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Die
financial
lirtintrie
SATURDAY,JANUARY 9 1932.
VOL. 134.
financial Chronicle
PUBLISHED WEEKLY
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The Financial Situation.
In his annual report the present week the Superintendent of Banking of New York State, Joseph A.
Broderick, makes a suggestion that may have considerable merit. He suggests "the formation of some
sort of Council of Bankers and Business Men with
whom the Superintendent may confer on general
banking conditions or on specific matters as to which
advice and official support may be helpful." He
adds that "It would seem that assistance of the sort
mentioned could be furnished by a properly organized Advisory Council, or Commission, which would
be in keeping with our present system of State Government."
He lays great stress upon sound management, and
that is a feature which cannot be emphasized too
much. As one sees bank suspensions occurring on
every side and in all parts of the country,and studies,
or seeks to study, the causes of the same, one cannot
fail to be impressed with the fact that what has been
lacking almost uniformly has been sane and sound
methods in the management of the afflicted institutions. There may have been other contributing
causes, some of them beyond the control of the managers, and these latter on occasions may have been
entirely free from blame, but in the great majority
of instances, and to an overwhelming extent, what
has been lacking has been sound management.
And this being true, it follows that what is needed
in the first instance is character in management.
Of course a knowledge and understanding of banking
principles is also essential and no neophyte should
ever be tolerated in the banking business, but character is the fundamental requirement even in that,
because in the last analysis he who enters upon the
business of banking undertakes a duty of trust—a
NO. 3472
relationship of fiduciary to the depositors and of
service to the public—and no one with a proper
sense of responsibility, in other words, no one having all the essentials of a good character, will enter
upon the discharge of such a duty and responsibility
unless he is properly and fully qualified for the task.
What is needed is not new law, new legislation,
but simply what is inherent in the individual himself.
And the remark applies to the subject of branch
banking, which has been bulking so large recently;
the defect when trouble occurs is not in the absence
of authority to establish branches, but the absence
alone of the simple quality of sound banking. And
that deficiency legislation cannot supply. As stated,
it must be inherent in the individual himself. Hasty
conclusions are often reached on slender and insufficient facts. But if there is one thing, beyond all
other things, which experience has taught in the era
of bank failures through which the country has been
passing, it is that sound banking is the one solvent
of all the country's banking troubles. Banks with
branches have failed, hundreds of them; chain banks
have failed, and every other kind of banks have made
their contribution to the bad banking record for
which the last few years will ever be notable, but all
methods of banking prove faulty when character is
lacking.
• Superintendent Broderick does not go into an
analysis or discussion of any of these things. He
simply lays down certain incontrovertible truths,
saying:
"Sound management is still the greatest factor in.
successful banking. Our real bankers understand
that their primary functions are to safeguard their.
depositors' funds and to finance the legitimate requirements of trade and commerce. So-called progressive ideas and fair-weather practices have been
tried and found wanting, and have not stood the test
of depression. Recent experiences have shown conclusively that there is no place in our banking institutions for trading or speculative activities, or for thefinancing or encouraging of such activities. More
than ever before, it appears absolutely necessary
that there shall be a distinct line of demarcation between deposit and investment banking. It is clear,
too, that many of our banking methods and our banking laws are nob in keeping with the changing conditions and changing practices.
"The past year has demonstrated more clearly than
ever before the interdependence of the vast numberof separate units which compose our State system.
We realize now, as never before, that no single institution or group can afford to disregard the problems
of the others. We must also learn that the same is.
true in times of rising markets, when some institutions, in their desire to expand and enlarge their
profits, depart from sound principles of banking.
We must recognize that the practices of such institutions are a responsibility upon the entire banking,
168
FINANCIAL CHRONICLE
community, and that their correction requires the
same unity of action with which our banks have met
their problems during this period of economic
stress."
Mr. Broderick, after quoting the banking law to
show that the duties of the Superintendent are
essentially executive in nature, goes on to say: "On
the other side of the question are many arguments in
favor of the formation of some sort of Council of
Bankers and Business Men with whom the Superintendent may confer on general banking conditions
or on specific matters as to which advice and official
support may he helpful. It would seem that assistance of the sort mentioned could be furnished by a
properly organized Advisory Council or Commission, which would be in keeping with our present
system of State government."
We find ourselves in full accord with this, and,
therefore, agree with the Superintendent in his further statement that: "In the future it may be found
that certain powers relating to the issuance of general orders may very properly be vested in such a
council. At the present time the problem of establishing uniform conservative interest rates is a matter of great importance to general banking conditions. If a council with advisory and certain other
duties should be created, the legislature might very
well give serious thought to empowering the Superintendent with the consent of two-thirds of such a
council, to establish maximum interest rates."
Mr. Broderick makes many other suggestions and
recommendations, each of which should have separate consideration at the proper time, but there
would appear no reason for taking exception to what
he says in arguing in favor of the Advisory Council
he has in mind, though in the end much will depend
upon how broad the powers and functions to be conferred upon that'body are to be. There is the more
reason for carefully studying the proposal,inasmuch
as Governor Franklin D. Roosevelt in his lengthy
annual message, discussing the State and national
problems,also gives unqualified support to the proposition. Mr. Roosevelt is not slow in characterizing
the financial debauchery of recent years, from the
effects of which the country is now so deeply suffering. The fact that he is altogether too sweeping and
too all-inclusive in his charges may well be overlooked in view of his earnestness. He says:
"Thoroughly unsound, even if wholly legal, banking practices have been growing for a generation.
Many banks became mere bond-selling houses. Many
bankers forgot that it was of doubtful ethics to sell
their own securities to their depositors and to trust
funds for which they themselves were trustees.
"Many billions of securities were sold to the public
at prices unjustified even by the expectation that we
had reached an immutable millennium, a permanent
Utopia. Consolidations, mergers holding companies investment trusts were touted in every corner
of the land,
a pyramiding unequaled since the days
of the Mississippi Bubble.
"To-day we recognize the unsoundness and the
danger. The bubble has burst with all its rainbow
glory. The public has burned its fingers in the flame
of wild speculation and has learned now to fear the
fire. While it still fears the fire, Is the time for us
to act."
With the foregoing as his basis, Governor Roosevelt argues that the necessary action to prevent a
repetition of our unfortunate experience must come
from the Legislature of the State of New York, now
[VOL. 134.
as in the past: "The people, through their representatives) have at all times found it necessary to
place curbs and regulations and supervision on those
who handle other people's money." What are the
necessary requirements for the purpose? Mr.Roosevelt names four of them, and mentions as the first
of them Superintendent Broderick's proposition for
the creation of an Advisory Council. The four requirements which Governor Roosevelt deems essential are named as follows:
First, we need new laws to give to the Superintendent of Banks and his department the benefit of
assistance and advice in meeting a situation which is
abnormal and without precedent. The inflexible
provisions of our banking law do not permit adequate
handling of emergencies. An Advisory Council
could provide under proper restrictions flexibility
with safety. With this I am confident ;hat we can
give additional protection to the deposits of millions
of our people who are depending on their savings and
to the wheels of industry which require banking
facilities to meet their payrolls.
Second, unsound practices of the past must be
eliminated by law from now on. The ethics of banking need restatement; savings must be managed as
savings and not confused with commercial or checking deposits.
Third, there must be revision of the laws relating
to the sale of securities to the public. It is time to
differentiate between prospects and true values, or
at least to tell an unskilled public the whole truth
about the contents of what in the past has been a
package too often sold only because of the bright
colors on its wrapper.
Fourth, we must by law maintain the principle
that banks are a definite benefit to the individual
community. That is why a concentration of all
banking resources and all banking control in one
spot or in a few hands is contrary to a sound public
policy. We want strong and stable banks, and at
the same time each community must be enabled to
keep control of its own money within its own borders.
We wish also to commend what Governor Roosevelt has to say regarding the "Problem of the Railroads," for we regard the solution of that problem
the most urgent and the most pressing with which
the country is confronted at the present time. The
Governor says:
PROBLEM OF THE RAILROADS.
"I come now to another problem of the Inoment
over which, unfortunately, the State can have little
control. For many generations the greatest of common carriers, the railroads, have formed the backbone of that form of wealth which seeks stable investment. Banks, insurance companies, charities, hospitals, churches, trust funds, all, rightly or wrongly,
have placed confidence in the permanence of the
underlying mortgages of the railroad. Many people
of late have seen the serious effects of a nation-wide
depression on railroad traffic. The railroads are
heavy sufferers, in addition,from a new competition
by great trucks and buses on highways built by the
State.
"In view of the fact that the taxes paid by the
railroads have helped and are helping to build these
highways and that the trucks and buses now use them
almost tax-free, a better equalization of taxes is
called for in all fairness. I shall ask in my budget
message for a tax on heavy motor vehicles commensurate with their use of the costly highways of
the State.
"Summing up, therefore, the present situation,
in so far as the State can give assistance to credit,
to bank deposits, and to the strengthening of the
general financial structure, it is incumbent on us
JAN. 9 1932.]
FINANCIAL CHRONICLE
169
to do everything in our power to protect the present other securities from $30,880,000 to $28,844,000. Of
and to rebuild for the future along far sounder lines." the total contraction of $296,90
5,000 for the week,
$278,000,000 occurred in the New York Reserve DisThe present week has seen a correction of the trict, showing again
that the bulk of the change
exceptional condition in which the Federal Reserve occurred
here. Notwithstanding this contraction,
banks of the country found themselves a week ago. however,in
the volume of Reserve credit outstanding
It may be recalled that last week the volume of Re- the amount of Federa
l Reserve notes in circulation
serve credit outstanding was increased in amount again increas
ed, rising from $2,613,104,000 to $2,651,of no less than $228,000,000 as measured by the total 026,000
. Gold holdings suffered a slight decrease
of the holdings of bills and securities, and that this during
the week, dropping from $2,987,564,000 Dec.
was after very heavy previous increases, and that
30 to $2,985,552,000 Jan. 6. Nevertheless, as the
every item forming a part of the total of these hold- deposit
liabilities were greatly reduced the ratio
ings contributed to the increase. The discount holdof total reserves to deposits and Federal note liabiliings mounted up from $911,194,000 Dec.23 to $1,024,ties combined, which last week had dropped from
133,000 Dec. 30; the holdings of acceptances in64.4% to 61.9%, the present week ran up to 65.5%.
creased from $257,351,000 to $326,975,000, and the
The mistake must not be made, however, of supposholdings of Government securities rose from $758,ing that the Reserve banks find themselves in easy
222,000 to $803,228,000. More than the whole of the circum
stances or in a state of liquidation. Quite the
increase in the discounts occurred right here in the
reverse is the case. The amount of Federal Reserve
New York Reserve District, where the volume of the
notes outstanding is almost a full billion dollars
discount holdings jumped from $236,396,000 Dec. 23
larger than it was 12 months ago, and amounts now
to $431,827,000 Dec. 30, and where the bill holdings
(Jan. 6) to $2,651,026,000 as against $1,624,898,000
increased from $74,975,000 to $160,580,000, and the on Jan.
7 1931. It is also $770,834,000 in excess
holdings of United States Government securities in- of what
it was when it was at its maximum at the
creased from $267,322,000 to $302,056,000, and where time
of the stock market crash in the autumn of 1929,
the total of the bill and security holdings in this when
it totaled only $1,880,192,000. Moreover,
Reserve District ran up in this single week from with
total deposits now of $2,169,419,000 the rela$592,756,000 to $908,620,000.
tively small sum of $281,108,000 is not tied up in
The great expansion in Reserve credit outstand- investments
or in discounts.
ing in that week has not yet been adequately explained. The "Monthly Review" of the New York
The stock market opened the new year on SaturFederal Reserve Bank for Jan. 1 tells us that during day last
in a gloomy and dismal way, with further
December there were the usual demands upon the heavy decline
s on Monday, thereby creating a feelbanks incident to the holiday trade and the year-end, ing that
the situation during 1932 was to be no better
including a demand for approximately $225,000,000 than
the sad experience in the whole of the preceding
of currency, fourth quarter income tax collections, period
back to the time of the collapse in the autumn
and preparations for year-end corporations and bank of 1929.
But the market has since retrieved itself
statements. But the so-called holiday demand for and
enjoyed very substantial advances, completely
currency has done duty on many occasions in the changi
ng the aspect of things and giving the market
past, and certainly New York City was not flush
a decidedly encouraging look which has inspired hope
with holiday money the present season, and yet, as
that the long-continued depression may now soon
we have just seen, it was in the New York Federal
be a thing of the past, though it is proper to say that
Reserve District that the sudden heavy discount adthere may have been nothing more than extensive
ditions occurred,and here that the heavy offerings of
covering of outstanding short commitments, which,
acceptances to the New York Reserve Bank occurred.
however, might be interpreted as signifying that the
In the two weeks from Dec. 16 to Dec. 30 the disbear contingent see brighter things ahead and, account holdings of the 12 Reserve banks ran up from
cordingly, think it a wise precaution to close out
$697,908,000 to $1,024,133,000, being an addition of
short commitments. What is a real source of en$326,225,000, out of which $312,283,000 occurred in
couragement is that the bond market appears at last
the New York District. It seems more likely that
to be evidencing sustained buying, which is imTreasury financing and the acquisition of unusual
portant since the general belief is that no permanent
amounts of Government securities in connection with
rise
in the stock market can be counted upon until
the United States Treasury's December program
of the bond market itself gives the cue in moving
financing played an important part in swelling
the steadily and persistently towards higher levels.
volume of Reserve credit so greatly.
It was the renewed quite unexpected collapse in
Whatever the cause, the exceptional circumstances
the bond market on Saturday and Monday, when
responsible for the same have now been eliminated,
bond prices tumbled once more in most serious
as evidenced by this week's Federal Reserve statefashion, that proved so extremely dispiriting. Bements, which show a contraction in the volume of
ginning with Tuesday, however, bond prices sharply
Reserve credit outstanding even more noteworthy
recovered and there has been substantial further imthan last week's expansion. In other words, while
provement in prices on every day since then, the
last week the total of the bill and security holdings
cumulative advances for the week being of quite
mounted from $1,957,221,000 to $2,185,216,000, the
large size. The stock market, after the severe
break
present week the amount has dropped back to $1,888,- on
Saturday and Monday, touched further low levels
311,000, the contraction falling not far short of the
early part of Tuesday, but after that display
ed
$300,000,000. The discount holdings have diminished a rallyin
g tendency which left most stocks at
the
during the week from $1,024,133,000 to $818,216,000; end of that
day not much lower than the close
on
the bills or acceptances from $326,975,000 to $275,- Monday.
On Wednesday and Thursday,on the
other
306,000; the holdings of Government securities from hand, share
properties spurted up with
$803,228,000 to $765,945,000, and the holdings of
great
rapidity, completely altering the entire
outlook, as
170
FINANCIAL CHRONICLE
[Vox,. 134.
8; Commercial Solvents at 91/4 against
already stated. On Friday confidence remained un- against 261/
4 against 9%, and Corn
& Co. at 93
Shattuck
8%;
the
Among
impaired, and prices moved still higher.
4
/
1
41%.
against
45
at
Products
week
the
during
dividend reductions and omissions
Allied Chemical closed yesterday at 71% against
that which attracted most attention was the reduction in the dividend on the common stock of the 68% on Thursday of last week; E. I. du Pont de
2against 55½; National Cash Regis1
Atchison Topeka & Santa Fe from $2.50 a share to Nemours at 54/
8; International Nickel
9%
against 81/
$1.50. Thus this premier stock has been reduced ter at
73/4;
Roller Bearing at
Timken
against
s
/
87
at
from a basis of 10% per annum to only 6%,testifyat 14% against
Mack
Trucks
4;
/
21
181
against
ing anew to the shrinkage in railroad revenues.
4 against 3%;
33
at
&
Coach
Truck
;
4
1
/
Yellow
14
menbe
may
reductions
Among the other dividend
8
/
221
against
17%; Gillette
at
Johns-Manville
which
Corp.,
Goods
Dry
Associated
tioned that of the
8; National Dairy
decided to omit dividends altogether on its common Safety Razor at 14 against 121/
/8; Associated Dry Goods
stock; the American Smelting & Refining Co. cut its Products at 24 against 227
Gulf Sulphur at 237
Texas
4;
8
/
73
against
2
1
/
6
at
2c. a share; the
1
guar. div. on common to only 12/
&
Foreign
American
8%
at
Power
;
4
/
223
against
was
previous quarterly payment by this company
8
/
2c. a share, the dividend payable Aug.1 was 50c. against 7; General American Tank Car at 307
1
37/
191
at
4
/
Improvement
Gas
against
United
31;
against
paying
been
had
company
the
a share, prior to which
8; Coca Cola
$1 a share; the Columbian Carbon Co. made its quar. 18½; National Biscuit at 42 against 401/
2
1
2 against 107; Continental Can at 36/
1
div. only 75c. a share against $1 a share at the previ- at 112/
;
4
1
/
81%
82
at
against
Kodak
Eastman
;
2
1
/
ous quarterly date and $1.25 a share prior thereto. against 34
2
1
/
17
against
;
Standex-div.
18%
at
Gold
Dust
Corp.
guar.
The Goodyear Tire & Rubber Co. reduced its
div. on common to 25c. a share, which compares with ard Brands at 13% against 13%;Paramount Publix
2 against 7; Kreuger & Toll at 6%
1
75c. a share on May 1 and $1.25 a share from Aug. 1 Corp. at 10/
Westinghouse Elec.& Mfg. at 26 against
5%;
against
Co.
Stores
Cigar
United
The
1931.
1
1929 to Feb.
4; Columbian
1
2 against 53/
1
Inc., at 52/
;
4
1
/
23
Drug,
stock
pref.
cumul.
6%
the
on
div.
quar.
its
reduced
34;
Tobacco at 71
Amer.
4 against
from $1.50 to $1. Cluett, Peabody & Co., Inc., cut its Carbon at 353
507
at
8 against
/
B
class
Myers
&
Liggett
69%;
against
quar. div. on common from 75c. a share to 50c. a
8;
/
353
36
at
against
B
class
Tobacco
8;
/
477
Reynolds
only
share, and the Exchange Buffet Corp. declared
Products
and
Tobacco
13,
against
14
at
on
Lorillard
paid
25c.
share
a
against
4c. a share on common
1
6/
2against 7.
1
2c. a share paid on previous quarterly class A at 7/
1
Oct.31 and 37/
The steel shares have moved higher with the
dates. The Allis-Chalmers Co. also reduced its dividend. The rate for call loans on the Stock Exchange rest of them. United States Steel closed yesters against 38% on Thursday of last week;
/
was twice reduced during the week. On Monday all day at 433
2against 18%; Vanadium at
1
2%;on Tuesday, after renewals had Bethlehem Steel at 21/
1
loans were at 3/
Steel at 21% against 24,
13
Crucible
;
4
1
/
against
14%
for
again been effected, there was a drop in the rate
5% against 5. In the
at
Steel
Iron
&
Republic
and
after
on
renewals
Thursday,
and
new loans to 3%,
2
1
yesterday at 140/
closed
Auto
group
Auburn
auto
new
rate
3%,
for
the
at
put
through
been
had again
2%, which also was the rate on against 131 on Thursday of last week; General
1
loans dropped to 2/
2 against 225/s; Chrysler at 14%
1
Motors at 23/
Friday for all loans, including renewals.
2;Pack1
4 against 17/
Nash
Motors at 173
14;
Trading has been only moderately large. At the against
Car at
Motor
4%;
Hudson
against
5
at
Motors
ard
half-day session on Saturday last the sales on the
at
5%
against
Hupp
Motors
and
8,
loy
11%
against
on
shares;
were
Exchange
721,990
New York Stock
8. In the rubber group Goodyear Tire & Rubber
Monday they were 1,513,365 shares; on Tuesday, 41/
4 against 19 on Thursday of
1
1,418,619 shares; on Wednesday, 1,837,910 shares; closed yesterday at 16/
on Thursday, 2,179,369 shares, and on Friday, last week; B. F. Goodrich at 5 against 4.
The railroad shares are generally higher. Penn1,969,650 shares. On the New York Curb Exchange
4 against 18%
1
RR. closed yesterday at 20/
sylvania
the sales last Saturday were 140,205 shares; on Monweek;
Atchison
Topeka & Santa
last
of
on
Thursday
181,602
day they were 292,240 shares; on Tuesday,
4
1
Coast
Line at 33/
85
85;
at
against
Atlantic
Fe
Thurson
shares;
265,550
Shares; on Wednesday,
9;
against
at
12%
Rock
Island
28;
Chicago
against
shares.
350,585
Friday,
on
and
day, 302,775 shares,
29;
&
against
Baltimore
s
/
315
at
New
York
Central
week,
prices
last
of
Thursday
with
As compared
at
2
1
/
24
Haven
;
4
1
/
New
15
17%
against
at
Ohio
the
of
recoveries
the
to
due
around,
all
are higher
2; Union Pacific at 75 against 71%;
1
last few days. General Electric closed yesterday at against 20/
4 against 27%; Missouri1
at 31/
Pacific
Southern
25 against 25 on Thursday of last week; North Amer6
4%; Missouri Pacific
against
at
4
1
/
Kansas-Texas
8 against 33%; Pacific Gas & Elec. at
/
ican at 347
at 10/
2 against
1
Railway
7;
Southern
2
1
/
8
against
at
30%
34% against 34; Standard Gas & Elec. at
Northern
28%;
against
29
at
&
Ohio
Chesapeake
63
at
Y.
N.
½;
against 2734; Consolidated Gas of
at
Northern
Great
and
,
15
against
8
/
207
at
Pacific
8
7
/
against
4
1
/
14
at
Elec.
8; Columbia Gas &
against 601/
.
2
1
2
1
/
/
22
17
against
bid;
2
1
/
75
against
4
813
at
13; Brooklyn Union Gas
The oil shares also recorded gains over the previous
8 ex-div. against 10%;
/
Elec. Power & Light at 123
2
1
2 against 541/4; Inter- week. Standard Oil of N.J. closed yesterday at 29/
1
Public Service of N. J. at 56/
week;
last
of
Standard
Thursday
8 on
/
national Harvester at 26 against 24; J. I. Case against 277
2 against 25; Atlantic Refining
1
/8; Sears, Roe- Oil of Calif. at 26/
78 against 407
Threshing Machine at 36'/
Freeport-Texas at 18 against
9%;
against
10%
buck & Co. at 33% ex-div. against 33; Montgomery at
2 against 4%; Texas Corp.
1
/
6
at
Oil
Sinclair
16½;
/8 against 7%; Woolworth at 41%
Ward & Co. at 97
Phillips Petroleum at 5/
2
1
12%;
against
13%
at
against 40; Safeway Stores at 45 against 43%;
.
4
1
/
4
against
4%
at
Oil
Pure
and
4%,
against
;
2
1
/
38
Union
at
40%
against
Telegraph
Western
The copper stocks likewise moved upward with
American Tel. & Tel. at 120 against 116%; Int. Tel.
/
4 the market. Anaconda Copper closed yesterday at
4 against 83
8; American Can at 631/
/
& Tel. at 103
/8 on Thursday of last week; Kenn&
2 against 97
1
against 60; United States Industrial Alcohol at 26% 11/
JAN. 9 1932.]
FINANCIAL CHRONICLE
cott Copper at 12% against 11%; Calumet & Hecla
at 3% against 31/
8; Phelps Dodge at 8% against 7;
American Smelting & Refining at 16 against 18%,
and Cerro de Pasco Copper at 137
/8 against 12%.
.
171
the market. French stocks were quiet, but gains
appeared here also. Prices on the Bourse continued
to move forward, Wednesday, with German issues
still in heavy demand. The opening was somewhat
hesitant, but the market soon began to advance, and
it continued the upswing through the remainder of
the day. French bank and industrial issues showed
sizable gains, it was reported. The favorable tendency was accentuated, Thursday, and the gains were
extended in all sections of the list. German bonds
resumed their advance and closed at the highest
levels of the day. Bank of France shares gained 325
points and other issues also moved forward smartly.
After early weakness yesterday the market steadied
and changes were small at the close.
Quotations of securities on the Stock Exchanges
in London and Paris were generally lower in the
first sessions of the new year, but as the week progressed substantial improvement took place. The
trading of the year was started on the European
markets on Monday, as the New Year's Day closing
was extended to include last Saturday. There was
little business at first, but as reports were receiv
ed
of the mid-week advance in the New York markets,
trading increased at London and Paris and the foreign trend also became favorable. The London market reported exceptional interest in German bonds,
The problem of German reparations occasioned
owing to rumors that the British and French Gov- numerous informal confer
ences in European capiernments had reached substantial agreement on a tals this week, but there
is still some uncertainty
moratorium of reparations payments under the regarding the date on which
representatives of the
Young Plan. The outlook on the reparations and interested governments
will gather at Lausanne to
debt negotiations was,indeed,of primary importance consider the report of
the B. I. S. Advisory Comon the London Stock Exchange and the Paris Bourse, mittee. The Britis
h proposal for a conference beas there were few indications of progress in other ginning Jan. 18 was accept
ed late last week by the
directions. The Berlin Boerse remains closed under French, German,Belgian,
Italian and Greek Governthe orders of the Government and the Reichsbank, ments. Britain and Franc
e took a further step
but unofficial trading is said to be on the increase Monday, when a suggestion
was made to President
and a sharp rise in quotations was reported on the Motta of Switzerland
for the meeting at Lausanne
basis of the B. I. S. Advisory Committee recommen- during the latter half of
this month. Uncertainty
dations on reparations.
regarding the date has again arisen, however, owing
The London Stock Exchange was dull and irreg- to the death, Wednesday,
of the French War Minular, Monday, owing partly to a decline in sterling ister, Andre Maginot.
Extensive changes in the
exchange and partly to speedy response to the Gov- French Cabinet are now
forecast, and these, a Paris
ernment's appeal for prompt payment of the new dispatch to the New
York "Times" states, "will
income taxes. The installment due beginning Mon- almost inevitably
cause a delay in the opening of
day is for nine months, and although the payments the proposed Lausa
nne conference."
proved very burdensome in a great many instances,
British policy with respect to reparations was disthe response to the request for early payment was cuised at a Cabine
t meeting in London on Thursday,
reported as extremely satisfactory. British funds and it was annou
nced thereafter that Neville Chamwere somewhat lower, but German issues advanced berlain, Chancellor
of the Exchequer, and Sir John
sharply. Home rail stocks were given good support, Simon, Foreign
Secretary, will head the British delewhile the industrial list turned soft. In Tuesday's gation at Lausa
nne. As a result of the meeting it
session, German securities again provided the best was established
that the British Cabinet will pursue
feature. British Government bonds were off at the the policy of
reaching an agreement with France as
opening, but most of the losses were regained. Home a preliminary
to a successful conference, reports
rail shares reacted, and industrial stocks also moved said.
In a London dispatch to the "Times" it was
lower, with textile issues especially soft owing
to indicated that the French desire for maintaining the
the Indian developments. A better tendency
in integrity of the Young Plan probably will not be
sterling exchange, Wednesday,occasioned a substa
n- challenged by Britain, although considerable weight
tial rally in British funds, while further advanc
es is likely to be laid by London on the necessity of
also were registered in German bonds. Home rail restor
ing world confidence in Germany's economic
stocks also were firmer and small advances appear
ed stability. In Berlin active preparations were carin the industrial section as well. The intern
ational ried on this week for the reparations meeting, and
it
list improved sharply, owing to favorable overni
ght was indicated that Chancellor Bruening is likely
reports from New York. The advancing
tendency to make a stand for "no more tribute payments."
was maintained Thursday, British funds showi
ng Some comment was occasioned in the German capital
added strength and German bonds also reflecting by
an unexpected visit of Walter E. Edge, United
excellent support. A long list of gains appeared in States
Ambassador to France, to Berlin, in order to
the industrial market, but in most cases the rises confer with
Frederic M. Sackett, diplomatic reprewere not large. Dealings were quiet in London, sentative of
the United States in the German capital.
yesterday, and a slightly irregular tendency was Mr.Edge
arrived in Berlin, Monday,and he returned
reported.
to Paris Wednesday. It was disclosed in Paris,
The Paris Bourse was heavy, Monday, and prices Wednesday, that
conferences on the problem had
receded drastically under general liquidation. Sell- taken place the
previous evening between Premier
ing ordersfrom other markst appeared in substantial Pierre Laval and
Leopold von Hoesch, the German
volume, it was said, and there was little buying Ambassador. No indica
tion was available of the
interest to offset them. Bank of France shares were trend of these diplomatic
discussions.
off 300 points, and other issues also showed large
declines. The trend was reversed Tuesday, with
Preparations are quickly being comple
ted in all
extensive purchases of German bonds the feature of countries for the World
Disarmament Conference
172
FINANCIAL CHRONICLE
[VoL. 134.
already taken by the Japanese in their self-appointed
task of suppressing banditry in Manchuria are apparently to be the subject of a protracted diplomatic
debate. It was indicated by the State Department
in Washington, Thursday, that the United States
will adhere to its rights under the various international covenants applicable in the Manchurian
affair. These include specifically the Nine-Power
Treaty and the Kellogg-Briand pact outlawing war
as an instrument of national policy. A notification
to this effect was dispatched to Tokio two days ago,
as part of a concerted international effort, in which
the Governments of Great Britain, France and Italy
also are expected to join.
An unfortunate incident at Mukden, last Sunday,
which involved Culver B. Chamberlain, a United
States Consular official, has served to becloud the
Manchurian issue to a degree. Mr. Chamberlain,
who is the American Consul at Harbin, Manchuria,
passed through Mukden while proceeding to his post.
On his journey to the railway station, at 6:30 in the
morning, in a motor car flying the American flag,
he was stopped and questioned by Japanese guards.
A misunderstanding arose, and as a consequence
he was severely beaten by the Japanese interpreter
and the guards before being allowed to return to the
American consulate in Mukden. An official Japanese apology was immediately transmitted through
the Japanese Consulate in Mukden, but Secretary of
State Stimson made known Monday that this was
not considered sufficient, and that he had protested
vigorously against the attack to Katsuji Debuchi,the
the
of
se Ambassador in Washington. In a stateweek
Japane
There were several reflections this
by the Department of State, it was
issued
prevastill
ment
on
situati
serious political and economic
"was stopped by
lent in Germany. Of foremost interest was a meet- remarked that Mr. Chamberlain
identified himhe
whom
ing, Thursday, at which Chancellor Bruening and three Japanese soldiers to
attacked, howwas
He
t."
Defense Minister Wilhelm Groener discussed with self by card and passpor
nt said,
stateme
the
ation,"
justific
ut
Adolph Hitler, the leader of the National Socialists, ever, "witho
h
he was
althoug
,
bruised
badly
was
his
face
and
urg's
the prolongation of President Paul von Hindenb
tenwere
es
apologi
r
Furthe
ed.
uninjur
se
underotherwi
is
"It
5.
term of office, which expires May
day
ng
followi
the
, Monday, and on
stood," a Berlin dispatch to the New York "Herald dered at Mukden
n
Stimso
ry
Secreta
on
i called
Tribune" said, "that the 84-year-old President has Ambassador Debuch
GovTokio
the
of
regret"
e
"sincer
the
consented to remain in office for a short period and expressed
ng the incident.
regardi
t
d
ernmen
provide
r
term
six-yea
his
of
ion
expirat
beyond the
troops in Chinchow having been
Chinese
the
All
that all parties vote in the Reichstag for the necesl Chang Hsueh-liang, the deMarsha
by
awn
s
withdr
require
sary alteration of the Constitution, which
Manchuria, Japanese forces
of
Lord
War
posed
conalso
lor
a two-thirds majority." The Chancel
quickly extended their advance, and a small force
ferred with leaders of other parties on this point.
plight of entered the city early last Saturday. It was
Some encouraging words regarding the
the promptly made apparent that this would not termiGermany were spoken in a radio address by
week. In nate the movement, as two armored trains manned
venerable President of the country late last
by Japanese troops moved south from Chinchow
characteristically frank and hearty fashion, the old
toward Shanhaikwan, where the Great Wall
to
Sunday
s
million
Field Marshal admonished the German
g
Manchuria and China proper comes down
dividin
past
the
of
"see it through" despite the sacrifices
This city, 113 miles beyond Chinchow,
sea.
to
the
sacrithe
of
and those yet to come. "The magnitude
that was entered by the Japanese Thursday, according
fices gives us a right to claim from other nations
to an Associated Press report from Tientsin. As the
they must not impose requirements upon us imposour Japanese entered the city they posted proclamations
sible of fulfillment, and thus stand in the way of
saying the occupation was "necessary," the dispatch
recovery," he said.
said. The Foreign Office in Tokio announced, Monthat the necessity for maintaining peace and
Extension of the Japanese occupation of Man- day,
in Manchuria will make it impossible to withorder
churia to the Great Wall of China has followed, this
draw troops from that area "for some time to come."
week,the capture of the key city of Chinchow, which
serious disturbances occur at points beyond
rendered the control of the territory complete in any Unless
Great Wall of China, Japanese forces will not
case, from a military viewpoint. There have been the
that border line, it was added.
rumors that the Japanese army leaders may extend cross
The Chinese Government at Nanking continued to
their drive into China proper and take the cities of
itself, in this situation, to diplomatic proPeiping and Tientsin, but such reports may be confine
a communication transmitted to the
In
doubted in view of the alarm that would be aroused tests.
riat at Geneva, Monday, China reSecreta
League
st
measure
in all countries if the step were taken. The
which is scheduled to begin at Geneva Feb. 2. The
American delegation, as disclosed in its entirety
last week, will consist of Ambassador Charles G.
Dawes, Chairman; Senator Claude Swanson, Ambassador Hugh S. Gibson, Norman H. Davis, and
Dr. Mary Emma Woolley. They will be assisted by
numerous advisers and aides. General Dawes returned to Washington, Tuesday, and all the members
of the American delegation thereupon conferred
with President Hoover and Secretary of State Stimson regarding the position to be taken at the meeting.
Secretary Stimson appeared before the House Foreign Affairs Committee, Wednesday, to urge the
passage of legislation providing funds for the expenses of the delegation. "The influence of this
country, while quiet, will be most important," he
said. "It has been evident for a long time that energetic steps should be taken to bring about a plan
for disarmament." Sir John Simon, Foreign Secretary in the British Cabinet,alluded to the importance
of the conference Tuesday, a London dispatch to the
United Press said. The attitudes of the nations to
the conference, he said, are "not so much the expressions of personal judgments of individuals as the
embodiment of widespread •and sensitive general
judgment on the part of entire populations." Disarmament was earnestly advocated by President
Paul von Hindenburg, of Germany, in a New Year's
greeting to the diplomatic corps in Berlin. It would
be disastrous for the world, he said, if the expectations for disarmament are disappointed again.
JAN. 9 1932.]
FINANCIAL CHRONICLE
minded the League Council of its December resolution enjoining both parties not to aggravate matters,
and informed tie League body of the recent developments at Chinchow. Hopes were expressed that the
Council "immediately will take effective measures
to prevent aggravation of the present serious situation." The League itself, Geneva reports said, probably will confine itself to a policy of passive resistance to the extension and consolidation of Japanese
power throughout Manchuria. Efforts would be
made, an official was credited with saying late last
week,to"keep the issue open and gain time for Japan
to realize the adventure has not been worth the candle
and a civilian reaction against the military has set
in." The League proceeded with its selection of a
Manchurian inquiry commission,as provided for last
month. Lord Lytton,of Britain, will head the group,
it was indicated Tuesday, while other members will
be Major-General Frank R. McCoy of the United
States, General Henri Edouard Claudel of France,
Dr. Heinrich Schnee of Germany, and Count A.
Aldovrandi of Italy. Little was said in Moscow regarding the developments, notwithstanding the Russian interest in the Chinese Eastern Railway, which
crosses Northern Manchuria. Some concern was
expressed Wednesday regarding a reported riot of
White Guard elements at Harbin, as it wag believed
such reports might 'be the prelude to Japanese occupation of that town. No change in Soviet policy was
considered likely, however, unless direct injury were
inflicted upon Soviet nationals or interests, a Moscow dispatch to the New York "Times" said.
The American notification to Japan, invoking the
specific provisions of the Nine-Power Treaty and the
Kellogg-Briand pact, was made public in Washington yesterday. The communication was brief, and
the iden tic text was sent also to China. "With the
recent military operations about Chinchow, the last
remaining administrative authority of the Government of the Chinese Republic in South Manchuria,
as it existed prior to Sept. 18 1931, has been destroyed," Secretary Stimson said. "The American
Government continues confident that the work of
the neutral commission recently authorized by the
Council of the League of Nations will facilitate an
ultimate solution of the difficulties now existing
between China and Japan. But in view of the present situation and of its own rights and obligations
therein, the American Government deems it to be
its duty to notify both the Imperial Japanese Government and the Government of the Chinese Republic
that it cannot admit the legality of any situation de
facto, nor does it intend to recognize any treaty or
agreement entered into between those Governments,
or agents thereof, which may impair the treaty rights
of the United States or its citizens in China, including those which relate to the sovereignty, the
independence, or the territorial and administrative
integrity of the Republic of China, or to the international policy relative to China, commonly known
as the Open Door policy; and that it does not intend
to recognize any situation,treaty or agreement which
may be brought about by means contrary to the
covenants and obligations of the Pact of Paris of
Aug.27 1928, to which treaty both China and Japan,
as well as the United States, are parties."
Whether the British, French and Italian Governments would make similar representations to Tokio
was not made clear at Washington, Thursday.
Doubt was expressed in some quarters, dispatches
173
indicated, whether the full force of the Nine-Power
Treaty, with its enunciation of the Open Door policy,
would be invoked in all instances. "It is plainly the
preference of some interested nations to rely on the
Kellogg-Briand pact and its more general expressions
of principles in favor of peaceful settlement of disputes," a Washington report to the New York "Herald Tribune" said. A protest to Tokio in a matter
of purely British concern was made Thursday by Sir
Francis Lindley, British Ambassador to Japan.
This concerned the holding by the Japanese army of
revenues of the British-built Peiping-Mukden Railway, deposited in Mukden banks. It was stated by
Foreign Office officials in Tokio, the same day, that
the funds will be released as soon as possible. The
officials stated further that Japan has no intention
of controlling the Peiping-Mukden line.
Renewal of the civil disobedience campaign in
India was ordered Monday by Mahatma Gandhi and
his associates of the All-India National Congress,
and the country is thus plunged for the third time
since the World War into a struggle against British
rule that loses little in severity because of its apparently non-violent nature. The decision to renew the
campaign followed a hasty exchange of messages
between Mr. Gandhi and the Viceroy, Lord Willingdon, regarding the repressive ordinances which were
passed while the Indian leader was returning from
the Round Table Conference in London. These
negotiations proving entirely unsuccessful, arrest
of Mr. Gandhi was ordered by the Delhi Government
late last Sunday, and the order was executed early
Monday morning. Numerous lieutenants and aides
of the Mahatma in the Nationalist movement also
were imprisoned, as the Government took prompt
and vigorous steps to keep down disorder. Although
it is recognized that serious trouble may develop as
a result of these incidents, it is considered noteworthy that there has been nothing like the widespread disorder which followed Mr. Gandhi's arrest
on May 5 1930. The London Government announced,
Monday, that it was determined to proceed with its
policy of Constiutional progress in India, notwithstanding the renewal of the campaign and the arrest
of Mr. Gandhi.
When Mr. Gandhi arrived at Bombay, Dec. 21, he
concerned himself immediately with the restrictive
measures and appealed to Lord Willingdon to repeal
them. The ordinances made applicable in Bengal
and other areas measures that had previously been
taken only in the Northwest Frontier Province. Mr.
Gandhi urged the All-India Congress late last week
to co-operate with the British Government only if
the ordinances were repealed, and by this step he
made himself liable to arrest under one of the acts.
The Indian leader appealed to the Viceroy for an
interview regarding the measures, and the latter replied Jan. 1 with a lengthy statement refusing to
discuss the ordinances and listing numerous specific
instances of anti-governmental movements against
which the measures were directed. A further message containing proposed terms of settlement was
sent by Mahatma Gandhi last Saturday. In reply,
however, Lord Willingdon stated the same day that
"no government consistent with the discharge of
their responsibilities can be subject to the conditions
sought to be imposed under the menace of unlawful
action by any political organization, nor can the
Government of India accept the position implied in
174
FINANCIAL CHRONICLE
your telegram that their policy should be dependent
on the judgment of yourself as to the necessity of
measures which the Government have taken after
most careful and thorough consideration of the facts
and after all other possible remedies had been
exhausted."
After receipt of this message the Mahatma awaited
arrest in his tent. "The nation must respond to the
Government's challenge," he said. "It is to be hoped,
however, that while people of all creeds and classes
will courageously and in all humility go through the
fiery ordeal, considering no price too dear and no
sufferings too great, they will observe the strictest
non-violence in word, thought and deed." He also
issued a "farewell message" to the United States, in
which he remarked that "on the eve of embarking on
what promises to be a deadly struggle, I shall expect
my numerous American friends to watch its career
and use the influence of a great nation for the sake
of oppressed humanity." To his disciples he said
he would urge the people "not to be angry with the
administration, as it is not easy for the British to
shed a habit handed down from generation to generation." A few hours later Mr. Gandhi was again
arrested and rushed to Poona, 75 miles from Bombay, where he was placed in Yeroda prison. Vallabhai Patel, President of the All-India Congress,
was arrested at the same time and also imprisoned
at Poona.
A hartal, or day of mourning, was declared
throughout India and Burma by the Nationalists,
Monday, in protest against Mahatma Gandhi's
arrest. The first casualties of the new movement
were reported at Allahabad the same day, two persons being killed and about 20 injured when an All.
India Congress procession was dispersed by the
police. Eighteen Congress party leaders were
arrested. The Government took immediate steps to
suppress the civil disobedience campaign, issuing
a series of four new ordinances which were described
in a dispatch to the New York "Times" as constituting "iron-clad repression." The measures, it was
said, declare the Congress party an illegal organization. "Peaceful picketing will henceforth be an
offense leading to arrest," the dispatch continued.
"The stern repressive ordinances hitherto applicable
only to the United Provinces and the Northwest
Frontier Province will be extended from Cape Cormorin to the Himalayas."
The Congress party countered by establishing 270
emergency "war councils" to supervise a complete
boycott of British goods. A final message from
Mahatma Gandhi was circulated in which the Indian
people were urged to spin their own cloth, to discard
narcotics and intoxicating liquors, and to avoid violence. "Begin by hartals, then by civil disobedience," Mr. Gandhi said. "Disobey orders, except
when a breach of the peace may be apprehended.
Defy all orders calculated to crush the national spirit
or to crush the Congress. When leaders are arrested,
individuals must become leaders. Maintain the
spirit of civil defiance. The handicaps imposed by
internal dissensions and opposition among the
Indians themselves will dissolve in the fire of suffering without hatred." The lines of the struggle continued to tighten this week, and a further deplorable
incident was reported Wednesday at Benares, where
the police fired into a crowd, killing one man, when
a gathering occurred in defiance of orders and the
people refused to disperse.
[VOL. 134.
A series of admirable resolutions was adopted by
the central banking representatives of five South
American countries at a financial conference in
Lima, Peru, which ended Dec. 12 last. The central
banks represented were those of Bolivia, Chile, Colombia, Ecuador and Peru. There were also present
a number of observers and advisers sent by the Federal Reserve System of the United States, among
them Professor Edwin W. Kemmerer of Princeton
University. Copies of the resolutions adopted were
received here late last week, and they indicate that
the delegates made a direct, if somewhat tentative,
approach to some of the outstanding problems with
which the central banks concerned are now faced.
Of particular interest at this time is a resolution
of the bankers reaffirming their faith in the gold
standard and holding that it is "still the most practicable, despite its many deficiencies." It was declared, moreover, that a favorable view would be
taken of "all reasonable efforts on the part of the
central banks of the world and of the Bank for International Settlements to co-operate in the work of
perfecting the gold standard and of making it a more
stable standard or measure of value."
It was anticipated that the conference would develOp a unified plan whereunder temporary credits
might be requested by the respective banks from the
Federal Reserve banks. A resolution said "the
possibility of entering into negotiations for obtaining such credits" as deserves the attention of "the
central banks of these and other countries, and of
the Bank for International Settlements, for the purpose of furthering the cause of central bank co-operation and international monetary stability, which
institutions of this class should foster." It was
recommended, in addition, that the central banks
"co-operate in the study of new mechanisms for providing intermediate credits for productive purposes
with maturities of one to three years; and in stimulating the centralization and mobilization of the
demand for such credits in the borrowing countries
and the mobilization of the supply of such credit in
the lending countries." Such intermediate credits
should be granted especially for the financing of
exportable products, it was held, since they "should
constitute a useful and constructive part of any plan
for aiding these debtor countries in fulfillment of
their international financial obligation."
There were also several resolutions relating to the
financing of the governments of the five Latin American countries. The several regimes were requested
to refrain from borrowing at the banks and thus
avoid inflation of the currency. The resolution covering this point emphasized "the desirability of maintaining at all times budgetary equilibrium, in order
that the Government may not find it necessary to
seek credits through recourse to the central banks,
a development which usually results in inflation of
the circulating medium." It was suggested also that
guarantees be given against political interference
with central bank policy. Likewise interesting, in
view of its possible application at the present time,
was a resolution recommending that any central
bank having part of its legal reserves in a country
which suspends the gold standard should, at the
earliest possible moment after the suspension, convert its reserves into gold or its equivalent, taking
the loss which may be involved, and re-establishing
its reserves completely on a gold basis. It was stated
on "high authority" in Santiago, Chile, Thursday,
JAN. 9 1932.]
175
FINANCIAL CHRONICLE
land; 3% in Holland; 23/2% in Belgium, and 23/2%
in France and Switzerland. In the London open
market discounts for short bills on Friday were
53'@5U% as against 5/@5% on Thursday of last
week, and 5 9-16@6% for three months' bills as
against 5%@63.1% on Thursday of last week.
Money on call in London on Friday was 33/2%. At
More than passing importance attaches to a con- Paris the open market rate continues at 1%%, and
ference of trade experts from some of the leading in Switzerland at 13
4%
Latin American countries, which was started at
Montevideo, Dec. 15, on the invitation of the UruThe Bank of England statement for the week ended
guayan Government. As a result of the discussions Jan. 6 shows a loss of £24,091 in gold holdings, bringa bi-lateral trade agreement between Brazil and ing the total of the item down to £121,324,630, in
Uruguay has already been negotiated, signatures comparison with £146,557,914 a year ago. Circulabeing attached last Saturday. Additional confer- tion contracted £1,291,000 and so reserves increased
ences are already scheduled, and it appears likely £1,267,000. Public deposits rose £7,948,000, while
that similar bi-lateral agreements will be reached by other deposits fell off £46,411,743. Of the latter
other governments of Latin America. This move- amount £44,573,942 was to bankers' accounts and
ment is apparently a spontaneous South American £1,837,801 was to other accounts. The reserve ratio
counterpart to the various abortive European efforts increased from 18.45% a week ago to 24.60% now.
to foster trade by means of customs unions and A year ago the ratio was 37.31%. Loans on Governregional trade agreements. All such attempts, ment securities decreased £30,450,000 and those on
whether European or South American, may well be other securities £9,215,009. The latter consists of
interpreted as efforts to surmount the intolerably discounts and advances and securities which fell
high tariff barriers that have been erected in recent off £7,391,642 and £1,823,367 respectively. The
years.
discount rate is unchanged at 6%. Below we show
The Montevideo conference was attended by repre- a comparison of the different items for five years:
BANK OF ENGLAND'S COMPARATIVE STATEMENT.
sentatives of the Argentine, Brazilian and Uru1028.
