with reinstatement of sensible practices in these matters — protheir present holdings and would be willing to take more of vided they were
accompanied by a return to soundness ir
them as time passes — except of course so far as suitable general policies to offset whatever deflationary effects arose
corporate issues and other available investments offer them¬ from reform of credit and money policies. Recent events
selves at satisfactorily higher yields.
should hasten their formulation and adoption.
/
Such may be, we repeat, the course of events dur¬
ing the months immediately ahead—and then again, of /
course, it may not be. Investors throughout the length
and breadth of the land have been joltingly reminded
during recent weeks that they reside in the palms of
^the hands of officialdom. They have been given an
excellent object lesson in the undependability of* the /
authorities, which suddenly and without the slightest
warning appear to be able to change ■ their mind and V
ESTABLISHED 1853
modify their market policy overnight. It may be some
are

Co.,

formerly conducted
Trust Building by
Phillips, Schmertz & Co., a part**
nership formed in 1935 by Mtt

in

control of Government "supported" '

tutions under the

&

ment business

that insti-

deficit financing

Facts to Be Faced

-

eco-

:

PITTSBURGH,
Schmertz

that would have prevailed had matters been

left to take their natural

drastic steps are necessary to "unrig'//

almost

Formed in Pittsburgh

J

prices far

2S

:

.i,

,

30

,,,

,,

;*,

.

,

k"

}'

vy;,/

THE COMMERCIAL

(126)

&

* *.

iV'V'',1*/>

•

'TM'','

bonds

The State of Business

•VA'Vl-

market

(Continued from page 3)
unless taxes are reduced, the

or

cash

Such

1948.
be

a

even

about $6.5
It will be
higher annual
first quarter of

the
a
large

surplus

signs of caution
loans.

iness

rate (perhaps $2.0 bil¬
year), may cease. Substan¬

additions

tial

not be

is

some

before

producers

inventories

ing

force

though

even

substantial aid is given under the
Marshall Plan.
Such aid will in

large part merely replace the ex¬
hausted foreign exchange of some
countries.

Imports have been ab¬
low relative to Amer¬

normally
ican

production

above
of

ity

the

but

are

wage

running

and, as productive
throughout the world

To

States will continue to increase.

for

costs

enterprises
creases

savings,

are

spend

high

so

production,

i

as

shall

point out presently, may be
inflationary rather than defla¬
tionary depending upon how the
increase is financed.
cereal

may

Weakness-in

prices will not spread at

an

early

date to most food prices,
especially to meats which will be

flationary
all.

It

or even

depends

plus

is

uses

the

used.

deflationary at
how

on

If

the

surplus

to

the

sur¬

government
retire

tions float new issues.

If the

sur¬

reasons

should

important point that
is undoubtedly more

fere somewhat with the
financing
of programs of expansion and re¬

a

be

specific
recession

the economy

that

only the
projects. Dividend in¬

wage

term

of

bank credit.

as

be impor¬

a

influences

tion,

bank
•

thi^rnund

can

secondary cause for de¬
flation, but hardly as a primary
cause.
So
long as independent

Chemical
et

A

increases

wage

tant

are

making for infla¬
increases are likely to

wage

be inflationary rather than
tionary.

::

Let

TRUST COMPANY

look

us

at

the

defla¬

Founded 1824

than the reasons for
expecting an

early recession.
CONDENSED STATEMENT OF CONDITION

of business, December 31, 1947 I

(1), Congress
to

;j

71,489,864.53
64,159,482.50

Other Bonds and Investments

Loans and Discounts

449,400,552.30

Mortgages-

,

on

Acceptances-

$1,413,980,108.48

$25,000,000.00

y;

'

75,000,000.00

8,149.916.91

reduction.

stiff

ent

.

income

tax

have

rates

drastically weakened, for the time
being at least, the incentive to
,ave

the middle and

among

ncome

upper

These groups do

groups.

aearly all of the personal saving
in the community, but under pres¬
ent
tax rates
they are able to

obtain
iheir

only

return

meager

a

investments.

position

on

The weak dis¬

save/is

to

the fact that
in

oetween

indicated1 by

rise of $18.3 billion

a

incomes

personal
the

afcer

third

taxe^
of

quarter

1946 and the third quarter

of

the

increase

went

nore

consumer

of 194

(

into

in

income

anc

expenditures

action

then

the

by

the

and

government

for

prospects

action ,by

business.'

!

The government is authorizing
enterprises to cooperate in allo¬
cating
a
few
scarce
materials
(useful in accelerating the elimi¬
nation of

bottlenecks) and it will
probably impose stricter controls
over
exports. ; There is a little

likelihood, however, that the
will make

ernment

gov¬

serious ef¬

a

fort to check any of the major in-

influences..:

ilationary

Each

of

these influences has strong popu-

tion,

for

goods.

small

ings

volume
means

every

individual

of

that

this

need

sav¬

must

for specific
; opposi¬
specific about

program

aetibii /meets^ formMable
tion.

The needs of industry for capi¬
tal are large and ^urgent.
The

be financed in large part by plow¬

Let

be

me

this:

,

t

j

v

(1) A reduction in the income
tax
under
presenty: conditions
would be

inflationary, but the de¬

for

mand

ing' back

,

,

,

*

are

increasing

reluctance

product

in

1947—about

billion—consisted

consumer

of

durable

goods, residential

con¬

struction, durable producers goods,
business

purchase of all of these types of

4.

(^jffperit-rup

ent

Other Liabilities

1,222,672.94

Deposits (including Official and Certified
Checks Outstanding $48,278,790.34) 1,284,087,036.21
$1,413,980,108.48
Securities carried

at $25,695,528.26 in the
foregoing
deposited to secure public funds
and for other purposes required by law.

statement are

idle bank balances.
in

the

sumer

output

of

Member Federal Deposit Insurance Corporation

a

durable

construction

will

be

and

rise
con¬

inflationary,

equipment
not defla¬

tionary.
.

Treasury

regards

the

maintenance of low interest rates
more

Vy

for

;

cOh«'

important than the pre¬
The policy of

same

reason—

purchasing
are

power than
in 1940,
critical of managements which

do

not

promptly

ing loans

affecting

many

is

the

the

demand

increase

workers

for

in the

goods

number

of

family. Families have
increased by 4 million since
1940,
the

but
work
far

per

number

of

persons

by about 10 million.

more

have

families than

more

than

one

The country

ever

at

at

be
and

more

been

erans

are

Inflationary

are

of these loans

nanced by

deposits

which hous¬

oi

being made to vet¬
are

because

being fi¬

the creation of demand

and, in

veteran makes

cases, the
small doyn

many

only

a

payment on the house.

One hears

before

income

earn¬

would undoubt¬

be willing at present prices
own and
operate
least 5 million more automo¬
than

The terms

tices in making housing loans to
veteraps.
!•

incomes to

biles

(4)

few protests against present
prac-t

edly
and

higher

on

pass

Hence

it has today and it
willing to pay for far
better housing than it
Relatively little has

(5) The expansion of

consumer

credit

is

sumers

wish to borrow and banks

are

inflationary,, but
to

eager

develop

con¬

this

well-

paying business. Hence, any at¬
tempt to restore control over con¬
sumer

credit will encounter

opposition from

banks

strong
little

and

done to

adjust the quantity, support from most consumers.
and quality of housing to the 33%
V> (6) .The
expansion
of
bank
rise
in real per capita income credit under
present conditions is
after
taxes which has occurred inflationary because
industry is
since 1940. Indeed far more fam¬
already
operating 1 at
capacity.
ilies

are

than

in

If

living doubled-up today Nevertheless, proposals to restrict
the expansion of bank credit meet

1940.

consumer

needs

for

translated

fast

indebtedness were, formidable opposition from banks.

in relation to Consumer in¬

as

might expect the huge
consumer

into

goods

demand

"people acquired

Consumer

to

be

only as
incomes.

indebtedness, however,

is low in relation to incomes. Con¬

sequently,

one

must

expect

that

will insist on spending
faster than they receive it

consumers

"(4) The

vention of inflation.

Charter Member New York Clearing House Association
Member Federal Reserve System

Hence

goods, housing, and indus¬

trial

as

$3,991,690.00

the activation of

or

*

high
income,
people desire more goods and bet¬
ter good® than was their previous
custom^ Particularly important in

comes, one

of bank credit

the

is far -from having
profits in the form of higher cliviFurthermore, at pres¬ dends.
'7;/■.vr:
levels of real

met;

high

by either the expansion

; yf f

; y

demand

goods

sumer

been

measure

10,918,853.26

individuals

for much

namely that it would give people
more money to spend.
i /;
;
(3) Dividend increases are in¬

adherence

savo,Viand

goods is financed in considerable

867,651.36

of

and

by the flationary, but stockholders, who
governmehi 'to* the policy of sup¬ have waited long^ years for divi¬
porting thergovernment bond mar¬ dend increases and whose divi¬
ket and>- encouraging the* expans¬ dend
payments often, have less
to

.

will make possible some increase
in the output of these goods. The

1,125,000.00

strong

possesses.

an

construction.
The
gradual elimination of bottlenecks

Acceptances Outstanding 11,786,504.62
(Less own acceptances

circumstances if or
producing an
expansion of credit and a rise in
prices—huge needs for capital,

er.

4,297,301.92
4,179,327.24

etc.

Assessed Valuation

tax

$108,149,916.91

Dividend Payable Jan. 2.1948.




:v

employment ex-r y.s.y'y
v :
;
cept in a few marginal firms. They
Is anything likely to be done,
will raise payrolls, and thus in¬
either by government or business,
crease the demand for consumer
to
control1 inflation
during the
goods. -:■;-v'y'3 next
year?
The answer to this
(6) The huge pent-up demand question is: "Not much." Let us
for consumer goods and the pres¬ examine first the
prospects for

national

and

Reserve for Contingencies—

portfolio)

1947.

reduce

would

$48

LIABILITIES

held in

not

Corporate
savings have
important restraint on in¬
flation during the last
year.
(3) About one-fifth of the gross

been

3,034,088.10
800,619.57

Taxes, Expenses,

as

come.

Receivable

Undivided Profits.

by

dividends thus reducing corporate
savings and raising consumer in¬

7,695,223.86

Other Assets

Capital StockSurplus.

a

s,.(2) Corporations

88,209,88*

y

Accrued Interest and Accounts

Reserves for

prevent

179,793.50
2,231,564.11 *

y

"Other Real Estate

Credits Granted

taxes—possibly

goods and capital goods,
but' especially
consumer
goods.
Oijly a deadlock between Demo¬
crats and Republicans in
Congress
over how taxes shall be cut
can

420,748,657:68

Obligations—
Municipal Bonds

y

determined

seems

consumer

$394,152,052.45

.

U. S. Government

*Banking Houses

reduce

*

much as $3 billion a year or more.
This will increase the demand for

ASSETS

State and

in¬

in

Under

ion- of bank credit?

for

reasons

expecting a continuation of infla¬
tionary pressures. They make a
far stronger
case, in my judgment,

Broadway, New York

Cash and Due from Bnnlcs,

1947,

indebtedness

'

financed4a^^:

reducing corporate
conditions in the money

are

At the close

local

^pdweed no increase in personal* IamsiBppport.; r Consequently, al¬
rities- held by- the- general
pub¬ •saving,
On the contrary, theie though there is much demand that
lic. the surp.us will
help corpora¬ Was a small drop. in saving.
All "something" be done about infla¬

—possibly to a dangerous degree!
Although 'uncertainty over longterm interest rates could inter¬

will

June

ended

year

and

sectfc?

late the expansion of bank credit

encroach

toe

,

for another year. A budget
surplus need not be seriously de¬

scarce

defla¬

expecting

be added the

on

165

in

ing
state

such va,.-reduction
is
/
earnings. Corporations strong.
(2) A third round of wage in¬
are reducing their savings by in¬
vulnerable to unfavorable devel¬
placement, the effectupon the de¬
creasing dividends. "Hence, one creases would be inflationary, but
opments than it was a year ago. mand for capital
gpods/would be must * expect industry to * meet the- demand for it is also very
For example, part of the accu¬ limited.
Only the mosLurgenL ex¬
much of its need for capital by' strong. One of the contradictions
mulated need for goods has been penditures are
being,
'borrowing from banks.. The Fed¬ in present-day opinion is that
met, inventories have been built these are being
eral'"'Reserve System is * encour- many of the people who are most
up in relation to sales, there has
normal extent out of
insistent about reducing taxes are
been a considerable increase in depreciation
allowances.-If useee&r, agfrij^the banks to expand their' most inclined to condemn
loans by-supporting the price of
wage
sary, part of these
expo»d$«rfi$ government bonds. Can one imag¬ increases as inflationary./ Of
could be financed
by infern^didte
ine a more perfect combination of course, each would be inflationary

(6) Not much further expansion
of expenditures by business con¬
cerns on
plant and equipment is
likely in the near future. Con¬
struction

sav¬

prices.

round .of

and

these

all of

In

seriously

will

profits
tionary.

stored, sales of goods to the United

add to it.

can

plus is, used, to retire issues held
by the commercial banks, it will
enlarge bank reserves and stimu¬

upon

re¬

increase

an

to curtail

higher

in

third

the

increases

capac¬

is

concerns

increases

Hence,

corresponding months

1946

most urgent

companies,

:V
case

secu^,

flationary, not deflationary. They

assets.

foregoing is the best

by the sale of

rides to commercial banks." Dur¬

the prevailing con¬
ditions these advances will be in¬

a

respects the foregoing pres¬
entation
greatly
overstates
the
case for recession".
For example,

long-term in¬

for expansion

business

liquid

m- ; ■v-'V.'

b

v

the reader

naps

expenditures, the demand for
capital goods is likely to drop, and
spotty unemployment may appear
in the capital goods industries.
(8) A third round of wage in¬
creases is certain.
If inflationary
tendencies are weakening, as the
above analysis suggests, business
concerns
will have difficulty in
passing on the third, round of

1947, will probably drop. The de¬
crease may be as high as $3 bil¬
occur

programs

been

some

such

which will be about $9 billion in

This will

over

insurance

has

for an early recession whicn I
have been able to construct. Per-

increasingly reluctant to purchase
long-term obligations at present
prices. The difficulties in financ¬

(5) The net volume of exports,

lion.

The

ings banks, and commercial banks

gone

are

de¬

that

believe

of

be

'V:

terest rates will increase and will

make

farther than
willing to admit.

already

to

Some

starts.

recession

a

accumulation

has

will

though there
further rise in production
even

businessmen

astute

the

inventories

to

needed,

there

extent

some

creased; by about $900 million.
During 1948 state and local in¬
debtedness will grow faster- than

will

strict the expansion of bank cred¬

it, uncertainty

and

holdings of

appear

a

y ,
third round

increases probably aver¬
aging from 8 cents to 12 cents an

pricey relative to holdings

of money and other

taken

moderate
a

hour.

rise of

creasing.
(7) Even though no action is
by the government to re¬

(4) Inventory accumulation,
has been
going on at a

which
lion

concerns

There will be

incomes),

in making term
expansion of

.

of wage

cash and demand deposits of bus¬

can

(5)

debt f (though
the
amount is still small in relation to

the

commercial loans the

depressing influence.

very

Despite

artificially ' keeping^

interest rates.

short-lerm

issues, particularly equity
issues, and the banks are showing

surplus will be
to $7 billion.

billion

running an
rate during

not favorable to float¬

are

ing new

I

Thursday, January 8, 1948

and

«*

down

vf'

f n i

FINANCIAL V CHRONICLE

money

and

that the volume of

(7)

Support of the government

bond

market

cause

it facilitates

is

inflationary be¬
ther

of credit by the banks.

the government,

expansion
NO

one

in

however, is will¬

ing to take the responsibility for;!
of support and there
is no popular demand that the'

withdrawal

government

pressing

cease

interest

artificially de¬
rates.

-

Inci¬

consumer

dentally, extraordinary reasoning
expenditures will continue to be is used to justify support of fhe
increased by a rise in consumer'
government bond market. One pf
indebtedness.

Many
manufac¬ the arguments for depressing in¬
merchants, and. banks are terest rates on government bonds
continue to be dominated by the doing their best to encourage con¬ has been that this would help
sumers to spend beyond their in¬
keep down Federal taxes. In order
Treasury. Hence the government
comes and to go deeper into debt. to
prevent low interest rates from
will continue to encourage the
(8) Local and state expendi¬ producing inflation, however, the
expansion of bank credit by sup- tures are
rising faster than rev- government needs a large budget
porting the prices of government enues and are being financed to surplus, and in order to obtain a
the Federal

Reserve System will

turers,

Volume

167

Number 4662

THE COMMERCIAL

large. budget surplus, the govern¬
ment needs
taxes! As a mat-u-

enough*

io

sub¬

advance

The

prevent a
in .prices.
rLp of 24% in the price of
sumer goods during the last
years may be regarded as a
by which the government in
stantial

con¬

two
way

,

WJ),at

the

are

over

prospects
the

that
com¬

against inflation? > Busi¬
Will certainly not resist in¬
by putting up strong op¬
io

position

of labor

an

bargaining

under

present

that

the

credit,

it

people to learn

States

chronic

a

the

times

long
fast

as

Nor is

has

shortage

suf¬

of in¬
Never¬

additional

term

about

untarily to refrain from borrowmg from commerci31 banks

too

small

very

return

a

from

invest¬

bank

is

raive to

And yet it is

no

im-

p£ ®,ntShered by "yes" than to
rterehr hv"eSS to .check inflation
of

mereaslng the °ntput

'goods

vi.

.

us

bank
The

be ProbIem

he

of
i

iin1?0." might be done?
of
What

credit

put into effect.
merely negative program of
the expansion of bank

u-

ec°nomic

§lc

u

credit is not

enough.

reach

most of the years since 1929 it
was

States
most of the countries
I is' brieffv f j
a' ,Thls Problem
L ' yu / s™Ply stated. On
-nd most of
the United of Eu¬
"nd
the countries States
mn

,

rope and Asia

are

acutely short of

Sd« P'-t and equipment
the other hand, the
people of
n

these countries have

strong

a

re-

conditfn t0 save- Both of fhese
the war
Thf Partly a result of
inLr i" J e }var prevented husjpess enterprises from making

nStih replacements
nli!^

f
plans for

and comPostpone executing
expansion. The war

aster than it
In

need

for

consumer

m explains the

goods

low propen-

toymniSaV?' Since industry needs
,

rpmake,Iarge caPita*

spendin^thl!iCe-Pe0pIe
spending their

incomes

Thbf is the essence of the of credit.
ifth y 3n exPansion problem
Tins

of inflation

the United States

in

large part of the problem

a

countries

of

Western

Europe.

Iij £hose countries, however, the

las

1929

of

-Spates the problem is
by

the

ments

state

and

spending

more

to

obtain

govern¬

than




their

Accrued

of

be added

must

to

.

the expansion of
credit would simply attack
the

credit for

..financing the purchase

§oods. It would

i

ly hamper
recent

to

gone

its

Bank

During
community has

extremes

great

saving.

was a planned pol¬
resulting from the illusion that

.

community

suffers from a
surplus of investmentseeking funds and that the com¬

capital needs of industry

are

far in

ness

of the community to

excess

impediments

on

the willing-

of

saving

save,

■

!/

the

second

anti-inflationary

part

the

This

of

.

.

Total

\

bank

$

Less: Own

100,000,000.00!

...

200,000,000.00
60,666,665.58

......

>.

Outstanding

.

.

.

.

$

t

.

.

36,321,724.72

,

2,451,659,286.69

,

.

%

360,666,665.58

$2,415,337,561.97

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

Acceptances

.

.

...

«

$

.

19,292,953.31

Acceptances Held for

Investment

*

Dividend

7,376,899.73

$

11,916,053.58

Payable January 2, 1948
Foreign Branches
Accounts Payable, Reserve for ^
Expenses, Taxes, etc.
-

3,000,000.00

.

Items in Transit with

2,164,365.93

19,137,185.31
36,217,604.82

Total

Liabilities.

./..........

Securities carried at $96,332,135.48 in the above Statement
moneys as required by law, and for other purposes.

J. LUTHER

CLEVELAND

credit

and

expan¬

then

are

$2,848,543,557.09

pledged to qualify for fiduciary
*
;"/V

powers, to secure

public

'

bank

PALEN

G.

over

the

ex¬

is, of
result of the policy of

WILLIAM

L. KLEITZ
President

WILLIAM

F.

W.

ALLEN

Director, BritishAmerican Tobacco Company,
Limited,
and President, Duke Power
Company
BELL

B.

President, American
Cyanamid Company

CHARSKE
Chairman, Executive
Committee, Union Pacific Railroad Company

J. LUTHER CLEVELAND
W.

PALEN

CHARLES
01'

CONWAY

P.

American

WINTHROP

Chairman of the
Executive Committee

COOPER

Executive

CRANE, JR.
Crane 6s Co.,

STUART

M.

CROCKER

President,
Inc., Dalton, Mass.
President, Columbia
Corporation

Gas & Electric
W.

DAVIS

HARTJFORD

President, The Great
Atlantic & Pacific Tea
Company

CORNELIUS F: I^ELLEY
Chairmap of the Poard,
Anaconda Copper Mining Company
MORRIS W.

KELLOGG

WILLIAM L.

KLEITZ

CHARLES S.

MUNSON

E.

of Davis Polk Wardwell

DUNLAP

'

/
GANO

DUNN
"

S.

President, BerwindMinjng Company

FRANKLIN

Vice-President,

President

Vyi|-LIAM C. POTTER

/

Retired

of Roosevelt & Son

EVGENE W. STETSON

Chairman, Executive
Committee, Illinois Central Railroad Company

ROBERT T.

STEVENS

Chairman of the Board,

J. P. Stevens & Company, Inc.
THOMAS J.

WATSON

President, International
Business Machines Corporation

White Coal

.President, The J. G.
White Engineering
Corporation

Company

President, Air
Reduction Company, Inc.

GEORGp p. ROOSEVELT

Sunderland 6s Kiendl
CHARLES

Chairman of the Board,

The M. W. Kellogg

Vice-President,

Telephone and Telegraph Company

M.

LEWIS GAWTRY

JOHN A.

Chairman of the Board

The Pennsylvania Railroad "Company

credit

CONWAY

Chairman of the Executive Committee

DIRECTORS
GEORGE

at

some

VII.

The lack of control
of

W.

Chairman of the Board

WALTER
•

a

$2,848,543,557.09

......

Capital Funds

Total Deposits

impediments to saving.

course,

1,308,353.92

.

\

.

Undivided Profits.

JOHN

possibility of removing

pansion

10,813,338.67

....

.J

Capital
Surplus Fund

an

program.

i°f restricting further
of

11,235,785.55

,

^LIABILITIES

look first at the possibil¬

us

9,000,000.00

10,330,173.56

.

124,857,447.68
4,872,577.78
131,085.40

'■' /J

(and in¬

vesting) should be reduced.
be

(*11,948,578.40
1,255,329,289.28

$82,169,795.98

.

.

Total Resources

chronic

Let

. .

851,404,578.55
.

Mortgages

dis¬

to

Partly this result

rates, partly it

ity

/

Premises

unintended consequence of
the use of progressive income tax

should

.

Other Real Estate

was an

the

.

$

...

.

severe¬

capital.

the

years

courage

.

.

industry in its efforts

increase

icy

on

,

,.

Interest and Accounts

Receivable

inade¬

quate supply of savings—namely
excessive
reliance
upon,
bank

to

...

on

the results of

of

.

.......

Restrictions
one

.

.

.

If the

amounts

enormous

capital
industry.
bank

..........

Obligations
Acceptances

Real Estate Bonds and

jobs

substantially above the

level,

United

aggravated

local

was

thousands

many

new

the

In- the

Credits Granted

using equipment which

to rise

sion

expenses.

than it

now

able

are

by

present

i

.

Treasurer's Checks

labor force

standard of living of the country

ability of governments to obtain
epppgh tax revenue to meet their

.

Deposits.

inefficient and obsolete.

is

BRUSSELS

•

Stock of the Federal Reserve Bank
Other Securities and

the

less

and

workers
s

.

Loans and Bills Purchased
Public Securities

replacing them.

by about 10 million.
result, capital per worker is

nly

PARIS

»

Obligations

grown
a

problem is aggravated by the in¬

current

was

60th

Hand, in Federal Reserve Bank, and Due from

on

Banks and Bankers.

equipment

expendiinsistcon¬ munity has plenty of plant. Now
on
for
that the

sume? goods, the needs of industry are being met in considerable

it: is

and

the meantime

also

compelled consumers to go without many goods which
they would
ordinarily have purchased.
The

hqge

plant

at

It does not

difficulty
communitynamely the unwillingness of peo¬
ple to save. Industry has enormous
needs for capital because
during

problem

'

Cash

essential

the

Ave.

RESOURCES

which confronts the

m

StSrp5ts the Unitecl

iof

are

infla¬ _ubstantially

K-f -olec.icn of policies should
^?sedcup.On a clear perception

to

MADISON AVE. OFFICE

Condensed Statement of Condition, December 31, 19*7

checking

oommunity, by some miracle,
develops the will to make a real

finn
tion

continue

■>

to

consuming

aSsjfmnH makTe ? b0ld and da™g
ssumpiion. Let
suppose that

should

happen unless ways
controlling the expansion of

of

more

expect these questions to

credit

continue

Tn-A^nCrease in Production?
Twprfhi S? 5uestions is to anS
.^doed, the questions
probably strike the reader as silly
or naive.

to

expand after industry is operating
at full capacity. Nevertheless, that
has been happening, and it will

lending
an

relate

OFFICE

Broadway

40 Rockefeller Plaza

U. S. Government

controlling
the expansion of bank credit; the
other part to stimulating saving.
It is obviously intolerable that

o

non-inflationary loans—that

Spme extreme pessimists suggest
that the drop in bond
prices might
precipitate redemption of gov(Continued on page 32)

Madison

LONDON

to induce them to save a
large fraction' of their in¬

should

part

ex-

loaps which make possible

bonds might even precipi¬
tate considerable
selling 6f bonds
by banks and the general public.

ROCKEFELLER CENTER OFFICE

physical output.

as

A program for controlling in¬
flation should have two parts. One

J? Purpose of financing
ahAS -e 1,ncreases in production
frim
expected t0 refrain
hiV^A encouraging consumers to
pvnpiPP credit? Can their
the banks be
expepted to confine
to

ment

St. {

three

come/'

expected vol¬

44th

at

high that persons in the middle
income brackets obtain

so

to

n

Aye.

140

and upper

tinn^w
rat/ler than curb inflal* V-.an business essential question
Heunce.
be
»•

uncertainty is that
business poncerns, states, and mu¬
nicipalities would be -unable to

AVE. OFFICE

war.
It is partly the
result of very stiff surtaxes—rates

ments

tends

Fifth

the low disposition of the

equipment, pointed in production,
the rise
I have
out,

govern¬

quences of this

MAIN

FIFTH

during ihe

mmt is bought in large measure
wjth money borrowed from banks
are automobiles,
houses, and
nnuph industrial construction and
as

I

Guaranty Trust Company of New York

community to save solely the re¬
sult of the huge needs for con¬
sumer
goods which accumulated

more

itself does not deIf

bank

United

the

over

enterprises is particularly effecuye .at discovering and eliminat¬
ing the bottlenecks which hold
in

v -

period

vestment-seeking funds.
theless, that is true and it explains
in part why credit has
expanded

which has millions of independent

'.inflation.

in

increase

fered

duction, and this best will be increasmgiw good.
An
economy

production

in doubt as to how far
employment would appear in the
interest ifites would rise. Natu¬ capital
goods industries, and this,
rally, insurance- companies, sav¬ in turn, would
produce a drop in
ings banks, and individuals would the demand for consumer
goods
be reluctant for the time being to gnd a decline of
employment in
\o withdraw their support of gov¬ purchase long-term bonds.
The the
consumer
goods industries.
ernment bonds and hence to r
'^Jjpessimistic view of the conse¬ The drop in the price of
everyone

developed dur¬
Many people believe
that the figserve Banks will be
pnable, for many years at least,
war.

have

every

31

ment bonds which

ing the

American

of

needs

will surprise many

increase pro¬

Unfortunately

govern¬

(127)

expansion the capital needs of
industry have been met in part by

,C,Sn do- its is,best to
]10n!
tQ0 strong. Business
WUl

back output.

needs

Consequently, during

third round of wage

a

advances, because, the

is

of

of

flation

position

States

price

to
t''.e
economy
industry; consequences
would be too serious.
raise long-term capital (at least
always been
met in large measure by plowing
Termination
of the
policy of until interest rates settled down to
back the earnings or business con- i artificially depressing interest the now
ieyels), that the demand
ceins.
Even the plowing back of rates
would
qbviously
leave for capital goods would drop, un¬
earnings has not been sufficient.
ital

munity
ness

the United

as

the

CHRONICLE

,

trie

These

protect

can

'

supporting

FINANCIAL

savings been sufficient' gain freedom to discourage ex¬
long run to meet the1 cap¬ pansion of bank credit because the

dividual

that

of the public debt.

business

far

As

than their
f'
-

more
v

con¬

concerned, however, present con¬
ditions are abnormal only in de¬
gree, not in kind. Never have in¬

Wodiated one-iourth

** rPa

spending

sumers

incomes.

taxes haye npt been

'

v

.

mgh

and also by many

revenues

&

CHARLES E.

WILSON

President, General

'

picctric Company

;
ROBERT

W.
''

WOODRUFF
Chairman, Executive
Committee, The Coca-Cola Company

Member Federal Deposit Insurance Corporation

St.

32

THE COMMERCIAL

(128)

r

&

,

Thursday, January 8, 1948,

CHRONICLE

FINANCIAL

should be

prepared to show why

a later date are likely
favorable as^ present, con¬

conditions at
to be as

.M\,>V'X'

V

* N;,.

h

Furthermore, in the absence of budget is running a substantial
1
controls, the-increase in credit surplus. When the demand for con¬
sumer goods and capital goods is
may easily become disorderly,
y There is much to be said for a strong, and when special measures
substantial rise in the price level are being taken to stimulate the

J (Continued from

page 31)
ernment savings bonds and shake
,

:,

ditions. W :*•

S'iCs\

P.

VIII.

.

v-:.-.

.r

can the community's need
substantially more individual
savings be met? Present taxes go
demand for investment securities. to inexcusable extremes in penal¬
might be compelled to buy con¬ of the United States over the next
siderable quantities of government five or ten years provided it comes Certainly withdrawal of support J izing both enterprise and thrift.
from the government bond mar-; The existing surtax rates: cannot
securities. HenCe, the commercial gradually. Such a rise would help
ket should be gradual and need
be defended either as a long-run
banks might emerge from the pe¬ other countries sell to us and thus
source of revenue or on grounds
not be complete. This withdrawal,
would help us develop properly
riod of transition with substan¬
or
the prospect of it, would un¬ of justice.- It is not unreasonable
tially higher reserves and greater balanced trade relations with the
doubtedly lead- the banks and to permit a man who invests mon¬
lending power than they had pre¬ rest of the world.' Furthermore,
some individuals to reduce their
ey or who sells services to keep
viously possessed. Thus 1 the at¬ a large advance in prices may also
of medium and long-¬ ior himself at least half of what a
be necessary in order to prevent holdings
tempt of the Reserve System to
The willing buyer considers this mon¬
wage
increases forced
by term government securities.
regain control over the expansion the
Reserve
Banks
would
probably ey or these services to be worth.
of bank credit might defeat itself. Unions from being deflationary. It
This is true regardless of how
Certainly the seriousness of the is imperative, however, that the buy these securities (or a large
rise in credit and prices be order¬ part of them)
at slightly below large a man's income may be. Un¬
problem should hot be minimized.
the old support prices. In order to fortunately the present is not a
Nevertheless, before one adopts a ly and occur slowly. Hence the
essential question is not whether prevent
the
commercial
banks good time to undertake a broad
defeatist attitude toward restoring
from
substantially
increasing reform of the tax system—unless
the- control of the Reserve System the Reserve System needs to re¬
their reserves, the Reserve Banks the reformers are willing tem¬
cover its control over the expan¬
over the expansion of credit, one
should consider the results of the sion of credit. The essential ques¬ would sell short-term government porarily to offset the immediate
The
tion is how and when this control securities.
Treasury might inflationary effects of tax refor^i
policy ofr.no control; and one
need to help by issuing short-term
by a forced saving levy. So great
should explore the possibilities of shall be re-established. Can it be
minimizing the disturbances which done without creating: grave dis¬ government bonds and retiring are the accumulated needs for
part of long-term issues. In order goods that the immediate effect
might accompany a policy of re¬ turbances? Under what conditions
to
reduce
the
capacity of the of tax reductions would be sub¬
storing control. The large hold¬ is the danger of disturbance least? banks to increase their reserves
stantially to increase expenditures
Undoubtedly much can be done by selling government bonds and for consumer goods.
ings of government bonds by com¬

people's confidence in the banks.
order to prevent a severe loss
of confidence, the Reserve Banks

In

How

for

-

,

capacity

mour

reserves

disturbances

the

to

increase ,their

to

which result from withdrawal

bond

of

needs

tremendous

of

the " government

from

market

/

and

undoubtedly,

•

industry for capital and the low-

also, the timing of the action is

disposition of the community-to

important.- It

save

credit

over

credit

will

expand

less

bank

restored,

are

or

quite

•

probable

than

people fear, par¬

many

ticularly if the withdrawal of sup¬

enormously

during the next five

is

controls that the disturbances will be much

unless

that,

mean

to limit the demands on the Fed¬

eral

Reserve

ment

support

bank

and thus to expand

The

loans.

minimize

them an enor-

mercial banks give

port

ten years.

occurs

at

time when the

a'

Banks, the govern¬
offer holders of its

might

obligations

opportunity to

an

them

vert

into

con¬

non-negotiable

issues, running from three to five
years.

The rate

tiable

issues

the

on

could

non-nego¬

be

suf¬

made

ficiently attractive to cause a sub¬
stantial proportion of present se¬
curities to be converted into

negotiable

issues.

costs

of

ment

The

non-

interest

would

the

debt

to

the

govern¬

rise, but this objec¬
tion is of minor importance. Much
of

the

national

debt

would

be

demonetized and the operation of

restoring to the Reserve System
power to halt the expansion of
credit would

be facilitated.

How thCn might

couraged?

One

renewed

a

saving be en¬
is by making

way

effort

to

sell

ment

say

savings bonds and by mak¬
more attractive—
by offering to redeem them at

the

;

ing these bonds

third
he

of

end

ten

Is the present or the

FULTON TRUST COMPANY

near

future

withdraw

to

their support

of the
If the

government bond market?

NEW. YORK

OF

problem

(Singer Building) NEW YORK'6

149 BROADWAY

'

'

(Bet. 77th & 78th Sts.) NEW YORk 21 *

1002 MADISON AVE.

were merely a dorheitic
the cases for prompt action
be
overwhelming.
The
budget is running a large surplus,

"one,
'

'

would

is

there
tent

for

insis¬

and

enormous

an

demand

both

consumer

goods and for capital goods which

CONDENSED STATEMENT,

DECEMBER 31, 1947

will not be easily

disturbed,

cor¬

porate

profits are large and the
demand for industrial equipment

Cash in Vault.

Cash

on

.

.........

,

.

,.......

$

on

466,850.23

8,326,650.05

State and

$33,992,837.19

700,873.65

Deposit in other Banks

U. S. Government Securities

Other Securities.

by Collateral.

Loans and Bills Purchased

'

.,

Real Estate Bonds and
Real Estate

Mortgages.

consumer goods and capi¬
goods will diminish/ This will

that

mean

788,167.31
120,000.00
•3,219,793.89
1,265,361.02
572,032.51
9,240.93

Municipal Bonds.

Overdrafts—Secured

for both
tal

24,498,463.26

Federal Reserve Bank of New York Stock........

Loans Secured

being financed
plough¬
ing back these profits.' As time
passes, the urgency of the demand

to -att^afbnormal extent by

Deposit in Federal Reserve

Bank of INew York

Cash

and construction is

RESOURCES

-

<

.

.

(Branch Office)

Accrued Interest and Other Resources

the

the

94,293.14
50,000.00
132,007.86

$40,243,733.85

$34,546,273.79

Depositors.

30,000.00

Payable January 2, 1948. ......
Expenses and Contingencies.:.
\ .$2,000,000.00

Reserved for Taxes,

Capital
Surplus.

309,989.29

Undivided Profits

•.

in

for tax reductions

pressure

is

so

strong that it is doubtful whether
the

government

continue

can

run

to

large budget surplus for an¬

a

other year or

two.

The

principal doubts as to the
wisdom of withdrawing support
from

the

government

bond

mar¬

spring from the in¬

ternational interests of the Uni'ed
States.
It is imperative that the

economic
States

prestige

of

be maintained

the

United

abroad

and

that the country continue to make

2,000,000.00

.

be

capital markets. Furthermore,

ket this year

Dividend No. 173

will

disturbances

to

*

LIABILITIES
Due

economy

sensitive

more

a

5,357,470.77

1,357,470.77

$40,243,733.85

good

for

record

turning

out

goods and for giving employment.
If withdrawal of support to the
government bond market produced
a
severe
recession, the Russians

BOARD

john adrian larkin,

Edmund

p.

Rogers,

Arthur j.

bernon

s. prentice

de Coursey faies

clark

Charles J.

Henry w. bull

-

.

nourse

•

Charles S. McVeigh

-

Russell E. burke

ation

president

E. townsend irvin

stephen c.

Franklin b. lord

Chairman

(selin

charles scribner

brown

charles s.
Russell V.

Walter n. Stillman
-

Cruikshank

their

supporters in Western
Europe would make much capital
from it. I believe that the oper¬

Honorary Chairman

Morris,

o'donnell

stanley A. sweet

and

DIRECTORS

OF

Frederick S.Moseley, Jr.

be

managed under
present conditions as to avoid se¬
rious or prolonged effects on pro¬
duction and employment, provided
can

Congress is willing to give its full
cooperation by removing some of
the impediments which in recent
years have been placed on saving.
Consequently,

Member Federal Reserve System and

Federal Deposit Insurance Corporation

so

soon

it

is

wise

to

budget

surplus

has

disappeared

and much of the accumulated
SPECIALIZING

IN




P E R S O N A L

T R U S T S

&

act

rather than to wait until the

„

BANKING

de¬

than

buyer paid for them instead

of one-third

dollars than he

more

paid for them. Greater sales of
savings bonds would enable the
both to control the
expansion of bank credit by pay¬
government

ing off part of the debt held by
the Reserve Banks and to increase
the funds available for private in¬
vestment

paying

by

the debt held

off

of

part

by corporations and

individuals.

good time for the Reserve Banks

one-

power

purchasing

more

with

years

'

(

a

govern¬

'

■

There

that,

political gains in; sup-*

are

parting

the other group to obtain

or

credit

*

price, in helping this,'

-a

on

terms, in encour¬

easy

aging this,-that, or the other group
to go after a wage increase, in
pro.ecting .this or that industry
T

from

the

foreign competition. Hence,
pervasive government

more

intervention in economic

matters,

the stronger are the inflationary
influences in the economy.
And
the

stronger the

inflationary

,

in¬

fluences, the more violent are the
major
collapses
and
the more,
comprehensive and radical are the
which

measures

must

to

use

the

combat

government

major col¬

a

'

lapse.

If

the

community continues to
dealing
with
the
problem of inflation, the volume
shrink

irom

of short-term debt will gradually

relative

increase

national

the

to

ahd

the

creeping rise in

will

go

on-—interrupted

income

prices

every now and then by small reCessions. The creeping advance in

prices will not be the major prob¬

lem—though
ficulties

it

for

will

create

special

groups

dif¬

such

persons having a large part of

as

their assets in bonds (government
or

private) and

pensions

or

living

on

proceeds

of

persons

the

on

life insurance. The principal prob¬
lem will be the rise in
short-term,
debts relative to the national inebme.

Eventually the volume

of

commercial bank loans may

climb
to 40%
of the national income
where it stood in 1929. That would
cake it far above $100 billion at

bank loans,. are
enq-sixth of the national

even

income.

As short-term

relative

to

the

a

debts, rise

national

he foundation will

for

To¬

commercial

day
not

level of prices.

future

some

big "bust."

not near a bust at

income,
slowly be laid

The

economy

is;

present. Indeed,

will be required to build
the conditions for a major col¬
lapse—especially since the de¬
mand for goods
is fortifiedby
huge accumulated needs. vy.^-v- -;.
years
up

.

Efforts

sell,

savings
market con¬
ditions will probably not produce
The
reluctance
of
the
com;he necessary increase in savings
.munity to deal squarely with the
Hence stronger ways of encour¬
problem of inflation makes one
aging saving are needed. A sim¬ wonder what kind of a transfor¬
ple way of doing this is to permi
mation
the
economy
will
go
taxpayers to claim a lower rate through when the next major col¬
of taxation cn that part of their
lapse occurs. The community will
to

.

more

bonds under present

axable

which

income

is

saved

This could

but not hoarded.

be

done by

permitting each taxpayer
submit a form showing the net

to

imount of

npn-mo^etary saving

which he hps made during the last
year—the net result of his pur¬

not tolerate large-scale unemploy¬
ment

for

It

long.

insist

may

on

promptly underwriting orders for
a large part of industry.
The bus¬
iness mdn would be -relegated ato.
order-taker,* ratherthano/a

an

maker of economic

policy. Today
community has a chance of
Stocks, bonds, and real estate, and insisting that the economy be so
the net change in his indebted¬
operated that it does not gradually
ness less any decrease in his bank
lay the foundation for a future
deposits. On this part of his in¬ bust.: The public is not doing it
come
let him be permitted
to and shows no signs of doing it.'; >
claim a substantially lower sur¬
Capitalism, as we know it, will
tax (say 25%. less) than he would
not be overthrown—at least not
pay under, present surtax
rates, in
the United States. It may slow¬
Such an arrangement would be a
ly change into something else by
direct attack upon the country's
failure of the community to in¬
essential
economic
difficulty —
sist on the policies which stabilitynamely the deficiency of savings.
requires.
The community must
hot expect its policymakers, eitherRemoving some of the impedi¬
ments to saving should be timed
government or private, to adopt
measures
which
to occur when the Reserve Banks
represent
th&
chases

C

sales

and

of

securities,

withdraw their support

from the

government bond market. A strong
incentive for individuals to
re¬
duce

their

expenditures for con¬

the

long-run
the

and

ital

markets from
Reserve

disturbance
ceased

Banks

as

sup¬

porting government bonds. :

^

" t--

the

which

demand

so^muchi

foresight, so" much self-restrain^
so

much devotion to 'commoni

interests
the

do
can

by

so

many

institutions

of

people'as
capitalism

be expected to survive; -/;;;
).'*

•

This

analysis of the near, term

business

outlook

reveals the

dif¬

the kind of
institutions which the

ficulties of operating
economic

com-

The central economic: ques¬
whether" insti¬

estate would go far to protect cap¬
the

of

tion of the time is

tutions

goods

interests

public is not willing to sup¬

port.

and to repay their
debts and to increase their pur¬
chases
of
securities
and
real
sumer

•

hdtinity but which at the moment

1

a

Jackson Sales

Mgr. for
Karris, Hall & Co. ■£>
:

United States possesses.be comfortable and
tbrt

economy

self—as

the

It would

convenient if

would only run it¬
nineteenth century

economists thought that it
be

trusted

to

do.

The

could

essential

aifficulty in operating the kind of

CHICAGO,
&

Co.,

Inc.,

ILL.—Harris,''Hall
Ill

West

Monroe

Street, announces that as of Jah. 1>
1948, Carl W. Jackson has been
appointed
sales
manager.
Mr.
Jackson
joined
the
company
,

shortly after it was organized in
1935 to carry on the: corporatebond business formerly conducted

economy which the United States
in¬
possesses is that tolerating or en¬
has been met.. couraging inflation has -far more by the investment department of
•the Harris-Trust &. Savings Bank*.
Certainly^ d voc ate s of delay politieal appeal than-restrictmg it/

mand for consumer goods and

dustrial equipment

ffifc'bbM^ERCIAL'

dumber 4662

Volume 1 $1

piNA'NCl'AL ''CHRONICLE:'

'

.