1929.
1930.
1931.
1932.
assembled
with
the
who
Governments,
guayan
Jan. 11.
Jan. 9.
Jan. 8.
Jan. 7.
Jan. 8.
avowed object of establishing some sort of regional Circulation
a362,860,000 363,504.599 362,921,772 369,517,787 135.933,585
customs union. President Gabriel Terra of Uruguay, Public deposits ___- 15,680,000 13,206,470 17.210,657 10,994,607 14,853.638
deposits
120,327,070 102,167,891 111,275,367 104,304.663 110,060,585
who opened the meeting, declared that its aim would Other
Bankers' accounts 81,823,788 88,874,566 76,701,298 87,491,247
36,813.416
be a freer interchange of goods among the three coun- Other accounts_ 38,503,282 33,293,325 35,574,069
Governm't securities 64,890,908 83,081,247 89,885,885 57,736.855 39,628.992
the
of
tries, by means of the practical application
Other securities_ _ -- 55,688,457 37,270,156 30,366,704 30.655.786 64,504,322
Dint. & advances 19,898,960 14,357,675 15,081,971 14.686,357
principles of co-operation. He gave to the gathering Securities
38,789,497 22,912,481 15,284.733 15,969,429
the key-note of an "economic Pan-Americanism." Res've notes & coin. 33,464,000 43,053,315 46,293.097 44,961.493 38,817,964
Coin and bullion___121,324,830 146,557,914 149,214,889 154.479,280 155,001.549
After almost two weeks of negotiations the Argentine Proportion
of reeve
81%
38%
36.02%
37.31%
24.80%
to liabilities
delegation returned to Buenos Aires, on the plea that Bank
434%
414%
5%
3%
6%
rate
of England
the time is not yet ripe for the organization of a a On Nov.29 1928 the fiduciary currency was amalgamated with Bank
note issues adding at that time £234,199,000 to the amount of Bank of England notes
united economic front by the three nations. The outstanding.
difficulties, it appears, related mainly to the meat
The Bank of France, in its weekly statement dated
export program, Argentina objecting to the Uruholdings,
guayan proposals for the establishment of State- Dec. 31, shows a further increase in gold
holdings
gold
Total
francs.
382,865,456
of
time
owned packing plants, concerted advertising abroad this
compared
as
francs,
68,863,039,681
at
stand
now
and united action toward development of new
with 53,736,958,426 francs a year ago, and 42,433,markets.
francs the year before. A decrease appears
625,382
The Brazilian and Uruguayan representatives,
balances abroad of 686,000,000 francs,
credit
in
however, signed a draft agreement Jan. 2 which probought abroad rose 297,000,000 francs.
bills
while
on
free
policy
limited
trade
a
specicertain
vides for
fied articles, a reduction of tariffs elsewhere, and a Notes in circulation reveal a large gain, namely 2,simplification of customs, consular and sanitary 178,000,000 francs. The aggregate of circulation is
regulations. The Brazilian delegation has been in- now 85,724,000,000 francs, which compares with
structed to proceed to Buenos Aires to negotiate a 78,937,582,475 francs last year and 70,288,003,860
similar pact with Argentina, dispatches from Monte- francs the year before. French commercial bills
video stated. Extension of the principle in other discounted and advances against securities increased
directions also is possible, as the Paraguayan Gov- 320,000,000 francs and 13,000,000 francs, while
ernment has approached the Uruguayan foreign creditor current accounts declined 1,431,000,000
office, suggesting a bi-lateral trade agreement and francs. Proportion of gold on hand to sight liabilities
expressing regret that it was not included in the is now 60.51%, in comparison with 60.57% last week
original conference. There is already apparent, and 52.87% last year. A comparison of the various
moreover, a movement for a conference along the items for three years is furnished below:
BANK OF FRANCE'S COMPARATIVE STATEMENT.
same lines between Argentina and Chile, a MonteChanges
Status as of
Jan. 3 1930.
for Week.
Dec. 31 1931. Jan, 2 193L
York
New
"Times"
the
video dispatch of Jan. 2 to
Francs.
Francs.
Francs.
Francs.
Gold holdings— —Inc. 382.865,456 68,883,039,681 53,736,958,426 42,433,825.382
indicates.
Credit bale. abed_Dee.686,000,000 12,354,000,000 7,226,387,687 7,098,820.623
an Associated Press dispatch said, that the central
banks of the five countries plan to undertake immediately the withdrawal of the gold deposits on reserve
in London for transfer to a gold standard country,
probably the United States. In other respects, also,
action in line with the resolutions is forecast.
There have been no changes in central bank rates
the present week. Rates are 8% in Austria and
Hungary; 7% in Germany, Portugal and Italy;
63/2% in Spain and Ireland; 6% in Norway, Sweden,
Denmark, Danzig and Czechoslovakia, and in Eng-
aFrench commen
bills discounted_Inc. 320.000,000 7,390.000,000
bBille bought abr.:line. 297,000,000 8,757,000.000
Adv. agt. securs_Ine. 13,000,000 2,729.000.000
Note circulation_Ine.2178,000,000 85,724,000.000
Cred. eurr. accts_ _Dec.1431000,000 28,080,000,000
Propor. of gold on
hand to sight lia60.51%
Dec.
.06%
bilities
7.430,255,110
19,388.568,811
3.114.874.565
78,937,582,475
22,701,921.767
7,912,985,825
18,698,108.185
2.888.780.293
70,288,003,880
18,189,583,164
52.87%
47.96%
a Includes bills purchased in France. b Includes bills discounted abroad.
_
176
FINANCIAL CHRONICLE
The Bank of Germany in its statement for the
last quarter of December recorded a loss in gold and
bullion of 931,000 marks. The total gold now stands
at 983,955,000 marks, which compares with 2,215,781,000 marks at the same period a year ago and
2,283,116,000 marks two years ago. Reserves in
foreign currency and bills of exchange and checks
showed increases of 2,482,000 marks and 446,617,000
marks, while the item of deposits abroad remains
unchanged. Decreases appeared in silver and other
coin of 86,284,000 marks, in notes on other German
banks of 4,854,000 marks and in other liabilities of
8,614,000 marks. Notes in circulation rose 263,645,000 marks, raising the total of the item up to 4,775,776,000 marks. Total circulation last year was
4,778,259,000 marks and the year before 5,043,677,000 marks. The proportion of gold and foreign currency to note circulation decreased from 25.6% last
week to 24.2% now. The same item a year ago
was 56.2%. The items of Alliances, investments,
other assets and other daily maturing obligations
showed increases of 68,317,000 marks, 57,782,000
marks, 120,132,000 marks and 348,230,000 marks,
respectively. Below we furnish a comparison of the
different items for three years:
REICHSBANK'S COMPARATIVE STATEMENT.
Changes
for Week.
Dec. 311931. Dec. 31 1930. Dec. 31 1929
Reichsmarks.
Assets—
Reichsmarks. Reichsmark:. Reich:marks.
Gold and bullion
Dec.
931,000 983,955,000 2.215,781,000 2,283.118,000
Unchanged
Of which depos. abr'd
128,600,000 '222,017,000 149,788,000
Reeve ln torn curs- __Inc. 2,482,000 172,298,000 469,243,000 403,227.000
Msof exch.& checksInc. 446,817,000 4,241,914,000 2,571,566,000 3,226,843,000
Silver and other coin_ -Deo. 86,284,000
81,515,000 138,868,000
89,111,000
Notes on 0th. Ger. bluiDeo. 4,864,000
2,088,000
3,990.000
3,979,000
Advances
Inc. 68,317,000 244,833,000 256,013,000 204,648,000
Investments
Inc. 57,782,000 160,682,000 102,454,000
92,489,000
Other assets
Inc. 120,132,000 981,409,000 496,658,000 563.167,000
Ltabtltiles—
Notes in circulation__Inc. 263,645,000 4,775,776.000 4,778.259.000 5,043,677.000
Oth.dally matur. obligInc. 348,230,000 754,870,000 651.819,000 755,170,000
Other liabilities
Dec. 8,614,000 867,725,000 328,568,000 193,209,000
Propor.of gold & torn
curr.to note circenDec.
1.4%
24.2%
58.2%
53.3%
[VoL. 134.
Dealing in detail with call loan rates on the Stock
Exchange from day to day, 314% was the rate on
Monday for both new loans and renewals. On Tuesday, after renewals had been put through at 33'%
the rate on new loans was reduced to 3%. On Wednesday all loans were at 3%, including renewals.
On Thursday, after renewals had again been effected
at 3%,the rate for new loans declined to 21
/%. On
Friday, all loans were at 23/2%. The 23'% rate was
the lowest call loan rate On the Stock Exchange since
Dec. 18. There has been no change in the time
money market this week, there having been practically no demand for this class of accommodation.
Rates are unchanged at 3@4% for all dates. These
quotations are nominal, however, as each transaction
is given special attention. The demand for prime
commercial paper has shown a slight improvement
this week, but the supply of paper has proved inadequate to meet the daily requirements. Rates are
unchanged. Quotations for choice names of four to
six months' maturity are 3%@)43i%. Names less
well known are 43'%. On some very high class
90-day paper occasional transactions at 33'% continued to be noted.
The market for prime bankers' acceptances was
moderately strong the early part of the week, but
eased off on Thursday and Friday due to the continued scarcity of paper. Rates remain unchanged
from last week. The quotations of the American
Acceptance Council for bills up to 90 days are 33i%
bid, 3% asked; for four months' bills, 33'% bid, 3%
asked; for five and six months,3% bid and 35
/s%
asked. The bill buying rate of the New York
Reserve Bank remains unchanged at 3% on maturities up to 45 days, and at 33% on maturities of
46 to 90 days. The Federal Reserve banks show a
falling off this week in their holdings of acceptances,
the total having dropped from $326,975,000 to
$275,306,000. Their holdings of acceptances for
foreign correspondents further increased from $248,529,000 to $269,544,000. Open market rates for
acceptances are as follows:
With the year-end monetary turnover accomplished, rates for funds tended to ease this week.
The supply increased steadily as the week progressed,
but demand remained small. Call loans on the New
York Stock Exchange were 33/2% Monday, with a
SPOT DELIVERY
—180 Days— —150 Dago— —120 Days—
few offerings noted in the unofficial street market at
/Rd. Asked.
Bid. Asked.
814. Asked.
334
334
314
344
314
3
°, or a rate of 33,4%. Renewals Prime smut:4e bills
a concession of WY
--WDays—
Bid. Asked.
Bia. sicked.
Bid. Asked.
Tuesday were again arranged at 332%, but new loans Prime eligible bills
3
314
334
3
334
3
dropped to 3%, while in the street market some
FOR DELIVERY WITHIN THIRTY DAYS
Eligible
member banks
accommodation was arranged at 23
4%. The official Eligible non-member
314 010
banks
834 MO
rate was 3% all of Wednesday, while in the outside
market funds were offered as low as 23/2%. The
There have been no changes this week in the redisdownward tendency was again apparent Thursday, count rates of the Federal Reserve Banks. The
and the official renewal rate of 3% gave way to a following is the schedule of rates now in effect for
23% charge for new loans. Yesterday's official the various classes of paper at the different Reserve
dealings were at 23/2% throughout, and offerings were banks:
reported in the street market at 2%. Time loans DISCOUNT RATES or FEDERAL RESERVE BANKS ON ALL CLAIMS
AND MATURITIES OF ELIGIBLE PAPER
were unchanged. The two regular compilations of
brokers loans were both published this week, and
Rats in Effect
Dais
Preteens
Federal Reserve Bank.
Established.
on Jan. 8.
Rate.
further sharp declines were disclosed. The New York
Boston
Oct. 17 1981
834
Stock Exchange tabulation for the entire month of New York
Oct. 10 1931
334
"
Philadelphia
Oct. 22 1931
334
8
2"
December reflected a decrease of $142,992,095, while Cleveland
Oct. 24 1931
3
334
Richmond
Oct. 20 1931
4
$
Nov. 14 1931
the Federal Reserve Bank of New York statement Atlanta
834
3
Oct. 17 1931
Chicago
EH
2g
Louts
Oct. 22 1931
334
showed a decline of $23,000,000 for the week ended St.
234
Sept.12 1930
Minneapolis
834
334
4
Oct. 13 1931
Kansas City
$
Wednesday night. Gold movements for the week Dallas
21
4
1931
Oct.
$
Oct. 21 1931
33,4
234
to Wednesday night, as reported by the Federal San Francisco
Reserve Bank, consisted of imports of $5,415,000
and exports of $5,688,000. There was also a net
Sterling exchange is dull and inactive, with rates
increase of $1,689,000 in the stock of the metal held fluctuating within reasonably narrow limits not withearmarked for foreign account.
standing that wide fluctuations are to be expected
when so important a currency as sterling is off the
JAN. 9 1932.]
FINANCIAL CHRONICLE
177
gold basis. The inactivity is attributable in large for foreign account. In tabular form the gold movemeasure to the usual let-down in markets around ment at the Port of New York for the week ended
the New Year ho'idays. On Thursday the market Jan. 6 was as follows:
gave signs of increasing activity and better sentiment GOLD MOVEMENT AT NEW YORK, DEC.
31-JAN. 6, INCL.
was displayed. The range this week has been from
Imports.
Exports.
$3,515,000
from
Argentina
$2,569,000 to Belgium
3.34% to 3.413 for bankers' sight bills, compared
793,000 from India
2,130,000 to France
with 3.37% to 3.433/i last week. The range for cable
655,000 from Cuba
595,000 to Holland
155,000 from Mexico
255,000 to Switzerland
transfers has been from 3.35 to 3.413/
2, compared
297,000 chiefly from Latin
139,000 chiefly to other European
American countries
countries
with 3.38 to 3.44 last week. Under present conditions of world-wide depression and mistrust of finan- $5,415,000 total
$5,688,000 total
cial trends, it is difficult to forecast the course of
Net Change in Gold Earmarked for Foreign Account.
sterling exchange. Under normal conditions all facIncrease: 51,689 000
tors should favor firmer sterling from now until about
On Thursday gold imports were $289,800, of which
the middle of August. The underlying influences $217,200 came from India and $72,600 from Straits
affecting sterling exchange are, of course, unaltered Settlements. There were no exports of the metal or
since suspension of the gold standard by England on change in gold earmarked for foreign account. YesterSept. 21. A feeling of increased confidence has been day gold exports amounted to $4,197,000, of which
engendered in the market since publication on Dec. $4,000,000 was shipped to France, $100,000 to Hol24 of the report of the Basle committee of experts. land and $97,000 to England. There were no imports
In foreign exchange circles it is generally believed but there was a decrease of $1,300,000 in gold earthat a compromise will be reached whereby an exten- marked for foreign account. During the week apsion of the moratorium on reparations will be granted proximately $10,239,000 of gold has been received
for at least two years beginning July 1.
at San Francisco, of which $10,067,000 came from
Sterling continues to gain some support through Japan and $172,000 came from China.
the large movement of gold from India to the London
Canadian exchange continues at a severe discount
open market. Thus far at least renewal of distur- although the disparity is less than a few weeks ago.
bances in India has not affected sterling adversely, On Saturday last Montreal funds were at a discount
but the belief is entertained that if the difficulties in of 153
4%, on Monday at 157
4%, on Tuesday at
India increase the pound will suffer more or less and 153
4%, on Wednesday at 15 5-16%, on Thursday
to a degree which may largely offset seasonal factors at 15%% and on Friday at 15 8%.
which might be expected to lend firmness to the
Referring to day-to-day rates, sterling exchange
rates during the next three months. When the on Saturday last was steady in a nominal market.
tourist season opens sterling should then have very Bankers' sight was 3.393@3.403/2; cable transfers
strong support.
3.39%@3.40%. On Monday sterling was under
• There is much speculation in banking circles re- pressure. The range was 3.363/
2@3.37% for bankers'
garding the probable action which may be taken by sight and 3.36%®3.38 for cable transfers. On Tuesthe Bank of England on Jan. 31 with respect to the day exchange continued under pressure. Bankers'
fiduciary issue. Since Aug. 1 the fiduciary issue sight was 3.35%@3.36%; cable transfers 3.363.®
has been held at £275,000,000 and there is some dis- 3.373. On Wednesday the market was quiet and
position to believe that the issue may be increased on easier. The range was 3.34%@3.363 for bankers'
Jan. 31 to permit repayments in gold of whatever sight and 3.35@3.363/
2 for cable transfers. On
amount the Bank of England may then owe the Bank Thursday the market continued dull but was higher.
of France and the Federal Reserve Banks. Most The range was 3.3834@3.40 for bankers' sight and
New York bankers, it would seem, are strongly of 3.383/2@3.403 for cable transfers. On Friday
the opinion that the Bank of England will not seek sterling was still firmer, the range was 3.393/2@
to increase the fiduciary issue. There is some 3.413. for bankers' sight and 3.39%@3.413 for
/
evidence that the Bank has been accumulating dollar cable transfers. Closing quotations on Friday were
balances in the form of bills with which to meet the 3.40 for demand and
3.403 for cable transfers.
indebtedness. Gold continues to sell at a premium Commercial sight bills finished at 3.39; 60-day bills
in the London open market and is generally taken at 3.35; 90-day bills at 3.333/2; documents for payfor Continental account. The price this week seems ment (60 days) at 3.35, and seven day grain bills at
to have ranged from 120s. 4d. to 122s. 9d. This 3.383/2. Cotton and grain for payment closed
week the Bank of England shows a decrease in at 3.39.
gold holdings of £24,091, total gold holdings standing at £121,324,630, the lowest since 1920. Present
Exchange on the Continental countries continues in
holdings compare with £146,557,914 a year ago. all important respects to follow the trends which
On July 8 the gold holdings of the Bank of England developed after the German crisis in June and the
stood at £165,810,946.
British crisis in September. All the Continental
At the Port of New York the gold movement for currencies have been exceptionally quiet during the
the week ended Jan. 6, as reported by the Federal past few weeks, but there are now signs of greater
Reserve Bank of New York, consisted of imports activity. French francs and Belgian belgas are the
of $5,415,000, of which $3,515,000 came from firmest of the Continentals. Francs have fluctuated
Argentina, $793,000 from India, $655,000 from rather widely during the week as on every sign of
Cuba, $155,000 from Mexico and $297,000 chiefly demand the rate showed a strong upward tendency.
from Latin American countries. Exports totaled Various recent reports to the effect that French banks
$5,688,000, of which $2,569,000 was shipped to have been selling sterling balances are firmly denied
Belgium, $2,130,000 to France, $595,000 to Holland, in official quarters in London, where it is positively
$255,000 to Switzerland, and $139,000 chiefly to asserted that the French banks are not launching an
other European countries. The Reserve Bank re- attack on the pound by withdrawing balances, and
it
ported an increase of $1,689,000 in gold earmarked is asserted that since Great Britain abandoned
the
178
FINANCIAL CHRONICLE
gold standard the attitude of the French banking
authorities toward sterling has been friendly and
helpful and that there is no indication of any likelihood of a change. In Monday's trading French
1 for cable transfers,
francs advanced sharply to 3.934
bringing the rate at once to a point at which gold
exports might be expected from New York to Pads
on a straight exchange basis. The Bank of France
statement for Dec. 31 shows the exceptionally heavy
increase of 382,865,456 francs in gold holdings. This
follows upon a sharp increase of 417,477,969 francs
during the week ended Dec. 24. The Bank of France
gold holdings are now at record high level of 68,863,039,681 francs, which compares with 53,736,958,426
on Jan. 2 1931 and with 28,935,000,000 francs in
June 1928 following stabilization of the unit. The
greater part of the recent increases in the Bank of
France gold holdings has been due to purchases of
gold by French interests in the London open market.
French individuals and banks then disposed of this
gold to the Bank of France.
The quotation for German marks is of course
largely nominal as there is no free exchange market
in the German center. Exchange and all financial
transactions are under strict governmental control.
The feeling with regard to the German situation continues to be somewhat mixed. The report of the
Basle committee on Dec. 24 was extremely helpful
to the German financial situation, and it is now
generally believed that the European countries will
agree upon a prolongation of the moratorium for
at least two years. On the other hand, confidence
in banking circles is somewhat chilled by the political
situation in Germany. It is pointed out that President von Hindenburg's term of office expires in the
spring, and uneasiness is felt regarding the choice
of his successor in view of the impressive gain in
strength made by the radical "Nazis" under the
leadership of Adolph Hitler. It is believed in banking
circles that German domestic problems will be solved
satisfactorily if the present Bruening Government
continues in power. Were President von Hindenburg
to retire at this time, it is felt that a sharp fight
would result between the "Nazis" and the Social
Democrats, the two largest political parties. The
hope is generally expressed that von Hindenburg
will seek, if not a full term, at least an extension
sufficient to carry out the Bruening policies. The
ReichElbank statement for the week ended Dec. 31
shows a reduction of 931,000 marks in gold holdings,
the total standing at 983,955,000 marks, which
compares with 2,215,781,000 marks a year ago.
Exchange on Belgium fluctuates within narrow
limits. A special dispatch to the "Wall Street
Journal" from Brussels on Monday said:
"Inquiry at the National Bank of Belgium brings
forth the strongest denials to the rumors recently
current that Belgium is contemplating an abandonment of the gold standard. The bank officials point
out that Belgium has no important credits tied up in
Germany, Russia or mid-Europe, except for purely
trade credits. These credits, particularly those with
Germany, are fully balanced by similar credits on
foreign sales in Belgium. Furthermore, the gold
cover against the country's monetary circulation
amounts to 67%,or among the highest to be found in
the world.
"The finance commission of the Chamber of Representatives has recently come forth in favor of the
anbadonment of the Belga and in favor of making all
[VOL. 134.
transactions in terms of the money termed 'le franc
beige' or the Belgium franc. The latter is worth
one-fifth of the Belga and in recent years has been
relegated to internal circulation only. Despite
certain confusion that has arisen in the use of the
Belga for external payments, it is generally considered that this money will continue to be employed
yet for awhile—that many more important problems are pressing for immediate Government attention."
The London check rate on Paris closed at 86.87 on
Friday of this week, against 84.56 on Thursday of
last week. In New York sight bills on the French
centre finished on Friday at 3.91 13-16, against
3 on Thursday of last week; cable transfers at
3.92%
3.91 15-16, against 3.927 and commercial sight bills
at 3.91 13-16, against 3.923
/s. Antwerp belgas
finished at 13.887 for bankers' sight bills and at
13.89 for cable transfers, against 13.897 and 13.90.
Final quotations for Berlin marks were 23.73 for
bankers' sight bills and 23.75 for cable transfers, in
comparison with 23.73 and 23.75. Italian lire closed
at 5.07% for bankers' sight bills and at 5.08 for cable
transfers, against 5.08% and 5.09. Austrian schillings closed at 14.12, against 14.12; exchange on
Czechoslovakia at 2.967, against 2.967; on Bucharest at 0.597, against 0.597; on Poland at 11.25,
against 11.25, and on Finland at 1.55, against 1.55.
Greek exchange closed at 1.285
% for bankers' sight
bills and at 1.28% for cable transfers, against 1.285
%
and 1.28%.
Exchange on the countries neutral during the war
displays much the same trend which has developed
since the Berlin and London crises earlier in the year.
All the units are extremely dull at this juncture.
The Scandinavian currencies have fluctuated rather
widely in a very thin market, following closely the
variations in sterling exchange. Swiss francs have
been lower this week, having dropped from 19.53
to 19.47, compared with par of 19.30. There has
been a steady flow of small amounts of gold from
New York to Switzerland for some months past,
although the Swiss National Bank seems to be averse
to increasing Swiss gold holdings. There has also
been a steady flow of small amounts of gold from
New York to Holland, as well as to other European
countries whose exchanges are below the gold shipping point from New York to Europe. These gold
shipments are, of course, not made on an exchange
basis, but indicate the lack of confidence on the part
of Europeans toward the banking and financial situation everywhere. One banker characterized the
movement as "barter of paper for gold." In ther
words, Dutch and other European investors in this
marke:, have ordered the sale of their securities and
have specified that the proceeds be converted into
gold and shipped home. Such transactions would,
of course, be rare in normal times, but at present
they furnish an indication of the uncertainty which
still prevails in Europe. Guilders have been ruling
frequently so low that an outward movement of gold
from Amsterdam to New York was to be expected
rather than the contrary movement which has been
under way. While some Dutch investors have
doubtless been selling securities, the market reports
that there is also a contrary buying movement by
Amsterdam investors. Guilders have frequently
shown a tendency to dip, since England suspended
gold payments in September, but have recovered
Jew. 9 1932.]
FINANCIAL CHRONICLE
sharply each time just before reaching the actual
gold point. These declines have been ascribed to
the operations of foreign speculators who claim to
see the possibility that Holland may follow the example of Great Britain and abandon gold. The
belief that Holland might be forced to abandon gold
payments is based largely upon the competitive
position of the Dutch East Indies, which are facing
stronger competition in the Far Eastern markets due
to the depreciation in sterling and yen. On the
other hand, the contention is gaining strength in
Amsterdam that whatever stimulus may come to the
export trade from depreciated exchange will not
prove permanent. It has been frequently and emphatically asserted in official quarters in Holland
that the country will maintain the gold standard.
Amsterdam is in the strongest gold position in recent
years. On Dec. 14, the Netherlands Bank reported gold holdings of f1.906,966,979, compared
with f1.426,193,561 a year ago. Notes in circulation amount to f1.1,016,813,085, compared with
f1.818,416,895, leaving an available metallic surplus
of f1.441,960,101, against f1.105,900,437.
Bankers' sight on Amsterdam finished on Friday
at 40.07, against 40.11 on Thursday of last week;
cable transfers at 40.08, against 40.12 and commercial sight bills at 39.75, against 39.80. Swiss
francs closed at 19.463/ for checks and at 19.47
for cable transfers against 19.523' and 19.53. Copenhagen checks finished at 18.70 and cable transfers
at 18.75, against 18.70 and 18.75. Checks on
Sweden closed at 19.00 and cable transfers at 19.05,
against 18.90 and 18.95, while checks on Norway
finished at 18.60 and cable transfers at 18.65, against
18.55 and 18.60. Spanish pesetas closed at 8.44
for bankers' sight bills and at 8.443/ for cable transfers, against 8.453/
2 and 8.46.
179
suspension of gold payments by Japan, the unit
fluctuates rather widely.
Closing quotations for yen checks yesterday were
363/
2, against 353 on Thursday of last week. Hong
Kong closed at 243/s@25 1-16 against 25 5-16@25%;
Shanghai at 32 13-16(4)323' against 3332; Manila at
49% against 4938; Singapore at 403
% against 413';
Bombay at 25% against 253', and Calcutta at 255
%
against 253/8•
Pursuant to the requirements of Section 522 of the
Tariff Act of 1922, the Federal Reserve Bank is now
certifying daily to the Secretary of the Treasury the
buying rate for cable transfers in the different countries of the world. We give below a record for the
week just passed:
FOREIGN EXCHANGE RATES CERTIFIED BY FEDERAL RESERVE
BANKS TO TREASURY UNDER TARIFF ACT OF 1922.
JAN. 2 1932 TO JAN. 8 1932, INCLUSIVE.
Country and Monetary,
Noon Basin° Rate for Cable Transfers in New You.
Value in Matted States Money.
Jan. 2.
Jan. 4.
Jan. b.
EUROPE8
$
$
Austria,schillIng
1395214 .139581 .139581
Belgium, belga
138939 .139023 .139057
.0071500 .007150 .007150
Bulgaria, ley
Csechosiovakia, krone .029627 .029626 .029628
Denmark, krone
187935 .186735 .186111
England, pound
3 40291663.375059 3.363750
sterling
Finland, markka
I 0157750 .015787 .015600
France, franc
1 .0392592 .039292 .039286
Germany. reichsmark .2374450 .237085 .236760
.0128848 .012872 .012879
Greece. drachma
Holland. guilder
4007975 .4.01887 .401610
Hungary. pengo
.174614
1745666 .
Italy. lira
.0508119 .050679 .050690
Norway. krone
1865529 .185382 .184458
Poland. sloty
1119416 .111931 .112007
Portugal, escudo
0315000 .031500 .031375
Rumania.leu
0059587 .005951 .005948
Spain, peseta
0844276 .094462 .084340
Sweden, krona
1899294 .190050 .190452
switzerland. franc- .1951150 .195102 .195147
Jugmlavia, dinar--- .0178000 .017780 .017798
ASIAChina1
Charm teal
.3466666 .346250 .343333
Hankow tael
I .3371875 .336875 .333750
Shanghai teal
3316428 .330714 .328541
Tienteln tadl
3483333 „347916 .345000
Hong Kong dollar-. .2507500 .250267 .248958
Mexican
.2387500 .239375 .236875
Tientsin or
dollar._Pelgang
I
dollar
2433333 .244166 .240433
Yuan dollar
2400000 .240333 .237500
India, rupee
2564583 .254791 .253958
Japan. yen
3475000 .349765 .349218
Singapore (13.13.) dollar .3937500 .391250 .391250
NORTH AMER.1
Canada, dollar
8380147 .844044 .840514
Cuba. peso
9993000 .999375 .999375
Maxim. peso (silver). .3922500 .394066 .389133
Newfoundland dollar .8370000 .841000 .838500
SOUTH AMER.I
Argentina. peso (gold) .5859620 .684835 .583117
Brasil, milreis
0621062 .061807 .061731
Chile, peso
.1205000 .120500 .120500
Uruguay. peso
.4460000 .445166 .444333
Colombia. nolo
9657090 .965700 . .965700
Jan. 6.
Jan. 7.
Jan. R.
$
3
$
.139517 .139568 .139400
.139057 .188986 .138878
.007150 .007150 .007180
.029626 .029625 .029629
.185705 .186658 .187656
3.353750
.015412
.039266
.237095
.012868
.401580
.174516
.050848
.194200
.111875
.031500
.005959
.084315
.190105
.195185
.017784
.340833
.330312
.326250
.342500
.247708
.235000
3.386964 3.402321
.015287 .015459
.039219 .039184
.237275 .237325
.012877 .012874
.401150 .400684
.174500 .174550
.050870 .050799
.185205 .186117
.111917 .111878
.031375 .031425
.005954 .005947
.084432 .084360
.190793 .190425
.195037 .194896
.017779 .017788
.335625
.324843
.320312
.337291
.244583
.229687
.339791
.328906
.323854
.341458
.246250
.233750
.239166 .235416 .240833
.235833 .232033 .237500
.252903 .254791 .256666
.350000 .352312 .358375
.391250 .392500 .396250
Exchange on the South American countries is practically at a standstill, due in some measure to the
.847867 .846397 .840625
.999300 .999250 .999300
decrease in business activity which usually develops
.389966 .391250 .394500
.846500 .844250 .838000
around Christmas and New Year's in the Latin
.583066 .582332 .581879
countries. The chief reason, however, is the fact
.061143 .061456 .061556
.120500 .120500 .120500
that exchange operations in these countries are ham.445166 .445166 .445166
.965700 965700 965700
pered through governmental restrictions on financial activities and through the moratoria which are
The following table indicates the amount of bullion
generally in effect throughout the South American
countries. All exchange quotations of these coun- in the principal European banks:
tries must be regarded as purely nominal.
Jan. 7 1932.
Jan. 6 1931.
Argentine paper pesos closed on Friday at 25 15-16 Banks of
Gold. I Siker.
Total. I
Gold.
I Total.
I
er
for bankers' sight bills, against 25 15-16 on Thurs£
I
I
£
£
£
1
£
121,324.630 146.557,914
1146,557.914
day of last week and at 26.00 for cable transfers, England..121.324.630,
France a _ _ 550.904.3171
a
(d)
550,904.317 429.895.6671
429.895.667
b 42,867.750 c994.600 43.862,350 99,679.000
994,600 100,673,600
against 26.00. Brazilian milreis are nominally quoted Germany
Spain ____ 89.879,000 20,839,000110,718.000 97.663.000 28,041,000125,604,000
Italy
60,848.000 57,275.000
57,275,000
5.95 for bankers' sight bills and 6.00 for cable trans- Nethlands 60,848,000,
74.880.000, 2,325,000 77,205,000 35.513,000 2,014.000 37,527,000
Nat. Belg_ 72,946,000
72,946.000 38,292,000,
38,292,000
fers, against 5.95 and 6.00. Chilean exchange is Switeland 61,042,000
61,042,000 25,609,000'
25,609,000
Sweden... 11,433.000
11.433.000 13.381,000
13,381,000
nominally quoted 123/
8,015,0001
8.015,0001 9.560,000
8, against 121
9,560,000
/
8. Peru is nomi- Denmark.
Norway __ 6.559,000'
6,559.000 8,135,000
8,135,000
-nally quoted 27.81 against 27.81.
1
Total week 1100698 6971 24,158,60011248572971961,460,581 31.049.600
992,510,181
Prey. week 1098411 415, 24,026.6001122438 0151961,217,242 31.155.600992,372,842
Exchange on the Far Eastern countries shows no
new developments since the suspension of gold by
Japan in December. The silver currencies have
latterly been weaker owing to some recession in
the price of silver, which yesterday was quoted at
around 303' cents per ounce. The Indian rupee is
showing a decided tendency to sag. The rupee has
fluctuated rather widely since the abandonment of
gold by Great Britain in September. At present
exchange on India is adversely affected by the renewal of political agitation. Japanese yen show a
softer undertone and as has been the case since the
a These are the gold holdings of the Bank of France as reported in the new form
of statement. b Gold holdings of the Bank of Germany are exclusive of gold held
abroad, the amount of which the present year Is £0,000,000. c As of Oct. 7 1924.
d Silver Is now reported at only a trifling sum.
A Clouded Outlook for Disarmament.
Speaking on Wednesday before the House Committee on Foreign Affairs in support of a measure appropriating $450,000 for the expenses of the United
States delegation to the disarmament conference
at
Geneva, Secretary of State Stimson undertook
to
impress upon the Committee the contention that
the
condition with which the conference is
expected to
deal "is responsible in large part for the
instability
180
FINANCIAL CHRONICLE
of the present world," and particularly of Europe.
The "very rigid disarmament" which was imposed
upon Germany by the Versailles treaty was supported by the United States, he said, "because we
said or felt that such would be the first step in general disarmament of the entire world." What has
happened, however, is that Germany and its former
allies "now exist in a condition of comparative disarmament, practical disarmament, in the centre of
Europe,and they are surrounded by a group of other
nations which have not disarmed but, on the contrary, they have rather increased their armaments
in many respects." The Geneva conference, he declared, was not a "snapshot," but the result of years
• of effort to bring about the kind of disarmament that
was hoped for, and unless something is done in that
direction the depression that now prevails throughout the world will be continued and deepened. "In
other words," he said,"this is not really a conference
on technical disarmament. It involves far more than
the original anticipation. It involves the hopes of
the world not only for peace but also for those foundations of peace upon which good relations and
peace are constructed."
There can be no doubt that the glaring disparity
in armaments between Germany and its neighbors
to which Mr. Stimson referred has had a great deal
to do with the feeling of political instability and
anxiety which exists almost everywhere in Europe,
and that there can be no real feeling of security so
long as such disparity continues. Unfortunately, a
look at certain world conditions makes it difficult
to share Mr. Stimson's hope that something of importance may come out of the Geneva parley. The
day before Mr. Stimson made his plea before the
House Committee on Foreign Affairs his Cabinet
colleague, Mr. Adams, Secretary of the Navy, appeared before the House Committee on Naval Affairs in support of the Vinson bill, the purpose of
which is to bring the American Navy, in the course
of the next ten years, up to the strength provided for
in the London naval treaty. The bill calls for the
construction of 120 vessels, comprising aircraft carriers, cruisers, destroyers and submarines, to an
aggregate of 303,240 tons, at an ultimate cost of
$616,250,000. "There is no question in my mind,"
Secretary Adams fold the committee, "but that we
should build up to the limits allowed by the London
treaty." Asked whether Mr. Hoover also favored
-building up to treaty strength, Mr. Adams replied
That he was not authorized to speak for the President, and when asked whether Mr. Hoover approved
of the Vinson bill he answered that the President
"scarcely could have approved a piece of legislation that he had not as yet seen." On Wednesday,
however, when charged by Representative McClintic
of Oklahoma with a breach of good faith toward the
President, Mr. Adams assured the committee that
he knew of no difference between his own testimony
and the attitude of the President, and that he appeared before the committee with the President's
knowledge.
Whether the Vinson bill involves any radical departure from the positions which the Administration
has assumed hitherto, or whether, if we are to have
a navy at all, it is the better policy to have one of the
dimensions which the London treaty contemplates,
are questions which it is not necessary now to discuss. The point is that any large plan of naval construction, brought forward on the eve of an inter-
[Von. 134.
national disarmament conference, is not likely to
have a happy effect on the conference. The fact that
the Vinson bill contemplates replacement rather
than out and out tonnage increase does not modify
the effect of the proposal, for what is intended is an
actual increase in the fighting strength of the navy.
The spectacle of two members of the American Cabinet appearing before committees of Congress, one
to champion a ten-year program of naval building
and the other to plead for general disarmament as
the great hope of saving Europe and the world, is
not calculated to strengthen the hands or clarify the
minds of the American delegates who, if Congress
appropriates the necessary money, will shortly depart for Geneva. The other nations represented at
the conference may well feel that if the United States,
the country which least of all need be influenced by
fear of attack, can afford to go in for rebuilding its
navy when the Treasury deficit is running into the
billions, other countries in which apprehension is
more acute need not hasten to reduce their own
war establishments.
If newspaper reports from Washington are to be
'believed, the policy which the American delegation
will be expected to follow will be one of "straddle."
The Washington correspondent of the New York
"Times," writing on Jan. 1, reported that the recommendations on policy submitted to Secretary Stimson by technical advisers, and "probably" to be
"adopted in large part, if not completely, by the Administration in formulating the instructions to the
delegation," include among other things the abandonment by the United States of its previous opposition to budgetary limitation of armaments, and acceptance of "a combination of direct and budgetary
limitation as a basic principle." As Europe has been
inclined strongly to favor budgetary limitation, the
new American position, if it is maintained, amounts
to a compromise. "Air armaments," the same correspondent continues, "are dealt with somewhat inconclusively" in the recommendations, "as a result
largely of the difficulties of making concrete suggestions for limiting this new military arm and of the
practical obstacles in applying military rules to
commercial aviation." The technical experts further
suggest that "it would be a waste of time to attempt
direct limitation of the number of rifles or the
amount of ammunition permitted a government at
any one time, since it is felt that in practice these
would be limited as effective equipment by the number of men under arms." The Washington correspondent of the New York "Herald Tribune," in discussing these various recommendations on Jan. 2.
Added the information that while "an explicit program designed to guide American policy" at the conference had been completed,"it was generally understood that the United States does not intend to
initiate proposals."
This, for the moment, is the uncertain American
attitude in the case. In Europe, while preparations
for the conference, in the designation of imposing
delegations, are actively going on, the outlook for
positive and harmonious action is far from encouraging. The New Year's Day speech of President von
Hindenburg,in which he called for equality of treatment of Germany in the matter of armaments, has
been strongly criticized by the Paris press as embody
ing demands which impede the work of the conference at the same time that they negative the work
of the Paris peace treaty. Great Britain, it was re-
JAN. 9.1932.]
FINANCIAL CHRONICLE
181
ported on Monday, will renew at Geneva its demands it has left the League of Nations. In a remarkable
for a reduction in the size of battleships, the limi- dispatch from Geneva on Jan. 1, the correspondent
tation of cruisers to 8,000 tons, and the abolition of of the New York "Times" quoted a spokesman for
the submarine, although the first two of these pro- the League as saying that the policy of the League
posals, it will be remembered, was strongly opposed regarding the extension and consolidation of Japby the United States in previous discussions of dis- anese power in Manchuria would probably now be
armament, and the latter met invincible resistance one of "passive resistance," and that Washington
from France. The German Minister of Defense, Dr. was expected to follow the same course. "Although
Wilhelm Groener, in a statement made public on a passive policy," the spokesman was quoted
as
Wednesday, declared that not only would Germany saying, "no doubt is unheroic and the immedi
ate
"advocate with all energy" at the coming conference effect from the viewpoint of prestige undoubtedly
both "its right to equal treatment and equal secur- will be hurtful to 'Washington and even more to
ity" and "the fulfillment of the peace hope of the Geneva, yet it is the best of a bad bargain and
it
nations for general disarmament," but that it would does have fair possibilities of success in the long
also refuse to recOgnize as a basis for the conference run
We are thus able to keep the issue open."
the draft agreement drawn up by the Preparatory The spokesman agreed,the correspondent continued,
Commission of the League last year, on the ground "that a passive policy has the defect that it not only
that it "does not conform to the principle of equality cannot succeed in time to help the disarmament
of rights." If, as is rumored,the French Ministry is conference, but it will make the peace organization
reconstructed in consequence of the sickness of M. appear in the worst light just when it needs to apBriand and the death of M. Maginot, Minister of pear in the best, in order to persuade the Powers
to
War, the attitude of France at the conference may limit their arms. His answer is that it cannot
be
be materially altered.
helped, since the League is unable to go farther than
To these evidences of half-heartedness, uncertainty its great Powers and the United States will go."
and opposing views is to be added the practical efWhat has been said only goes to show that a postfect of the continuance of the Sino-Japanese conflict ponement of the conference would, under
the cirin discouraging reliance upon peaceful means of cumstances, be a wise step. What
with a huge naval
settling acute international disputes. Whatever the 'building program energetically
urged in Congress,
ultimate plans of Japan in Manchuria may turn out uncertain instructions with import
ant reservations
to be, there seems no reason to doubt that Japan for the American delegat
ion, sharply opposed deproposes to clean Chinese troops and bandits out mands by European govern
ments, an ominous situaof that province, or that, having done so, government tion in Manchuria,
and the League admittedly in
and administration will pass under Japanese con- contempt, the prospec
t of agreement among the natrol. To what extent, if at all, a Japanese occupa- tions regarding any
phase of armament reduction
tion would trench upon the treaty rights of other or limitation seems
slight. If there is any wide
Powers in Manchuria or China is not clear, but
there popular demand for disarmament in any country,
are indications that the progress of Japanese arms even in those in
which the financial burden is
is being watched with some anxiety in this
country heaviest, the demand is extremely hard to discern;
and in Europe. A Washington dispatch on Thursday the demand, such
as it is, appears rather as a proreported that "definite action" had been decided test against unequa
l treatment of Germany and its
upon in conferences between Secretary Stimson and former allies,
or as a criticism of the armament of
the British, French and Italian ambassadors,
but another Power rather than of one's own. It would
instead of the expected joint action, Mr. Stimson be better in
every way for the cause of peace that
later made public the text of identic notes which had the questio
n should not be debated at all, than that
been dispatched to China and Japan, represe
nting it should be debated without result.
action by the United States alone. The notes
declared that the American Government"cannot
admit
What Bankers Say of Themselves.
the legality of any situation de facto, nor
does it
FIFTH (AND FINAL) ARTICLE.
intend to recognize any treaty or agreem
ent entered
In four preceding articles attempt has been made
to
into between" China and Japan "or agents
thereof, review in comprehensible fashion the position taken
by the
which may impair the treaty rights of the
United Federal Reserve banks about the development of their busiStates or its citizens in China,including those
which ness during recent years. A sketch has been afforde
d of
relate to the sovereignty, the independence
, or the their discount and open market policies, and
of their attiterritorial and administrative integrity of
the Re- tude toward the acceptance market as well as
toward the
public of China," or to the policy of the
open door. question of trading in Government bonds
and Treasury
A statement accompanying the notes made
clear that certificates.
the declaration just quoted had reference to
the NineSince this series of articles was begun, the Senate
Power Treaty. The notes further announ
Subced that committee on Banking and Currency
has issued a further
the United States "does not intend to recogni
ze any study of matters closely akin to those herein
previously resituation, treaty or agreement which may be
brought viewed. Part VII of the "hearings" before the
Subcommitabout by means contrary" to the Paris anti-war
pact. tee furnishes a summarized statement of the returns
The only response of the other Powers to the
made
Amer- by a select body of large banks in answer to
questionnaires
ican statement, at the time this article was
written, addressed to them with reference to their
practices and the
was an announcement by the French Foreign Office,
condition of associated enterprises of
the sort now generally
on Friday, that France did not contemplate similar known
as "security affiliates." In the present
review effort
action.
will be made to outline what bankers
thus say of themselves,
The Manchurian imbroglio has a direct bearing as it
is summarized and presented by
the Subcommittee.
upon the disarmament conference, not only because It
appears that the latter body, having
originally underof the threat of war which any such controversy
al- taken not to publish the return of any
individual bank, or
ways holds, but also because of the position in which bank
affiliate, or to issue statements
that would identify
such return, has adopted the plan of presenting the information derived from the questionnaires in tabular form, in
which is set forth the salient facts relating chiefly to the
investment side of the banking business.
31,319.521,000
1,020,359,000
908,722,000
512,520,000
290,261,000
228,365,000
194,974,000
170,107,000
144,075,000
128,253.000
106.239,000
8,304.000,000
7 614 ono non
32,945.970,000
3,300.331,000
3.173,823,000
3,165,481.000
3,774.775.000
3,857,662.000
4,667.750,000
5,759,678,000
5.703,092,000
6,587,067,000
7,023,487.000
8,304.000,000
7.614.000.000
34.265,491,000
4,320,690,000
4.032.545.000
3.678,001.000
4,065,036,000
4,036,027,000
4,862,734,000
5,929,785,000
5,852,167,000
6,715,320.000
7,129,726,000
8,304,000.000
7.614000000
33.216.000.000
0,
,
0000
mom1'.r.000000.
.300mwwWWWoommo,com
e0 .
Ci COI,
05 00asel.ft,
0.00•4•N I
4000,
cDOIC.
0co to •
•
t--1.
G0 CO In it,
t- I,
Aug. 15 1919
Dec. 26 1919
Dec. 31 1920
Dee. 28 1921
Dec. 27 1922
Dec. 26 1923
Dec. 31 1924
Dec. 30 1926
Dec. 29 1926
Dec. 28 1927
Dec. 26 1928
Dec. 31 1929
'fa Q1 In7n
.
Total of
security
loans.
lllllllll 111.1.1
Secured by
other stocks
and bonds.
1
Secured by
United Slates
Government
bonds,
3823,000,000
525,000,000
311,000,000
310.000,000
231,000,000
217,000,000
138,000,000
110,000,000
105,000,000
104,000,000
95,000,000
89,000,000
63,000,000
33,000,000
31,000,000
16,000,000
15,000,000
I
Numbee of
banks,
llllllllll g
follows:
11..111
L')ANS.
Manifestly, several questions of considerable significance
have been faced by the Committee in this inquiry, among
them the queries: (1) Have these changes resulted in a
large or dangerous overgrowth of such security loans and
Investments? (2) For what purposes have the loans been
chiefly made? (3) In what position does the change of
banking methods leave the banking community? (4) Is
there a real danger of illiquidity to the banks growing out
of the changes thus noted?
What has actually been the alteration of bank position
that has been brought about of recent years? As to this,
the Committee prints a table showing security loans for
reporting member banks of the Federal Reserve System, as
CHARACTER OF THE COLLATERAL FOR SECURITY
.11111111111101•1
by such institution for these purposes.
181111111 llllllll
than from the management of the credits of the community.
But this has not been all. Due to the more or less rigid
control exercised over the doings of the banks by the Government, through its banking legislation, bankers have called
In the aid of capable lawyers to assist in the process of
finding a means of unlocking the security markets to them
without overt violation of the law. The result has been the
development of the security affiliate system which has
tended, for some years past, to become an unlicensed and
unrestrained medium of speculation in underwriting, initiating, trading, and distributing bonds and stocks, with the aid
derived from the "parent" institution through loans granted
Per cent of Per cent of Per cent of
collateral
collateral
Loans on stocks collateral
without
in listed
consisting
and bonds.
active
ofstocks. securities,
markets.
Bank.
•-•0102.0.00t-COCOC••-•CVM.0..001,
As is well known to most banking observers, the striking
development of American banking, perhaps of all banking,
'since the close of the war, has been the tendency on the
part of banks formerly known as "commercial," to go into
the Investment side of the business, and to make their profits
from their dealings in bonds and other securities, rather
CHARACTER AND MARKETABILITY OF COLLATERAL OF SECURITY
LOANS—NEW YORK CITY BANKS.
OdOOOOOOOOOOOOOSO g
ZZZZZZZZZZZZZZZZZ
TENDENCY OF COMMERCIAL BANKS TO GO INTO
INVESTMENT BUSINESS.
Date.
[VOL. 134.
FINANCIAL CHRONICLE
182
76
63
68
69
89
80
76
70
96
70
95
90
71
86
90
90
95
83
I
76
16
3
3.3
3.6
3.7
2.4
15
2.5
4
6
3
4
3.3
5
1
2
5
I7
BANKS OUTSIDE OF NEW YORK CITY.
Bak.
No. 1
No. 2
No. 3
No. 4
No. 5
No. 6
No. 7
No. 8
No. 9
No. 10
No. 11
No. 12
No. 13
No. 14
No. 15
No. 16
No. 17
No. 18
No. 19
No. 20
No. 21
No. 22
No. 23
Tot.23 banks
State in which
located.
Massachusetts
Massachusetts
Massachusetts
Rhode Island
New York
Pennsylvania
Pennsylvania
Ohio
Illinois
Illinois
Michigan
Michigan
Minnesota
Minnesota
Minnesota
Missouri
Nebraska
California
California
California
California
California
Washington
Per cent of Per cent of Per cent of
collateral
collateral
Loans on stocks collateral
in listed
consisting
without
and bonds,
active
of stocks, securities,
markets.
73
77
3169,000,000
85
90
59,000,000
75
82
12,000,000
85
85
28,000,000
85
90
82,000,000
56,000,00095
70
.
+5
.
30,000,000
64
77
113,000,000
90
75
548,000,000
60
50
54,000,000
98
90
47,000,000
66
89
7.000,000
100
78
28,000,000
70
90
16,000.000
58
44
11,000,000
80
60
59,000.000
95
60
1,000.000
83
87
91,000,000
90
100
39.000,000
85
67
32.000,000
75
70
21,000,000
99
70
20,000,000
64
38
1,000,000
31,524,000,000
77
54
7.6
5
2
5
10.8
(a)
3.5
1
10
25
10
1
.03
15
2
15
1
10
-5
7
1
36
10
a Negligible.
DO BUSINLSS MEN NOW COLLATERAL THEIR LOANS WITH
SECURITIES INSTEAD OF BORROWING ON THEIR
CREDIT AND PAPER.
Of recent years there has been a widespread effort on the
part of many banks and bankers, and, indeed, of many
Reserve bankers, to make out a case for the security loan as a
"new" method of financing business, hence one desirable
from the purely business standpoint. The argument in this
regard usually states that it is growing customary for business men to collateral their loans with securities, rather
than to resort to the "old" method of presenting a statement
and receiving, on the strength of it, a "straight" loan. In
order to ascertain the facts on these points the Committee
inquired:
What proportion of loans on stocks and bonds reported by you at
the last condition call whs made by the borrowers, in your opinion, for
direct commercial, industrial or agricultural use?
What proportion of such loans was made, in your opinion, for the
sole purpose of carrying securities?
The replies show that: "As would be expected, a number
of banks had no data for forming an opinion on this subject.
of reporting member
"It will be seen from the statistics of security loans
Of the institutions answering the questionnaire, however,
more than 100% from
banks presented above that such ativances rose
extent of the growth in 56% (10 out of 18) in New York City and 84% (41 out of 49)
1921 to 1929. This is a truer picture of the
of all banks to the
security loans than that furnished by the reports
of cases
that have occurred elsewhere were able to give replies. In a majority
comptroller, because of the changes in classification
that
indicating
form,
the reply was given in approximate
In the latter data."
And again:
In
.
approximation
empirical
upon
tile division was based
1921-1930 was a
"The expansion of security loans during the decade
in
given
times
at
exact,
more
was
the
division
of reporting other cases
nation-wide phemomenon. This is proved by the statements
member banks of the Federal Reserve System, as divided by districts." percentages carried to two decimal places, indicating that
BANKS
INCREASE IN SECURITY LOANS OF REPORTING MEMBER
notations on loan cards or other devices were being habituBY FEDERAL RESERVE DISTRICTS.
ally
used by many banks to indicate the purposes of security
Increase
Jan. 8 1930.
Jan. 7 1921.
Federal Reserve District.
%
loans. Such action by some institutions, therefore, points
121
3533,000,000
3241,000,000
Boston
possibility of all banks securing at least
100 to the general
3,488,000.000
1,743,000.000
New York
84
505,000,000
as to the purposes
274,000.000
Philadelphia
sa approximate information from customers
740,000,000
404,000,000
Cleveland
40
189,000,000
to
142,000.000
and dealers
brokers
Loans
loans.
Richmond
77 of security collateral
152,000,000
86,000,000
Atlanta
29
1,247,000.000
542.000.000
enas
advanced
considered
Chicago
be
course,
of
67 in securities can,
251.000,000
150.000.000
St. Louis
62
86,000,000
53,000,000
for
investment
securities
carrying
Minneapolis
of
purpose
the
22 tirely for
127,000,000
104,000,000
Kansas City
126
113,000.000
50,000,000
Dallas
advance in many cases
133 or speculative purposes, although the
435,000,000
187,000,000
San Francisco
one
pending
distribution of a
temporary
a
as
98
planned
37.888.000.000
is
33.976.000.000
Total
to customers. The replies to the
bonds
or
stocks
of
block
was
loans,
such
in
Marketability, always a severe test
cases covered the September 24 1930
Investigated, with the following results for a group of large questionnaire in some
that of Dec. 31 1930."
others
call date, and in
Institutions:
JAN.
9 1932.]
FINANCIAL CHRONICLE
In tabulated form, the purposes of security loans are
exhibited substantially as follows:
PURPOSES OF SECURITY LOANS-NEW YORK CITY BANKS.
Proporlion for
Bank.
Loans on
stocks and
bonds.
Proportion for
the sole
industrial purpose
or agriof
cultural carrying
use.
securities
COMmer-
Bank.
Loans on
stocks and
bonds.
Proportion for Proporcommer- tion for
the sole
industrial purpose
or agriof
cultural =Mane
securities
use.
No. 1__ 5823,000,000 220
a80
No. 6_ _ $138,000,000
550
No. 2__ 525,000,000
a5
295
No. 7_ _ 110,000,000
2.03
No.313_ 311,000,000 a40
a60
No. 8_ _ 105,000,000
a7.5
575
No. 4_ 231,000,000
57.1
42.9
No. 9._ 104,000,000
a2
a98
No. 5-- 217,000.000 C15.3
84.7
No. 10_
33,000,000
90
10
a Des gnated as an estimate, approximation, or belief. b For head office and
larger domestic branch, given as 43.5 and 56.5, based on undivided analysis of
loans. c Including consumptive loans.
The summary of replies on the purposes of security loans
from banks outside New York City were as follows:
PURPOSES OF SECURITY LOANS-BANKS OUTSIDE OF
NEW YORK CITY.
183
had had large credits advanced to affiliated security corporations previously had liquidated them by that time. With
one exception, we are told, the New York City banks showed
moderate commitments in this respect at the close of 1930
relative to their total security loans.
LOANS TO SECURITY AFFILIATES, BANKS OUTSIDE OF NEW YORK.
Loans to affiliates, Des. 31 1930.a
Bank.
State in which
located.
Amount.
Per cent
of total
security
loans.
None.
No. 1__ Massachusetts
No. L.- Massachusetts $1,000.000
None.
No.
New York
No, 4_ Ohio
3,200,000
575,000
No. 5__ Ohio
14,100,000
No. 6..___ Illinois
2,696,000
No. 7_ _ _ _ Illinois
1,344,472
No. 8._ Michigan
166,000
No, 9____ Minnesota
937.266
No. 10....Minnesota
550,000
No. 11____ Missouri
380,000
No. 12__ California
Per cent
of capital
and
surplus.
1.7
3.3
2.8
1.6
2.6
5.0
3.5
1.0
8.7
0.9
1.9
6.8
10.1
13.5
12.2
2.4
8.5
2.2
4.5
ifazimum loans to
affiliates.
Amount.
Date.
$7,985,000
2,600,000
4,700,000
4,120,000
1,021,000
21,000,000
4,920,000
6,788,264
394,660
937,266
1,500,000
600,000
1930
1927
1929
1930
1930
1930
1929
1930
1928
1930
1926
1930
a In a few cases, the data are as of Sept. 24 1930.
Bank.
No. 1
No. 2
No. 3
No. 4
No. 6
No. 6
No. 7
No. 8
No. 9
No. 10
No. 11
No. 12
No. 13
No. 14
No. 15
No. 16
No. 17
No. 18
No. 19
No. 20
State in
which located,
Loans on
stocks and
bonds,
Proportion
for commerdal. Industrial or agricultural use
Massachusetts $169,000,000
28.000,000
Rhode Island
82,000,000
New York
113,000,000
Ohio
36,000,000
Ohio
548,000,000
Illinois
54,000,000
Illinois
Michigan
47,000,000
7.000,000
Michigan
28,000,000
Minnesota
16,000,000
Minnesota
11,000,000
Minnesota
59,000.000
Missouri
1,000,000
Nebraska
159,000,000
California
91,000,000
California
32,000,000
California
21,000.000
California
20,000,000
California
1,000,000
Washington
a20
a10
9.7
b
a23
a5
a0
a40
a9.2
25
a90
10
17
30
9.846
33
10
20
26
Proportion
for the sole
purpose of
carrying
securniee.
a66-3
a85
90.3
36.49
al00
a77
a95
al00
a60
884
65
al0
90
83
70
80.269
50
90
80
20
a Designated as an estimate, approximation or belief. b Very small percentage.
Out of 25 representative out-of-town banks answering
the question, the Committee says, only 12 reported having
made collateral loans to affiliates within the last few years,
and but 10 had such loans outstanding at the end of 1930.
"In general, it will be seen that several out-of-town banks
had a substantial part of their capital and surplus advanced
as loans to affiliates. The practice is not, therefore, as some
suppose, restricted entirely to the largest cities."
THE
GRAND
AGGREGATE
OF
BROKERS
LOANS.
The results of this inquiry throw rather more light also
upon the subject of brokers' loans, their totals, and sources,
than has hitherto been available. First of all, of course,
the total figures representing these loans need to be recalled, as follows:
"The two conclusions indicated in a general way by the
TOTAL BROKERS LOANS.
Weekly brokers' loan report Federal Reserve Bank of New York, member
above tables are that first, in the majority of cases which [Sources:
bank call report. Federal Reserve Board, and monthly report on members
borrowings New York Stock Exchange).
reported, much the larger part of security loans were not
By and through New York
made for commercial, industrial or agricultural uses, but
From Private To brokers
banks.
banks, brokers, outside of
Date.
&c., to New New York by
Total.
rather for the purpose of carrying securities; and secondly,
out-of-town
York Stock
Bank account.
Others.a
member
Exchange
that a few banks find it feasible to separate such loans
banks.
members.
according to purpose with considerable nicety, while a great Oct. 1928 $1,807,000,000
$2,835,000,000 $866,000,000 $805,000,000 $6,313,000,000
1929 2,008,000,000 3,346,000,000 1,071,000.000 925.000,000 7.350,000,000
many others are able to make a rough division without any Jan.
Oct. 1929 1,860,000,000 4,944,000,000 1,472,000,000 893,000,000 9,169,000.000
apparent difficulty."
a As shown above, loans made for "out-of-town banks" are divided in such a
manner as to include loans made by non-member banks with the "others."
The hollowness of the "new era" claim about the converThese figures should now be studied in the light of other
sion of "business" loans into secured loans needs no further
data showing the percentage of total of security loans which
exposition.
went to brokers. The results may be consolidated as follows:
THE LOANS MADE TO AND THROUGH SECURITY
AFFILIATES.
Percentage of AU Security Loans Advanced to Brokers, AU Member Banks.
Banks inNew York City
41
34
Chicago
14
Other reserve cities
Country
5
Utmost importance is, of course, assignable to the facts
as to loans made to and through security affiliates. On
this point there has been much misapprehension inasmuch
as it has been carelessly assumed by many that such affili23
Average, all
The Committee says that brokers' loans of all kinds conates followed the same general policies. The fact is that
there is as great a variation of method and management in stituted 50% of all security loans, including both bank and
this particular as there is among banks themselves. The other sources, in October 1928. A year later, at the peak
Committee brings out this aspect of the case in replies to of the stock market inflation, they constituted 53% of the
a question regarding the percentage of total loans repre- total. In June 1931 the proportion was reduced, however,
sented by security loans, the answers to which are sum- to 22%.
SOURCES OF BROKERS LOANS.
marized as follows:
Finally,
it
Is
worth while to study carefully the facts as
LOANS TO SECURITY AFFILIATES-NEW YORK CITY BANKS.
to sources of brokers' loans, and thus to ascertain from
Maximum loans to
drawn. This
Loans to affiliates, Dec. 311930.
affiliates during year. what sources the funds were ultimately
analysis is presented, as follows, for a specified select group
Per cent
Bank.
Per cent
Of total
of capital
of banks:
Amount.
security. and surplus. Amount.
Date,
loans.
No. 1
No. 2
No. 3
No. 4
No. 5
No. 6
No. 7
No. 8
No. 9
No. 10
$28,820.000
None.
None.
4.799.600
4,300,000
24,650.000
2,250,000
3,000,000
None.
207,000
SOURCES OF BROKERS' LOANS FOR THE ACCOUNT OF OTHERS.
3.5
9.7
1.5
3.1
22.3
2.2
3.4
2
5.1
20.3
8.9
4.1
1.3
5.2
$28,820,000
18,100,000
31,296.849
25,504,966
5,500,000
25,020.000
4,545.000
7,100,000
825,000
400.000
1930
1927
1927
1930
1930
1929
1930
1929
1929
1930
Out of 18 banks answering questionnaires in New York
City, it is pointed out, only seven had collateral loans outstanding to their affiliates at the end of 1930. Several that
Bank.
No. 1
No. 2
No. 3
No. 4
No. 5
No.6
No. 7
Per cent
from
Per cent Per cent Per cent
Highest amount business from in- from infrom
handled, 1929. corpora- vestment dividuals. foreign
Mins.
trusts,
banks.
$757,000,000
631,000,000
437,000.000
360.000,000
b241.000,000
153,000.000
97,000,000
Tot.(7 banks) $2,676,000,000
a Includes investment trusts
unstated amount.
a6811
49
ii
30
2
56
33
57
18
23
42
7
4
73
0.1
17
63
4
15
58
8
18
19
3
2
I
0.1
8
1
Per cent
from
other
foreign
sources.
2
2
1
1
1
3
o
7.5
b Includes loans from out-of-town banks of
184
FINANCIAL CHRONICLE
CHEAP MONEY POLICY OF.FEDERAL RESERVE THE CAUSE—
GREED OF LARGE BUSINESS HOUSES.
The data thus provided furnish, with the auxiliary and
detailed tables, material for the more complete study of
brokers' loans and suggest the real causes which lay at the
root of the vast brokers' loan movement of the years before
1929. These stand out clearly as the cheap money policy
of Reserve banks, their practice of systematically feeding
the stock market with funds until it became so powerful
it no longer heeded the dictates of its keeper and mentor,
and the dangerous greed of large business houses provided
with funds which they had been able to get from the public
(in part by issuing non-dividend stock or often at a merely
nominal cost in interest or dividend charges), and which
they now sought to place in position to reap harvest from
the speculative propensities of the rank and file of that
same public.
HOW BANKS HAVE FARED WITH THEIR VENTURE INTO
INVESTMENT BANKING.
As to the question how banks have fared with their "flyer"
In investment banking, there are two elements to be noted.
One is the question how they have come out with their direct
Investments, the other the problem how they have succeeded
in their ventures through security affiliates. As the first
of these points, we can, with available space, cite merely
two brief tables showing in one case the trend of bank
securities, as follows:
INCREASE IN INVESTMENTS OF ALL COMMERCIAL BANKS,BY
TYPES OF SECURITIES-1921-1930.
1921.
1930.
Tope of security.
Amount.
Per cent
of total.
Amount.
Per cent
of total.
35
9
17
39
83,614,000,000
1,221.000.000
1,968,000.000
6.869.000.000
26
10
15
49
100
$13,672,000,000
100
U. S. Government bonds
82,924,000,000
State.county & municipal bonds
722,000,000
Railroad & public utility bonds 1,396,000,000
Otherbonds, stocks
3,364,000.000
Total
88.406,000.000
The other table shows the net earnings and losses on
securities, as follows:
EARNINGS AND LOSSES OF ALL MEMBER BANKS.
Year,
1926
1927
1928
1929
1 win
Net earnings
and recoveries.
AU losses.
8639,013.000
655.702.000
721,062,000
851,987.000
091 010 000
8207,520,000
208,693,000
217.194,000
295,473.000
3853l , one
Percentage of
Losses on
tosses on stocks.
stocks, bonds, bonds, v4c., to
v4c.
all losses.
835.909.000
37.284,000
45,293.000
95.465,000
100 020 win
17
18
21
32
HOW SECURITY AFFILIATES FARED
[vol.. 134.
THE FAULT THAT OF FEDERAL RESERVE POLICY.
Our survey of the Federal Reserve banking situation, and
d that phase of commercial banking which is closest to
Federal Reserve banking—that of security operations—is
now complete. It has merely followed the facts as set
forth in the publications of the Subcommittee on Banking
and Currency; and that setting forth (as already stated)
is merely the setting forth afforded by both classes of banks
in their own language and own statistics, as nearly as
possible.
The showing reveals our commercial banking system at
the close of the greatest debauch of speculation—of bank
speculation—in modern times. It reveals a banking system
supposed to serve the industrial and commercial community
drained and depleted by losses due to depreciation of securities the banks should never have held,and endangered by the
vast extent of the frozen assets represented by bond investments for which there is not and could not be any market. It
indicates the position of a central banking system devoting
itself almost wholly to a study of security conditions, operating heavily in those of the Government, practically converting that type of paper which had been thought of as most
liquid—the bankers' acceptances—into a bond of uncertain
maturity, gauging its interest and discount rates primarily
by stock market conditions, regarding itself as performing
the function of spreading "contentment" throughout the
nation by stock market stimulation, but at last obliged to
recognize its failure. It depicts the central banking system
of the United States as inexpertly tinkering with the credits
of foreign central banking enterprises, and succeeding only
in tying up a goodly percentage of the reserve funds of the
country in so-called short-term loans to foreign institutions.
The picture is worth dwelling upon. No thoughtful citizen
can fail to be impressed by it. From him and from his
decision alone will come the answer of the community, whatever it may be, with reference to the future. Will he call
for a really "new era" in banking management, or shall those
who have broken down and misused the present system continue along the familiar lines of their policy?
The Course of the Bond Market.
The current week has been marked by greater activity in
the bond market, and a more sharply rising trend of prices,
than has been exhibited in many weeks. With the strength
shown at the market's close on Friday, we have witnessed a
higher level of prices than has been seen since Nov. 27.
The present rally began on Dec. 17, and has been irregularly
continuous since that date, though with a sharp break
RESULTS OF OPERATION OF SECURITY AFFILIATES, 1930.
last Saturday and Monday, from which a quick recovery
occurred.
Approximate
Approximate
decline in
Reported
Bank.
Bank.
Reported
decline in
Comparative strength in the bond market can be ascribed
market value
earnings.
market value
earnings.
of portfolio
of portfolio
to several very important factors. Among the principal
for year.
year.
for
causes was the better sentiment with regard to railroad obli88.989.628 412.500.000
No.8
No. 1
8133.593
84,000.000
No. 9
al2,500.000
No. 2
2.380.691
10,000.000 gations, based chiefly on hopes of acceptance of a voluntary
2,018.956
No. 10No.3
29.562.330
2,289.011
5.032.968
2,500.000 wage cut by carrier employees. Optimism is also being exNo. 11---No.4
369,127
4,608,835
1,249.517
1,500.000
No. 5
No. l2,
224.210
(y)
1.067,922
1.200,000 pressed in a practical manner as to the results that will be
No. 13._ -No.6
13.235.000
133.874
3,099.902
45,239
No. 7
10,944
No. 14._-851,000
44.569
950,000 achieved by the proposed Reconstruction Finance CorporaSeveral large holdings having no markets not included In computation. y Book tion as well as by the Railroad Credit Corporation. Sentikept on ma ket-value basis.
ment abroad has likewise been much more cheerful since the
In closing this review it is worth while to call attention holidays, due to rumored agreement between England
and
to one further point—the extent to which security affiliates France with regard to an extension of the moratorium.
Friday's rally was marked by some unexpectedly large
rely on their own capital. This is set forth from the quesadvances, while average prices mounted most rapidly in the
tionnaires as follows:
ease of bonds in the lower-rated classes. Railroad bonds
SOURCES OF FUNDS OF SECURITY AFFILIATES END OF 1930.
rated Baa by Moody's Investors Service scored large gains,
•
Capital and
Capital and
Borrowed funds
and foreign bonds in the same rating class also recorded
Bank.
borrowed funds
surplus: perPercentage
of affiliate.
tentage of total,
of total.
largest price increases.
No. 1
8137,414,000
As contrasted with a week ago, most important percentage
79
21
No. 2
93.467,000
24
76
No. 3
has been shown by the Baa domestic issues,
improvement
61,370,000
36
64
No.4
34.341.000
83
17
but these still reveal the poorest comparison with figures of
No.5
17.792.000
39
61
No.8
23.291,000
76
24
January 1931. Continuing the contrast with the 1931 comNo. 7
35.015.000
66
34
No.8
23,140.000
38
putations, the average railroad yield is up 45%, that of the
62
No.9
60.939.000
43
57
No. 10
industrials is 36% higher, and the utility return is 21% above
41.440.000
53
47
No. 11
6.955,000
96
4
that of last year because of the low level of values still pre_Total. 11 banks
8535.164.000
114
28
vailing. As we have previously pointed out, declining prices
One other topic remains for consideration—the situation
as to security affiliates. On this point the Committee affords
the following consolidated statement exhibiting the situation as reported by a group of large representative banks
possessed of such security affiliates:
JAN. 9 1932.]
FINANCIAL CHRONICLE
in the 1931 bond market were least evidenced by the utility
group.
The usual tables are given below:
MOODY'S BOND PRICES.
1932
Daily
Averages.
Jan.] 8
7
6
5
4
2
1931-WeeklyDec. 31
24
'
18
11
4
Nov.27
20
13
6
All
120
Domes-
120 Domestic by Ratings.
120 Domestic
by Groups.
Aaa.
.42.
A.
Baa.
RR.
72.26
71.09
69.68
68.85
68.76
69.22
85.05
84.48
83.78
83.78
83.78
83.92
76.81
76.47
75.46
74.59
74.38
75.13
74.28
73.14
71.84
71.03
70.85
71.03
59.87
58.16
56.29
55.08
55.19
55.59
59.47
58.02
56.26
55.16
54.95
55.23
80.77
80.30
79.25
78.67
78.67
79.48
77.83
76.96
75.94
75.32
75.48
75.55
68.49
68.27
65.29
66.89
69.50
72.65
75.17
77.55
76.56
82.82
82.82
81.22
83.54
84.76
87.06
88.57
89.62
88.26
74.27
74.70
73.20
76.11
78.77
81.30
83.19
85.02
83.97
70.49
70.76
66.35
67.49
70.67
73.69
75.95
77.98
77.17
55.08
54.08
50.97
51.77
54.40
57.97
61.54
64.80
63.93
54.80
53.89
60.04
49.81
51.91
55.59
59.46
63.02
61.59
78.56
78.33
75.37
78.23
81.25
83.68
85.36
87.08
86.41
74.87
75.32
74.11
76.80
78.96
81.21
82.22
83.27
82.56
P. U. Indus.
185
present time the problem of establishing uniform conservative
interest
rates is a matter of great importance to general banking conditions.
If a
council with advisory and certain other duties should be
created, the
Legislature might very well give serious thought to empowering
the Superintendent with the consent of two-thirds of such a council,
to establish
maximum interest rates.
The question of providing for such a council or commission
is being
carefully considered by the Joint Legislative Banking Commission
and
we are confident that that body in making its recommendat
ion will take
full cognizance of the facts and considerations above mentioned.
Other legislation proposed in the report for the consideration of the Legislature includes the following:
General.
To provide for the segregation of so-called thrift accounts in commercial
banks and trust companies and to place restrictions on the investment of
such funds. Such a bill should apply generally throughout the State,
but its application should be effected gradually over a period of five years.
To permit prompt mergers of banking institutions in case of emergency
or when necessary to protect the interests of depositors and shareholders
,
by providing that with the approval of the Superintendent of Banks, the
board of directors of any two or more banking institutions may merge such
institutions under an agreement which would protect and preserve the
MOODY'S BOND YIELD AVERAGES.
equities of the respective stockholders.
(Based on closing prices)
To limit the amount of the funds of any banking institution that may
AU
be deposited with any other banking institution.
120 Domestic
19321
120
120 Domestic by Rat ngs.
by Or0141M.
To require banks and trust companies to maintain reserves against time
40
Daily
DomesFordeposits.
Averages.
tic.
Aaa.
Aa.
A.
Baa.
RR.
P. U. Indus. dens.
To omit foreign exchange balances credited to a banking institution
Jan. 8__ 6.94
5.18
6.17
7.12
9.30
7.38
6.12
7.34 13.85 from the items that may be deducted from the total deposits ofsuch banking
7__ 7.06
5.22
0.20
7.24
9.57
7.56
6.16
7.45 14.06 Institution in arriving at the aggregate demand deposits, thereof, against
6._ 7.21
5.27
6.29
7.38
9.88
7.79
6.25
7.58 14.49 which reserves are
required to be maintained.
5__ 7.30
5.27
6.37
7.47 10.09
7.94
6.30
7.60 15.05
4__ 7.31
To limit the aggregate amount of funds which a banking institution may
5.27
6.39
7.49 10.07
7.97
6.30
7.64 15.22
7.26
5.26
6.32
7.47 10.00
7.93
invest in the stock, convertible bonds or other obligations of other cor6.23
7.63
15.68
1931.
porations.
Weekly.
To prohibit banks and trust companies from accepting deposits of less
Dec. 31__ 7.34
5.34
7.53 10.09
6.40
7.99
6.31
7.72 16.01
24_ 7.37
than
5.34
6.36
7.50 10.27
12,000 repayable in foreign exchange.
8.12
6.33
7.66
16.48
18._ 7.71
8.02
5.40
8.50
10 87
8.72
6.60
7.82 16.18
To limit the amount which banks and trust companies may invest in
11._ 7.52
5.28
6.23
7.88 10.71
8.76
6.34
7.47 14.52 bank buildings, such restriction
PI
to apply only to future investments.
4__ 7.23
5.20
6.00
7.51 10.21
8.42
6.08
7.20 13.75
Nov.27_ _ 6.90
5.04
5.79
7 18
9.60
7.88
5.89
6.93 12.28
Noting that Superintendent Broderick's proposals for
20._ 6.65
4.94
5.64
6.95
9.05
7.38
5.75
6.81 11.60
13._ 6.43
4.87
5.50
6.75
8.59
6.97
5.62
6.69 11.11 changes in the Banking Law show little changes from those
6._ 6.52
4.96
5.58
6.83
8.71
7.13
5.67
6.77 10.73
Yr. Ago
advanced last year following the collapse of the Bank of
/An 7 .21
A is
A Al
470
621
6.40
5.09
5.06
5.39
7.14 United
States, the New York "Journal of Commerce" of
Jan. 7 said:
Superintendent of Banks Broderick in Annual
Report Would Vest Certain Powers in Council or Commission-Sees Need of Establishing
Uniform Interest Rates.
In his annual report, presented Jan. 6, to the Governor
and Legislature, Joseph A. Broderick, New York State
Superintendent of Banks, refers to the recommendations in
his report of a year ago, with respect to amending the State
Banking Law, and says:
It is apparent that consideration might well be given to a general revision of the Banking Law with a view to simplifying its requirements
and effecting a restatement of its provisions in clear and concise terms
and we so stated in our last annual report. However, we believe the
task a difficult one and one that would require months of constant labor
by a commission free of the burden of other duties and responsibilities.
We recommend, therefore, that consideration be given to the creation of
a commission that will be charged with the duty of preparing for submission to the Governor and the Legislature a general revision
of the
Banking Law as contemplated.
Superintendent Broderick also says:
If the State is to regulate and supervise the business
of its banking
institutions. it must do so by defining, as far as compatible
with the public
good, the business in which those institutions may
engage. In addition
to such laws, the State must vest in the Superintendent
power with which
he can enforce department orders. This does
not mean that greater
authority than he now has should be given the Superintendent,
but rather
that he be provided with certain Intermediate powers with
which he may
correct unsound practices without resorting to the drastic step
of closing
an offending institution.
The fact that in fair weather and rising markets, our law
has seemed
to serve our needs, is no reason why we should now congratulate
ourselves
upon the past and without further study, assume that the
same code may
be relied upon to direct us indefinitely through all fields of
business, without
regard to constantly changing conditions and practices.
It is pointed out in the report that "much has been said
during the past few months with respect to providing a
council or commission to assume all or part of the duties
of the Superintendent of Banks." The report goes on to say:
At that time he demanded, and to-day he renewed his demands,
that
shares of banks and their affiliates be represented by different
stock certificates, that the Banking Superintendent in case of
emergency be permitted with the boards of directors to merge two banks
without calling
for vote by stockholders, that thrift accounts and
commercial deposits
in commercial banks be segregated as well as other demands.
Last year strong banking opposition against Mr. Broderick's
proposals
developed. The Merchants' Association went on record
against most of
his proposals. The Legislature referred his bills to
committee.
Two Sets of Bills.
As predicted in the "Journal of Commerce," two sets of
bills for changes
in the banking laws will be submitted to the Legislature during
the present
session. In addition to those submitted by the Banking
Department
there will be another set offered by the Cheney Committee,
which held
a set of meetings throughout the State during the past few
months. The
principal recommendations of the Cheney Committee will be to
form a
State banking commission controlled by bankers to advise
on all new
legislation and to change the rules regarding legal investments
for savings
banks.
The Superintendent's report, submitted this week, in
addition to the legislation indicated above, also suggested
further amendments as follows:
Departmental.
To permit the Superintendent to remove from office, officers
or directors
of banking institutions who have been guilty of persistent
violations of
the Banking Law, or of a continuance of unsafe and unsound
policies and
practices. Such bill. however, might permit a board of
directors upon a
two-thirds vote to reinstate any officers or directors so removed.
To permit the Superintendent, in his discretion, to omit one
examination
in any year of a bank or trust company which is a member of the
New York
Clearing House Association and to accept in lieu thereof a
report of examination made by such Association during that year.
To permit the Superintendent to compel an institution to charge off
bad and doubtful assets and (or) set up adequate reserves. Such a bill
might permit a board of directors by a two-thirds vote to over-ride
such
an order.
To permit the Superintendent to require a bank or trust company to
furnish appraisals of any real estate in which such institution may
have
financial interest.
Affiliated Corporations.
To provide that the stock of all banks and trust companies and other
corporations subject to the supervision of the Banking Department
be
evidenced by individual certificates of stock, which shall not be
coupled
with the stock of any other corporation.
To limit to 10% of capital and surplus the amount which
any bank or
trust company may be interested in all affiliated corporations
by way
of loans, investments in stock or obligations and loans
to others secured
by stock or obligations of such affiliated corporations.
Additional loans
in conservative amounts might be permitted provided
they are secured
with high grade collateral having a margin of value well
above the amount
of the loan.
To provide that an officer of a banking institution
shall not be permitted to become an officer of any corporation engaged
primarily in the
business of buying and selling securities.
In considering legislation to provide for such commission, it
should be
borne in mind that the duties of the Superintendent are essentially
executive in nature. To use the words of Sec. 10 of the Banking Law,
"There
shall continue to be in the State government a banking department
charged
with the execution of the laws relating to the . . . corporations to
which
this chapter is applicable. The head of the department shall be the Superintendent of Banks." Commissions vested with the power to
formulate
general rules to apply to particular lines of business, such as public
service
commissions. have a very proper place in our form of government.
Such
functions, however, are of a legislative nature and we believe that
we
should give very serious thought to the subject before vesting functions
of an executive character in such a commission.
Directors and Officers.
On the other side of the question are many arguments in favor of the
To require directors who are obligated upon loans
to their own instituformation of some sort of council of bankers and business men with whom tion to
file financial statements at least once in each year
and at such
the Superintendent may confer on general banking conditions or on specific Other times as the
Superintendent may require.
matters as to which advice and official support may be helpful. It would
To further restrict the loans which an institution
may
make
to its diassistance
of the sort mentioned could be furnished by a properly rectors.
seem that
organized advisory council or commission, which would be in keeping
To prohibit an officer of a bank or trust company from
borrowing from
with our present system of State government.
the institution by which he is employed.
In the future it may be found that certain powers relating to the issuance
To change the period within which directors'
examination
s are to be
of general orders may very properly be vested in such a council. At the made, to provide for such examination
s at least once in each six
-months'
186
FINANCIAL CHRONICLE
[Wu 134.
period. The scope of such examinations to include a review of all loans releasing that credit for use elsewhere. Also, offsets of a considerable
in excess of ji of 1% of the capital and surplus of such institution, in- sum have been made with respect to borrower-depositors accounts, thus
reducing amounts due to depositors by an equivalent contraction of credit.
cluding all extensions of credit to affiliated or subsidiary companies.
To permit the directors of an institution to rescind officers' contracts To the extent that these borrowers were able to obtain banking accommodations elsewhere, this has meant, likewise, a release of credit. Thus,
of employment.
To reduce the maximum number of directors which banks and trust during the year, the total funds paid to depositors and other creditors
companies may have and to permit such institutions to form advisory amounted to $127,016,501 and credits otherwise made available amounted
directorates, the members of which would have only such duties as might to $43,212,374, making a total of $170,228,875.
The Citizens Bank of Griffin Corners, Fleischmanns, N. Y., was closed
be set forth in the by-laws.
on July 18 1929, and its liquidation completed on May 5 1930, in accordInvestment Companies.
ance with a contract entered into by and between the Superintendent and
The business of certain types of corporations organized pursuant to the First National Bank of Fleischmanns, Fleischmanns, N. .1., dated
the investment section is of such a nature that it is impossible of examina- May 1 1930, and approved by the Supreme Court of the State of New
tion and supervision by this Department. These corporations do not fork. According to the terms of this contract, the First National Bank
engage in a general deposit business, but instead are engaged in the exercise agreed to purchase the assets of the Citizens Bank of Griffin Corners and
of powers of a general business nature. In most of our States, corporations pay to its depositors and other creditors the full amount of their approved
of this type are organized under the general business laws and we recom- claims.
mend that provision be made to exclude these corporations from the superThe report also said:
vision of the Banking Department and that provision be made whereby
they will be able to continue to operate under the general business laws
In the past years a salient defect of our system has been its failure to
of the State.
provide a proper check upon the issuance of new charters, with the result
Savings Banks.
that some communities have been supplied with more banks than business
to
conditions have justified. The results have been most unsatisfactory and
To permit savings banks with the approval of the Superintendent
establish and maintain deposit and withdrawal stations limiting the loca- while no new bank or trust company charter has been issued during the
past year and only six since September 1929, we cannot emphasize too
tion thereof to the county in which the principal office is loacted.
To permit a savings bank to change the location of a place of business strongly the duty which rests with our bankers to use the persuasive powers
which they have to prevent the wholesale issuance of charters in years to
acquired by merger.
To permit the payment of extra dividends above the basic rate when come. This duty, like that of correcting bad practices, requires cooperation and an interchange of views which can best be accomplished through
earnings and surplus permit.
the medium of voluntary membership associations.
Savings and Loan Associations.
The problem of investments has been one of increasing importance,
To provide for the transfer each year to guaranty fund of a larger portion especially to banks in rural sections where a reduction in commodity and
of the earnings of a savings and loan association and to require a more trade financing during the past few years has been accompanied by increased security investments. Recognizing this trend, we have constantly
adequate guaranty fund.
To provide for yearly examinations of such institutions by the board emphasized the need for more careful diversification, for increasing the
of directors and such examinations at least once in each two years to include percentage of high grade short term maturities, and for sound investment
advisory service. The effort to maintain high interest rates has also
a verification of share liabilities.
had unhealthy effect upon investment policies by resulting in the purchase
The report also deals with the liquidations during the of high yield bonds
without sufficient regard to underlying security. . . .
In the past this department has gone on record many times in opposiyear incident to bank closings, and says in part:
tion to the formation of corporations by our banks to engage in functions
LIQUIDATIONS.
forbidden the banks themselves. In pursuance of this principle we recomOne of the greatest problems with which this Department has ever been mended and sponsored bills at the last session of the Legislature calcuconfronted arose this year from the necessity for releasing funds and credit lated to divorce such corporations from our banks and trust companies.
from closed institutions with all possible speed. Our State is unaccus- Events of the past year emphasize more strongly than ever before that
tomed to bank closings and consequently the means which we have today these corporations have no legitimate place in our commercial banking
to meet such conditions are those which have been in existence for decades system and it is to be hoped that in the future legislation will be adopted
In the past. The Banking Law relating to liquidation of closed institu- which will either strictly limit their activities or prohibit their future use.
tions by the Superintendent as it now stands places legal encumbrances
on liquidation procedure which are deterrent to a prompt distribution of
funds to depositors. We believe that serious consideration might well be
York Legislature Proposes
given to the creation of some reconstructive method of dealing with the Bill Introduced in New
Creation of Banking Board of Nine Proposed by
assets of closed banks, which will provide for prompt partial payments to
depositors and for the realization upon assets at opportune times as a
Cheney Commission—Another Makes Present Insubstitute for forced liquidations with their consequent depreciation of
vestments of Savings Banks Eligible Until April
assets, delays in collections and delays in payment of dividends.
Utilizing the means at our command, we did succeed, however, in
1 1933.
achieving the best possible results, accomplished partly through means
Two
emergency banking bills were among the first measinstituof reorganization, partly through the assistance of other banking
tions but chiefly through liquidation by our own organization. We have ures to be introduced in the opening session of the 1932
been able this year to pay to depositors $91.904,893 and to release credit Legislature on Jan. 6, said an Albany dispatch to the New
In other forms of $79,185,821, making a total of 3171.090,714. We believe
these results are without parallel in the history of banking in this country. York "Herald Tribune," which continued:
We were assisted in speeding funds on their way to depositors by the
The measures, by the joint Legislative Committee on Banking, were
amendments to the Banking Law in relation to the time required for fling advanced to third reading without objection from the Democratic side.
proofs of claim which were adopted at the 1931 session of the Legislature.
One would create a State Banking Board of nine members, of which
By reason of these amendments it has been possible for us to pay a dvi- the Superintendent of Banks would be chairman, and the other would
dend in less time than it was hitherto possible to carry out the procedure provide that bonds eligible on Jan. 1 1931 as yesterday's investments for
for filing claims.
savings banks would continue to be legal investment for such banks until
Chelsea Bank & Trust Co. depositors were paid in full when the Mer- April 1 1933.
all
of
the
liabiliopened
for
business,
assuming
Trust
Co.
Bank
&
cantile
In effect, the latter bill would declare a moratorium on the provision
ties of the former.
of the Banking Law, which requires that bonds to be eligible as savings
World Exchange Bank depositors were paid in full, chiefly through bank investments must represent earnings of 1 ji times their interest for
liquidation and partly through the sale of the remaining assets to a private five of the last six years.
corporation.
The only exception to the moratorium provision under the bill introA plan for reorganization of the Ontario County Trust Co., Canandaigua, duced to-day would be bonds on which there has been a default in the
N. Y., which will result in the realization of greatest benefit to its deposi- payment of interest in 1931.
tors, has been approved and will, it is hoped, be effected shortly.
Senator Henry G. Schackno, Bronx Democrat, served notice that he
Directors of the Federation Bank & Trust Co. have proposed a plan of would oppose the measure which would create a State Banking Board.
reorganization for that institution which, although in the stage of develop- This opposition was regarded as indicative of an intention of the Demoment, has been well received in many quarters. That plan, too, should cratic minority to sponsor a bill embodying the recommendations of State
realize for depositors benefits that could not be equalled under a forced Banking Superintendent Joseph A. Broderick, who, in his annual report
liquidation.
which was submitted to the Legislature to-day, urged the creation of an
American Union Bank, Bank of Europe Trust Co., Globe Bank & Trust Advisory Council.
The Banking Board which the joint committee's bill would create would
Co., International-Madison Bank & Trust Co. and Times Square Trust
Co. depositors have had released to them one-half the amount of their have more than more advisory powers. Superintendent Broderick
acquireththe
assets
has
Trust
Co.
Manufacturers
The
approved claims.
recommended that "if a council with advisory and certain other duties
of each institution by purchase from the Superintendent and further should be created the Legislature might very well give serious thought to
funds will be made available to depositors of the closed banks as they empowering the Superintendent, with consent of two-thirds of such a
council, to establish maximum interest rates."
are realized.
Many suggestions have been received for the reorganization or liquidaAs bearing on the new legislation offered in the Legislaproposition
concrete
no
recently
until
States
but
United
of
of
Bank
tion
ture on Jan. 6, Albany advices Jan. 5 to the New York
or plan has been submitted to us. . ..
the
At the present time there is in process of development a plan for
"Times" said:
liquidation of the Bank of United States, proposed by Samuel Untermyer.
Establishment of a State Banking Board and investment relief for
This plan provides that the assets of the bank shall be in effect sold to a
liquidation corporation which shall have a satisfactory personnel of officers securities hit by depression will be sought on the opening of the Legisand directors and cash capital of at least $8,000,000, which will be security lature to-morrow by the Joint Banking Committee as the first step in a
for the corporation's obligation to pay the depositors in full. The plan program of banking law revision in the State.
At a meeting here to-day the Commission, headed by Senator Nelson
provides that at least $3,000,000 of this capital shall be subscribed by
the former directors and that at least $5,000,000 of the capital shall be W. Cheney, of Erie, made preparations to introduce the two measures
subscribed by stockholders of the Bank of United States. The realiza- to carry recommendations resulting from a study begun last summer.
In a statement outlining the bills, Senator Cheney and Parton Swift.
tion of this plan depends upon the raising of cash capital of at least $8.000,000 and upon the designation of a group of satisfactory persons who will counsel for the Commission, said:
"One bill provides for the creation of a State Banking Board of nine
serve as directors and officers of the liquidation corporation.
In the meantime, while these plans have been under consideration, members, with broad, general powers. The Committee is of the opinion
liquidation has proceeded in an orderly manner with the purpose of releas- that the creation of this Board will accomplish every purpose sought to
ing funds to depositors as quickly as possible. The first dividend pay- be accomplished by the very large number of banking bills which have
ment of 30% was made to depositors on Sept. 1 1931, representing a dis- been introduced in the Legislature in the past two sessions.
"Under the bill, which will be introduced on Wednesday, the Board
tribution of $41,013,970.13 and a second dividend of 15% was paid on
Dec. 21 1931, representing a disbursement of $20,165,313.35, making an would consist of nine members, four representing the public, four representing banking institutions, the ninth member being the Superintendent
aggregate of $61,219,283.48.
Of the 32 banks and trust companies closed during the last 13 months, of Banking himself, who would act as chairman.
"The four members representing the public would be appointed by the
payments have been made to the depositors of 13 institutions. Moreover,
pre-closing borrowings of all closed institutions have been paid off thus Governor with the advice and consent of the Senate. One member would
JAN. 9 1932.]
FINANCIAL CHRONICLE
serve until March 1 1933; two until March 1 1934, and one until March 1
1935. Thereafter each member would serve for three years.
"Of the four members representing banking institutions one must be
an officer of a New York City State bank or trust company having resources of at least $150,000,000. The second would be an officer of a
State bank or trust company from the First, Second, Third, Fourth, Fifth,
Sixth or Ninth Judicial District, or, roughly speaking, the territory in
New York State east of Syracuse.
"A third member would be an officer of a State bank or trust company
coming from the Seventh or Eighth Judicial District, or the western section
of the State, and the fourth member would be a representative of a savings
bank from any part of the State.
Ilt-"The representatives of the banking institutions would also be appointed by the Governor, with the advice and consent of the Senate.
The bill provides, however, before the Governor may make his appointments the Superintendent of Banks must submit to him a list of names
submitted to the Superintendent by various banking groups.
Oki"The members of the Board would receive no salary, but would be paid
their actual expenses while attending meetings. Meetings would be held
at such times as the Board itself might fix.
"The Board would have power by a majority vote to make, alter and
amend rules not inconsistent with law for the following purposes:
"1. For regulating the methods and standards to be used in making
bank examinations.
"2. For defining what is an unsafe manner of conducting the business
of the corporations and persons to whom the Banking Law applies.
187
"3. For defining what is a safe or unsafe condition for transacting business for such corporations and persons.
"4. For establishing safe and sound methods of banking throughout the
State and safeguarding the interests of depositors and stockholders generally
in times of emergency.
"Under the bill the Superintendent of Banks would have power to deny
any application for a new bank charter, but no new bank charter could
be issued without a majority vote of the Board.
"The second bill is an emergency bill, amending the section of the Law
which defines legal investments for savings banks and trustees.
"Under the present law, before the bond or a railroad is a legal investment for a savings bank or a trustee, the corporation issuing the security
must have earned 1% times its fixed charges for five out of six years before
the investment is made, must have met other financial requirements over
the same period of time and must have earned its fixed charges in the
year immediately preceding the investment.
"The amendment provides that in making these calculations the year
1931 shall not be considered, if 1931 earnings would render the bond illegal
under the present law."
Assemblyman Streit, Democrat, of New York, announced that he had
ready for introduction a bill to strike at "stock racketeers" which would
create a State Securities Commission consisting of the Attorney-General,
the Secretary of State and a chairman appointed by the Governor.
The measure would require complete statements describing securities
before they could be sold in the State and would prescribe strict penalties
for false or inaccurate statements.
Indications of Business Activity
THE STATE OF TRADE—COMMERCIAL EPITOME. primary prices are firm at about a cent over the New York
spot parity for Santos 4s. Sugar futures have dropped 6
Friday Night, Jan. 8 1932.
Trade has been quiet in most lines whether retail, jobbing to 7 points as the Paris conference was a bit of a disappointor wholesale. Here in the East it has been too warm with ment to not a few and what is quite as much to the point
temperatures in New York as high as 57 degrees on Jan. 7. the grinding of cane in Cuba will begin on the 15th inst.
Rough weather has prevailed in parts of the West and The uncertainty as to what will finally be done in Paris
Southwest with big rains and snow storms, accompanied by about sugar regulation is a disturbing factor. The sessions
rather low temperatures. The rains and snows were good will not be resumed until some time in February. Meanfor the wheat crop but bad for trade. Special sales in the while there has been some hedge selling against purchases
post-holiday period have not been attended with satisfac- of Cuban and Philippine sugar.