Party, the iirst^'Cqmmunist Inters

for exatnple, the Social Democrat¬
<! ;
(Continued from page 6)
gether, now it will be a fight for ic Party developed a sort of com¬
life."
Wl:--V ' V promise between the views of,
But the crisis passed without a xAibbaue aim inose 01 Marx; in
and Italy
revolution and Marx and Engels France
there was a
began to suspect that they had strong trend toward Anarchistbeen, false prophets.
On Febru¬ Comhaunism; and in Britain the
ary v 13,
1863,
Marx wrote to London Trades Council declined
Engels thus: "This much is cer¬ to become the British section of
tain—the era of revolution has the International. Then, too, there
was
a
serious quarrel between
now fairly opened again in Eu¬
rope.
And the general position Marx and the anarchists led by
of things is good.
But the com¬ Bakunin, which resulted in their
fortable delusions and the almost expulsion from the International.

v

methods * than
and revolt."

./•.>

childish

enthusiasm

before

of revolution

era

February,

1848

have

all

to hell."

gone
,

which

Similarly, in 1895, twelve years
the

after

death of

Marx, Engels
wrote:
"History has proved us,
and
all
who
thought ; like us,
wrong.
|t has 'made it plear, that

the. state
ment

on

of

economic

develop¬

the Continent at that time

long way, ripe for
the removal of capitalist produc¬
not,, by

was

a

'

The time was not ripe and the
premature insurrections failed
because, as Engels said, big in¬
dustry had not yet taken root in
France, Germany, and other coun¬
tries, and had not yet created "a

genuine bourgeoisie and

a genuine
large-scale industrial proletariat."

Moreover, attempts at revolution
Marxian type

the

were

rare,

for most of the radicals of those

days

political

were

Schurz

-Karl

leaders like

Louis Kossuth,

and

utbpian socialists like Fourier,

or

conflict,^ together with the

Owen, and some of the Chartists.
Internationalism, however, sur¬
vived, ; and took a new lease on
life at and after the international

;

exhibition held in London in 1862,
when British and foreign labor
leaders met and steps were taken
toward the creation of

organi¬

an

zation to promote the interests of
labor throughout the world.
The

movement culminated in

a

meet¬

ing in London on Sep. 28, 1864,
mostly attended by English wageearners
and labor leaders, with
representatives from France and
Italy and a group of German so¬
cialists, who had been members
of the Communist League. Among
them was Karl Marx, who was
asked to prepare the Inaugural
Address

and

set

a

of

for

rules

■"The Workingmen's International
Association," which were unani¬
mously' adopted on Nov. 22, 1964.

Thus*'

borm the

was

First

Inter¬

national.

either

say,

Marx

address

justified by thfi out¬
for the affiliated parties in

Stalin

to look

in

several

did

socialism

not

mention

communism,

or

Social

itss tnan

But

Democrats polled

years

letter to Sorge, the
German-American secretary, En¬

where, despite their profession of
pacifism, sided with their respec¬

gels

wrote ' in September, 1874:
"With your1 resignation the old
International is entirely wound
up and at an end
I think that

tive

the

quite recovered. Composed mostly 1

.

next

.

.

International

after

—

writings have had some
years of influence—will be direct¬
ly Communist and will openly
proclaim our principles."
After this, the march of socialism
continued
in
various countries,

countries

about

forces

Second

from

moderates

reviled

it

is

and

Engels who, in a long letter
Liebknecht, Bracke, and
others, criticized their policy of
compromise with biting sarcasm,
denounced the spineless attitude
of those who wished to repudiate,
the class struggle and the expec¬
tation of a bloody revolution, and
threatened
to
resign from the
Party.•;; •'/'
True, Marx and Engels them¬
selves had compromised with the

to Bebel,

trend

toward reformism

portunism, but had

and

op¬

repudi¬
as
many
social
democrats had done, though still
professing to be Marxists. In one
connection
Marx said: "I have
ated

never

revolution

dragons and gathered

sown

vest

fleas."

of

of

say

"All

I

And

he

certain French
is that

know

Marxist." '

to

used

Marxists:
not

I ..am

a

*

founded

was

at

international

an

in Paris in

congress

hundredth

1889

the

of

anniversary

—

the

people

in

Marxism

ciples
to

of

communism

in

various

countries unite!"

the

of

his

.^op,radical.

-

In a letter to Engels

be wrote:. "It

Jo

was

very

jframe. the thing

own,

view

associates
anything

should

so

difficult

that

our

in

appear

a

jform acceptable from the present
standpoint, of the workers'
ment.

It

Will

take

time

move¬

before

their awakened movement allows

^hemld boldness of speech."

.

f

lMarx\« find Engels had great
hopes of the International, even
though iii twas not revolutionary
.enough, for them.. In the year
1 $67. Mapx wrote, in a letter to
' ■

Engels: "Things are moving. And
In the hew revolution, which is
perhaps nearer than it anpears,
we
(i.e. you and I) will have a
powerful engine in our hands."
But .there was lack of unity and
harmony in the movement be¬
cause
of theoretical differences,

premature
fashion

after

It

Babeuf.

the proletarian revolution to

was,

come

in the fullness of time as a. peace¬

ful

culmination of

a

long period

of. social evolution.
,

Engels,

for

of

;

course,

violent

a

conditions

j

Comintern

all

re¬

itself

officially

party"

and-

"communist

a

there; must be peri¬

odical purges of the whole party

membership.

principles
embodied

ar.e

the

in

Similar

the

cf

Lenin in his

orders

were

given by

"Left-Wing Commu¬

should

in

masses

where

this

he

cialism

in

1895,

tactics

must

where

twelve

Not

revised.

is

direction."

be

utilizing the suffrage, of win¬
ning all posts accessible to us has
been
the

initiated.

Socialists

Even

in

France

So¬

regenerating
revolutionary,
*

more

that

are

social¬
ists of the world, including Bern¬
stein, Scheidemann, Vandervelde,
Languet, Turati, Sidney and Beat¬
rice
Webb, Ramsay Macdonald,
Philip Snowden, Arthur Hender¬
son, and Bernard Shaw.
In fact,
there is scarcely one well-known
when

who

Lenin

William

could

pass

muster

are

Demand Loans

$ 27,201,431

U.

00

1,088,800

00

47,429,708

25

Brokers, Secured

to

S. Government Securities

State, Municipal and other Public Securities

.

1,536,481, 99

.

'

Loans

Discounts

and

.

.

.

Customers'

180,000, 00

......

Liability for Acceptances

Accrued'Interest and Other Assets

.

770,072. 66

....
.

.

.

.

Capital Stock
Surplus

LIABILITIES

<

.

.

%

.

.

$3,000,000.00

.

.

.

.

.

3,000,000.00

Deposits*

.1,

.

86,488,752. 2:

..........

Certified and Cashier's Checks

Outstanding

Acceptances
Less Own Acceptances in Portfolio
Reserve for

$6,898,736.

898,736.75

Undivided Profits

.

5,585,310. 41

v.

2,364,335.59
1,471,127.08

893,208.,51

Contingencies, Interest, Expenses, etc.

766,479.80

back."

/A

.

"r::: •./

$100,632,487.69
♦Includes U. S. Government

David M. Keiser

Chisholm

President. Oxford Paper Co.
>

Robert

Notwithstanding the animosity
communists, evolutionary so¬
stronger in Great Brit¬
ain,
Scandinavian
France,4 the
countries, and some others than it

Deposits aggregating $1,795,156.61.

DIRECTORS
Hugh J.

President,
i
/,
The Cuban-American Sugar Company

;

.

J. Cuddihy

F. G. Kingsley.

Vice-President and Treasurer,

of

Chairman of the Board,

■r

Funk if Wagnalls Coijnpany

„

Mercantile Stores

cialism is

the

first

world

war,

ists,

revived in

but

the

1919 and still

Bolshevik

revolution

-

.

,

.

—

Chairman, Executive Committee,
International General ElectHc

David Dows

Co., Inc.

New York

William M. Robbins

Robert E. Dwyer
Executive

ex¬

Vice-President,

Anaconda Copper Mining
'

•

Company

"A 'V

■

General Foods

Harold

Corporation

J. Roig

Vice-Chairman,

John C. Griswold

W. r. Grace if Co.

President,
v

Criswold and Company, Incorporated

Cletus Keating

if Keating

-

■

President,
Pan Amcrican;Grace

Kirlin, Campbell, Hickox

r

Vicc-Prcsidcnt,
': i

led

by Lenin and Trotsky broke out
on
Nov.
7, 1917 (Oct, 25, old
style), and at a party conference

Company, Inc.

Clark H. Minor *;;

;

,

.

President

socialist

parties in
the several countries go their own
way without much international
cooperation. ./
The

Chester R. Dewey

recognized by friend and
a
bulwark against Bol¬

shevism. The Second International
was

256,052, 74

v

$100,632,487. 69

sheep
And to all of this

Z.

before

22,169,941. 05

'

.

Stock of Federal Reserve Bank

separates the

Foster, chief of the
Communist Party of the United
States, said this hearty amen:
"The Socialist parties of the world
are the
third parties of Capital¬
ism, the maid-of-all-work of the
capitalist
class.
The
Socialist
party stabs the working class in
the

'

RESOURCES

Airways, Inc.

James H. Sharp
Vice-President

_

in March, 1918, the Bolshevik fac¬
tion
of
the
Social
Democratic

D. C. Keefe

'

>

Frank C. Walker

President,

Chairman, Executive Committee,

Ingersoll-Rand Company

Comcrford Theatres, Inc.

no

.

personal bickerings. In Germany,

'■

.

of. the leading

realizing more
lasting victory Party of Russia, changed its name
is possible for them, unless they, to
"The
Communist
Party
of
first win the great mass of the Russia," arid
uptil the end of the
people, i.e., the peasants.
We, War it was the only communist
and

of Condition, December 31, 1947

Cash in Vault and with Banks

Else¬

"Reformist

dying;
will

number

as

of

Statement

and{ apostates Lenin, jnqifttjfQnad
a

foe

unprepared onslaught
has
gone into the: background,
everywhere the German example

SQUARE; NEW YORK

except

ov
were
thus placed under the
ban, but in his list of renegades

is

Every¬

OF NEW YORK

HANOVER

only Kautsky and Plekhan¬

was

the

be

GRACE NATIONAL BANK

Marx¬

non-compromising, rebellious."

and

years

castrate

wrote:

Socialism

when

be

stand¬

,

looked

still

revolution

favorable,
after
the death of Marx, he wrote: "In
Latin countries it is being more
and more recognized that the old
but

the




insurrection

of

therefore, characterized by a spir¬
it of compromise, opportunism,
repudiation of violence, and a
disposition to wait patiently for

conditions, and

.national and local

which

scious of the danger and futility

'

most

countries

developed in. their several
ways, no longer called themselves
communists, and were very con¬

of

would not have stood for

according

Marx

slogan of the Communist
Manifesto:
"Working men Of all

ly.,, that

basic

centrists

and

from

hering to the Comintern must calf

i-

revolutionary means - of
strug¬
gle, except the advocacy of,
and
the
preparation for,
such
struggle, and the education of the

But he

rooted and grounded in the prin¬

as

everything

or.

Mqfjx

and

by the Central Committee of the
Communist Party pf the U.S.S.R.,
that by the Political Bureau
of
seven
members,
of.. which
Stalin was Secretary for so many
•

Reformists

be removed

sponsible positions within the la¬
bor movement and replaced by
communists.
Every
communist
party, must endeavor to disorgan¬
ize, as much as possible, the army
of his country.
Every party ad¬

.and

they purge it by means of
obvious sophisms of its revolu¬
tionary living soul;, they recognize

had

mere¬

must

meet the Comintern is dominated

The

to foment;
general, to'

in

ism;

har¬

a

•

,

"These

Continental

ha<I changed his views, but

detested

Kautsky, "the greatest
authority of the Second Interna¬
tional," and Plekhanov, the lead¬
ing Menshevik, thus:

the

This toning down of revolutiqnindicate that

lution.
j

supreme

years.

unions,
and,

create unrest apd prepare the way
for the coming proletarian revo-;

denounced

from the goats.

ism/did. not

the

never

labor

strikes

famous "twenty-one points" laic1 nism," first published in June,
ing for gradual evolution, paci¬ down by Lenin in July, 1820. 1920,-in which he wrote:
"The
fism, peaceful persuasion, obsolete among which are the following' revolutionary
but
foolish
left
democracy, parliamentarism, po¬ The decisions of the Congress anc Communists stand by shouting;
litical
action, compromise With its Executive Committee are bind¬
(Continued on page 34)
especially in Germany, where the the bourgeoisie, half-hearted en¬
Social Democratic Party, succes¬ couragement of labor unions and,
sor
to
the
Universal
German in general, a policy of watchful
Workingmen's Association, found¬ waiting until, by virtue of ballots
ed by Lassalle in the year 1863, rather than bullets, the proletar¬
iat, shall come to its own./ In
was very, active under the lead¬
ership of Bebel. and Liebknecht. brief, communists hate evolution¬
But as they stood for reform rath¬ ary socialists more than they hate
er than
revolution and had dis¬ capitalism, and their feelings are
carded the name of communism heartily reciprocated.
Writing in 1915, Lenin bitterly
they incurred the Wrath of Marx

ties

'

has

by communists

of action between the British and

*

brought

which

International

and. Engels.
It was a
loose federation of socialist par¬

his address

thus

and

'

irreparable division of

an

socialist

of

and

socialist

did'end

latqr the World
socialists every-

in 1873,

came

the

of

mass

.

authority is vested
in the World Congress, composed
of
delegates
of the
affiliated
countries, but as it does not often

War

great French Revolution—was not

with*the

the

no

*,2a#,uuu votes, or

two

but dwelt chiefly on the miseries
of; the poor, the indifference of
the rich, the benefits of labor leg¬
islation, the cooperative move¬
ment, and the need of solidarity
working classes
for the conquest of political powr

of

to communism, to obtain control''

,

Europe. In Germany, for I
According to the constitution
example, in the election of 1912, of, the Communist International

ternational, which ceased to exist

TheBecond International, which

in his inaugural

countries

1926—and later "liqui¬
After him the successive

western

after the final congress in Geneva
a

throughpqt the Wprld;

presidents were Bukharin, Molotov, Manuilsky, Kuusinen, and
Georgi Dimitrov. of Bulgaria.

though the revolution
might come by peaceful political
as

action

in

dated."

of the total vote.

In

ing uponall the ...affiliated

■»

,

every cp^try increased in num¬
bers and influence until it began

Franco-Prussian War of 1870 and
the
events
connected with the

'

Strange to

been

come,

the

Marx's

tion."

bi

This

.

the Second International seem to

have

Commune of Paris, ruined the In¬

hailed the

we

with

As, the, proverb ,has, .it: "The
proof of the. pudding is the eating
of it"; and certainly the tactics of

33

parties
and iroii >
discipline must be enforced. The
whple-1 press of every party must
ternational ■-!— the Comintern
in be directly uilder control of the
opposition to the Second Interna¬ Executive
Committee.
Every
tional and for the propagation of member of such a
party must be¬
communism throughout the world.
long to a nucleus or cell within
Gregory Zinoviev was elected the establishment in which he is
President and served in that ca¬
employed,' and the duty of the '
pacity. until he was ousted by nucleus is to convert' the workers
national, ;Con gress'
eow in March, i$19, and there
born the. Third or Communist In¬

illegal - methods

on

,

,

i <• ♦*. r

(129)

.

The: Grace

name

has been identified with domestic and international

banking arid commerce for almost

a century.

.

revolutionists, the rebels—we
thriving far better on legal

party in the world.

At the

call

of the Central Committee of that

member

federal

deposit

insurance

corporation

!;V

34

(130)

%

COMMERCIAL

THE

CHRONICLE

FINANCIAL

Thutsitay, Jariiiafy 8, 1948

dis¬

"the industrial workers alone are

pie composed of two V represerita-: Ramadier who are traitors in this
bf the cbmmdriisi pafties of cbirtmori caiiise."
I.^£;;,v
■
the nine countries,, seven of which
; The Manifesto closes with this,
a
combination
of
strikes ririd: hrb HQSdiaii satellited; kridr thbir
meriaciriig resolutiohS "
armed
rocbifihte ahd^kchafige
demonstrations* arid* flA task i§
."The Cbriamiiriist parties Shduld ^
hally,' the general strike bdrijointly fexheribfica dnd; iti case 8f hbdefeWith airbed irisurriectiori idgairist Sity; cdordinate the activity of Place.themselvesriii the Vanguard, j
comiriuhist pai-tieS Ori the fouridd- Pi 0|>pbsition against the imperiithe state power of thk
alistie plans, pt expaftsiom
antt ag-s:
The latter form, of steugglfr>wmeh; tidii of mUtiiai agreement." The
.IS. th§ khfJfbirib. fOfrft; mrisfbbb^t^ Bureau is to publish a fortnightly gression in all their manifestatioris,
ducted according td thO'iriiria- bf drid, later, a weekly organ; and whether in support of state ad¬
War; It pitesiippbses a flah df ckm-: Its headquarters are td be iii Bel¬ ministration, politics;, ecoridjrites,
or
ideology; arid) they should bt I
grade, Capital city 6fYugdslai/ia.
palgh, Offensive
the same time make and coprdi-:
tiOris grid
,*Tri the Manifesto; which was

vital question is
communists should

capable Of leading the entire maSs

heroism on the

tjves
l

(Continued from page 33)
r
'the masses; the masses!.' .and re¬
fuse to work with thd trade
unions.
Greater
stupidity I arid
greater, damage to the revOlutibn
than that cahriot be imagined;"
Thus. Lehin sanctioned, the policy

WHtihgs;
Directions ate
fOh liquidating
the rich
peasant neutralizing tfi£; middle
peasants; arid §hliStihiv the suppdirt of the a|Hcuitimai iaborers
and poor peasants; The small uh-

of> "boring

also are to be neutralized Or mer¬
cilessly suppressed, but cbmriiu-

t

from within" long
by
socialists
in the

practiced
the

to

b8ok

same

Lenin

ahbther

cussed

whether

craftsmen

bari

shopkeepers

and

rerriembei* that

riists are asked to

United States.
In

.

the toilers."

of

-

,

;

:

UribohridednevoUori'dridpart of>th^ brpio- •made public on Oct. 5, it is stated
An
ribsolutel^^sserittai that aftef the War the Soviet

tariat.

hate their efforts bn the basis of
cohimon anti-imperialistic, and
democratic platform as well as

a

Condition
is
intensified'r:irf^ritri-V' tJri
counf
The
participate in bOiirgeois parlia¬
wihriing of the masses,
rill
Ivil" •nt.w.";;'',
'.'Wpcipo^ (Tin rebuilding and gather around themselves
ments, arid cbhcludes that, al¬ therefore; is the task Of the cohi- ■j^Qjjgrjlr wdrk iri thb Tarm^iiatii^ itries "desired the roKiill/Uncr On4
riavy."
«ivy."
strengthening of democracy in democratic ?ahd patriotic forces in
though some might be corrupted munist parties in all countries arid
their respective countries."
*
:
After the revolution of NoVea^ EUrope, the liquidation of fascism
by the bourgeois environriieht, the can best be achieved thrOiigh the
This recrudescericb of the Corftprevention of>a» possible
faithful would have opportunity trade unions. "It is the bounden ber, 1917, the Bolsheviks;? flu^
.

.

iri parliament td make their voices
heard; arid in times of election

dOuld

appeal

effectively

the

to

In England, for example,
inhere such socialists as the Hen¬
masses.

dersons, Clynes, Macdonalds, and
were "hopelessly reac¬
tionary," it might upon occasion
be wise to cooperate. With* them
iri order to trip thOhi Up later.
Thus he wrote, in,a passage wor¬
thy of Machiavelli:
Snowderis

"If I

as

commuhist come out

a

arid call upon the workers to vote
for the Hendersons against Lloyd
.

George; they will certainly listen
to

And I will be able to

me.

plain

in

popular

a

manner

duty of ever communist to belong
to a trade .union, even a most re¬
actionary brie, provided it is a
mass organization."
As members
of unions, communists are to cooperate in working for higher
wages,

partial

demands

palliatives;

and

they mUst remember the final

from

lead

which' to

thih, of

the

is prepara¬

course,

ex¬

tory to the expected day of ripe¬
ness for revolution
and the time

not

to strike. For this the instructions

Only why Soviets are better than

are

Parliament/ but I will also be able
to explain that I want to support
Henderson with my vote in the

France under orders from Moscow.

supports one
who is hanged
and will accel¬
erate the political death of the
same

way as a rope
.

.

.

Hendersons and the Snowdens
was

the

their

with

case

as

friends

in RuSsia."
In the Program of

nist International,

the Commu¬

adopted at the

6th Congress in 1928, the strategy
and

tactics of

everywhere
the

lines

communist parties

prescribed along

were

laid

down by

"Left-Wing

Lenin in

Communism"

and

specific arid seem to be fol¬
lowed just now
by Italy arid
"When the revolutionary

tide is

rising, when the ruling classes are
disorganized and the masses are
ready for action and for sacrifice,
the party of the
proletariat is
confronted with the task of lead¬

ing the masses to a direct attack
the bourgeois state. This it
does by carrying on propaganda
upon

increasingly radical
and by organ¬
izing mass' action. This mass ac¬
tion includes: strikes; a continua¬
in

of

favor

transitional

slogans

tion of strikes and

soon

as

word.

they

as

Zinoviev,

gave

first

demonstrations;

Kings County Trust

tb

over

the

Trotsky

Soviet

claimed

system;" arid

that

Red

the

nounced

Rightest Socialists
of the kind of Leon Blum, Prime
Minister Attlee and Foreign Sec¬
retary Bevin, Socialist leader Dr.

was

only in backward Russia but
highly civilized coun¬
try in - Europe, Germany, and in
the ancient capitalist stronghold,
England.
Even in America, the
most powerful and youngest of
the capitalist countries, the Soviet
system has the sympathies of the

working class."
These

not

were

7,500,000.00
641,000.00

prophecies

fulfilled, for

the

and

Bolshevik

brought
in

about

its

world-wide

a

revolution

negation

own

counter-revolu¬

tion which,
in Italy, Germany,
Spain, and some minqr countries,
took shape as Fascism, Nazism,
other

and

reactionary dictator¬
ships. The Comintern, always the
agent of the Soviet Government,
was at first
very active in foment¬
ing' revolutionary movements in
various countries,

including China,

especially during the presi¬
dencies
of
Zinoviev
and
Buk-

Cash

on

Sec'y

LEONARD D. O'BRIEN, Asst. Sec'y
WILLIAM TUNIS, Comptroller

Party,

the

and

-

of

Trotsky and most
old guard of Bolsheviks,

the

Soviet

Government;

followed

more

Under

arid

more

tried

to

i

Cash in Banks—______

Bonds

2,092,683.32

12,270,223.45

25,537,091.50

N. Y. State and City

Capital

5,847,960.32

$

another
version

Stocks

and: Mortgages,

824,815.46
938,792.43

Collateral,

7

______

Real Estate

Other Assets

_________

for

the

con¬

the world."

of

importance of the Comin¬
tern, therefore, gradually diiriiriin

arid

to

be

nouncerhent

1943,

May,

Under

dissolved.
Was

This

an-

with

received

great enthusiasm in certain quar¬
ters, but those who Were better
informed believed that the Coirihad

ready to revive
occasion.

and

re¬

upon

378,918.97

862,637.87
6l5,000.00

Depositors

of

384,102.99

Official

46, 869,615.95
36,066.87

3,838.55

___

territorial

" 691,087.4f

Checks
45,403.53
$56,287,090.95

ICINGS COUNTY TRUST COMPANY
The Kings County Trust Company offers to its depositors
every facility and
accommodation known to modern banking,
if you are not already availing
yourself of the advantages offered by this institution, the Kings County Trust

Company will be glad to have you open an account.
MEMBER FEDERAL DEPOSIT INSURANCE




it

though the United States
to the help of Greece,
Turkey, and western Europe in
i large way arid thus block the

Russia.

Outstanding

$56,287,090.95

when

come

spread

arose

as

would

Reserves for Taxes,

gencies

occasion

looked

Checks Certified
Unearned Discount

The

SOd,000.00

Expenses and Contin¬

Demand and Time™

Bills Purchased

campaign

suc¬

launching

The

500,000.00

6,534,864.64

on

eorrimunisiri

make

641,078.64

Surplus
Undivided Profits_____
Due

Bonds —;
Other Bonds

Loans

and

cessful in Russia before

sume

LIABILITIES

U. S. Government

Bonds

nationalism, im¬
bureaucracy, and

merely gone Under¬
ground, hibernating, as it were,
in a state of suspended animation,

of business, December 31, 1947

CORPORATION

communists in France and Italy,
wonders whether

One

Government
time

is

;

the

believes

ripe

for

\

Soviet

that

the

in

revolution

western Europe and that Britain
and the
United Nations can cto

nothing to prevent it.
However that may be, it looks

though the Comintern arid its
parties had begun to'

as

affiliated

celebrate the 100th

anniversary of

the Communist Manifesto and the
abortive revolution of 1848.

•

v

Can the Federal Reserve
Serve Two Masters?
(Continued from first oage)
i clear,; however, that
the policy
commitment to the Treasury | was extra-legal arid that Congress
has never sanctioned such a policy
Department or to maintain ade¬

:ts

credit

quate

line with

in

control

its legal public responsibilities as
outlined in the Federal Reserve
When

Act.

Federal

the

commuriiSm

expansion

The Coriiintern,

arid
of

the

Soviet

therefore,

by

any

Reserve

ties for any reason it increases the
reserves of member banks, which

vored

is

government

inflationary.
The

Federal

Reserve

System

purchases

Reserve

Federal
the

that

Act

states

principles
governing
open-market operations are that
"the time, character, arid voluriie
of all purchases and sales of paper
described

Act

Section

in

of

14

this

eligible for open-market
operations shall be governed with
a
view to accommodating com¬
merce and business and with re¬
gard to their bearing upon the
general ; credit
situation of the
country." This, and this only, is
the
legal
justification for the

operations

open-market
lary

the

of

It is true that as a corol¬

Board.
to

Federal

general

its

the

ooWers

Reserve

interest

low

rates

has

*

fa¬

alriiOSt

continuously since the advent of
the New Deal. Iri the early
days
of the great depression, the argu¬
ment was made that 10W

iritere$t

general would stimulate
business and low rates on govern¬
ment issues would keep dowh the
rates

cost

in

of

,

as

.

Low Interest Rates Favored
The

buys

amendment to the Federal

Reserve Act.

securi¬

Board

servicing
At

a

rapidly rising

the public
policy of the Federal ftdand
the TrfeasUry policy
were
quite compatible.
DUriing
World War II, a policy favoring
a gradual declining interest rate
was favored by the Treasury de¬
partment arid the Federal ResferVe
System, the two working haftld
in hand in supporting government
debt.

that

time

.

credit
serve

securities.

Such

\

■

;

policy

a

I

was

not at vari¬

with the public responsibili¬
ties of. the Board. It was in the
general public interest as part Of
ance

war program.
Credit was re¬
stricted unless it was used to pro- i

Board might be

justified in pur¬
chasing goverhrrierit securities in

our

certain iri stances—(1) if commer¬
cial banks are in need of funds'

mote

production or produc¬
satisfy essential minimum

war

tion to

belief in the mind of the gen¬

eral

public that such iiripairment

had taken place. Nowhere iri the
Act dries it state that the function

sUppbrt gbvernprices, or control in¬

of the Board is to

riterit

bbhd

terest rates iri order to keep
debt

service

as

low

as

the

higher Federal deficits,

'ri

September, 1947, of representa¬

slavia, Bulgaria, Romania, Hun¬
gary, Czechoslovakia; France, and
Italy, it* was decided to create aft
International Information Bureau
Which can be nothing else than a

credit
Such

situation

action

extra-legal

of

wbuld

as

the country.
therefore be

far as the Federal

Reserve Act is concerned.

No

One

WOuld

criticize

such

extra-legal activities of the BOard
.n
supporting the government

easy-money

policy during war¬

the

later wish to

participate.
The

Information

economy,

such a

policy would have little ill effect
Bureau

is

to

>

bf

New

Deal

1947.

Naturally, the cost of serv¬

until

summer

government: debt vvas

paramount

in

the

minds

of

the

nomical maturities to use, to ,conr

trol

on

our

economy.

It

over

the types

chan¬

economy in order to secure the
most economical financing of a

rapidly

should

be

expanding

government

debt.

report issued
Federal " Reserve

In its 1945 annual
in

1946;

Board

the

pointedly

,

'

ant} amounts :

securities

of. government

time, -especially when, under our
war-regimented

may

?

u *

neled to various segments of our

such

as

.

;

is

It

revival of the Comintern for the
nine countries
in question and
others

.

The Treasury Department quite (;
generally favored a low interestrate from; the early days of the

.the icing the

possible.

•

contrary to the Act if sufch United States Treasury officials.
or its
equivalent, awoke and took a policy Would have an adverse
Everything possible
was
done,
actiori. At a meeting iri Warsaw
effect on the general business arid, from an analysis of the most ecotives of the communist parties of
the Soviet Union, Poland, Yugo¬

;

needs.
We
did have
that a
drop iri the market value of gov¬ credit inflation; but it was almost
ernment securities would impair entirely the result of war finanethe financial integrity of these ing
through commercial banks,
institutions or would give rise to which was essential in financing
consumer

if it could be proven

(2)

a

Hand_____

right-wing Socialist Paul

The

Communist

clared

RICHARD C. CUMBERS, Asst.

RESOURCES

Germany,

and sells government
securities through the operation
of
its
open-market committee.

though
r

V':

arid the

arid

stress of War arid to allay the
fears of Russia's allies, it was de¬

STATEMENT
the close

in

Schumacher

Kurt

similar belligerent articles in the
Soviet press, and the behavior bf

the

Austria, Hungary, Czecho¬
slovakia, and elsewhere failed,

iritern

at

"treasonable

the

also

of

many,

Stalin

WILLIAM J. WASON, Jr., President

ALBERT I. TABOR, Secretary
WILLIAM N. BOYLE, Asst. Sec'y

policy

,

'

.1

premature

however,

the

OFFICERS
ALLEN, Vice-Pres.
CARL J. MEHLDAU, Vice-Pres.

first

the

the attempts at revolution in Ger¬

:shed,

CHESTER A.

of the

in the most

of

500,000.00

.

European branch

a

not

perialism,

Undivided Profits

is only a farce,

already
an accomplished fact, for he said:
"The Soviet system has conquered

the world revolution

the old ways of

.....

positiori.'
nndtmH»

The
Manifesto
also
declared
that "the Truman-MarShall Plan

general world plan of po¬
litical expansion being enlarged
by the United States of America
in all parts of the world." It de¬

liquidation

BROOKLYN i, N. Y.

Surplus

dominant

+hAit>

the

342, 344 and 346 FULTON STREET

$

their

harin; but after their demotion
and liquidation, the purging of

Company

Capital

in

course,

attack oil the Marshall
the supposed imperial¬

President

Army, after defeating the Whites,

a

as

working class to the revolutionary
struggle |or power."
All

of

an

and

of the

would conquer Europe arid Amer¬
ica.
Lenin seemed to think that

everyday needs

point

masse

starting

in view

nor,

interri; is,

instance
Plari

"utilize the mi¬

end

and

victory, expected the prole-fPggression on the behalf of Gerof
the world to rise>iwhereas/'the United States

tariat

the. of America and with them England aim at a different goal—-the istic desigris of* the United States.
view
of- the
violent
Comintern, wrote iri 1919: j elimination of competition on the BUt, iri
"Before a year has passed the world ^market (Germany arid da- speeches of the Soviet representswhole of Europe will have gone! pari)
and the consolidation of tives in the United Nations arid
arid other

shorter hours,

but

with

recognized

the

dilemma facing it iri the atmos-

Volume

pftere of

167

a postwar inflation.

Board* asked

Congress for

The

addi¬

H

strict

and v.varied

control, river

credit in order to avoid

dilemma.

In

inflationary

■

stated

the

for a

that

tbe^^xist-

discussihg':ilie
the
Board

boom,

''problem

vigorous attack

on

called
the basic

of

cause

inflationary pressures."
In discussing the need for addi¬
tional legislation to control credit,

the Board stated that

straints

existing "re¬

suffice because

not
off circumstances
may

which

the

are

heritage of war financing," Par¬
ticularly worried about the shortterm

government

tirrie,

the

Federal

debt

Board

at

added:

that

"The

Reserve

System stands
ready to purchase short-term se¬
curities on the open market in
order

THE COMMERCIAL
the

at

present

time

&

FINANCIAL

to

in¬

short-term

prevent

'could not be tolerated and 7 .>
might fail to accomplish the de¬
sired purpose" in any event. ;

Statements issued in 1947 by the
Board have not contradicted the

assurance

States

(to

Treasury)
the Board

cause

the

United

given -be¬

was

does not favor

a

r

upward and the Fed-

asking

erad Reserve has permitted yields

should

securities

government

of

summer

eral

found

the

-

Fed¬

System holding the
majority of the very shortest

vast
term

securities

government

result
is

1947

Reserve

the

to

ceed

Treasury ? would

and

one

dollars.

banks

money

increase

to

the

supply irrespective of the

"constant downward pres¬

a^

interest rates is

on

not

...

desirable under inflationary con¬
ditions." Thus the Board favored

an

stab'lized at about the

holding all of the securi¬

up

you

trying

are

to

support.
lesson that the

a

Federal Reserve Banks might re-r
View
in., considering
continued

The

Federal

Reserve

has

permitted long-term rates to
drift gradually upward from 2.08
to
2.39%
during the past two

'

years.

The treasury Department raised
se¬

curities from %% to %% and on
its one-year y securities from % %

1% in the summer and early
fall of1947. This must have been

to

slight

set-back to
that
had

Reserve

the

Federal

It did not favor higher rates

be Increased because of the addi¬

so

governments with long-term

tional cost that would be entailed

curities as either

by

course

se¬
would in¬

the cost of the public debt."

The

Board

at the

time

further

took the position that the current

inflation

the result of

was

a

large

supply pf money already created
and the insufficiency of produc¬
tion

in

relation to

neither

supply,

would be

the monetary

of

which cause
corrected by higher in¬

the

United

tionary
well

spiral,

in

of

excess

quarter

a

seek

their free and uncontrolled
economic. level and has released
the Federal Reserve from its com¬
mitment
bond

to

.

support

government

prices.

Government

Prices

payer

to

Additional

Bond
In

•

November.

Powers
Mr.

Eccles

re¬

quested additional powers to con¬
trol credit in a statement before

to

this would create difficult market

problems for the Treasury which

rates

to

rise

refund constantly; and, in
eddition, if the price decline was
sharp, it might weaken the confi¬
dence -of the public in financial
must

institutions whose

assets were

so

largely invested in government
obligations.
However, the Board
inflation

saw

as a

dangerous threat
to our. further economic well-be.ing and asked for more power to
curb the
as

rising inflationary spiral,
existing powers could not be

its

used.

in 1947, the Board caUed,attentiori
to certain factors which were lim¬

iting the further monetization of
the

public debt: (1)

the redemp¬
tion of securities by the
Treasury,
(2) the selling of governments by
commercial banks in order to ob¬
tain reserves to back
expanding

loans, (3) and

discontinuance of
the preferential rate by the Fed¬
eral

Reserve

cured loans.
the

it

stand

had

a

on

government

se¬

The Board repeated
interest rates which

on

stated

forcefully in 1945.
"In 'view of the large public debt
outstanding, ; it is • desirable t o
maintain at the existing low level
the rate at which the government
caniborrow

on

its long-term oblU

gallons."--: As in the-194&- report
^however,; the Boand^stated that "it
would
;

be de$B?abl& to. avoid

ther declines
For
the

some

shift

term

.ii

fur-

in interest rates."

time the Board feared

by

banks

governments

from
to

short-

long-term

governments in order to increase

earnings.

To

request included only one of
the series of changes suggested in
the Board's 1945 and 1946 annual

prevent

this,

the

the

additional

Reserve

System and

in excessive credit

Board

stated

thu»

engage




result

of

artificially
by the

money

expansion of central bank credits."

Board

rates

Redemption of Bonds
Of Republic of Haiti

to

government

Banque Nationale de la Republique d'Haiti, as fiscal agent, is
notifying holders of Republic of
Haiti
A

se¬

this

level

new

curities

step in a
permit government se¬

to

gradually

seek

their

series

certificates

15,

1957, that $410,040
principal
amount
of

will be redeemed

Jan.

on

15 at

price equivalent to
100% of the principal amount and

interest

to the redemption date,
through operation of the sinking
fund. Payment of the bonds and

bond certificates will be made at
the head office of the fiscal agent,

Rort-au-Prince, Haiti, and at the

serv¬

its stated policy towards govern¬
ment interest rates at a time when

head office of its New York agent,
the National City Bank of New

case, in the mat¬
refunding, it seems ex¬
tremely unlikely that the Federal

the inflationary spiral
is rising
rapjdly. The broad viewpoint as

York.

Government,

economy

new

ury

of

cost

In the second

ter

of

after adjusting its
offerings to current market

what

to

conditions, would run into any
difficulty in refunding operations.

the

There is still and will be

serve

demand

great

a

for

governments at the
In fact, if the Fed¬
eral Reserve and the Treasury De¬

right yield.

conditions where rates

mitted to adjust to their free
level.
Support
of

the

Federal

contention

in

whole

W. P. Watts Dead

should

government

William Prescott Watts, widely
known railroad bond consultant

cost

be

the

for

Stroud & Company, Incorpo¬
rated, died at the age of 62 after

guiding

principle of Federal Re¬
policy. The Board needs no

additional powers to meet its re¬

sponsibility.
Mr.

J.

A

leading

Stewart

Baker,

a

banker

President

Cdirii>ahy; stated the "mim

and Baltimore where he acted

imum program"

the
sion

tide
in

clearly. "To stem
rising prices, expan¬

of

the

supply of

illness.

joined Stroud & Company's
Philadelphia office in 1936, after
a number of years in
Washington

of the Board of the Bank of Man¬

hattan

month's
He

an

independent

consultant.

railroad
the

For

Stroud

and

money

firm,

to

tion, "Bond of the Week," and

ab¬
even

accomplish this the Federal Re¬
Board

serve

should

abandon

was

known to hundreds of persons in

all

commitments—stated and implied

financial

—to hold

country.

yields

on

United States

circles

throughout

the

regard

might be expected.
Effect

of

Lower

Prices

BROOKLYN TRUST

of

Government Bonds
In

the

third

what

case,

the problem of a

COMPANY

about

declining market
MAIN OFFICE:
177

NEW YORK OFFICE:

26 Broad Street

Montague Street

Brooklyn 2, N* Y.

New York 4,

N. Y.

requirements.

would

be

in

the

This

cash; items.

.

Mr/ Eccles

justifiable to permit them to carry
a
government security at par; as
there is no foreseeable reason for

25%

of

sug¬

demand

their

being forced to liquidate
their long-term
securities, even
though the proportion of their

deposits and
10% of. time deposits. Not only
has banking opinion been univer¬ assets in long-term governments,
sally opposed to this proposal, but especially in the case of savings
Mr.
.Snyder,
Secretary
of
the banks, is higher than that of com¬
Treasury, stated "I am against it mercial banks. Banks should be
because

I
don't
think
it
will
achieve the ends he expects." The

Federal

Advisory

is

-

100%

out

came

posal and

so

Council
against the

also
pro¬

advised the Board

as

its duty.

credit; because if it uses its existing powers, especially in openmarket
operations, such action
counter

run

to its commit¬

ment to the

Treasury. It justifies
this commitment, even though it
is extra-legal, on
the following
grounds: (i) that the ,additional
cost

to

great;

,

the

(2)

be
and

Treasury would be
that instability might
the financial markets,

carried

on

interfere

by

the

with

the

Treasury;

(3) that the decline in market

values

of

permitted
Federal

to

borrow

from

the

Reserve

against
their
government securities at par al¬

though, of
would

RESOURCES
Cash

Hand and due from Federal

on

Reserve Bank and Other Banks
U.

government

standing of banks

securities

the

financial

and

insurance

135,187,151.01

State and Municipal Bonds
Other Securities
and

Bonds
Bank

Bills

and

Loans

5,802,519.86
Z

Mortgages

Buildings

Purchased

from

rising. The Board has said
higher interest rates would
not, in its opinion, deter inflation,
as low interest rates were not the
cause of inflation.
While it must
that

Other Real Estate

'

Other Resources

1,000.00

664,475.90

«

$245,257,317.32

LIABILITIES

Capital

$

Surplus

pf inflation is the over-supply of
in relation to production,
this
situation,
will
gradually

5,700,000.00

Undivided
Reserve

Profits——

—

808,794.17

January 2, 1948_._

while

the
be

227,800,030.20

Reserves for

Taxes, Expenses, etc

*.■■■

$245,257,317.32
^V'

v

United
bonds

interest

now

as a

864,552.83

V

States

carried

Government
at

and

$13,469,731.44

'—•/'l:'

State
are

public deposits and for other purposes,

of major

not

205,000.00

Deposits

money

and

1,678,940.12

-

for Contingencies

Dividend payable

i

8,200,000.00

-

be conceded that the major cause

importance

2,500,000.00

-

at a rate that
it profitable for

supporting government bond
prices further or in preventing the
yield on government securities

may

36,149,329.83
239,555.37

-

•

rates

2,430,416.53

—

so.

It does not seem that the Fed¬
eral Reserve Board is justified in

change;

$ 62,282,868.82

S. Government Securities

and

pledged

■

.

,

Municipal
to

secure

required by law.

deterrent to infla¬

tion, it will gradually assume in¬
creasing importance. On the other

One of the Oldest Trust
Member

jeopardize

Condition, December 31, 1947

course,

not make

them to do

In summary of the Board's
posi¬
tion, it has stated that it must
have additional powers to control

would

Condensed Statement of

companies, it would certainly be

of

gested that the maximum be fixed
at

drop in govern¬
prices could seriously

re¬

form

short-term government securities
or

conceivable
bond

hand, when the Federal Reserve
does support

as

bond

eco¬

Reserve

this

our

he wrote and edited the publica¬

buying irt great volume
the refunding issues as well as
the outstanding issues.
Therefore,
the reserve of the Federal Re¬
serve

for

credit must be curtailed. In order

nomic

that

best

.■

per¬

were

normally low yields might

is

and not what the Treas¬

Department thinks it will

affect such institutions. In the case
of savings banks and insurance

serve

a

redemption

from

times the increased

July

(5%)

bond

these bonds and bond certificates

recent action only a

program to

loan

and

aggregate

will

permanent and that they will
not permit a further decline. Does
the Board actually mean this or is
its

internal

bonds

due

However, the Board in¬
that

consumer,

a

addition to existing primary legal

expansion. The might

that attempts to re¬

interest

ment

would

the Federal

tax¬

No

reserves against
both demand and time deposits in

refunding which must constantly

at

the

special secondary

which

shift

is

mercial banks be required to hold

it irhust be given a direct way to

ernment securities to

high

money

know that inflation is the

we

.

decrease

ability of banks to
will their holdings of gov¬

it

certain

dicated

were se¬
of
value
government
securities
opposed.
Mr. Eccles of¬ held in the portfolio of financial
fered a five-point program to pre¬ institutions?
It
has been esti¬
vent inflation. The point to which mated that less than
10% of the
bankers took immediate and voci¬ holdings of commercial banks
have
ferous exception was that com¬ maturities in excess of ten
years.

in

the

too

reports to which bankers

result

Federal Reserve Board stated that

is

Inflation

.

maintaining cheap

be

riously

reserve

•

.

In its 1946 annual report, issued

interest

his sav¬ economic level? This is the ques¬
halting or tion that many bankers are ask¬
slowid# down the pace of the in-v ing at the moment.
flatiphary spiral would be many
The Reserve Board should review

his

interest

interest

Awho would be called upon

bear

the Senate Banking and Currency
Committee.
Surprisingly enough,

and

billion and

extra

would be

The Board stated that if govern¬
ment bond prices were permitted

fall

the

dollars

cost. Furthermore,

mean

Federal Reserve Requests

s

of the infla¬
which would be

pace

States

Sv-T,

on

this

Treasury partment Insist on maintaining
Department. The "sixty-four dol¬ yields at low rates riot justified
lar" question is whether or not by general economic
conditions,
the Treasury has decided to let all refunding might be much more
yields of government securities difficult than it would be under

terest rates.