In some parts of the country where heavy storms have
tory results. Retail stocks of merchandise throughout the
country are believed to be down to a low stage, but this prevailed winter apparel has been in better demand. With
fact does not help the wholesale trade. The buying is the turnover in general very slow, retail failures in this
cautious. Pretty much everybody is waiting to see. One country were much larger than in the previous week. Colbright spot in the business world of the United States was lections have been slow, and this fact is a serious drawback
the rising stock and bond markets for three days in succes- in many lines of business. The effect of widespread unemsion. The grain markets too have been very well sustained. ployment is seen in the lessened demand for working clothes.
And at one time a good export business in wheat was re- In Boston the leather trade is quiet, but the sales of shoes
ported, mostly, however, Canadian wheat via the Pacific are about equal to those of a year ago. There is not much
Ocean. But the tone in the wheat market is more confident. doing in suit and dress manufacturing, as it is between
It is believed that Europe will have to buy wheat from the seasons. Wool has been quiet and about steady. The
United States on a larger scale even, though Argentine and wholesale jewelry trade was plainly hit by the dullness of
Australia are beginning to compete for the European market. the times in 1931, when the sales were noticeably less than
At the present time Canada is doing the export business on those of 1930. With retail failures large, there is also some
this side of the water. But the turn to the United States increase in the failures among wholesale and jobbing conis expected to come later. Corn has declined only slightly, cerns. Many banks failed in the Carolinas. Building is
despite increased country offerings of late and the dullness slow, as usual at this time of the year, and steel remains
of the cash trade. Many farmers are still holding their quiet, with auto companies buying very little, so that prices
corn crops. A mild fall and winter has had a tendency to are hardly tested, though on the surface they seem as a rule
increase the farm supplies of such grain as corn and oats. comparatively steady. The rainy weather here and at the
What the corn market needs most is a vigorous cash demand. West has caused increased sales of rubber and other footOther grain has shown little change. The export demand wear. The automobile trade is slow, and there are no
for American rye is disappointing but the price of this grain indications of any considerable increase in output. It might
to-day was about the same as a week ago. The rise in the perhaps be said that the automobile trade is marking time
stock market has tended to steady all grain prices. Provi- awaiting further developments, though here and there some
sions have again declined, lard falling some 22 points and new models are being brought out. Kerosene prices have
is the cheapest for many years past. Cotton has advanced been very firm and furnace oils have sold well. Gasoline
sratly because of the incessant trade demand for domestic stocks are increasing. Petroleum is unsettled. On the
and Far Eastern account. One circumstance which attracted Pacific Coast many of the lumber mills have closed down
not a little attention was a sharp advance in cotton at completely. Seattle reports about the lumber trade are
Bremen which was taken to mean that Continental cotton more cheerful, but the tone in that branch of business, to
interests are not apprehensive that any debenture legislation say the least, is not optimistic as a rule at this time. Copper
will be enacted in the United States. It would be contrary has advanced. In Pittsburgh the plate glass business is
to interests of the European trade. The South continues to generally dull, though there is a fair demand for table glass.
hold cotton off the market, and hedge selling has been very The coal trade here in the East has been fairly good. It
small except for one day when accumulation of hedge orders would have been much better but for the mild weather. In
over the holidays had some passing effect. Worth Street this city retail trade in general merchandise is not equal, as
has been in the main quiet, though some constructions of a rule, to that of a year ago, nor are collections as good
print cloths have sold on a fair scale. At Manchester busi- as then.
On Jan. 2 prices in the New York Stock market declined
ness has been dull. The foreign news does not help it,
especially the political disturbance in India and the war 2 to 4 points on some leading issues. The stocks which
news from China. Rubber has declined only slightly and declined the most were Auburn, 6 points; Western Union,
may perhaps be near the point of a stabilized price. Hides 4%; American Telephone and du Pont, 43; Eastman, 33,
have declined only 10 points net. Cocoa is off 22 points. and Coca Cola 33/s. General Motors fell 1%,and Chrysler
Silk is up 1 to 3 points. Silver declined 5 to 10 points. 1. One bright spot was the advance in U. S. Government
Coffee has not changed much. The trading has been light bonds. For that matter, bonds in general, though somepending further developments and there is a net decline what irregular, held up well. French, Dutch and Italian
for the week of 1 to 7 points. New Orleans has been selling bonds advanced. On the other hand, German Government
here for hedge account to some extent. Brazil reports that 7s declined 5 points and 53/2s, 2. The principal commodity
188
FINANCIAL CHRONICLE
[VOL. 134.
markets were closed. On the 4th inst. stocks and bonds 30 days. Smaller sums were carried in most of the other
were lower on smaller transactions; that is, 1,513,365 shares closed banks.
Montgomery Ward & Co.'s December sales for December
of stocks. Stocks fell in some cases 1 to 6 points. Cornmodities were also lower; i.e., wheat, 13'c; cotton, 20 to 22 show a decline of 23.6% from the total for the same month
points; rubber, 35 to 38 points; sugar, 6 to 7 points; hides, last year. Receipts were $21,899,269 in December, against
20 to 30, and some others also declined. Amer. Tel. & Tel. $28,672,184 in December last year. For the entire year
was the lowest in 11 years. Consolidated Gas and Western 1931 the company transacted a volume of $219,361,585,
Union went to the lowest on record. Brooklyn-Manhattan against 8272,319,625 for 1930, showing a decrease of 19.4%.
Transit was the lowest in eight years. Allis-Chalmers on The S. S. Kresge Co. at the close of December reported
its face touched a new low for all time. General Electric, sales for that month of $22,173,414 a decline of 7.5% from
also the surface, was the lowest in some 35 years. Westing- the total of $23,982,054 for December 1930. Sales for the
house was the lowest in more than two decades. Industrial 12 months aggregated $145,785,474, against $150,353,703
stocks sank to new lows. They included J. I. Case, du Pont, last year, a loss of 3%. Chicago wired that Sears,Roebuck
General Motors, Sears Roebuck, United States Steel, Co. reported for four weeks ended Dec. 31 sales of $33,Baltimore & Ohio, Missouri Pacific and Southern Pacific, 167,501, against $39,075,133 in the corresponding period of
as well as Union Pacific, Air Reduction, Allied Chemical, 1930, a decrease of 15.1%.
Manchester cabled that in textiles a variety of useful
American Can, American Smelting and Bethlehem Steel.
Short selling in some of these stocks has recently been re- orders were booked despite the uncertainties prevailing and
ported very large. Shorts seem glad to cover as apparently the holiday season. Political developments in India caused
certain pools let go. Yet the trading was, as already stated, anxiety and are being watched carefully. In cotton yarns
far from large. To some this suggested that liquidation was deliveries on old contracts are being taken freely but new
less pressing. They were hopeful that the time was not business was small. The political situation later became
distant when "long" selling would be seen to have finally tense with a large number of arrests and imprisonments, inspent its force. In bonds, not a few railroad issues lost last eluding Ghandi himself. Amsterdam wirelessed the "Times"
week's rise. United States Government issues fell 5-32 that riots at Enschede, Holland, in connection with the
to 1 28-32. Foreign bonds advanced,led by German issues, walkout of the textile industry caused the police to charge
with a rise of 14 to 3% points. French Government issues the strikers. A wage reduction of 5% in the woolen and
declined a fraction. It was not a cheerful day. Stocks were cotton mills was reported to have gone into effect this week
without trouble.
again under a cloud,
Lawrence, Mass., wired that the Pacific Mills of that
On the 5th inst. prices declined early in a small market
owing partly to the suspension of Gurnett & Co. with ex- city will not be forced to abandon that center as operatives
tensive New England connections and a dividend reduction have learned that it is possible for the mills to get the work
by the Atchison, Topeka & Santa Fe Ry. Co. to $1.50 on done more cheaply outside of the city and are more reasonthe common stock, a cut of $1 compared with what has been able. That has encouraged the managers to make a further
paid quarterly since 1928. But any bearish news was offset attempt to meet conditions and continue their operations
by a lack of a severe pressure. Rallies came later. What instead of moving elsewhere. Ware, Mass., wired that the
struck observant people, was this resistance of the market Ware Woolen Co. has received sufficient orders to bring
to such pressure as existed and the evidences of larger about an immediate resumption of activity and it is hoped
buying by prominent operators and what is more to the point, that production will be resumed on a full-time schedule.
Charleston, N. C., wired that the People's State Bank of
by the outside public. The rallies were not due solely to
covering. And in the nature of things, liquidation cannot that city, with 44 branches in 41 towns, and one of the
go on forever. On the 6th inst. stocks suddenly came to the oldest banks in the State, has turned its affairs over to the
right about and advanced 3 to 6 points and German bonds State Bank Examiner, pending reorganization. Washington
1 to 10 with grain higher and covering in stocks on a larger wired Jan. 6: "Production of boots and shoes in November
scale. German bonds rose co-incidentally with rumors that totaled 18,470,065 pairs, against 25,380,808 in October and
both France and England were disposed to ease the terms of 18,941,199 in November 1930, the Department of Commerce
reparation payments. It was even rumored at one time that announced. For the 11 months, output was 296,636,157,
England and France favored granting Germany a three-year compared with 286,632,267 a year ago, an increase of 3.5%."
moratorium. On the 7th inst. stocks advanced again, this Manila cabled the New York "Times": "The Big Wedge
time 1 to 5 points, railroad bonds in many cases, 2 to 6, and Mining Co. reports one of the most sensational gold strikes
foreign issues 2 to 8. The atmosphere at home and abroad in the Philippine history with samples of ore running as
seemed more cheerful. Hope was in the air. International high as $3,000 to the ton.
New Orleans wired Jan. 3 that although last year witpolitics seemed to be more promising. In this respect the
recent rise in German bonds was in some sense a barometer. nessed the lowest prices for cotton in more than a generation,
To-day stocks advanced 1 to 3 points. Preferred stocks it ended with a fairly cheerful feeling and a belief that
advanced 1 to 5 points or more in striking contrast with the higher prices in 1932 would result from a radical cut in
depression in such stocks at one time towards the close of acreage, a reduced cost of production and the holding off
1931. But United States Steel, corn. led the way upward the market of more than 7,000,000 bales of the current
among the popular stocks with a rise of 2%, ending at near supply, adding that with a short crop next season, it is
the high point of the day, which showed an advance of 3 believed the world's surplus of cotton will drop to workable
proportions and in anticipation of this result, there has
points,
' Charlotte, N. C. wired to-day: "With the passing of the been a good investment demand for spot cotton, not only
Christmas holidays, cotton manufacturing plants in the from spinners, both domestic and foreign but from large
Carolinas have resumed operation, many of them operating traders as well.
Fertilizer sales in eight cotton-growing States, as reprodouble shifts. Between Greensboro, N. C. and Greenville,
sented
by fertilizer tag sales, during December, totaled
number
mills,
a
large
of
density
greatest
section
of
S. C. the
of mills are reported lighted up at night and in full operation. 18,000 tons, compared with 24,000 in the same month last
year, 31,000 two years ago, and 57,000 three years ago,
Many mills report an improved demand."
Greenville, S. C. wired that "business as usual" was the according to advices to the New York Cotton Exchange
slogan over South Carolina following the closing of 46 banks Service.
The temperatures on the 3rd inst. here were 35 to 40
in various parts of the State, including one in this city, and
two others in the county. Deposits exceeded withdrawals at degrees. Boston had 28 to 34, Chicago 26, Cincinnati 34
local banks during the day, and it was generally predicted to 42, Cleveland 32 to 36, Detroit 34 to 38, Kansas City
that the shock of the bank closings will have become negligi- 22 to 34, Milwaukee 26 to 28, Minneapolis 2 to 22, Montreal
ble by the first of the week. The Piedmont section, where 24 to 30, Omaha 12 to 20, Philadelphia 42 to 46, Portland,
the textile industry is located, is not so hard hit as the re- Me., 26 to 32, Winnipeg zero to 18 above. On the 6th inst.
mainder of the State, as is shown by the fact that branches it rained here all day and the temperatures were mild, 47
of the People's State Bank in Greenville, Anderson, Greet, to 54. Chicago on the 5th inst. had 40 to 50 degrees,
Abbeville and Clemson College were in excellent condition. Cleveland 42 to 56, Cincinnati 48 to 58, Kansas City 20 to
Because comparatively few textile accounts were handled 40, St. Paul 24 to 30, St. Louis 38 to 54, Winnipeg 12 to
by the closed banks, the mill situation will not, except in a 28. High rains swept from the lower Mississippi Valley over
general way, be affected by the closings, it is pointed out. to the Atlantic States. On the 6th inst. there were heavy
The local branch of the People's State Bank had approxi- snow and rain storms over the plains area from the Rocky
mately $1,500,000 on deposit when it closed Saturday for Mountains to the Mississippi Valley which disrupted traffic.
JAN. 9 1932.]
The New York report said that the whole of the Northeastern and Central States was covered by the storm, the
center of which was over northern Michigan. The warm,
wet spell was to continue until Thursday night, the Bureau
predicted, when the weather would turn colder. On the
7th inst. the temperatures here were 45 to 57 degrees, the
average being 53, against 31 on the same date for 46 years
past. Chicago had 30 to 34, Cleveland 32 to 44, Kansas
City 22 to 24, Cincinnati 28 to 46 and Boston 54 to 56.
To-day it was 36 to 43 degrees and the forecast with rain
and at times sleet, mostly rain all day. The week has been
abnormally warm in the East, though cold in parts of the
West and Northwest. St. Paul yesterday had 4 to 16
degrees, Kansas City 18 to 24 and Winnipeg 2 to 14. Much
rain has fallen in the Southwest. Thus far the winter on
the Atlantic seaboard has been mild. Curiously enough,
Moscow reports that the winter in Russia has been the
warmest in many years. The snow in Moscow is melting
rapidly. On the 6th inst. rains occurred, with flooded
rivers in England, France, Germany and Czechoslovakia.
Winds reached gale force in England and Wales. In the
Dutch East Indies a hurricane disrupted communications.
National Fertilizer Association Finds Wholesale Prices
Steady During Week Ended Jan. 2.
During the week ended Jan. 2 the wholesale price index
of the National Fertilizer Association, based on 476 commodity prices, showed no change. During the preceding
week the index advanced one fractional point, while two
weeks ago the index declined three fractional points. While
the index number for wholesale prices has been steady during
the last two weeks, it should be remembered these were
holiday weeks and that wholesale trade was very inactive.
The latest index number is 65.1. A month ago the index
number was 66.0, while at this time last year it was 78.8.
The index number 100 represents the average for the three
years 1926-1928. Based on 1913 as 100, the index number is
91.0. The Association further reports Jan. 4:
Seven of the 14 groups constituting the index were active during the
latest week. Three groups advanced, while four groups declined. The
advancing groups were textiles, foods and grains, feeds and livestock.
None of the groups advanced as much as 1%. The declining groups were
fats and oils, metals, building materials, and fertilizer materials. The
decline in the group of fats and oils amounted to almost three full points,
due to lower prices for lard, butter and tallow.
Advances were made in the prices for 14 commodities, while declines were
shown in the prices for 17 commodities during the latest week. Higher
prices were noted for cotton, corn, cattle, light-weight hogs, apples, sugar,
flour, turpentine and rubber. Lower prices were shown for lard, butter,
corn oil, tallow, eggs, heavy-weight hogs, finished steel, copper, tin, silver,
silk and cottonseed meal.
The index number and comparative weight for each of the 14 groups are
shown in the table below:
WEEKLY WHOLESALE PRICE INDEX-BASED ON 476 COMMODITY
PRICES (1926-1928=100).
Per Cent
Each Group
Bears to the
Total Index.
Group.
All groups combined
1.4C,Ci.MCMNOVICts
Foods
Fuel
Grains, feeds and livestock
Textiles
Miscellaneous commodities_
Automobiles
Building materials
Metals
House furnishings
Fats and oils
Chemicals and drugs
Fertilizer materials
Mixed fertilizer
Agricultural Implements
Latest
Week
Jan. 2
1932.
Ica=g=12113E2ggN
CO elq.c0.4!
Cqq.C.740
-.000
MONOWC=C4,
M,
N 9-4 9-4 •-•
100.0
189
FINANCIAL CHRONICLE
65.1
I
Preceding
Week.
Month
Ago.
Year
Ago.
68.1
58.7
50.8
49.5
66.6
89.1
73.4
74.4
84.3
55.8
88.9
70.4
79.6
92.7
70.7
59.9
51.()
49.9
66.5
89.3
74.0
74.1
84.4
55.6
86.6
70.5
80.2
93.0
83.7
75.0
73.8
65.4
74.9
89.4
84.4
82.3
96.6
63.4
94.6
83.9
93.5
95.6
65.1
66.0
78.8
Total loadings by commodities in 1931 compared with 1930 follow:
1931.
2,030,779
1,165,404
6,531.428
327,462
1,483,312
877.105
10,965,089
13,891.792
1930.
2.265,400
1,285,153
7,927,035
487.841
2,369,319
1,661,659
12,200,534
17,681,033
For the week ended on Dec. 26, loading of revenue freight amounted
to 441,589 cars, a decrease, due to the Christmas holidays, of 140,144 cars
compared with the preceding week. It also was a decrease of 99,703 cars
compared with the corresponding week i 1930 and a decrease of 197,800
cars under the same week in 1929.
Total
1929.
1930.
1931.
3,490,542
2,835,680
2,939,817
2,985,719
3,736,477
2,991,749
2,930,767
3,747,284
2,907,953
3,813,456
2,619.705
2,273,222
4,246,552
3,506,899
3,515,733
3,618,960
4,593,449
3,718,983
3,555,610
4,671,829
3,725,686
4,751,349
3,191.342
2,781,582
4,518,609
3,797,183
3,837,736
3,989,142
5,182,402
4,291.881
4,160,078
5,600,706
4,542,289
5,751,645
3,817,920
3,338,334
37.272.371
45.877.974
52.827.925
Five weeks in January
Four weeks in February
Four weeks in March
Four weeks in April
Five weeks in May
Four weeks in June
Four weeks in July
Five weeks in August
Four weeks in September
Five weeks In October
Four weeks in November
Four weeks in December
The foregoing, as noted, cover total loadings by the
railroads of the United States for the week ended Dec. 26.
In the table below we undertake to show also the loadings
for the separate roads and systems. It should be understood, however, that in this case the figures are a week
behind those of the general totals-that is, are for the week
ended Dec. 19. During the latter period only 17 roads showed
increases over the corresponding week last year, the most
important of which was the New York Ontario & Western
Ry., Pere Marquette Ry., Florida East Coast Ry., Ft.
Worth & Denver City Ry., Western Pacific RR. and St.
Louis Southwestern Ry.
REVENUE FREIGHT LOADED AND RECEIVED FROM CONNECTIONS
(NUMBER OF CARSI-WEEK ENDED DEC 19
Total Loads
Received from
Connection*.
Total Revenue
Freight Loaded.
Railroads.
1931.
Loading of Railroad Revenue Freight Shows Heavy
Decline for Years 1930 and 1931.
Complete reports for the year show that 37,272,371 cars
were loaded with revenue freight in 1931, the Car Service
Division of the American Railway Association announced
on Jan. 6. This was a reduction of 8,605,603 cars, or 18.8%
under the number loaded in 1930 and a reduction of 15,555,554 cars or 29.4% under 1929.
Grain and grain products
Live stock
Coal
Coke
Forest products
Ore
Merchandise less than carload lot freight
Miscellaneous
Miscellaneous freight loading for the week of Dec. 26 totaled 145.887
cars, a decrease of 46,914 cars below the preceding week, 29.311 cars under
the corresponding week in 1930 and 76,312 cars under the same week in
1929.
Loading of merchandise less than carload 1 t freight totaled 150,441 cars,
a decrease of 41,301 cars below the preceding week, 16,290 cars below
the corresponding week in 1930 and 36,808 cars under the same week
In 1929.
Grain and grain products loading for the week totaled 20.514 cars,
7,898 cars below the preceding week, 6,153 cars below the corresponding
week in 1930 and 11,070 cars below the same week in 1929. In the Western
Districts alone, grain and grain products loading for the week ended on
Dec. 26 totaled 13,128 cars, a decrease of 5,701 cars below the same week
the year before.
Forest products loading totaled 13,707 cars, 4,378 cars below the preceding week, 6.988 cars under the same week in 1930 and 14,130 cars below
the corresponding week in 1929.
Ore loading amounted to 3,605 cars, a decrease of 618 cars under the
week before, 676 cars under the corresponding week in 1930, and 2,802
cars under the same week in 1929.
Coal loading amounted to 89,644 cars, 30,168 cars below the preceding
week, 27,813 cars below the corresponding week in 1930 and 46,306 cars
under the same week in 1929.
Coke loading amounted to 4,352 cars, 1,166 cars below the preceding
week, 3,286 cars below the same week in 1930 and 6,591 cars below the
same week in 1929.
Live stock loading amounted to 13,439 cars, a decrease of 7.701 cars
below the preceding week, 4,186 cars below the same week in 1930, and
3,781 cars below the same week in 1929. In the Western Districts alone,
loading of live stock for the week of Dec. 26 totaled 10,148 cars, a decrease
of 3,325 cars compared w.th the same week in 1930.
All districts reported reductions in the total loading of all commodities,
compared not only with the same week in 1930 but also with the same
week in 1929.
Loading of revenue freight in 1931 compared with the two previous years
follows:
Eastern DistrictGroup
Bangor & Aroostook
Boston & Albany
Boston & Maine
Central Vermont
Maine Central
N.Y. N. It. & Hartford
Rutland
1930.
1929.
1931.
1930.
1.636
1.749
2,068
270
3,283
8,190
619
2,665
11,358
535
3,617
9,330
784
3,621
12,537
551
3,532
10.718
808
3.928
14,422
655
5.184
10.147
2.495
2.215
12,223
1.009
298
5,624
11,043
2.894
2,738
12.720
1,013
28,286
32,189
36,131
33,543
36,330
2.770
4,836
7.822
10,792
130
1.427
7,544
1.545
18.982
2,085
460
349
42
3,896
7,914
10.069
13,291
165
1,806
9.290
2.047
23.700
1,246
666
424
37
5,072
9.317
11.925
15,616
236
1,626
10,766
2,145
26.204
1,862
950
541
43
1,020
6.843
5.794
12.149
1,888
928
6,579
29
25.354
1,910
23
205
50
955
7,473
5.488
14,674
2,257
1.169
7,347
46
31,858
2,274
22
282
.86
•
58,784
74,551
86,303
62,772
73,931
Group Chan Arbor
•
Chicago, Ind.& Louisville
•
C. C. C.& St. Louis
•
Central Indiana
Detroit & Mackinac
Detroit de Toledo Shore Line__
Detroit, Toledo & Ironton
Grand Trunk Western
Michigan Central
Monongahela
New York, Chicago de St. Louis
Pere Marquette
Pittsburgh & Lake Erie
Pittsburgh & West Virginia
Wabash
Wheeling & Lake Erie
551
1,652
8,168
39
195
251
1,158
2,831
5.414
3.872
4,247
4,257
3,040
815
5.223
2,503
471
2,013
9.707
64
288
200
1,674
3.336
6,370
4,783
4,693
3,871
4,316
1,281
5.961
2,783
468
2,039
11.190
74
306
244
2,271
3,493
6.492
6.443
4,978
4,759
6,592
1.252
5,752
3,591
982
1.762
10,164
152
98
2,578
1,266
6.546
8,599
157
7,934
4,338
4,479
635
7,006
1,918
1,324
2,379
12,577
79
117
2.846
1,762
7,125
Total
Group BBuffalo, Rochester dr Pittsburg
Delaware & Hudson
Delaware Lackawanna & West •
Erie
•
Lehigh & Hudson River
•
Lehigh & New England
•
Lehigh valley
Montour
New York Central
New York Ontario & Western_
Pittsburgh & Sbawmut
•
Pitts. Shawmut & Northern
Ulster & Delaware
Total
Total
9,403
241
9,972
4.384
6,141
581
8,385
2,456
44,216
51,811
59,944
58,614
69.772
Grand total Eastern District. 131,286
158,551
182,378
154,929
180,033
FINANCIAL CHRONICLE
190
Railroads,
Allegheny District-Baltimore & Ohio
Bessemer & Lake Erie
Buffalo & Susquehanna
Buffalo Creek & GauleY
Central RR. of New
Jersy.Conwal
Cumberland & Pennsylvania...
Ligonier Valley
Long Island
Pennsylvania System
Reading Co.
Union (Pittsburgh)
West Virginia Northern
western Maryland
Total
Pocahontas Marie:
Chesapeake & Ohio
Norfolk & Western
Norfolk & Portsmouth Belt Line
Virginian
Total
Southern DistrictGroup AAtlantic Coast Line
Clinchfleld
Charleston & Western Carolina
Durham & Southern
Gainesville Midland
Norfolk Southern
Piedmont & Northern
Richmond, Fred. tt Potomac
SeaboardAir Line
Southern System
Winston-Salem Southbound__.
Total
Group B.Alabama. Tenn.& Northern_
Atlanta, Birmingham & Coast
All.& W.P.-West RR.of Ala.
Central of Georgia
Columbus & Greenville
Florida East Coast
Georgia
Georgia & Florida
Gulf Mobile & Northern
Illinois Central System
Louisville & Nashville
Macon. Dublin & Savannah_
Mississippi Central
Mobile & Ohio
Nashville. Chattanooga & St. L
New Orleans Great Northern...
TIMIleeeeff Central
Total Loads
Received from
Connecttons.
Total Revenue
Freight Loaded.
1931.
1930.
1929.
1931.
1930.
22,414
923
566
139
5,897
39
400
215
1,205
59,222
13,233
5,217
60
2,991
27,903
1,286
614
247
8,147
2
547
163
1,425
70,016
16,346
8,322
78
3,642
34,229
2,277
678
202
11,174
498
545
280
1,153
87,704
20,080
11,507
67
4,481
12,395
936
140
8
10,574
64
19
17
3,337
32,215
16,336
1,117
0
4,121
15,594
1,768
145
8
12,961
87
14
20
3,700
37,657
20,518
1,631
2
4.670
112,521
138,738
174,875
81,279
98,775
18,134
14,806
684
3,043
22,080
17,561
711
3,908
27,978
24,137
871
4,710
4,970
3,119
1,269
313
6,660
4,604
1,876
390
36,666
44.260
57,696
9,671
13,530
9,599
1,144
407
146
58
1,697
506
369
7,611
19,516
170
10,994
1,360
542
182
79
2,031
485
391
9,225
23,309
175
13,044
1,532
678
183
110
2,295
501
546
11,067
27,313
196
4,263
1,089
692
307
85
1.067
768
3,937
3,211
10,805
828
5,401
1,376
980
359
138
1,334
950
3,654
3,685
12,841
929
41,223
48,773
57,465
27,052
31,647
232
638
637
3,190
264
1,112
834
340
773
19,058
16,617
117
126
1,969
2,388
633
513
199
765
749
3,787
305
1,056
956
402
994
24,144
22,894
101
240
2,375
2,836
725
667
249
988
914
4,633
518
1,196
1,261
449
1,262
27,492
28,029
182
367
2,909
3,378
817
588
136
802
877
2,294
192
607
1,168
373
672
8,451
3,521
403
206
956
1,828
238
467
198
777
1.384
2,470
298
722
1.109
294
940
10,247
4,632
410
296
1,322
2,143
345
597
Total
49,441
63,195
75,252
23,191
28,184
Grand total Southern Dlat_
90,664
111,968
132,717
50,243
69,831
Northwestern DistrictBelt Ky. of Chicago
Chicago & North Western
Chicago Great Western
Chic. Mile/ St. Paul & Pacific..
Chic. St. Paul, Minn & Omaha
Duluth, allasabe & Northern..
Duluth, South Shore & Atlantic
Elgin. Joliet & Eastern
Ft. Dodge, Des. M.& Southern
Great Northern
Green Bay & Western
Minneapolis & St. Loofa
Minn. St. Paul & S. S. Marie..
Northern Pacific
Spokane, Portland & Seattle....
939
13.670
2,569
18,167
3,516
388
444
3,274
249
7,575
507
1,777
4,533
8,427
716
1,224
16,261
2,682
21.279
4,692
659
898
5,054
297
10,124
529
2,395
5,402
11,520
968
1,433
19,470
3.120
24.605
6,197
976
1,302
358
10,733
633
2,678
6,732
11,714
1,215
1,113
8,100
2,331
6,381
2.492
91
366
4.148
154
1.677
348
1,178
1.617
1,880
868
1,613
9,123
2.406
7.155
2,934
75
456
7,217
212
1,853
523
1.526
1,890
2,228
1,027
66,751
83,984
97,324
32,744
20,305
224
3,090
15,922
12,945
2,731
1,699
3,189
432
1,693
388
96
12,670
241
231
13,307
1.137
1,503
25,235
238
3,460
22,067
14,181
3,167
2,086
4,141
624
1,485
636
147
17,064
320
262
16,594
1,046
1,473
27,876
330
3,788
23,230
16,254
3,744
2,464
4,487
866
1,811
669
213
20,337
362
282
17,883
1,067
1,660
3,906
39
1,7.52
5,114
5,995
1,870
780
1,780
5
929
184
79
3,250
207
652
6,045
12
1,232
91.803
114,226
127,353
33,831
130
119
278
2,083
113
1,489
259
1,625
1,236
254
850
49
5,158
14,472
43
93
8,385
2,291
446
6,269
4,795
1,577
28
173
259
324
2,276
368
1,950
333
2,168
1,262
339
843
122
5,552
17,643
43
89
9,652
2,215
643
7,682
6,281
1,876
45
296
287
426
2,601
352
1,710
451
2,251
1,695
389
1,148
101
6,360
19,879
48
137
11,555
2,534
414
8,970
6,926
1.852
50
2,362
523
86
1,134
32
1,829
825
1,558
1,196
372
273
617
2,183
6,211
123
86
2,668
1.078
196
2,137
3,045
2,222
38
52,042
62,138
70.432
30,794
Total
Central Western DistrictAtoll. Top. & Santa Fe System.
Bingham & Garfield
Chicago de Alton (Alton)
Chicago, Burlington & Quincy.
Chicago, Rock Island & Pacific
Chicago & Eastern Illinois
Colorado & Southern
Denver & Rio Grande Western_
Denver & Salt Lake
Fort Worth & Denver City
Northwestern Pacific
Peoria & Pekin Union
S. P.(Pacific)
St. Joseph & Grand Island
Toledo, Peoria & Western
Union Pacific System
Utah
Western Pacific
Total
Southwest DistrictAlton & Southern
Burlington-Rock Island
Fort Smith & Western
Gulf Coast Lines
Houston & Brazos Valley
International-Great Northern..
Kansas, Oklahoma & Gulf
Kansas City Southern
Louisiana & Arkansas
Litchfield & Madison
Midland Valley
Missouri & North Arkansas.Missouri-Kansas-Texas Lines..
Missouri Pacific
Nineties & Southern
Qtlanah Acme & Pacific
St Louis-San Francisco
Si Louis Southwestern
San Antonio, Uvalde &
Southern Pao. In Texas & La..
Texaa & Pacific
Terminal RI'.. Asso. of St. Louts
Weatherford .Min Wells & Nor.
Total
6,158
(VOL. 134.
National City Bank In Viewing Business Situation
Comments on Proposed Creation of Reconstruction
Finance Corporation-Looks for Its Support to
Railway Situation-Wage Reductions as Necessary
to Roads as Loans-Reparations and Government
Debts Seen as Depressing Influence on Business.
The National City Bank of New York in its monthly survey
of conditions, issued Jan. 4, states that "it cannot be doubted
that reparations and government debts have become the
most depressing influence upon the business situation." The
bank further says:
The conditions in Germany afford little reason to believe that the Treasury
will have any funds with which to pay reparations or that any government
which attempts to pay reparations in the present state of the country will
survive an election. We shall not undertake to say what nations will or
will not make payments to the United States in case they receive none from
Germany, but hold the opinion that all of the allied countries should, in
such adjustments as are found necessary, bear their portion of the burden:
and that this country will gain by an attitude of reasonable co-operation
and compromise in a time of such univerasl distress.
It is in order also to say that the sums involved in the annual payments
on these debts are small for the countries that are involved in comparison
with the cost of present economic conditions. The total payment to the
United States of about $250,000,000 a year is a truly insignificant figure
in comparison with the shrinkage in the earnings of the industries of this
country or the wage losses of the workers, or even the sums raised for unemployment relief.
The supreme question of the time is not whether the debts shall be collected or not collected, but how this country may co-operate with other
countries in restoring industry and normal living conditions for the American people.
As to general business conditions the bank says in part:
The closing month of 1931 has brought little change in the character
of the trade news, and the problems that have been to the fore have been
such as to make it another period of anxiety and strain for the American
business men. The public mind has been occupied with the difficulties of
the railways and of Germany, among other consequencles of the depression:
and the fall in prices of bonds, stocks and commodities to new low levels
during the month was decidedly depressing, coming as it did after a turn
for the better in the first half of November had aroused hopes that the
way to recovery was opening up.
To its credit the country has met the strain of this trying period with
composure. There has been no such epidemic fear for the safety of bank
deposits as appeared in the early days of October, and no such clamor
for currency. * * *
It is undoubtedly more than a coincidence that in both 1930 and 1931
the low point in the general business situation and in the markets was
reached toward the end of the year. In basic industry December is always
a slow month, with shutdowns common for holiday and inventory purposes,
and the trade figures are seldom of a stimulating mature. In a depression
year it is likewise a month of selling goods to reduce inventories, and of
selling securities and commodities to establish losses.
With reference to President Hoover's program to bring
about economic recovery, the bank comments in part as
follows:
The principal feature of the program is the creation of a Reconstruction
Finance Corporation to furnish necessary credit otherwise unobtainable
under existing conditions, and to protect against "further paralyizing Influnces and shocks." A bill for the establishment of this Corporation haa
been promptly introduced Into Congress, and its passage in January is
predicted. It will give support, among others, to the railway situation,
which through its effect on the bond market constituted in December a
national emergency: and it appears likely that early in the new year the
plight of the railways will be relieved in a threefold manner: through rate
increases already authorized, the proceeds to be loaned to the weak roads,
through wage reductions, and through loans by the proposed Corporation
40,238 to roads having maturing debts to meet which it is not procticable to refund in the present bond market. It is certain that nothing could be
more helpful in the domestic situation than measures enabling the rail5,103 roads to overcome their temporary difficulties.
48
The purpose of the Resonstruction Finance Corporation is to bolster
2,559
6,992 private credit by a movable pool of public credit, in order to preserve the
7,739 liquidity of solvent institutions and to prevent the loss and demoralization
2,299 that would result from unnecessary foreclosures forced by temporary con1.193
1,806 ditions. There is room for dispute as to the limits within which the Cor14 poration should function, but the general proposition is one suitable to
1,072 the emergency. Technical argument as to the inflation that may be in272 volved, in case part of the
Corporation's funds come in last analysis from
72
3,529 the Reserve Banks, seems beside the pooint. The situation is that going
187 concerns, very important in the business activities of the country, need
730 more credit than it is practicable to obtain through the usual channels
6,478
9 under present conditions.
A necessary qualification Is that the ability to borrow should relieve
1,049
no one from the need of reducing costs and making the other readjustments
41,151 required by the
depression. Wage reductions that will help the reailroads
to balance their outgo and income are as necessary in this reconstruction
program as loans to them. We could not view with complacency efforts
2,618 to stimulate building for example, through expansion of credit unless they
388
reduction in building costs.
167 should be accompanied by continuing
1,690
54
2,243 Secretary of Commerce Lamont Says Liquidation Has
1,147
2,055
Run Course-Natural Up-Building Forces Taking
1,119
Hold-National Credit Corporation Seen As Aiding
609
287
Situation.
607
2,502
Viewing conditions under date of Jan. 1 Secretary of
8,524
27 Commerce Robert P. Lamont states that "on the whole,
99
3,531
evidences are accumulating that liquidation has largely
1,595
547 run its course and that the natural up-building forces are
3,495
hold. The very extent and nature of the
3,573 beginning to take
3,031 decline" he says "have forced drastic readjustments which
40
39,948
are serving as correctives and are aiding In the restoration
of equilibrium."
JAN. 9 1932.]
FINANCIAL CHRONICLE
Seoretary Lamont further says that "the establishment
of the National Credit Corporation and the proposal by
the President of other measures for financial relief have
already tended to check needless liquidation and to arrest
hoarding. . . . Present difficulties, formidable as they
may be, are temporary, and the recuperative powers of
our country, stimulated by this constructive program, are
sufficient to contribute in large measure to the restoration
of world prosperity."
We give herewith Secretary Lamont's statement in full:
191
pared with an indicated drop of 16% in our industrial output. Exports,
on a quantity basis, were about one-third less than in 1929, but that our
purchases abroad have continued relatively large is indicated by a drop
of only one•fourth in the quantity of our imports in the same period.
Of this same basis, our imports in 1931 were at the level of 1924 while
our exports were about the same as in 1922. With wholesale prices back
to 1913 levels, the value of our manufactured exports was 50% greater
than in that year.
Security Markets.
Security markets reflected the improved tone of business in the early
months of the year, the gains being more pronounced in stocks than in
bonds. The weakness in the bond list has been an important retarding
influence, since it has made difficult the flotation of new issues, except
those of the highest grade, and has had important repercussions on the
banking situation through the depreciation of investment portfolios.
Prices of foreign bonds, which were absorbed in large quantities in the
years prior to 1929, were adversely affected by the swift developments
abroad and there has been a very great shrinkage in the market value of
our foreign holdings, especially during recent months.
Business has continued under the influence of the world-wide economic
depression, which has deepened and broadened in the past year chiefly
because of foreign influences. Most of our domestic difficulties could
have been corrected prior to this time had it not been for the destructive
effect upon our own economy of a series of financial crises abroad. In
the early months of the year we made distinct recuperative progress resulting in an upturn of more than seasonal proportions in industrial
Bank Suspensions.
output, accompanied by increased employment and improvement in
security markets.
Bank suspensions, particularly among the smaller banks, have been
numerous and widespread, and although they involved only a email
Gains in Principal Industries.
Gains in the principal industries producing consumers' goods were percentage of the total deposits, nevertheless the effect upon depositors
pronounced, and these were subsequently held to a greater extent than and upon business in communities affected was serious. Since the end
were those in the heavy industries. This expansive movement, however, of October, however, the volume of hoarded money has shown no further
was stopped by the crisis which developed in Central Europe in May increase and there has been some return how to the banks.
and June. That crisis created apprehension and fear in the United
Liquidation Largely Run Course.
States which resulted in currency withdrawals and bank failures, besides
On the whole, evidences are accumulating that liquidation has largely
reversing the upward trend of industry and commerce.
The year's postponement of intergovernmental debt payments at the run its course and that the natural up-building forces are beginning to
initiative of the United States prevented impending catastrophe, and take hold. The very extent and nature of the decline have forced drastic
the situation was further relieved by the agreement by which Germany's readjustsnents which are serving as correctives and are aiding in the
short-term obligations were extended to the end of a six-month period— restoration of equilibrium. Had it not been for the repeated shocks from
abroad the United States would have already experienced substantial
also at American initiative.
The favorable effect of these agreements upon world business were improvement.
National Credit Corporation.
vitiated by lack of co-operation in Europe, which resulted in the crisis,
culminating in September in the suspension of gold payments by Great
The establishment of the National Credit Corporation and the proposal
Britain and later by other European countries. The fear and apprehension by the President of other measures for financial relief have already tended
caused by this crisis both abroad and at home resulted in enormously to check needless liquidation and to arrest hoarding. Prompt enactment
Increased hoarding and domestic bank failures, and unprecedented with- of these latter proposals by Congress will strengthen basic elements of
drawals of gold from the United States by other nations fearful of a our economic structure, will enable us to withstand any possible additional
repetition of the British action. A financial Crisis rapidly developed shocks from Europe, and will put us in a position to begin our own
in the United States which was again arrested on Oct. 6 by the action Independent economic recovery. Present difficulties, formidable as they
of the President in creating the National Credit Corporation and by may be, are temporary, and the recuperative powers of our country,
other economic measures initiated at that time.
stimulated by this constructive program, are sufficient to contribute in
large measure to the restoration of world prosperity.
Commodity Prices.
Commodity prices M the United States have shown encouraging steadiness
during the past few months. The rapid decline of wholesale prices since
1929 which had extended to 29% was halted in June. Since then we Fertilizer Sales in Eight Cotton-Growing States in
have had a saw-tooth movement with the general index varying less than
December Totaled 18,000 Tons, Compared With
8%, which suggests that the force of the decline has been spent. With
24,000 in Same Month in 1930.
prices practically at 1913 levels the outlook now appears more encouraging
Fertilizer sales in eight cotton-growing States, as reprethan at any time since the acute weakness developed two years ago.
Current price levels for raw materials are acting positively to reduce sented by fertilizer tag sales, during December totaled
production induced by war demands and to bring about a better balance
18,000 tons, compared with 24,000 in the same month last
between production and consumption.
Following the drouth which affected a large part of the country in year, 31,000 two years ago and 57,000 three years ago, ac1930, the composite crop yield advanced to normal in 1931 and pro- cording to a,dviees to the New York Cotton Exchange Service.
duction of the most important crops has been above average. Food and
feed crops have been adequate. However, the low level of prices of
farm products has further impaired the purchasing power of this section Production of Electric Power for Public Use in the
of our population. Increases in the prices of major farm products in
United States Showed a Decline of 4% in November
the last quarter, although not fully held, have injected a more hopeful
element into the situation at the year-end.
1931 As Compared with the Corresponding Month
Industrial production has declined substantially below 1930 levels.
in the Preceding Year.
The drop in the Federal Reserve Board's production index amounted to
According to the Division of Power Resources, Geological
about 16% compared with a decline of 18% from 1929 to 1930. Industrial
production for the past year, nevertheless, was one-fourth higher than Survey, output of electricity for public use in the United
in 1921 which marked the bottom of the post-war depression.
States amounted in November 1931 to 7,382,890,000 kwh.,
Loss in Railroad Revenues.
a decrease of 4%,as compared with the same month in 1930,
Freight car loadings declined approximately 18% below 1930, and
resulted in a sharp diminution of railroad revenues. To strengthen the when output totaled approximately 7,692,979,000 kwh. Of
position of the roads, the Inter-State Commerce Commission has authorized the figure for November 1931 there were produced by fuels
the imposition of certain temporary rate increases.
5,292,248,000 kwh. and by water power 2,090,642,000 kwh.
Dollar volume of department store sales was 11% below the preceding
year, largely due to the lower price level. Sales of the leading chain The Survey's statement follows:
stores and mail-order houses were 6% less in dollar volume than In 1930. PRODUCTION OF ELECTRICITY FOR PUBLIC USE IN THE UNITED
However, this year's total includes some new outlets. Department store
STATES (IN KILOWATT-HOURS).
stocks have been reduced by 17% since 1929 and, in fact, conservative
buying practices have resulted in a substantial reduction of stocks of
Change in Output
moat manufactured goods—which are currently about 11% below a
Total hi) Fuels and Water Power.
Division.
from Previous Year.
year ago.
Sept. 1931.
Nov. 1931. October. Nov.
Oa. 1931.
Efforts by moth private and governmental interests to alleviate unemployment has continued, in the latter case particularly through the New England
—5%
—3%
525,706,000 555,706,000 511.694,000
—3%
—2%
medium of public works construction. The number employed on Federal Middle Atlantic_ _ 2,001,681,000 2.131,085,000 2.078,117,000
East
North
Central_
1,640,376,000
1,659,127,000
1,703,204,000
—11%
—7%
construction has more than doubled in the past two years, and each West North Central_ 491,866.000 512,272,000 484,299,000
—1%
+2%
month since 1929 has shown an increase over the same month of the South Atlantic
+1%
837,811,000 880,966.000 808,478,000
preceding year. The year was marked by a continued absence of industrial East South Central_ 327,615,000 296,955.000 277,867.000 —14% —13%
West South Central_ 414,832,000 412,168,000 389.938.000
—3%
—1%
disputes which have characterized previous depressions, and labor relations Mountain
259,292,000 248,595,000 239,115,000 —18% —16%
have been marked by a suirit of co-operation.
Pacific
1,033,169,000 1,000.296,000 934,255,000
—7%
—6%
Unemployment.
Total for U. S.__ 7.532,328.000 7.741.247,000 7,382,890.000
—8%
—4%
Recent statistics indicate an unemployment total for the United States
The average dal y production of electricity for public use in the United
of about 6% and for Germany, nearly 8%.
States for November was 246,100,000 kwh., about 1% less than the daily
Construction.
output for October.
Construction underwent a sharp contraction in 1931, a continuation of
The total production of electricity for public use in the United States in
the decline which commenced in 1929. Nevertheless, the programs of 1931 , as estimated from the production from January to November. IS
both national and local governments were pushed with vigor. Federal about 91,650,000,000 kwh., about 41% less than that for 1930. The
Government expenditures during 1931 increased by about two-thirds over production of electricity in 1930 was 131% less than in 1929. The average
the total for 1930, and the average monthly contract awards for public annual increase in production of electricity for public use from 1919 to 1929
works and utility construction, as reported by the F. W. Dodge Corporation, was about 10%•
The production of electricity by the use of water power in 1931 is estiwere not far below the average for the period 1925-1929. Compared
with 1930, total contract awards declined 30%, with residential and mated to be about 30,000,000,000 kwh., about one-third of the total
production for the year. The production of electricity by the use of water
public works and utility construction off 25% and 28%, respectively.
power in 1927 was practically the same as in 1931, but in 1931 the capacity
Foreign Trade.
of water wheels in public utility power plants was about one-third more
In foreign trade, preliminary estimates indicate a decline in quantity than in 1927. These figures indicate in a general way the effect of the
during 1931 of 18 to 20% in exports and of about 10% in imports com- cirouth on the production of electricity by water power plants. It Is of
interest to note, however, that in spite of the continuation of drouth conditions during 1931 the production of electricity by the use of waterpower
was still about one-third of the total output.
TOTAL MONTHLY PRODUCTION OF ELECTRICITY BY PUBLIC
UTILITY POWER PLANTS IN 1930 AND 1931.
January...._
February ___
March
April
May
June
July
August
September
October
November
December
Total
[VOL. 134.
FINANCIAL CHRONICLE
192
Produced by
Water Power.
1930.
Kw. Hours.
1931.
Kw. Hours.
1931
Under
1930.
1930
Under
1929.
1930.
1931.
8,663.208.000
7,626,574,000
8,186,894,000
8,018.769,000
8,063,776.000
7,783,762.000
7,899,144.000
7,905.978,000
7,791,702.000
8,195,499,000
7,692,979.000
8,107,814,000
7.946.776,000
7,159,882,000
7,875,967,000
7,643.276,000
7.639,075,000
7,526,464,000
7,765,780,000
7.628,393.000
7,532,328,000
7,741,247,000
7,382,890,000
8%
6%
4%
5%
5%
3%
2%
4%
3%
6%
4%
----
55%
a3%
a2%
a2%
____
____
2%
5%
3%
6%
7%
5%
34%
36%
40%
41%
40%
39%
37%
32%
29%
28%
29%
29%
30%
30%
34%
41%
41%
38%
35%
32%
29%
26%
28%
----
34%
----
1.5%
95.936,097,000
a Increase 1930 over 1929
"Annalist" Weekly Index of Wholesale
Commodity Prices.
The "Annalist" Weekly Index of Wholesale Commodity
Prices continued its fall to 95.5 on Jan. 5, compared with
95.9 the week before, 96.5 two weeks previous and 115.6
on Jan. 6 1931. The "Annalist" continues as follows:
The general trend was largely obscured by the usual seasonal decline in
two of the minor commodities, butter and eggs, which dominated the week.
Had these remained steady, the index would now stand at 96.0, an increase
of 0.1 for the week instead of an actual less of 0.4. The week's decline
may therefore be regarded as without particular significance.
THE ANNALIST WEEKLY INDEX OF WHOLESALE COMMODITY PRICES
(1913=100)
•
Farm products
Food products
Textile products
Fuels
Metals
Building materials
Chemicals
Miscellaneous
All commodities
Jan. 5 1932. Dec. 29 1931. Jan. 65031.
82.3
98.9
70.7
123.8
98.1
109.0
96.8
86.9
95.5
.
82.2
100.8
*79.7
123.8
98.2
109.4
96.8
87.0
95.9
108.3
120.9
105.8
142.1
106.1
127.1
101.0
89.1
115.6
The quantities given in the tables are based on the operation of all power
plants producing 10,000 kwh. or more per month, engaged in generating
I
electricity for public use, Including central stations, both commercial and
*Revised.
municipal, electric railway plants, plants operated by steam railroads
generating electricity for traction, Bureau of Reclamation plants, public
works plants and that part of the output of manufacturing plants which
New York Federal Reserve Bank on Production and
is sold for public use. The output of central stations, electric railway and
Trade in 1931-Reduction of About 13% from 1930,
plants.
publlc works plants represents about 98% of the total of all types of
and 25% from 1929.
The output as published by the National Electric Light Association and
the "Electrical World" includes the output of central stations only. ReAccording to the Federal Reserve Bank of New York
ports are received from plants representing over 95% of the total capacity.
The output of these plants which do not submit reports is estimated; there- "as a result of the continued decline in business through the
fore, the figures of output and fuel consumption as reported in the accom- second year, this Bank's estimate of the total volume of
panying tables are on a 100% basis.
production and trade for 1931 indicates a reduction of
[The Coal Division. Bureau of Mines, Department of Commerce, co-about 13% from 1930 and about 25% from the peak year of
Operates in the preparation Of these reports.]
1929." In its "Monthly Review" dated Jan. 1, the Bank
Electric Output in the United States During the Year continues:
This estimate is based on a compilation of all the principal data available
1931 Showed a Decline of 4.2% as Compared with at this time
relating to production and trade-in all about 180 series. The
the Previous Year-December 1931 Production 1931 annual figure for each series was obtained by taking actual figures se
far as possible, usually for the first 11 months of the year, and adding
4.3% Below That of Same Month in 1930.
to them estimated figures for the remainder of the year. The various series
The production of electricity by the electric light and have been weighted so that they would be represented according to their
power industry of the United States for the week ended relative Importance in the group averages and in the composite.
As is Indicated in the accompanying diagram, which is drawn on a ratio
Saturday, Jan. 2 1932, was 1,523,652,000 kwh., according scale
to show the comparative rate of increase or decrease from year to
to the National Electric Light Association. The Atlantic year, the estimated percentage decline in the volume of production and
seaboard shows a decrease of 1.7% from the corresponding trade during 1931 is virtually the same as the recession that occurred in
1930 from
1929 volume. The diagram also indicates that the estimated
week last year and New England, taken alone, shows a volume of the
production and trade during 1931 was the smallest for any year
decrease of 2.0%. The central industrial region, outlined since 1922, notwithstanding the growth in the population and in the procapacity of the country during the intervening nine years.
by Buffalo, Pittsburgh, Cincinnati, St. Louis and Mil- ductive
All groups of production and trade series were below the 1030 level, with
waukee, registers, as a whole, a decrease of 7.0%, while the exception of crops. In this category, the production of principal
the Chicago district, alone, shows a decrease of 4.4%. agricultural commodities, exclusive of live stock and dairy products was
10% larger than in the previous year. The output of foods showed a
The Pacific Coast shows a decline of 7.0% below last year. about
much smaller decline from 1930 than did aggregate production and trade.
Production of electricity during the month of December and series reflecting general trade showed less than the average decrease.
The outstanding large reductions in volume between 1930 and 1931 came
1931 is estimated at 7,240,000,000 kwh., a decrease of in
the more basic groups, such as those representing the production of
4.3% as compared with the corresponding period in 1930 minerals and metals, and construction activity and the output of building
materials. The group of manufactures also showed a somewhat larger
when output totaled 7,566,601,000 kwL
Output of electricity during the calendar year 1931, ac- drop than the composite of all series of production and trade.
% Change
% Change
cording to preliminary figures, is estimated at 85,700,000,1931 from
1931 from
1930.
1930.
000 kwh. as compared with 89,467,099,000 kwh., or a
CropsManufacturesPeaches
+10
Wool m111 activity
+44
decrease of 4.2%.
Apples
+3
Boots and shoes
+36
Corn
Arranged in tabular l'Orin, the output in kilowatt hours Silk consumption
+2
+24
+1
Cottonseed
consumption
+22
of the light and power companies for recent weeks and by Cotton
Cotton
-1
Gasoline
+21
Strawberries
-4
Electric power production
+17
calendar months since the beginning of the year, according Pneumatic
Potatoes
tires
+13
Wheat
Tobacco products
+4
to the National Electric Light Association, is as follows:
Weeks Ended
1931.
1931Sept. 5_ _ - _ 1,635,623,000
Sept. 12._ 1,582,207.000
Sept. 19____ 1,662.660,000
Sept. 26-- _ 1,660,204.000
Oct. 3_ .._. 1.645,587.000
Oct. 10____ 1.853.309.000
Oct. 17-- _ 1,656,051,000
Oct. 24......_ 1,616,531,000
Oct. 3I____ 1,651,792.000
Nov. 7___. 1,628,147,000
Nov. 14____ 1,623,151,000
Nov. 21____ 1,655,051,000
Nov. 28..,,.. 1,599,900,000
Dec. 5____ 1,671,466.000
Dee. 12____ 1,671.717.000
Dec. 19____ 1,675,653,000
Dec. 26____ 1,664,652,000
1932Jan. 2
1,523,652,000
Months.
January
7,439,888,000
February
6,705,564,000
March
7,381,004,000
April
7,193,691,000
May
7,183,341,000
June
7,057,029,000
July
7,222.869,000
August
7,144,840,000
September....7,042,783,000
October ....... 7,256.279,000
November.. _ y6.830,000.000
December
y7,240,000.000
1930.
1929.
1,630,081.000
1,726.800.000
1.722,059,000
1,714,201.000
1,711,123,000
1,723.876,000
1,729.377,000
1,747,353,000
1,741.295.000
1.728,210.000
1,712,727,000
1,721,501,000
1,671,787,000
1,746.934,000
1.748.109,000
1,769,944.000
1,617,212,000
1,674,588,000
1,806,259,000
1,792,131,000
1,777.854,000
1,819,276,000
1,806,403,000
1,798,633,000
1,824,160,000
1,815.749,000
1,798.164.000
1.793.584,000
1,818,169,000
1,718,002,000
1,806.225,000
1,840.863.000
1,860,021,000
1,637,683,000
1928.
1931
Under
1930.
1,484.000,000 1x4.1%
1,604,000,000 f
1,614,000,000 3.4%
1,623,000.000 3.2%
1,637,000.000 3.8%
1,651,0(10,000 4.1%
1,605.000,000 4.2%
1,678.000,000 5.8%
1,688,000,000 5.1%
1,697,000,000 5.8%
1,698.000.000 5.2%
1,701,000,000 3.9%
1,619,000,000 4.3%
1,706.000.000 4.3%
1.716.000.000 4.4%
1,710,000,000 5.3%
1,527,000,000 3.3%
1,597,454,000 1,680,289,000 1,512,000,000
4.8%
6,637,064,000
6,289,337.000
6,632.542,000
6.256,581,000
6,652,575,000
13,454,379,000
6,570,110,000
6,944,976,000
6,724,148,000
7,360,480,000
7,174.145.000
7,233,488,000
7.3%
5.1%
2.6%
3.0%
4.2%
2.5%
1.9%
3.3%
4.0%
6.0%
6.1%
4.3%
8,021,749,000
7,066,788,000
7,580,335,000
7,416,191,000
7,494,807,000
7,239,697,000
7,363.730,000
7.391.196,000
7.337,106,000
7,718,787,000
7.270,112,000
7,566,601,000
7.585,334,000
6,850,855,000
7,380,263,000
7,285,359,000
7,486,635,000
7.220,279,000
7.484.727,000
7,773,878,000
7,523,395,000
8.133,485,000
7,681,822.000
7,871,121,000
Total year v85700000.000 50.4457000.000 on 277 153 MO 80.829.833 1100 428t
I Because of irregularity of Labor Day holiday, change is calculated for the
fllst two weeks of September. y Estimated.
Note.-The monthly figures shown above are based on reports covering 92% of
the electric light and power industry and the weekly figures are based on 70%.
Paper, total
Automobiles, trucks
Automobiles, pass. cars
Locomotives, shipments
Freight cars, shipments
Group average
Minerals and MetalsCrude petroleum
Anthracite coal
Bituminous coal
Copper
Lead
Steel ingots
Silver
Zinc
Pig iron
Group average
TradeCoffee Imports
Raw silk imports
Crude rubber imports
Raw cotton exports
Department store sales
Newspaper advertising
Car loadings, mdse. and raise- Wholesale trade
Grain exports
Car loadings, other
Magazine advertising
Auto exports
Group average
-11
-23
-31
-80
-88
-16
-15
-18
-26
-30
-37
-38
-40
-41
-25
+10
+9
-4
-10
-10
-17
-19
-20
-23
-23
-44
-11
Hay
+1
Tobacco
-2
Oranges
-7
Oats
-13
Tomatoes
-33
Barley
-35
Grapes
-35
Group average
+10
FoodsSheep slaughtered
+8
Butter
+4
Calves slaughtered
+3
Lard
+2
Poultry receipt
+2
Swine slaughtered
Meat
0
Egg receipts
0
Cattle slaughtered
Wheat flour
-7
Cheese receipts
-8
meltings
is
-10
Fish
-23
Group average
-4
Bldg. Materials & Construct'nConcrete pavements
-10
-22
Building contracts
-26
Lumber
-35
Faeebr
-35
Group
ick
average
-27
01
182
Average
series
-13
New York Federal Reserve Bank's Indexes of Business
Activity.
Jan.
1 "Monthly Review," its indexes
its
in
presenting,
In
of business activity, the Federal Reserve Bank of New
York says:
Christmas trade in New York and vicinity, as reflected by the sales of
the principal department stores from Dec. 1 to 24 incl., was about 734
smaller than a year previous, a figure which compares favorably with the
JAN. 9 1932.]
FINANCIAL CHRONICLE
records for the preceding autumn months. A further decline in the primary
distribution of goods, however, was indicated by a more than seasonal
decline in the movement of merchandise and miscellaneous freight over the
railroads during the first three weeks of the month.
In November, this bank's adjusted indexes of business activity and of the
distribution of goods generally showed further reductions. Car loadings
both of merchandise and miscellaneous freight and of the bulk commodities
declined more than seasonally, as did bank debits in 140 centers outside of
New York City. Department store sales in this district and in the country
as a whole showed somewhat less than the usual increase in November, and
chain store sales were also moderately reduced, after seasonal adjustment.
Declines occurred also in the adjusted indexes of postal receipts and of
advertising. The amount of life insurance sold increased, however,
and
business failures rose less than seasonally from October to November
,
although the actual number was the largest for any November
on record.
(Adjusted for seasonal variations and usual year-to-year
growth.)
Oct.
1931.
W00.9100
67
63
56
74
55
80
66
60
571'
75p
-....
WWWV.C.00V
91r
82
84
72
72
82
36p
89
80
82
.N.
Mt...0.d..CONM.OWOO.C.MW
b..0.41,C.OMC.C9MNMMN 4 O.
Wt--OWVOWWW0.0.00.0
Preliminary. r Revised. * 1913 average=100
Sept.
1931.
00N00.. 00N14 OON
Wt.t..0W0 000003000.0
Primary DistributionCar loadings, merchandise and miscellaneous__
Car loadings, other
Exports
Imports
Waterways traffic
Wholesale trade
Distribution to ConsumerDepartment store sales, 2nd District
Chain grocery sales
Other chain store sales
Mall order house sales
Advertising
Gasoline consumption
Automobile registrations
General Business ActivityBank debits, outside of New York City
Bank debits, New York city
Velocity of bank deposits, outside of N.Y.City
Velocity of bank deposits, New York CRY
Shares sold on N.Y.Stock Exchange
Life insurance paid for
Postal receipts
Electric power
Employment in the United States
Business failures
Building contracts
New corporations formed in N. Y.State
Real estate transfers
General price level*
Composite index of wages*
Cost of Irvine*
Nov.
1930.
77r
74'
88
80
115
90
79
791/
72
113
50
88
51
144r
208
146
Non.
1931.
sop
70
70
56
81
62
94
100
77
71
107
38
85
lii
206
144
Shippers Estimate that Approximately 5,241,746 Freight
Cars Will Be Required to Handle Commodity Shipments in First Quarter of 1932-Represents 6.6%
Below Same Period in 1931.
Shippers of the country, through estimates submitted to
the Shippers' Regional Aclivosry boards and made public
Jan. 4 by the Boards, anticipate that carload shipments of
the 29 principal commodities in the first quarter of 1932
(the months of January, February and March) will be approximately 5,241,746 cars, a reduction of 370,415 cars, or
6.6%, below the corresponding period in 1931. Announcement to this effect was made by the American Railway Association, which further said:
These estimates are furnished quarterly to the Shippers'
Regional Advisory Boards, which cover the entire United States,
by the Commodity
Committees of the various Boards. They are based
on the best information obtainable by those committees at the present
time. The Shippers'
Regional Advisory Boards have a membership of
approximately 16,000
persons representing every section of the United
States and virtually every
industry, including agriculture, to be found
in this country.
The estimate by each Board as to what freight
loadings by cars are anticipated for the 21) principal commodities in the
first quarter of the year, compared with the corresponding period in 1931 and
the percentage of increase
or decrease follows:
193
Machinery and boilers.
Cement.
Brick and clay products.
Lime and plaster.
Agricultural implements and vehicles other than automobile
s.
Paper, paperboard and prepared roofing.
Fertilizers of all kinds, and
Canned goods.
The estimate for cotton is the same as actual loadings
during the first
quarter of 1931.
The estimate in detail as to what transportation requireme
are anticipated for the various commodities in the first quarter of 1932nts
compared
with the same period in 1931 follows:
Carloadings.
Commodity.
Actual.
1931.
Estimated.
1932.
Crain, all
296.233
257,294
Flour, meal and other mill products
227,669
222.837
Hay, straw and alfalfa
54,703
48,123
Cotton
40,367
40.368
Cotton seed & products, except oil
36,884
40.212
Citrus fruits
51.632
47,342
Other fresh fruits
48,275
54.947
Potatoes
67.863
63,259
Other fresh vegetables
71,097
66,653
Live stock
280.260
278.883
Poultry and dairy products
38,081
36,525
Coal and coke
2,088,414 1,970,859
Ore and contentrates
76.866
67,894
Gravel, sand and stone
250,934
221,472
Salt
28,481
27,407
Lumber and forest products
477,960
430,867
Petroleum and petroleum products
508,409
510,608
Sugar, syrup and molasses
37,759
36,113
Iron and steel
312,745
273,716
Machinery and boilers
31,245
26,577
Cement
78,267
67,100
Brick and clay products
70,990
62,918
Lime and plaster
32,110
27,918
Agricultural implements Se vehicles, other
than automobiles
21,531
12,973
Automobiles, trucks and parts
125,619
127,556
Fertilizers, all kinds
111,554
86,018
Paper, paperboard & prepared roofing
78,283
69,630
Chemicals and explosives
22,115
22,599
Canned goods: An canned food products,
(including catsup, jams, jellies, olives,
pickles, preserve, &c.)
45,815
43,078
Total for all commodities
5.612.161 5.241.746
Estim'd.
Increase Decrease
%
%
__
__
-__
9.0
__
13.8
__
__
.._
._
__
__
___
__
.4
__
__
.._
__
__
__
13.1
2.1
12.0
--
__
1.5
--_
__
2.2
1.5
-6.T3
6.3
.5
4.1
5.8
11.7
11.7
3.8
9.9
-4.i
12.5
14.9
14.3
11.4
13.1
39.7
-22.t
.
11.1
__
6.0
__
6.6
Executive Manager of National Association of Credit
Men Notes Seven Favorable Developments in Business at Turn of Year.
Seven factors that augur more favorable days for business
during 1932, are presented by Henry H. Heimann, Executive
Manager of the National Association of Credit Men, in his
monthly review of business sent to the Association's members on Jan. 4. The items listed include:
1.
2.
3.
4.
5.
6.
7.
Old inventories.
Signs of strong resistance to further deflation.
Improvement in the banking situation.
Co-operative spirit between labor and management.
Improved retail buying.
Checking of the decline in the bond market.
Greater efficiency throughout all industry.
Mr. Heimann says:
There are many fundamental factors which portend
favorably as we
approach the new year. Inventories are at a low point.
Raw materials
have been rather thoroughly liquidated, and begin to show signs
of strong
resistance to further deflation.
Our banking situation, though far from what might
be hoped for, is
nevertheless improved over several months ago, and
there is a returning
measure of confidence that is very vitally necessary to
an emergence from
the present situation.
Throughout all these trying times we have had no
serious strikes. The
co-operative attitude of railroad labor and railroad manageme
nt is most
Per Cent of
encouragin
g.
Actual
Estimated
Increase or
1931.
1932.
Our national banking system, the Federal Reserve System, is unusually
Atlantic States
637,494
611,289
41 ege
eas
cre
eitse sound. The formation of the National Credit Corporation and
Central Western
271,171
the exten231,536
14.6
..
Pacific Coast
sion of assistance to the Federal Land bank system
204,016
192,906
were very constructive
5.4
'.
Pacific Northwest
160,902
moves. In addition, there is the proposed formation
153,369
4.7
corporatio
a
of
n for
Great Lakes
304,808
289,114
the rediscounting of real estate paper. The railroad situation,
5.1
Ohio Valley
with respect
625,789
612,365
2.1
to
securities,
Mid-West
is
the
in
minds
of
all
of our leaders, and undoubtedly some1,000.616
911,558
8.9
Northwest
thing constructive will develop that will be of assistance.
191,868
157,121
18.1
Trans-Missouri-Kansas
336,012
Retail buying has shown some improvement, and even though it
326,300
2.9
Southeast
has not
631,326
596,356
been all that might have been expected,
5.5
New England
it is a slight indication of the fact
141.498
125,770
11.1
"
Allegheny
that consumption has constantly run ahead
717.353
of production. This is a
643,238
10.3
"
Southwest
389.308
390,824
.4 Increase healthy condition and one that can not help but assert itself beneficially
In time. The buying power of this nation
Total
rather high and it reis
still
5,612,161
5,241,746
6.6 Decrease mains only for a measure of confidence
to set it in motion.
In making the compilation, each Board estimated what freight car
Finally, there is the factor of a more
reefficient operation of industry.
quirements would be for the principal industries found
in the territory cov- Instead of waiting for a return of prosperity, industrialists have set in
vered by that Board. On the basis of this information, it is
estimated that motion economies and developed a degree of efficiency in operation which
of the 29 commodities, increases in transportation requiremen
ts will de- will prove a powerful influence in developing a return to normal conditions'
velop for five, as follows: Cotton seed and products, except
oil; fresh fruits
other than citrus; petroleum and petroleum products;
automobiles, trucks
Decline Shown in New York Building Plans
and parts; and chemicals and explosives.
-Total
Commodities for which a decrease is estimated totaled
of $293,000,000 for 1931 Is $57,000,000 Below 1930
23, as follows:
Grain.
Chief Drop in Manhattan-Gains in Bronx and
Flour, meal and other mill products.
Hay,straw and alfalfa.
Staten Island.
Citrus fruits.
Building
plans filed in New York City during 1931 totaled
Potatoes.
approximately $293,000,000, a decline
Other fresh vegetables.
of $57,000,000 from
Live stock.
the 1930 total of $350,000,000, accordin
g to a survey of
Poultry and dairy products.
figures in the Building Bureaus
Coal and coke.
of the five boroughs on
Dec. 31. The New York "Times"
Ore and concentrates.
of Jan. 1 in indicating
Gravel, sand and stone.
this, went on to say:
Salt.
The loss was attributable chiefly
Lumber and forest products.
to the drop of $60,000,000 in plans filed
In Manhattan. Brooklyn and
Sugar,syrup and molasses.
Queens showed totals about even with the
previous year's figures, while the
Iron and steel.
Bronx and Staten Island registered
gains due largely to the heavy
amount of residential construction.
.-1
194
FINANCIAL CHRONICLE
The tentative total of plans filed in Manhattan, as announced by Samuel
Fassler, Superintendent of Buildings was $106,640,000, as compared with
$166,000,000 in 1930. For class A multiple dwellings the cost was estimated at $15,570,000, against $57,471,000 in the previous 12 months.
These were 230 building projects in the 209 plans filed last year.
[VOL. 134.
ment stores in the entire country, which has been computed since January
1931, was 157o lower on Dec. 1 than in January.
higher
The seasonally adjusted index of daily average sales was slightly
in November than in October, still it was much below other years.
Preliminary reports on Christmas buying indicate that dollar sales are
1981.
behind 1930 in about the same amount as in earlier periods of
dm.
Unusually warm weather has retarded sales of seasonable clothing, shoes,
a
than
higher
The dollar value of retail stocks on Dec. 1 was slightly
month earlier, but the expansion was smaller than seasonal. Compared
with a year ago, the value of stocks at retail was off 16%.
Collections fell off slightly, and the percentage of accounts receivable
at the beginning of the month which were collected in November was 11%
under the same period of 1930.
in
Furniture and wearing apparel store sales showed a greater decline
November, compared with a year ago, than did department store sales.
Chain grocery sales, on a unit basis, were 9TO smaller in November, and
down 5% in the first 11 months, compared with similar periods of 1930.
Chain drug sales were off 8% and 4% in November and the first 11 months,
Brooklyn Alterations Gain.
In Brooklyn plans or new buildings have been slightly behind the
1930 figures, and indications are that the total estimated cost of new structures thero will show a slight drop from the $60,000,000 listed in 1930,
and will aggregate about $57,000,000. Alteration plans, however, have been
above 1930, and will help to bring the total for all Brooklyn permits close
to the previous year's figures.
In Queens the total in round figures was about $70,000,000. although
the exact figures have not yet been compiled. The cost is almost exactly
the same as in 1930 and the list includes housing projects to accommodate
more than 12,000 families.
In the Bronx a gain of about $3,000,000 was recorded. accordlig to
Patrick S. ReviIle, Superintendent of Buildings. The total was 851,544,377,
respectively.
against $48,912,559 for 1930. Of this amount $28,853,000 was for multiWholesale trade, based on figures from four reporting lines, was 28%
family houses.
a year ago. Wholesale grocery sales were off 22%,
For Staten Island the total was $7,409,265, with 3,209 plans, including smaller in November than
23%, and dry goods 30%.
alterations, and involving some 2,800 new structures, mostly private drugs 17%, hardware
The "Review" reports conditions in the rubber and tire
homes and garages.
Bronx Classified Totals.
as follows:
industry
The Bronx was the only borough in which classified totals had been
Replacement tire sales in November were at a higher rate than in
compiled yesterday. Mr. Reville reported the following figures, with October, according to reports from Akron manufacturers, and employment
been expericomparisons with 1930:
1930.
at 26 reporting concerns did not show the falling off that has
1931.
1,032 enced in former years. It was, however, 11% below last year, and the
1,044
Plans
1,712
1,821
Buildings
in the first 11 months from the same period of 1980
$51,544,377 848,912,559 average reduction
in November
Cost
130 was 22%. The very sharp reduction in automobile production
180
Tenements
6,111 affected demand for original tires, and offset, in part, the Increase In
7,340
Families
$28,853,000 $23,064,500 replacement tire sales.
Tenement cost
776
1,031
3% ahead of October, comDwellings
901
Crude rubber consumption in November was
1,197
Families
8% for the period in past
$5,684,400
$7,084,452
pared with an average seasonal decline of about
Dwelling cost
23,479 in November 1930, a
figures in- years. At 22,943 tons, it compared with
The gain, Mr. ReviIle pointed out, was even larger than the
dur- reduction of 2.3%.
dicated, due to the lower unit cost of construction work prevailing
Association reveal that
The latest figures of the Rubber Manufacturers'
ing 1931 as compared with 1930.
17% below a year ago.
output in October was 6% under September, but
about 4% from the same
In the 10.month period production was down
ago. Sales have kept
Office-Building Status—National Estimate of Existing interval of 1930. Stocks are 15% smaller than a year shipments
in October
year, but
the
of
most
during
production
of
Capacity.
of
ahead
82%
Rentals Reported as
was greater than the decline
28% from September. The falling off
dropped
Office buildings, which make up one of the nation's in production, and stocks increased 1.7% in the latest month.
depending on type, in early DeTire prices were lowered 5% to 19%,
five greatest industries, employing more than $7,000,000,000
raw cotton
so far this year, despite the fact that
of capital, are rented to about82% of capacity at the present cember, the first revision crude
in the past year. Labor costs,
40%
rubber
and
25%
down
are
time, reports Charles F. Palmer of Atlanta, Ga., President prices
tire manufacturing expense, have
which constitute the major portion of
of the National Association of Building Owners and Man- been reduced about 10%.
43,733 tons, were nearly twice
Imports of crude rubber in November, at
agers. Noting this the New York "Times" of Dec. 27,
31,765 tons in November
in the month and compared with
consumption
follows:
as
quoted Mr. Palmer
increased 7% in the month, and, at
1930. Domestic stocks consequently
decade
months ago. If crude rubber afloat
"Statistical analysis compiled three times each year for the last
292,493 long tons, were 54% above 12
amount to 869,986
by the National Association of Building Owners and Managers have given
States be included, total crude rubber stocks
United
the
to
consumption.
the exact status of the industry," states Mr. Palmer. "The periodical
16 months' supply at the current rate of
over
or
tons,
December had advanced from
figures for the latter part of 1931 show that vacancies are still increasing,
Crude rubber prices in the third week of
but the curve is less abrupt than that from May 1930 to May 1931. Also
pound, but at 4%c. were
all-time low of slightly above four cents a
the
contraction.
is
less
There
of
space.
use
their
are
condensing
fewer tenants
half as high as in December 1930.
"As office buildings house a complete section of all business, and as just about
the National Association includes practically all the largest structures on
this continent, it is logical to assume that business is near to bedrock and Dividends of $500,000,000 Paid by Building and Loan
that better days are not so far ahead.
Associations Since They Began.
"Increased vacancies have forced the scrutiny of the tax bill, and owners
are seeing to it that loose methods in the city expenditure shall come to a
is from the New York "Times" of Jan. 3:
following
The
halt. They are giving of their time for friendly co-operation with the
and loan associations of the
By the beginning of his year, the building
city fathers, and some real savings are being made."
dividends of about $500,000,000,
country had paid out during their history
Loan League, which has
according to the United States Building and
of safety of 12,000,000 shareholders'
Conditions in Cleveland Federal Reserve District computed that in 1931 the percentage
when it stood
in the associations increased 0.16% over 1930,
Changed Slightly During December—Wholesale nvestments
at 99.89% in the first half of last year.
because
largely
year
last
and Retail Trade Conditions—Rubber and Tire
"Building and loan safety was maintained
says H. F. Cellarius,
loans made by the associations are amortized,"
Industry.
the figures. "This
Secretary-Treasurer of the League, who compiled
The Federal Reserve Bank of Cleveland reports that plan gives them a contractural income such as no other financial institution
into the assomoney
of
loans cause a steady flow
"favorable developments in the past month have been offset has, since payments onmonth
out. In a deplorably large number of cases
month in and
ciations
by unfavorable ones, and conditions in the Fourth (Cleve- community funds have been tied up by adverse conditions in other financial
funds for an association's normal
land) District in December were little changed from a month institutions, and in many cases thetie-up.
In spite of this, investmenta
the
in
included
were
daily
activities
ago. Christmas buying dominated the retail field, but pre- in our associations have continued to be worth one hundred cents on the
liminary figures indicate that sales in the first half of dollar paid in.
09.9929% in 1928.
"Safety of these investments was 99.89% in 1929 and
December were off about as much from the corresponding
had no liquidations
"Thirty-three States and the District of Columbia
with 34
period of 1930 as they were in the first 11 months." The of any association during the first half of 1931. This compares
1930. TwentyStates and the District of Columbia having no liquidation in
Bank, in its Jan. 1 "Monthly Business Review," adds:
liquidasingle
six States reporting as of July 1 the past year had not had a
The number of bank suspensions increased slightly in the latter half of tion of an Association during the past 2%-year period, including the
in
nine
with
compared
17,
totaled
month
entire
December and in the
whole depression phase.
absolutely
November. The demand for currency, though it increased in the first three
"Of the total assets of nearly 29,000,000,000, 99.5% were
half of 1931. Even
weeks of December, was not up to seasonal proportions.
unaffected by any liquidations reported for the first
in 1931,
conditions
a
than
Failure of the automobile industry to expand production at more
in the case of the 0.5% of assets affected by adverse
very moderate rate from the exceedingly low level touched in late Novem- the loss will be only a small portion of such assets.
shows that our asso"The improvement in conditions in 1031 over 1930
ber, caused steel mills and parts and accessory plants to curtail production
but actually fulfilling the
after fulfilling the very moderate automotive requirements for new model ciations are not only standing their ground
would lead the way
we
at 24% predictions made by many business leaders that
production. Steel production made a new low for this depression
to be based upon savings which
of capacity in mid-December, though local mills were operating at slightly to recovery. We may expect recovery
have earned steady dividends
have suffered no depreciation and which
higher-than-average rates.
The
phase from which we are now emerging.
Tire production expanded in November, contrary to seasonal movements throughout the depression
and loan associations represent that basic kind
building
showed
employment
and
the
in
3%
nine
billion
increased
of past years. Rubber consumption
of capital."
no change, both in contrast to a reduction in past years.
were slightly
Life insurance sales in November in Ohio and Pennsylvania
Activity During
11 months. Further Recession Noted in Business
ahead of the same month of 1930, but were off 16% in the first
November in Boston Federal Reserve District.
Commercial failures were 13% more numerous' in November than in the
of
the Federal Reserve Bank
corresponding month of 1930, while in the first 11 months an increase
In its Jan. 1 "Monthly Review"
16% was reported.
conditions in the First District as follows:
of Boston reports
Conditions in retail and wholesale trade are indicated as
recession in the general level of
During November there was a further
brought the aggregate to the lowest
follows by the Bank:
business activity in New England which
The dollar value of retail sales at 56 department stores in the Fourth
District in November was 17.5% smaller than in the corresponding month
of 1930, and the falling-off in the 11.month period from the same interval
of the preceding year was 12.4%. "Fairchild's" index of prices at depart-
activity in this district, after
point of the year. The decline in industrial
was more
adjustments have been made for the customary seasonal changes,
it was between October
pronounced between September and October than
Novemin
New
In
England
shoes
and November. Production of boots and
JAN. 9 1931]
FINANCIAL CHRONICLE
ber declined from October by more than the usual seasonal amount, and has
shown a sharp contraction in activity since August. During the first 11
months of 1931, however, total production of boots and shoes in this district
was more than 6% larger than in the corresponding period of a year ago.
One division of the textile industry in this district reported a curtailed
volume of activity during the entire year, with the highest amount of raw
cotton consumed in any month of 1931 being only 71% of the average
month of 1923-24-25, while in November the consumption was about 41%.
The cotton textile industry, therefore, operated during the first 11 months
at an unusually low level. On the other hand, wool consumption by New
England mills increased considerably during the first seven months of 1931,
and then decreased month by month through November,so that, although
the volume ofraw wool used in November was the smallest for any month in
1931. nevertheless, the activity during the first 11 months considerably
exceeded that during the corresponding period in 1930. The building
Industry in this district in November continued to reflect the quiet conditions which characterized the entire year, and the value of total contracts
awarded in New England during November was about 24% less than in
that month in 1930. The volume (square feet) of residential contracts
awarded, adjusted for usual seasonal influence, dropped to approximately
47% of the average month of 1923-24-25, while the volume of commercial
and industrial building increased slightly, but in November was only about
39% of the 1923-24-25 average. CarloadIngs of merchandise, 1.c.l., and
miscellaneous freight in New England during November were the lowest of
any post-war month, although there has not been much variation from
month to month during 1931. The amount of new ordinary life insurance
written in New England during November was 6.1% less than in November
1930. and during the first 11 months the amount was 6.4% less than
in the
corresponding period a year ago. The number of commercial failures in
November in this district was 10% higher than a year ago, with total
liabilities of commercial failures 17.7% greater than in 1930. Sales of
New England reporting retail establishments during November were
about
14% less than in that month a year ago, and for 11 months were 8% less.
Holiday Lumber Production Exceedingly Low.
Production of lumber reached the lowest point in years in
the New Year Holiday week. Orders for the week (ended
Jan. 2) exceeded the cut by approximately 42%, about a
third less than a year ago, it is indicated in telegraphic
reports from 763 leading hardwood and softwood mills to the
National Lumber Manufacturers Association. Shipments of
these mills were 69% above their production which amounted
to but 78,073,000 feet. A week earlier 780 mills reported
orders 43% above and shipments 39% above a cut of 81,517,000 feet. Comparison by identical mill figures for the
latest week with the equivalent period a year ago shows—
for softwoods, 440 mills, production 39% less, shipments
25% less and orders 31% less than for the week a year ago;
for hardwoods, 188 mills, production 23% below, shipments
6% above, and orders 7% below the volume for the week
last year.
Lumber orders reported for the week ended Jan.2 1932 by
548 softwood mills totaled 99,971,000 feet, or 41% above the
production of the same mills. Shipments as reported for the
same week were 119,465,000 feet, or 68% above production.
Production was 71,127,000 feet.
Reports from 232 hardwood mills give new business as
10,970,000 feet, or 58% above production. Shipments as
reported for the same week were 12,826,000 feet, or 85%
above production. Production was 6,946,000 feet. The
Association's statement also shows:
195
a decrease in production of 57%, and in new business a decrease of 41%,
as compared with the same week a year ago.
The Western Pine Association, of Portland, Ore., reported production
from 123 mills as 10.370,000 feet, shipments 24,061,000 and new business
22,435.000. The 94 identical mills reported a decrease of 49% in production
and a 28% decrease in new business, compared with the same week last year.
The Northern Pine Manufacturers of Minneapol's, Minn., reported no
production from 7 mills, shipments 1,089,000 feet and new business 675,000
feet. The same number of mills reported new business 64% less than for
the same week a year ago.
The Northern Hemlock and Hardwood Manufacturers Association, of
Oshkosh, Wis.,reported production from 17 mills as 556,000 feet.shipments
570.000 and orders 378,000. The 14 identical mills reported new business
66% less than for the same week of 1931.
The North Carolina Pine Association, of Norfolk. Va., reported production from 75 mills as 4,459,000 feet, shipments 5,447,000 and new business
3.991,000. The 35 Identical mills reported a decrease of 18% in production
and a decrease of 20% in new business, compared with the same week a
year ago.
Hardwood Reports.
The Hardwood Manufacturers Institute, of Memphis, Tenn., reported
production from 215 mills as 6,547,000 feet, shipments 11,693,000 and new
business 10,130,000. The 174 identical mills reported a 24% decrease in
production and an 8% decrease in new business, compared with the corresponding week last year.
The Northern Hemlock and Hardwood Manufacturers Association, of
Oshkosh, Wis.,reported production from 17 mills as 399.000 feet,shipments
1,133.000 and orders 840,000. The 14 identical mills reported production
74% less, while new business was the same as last year,for the corresponding
week.
We also give below the report of the National Lumber
Manufacturers Association for the week ended Dec.26 1931:
Low lumber production during the Christmas holiday period largely
accounted for a 43% excess of new business over the cut during the week
ended Dec.26,as indicated in telegraphic reports from 747 leading hardwood
and softwood mills to the National Lumber Manufacturers Association.
Production of these mills amounted to but 81,243,000 feet. Shipments
exceeded this figure by 39%. A week earlier 775 mills reported orders 30%
above and shipments 8% above a cut of 119,234,000 feet. Comparison by
Identical mill figures for the latest week with the equivalent period a year
ago shows—for softwoods, 444 mills, production 27% less, shipments 29%
less and orders 23% less than for the week in 1930;for hardwoods 177 mills,
production 37% below, shipments 7% above and orders 18% below the
volume for the week a year ago.
Lumber orders reported for the week ended Dec.26 1931, by 557 softwood
mills totaled 101.055,000 feet, or 43% above the production of the same
mills. Shipments as reported for the same week were 98,308,000 feet, or
39% above production. Production was 70,696,000 feet.
Reports from 209 hardwood mills give new business as 15,056,000 feet,
or 43% above production. Shipments as reported for the same week were
14,887,000 feet, or 41% above production. Production was 10.547.000 feet.
Unfilled Orders.
Reports from 486 softwood mills give unfilled orders of 500,990,000 feet.
on Dec. 26 1931, or the equivalent of 10 days' production. This is based
upon production of latest calendar year-300-day year—and may be compared with unfilled orders of 486 softwood mills on Dec. 27 1930, of 743,763,000 feet, the equivalent of 15 days' production.
• The 412 identical softwood mills report unfilled orders as 475,103.000
feet on Dec. 26 1931, or the equivalent of 10 days' average production, as
compared with 732,189,000 feet, or the equivalent of 16 days' average
Production, on similar date a year ago. Last week's production of 444
identical softwood mills was 66,501,000 feet,and a year ago it was 91,516,000
feet; shipments were respectively 93,150,000 feet and 131,822,000; and
orders received 97.118,000 feet and 126,480.000 feet. In the case of hardwoods, 177 identical mills reported production last week and a year ago
10,136,000 feet and 16,006,000; shipments 13,656.000 feet and 12,705,000;
and orders 13,924,000 feet and 17,025,000 feet.
West Coast Movement.
The West Coast Lumbermen's Assn. wired from Seattle the jollowing
new business, shipments and unfilled orders for 224 mills reporting for the
Unfilled Orders.
week ended December 26:
Reports from 482 softwood mills give unfilled orders of
474,042,000
feet on Jan. 2 1932, or the equivalent of 10 days' production.
NEW BUSINESS.
UNSHIPPED ORDERS.
SHIPMENTS.
This is
based upon production of latest calendar year-300-day year—and may
Feel.
Domestic cargo
Feet.
Feet.
be Domestic cargo
delivery _ _133.434.000 Coastwise and
compared with unfilled orders of 480 softwood mills on
Jan. 3 1931 of
delivery____ 28,731,000 Foreign
25,829,000
lotercoastal
75,370,000
724,727,000 feet. the equivalent of 15 days' production.
Export
10,412,000 Rail
11,512.000
52,920,000 Export
The 408 identical softwood mills report unfilled orders as 455,820,000
Rail
15,844.000
15,317,000
Rail
feet Local
5,104,000
on Jan. 2 1932, or the equivalent of 10 days' average production, as
5,104,000
Local
compared with 708,997,000 feet, or the equivalent of 16 days' average producTotal
58,091,000
57,561,000
Total
tion, on similar date a year ago. Last week's production of 440 identical
Production for the week was 45,230,02
24
t10 00 Total
06
01fee
softwood mills was 66,425,000 feet, and a year ago it was 109,202,000
feet;
For the year to Dec. 19, 171 identical mills reported orders 0.5% above
shipments were respectively 113,486.000 feet and 152,040,000; and
orders production,and shipments were4.7% above production. The same number
received 95,813,000 feet and 139,520,000. In the case of hardwoods,
188 identical mills reported production last week and a year ago 5,898,000 of mills showed a decrease in inventories of 10.5% on Dec. 19, as comfeet and 8.760.000; shipments, 11,118.000 feet and 10,517.000; and orders pared with Jan. 1.
Southern Pine Reports.
9,259,000 feet and 9,973,000 feet.
The Southern Pine Association reported from New Orleans that for
West Coast Movement.
110 mills reporting, shipments were 11% above production, and orders
The West Coast Lumbermen's Association wired from Seattle the follow- 32% above production
and 19% above shipments. New business taken
ing new business, shipments and unfilled orders for 224 mills reporting for during the week amounted
to 14,469,000 feet. (previous week 17.640,000
the week ended Jan. 2:
at 108 mills); shipments 12,180,000 feet, (previous week 17,094,000); and
NEW BUSINESS.
UNSHIPPED ORDERS.
production
10,939,000 feet, (previous week 20,891.000). Orders on hand
SHIPMENTS.
Feet.
Feel.
at the end of the week at 100 mills were 57,183,000 feet. The 105 identical
Feet.
Domestic cargo
Domestic cargo
Coastwise and
mills
reported
a decrease in production of 39%, and in new business a de
delivery -___ 23,381,000
delivery _ __124,679.000 intercostal 28,725,000
Export
8,278.000 Foreign
85,082,000 Export
18,450,000 crease of 37%, as compared with the same week a year ago.
Rail
17,488,000 Rail
The
Western
55,883,000 Rail
Pine Association, of Portland, Ore., reported production
14,229,000
Local
6,063,000
Local
8,083,000 from 122 mills as 10.789,000 feet, shipments 22,213.000 and new business
22,055,000
feet.
The 92 identical mills reported production 48% less and
Total
Total
55,188,000
245,644,000 Total
67,466,000 orders 37% less than
for the same week last year.
Production for the week was 42,519.000 feet.
The Northern Pine Manufacturers, of Minneapolis, Mimi., reported
For the year to Dec. 26, 171 identical mills reported orders 0.8% above no
production from 7 mills, shipments 858.000 feet and new business 1.production,and shipments were 4.9% above production. The same number
354,000 feet. The same number of mills reported a decrease of 21% in
of mills showed a decrease in inventories of 11.3% on Dec. 26, as compared
orders, compared with the same week of 1930.
with Jan. 1.
The Northern Hemlock and Hardwood Manufacturers Assn., of Oshkosh,
Southern Pine Reports.
Wis., reported production from 19 mills as 357,000 feet, shipments 471,000
The Southern Pine Association reported from New Orleans that for 102 and orders 420,000. The 14
identical mills reported production 69% lees
mills reporting, shipments were 58% above production, and orders 31% and new business 42% less than
for the same week last year.
above production and 17% below shipments. New business taken during
The North Carolina Pine Association, of Norfolk, Va., reported producthe week amounted to 17,304,000 feet, (previous week 14,469,000 at 110 tion from 75 mills as 3,372,000 feet.
shipments 5,025.000 and new business
mills); shipments 20,832,000 feet, (previous week 12,180,000); and produc- 4,666,000. The 35 identical mills
reported a 48% decrease in production
tion 13,223,000 feet,(previous week 10,939,000). Orders on hand at the end and a 34% increase in orders
compared with the corresponding week of
of the week at 95 mills were 49,564,000 feet. The 99 identical mills reported 1930.
NUMBER OF VEHICLES.
Canada.
United States.
TartPassenger
Trucks. calms.1
Cars.
Total.
1929January
February
March
April
May
June
July
August
September --October
•
November
401.037
466.418
685,455
621,910
604,601
545.932
600,840
498.628
415.912
380,017
217,572
345,545
404.063
511,577
525,878
514,863
451,371
424,944
440.780
363,471
318,462
167,846
53,428
60,247
71,799
84,346
88,510
93.183
74.842
156.808
51.576
60.687
48.081
2,064
2,108
2.079
1,686
1,318
1.378
1,054
1,040
865
1368
1,646
PassesTotal. gee Cars. Trucks.
21.501
31,287
40.621
41,901
31,559
21,492
17.461
14,214
13,817
14,523
9.424
17,164
25.584
32,833
34.392
25,129
16,511
13,600
11,037
10.710
8,075
7.137
4.337
5.703
7,788
7,509
6,430
4,981
3.861
8,177
3,107
5,548
2,287
Tot.(11 mos 1 5,238,413 4,478,800 743,507 16.106 257,800 203,072 54,728
6,495
4.426 1,069
91,011 27.513 1,483
•
120,007
December
Tot.(11 We
December
Total (year)
232.848
279.165
329.501
372,446
360.928
285,473
221,829
183.532
175,496
113,226
100.632
39,406
60,398
65,466
71,091
68,659
48.570
43.328
40,450
44,223
40,593
35.613
3,200,285 2,654,976 537,798
155,701
120,833
33.443
3,366,986 2,775,809 571,241
171,848
219.940
278,406
336.939
317,163
250,640
218,490
187,197
140,586
80,142
68,867
137,805
179,890
230,834
286,252
271,135
210,036
183,993
165,321
109.087
57,764
48,185
33.531
39,521
45,161
50.022
45,688
40.244
34.317
31,772
31.338
21,727
19,683
10,388
15,548
20,730
24.257
24,672
16.090
10.188
9,792
7,967
4,541
6,407
8,856
13,021
17,165
20.872
21,251
12,194
8,556
6,946
5,623
3,206
3,527
1,632
2.527
3,566
3,385
3,421
2,896
1,632
2,846
2,334
1,335
1,880
7,511 148,570 121.217 27,353
1,425
5,622
4,225
1,397
8,936 154,192 125.442 28,750
*04.1.0PMft...co.
1931January
February
March
April
May
June
July
A must
September
October
November
6,358,420 4,569,811 771,020 17.589 263,295 207,498 55,767
acweowcura^lemelo
1930January
February
March
April
May
June
July
August
September
October
November
OXWW..40.PCON47.0
C.0a0WO=...4
Total (year)
NOC.0000-..0 .
Relatively a better exhibit was made by distribution than production, the
rate of operations at manufacturing plants as a whole being slightly below
that of the preceding month, and considerably less than during the corresponding period last year. In the chief industrial centers the reduced
rate of manufacturing activity was reflected in a further increase of the
number of idle workers during November and early December, offset
partly, however, by a gain in clerical employment at retail establishments
incident to the holiday trade.
The trend of commodity values continued downward, with a number of
important classifications reaching new lows on the present retrograde
movement. This served to emphasize caution in the matter of purchasing,
particularly of raw materials for future requirements. Producers and distributors of pig iron, finished iron and steel products, non-ferrous metals,
lumber, and a number of other important commodities report ordering for
first quarter of the new year in smaller volume than any similar period in
recent times. The same attitude prevails in lines rot ordinary consumption.
purchasing being confined largely to only enough merchandise for immediate
or nearby requirements. This policy has resulted in generally small inventories, both in the hands of manufacturers and merchants. While as
compared with last year average sales volume has declined heavily, the
lower range of prices prevailing now accounts for a considerable part of the
decrease. It thus becomes evident that the unit volume of distribution
makes a much more favorable showing than the dollar volume, also that
large quantities of merchandise continue to flow through distributive
channels.
As had been the case since early fall, the unusually high temperatures
prevailing throughout this region have seriously interfered with the movement of seasonal merchandise, particularly fuel, heavy wearing apparel and
heating apparatus. November production of bituminous coal n fields of the
district was substantially below the average for that month during the past
decade. Christmas holiday shopping got a later start than usual,and during
November and the first week of December failed to gain the expected
momentum. In both the large centers of population and smaller communities, demand centers chiefly in cheap-priced merchandise. Since the first
week of December considerable improvement has developed in purchasing
of holiday goods, a number of important interests reporting volume comparing favorably with a year ago.