Attitude

billion

against

ing the debt.

the rates on its shortest term

.

inevitable

December the Board permitted the
price of United States government
securities to drop by lowering its

ing down the

the replacement of short-term

crease

ex¬

may

You

.

price to pay for cheap

and

adjust gradually to their economic
level. It should ask to be released

This

rate.

recently
argued that the rates should not

levels.
nor

1945

Reserve

permit

sup¬

Perhaps this is

a

quarter

a

Balanced

ings//resulting

mercial

Federal

artificial

its

of

a

cost; but, as

Board's national monetary policy.
The Board did add that while it
did not favor higher interest rates

The

support policy.
happens when you

as

support of long-term government

paying."
The, Board admitted, that the pol¬
icy. made it possible' for.the com¬
now

be

would be the savings the
govern-^ bid for
ment obtained by halting or slow¬ curities.

what

port

cost

securities.

Government is

to

was

permitted to rise in line with de¬

the

rates

levels.
a

for more powers to
restrict credit.

long-term issues to rise to
2.39%, If the yield on long-term
on

higher level of interest rates than

-

_

35

Government securities at specific

policy of the Board re¬ mand and siipply forces, it seems from its commitment to the Treas¬
garding interest rates; in fact, the highly unlikely thaft the additional ury Department. At the
end; of

ties

-

m

"announced

end

rising above the level
Government is now paying.

sure

(131)

companies in the eyes of the pub-

i#

the

styll

CHRONICLE

to keep the yield down, it places
by :Sellfng^Ccurities of the system lie/
an equivalent
■
amount of reserves
in' the open market, or by limiting
Is the Federal Reserve System in the hands of commercial banks.
the; purchasing of securities by the
It thus expands the credit
justified in its position? From the
base,
iy_stem, eithor of which actions standpoint of costs, the Treasury which must be considered as
might cause-sharp declines in the itself has
already adjusted short- strongly inflationary, at a time
prices of government securities, term rates
when the Board itself is

terest rates

ThTs

credit

i.

.

tional

ing

st *.s" •:

Number 4662

government securi¬

ties by purchasing them, in order

New

York

Federal

as

Companies in the United States^

Deposit

Insurance Corporation,

Clearing House Association and Federal Reserve System.

■

96

(132)

,,
t

«<»* <

f

*

v

i

»'

t

t i >

}

THE COMMERCIAL

&, FINANCIAL, CHRONICLE

' » 1

basis

Consumer

.

Thursday, January 8, 1948

expectations

of

rising

of

credit; and, in

date

ume

those

debts

the

on

basis

of.

V (Continued from page 4)
of

When

1929

on

total

monthly personal income

the relatively greater

as

trend

Outstanding

P

Total

in

The
in¬

personal

credit

consumer

income

v:

89.4

(including automo¬
biles); instalment cash loans, and
charge account sale debt,
.7,
Instalment sale debt shows the
relation

to

incomes

as

credit—falling

downward
In

income

in

November,

1938, the index of

per¬

payments

rose

ber.
It

;

a

p p e a r sy therefore,that
changes in credit7 trends are the
result of changes in personal in¬
come receipts.
It is the expecta¬

76.4

53.6

58.0

tion

51.4

54.8

stimulates

increases

income

of

that

credit

in

the

disposable per¬
pointed out

was

total

of

case

declining disposable personal in¬
rising

and

rapidly than
rising disposable personal income.
While the decline in personal in¬
come payments began in Septem¬
ber, 1929, the index of instalment
sale debt started down unsteadily
in
September and decidedly in
November,' - The * recovery in in¬
come

more

crease

recessions will not succeed unless

119.7

91.8

The conclusions

129.5

111.6

expectation of increasing in¬
comes
is developed; nor will de¬
vices designed to curb consumer
credit expansion succeed unless

89.7

80.1

1937

98.1

86.1

92.5

1938
-

—

1940

—

1941

"Federal

Source:
letin"
S.

for

an

*v

Bul¬

Reserve

credit;

consumer

'

U.

the

Department of Commerce,
of Current Business,"

of

prospect

rising

personal

income payments is dampened.

"Survey

is

It

Supplement, July, 1947 for dis¬
posable personal income.
' ::

cially

important to know, espe¬

as an

administrative device,

Table II—Indices of Variations of Consumer Credit and Personal

regarding
are

total consumer credit
applicable to instalment credit.

This

is

Payments According to the Timing of the Variation.

these

.ng

in

Personal Income

.

*

t

Consumer

Payments

Credit
Year—
1929
1933

1937
1938

1933-37:1929=100;

1935-39 = 100

-

Nov.

(recession)
(recovery)..
(recess'on)
(recovery)

1938-41:1935-39

instalment

that

the

not

Ef¬

at

'

causes.

Instalment cash loans show litcorrelation in

55.5

/ariations.

Nov.

115.6

Sep.

88.7

cline

Nov.

105.3

July

96.4

in

lagged

time

income

to

For example, the

instalment

de¬

loans

cash

behind the decline in in¬
in

payments

come

While

months.

1929

income

by

14

payments

decreased in

1937, instalment cash
continued to rise through

loans
1941.

Charge account sale debt in¬
began a decline, after four
months of stability, in January,
1930, lagging behind the Septem¬
ber, 1929, decrease in income pay¬

Fidelity-Philadelphia
Trust Company
■7/777':

7 '

Organized 1866

dices

'

ments.

Recovery

the

began

in De¬
1933 lagging far behind
of recovery in personal

cember,

'.7777/

of Condition, December 31,1947

Statement

start

income payments.

Cash

on

4.EDYARD HECKSCHER
•

•

•

Dumor Plastics, Inc.

Securities

BENJAMIN RUSH
Chairman of the

America

.

.

.

$ 73,700,738.83

.

.

.

..

.

v

■.

Municipal Securities

...

Other

.

M. CARDEZA

Securities

tion.

Loans

Less Reserves

OEOROE WHARTON PEPPER
Pepper. Bodlne A

Stokes

Mortgages

ROBERT DECHERT
Barnes. Dechert, Price. Smith

Real Estate

Sharpies Corporation

Other Assets

President

Inc.

71,337.96

...........

Total Assets

Recovery
began

in

accounts

regarding the relation

credit trends to

that

has

been

applies in this

levels

income

reached

change

a

consumer

55,505.56

...........

$202,789,894.98

after

occurs

income

credit

in

credit

trend of
normally

the

which

payments,

volume

then

consumer
in the

moves

JAMES H. ROBIN8

,

.

American Pulley Company

LIABILITIES

ADOLPH G. ROSENGARTEN. JR.
Sirsdley. Ronon, Stevens and

'•

v;

'

"

7:7

*

,777 '/

;/'7

RRANCIS J. CHESTERMAN
j,

Deposits
■
y. U. S. Treasury
:
.
■
»
$
214,400.46
Other Deposits
...71; . . 176,973,788.58
ReserveforInterest,Taxes,etc.
651,241.37

•

President

Prealdeat

'. v'

ments

.

-■

; The Bell Telephone Company of
■Pennsylvania
y

Other Liabilities

.

i

\

V

;,777

Virginia Coal A Iron Company
THOMAS S. GATES

Capital Funds
Capital . .
Surplus

.........

'•

University of Pennsylvania

77

Morgan. Lewis A Bocklus

Total

MALCOLM ADAM

"

,

>

'■""

652,826.19

Capital Funds
.

.

$202,789.894.98

Mutual Life Insurance

Company

United States Government obligations and other securities carried In the above

B. HOFFMAN

DOLAN

statement are

PAUL DREWRY FOX

pledged to

secure

Government, State and Municipal deposits,

Clearing House Exchanges, and for fiduciary purposes as required by law in the

Treasurer

v—sum

Pennsylvania Railroad

of $22,778,866.65.

Company

:ncome

System''

,

..




"V

trends
the

in

are

in
oc¬

con¬
more

corresponding
It may be ar¬

payments.

that in

the

of

none

years

made to shape the course of credit

like

PHILADELPHIA 9

Member Federal Deposit Insurance Corporation

the

during the War.
been
could

made

have

then

efforts

made

If the effort had
credit changes

been

controlled.

If

changes in credit volume had been
controlled then it may be
that income would have

argued
shown

stability .during this pe-

riod.

'

'

■

•

'■

The time relations between
consumer

Member Federal Reserve

fluctuations

than

greater
STANLEY W. COUSLEY, President

BROAD AND WALNUT STREETS,

change
payments trend

credit

movement

24,771,309.99
.

■

pay¬

next

under consideration was an effort
-

....

.

income

as

the

movement in the trend of personal

gued

4,118,483.80

Total Liabilities and Capital Funds

Vice-President

"■■■

13,300,000.00

.

/ The

severe-

$178,018,584.99

:'/7-'

•

.

,

income

curs.

$ 6,700,000.00 v<;77

.

until

sumer

Reserve for Contingencies,
etc.

THOMAS B. K. RINOE

,'.7:'' 'V

Undivided Profits

77/

Chairman

The

-» j

'

Director

The Penn

\ V

.

179,154.58

.

.

Total Liabilities

.

ORVILLE H. BULLITT

the

.

Young

Stanley w. cousley

'

direction

same

President
.

soral

that

credit changes and per-

income

people

payments indicates

incur

would have

payments,

been

reduc¬

a

offset by

a de¬
savings.
only
by an attack on credit, savings
habits and incomes—not on credit
volume alone.
;
1
in

the

Inflation

volume

be

can

of

controlled

.

The objection may be raised to
the last conclusion that those who
credit

use

provide

not the people who

are

the

savings; therefore, if
restrictions are placed on the use
of

credit they will not affect the
of savings

rate

restrictions

and, hence, these

will

to

serve

retard

total spending.
It is true that if
the level of dividend, rent, inter¬

follows, then, that as incomes est and transfer payments in 1939
and people are confident of is corrected for changes in the
the future, if they find consumer cost of
living, the recipients of
credit is. not available they will these shares of
distribution had
spend from, sav.ngs or from in¬ the ability to save as much, if not
that

been

otherwise

would

have

more,

They are willing to
savings volume in
spend because savings

mates

saved.

their

order

to

are

safeguard

a

the

aga nst

un¬

certainties of the future; when
ris'ng incomes provide this safe¬
guard, then the need for savings
is diminished in the saver's mind.

be illustrated

may

by the

fact that in 1930 when disposable

personal incomes stood at $73,688
millions

the volume

and

credit

consumer

total

of

outstanding

was

declining and the cost of living
falling, personal savings for

was

the year amounted

lions.

This

of

era

In

comes.

of

an

was

the beginning ot

declining personal in¬
1939, at the beginning
of

era

to $2,899 mil¬

rising

personal

in

Board

50%

1939

show

of

stood at $70,167 mil¬
lions, savings out of personal in¬
amounted to $2,701 millions.
In other words, put of an income,

that

provided about 45% of liquid-

and

held.

assets

If

16%

of

liquid

true, it seems certain that
deal

of

will

afforded

as

in 1930.

The relatively large pro¬
portion of savings out of income
in

1939

was

due,

doubt, to

no

a

lower cost of

living as well as tc
rising personal incomes.
But the
ris'ng volume of consumer credit
that

of

nificant.
the

the increased
savings in 1939 is sig¬

accompanied

volume

It indicates that despite

lower

cost

willing to

were

debt.

In

of

far

so

living
these

as

people
to incur

save and

savings

deflationary they offset the

wen.

our

a

great
con¬

by controls

offset

be

savings

by spending from
income .that
would

or

otherwise be saved
have

comes

so long as in¬
tendency to rise.

a

II.

V

Credit

Consumer

credit

and

Sales—If

Store

ment

Depart¬
consumer

an
important in¬
creating inflation it

exerts

fluence

in

this by affecting the de¬
for
goods.
In order to

must do
mand

relations may be
The
timing
of

much

if

in

contraction

the

debt

sumer

amounted

as

and

assets,

conclusions regarding the reasons
the
incurrence
of
debt
be
for

ascertain the

almost

debt

consumer

arises largely from this group and
those below it, who held about

that in 1939 amounted to $3V2 bil¬
lion
less
than
in
1930, savings
to

Esti¬

Reserve

approximately
units received

spending

in¬

payments

1930.

Federal

incomes from $2,000-$5,000 in 1946

comes

(following the 1937-193S
recession) when "personal income

in

as

the

of

debt

sales

normal influence of

credit

consumer

of

instalment

and

sales,

on

two

established: (1)
charge account

department stores
sale debt of de¬

mail order
department
sales; (2) the relative varia¬
tions in these types of consumer
credit, personal income payments
and department %store sales.
partment

houses

and

stores

to

compared

store

The

timing cf changes in charge
instalment sale debt of
department store and mail order

account,

houses and

department store sal$3>

is shown in Table III.

Table III.—Indices

(Seasonally Adjusted) and Timing of Changes
Charge Account Sale Debt, Instalment Sale Debt of De¬

in Trends of

partment Store and Mail Order Houses, and Department Store Sales.
Charge Account
Instalment
Sale Debt
Sale Debt
V
Sales
V v
"

Year—

1935-39=100

>

.

Jan.

1937

(recession)
(recovery)
(recession)

1938

(recovery)

Jun.

1933

1935-39=100

124.3 '30

Dec.

Mar.

Apr.

77.2

Dec. 104.3

1923-25=109

61'30

Oct. 112

37.6

.

Apr.

93

Jun.

Nov. 113

100.3

67

Oct.

Dec. 119.2

82

Source: Cf, Table II.

change in personal

a

income

by force in consumer' credit

already

It has been shown that, follow¬

ing

tion

It

also.

case

sonal

rise

1929

1938,

582,970.14

......

Prepaid Taxes and Expenses

DOWNS

Day A Zlmmermann.

1.00

.

.

Accrued Interest Receivable

•

W. FINDI.AY

100,000.00

743,798.25

other

and consumer credit.

come

2,989,117.48

...

.....

Vaults, Furniture and Fixtures

President

1,764,665.18

Fidelity Building Corporation

Branch Office, 325 Chestnut Street

FIIILIP T. SHARPLES
The

154,052,413.32

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

Investment in

A Clark

MARSHALL 8. MORGAN

1937,

sonal income payments.
in
income
payments

of

2,000,000.00

Total Securities and Loans

1929-

words, the trend
savings rates varies in the
same direction as the trend of in¬

conclusion

61,615,386.41

In

The decline in

following the
September, 1933, decline in per¬

charge

$156,052,415.32

President

from

of

while
recovery
in
began
slightly
before—in June, 1938.
The same

8,141,625.03

12,594,663.05

....

JJIWRENCE SAUNDERS
W. B. Saunders Company

December,

July,

State, County and

Board
of North

Insurance Company

;

$ 42,450,088.09

...

U. S. Government

President

THOMAS D.

Hand and Due from Banks

77 jY

that

ments varied savings out of those
incomes varied in the same direc¬

charge account sale debt began in
ASSETS

DIRECTORS

1947, pp. 951 ft).
Department of

come

Apr.

Us

advance

we

total personal income pay¬

as

are

of income fluctuations.

aimed

to

as

the

of

Commerce show
1941

an

they

controlling instal¬
ment credit, therefore, may be atacking
symptoms
rather
than

;le

Business.

relative

credit

indicate

57.7

U. S. Dept. of Commerce, Survey of Current

Source:

variations

The

normally the result and

100

Sep. .102.1

113.6

Jun.

=

instalment

because

years.

incomes

forts

■

true

credit made up so large a part of
total consumer credit volume dur-

cause

Income

Reports

This

already reached

Federal Reserve

shows that

letin," August,

credit in November.

1936

the

of

along the income scale, savings
increase ("Federal Reserve Bul¬

reduce

85.1

70.3/7

1939

Board

come

79.4*-

62.6

71.2

—

incurring debt.
Studies

ment

payments came in April,
1933, while the recovery in instal¬
sales debt began in May.
The collapse in personal income
payments in 1937 began in Sep¬
tember; in instalment sales debt
it began in October.
The recov¬
ery Jn; income payments; began in
July,
1938,
and
in
instalment

the vol¬

credit and.

consumer

of

come

104.6

57.6

1934
—

consumer

rapidly than

more

expansion and
the expectation of declining in¬
come
that depresses credit vol¬
ume; therefore, it is fair to con¬
clude
that
devices
designed to
stimulate credit expansion during

—

1935

this

ment sale debt

halted

in
July, while the consumer credit
trend started up uncertainly in
August and definitely in Novem¬

89.3

72.4

1932

1933

For

trends.

sonal

sonal

Income.,
100

—^

-

in

Personal

1930

1931

per¬

purpose! we may review three
classes of consumer credit: instal¬

same

started

Disposable

(End of Year)
100
>

u*

to

sonal

the trend in total consumer credit

and

Consumer Credit

1929

of

did

1933. The upward trend
personal income payments
halted in September, 1937, while

Income

1

e rs o n a

7

types

volume

in

(1929 = 100).

UTear ".

credit

consumer

in June,

credit.

of per¬

I.—Indices of Total Con¬
Credit

Disposable

specific

of

the

.

1937.

sumer

relation

in

payment halted in Aprilj
1933, while the more drastic de¬

come

cline

payments (not the
disposable personal in-

Table

the

index

credit

until November.

begin

downward

income

same

decline

the

while

consumer

not

change

consumer

decline in the index

sonal

in

I)

consumer

as

savings appears to be the result
of changes in the volume of per¬

incomes.

.

in the volume of
The

Table

in

to

(cf. Table II) began in Sep¬

tember

prices.

payments are compared with
monthly levels of consumer credit,
it is apparent that the cause of the
fluctuations in income payments is
not

referred

come

changes

credit

consumer

sales and

Inflation

as

of both

far

so

expectation of falling personal
The expectation of rising incomes lessens the risk of
incurring debt; the expectation of
falling incomes increases the risk
an

Credit

inflationary tendency of

personal incomes, and they liqui¬

debt

on

the

Both types of

credit lagged be¬

sales expansion came in the same

hind the decrease in sales in 1929.

month.

Charge, account

In the 1938 recovery in
instalment, sales debt lagged five

behind

sale debt lagged
in the recovery of

months

1933

sales

the

while

instalment

credit

revival started with the sales
Both types of credit

vival.

behind sales in the 1937

re¬

lagged

recession,'

Instalment: sale/debt,_ unlike

the

1933 recovery, lagged far behind
the recovery in sales in 1938 while

charge account sale debt recovery
began with the recovery in sales
Variations
in
personal
income
payments (cf. Table II) preceded
the

1929

in the

recession

same

month

while
came

of

in
Charge

recovery

sales.

expansion lagged behind

in

1938

in the

recovery

same

in

month.

both

In view

this, it is questionable if credit

is the

in

primary cause of variations
In so far as it is not„

sales.;

then credit controls will prove in¬

effective in controlling demand in
this
A

recession; and followed the

1938 sales recovery

the

store

the recovery, in department store
sales in: 1933
by eight' months*

the recovery

in sales in 1933; preceded the 1937
sales

account

came

in sales;
as

behind

department

by

a

month.

The

area.

<

77J *;,7ir ■//.;■

comparison of the extent of*
change in charge account, instal¬
ment sale debt, personal income
payments and department store
sales

is

given in .Table IV.

This

timing of the expansion in
sales credit was more closely re¬

will indicate the extent to which

lated

change in each of these influences

in

some

with

years

sion in sales than

was

expan¬

the relation

between the contraction

of credit

and

the contraction in sales.

the

closer

relation

between

But
the

the volume of sales.

the

expansion

consistent.

income

sale

debt

and

instalment
department store

in

department

store sales was much more

correlated

1933,

7

From 1933 to 1937 the extent of

expansion of the variables is not
In

i

a

From

to

the

payments

1938-1941,

closely-

expansion

than to

in

credit.

instalment

sale-

Volume

167

and: income

credit

pansion

far

ran

expansion

payments

ahead

while

the

count sale

ex¬

sales

ot

COMMERCIAL

THE

Number 4662

\

charge ^ac¬

conclusion

reached

be

can

Peace

IV—Relative Changes in Volume of Charge Account Sale
Debt, Instalment Sale Debt of-; Department Store and Mail Order
Houses, Personal Income Payments and Department Store Sales.
Charge Account
Sale Debt,

-

1933—

'

1941

(June)

55.1—

120.2

99.2—

slake

ditions to increase its prospects of

truth.

127.6

or

94

96.2—

177.8

-

but above all, treating it
as the bipartisan program
that it
is, and not permitting quibbling
or

78—

137

-

Base Years:

stalment Sale Debt 1935-39

=

Charge Account Sale Debt and In¬
100.

that

credit

have

the

expansion

causal

influence

does

then that after

intensifying

or

sales volume that is

credit

by those that advocate its

assumed

might

on

control.

'

.

to

III.

(Consumer

'

trend

credit

sales

after

in

or'

prices to fall
greater degree than
in

the

absence

rise

or

would

of

the

in¬

in

of

timing

total

fluctuations

have

credit

consumer

and

of

cost

living

ndices from 1929 to 1941 is shown

certain

a

comparison of the extent and

Table V.

n

\

/,

;

Living, 1929-1941.

1929

1937

page of
oe

rule

our

in

leaders

unless and

the

agreement

show

chat

they will cooperate in
building Europe.
According

Russia

Nov. 105.3

Jan.

to

France

land

combined.

make

sense

buro.

■credit

recession
in

and

in

retail

">rices up.' In this respect the imDosition
of
credit
controls will

consumer

prices began

in November, 1929, and Novem¬
ber, 1937.
But the same correla¬
tion in timing is not shown when

credit levels

the expansion .of consumer credit

come

Is

retail
prices.
The
1933
price level rise preceded the in¬
crease
in
consumer
credit and,

luring periods of rising income,
credit expansion is offset by in¬
creased savings the effort to com¬
bat price inflation by credit con-?

whereas

crols will prove fruitless.

credit

and

the

had

150.1

the

to

compared

risen

between

some
purpose
irice increases.
But,

expansion

of
retail

index

of

consumer

from

105.3

November,

to

points to

dence

is

sumer

conclusive

that

the

con¬

influence in creating a price rise.
ent

situation

condition
here

in

day.

in

years

scarcities

To that extent

ment

to

the

that

it

is

to¬

a

that

of

inflation.

be

made

factor;

to

otherwise,

responsible for

are

responsibility which they

be unable to carry out to the
of preventing price inflation.

Clarifies Restrictions

is

con¬

may

goal

may be exported.
The "Chronicle" has been furnished with
letter of Nellie Tayloe Ross, Director of the

less

than

%

of these two
we

can,

ores

with

develop the
our

and

refiners

en¬

program
Avoid

ease,:

to

fill

to

such

finer of the

gold-bearing material,
participate in the sale' of the
gold refined from such material.
to

"To avoid any misconception of
the licensing policies of the Treas¬

and addresses of

names

The

that

person

or

the

in

a

United

organization

States

an

has

partici¬
pated in the sale of such gold.
"In
out

order

this

effectively

policy,

authorizing

carry

16

licenses

to

TGL

exports

to

anyone

(b)

information

'•V

the

the

sale

extreme
From

Russia.

the

of

with

desire

for

American

freedom

the nature of
or

assistance

applicant has supplied

"Very truly

The

exporter

to

order

of

deliver

the

foreign




gold

and

the issues.

see

be

not

duty to

I

only

But it wilf

right,

our

oppose

convinced

such direct and

tion

can

the

Pittsburgh S. E,

PITTSBURGH, /PA.—-W. W.
Reynolds, Reynolds & Co., has
been

elected

James

Carothers

hardt

do

a

&

Co.

advocated

says

the

by

directors

JACKSON,

for

to

with

by the

vestors

that the road

the

Weil

problems
our

are

not

to

eyes

R.

associated

&

Arnold, Millsaps
Building, and will provide con~
tinuing service to Mississippi in¬

ancient

of

MISS.—Joseph

Donaldson has become

America.

in

lessons

closing

elected

With Weil & Arnold

pol¬

spineless semi-

now

were

through

the

medium

of

selected mutual investment

according to
R. C.
Strain,
Mr.

funds,
announcement
by
resident manager.

Donaldson

years,

that

solved

and

the

three-year terms.

investment

us

of

Tiernan, Jr., Preston,
Watt
&
Schoyer,
was
electe#
Vice-President. William J. Baue?,
John B. Barbour & Co., and Hugt*
A. McNicol, Secretary, were re¬
elected. Clyde A. Buzza,
McKelvf
& Co.;
Nathan K. Parker, Kay,
Richards & Co.; and M. A. Eber-

tell

the

President

Pittsburgh Stock Exchange, suc¬
ceeding John A. Carothers, of

has

been

business

for

in

the

many

in the past having been ii*

the business in New York

OF DECEMBER 31,

City.

LIABILITIES

$ 72,924,275.31

...

.....

1947

Deposits

v.......

(Includes United States Deposits

115,263,137.53

$261,384,974.01

$856,689.81)

$188,187,412.84

Other Securities..

Time Collateral Loans

Bills Discounted

Discount...:

897,092.55 '

Interest, etc..

759,650.13

Reserve for Dividend Payable Jan. 2, 1948

16,283,369.33

19,996,828.16
Demand Loans......

Unearned

Accrued Taxes,

Acceptances Executed

142,187.50

....

$2,630,014.61

Less: Acceptances Held in Portfolio 2,427,279.57

19,536,301.76

202,735.04

4,947^043.32

Capital Stock

48,328,912.42

$ 5,687,500.00

(par.$20.00)

72,812,257.50

Surplus...... ..10,312,500.00

2,562,100.57

Banking Houses
Customers' Liability under Acceptances.......
Accrued Interest Receivable

..

202,735.04

16,000,000.00
Undivided Profits

.

514,618.59
49,641.39

i.

3,144,346.49

.
•

Street, is

Reserves

Thomas

Officers

Kemp,

$284,325,594.09

as

are

President

a

F.

National BanM\» Trust Company

and

Treasurer; J. W. Moorehead, Viceand

John

J.

Fetters
some

has

time.

been
v\

f

1,794,608.34

$284,325,594.09

CALIF.—Thomas

doing business

now

corporation.

V/,

19,144,346.49

Kemp & Co., 180 East California

for

but

them.

that only
byforthright opposi¬
Republican party in
1948 be a party that is of
service,
a
party that is humanitarian, 9
party that is victorious.
*
-V
am

Thomas Kemp Officers
PASADENA,

Mr.

nar¬

"

PHILADELPHIA

Fetters,

proprietor of the firm, with which

such

the

of

cannot be paved with the

Equally

Secretary. Mr. Kemp has been sole

"(1)

they

past and our own powers of reason

Other Resources

President;

......

shortsighted,

evasive,

Joseph R. Donaldson to

history

Munich

State, County & Municipal Securities 3,713,458.83

yours,

the

be granted unless:

an4
youth of

integrated

jellylike blocks of appeasement.

versatility
assist

history

to peace

It should go far

voice
and

as

left

modern

Athens

to

of

other than the foreign exporter of

gold-bearing material will not

al¬

Jellylike Appeasement

demands

or

Com¬

"NELLIE TAYLOE ROSS,
"Director of the Mint."

material

will not be granted in
instance in which it appears

in

in connection with that sale.

Department, we wish to ad¬
vise you that a license on Form
TGL 16 for the export of gold re¬
fined from imported gold-bearing
any

gold; and

which the

ury

an

the

and

of

as

It will be their right to acf

also

totalitarian concepts

U. S. Government Securities

participated

any

for

icy of blind

should

Cash & Due from Banks,>..

applicant submits a
gold-bearing
material
it appear that many refin¬ supplementary
statement
giving
interpret the amended gold' (a) all information available to
regulations as permitting United him concerning the persons who
have

as

RESOURCES

refined in U. S.

ore

make

States residents and organizations,
the importer and re¬

ask

such

ers

other, than

were

of long view.

Certainly

all persons who have participated
in the sale of such
gold; and

"(2)

Imported

the

these

America,

further

me

STATEMENT AS

*N

from

of

world does not recommend

resourcefulness

genuine

of

surrender to

the

broadcasts

including

progress,

States

promptly

'

everywhere.

beyond

men

happy steps in mankind's

ternatives

Its objective
advocate, explain,
inspire,; individual freedom for
men

of

by such labels.

Let

total imports

sources

line

of

be

and

establishment

United

campaign of ideas to combat the
munists

ideas

of

extensive world-wide

'(We
an

propaganda
should

a

from Russia and

other

obstructionist,
row.

our

policies
the

to

appear

Frank M.

tortuous

complete needs.

initiate

rights,

"visionary" to thoughts like
these, permit me to respond that

man¬

comparative

the party

year

a

states the

"Inquiries

our

individual

human

,

all broad

We have received

of

a

To those who mutter "dreamer"

ganese and chrome ore from Rus¬

sia is not true.

which

■;

copy of the following
Mint, dated Jan. 2, 1948,
Smelting and Refining Co. and other

gaged in the business of refining

essential

our

for

peace,

and

met

of

Smelting Refining Co.

stating condition under which imported gold

American refiners.

peoples.

ceive

most

this

Gold Refined

on

Director of Mint sends letter to American

""Dear Sirs:

goods,

original

From Foreign Ore

and addressed to the American

to

onstrate

practices

could

between nations, and tremendous
dividends of better living to all

to refer

nor

and

not

attempts

seniors may dem«

our

Of

of

assurance

outlook

of

our

ex¬

credit will be saddled with

sumer

any

the

income that

the

Nations

our

of

Reynolds Elected Pres.

imports justify this incon¬
sistency. The claim that we re¬

to

Fifth:
paper

tending and for controlling

reviewed
exist

fact

1

:

fundamental causal factor in

those who

supple¬
quickly pushes

income

the

personal

control

pres¬

from

differs
the

that

that the

of

far as,

so

this

of

creating the spiral
Every effort must

credit expansion had little

It may be argued

the result of in¬

are

evidence

*evel

curbing

in so far as

variations and in

The

1938,

April, 1941, the cost of living
increased none.
The evi¬

"had

in

serve

Neither

minimize the amounts

United

Some

greater

larger
enjoyment
of
life
with
higher production and easier flow

policies of the Polit¬

does

na¬

;

a

brighter

under the current ob¬

This

-.K

•

freedom

and-Eng¬

86.9
86.9

150.1

diminishing

of

year, 194#t
impact on thi
party and own

increased

States

than

and

this

historic

strength along
major realignment of Rus¬
sian policy. This could mean an
with

to

89

Nov. 100.9

the

to

grow

re¬

Nov.

100

=

com¬

This could well be the soil from

available

United

poor

Russia

to successfully wage

war,

■;;•:

which

by

Nov. 115.6

the

in

and

Communist strength in other

action

and

Kremlin

tions.

the

72.3

Living

Source: Cf. Table II.

The

the

stop¬

until

Kremlin

production

standards

aggressive

this type shipment should

This

May

Jun.

...

living

policy.
Specifically, we
promptly stop shipping to
Russia heavy machinery, machine
tools, electrical devices, and other
apparatus and equipment which
could become a part of a Commachine.

low

in

can

an

country.

Europe

economic, so¬
freedom, con¬

political

make

policies

pounded rather than corrected by
the ruble purge, the
inability of

should

war

individual

and

tinued

prac¬

structionist

1941

cial

strong.

are

57.7

1923

Nov. 113.6
___

(recession)
(recovery)
(April)........

1938

we

of

America

marked

standards of living,
definite trend toward in¬

a

does time stop march¬

nor

we reach out to turn back>
ward the hands of the clock.
The
Young
Republicans

*

system,
rebuilding

in

creased

the
likely

economic

them,
ing if

of the Amer¬

success

rising

and

can

statistics, in 1947
shipped more
industrial
machinery to Russia
than to either France or England,
and more electrical machinery to

Credit

(recession)..
(recovery)

1933

with

foreign

latest

Cost of

Consumer

Year—

3T

h

economic

progress

tices must be consistent with our

definite

Table V.—Indices of Variations of Consumer Credit Volume and

Cost of

if

Our

for

Target

this situation:

see

ican

and

more

are

1950

Continued

in¬

munish

stimulating

trend

a

A

sales,

to

appears

influence

contraction

in,
expansion

and^Cost of tensifying influence of credit.

Credit

of .incomes, and

consumer
some

trend has set

a

be for peace

Fourth:

possible

cause

occur

ILiving—Despite its apparent un¬
importance in causing changes in
the

a

It is

one

no

peace

decisions of others
to

direction has set in.

not

100.

that

future

guarantee
=

could

a

This is essential for

the dual reasons

Department Store Sales, 1923-25 — 100.
Income Payments, 1933-37,1929 = 100;
1938-41,1935
All figures seasonally adjusted.
.1

and

thirst

„

The

air power and enlarge

our

research.

our

maintain

position

military

strong
crease

Source: Cf. Table II.

should

We

world-wide

•

If these five interim
phases are
well carried
out, the year 1950

politics to delay and handicap
cut in half and destroy.*
;
Third:.

104

.

the

success,

57—

90.2

112—

.

Sales

Payments

<

37.2—

108.1

1938—

Income

Sale Debt

:

75.4—.

1937

Instalment

...

(133)

Targets for 1948 and 1950!

(Continued from page 4)

Table

Period

CHRONICLE

debt volume increased

nearly the same degree as sales.
The

FINANCIAL

&

associated

*

Established 1858
MEMBER

FEDERAL

DEPOSIT

lyf-

INSURANCE

CORPORATION

38

THE COMMERCIAL

(134)

pin of Hoppin Bros.
J.

John

Nolan of

&

Co.

FINANCIAL

&

CHRONICLE

Thursday, JahuaTy 8/1448

and,

Cievelaiiid^ DhiOi Were .announced

.

G./H. Walker

an tare

Db.c;v3i by John K: Thompson, /
Archie d./Baftistaj^o
Assistant; Vice-President,
(Continued from page 17)
as Class B members Of 'the board.
the
National the Boston, bank are elected by : has been /advanced to Vice-Presi¬
Absorption
by
Edward
C.
Werle
has
been
Thomas Morris and E. J. Muller Commercial Bank & Trust Co» of Federal Reserve member
banks in dent, while' E. W. McNelly add
nominated to the Chairmanship
have
received
nominations
for Albany, N. Y., of the Rensselaer the New England district.
W;^/Mcmde;-Aasistnntuashieas; ■
of the Board of Goverriors of the
& Co. huve

For Curb Chairman

election to

New York Curb Exchange for

ensuing
it

the

year,

was

a s

t

has

Marshall

that

)f

Gammack

of

Class B

as

Werle began his career in

the

on

Stock
C.

Edward

be filled at
r,
annual election

Werle

the

of

the

Ex¬

1948, also
names Eugene P. Barry of Shields
& Co., John J. Mann, Fred C.
Moffatt, President of the Curb Ex¬
change Securities Clearing Corp.,
C.
V.
Quayle and Howard C.
Sykes
to
three-yearterms as
9,

Feb.

Governors

Mr.

Curb

the

of

Barry

Mr.

and

will be new members of
the bOard. Mr. Quayle was named
a Governor during 1947 to fill the

Mann

unexpired term Of Thomas W.
Bartschj resigned.
Mr. Moffatt
and Mr. Sykes are

members.:

Foster

S.

Wall Street in 1919

for 'offices' to

A

included

and

Stern, Lauer & Co.
Mr.

slate

ing committee

Class

Co.

members.

proposed by
the
nominat¬

Exchange.

&

&' Co. and Conrad H. Liebenfrost

dur¬
ing the past

on

Kimm

seph F. Reilly, as Class A mem¬
bers, and Albert G. Redpath of
Auchincloss, Parker & Redpath,

capacity

change

of

the Curb Exchange gratuity fund.

of

Exchange. Mr,

year.
The

trustees

as

current board

'///>://: ;■/>?>.-.

Caspar C. deGersdorff of Harris,

of

floor

Exchange.

as

the

a page boy
New York

He quickly be¬

order clerk for the stock

came an

exchange firm of Wade, Templeton & Co., worked for two years
for Morin S. Hare & Co., and in
1923 joined

the employ of John¬
In 1928, Mr. Werle
was
appointed salaried market
employee for Aymar Johnson of
& Wood.

son

Johnson & Wood, and

pacity
the

represented

New

floor

York

until,

in

in that

the

ca¬

firm

a

Curb Exchange
1940, he acquired

partner of the firm.

member

A

since

change

of

the

July,

Curb

1940,

Ex¬

and

a

Governor for the past four years,
Mr. Werle has been continuously

active in exchange affairs.

He is
•at present Chairman of the Exec¬
utive Committee

and

has

served

Upharii & Co., William E. Dugan

in the past on many

of Laidlaw &

ing committees of the exchange.

Co., Bayard C. Hop-

has been

County Bank & Trust Co. of Rens¬
selaer, N. Y., on Dec. 22, was in¬

hate beefi named Assistant Vice-

Mr.
Battista,
who
bank's foreign depart¬
ment,/ was r associated with;, the
';
•/'
Dec. il, '47
Sept. 30,>47;
Governors of the Federal Reserve fotril resources,__$284,H25,594 $279,600,587! •foreign. department of J, P, Mor261,384,974 256,408,944 gan &-Co. Inc.; for 47 years before
System. The Board states that in Deposits
Cesb.and.duefrom .,7\-;■
■'.v;
Connection with the absorption,
joiningv the Union./Bank of, Combanks
72,924,275 * 69,593,792/
the former office of the Rensselaer U: S. Govt, secur/ihe^ei4hM946i^^fe:::fsia:!;director-;
■,*
iuf the. Cleveland World .Trade As-,
'rit^ holdingSi^i. 115,263,138
108,"945,234^
County Bank & Trust Co. as well
as
the branch formerly operated JLOftns:,«fc bijls dis-.' ^/•.,/. 7<'<,u7,/ sociation and is a member of vari¬
counted72:812/258
77',913/682 ous organizations.- . E. W. McNeily
by the Rensselaer County Bank & Undivided profits,*: 3,144,346
3,044,963
came to the Union Bank of Com¬
Trust Co. will be operated by
merce
in 1940 from Investment
the National Commercial Bank
•A
1'0-for-l
stock split-up 'has Counsel, Inc. of Detroit and prOand Trust Co.
been recommended by directors viously had spent three years with
The Albany "Times-Union" of
Of American Security & Trust Co; Chem ical Bank and Trust Co. ^ Of
Dec. 16, referring to the, proposed
of Washington, D. /€.-,/ according New York. Mr, McWade has been
consolidation, stated that .Walter
to an item in the
"Washington with the bank sihee its formation,,
Nelson, Cashier and Trust Officer
Post"
of Dec. 23 * by S. Oliver having, previously been associated
of the Rensselaer County Bank &
Goodman, whose advice also said with the Union Trust since 1924.,
Trust
dicated in the weekly announce¬
ment Dec.
27 of the Board of

Presidents.

CORN

AND

TRUST

CO.

■

'

v

-

Co., has been named
the

of

President

a

National

Vice-

banks

coincident

with

the

that

nounced
Assistant

time

same

it was

Bartlett; M.

Cashier

of

Huth,

the Rensse¬

tion.

22

operations
begin."

years,

under

the bank's stock.
in

American

Security's stock

at $300 a

i"."---/'M'/

officers

Four

N

Trust Co. of

'":•••■ I

'

the

of

:

new

Security

posts.

LOUIS

Bowlby

w

i 11

fill the

Bendon, John G. Ermantinger and;
Stanley J. Du Burck, according to
the Rochester "Times-Union" of

pired t er m,
ending Dec.
31, of Thomas
E.
Millsop,

Dec.

which added that Ken¬

23,

Vice-President.

v-V'.'.': >•

oj Business, December 31, 1947

TRUST

Dec. 31, '47
Total

resources

Deposits

,

$148,217,904.27
143,54$,177.32
179,552,017.38

;

U. S. Government Securities
Loans and Discounts

Other Bonds and Stocks

10,041,888.82

Stock in Federal Reserve Bank

U.

S.

ity
Loans

40,291,020

73,700,739

&

75,739,375

61,615,386

bills

Undivided

54,396,960

4,118,486

5,046,017

dis¬

profits,

317,303.30
881,002.00
>/

Acceptances, etc.
Accrued Interest Receivable

1,365,923.47

951,580.89

Overdrafts

4,234.35

$485,509,857.00

NATIONAL

BANK,

resources,

$766,335,111 $713,838,267
698,794,474

;

U.

265,441,018

banks
S.

Govt,

240,715,735

the

ity holdings,,,, 288,373,195
Lcfons & bills
Undivided

298,623,750

dis¬

counted

155,155,579
profits,

120,327,025

8,485,825.

$ 10,300,006.00
10,200,000.00

Undivided Profits

7,546,245.73

Dividend Declared, payable February 27,1948
Reserve for Taxes, Interest, etc.
Unearned Discount

300,000.00
1,442,032.57

Liability a/c Letters of Credit, Acceptances, etc.
Other Liabilities

'

DeThahd Deposits

Total

M

.

;

■

$390,293,322.30

Time Deposits
U. S. Government Deposits

'■

'

295,335.13
1,373,733.47
> //
1,005.29

58,518,088.56
5,340,093.95

Deposits

454,151,504.81

$485,509,857.00

7

Broadway * Locust * Olive
Member Federal




Deposit iHsuruiice Corporation

year

1948

by

the

Board

8,081,853

The

Board

of

Governors

reap-

Co., to the board of directors of
the

bank

renamed

and

Paul

G,

Koch to the
Reserve agent for the Federal Re -1 Blbzer and Josiah
boards of directors, respectively,
serve Bank of Boston for the
year
of th6 Reserve Bahk's branches at
1948.
Mr.
Creightdh, Who /has,
Cincinnati and Pittsburgh,. all tor;
Served in

this capacity since his

original appointment in January,
1*942, was also reappoiUted /as
Class C director of the bank lor

terms
_

sheet,
c.

Bank

reappointed

John B. McCoy,

the

company

v;

///; /. >;'/■>//:Vv■./>;/■

/

/'7.-

Roger B.
Shepard, St. Raul,
Minn., has been reappointed Cl&ss
C director ahd renamed as Chair¬
man of the Board of the Federal
Bank of Miimealpdlis and FedeTAl
Reserve

agent by the

Board of

Governors of the Federal Reserve

System, the bank announced dn
2.
Mr; Shepard's term as
ending
Dec. 31/1950/ His appointment :as
Jan.

director is for three years

Bdard

ending Dec. 31, 1950: /The 1948.

directors of the Federal Reserve

and

thereupon transferred to the emoloyees' pension trust the full
omount of $1,712,992 shown as a
liability in last year's balance

ol

.pointed A. Z. Baker, director of
the Cleveland Union Stockyards

Revenue

nal

•

1, Albert M. Creighton
was redesignated Chairman of the
Board of Directors and Federal

.

Auto

System at Washington. Mr. Brain¬
ard also was reappointed Federal
Reserve Agent.
\
/

On Jan.

Capital Stock
Surplus

Columbus

Governors of the Federal Reserve

secur¬

*

LIABILITIES

the

the bank's board of directors for

648,475,219

Cash and due from

16,825.20

Other Resources

of

Co., Columbus, Obio, have
bebn reappointed Chairman and
Deputy Chairman, respectively, ol

PHILADELPHIA, PA.
Total

deposits

a/c Letters of Credit,

ng

Parts

PHILADELPHIA

and Fixtures

Bowlby

as

President

612,000.00

Other Real Estate Owned

hg to $475,000 and the account
charged With the cost of movand expenses related to the
opening bf the company's "new
offices amounting to $72,908 and
;he
purchase of
equipment
Unounting to $367,762. During the
year the company's
entire em¬
ployee retirement program was
approved by the Bureau of Inter¬
vas

Joel M.

his, elecMayor of that city.
>
President Ray M. Gidney of the
bank announced that George C.
Brainard, President of the Addressograph-Multigraph Corp, ol
Cleveland, and Reynold E. Klages.

tion

secur¬

counted

Banking House, Improvements, Furniture

Customers' Liability

42,450,088

_

Govt,

holdings

/ ease of excess reserves account-

re¬

ing

171,655,770

C&sh and due from
banks

I

177,188,189

Co.,
W.

signed follow¬

Sept. 3q, '47

$202,789,895 $199,'316,898

——

,

f

Weirton

e

Weirton,
Va., who

CO.