Reversing the usual seasonal trend, the volume of retail trade n November
as reflected in sales of department stores in leading cities of the district,
was 4% smaller than in Octobe,. The November total fell 10.4% below
that of a year ago, and for the first 11 months this year a decrease of 12.7%
was shown as compared with the same period in 1930. Combined sales
during November of all wholesaling and jobbing firms reporting to this
bank were 4.6% smaller than in the preceding month, and approximately
8% less than for the same month in 1930; for the first 11 months this year
the aggregate was 15.6% below that for the same period in 1930. The value
of permits issued for new buildings in the five largest cities of the district
In November was 64% and 60% smaller, respectively. than a month and a
year earlier. Construction contracts let in the Eighth District in November
were one-fifth smaller than the low October total, and 61% less than in
November, 1930. Debits to checking accounts in November fell 16%
below October, and 22% below the November 1930, total; for the first 11
months this year the aggregate was 21 smaller than for the same period
In 1930. The amount of savings accounts held by selected banks decreased
slightly between Nov. 4 and 1/ c. 2, and on the latter date was about 5%
smaller than on Dec 3 1930.
According to officials et railroads operating in this region, freight traffic
handled continued the downward trend ofrecent months, and the November
total fell substantially below that of the corresponding period in 1930 and
1929. There was a particularly heavy decrease in merchandise and miscellaneous freight. As was the case during the preceding month, the movement of coal, coke and other fuels was held down by the unusually mild
weather and was in considerably less than the seasonal volume. For the
country as a whole, loadings, of revenue freight for the first 48 weeks this
year. or to Nov. 28, totaled 34,999,149 cars, against 43,096,392 cars for
the corresponding period in 1930 and 49,489,591 cars in 1929. The St.
Louis Terminal Railway Association, which handles interchanges for 28
connecting lines, interchanged 132,895 loads in November, against 144,833
loads in October. and 166,395 loads in November 1930. During the first
nine days of December the interchange amounted to 40,976 loads, which
compares with 46,993 loads during the same period in November and 47,235
loads during the first nine days of December last year. Passenger traffic
of the reporting lines in November decreased 26% as compared with the
same month in 1930. Estimated tonnage of the Federal Barge Line between
St. Louis and New Orleans in November was 86,400 tons, against 104,873
tons in October, and 83,000 tons in November 1930.
Little change in the general trend, noted during the past several months,
was reflected in reports relative to collections. Considerable irregularity
and spottiness exists, both with reference to the several lines and different
locaillties. For the most part wholesalers in the chief distributing centers
reported early December settlements in considerable colume, a number of
important interests indicating bettor results than a year ago. The rela-
Declining Automobile Production in November and the
Eleven Months.
November factory sales of automobiles manufactured in
the United States (including foreign assemblies from parts
made in the United States and reported as complete units or
vehicles), based on data submitted to the Bureau of the
Census, consisted of 68,867 vehicles, of which 48,185 were
passenger cars, 19,683 trucks, and 999 taxicabs, as compared with 80,142 vehicles in October 1931, 136,754 vehicles
in November 1930, and 217,573 in November 1929. For
the eleven months to Nov. 30, the output of vehicles was
only 2,268,197 in 1931 against 3,200,285 in 1930, and
5,238,413 in 1929.
The table below is based on figures received from 144
manufacturers in the United States for recent months, 42
making passenger cars and 113 making trucks (11 making
both passenger cars and trucks). Figures for passenger cars
include only those designed as pleasure vehicles, while the
taxicabs reported are those built specifically for that purpose, pleasure cars later converted to commercial use not
being reported as taxicabs. Figures for trucks include
ambulances, funeral cars, fire apparatus, street sweepers
and buses. Canadian figures are supplied by the Dominion
Bureau of Statistics.
-1
Further Decline in Trade and Industrial Activities
in St. Louis Federal Reserve District During
November Ascribed Due to Extreme Conservatism.
The Federal Reserve Bank of Dallas reveals that extreme
conservatism in purchasing of commodities by the general
public, merchants and other groups of consumers was reflected in a further recession in trade and industrial activities
in the Eighth (St. Louis) Federal Reserve District during
the past 30 days. With the single exception of dry goods,
all wholesaling and jobbing lines investigated by this bank
showed a smaller volume of dollar sales in November than
for the preceding month, and without exception decreases
were recorded as compared with November 1930, and the
average for the month during the past eight years. The
Bank in its Dec. 30 "Monthly Review" continues:
tively small inventories of retail merchants and the policy of hand-to-mouth
buying lend themselves to prompt defraying of bills. In the clothing line
there were complaints of backwardness, and the same was true of building
materials and some of the other heavier classifications. Country retailers
report moderate betterment in collections as contrasted with earlier in
the season. There has been considerable liquidation in the tobacco and
rice areas, also in parts of the typical cotton sections, though the disposition
of producers to hold their stocks for higher prices is still holding down payments as a whole in the country. Questionnaires addressed to representative interests in the several lines scattered through the district show the
following results:
Poor.
Fair.
Good.
EzcellenS.
14.0%
67.5%
18.5%
0%
November 1931
22.5
56.4
21.1
04tober 1931
35.0
10.0
65.0
November 1930
Commereal failures in the Eighth Federal Reserve District ;n November,
$3,357,116,
according to Dun's numbered 117, involving labilities of
against 126 failures in October with liabilities of $2,497,736, and 92 defaults
for a total of $3,870,162 in November 1930.
..cow
Hardwood Reports.
The Hardwood Manufacturers Institute, of Memphis. Tenn., reported
production from 190 mills as 10.188,000 feet, shipments 13,799.000 and
new business 13,375.000. The 163 identical mills reported production
32% less and orders 4% more than for the same week a year ago.
The Northern Hemlock and Hardwood Manufacturers Assn., of Oshkosh
Wis., reported production from 19 mills as 359,000 feet„ shipments 1,088,000 and orders 1,681,000. The 14 identical mills reported a 77% decrease
in production and a 70% decrease in orders, compared with the same week
of 1930.
[VoL. 134.
FINANCIAL CHRONICLE
C4CCCa.aC
196
5.496
9,871
12,993
17,159
12.738
6,835
4,220
4,544
2,646
1,440
1,247
4,552
7,529
10,483
14,043
10,621
5,683
3,151
3,426
2,108
761
812
1,944
2.842
2,610
3,116
2,117
1,252
1,069
1.118
638
679
435
4.891 80,189 63.069 17,120
Tot.(11 mos.) 2,268,197 1.870.302 393,00
x Includes only factory-built taxicabs, and not private passenger cars converted
Into vehicles for hire.
State Automobile Association Moves to Avert Increase
in Motor Tax in New York State.
Press advices from Albany, Jan. 1, said:
Having served largest tax paying groups in the Legislature that motorists
unjust and unwarwill regard any increase in taxation as discriminatory,
ranted, the State Automobile Association is circulating petitions among
increased
tax.
any
to
opposition
in
clubs
affiliated
the fifty-two
"The total per vehicle tax in New York State is $30.03, including chaufon
6%
annually
a fair average
feurs' and operators'fees and this amounts to
valuation of $500 per car." Frank J. Smith of Rochester, Chairman of the
to-day.
said
committee,
legislative
association's
JAN. 9 19321
FINANCIAL CHRONICLE
197
ber, but the comparison with the corresponding month of 1930 was more
favorable than in either of the two preceding months. Sales of merchandise
were 8.5% below those in October, and 21.8% less than in the corresponding
month of 1930. The latter figure compares with a decline of 23.4% in
October and 26.7% in September. Distribution during the first 11 months
of 1931 showed a decline of 16% as compared to the same period of 1930.
According to reports, holiday trade during the first half of December
ranged from fair to good, with practical commodities in greater demand
than novelties.
Stocks of merchandise on hand at the close of November reflected a
decline of 2.8% as compared to those a month earlier, and continued 21.4%
below the same date a year ago. The rate of stock turnover during the
through Nov. 30 1931, was 2.59, as against 2.66
Sales of department stores in larger cities reflected the usual seasonal 11 months from Jan. 1
decrease as compared to the previous month, and were 22% below those in the same period of the previous year.
remained on the same level as those a month
collections
November
in November 1930. This latter decrease, however, was smaller than in
either of the two preceding months. In wholesale channels, distribution earlier, but showed a decline from a year ago. The ratio of collections to
generally continued to show an improvement. In most reporting lines accounts outstanding on Nov. 1 was 32.0% as compared to 34.4% In
the decline in sales as compared to the previous month was considerably November 1930.
less than seasonal, and comparisons with the corresponding month a year
ago were the most favorable reported in several months. While purchases
Production of Flour Continues Lower.
at wholesale are being made in small lots, the sustained consumer demand
General Mills,Inc.,summarizes the following comparative
has necessitated retailers making frequent reorders to replenish stocks.
Debits to individual accounts at banks in principal cities were 21% smaller flour milling activities as totaled for all mills reporting in the
than in October, and 22% below November 1930.
The number of commercial failures in this district during November, milling centers as indicated.
while higher than a year ago, reflected a noticeable decline from the prePRODUCTION OF FLOUR(NUMBER OF BARRELS).
ceding month. The indebtedness of defaulting firms was in smaller volume
than in either the previous month or the corresponding month of 1930.
Production Production Cumulative Cumulative
Federal Reserve Bank loans to member banks, after reaching a peak at
Same
Production Production
5 Weeks
Ended ' Period
Since June Same Period
$26,068,000 early in November, reflected a gradual decline during the
30 1931.
Jan. 2 1932. Year Ago.
1930.
subsequent six weeks and stood at $19,650,000 on Dec. 15. The latter
figure, however, was considerably larger than that on the corresponding Northwest
1,407,833
1,838,707 10.309,858 12,463,313
date of 1930. The combined net demand and time deposits of member Southwest
2,154,116
2.288,772 13,352,970 13,708,450
1.904,627
2,286,185 12.391.070 13,707,022
banks averaged $687,698,000 during November, as compared to $689,838,- Lake Central and Southern
2,421,831
437.874
406.028
2,247,105
000 in October, and $827,987,000 in November a year ago. The loans, Pacific Coast
investments and deposits of banks in larger cities reflected a decline between
nra.nd tntAl
5 904 450
6.819 692 39.301.003 42.300.616
Nov. 11 and Dec. 9. Subscriptions to the Treasury notes and certificates
Note.-This authoritative compilation of flour milling activity represents approxiof indebtedness issued on Dec. 15 totaled $43,332,900, and allotments to mately
90% of the mills in principal flour producing centers.
the extent of $37,447,200 were made.
The heavy general rains during the past 30 days were very beneficial
to the agricultural and livestock industries. Moisture conditions throughout the district are now favorable and livestock ranges have shown a notice- Argentine Wheat Estimated at 218,623,000 Bushels,
able improvement. Small grains have responded to the better moisture
Against 235,000,000 a Year Ago.
conditions and favorable weather, and are now reported to be in satisfactory
condition. Livestock generally are going into the winter in good shape.
The
following
is from the "Wall Street Journal" of Jan. 5:
The valuation of building permits issued at principal cities was 18%
Argentina's new wheat crop is estimated at 218,623,000 bushels, comless than in October, and 23% below November 1930; yet the latter com- pared with 235,000,000 a year ago and 162,575,000 two years ago, making
parison was, with one exception, the most favorable shown for the current it certain that Argentina will be a more important factor in the world
year. The production and shipments of cement reflected a decline as wheat market during 1932 than was thought two months ago. From the
compared to both the previous month and the corresponding month last distribution of the three preceding crops, as shown by the following table,
year.
that of the present one and its effect on world exports may be fairly estiWe also quote from the "Review" the following details mated:
Crop Year Beginning Jan. 1
as to wholesale and retail trade:
1932.
1931.
1930.
1929.
Wholesale Trade.
Production
218,623,000 235,960.000 162,576,000 349,051,000
15.472,000 25.679.000 12,746,000
While the month of November witnessed a seasonal slackening in the Carry-over Jan. 1
demand for merchandise at wholesale in the Eleventh Federal Reserve
Total supply Jan. 1
251,432,000 188,255,000 361,797,000
District, sales in all lines except farm implements reflected less than the Domestic consumption
93,328,000 85,979.000 85,979,000
usual seasonal recession, and comparisons with the corresponding month
Balance for export
158,104,000
102,276.000 275,818,000
a year ago were better than had been registered in several months. As
Allowing for an average don.estic use, crop and carry-over on Jan. 1
compared to the same period in 1930, cumulative sales from July 1 to Nov.
1932 should give an exportable surplus of 140,000,000 bushels.
30 of the current year reflected decreases ranging from 16.2% in the case
Monthly shipments from Argentina for past three years are given in
of groceries to 51.9% in the case offarm implements. Purchasing continues
on a moderate scale and most orders are made for replacement purposes, bushels:
1931.
1930.
1929.
as retailers are keeping purchases closely aligned to consumer demand, and
January
10,946.000 12,721,000 22,607,000
• are desirous of closing the year with low inventories. On Nov. 30, stocks February
17,614,000 11,336,000 27,541.000
showed declines from a year ago varying from 8.2% to 39.9%. While March
13,411,000 10,037.000 29,861,000
17,609.000 10,806.000 22.381,000
the collection of current accounts has been rather active, seasonal declines April
May
21,001.000
8.555.000 24.218.000
were reflected in the November collections of all lines except dry goods.
June
16,658,000
9,881.000 25,391,000
For the first time in any month since June 1929, the sales of wholesale July
7,738.090
3,989,000 14,463.000
dry goods firms in this district during November reflected a slight increase August
*5.372,000 *3,728,000 25,292,000
*6,940.000 *3.755.00o 19,834,000
as compared to the corresponding month of the previous year. The com- September
4.572.000 *4,124,000 17,322,000
parison with the preceding month showed a decline of 14.5%. which is October
November
*5.779,000 *2,912,000
8,308,000
much less than the recession that usually occurs in November. Late reports Balance Dec. 1
29,464,000 20,431.000 38,600,000
indicate that buying during the first half of December has been holding up Exports, December
4,964,000 12,712,000
fairly well. Total distribution during the months from July to November,
* Trade estimates. All other figures from Department of Agriculture.
inclusive, was 24.1% below the volume of the same period in 1930. Stocks
on hand were reduced 20.1% during November. Collections were on
practically the same scale as in October.
The business of reporting wholesale hardware firms in November showed
a decline of5.2% from October,which is less than the usual seasonal amount. Cotton Crop of Argentina Estimated at 105,000 Bales,
According to Advices to New York Cotton Exchange
As compared to the corresponding month last year, there was a reduction
of 26.5%, whereas in October the like decrease amounted to 37.5%. In
Service.
view of these figures, it appears that the volume of distributipn is not only
The current cotton crop of Argentina is estimated at
holding well up to recent levels, but is showing some tendency toward
Improvement. Average sales from July 1 to November 30 were 31.8% 105,000 bales of 500 pounds each, compared with 133,000
less than a year ago. Collections declined only slightly during the month.
Reports from wholesale drug firms in this district indicate that business last season, and the current crop of Paraguay is estimated at
during November held up slightly better than is usually the case in that 15,000 bales against 20,000 last season, according to a cable
month. Sales decreased 7.6% as compared to the previous month, and from trade sources to the
New York Cotton Exchange
were 16.2% under the volume of the corresponding month last year,showing
practically the same comparison as was shown in October. Inventories Service,
were reduced 5.8% during the month. November collections were in
somewhat smaller volume than in the preceding month.
While the demand for groceries in wholesale channels during November Selling Price of American Cotton Compared With
was 5.4% less than in the previous month, the decrease was smaller than
That of Indian Cotton.
Is usual at this season. The slight decline was all the more favorable in
American
cotton
is selling much below the average of past
contrary-to-seasonal
followed
the
increase
which
it
view of the fact that
occurred in October. November sales were only 8.2% less than in the same relationships with Indian cotton, according to the New
month last year, this being the best comparison that has been recorded since York Cotton Exchange Service. As
a result,foreign spinners,
September a year ago. Collections reflected a largely seasonal decline
in Europe and the Orient, are showing a pronounced tendency
of 9.2%.
A reduction of 49.5% was reflected in the business of wholesale farm to revert to a larger relative use of the American staple.
Implement firms during November as compared to the previous month. The Exchange Service on Jan. 5
said:
Sales fell 81.0% below the level of November 1930, the small scale buying
A rough indication of comparative prices of American and Indian cottons,
being due largely to the reduced purchasing power offarmers caused by low
afforded by the prices of middling seven-eights-inch American cotton and
prices of agricultural products. For the period between July 1 and Nov.30,
fine Oomra Indian cotton, both on the spot at Liverpool. At the present
the volume of distribution this year was on a scale 51.9% below that of the
time, the price of fine Oomra Indian is equal to 91.5% of the price of
same period last year. After showing two seasonal monthly increases, the
middling American, compared with 70.6% a year ago, 74.7%, two years
volume of collections declined in November.
ago, 78.9% three years ago, 82 7% four years ago, and 90.5% five years
Retail Trade.
ago. It will be recalled that five years ago the relatively high price of
The distribution of merchandise at department stores in leading cities Indian cotton resulted in foreign spinners cl glee from I- - tan to American
of the Eleventh District reflected the usual seasonal decline during Novem- cotton to the extent of hundreds of thousands
Demand for Merchandise in Dallas Federal Reserve
District Steady but Moderate During November.
In summarizing business conditions in the Eleventh
(Dallas) Federal Reserve District, the Federal Reserve Bank
of that place in its Jan. 1 "Monthly Business Review" state
that "a steady though moderate demand for merchandise
in both wholesale and retail channels was in evidence in the
Eleventh District during the past month." The Bank continues:
198
FINANCIAL CHRONICLE
Imports of Raw Silk Increased in 1931-Approximate
Deliveries to American Mills Also Higher for the
Year-December Figures Below Those for Preceding Month.
According to the Silk Association of America,Inc., imports
of raw silk declined from 67,999 bales in November 1931 to
50,617 bales in December 1931. The latter figure also compares with 64,616 bales in the corresponding month in 1930.
Approximate deliveries to American mills totaled 48,432
bales in December 1931 as against 50,645 bales in the preceding month and 55,424 bales in December 1930.
During the calendar year 1931 raw silk imports totaled
605,919 bales, an increase of 56,035 bales, or 10.2% over
the preceding year. Deliveries to American mills amounted
to 594,889 bales, an increase of 12,663 bales, or 2.2%, over
1930. Stocks at warehouses on Dec. 31 1931 were 69,460
bales, as compared with 58,430 bales on Dec. 31 1930 and
67,275 bales on Nov. 30 1931. The Association, in its statement, shows:
RAW SILK IN STORAGE JAN. 1 1932.
As reported by the principal public warehouses in New York City and Hoboken.)
European. Japan.
•
Figures in Bales.
All alter. Total.
In storage, Dec. 1 1931
Imports, month of December 1931 x
2,453
2,420
57,475
45,040
7,347
3,151
67,275
50,617
Total available during December
In storage, Jan. 1 1932 x
4,879
2,272
102,515
60.532
10,498
0,656
117.892
69,460
2.607
41.983
3,842
48,432
Approximate deliveries to American mills
during December 1931 9
SUMMARY.
Imports During Use Month.:
January
February
March
April
May
June
July
August
September
October
November
December
Total
Average monthly
1930.
1929.
1931.
1930.
1929.
49.294
47.827
57,391
29.446
42,264
46,825
37,315
58,411
48.040
70,490
67.999
50,617
43,176
42,234
39,990
37,515
22,596
22,369
47,063
51,147
58,292
65,594
55,293
64.818
58.384
43,278
4.8,103
47,762
49,894
54,031
48,795
65.516
59,970
66,514
62,885
58,479
51,814
45,399
47,407
35.497
32,688
37.352
29,921
41.878
36,099
49,921
67.275
69,460
76,264
88,646
57,773
53,704
35.477
28,450
35,565
44,978
47,621
51,278
49,238
58,430
49.943
46,993
45,218
39.128
39,895
47,425
42.596
48,40 -4
55,104
64.12
76,45
90,772
605.919
50,493
549,884
45.824
681,811
55,134
45,393
50.619
53.839
Approximate Deliveries
to American Mills.y
January
February
March
April
May
June
July
August
September
October
November
December
Storage at End of Month.z
1931.
Approximate Amount of Japan
Silk in Transit Between Japan
and New York End of Month.
1931.
1930.
1929.
1931.
1930.
1929.
55,910
54.242
55.383
41,356
45,073
42,161
44.746
46,454
53,819
56.668
50,645
48,432
57,683
49,852
50,863
41,584
40,823
29,396
39,948
41,734
55.649
61,937
57,333
55,424
57,349
46,228
49,878
53,855
49,121
46.504
51,624
59,704
53,274
57,489
50,562
44,159
37,700
37.700
21,300
24,800
36,900
33,400
41,600
40.500
53,200
59,700
50.800
52,700
37.000
24.000
17,800
8,000
7,700
16.300
31,200
41,700
51,600
46.400
45,500
35,600
31.000
30.000
29.000
30,700
28,000
21.200
34,100
41.600
30,000
49,000
41,000
38,000
594,889 582,226 619,747
Total
30,233
34,383
51.646
40.858
48,519
Average monthly._ 49.574
x Covered by Eu opean manifests 52 o 56, incl. Asiatic manifests 261 to 277,
end of
at
erminals
at
Includes
8
bales
held
ncl. y Includes re-exports. z
month. Stocks in warehouses Include National Raw Silk Exchange certified atorika.
7.100 bales.
(Vol. 134.
return to more unrestrained production, will have no immediate effect, Governor Ross Sterling declared yesterday.
He stated that martial law under his direction would continue
for "at least two weeks" and intimated that he would go to
extremes to continue this form of supervised curtailment
which has met with such success since invocated by him last
summer.
Production leaders declare that if the East Texas martial
rule is continued, crude prices will move upwards by spring.
Prices in Kansas, Oklahoma, north, central and east central
Texas, north Louisiana, Arkansas and similar areas now
range from 520.for below 28 gravity, to 85e.for 40 and above,
with a 3c. differential for the last 13 grades.
Oklahoma City operators a few days ago petitioned the
State Corporation Commission to reduce daily allowable in
that field by 40,000 barrels, making the new allowable output
120,000 barrels per day. They hold that this reduction
would meet the present demand and serve to still further
stabilize the market.
The situation in East Texas is further emphasized by the
fact that about 650 new wells are being drilled, and that
their completion will, within the next few weeks, bring the
total number of producers to nearly 4,400. With this in
mind, it is probable that the present per well allowable of
100 barrels daily will have to be further reduced to restrict
the field's production within its designated limits.
The matter of the suits filed against all of the major companies operating in Texas, charging alleged violations of
anti-trust laws, was featured this week by the announced
failure of State Attorney-General Allred of Texas to obtain
service on the Standard Oil companies of New York, New
Jersey and California, and has placed those companies
temporarily out of the court scene. Allred seeks assessment
of fines against the companies, and their ouster from Texas.
The case, however, faces delay as Allred has already requested postponement until Jan. 18 and it is probable that
at that time the suits will be put off until the next term of
District Court at Austin.
Opening of a new oil area in Texas took place this week
when Victoria County's first oil well was completed. It was
the Texas Company's No. 3 Maaddin, which was drilled
in for a daily flow of 500 barrels of high gravity oil. This is
3 miles east of northern Refugio County, where a new field
was opened several weeks ago.
Price changes follow:
Jan. 8.-Magnolia Petroleum Co., Mid-Continent buying subsidiary for
Socony-Vacuum, adopts gravity basis of purchasing Mid-Continent crude.
Prices of Typical Crudes per Barrel at Wells.
(All gravities where A. P. I. degrees are not shown.)
80.63
81.85 Eldorado, Ark., 40
Bradford. Pa
.68
.80 Rusk, Texas. 40 and over
Corning. Pa
.85
.80 Salt Creek. Wyo.,40 and over
flllools
.60
.75 Darst Creek
Western Kentucky
1.05
Midcontinent, Okla., 40 and above_ .85 Sunburst, Mont
Hutchinson, Texas.40 and over-- .66 Santa Fe Springs, Calif..40 and over .75
.72
Spindietop, Texas, 40 and over-- .79 Huntington, Calif.. 28
.71 Petrolia, Canada
1.76
Winkler, Texas
.ss
Smackover, Ark., 24 and over
REFINED PRODUCTS-GASOLINE MARKETS IMPROVE AS
CURTAILED RUNS TO STILLS SHOW EFFECT-KEROSENE
ACTIVE AT 6 CENTS LEVEL-LOCAL U. S. MOTOR SALES
EASIER.
Childs Reduces Wages.
Gasoline markets throughout the country, with the exThe following is from the New York "Evening Post"
ception of the Eastern seaboard, show a strengthening
of Dec. 31:
of curtailed runs of crudes to stills,
A general reduction in wages and salaries, applying to all employees tendency as a result
and ranging from 10 to 25%, will become effective to-morrow in the Childs reports from the West indicate. The tank car gasoline
Company and its subsidiaries. All wage roll employees will be reduced market in inland Texas and the Mid-Continent shows signs
10% and salary roll employees will receive cuts of from 10% to 25% accordthe cut in refining
ing to the amount of salary being received with the highest paid taking of an upward price movement, based on
operations. It is believed in Tulsa that the bottom for
the most severe reduction.
gasoline prices was reached early this week when U. S.
10% Cut in Salaries Announced By James A. Hearn Motor gasoline, below 57 octane, was moving at 23'c. to
& Co.
2Yic. a gallon, and that despite seasonal declines in consumption the reduced output will more than offset this
The "Wall Street Journal" of Dec. 30 said:
James A. Hearn & Co., effective Jan. 4 1932, will reduce by 10% all influence and support price advances.
salaries above 81,500 annually. Firm also rescinds all scheduled oneIn the New York territory bulk gasoline continues easy,
week winter vacations.
with posted prices unchanged, but with smaller companies
Petroleum and Its Products-Magnolia Adopts Gravity accepting business on U. S. Motor at 5%c. tank car, a full
Basis in Mid-Continent Purchasing-Martial Law cent below the general postings. Some factors believe that
to Continue During January, Sterling Announces the larger distributors will be forced to recognize this competition by lowering posted prices, while others hold that
-One-Day Shutdown Strengthens Crude.
curtailment of crude and refining operations will
continued
The firmer status of the crude oil situation was recognized
this movement. Only one change of importance
counteract
yesterday in the action of the Magnolia Petroleum Co.,
during the week, and this was a cut of le.
announced
was
Soeony-Vacuum,
in
-Continent
buying
Mid
subsidiary of
tank wagon gasoline price in Ashland
the
in
gallon
per
adopting the gravity basis of purchase of crude in their
posted by the Standard Oil Co. of Ohio.
territory. This basis, as compared with the flat price post- County, Ohio,
This reduction brought Ashland County lo. below the Stateings, puts a premium on the better grades.
Sohio ethyl and 18e. for X70,
Hearings at Houston to determine the possible discontinu- wide structure of 21c. for
ance of martial law in the East Texas fields and a consequent service stations.
FINANCIAL CHRONICLE
JAN. 9 1932.1
Chicago reports that continued cold weather has influenced buying considerably and that jobbers are avoiding
heavy commitments at this time. Reports current in that
territory of impending reductions in crude prices were not
sustained, as continued progress is being made in curtailment of output by means of a one-day shutdown each week.
Domestic heating oils are moving into consumption
steadily, with prices on a firm basis. Grade C bunker fuel
oil is more active than it has been for several weeks, and the
price is firm at 60c. a barrel, refinery. Diesel demand is
quiet, but the market holds steady at $1.30 per barrel,
refinery.
Kerosene is now one of the strong corners of the refined
market. Buying is on a large scale, and while there have
been no price changes as yet, it is understood in the trade
that the present 6c. per gallon, tank car, price for 41-43
water white may be advanced shortly.
Price changes follow:
Jan 4.-Standard Oil Co. of Ohio announces lc. reduction in tank
wagon gasoline prices in Ashland County only. New prices at service
stations are lc. below Statewide structure of21c. for Sohio and 18c. for X70.
Gasoline, U. S. Motor, Tank Car Lots, F 0.B. Refinery.
N. Y.(Bayonne)New Orleans,ex4.05-.05%
New YorkStand. 011. N. J-30.0634
Arkansas
Colonial-Beacon.$0.06
.04-.0434
Stand.011, N.Y. 0.0635
.05-.07
Crew Levick-- mg California
Los Angeles, ex_ .04%-.07
TideWater011 Co .06
z Texas
.06
Gulf Ports
.06
Gulf
.05-.0534
Rlehfield011(Cal) .0634
Warner-Quin. Co .0634
Tulsa
046-.05
Continental
.06
Pennsylvania-.
Republic Oil
.06
Pan-Am.Pet.Co. .06
.0534
Shell Eastern Pet .06
$.0336
, -.04
Chicago
z "Texaco" is .07.
Gasoline, Service Station, Tax'Included.
New York
6.18 Kansas City
$.143 Cincinnati
$ 149
Atlanta
.18 Minneapolis
195 Cleveland
162
Baltimore
.19 New Orleans
.159 Denver
118
.131 Philadelphia
Boston
16 Detroit
11
.13 San Francisco
Buffalo
148 Houston
17
19 St. Louis
Chicago
15 Jacksonville
129
Kerosene. 41-43 Water White. Tank Car Lots, F.O.B. Refinery.
N.Y.(Bayonne)3.0534-.06 Chicago
$.0234-.0334 New Orleans, ex-60.0334
LosAng.,ex.. .0434-06 1Tulsa
North Texas
.03
0434-.0334
Fuel Oil, F.O.B. Refinery or Terminal.
I Gulf Coast "C"--$.55-.65
N. Y.(Bayonne)California 27 plus D
Bunker "C"
3.75-1.001 Chicago 18-22 D..4234-.50
6.60
Diesel 28-30 D.__ 1.30 New Orleans "C"- .551
Gas 011, F.O.B. Refinery or Terminal.
N. Y.(Bayonne)'TulsaChicago28 D plus„--$.0334-.04
32-361)Ind__$.0134-.021 32-36 D Ind_ _$.01%-.02
199
those closely connected with it have always generally known of their existence. The report for the week ended Aug. 22 1931 was the first time
that definite statistics had ever been presented covering the amount of
such stocks. The publication of this information is in line with the Institute's policy to collect and publish in the aggregate statistical information
of interest and value to the petroleum industry.
For the purpose of these statistics, which will be issued each week, a bulk
terminal is any installation, the primary function of which is to supply
other smaller installations by tank cars, barges, pipe lines or the longer
haul tank trucks. The smaller installations referred to, the stocks of which
are not included, are those whose primary function is to supply the local
retail trade.
Up to Aug. 22 1931, statistics covering stocks of gasoline east of California reflected stocks held at refineries only, while for the past several years
California gasoline stocks figures have included, and will continue to include, the total inventory of finished gasoline and engine distillate held by
reporting companies wherever located within continental United States,
that is, at refineries, water terminals and all sales distributing stations,
including amounts in transit thereto.
Gasoline at "Bulk Terminals."
Gasoline "in Transit."
Figures End of Week.
Figures End of Week.
District.
Jan, 2
1932.
Dec. 26
1931.
Jan. 3
1931.
Jan. 2
1932.
Dec. 26
1931.
Jan. 3
1931.
East Coast
7,355,000 6,883,000 7,373,000 1,598,000 1,634,000 1,977,000
397,000
Appalachian
317,000
336,000
Ind., Ill., Ky
47,000
2,955,000 2,949,000 1,919,000
654,000
390,000
Okla., Kam., Mo_
18,000
194,000
230,000
216,000
Texas
10,000
426,000
Loulstana-Arkans _
424,000
366,000
16,000
Rocky Mountain _
Total east of Calif. 11,935,000 11,140,000 10,309,000 1,626,000 1,681,000 1,993,000
Texas Gulf
Louisiana Gulf_
204,000
341,000
182,000
318,000
166,000
391,000
18,000
16,000
Weekly Refinery Statistics for the United States.
Reports compiled by the American Petroleum Institute
for the week ended Jan. 2 1932, from companies aggregating
3,665,600 barrels, or 95.2% of the 3,852,000 barrel estimated
daily potential refining capacity of the United States, indicate that 2,207,700 barrels of crude oil were run to stills
daily, and that these same companies had in storage at
refineries at the end of the week 37,989,000 barrels of gasoline and 132,477,000 barrels of gas and fuel oil. Reports
received on the production of gasoline by the cracking
process indicate that companies owning 95.6% of the potential charging capacity of all cracking units manufactured
Imports of Petroleum at Principal United States Ports 3,214,000 barrels of cracked gasoline during the week. The
Higher in December.
complete report for the week ended Jan. 2 1932 follows:
According to figures collected by the American Petroleum CRUDE RUNS TO STILLS, GASOLINE STOCKS AND GAS AND FUEL 011.
Institute, imports of petroleum (crude and refined oils) at
STOCKS, WEEK ENDED JAN. 2 1932.
(Figures In Barrels of 42 Gallons)
the principal ports for the month of December 1931, totaled
7,164,000 barrels, a daily average of 231,097 barrels, comPer Cent
Per Cent
pared with 5,628,000 barrels, a daily average of 187,600
Gas and
Oper.
Crude
Potential
Fuel Oil
of Total aGasoline
Runs to
Capacity
District.
barrels for the month of November 1931. The Institute also
Stocks.
Stocks.
Capacity
Stills.
ReportReport.
ing.
reports as follows:
IMPORTS OF PETROLEUM AT PRINCIPAL UNITED STATES PORTS.
(Barrels of 42 gallons)
Month-
Dec. 1931. Nov. 1931. Oct. 1931.
At Atlantic Coast PortsBaltimore
Boston
New York
Philadelphia
Others
Sept. 1931.
628,000
521,000
3,776,000
981.000
1,062,000
619.000
223,000
2,604,000
668.000
a939,000
1,665,000
449.000
3,124.000
829,000
1,260,000
812,000
218.000
3,159,000
603.000
689.000
Total
Daily average
At Gulf Coast PortsGalveston District
New Orleans & Baton Rouge
Port Arthur .4 Sabine restrict
Tampa
6.968,000
224,774
5,053,000
168,433
7,327.000
236,355
5,481,000
182,700
61,000
135,000
118,000
325.000
91,000
41,000
189,000
213,000
65.000
57,000
145,000
250,000
Total
Daily average
At all United States PortsTotal
Daily rivenurA
196,000
6,323
575,000
19,167
524,000
16,903
395,000
13,166
7,164,000
221 007
5,628,000
157 MIA
7,851,000
9KR OM,
5,876,000
ine 0.0
DISTRIBUTION OF TOTAL IMPORTS.
(Barrels of 42 gallons)
MonthCrude
Gasoline
Gas oil
Fuel oil
Total
Dec. 1931. Nov. 1931. Oct. 1931. Sept. 1931.
4,165,000 83,232,000
834,000
530,000
129,000
92.000
2,036,000 .1,774,000
4.215,000
1,045.000
63,000
2.528,000
2.795,000
1,012.000
24,000
2,045,000
7.164,000
7,851,000
5,876,000
5,628,000
a Revised.
Bulk Terminal Stocks of Gasoline Increase-Gasoline
in Transit Falls Off.
The American Petroleum Institute below presents the
amount of gasoline held by refining companies in bulk terminals and in transit thereto, by Bureau of Mines refining
districts, east of California. The Institute's statement follows:
It should be borne definitely in mind that comparable quantities of gasoline have always existed at similar locations as an integral part of the system
of distribution necessary to deliver gasoline from the points of manufacture
to the ultimate consumer. While it might appear to some that these quantities represent newly found stocks of this product, the industry itself and
100.0
East Coast
91.8
Appalachian
Ind., Illinois, Kentucky 98.9
Okla., ICans., Missouri_ 89.6
91.3
Texas
Louisiana-Arkansas- 98.9
89.4
Rocky Mountain
97.1
California
3,236,000
526,000
2,049,000
1,472,000
3,642,000
1,180,000
222,000
3,127,000
73.0
54.7
67.8
48.3
68.0
73.1
22.0
50.3
4,478.000
1,326,000
4.416.000
3,311,000
7,967.000
1,347,000
1,736,000
13,408,000
8.038,000
1,581.000
5,519.000
4,279,000
11.504,000
4,343,000
737,000
96,476,000
Total week Jan. 2
Daily average
Total week Dee. 26Daily average
95.2
95.2
15,454.000
2,207,700
15,666,000
2,238,000
80.2
37,989,000
132,477,000
61.1
37,199,000
132,541,000
Total.Tan. 3 1931....
Daily average
95.7
14,667,000
2,095,300
58.7
b38.380,000
136,224,000
c Texas Gulf Coast.... 99.8
c Louisiana Gni( Coast 100.0
2,930,000
810.000
78.8
78.4
6.178,000
1.219,000
8,517,000
3,515,000
a In all the refining districts indicated except California, figures in this column
represent gasoline stocks at refineries. In *California they represent the total inventory of finished gasoline and engine distillate held by reporting companies wherever located within continental United States (stocks at refineries, water terminals
and all sales distributing stations, including products in transit thereto). is Revised in Indiana-Illinois district, due to transfer to "bulk terminals" of stocks previously reported as "at refineries." c Included above in table for week ended
Jan. 2 1932.
Note.-All figures follow exactly the present Bureau of Mines' dettnitions. Crude
oil runs to stills include both foreign and domestic crude. In California, stocks of
heavy crude and all grades of fuel oil are included under the heading "gas and fuel
oil stocks."
Natural Gasoline Output Continued to Increase in
November 1931.
According to the United States Bureau of Mines, Department of Commerce, the production of natural gasoline continued to increase in November 1931, when the daily average
output rose to 4,770,000 gallons from 4,530,000 gallons daily
in October. The major part of the gain in outputin November
was recorded in the Oklahoma City and Seminole fields,
which were operated throughout the month, and at Kettleman Hills. Stocks of natural gasoline at plants, which had
declined steadily since April, increased from 21,993,000
gallons on Nov. 1 to 26,924,000 gallons on Nov. 30 1931.
November marked the first month in a considerable period
in which the supply of natural gasoline has exceeded the
demand. The Bureau shows:
.
PRODUCTION OF NATURAL GASOLINE (THOUSANDS OF GALLONS).
Stocks End of Mo.
Production.
Jan.Nov.
1931.
Nov.
1931.
7,600 66,000
1,100
8.900
42,600 406,000
3,100 27,300
44,000 392.900
5,000 49,200
2,500 25,000
5,700 62,800
69,700 620,500
2.203
256
7,071
414
8,070
1,008
237
693
6,972
1,957
243
5,468
422
5,460
868
161
608
6,806
143,000 140,500 181,300 1658600 26,924
4,770
4,530
6,040
4,970
641
3,405
3,345
4,317 39,490
144
114
118
108
21,993
Nov.
1931.
Oct.
1931.
Appalachian
6,100
illinols, Kentucky,Indiana_
900
Oklahoma
36,900
Kansas
2,400
Texas
33,000
Louisiana
4,900
Arkansas
1,900
Rocky Mountain
5,700
California
51,200
6,900
900
31,300
2,400
34,900
4,600
2,000
6,100
52,400
Total
Daily average
Total(thousands of bbls.)
Daily average
[Vol.. 134.
FINANCIAL CHRONICLE
Nov.
1930.
64% of their recorded capacity given above, as compared with 357 refineries operating at 65% of their capacity in October.
SUPPLY AND DEMAND OF ALL OILS.
(Including wax, coke and asphalt In thousands of barrels of 42 U. S. gallons.)
Oct.
1931.
524
New SupplyDomestic production:
Crude petroleum
Daily average
Natural gasoline
Benzol
Total production
Daily average
Imports:
Crude petroleum
Refined products
Total new supply, all oils
Daily average
Increase in stocks, all oils.
Receipts of California Oil at Atlantic and Gulf Coast
Ports Increased in December.
Receipts of California oil (crude and refined) at Atlantic
and Gulf Coast Ports for the month of December, totaled
1,496,000 barrels, a daily average of 48,258 barrels, compared with 1,162,000 barrels, a daily average of 38,733
barrels for the month of November 1931, according to the
American Petroleum Institute, which further reports as
follows:
CALIFORNIA OIL RECEIPTS AT ATLANTIC AND GULF COAST PORTS.
(Barrels of 42 gallons)
MonthAt AUantic Coast PortsBaltimore
Boston
New York
Philadelphia
Others
Total
Daily average
Al Gulf Coast PortsTotal
Daily average
At Atlantic di Gulf Coast PortsTotal
Daily average
Dec. 1931. Nov. 1931. Oct. 1931.
98,000
30,000
697,000
274,000
187,000
Sept. 1931.
684,000
347.000
73,000
35,000
598,000
518,000
289,000
128,000
110.000
388.000
141,000
221,000
1,256,000
40,516
1,061,000
35,367
1,513,000
48,806
988.000
32,933
240,000
7,742
101,000
3,366
103,000
3,323
207,000
6,900
1,496,000
48.258
1,162,000
38.733
1.616,000
52.129
1,195,000
Rolm
Month-
Total
Oct. 1931.
Sept. 1931.
1.161,000
95,000
963,000
95,000
3,000
1,513,000
704,000
284,000
1,256,000
1,061,000
1,513,000
988,000
240,000
101,000
103,000
177.000
30,000
240 rum
ini non
ins non
on, non
67,957
2,265
4,317
187
72,461
2,415
777,101
2,327
39,490
1,796
818,387
2,450
831,039
2,488
48,360
2,506
881,905
2,640
4,106
4,467
42,935
57,402
3,604
2,579
3,939
2,807
35,929
40,179
82,574 84,611 79,735 897,251 979.486
2,752
2,729
2,658
2,686
2,933
--2,762 141,339 a2,504 a49,533 a17,623
DemandTotal demand
Daily average
Exports:
Crude petroleum
Refined products
Domestic demand
Daily average
Excess of daily average domestic
production over domes. demand_
79,812
2,660
90,950
2,934
82,239
2,741
946,784
2,835
997,109
2,985
2,449
8,068
69,295
2,310
2,389
8,057
80,504
2,597
1,765
7.768
72,706
2,424
24,475
92.867
829,442
2,483
22,366
123,066
851,677
2,650
236
b127
b9
b33
90
327,138
135,941
463.079
2,586
153,273
326,106
135.894
462.000
2,577
151,599
373,296
143,725
517,021
2.380
152,473
327,138
135,941
463,079
2,586
153,273
373,296
143,725
517,021
2.380
152,473
Drand total stocks,all oils
618,938 616,176 671,874
•
245
210
Days' supply
233
Bunker oil (included above in do3,794
3,643
mestic demand)
3.062
a Decrease. b Deficiency. c Includes residual fuel oils.
618,938
218
671,874
225
40.269
46,905
Stocks(End of Month)Crude petroleum:
East of California
California c
Total crude
Natural gasoline
Refined products
PRODUCTION OF CRUDE PETROLEUM BY STATES.
(Thousands of barrels of 42 U. S. gallons.)
November 1931.
Total.
Arkansas
California:
Kettleman Hills
Long Beach
Santa Fe Springs
Rest of State
Total California_
Colorado
Illinois
Indiana-Southwestern,.
Northeastern
Total Indiana
Kansas
Kentucky
Louisiana--Gulf Coast_
Rest of State
Total Louisiana_ __ _
Michigan
Montana
New Mexico
New York
Ohio-Central & Eastern
Northwestern
Total Ohio
Oklahoma-Okla. City
Seminole
Rest of State
Total Oklahoma.__.
Pennsylvania
Tennessee
Texas-Gulf Coast
East Texas
West Texas
Rest of State
Total Texas
West Virginia
Wyoming-Salt Creek
Rest of State
Total Wyoming
U. 8. total
October 1931.
1,041
35
1,093
1,800
2,263
1,873
9,062
14,998
115
429
64
60
75
62
303
500
4
14
2
67
3,063
602
932
845
1,777
425
192
1,324
291
322
78
400
5,359
4.538
6,360
16,257
1,072
1
2
102
20
31
28
59
14
6
44
10
10
3
13
179
151
212
542
36
1,856
2,363
1,896
9,537
15,652
143
441
67
3
70
3,122
592
994
902
1,896
406
247
1,335
324
355
96
451
3,631
2,970
7,016
13,617
1,201
3.692
Jan.-Nov. Jan.-Nov,
1931.
1930.a
Daily Av. Total. Daily Av.
_
Ho
12,019
6,021
7,665
29,297
352
664
484
1,148
401
201
255
977
12
22
16
38
3-,633
12,825
6.145
8,373
30,976
415
695
403
1,098
72.851
2.428
73,079
...V
Declines in output were recorded in the majority of the producing fields
In November 1931, but these were compensated by increases in the Oklahoma City and Seminole districts, both of which were allowed to produce
throughout the month. Daily average output in Texas, the leading
producing State, fell from 999,000 barrels in October to 977.000 barrels
in November,largely the result of a decline In the East Texas field. Production in California showed a small decline in November,falling from 505,000
barrels daily in October to 500,000 barrels daily In November.
The trend in crude storage was reversed in November 1931, when there
was a net increase in stocks, the first since February 1930. Total stocks
of crude petroleum, including fuel oil in California, rose from 462,000,000
barrels on hand Nov. 1 to 463,079,000 barrels Nov. 30. The major portion
of this gain In stocks occurred in the Mid-Continent district.
Daily average runs to stills of crude petroleum In November 1931
amounted to 2,379.000 barrels, compared with an average of 2,441,000
barrels In October and with 2,344,000 barrels a year ago.
Production of motor fuel continued to decline and amounted to 1,205,000
barrels daily in November, compared with a daily average of 1,245,000
barrels in October. Imports of gasoline in November amounted to approximately half the October total. Daily average exports of motor fuel
increased, the first gain since July. The indicated domestic demand for
motor fuel in November totaled 30,640,000 barrels, a daily average of
1,021,000 barrels. This compares with a daily average of 1,131,000
barrels the previous month and is less than 1% below the daily average of
November a year ago. Stocks of motor fuel on Nov. 30 amounted to
38,696,000 barrels, a gain of 2,340,000 barrels during the month. At the
current rate of domestic demand, these stocks represent 34 days' supply,
compared with 29 days' supply on hand a month ago and 34 days' supply
on hand a year ago.
The refinery data of this report were compiled from schedules of 357
refineries, with an aggregate daily recorded crude-oil capacity of 3,745,660
barrels, covering, as far as the Bureau is able to determine, all operations
during November 1931. These refineries operated during November at
73,079
2,357
3,345
142
76,566
2,470
.
Production of Crude Petroleum in the United States
in November 1931 Showed an Increase of 4,894,000
Barrels Over the Same Month in the Preceding
Year-Inventories Higher.
According to reports received by the Bureau of Mines,
Department of Commerce,the production of crude petroleum
in the United States during November 1931 amounted to
72,851,000 barrels, a daily average of 2,428,000 barrels.
Compared with October, this represents a decline in total
output, but a gain of 71,000 barrels in daily average production. The Bureau further goes on to say:
72,851
2,428
3,405
135
76,391
2,546
.
Total
At Gulf Coast PortsGasoline
Kerosene
Dec. 1931. Nov. 1931.
Nov.
1930.
•
At Atlantic Coast PortsGasoline
Fuel oil ___________
Lubricants
Oct.
1931.
MN
DISTRIBUTION OF TOTAL CALIFORNIA OIL RECEIPTS.
(Barrels of 42 gallons)
Jan-Nov. Jan-Nov.
1930.
1931.
Nov.
1931.
2.357
.
I..
0
. 8.Vtlas
...V.PIA
.N.
V.... .
0004.4...0P. 000..P.00001000.00.
IP...V.V. CO
-0-4.,
-.014.
00.
00 olboi.DeRiz'
0-0
cob-ooblo-oWb.
..-cbW...-4
.4.
0.
W"
00.....0000 010............P.O.WWVN.V00. V
1001000000000100.......00010010...000100.P....... .
200
101,113
111,976
269.499
4,689
9.672
6,777
16,449
777,101
831,039
18,159
5.497
33,686
41.588
128,822
209,593
1,518
5,330
783
50
923
38,439
6.848
7,791
13,351
21,142
3,644
3,071
8,971
3,385
4,766
1,216
5,982
31,994
62,084
107,402
201,480
11,891
19
56,410
a Includes Alaska and Utah.
NUMBER OF WELLS COMPLETED IN THE UNITED STATES.a
November
1931.
Oil
Gas
Dry
874
161
253
October
1931,
705
142
199
November
1930.
657
231
494
Jan.-Nov.
1931.
6.004
1,798
3,430
Jan.-Nov.
1930.
11,100
2.591
6,249
Total
19.040
1.288
1.046
1.382
11.232
a From "Oil ev Gas Journal" and California office of the American Petroleum
Institute.
Crude Oil Output in the United States Falls Off During
the Week Ended Jan. 2 1931, But Continues
Higher Than in Corresponding Period a Year Ago,
The American Petroleum Institute estimates that the
daily average gross crude oil production in the United States
for the week ended Jan. 2 1932, was 2,209,100 barrels, as
compared with 2,292,900 barrels for the preceding week, a
decrease of 83,800 barrels. Compared with the output for
the week ended Jan. 3 1931 of 2,082,100 barrels daily, the
current figure represents an increase of 127,000 barrels per
day. The daily average production East of California for
the week ended Jan. 2 1932 was 1,709,400 barrels, as compared with 1,793,300 barrels for the preceding week, a decrease of 83,900 barrels. The following are estimates of
daily average gross production, by districts:
JAN. 9 1932.]
FINANCIAL CHRONICLE
DAILY AVERAGE PRODUCTION (FIGURES IN BARRELS).
Weeks Ended—
Jan. 2'32. Dec.26 '31. Dec. 19'31. Jan. 3 '31.
Oklahoma
493,300
534,950
545,350
448,900
Kansas
103,150
• 105.550
107.800
108.300
Panhandle Texas
49,800
51.750
52.600
54,000
North Texas
50.050
54.350
55.500
58.300
West Central Texas
24.150
26.250
26.600
28.000
West Texas
172,950
175.600
197.500
235,850
East Central Texas
50.950
50.300
56.850
40.850
East Texas
290,900
318.000
307.050
Southwest Texas
52,100
55,200
58.250
77.300
North Louisiana
27.800
27,550
27.900
41.750
Arkansas
33.700
33.050
34.250
49,750
Coastal Texas
114.700
115.700
120.000
158,400
Coastal Louisiana
29,850
29.700
33.650
27.850
Eastern (not incl. Michigan).—
107,950
108.250
110,050
103,750
Michigan
17,100
16,250
14,150
9.550
Wyoming
37.350
37.800
38.350
48.550
Montana
6,500
7.800
7.800
7.600
Colorado
3.850
4,000
3,950
4.150
New Mexico
43,250
43,250
43.500
41.750
California
499,700
499,600
509.200
537,500
Total
2.209.100 2.292,900 2.430,300 2,082,100
The estimated daily average gross production for the Mid-C
ontinent
Field, including Oklahoma, Kansas, Panhandle. North.
West Central,
West, East Central, East and Southwest Texas, North
Louisiana and
Arkansas, for the week ending Jan. 2 1932 was 1.348.850
barrels, as compared with 1,430,550 barrels for the preceding week, a
decrease of 81.700
barrels. The Mid-Continent production, excluding Smackover
(Arkansas)
heavy oil, was 1.325,900 barrels, as compared with
1.408,750 barrels, a
decrease of 82,850 barrels.
The production figures of certain pools in the various
districts for the
current week, compared with the previous week, in
barrels of 42 gallons,
follow:
—Week Ended—
—Week Ended—
Oklahoma—
Jan. 2. Dec.26
Southwest Texas—
Jan. 2. Dec.26.
Bowlegs
12.850 14,050 Chapmann-Abbot
1,800 1,800
Bristow-Slick
11.900 11,800 Darst Creek
14,050 17,250
Burbank
11.800 11,800 Luling
7,350 7.400
Carr City
21.700 22.050 Salt Flat
8.650 8,400
Earlabor°
14,550 16,350
North Louisiana—
East Earisboro
16,000 16.050 Sarepta-Carterville
800
800
South Earisboro
5.800 5,200 Zwolle
5,100 4,750
Konawa
6.600 6,400
Arkansas—
Little River
19,900 20.800 Smackover, light
3.000 2,900
East Little River
2,300 2,350 Smackover, heavy
22.950 21.800
Maud
1.950 1.900
Coastal Texas—
Mission
7.300 9,500 Barbers Hill
19.000 20,100
Oklahoma City
137.150 171,050 Raccoon Bend
4.800 4.700
St. Louis
19.850 20,000 Refugio County
13,300 14,150
&aright
3.650 4,000 Sugarland
9,600
9.500
Seminole
12,850 12,650
Coastal Louisiana—
East Seminole
1.200 1,350 East Hackberry
7,400 6,900
Kansas—
Old Ilackberry
600
600
Ritz
13,650 16,700
Wyomtng—
Beigwiek County
16,650 15,650 Salt Creek
21.750 21,950
Voshell
9,950 10,150
Montana—
Panhandle Texas—
Kevin-Sunburst
3,350 4.800
Gray County
32,250 33,050
New Mexico—
Hutchinson County
10,950 11,450 Hobbs High
37.200 37,200
North Texas—
Balance Lea County
4,000 4,000
Archer County
11,200 11,700
California—
North Young County.., 6,400 6,800 Elwood-Goleta
16,600 16.000
Wilbarger County
10,000 11.400 Huntington Beach
23,000 22,700
West Central Texas—
Inglewood
13,600 13,600
South Young County-- 8,700 4,500 Kettleman Hills
58,700 59,500
West Texas—
Long Beach
76.000 76,800
Crane and Upton Cos— 19,500 19,650 Midway Sunset
48,200 49,300
Ector County
5,500 5,550 Playa Del Rey
22,000 22,000
Howard County
22.400 23.400 Santa Fe Sprit=
64,400 63.000
Reagan County
23.800 24.800 Seal Beach
13,000 13,000
Winkler County
32,000 32,000 Ventura Avenue
42.300 41,500
Yates
56,800 56,900
Balance Pecos County.. 1,800
1,900
Pennsylvania Grade—
East Central Texas—
Allegany
9,050 7,600
Van Zandt County
44,350 43,700 Bradford
26,900 26,650
East Texas—
Kane to Butler
6,850 6,950
Busk County—Joiner-- 97,700 106.500 Southeastern Ohio
5,650 6,150
Kilgore
92,100 104,450 Southwestern
Gregg Co.—LongvIew 101,100 105,050 West Virginia Penns-- 3,350 3.150
12,650 13,250
Export Pact Lifts Price of Copper—Quotation of 73%
Cents a Pound Accelerates Volume of Shipping
Demand.
From the New York "Evening Post" of last night (Jan. 8)
we take the following:
Approval by directors of Copper Exporters,
Inc., of revised marketing
rules resulted to-day in strengthening of domestic
prices for the red metal,
marketers lifting quotations to 7Si cents a pound
from
In the export division, sales of copper this morning 7 Si.
registered improvement, with estimates placing total engaged for
shipment abroad so far today at close to 1.200,000 pounds, at 73ic. a pound. c.i.f.,
European ports.
Directors of Copper Exporters approved the new
regulations yesterday
and a meeting of members
the organization was called for this
afternoon
to pass on the changes. After members have approved,
the regulations will
be filed with the Federal Trade Commission.
The most important changes are understood to
be provision that the
export price must be based on the domestic
price established by actual
sales of custom smelters, allowing individual members
to sell copper abroad
below Copper Exporters' price at their wish and
inclusion of fire-refined
copper under control of Copper Exporters along
with electrolytic.
For several months last summer and fall, the export
price of copper was
above parity with the domestic quotation. That
led to dissatisfaction and
a demand for a change in Copper Exporters' practices
in fixing the foreign
price.
Cables on the copper curtailment agreement, which
became effective
Jan. 1,say London understands there will be less than
half a cent difference
in the price of copper anywhere in the world at a given
moment and that
efforts to extend uses and increase consumption of copper
will be redoubled.
In connection with the agreement, the mill of Mufulira
Copper Mines.
Ltd., in South Africa, with a capacity of 80,000,000
pounds a year, will not
go into operation for about a year. Meanwhile
, Roan Antelope will produce about two-thirds of Mufullra's quota, and
Rhokana the rest. Overhead expenses will be saved through that arrangement.
Mufullra is nearly
two-thirds owned by Rhodesian Selection
Trust and nearly one-third by
Rhokana Corporation.
a
The Non-Ferrous Metals.
The year 1932 was started during the current market
week, but sellers of metals noticed no change in consumptive
demand, reports "Metal and Minerals Markets.
" All the
non-ferrous metal markets were extremel
y dull. Copper
producers continued to quote their metal
at 73c., delivered
201
Connecticut, in spite of the lack of buying interest. The
custom smelters are under no particular pressure to sell and
the price seems steady.
Lead sales, though small, were all put through at
unchanged prices.
Zinc, tin, and silver prices eased off somewhat, the
last-named dropping
below the 30c. level. Among the minor metals, the only
change in price
was a drop of about Sic. to a 6c. basis for antimony.
Quicksilver may
still be had in round lots for $65 a flask.
Even though demand for copper at 7Sic. a pound, delivered
Connecticut,
seems virtually non-existent, sellers are convinced that nothing
is to be
gained for the present by cutting prices and are uniformly
maintaining
the level established more than two weeks ago. The custom smelters,
who,
In the past, have been the first to cut prices because of the
necessity for
disposing of their output, appear as anxious as the larger producers
to see
the price remain firm. This is particularly true as they are likely to obtain
priority in the foreign market through the new marketing policy of copper
exporters, now being arranged. In fact, since the first of the
year they
have actually obtained such priority.
Details of the new marketing policy have not yet been completed,
and
meetings of the leading proders are still being held regularly. However,
there seems little doubt that the custom smelters will be given every chance
to dispose o'their intake and thus take the pressure off the domestic market.
It is believed that about 12,000 tons of copper monthly represents the
present custom intake and, since both domestic and foreign markets will .
now be available to absorb this total, it should no longer be so important
a factor In determining the price as It has been in the past.
Production and Shipments of Slab Zinc Declinea
During 1931.
According to the American Zinc Institute, Inc., production of slab zinc during the month of December 1931
totaled 21,965 short tons. This compares with 20,526 tons
produced during the preceding month and 32,733 tons in the
corresponding month in 1930. Shipments amounted to
23,005 tons of slab zinc during December 1931, as against
34,254 tons in the same month in the previous year and
20,327 tons in November.1931.
Production of slab zinc in the calendar year 1931 totaled
301,073 short tons, as compared with 504,463 tons in the
preceding year and 631,601 tons in 1929.Shipments amounted
to 314,866 short tons in 1931 as against 436,275 tons in 1930
and 602,601 tons in 1929. The Institute's statement follows:
SLAB ZINC STATISTICS(ALL GRADES 1929, 1930 & 1931 (Tons of
Produced
During
Month.
Shipped
During
Month.
50,862
48,057
55.107
55,203
57,475
52.532
54,447
55.708
51,994
54.513
48.411
47,292
50,234
52.395
58,463
58.334
58,226
49,182
47.943
51,980
47,202
48,777
43,148
36,717
Total
1930.
January
February
March
April
May
June
July
August
September
October
November
December
631,601
602,601
52,010
44.628
48,119
44.435
44,556
43,458
40,023
41,012
40,470
40,922
32,097
32,733
40,704
41,296
41,820
40,597
38,681
36,448
35.389
31,901
32,470
32,430
30,285
34,254
Total
1931.
January
February
March
April
May
June
July
August
September
October
November
December
504.463
436,275
32,522
29,562
30,328
29.137
25,688
23.483
21,365
21,467
21,356
21.674
20,526
21,965
31,064
30.249
35.224
27,418
25,851
27.604
28,460
23,599
20,902
21,163
20,327
23,005
Month.
1929.
January
February
March
April
May
June
July
August
September
October
November
December
2.0001lisa
Retorts Unfilled
Stock at z Ship- Operarg Orders Daily
End of ped for End of End of Aver.
Month. Export. Month. Month. PTO&
47,058
42.720
39,364
86.233
85,482
88.832
45,338
49,064
53.856
59.592
64,855
75,430
1,551
1,014
1.025
1.227
690
235
185
185
123
67
39
11
63,698
68,127
68.015
70,455
70,533
69,703
69.911
59,408
69.468
67,636
58,723
57,999
58.726
59,610
79.995
55.571
42,883
36.127
32,031
24,283
20.270
14,844
11,872
18.585
1,641
1.716
1,778
1,840
1,854
1.751
1.756
1.797
1.733
1,758
1.614
1.526
59,457
57,929
51,300
50,038
52,072
52,428
46.030
50.404
44,974
41,004
37,492
33,640
39.017
32,962
29,330
29.203
30,515
28.979
34,135
28.972
27,108
29,510
24,481
26,651
1,678
1,594
1,552
1.481
1,437
1,449
1,291
1.323
1.349
1.320
1,070
1,056
85.635
35.518
34.221
29,072
23,024
21.422
21,666
721,705
22.817
23.774
21,828
22.275
30,251
33,453
31,216
36.150
31,146
33,086
24,815
20,503
15,388
18.365
21.155
18,273
1.049
1.056
1.043
971
829
783
689
692
712
699
684
709
6,352
86,736
90,068
96.367
100,205
106,080
113,090
117,724
126,835
134.835
143,327
145,139
143,618
20
6
17
26
31
37
31
17
11
0
0
0
196
145,076
144,389
141,493
143.212
143,049
138,928
131,833
129.701
130.155
130,666
130,865
129.825
1
2
2
mt..'
sol Iws nie. nes
11 le 272
x Export shipments are included in total shipments. y One company's
retorts
estimated.
Accedes Retorts Operating During the Last Nine Months.
Dec.
Nov.
Oct.
Sept.
Aug.
July. June, May. April.
1931 __20,623 20,645 22,209 22,512 20,640 20,320 22,298 23,032
1930 ...35,190 35,825 43,745 47,415 48,575 44.646 52.440 52,004 29.105
50,261
Note.—The foregoing figures have been adjusted to include a number of corrections
made by slab zinc producers in their reports as originally submitted to the
Institute.
The corrections were made to insure uniformity in the method of
reporting and
particularly to include in -Stock on Hand" all slab zinc at the
reporting plants,
regardless of whether sold or unsold.
Steel Ingot Production Lowest Since August, 1921.
The American Iron & Steel Institute in its latest monthly
report of steel ingot production estimates the output of all
companies during December at only 1,302,399 tons,
which
is 291,285 tons less than in the previous month, when
the
production was placed at 1,593,684. In December
1930,
1,979,547 tons were produced. The output for the
year
1931 was 24,900,195 tons, as compared with
39,286,287
tons in 1930 and 54,312,279 tons in 1929.
Average daily
output in December 1931, in which month there were 26
working days, was 50,092 tons, while in December 1930,
with the same number of working days, production averaged
76,136 tons. For the 25 working days in November 1931,
daily output approximated 63,747 tons.
The figures for December 1931 are the lowest since August
1921, when the monthly production totaled 1,300,199 tons
and the average daily output was 48,156 tons.
Below we show the statement given out by the Institute,
which contains the monthly figures back to January 1930:
MONTHLY PRODUCTION OF STEEL INGOTS, JANUARY 1930 TO
DECEMBER 1931-GROSS TONS.
Reported by companies which made 95.21% of the open-hearth and Bessemer
steel Ingot production In 1930.
Months.
OpenHearth.
1930.
Jan
Feb
March__
April
May
June
July
August-._
Sept
Oct.
Nov
Dec
Total
1931.
Jan
Feb
N.arch
April
May
June
July
August.__
Sept
Dct
Nov
Dec
[VoL. 134.
FINANCIAL CHRONICLE
202
Calculated No.of
Monthly
Monthly Work(Wool
Bessemer. Companies Output AU ing
Reporting. Companies. Days
Approx. Per
Cent.
Daily
Output OperaAll Cos. tion.a
27
24
28
26
27
25
26
26
26
27
25
26
139.935
168,130
163,628
158.057
147.515
138.741
112,393
117.722
109.245
99.724
88.489
76,136
69.89
83.98
81.73
78.95
73.68
68.30
58.14
58.80
54.56
49.81
44.20
38.03
32.405,466 5.020.588 37,426.054 39,286,287 311
126.322
63.09
27
24
26
28
26
26
26
26
26
27
25
26
91.063
104.265
115.138
104.711
96.365
79.843
72,544
66.133
59.523
58,977
63,747
50.092
42.86
49.08
54.20
49.29
45 38
37.58
34.15
31.13
28.02
27.76
3001
23.58
3,157.761
3.335.428
3,513,269
3.405.671
3,265.353
2.849.079
2,430,128
2,541,367
2.275,910
2,165.341
1,807.133
1,659.026
2.044.298
2.08.5,529
2,504.060
2.275.404
2.083.833
1.730.109
1.570.776
1.462.720
1.274,321
1,320.158
1,278,906
1,069,468
441,572
5i18.618
539.616
509.234
528,968
407.588
353.723
374.467
429.975
399.704
300.337
226,788
296.620
296.974
346.137
316,668
301.639
246.365
225.030
174.380
199,151
195.943
240,441
170,546
3,599,333
3.844,046
4,052.885
3.914.905
3.794.321
3.256.665
2.783.851
2.915.834
2,705.885
2,565.045
2.107.470
1.885,814
2,340.918
2,382.503
2,850.197
2,592.072
2.385.472
1.976.474
1,795.806
1,637,100
1,473.472
1,516.101
1.517.347
1,240,014
3.778.235
4.035.111
4.254.331
4.109.492
3,982.915
3.418.535
2,922.220
3.060.763
2.840.379
2,692.539
2.212,220
1,979,547
2,458.689
2.502.366
2.993.590
2.722.479
2,505,485
2.075.910
1.886.153
1.719,462
1,547,602
1,592,376
1,593.684
1,302,399
80.065 37.60
Tata] __ 20.897.582 3.009.804 23.707.476 24.900.195 311
the anauat capacity
a The figures oi -per cent of operation' In 1930 are based on
steel
and
open-hearth
1929, o 62.265.670 gross tons for Bessemer
as of Dec. 311931
are based on the annual capacity as of Dec.31 1930, of 66,089,570
ingots. and In
Ingots.
steel
open-hearth
and
gross tons for Bessemer
Steel Output Improves Slowly-New All-Time Low
Price for Steel Scrap.
has recovered slightly from the low
production
ingot
Steel
point of the last two weeks of December,now being estimated
at 24%, reports the "Iron Age" of Jan. 7. In the corresponding week of 1931 the rate was 41%. The "Age" also
states:
The Pittsburgh and Chicago districts are only at 20%, but Cleveland
continues at 32%. the Wheeling rate has risen sharply to 40%, and the
Birmingham district, aided by the resumption of the Ensley rail mill, is at
50%. A minor improvement has occurred in eastern Pennsylvania.
Year-end orders for January shipment were meager, steel companies
having accumulated scarcely any backlogs. An unsettled price situation,
coupled with discouraging fundamental conditions, has contributed in
in
no small measure to hesitancy among steel consumers and distributers
placing January replenishment orders.
Notwithstanding the slow start of the new year, it is expected that steel
operations will continue to gain moderately during January, with the possibility that February will reflect the usual seasonal rise more than this
month.
Automobile and farm machinery manufacturers are increasing their
schedules gradually and men are being called back to railroad shops for
repair work, while industry generally has existed so long on a starvation
basis that some buying for stock is held to be a possibility if price declines
are checked.
Whether price strengthening can be brought about in advance of a gain
mills are making
in volume of business remains to be seen, but Chicago
stand for 1.70c. a lb. on
a move in that direction, having taken a firm
that have recently
plates, shapes and bars, a $2 a ton increase over prices
on Tuesday anrepresented sales in that district. The Illinois Steel Co.
ad Steel Co. last
nounced the higher price, following like action by that
on some grades
quotations
their
stiffened
week. Sheet makers have also
in that territory.
Meanwhile, further concessions of $2 a ton on automobile body sheets
weakened
have been made, and cold-rolled strip steel and fender stock have
at Pittsburgh and Cleveland.
what is already
Pig iron production figures for December add emphasis to
average
known of the sharp curtailment in activity last month. The daily
low records
of 31,625 tons and the month's total of 980,376 tons make new
output
daily
the
1921,
for the past 10 years. Excepting July and August,
was the smallest since November 1900.
service
Furnaces in blast on Jan. 1 were 56, a net loss of 11 from the 67 in
at the beginning of December. The year-end figure is by far the lowest
of
summer
the
of this century and probably below that of any time since
1894. The 56 furnaces active on Jan. 1 were making iron at a rate of29,365
tons a day, compared with 35,810 tons on Dec. 1. Several furnaces that
were banked last month are, however, scheduled to resume production
shortly.
December output of automobiles in the United States and Canada was
about 110.000 units, a gain of about 40,000 over that of November. A
further increase to between 125.000 and 150.000 is indicated for January,
with the first quarter estimated at 500,000 to 550,000 units, against
697,449 in the corresponding period last year. Ford Is not expected to
attain volume production of the new eight-cylinder model until February.
Building construction, as reflected by structural steel lettings, is at the
between-seasons low point. Only 6,000 tons was awarded in the week,
and new inquiries were negligible. Considerable work, however, Is pending
on which action is expected soon, as, for example, 22,000 tons at Chicago.
Steel companies will make formal protest to the railroads regarding the
new freight rates effective Jan.4. Confusion has resulted from the advances
on finished steel, which produce unwieldy fractions sometimes running into
four decimals, such, for example, as the rate from Bethlehem, Pa., to New
York, which becomes 1.6775c. a lb. On pig iron the rate was fixed at 12c.
a net ton, whereas that commodity is sold in gross tons, making the charge
13.44c, a ton on that basis. The Ohio Railway Commission has already
ruled that 12c. a gross ton shall apply on intrastate shipments, and an effort
will be made toward the adoption of the same ruling on inter-State movemoms.
A further objection of the steel companies is on the iron ore rate, which
originally was $3 maximum per car, but on request of the carriers was
changed by the I.-S. C. Commission to 6c. a net ton. As the average ore
shipment is 65 gross tons, the increase that will be levied is a great deal
more than was contemplated in the original decision of the Commission.
Heavy melting steel scrap has made another all-time low, the "Iron Age"
composite price having declined to $8.47 from $8.50 a week ago. A comparative table shows:
Finished Steel.
Based on steel bars, beams, tank plates.
Jan. 4 1932, 2.052e. a Lb.
2.0520.1wire, rails, black pipe and sheets.
One week ago
.
2.0950. These products make 87% of the
One month ago
2.1210,1 United States output.
One year ago
High.
Low.
2.052e. Deo. 29
2.1420. Jan. 13
2.121e. Dee. 5
2.3620. Jan, 7
2.362c. Oct. 25
2 412o. Apr. 2
2.314c, Jan. 3
2.391e. Dec. 11
2.293e. Oct. 25
2.453c. Jan. 4
2.403c. May 18
2.453e. Jan. 5
2.3960, Aug. 18
2.560e, Jan. 6
Pig Iron.
Based on average of basic iron at Valley
Jan. 4 1932, 114.79 a Gross Ton.
$14,791 furnace and foundry Irons at Chicago
One week ago
14.961 Philadelphia, Buffalo, Valley and 131rOne month ago
15.901 mInghara.
One year ago
Low.
High.
$14.79 Dee. 15
515.90 Jan. 6
1931
7
Deo, 16
Jan.
15.90
18.21
1930
18.21 Dee. 17
18.71 May 14
1929
17.04 July 24
18.59 Nov.27
1928
17.54 Nov. 1
19.71 Jan. 4
1927
19.46 July 13
21.54 Jan. 5
1926
18.96 July 7
22.60 Jan, 13
1923
1931
1930
1929
1928
1927
1926
1925
Steel Scrap.
iBased on heavy melting steel quoJan. 4 1932. $8.47 a Gross Ton.
$8.30 tenons at Pittsburgh. Philadelphia
One week ago
One month ago
One year 940
8.68J
11.33
and Chicago.
Mob.
1931
1930
1929
1928
1927
1926
1025
$11.33
15.00
17.58
18.50
15.25
17.25
20.83
Jan. 6
Feb. 18
Jan. 29
Dee. 31
Jan. 11
Jan. 5
Jan. 13
Low.
$8.50
11.25
14.08
13.08
13.08
14.00
15.08
Dee. 29
Dec. 9
Dee. 3
July 2
Nov.22
June 1
May 2
Iron and steel markets are emerging from the holiday lull
without any measurable clarification in demand or prices,
says "Steel," of Jan. 4. The automotive industry is awaiting the verdict of the January shows; railroads are withholding track material releases pending a decision on wages;
building activity is good, considering the season, but pipe
business is being deferred by the formulation of municipal
budgets and financing for projected long-distance lines.
"Steel" further adds:
Steelworks operations have snapped back practically to the level prior
to the Christmas shutdown, raning between 20 and 24% in the week
ended Jan. 2, compared with 15-20% in the week ended Doc. 26. A
further slight gain is indicated for the week beginning Jan. 4, but rarely
have steel producers entered a first quarter with so little tangible business
on books. In few instances have consumers anticipated requirements to
forestall increases in freight rates effective Jan. 4.
Because prices are unsettled and buyers are disposed to wait. producers
are not pressing for contracts. Further weakness has developed in semifinished steel; in galvanized and No. 10 blue annealed sheets; in hot-strip
and hot-rolled steel bars, and in pig iron at Buffalo. "Steel's" single
price composite, therefore, is down 20 cents to $29.96, and the finished
However, definite measures to
stabilize steel prices now are being undertaken.
Concrete reinforcing bar awards are unusually heavy at 13.600 tons, due
to an award of 9.000 tons by Minnesota for highway work,to the Minnesota
Steel Co. Structural steel awards for the week total 17.100 tons, compared with 45,520 tons a week ago. It now develops the 70.000 boxes of
tin plate to be purchased by an American packer for delivery in Argentina
may be placed with an American mill. The Erie railroad has definitely
inquired for 1932 rail requirements, estimated at 40,000 tons.
Climaxing an unsatisfactory year, an estimate of pig-iron production for
December places the daily rate at 31,694 gross tons, a decline of 13.7%
from 36,727 tons in November. Output of coke pig iron for 1931 totals
18,265,155 tons, contrasted with 31,441,488 tons in 1930. A net loss
of 10 stacks leaves only 57 in blast Dec. 31, a smaller number than at the
bottom of the depression in 1921.
steel Composite is off 40 cents to $47.12.
Since the beginning of the current week there have been
resumptions of steel operations in various districts which
should result in a rather good gain for the current week,
unless there are some shut-downs between now and next
Monday (Jan. 11), and these are not looked for, stated the
"Wall Street Journal" of Jan. 6, which also went on to say:
still was under the
Steel ingot production during the week ended Jan. 4
day beholiday influence, as many companies curtailed over New Year's
to the compilaAccording
factors.
cause of Inventory taking and other
was slightly under 22% of
tion of Dow, Jones & Co., Inc., the average
fraction above 20% in the preceding
theoretical capacity, compared with a
ago,the final full period
weeks
and a shade below 24% two
Christmas week,
for operations.
a larger gain than U. S. Steel,
Independent steel companies recorded
contrasted with 183,5% in the previous
and are estimated at about 213i%,
shows a fractional increase to
Steel
U. S.
week and 23% two weeks ago.
22% in the week before, and 25% two weeks
a shade above 22% against
ago.
ago, the average was 36%. with U. S.
In the corresponding week a year
32%. For the like period of 1930
Steel at 41% and independents around
being nearly 61% and independents
the average was 59%, U. S. Steel
average was nearly 84%, with U. S.
58%. In the first week of 1929 the
above 81%, while in the similar
Steel at 87% and independents slightly
was
about 70%, U. S. Steel showing a range of
week of 1928 the average
73% to 75%,with independents at 67% to 68%•
JAN. 9 1932.]
FINANCIAL CHRONICLE
December Output of Pig Iron Makes
New Low Record
for Past Ten Years.
Production of coke pig iron in December
1931 amounted
to 980,376 gross tons, an average of 31,625
tons daily, according to returns gathered by telegraph
and telephone by
the "Iron Age." This compares with
1,103,472 tons in
November and a daily average of 36,7
82 tons. The "Age"
further goes on to say:
Both the daily average and the
month's total make new low recor
ds for
the past ten years. The most
recent lower totals were those for
August
1921 at 954,193 tons for the month
and a daily average of
30,78
0 tons.
Except for Aug St aril July 1921.
it Is necessary to go back to
November
1900 to find a lower average daily rate.
Furnaces In operation Dec. 1,
at 67, were already lower than the
number
of stacks in blast at the botto
m of the 1921 depression, that
being 69 on
Aug. 1. A net December loss
of 11 furnaces, however, has now
reduced
the figure to 56. which is by far the
lowest of the 20th Century,and
probably
below that of any time since
the summer of 1894. The 56 furna
ces now
blowing are making iron at
a daily rate of 29,365 tons, compa
red
with
35,810 tons a month earlier for
67 furnaces.
Three furnaces were blown
in during December and 14 were blown
out.
All three furnaces going into
action were United States Steel
Corp. stacks;
that corporation put four furna
ces out. Independent steel companies
lost
eight furnaces with none going in,
and two merchant stacks went out
none in. The three furna
and
ces going in include No. 1 at the Clairt
on plant
of the Carnegie Steel Co.
in the Pittsburgh district, and Nos.
3 and 6 of
the Tennessee company at the Ensle
y plant In Alabama.
PRODUCTION OF COKE PIG IRON
AND OF FERROMANGANESE.
(Gross Tons.)
Pig Iron.1
January
February
March
April
May
June
Half year
J1113,
August
September
9 months
October
November
December
Ferr°manganese.3,
1930.
1931.
1930.
1931.
2.827,464
2.838,920
3,246.171
3,181,868
3,232,760
2,934,129
1,714,266
1,706,621
2.032,248
2,019,529
1,994,082
1,638,827
27.260
21,310
23.345
27,777
30,296
27.327
14,251
19.480
27.899
25,458
23,959
11,243
18.261,312
2,639.537
2,523,921
2,278,770
11,105,373
1,463,220
1,280,526
1,168,915
157,325
17.728
20.909
21,181
122,288
17.778
12.482
14,393
25,701.540
2,164,768
1.867,107
1,665,690
15,018.034
1.173.283
I.103 472
980,376
217,143
24,480
18.619
16,288
166.939
14,739
14.705
15,732
Year
31,399,105 18,275,165
276,530 212.115
These totals do not Include charcoal
pig iron The 1930 production of this iron
was 96,580 gross tons. 3,Includ
ed In pig iron figures.
DAILY RATE OF PIG IRON PROD
UCTION BY MONTHS-GROSS TONS
.
Steel
MerWorks chants.* Total.
Steel
MerWorks. chcogs.. Total.
25,514 111,044
July
66,949 18,197 85,148
25,261 114.507
August_. 64,857 16,560 81,417
24,361 119,822
Septemb'r 82,342 13,548 75.890
26,407 122,087
October _ 57,788 12,043 69,831
25.571 125,745
IsTovemb'r 49,730 12.507 82,237
23,915 123,908
December
11,780 53,732
24,056 122,100 1931-January. 40,952
45.883 9,416 55,299
22,251 121,151
February 49,618 11,332 60,950
21,159 116.585
March __ 54,975 11,481 65.556
22,101 115,74
April____ 53,878 13,439 67.317
22,771 106,047
May ____ 51.113 13,212 64,321
23,361 91.513
June ____ 43.412 11.209 54,621
19,762 91,209
July ____ 35.189 12,012 47.201
19.810 101,390
August.. 31,739 9,569 41,308
20,815 104,71.
Septemb'r 29.979 8,985 38,964
20,573 106,062
October. 30,797 7,051 37,848
19,973 104,283
Novemb'r 31.024 5.758 36,781
10 021 0750
ilanprnhAr 94 547
R 772 21 R9*
* Includes pig iron made for the
market by steel companies
DAILY AVERAGE PRODUCTI
ON OF COKE PIG IRON IN THE
UNITED
STATES BY MONTHS SINCE
JAN. 1 1926-GROSS TONS.
1929-January _ 85,530
February 89,246
March__ 95,461
April.,._. 95,680
May ____ 100,174
June ____ 99.993
July
98.044
August
98,900
Septemb'r 95,426
October . 93,644
Novemb'r 83,276
December 68.152
1930-January. 71,447
February 81,850
March
83,900
April __.._ 85,489
May ---. 84,310
1030-inns
77552
1926.
January
February
March
April
May
June
First six months
July
August
September
October
November
December
12 months'average
106,974
104,408
111,032
115,004
112,304
107.844
109,660
103,978
103.241
104,543
107,553
107,890
99.712
107.043
1927.
1928.
1929.
100,123
92.573 111.044
105,024 100,004 114,507
112,366 103,215 119,822
114.074 106.183 122,087
109,385 105,931 125,745
102,988 102,733 123,90
107,351 101,763 119,5648
95.199
99,091 122,10
95,073 101.180 121,15 0
92,498 102,077 116,5815
89.810 108,832 115,74
88,279 110,084 106.045
7
86,960 108,705
91,513
99.266 103.382 115.851
1930.
1931.
91,209
101,390
104,715
106,062
104,283
97,804
100.891
8.5,146
81,417
75,890
69,831
62.237
53,732
88 025
55,299
80,950
65,556
67,317
64,325
54,621
61,356
47,201
41,308
38,964
37,848
36,782
31.621
sn ns<
Iron and Steel Scrap Prices Up.
"Iron and steel scrap prices have been advanced
approximately 50 cents a ton this week in Youngsto
wn district,"
said the Brooklyn "Daily Eagle" of Jan. 8.
Consumption of Coking Coal at By-P
roducts Plants
Again Declined in November 1931.
The slight improvement in the demand for
coking coal
that was registered in October 1931, prov
ed to be only
temporary, reports the United State
s Bureau of Mines,
Department of Commerce. In Nove
mber the consumption
of coking coal again declined. The total quantity
of coal
charged into by-product ovens during the mont
h amounted
to 3,829,319 tons, a decrease of 27.8% when comp
ared
with the tonnage consumed in the correspondin
g month of
1930. With the exception of New England, all
of the coke-
203
producing regions shared in this
decline, but it was most
marked in the Mountain and Pacif
ic Region, where a decrease of 62.1% was reported. Othe
r large losses are shown
for the Illinois-Indiana, Ohio and Midd
le Atlantic regions.
CONSUMPTION OF COKING COAL
AT
REPORTED TO THE BURE BY-PRODUCT PLANTS, AS
AU OF MINES.
Number
of
Plants.
Region.
New England
Middle Atlantic
Ohlo
Southern Michigan
Illinois-Indiana
Lower Missouri Valley_
Lake Dock Territory.
Southeast
Mountain and Pacific
Total
Net Tons Consumed.
Increase or Decrease.
Nov. 1930. Nov. 1931.
Net Tons. Per Cent.
213,489
1,828.797
580,758
297.084
824,299
160,075
219.845
1,337,334
403.255
280,682
449,563
133,864
4-8.358
--491.463
--177,503
--16.402
--374,736
--28,211
--16.4
3
576,979
76.868
435,675
29,101
--141,304
--47,767
1 4,558.349
-24.5
-62.1
86
3.289,319 -1,269,030
-27.8
24
14
7
14
1{
13
---26.9
---110.8
---5.5
Consumption of Coal by Class I Rail
roads in October
1931 Far Below the Level a Year Prev
ious.
Although consumption of coal by Class I stea
m railroads
in October 1931 was 9.5% more than in
September, the
present rate still ramains far below the level
of a year ago,
reports the United States Bureau of Mine
s, Department of
Commerce. The total consumption for
the month amounted
to 6,834,598 tons, a decrease of 1,646,27
5 tons, or 19.4%
when compared with October 1930. Each
of the consuming
regions shared in this decline, but it
was most pronounced
in the regions west of the Mississippi Rive
r. The smallest
decrease is shown for the roads operatin
g in New England,
where the rate of consumption was withi
n 9.1% of the
corresponding month of last year.
CONSUMPTION OF COAL BY CLAS
YARD-SWITCHING SERVICE, S I RAILROADS IN ROAD TRAIN AND
AS REPORTED BY THE I.-S. C.
MISSION.
COMRegion.
New England
Great Lakes
Central Eastern
Pocahontas
Southern
Northwestern
Central Western
Southwestern
Total
No. of
Net Tons Consumed.
Roads
'intoning. Oct. 1930. Oct.
1931.
Increase or Decrease.
Net Tons.
11
27
25
4
23
17
21
28
289,372
1,574,391
2,130,334
465,086
1,330.722
1.116.088
1,206.700
368,180
253,179
1.307.244
1,722,363
388.753
1,091.943
866,771
928,297
276,048
156
8.480,873
6,834,598 -1,646.275
Per Cest,
--26.193
---9.1
--267.147 --17.0
--407.971 -19.2
--76,333 --16.4
--238.779 --17.9
--249,317 -22.3
--278,403 --23.1
--92.132 --25.0
-19.4
November Output of Bituminous
Coal and Pennsylvania Anthracite Continued Below
Figures for
Corresponding Period in 1930.
According to the United States Bureau
of Mines, Department of Commerce, the total producti
on for the country as
a whole during the month of November
is estimated at
30,110,000 net tons, as against 35,700,0
00 tons in October.
The decrease in November was due in
part to the smaller
number of working days in the mont
h. The average daily
rate of output for the 23.6 days in November
, however, was
1,272,000 tons in comparison with 1,32
2,000 tons for the
27 days in October. This indicates
a decrease, in the
November daily rate, of approximatel
y 3.8%.
Production of anthracite in the Stat
e of Pennsylvania
during the month of November amou
nted to
tons, as against 6,551,000 tons in October. 4,141,000 net
There were 23
working days in the anthracite field in Nove
s
mber, and 26
in October, indicating a daily average prod
uction of 180,000
tons for the month of November in comp
arison with 252,000
tons in October.
Estimated Monthly Production of Coal
by States in November (Net Tons).a
StateNov. 1931. Oct. 1931. Nov. 1930. Nov. 1929.
Nov. 19:3.
Alabama
848,000
903,000 1,223,000 1.183,000 1,671,000
Arkansas
140,000
249,000
155.000
176,000
Colorado
116,000
627,00
0
701,000
855,000 1,147,000
Illinois
963,000
3,630,000 4,200,000 4,941,000
5,585,000 6,416,000
Indiana
1,020,
000
1,183,
000 1,460,000 1,587,000 2,188,000
Iowa
260,000
299,000
342,000
454.000
Kansas and Missouri
523,000
535,000
528,000
553,00
654,000
Kentucky-Eastern
716,000
2,374,000 3,065,000 3,042,0000 3,697,
Western
000 2,957,000
671,000
795,000
840,000 1.245.000
Maryland
890,000
165,000
182.000
182,000
Michigan
233,000
144.000
40,000
42.000
69,000
Montana
72,000
106,000
250,00
0
223,00
0
292,00
0
New Mexico
349,000
340.000
130,00
0
130,00
0
197,000
North Dakota
251,000
253,000
173.000
171,000
230,00
Ohio
236,000
143,000
1,680.000 1,989,000 1,998. 0
Oklahoma
000 2,121,000 3,120,000
160.000
231,00
0
267,000
Pennsylvania(bItumlnowe 7,280.000
430.00
293,000
8.336,000 9,833,000 12,072,0000 12,222
Tennessee..
,000
314,000
372,000
420,000
Texas
455,000
481.000
65,000
76,000
62,000
Utah
70,000
117,000
444,000
370,000
529,000
Virginia
583,00
0
458,000
821.000
958,000
896,000 1,085,000
Washington
886.000
189,000
172,000
210,000
w.VIrgInla-Southern_b_ 5,807,
227,000
293,000
000 7,720,000 7,011,000 8,745,
Northern _c
1,983.000 2,270,000 2,423,000 3,131,000 5.190,000
Wyoming
000
3,169,
495,000
000
531,000
563,000
699,000
Other States_d
750,000
9,000
4,000
16,000
27,000
20,000
Total bituminous coal-_30.110,000 35,700
,000 38,609,000
Pennsylvania anthracite__ 4,141,
000 6,551.000 5,176.000 48,514,000 44,425,000
5,820,000 7,575,000
Total all coal
34.251
42,251,000 43,785,000 52,334
a Figures for 1923, 1929 and .000
.000 52,000,000
1930
are
fbaal. b Operations
C.& 0., Virginian, K.& M.,and B.C.
&-G. c Rest of State, on the N. & w.
d Figures are not strictly comparable
for the several years. including Panhandle.
1
[Vox.. 134.
FINANCIAL CHRONICLE
204
production of bituminous
Note.-The above table presents the estimated
of the
The distribution
coal. by States, in the month of November.
by railroad divisions, furtonnage is based largely on figures of loadings
by officials of certain
nished by the American Railway Association and
the United States
roads, on reports of waterway shipments made by
ion submitted by assoEngineer Offices, and on figures of field product
ciations of operators.
Coal and
Further Decline in Production of Bituminous
g Week
Durin
ted
Repor
acite
Anthr
ia
ylvan
Penns
Ended Dec. 26 1931.
Mines, DepartAccording to the United States.Bureau of
coal and
inous
bitum
of
ction
ment of Commerce, produ
,000 net tons and
to
5,400
ted
amoun
cite
anthra
ia
ylvan
Penns
ended Dec. 26
717,000 tons, respectively, during the week
6,980,000 tons
of
t
outpu
total
a
1931. This compares with
ylvania anthraPenns
of
tons
00
965,0
and
coal
inous
bitum
of
and 7,056,000 tons
cite in the corresponding period last year
ylvania anthraPenns
of
tons
of bituminous coal and 892,000
1931.
19
Dec.
ended
week
the
g
cite durin
production of
During the calendar year to Dec. 26 1931,
as against
tons
net
0
15,00
bituminous coal amounted to 373,4
27 1930. The
Dec.
to
year
dar
calen
the
in
tons
0
460,466,00
follows:
Bureau, in its statement, reports as
Tons).
Estimated Weekly Production of Coal by States (Net
Week Ended
21'29.
Dec.
2030.
Dec. 19'31. Dec. 1231. Dec.
State417.000
365.000
194,000
202.000
Alabama
48,000
39.000
30.000
30.000
Arkansas
268.000
252.000
163.000
158,000
Colorado
963.000 1,306.000 1,511.000
932,000
Illinois
420.000
382.000
271.000
288.000
Indiana
110 000
112.000
70.000
68.000
Iowa
59.000
74.000
59.000
59.000
Kansas
959.000
737.000
550.000
498.000
Kentucky-Eastern
338.000
248.000
171,000
191.000
Western
60.000
72.000
43.000
48.000
Maryland
12.000
16.000
13,000
10.000
Michigan
96.000
88.000
73.000
77.000
Missouri
83.000
68.000
67.000
68.000
Montana
49.000
40,000
34.000
35.000
New Mexico
69.000
44.000
45.000
43,000
North Dakota
572.000
430.000 • 489.000
396.000
Ohio
90.000
68.000
39.000
47.000
Oklahoma
00 2,250.000 2,756.000
Pennsylvania (bituminous) 1,607 000 1,749.0
118.000
113.000
75.000
69.000
Tennessee
16.000
46.000
11.000
10.000
Texas
115 000
115.000
132.000
131.000
Utah
274.000
227.000
184.000
184.000
Virginia
60.000
53.000
48.000
47.000
Washington
1,578.000 2,047.000
W. Virginia-Southern_b_1,302 000 1,275.000
666.000
560.000
483.000
443.000
n_c
Norther
138 000
121.000
113,000
108.000
Wyoming
9,000
12.000
5,000
5.000
Other States
Dee. 1923
Averaoo.a
349.000
25,000
253.000
1,535,000
514.000
121.000
90.000
584,000
204,000
37.000
21.000
69.000
64,000
56.000
27.000
599.000
58.000
2,818.000
103.000
21.000
100.000
193.000
57.000
1,132,000
692.000
173.000
5.000
00
7,056.000 7,290.000 9,475.000 11.360.000 9.900.0
00
892.000 1.246.000 1,385.000 1.795.000 1.806.0
000
11.706,
000
13.155.
000
11,860.
00
8.536.0
7.948.000
Total all coal
b Includes operations on the N.&
a Average weekly rate for the entire month.
C.40. c Rest of State, incl. Panhandle,
W., C.40., Virginia, K.& M., and B.
Total bituminous coal
Pennsylvania anthracite
PENNSYLVANIA ANTHRACITE.
anthracite during Christmas week
The total production of Pennsylvania
a decrease of 175,000 tons
BITUMINOUS COAL.
is estimated at 717,000 net tons. This shows
and compares with 965,000 tons
the week ended Dec. 26 1931. from the output in the preceding week,
during
coal
soft
of
ion
product
The total
in 1930.
at the mines, is estimated at 5.400,000 produced during the holiday week
including lignite and coal coked
Anthracite (Net Tons).
of 1,656,000 tons from the output in
Estimated Production of Pennsylvania
1930
net tons. This shows a decrease
ed
1931
and compares with 6.980.000 tons produc
DoilyDaily
the preceding full-time week,
Average.
Week.
1930.
in
.
week
Average
mas
Christ
Week.
during
Week Ended201.500
1.209.000
207,700
Bituminous Coal Wet Tons).
1,246.000
Dec. 12
230,800
Estimated United States Production of
1,385.000
148,700
892,000
1930
1931
19..a
Dec.
193,000
965,000
143,400
Year
717.000
Cal.
Cat. Year
Dec. 26.b
to
Date.a
Week.
:
to
revision
Date.
Subject
to
b
Week.
since last report.
Revised
a
Week Ended.000
444,011
00
8,896.0
7,290,000 360,959.000
Dec. 12
1,520,000
1,483.000
1.235.000
BEEHIVE COKE.
1,215.000
Daily average
9.475.000 453,486.000
7,056.000 368,015.000
the week ended Dec. 19
Dec. 19_b
1,521,000
1,579.000
production of beehive coke during
00
1,234.0
total
The
00
1,176.0
21,800 tons
Daily average
6,980.000 460.466,000 1931 is estimated at 18,600 net tons. This compares with
.000
373.415
00
5.400.0
Dec. 26.c
the week of 1930
1,519,000
1,396,000
1,231 000
1,080,000
preceding week and 39,300 tons in
the
during
Daily average
ed
produc
in January to equalize number of days
• Minus one day's production first week
corresponding with that of Dec. 19.
report. c Subject to revision.
Coke (Net Tons).
In the two years. b Revised since last
Estimated Weekly Production of Beehive
1930
1931
the present calendar year to
Week EndedThe total production of soft coal during
to
tO
20
Dec.
net
Dec. 12
amounts to 373.415,000
Dee. 19
Date.a
Date.
Dec. 26 (approximately 303 working days)
1930.
1931.c
given
are
1931.6
years
recent
in other
1,979,100
Region985.800
28,600
tons. Figures for corresponding periods
17,900
15,300
416,200
Pennsylvania
105.600
5,200
1,000
1,100
below:
234,700
West Virginia
105.200
4,500
1,500
493,295,000 net tons Tenness
1,400
ee and Virginia
460,466,000 net tons 1928
102,500
1930
1929
527,014,000 net tons 1927
508,669,000 net tons
above, the total production
As already indicated by the revised figures
during the week ended Dec. 19
of soft coal for the country as a whole
ng table apportions the tonamounted to 7,056,000 net tons. The followi
for other recent years:
nage by States and gives comparable figures
50,700
1,000
1,400
00 2,732,500
1,247,3
39,300
21,800
18,600
9.048
United States total
4.130
6,550
3.633
3,100
Daily average
In January to equalize number Of daYS
Minus one day's Production first week c
report.
last
Revised since
In the two years. b Subject to revision.