PHILADELPHIA

OF

Cash and Due from Banks

th

o

Steel
FIDELITY-PHILADELPHIA

RESOURCES

unex¬

President

S. Government obligations
year-end totaled $27,104,815.
About 90% of the U. S. Govern¬
ment obligations mature in less
than one year. Holdings of pre¬
ferred and common stocks weTe
-educed frbm the year previous
and State, municipal and corpocAte b'ond holdings in the one- to
V6-year maturity range have been
considerably increased.
At the
year-end
marketable securities
iad a market value 6f $1,164,589
/ bdve/Cost; The undivided profits
Account Was credited, with a reU.

of

it the

Chairman. Mr. '

Elected

neth C. Wild was named Assistant

At the Close

-

/OnZ/v

nouneed

Vice-Presidents are:" Frederick J;

ST.

*:

.an-7/

was

Jan. 1 by Gefe
C. Brain at d>;

i

R9chestfer,JV. Y., have

been named to

capital gains or losses
sales of investments in se¬
curities or real estate. Holding^
lot include

from

Cincinnati, Ohio, to the board

land

❖

IN

share." M

Bank of Cleye-

;■

on

of directors of the Federal Reserve

.

Title and Trust Co. of
Chicago, 111., had net income fdr
1947 of $1,773,147, equal to $2.96
per share, as compared with $2,i08,044, equal to $3.51 per shate,
;n 1946. Earnings as reported did
Chicago

The election of Joel M. Bowlby,
of

approved the consolida¬

••.

Last transaction

President of the Eagle-Picher Co.

•

The stockholders Of the Rensse¬
laer bank

CONTINENTAL ILLINOIS NATIONAL
BAND
AND TRUST CO. OF CHICAtJO

Washington Stock Exchange

was

will retire as
the new plan

".M/////://

I

by

Pec. 31, '47
.Odt. 6, '47:
ing on Jan. 20, will mean chang¬
ing the par value of each share Tot. resources_$2,422,901,275 $2,417,711,559
Deposits
2,229,664,369 2,228,000,6„0
from $100 to $10. There will be
Cash
ana due
no change' in the total
550,112,685
from
banks634,122,208
par value
>''■
J
of outstanding capital stock which U. S. Govt, se1,330,833,601
curity hldgs. 1,210,873,167
is $3,400,000.
A letter to stock¬ Loans and bills
holders .explained the .proposed
458,929,978
discounted
490,000,608
38,988,514
27,399,698
stock splitupMs >in order to en¬ Undiv. profitscourage a broader distribution' of '('■■■
*
.
sis
' *
■,//;;;' ;

the

J.

Guilfoil, President
of the Rensselaer County Bank for
last

approved

«.

an¬

bank, will occupy the same
position in the Com'mercial Bank
organization after the consolida¬

the

if

——

laer

"Edward

action,

stockholders at the annual meet¬

the

merger, said the paper from which
we
quote, which also stated in
part:
•
"At

7/7:7/.■/""/>>;>/V/>,/;/

-"The

directing head of the two Rensse¬
laer

part:

in

Com¬

mercial Bank & Trust. Be will be

had previously voted in faVor of
the plan. 77/ ; •■■V'-/:/:^!/

FIRST NATIONAL BANK

the

heads

PHILADELPHIA

•.

of the stand¬

STATEMENT

OF

BANK

'

tion plans on Dec. 15; the directors

CONDENSED

NATIONAL

EXCHANGE

,

on

his membership on the Curb and
became

on

President.

years

James A. McDermott, Charles M.
Finn of Adriance & Finny and Jo¬

Truslow, President of the

served in

terms

three

for

nominating committee was
headed by Walter E. Kimm, Sr.

night by Francis Adams

Werle

serve

three-year

r

nominated for

The

an-

nounced l

been

of

Ghairman
W.

W, D.

is for the: year

D^ .Gochran, proprietor
Uodhran Freight Line^

Mountain, MichM was redes-:
ignated Deputy Chairman of the
bank's /board for 1948 by the
to the Fedetal Advisory
Board of Croveriiors.J At the same
Council for the year 1948, and : >
time it was announced that Renry;
Chairman
of
the
management!
Redesignated) Dr. Francis H, E. Atwood, President of the First
board of William Filene's Sons Co., Bird
and
Howard
W. Jordan, National Batik of Minneapolis, has:
was designated as Deputy Chair¬
Chairmen, respectively, of the been
reappointed by the bank's;
Cincinnati and Pittsburgh Branch
man of the board of directors of
directors to the Federal Advisory!
beards Of directors, both for the,
Council
for
the coming
the Reserve Bank.
year.;
Mr. Hodgkin¬
year 1948, and reappointed Walter
Malcolm E. Holtz, /Great Fai»,
son -has been a Class C director
H. J. Behm and Thomas C. Swarts
Morit, and B. M. Harris, President
since January, 1947.
These ap¬ to the boards of directors, respec¬ of the Yeildwstone Bank, Goltittipointments were made by the tively, of the Cincinnati and Pitts¬ bus, Mont., "were realppointed to
Board of Governors in Washing¬ burgh branches, both for terms: the directorship of the Minne¬
apolis
Federal Reserve
Bank's
ton, which appoints the three ending Dec. 31, 1950.
branch at Helena, Mont., for two-'
Class C directors and designates
year terms ending Dec. 31, 1949.
the chairman and deputy chair¬
Promotions of three officers of Mr. Rolfz received his
appointPresident

three-year term. At the same
Bank
time Harold D. Hodgkinson, Vice-/
Ohio,
President, General Manager and/
a

man.

The

other six

directors -of

the

&

6f

the

Trust

Co,

City

National

Iron

6f Ublumbus^

Union Bank of Commerce of

•tvioTi

t

ifr/wn

4hp

RnarH

rvf

f/nvftiv

-

I

Volume

167

Number

and Mr. Harris

wors,

by the directors of
apolis. Reserve Bank.
«

*

NATIONAL

FIRST

named

was

the
*

BANK

IN

ST.

LOUIS

Oct. 6, '47

—

•

Qash and due from
banks
U.
:

£.

148,217,904

holdings—'v.. 143,549,177

I^oans

&

179,552,017

*

*

<-

THIRD

7

„

si-«

NATIONAL

8,197,367
.7,,' • ■' ,u

:

Total

resources...

/

••

■

Oct. 6, '47

90,854,304

.banks
S.

84,219,155

29,036,675

23,961,504.

____

Govt,

bills

counted

Undivided

23,069,823

34,874,514

867,634

708,704

procedure

In

nade

Vice-President of the Mer¬
National

Texas,

has

Milton F.

bank.
land

In

been

of

announced

"Plain

Dealer"

of

by

Dec.

25

7:

;■

"

Society for Savings since 1932,
named

was

the

a

Cleveland

Vice-President
bank

in

1947.

Becoming: associated with
Society as a collector in the
school
savings
department
15
years ago, he has gained experi¬
ence serving
in most of the de¬
ber of

the

He has been
term

loan

a

and

mem¬

As

"As

[June

the

for

30,

iresent

fiscal

1949,

volume

prices will doubtless
tinuation of

high

of

that

national

"The 1 In¬

and

and inter¬
finance, to¬

approximately $5.1
billion interest and $2 billion of
tax refunds, aggregate $29.3 bil¬
or

1948

"In

i

almost

80%

of the entire

con¬

How¬
ever, if European Recovery Plan
butlays are imposed on top of the
revenues.

appraising Congress' effec¬

remembered

where

ultimate

re¬

sponsibility rests: the Appropria¬
tions Committees do not originate

Ore-sent level of exne^Hiturps. the

expenditure programs; they may
recommend
appropriations
only
for objects on which legislative
action
has
already been taken

department since its incep¬
7'7;',, 7 v7
a :7 •'
C

been

appointed

a

Deputy

as

of Jan; 1

past

,

procedure,

process

the basic legislation for

budgetary

the

is greatly improved, par¬

place of Sir Malcolm Hogg
Who, acting on medical advice, re¬
tires from the Deputy Chairman¬
ship, but will remain a member of
the board.

the

propriations

ticularly
in
initial
preparation
and screening by the Budget Bu¬
reau.
However^ it would seem

in the

Sir Eric Charles Mie-

ville, K.C.I.E., has been appointed
an

additional director.

,;;:

,

R. F. Lafferty & Co. Adm't*
Bernard Wolff has been admit¬
ted

to

partnership in R. F. Laf¬
ferty & Co., 19 Rector Street, New
York City, members of the New

which
necessary."

still

remains

to

be

done

Publicly Offered
of

Halsey,
headed

Stuart

a

$1

of dealers which
$10,000,000 Central

Public

Service

first

Co.

bonds, Series B, 3%%
due Sept. 1, 1977, on Jan. 5, on its
bid of 101.705%. Reoffering of the
bonds is being made at 102.365%
mortgage

and

accrued

interest,

Concerning revenues, "The In¬
dex"
says
that "individual and

at

proceeds

used

to

American

common

a

of the

stock, of
share.
issue will

purchase

machinery
and equipment necessary for com¬
mercial
operation,
adapt
the
company's plant in Pennsylvania
to
operations,
purchase
inven¬
tory, retire small existing obliga¬
tions, and for working capital.

yielding

Philip T. Collins Is

3*4%.
Proceeds

from

the

sale

of

the

bonds and from the recent sale of

additional

stock

common

are

to

be applied to the cost of additions
and extensions to the company's

properties.
The

7

*

is engaged prin¬
furnishing
electric

company

cipally

in

and gas to 60 counties in

energy

southern

central

and

with

estimated

an

Illinois,

population

of

ended

With Graham, Parsons
Special to The Financial Chronicle

■;

CHICAGO,' ILL.—Philip T. Col¬
lins

has

become

associated

with

Graham, Parsons & Co., 135 South
La Salle Street. He was formerly
institutional
Kneeland

had

representative

for

Co.," with which he

&

b€|en associated for a number

of years.

Among the larger cities
Quincy, Mattoon and

650,000.

of

be

of

shares
Co.

value, at $1.50

par

The

Inc.

group

awarded

Illinois

Co.

&

1,000,000

Cladmetals

are

M. L. Morton

1947, about 90%
operating revenues of

Sept. 30,

gross

(Special

to

The

SOUTH

Opens Offices

Financial

Chronicle)

IND.—Max

BEND,

Morton has opened offices at 1423
East Fox Street to engage in a

heating.

During that period the
reported gross income,
after
maintenance
depreciation
and all taxes, of $5,910,755; maxi¬
mum
annual interest charges on
all bonds outstanding after this

Co.

company

ted

with

and

prior thereto

securities business under the Jirm
M.

of

name

He has

L.

Morton

Securities" Co>

Maxson

was

James Ebert Co. Opens
CALIF.—

BAKERSFIELD,
James

With Barcus, Kindred
(Special

to

The

Financial

in

gage

D.

Ames has joined the staff of Bar¬
cus,

has

Ebert

opened

offices

in the Haberfelde Building to en¬

Chronicle)

ILL. —Richard

CHICAGO,

in business

for himself in South Bend.

financing will require $1,697,000.

:

Securities

recently been associa¬

the

a

firm

securities business under
name

Hoffman

&

Baker &

Kindred & Co., 231 South La

Salle Street.

of

James

Co. He Was formerly with

Ebert

Walston,

Co.

'#

Goodwin

y7";" 7V

■

and

H.

7\'7-7.

;7'Most important of all, Congress

8%.i: This category, representing
never adopted the concept of
mainly sale of surplus property
legislative audit, nor does it call [ and recapture of funds in governfor periodic progress reports from ment corporations will undoubthas

a

the

Departments,^ which
permit proper evaluation
various programs.

The machinery

time

for

review

a

post

audit,

of

Continental Illinois

edly decline in future years. Cusnow account for only

would
of the

toms taxes

slightly

ex-

National Bank

than 1% of total
Prior to World War I,

more

.revenues.

Trust Company

and

OF CHICAGO

/STATEMENT

THIRD

OF

CONDITION

NATIONAL

Statement of Condition, December

BANK

'

NASHVILLE,

$

Cash and Due from Banks.

United States Government Obligations.

31, 1947

Cash and

Due

States

From

Banks

__$29,036,675.45
23,069,822.65

^

State, County and Municipal Bonds*
Corporate Bonds and Securities*
Loans

and

Discounts

Furniture and

_

Income

J___

Fixtures___i_,___i

-

38,635 299.50
600,030.00
103,125.00

;

Other Real Estate

Stock in Federal Reserve Bank..

Customers' Liability

3,299,444.24
1,372,171.28

Building
Garage and Lot_^________

66,232,520.44

Loans and Discounts..................... j490,000,607.61

Government Bonds*__

Bank

"_1-

;

7;

Earned—Not Collected

.___

on

4,050,000.00

Acceptances

1,215,795.57

Income Accrued but Not Collected

6,206,975.86

Banking House

10,200,000.00

;:;i:7- 7:.;'

V777 ;

$2,422,901,274.88

LOO
1.00

Other Assets

liabilities

260.152.32

$2,229,664,369.25

Deposits

18,390.11

Acceptances
Total

634,122,208.13

1,210,873,167.27

Other Bonds and Securities

ASSETS

United

31,1947

resources

TENNESSEE

As of December

$96,395,082.55

•.

__

1,215,795.57

Reserve for Taxes,

Interest, and Expenses...

11,131,765.35

Reserve for Contingencies

18,109,151.32

LIABILITIES
Income Collected but Not Earned

Capital

380,495.70

$ 1,000,000.00

Surplus
Undivided Profits

<_

«_

Reserve for Taxes & Interest

Income Collected—Not Earned

Deposits—Demand

*■__

—

Time

•

!

,

Capital Stock.

3,000,000.00
867,634.35
343,846.77

60,000,000.00

Surplus

75,000,000.00

Undivided Profits

27,399,697.69

...

J

329,297.13
$74,802,398.86
16,051,905.44 90,854,304.30

$2,422,901,274.88

United States Government obligation* carried at $221,448,067.76
..

Total

__$96,395,082.55

are

plc4fed to

secure

purposes aa

^Market

value




exoeeds

value at

Member

which

carried

Federal Deposit

on

our

Insurance

L.

$29,971,830 was derived from the
sale of electricity, about 8% from
the sale of gas and the remainder
from the sale of ice, water and

ap¬

r

Exchange. Mr. Wolff
l\as been with the firm for some
trader.

are

corporate taxes are estimated to
provide over 71% of total revenCongressional
stage.
The|ues in 1948 compared with only
Budget submitted to Congress is 49% in 1939. Excise
taxes, while
so
complex that it is intelligible expanding ^sharply, now provide
only to the few who have been
0nly about 17% of total revenues,
dealing with it for many years.
and
miscellaneous receipts
only

much

York. Curb

as

much

as

West Frankfort. For the 12 months

tiveness in limiting expenditures,"
the .article continues, "it must be

invest¬

Chairman of the bank

times

in 1939."

Halsey, Stuart Group
Offers Utility Issue

served

budget.

v

has

16

Cladmetals Shares
Mercer Hicks & Co., New York,
Jan. 6 announced the offering

program

affairs

budgetary surplus will be primar¬
ily dependent on the extension of
tion.
present abnormal conditions."
7";7; *
*
*
'..'v...''1
After tracing the development The
The
Military Affairs, Veterans'
directors of Westminster
Bank
Ltd. of London announce of budget control in this country,' and Foreign Affairs Committees,
the article notes that "in terms of to mention only a few, approve
that Duncan Alexander
Stirling
ment

as

rev¬

individuals

defense,

with

gether

a n r>

mean a

appropria¬

expenditures,

notes

national

lion

maintenance

business

whose

on

veterans'

the

ending

year

for

dex"

permitted

has

agency

tion he must act."

he budget to be balanced.

I

the

partments.

which

irograms,

of

January,

the

nflation, rather than reduction ol

s

Mr. Binyon; who has been with

the

"a start has been

says,

toward control of expenses.

Congresser,
however,
Save
benefits to special groups
everal times as great as the re¬
ductions recently initiated. It has
jeen
the
buoyancy of revenues
esulting from a boom and price

Dallas,

Brown, President of the
noting this, the Cleve¬

said in part:
.

Bank

possible, for each member of the
Appropriation Sub-Com¬
mittees to be fully cognizant of
various

first two postwar years,

Previous

•

cantile

the

he article

j The election of Dudley E. Binyon as

of general accounting
will call for a much
larger professional staff than Con¬
gress
has so far contemplated.
Certainly it is difficult, if not im¬

adoption

•

-if

'

•

re¬

are possible only if Con¬
willing to review periodially its major programs with, a
yiew toward contracting them as
londitions change and the neces¬
sity no. longer exists."

24,312,700

-

38,635,300

profits.

■

.

penditures in terms of appropria¬
tions
originally made, and the

ductions

dis¬

i.

-

provide

on

39

on

was

gress is

secur-

'.Ity- hoidings-_i_
&

individuals.

heavy tax^

our

ysis observes, and "substantial

$89,600,542

Cesh and due from
U.

on

burden appear feasible, the anal¬

$96,395,083

Deposits

Loans

direct taxes

effective

only small cuts in

NASHVILLE

Dec. 31, '47

i

.

*

,

BANK,

TENN.

•

171,190,751

7,546,246

90% of all Federal

Direct taxes

enue.
now

budgetary control and scrutiny of expenditures
:>y Congress are urgehtly needed, according to a study of the Fed,ral- Budget in the Winter issue of "The Index," quarterly publica¬
tion of The New York Trust Co. While the budget can be reduced,
More

dis-

_

profits."

made up

revenue

secur-

bills

•oounted

Undivided

customs and excise taxes together

effective budgetary control is
Notes-dependence of Federal Government

by Congress.
on

151,472,896

—

Govt,

ity

needed

117j306,423

S.

Even

(135)

New York Trust Co. points out more

resources-,._$485,507,857 $454,9(73,'535
454,151,505
422,920,446

Deposits

CHRONICLE

FINANCIAL

&

Looks for Only Small Cui in Tax Burden
Under Reduced Budget

Minne¬

Dec. 31, '47
Total

THE COMMERCIAL

4662

public and

required

or

trust

deposits and for other

permitted by law

books.
MtmUr Ftjtrml D.frilt fnimrmm Ctrptrall*»

Corporation

new

york

correspond ents

•

e. j. mcc rath

and

l. a. anderson* it

wall

street

R.

40

THE COMMERCIAL

(136)

How
>

(Continued from page 6)

;

difficulties and delays

all the legal

in such

involved

More¬

move.

a

dollars (the only
currency of any practical impor¬
tance at this time)
would have
the

over,

to

new

American

S. Treasury

U.

from the

come

again burden the

and thus would

taxpayer. Therefore* an
the capital does not

of

increase

to represent a constructive
to the fund raising prob¬
'
-r\-

appear
,answer

lem.

the United

Outside

Sales

Bond

States
Additional
keted

bonds

this

in

be

may

country

mar¬

abroad.

or

attitude in its dealings with

orous

•-

Charter with

the

of

amendments

The President of the Bank visited

.Every effort
to
explain ; its

countries.

foreign
should

be

*

made

work

and

which

are

aims

its

nations

to

with

flooded

mislead¬

ing information. This may be ac¬
complished without any, consider¬
able expense through the world¬
facilities of the

wide

United

tions Information Services

the various central

as

International

same.

The

successful.
deserves

the matter
thorough explora¬

However,

more

tion before it may

be written off

be very helpful in
facilitating negotiations with bor¬

suffered from the

in

are

war

no

position to spend any of their
precious dollars for investment in
bonds

International

the

of

Bank.

bonds

Government

stocks

or

for

those in bonds of the Bank in the

interest

of

European

reconstruc¬

tion.
v

amounts

there

huge

dollars which

hidden

of

the

are

be channeled into some pro¬
ductive tikes by appropriate meth¬
ods;
An interesting proposal 'by
Andre Istel, noted French expert,
should be studied Closely by the

may;

staff of the Bank.4

There is

r

•

different situation for

a

the former neutrals.

Sweden and

Switzerland, in particular, were
important. prewar financial cen¬
ters
the

and

were

has

much : greater

than

sources

has

during

prosperous

However Sweden, which

war.

natural .re¬
Switzerland,

little

managed

under

its. Socialist

Government to get involved into
serious monetary troubles (this is

Aj quite unusual situation deserv¬
ing
'

special

some

analysis).

field.

administra¬

conservative

more

tion, the only important financial
market
this

of

Continental Europe at
Financial ' experts

time.

Switzerland

when

in

consulted

the writer expressed the

by

'opinion

that the interest rate of the Bank's

is

bonds

low for European
They point to the fact

too

investors.
that

50

a

of the

million francs 4%

loan

Belgian Railroad Adminis¬

'•S

tration

and

guaranteed by the
Belgian Government maturing in
12

and offered at 99%

years

received

with

little

enthusiasm.

fee placed in Switzerland provided
the terms would

investors.

'

satisfy the Swiss
f

,

,

,

'

{ ' This, of course, would be just
drop in the bucket, but the
implications would be significant
initial

an

the

Bank

step toward making
truly international

a

organization

suchj

as

it

in¬

was

tended to be

been

originally. What has
switching oper¬
before, should be particu¬
timely in the instance of

said

ations

larly

about

Switzerland. There

are

A

-•

est

"{

misunderstandings*-

recent

ruling

the

on

does

the

Swiss

Bank's

Code

toward

distribution of

if the risk is small and indi¬

only.

Bank's

not

into

accept

francs

these
vested

at

funds
in

are

U.

S.

for

Bank

conversion

the■/ official
now

rate;
mainly in¬

Government

se¬

curities. ' By exchanging part of
them for bonds of the Interna¬

tional

Bank, Switzerland could
contribute materially toward suc¬
cess

any

of the Marshall Plan without

inconvenience to the holders

of those funds.

■

[.The Bank would be well ad¬
vised in taking a much more
vig¬
4 New

t

York

*

"Times," Nov. 24, 1947.

m

«-•<*

*

.#

*»"*

»



»

*

*•.*;

*'

there appears to

is the American
determine

decide

whether

just

Any

$41/2

be attained

can

main

the

danger
falling into the opposite ex¬
treme.
Attempts to keep the in¬
terest rates at the lowest possible

level

eventually dry up the
flow of funds and may leave
many
may

countries without urgently needed
means of production.

?,

the present economic situation.

..

billion

Helpful

re¬

There is a' very strong induce¬
>'
ment for themanagers of the Bank
market, to
proceed ; slowly;-and not to
v

of

much about the future.

worry very

.

The Bank may be able to sell an¬
other two billion dollars over the
next few: years

within;the limits

of the American guarantee at

in¬
terest* rates, somewhat higher than
.

to:

$3,175 million; 20%, or $635
million, have been paid in, while
the remaining 80%, or $2,540 mil¬
lion, can be called only to meet
unpaid obligations of bondholders.
.

Li-' Under : present-day
the

market

subscription

curity

the

as

behind

the

the

U.

principal
Bank's

.

preparing

initial

successful

a

•

tRe

This

but it

was

tunate

of

sale

Bank

tude

has

when

this

and

de

Plan

referred

to

should

In

the
,

million

goal

as

four

next

quarters
what

reach

to

to

seem

fatalistic

be

/

And

yet

makes it

the

present

a

attempt for breaking

vicious

circle

that

prevents

bond issues beyond the $3 billion

ceiling.
well

This is

deserves

a

problem which

most

careful

anal¬

ysis and exploration.
Rates

and

the

S.

U.

Guarantee Are Interrelated
Bond

either

sales

by

an

be promoted
increase in interest

rates, a strengthening of the se¬
curity behind the bonds or a com¬
bination

of

both.

The

rule

,,

objec¬

has

job assigned

a

to

it

has

duty to do

a

complete

it

even,

if

.

its

that

the lower the

ican

an

in

the

rate

long

were

not

the

successful

run.

The Bank has insisted all along
that, it is marketing a highest-

grade bond which is qualified for
i low interest rate.
To justify its
contention it had to overemphasize

is

as

ex¬

proceeds

the

spent;
on

would pretend that these are rea¬

world

terms

prevailing

under

conditions which

investors

might accept without misgivings?
i

Mere silence will not settle the

The Bank will have to

consider it

fully and will have to
position clear beyond any

doubt.

pected to result from the Marshall
junior bonds to private inves¬

the

no pro¬

the good
intentions of its borrowers. Who

L.'/L:

Three

Plan—will permit large-scale sales
of

been

merely rely

can

situation—such

tional

when

and

the

half

a

'■
ago,

years

Bretton Woods

agree¬

ments. were drafted, there were
high expectations regarding the
important role of the newly created
higher .return. -m
The trust funds are increasing international organizations in the
post-war period. However, events
now by- some three billion dollars
tors

who

limited

prepared

are

risks, in

to

take

exchange for

a

annually;
moreover,
they
sold
almost $1,800 million government
bonds during 1947 and, therefore,
have constantly

able

large
inyestment.

for

sums

avail¬

All

these

this

different from those foreseen'

were

by the draftsmen
and

thus

|>f the Charter

rendered

very

difficult

the development of the new insti¬
tutions. .-.yx:;:vVLL;;''

amounts have been used for plac¬
ing government securities and the

The next year may bring a de-i
cisive turn in the work toward a

proceeds used by, the Treasury to
retire shprt-term holdings of gov¬

permanent peace and better con¬
ditions all over the world. To

ernment securities
-

by the banking

•'
recommendable pol¬

This very

bonds

if

even

an

just

it had to be done during

as

.the closing phases of the war. The

of two to two-and-a-hah

International

dollars " should

signed

its

will be

no

;

of

the

the

over

achieve success, all available
forces will have to be concentrated

^

be

ear¬

International
fevfr

next

Bank

years;

this

has

Bank

been

as¬

place in the strategic
plan and it will be up to the man¬
agement to make sure that there
failure.

;

-

\

would absorb only..a fraction of
the: annual

accumulation.

How¬

ever,. these purchases, of the trust
funds would be made only if the
bonds

could

private

not, be

investors.

placed

The

with

Tax Gut and Reduced
Govt.

Spending to Come

of.,, all reason. They want those
costs cut.; We shall dp, that. The

a

methods in

determined ef¬

a

that the

trust funds

very

are

fact

The

1%%

trust

funds

2V2%

to

receive

interest

from

the

to $4,500 million

would have to be placed in a spe¬
cial reserve to provide for possible

defaults

will

face

have

to

the fact that

deal

with

two

it

dif¬

have

to

draft

its policies accord¬

ingly. In the first group are those
investors, particularly institutions,
which
participated in the first
bond issue.
They look for high
grade
with

material

but

are

they will avoid even to approach
the "ceiling" and as a resylt the
volume of bonds they will be will¬
ing to absorb is definitely limited.

they

addition,

the

upon

will
Bank

to pass over

be

exercise
to

applications that

eligible from

of view.

■

a

the

deal
may

broader point

''^Vv

v;7

'

"

The second group, on the

other
hand, will consist of investors who
willing

are

to

take

reasonable

provided they are allowed
appropriate premium either by
means of a higher interest rate or
an opportunity for appreciation of
the

principal.

In

order to

vestors,

service

appeal to those in¬

the • Bankmay have

the

bonds.

Special legislation will probably
required to permit these in¬

be

vestments.

But

Congress

this

solution

during

its

eliminate

to

started

expenditures and re¬
lieve the Federal payroll of need¬
less persons.
We lopped off several billion dollars from President

*

Truman's padded budget. We have

reduced

the

Federal

payroll • by
million per¬
Republican drive

approximately
the

since

sons

one

eliminate

useless

bureaucrats.

These

accomplishments
were
made in spite of vigorous opposi¬

surely
to the

tion of President Truman and his

need for additional disbursements

fought economy every step of the
way.
They . turned loose their
propaganda machine to misrep¬

will

.

prefer

from the

Treasury's general fund.

Bondholders

Should

By Mortgage

on

Secured

Be

Facilities Con¬

Bank, in its loan agree¬
ments negotiated up to now, has
failed to provide for such safe¬
guards as the bondholders may

reasonably expect. This was one
reason
why so much em¬
phasis had to be given to the
"American guarantee." Although
the question has been under dis¬
cussion for more than a year, the
Bank has not explained why it
more

did not ask for additional guaran¬

future.

.

•

past

whether

and

that policy

v

-

it

in the
--

tors

are

instructed

by

spread between the two categories

doctrine of sovereignty

mined

which
to

use

seem

the

to

govern¬

be

deter¬

time-honored
as

a

con¬

Administration

the country one could,
of busybody bu¬
deprived ; of some * of
their sugar plums. The American
people are deeply concerned over
the high cost of government.
across

the

wails

reaucrats

•

;

Federal,

ernments

lion
of

a

our

state,
now

&dv-

local

and

cost about $50 bil¬

year.

That

entire

national

The

nation's

than

one-foiirth

is

roughly $200 billion.

income of'
Think of it!

$40

food

bill

was

less

billion in 1946. It cost
our people more to be governed
or
misgoverned than their food
cost them.

cost

Undoubtedly, this is a ticklish
problem in view of the fact that
a majority of the executive direc¬

The

resent the facts.

hear

The

the

followers.

All

structed With Rank's Loans

ments

a

Congress

session

risen out

unnecessary

to

to
higher; interest
rate and perhaps below par. The

issue bonds with

of

satisfied

comparatively low rate of
interest. In view of this position,
a

pressure

in

Republican
first

now

Treasury. The difference between
the present return and the higher
interest rate of the Bank's bonds

to

(Continued from first page)

standing

total to be sold to the trust funds.

in

of

the

v

is

the

once

have

problem.

contipue

significance

Bank

make its

tees

the

provide

may

bridge the period until
improvement of the interna¬

will

interest

ad¬

all

at

loan

a

to

means

an

minimize

the

ministration of the U. S. Treasury

risks

to

tection
of

measures

under

default

Under the terms granted by

sonable

trust funds

Department

of

country.

taxpayer.

The

reason

bargain with
of a debtor

something to

case

Bank in the past there

initial. period in order to avoid ap
additional burden upon the Amer¬

fundamental.

efforts

them
in

rather

be

to

will have to be taken during that

security the higher
the interest rate has always been
Recent

have

conclusive

no

Cost, of government has;

mean

with the best borrowers only and

may

wotild

is

There

surely support their market to a
degree as may greatly reduce the

In

Interest

on

■

•

ferent groups of investors and will

'

situation

tations

small/Therefore, special

paper

face

why the facilities constructed with
funds
advanced
by
the
Bank
should not be mortgaged in the
interest of the bondholders to give

sea¬

of; this
type, of bonds and the initial flo¬

will have

feel

prepare

■

take-it-easy policy.

a

order to sell up
of new bonds.

is

-

be

receives

promises, it will have
increasing difficulties in
selling its. bonds. *
,,

to

absorption

"q. In the circumstances, the Bank

report

Responsible
in a some¬

imperative to

determined
the

•

close

tical

they are at the mercy of the mar¬
ket and have little power of in¬

fluencing it.

'

fully. This will mean, for all prac¬
purposes, to go beyond the
"three billion dollar ceiling" in

atti¬

They

the

Marshall

it

unless

ready tt> absorb these bonds would

new

the

mood.

•

fort to complete its task success¬

$4,500
required for the

years.

for

the

under

at this time, and try" to
out a new approach, and

work

official

circumstances, there

hope

will" be

program

of the Harriman Committee.

scant

soned

loans

scheme

good deal of trou¬
bles and difficulties. The manage¬
ment should consider the" whole

bonds,

the

in

and

best: to

may

facto

almost

The market will have to

marked for the purchase of junior

The Bank

a

become

exces¬

high pres¬
sure methods of
selling similar to
those used during the 'twenties.

amount

it. by the Chapter and the Marshall

long-range" view¬
point.- ; For the market. has finally
decided upon a definite "ceiling"
of some $3 billion for issues of
the

require

billion'

tions to such

certainly most unfor¬

from

would

sive interest rates and

situation when the "three billidzr

There .should, be strong

secure

those

conditions

it

makes

adequate security for the benefit
of
its bondholders,
rather than

Indispensable

icy could be continued

-

t

for

market

issue.-

bond

been unavoidable to

Funds

.Why. not: leave it to future
developments to take care of the

-

even more by the public relations
policy of the Bank. which per¬
sistently stressed the guarantee

its

Trust

Any attempt to sell from two to
three billion of these junior bonds
under the present unsettled world

dollar * ceiling"
hand?
<„

se¬

extend

Plan

S.

U.

.

Bank

the

abundantly clear that it will not

,-

system.". V

bonds.

This belief has been strengthened

have

From

ket.

S.

^Unless

mere

Support

'-*•/•'•••!',

entitled.

"

those of last summer in view of
the general stiffening of the mar¬

conditions;

considers

s• ;•

.

Temporary

unwill-?

for- their

excuse

ipgness to give the bondholder^:*
the protection to which they are'

,

Different Kinds of Bonds May Be

that
however, will have to begin with
the
U
S.
subscription
to
the
Bank's capital usually referred to
as the "American guarantee;" The
total U. S. subscription amounts
analysis

some

of

the

will

or

dream.

a

be

Here is a real dilemma; but It
has to be broken-in order to meet

Guarantee

of the Bank's operations and

scope

world

borrowers which could
the stress of less favor¬
business
conditions.
Now

able

a

In any event, it
market that will

first

not stand

the

The American

the

by

upon

bonds.

long run, these bonds should
leading means for interna¬
tional arbitrage operations such as
flourished during
the inter-war
period and may be resumed grad¬
ually during, the next few years.

After

war, excessive and unconscionable
terms were demanded and agreed

international

the

pre¬

rect

to

Internal Rev¬

broader

kind of risk

even

paid

may

a

in

inter¬

that

bonds

furnish a good
starting point for a drive pointing

large hold¬

National

a

U. VS.

ofr the

taxation. under the
enue

ings of so-called "finance dollars"
which

they have

some

&

as

feel

stepping into that field

was

They tend to believe that a bond
issue of $10 to $20 million might

Investors

right for

when

This has left Switzerland, with

a

doubts

as

mium

goal

Moreover,

well

as

cles and

possibility to exchange, some
in American

developments, both politi¬

the

sanctity
of
contractual
agreements in the international

by removing

However, this might not exclude
the

of their investments

is

limitless;

political and psychological obsta¬

hopeless.
1 In
Obviously, the countries which be

as

re¬

expansion

,

almost

in

future

non-resident aliens is exempt from

subject since his return in¬
dicates that' his efforts were not

and

industrial

but the supply of funds is deter¬
mined by uncertainties regarding

activities may

The silence he has maintained on
that

and

worldwide

cal and economic

Treasury Department

important

more

for

might be enrolled advantageously.
understanding of the Bank's

capitals of
Europe during the fall to explore
the possibilities of bond flotations.
the

virtually impossible.

demand

habilitation

In

Settlements

governments

venient

other

countries

Better

rower

Thursday, January 8, 1948

respect the rights of both
categories of bonds would be the

Europe, the assistance of the Bank
for

CHRONICLE

ket for the bonds. As shown above,
it has made their sale in foreign

Na¬

banks. "

FINANCIAL

may be 1 to 1V2 %. However, these
"junior bonds" woyld have to give
preference
to
the ; low-interest
the U.
S.
bonds in regard to the "American
guarantee. However,
with a view 10 the big job the guarantee."
They would partici¬
Bank" has to face, the question pate in that guarantee to the ex¬
arises as to whether this policy tent only as it has not been^qsed
has not narrowed unduly the mar¬ up by the senior issue. In every

well

as

&

93%
of

of

It is estimated that the

food

since

has

increased

the-Federal

about

while' the

cost

Government

has

1939,

33%.

Yes, we are going
right ahead with our reduction of
unnecessary government expendi-^
gone up

.

tures this session.

Of course, we'll

not be able to finish that job and

Volume 167
matters

other

THE COMMERCIAL

Number 4662

until

fiext November elect

FINANCIAL

&

CHRONICLE

the

people
Republican

a

President who will cooperate with

Republican Congress.

shall

to

as

taxes,

reduction

tax

a

t

■

Now

a

we

bill

'

this

Securities Salesman's Corner

-

pass

session.

taxes

war

tolerable

in

American

people

know

reduction.

Twice

of the"

session

during the first

Eightieth Congress

passed tax reducing bills, only

we

to meet indefensible vetoes

President.

by the
indefensible be¬

I say

the

cause

Constitution

definitely

lodges in the Congress the
to

power

what the tax policy

say

be.
Our

be

today

Treasury

operating .in the red if

the Republican Congress had ap¬

all the spend and spend
proposals of the Truman Admin¬
istration. Largely due to encour¬
agement for competitive enter¬
prise with the advent of a Repub¬
lican Congress and the construc¬
tive record of this Congress, Fedproved

•eral

revenue

exceeds

now

We

the
red, and we are getting the Reds
out of the government.
We shall continue to provide
adequate funds for effective na¬
the

the

whatever

needs

of

We

and

veterans.

war

our

of

out

government

defense

tional

shall

do

to

necessary

maintain

the upsurge in home building be¬

the
Congress
took
•charge of the housing effort from
ignorant New Deal planners.' We
appropriated the largest amount
in history for flood control.
The
Republican Party originated the
vast
reclamation
program
that
when

gun

In order to be successful as a security
certain

today is meeting the needs of our
Western states.
The present Re¬
publican Congress is expanding
and developing that program in
a
sensible, businesslike way.
With continuation of

the

econ¬

of the present Con¬
there will be ample margin
of Treasury surplus to give the
people the tax relief they demand
and which they are entitled to
gress,

Lower

have.

taxes

more

mean

take-home pay. Lower taxes mean
money to
invest in busi¬
enterprises for production of

more

ness

goods and to provide jobs. Lower
will, help ; cut the cost' of
Jiving., Taxes enter, into the Cost
of everything we buy.' Every time
you housewives go to the store
and spend ten dollars, $2.50 of it
goes for taxes. Lower taxes mean
more money to save, and for our
taxes

must have

a man

business.

qualifications that lend themselves to this unique

character and personality, it is'unfair to the new candidate for a
position of salesman to waste his time trying to train him for the job;

(1) Honesty—No man can carry conviction and cause others to
believe in his own integrity if he is in any way dishonest with him¬
self.

!

we do not mean honesty in money matters alone but
other act of life itself.

By this

lasting success
of mak¬
ing a quick killing, using it as a stepping stone to some other line of
endeavor, or as a method of exploiting the established relations which
he may have with friends and relatives.
<
y
(2) A Desire to Help Others—No

man can

make

citizens lower taxes mean
tney can obtain the necessities of
life and some of the comforts. We

must cut the cost of government
and cut taxes to help keep Amer¬
ica

strong.

-do

all

foreign
the

war.

people want to

to help friendly
countries recover from
They want to stop Com¬

they

can

munism, but

be

people want the

our

"Congress

to

prudent about it

not bankrupt America.

and

strong America

a

can

be

Only
a

bul¬

wark for the Republican form of

government and
liberty;'./.
'i:

an

inspiration for

■■•TV;

.

ti

-v

■

-W

V/'

;

Two With Edwards & Sons
1.1 j

(Special to The Financial Chronicle)

ST.'

LOUIS,

MO.—Harold

Cahill and Frank

have

joined

the

M.

staff

of

A.

man must believe in our capital¬
private enterprise, and the benefits of saving and invest¬
ing if he wishes to convey sound investment ideas to others. He must
believe in his own capacity for doing a good job whatever it may be.

(4) A Desire to Be a Success in the Securities Business—He Must
Business—The securities business is

not an easy business
willing to pay the price of hard work,
constant study, and the insecurity which surrounds this industry, be¬
cause they enjoy their work and the associations that go with it.
the

Like

but some men like it.

They

are

(5) Mental Courage—To be
deavor

a

good salesman in

must be able to take it

man

a

on

line of en¬

any

the chin and keep plugging.

There

are days when selling securities is not too difficult—other times
going is so tough that many a man just can't take it. Those who
stick to this business in good times and bad must have plenty of old
fashioned "guts."
\, ■>•
; '■ ' ;• :y y!'■"[''r .' ^yy-yy\\■

the

.

(6) Good Health—No man can go out and inspire others to fol¬
low him if he doesn't have the energy to back up his ideas with a
smile and

possible.

a

healthy outlook

on

life.

Without good health this is im¬

;.y; ' ; •;y-yyy yl'yy
(7) Creative Imagination—There

; 0 ,/yyyy:~:/y

,

'■!

■

>'

those with a flair for. say¬
little salt and spice, or of making a suggestion

,

are

ing something with a
that can turn an objection into a reason for doing business. It will
come in handy if you have the ability to dream and think things out
in a different way, although many men have made a success retailing
securities without too much of this sort of thing. Some men can see
a trade or a sale while another may walk right by it—that is the sort
of an opportunist that does well in any business, but it is especially
valuable to

a

securities salesman.

If you can

hire

who

v

•Street, members of the New York
St.

and

Mr'.

'

Slayton
was

Louis

Cahill

&

Stock

Co.;

Exchanges.

formerly

was

Mr.

with

Montgomery

men

train such

business,

you

should be able to

to become good

men

The next step

after

you

salesmen.
have selected the

men

whom

you

think

securities




net.

income

after taxes of all

Commission.

believe in what he is selling HE MUST BELIEVE IN IT HIMSELF.
Please read that over again. He must believe in what he is selling.

That is where those who do the training must do some selling them¬
do this you must have'policies and principles of your

selves. iTo

which

can convey to new men that will give them confi¬
abilities and experience. If you are just selling securi¬
ties, buying this and selling that, following a trend or the style of the
times, how in the world do you expect a new man coming into the
business to pick up the pieces you are throwing around? Yet many
firms do just that.
'
y;'
;
•
own,

you

,

dence in your

If you

sell special situations and do original research to back up
offerings—show your new man how this works but to the ad¬
vantage of your clients. If you specialize in portfolio analysis show
him how this is of benefit to your clients. Give him some
proof by
allowing him to see some actual case histories that you have in your
your

If you

let him
new

any

see

combine special situations with investment offerings,
can be of advantage to the customer.
Let your

how this

man understand that no
security that you offer will be sold to
customer unless your research and experience causes you to be¬

lieve that his welfare will be served best by selling such a
Make it understood that you

would rather
something unsuitable to your clients.

pass up an

security.

order than sell

After your new man has confidence in his firm and the competent

•

way they do things you can assist him in acquiring confidence in his

ability to
simple. There
own

out and do business.

go

much

Keep

your

training

course

important things for a new man to
thing to learn is how to detect the three
broad classifications of security buyers than he will meet.
(We are
not including institutional buyers because that is a
special field of
work in itself.)
The three classification are as follows: (1) The in¬
are

more

learn than statistics. The first

vestor who

seeks

in

once

a

income;

(2) primarily desires income but takes a
while for price appreciation; (3) interested in price

PACIFIC

has

been

formed with offices at 15316 Sun¬
Boulevard

set

securities
Jesse

to

R. Bowman

in

The transportation equipment in¬

higher sales.

report," total dustry, other than motor vehicles
manufacturing cor¬ again had the lowest ratio, 0.5%;

According
of

sales

all

porations
are

the

to

for

the

second

The

quarter

estimated at $36.9 billion con¬

ment

trasted with $35.4 billion the pre¬

ties, which is

ceding quarter. Net profits before

of

amounted

taxes

to

$4.1

billion

compared with $4.4 billion during
the first quarter; Federal income
taxes

estimated at $1.6 bil¬

were

porations at the end of June, 1947,
a
slight increase over the March
ratio.
This ratio varied from 66%

lion for the second quarter and at
$1.7 billion for the first quarter.

for

More

laree

out

than $800,000,000

in

dividends,

an

paid

was

increase

of

about $100,000,000 over those paid
during the prior quarter. ./'
Total

assets

of all

manufactur¬

at

the

of

end

June, 1947,
while stockholders' equity was es¬
timated

$64.5

at

billion,y

billion

$1.7

of

in¬

an

the

over

companies with less than $250

thousand in assets to 111% for the

corporations

$100,000,000 and

Mrs.

Warendorff. Mr. Bowman

E.

was

915

LOS

to

The

Financial

(Special

to

The

609

South

F. H. Breen &

Grand Avenue.

Chronicle)

Avenue.

more

000,000, while $29.9 billion repre¬
sented

net

Marxer & Co. Admits Jones
DETROIT, MICH. —Marxer &
Co.,' Penobscot Building, members

property, plant;f and
equipment. The-net working cap¬
ital of all manufacturing corpora¬

have admitted H. H. Jones to part¬

tions amounted to $36.0

nership in the firm.

billion at

of

the

Stock

Detroit

Exchange,

the end of June.
As

shown

rates of

by the report, the
profit both in relation to

investment

and

sales

to

were

somewhat

lower, during the sec¬
quarter than in the previous
quarter. This was true for all but
ond

J.

0< Ruvoldt Opens

REYNOLDSBURG,
OHIOJames O. Ruvoldt is engaging in a
securities business from offices at

Main

94 East

Street.

-

the smallest size class of corpora¬
for nearly all industry
The- quarterly ratio of
profits after taxes to stockholders'
tions

and

For

groups.

equity dropped from 4.2% during
the first quarter to 3.9% for the
second.

Related

to

dropped from 7.5%
during the first quarter to 6.8%
during the second quarter.
Corporations in the middle-size
class with assets between $1,000,000

and

show

$5,000,000
the
highest

continued

profit

to

The

Preferred

$5

pany,

which

Earnings

the previous ten

years

While

paid

for

earnings
ten

that

years

$77

share.

a

$21.30

averaged

y -v."
no

trial

found

over

have

paring ratios for different indus¬
was

dividend

a'

of

share,

it

has

an

com¬

accumulation

ratios

groups,

of

stock

85-year-old New England

while the smaller and larger com¬

panies showed lower ratios. Com¬

■

,

Profit

sales, profits

taxes

after

a

"

■

have been

dividends

number of years,
nine of the past
covered annual divi¬
a

in

requirements

■^yy-o/'For 35Years

Ten-year
the

yyy

by

a

wide

price 37

average

$4.07

Common

Recent

earnings
a

in

share.

price 7

Descriptive analysis of this

special situation mailed

for¬

Co.,

Financial

CITY, MO.—John R.
Wahlstedt is now with Herrick,
Waddell & Co., Inc., 1012 Balti¬

Recent

request

on

NATIONAL QUOTATION BUREAU, Inc.
Established
46 Front Street,

Hughes has been added

to the staff of

of

quarter.

Over-the-Counter Quotation Services

ANGELES, CALIF.—Wil¬

liam J. A.

assets

KANSAS

G.

Chronicle)

with

over.

With Herrick, Waddell Co.

ing companies amounted to $91.9
billion

rough measure

one

corporate liquidity, amounted
to 90% for all manufacturing cor¬

margin.

are!

and

ratio of cash and govern-r
securities to current liabili¬

dend

t,hq

Partners

engage

business.

manufacturing

may be com-<i
—\
■ y .■— y,.... ■ ,i:
$2.7 billion of manufacturers of paper and allied
profits after taxes during the first products and lumber and wood
quarter reflecting higher costs and products had the highest profits
expenses
more
than ' Offsetting related
to
stockholders'
equity.

PALISADES, CALIF.
Associates

States

the'

y, ' ' <§>
Bowman Associates Formed
—Bowman

United

»

This

with

pared

Of total assets, about
$25.2 billion was in the form of
inventories, an increase of $500,-

Joins F. H. Breen Staff

LA.—Neilson-

business.

The

*

to CREATE CONFIDENCE.

Before any man can persuade others to

:

corporations amounted to $2:5 billion during the second quarter of
1947, according to the quarterly report made public jointly today
by the Securities and Exchange Commission and the Federal Trade

crease

(Special

Sixth Street, are now engaging in
a

study of SEC and Federal Trade Commission computes 1947
profits at $2.5 billion against $2.7 billion in
preceding quarter.

second quarter net

have the qualifications for success in this work is to teach them how

"

Underwriters,

Joint

measure up

the fundamentals of the investment

Neilson-Breithaupt
Breithaupt,

Reports Reduction in Manufaclnring Ret Income

merly with Slayton & Co., Inc.

with Whitaker & Co.

ALEXANDRIA,

classroom.

.

to the foregoing standards,
who also have the mental and educational background to grasp

and

G.

Bdwards & Sons, 409 North Eighth

recognize three different types of security buyers; and (4) furnish the
right sales ammunition to be used for each particular category of
investor or speculator.
The fine points of selling will come along
later and most men learn more by doing, than
by going to the

(3) Courage of Convictions—A

flyer

C. Montgomery

a

fieations

istic system,

office.

American

The

investing for income. Summarizing briefly the nucleus
plan for training new men is: (1) Pick men who have the quali^
for success; (2) establish .their confidence in the firm for
whom they are working; (3) build their own confidence in themselves
by teaching (a) knowledge of the business; (b) showing them how to

of

,

,■

aged,

of a sales campaign
based upon obtaining business from the first group—those
primarily
interested in

a

otit of the investment business if he goes into it with the idea

record

omy

salesman,

Only if he has those qualities will he have the capacity of inspiring
others to place confidence in his ability to offer them competent in¬
vestment service.
If he does not have the following attributes of

outgo

for the first time in 17 years.

got

that is what you should teach your new men.
Next week we will present the framework

(Training of Salesmen)

in every

Federal

would

shall

,:

...

SECOND ARTICLE

Re¬

publican Party is a party of econ¬
omy in
government and of tax

canned sales talk can be prepared to

a

bring in the business from
of security buyer—but there is a certain framework for
each particular sales presentation that can be used to
advantage, and

The

the

aim—then

each type

peacetime is in¬

indefensible.

and

words,

salesman must learn the three main targets at which he has
he selects the right ammunition.
This does not mean

your new

that

By JOHN DUTTON

House
of

appreciation. If a security salesman can determine into which classi¬
fication, his prospect belongs he can then select the
proper approach
in the solicitation of business. The sales
presentation for an investor
will not fit the speculator—this is
just common sense. In other
to

hopeful we can pass it in the
this month.
Continuation

am

41

(137),

Chicago

148

1913

New York 4, N. Y.
San Francisco

Tel.

State

St., Boston 9, Mass.

CAP. 0425

:

:

Teletype BS 259

N. Y: Telephones: HAnover 2-7914

42

THE COMMERCIAL

(138)

philosophy; not that I haven't
done it before. Many readers

Tomorrow's

of this column

To

Markets
Walter

his

Whyte

"'

weeks.

for

make

prepared for

sur¬

prises.
From

from

isn't
stock

v.

the

plus

some assur¬
his 'investment is

that

Under normal economic

It may
even
turn out to be profit¬
able. Because safety and rea¬
sonable return on principal
frequently carries with it un¬
expected profits which may
not have originally been an¬
ticipated.
an

market for next few
Be

money

on

and political ,conditions such

will

Congress

reasonable return

a

ance

By WALTER WHYTE=

nervous

who

safe.

Election speeches in and out
of

one

things look
where I'm sitting, this
going to be much of a
market week.
The big¬
way

approach is wise.

*

.

weeks

the

these
speeches will increase, but
they will become common¬
place by then and will have
little effect

pass

It

the market.

on

is the first few utterances that
make

impression.

an

not

I'm

but

also sound off in various di¬

rections, will also bring mar¬
ket

repercussions. These will
be nothing new, except that
this is in an election year. So
the

what

matter

no

parties believe in
safe

various

want, it's

or

bet

they'll have to go
sort of regula¬
tion, not voluntary, to show
the voters they have their in¬
a

back

to

some

that

has

This doesn't

all sides.

on

stocks

that

mean

touched

neces¬

are

■

add to them.,

or

Si:

'

prepared

-

tional

for

"surprises."
*

In

have
v

*

to

the

past

recommended

Re-examining
day, they continue
the "up" tendencies

pers.

to advise them

I

black, others
This is
any

to

are

I

But I'll continue

go

enthusiasm: from the

fuel for the winter.

It is a strange
sight
to
see
on
hot
summer
days adult workers in the Berlin
Zoo—it would be better to say the
former zoo—chopping roots or to
see
women
gathering sticks, in
a
temperature of 100 degrees.

"New

The

Allied

Plan"

into
German
hands,under the
supervision of the North German

ternal

Coal

great

Control, the body that acts

trustee for the British Military

as

Government in whom the

to

an¬

decided

been

"put" the level of industry on
would be approximately a
basis.
Of this, however, the

what

bers.

Professional

administration

-is

incapable;

the

people must do this and

for

good,; com¬
It Is doubt¬

ful

be

course

necessary

whether this

teed

by

Allied

the

appoint

German

threatens

to

be

to

whether

seen

will

in¬

Whyte
in

this

are

,

There

is

just

little—desire

much^or

as

' as

nationalization

for

in the German miners

there is

as

Street, New York 5, N. Y.

Teletype NY 1-928

—

—

Monterey

Fresno

/

Oakland

from out'1

seen

the Allies; have seen the
whole problem chiefly as a food
problem, as the organization of
the
management;; (about which
side,

is not

one

agreed) and

as a

prob;

greater efficiency in thie
imports and exports via
Joint
Export
and
Impprt

of

lem

control of

the

Agency.

This

.

latter,

however,

,

with the retention of the red tape

this

of

character

acts;.as

control, which
brake.
In the

strong

a

event of

an expansion of the Gerexports to the desired level

man

us say

for the time being up

.

,

billion- reichmarks a year)
it would grow into a monstrosity.
As enticement of a bonus of 10%
of

the

foreign

proceeds

currency

it is

puzzle in the

of

cause
a

suspicion

spirit

of

because of

or

resistance.

It

is

not

to believe in the latter

necessary

in order to

explain this mentality.

The German,

both the: industrial-

ist and the

worker, is prepared to
work only if he can share in the

since

1946;

more is being
built, but all this

repaired,

even

is

benefit

the

to

of

the

German

people which, in this way, is im¬
proving its apparatus.. Whether he
be

industrialist •or; a

an

worker,

the German is quite indifferent to
an

export

program

being put
This

to

was

be

aV

as:

forward

present

by the allies.
at the

seen

Han¬

Export Fair, held frprri Aug.
18 to the beginning of
September;

and

meal.

He

will

follow

give his confidence to those

who

offer

can

and work.

ing

hipi more bread
The plan for the rais¬

Ruhr; coal

of

production—
showing an increase
larger; food: rations^
does
not
depend only on the
quantity of food one puts into the
Ruhr. Also necessary; in order to
guarantee regular labor and proauction is
the .confidence
bne;
which is

now

owing; to

creates

among
the
miners
by
management and by the destina¬

A number

is

even

? unto

ran

tens of millions of dollars—

some

it

will

is

be

doubtful

carried

these

out.

Half

were

1,300 exhibitors
conclude

whether

prepared to

the

of

condition
that the necessary raw materials
and power for production would
be supplied. They would not allot
contracts,

materials

raw

marks
for

living

product

their

own

Reichexchange

only

received

are

the

from

because

reserves,

on

in

and

this

means

on

real capital.

of the

exhibitors
in

only

The other

quite

were

exports,

and

because ,the

ex¬

"Han-

delskammern"

authorities
done.

feared

was

It

is

difficult

to

get

anything done with intractable
people. It is extremely difficult
the

Allied

administration

to

the

in the "New

in

1946.

This

will

now

be

the

of

coal

the

greater

order to revive, exports ,j.t is

In

just

to v have ; the
desire to export,.; of the .German
as

necessary

industrialist and worker,
it

end

is

essential

and

cycles

motor¬

are

faced.

Necessity for

Export Currency

an

jfii- what

these object

way all
tioha^ould be met?

ish

from

as,

well from Brit¬

as

German

side.

Apart

To

s

to

this

recreate

point,

will

moment

which

on

this

monetary reform at this

a

could

involve

difficulties

only be surmounted

by doing it in the rough "way of
the recent Russian money purge.
And

this way would not be

even

effective if

there

Allied Administration and

to

tees

against

a new

amine

means

the

advice

what

by

technical

ex¬

the desire to export can be stimu¬

lated and finally in what way the
new German export can be placed

world's

the

on

If

offers

one

worker

him

to

more

the

eat

German

•

and

affords

the

off

than

is

he

with

the

present primitive barter, he will
undoubtedly, if at first slowly,
a

more

absenteeism.

less

also

must

turer

in

in

work

to

set

fashion with

I

value
that

and

be

able

to
a

relied

on.

trade

certain
power

He

must
ma¬

chinery and red tape.

In this con¬
forgotten
that no freedom of trading can
be granted him, not only because
one

it

must

not

be

would thus loose control

a

on

country
many
the

over

German industry

and because all sorts of

practices

impermis-

.would

creep

is

export

in

German competi¬

suspicious of'
of others and

are

drive

restrict their

for this

was

many,

know

Dr*.

Schacht
that the

reason

during his visit to Gei*^
sought out Dr. Schacht, the
President

former

of

the

Reichs-

bank (from 1923 to 1928 and from
1933 to

1938) to hear his views on
Through the kindness
and cooperation of the Eucom the

the matter.

ever,

-was

able

to

talk

with Dr.

Schacht, how¬

intends to publish his plans
are completed—
as he says, he is rehabili¬

—which he says

when,
tated

in

the

eyes of his people.
simply: Schacht will
cooperate if he is released. Never¬
theless, an interview of about two

Put

more

with

hours

the

former

financial

German

leader

of

and

banking
policy gave the writer—who has
followed Schacht's policy closely
since 1923*—an insight into Dr.
Schacht's plans.

Dr. Schacht hinv-

desirable

also

the world market; every
now wants to export and

countries

With

Interview

writer,

who

well and has
experience of monetary
may be useful. •
:

Schacht at length.

also be free of administrative

nection

measures

It

men

writer

purchasing

a

be

can

of

The

manufac¬

guaran¬

economy

had

also

animation and

that has

currency

normal

more

no

inflation which
would
make the money reform
meaningless.
The
situation - in
Germany is so complicated that
German

markets.

are

imports.

One

must

*It
the

is

interesting

writer

cized

Dr.

caused

has

to

note that

continually critir

Schacht's policy,

Schacht

to

which

express

his

great displeasure publicly at the
Stillhalte
conference
in
July,
1933, because the writer had de¬
that a Receiver be ap¬

different

therefore "fit in" German exports
into world trade. This aspect of

manded

organization of the mines where¬
by the management would be put

the German export problem may
perhaps produce just as many or

pointed for Germany because she
was
no
longer paying her debts.

the

food

ration

and

a

'

puzzles the dividers of the bonus

confidence in the intentions of the

tion

It is true that this is

the

for

Russians is not reachable

Stimulating the Desire, to Export

In Allied circles the only pos¬
sibility of improvement is seen to

production.

parts

cycles it manufactures by fifteen
factories from the Western zones',
one
can
understand with what

„

view to

coal

re¬

AG that this firm is supplied with

they try to support themw problem was considered at Pots;
selves, by direct exchange, primi-' data as an exclusively quadrapartite affair and agreement with the
tive barter!
'
-

with

Ruhr

monthly

views of the Neckarsulmer Werke

part,

Control

of

reads

frp^ffhte^fact that ;the'nionetary

again.

increase

wis¬

one

method whereby, for

sable

the

of each

the

When

of last year's

one

it

demanding

dom of Solomon.
in

case

of

from American

ment?

in

a

division

the

a

the activities of

be

but

this,

that they can
give up their—
economically—extremely wasteful

of contracts were' con¬

cluded— orders

to

exporter has been attached

How'is'one
produced;, This
psychological factor of the to arrange the appropriate policy?
first rank. It is therefore ,oi ,the It must be clear that the money
greatest importance that (1) one situation in Germany if not the
can
give the Germans a better- root of all evil is one of the most
standard of living through their; "important factors. Without sound
increased achievements, (2) pro-' njoriey all economic measures are
doomed to fail. There are already
vide- more hope in the future by
good commercial management, so several- flans for money reform
tion

over

to
—

Food Probleml

a

be

transaction

necessary before all. It is hoped
achieve this by an increase in

Principal Offices

Santa Barbara

can

morrow's

regulations, either be¬

Increase in Ruhr Coal Production

Trade

As far as

growing disinclination to conform

however, | a

extremely difficult: the misery is
so
great that the people seem to
be inert.
What must happen in

(Associate)

supply.

can

Exclusively

with allied

tion

Chicago Board of

for the
which Ger¬

may

those who have a right to

Germany^

cooperation of the Ger¬
Plan," simply
because they do not believe in it.
The plan has come too late.
A
similar action might perhaps have
spurred the Germans to coopera¬

Exchanges

demand

among

mans

on

many

spire the confidence of tke Ger^ (let
worker.
IV'V ;tp 5

man

were

COrtlandt 7-4150




It remains

this

if-it

They

New York Curb Exch.

Sacramento

a

not

Exchange

to

man¬

the

moment be for goods

Not

the in¬

as

German problem, however

preoccupied : • with
the ; way
in
which he can get today's and ten-

in

able

hibited

presented ai
those of the author only.]

York Stock Exchange

Wires

the

Chronicle.

Members

—

give

political rather than

a

commercial character.

better

Schw abac her & Co.

Private

leaders:

by
means
of an
economic
council,
whose members are appointed by
the parliaments of the "Laender."

Germany and how will it be pos¬
sible
to
bring
about improve¬

Francisco

to

allied

Pacific Coast

San

thinks

and unpleasantness with the

Orders Executed

14 Wall

guararir-

which- .the

article do not necessarily at any
time coincide with those of the

expressed

SECURITIES

Stock

in

way

administration

difficulties

more

to the

willing to make the effort to
realize the plan. There is notice¬

get

Francisco

will

(Chambers of
Commerce) had encouraged them,

views

PACIFIC COAST

San

of

are

even

political interest displayed by the
German
generally: he is more

be

for

New

men

mercial management;

1936

German

owner¬

ship of the mines is vested^ This
body acts as manager and .will be
supplemented by American mem¬

agement

administration

nounced that it had

uninterested

Thursday.
—Walter

[The

so-so.

chance as
my
market

plan
no

people; the attitude'was
complete
indifference,
people being too much absorbed
in the daily cares of getting to¬
day's and tomorrow's bread and

half

More next

well in the

a

Thursday, January 8, 1948

opportunity of really
buying something with the fruits
of his efforts and not merely of
exchanging them for Reichsmarks
without purchasing power, and he
realizes that, in this way, he is

originally.
stocks

just

good
explain
as

bring,

past.

Some of the individual
in these groups are

will

1948

along as I have in the
The market will prob¬
the purably stay in business for some
and cop¬
time. And so long as it does
them to¬ it
will, in its own way, fore¬
to show cast
coming changes both here
that led and abroad.

few/weeks

chase of steels, oils

me

What

don't know.

❖

was

of

one

strides

In all the years

stocks

common

be

level

was '

German

but

better

the

solutely

1936

able :fo see
called "forth, ab¬

He

that, in the majority of towns, the
clearing of debris has made rapid

•>,

~'fi

❖

■:

So holders of

how

its

about

.

profits in this record.
speeches
and
promulgated But by the same token, nei¬
programs by more dullness— ther do I have
any shattering
it is possible, but not probable.
losses to worry about.
had

to

published.

—

f

and will react to the various

tion

raising German produc¬

sarily cheap. They are never fruits of his efforts;-. This
partly
cheap. They are always worth psychological factor is clearly re¬
what they are selling for, no flected in Ruhr coal production
more
no less.
Subsequent statistics, which have not only
reacted to the food ration, but
changes make them higher also to an increase or decrease
or lower.
It is the speculator's
in the export of coal.
■
•
job to foresee these changes
Without doubt, work is getting
and act to protect his profits done in Germany. It is striking

I have writ¬
ten this column I have kept
v
""v;
*
- *
*
this objective before me.
If
It is possible that the marmy own records mean any¬
ket, by it lethargic behavior
thing I think I have managed
of the past ten days or so, has
to do fairly well,
though I
already anticipated the above doubt if there are any sensa¬

terests at heart.
•

inflationary

the

with

pace

movement

Congress will

Plan" for

in¬

an

primarily
profits. I think
this is most important today
if only to keep intact the pur¬
chasing value of the dollar.
Stocks are probably the only
media
which
haven't
kept
have,

us

The fact that

(Continued frond page 10)

This

am

concerned with

As

1

The

to

*

CHRONICLE

sjs

:|j

However, I

vestor. I'm a trader, or if you
gest obstacles ahead are the prefer, a speculator.
Safety
political speeches sheduled to and return on capital is nice

start this week;

FINANCIAL

Germany's Sorry Outlook

investors.

are

investor is

me ate

seeks

Says—
=

&

.

167

Volume

.~SQl«' said ori|^v: ^t. they; would
/restore Ge r m any's,, expqrts wjth-'.
Out/German; Competition—■ since

Further thai they

bh

given more steel it must come out of quotas
by steel firms for other steel users. A checked survey
"Iron Age" editors indicates almost without exception steel cus-*

already set

would

private,; initiative,
without which he did not.consider
based

:>y

on

;

v, •

,,,

.

wheat declined and

prices sagged under the influence of selling
Domestic demand for flour showed usual
year-end slowness, with prices trending easier as bakers generally
displayed little inclination to expand their commitments.
Export
flour business showed some improvement following issuance of Feb¬

'■

.What did Schacht do after the
war; when the situation in
Germany was by np means so
serious as it is now, but in prin¬
ciple had the same features? He
stabilized the Reichmark and, to
promote exports, established the
Golddiskontbank at about the
sauie time—in March, 1924.
This
-

above trade au¬

and steel producers fear, the

consumers

for lard was relatively slow.
Prices remained steady
despite recent marked strength in hogs.
Hog receipts at the princi¬

pal Western markets totaled 291,500 head for the week,

recently because of the glare of publicity and militant action
steel companies. Small users and even large consumers

some

by

Trading in spot cotton markets was less active last week, reflect¬
ing the holiday season.
Prices fluctuated in a narrow range and
he undertone was firm throughout the period.
There

some

quptas might be cut further early this year must have steel
to maintain competitive manufacturing schedules and as they have
done in the past they will obtain it no matter what the price.
Stnel consumers are in for another jolt soon because of the
second freight rate advance. The rate raise will force additional steel
J'irms, to withdraw from distant territories because present steelmaking costs will not allow them to absorb the additional freight
whose

to remain competitive in those areas.

necessary

certainty that steel labor will
the probability of, higher ore

Increased freight costs, the almost

receive

a

moderate

increase;

wage

prices and the chance that miners'

was

stimulated
show

,

h^d a capital of 10 million pounds
sterling and its task was to supply
export credits and to issue bank¬
notes in foreign
currencies^ It
npver issued banknotes, but it, was
extremely useful in creating ex¬

compared

with 247,300 for the corresponding 194$ period.

thority notes, that steel allocations if put into effect will provide
a major shot in the arm for gray market activity which has lessened

last

allocations.

Demand

allocation of steel supplies under government

suggestion.

or

Some

ruary

up

tomers are opposed to
control

he most strong¬
ly condemns every form of col¬

recovery possible;

lectivism. y

btdusby

(Continued from page 5)

'

43

for income tax purposes.

that if certain groups are

creating <«political

without

tension.

•

(139)

FINANCIAL CHRONICLE

The State of Trade and

a

ahd

$

: n

recurring cause of inter¬
national friction—being revived
1900

COMMERCIAL

THE

Number 4662

<*>

the final day of the week,

on

belief that the

the

would

mid-December parity

rise and the expectation of increased European buying.

a

The

culture

moderate advance

a

by

higher parity

was

confirmed by the Department of Agri¬

announcement

that

the

Dec.

figure

15

30.38

was

cents, or

50 points above the revised November parity of 29.88 cents.

Some

reported in textile mill operations. Holiday dullness
trading in cotton gray goods. Some mills were said
to be selling moderate yardages for fourth quarter delivery.

slackening

was

characterized

the price of coal may
oe
advanced -this year all point to a strong possibility that steel
prices must be advanced before the next several months go by, the
wages and

Although trading in domestic wools in the Boston market re¬
mained seasonally dull in the week ending Dec. 30, there was a fair
VQlume of business done to fill in needs for the near future.

displayed

a

keen interest for fine and half-blood staple wools.

Buyers
Trad¬

ing in foreign wool markets was largely suspended due to the holi¬
days.

port credits. It attracted a great magagirie concludes.
\
.
heal of foreign capital and issued
The American Iron and Steel Institute announced on Monday
export credits on this basis to
RETAIL AND WHOLESALE TRADE LOWER FOR WEEK
of this week the operating rate of steel companies* having 94%
German industry. These credits,
BUT ABOVE YEAR AGO
of the steel-making capacity of the industry will be 97.9% ojf
from Britain, United States, Hol¬
The large increase in the number of clearance sales following
capacity for the week beginning Jan. 5, 1948. This compares with
land and France, helped to make
the Christmas holiday helped to attract consumers to the stores.
96.4%
one
week ago, 97.7% one month ago and 90.3% one
iJ possible that Germany, how¬
Retail volume in the past week was moderately below that of the
year ago. Comparison of the current rate with, that for the sim¬
ever impoverished, could execute
ilar week in January, 1947 must give consideration to the change
preceding week and slightly exceeded lhat of the corresponding
the agreement of Rapallo of 1922
week a year ago, according to Dun & Bradstreet, Inc., in its survey
in basic ingot capacity of the industry.
and issue credits to Russia, and
of trade for the period ended Dec. 31, last.
This week's operating rate is equivalent to 1.708,600 tons of
Generally, mark-downs
ofher East European countries.
were neither as large nor as widespread as they were a year ago but
steel ingots and castings as against 1,686,900 tons last week, 1,Qpe can see that such an organi¬
consumer response was very favorable.
710,000 tons a month ago and 1,580,900 tons one year ago.
zation would certainly have to be
The approach of New Year's Day stimulated the demand for
kept under control. By means of FREIGHT LOADINGS 28% UNDER PRECEDING WEEK
food and grocery volume was steady and at the high level of the
bhis organization it is possible to
DUE TO CHRISTMAS HOLIDAY
previous week.
The demand for liquor was steady at the level of
£et a complete survey of German
Loadings for the week ended Dec. 27 totaled 599,357 cars, accord¬ tlie preceding week but was moderately below that of a year ago. ■
exports and thus prevent undesir¬
Promotional and clearance sales of apparel induced consumers
able
competition,
international ing to the Association of American Railroads. This was a decrease
to buy.
Silk blouses and fancy dresses were popular with some
cartels and other unwished for of 232,773 cars or 28% below the preceding week, and represents
The prices of many
a decrease of
28,610 cars or 4.6% below the corresponding week in increase in the demand for resort-wear evident.
developments, and therefore po¬
types of Fall and Winter apparel were lowered but consumers were
litical friction as well.
There is 1946 but an increase of 93,380 cars, or 18.5% above the same week
especially eager to purchase reduced sportswear.
;:Lv, Vr; ' V"x//
■ •• ,'*; ■'■"
further the advantage of being jn 1945.
.

-

,

official control

able to replace an

ELECTRIC PRODUCTION

apparatus with one that is com¬
mercially organized and made the
instrument of a commercial pur¬

industry for the week ended Jan. 3, 1948 was

4,868,011,000

kwh., according to the Edison Electric Institute. This was an increase
of 38,432,000 kwh. when compared to the 4,829,579,000 kwh. produced

which, of course would have
to be managed through or under
allied control.
The Golddiskontpose,

bank worked very

that of

preceding week, and exceeded by 6.4% the- 4,573,807,000

in the

turned out in the week ended Jan. 4, 1947.

well for many

kwh.
;

German exports.

Such

new

a

create

would

an

V

^

computations

;

ceeded

Golddiskontbank
export currency

5,621,045 units

Reichs-

turned

according

-

•

t)ecember included 361,928

1947

in

14,993 cars and 5,738 trucks in Canada

totaled

5,048,780

were

made, anqi by

out.

cars

and trucks in the

exceeded only by 1929, when

1941, when 5,108,992 were
'•
• ' V
'

BUSINESS

■

.

;

forming of quotations in terms of
Reichsmarks. Does not the famous

of

18th

17th and

the

30. occurred.

cen-

did

that

of

parallel

a

not

cause

The
•

1

currency

the

slightes

*' T.

disturbance?

insoluble

♦

problem

of

the

division of the 10% bonus among
exporters and workers would then
be

solved

because

would

it

V division can be safely left to the
Germans because, it is clear that

G

r -

wishing to - buy something for export, will have to pay
everyone

pould gradually replace \he ol,c

j Reichsmark,

^opportunity to bring the financia

man
a

recovery

solution.

-

is

The




the

1947,

last year.

the past week,

a

record

storms, played havoc with
sales volume in particular. More

business in general and retail

declines than those

sales

department stores showed
increases for the period.

reporting

L

Federal Reserve Board's index, department
store sales in New York City for the weekly period to Dec. 27, 1947
increased 15%* above the same period last year;
This compared with
an increase of 7%
(revised) in the preceding week.
For the four
weeks ended Dec. 27, 1947, sales increased 7% and for the year tp
date rose by 9%.
/;•...
to

According

the

large increases shown for this week reflect in part the fact that in
fell
on
Thursday and the week therefore included three days
pre-Christmas shopping as compared Vfitk two days last year when
Christmas
fell on Wednesday.
'
"v7'i
■'. '■/ \ x'"x:
;
*The

1947

of

Christmas

heavy

,

.

When you want to CIRCULARIZE the Investment
Firms in the United States and Canada,

rise

continued

wholesale food

in

against

week a year ago.

UPWARD TREND

year ago

when the

index stood pt $6.21.

This
-■

The

daily wholesale

SLIGHTLY

In

mailing

our

and bank listed in

department

"Security Dealers

list

an<f

is

within

the

daily

revised

Cities

and

by

offers

firm
ypy

names.

the most

Our

charge
or

A.

complete,

addressing

for

Canada)
N.

is

S.

$5.00 per

D.

LIST

fist

(United

thousand.
offices

(main

only)

or

splectf4 States or Cities $6.00, per thousand-

commodity pri<?e index, compiled by Dun

Inc., held within a fsu.riy narrow range during the
final week of 1947.
The index figure for Dec. 30 registered 30,1.48,
as

stencil

metal

firm

up-to-the-minute service available.

States

WHOLESALE COMMODITY INDEX RECEDES

a

Cities,

an£

This

a

every

of North America"- arranged alphabetically by States

foodstuffs lifted the Dun & Bradstreet

price index for Dec. 30 to, $7.24, a new peak.

have

for.

:

sharp rise above the $7.11 a week earlier.
The most recent
index represented an increase of 16.6% above the corresponding date

was

Remember Us!

All

addressing

We

can

compared with 302.30 a week ago, and with 243.35 on Dec. 31, 1946.

at

a

also

hours.

completed within, 24

Bradstreet,

supply

the list on

small additional charge, v

gummed roll labels
*

Holiday dullness prevailed in leading grain markets in the
week with price

movements highly irregular and largely reflect¬

ing uncertainties hanging over the markets.
Corn declined

CHICAGO,, ILL.—Roy H. Morris
now with Carter H. Corbrey &

$,treet.

The

^

>

Chronicle).

Co,, 13.5. South La Salle

The effects of the heavy snow storm

We

'

Financial

of

this yveek, 7 had losses exceeding

Small f.ailures under $5,000 rerpained low, totaling 6,
previous week and in thp corresponding

FOOD PRICE INDEX CONTINUES

Joip$ Corbrey Staff
to

that

Although higher than in the first week of any of the

larger failures occurring

4 in the

;

(Special

52

the

$100,000.

&

aspects of the Ger
problem nearer to
'

the like, period of

from

27%*

by

SPECIAL

offering thus a sound

and monetary

the week end

1944 through 1947, failures remained far below the prewar
level, claiming only one-fifth as many businesses as in the cor
responding week of 1939.
Failures involving liabilities of $5,000 or more predominated in
the week just ended, numbering 52, compared with 34 a week ago
and were two times as heavy as in the same week of last year.
Of

a

^ in su.ch fixed-value currency.
.>

below

for New York City, followed by sleet

be

/ paid out in export currency. The

•

somewhat

years,

Aypy—then the currency for the
"Whole of Europe—afford the finest

example

Commercial and industrial failures rebounded in

\ from the previous week's sharp decline, Dun & Brad
street, Inc., reports.
Rising from 38 to 58, concerns failing were
almost twice as numerous as in the comparable week of 1947 when

the accounting
p,uit of the Amsterdam,se Wissel-

was

exceeded

RESUME UPWARD TREND

ing Jan.

gulden-banco—
bank

FAILURES

volume

slightly

but

This com¬
pared with an increase of 8% in the preceding week.
For the four
weeks ended Dec. 27, 1947, sales increased by 11% and for the year
to date increased by 9%.
,V.

and 100,980

cars

week

the Federal Reserve Board's index for the week ended Dec. 27,

preliminary

to

Wholesale

weeks.

increased

*

Production

holiday with buyer attendance considerably below that of pre¬

that of the corresponding
week a year ago.
Purchasing continued to center on current needs.
Department store sales on a country-wide basis, as taken from

amounted to 483,639 units and ex¬
peak of 460,527 units reached in

United States and Canada and was

provided one allows a free

rency

steadily purchased and sporting goods continued to sell well.
The wholesale centers were generally quiet following the Christ¬

postwar

trucks made in the U. S. and

There is no reason to be
concerned for such a parallel cur¬

»

t

1947

mark.

-

:

"Ward's"

by

The breakdown for

no

value in addition to t,he

December,

previous

the

October, last.

objection
whatsoever to letting this freely
"(.-circulate in Germany; it would be
a means of exchange with a fixed,
be

would

There

in

Production

Germany primarily needs

which

1,870 cars and 1,010 trucks in Canada.

in the U. S. and

borne by allied taxpayers but
chiefly by foreigners who had di¬
rect
interest in
the revival of

;•

and trucks in the United States anc

week amounted to 74,092 units, "Ward's Automotive
Reports," states.
This compared with a. revised, figure of 75,638
units in the preceding week.
i
* •
"
Last week's total comprised 52,987 cars and 18,225 trucks buil
Canada the past

would, moreover, have the great
advantage that the risks of loans
to Germany would no longer be

ahead of

quality china and glassware were eagerly sought and
nationally advertised stoves, refrigerators and washing
machines remained very large. Automobile tires and accessories were

preceding

SINCE WAR'S END
cars

well

was

only slightly.

rose

Good

vious

AUTOMOTIVE PRODUCTION FOR DECEMBER LARGEST
output of

unit volume

»

-;f

years,

Estimated

of housewares

dollar volume

the

year ago,

demand for

mas

attracting foreign capital
.through bills of German under¬
takings and banks endorsed by
the Golddiskontbank and foreign
establishments.
This
methoc.

a

electric light

The amount of electrical energy distributed by the
and power

While

6.4% HIGHER THAN A YEAR AGO

of

sharply at mid-week

long accounts by commission houses.

as

,

*

Herbert D. Seibert & Co., Inc.

\

the result of liquidation
Some of the losses were

regained in final dealings aided by good demand for the cash article

' j and continued small country offerings of the yellow cereal.

Trade

25 Park Place

REctox 2-9570

New York 7, N. Y.

•44

THE COMMERCIAL

(140)

CHRONICLE

FINANCIAL

&

Traees Effects of Lowered Govt. Bond .Prices

Let's
countries

(Continued from page 16)
and

will

mistakes

our

of

be

greater consequence.
The

who

one

in

man

the

street

realize

must

is the
that
a

peaceful world depends on equal
trading opportunities for all; that
it depends to a large extent on
how

-quickly the United States
put into effect measures guar¬
anteeing a proper relationship be¬
tween our exports and imports.
It must be accepted as though it

can

"holy writ," that we cannot

were

Continue

sell

to

than

more

We

buy and expect to escape the con¬
sequences.
We must expose the
ugly history of unbalanced and
jrestricted trade; explain how it
led to a depression, to a second
World war and how easily it can
lead
;

to

third.

a

How about the foreign trading

As a

policy of our government?
iiatio'n

we

committed

are

of

development

to the

and

free

unre¬

But this may die in

stricted trade.

diplomatic pouch unless the
people of this country—the busi¬
nessmen, the. workers, from all
walks of life—put teeth into it by
backing it up with some- cold
facts about exports and imports
instead of hearsay and a smatter¬
ing of ignorance which too long
hasc deluded all of us as far as
a

World

trade

is-concerned.

our

motives.

they

produced;

fittported materials.

upon

Without

imports

this

the

make

industrial plants would drone to
a
standstill
without
imported
manganese, nickel, tin, asbestos,
chrome ore—imports which also

make it possible for us to sell our

cotton,

locomotives, automobiles,
machinery and other products.
We must

preach facts and fig¬
the reasoning of
those who ignore imports and are
actually thinking in terms of re¬
ducing exports. Before such ex¬
perts
finish
wiping
off
their
to

ures

combat

celluloid collars let

with
the first fact they drag out of
their portfolios. Yes, it's true that
we only export on an average of
about 7% of our,national income.
But

before

we

us

agree

frown at the size

of this

figure let Us see how big
really is. Our automobile in¬
dustry sells only 7% of its output
in Boston, Chicago, New York and
Washington, but if it dispensed
with these markets, it would be
unable to operate profitably on a
mass production basis.
it

The

idea

free

of

and

unre¬

stricted trade is not

a

day Americans

given a dem¬

are

myth. Every

onstration of how, it works.
nation we
dous

have made

success

out of

to each other and

based

on

a

As

a

tremen¬

selling things
economy is

our

the free and unrestricted

exchange of goods between states,
between
cities,, between towns
and between people. If we were
a
continent composed of 48 na¬
tions and if we attempted to fol¬
low

some

of the

principles which




same/kind

the

in

secure

agricultural
machinery.

man

state

can

nated

According to figures recently
published by the Department of
Commerce, the annual rate of our
exports is now in the nature of
$16 billion with imports tagging
along at less than $7 billion. Even
making, all
there

will

possible

approximately
which
This

is

$5

the

Manufacturing Works in
companies West¬
inghouse
grants
a
licensee
arrangement, furnishes technical
assistance regarding plant layout,
and
also specifies the
type of
equipment needed for manufac¬
turing operations.
Additionally,
we
train in our plants hundreds

of

return.

no

close,
this is the battle We'must fight.
gap

must

we

con¬

Electrica de Mexico and the
To such

China.

for

billion

will receive

we

sum

a

this

Central

allowances,

remain

still

In

nection, Westinghouse is also as¬
sisting in the formation of new
companies abroad such as Industria

The Marshall Plan

have

You

of

remedies

the

sidered

a

of students who will have key
great deal | positions, in- these new industries.

This is

Marshall Plan.

about the
one

heard

to

for

currently being

con¬

supply needed credits

the

for

rebuilding of shattered
The plan holds hope,
but its' greatest hope lies in our
willingness to accept some of the
sconomies.

goods we have helped other coun¬
tries produce in payment for these
credits and for our exports. What¬
ever plan is adopted, the Battle
of the Gap can only be won by
the

removal

acceptance

goods and services.
There

people in this coun¬
believe that trade and
commerce, being based on profit
and advantage, are rather sordid
affairs which have no place in the
are

reserved

for

advancement

idealism

and

mankind.

of

Happily, there is no contradiction
between promoting
the sale of
American products in the. world
and the general advancement of
the world. And there is a great
need for both idealism and real¬
ism in

the efforts being made to
raise economic levels abroad.

Westinghouse Import Department
Proof that idealism and realism
can

is

be combined toward this

best

goal

expressed by two activi¬

ties undertaken by Westinghouse.
Most recent was the creation of
an

Department

Import

in

1944

which for Westinghouse, with its

heritage of research, engineering
and
manufacturing, involved a
new way of thinking.
In this new
role, Westinghouse has been act¬
ing as the exclusive U. S. Dis¬
tributor for the products of for¬
eign manufacturers.
Since this
enterprise is serving as a mecha¬
nism by which dpllars can be
planted where they will do this
country the most good,
been

drawn

products

to

as

to

no

the

line has
type of

be

handled, except
they are in competition
with those products being manu¬
where

factured by domestic customers of

Westinghouse.
great variety

Consequently,
a
of articles have
found their way into the ware¬
houses of the Import Department
—silverware from Peru, Mexico,
Belgium
and Denmark;
tennis
court surfacing materials and bi¬
cycles 'from England; sausage cas¬
ings from Iran; alabster lamp
bases

and

Italy, and

leather

articles

offer

it

needs

a

in exchange

for dollars
This Import
Department puts Westinghouse
into foreign trade with both feet,
since

so

the

a

quarter of

a

category

early in August, causing

a

sharp

more, it appears likely that 'con¬
siderable amounts of the latest

1

rise in Federal Reserve holdings
of the shortest maturity group

during

issue of Treasury bills will be
absorbed by the banks, resulting
in a corresponding reduction in
Reserve Bank

,

holdings and in the

reserves of member banks,

excess

the week ended Aug. 6,
holdings of securities ma¬
turing in over six months to one
year showed a corresponding re¬
duction.
V'
while

line

The

with

securities

for

final maturities extending beyond

"The effects of recept purchases
of Treasury bonds and of earlier

five

years

the

middle

transactions

Federal Reserve Bank holdings of

in

other

types

of

began to rise toward
of November, and

Treasury

such issues increased $600 million

Reserve

between Nov. 12 and Dec. 17. Pur¬

securities on Federal
holdings of Government
securities, classified by maturity,
are
shown in the accompanying
chart by weeks from the begin¬
ning of July, 1947, through Dec.
24.
As illustrated in the chart,
Federal
Reserve
h o 1 d i n.g s of
Treasury
obligations
maturing1
within

six

months

have

declined

since

early in July, and those
maturing in over six months to
a year have
increased, as a result
of

commercial

the

bank

shifts

from

longer term certificates and

notfes

into

shorter

term

certifi¬

chases

of

longer

securities

by

were

sales

of

Treasury

term

more

the

than offset

shortest

term

Treasury securities outstanding
and by redemptions of maturing:
issues, however, so that Federal
Reserve holdings of the latter fell ;
about $1 billion. In this period the
decline

in

the

total Federal

Re¬

was about
$400
In the last two weeks of

portfolio

serve

million.

the year, however, the volume
Federal Reserve
acquisitions

of
of

Treasury bonds maturing in oversales of short¬

cates,

five years exceeded

securities

est-dated

and

million.

and

redemptions of maturing
(chiefly Treasury bills
certificates), and sales of bills
short certificates indirectly

nonbank

to

investors

well-as

longer

issues by about $900
Treasury purchases of
term Government bonds

also substantial in November

and

in

in other countries

temporary investment. This tend¬
ency
is obscured somewhat by

December, but such purchases in
effect represented the return of
tax and other Treasury receipts;

compatible with the fact that people
ious

be

to

receivers
want to

are

partners

of

charity;
their

use

create their

more

than

be

hands and

economies

own

anx¬

to

that .they

own

did

as

tools.

proper

one

ma¬

turity group to another caused by
the passage of time. For example,
a
large certificate issue entered

Federal Reserve

the

to

the

first

market

considered

supply."

as

three

weeks

could

and

not

of

be-

adding to the money-

'

System Holdings of Government

Securities

by Maturity, 1947*

BILLIONS

One of the
which

as

shifts of securities from

the people of this country and,
despite popular thinking, they are
eminently qualified to do just
this,
provided
they
have
the

principle advantages

OF DOLLARS

24

do have in this country

we

fered to

by

us

which

ket

a

large home

mar¬

makes it practical for

run free in devising
putting into operation many
improvements in methods of
manufacturing and in the devel¬
our

minds to

and

of basic materials.

opment
this

techniques

in

act

the

United

have

States
we

must

the

with

accordance

we

i

;

point where

a

im¬

part our country must
the world's future. For

portant
play in
too

brains.

the

in

reached

our

It isn't that

the

all

We

kept
ahead of

step

a

rest of the world.

have

It is

which has

market

real

we have
facts
about

trade

the

for

long

reserved

international

"experts" and "special
interests." But today, with many
countries engulfed in
waves of
suspicion about each other's mo¬
tives, there is a great need for
universal understanding of trad¬
ing problems and for the inter¬
vention

economic

of

of

century by its

International Company.

Natural¬

•vOVER 6

MONTHS*TO

1 YEAR

OVER 1 TO 5 YEARS

OVER 5 YEARS
A

J

statesman¬

ship as opposed to governmental
diplomacy.

*

Wednesday dates;

S

.

_

O

latest figures

N

are

D

for December 24.

People must realize that all the
commotion

is

being

Man—who

is

eternally

basic

the

essentials

of

will

get them

seeking

one

who

another.

It is

our

life

do

this

the gap

job

best

between

and

way

or

our

by

And

we

closing

exports and

imports. In this Battle of the Gap
let

find

us

slogan
Die."

"Import

inspiration

Britain's

in
But
or

let's

Spring Term Courses

Opening at li Y. Inst,

job to see that

he gets them peacefully.
can

by

caused

make

for

our

"Export
ours

or

read:

Registration for the Spring Te^m
of the New

York
has
begun. The Institute of Finance
specializes
in
stock
brokerage
practice and investment analysis
courses, offered in the early eve¬
ning and by correspondence.
Located at 20 Broad Street, its

instructors and the majority of its

students

With Herrick, Waddell & Co.
(Special

to

The

Financial

Chronicle)

CITY, NEB.—Fred C.
Busing is with Herrick, Waddell
& Co., Inc., of 55 Liberty Street,
New York City.
DAVID

With Wm. C. Juen Co.
BELLEVILLE,

Chronicle)

ILL.—John T.
Murphy has been added to the
staff of William C, Juen & Co.,
9

Public

Square.

York Institute of Fi¬

nance, successor to the New
Stock
Exchange
Institute,

;

Else."

(Special to The Financial

activities

Westinghouse have been handled
for

the "within six months"

cooperation are of a nature

badly.

export

of indebtedness

that date, held by
Federal Reserve Banks, Further¬
on

were

from

host of other widely
assorted items—a strange galaxy
but the best that the world has
to

i

$400 millions

is the unbounded oppQrtunity of¬

who

try

|,

redeem

banks having available funds for

trade restrictions

the international

and
of

of

Such instances of international

I

world

maturing

-

abroad.

areas

to

of the certificate

S.

U.

other

do

as

Westinghouse is aiding countries
by selling them design and manu¬
facturing information, in other
words, industrial know-how. Un¬
der specific arrangements, foreign
manufacturers are permitted to
make products according to West¬
inghouse methods and standard
and to sell them, in certain desig¬

single trading unit, or else to
engage in periodic wars in order
that the man in the industrial
food and the

same

Another example of combining
and realism is the way

a

can secure

be used

di¬

return

idealism

that the world must make today.
We must decide either to live as

state

not

manufacturers;

decision

of

the

fit

country we would be obliged to

country

could never have reached its pres¬
ent industrial capacity. Our great

the

situation existed in this

a

will

means

rectly to Westinghouse but they
will help export trade in general
and Westinghouse stands to bene¬

people of
they manu¬
factured; the people of Texas and
Oklahoma all the oil they drilled.
If such

(Continued from page 11)

ly,' the dollars planted abroad by
this

Akron all the rubber

the

Furthermore, we must impress
people that imports serve other
practical purposes. Imports mean
cigarettes,
house paint,
spices,
cosmetics,
mica for electrical
equipment, tungsten for electric
lights, leather for shoes. There is
hardly an article they use that
does nt>t dep'Sfett, t6 some extent,

international

trading, there would come a time
when the people of Pittsburgh
were forced to use
all the steel

niche

Meaning of Imports

in

use

rehabilitation

How can the people be told?
Hot in-terms of astronomical fig¬
ures, these are for the economist
and the banker. Not by the rising
and falling of lines on charts and
graphs, these are the sign lan¬
guage of industry.
People with
empty chairs beside their tables
seldom have the patience to wait
while an explanation takes such
hurdles. They want a simple an¬
swer, and it is our duty to explain
to them simply that in selling
more and buying less we are in¬
cubating the seeds of mistrust;
instigating a situation whereby
peop.1^ in other countries mis¬

construe

Thursday; January 8, 1948

of

are

drawn from the ranks

professionals actively engaged
the working day in the

during

securities

business.

last

totalled

term

Enrollments
1,000. Mature

nance,
and
Security
Analysis.
Every state has had representation
in
the. correspondence
student
body.
;
i..

P. • C.a swell Exch. Member
CHICAGO, ILL.—The Executive
of the Chicago Stock
Exchange today announced the
Committee

election of Percy A. Caswell to
membership.
.Mr. Caswell is af
partner of Caswell & Co. which
maintains

offices

at

120

South

With his election,
Caswell & Co. becomes registered
LaSalle Street.

as

a

member firm.

The

total

number

of

partner¬

ships and corporations which are
now

member

firms

has

reached!

157, the highest in the history of
the Exchange.
,-./v. ;
,

professionals attend courses in
Current
Developments in Rail¬
E. F. Hutton Admits
roads, Utilities^ and Selected In¬
dustries, Current Economic Devel¬
E. F. Hutton & Co., members of
opments Affecting Security Val¬ the New York Stock Exchange, 14
ues, and Commodity Trading Prin¬ Wall Street, New York City, have
ciples, Beginners are offered such admitted W. Allen Taylor and
bourses as Work of the Stock Ex¬ Frank E. Naley to partnership. Mr,
change and Brokerage Office Propprhirp.

Amounting.

Business

Fi¬

Taylor makes his headquarters at
the firm Santa Monica

office.

■

\

Indications of Current Business
The

following statistical tabulations

shown in first column

Gas oil

distillate

,

output

distillate

fuel

oil

1,710,000

1,580,900

BUSINESS FAILURES—DUN

fuel oil

(bbls.)

5,543,000

5,284,489
5,246,000
16,006,000

2,334,000

Dec. 27

7,041,000

2,291,000
6,520,000

Dec. 27

9,698,000

8,643,000

91,269,000
16,393,000

Dec. 27"

____

17,013,000

Dec. 27

(bbls.)__

50,324,000

51,896,000

transit and in pipe lines—

(bbls.)

at

at—

at

4,932,000

5,309,000

16,667,000
2,324,000

6,000,000

8,405,000

8,147,000

87,056,000

86,319,000

91,851,000

16,866,000

51,502,000

20,619,000
61,988,000

60,304,000

52,113,000

56,747,000

OF

AMERICAN

Manufacturing

freight loaded

Revenue

freight rec'd from connections

ENGINEERING

Public

599,357

832,130

792,339

Commercial
Total

627,967

Dec. 27

ENGINEERING

and

641,578

722,498

706,018

620,984

U.

1

$54,364,000
26,057,000

$63,608,000

$214,014,000

1

36,231,000

137,329,000

32,200,000

Jan.

1

28,307,000

27,377,000

76,685,000

29,708,000

Jan.

1

23,611,000

18,837,000

55,800,000

24,124,000

Jan.

1

4,696,000

8,540,000

20,825,000

5,584,000

____

1—

;

-

Bituminous

(U. S. BUREAU

coal

and

lignite

Pennsylvania

anthracite

Beehive coke

MINES):

$61,908,000

NEWS

Dec. 27

(tons)

8,340,000

'13,180,000

11,970,000

*

and

OF

746,000

126,300

AND

PAYROLL—U.

Month

—

of

of

111,500

All
—Dec. 27

357

."*576

367

281

IRON

AGE

INDUSTRIAL)—DUN

_

COMPOSITE

(-;

..—Jan.

———

(E.

&

M.

Straits

Zinc

tin

(St.

U.

S.

4,829,579

5,217,950

4,573,807

St.

Govt.

Average

QUOTATIONS):
.v:

60

30

3.18925c

3.18925c

$37.39

$40.00

$39.75

$40.25

21.435c

21.425c

21.425c

94.000c

80.000c

70.000c

Dec. 31

15.000c

15.000c

15.000c

12.550c

21.200c

21.200c

19.275c

14.800c

14.800c

14.800c

10.500c

10.500c.

10.500c

Jan.

6

Jan.

6

100.73

6

Jan.

6

100.69

101.84

104.15

110.52
'

109.97

111.07

114.85

116.02

Group _!
Group

114.08

113.50

114.27
110.70

117.00

104.14

104.66

104.31

106.04

6

112.37

112.00

112.93

Policy4

|

6

114.85

113.70

114.66

OF

Mine

112.75

I

2.38

2.22

Zinc

3.11

2.80

"Revised

6

2.86

2.91

2.85

2.59

2.98

NATIONAL
ITY

FERTILIZER

INDEX

BY

2.94

3.23

3.13

3.55

3.57

3.50

6

3.47

-3.49

3.39

3.02

6<

3.04

3.06

3.01

2.76

Jan.

6

2.91

2.97

2.92

2.64

3.15

PORTLAND

and

448.1

455.7

453.3

Grains

280.0

272.7

282.0

277.3

278.6 \

279.9

272.9

229.6

Jan.

3

341.9

336.3

333.2

3

305.3

304.9

310.9

198.1

_Jan.

3

269.1

272.6

258.9

3

213.0

*209.0

198.2

157.6

Jan.

3

179.9

180.2

178.9

154.4

220.6

1

1———

,

.

J-i-l

v.

.'

-

—

Miscellaneous commodities
Textiles

i—

Jan.

3

•219.7

224.6

Farm

3

160.8

160.4

159.3

drugs

236.3

236.3

236.4

3

156.4

156.4

157.1

;

Jan.

3

137.5

137.5

136.8

141.8

141.8

140.6

134.5

134.5

129.3

•

T

*.

»

224.8

*223.2

219.1

191.3

!•"

•

PAPERBOARD

received

ASSOCIATION:

(tons)——

'V

(tons)

Percentage of activity
Unfilled orders (tons)

—

PRICES—U.

f

.

•

•

-

-

,
'

..

,

'

Textile

114,444

157,585

126,659

183,641

71

100

406,738

416,851

171,580
170,175
„■

?
•

h

66

163.0

162.5

159.8

139.6

Dec. 27

197.0

196.9

190.3

OF

17,480,000

16,450,0(^

*20,365,000

17,153,000

8,612,00®

8^r»

86 '/o

AGRICULTURE

'
301

i

287

26®

*

178.2

178.3

159.1

150.7

150.5

203.4

204.4

203.3

268

318

312

hay

305

283,

350

324

134

377

354

40®

275

257

24®
211

j—-i;.

crops

146.9

144.7

RR.

126.2

119.1

97.0

_Dec. 27

152.0

151.6

151.3

Dec. 27

133.9

189.1

189.1

187.2

and

149

151

294

272

164

367

349

334

320

304

294',

352

338

314

311

293
242

31®
224

—

products

—

__—__--J1

animals.

products
and

,

eggs

adjusted—/"
164

133.0

132.9

138.0

126.1

135.3

135.3

134.8

EARNINGS—CLASS

I

RRS.)—Month
of

miles

operating

120.5

118.7

107.7

than

farm




183.4

183.4

177.9

154-.2

—Dec. 27

"Revised figure.

28®

232

ROADS

of

214

204

154

.(ASSOC. OF

October:

,

:

i

represented

227,414

227,209

,227,414-

i $794,165,231 $726,549,842 $710,020,09#

revenues.:

2-

611,871,599

U.

77.05

I

S. CLASS

157.4

156.9

157.1

135.0

__Dec. 27

155.0

154.4

152.5

134.5

154.9

153.1

133.5

145.4

142.6

Dec. 27

products and foods

Dec. 27

155.4

146.6

RYS.

ITEMS

(Interstate

81.01

78.66

$75,939,347
47,979,446

$53,156,191
85,255,053

48,000,000

21,150,000

58,000,00®

OF

Commerce

of September:
operating income—j—
income
!

railway

Total

income

Miscellaneous
Income
Income

i\.

available

charges

Amortization
Dividend
r

...

from

.

$47,968,461

of

income

income—_—

14,278,01®

95,053,667

81,816,718

3,445,697

2,533,429

58,832,859

91,607,970
55,083,092

79,283,289

23,053,739

2,906,783

_____——

structures & equip.) —

defense

$67,538,7(11

14,228,841

62,127,157
3,294,298

-——I———20,146,956
(way &

$80,824,826

14,158,696

for fixed charges—__
charges——

fixed

income

Federal

—

—________

deductions

after

Depreciation

123.9

products

INCOME

Commission)—Month
Other

558,433,90#

76,433,466

——

SELECTED

Net

588,591,241

$89,490,106

RAILROAD

Net

farm

273

J

railway operating income before chargesNet income after charges (est.)

Contingent

than

307

288

operating expenses
Operating
ratio—per
cent

120.5

121.5

Dec. 27

articles

234

167

271

——_

Total

154.6

groups-

products——

186

262

•:

crops

AMER.

133.3

127.7

Dec. 27

materials

224
•

(IIL'iL—_ii

•

crops

Dairy products
L
Poultry and eggs—!

171.3

146.9

Dec. 27

!

_

23®

281

——

167.7

177:8

149.9

Dec. 27

,

commodities

All commodities other
All commodities other

|

149.4

Dec. 27

allied

and

Semi-manufactured

-

2

Dec. 27

materials—

Manufactured

DEPT.

—•.

Poultry

532,773

;_Dec. 27

—

••

f

109,210

«•*.

420,456

Dec. 27

!

leather products

Miscellaneous

Raw

■

,8,48®

INDEX

—

Taxes

products
Housefurnishings goods

Special

v :

*10,452,000

881o

—

Dairy

Seasonally

99,555

Dec. 27

—

products

Chemicals

9,609

r-U

Meat

•

LABOR—1926=100:

Fuel and lighting materials
Metal and metal products—,

Building

■

v

'

17,319,000
19,840,000

Fruit

Dec. 27

—Jan.

..

and

i.

7,931,000

FARMERS

and
grain

Truck

Total

Farm products
Hides

$47,14®

,

MINES)—

OF

Net
—__

Foods
i

$1,814,853

*47,126,"

.1 "e

7,855

_i.

Livestock

!

Dec. 27

S. DEPT.

All commodities
,.

BY

grain

Truck
•;

-—Dec. 27

at

OIL; PAINT AND .DRUG REPORTER PRICE
1! INDEX—1920-36
AVERAGE=1(><>
WHOLESALE

*2,767,891

.

grain

Number
«

$125,296
$27,70®

T;

—

Oil-bearing

..

"V

—Dec. 27

——

_

j

■

■
•

;

$50,196

*30,000

£

November—

Fruit

120.8

3

;
.

Production

&

Cotton

129.7

3

V,V"

124.8

3

Jan.

___

—

combined

...

•

DUN

—

S.

Tobacco

153.1

Jan.

——

•

Orders

(BUREAU

—

products

Feed

•

'

—;

machinery

NATIONAL

*70,470

*194,263

2,951,569
50,643

—

Feed

i,

215.0

Jan.

1

—_

—

materials

groups

used

65,745
32,197

—

INCORPORATIONS

Food

141.3

3

Jan.

Jul

—

All

;

—

.Crops

215.0

Jan.

—

—i__

materials

Fertilizers
,

All

:

—_—Jan.

—

Metals

and

the

in

215,087

—

(bbls.)

farm

228.6

Jan.

metals

V'"

tons)

tons)

RECEIVED

314.3

.—Jan.

_______—

Fuels

Fertilizer

715,00®

299,000

OF MINES)—Month

August, 1909-July, 1914=100—As of Dec. 15:
Unadjusted—

217.2

3

.

Chemicals

247,000

(DEPT.

;.

■

—

Building

2?7.4

3

———

-

238.4

-Jan.

Livestock

-

242.1

—Jan.

Farm products
Cotton

$235,775,00®

tMonthly average in year 1946.

NUMBER—U.

GROUP—1935-311=100:
3

36,232,00®

$247,149,000 $236,414,000

from mills (bbls.)___
end of month) (bbls.)

(at

Capacity

375.6

COMMOD¬

Jan.

26,172,00®

42,364,000

October:

of

September:

Production

Shipments

PRICES

oils

PRODUCTS

recoverable

CEMENT
of

Month

Stocks

ASSOCIATION—WHOLESALE

30,640,000

38,527,000

BRADSTREET, INC.—Month of

Foods
Fats

BUSINESS

NEW

2.80

6

6

17,721,00®

ounces)

figure.

2.67

Jan.

Jan.

7,996,00®

17,795,000

(in fine ounces)— __—
(in short tons)

2.45

i

qqq

nfMl
35,899,00®

18,024,000

y

v:

short

3.17

INDEX

I\r\r\

34,205,000

of

fine

3.14

Jan.;

COMMODITY

on

7,269,000

—

short

(in

(in

2.45

——Jan.

1

30,167,000

7,609,000

pounds)

(in

Jan.

—_

rjn

36,261,000

WROUGHT

production

6

3.19

*

TO

LIFE

s.—

u.s.

6

2.95

Group

OF

—

(in

Copper

Silver

Baa

2,952,70®

October:

Jan.
...——

PAYMENTS

„

Jan.

.

451,50®

2,679,858

October:

__

OUTPUT (BUREAU

of

Bonds
—

626,273

434,387

$112,523,000 $108,179,000 $111,755,00®

Lead

———

of

1,077,83®

590,702

month

of

INSTITUTE

—

COMMERCE)—Month

METAL

120.22

V

end

1,025,089

499,766

tons)—

values

Shipments

AVERAGES:
_

MOODY'S

\ 1,154,192

654,426

at-

BENEFIT

—

dividends

MAGNESIUM

117.80

Jan.

Utilities Group
Industrials Group

7,441,00®

COM¬

__r_

(short

use

sale

for

payments

Surrender

110.34

6

Jan.

—

OF

2,668,781

own

Gold

Railroad

15,064,00®
7,623,00®

7,917,000

119.61

108.88

102.96

Jan.

—_—;____

Public

*7,881,000

payments

Annuity

121.25

103.30

■_

*15,798,000

7,938,000
7,894,000

—

117.00

115.82

(DEPT.

tons)—

endowments

Total

Utilities

Govt.

253.9

15,832,000

benefits

Disability

'

AVERAGES:

Industrials Group

8.

328.1

302.4

^

tons)

Matured

10.500c

109.60

U.

*372.2

304.5

379.6
—

manufac¬

tons)____—

INSURANCE

Death

12.350c

Dec. 31

at

Average corporate

173.®

October:

(short

orders

(short

19.675c

94.000c

—

Aaa

292®

—

INSURANCE—Month

Dec. 31.<

.DAILY

130.®

*336.9

149.®

■

——

of

POLICYHOLDERS
21.200c

at

YIELD

138.7

v

———

(short

producers'

Unfilled

$31.17

Dec. 31

Bonds—

BOND

in

—

Month

sale

LIFE

Jan.

MOODY'S

*179.4

138.1

?

__v_—
—;

CASTINGS

IRON

For

$30.14

Dec. 31

Aa

Public

*156.6

180.8

*6,477,000

■

employees

goods

For

2.83599c

$37.06

:

DAILY

GRAY

.

3.18925c

—Dec. 31
—

.

Railroad

156.9

341.6

of

goods

Non-durable

yy

1
-

:

corporate

6,352,000

"
_~i——

manufacturing „*

Durable

Shipments
;

$38.39

•

;

PRICES

38

/:■

'v;

at

Louis)

BOND

58

Dec. 30

at

Louis)

1

s;y.'7#-'-

Aaa

/

; " All

.

Dec. 30

-

York)

York)

(East

MOODY'S
;

(New

(New

Lead

4,868,011

Dec. 30

J.

*12,829,000

'

V''•

goods
goods

number

12,253,00®
6,281,00®
5,972,00®

12,854,000
6,528,000
•6,326,000

______

—

goods

manufacturing

MERCE)

PRICES:

Electrolytic copper—
Domestic refinery at
Export refinery at—

DEPT.

workers- in

indexes—\

Durable

,

'

(per lb.)
Pig iron (per gross ton)
Scrap steel (per gross ton)

Lead

3

BRAD-

&

Finished steel

METAL PRICES

S.

96,332,00®
10,216,00®

turing industries—
-Jan.

.

AND

INC.

45,872,000

231,017,000

—

October:

production

manufacturing
goods

Payroll

-

106,548,00®

.—

—

RESERVE
-

$352,85!j 00»
246,307,00®

249,972,000
204,100,000

86,670,000

number

Estimated

kwh.)__

(COMMERCIAL

of

144,347,000

——

Employment indexes^—
All
manufacturing
___'—
Durable goods
—__—£
Non-durable
goods
—

818,000

103,500

/1,218,000
•
142,800

1,057,000

Dec. 27

-

STREET,

$12,511,00»

—$503,384,000 $474,357,000
224,385,000
272,367,000

—___________

Non-durable

t.

$21,332,000

Municipal

LABOR

All

BDISON ELECTRIC INSTITUTE':

FAILURES

3,202,00®

•y:manufacturing industries—

.

■

1,074,000

_——

Estimated

9,508,000

Dec. 27

-

:

(in 000

136,00®

505,000

EN¬

—

RECORD —Month

Construction

Non-durable

(tons)-

(tons)—

Electric output

392,00®

2,301,000

$16,345,000

Construction

EMPLOYMENT

'

//V

DEPARTMENT STORE SALES
INDEX—FEDERAL
SYSTEM—1905-39 AVERAGE—J00

-

289,00®

2,289,000

537,000

CONSTRUCTION

Durable

OF

$8,492,00®

2,321,000

—

Construction-——;

Federal
Jan.

Federal
COAL OUTPUT

$13,337,000

;

service liabilities

S

State^

Jan.
;

$12,574,000

...

liabilities

Private

r-'-';:;■".:"■ ■

municipal

10*

—

ENGINEERING

Total

NEWS

.

construction

State

la

336

.—

December:
Dec. 27

(number of cars)-.

Total U. S. construction
Private construction
•

a

29

—-

liabilities

GINEERING

(number of cars)

CONSTRUCTION,

RECORD:

;

3#

25

-

23

313

—

17,338,000

Public

CIVIL

129

'

1,198,000
1,531,000

liabilities

Wholeesale liabilities
Retail liabilities

RAILROADS:

Revenue

25

:

_

52,922,000

2,113,000

CIVIL

ASSOCIATION

55

26

115

3®

98

124

—

15,556,000

6,382,000

Ago

i

——-

—

service, number.
number
1

Total

Year

Month

—

_.

Commercial

Construction

——Dec. 27

:

(bbls.)

4,713,200

5,257,250

Previous

BRADSTREET,

November:

of

number

Construction number

5,285,440

&

Manufacturing number
Retail number

Dec. 27

Finished and unfinished
gasoline
Kerosine (bbls.) at
*
and

1,686,900

Dec. 27

output
(bbls.)
;

refineries, at bulk terminals, in

oil

1,708,600

Dec. 27
L

fuel oil

Stocks at

Residual

Latest

i 90.3

Dec. 27

of that date):

are as

Month

97.7

;__Dec. 27

_•___

fuel

Gas

•

9G.4

J.*

Residual

oil

t

of quotations,

cases

Ago

Ago

97.9

Jan. 11

output—daily average (bbls. of 42 gallons
each)
to
stills—daily average (bbls.)
;

and

in

or,

Year

Month

Jan. 11

(net tons)

INSTITUTE:

output (bbls.)
Kerosine output
(bbls.)
.

Week

.

.

capacity)

Crude runs

Gasoline

Previous

that date,

on

Wholesale

PETROLEUM

Crude oil

month ended

INC.—Month

Steel ingots and
castings produced
AMERICAN

■
.

(percent of

or

Week

'

"*

-

steel operations
Equivalent to—

production and other figures for the latest

Latest

AMERICAN IRON AND STEEL
INSTITUTE:
Indicated

cover

either for the week

are

projects

29,486,338
1,336,568

taxes

20,381,450

3,739,746

42,535,502
•2,496,005

51,343,346

40,039,491

29,578,939

28,441,182

1,354,223

1,139,580

30,738,444,,

5,798,42®

appropriations:

On

common

On

preferred

stock

Ratio of income

stock
to

9,676,324

—_____

_———-V4i4"

fixed

charges

—

17,280,446

15,161,928

1,189,238

4,318,989

399,184

1.64

2.51

2.1®

•;

46

of

cratic values, we can

(Continued from first page)
which

divide

but

us

system, and
tions

for

our

the

security

of

upon

future

the

welfare

people

fear

United

States

been

The
are

we,

able

as

of

strength

our

They include

many.

dem¬

our

ocratic government, our economic

system,

our

sources.

But

great
these

natural

dignity of
he

was

par¬

in

the

We believe that
image of the

man.

us

all.

We do not believe that

men

ex¬

ist merely to strengthen the State
to be cogs

or

chine.

We

ernments

in

do

are

an

economic

believe

ma¬

that

created to

gov¬

serve

the

people and that economic systems
exist

We

minister

to

have

to

their

care

pushed back, and our great
were built by men who

I propose

that we look ahead to¬
day toward those goals for the fu¬
ture
which
have
the
greatest

created in the

Father of

by those with vision.
Our
formed, our frontiers

was

looked ahead.

strength
a people

is spiritual. For we are
with a faith.
We believe

The heart
must be a national
payment for medical

tional health program.

industries

tial explanations.
The basic source of our

planning
great na-

system

were

re¬

only

are

our

wants.

profound devotion to
the welfare and rights of the in¬
dividual as a human being.
The faith of our people has par¬
ticular meaning at this time in
history because of the unsettled
and changing state of the world.
a

of

based

tional

confident in the thought democracy is to provide an ade¬
clear
objectives and quate education for every person.
Our educational systems face a
with firm determination, we can,
in the next 10 years, build upon financial crisis.
It is deplorable
the accomplishments of the past that in a nation as rich as ours
decade to achieve a glorious fu¬
iiere are millions of children who
ture.
Year
by year, beginning do not have adequate schoolhouses
now, we must make a substantial
or enough teachers for a good ele¬
part of this progress.
mentary or secondary education.
Our first goal is to secure fully If there are
educational inade¬
the essential human rights of our quacies in any state, the whole na¬
citizens.
'•
tion suffers. The Federal Govern¬
States

United

deep

a

always

cific steps

vigorously

ural

wealth

is

We need

against

accurate

those

efforts

and

and to

to

must

develop

land

to

who

As

examine the state of

we

viewing it on a basis of the ac¬
complishments of the last decade

goals for the next.
How
far have we come during the last
our

10 years

and how far can
during the next 10?
It

we

mankind became appar¬
The
years
that
followed

upon

ent.

brought untold death and destruc¬
tion.

jl,

We shared in the human suf¬
of the war,.but we were

fering

fortunate

of

war's

able

our

We

destruction.

most
were

strength of

the productive

farms and factories.

More

new

these

courage

and

the. ideals of

racy.

brought

years

new

our

intensify our
supplies

new

scarce

protect and restore

expand

our

reclama¬

bring millions of
of arid land into production,
to improve water supplies for

In

free

Wants

erected

justice was reinforced in the

foundations

social

legislation.

security
of

millions

citizens

our

which

come

can come

with

civilian

to

now

of in¬
unem¬

,

of

Over

life.

2,000,000

being helped through

veterans are

Millions have been aided

finding jobs, and have been
in buying homes, in ob¬
taining medical care and in ad¬

while

helped

themselves

Many justing

are

protected against the loss

to

physical

handicaps.
All but

a very

successfully

few veterans have

transition

the

made

ployment, old age, or the death of from military life to their home
wage-earners. Yet our system has communities. The success of our
gaps

and inconsistencies; it is only veterans'
this fact.

half finished.
We

should

ployment

now

extend

compensation,

unem¬

old age

benefits, and survivors' benefits to
who
We

tected.

are

not

now

the

to

by

proved

This nation is proud of

eagerness

erans

is

program

shown by our vet¬
self-reliant and

become

y
our

tion's

proud

Program

structure is the

security

provision
We

health.

of

the

high

care we

for
are

and

-our

sharing

eco¬
more

and

third
our

use

na¬

of

know how to pro¬

to

conserve
so

contribute most ef¬
the

welfare

of

our

The

to

resources

this

tensive.

country

given by nature
are

rich and

ex¬

The material foundations

con¬

average

Price Supports for Farm Products

this

To

end

farm

our

prograih

should enable the farmer to
ket his varied

levels and
ard of

to

improve his stand¬

living.

We need

mar¬

at fair price

crops

;

•

,

'{

to continue

price sup¬
ports for major farm commodities
on

basis which will afford

a

sonable

protection

tuations

in

tion

support

must be
modernized,

program

and

re-examined

fluc¬
produc¬
present

The

demand.

"and

price

rea¬

against

levels of

the

should
strengthened and its benefits

be

insurance

Crop

tended

in

the

protect

to

order

ex¬

farmer

against the special hazards
to which he is subject.
'
We also need to improve the
for

means

the

into

hands

and

this

directly

or

indirectly
be

must

purpose

the

into

Co-opera¬

consumers.

tives which
serve

products

getting farm
markets

of

en¬

discouraged.
The
school lunch program should be
continued
and
adequately
fi¬
couraged—not

nanced.
We need to go

forward with the
program
to

electrification

rural

bring the benefits of electricJy to
all our farm population.
We can,
courage

soil

and

must, aid and en¬

farmers to conserve their
and restore the fer¬

resources

of land that has suffered
from neglect or unwise use, ■]

tility

All of these

are practical meas¬
which we should act
immediately to enable agriculture
ures

upon

make

to

its

contribution

full

to

prosperity.

our

Industrial

More

We

must

also

Capacity

strengthen

our

economic system

within the next
by enlarging our indus¬
trial capacity within the frame¬
work of our free enterprise sys¬
decade

tem.

'•*

We

today far short of the

are

industrial capacity we need for a

dustry to improve and expand our
productive facilities over the next

The

...

thirds.
The average

income of our peo¬

ple, measured in dollars of equal
purchasing power, has increased
—after taxes—by more than 50%.
In
no
other
ten- years have
businessmen

farmers,
earners

and

wage

made such great gains.

not be able to expand

rapidly in the next decade as
the

last,

because

full

we

are

now

employment

from

and very

high production. But

can

increase

our

we

annual output by

few

But this is only the
The industrial appli¬
cation of atomic energy and other
years.

beginning.
scientific

advances will

constant¬

ly open up farther

opportunities
for expansion.
Farm prosperity
and high employment will call for
an
immensely increased output
of goods and services.
'- *
•»
Growth
economy

and

vate enterprise.

is the key to

in '

vitality

depend

on

our

vigorous pri¬

Free competition

industrial develop¬

ment, full production and employ¬
ment, fair prices and an ever im¬

proving standard of living.

Com¬

petition is seriously limited today
in

industries

many

by

the

con¬

at least one-third above the pres¬

centration of economic power and

ent level. We can lift our standard

other elements of monopoly.

of

people.

rightly

standards

to

is

$779,

was

an

growing future. At least $50,000,000,000 should be invested by in¬

goods we produce.

starting

natural resources

that they can

lack of fectively

the

goal

people
with

trasted

amazing economic progress
of the past ten years points the
way for the next ten.
Today 14,000,000 more people
have.jobs than in 1938.
ty
Our yearly output of goods and
services
has increased by two-

people

our

in

Be

have

the

among

as

greatest gap in our socia

adequate

system

We may

Resources to

Natural

should also raise the

Health

strengthening

by

broadly

pro¬

Our

The

ple

nomic

self-supporting citizens.

level of benefits.

renewed confidence in demo¬ medical




12 years we have
framework of

sound

a

in

forces

armed

the

World War II have now returned

school.

Security

Social

Expanded

democ¬

greatly strengthened economy and
our

j

in

°erved

Conserved
us

Our deep belief in freedom

the

hous-

ing.

sible

confidence

crucible of war...
On

social security and

cation,

millions

important, however, is the

that

fact

and

escape

through these 10 years to ex¬

pand

in

enough to

equality can be given specific
meaning in terms of health, edu¬

Over the past

was

war

land.

go

10 years ago that the- de¬
termination of dictators to wage
•

our

our

Union today, we can benefit from

and

in

farmer
before,

whole

a

as

ever

income
of
$1,288 for non-farm people.
Within the next decade, we should
eliminate elements of inequality
in these living standards.

tion program to
and

families

farm

of

acres

crisis.

average

only begun to catch up with the
standards of living enjoyed in the
cities. In 1946 the average income

—

must

the

better off than

now

farm

public and private
through combating erosion and
rebuilding the fertility of the soil.
We

^bsorb a

tyv-

;•/;

We need
our

industries

our

production, will

Although

compre¬

acquire stockpiles of

materials.

American family,
of

levels.

ent

hensive knowledge of our mineral
resources

every

needs

the

farm output well above our pres¬

nat¬

and

for

full

at

addition, we must make pos¬
additional millions of acres. This
greater equality of oppor¬
Any denial of human rights is a tunity to all our citizens for an will provide new opportunities for
particularly
denial of the basic beliefs of de¬ education. Only by so doing can veterans and others
in the West, and aid in providing
mocracy and of our regard for the we insure that our citizens will be
a
worth of each individual.
rising living standard for a
The victims of war in
capable, of
understanding
and
many
Today, however, some of our sharing the responsibilities of de¬ growing population.
lands are striving to rebuild their
We must protect and restore ou1
citizens are still denied equal op¬ mocracy.
lives and are seeking assurance
forests by sustained-yield forestry
The Government's programs for
that the tragedy of war will not portunity for education, for jobs
and by planting new trees in area's
and economic advancement, and
occur
health, education and security are
again.
Throughout
the
now jslashed
and barren.
world new ideas are challenging for the expression of their views of such great importance to our
We must continue to erect mul¬
Most serious of all, democracy that we should now
the old. Men of all nations are re¬ at the polls.
some are denied equal .protection
establish an executive department tiple-purpose dams on our grea*
examining the beliefs by which
rivers—not only to reclaim land
under our laws. Whether discrim¬
for their administration.
they live. Great scientific and in¬
but also to prevent floods, to ex¬
ination is based on race, or creed,
dustrial
changes have
released
tend our inland waterways and
More Homes Needed
new forces
which will affect the or color, or land of origin, it is
to provide hydro-electric power.
utterly
contrary
to
American
Health and education have their
future course of civilization.
This public power must not be
; *
The state of our Union reflects ideals of democracy.
beginning in the home. No matter
monopolized
for
private
gain
the changing nature of the mod¬ : ' The recent report cf the Presi¬ what our hospitals or schools are
Only
through
well-establishec
dent's Committee on Civil Rights like, the
ern world. - On all sides there is
youth of our nation are
polfoies of transmitting power di¬
heartening evidence of great en¬ points thfe way to corrective ac¬ handicapped
when
millions
of
rectly to its market and thus en¬
tion by the Federal Government them live in
ergy—of capacity for economic
city slums and coun¬
couraging wide-soread use at lov
and by State and local govern¬
development— and even more im¬
try shacks. Within the next decade
rates
can
the Federal
Govern¬
ments.
Because of the need for
we must see that every American
portant,
capacity
for
spiritual
ment assure the people of thei1
effective Federal action, I shall
growth.
But accompanying this
family has a decent home. As an
full share of its benefits.
Addi¬
send a special message to the Con¬
;mmediate step we need the longgreat activity there are equally
tional power—public and private
great questions—great anxieties— gress on this important subject.
range housing program which I
—is needed to raise the ceilings
We should also consider our ob¬
great aspirations. They represent
have recommended on many occa¬
now imposed by power shortage?
the
concern
of
an
enlightened ligation to assure the fullest pos¬ sions. This should include finan¬
on industrial and agricultural de¬
sible measure of civil rights to the
people that conditions should be
cial aids designed to yield more
people of our territories and pos¬ housing at lower prices. It should velopment.
so arranged as to make life more
We should achieve the wise use
sessions.
I believe that the time
worth while.
provide public housing for low- of resources
through
the inte¬
has come for Alaska and Hawaii
income families, and vigorous de¬
grated development of our great
Basis for True Freedom and
to be admitted to the Union as
velopment of new
technics to river basins. We can learn much
States.
Opportunity
/
lower the cost of building.
from our Tennessee
Vallev ex¬
Our second goal is to protect
We
must
devote
ourselves to
Until we can overcome the pres¬
perience.
We should no longer
finding answers to these anxieties and develop our human resources. ent drastic housing shortage, we
delay in applying the lessons of
The safeguarding of the rights
and aspirations. We seek answers
must extend and strengthen rent that vast
undertaking to our othei
which will embody the moral and of our citizens must be accom¬
control.
great river basins.
spiritual elements of tolerance, panied by an equal regard for
We have had, and shall continue
unselfishness
and
brotherhood their opportunities for develop¬ to have a
Seeks Higher Living Standards
special interest in the
ment and their protection from
upon which true freedom and op¬
welfare
of
our
veterans.
Over
Our fourth goal is to lift the
economic insecurity.
In this na¬
portunity most rest.
tion the ideals of freedom
and 14,000,000 men and women who standard of living for all our peo¬
realities

cherished

full

and

We

our

high and when there
employment. 1 Adequate

are

earners

diets

would misuse it for selfish gain.

viding financial aid to meet this

soeech and freedom of thought are

goal.

whole econ¬

as our

and prospers.
The
sell more food at good

prices when the incomes of wage

use

is

defend

only

farmer can

take spe¬

this

toward

must

,

abundance

grows

omy

without destroy¬

resources

our

responsibility for pro¬

ment has a

for human
freedom, free

concern

Religious

rights.

has

achieved

na¬

do to make

We must continue to

with

The

had

our

* v< ■ \
prosperity and
.wdl be

Permanent farm

resources

of

forward to¬

move

/'

,.*

agricultural

future.

I do so,

that

gether.,

we

know how to

we

of

preservation

agriculture, business

To-do this,

and labor must

strength.
are doing far less than

Yet

Another fundamental aim of our

people.

our

eration.

ing them.
Both the public and
principles. This great nation can¬
private use of these resources must
not afford to allow its citizens to
have, the
primary objective of
suffer needlessly from the lack of
maintaining and increasing these
proper medical care.
basic supports for an expanding
Our ultimate
aim must be a

comprehensive insurance system
bearing upon the foundations of to protect all our people equally
our democracy and the happiness
against insecurity and ill-health.

of

the

and

these

of

conservation

well-tried insurance

on

stamping out poverty in our gen¬

ing to appreciate more each day
the close relationship between the

of the program

a

to work

elements

upon

Yet

tained

become

people,
together
for great objectives even
while
differing about details.
have

distrust

and

donal achievements have been at¬
union

because

great

has

who look with

some

are

for the future.

the

United States.
The

is, however, that most of our
cannot afford to pay for
the care they need.
I have often and strongly urged
that this condition demands a na¬

Must Plan for Future
There

and

of

The

I teopie

aspira¬

common

States.

United

the

in

fields, the wealth of .our mines
and forests, and the energy of our
waters. As a nation, we are com¬

fact

forward.

move

those
which bind us together—the en¬
during principles of our American

vide

continue to

growth and economic de¬

our

velopment are the bounty of our

Higher Taxes on Business

Truman Urges

Thursday, January 8, 1948

CHRONICLE

FINANCIAL

&

THE COMMERCIAL

(142)

living to nearly double what it

was

If

ten years

to

ago.

we' distribute

properly,

we

can

go

these

gains

far toward

The

appropriation of sufficient funds

the

permit

proper

enforcement of

present anti-trust laws is

sential.

Beyond

that we

es¬

should

Number 4662

Volume

167

gb

strengthen

to

on

legisla¬

our

e.forts toward world

Well

" "

Being of Wage Earners

Another

strong

basic

element

economic

well-being of

of

system

wage

is .the

being of workers depends on high
production and consequent high
employment.
We
have
learned

equally well that the welfare of
industry and agriculture depends
on high incomes for our
workers.
The

Government

chosen to set
But

has

75

cents

hour.

an

price, profit and wage relation¬
ships and with increasing product¬
ivity.
The Government's part in la¬

act

of

cieac

1947.

to

I

made

minister

it.

attitude
veto mes¬
June-.

duty to ad¬
:

/

look

ahead

the

we

crucial

'

-

we

can

of

is

We

>

un¬

also

with

greater

urgent relief needs

impor¬
provision for

training.

There

na¬

nomic

speed

in
many
be achieved

can

leader-

^No nation hy itself
programs

to

can

carry

success;

ties

countries.

Yet

inevitably

they

ours,

the creation

peaceful
nations.
;

relationships
:

:

and

participating
leadership is

the

I consider if of
the

highest im¬
portance that the Congress
should
aid to Greece and Turkey to assist authorize support for the European
,

,

recovery

Had

integrity of - those countries will
have £ powerful effect upon other

1952, with an initial amount for
the first fifteen months
of $6,800 000,000. I urge the Congress to
act promptly on this
vital meas¬
ure of our
foreign policy—on the

also, deny the necessities of life to

nations

decisive

the

Europe struggling to maintain their

pnportance

*qf restraint and wisdom in arriv-

ipg

at

.

labor-management

new

these

nations

in

it not been for

contracts.; Work stoppages would

situation,

result

radically different.

loss

in

which

prices for

of

production—a

could

our

bring

higher

citizens and

could

hard-pressed peoples of other

lands.
the
of

loss

a

It is my sincere hope that

representatives

of

labor

and

industry will bear in mind that

the

nation

as

stake in the

whole has

a

vital

a

of their bar¬

success

gaining efforts.
If

:

to

current

our

difficulties

ahead

we

can

eco¬

move

great increase in

a

our

national income which will enable

all

people to enjoy richer and

our

fuller

lives.

All of

must advance together.
One-fifth of our families now have
.

us

annual

average

than $850.

incomes

We must

of

less

that

see

gains in national income

our

made

are

largely

available to those
with low incomes, whose need is
more

greatest.

This will benefit

all

us

through providing a stable foun¬
dation of buying power to main¬
tain prosperity.
/ Business, labor, agriculture and
government,
working
together,
must develop the policies which
Will make possible the realization
of

the

full

benefits

of

nomic system.
*

Problem

Our
world
of

fifth

freedom

'eco¬

our

world

of World

is

based
and

Peace

achieve

to

principles

on

justice

have

wars

cannot,

the

and

taught

that

us

isolate ourselves from

tjie rest of the world.
.

.

We

have

learned

freedom

of

world

means

independence
5

The

in
a

The continued

Middle

while

United

that

the

loss

any - area of the
loss of freedom to

ourselves—that

be

Bast

they

and

repair

countries in which

loss

inde¬

of

and

,

blocked.

been

continue

to

exert

But

we

of

of

States.

again urge
suitable legis¬

its

do

share

all

faiths.

We

_7, Y;/7 1/V'/ v'"'v

•

moving toward our goal
of world peace in many ways. But

small

all-else,
a

we

are

concord

war.

restore

which

the

based

upon

dignity of the individual

can

go

and

ralysis
tries/"'

to

world

trading system
by the war
remedy the economic pa¬
which grips many coun¬

/.''

war.

forward with confi¬

nations, which will

toward
■

great

our

goals

nomic, social and

moral

lead

for

us

eco¬

achieve¬

ment.

Inflation; Major

To restore world trade

we

have

recently taken the lead in bring¬
ing about the greatest reduction
of world

As

tariffs that has

enter

we

must
lem

the

surmount

which

That

new

one

affects

Pro

ever

any

The extension of the pro¬

our

of

is

try

undermining

goals.

inflation.

go on to

peace—that

trade

economic

distress

is

disease whose evil effects snread

Food

costs

too

the

much.

has reached fantastic

Schools

and

far

beyond the boundaries of the

afflicted nation.
For

these

to
on

obtain
a

we

reasons

the

United

Housing

are

in

fi¬

con¬

peace¬

depression, just

depression after the

unstable boom following the first
war.

Recovery

Program

must

I

high cost of living.

time

the

shortest

the

wil

Congress

make available to the Government
the weapons that are so

desper¬
ately needed in the fight against

As

do

we

high

determined

of

that

this

are

shall

nation

Surplus

in

stature

and

to

control

the

in

revenues

We

take

of

his

his

place

nation's

determined that the pro¬
of the nation

are

ductive

resources

shall be used

wisely and fully for

the benefit of all.

determined

are

strength of

that

the

people and
resources shall

our

our

contribute their full share to the
attainment
the

expenditures.

over

have

destiny.

the

inflationary factors in our economy
today is the excess of Government

every

equal right and an equal op¬
portunity to grow in wisdom and
an

We

Budget

ever

purposes.

democratic faith of

Cites

chosen

our

sb, let us keep

us our

We

inflation.

One of the most powerful anti-

position to

a

goal.

our

stop the spiral of in¬

shall be in

forward toward

move

citizen

trust that within

possible

Government

Day

of

enduring

in

peace

world,

It is

that the Congress was
being called
into

expenditures have

Federal

faith in human

our

dignity

session, I described the price

people.

expenditures have
been sharply reduced. They have

selves of these fundamentals.

been cut from

today the whole world looks to

more

than

000,000 in the fiscal
less

$63,000,1946 to

year

This

for

than

$38,000,000,000 in the
present fiscal year. The number of
civilian

employees has been cut
nearly in half from 3,750,000 down
to 2,000,000.
%
On the other

hand, Government

must not be reduced. Un¬

revenues

til inflation has been stopped there
should be no cut in taxes that is
not offset

point in

Certain
made

is

time

a

to

remind

leadership.

This

is

For
us

V
hour

the

our¬

to

rededicate

ourselves to the faith in mankind
that makes

This

is

strong.

us

the

hour

to

rededicate

ourselves to the faith in God that

gives

confidence

us

challenge of the

face the

as we

ahead.

years

by additions at another

Detroit Ellison Stock

tax structure.

our

adjustments

within

should

be

existing

our

tax

Oversubscribed

structure that will not affect total

receipts,
pay

adjust

the

have

their

burden

by the transfer of

les¬

portion

a

The First Boston

tax

that those least able to

so

will

sened

will

yet

of it to those best able to
pay.y

Many of our families today are
suffering hardship because of the
high cost of living. At the same
time
profits
of
corporations

ager

Corp.,

of the group that

shares

a

as man¬

won

450,000

Co.

capital

Detroit Edison

stock in

competitive sale Jan. 6,

announced Jan. 7 that the
has

been

and

offering

the books closed.

heavily

The group

all-time record in 1947.

an

oversubscribed

bid $19.06

share for

a

the stock and reoffered

it

to the
Corporate profits totaled $17,000,000,000 after taxes. This compared public at $20.50.
with $12,500,000,000 in 1946, the
Immediately following the clos¬
previous high year.
ing of the books on Jan. 7 the
Wants

Higher Corporate Taxes

Because

of

this

extraordinarily

high level of profits, corporations
can well afford to carry a
larger
During this period in which the
high cost of living is bearing down
on
so
many of our families, tax
adjustments should be made to
ease

their burden. The low-income

particularly is being pressed
hard. To this group a tax
adjustment would result in a sav¬
ing that CQuld be used" to buy the

group

stock

I recommend therefore

fective Jan. 1,

1948,

that, ef¬

cost of liv¬

a

ing tax credit be extended to
people consisting of
each

individual

a

our

credit of $40

taxpayer

$21.25

at

per

The seller of the shares at

petitive sale

was

com¬

American Light

& Traction Co.

Carl M. Trotte Sales

Mgr. for Tellier & Co.
Tellier
way,

that

&

New
Carl

Company, 42 Broad¬
York

M.

City,

Trotte

associated with them
of

the sales

announce

has
as

become

Manager

department.

He

was

formerly with First Colony Cor¬

poration.

and

additional credit of $40 for each

dependent. Thus the income tax of
a

quoted

was

share.

very

man

with

wife and two chil¬

a

dren would be reduced

credit

would

taxpayers,

be

but

Buy U.S.Savings Bonds
REGULARLY

$160. The

extended

it would

to

all

be par¬

ticularly helpful to those in the
low-income group.
It is estimated
credit

would

revenue

such

that

reduce

the

tax

a

Federal

by $3,200,000,000. This

re¬

duction should be made up by in¬

creasing

the

profits in

When I announced last October

Europe

Our present major effort toward

ful and prosperous world.

a

duct in international trade.

following pol¬
a

had

worldwide

code of fair

be

not

flation.

an

Inflation threat¬

threat of another

world

icies designed to achieve

We

living

Worst of all, inflation holds the

organization, through which

agreement

<

States is vigorously

support the international

hope

must

with the

once

to

price levels.

hospitals

nancial distress.

as
we

prices

of rationing.

a

struc¬

have conquered infla¬

we

we

before

We must deal effectively and at

coun¬

of

world economy is essential to world
a

High
means

we

major prob¬

all

is the problem

year,

Already inflation in this

oc¬

curred.

i

made

necessities of life.

standards of millions of families.

v'7\*

have

share of the tax load at this time.

man.

we are
following sound
policies, both at home and with

other

shattered

was

to

re¬

17

essential.

the

among

dence that

important efforts which
now
making are those

which support world economic
construction. We are seeking

When

tion,

clearer that all 10 points are

even

striving

are

are

and

world

-

oeoples of the world

in

mission of these persons will add
to the strength and energy of this

nation. '■

Nov.

on

reached

may live free from the fear
/ -

We

believe that the ad¬

I

war.

building toward a
nations, large and

achieve

the

in

fighting poverty, hunger

This leads to peace—not

caring for
homeless and suffering refugees of
may

to

con¬

course

determination to
V;

the brotherhood of

the Congress to pass
lation at once so that this nation

sound,

a

our

aggression.

Above

displaced

I

world

This leads to peace—not

•

still living in camps over¬
should be allowed entry into

seas,
the United

are

alike,

ef¬

persons,

30,

suffering.

where all

j

thousands

Many

to

practical

peace.

shall

utmost

our

following
and

are

We

so

forts to obtain satisfactory settle¬
ments for each of these nations,

June

This leads to peace—not

reach* agreements on peace settle¬

far

are

We

forces: Germany
Austria,
Japan and Korea. Our efforts to

ments for these countries have

period

the reciprocal trade ens to bring on disagreement and
natioif adds di¬
rectly To the .insecurity of the agreements act, which made this strife between labor and manage¬
Achievement - possible, is of ex¬
United States and all free nations.
ment,ri </, "■
treme importance. We must also
We have leqrned that a
healthy

pendence by

gress

burden

We

achieve

occu¬

visions

the

,

carrying out

has

have

to

contribution

structive

we

1948.

the

peace.
•

war.

States

for

program

AprU l,

.

special
responsibilities with respect to the

we

equality of all nations.
Twice within
our
generation,
we

the

the damages of

the most

-

goal

peace

in

from

aid, their

mightwell

pation

surmount

we

nomic

today

our

10-point

my

anti-inflation program to the Con¬

We have been giving substantial

preserving their
integrity against foreign pressures.

derstand

presented

tax

and vital

depend upon the co-operative
honest efforts of all

lasting

I

entire

our

ture.

The events which have occurred
since

of

been and must continue to be held

"The United States is engaged to¬
ddy'^ ih many international activi¬

among

up

sider tax reduction based upon
revision

to the lowest safe levels. Since V-J

we
will go forward with
efforts to oversome economic
paralysis; '
v
-

;

of

rate

that underlies these purposes.
It
is this faith that keeps us a strong

these

toward

annual

an

prices have gone
at an.annual rate of 10%.

our

security of this nation and

directed

at

up

Retail

47

ences

date is of world importance. I am
convinced that such action is vital
its

to

through co-operative effort
among
nations. In spite of
these differ¬

A favorable de¬

of

reconstruction

of the world

areas

training should be the founda¬

the maintenance

and

Unfortunately, not all govern¬
ments share the hope' of the
peo¬
ple of the United States that eco¬

are

balanced

a

cision by the Congress at an early

to

work

reconstruction, will be submitted
to the Congress. *

elements in

to the

to

nations in achieving world,
economic recovery. We shall con¬
tinue our co-operation with the
nations
of
the
Western
Hemi¬

sphere: A special program of as¬
sistance
to
China,
to
provide

early

tion for them all.

intend

gone

18%.

(143)

other

notable step

a

even

the

eco¬

spair will be a moral stimulus to
the entire world.

Conscription

was

of

areas

ability of free
hunger and de¬

to overcome

the

to

^

Favors

to

have
of

men

world, we
strong armed
-

universal

.

this

•

re¬

tional security program, all inter¬
related and necessary, but univer¬

my

out my constitutional

opposition

'

forces.

sal

-

•

many other
nomic distress. The

arma¬

there

as

peaceful

a

maintain

many

Nothing has occurred since to
change my opinion of this law.
As long as it remains the law of
the; land, however, I shall carry

As

serious

of

tance-

relations

this act in my
the Congress last

on

sage

mains

ideals

consider

bor-management relations is now
largely controlled by the terms of

labor-management

long

so.

efit

in
providing for the security of this
country. A further step which I

ent with the maintenance of sound

the

Yet

last session

general, however, we must
continue to rely on our sound
sys¬
tem of collective bargaining to set
wage
scales.
Workers'
incomes
should increase at a. rate consist¬

extend

to

economy is strengthened, the prod¬
uct of its industry will be of ben¬

curity Act by the Congress at its

In

<

force

The passage of the National Se¬

inadequate and obsolete. I recom¬
mend lifting the minimum
wage
to

effective

an

nations will decrease their
ments.

a

States

CHRONICLE

I want to reaffirm
my belief in

for world peace only if it is strong,
We look forward to the day when

floor under wages.
40-cent minimum wage is

our

be

can

wisely

TJnited

.

FINANCIAL

mutually supporting* the soundness and promise of this
believe
that 'the ^United proposal? *41 When
the
European

States

must

&

support.

and

We

a-

We have learned that the well-

•

and

These

related

earners.

the

economic;re¬

the revival of,.world
actions are closely

covery

trade.

tion to protect competition;""

THE COMMERCIAL

.

duce

an

this

tax

on

corporate

amount that will pro¬

sum—with

appropriate

adjustment for small corporations.
This is the proper method of tax

"

We

giving, and will con¬
tinue to give, our full support to
the

are

United

Nations.

While

organization has encountered

that

am

success.

confident of ^jts ultimate

We are also

devoting




increases

port the program for" recovery de¬

since

June, 1946. Wholesale prices

to those who need it most without

increased

cutting

veloped

"

which

our

rope.

In

had

taken

by

the countries of Eu¬

had

my

recent message to the

place

prices had increased 23%.

un¬

foreseen and unwelcome difficul¬

ties, I

economic reconstruction is to sup¬

Congress,

I

outlined

the

reasons

why it is wise and necessary for

Since October

tinued

to

rise.

40%,

and

retail

the

total

It gives relief

tax

revenue

of

a&Z?'-

Ask where you

WORK

the Government.

prices have
Wholesale

relief at this time.

con¬

prices

When the present danger of in¬
flation has

passed

we

should

con¬

Ask where you

BANK

48

THE COMMERCIAL

(144)

CHRONICLE

FINANCIAL

&

Thursday, January 8, 1948

in
*

Acme

Broach Corp., Ann Arbor, Mich.
(letter of notification) .40,000 shares ($5 par)
Price—$5 a share. Underwriter—Dean W. Titus
and Co., Ann Arbor. To build factory, pay obligations

Dec.

All

working capital.
American

/

,

_

,

,

Industries,

Bankers

Insurance

of

Co.

•

'

«•

(letter of notification) 2,500 shares of class A""
common, 5,000 shares ($10 par) class B common, and 11,250 shares 8% ($10 par) cumulative pre-,
ferred. Price—$240 per unit, consisting of 2 shares of class
A, 4 shares of class B and 9 shares of preferred.-,. No
For

Into

insurance

•

fire

stock

capitalization

of

enter

to

company

\

business.

Apple Valley Building & Development Co., Long
Beach, Calif,
--r'
(letter of notification) 30,000 shares ($10 par),
A

Price

common.

—

$10

share.

a

Underwriter

Dec. 23

Welding Equipment Co., Phoenix, Ariz.

(letter of notification)

$100,000 of 6%

convert¬

ible sinking fund debentures and 2,000 shares of
$1 par
common. The debentures will be sold at $1,000 each and
the common at $8.75 each. Underwriters—Pacific Coast

Securities Co., San Francisco. To retire indebtedness and
for

working capital.

,

Armstrong Cork Co., Lancaster, Pa.

prices.

8

basis

only

Oct. 21

one

share

ceeds—For;

common

new

share held.

share
Price

of

for

new

each pre¬

common

by amendment.

for

Pro¬

construction and repayment of bank loans.
Power &

Light Co.

negotiated.

be

may

(1/22)

Dec. 19 filed 88,179 shares
(no par^ $4 cumulative pre¬
ferred. Underwriters
Smith, Barney & Co.; Kidder,
—

Proceeds—For property

Jan.

7

in

ratio

"Rights expire 3
will

be

to

of

stockholders

common

share

one

for

Arrow
N.

of

record

shares

16

held.

(EST) Jan. 21. Unsubscribed shares
publicly.
Price—102 %.
Proceeds—To

p.m.

offered

finance expansion program.
•

each

Nov: 10 filed 4,000

Cincinnati

Gas

&

Electric Co.

held.

Rights expire Feb. 2.

..

Price by amendment.

ceeds—To finance construction.

Pro¬

share.

Corp., Milwaukee, Wis.
Dec. 23 (letter of notification) 525 shares of 5% cumu¬
lative preferred ($100 par). Heronymus & Co., Sheboy¬
gan, Wis., is offering 90 shares on
its own account.
Price—$100 a share. For working capital.
Clinton

(la.)

Industries, Inc.
^
210,000 shares ($1 par) capital stock.
Underwriting—None. Offering—Shares are to be offered

Dec.

Working capital.

in

exchange for 300,000 shares of Obear-Nester Glass Co.,

•

V

i

\

Oct.

Beam

(James

B.)

Distilling Co., Chicago
Dec. 29 (letter of notification) 150,000 shares ($2 par)
common.
Price—$2 a share.
No
underwriting.
For
working capital.
•

Burwood

Products Co.,

Traverse City, Mich.

Dec. 29 (letter Of notification) 2,000 shares ($50 par) pre¬
ferred stock. Price—$50 a share.- No
underwriting. ; To
reduce indebtedness and for working capital.

\

California

Union

Insurance

Nov. 28 filed 99,700 shares of

Underwriter—None.

working capital.

V*

common

Price—$25
■

,

Co.,

a

share.

,

-

Francisco
stock (par $10).
San
„

Proceeds—For
; :
.

,

.

Cameron Aero

Engine Corp. (1/12-16)
"
(letter of notification) 101,000 shares of common
stock (par $1), of which 85,000 shares will be sold to
the public; 8,500 shares will be issued to underwriters

Coosa

River

4%

Newsprint Co.
common

(par $50). Under¬

Offering—Stock will be offered direct to

none.

public through directors and officers. Price, par. Proceeds
and operate mill for manufacture of newsprint
from Southern pine. Company also contemplates the sale
of $16,000,000 4% 1st mortgage bonds.

—Erect

Dayton

(Ohio)

Power & Light Co.

■

/

filed

5

Dec.

170,000 shares ($7 par) common. Under¬
writing—The common shares will not be underwritten.
Offering—The

common

shares will be offered for sub¬

scription by stockholders
each nine shares held.

on

the basis of one share for
supplied b,y amend¬

Price—To be

Proceeds—To finance construction program.

ment.

Dec. 29

as

additional

underwriting consideration and 7,500 shares

will be issued to American Die &

Tool Co. for invest¬

ment in return for

cancelling $15,000 open account for
machine tools. Price—$2 per share. Underwirter—R. A.
Keppler & Co., Inc., New York. To provide operating
funds, etc.
■
*•'/',
'

•

Canyon Copper Co., Yuma Ariz.
(letter of notification) 290,000 shares of capital
stock. Price—50 cents per share... Anticipate
making ar¬
rangements for sale of stock through agent.
For pur¬
chase of mining machinery and -for
development of
mining claims.

Dec. 26

Central

Chemical

Corp.,

,

Hagerstown,

Md.

Dec. 29 filed 254,682 shares ($10
par) non cumulative 6%
and 70,643 shares ($10 par)

stock

Class B stock.

non-voting common
Underwriters—To be sold through com-

Dee

Stores, Inc., Olean, N. Y. (1/12-16)
*Dec. 15 (letter of notification) 90,000 shares of common
stock (par $1)., Price—$3 per share. .Underwriters—
Willis E. Burnside & Co., Inc., and Otto Fuerst & Co.,
New York.
Purpose—Working capital.
De

Walt, Inc., Lancaster, Pa. (1/19-23)
110,000 shares ($2.50 par) common. Under¬
writer—Reynolds & Co., New York. Price—By amend¬
ment. Proceeds—Company is selling 20,000 shares and
the remaining 90,000 shares will be offered by stock¬
holders. The company will use its proceeds for plant
construction and for working capital.
5 filed

Dec.

Dogpaw Gold Mines Ltd., Toronto
22 filed 1,000,000 shares
($1 par) capital stock,
Underwriter—Tellier & Co.
Price—40^ per share. Pro¬
Oct.

ceeds—To

develop mining properties in Flint Lake
ity of Ontario.
•

Doman-Frasier
"

New

Jan.

6

stock

Corporate and Public Financing ;

None.

CORPORATION
New

Yorjc;^

Chicago and other cities

'

•

■

Pittsburgh
.

"

<

Offered to

basis

of

common

one

new

#




stockholders of record Dec. 16
share

for

each

seven

held.

on

the

Rights

expire Jan. 7, 1948.
Price—$12.50 per share. ■ Company
also plans to sell privately 50,000 shares ($100 par) pre¬

Proceeds—For new construction.

ferred $4.50 seijes.

Guyana Mines, Ltd., Toronto, Canada
26 filed

Nov.

-

X

; <

303,587 shares ($1 par) common. Under4
Price—50 cents a share. Proceeds—For

writing—None.

Chemical

Harshaw

initially will be offered for subscription by stockholders.
Unsubscribed shares will be offered publicly. Price by
amendment.

Proceeds—To

•

v

Phila. (1/12)
Jan. 2 (letter of notification) 3,700 shares of non-cumu¬
lative preferred stock (par $25) and 18,500 shares of
common stock
(par 50). Underwriter—A. W. Smith &
Co., Inc., Boston. Price—$25.25 per unit, consisting of
one share of preferred and five shares of common.
Pur¬
chase of laboratory equipment and facilities, working
capital.
......;,
„

lllinois-Rockford

Corp., Chicago
^
July 24 filed 120,000 shares ($1 par) common. Under¬
writers—Brailsford & Co., and Straus & Blosser, Chicago.
Price—$9.25 a share.
Proceeds—The shares are being
sold by four stockholders and represent part of the stock
the sellers will receive in exchange for their holdings
of four furniture companies to be merged with the regis¬
trant. The merging companies are Toccoa Manufacturing
Co. and Stickley Brothers, Inc., both Illinois corpo¬
rations, and the Luce Corp. and Stickley Bros. Institu¬
tional Furniture Co., both Michigan corporations.
In¬
definitely postponed.
Inter County

Purchase of inventory,

Postponed indefinitely.
3"> t'>]

t.i. 'J

Telephone & Telegraph Co.,

Fort

Myers, Fla.
Dec. 24 (letter of notification) 4,000 shares of 5% cumu¬
lative preferred stock. Price—$25 a share. Underwriter
—Florida Securities Corp., St. Petersburg, Fla. For prop¬
erty improvements.

•, /

Inc.
fund debentures.
York. ' Price to
be filed by amendment.
Proceeds—To repay bank loans
and for general corporate purposes including the financ¬
ing of new stores. Temporarily postponed
I *
Interstate

Department Stores,

Oct. 30 filed $5,000,000 15-year sinking
Underwriter—Lehman Brothers, New

Power &

Iowa

Light Co.

(2/2)

$6,000,000 first mortgage bonds, series dj
Underwriting—To be determined by pompetitive

Dec. 22 filed

1973.

Ml

II § ®i

Credit

writer—Reich & Co.. New York.

short-term bank in¬

Processes, Inc.,

High Vacuum

test

Electric Steam Sterlizing Co., Inc., N. Y.
Sept. 22 (letter of notification) 65,000 shares of commoB
stock J(par 10tf).
Price—65 cents per share.
Under¬

repay

debtedness.

(letter of notification) 10,000 shares of capital
Price—$1.50 per share. Underwriting—
of

Co., Cleveland, O.

58,612 shares ($10 par) common. Underwrit¬
Co., Cleveland.
Offering—The shares

ers—McDonald &

Inc.,

Operating

.J
**>

local¬

expenses during completion and demon¬
flight progress of corporation's rotorblade system for helicopters.

etc.

(1/8)

13'filed 272,852 shares (no par) common.
Under¬
writer—Stone & Webster Securities Corp. and others.

ployees, executives and management personnel. Price—
$3.49 a share.
Proceeds — Company did not state how
proceeds will be used.

FIRST BOSTON

>

Gulf States Utilities Co.
Nov.

(par $1).

stration

Inc., Waterville,

343,000 shares

Corp., Chicago
Dec. 29 filed 150,000 shares ($1 par) Class A Commorr.
Underwriters—None.
Offering—To be offered to em¬

The

,

Helicopters,
(1/13)

York

Domestic

Boston

Fibers,

filed

Dec. 26 filed

$1,000,000

Dec. 23 filed 238.829 shares of

writing

(par $1). Under¬

Co., Inc., New York.
Proceeds—Stock
being sold by four stockholders who will receive pro¬
ceeds.
Price by amendment.

Cooperative Assoc., Kansas City,

non-cumulative common
stock ($25 par); $4,000,000 of 3%% certificates of in¬
debtedness
cumulative; and $1,000,000 of V/2% loan
certificates cumulative. No underwriting.»' Offering—To
the public. Common may be bought only by patrons and
members. Price—At face amount. Proceeds—For acqui¬
sition of additional office and plant facilities.

,

•

filed

16

Corp.

writer—Burr &

equipment and working capital.

Missouri

Cooperatives, Inc., Oakland, Calif.
Dec. 31 (letter of notification) 25,000 shares ($10 par) 5%
non-cumulative preferred.
Price—$10 a share.^ No un¬
derwriting. For construction of new warehouse in Los
Angeles and for working capital.
/
/

24

Nov. 14 filed 150,000 shares of common

filed

15

Consumers

Associated

'

-

Frigidinners, Inc., Philadelphia '
'i
Dec. 4 (letter of notification) 75,000 shares ($2 par)
common and 15,000 shares of common reserved for issu-|
ance upon exercise of warrants.
Price—$2 a share. Un-j
tlerwriter—Woodcock, McLear & Co., Philadelphia. To;
pay off loan and for working capital.

■

:

<

•

are

proceeds.

1

Dec.-30

Clarvan

Safety Device Co., Mt. Holly,
(i/i3)

(letter of notification) 12,950 shares of common
stock (no par). Underwriting—None.
Price—$17.25 per

ceive

O.
($1 par) common. Under-;
writer—Kebbon, McCormick & Co., Chicago. Price by
amendment.
Proceeds—To repay indebtedness and folk
working capital.
*?..*■;

204,000 shares ($8.50 par) common.
No un¬
derwriting. Offering—To common stockholders of record
Jan. 15 on the basis of one new share/for each 10 shares

Y.

Jan. 5

shares

Glass

Dec. 1 filed

St. Louis.

>

($1 par) common.- Under¬
Campbell, McCarty & Co.* and Keane & Co.,f
Price—$5.25 per share.
Proceeds—The;
being sold by 14 stockholders who will re¬

General. Instrument

Century Steel Corp., Hollydale, Calif.
shares ($100 par) common. No under¬
writing.
Price—$100 a share.. Proceeds—To purchase;
rolling mill, equipment and for working capital.

V -

Peabody & Co., and The First Boston Corp., New York.

.Offering—Offered

Co., Detroit, Mich.

100,000 shares

Detroit.

Oct.

No bids received at competitive bidding Dec.

Sale

—

Co., Cleveland
(letter of notification) 10,000 shares ($1 par)
common, on behalf of Wm. H. Miller, a director of the
company, to be sold at market.
Underwriter—Sills, Minton & Co., Chicago.
Indefinitely postponed.

40,000 shares ($100 par) cumulative pre¬
Underwriting to be determined by competitive

bidding.

both

Products

filed

writers

Gabriel

filed

21

ferred.

15.

of

one-tenth

hnd

Central
Nov.

share

one-half

of

common

Wash.

Seattle,

Proceeds—For investment.

Fraser

.

—

Tripp Realty Co., Long Beach. To erect guest ranch cot¬
tages and allied expenditures.
Arizona

i\

,

Co.

additions and expenses.

Dec. 29
class

> *

(

Power

bid, that of Blyth & Co., Inc. and '
Kidder, Peabody & Co. was submitted and was rejected
by the company.
They bid $13.75, less $1.75 under¬
writing commission. Offering—To be offered to 6% pre¬
ferred and common stockholders for subscription on the
Dec.

each

3

underwriting.

,

Maine

shares ($10 par) common. Under¬
writing—To be determined by competitive bidding. On

(par $10)

-

l

,

Central

ferred

Florida,

Miami.
Nov.

•

Fund,; Inc.,

Dec. 29 filed 103,089 shares of common. UnderwritersPacific Northwest Co., Seattle. Price based on market;

Proceeds—To retire indebtedness and for working capital.

Nov: 10 filed 160,000

Inc., New York
Oct. 30 filed 100,000 shares ($1 par) common (name to
be changed to American Steel & Pump Corp.) Under¬
writer—Herrick, Waddell & Co., New York.
Price by
amendment. Proceeds—To pay off indebtedness incurred
in the acquisition of the capital stock of A. D. Cook, Inc.,"g
Lawrenceburg, Ind.
American

Equity

officers and employees..
Offering — To company
stockholders, employees and customers. Price—At par.

pany

2,

common.

and for

INDICATES ADDITIONS SINCE PREVIOUS ISSUE

•

>

fm II
>

'

'

1

m

'

''

•/'

?!$

",
'

an

;

j

Volume 167

Number 4662

THE COMMERCIAL

January 8, 1948

;
Noon

RR.f '

;

»

each.

*

Doman-Frazier Helicopters Inc.__

—...Common

finance purchase

Common

ment.

Common

Dec.

Ribbons Mfg. Corp...Stocks
Equip. Trust Ctfs.

Co.l

$45

California

Edison

January 22, 1948
Armstrong Cork Co
January 26, 1948

7

Baltimore

&

Ohio RR.______

Kaiser-Frazer Corp.
j

bidding.

,

*

Common

\;7;/.

Probable bidders: Blyth & Co., Inc.; The First

Price—By amendment. Proceeds—Con-•
Expected about Feb. 2.
"
> •

—

Dec. 30 (letter of notification) 246 shares (no par) com¬
on behalf of J. L.
Goodwin, President of the com¬
pany. Price—$100 a share. No underwriting.
:

New Castle, Pa.
150,000 shares ccrnmon stock (par 500).
Underwriter—Lee Higginson Corp.
Proceeds — Stock
being sold for account J. P. Flaherty, a stockholder.
filed

common

,

Kaiser-Frazer

Corp. (1/26-30)
1,500,000 shares ($1 par) common. Under¬
writers—Otis & Co., Cleveland; First California
Co., San
Francisco, and Allen & Co., New York.
Price—By
6

filed

amendment.

•

mined by competitive
bidding.
/ construction program.
"J "
_7
Northeast Airlines, Inc.,

Proceeds—To

purchase
machinery and
tools to increase production of automobiles from current
rate of 950 per day to 1,500 per day.

Proceeds

;V

7

—

To

•" v7 7;

Boston, Mass.

A

-

•

Kores

,

Jan.

Carbon

for acquisition of water prop¬

Paper

&

N. Y. (1/17)
(letter of notification)

5

;1 :'"v'

Ribbons
490

Mfg.

shares of

Corp.,
first pre¬

ferred stock (no par), 1,500 shares of second
preferred
(no par) and 2,100 shares of common stock (no

stock

par).

Price—First and second preferred, $100 per share;
$5 per share. Underwriters—None. Acquisition
of,and payment for equipment and raw materials, etc.

common,

Legend Gold Mines, Ltd., Toronto, Canada
June 27 filed 300,000 shares ($1 par) common
treasury
stock.
Underwriting — To be supplied by amendment
Price—50 cents

properties.-

•

a

share.

Proceeds—To develop mining
•
77'

■

■

,

•

Liberty Discount Co., Inc., Bremen, Ind.
Dec. 30 (letter of notification) $300,000 ($100 par) class A
Common. Price—$100 a share. No underwriting. For
Working capital.
Lock Nut Corp. of America
Oct. 6 (letter of notification) 24,000 shares of 5% cumu¬
lative convertible preferred stock (par $12.50). Underwriter—Ray T. Haas, Chicago. Price—$12.50 per share.
....

,

General corporate purposes.
.

McClanahan Oil Co.,

Grand Rapids, Mich.
shares ($1 par) capital stock. Un¬
derwriters—None. Offering—Shares will be exchanged
fpr $1 par stock of Great Lakes Chemical Corp. on the

Dec. 30 filed 260,000

22

•

(1/16)

$10,000,000 sinking fund collateral trust
bonds, due Jan. 1, 1968. Underwriters—W. C. Langley &
,

Co.

The First Boston

and

McColl-Frontenac Oil

Co., Ltd., Montreal, Can.
(no par) common. Under¬
writing—None,. Offering—The shares will be offered for
subscription by stockholders on the basis of one for each
two shares held.
No plans have been made for unsub¬
16 filed 900,000 shares

amendment.

Proceeds—For

building expenditures and to repay bank loan.




Edison

pre¬

l-for-2i

publicly.

Co.

(1/21)

..

.

&

Beane.

Proceeds—To

Expected about Jan.

finance

14.

'

construction

7

.

-

,

-

>

,

pref¬
Underwriters—Central Republic Co. Inc.,
Chicago; The First Boston Corp., and Blyth & Co. Inc.,
New
York.
Offering—For subscription by common
basis

on

of

preferred share for each
Unsubscribed shares will be

one

shares held.

common

offered

publicly.
Price—$21 a share.
improve its public utility system.

7

Tampa

Dec.

&

•

Equipment

Co.,

Pueblo,

<

24

(Fla.)

filed

Electric

Co.

$6,000,000

30-year first mortgage bonds.
Underwriting—To be filed by amendment. •
Price by
amendment.
Proceeds—To pay construction costs.

stock.

stockholders

Supply

notification) 6,000 shares of stock. Price
—$10 a share. No
underwriting. To construct buildings
and for
operating capital. /•■<.
7

.

,

,

City

Jan. 2 (letter of

Northern Indiana Fublic Service Co.
Oct. 29 filed 272,694 shares ($20
par) cumulative

eight

Steel

Colo.

Corp. Price—By amendment.

Proceeds—To pay bank loan.

7777

Washington

(D.

C.)

Gas Light Co.

(1/14)

7

Nov. 7 filed 85,000 shares
(no par) common.
Offering—"
Shares are offered for
subscription by common stock¬
holders of record Dec. 26 on
the basis of one share for
each five held.
Subscription warrants will expire

Proceeds—To

Jail,
13, 1948. Price—$20 per share. ^
Dealer-Manager—Com¬
pany has arranged with, a
group of security dealers to
manage the solicitation
of-.stockholders' ■/ subscriptions.

Ohio Public Service Co.
Dec. 22 filed
1978.

Old

;

Poindexter

Heading this group are The First Boston
Corp.; Alex.
Brown & Sons;
Auchincloss, Parker & Redpath; John¬
ston, Lemonn &
Co.; Folger, Nolan, Inc.; Goodwyn &
Olds; Mackall & Coe; Ferris &
Co.; Robinson, Rohnbaugh
& Lukens, and Robert C.
Jones & Co.
Proceeds—To be
added to general funds for
current construction
program.

.7 7

.

Distillery,

Inc. (1/12)
50,000 shares ($20 par) 5% 'convertible
cumulative preferred and 125,000 shares
<$1 par) com¬

Mar.

31

Wisconsin Power &
Light Co., Madison, Wis. V
29 filed
$3,000,000 30-year first mortgage
bonds,
Series B, and 30,000 shares
($100 par) A\'o%

filed

Dec.

mon
into which the preferred is convertible.
Under¬
writers—F. S. Yantis & Co., and H. M.
Byllesby & Co.,

both of

Chicago.
working capital.
Potomac

Price—Par.

Edison Co.,

*

cumulative
preferred stock.
Underwriters—Only the bonds will be
underwritten under competitive
bidding terms. Probable
Bidders—Halsey, Stuart & Co. Inc.; Glore, Forgan & Co.
and Harriman
Ripley & Co. (jointly); W. C.
Langley &
Co.,7 White, Weld & Co. and
Kidder, Peabody & Co.
(jointly); Blyth & Co., Inc.; The First
Boston Corp,;
Shields & Co.
OffteVlng^—Bond^ will be offered publicly
while stock will bb'offered to
holders of 4Vz% preferred.
Price by amendment.
Proceeds—To pay bank indebted¬
ness ancl for
construction costs.

Proceeds—To be added to

Hagerstoton, Md.

(1/20)

Dec. 16 filed $4,000,000 30-year first
mortgage and col¬
lateral trust bonds. Underwriting—To be
determined

by
competitive bidding. Probable bidders: Halsey, Stuart
& Co. Inc.; W. C.
Langley & Co., and The First Boston
Corp. (jointly): Blyth & Co., Inc.; Harriman Ripley &
Co.; Shields & Co.
Proceeds, together with $1,000,000

from

sale

of

50,000

Penn Electric
for

Jan.

new

shares of

to

common

20.

parent,

West

Co., will be used to repay bank loan and
Expected bids to 'be opened

construction.

.

-

•

Potomac
Dec

19

Electric

Power

Co.

(1/20)

filed

$15,000,000 35-year first mortgage bonds.
Underwriting—To be determined by competitive bidding.

Baltimore & Ohio RR.

Company plans
ceived

on

Halsey, Stuart & Co. Inc.; The First
Corp.; Kubn, Loeb & Co., and Blyth & Co., Inc.
(jointly); Harriman Ripley & Co.; Kidder, Peabody &
Co. and Merrill, Lynch, Pierce Fenner &
Beane (jointly)
White, Weld & Co., Glore, Forgan & Co. Proceeds—To

to

(1/26)

issue

invitations for bids to be re¬
Jan. 26 for $4,000,000 in l-to-10
year certifi-

(Continued

Probable bidders:

on

page

50)

%

Boston

finance

construction

and

for

other

corporate

purposes.

Expected bids will be opened Jan. 20.
Public

Service

Offering—Common

Price—By

a

Southwestern Public Service
Co., Dallas, Tex*
10,000 shares ($100 par) cumulative
pre¬
ferred and 103,113 shares
($1 par) common. Underwrit¬
ing—To be filed by amendment.
Offering—The pre¬

filed

15, 1948.

shares.

California

filed

,

Dec.

Nov. 25 filed 139,739

scribed

on

offered

.

Water Co.

basis of one share of McClanahan common for each two
shares of Great Lakes common. Offer will expire March

Deo.

be

Dec. 24 filed

con¬

for construction.

Price—$26.50 a share. Underwrit¬
ers—The; Bankers Bond Co. and Smart &
Wagner, both
'

common

■

cumulative preferred.

To pay
■''■■.•

stockholders, the

will

Harriman, Ripley & Co.; Merrill Lynch,
Pierce,

Fenner

7,77:

Kentucky Water Service Co., Louisville, Ky.
Dec. 23 (letter of notification) 10,000 shares
($25 par) 6%

Louisville, Ky.

30

-program.

$10^000,000 first mortgage bonds, series due
Underwriting-^—To be determined by competitive
bidding. Probable bidders: Halsey, Stuart & Co. Inc.;
The First Boston Corp.; Harriman
Ripley & Co.; Blyth
& Co.; W, C, Langley &
Co., and Glore, Forgan & Co.
(jointly). Price—By amendment. Proceeds—To be tfsed

par)
preferred. Price—$95 a share. Unde writer—Kenneth Van
Sickle, Inc., Emporia. For additional working capital.

erties.

shares

.

Kansas Soya Products Co.,
Jnc.,' Emporia, Kans.
Dec. - 3 (letter of notification) >3,1571 shares- ($95

of

Unsubscribed

$40,000,000'25-year first and refunding
mortgage bonds, series A. " Underwriters—To be
deter¬
mined through
competitive bidding.
Probable bidders:
The First Boston
Corp.; Halsey, Stuaft & Co. Inc.; Blyth..
& Co., Inc.
Proceeds—To retire $22,000,000 of bank
loans and to reimburse
treasury; - for construction of

finance

Dec. 24 filed 83,333 shares (no
par) $1 cumulative
vertible preferred. Underwriter-—Atlas

erence

•

Tq

Rockbridge,

Price to be filed by amend- ^ additional power facilities.
Expected Jan. 21.
Proceeds for general corporate purposes includ-; 5
Southwestern Gas & Electric Co.
(1/14)
ing financing new plant construction and additions to-.-.
..7,
Nov. 5 filed $7,000,000
30-year first mortgage bonds,
present facilities.
Offering postponed due to market
series B.
Underwriting—Tq be determined at competi¬
conditions. '
A 7 7' ''.":'/7~ r' '.'■■■
-7.7'
7'--/J;;/./.-' 7'.
tive bidding.
Probable bidders: Halsey, Stuart & Co.
New York Telephone Co.
7/"'.,
Inc., Lehman Brothers and Lazard Freres & Co.
Dec. 30 filed $60,000,000 30-year
(jointly);
refunding mortgage
White, Weld & Co. and Kidder, Peabody & Co.
(jointly);
bonds/ Series E.
Underwriters—To be determined by
Blyth & Co., Inc. and Stone & Webster
Securities Corp.
competitive bidding.- Probable bidders:- Halsey, Stuart -v
-.(jointly); Glore, Forgan & Co. and W. C.
Langley & Co*
& Co. Inc.; Morgan
Stanley & Co. Price—To be deter¬
(jointly);

Northeastern

(1/13)...

(par $1). Underwriters—Hallgarten & Co., R. W. Pressprich & Co. and
Adamex Securities Corp.
Price—By amendment. Pro¬
ceeds—Repayment of $4,400,000 bank loans and increase
company's general funds.
Jan.

in

stockholders.

Johnson Bronze Co.,

Joy Manufacturing Co.
Dec. 19 filed 185,000 shares of

preferred

ferred will be offered
publicly and the common will
Offering—The shares will be offered for / be offered to
Southwestern's common stockholders at
subscription to common stockholders on the basis of one ; the rate of one share for
each 11 held.
Price by amend¬
share for each six common shares held. Price
by amend-', ment.
Proceeds—To retire bank loans and for
con¬
ment.
Proceeds—To pay off indebtedness.
struction purposes.

mon

10

cumu¬

Corp., owner of
100,000 shares of the registrant's common stock, has
agreed to purchase all shares not subscribed for
by other

Jay Goodwin Industries Inc., Denver, Colo.

Nov.

common

l-for-10 basis and the

a

t

Hipley & Co.; .Kidder, Peabody & Co., and White, Weld

•

a

-

<•

Bonds

Boston Corp.; Halsey, Stuart &
Co.;'Inc.; Glore, Forgan
& Co., and A. G. Becker & Co. (jointly); Harriman
& Co., (jointly).
Struction. Bids

'

Barney & Co., New York.

February 2, 1948
iIowa Power & Light Co—

$100

underwriting.

;

Southern
Dec.

St. Louis

$4 dividend

—

No

station

ment/

Preferred
.

•

Underwriter—Smith,

.Equip. Trust Ctfs.

i;

7/

Monsanto Chemical Co.,

Nov. 28 filed 250,000 shares (no par)
lative preference stock, series B.

Bonds

„

.

.

:

Price

share,

Price by amendment.
Proceeds—Proceeds together with
other funds will be used to
purchase all of the outstand¬
ing common of Soqth Carolina Power Co.
from the
Commonwealth & Southern
Corp."'*
\
"
'
V

share!. To reduce debt and improve working

per

on

basis.

*

Bonds

Co.___—

•

.

common.

scription by company's

ferred

Co., Syracuse, N. Y.
(letter of notification) not over 1,100 shares of.;
stock '(par $10). Underwriting—None. Price—-

'.capital.

Bonds

\

of

South Carolina Electric &
Gas Co.
Dec. 2 filed 80,858 shares
($50 par) cumulative convert¬
ible preferred and
404,293 shares ($4.50 par) common
for sale, and
687,293 shares reserved for conversion of
preferred.
Underwriter—Kidder, Peabody & Co., New
York. Offering—Shares
initially will be offered for sub-,

Pasadena,, Calif.

Mohawk Wire

common

January 21, 1948
Southern

County, Va.

26

Dec. 23

shares

broadcasting

filed

■

300

share and $50 a common
construct
radio *

Martin

•,r

January 20, 1948
Edison

Basket,

Rockbridge Broadcasting Corp.,
Lexington, Va.
2 (letter of
notification) 350 shares'of preferred

and

tc

of machinery and other plant equip¬

-.and development work;

St. Louis-San Francisco Ry
Potomac

30

Dec.

i.-.iCommon

Potomac Electric Power Co._

and

Phosphate Mining Co., Butte, Mont.
'
(letter of notification) 50,000 shares class A
stock and options for a like amount of stock.
Price—$1
per share of class A stock.
No underwriting. For test

____Bonds

January 19, 1948
Kores Carbon Paper

,

Proceeds—For additional working capital.
*

Bonds

Walt, Inc.__

indebtedness

Canadian funds. Proceeds—For exploration
development of mining property.
Business—Mining

•

of common stock purchase warrants issued in
July, 1945. Price—Two shares per warrant at $6 a share.

Washington Gas Light Co
_________LCommon
January 16, 1948

De

bank

share in

Jan.

exercise

Common

Northeastern Water Co.__

retire

49

business.

27,788 shares (50c par) common. Under¬
writers—None. Offering—Shares are to be issued upon

Common

Southwestern Gas & Electric Co._

a

and

"

Market

Pfd. and Com.
r_lPreferred

Joy Manufacturing Co
January 14, 1948

Proceeds—To

(145)

-

$4

__:_Common

wJanuary 12, 1948
Cameron Aero Engine Corp.___
Dee Stores, Inc
High Vacuum Processes, Inc
Old Poindexter Distillery, Inc
January 13, 1948
Arrow Safety Device Co.____

CHRONICLE

—The debentures at 102.507, while the preferred sharei
will be offered at par and the common shares at

-Equip. Trust Ctfs.
!

Gulf States Utilities Co

FINANCIAL

Manhattan Coll Corp., Atlanta, Ga.
,r
'May 20 filed $500,000 5% serial^debentures, due 19481957; 12,000 shares ($25 par) 5%% cumulative converti¬
ble preferred and 85,000 shares ($1 par) common/
Un¬
derwriter—Kirchofer & Arnold, Inc., Raleigh, N. C. Price

NEW ISSUE CALENDAR
Delaware Lackawanna & Western

&

derwriters—To

scription

to

be

Co.

of

New

shares of

determined

STATE, MUNICIPAL AND

common

(par $10). Un¬
by competitive bidding.

shareholders

at

offered
the

rate

for
of

sub¬
one

Blair

share for each five shares held.
the bonds will be offered

Unsubscribed shares and
publicly. Proceeds—To pay off

Raleigh Red Lake Mines, Ltd., Toronto, Can.

Jan. 7 filed 460,000 shares of common stock.
—Mark Daniels &

Underwriter

Co., Toronto, Canada. Price—25

cents

6- Co.

inc.

loans and for construction
purposes.
6

GOVERNMENT,

CORPORATE SECURITIES

Hampshire

stock first will be

present

UNITED STATES

NEW

atlanta

,•

boston

philadelphia

•

YORK
•

buffalo

pittsburgh

•

•

st.

chicago
louis

50

THE COMMERCIAL

(140)

The proceeds from this offering

80%
Co.

•

Central

RR.

(EST)

Enderlin, Treasurer,vRo

2008,

j for dealing • with. 1950-55<<maturities of mortgage -debt

Probable bidders:

Halsey,

140

Halsey, Stuart & Co. Inc.; Salo¬

Cedar

t

Pennsylvania

St., Hew

reeeived

York.

tral RR. of Pa.

of

5

/•

1978.

Proceeds for

such

2)

enough investments to go around,
but rather, is ihere enough capi¬
tal available?
The McGraw-Hill
Department of Economics recent¬
ly made a synopsis of an 857-page
report of the Twentieth Century

Fund, which
May of 1947.
"America's

*9

Companies

expenditures never reached

billion

they

per

million.

In

annum.

1941,

billion four hun¬

$11

were

dred

In 1946, they were

$17 billion, four hundred million,
but the first quarter of 1947 indi¬
cated
that
these
expenditures
,

published in would be, at the rate indicated
entitled, above, namely $21 billion per an¬

was

It

was

Needs

Resources

and

said:

and

what

"If

it

time
a

cary

you

is,

wrist

want

to know

don't you
like other

why

watch,

people?"
sometimes people do things

So

hard

the

way,

much for

actual

unwittingly.
So
capital ^require¬

ments. I think these studies

fairly

well-indicate there are-enormous

in

me

earlier

made

ever

No

decades.

one

estimate

an

has

how

of

much it would cost to modernize

industrial

plant, which
is
valued at around $200 billion at
our

third

If

prices.

prewar

or

of

it

at

tional

much

as

needs

rehabilitated

lion,

be

to

around

investment

a

replaced
$100 bil¬

will

be

re¬

'

I think the reason

made

as

prices, of addi¬

current

quired."
no

one

ever

estimate is

they didn't
.have the temerity to make it. "In
an

addition, huge amounts of mdhey
'to be invested in housing
public works to raise the
services provided merely to ade¬
quate levels. The Fund estimates
need
and

that

the

of

cost

15-year

a

pro¬

to modernize our city streets
and rural highways would run to

gram

$40 billion. To bring the nation's
housing up to minimum standards
of health and
decency by 1960
would
serve

cost
our

$115 billion.
natural

To

resources

con¬

and

develop our water power would
cost $27 billion over a 15-year

period."
These

staggering

are

figures.

There seems to be little question—
"that needs exist for all the capi¬
tal investment we can make for a

long time to

The behavior

come.

of investments in the past strongly

suggests that the problem is not
one

of lack

of

but

needs

one

of

finding ways to add to our capi¬
tal, in an orderly fashion."
I would

like you to note, par¬

ticularly, the next sentence: "Cap¬
ital

has

bust

followed

route

wanted is
of

.

1950

Let

in

the

boom

the past.

and

What is

high but steady rate

a

investment."

That is

the

McGraw-Hill

mate.

Let

from

another

somewhat

me

quote

an

esti¬

excerpt

capital

closer

analysis,
home; the

to

Lionel D. Edie organization, in
July of. 1947, made a study en¬
titled
"Capital Requirements of
Private Industry."
They predi¬
cated it on a-gross national prod¬
uct in 1950 of around $200 billion

and I stress the word "laws" be¬

There is another way qf looking

at that.

The Investment Bankers

Association, Committee on Indus¬
trial Securities weighed it from
quite a different standpoint and
arrived at almost the same figure.
Now, raising that amount of mon¬
is a difficult enterprise. Peo¬

ey

ple often do things the hard way,
sometimes unwittingly.
I

I will revert to that.

cause

has

been
I

that.

considerable

would

like

to

There

study

of

contrast

bit, if I may, with the 1925to which we adverted
earlier. From 1925 to 1929, indus¬
that

1929

a

era,

try
required
$2,200,000,000
of
capital funds per annum, while
the savings were about $4,008,000,000 annually from the higher in¬
come
brackets.
That is, those

am reminded of the story of
gentleman who overlooked his over $10,000, whereas now, with
It was an impor¬ annual industry requirements *of
tant birthday and he was very about $6,500,000,000 there is only
emotionally moved by the fact about $1,200,000,000 of annual sav¬
that up until about the proverbial ings available, according to the
61st second he had not found her Lionel Edie stimate.
a
present.
He knew that she
I want to say we have looked
wanted a particular grandfather
for
other
estimates along that
clock and, being a devoted hus¬
line. There are some that range
band, he would go to any length considerably higher. But, in all
to satisfy her wish.
He shopped
fairness, I want to say those that
along Third Avenue and finally
range higher do not seem to me
found one absolutely the apple of
to be any more authentically for¬
her
eye,
he was certain.
ThO
mulated, so I am taking the only
clerk said, "This, is a thousand
one that appeared in actual print
dollars," and he whipped out a
recently. While you may say that
roll of bills, paid the clerk,' and
the lower estimate fits into the
said: "Send it right over. We only
Lionel Edie discussion more aptly
live five blocks away." The clerk
than some of the higher figures,'
answered: "This is a very high
even Thomas Moore
and Lenuie
type storO and we deliver only Rooks in Lalla Rookh, the Veiled
once a week.
The next delivery
Prophet said: "That prophet ill
will be'on next Thursday." The
.sustains his holy call, who finds
man said: "Well, it has to be over
pot heavens to suit the tastes of
there today." He reasoned with
all,"
him, but to no avail. Finally he
However, that estimate is fairly
said: "Well, at least give me a
well substantiated by some other
hand to get it out to the curb.
figures which have the imprima¬
Maybe I can get a taxi to take it."
tur, if I may allude to it, of the
He stopped taxis, but no amount
SEC—because recently in a study
of money would induce the driv¬
called "Volume and Composition
ers to show any interest.
There¬
of Individual Savings from Aoril
fore, being a devoted husband and
Through June of 1947"—and also,
rather welL built, he hoisted the
if a plug may be put in for Her¬
clock up on his back and - started
bert Hall and Morgan Stanley-r¬
walking up Third Avenue with it.
and I want to put in one for
On the corner, a drunk came out
Kuhn-Loeb—there was one the
of a saloon and barged into him,
other day carrying it through July
knocking him over. There he was,
and September, and we have those
lying on the sidewalk, with the
clock on top of him, "Why can't figures. The liquid savings of this
you look where you're going?" he
country
increased
enormously

the

wife's birthday.

called

out,

in

an

tone

angry

voice. The drunk leaned

over

of

him

during

the

In

war.

liquid savings

were

Bidders may submit alternate proposals for

year

certificates

1940,

the

$4,100,0.00,00.0.

a

the

75% loan.

In 1942.

following

$36,900,000,000, still

a

year
to
high figure.

Declined to $14,50.0,000,000 in 1946.
Reduced

'

,

Jmolications of not meeting capiital

fi¬

requirements along sound

nancial lines?

I think that is the

crux
of the question.
It.is- nqt
plope. the economics of it; it* in¬
volves the social implications of

it..

ne

present laws'with regard
of

the investments

to

funds^foir

insurance companies and

1947

Savings in

The l-to-10 year
80% loan and the l-to-15
Probable bidders: Halsey,

an.

Inc.; Salomon Bros. & Hutzler.

$19,600,000,000.

declined

certificates.

year

certificates would constitute
t

they • rose to $29,100,000,1)00. " In
1943, to $38,300,000,000.
In 1944
they reached the astronomical
heights of $40,200,000,000. " They

banks

savings

contributing at least
attention to somewhat, I think, to unsound
what has haippened so far in 1947. corporate
structures because H
For. the first three months they this vast reservoir of savings ip
were a paltry $800,000,000.
April tied up in certain quarters wherp
to June, $1,800,000,000.
July to 'its investment is restricted along
September, $2,900,000,000. Now let narrow lines, obviously they must
me
show you a figure that has temper the wind of the
shorn
really increased enormously. The lamb, and corporate structures arp
amount that goes to private in¬ affected.
Let me read to
yo^t
surance has'risen enormously.
In what others think of present fi¬
Let

num, "
capital requirements needed an¬
through 1960."
U'nat isn't all to come from new nually.
just lake the liberty of investments, obviously. If $21 bil¬
reading an excerpt from that: lion is required annually, about The Means for Supplying Capital
"Analysis of our present capital $14% billion per annum should be
Now the next obvious question,
needs lends little support to the generated
from
undistributed and the one that we listed earlier,
idea prevalent during the nineteen profits and reserves. That leaves
was: "What are the present actual
thirties that we had reached eco¬ about $6% billion to be raised in
and future probable means for sup¬
nomic maturity so there was no capital markets.
plying such needed capital under
way to invest as much as we had
the present methods and laws?"—
Estimate Confirmed by IBA

from

certificates.

$8*280,000 in 1-to? 1§

Stuart & Co,

Satisfy Our Capital Needs!
page

;
5

Corp.; Halsey, Stuart & Co. Inc.;

In J941,

,

V

(1/19)

Jan.

Probable bidders in¬

expansion.

'

v

Loui s-San Francisco Hy.

St.

Company has issued an invitation for bids to be received
19 on $8,840jQ0Q in' 1-to^lO ^earequipment trust

,

Lehman Brothers; Shields & Co.

>

Let Life Insurance
(Continued from

clude Kuhn, Loeb &Co. ^

,

has filed an^application with-Missouri

company

clude The First Boston

Probable bidders: Halsey, Stuart & Co. Inc.;
•

Hutzler..

i aggregating,more than $100,000,000. Probable bidder! in¬

P. S. Commission to issue $4,000,000 1st mtge. 3% %; bonds

equipment trust certificates to he known

Harris, Hall & Co. (Inc.).

uprto noon

Empire, District Electric Co.

Jan.

series A.

!

cer¬

'

The Central EH. Co. of N. J. and Central RR. of Pa. have
asked the ICC for permission to issue $1,950,000 of Cen¬

as

^

be

$l,6QQ,Q0%beuptpment, trust

of

Stuart & Co, Inc.; Salomon Bros. &

of

-

Jan. 8 :at office of J. G.

Bros. & Hutzler.

mon

Illinois Central JtR.

tificates series G will

1,200 7Q-ton open-top steel hopper
by Pullman Standard Car Manufacturing

Probable bidders:

Thursday, Januarj 8, 1948

Reported that directors an Jan; 15 will consider in addftion to the matter.of .a preferred stock
dividend, *plarjs

Bids, for purchase

will finance up to

of the cost of

cars to be built

FINANCIAL CHRONICLE

Delaware Lackawanna & We^tern Rl^ ^l./8)

(Continued from page 49)
cates.

&

call

me

your

$1,800,000,000.
In 1941, it
It reached the zenith
fox the recent present in 1945,
when $3,500,000,000 went into the
insurance companies.
It is going
at about that rate, and the growth
of insurance companies' assets re¬
flects that precisely, because the
assets of life insurance companies
1940,

went

are

up.

nancial requirements and the-un¬
soundness of corporate structure's

due, to

extent, I'll

an

laws—we'll

tax

admit, to

discuss them by

and

by—-but due also, I think, to
legal straitjacket in which
large purveyors of capital find

the

themselves.

-

r

The National City Bank, not h
growing at approximately the very radical organization, in its
$3% billion per annum figure "Review" of November of 1947, un¬
year by year.
/
der the heading "Deficiency of
Savings," said: "In the present
Growth of Insurance Company
juncture, the supply of new sav¬
•*. Assets •
ings out of current incomes of
We are all conversant with the
individuals is seriously deficient,
enormous
growth of life insur¬ in
relationship to the demands for
ance company assets, but I think
capital.
For example, the 'indi¬
it can be brought to your atten¬
vidual investor has come close to
tion a little more dramatically by
disappearing as the source of new
citing a few figures. At the end
capital for private business. Es¬
of 1920 the total .assets of mutual
timates of the SEC indicate that
life
insurance
companies were individuals in all of 1946 added
$7,300,000,000.
By 1930 they had nothing net to their holdings of
reached $18^900,000,000. By 1940
corporate stocks and bonds. The
they were $30,800,000,000.
Look same is true for the first half of
what happened during the war
1947."
\
'
years:
1944, they were $41,000,The reason I characterized the
000,000. - In 1945 they were $44,National Cjty Bank as not being
800,000,000. ' In 1946, $48,000,000,particularly radical is that T did
at the end of December,
are

•

000, and.

the

use

word

"radical"

in

sug¬
the end of last year, they
gesting that some of the changes
$51,500,000,000.
There
is
that I might advert to later would
your $3% billion almost constant
not appear radical and, also, if
annual growth.
That is where a
ever there was
a euphemism, it
great deal of the savings of the
is their observation that the SEC
country are going.
J,
study shows that individuals add¬
The mutual savings banks re¬
ed nothing net to their holdings
flect
a
similar
picture.
Their of
capital stocks and bonds, be¬
growth in deposits has been some¬ cause I can tell you
they added
where in the neighborhood of a less
than that.,, This shows that
billion dollar? per annum.
In individual
holdings of securities
1939 they were $10,500,000,000. At not
alone did not increase during
the end of 1946 they were $16,the war years, but decreased at
870.,000,0,00 and at the end of 1947, the rate of about a half billion
according to Earl B. Schwulst, dollars a year
through the war
Vice-President
of the
Bowery
years.
They decreased by" $70p
Savings Bank, and President of million in 1945.
They Were just
the Mutual Sayings Bank Associa¬ even in
1946. For the first quarter
tion, they were just under $18 of 1947 they declined by
$200 mil¬
billion.
lion, and for the second quarter
by $100 million, so I don't think
Growth in Depositors
the National City Bank overstated
The other significant figure is
the
case.
Resuming- quotation
that the number of depositors has
from National City Bank "Re¬
grown enormously. Their depos¬
view":
"The individual .savings
itor
accounts have increased a
that take place today in; largest
1% million since V-J Day. I don't
volume are either, institutionalized
say
that represents individuals
savings, reflected in accumula¬
because, naturally, some people
tions of insurance and pension
may have more than one account,
funds, or savings in anticipation
in various savings banks, but the
of consumption.
•.
t;
number of individuals accounts

1947,

were

'

per

then,

annum;

with

teristic caution, took
count
a

and

gross

said

on

charac¬

a slight dis¬
the basis of

Jan.

and

on new

construction

durable

amount to

eauipmeat
$21 billion per

should
annum.

Let's analyze that in comparison
with
the not-so-far past: from
1925 to 1929, such expenditures
were from
$9 to $12 billion per
annum—and

always keep in mind

that $21 billion figure; we will re¬
vert to it quite often during this

discussion—from

1931




to

1940,

Apr.

July

June

Sent

1940

1941

1942

1943

1944

1945

1946

4.1

10.6

29.1

38.3

40.2

36,9

14.5

.8

1.8

2.9

4.9

10.9

16.0

17.0

19.0

12.2

-1.9

1.0

Insurance

1.8

2.1

2.5

2.8

3.2

3.5

3.2

.8

.7

U. S. Savgs. Bonds

.9

2.8

8.0

11.1

11.8

6.9

.9

.4

.8

1.9

2.7

3.6

3.4

♦Liquid

Saving:—

Mar.

2.9

of which

Currency & Bk,
Deposits
PrivateOther

U.

S.

.4

.9

Govt.

1.0

t

V/z

number of

million

since

V-J

That is

.2

Corporate & other

mon

an

places

18 V2

where

it

is

pot

we

have planned to

here today,

discuss

-

Municipal)-,

Economic and Social Implications
.5

.3

71

.7

.2

.1

That
the

*Gross

saving excluding purchases of homes, automobiles and ot.heiv durable con¬
sumers' goods.
tDoes not include armed forces leave bonds amounting to $400 million.

What

jleads us, obviously, into

next
are

important

question:

the economic and social

■

"

•

.

■"

j

are

,

not available

equity investments and
stocks.

com¬

The absence of sub¬

stantial individual saving for tak¬

ing risks of ownership is a serious
missing link in the structure Qf
sound financing of postwar pros¬

perity.
sure

(non-Governmt.
or

:

"These funds

million.
awful lot of money in
about

•

The Missing Link

for

available for the type of capital
that

:

.

depositors, that is., not
is

accounts,
certain

'

Securities

risen

Day. But the deposits have gone
up about a billion and the total

-19*7-

national product of $194

billion, annually, private business

expenditures

has

SEC Release of Oct. 3, 1947,, re ''Volume and Composition of
Individuals' Saving April-June 1947" shows: in 'billions of
$

is

Without them, the
on

pres¬

the corporation to sell

bonds and to go further into debt
to

the hanks and to the

institur

tional investor."

.

I read that with particular

phasis because I think it is

em¬

so

di-

>

■

"

.

Volume

o

<

Number 4662

167

■

,

THE

!• jectly applicable to the point that

)

'

COMMERCIAL

I have

endeavored to make,

tion,

who

pointed

out

great

a

that
being distotted, I believe, and unsoundly
distored, because of the shortage
(jf equity capital. Let me read to
you, if I. may, what the Special
Tax'4 Study
Committee
of
the
House Ways and Means Commit¬
tee said, under the Chairmanship

is tax

financial structures

,

'«?

•

1

of-these citations.

many

Needed

financial

Kansas.

The

Carlson

of

I indicated to

reason

of plans."
\l

r

I think I

moment

a

by

capital,

experiences
;

on

of

some

huge

debt outstand¬

a

further and

further

on

I think it is
to maintain

high

the

as

debt

you

panacea

this
pay

>.-Depleted

■'

'A,

Corporate

Working

:

Capital

•

"Many

corporations

have

de¬

pleted working capital because of
heavy increases in the cost of in¬
ventories and badly needed addi¬
tional
equity
money,
which is

largely unavailable today."

ment

laws.

How

do

think

you

this will strike the life insurance

companies charged with the re¬
sponsibility of safeguarding the
savings of millions who are in¬
sured
by them, and who must
J look to safeguarding the future of
generations yet unborn."
read

what

you

Mr.

Let

Stabrl

me

Ed-

jmunds. the Economic Analyst of
the

Northwestern

National

Life

Insurance

Co., said in an article
"Outlets for Life Insur¬

entitled
ance

Investments," in the "HarBusiness Review," the sum;mer of 1947 number.
He said, in
vard

part: "Because the national econlomy has arrived at a stage of
advanced

intensive

and

indus¬

trialization,

a
relatively greater
proportion of equity capital is re¬
quired for the development of

commercial

new

enterprises.
life

insurance

tain

their

industrial

and

At

'

the

same

time,

companies stdl

traditional

re-

status

as

lenders, rather than providers of
equity capital, even though their
capacity for capital accumulation
•

has grown to be one of the foremost in the economy. These two

developments
•

►

may

if

not

have

well

very

mutually

a-re

compatible i^and,
consequences

.

rather

think

I

reason

questionable

that if you

obviously,

making

some

will

many

cases

adjusted,
disastrous

the

for

in-

as

it

to

can

attractive

for

what

happens to your quarters.
If you don't pay rent for funds,
I

doubt

loaned

if

out,

of

form

will

you

in

purveyed

or

them

get

the

equity.

Turn

to

Life

Companies!

been

every

same

but just

company,

therfc

as

the

certain

are

very
well reasoned areas within which
-

life insurance companies are per¬
mitted to invest now, in the form
of

bonds,

notes,

preferred

stocks,

to

seem

me

debentures

and

so too it would
that it would be sound

from the angles which I have en¬
deavored
to
adduce
to
permit

them to invest

portion of their

a

assets in common stocks of sound

enterprises. And let me empha¬
size, this added investment me¬
dium would merely be permissive,
surely pot mandatory.
I might

in passing, it might

say,
wise

do

to

that

savings banks.

in

even

the

case

be
of

>

I think there is

economy

life insurance alike."

insurance

of New York

now?

around

Let's

this

State

use a

com¬

doing

word often

circles, let's be

our

minute

I submit that

the

life

companies of this State are
actually investors in equity. They
not realize it, and I

may

a moment

not

am

that they

in any slightest degree in let¬

breaching the very
governing their in¬
vestments, but—they are actually
investors in equities.
laws

Already Equity Investors
Let

me

companies

to

are

extent

some

equity investors—and I applaud
them for it because I reiterate that
I

think

it

is

economically

sound

andsociologically desirable.
Where, as they do, they build
whole housing developments,
which I repeat is most helpful to

I

in

am

agreement

with

it,

but

merely that I think it is obviously

obligations do

unfair

portfolios

to

person's
pen

quote

article

a

portion

which

of

hap¬

may

to fit in with the point

js endeavoring

adding
which

the
Mr.

make

additional

to

one

without

coloring

Edmund's article

ried with it.
I wanted

to

a

car¬

I cite it also because
pay a

personal

com¬

pliment to Mr. Ben Feldman, the
head

of

our

Statistical

organiza¬




not fare

invested

partially

fixed obligations and

equities. The

reason

ence

this,

as

patent

so

if

you

but

it

invest

in

obvious

to point

well-informed

so

as

partially in

is

that I hesitate almost
out to

well

as

is
in

it

audi¬

an

perfectly
broad

a

cross-section of bonded indebted¬

ness,

fixed

appraisal
on

two

or

obligations, and

or

your

three

or

guess

four

stock

mon

investment

Wednesday

in

upon

banking circles,

as

some

extent tantamount to invest¬

ing in equities.
if

So

the

already

are

veyers

of all

'

..

insurance
in

day.
Southwestern Bell.
Market

conditions

doubtless will
of

New Year.

the

The

overall

operation

those

of

one

that

was

to

served

bear out the contention of hank¬
ers who hold that securities can
be

sold

if

the

quality
and the price is right.
Two

after

third

the issue
dissolved and

had

withdrawn from the

portedly

after

race

re¬

reaching the conclusion
utility's earnings might

the

had

than

more

tures

in

one

one

into

ect or

building, why not

or

Just

swoop
more

now,

whole

operation.

proj¬

Then

at

the

least

in the palmier years they would
have available sufficient of the

profits out of such operations to
build a cushion, if you will, amor¬
tize against the leaner years when
of

some

be

those

quite

now

as

earnings

may

satisfactory

as

appear, and I am not

not

they

saying

For

all

of

the

reasons

that

eration.

ance

will seek
and

represent—will
tected and

more

ibe

better

soundly used by

legalizing the investment of
portion

pro¬

inrv equities

along

some

well

;

single op¬

to get the feel of the market.

"

which have vied steadily for tele¬

phone business since the advent of
competitive bidding will be in the
field.

liberal

a

DIVIDEND

The purchasers paid the seller
a share for the stock and

intentions to buy,

NOTICES

AMERICAN

ent,

within

15

suffici¬

were

minutes

the

of

CAN

COMPANY

COMMON STOCK

On December 30,

1947

a

quarterly dividend of

seventy-five

cents per share was declared on the
Common Stock of this
Company, payable Feb¬

fixing of the reoffering price to
assure complete
distribution of

ruary

16, 1948, to Stockholders of record

the

close

of

issue

formal reoffer¬

upon

business

January 22,

books will remain

ing.

1948.

at

the

Transfer

Checks will be mailed.
R. A. BURGER,
Secretary.

open.

Bankers

were

the

fact

that

American

& Traction still has
another

million

shares

the

Edison

OTIS

the

ELEVATOR

received

California

Commission.
call

of

dispose of.

Having
of

Light

approximately

$40,000,000 Issue
the

Southern

is

COMPANY

Set

approval

Public

Company

Common Dividend No. 161

Utilities

California

expected

for bids for its

soon

issue of $40,000,000 of

A dividend of 50i per

to

the

projected

year

has

company request

period

between

to

agreed

opening of the

declared, payable Jan'

of

at

the close of business

on

January 9, 1948.
a

to shorten the

notice

on

29, 1948, to stockholders of

record

Commission

share

value Common Stock

par

been

uary

maturity.

The

no

series

new

A first mortgage bonds with a 25-

Checks will be mailed.

C. ,A. Sanford, Treasurer

sale

bids to six

New York,

December 30, 1947.

days.
Meanwhile
gone

into

mission

the

and

to

with

Exchange

cover

has

company

registration

Securities

the

the

Com¬

flotation

.1

which will provide for the repay¬
ment of $22,000,000 of bank loans
and to cover expenditures already

The Board of Directors

made for the acquisition of prop¬
erties and for improvements to

has declared
today the fol¬
lowing dividends:

facilities.

DIVIDEND

$1.25

per

share

NOTICE

for the first

of 1948 upon the $5
Preferred Stock, payable March

auarter

Kaiser-Frazer Stock

Preparing

to

raise

additional

15,

1948

record

at

to

stockholders of

the

close of

busi¬

capital needed for expansion of its

ness

producing facilities Kaiser-Frazer

$1.00 per share upon the
Common Stock, payable March

Corp. has registered
1,500,000

shares

of

an

issue

new

stock with the SEC for

of

capital

public of¬

fering.
The

underwriting

group

will

be nationwide in scope judging

your

reasoned, codified lines, similar to
the standards governing the other

firms

what¬

investments of these well trusted

New

i

a

is

hardly
ex¬
pected before early April, so the
company will have ample time

$19.06

I

companies and savings banks

under¬

however,

But the deal is not im¬

minent,

reoffered at $20.50 a share. Po¬
tential orders, or indications of

and

have endeavored to adduce, socio¬
logical and economic, and, I think,
above all, for practical reasons, in
the long run your and my invested
savings—that is what the insur¬

split it up

or

deals.

•

pur-

own

sell

contem¬

its list.

part of the equity

or

and all of the funded debt of

of its

Bell

to

writers lean to the view that the

sorinkling of firms of that city in

companies
the

seek

Groups headed by the two firms

The successful
group, incident¬
ally, headed by a New York firm
and boasting not a
single Detroit
house,
outran
a
second
group
which

time

question

plated $100,000,000 of new deben¬

bit hence.

a

will

amount

comnany

sought

groups

a

is there

the

Southwestern

Co.,

entire

the

at

settle

whether

Telephone

stock to

reality

Potomac

and

Co., with $15,000,000 of first mortgage bonds,
35-year maturity, on the same

a

of

earnings of such projects
buildings—I submit they are to

$7,000,000

Power

"good omen" for the start of the

is wrong
or

looked

was

or

po¬

with

Gas

can

Light & Traction Co, of a
block of 450,000 shares of its hold¬
ings of Detroit Edison Co., com¬

tential

reasoned

.

sive studies have shown that port¬
folios invested' entirely in fixed

Co.

handling the business
especially well pleased with
the outcome particularly in view

calculated and well

of

I cite that not because

Outcome of the sale by Ameri¬

Southwestern

mortgage 30-year bonds

Electric

■

ples where I think life insurance

oppor¬

change in the sched-

a

include

Electric

&

taper off

cite to you a few exam¬

the

The issues up for bids, unless

that

Life Insurance Companies Are

have

keen.

in spirit

or

precise

will

is the type and size
offering which the underwrit¬
ing fraternity really likes, it seems
certain that competition will be

insur¬

ance

thfeir

finance

to

Since this

ticut and New Jersey permit life
insurance companies to invest a

the life

another

and

of

on

,

companies.

Bankers

State, because many other states
including Massachusetts, Connec¬

are

spend

tunity of bidding for a total of
about $22,000,000 in new public
utility bonds next week, consist¬
ing of two issues.

of first

portion of their funds in equities

tools

suppliers

attention to the laws of New York

along certain lines.

to

facilities, in¬

on

expansion.

there is

further facet

one

its

sys¬

this in any Cassandra-like way.

/'V'V

com¬

panies.

trust

using that

concerned, it seems to me a
Therefore, the only other pos¬ portion of the investment repre¬
sible solution I see is to amend
sents equity. Where they loan a
the laws regulating life insurance
percentage of the cost of any proj companies', investments.
Permit ect or
building which is larger
a
certain percentage of their as¬
than the usual percentage of the
sets to be invested
along codified cost or usual valuation of such
lines. I don't by any means say
project or building—based on well
*put it all in common stocks. I
of

in the laws
governing investment
of the assets of insurance

maturity]

redemption. Many

have

all

don't say put it in common stocks

desirable

and

$5,000,000 will be made available
to

ule,

such

In addition, divi¬
dends, just like interest, repre¬
sent merely hire of money and if
you
don't pay rent, you know

be

to consider changes

need

this additional

purvey

wouldn't
or

plans

company

$7,000,000

hardly point out to this
audience that I am directing our

I

ter

in dividends,
go further toward
popular equity in¬
and therefore you will

it

change

tem.

a

pay less

less

prior

or

is

you

to

The
about

ventories

you

expect to get from fixed obliga¬
tions is their payment at

are

is

panacea

compen¬

Therefore, if the life insurance
this question.
A great many companies are, in effect, making
I want to be perfectlv fair to people may say a suggestion of loans, a portion of which makes
Mr. Edmunds' article. Elsewhere this nature is radical.
They may them, in effect, owners of equity
in that article, which some of
capital, why not legalize it and
you say it is a new departure. I sub¬
may have seen in the "Harvard mit that it really doesn't represent open to the sorely needing capital
Review," he did make the point any actual change. It isn't an market another avenue to which
that there may be certain
politi¬ actual
departure
from
present it may turn, a very important
cal implications in life insurance
realities, and I don't make that avenue through which it can ob¬
companies owning too significant assertion lightly.
tain this very much needed
equity
a portion of the
equity of certain
First of all, many comprehen¬ capital,.
and

51

domiciled in Cleveland and the
third on the West Coast.

to

equities, not with regard to
bonds, because the most one could

suggesting for

this

than

more

in

attempt

opportunity to consider with
whether

on

ever

suggest-in financial circles
at least it
may be well to say,
"In days of
prosperity, consider,"
and that is why I
appreciate this

it

compensated,

not

word of the bible but I

a

to

right

for

less

vestments

be

would

change
would

ap¬

sated, by the increase in the others,
That can only happen with regard

equity capital.

visors,
analysts,
to
champion
changes in life insurance invest¬

■

The

great many people will say,

a

A

•

-V

make

a

■'This is all very well for
you in¬
vestment bankers, investment ad¬

,

earnings available
future capital requirements.

or

expect and apparently
has been shown that the loss

realistic about this.

more

their

of

That
special committee
Congressional Committee.

report of

a

of

the corporations would have

guess

your

to

even

out less in dividends. Thereby

JV

is

(147)

guardians of a large and growing
part of the nations savings.
I

the

on

able

used

suggested, toward meet.ng
capital situation and that is

that loss. If
in equities

wrong

some

panies

times

wish

offerings, I think some of us
they had deferred the plans
before they were underwritten.

the

is

What

some¬

such

•

CHRONICLE

wrong with regard to
of those equities it is reason¬

and

can,

as

There is another

:j

as

expeditiously
humanly possible.

as

of

as

insofar

reduce

our

praisal

funds

fair

it pos¬
sibly can be, and I guess it is that
now,
curtail government expen¬

theyditure
of. addi-

underwriters

as

question

sociologically

tax level

your

that really strikes

-'home; and based

I

much more advisable

•

tional

is

so

that debt

divert for

costliness

it

billion.

coming- generations.

saying when

talk about the

$257

ing for any longer .period than is
absolutely inevitable, because all
it means is that we are saddling

deferment

can

brackets.
I question
is
economically

national debt of approxi¬

a

to have

through offerings of share capital
except on terms so costly in many

up for

guess

equities, but if

sug¬

that

whether

,

choose,

you

portion

a

your''may

the

often

sociologically fair at
juncture in our history.
I

mately

'strongest corporation finds it im¬
possible to raise additional funds

to necessitate

most

of

face of

That report stated: "The
equity
market is starved and even the

as

Obviously,

that -is

upper

this

teresting cross-section of opinion
distinguished tax
lawyer and the Governor of an
agrarian State to agree on such
A subject.
I think that is news.

invest

you

question whether it is economi¬
cally sound to reduce taxes in the

when you get a

.'cases

«

reduction, to permit greater
savings of capital, especially in.

sound

you the joint chairmanship is that
I think it represents such an in¬

-

lines?"

panacea

the

Frank

Changes

Tfyat leaves the question, "What
changes would aid
in
meeting
capital requirements along sound

whether

Governor

percentage

possibly make

-

and

'

FINANCIAL

balance" of those investments can't

are

Roswell MacGill, the distin-,
guished tax expert of Cravath,1
De Gersdorff, Swaine and
Wood;

;

ever

gested, especially in this quarter,

of

•"

&

.

from

the fact that

which
York

head

house,

of
it

the
one

three
is

another

a

is

February 16, 1948.

15, 1948 to stockholders of
record at the close of business

February 16, 1948.
The

Goodyear Tire

&

Rubber Co.

By W. D. Shilts, Secretary
Akron, Ohio, January
1948.

W

The

Greatest
Name
in Rubber

•

52

Thursday, January 8, 1948

CHRONICLE

FINANCIAL

&

THE COMMERCIAL

(148)

members who

Thanks, Senator!
"As far

on.

•

•

the

for food

or

A

Behind-the-Scene Interpretation*

from the Nation's Capital

N

gJ

~

■

/■

■

■

■

•

lin's,

and the forthcoming

the goods which will sell^
Senators
concerned
with
ex¬
These will determine
the RFC's life beyond
Whether his management will be tending
continued
by
the
stockholders June are predicting that the ex¬
when they review the manage¬ tension will be made "with fur¬
ther curtailment of RFC's lending
ment's affairs in November.

of

Speaker

of

spectacle

Martin

department asking for
immediately and Senator

the House
i

a

tax cut

I'Taft saying, "no, no, let's

the business

For Mr. Truman,

i

wait." *

broken in
True, he
can
rurt in a special now and
then. He can even offer some
new baubles for the Democratic
national platform next summer.
On the whole, however, his final
"record" is made with what he
made

mostly

is

or

these three messages.

.

.

asks for now.

The longshot is that
find themselves play¬
ing through RFC in fact or in dis¬
guise, as well as through the Ex¬
port-Import bank. Vy

A

didate, who will

two

State

messages,

The economic

Report

of new-fangled in¬
vention
which
will
be
"on
order" from the mail catalog

is

a

kind

department only when the Pres¬
ident or the Congress reduce it

board of spe¬
proposals. In
the annual and budget messages
one will read to see where Mr.
Truman stands on pending is¬
sues, and what new issues he
may have added.
to

drawing
legislative

the

cific

Congress's new provision for a
mandatory wheat carryover

of 150

going

isn't

bushels

million

to

Department of Agri¬
very much in feeding Eu¬
The particular provision
the

cramp

culture
rope.

escape clause.
It per¬
government to cut belovy
150 million bushels if, by spring,
wheat crop prospects look pretty

carries

an

mits the

good.

This is about what the Ad¬
would

do, anyway.
the $3 wheat
the Administration is too scared

ministration

r

or

to

according

That,

$

-.

_

%

of the

After the fuss about

pretty

"rebel

of

Markos

plan:

which

of

to

Greek

soil.

rines

This

ernment.

rebel government and to
Russian munitions via Albania. It
the

because

convenient

also

was

not

a

general if necessary could
Albania with¬
even
waiting to put on his

rebel

So

Subsequently the Ma¬
dispatched
for
a

it

now

stand.

like the

looks

Reds

camouflaged vehicle
in
which
they can ride for a
strong attack on the Athers gov¬

haven't got a

S.

U.

is

it

And

ernment.

clear

of

threat of

the

flee conveniently to

limited war, at least

out

With

a

governments
then
would
recognize Markos. The Red hire¬
lings would not be embarrassed
further by American planes now

bomb.

the

In

atomic

fronted

with

necessity

the

not

are

the United
been con¬

meantime

of

now

sion.

bomb, so long as there
many planes to carry

•

*'•

'

may

be- getting

'

'> '

.

i. Sentiment

in

..

,

'

a

is

V \

building

favor

the

of

7.,

-.«*

up

•

..

-

-.

the light

choosy about loans in
of the

scare

to saddle the sec¬

ondary

reserve

shown

privately

pected
which

behind

picking

upon

by

in

Byrd

Congress

the

them was
an

ask¬

ing the RFC to please take over
since some banks don't want to

string along. It's a small
thus far,
but indicative.

trend
The

idea, spon¬
sored by Reserve Board Chair¬
man,
Eccles, is now a dying
duck.
Only Dr. Truman can
save it, and maybe he can't and
secondary

reserve

won't.




had

up

Army.
...

*

*

M. S. WlEN & Co.
ESTABLISHED 1919
Members
40

N.

Y.

Security Dealers Ass'n

HA. 2-8780

Exchange PI., N. Y. 5

Teletype N. Y. 1-1807

*

of

the

*

Home

Trading Markets:
Ralston Steel Car

Loan

Oregon Portland Cement
Riverside Cement 4 & B

Spokane Portland Cement

a

year.

when

turmoil

The

board

will

end

LERNER & CO.

(1) the membership of the
has

confirmed

completed and
the Senate, and

been

by

(2) when and if the

Investment

10 Post Office

<

Securities

Square, Boston 9, Mass.

Telephone Hubbard 1990

;

Board gets

i

Telet>pe Ba C9
i

to

in
Confederate uniforms and be¬
come
volunteers for the Greek

parade, is
Many of the cus¬

tomers with term loans are

have

Italian Securities

remain
turmoil until well into this

"to guard sup¬

would have to be dressed

lending

up.

might

plies and port facilities." May¬
be
also
some
American GI's

source. RFC's business,
has been limping along

the

S.

U.

send some troops

unex¬

Longchamps

ad¬

be

7..'"'vV "

'v:

■'

1

bill, which would combine all ap¬
propriations into a single supply

to

..

Affairs

in
*

■

Berkey & Gay

Bank Board are likely to

prevent this. It might
have sufficed to give abundant
material aid. On the other hand,
ment

banks

however,

*

them.

,

Depart¬

General, and the
Agriculture.

ment of

this

in

toward enactment in another ses¬

pretend to have,
have, of the

backing up the Athens govern¬
That

interest

by the thinking about it,

vanced

the

will,

It

year.

Then the

really

don't

but

*

would Jiave

States

is

there

While

Aircraft the

Russians really would have
fear they

ney

This would work in a
toward budgeting.

proposal, the shortness of the time
available for the session makes it
doubtful if it can be adopted this

power

aircraft.

terms agreeable
the Attor¬

The

"

ises.

to risk meeting the 520
million all-grain export goal if it
looks like a short crop. 1 : r

military

President would buy.

regime—and move into the prem¬

anyway

small way

afraid of the atomic
the one kind of

is

sufficient

"Russian

*

spendings.

which
could be brought to bear quick-*
ly, assuming the availability of

the port

*

are

It

S.

U.

away,

■'•,

in

Russians

The theory is that the

actually

rebels, but
would shoot them, When the re¬
bellion succeeded in its fartherreal objective, the taking of
of Kavalla to be used as
commercial and naval
base on the Aegean, then Moscow
itself would recognize the rebel

be confirmed next week

to build up
the number of military aircraft.

the

to

movements

of details.

supply would be held in abeyance
until
they were all
in.
They
would all be decided at once, and
in relation to each other and tota"

the Budget message,

munitions

and

troop

reporting

directly in
which

may

on

the White House,

to

few big

to decide the mass

decision,

tentative

speculation

the details of appro¬

advantage of this plan, however
is that decision on all big items of

the

elite

a

for the-time

Red Russia figures

putative government es¬
on Greek
soil the sat-

a

attacked un¬

be

Republican
"anti-in¬
hill
for
"voluntary

agreements." The organized ex¬
changes would be called in to
draft
an
agreement
curbing:

items, but the run of de¬
as proposed by the sub¬
committee. Under the Byrdv bill
the subcommittees would continue

a

being.

tablished

could

the

flation"

tails holds

«.'!

'

pants.

ulation"
der

*

♦

*

how "excessive spec¬

is

changes in total allowances or for

the

like

looks

by example. Whether it will
depend upon Con¬

Here

priations are actually settled for
most part bfy the Appropria¬
tions subcommittees. When a sub¬
committee has drafted its recom¬
mendations for supply for a par¬
ticular Federal agency, it submits
the bill to the full committee. The
full committee obviously is un¬
familiar with the details. It makes

were

dress front for the U. S.

is try¬

the

ideal rebel

was an

capital, because it was close to the
Albanian source of "volunteers'
for

the

up

warnings to
to recognize

be

this

be used will

the in¬

the

At present

seat of gov¬

the

as

on

backed

strong

satellites

Markos.

The town of Konitsa

selected

was

Britain

of

corner

a

with

S.

the

govern¬

itself

establish

was

got

for this provision is one of
things that must first be
submitted t® Congress.

expenditures and revenues. This
has directed Congressional atten¬
tion to the subject of budgeting,
even
if the Reorganization Act
falls far short of giving Congress
the machinery for budget making.

to

trying

the
real property of the government
it allegedly is rebelling against.

ment"

Senate

gress,

by Feb. 15 to frame the limits of

After

supposed rebel gov¬
even
isn't
in

a

possession

days.

Russian

the

should

what

those

Legislative Reorganization
Act that Congress should attempt

the
that the "reb¬
with

thin

ernment

U.
was

made with¬

was

the

big chunk of the Argentine corn

crop,

creasing interest in this proposi¬
tion is the awkward requirement

T-

was

Then

Here

of

idea
Then

the

foreign

signed to work out plans. There
will be no "parity" for Argentine
corn.
But it could be used to buy

We

What is behind

measure.

swipe here

wrong

recognize

though it must be

last several

went

its

all

unidentified,
significance in the Balkan

news

that

encourage

ing to figure out what to do with
it.
Special brains have been as-i

a

els" did not hold Konitsa.

a

ia the

proposals

thing tied on to the the Republi¬
can "anti-inflation" bill.
Now the

glad the Senator again has taken up the cudgels
good cause.

tReds' plans

and the
Greek soil has
at least post¬

*

*

not, the

or

should

an

done.

■1

things badly needed to be said.

and there.

which is competent even

source

The

*

the
most
important are the
of the Union and Budget

messages.

averted

been

poned.

stuff.
*

a

What

Russia

between

United States on

peddle his own

three

?

these

estate they attempt to

Presidential can¬

have to select a

*

in

■,

real threat of limited

very

war

it

production

out

so

are

*

$

S.

food

were

^

All

loan

and

Administration

the

U.

*

of

Opposition. They also have a con¬
vention next summer in which to
.stock up with the latest in politi¬
cal merchandise.
And they also

of

may

*

also for the most
make their own sales
between now and July.

the

Taft.

foreign aid.
they

savings

*

Believe

*,

independ¬

the

to

the

of

system.

proved to be necessary to extend aid to
Europe in the volume proposed, then we must rec¬
ognize that our people have to pay the price both
in taxes and increased prices."—Senator Robert A.

Some of the

now.

"threat

this
ence"

Department of Agriculture

."If it

gentlemen on Capitol Hill think
they
can
wave
the legislative
wand, create a brand new cor¬
poration complete with staff, tech¬
niques and red tape, ready to go
to work by June on long-term

Obviously, however, they have a
little more time leeway than the

Of

right

will be raised in Congress over

run,

*

Foley,

Eyebrows

trust.

brain

ap¬

The

Administration

the

of

housing

„

as

shot buy

will

record

com¬

long

and

Chairman,
latter

as

Divers.

aide to Raymond

an

head

the ques¬
tion of whether France, for in¬
Robert A. Taft
stance, goes Communist will de¬
pend, 90 %, on the wishes of her own people and on
the policies of her own Government.

it is to define with par¬
ticulars what are'good and bad
loans for commercial banks in the
terest,

was

•

,

"But in the

mercial business'in the public in¬

Republicans
part

undesirable

and

*

%

.

as

difficult to define for RFC what is
desirable

help and

lems.

Dyke,

name

K.

-

House

White

instead

William

help these

tendency to

the

pointed

peoples to solve their own prob¬

present inflationary era. If RFC
were
only a private corporation,
its stock would be a good long

about

is

It

direct

a

power." There is now doubt about
curtailment.

failed,to

many

that such aid will have

can see

we

Corp., and boosting the

surance

savings and loan business generally,. Then

are

situations where we can

not sell.

that

European industry,

only we can help. Where we have
a surplus, I believe we should be
liberal in providing aid wherever

Economic and Budget messages, Mr. Truman must

Republicans, Inc., the compet¬
ing shop across the street, unfor¬
tunately is without central pur¬
chasing. Each departmental man¬
ager, the House or the Senate de¬
partment, or even the head man at
each counter, tries to decide what
,he will sell.
Thus there is the

up

*

"Undoubtedly there

stock up
or

help build

*

'4.:^*
What you are now seeing in effect is Chief Buyer Harry S. Tru¬
man for Democrats, Inc., laying in most of his 1948 stock of political
merchandise. For in the annual message to the opening of Congress,
,

start

expanding

European TVA.

or a

was

and

five-year plan like Sta¬

kind of

a

themselves.

Fahey resigned
Nathaniel Dyke,'

scheduled to take over
a
program aimed at
membership in the
Federal Savings and Loan In¬

Jr.,

Plan') is for relief

for fuel.

or

H.

Chairman,

as

work reason¬

can

among

John

When

discover, much less than half of

can

"Most of it is to

^ .

JL Ulil

jLjiUlA/

.

I

as

asked (in the 'Marshall

sum

well

ably

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to

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a

a

of dollars

affair.

It will

jostling of Reds out of real

Hill, Thompson & Co., Inc.

FOREIGN SECURITIES

It need not

full scale, billions

and millions of men
be

HARL MARKS & TO- INC.

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Russia and the U. S.
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this is the

matter of fact,

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