Colo., Utah and Wash
800
Current Events and Discussions
s.
The Week with the Federal Reserve Bank
credit
bank
ve
al
Reser
Feder
of
e
volum
ge
avera
The daily
ted by
repor
as
6,
Jan.
ended
week
the
g
durin
g
andin
outst
,000, a decrease of
the Federal Reserve banks, was $1,933,000
week and an inding
prece
the
with
$86,000,000 compared
corresponding
the
with
red
compa
00
000,0
crease of $578,
al Reserve
the
Feder
facts,
these
g
notin
After
1931.
week in
Board proceeds as follows:
bank credit amounted to $1,921,000,000, a
On Jan. 6 total Reserve
the week. This decrease corresponds with
decrease of $281,000,000 for
member bank reserve balances and $9,000,000
decreases of $287,000,000 in
non-member deposits, &c., and an increase of
In unexpended capital funds,
y, adjusted, offset in part by an increase
currenc
ry
Treasu
in
$14,000,000
circulation.
of $28,000,000 in money in
ed $26,000,000 at the Federal ReHoldings of discounted bills increas
d
and $5,000,000 at Kansas City, and decline
serve Bank of San Francisco
at Chicago. $6,000,000 at Boston
,000
$7,000
York,
New
at
$234,000.000
Reserve banks. The System's holdings of
and $206,000,000 at all Federal
d $52,000,000, of United States bonds
bills bought in open market decline
certificates and bills 323,000,000.
$15.000,000 and of Treasury
28 1930 the text
Beginning with the statement of May
of the Federal
ment
state
ion
condit
y
accompanying the weekl
amount of Reserve
Reserve banks was changed to show the
items not included
bank credit outstanding and certain other
ary gold stock
monet
as
in the condition statement, such
ve Board's
Reser
al
Feder
The
ation.
circul
in
y
mone
and
tion of
defini
the
with
er
togeth
es,
explanation of the chang
1930 issue
the different items, was published in the May 31
of the "Chronicle," on page 3797.
The statement in full for the week ended Jan. 6, in coming
parison with the preceding week and with the correspond
y,
date last year, will be found on subsequent pages, namel
pages 286 and 287.
Changes in the amount of Reserve bank credit outstandg
ing and in related items during the week and the year endin
s:
follow
as
were
1932,
January 6,
Bills discounted
Bills bought
United States securities
Other Reserve bank credit
Increase (1-) or Decrease (-)
Since
Jan.6 1932. Dee.30 1931. Ian. 7 1931.
818,000,000 -206,000,000 +526,000,000
+10,000,000
275,000.000 -52,000,000
766,000.000 -37,000,000 +107,000.000
+30,000,000
61,000,000 +13,000,000
000,000 -281,000.000
TOTAL RES'VE BANK CREDIT-1,921.
4,458.000,000
Monetary gold stock
1,775,000.000 +14,000,000
Treasury Currency adjusted
00,000 +28,000,000
5,661,0
Money in circulation
2,038,000,000 -287,000,000
Member bank reserve balances
mnon-me
funds,
capital
ded
Unexpen
456,000.000 -9,000,000
ber deposits, &c
+673,000,000
-144,000,000
-9,000,000
+879.000,000
-408,000,000
+47,000,000
and Chicago
Returns of Member Banks for New York
Loans.
'
kers
-Bro
cts
Distri
ve
Reser
al
Feder
the Federal
1927,
Beginning with the returns for June 29
figures of
the
out
give
to
nced
comme
Reserve Board also
District
ve
Reser
al
Feder
the member banks in the New York
on Thursct,
Distri
ve
Reser
go
Chica
the
in
as well as those
Reserve banks
day, simultaneously with the figures for the
d of waiting until
instea
week,
same
the
for
and
,
themselves
the statistics coverthe following Monday,before which time
banks in the differer
ing the entire body of reporting memb
.
ready
got
be
t
canno
ded
ent cities inclu
York member banks
Below is the statement for the New
the current week,
for
banks
and that for the Chicago member
of the member
ment
state
full
the
of
ce
advan
as thus issued in
the coming
until
ble
availa
be
banks, which latter will not
includes
also
e,
cours
Monday. The New York statement, of banks. The grand
er
memb
ing
report
of
the brokers' loans
nt week records a deaggregate of brokers' loans the prese
these loans on Jan. 6
of
t
amoun
the
0,
00,00
$23,0
crease of
nt week's decrease
prese
The
00.
000,0
$568,
1932 standing at
00,000 last week
$20,0
of
of $23,00000 follows a decrease
preceding weeks
15
the
in
00
000,0
$752,
of
se
decrea
and a
g the week from
Loans "for own account" decreased durin account of out"for
loans
$544,000,000 to $505,000,000, but
205
FINANCIAL CHRONICLE
JAN. 9 1932.]
of-town banks" increased from $41,000,000 to $56,000,000,
and loans "for account of others" from $6,000,000 to $7,000,000. The amount of these loans "for account of others"
has been reduced the past eight weeks due to the action of the
New York Clearing House Association on Nov. 5 1931 in
restricting member banks on and after Nov. 16 1931 from
placing for corporations and others than banks loans secured
by stocks, bonds and acceptances. The present week's
total of $568,000,000 is the lowest since Feb. 1 1918, when
the amount was $510,179,000.
•
CONDITION OF WEEKLY REPORTING MEMBER BANKS IN CENTRAL
RESERVE CITIES.
New York.
Jan.6 1932. Dec. 30 1931. Jan. 7 1931.
Loans and investments—total
7.039.000,000 7.147,000,000 7,968,000,000
Loans—total
4,472,000,000 4,492.000.000 5,658,000.000
On securities
All other
2,223,000,000 2.295.000.000 3.233,000,000
2,249,000,000 2,197,000,000 2,425,000,000
2,567,000,000 2.655.000,000 2,310,000.000
Investments—total
U.S. Government securities
Other securities
•
1,722,000.000 1,712.000.000 1,225,000.000
845,000,000 943.000,000 1.085,000,000
Reserve with Federal Reserve Bank
Cash in vault
705.000.000
52,000,000
941.000,000
58,000,000
821,000,000
79,000,000
5,148,000,000 5,217,000,000 5.911.000.000
775,000,000 779,000,000 1,180,000,000
25,000.000
139,000,000 166,000,000
Net demand deposits
Time deposits
Government deposits
Due from banks
Due to banks
68,000,000
942,000,000
Borrowings from Federal Reserve Bank_
60,000,000
92,000.000
71,000.000
900,000,000 1,288,000,000
289,000,000
17,000.000
Loans on accur, to brokers & dealers'
505.000,000
For own account
56,000,000
For account of out-of-town banks
7,000.000
For account of others
544,000,000 1,206,000,000
41,000,000 315.000.000
6,000,000 358,000.000
568,000,000
591.000.000 1,879.000,000
427,000.000
141,000,000
442,000,000 1,422,000.000
149,000,000 457,000,000
Total
On demand
On time
Loans and investments—total
Chicago.
1,560,000,000 1,584,000,000 1,997,000,000
Loans—total
On securities
All other
Investments—total
U. S. Government securities
Other securities
Reserve with Federal Reserve Bank
Cash in vault
Net demand deposits
Time deposits
Government deposits
Due from banks
Due to banks
Borrowings from Federal Reserve Bank_
1,074,000,000 1,076,000.000 1,443,000,000
617,000.000
457,000,000
633,000.000
443,000,000
838,000,000
605,000,000
486,000,000
508,000,000
554,000,000
275,000,000
211,000,000
293,000.000
215,000,000
257,000,000
297,000,000
147,000,000
19,000.000
154,000.000
19,000,000
184,000,000
17,000,000
1,021,000,000 1,034.000.000 1,293,000.000
412.000,000 417,000.000 593,000.000
18,000.000
16.000.000
13.000,000
126,000,000
274,000,000
133.000.000
265,000,000
174.000.000
368,000,000
11,000.000
9.000.000
1,000,000
Dec. 30 1931.
Increase 1+) or Decrease (—)
Since
Dec. 23 1931. Dec. 31 1930.
Loans and investments—total —20,532,000,000
—202,000.000 —2,424,000,000
13,104,000.000
—15,000,000 —3,159,000,000
5,777,000,000
7,327,000,000
+44,000.000 —2.037,000.000
—59,000,000 —1,122,000.000
Loans—total
On securities
All other
Investments—total
U.S. Government securities
Other securities
Reserves with F. R. banks
Cash in vault
Net demand deposits
Time deposits
Government deposits
Due from banks
Due to banks
Borrow.ngs from F. R. banks
+735,000,000
7.428,000,000
—187.000.000
4.060,000,000
3.368,000.000
—148,000,000 +1,068,000,000
—39,000,000 —333,000,000
1,833,000.000
271,000,000
+307,000,000
—21,000,000
11.871,000.000
5,892,000,000
352,000,000
—45,000,000
—16,000,000
+100,000.000 —2,128,000.000
—55,000.000 —1,178,000,000
+148,000,000
—*
993.000.000
2,472,000,000
+54.000.000
+87,000.000
—1,097.009,000
685,000,000
+118,000,000
+596,000,000
—624,000,000
*Dec. 23 figures revised (Atlanta district).
Charles D. Dickey Becomes Member of Firm of
J. P. Morgan & Co.
the admission of Charles D. Dickey of
of
Announcement
Philadelphia, as a member of the firm of J. P. Morgan &Co.
in New York, and of its banking houses in Philadelphia,
London and Paris, was made as follows under date of Jan. 2:
Charles Denston Dickey, heretofore a member of the firm of Brown
Brothers Harriman & Co., is this day admitted as a•partner in our firma in
New York, Philadelphia, London and Paris, resident in Philadelphia.
J. P. MORGAN & CO., New York.
DREXEL & CO., Philadelphia.
MORGAN GRENFELL & CO., London.
MORGAN & CIE., Paris.
Until Dec. 31, Mr. Dickey had been in charge of the Philadelphia office of Brown Brothers, Harriman & Co., it was
noted in the New York "Times" of Jan. 3, from which the
following is taken:
Mr. Dickey's residence will be in Philadelphia and his headquarters will
be at Drexel & Co. Other partners in Drexel & Co., who are also members
of J. P. Morgan & Co., are Edward T. Stotesbury, H. G. Lloyd, Edward
Hopkinson Jr. and Thomas Newhall.
The addition of Mr. Dickey to J. P. Morgan & Co. increases the number
of partners to 20. He is the first member to be admitted to the firm since
the appointment of S. Parker Gilbert on Jan. 2 1931.
A Graduate of Yale.
Mr. Dickey, who is 38 years old, was graduated from Yale University
in 1916 and began his banking career in 1918 with Brown Brothers & Co.
and became a partner in the firm in 1922. His father had become a partner
in Brown Brothers in 1889, and his grandfather had become a member of
the firm in 1859.
Mr. Dickey's father, Charles D. Dickey died in 1921.
Brown Brothers was merged with the Harriman interests last year to form
Brown Brothers, IlarrIman & Co. During his association with Brown
Brothers, Mr. Dickey achieved a national reputation as a banker and took
a prominent part in the affairs of the Investment Bankers Association.
He has served as Chairman of several committees of the Investment Bankers
Association.
Director of Many Companies.
Mr. Dickey is a director of the American Ice Co., Knickerbocker Ice Co..
Pine Hill Collieries Co., Sharp & Dolune, Lehigh Valley Transit Co..
Pennsylvania Glass Sand Co., City Bank Farmers Trust Co., Century
Shares Trust and other companies.
Mr.Dickey's place in the Philadelphia office of Brown Brothers, Harriman
& Co., will be taken by Ellery S. James, who has been a partner In the firm's
New York office for several years.
Complete Returns of the Member Banks of the Federal
Reserve System for the Preceding Week.
As explained above, the statements for the New York and
Chicago member banks are now given out on Thursday,
simultaneously with the figures for the Reserve banks them- Swiss Gold Imports—Net for First 11 Months of 1931
selves, and covering the same week, instead of being held
Totals 1,052,000,000 Francs.
until the following Monday, before which time the statistics
Basle (Switzerland) advices, Dec. 26, are taken as follows
covering the entire body of reporting member banks in 101 from the New York "Evening Post":
cities cannot be got ready.
Net imports of gold into Switzerland in the first eleven months of this
In the following will be found the comments of the Federal Year amounted to 1,052,000,000 Swiss francs, of which 800.000.000 francs
Bank of Switzerland and the bulk of the
Reserve Board respecting the returns of the entire body of was absorbed by the National
remainder by private banks. Principal receipts were 376,000.000 francs
reporting member banks of the Federal Reserve System for of South African gold via London, 209.000,000 francs from Germany to
support the mark and 187,000,000 francs from the United States, of which
the week ended with the close of business on Dec. 30:
The Federal Reserve Board's condition statement of weekly reporting
member banks in leading cities on Dec. 30 shows a decrease for the week of
$202,000,000 in loans and investments, increases of $307,000,000 in reserves
with Federal Reserve banks, of $118,000,000 in borrowings from Federal
Reserve banks and of $100.000,000 in net demand deposits, and a decrease
of $55,000,000 in time deposits.
Loans on securities increased 361,000,000 at reporting member banks in
the New York district and 344,000,000 at all reporting member banks, and
declined $11,000,000 in the Boston district. "All other" loans declined
$21,000,000 in the Boston district, $12,000.000 in the Cleveland district,
$10,000,000 in the St. Louis district, $8,000,000 in the Chicago district
and 859,000,000 at all reporting banks.
Holdings of United States Government securities declined $70,000.000
In the New York district, $20,000,000 in the Cleveland district, 815,000,000
each in the Philadelphia and San Francisco districts, $13,000,000 in the
Boston district and 8148,000,000 stall reporting banks. Holdings of other
securities declined $35,000,000 in the New York district and $39,000,000
at all reporting banks.
Borrowings of weekly reporting member banks from Federal Reserve
banks aggregated 5685,000,000 on Dec. 30, the principal changes for the
week being an increase of $185,000,000 at the Federal Reserve Bank of
New York, and decreases of $18,000,000 at Philadelphia. $15,000,000 at
San Francisco, $11,000,000 at Cleveland and 88,000,000 at Boston.
A summary of the principal assets and liabilities of weekly reporting
member banks, together with changes during the week and the year ending
Dec. 30 1931, follows:
170,000.000 francs were received during October.
Maitland, Coppell & Co. to Liquidate—Irving Trust Co.
Appointed Receiver in Response to Voluntary
Petition.
The death on Oct. 29 of Herbert Coppell, the only floor
member of Maitland, Coppell & Co., has resulted in the
decision to liquidate its affairs through a voluntary receivership. Federal Judge Patterson has appointed the Irving
Trust Co. of this city receiver for the firm. A voluntary
petition in bankruptcy, stating liquidation of the firm's
business through a receivership was advisable, was filed with
the clerk of Federal District Court. The firm, located at 68
William St., has always maintained a position of exceptionally high standing throughout its long career, and its passing
is deplored among the many in Wall Street who have regarded
it with esteem. From the New York "Times" of Jan. 6,
we take the following:
The firm was founded in 1796, Mr. [Herbertl Coppell's father, the late
George Coppell, was a member of it as well as a prominent railroad man.
2O6
FINANCIAL CHRONICLE
[VoL. 134.
After Mr. [Herbert] Coppe11 died the firm filed a notice with
the Stock 035,700 and silver 74,961,075 ounces, gives reductions respectively of
Exchange of its intention to continue in business using the same
name, $52.128,600 gold and 43,993.457 ounces silver.
pending the acquisition of another membership in the Exchange.
Partners
in the firm are Arthur Coppell, Frederick H. Amerman
and George Myers
Church.
Silver Bullion Tendered
As indicated above, it was finally decided to wind up its
affairs.
Statement of Bank for International Settlements for
Dec. 31.
The statement of the Bank for International Settlements,
showing its condition as of Dec. 31, as made public at Basle,
Jan. 5, was given as follows in Associated Press cablegrams:
(Figures are in Swiss gold francs at par, 19.3 cents.)
Assets-.
December.
November.
I. Cash on hand and on current account with
banks
15,398,887.47
14,076.231.49
H. Funds employed at sight
143,081,501.41 151,438,334.32
III. Rediscountable bills and acceptances at cost:
(1) Commercial bills& bankers acceptances 356,350,162.16 357,647,449.42
(2) Treasury bills
95,950,084.52 144.779,264.62
Total
IV. Time funds at interest:
(1) Not exceeding 3 months
(2) Between 3 and 6 months
452,800.246.68
502,420.714.04
240,849,015.01
248,841,977.83
Total
240,849,015.01
V. Sundry investments at cost:
104,327,741.18
(1) Maturing within 6 months
(2) Maturing between 6 months and 1 year 12,246,042.49
(3) Maturing in over 1 year
833,044.98
248,841.977.83
Total
VI. Other assets
Total assets
LiabilitiesI. Paid-up capital
II. Reserves:
(1) Legal reserve fund
(2) Dividend reserve fund
(3) General reserve fund
177,406.828.65
11,794,348.97
143,678,091.68
33,828,322.23
933,866.68
178.440,280.59
12,084,061.92
1,040.830,828.19 1.107,307,600.19
December.
November.
108,500,000.00 108,500,000.00
559,328:10
1,094,189.17
2,188,378.35
Total
III. Long-term deposits:
(1) Annuity trust account
(2) German Government deposit
(3) French Government guarantee fund
559,326.10
1,094,189.17
2,188,378.35
3,841,893.62
3,841,893.62
153,768,617.50
76,884.308.75
68,648,520.43
153,768,617.50
76.884.308.75
68,648,520.43
Total
IV. Short-term and sight deposits:
(1) Central banks for their own account:
(a) Between 3 and 6 months
(b) Not exceeding 3 months
(0) Sight
299,301,446.68
299,301,446.68
166.180,014.48
297,365,679.96
184,205,400.25
326.327,426.45
Total
(2) Central banks for account of others:
(a) Between 3 and 6 months
(b) Not exceeding 3 months
(c) Sight
463,545,694.44
510,532,826.70
34,167,806.18
101,379,187.97
57,106,616.97
100.518,020.09
Total
(3) Other depositors:
(a) Not exceeding 3 months
(b) Sight
135,546,994.15
157,624.637.06
Total
V. Profits for distribution:
(1) Dividend
(2) Participation of long-term depositors....
Total
VI. Miscellaneous items
Total liabilities
3,385,986.71
3,394,015.14
3,385,986.71
3,394,015.14
26,708,812.59
24,112,780.99
1 040,830,828.19 1,107,307,600.19
Production of Gold and Silver in the United States
According to the Director of the Mint-Increase in
Gold Production-Decrease in Silver Production.
On Jan.5,the office of the Director of the Mint,in making
public the figures of gold and silver production in the United
States in 1931, stated that "comparison with 1930 production
indicates increase in 1931 of $2,755,300 in gold and decrease
in 1931 of 17,670,180 ounces of silver. The statement issued
at the Treasury Department, Jan. 5, follows:
in Payment to Holyoke Water
Power Co. by American Writing Paper Co. Declined.
Under date of Jan. 2 Associated Press advices from
Holyoke, Mass., stated:
For the second time in six months several hundredweight of silver bullion to-day was tendered to the Holyoke Water Power Co. as payment
for a power bill, and acceptance was refused by the power company officials.
The tender was made by officials of the American Writing Paper Co..
Inc., on the basis of a clause in an old contract which reads:
Perpetual annual rentals shall be paid in troy weight of sliver of the
standard value and fineness of the silver coin of the United States or an
equivalent in gold, at the option of the grantee at the time of the payment
The amount due from the paper corporation for water rentals is said
to be about $30,000, covering a period of a year and a half. It is expected
that the controversy will eventually find its way into the courts.
Note of Secretary of State Stimson to Japan and China
Insisting that Rights of Americans in Manchuria
Must Be Respected.
At Washington on Jan. 7 a note addressed to Japan and
China by Secretary of State Stimson, warning that the
rights of American citizens in Manchuria must be respected,
was made public as follows:
With the recent military operations about Chinchow, the last remaining
Administrative authority of the Government of the Chinese Republic in
South Manchuria, as it existed prior to Sept. 18 1931, has been destroyed.
The American Government continues confident that the work of the neutral
commission recently authorized by the Council of the League of Nations
will facilitate an ultimate solution of the difficulties now existing between
China and Japan.
But in view of the present situation and of its own rights and obligations
therein, the American Government deems it to be its duty to notify both the
Imperial Japanese Government and the Government of the Chinese RePublic that it cannot admit the legality of any situation de facto, nor does
It intend to recognize any treaty or agreement entered into between those
governments, or agents thereof, which may impair the treaty rights of the
United States or its citizens in China, Including those which relate to the
sovereignty, the independence or the territorial and administrative integrity
of the Republic of China, or to the international policy relative to China,
commonly known as the open-door policy, and that it does not intend to
recognize any situation, treaty or agreement which may be brought about
by means contrary to the covenants and obligations of the Pact of Paris
of Aug. 27 1928, to which treaty both China and Japan, as well as the
United States, are parties.
Copies of the note were also handed by Secretary Stimson to the diplomatic representatives of Belgium, Great
Britain, France, Italy, The Netherlands and Portugal.
Details of Foreign Dollar Bonds in Default Supplied
to Senate Committee by Otto H. Kahn of Kuhn,
Loeb & Co.-Total Over $815,000,000-South
American Nations and Divisions Comprise ListBrazilian Group Largest-National City Profit
of $24,000,000 Retold.
Defaults on foreign bonds held in the United States
amount to more than $815,468,000, according to a list made
public in Washington on Jan. 1 by the Senate Finance
Committee. All of the defaulting debtors are South American governments, States or municipalities. The defaults
include those of sinking fund payments, of interest or of
both, said the account from Washington, Jan. 1, appearing
in the New York "Times," from which we also take the
following:
The South American countries whose Federal bonds have been defaulted
are Bolivia, Brazil (with the largest group of defaulted bonds), Chile and
Peru.
In Brazil the States of Ceara, Maranhao, Minas Geraes, Parana, Pernambuco. Rio de Janeiro, Rio Grande do Sul, Santa Catharine and Sao
Paulo have defaulted, most of them on more than one issue. Brazilian
PRODUCTION OF GOLD AND SILVER IN THE UNITED STATES IN 1931.
municipalities in default are Porto Alegre, Rio de Janeiro, Rio Grande de
(Arrivals at United States Mints and Assay Offices and at private refineries.)
Sul and Sao Paulo.
Chilean defaults, aside from the National Government, are listed as an
Gold.
Issue by the city of Santiago, a Chilean consolidated municipal loan and
States.
the Mortgage Bank of Chile.
Ounces.
Value.
Value.*
Ounces.
Besides the Peruvian Government's own default, others in Peru are
Alaska
$9,325,600
354,609
451,126
$102,837
charged against the Province of Callao and the city of Lima.
Alabama_
1
5
600
29
Colombia and Uruguay have not defaulted on Federal bonds, but the
Arizona
4,303,761
1,248,091
2,817.000
136.272
California
cities of Medellin in Colombia and Montevideo in Uruguay have fallen
709.891
205,868
10,547,500
510,235
Colorado
4,714,500
2,147,909
622,894
228,064
behind.
Georgia
11
3
1,600
77
0.The great majority of the defaults occurred during 1931. The latest Is
Idaho
7,389.633
2,142,994
364,700
17,642
that of the State of Sao Paulo, Brazil, with five outstanding issues totaling
Michigan
1,436
416
Missouri
3,630
12,519
more than $70,000.000, on which the default date was given as Jan. 11932.
Montana
46,711
4,119,573
1,194,676
965,600
Elsewhere in this issue of the "Chronicle" we give a later item from the
Nevada
699.742
2,847,400
2,412,904
137,743
"Times,"
New Mexico
which points out that two Sao Paulo issues included in the Senate's
28.856
596.500
298,835
1,030,467
North Carolina
list of bond defaults are not so rated by the Institute of International
223
3,072
4,600
10,592
Oregon
14,561
301.000
7.230
2,097
Finance--Ed
Pennsylvania
242
464
5,000
1,600
V.• The list was supplied at the request of the committee by Otto H. Kahn
South Carolina
24
500
of
South Dakota
Kuhn, Loeb & Co., New York, who told the committee that he had
432,772
82,961
8,946,200
113,657
Tennessee
499
obtained it from the Institute of International Finance, New York City.
10,300
52,000
15,080
Texas
250
72
"While we believe this list is accurate, we request that it be used without
Utah
183,433
3,791,900
8.173,203
2.370,229
responsibility on our part or on the part of the Institute," Mr. Kahn wrote.
Washington
3,328
68.800
22.345
6.480
Wyoming
44
Mr. Kahn added no comment nor was there any indication by any one
900
19
6
Philippine Islands
174,000
3,596,900
104,004
concerning the future of the issues llsted.
30.161
The information came in an interim of an investigation into foreign
Totals
2,385,881
48,907.100
30.967,618
8,980,609
bond issues in this country which is being conducted by the Finance Com* Value at 29c. per ounce, the average New York price of bar elver.
mittee, under a resolution proposed by Senator Johnson, Republican, of
• Comparison with 1930 production indicates increase in 1931 of $2,755,300 California.
In gold and decrease in 1931 of 17,670.180 ounces of silver. Comparison
The Finance Committee has taken testimony from Charles E. Mitchell.
with the year of largest production, 1915, when gold amounted to $101,- President of the National City Bank and the National City Co.; Thomas
The Bureau of the Mint, with the co-operation of the Bureau of Mines,
has issued the following statement of the preliminary estimate of refinery
production of gold and silver in the United States during the calendar
year 1931:
JAN. 9 1932.]
FINANCIAL CHRONICLE
Lamont of J. P. Morgan & Co., and Mr. Hahn, who will reappear when
the committee reconvenes Monday.
Profits of Banking Rouses.
Coincident with the tables concerning defaulted bonds, the committee
published tables showing the amount of foreign bonds issued by the houses
represented by the three witnesses.
These lists were not comparable, as they were arranged in varying forms.
For instance, the lists supplied by Mr. Mitchell showed, as he testified,
that the National City Co. made a net profit of $13,392,502.21 in the
issuance of foreign bonds through syndicates organized by itself, and a net
profit of $11,363,501.26 through participation in syndicates formed by
others for underwriting, distributing and marketing foreign bonds, or a
total net profit of$24,756,003.47,exclusive oflarge transactions in Canadian
and Cuban bonds, which were not listed in the "foreign" category and
were not totaled.
Exclusive of Canadian and Cuban bonds, the National City Co. issued a
total of $1.071,955,000 of bonds through its own syndicates on which
sinking fund payments to date total $222,866,908.78.
It participated in the issuance of $3,260,407,000 by syndicates managed
by others, on which sinking fund payments to date total $943,407,800.
Many Shared in Syndicates.
These syndicates were managed by such firms as J. P. Morgan & Co.;
Kuhn, Loeb & Co.; Lee, Higginson & Co.; Dillon, Read & Co.; Guaranty
Trust Co., and others, many of whom participated in turn in syndicates
managed by others.
For this reason, it was stated by all three witnesses, it would be impossible to find a total of all foreign bond issues in the United States by adding
the totals given by the various issuing houses, because these included
duplications
The National City Co. handled Latin-American bonds through its own
syndicate, which included four issues by the Republic of Chile, two by
Brazil, one by Uruguay and one each by the Chile Copper Co. and the
Lautaro Nitrate Co., Ltd., a British corporation operating in Chile.
This company participated in syndicates managed by others which
handled Latin-American bonds, including three Brazilian loans and one
loan each for the Brazilian States of Rio Grande do Sul and Sao Paulo, one
for the Republic of Chile and five for the Mortgage Bank of Chile, four
for the Republic of Peru and one for the Cerro de Pasco Copper Co. of Peru.
Partial Retirements Listed.
The tabulation furnished by Kuhn, Loeb & Co. omitted net profits. Mr.
Kahn having testified that it was virtually impossible for his company to
arrive at these figures in relation to individual bond issues. but contained
other information grouped in a manner not in the two other reports.
In this it was shown that Kuhn, Loeb & Co. had issued $577,750,000 of
foreign bonds through its own syndicates and had participated in the
issuance of 8580,430.000 of foreign bonds. Of the bonds issued by itself.
$178,112,900 were shown to have been retired, and, of the other group in
which it participated, $86,546,100 have been retired.
Latin-American issues played a large part in the financing done by
syndicates managed by Kuhn, Loeb & Co., this type of bond accounting
for $205,000,000 worth of its business. Of that sum $115,000,000 was lent
to the Argentine Government and $90,000,000 to the Mortgage Bank of
Chile.
No South American financing was done by foreign bond syndicates in
which Kuhn, Loeb & Co. played only a participating role.
The house of J. P. Morgan & Co., making no differentiation between
syndicates which it organized and those in which it participated, reported
that it had issued $1,807,578,000 in foreign bonds, of which $438,280,100
had been retired by Dec. 15, leaving outstanding a total of $1,369,297,000.
Among its issues were six for Argentina, totaling $159,800,000, and one
for Chile for $24,000,000.
The list of foreign dollar bond issues in default was made
public as follows by the committee:
Country of Issue—
Date of
Amount
Bolivia.
Default.
Remarks—
Outstanding.
Republic of Bolivia 6s, 191740__Apr. 1 1931 Int. & s. t. not paid___ $1,431,000
Republic of Bolivia 8s, 1922-47_ May 1 1931 55% of coupons paid,
s. f. not paid
23,267,500
Republic of Bolivia 7s, 1927-58—Jan. 1 1931 Int. & s. f. not paid_ 13,590,500
Republic of Bolivia 75, 1928-69 _Mar. 1 1931 Int. 8; s. 1. not pald
22,815,000
Federal Government—
U. B. of Brazil 8s, 1921-47
U. S. of Brazil 78, 1922-52
U. S. of Brazil 61i8, 1926-57
U.5. of Brazil 6Hs, 1927-57
State Governments—
State of Ceara 8s, 1922-47
Dee. 1 1931 The Brazilian Govt.announced Oct. 18 1931
that Int. on these
bonds would be paid
in scrip for a period
of 3 years
31,352,500
Dec. 1 1931 Payable in scrip for a
period of 3 years._ 17,503,000
Dec. 1 1931 Payable in scrip for a
period of 3 years-- 50.108,000
Dec. 1 1931 Payable in scrip for a
period of 3 years-39,709,000
207
Dole of
Amount
Country of Issue—
Default.
Remarks-Outstandissyt
*State of Sao Paulo 8s, 1921-36.-Jan. 1 1932 Int, paid, but partial
default on s. f
4,950.000
*State of Sao Paulo 88, 1925-50—Jan. 1 1932 Int. paid partly from
reserve fund: Partial
default on s. f
14,719,000
*State of Sao Paulo 7s, 1926-36...
5200.000; reserve fund
on hand to meet
Mar. 1 1932 coupon_ 6,914,000
'State of Sao Paulo Cis, 1928-68—July 1 1931 Reserve fund used for
July 1 1931 paym'ts;
payments due Jan. 1
1932 will not be made 14,698,000
No default expected.-- 31,469,000
*State of Sao Paulo 76, 1930-40Municipal Governments—
City of Porto Alegre 8s, 1921-61--Dee. 1 1931 Coupon not paid
3,320,000
Jan. 1 coupon not exCity of Porto Alegre 7518, 1926-66
pected to be paid-- 3,890,000
Feb. 1 coupon not exCity of Porto Alegre 78, 1923-63..
pected to be paid_ _ — 2,211,000
April 1 coupon not exCity of Rio de Janeiro 88, 1921-46
pected to be paid...... 8,055,000
City of Rio de Janeiro 6348.
1923-53
Aug. 1 1931 Coupon not paid
29,492,000
City of Rio de Janeiro Os,
1928-33
Oct. 1 1931 Coupon not paid
1,770,000
Rio Grande do Sul consol. municiDec. 1 1931 Coupon not paid
pal loan 78, 1927-67
3,912,500
May 1 coupon not exCity of Sao Paulo 6s, 1919-43-pected to be paid-- 5,535,000
3,157,000
City of Sao Paulo 88, 1922-52_ —Nov. 1 1931 Coupon not paid
5,602,000
City of Sao Paulo 055, 1927-57„Nov. 15 1931 Coupon not paid
Chile.
National Government40,116.000
Republic of Chile Os, 1928-60---Oet. 1 1931 Coupon not paid
Jan. 1 coupon will not
Rep. of Chile 6s, 1928-Jan. 1 1981
44,152,000
be paid
25,935.000
Rep.of Chile 68, I927-Feb. 1 1961 Aug. 1 1931 Coupon not paid
15.577.000
Rep.of Chile 55, 1928-Sept. 1 1961 Sept. 1 1931 Coupon not paid
9,790.000
Republic of Chile 69, 1929-62----Sept. 1 1931 Coupon not paid
24,745,000
Republic of Chile 6s, 1930-63____Nov. 1 1931 Coupon not paid
15,094,000
Republic of Chile 78, 1922-42_ __Nov. 1 1931 Coupon not paid
Municipal Governments—
Jan. 2 coupon will not
City of Santiago 78, 1928-49
be paid
3,600,000
2,175,000
Nov. 1 1931 Coupon not paid
City of Santiago 78, 1930-61
Int. & s. 1. payments on
Chilean consolidated municipal
Sept. 1 1931 Sept. 1 1931 made
loan, series A, 7s, 1929-60
from reserve fund—. 14,684,000
Mortgage Bank—
Service completely susMortgage Bank of Chile 6165,
July 31 1931 pended: int, being de1925-57
pos. In Chile in pesos 18,882,000
Service completely susMortgage Bank of Chile 65is.
pended; int, being de1926-61
Dec. 31 1931
pos. in Chile in pesos 18,897,500
Mortgage Bank of Chile (is,
Service completely sus1926-31
Dec. 31 1931
pended; int. being depos. In Chile in pesos 10,000,000
Mortgage Bank of Chile rls,Oct. 31 1931 Service completely sus1928-61
Oct. 31 1931
pended: int. being depos. In Chile in pesos 19,469,000
Mortgage Bank of Chile 6s,
Service completely sus1929-62
pended; int, being deNov. 1 1931
pos. in Chile In pesos 19,900,000
Colombia.
Dec. 1 1931 Coupon not paid; it is
City of Medellin 78, 1926-51
understood that funds
have been deposited
in Colombia
2,703,000
City of Medellin 6 yis, 1928-54_._Dec. 1 1931 Coupon not paid: it Is
understood that funds
have been deposited
in Colombia
8,527,000
Peru.
National Government—
Complete default on
Republic of Peru 78, 1927-59
14,357,500
Sept. 1 1931 int, and s. f
(tobacco loan)
Complete default on
Republic of Peru, national loan,
48,383,000
June 1 1931 int. and s. f
first series 6s, 1927-60
Complete default on
Republic of Peru, national loan,
Apr. 1 1931 int, and s. 1
24,469,500
second series 8s, 1928-81
Provincial Government-1931
Int.
&
s.
f.
payments
1927-44_
_Jan.
1
Province of Callao 7518,
due Jan. 1 and July 1
1931 were met partly
from the reserve fund;
no further remit'ees_ 1,189,000
Municipal Government—
City of Lima 63.0, 1928-58
Sept. I 1931 Int. & s. f. payments
due Sept. 1 1931 were
met partly from re2,887,000
serve fund
Uruguay.
5,684.000
City of Montevideo 7s, 1922-52_ -Dec. 1 1931 Int. not paid
*See item below showing that two Issues listed in Senate figures as having defaulted are not so rated by Institute of International Finance.
June 1 1931 Int. At s. f. not paid;
Figures on South American Bond Defaults—Senate
bondholders' protecListed Two Sao Paulo Issues Not So Rated by
tive comm. formed
under auspices of InInstitute of International Finance.
terstate Trust Co..— 1,980;000
State of Maranhao 78, 1928-58___Nov. 1 1931 Int. paid Nov. 1, but
From Washington, Jan. 2, the New York "Times" res. f. not paid; no further remittances beported the following:
ing made
1,682,000
In reporting a list of foreign bond defaults, filed with the Senate Finance
Int. & s. f. paid Sept. 1
State of Minas Geraes 6345.
Committee from the Institute of International Finance by Otto H. Kahn,
Sept. 1 1931 out of reserve fund;
1928-58
no further remitwho obtained them, it was stated in the New York "Times" to-day that
tances being made_
8,132,000 the State of Sao Paulo in Brazil had defaulted on five bond issues totaling
Int. & s. 1. paid Sept.1
State of Minas Geraes 6118,
more
than $70.000,000.
Sept.
1
1931
out
of
reserve
fund;
A. 1929-59
The total was cast from a table carrying the heading "Record of Foreign
no further remittances being made
7,812,000 Dollar Bonds in Default." The table contained, however, two issues by
Sept. 15 1931 Reserve fund used to
State of Parana 78. 1928-58
Sao Paulo on which no defaui‘ has occurred.
pay int.:s. f. not paid;
One of these was an issue of which $6,914,000 is outstanding, dated
no further remittances being made._ 4,642.000 1926-1956.
5,233,000
State of Pernambuco 78, 1927-47_Sept. 1 1931Int. & e. f. not paid
One other issue of 1928-1968 Sao Paulo bonds, of which $21,489,000 is
Funds to pay Jan. 1 '32
State of Rio de Janeiro 6518,
5,981,000 outstanding in the United States, although listed under the heading of
int. & s. f. on hand
1929-69
"Record of Foreign Dollar Bonds in Default," and so considered by the
Oct. 1 1931 Int. Jr s. f.
State of Rio Grande do Sul 8s,
Senate Finance Committee, carried a note "no default expected."
paid; no further re1921-1946
mittances being made 5,900,500
Partial defaults on sinking funds were specified in connection with two
S. F. paid Nov. 1, but
State of Rio Grande do Sul 7s,
other
Sao Paulo issues for 84,950,000,$14,719,000 and a loan of$14,698,000.
9,713.500
Nov. 1 1931 int. defaulted
1926-66
It was stated that payments due Jan. 1 1932 would not be made.
State of Rio Grande do Sul 6s.
not
paid-1.
23,000,000
Dec. 1 1931 Int. & s.
1928-68
Funding arrangement
State of Santa Catherine 88.
1922-47
1925,'28,'30 made in 1925, default
Sao Paulo Meeting Jan. 1 Interest Payment on 8%
on this agreement in
Loans—Status as to 6% Loan.
May 1928; new arrangement for lower
It was stated at the offices of Speyer & Co. and J. Henry
schedule of payments
no payments made
since February 1930- 4,704,800 Schroder Banking Corp. that they are paying the Jan. 1
208
FINANCIAL CHRONICLE
[VOL. 134.
coupons on $4,568,000 8% State of Sao Paulo loan of 1921,
due 1936, and also on $14,719,000 8% State of Sao Paulo
loan of 1925, due 1950. The announcement adds:
"The total foreign obligations held by the Chase National Bank are
16% of the total of its business; accordingly,84% of its business is domestic.
Its German commitments are 37% of its total foreign commitments. The
total German commitments are 3
of the total resources of the bank."
As regards the 6% sinking fund loan of 1928, the Government of the
A list of 253 foreign bond issues which the Chase Securities Co., the
State of Sao Paulo announces that it has duly deposited with Banco do Equitable Trust Co. or Harris, Forbes & Co. originated or managed or in
Commercio e Industria. Sao Paulo, to the order of the New York agents which one of the three participated, showed that the three companies made
of the loan 4.139,166 milrels, equivalent at 12 cents per milreis to 3496,700, a total profit of $11,887,428 out of the transactions and that the defautled
the amount of the half year's service of the loan. The Government regrets issues totaled $290,272,000. Of the defaulted issues, $10,860,000 were
that owing to exchange difficulties it has been unable to remit any of these among those originated or managed by the three companies.
funds to New York, and, therefore, there are no funds available in New
The other 5279.412,000 in defaulted issues, mostly of South American
York for the service due Jan. 11932. The entire financial situation of the bonds, were issues in which one or more of the three companies particiState of Sao Paulo is engaging the fullest consideration of the Government pated but did
not originate or manage
and a further announcement will be made at the earliest possible moment.
The principal amount of the bonds, originated or managed by the Chase
Mr. DeWitt Milihauser of Speyer & Co. has been in London for some time
conferring with the British bankers of the State of Sao Paulo in the interest Securities Co., was $496,632,000, the profits $1,702,000 and the defaulted
issues $10,860,000. The principal amount in issues to which the Equitable
of the bondholders.
Trust Co. had a similar relation, was $103,000,000, and profits $564.000.
The principal amount of the issues originated or managed by Harris.
Notice by New York Stock Exchange Regarding 6% Forbes & Co. was $174,643,000.
In issues originated or managed by others, in which the three companies
Bonds of Sao Paulo—Issue Dealt in "Flat."
had a total participation of $438,992,649 out of a principal amount of
The following notice was issued Jan. 2 by Secretary Green $4,720,496,000, the Chase Securities Co. had profits of $2.138,041, the
Equitable Trust Co. of $1,527,572 and Harris, Forbes & Co. of $4,217,825.
of the New York Stock Exchange:
The defaulted issues out of the $4,720,496,000 total amounted to $279,STATE OF SAO PAULO 40-YEAR 8% SINKING FUND GOLD BONDS 412,000. of which $50,000,000 was in issues in which the Chase Securities
EXTERNAL DOLLAR LOAN OF 1928, DUE 1968—INTEREST. Co. participated, $51,000,000 in issues in which the Equitable Trust Co.
participated, and $178,412,000 in issues in which Harris, Forbes & Co.
New York Stock Exchange—Committee on Securities.
participated.
Jan. 2 1932.
Figures showing the foreign bond flotations of the Chase
Notice having been received that the interest due Jan. 1 1932 on State
of Sao Paulo 40-year 6% sinking fund gold bonds external dollar loan of National Bank affiliates are given under another head in
1928, due 1968. is not being paid:
The Committee on Securities rules that beginning Saturday, Jan. 2 1932, this issue.
and until further notice, the said bonds shall be dealt in "flat" and to be a
Summary of Foreign Bond Flotations by Chase National
delivery must carry the Jan. 1 1932 and subsequent coupons.
The Committee further rules that all contracts, except "time option"
Bank Affiliates—Amount of Long-term Securities
contracts, in said bonds maturing on Monday, Jan. 4 1932, shall be settled
Small, W. W. Aldrich Tells Senate Investigating
on the basis of computing six months' interest only.
ASHBEL GREEN, Secretary.
Committee.
Foreign Bond Flotations by Affiliates of Chase National
Bank of New York Detailed to Senate Committee
by President W. W. Aldrich—German Securities
in United States Put at $2,120,000,000.
W. W. Aldrich, President of the Chase National Bank
of New York, testified on Jan. 4 before the Senate Committee inquiring into the foreign securities in this country
that the Chase Securities Co. and two affiliates had sold
between 1917 and 1931, $5,084,749,000 worth of foreign
securities in the United States. This total, Mr. Aldrich
said, represented, in addition to the business in this line
done by the Chase Securities Co., the sales of the Equitable
Trust Co., taken over by the Chase company in 1929, and
by Harris, Forbes & Co., which was absorbed in July 1931.
The Washington advices Jan. 4 to the New York "Times"
in which the foregoing appeared, further reported what he
had to say as follows:
German Securities Held Here.
Mr. Aldrich also testified that a survey of 100 leading banks, which
he declined to name,showed an estimated total of $2,120,000,000 worth
of German securities of all kinds held in the United States. Of this total,
31.177,000,000, according to a Department of Commerce report, consists of
long-term bonds; there are $700,000,000 in German short-term securities
and $243,000,000 of American investment in Germany.
The amount of foreign long-term securities now held by
issuing banking houses and commercial banks is small,
Winthrop W. Aldrich, President of the Chase National
Bank, New York City, told the Senate Finance Committee
Jan. 4. Mr. Aldrich appeared in connection with the Johnson resolution (S. Res. 19) to investigate sale of foreign securities in the United States. We quote from the "United
States Daily" of Jan. 6,from which we also take the following:
Short-term credits are utilized, Mr. Aldrich explained, largely in the
financing of American foreign trade, partly, also in financing the foreign
trade of other countries. having an indirect bearing on the United States,
in that it stimulates the total of that class of transactions.
Mr. Aldrich detailed the short-term credits of German origin held by the
Chase National Bank. The total he gave as $68,925,748, made up as follows; Acceptance credits granted to German banks, which are secured by
documents or otherwise guaranteed, and so really self-liquidating, $24,750,230; acceptance credits to German banks, commercial concerns, or
industry, unsecured, $4,071,131; loans to German banks, commercial concerns, or industry, which are their joint obligations or guaranteed by the
German Government or the Gold Discount Bank or collateraled by German securities or bills of exchange, 325,128.842; loans direct to German
banks, $1,339,326; and a participation in a 1930 bank loan to the German
Government, $13,737,833. In addition, Mr. Aldrich stated that their
London office held $1,580,000 of short-term German debt.
Long-term German holdings of the Chase National Bank on Dec. 31
1931, the date applicable also to the short-term holdings, totaled $607,781.
at present market quotations, Mr. Aldrich said. The par value he gave
as $1,812,000. Chase Securities Corp., he added, holds $1,118,774 German long-term bonds, market value, and Harris Forbes, 344,120. This
makes the total German commitments of the Chase National Bank interests,
including the London office, $71,127,981, he said. The Chase Bank,
an Edge Act corporation, for foreign trade, has short-terms of $2,353,000
and long-terms of $5,000, he said.
The short-term obligations fall in four groups, Mr. Aldrich explained:
Those financing exports from the United States to Germany; those financing
the warehousing of readily marketable staple commodities; those financing
the export of merchandise from Germany to the United States and elsewhere, and those issued to cover exports to Germany from countries other
than the United States.
Mr. Aldrich gave the committee figures on the foreign indebtedness of
Germany at various periods, with the American share. The present participation of America in German obligations he gave as: Long-term,
31.177,000,000; short-term, $700,000,000, and direct investments, $243,000,000.
The summary of foreign bond issues of the three investment houses which
are now affiliated withthe Chase National Bank are given in the appended
table:
Total Principal Amount, Both Originations and Participations with Others.
A; Total Gross Profits, B.
Chase Securities Corp.—
A.
B.
Canada
3526.200,000
$727,000
Latin America
582.854,500
1,983.823
Germany
177.650,000
439,977
410,400,000
Other European
1,220,383
200,000,000
Miscellaneous
195,848
Aldrich Tells of Chase Holdings.
Mr. Aldrich testified that the Chase National Bank holds more than $68,000,000 in German short-term securities, or about 1-10th of the total
amount in the United States, but said that "German commitments are
33% of the total resources of the bank." The Chase Bank also holds
$607,781 in German bonds
The Chase Bank short-term German holdings, as of Dec. 31, were
listed by Mr. Aldrich as follows:
1.—Acceptance credits to German banks. These have been utilized in the
operation of bankers' acceptances, drawn for the most part to finance import and export trade. They are the unconditional joint obligations of
German banks and of German commercial concerns, or have the guarantee
of the German Government or the Gold Discount Bank, $24,650,616.
2.—Acceptance credits to German banks, commercial concerns or industries. The bankers' acceptances drawn under these credits serve generally the same purposes as the foregoing. They are not formally secured
or guaranteed but depend upon the good name of the borrower,$4,071,131.
3.—Loans to German banks, commercial concerns or industries. These
loans are the joint obligations of German banks and commercial or industrial concerns, or are guaranteed by the Gold Discount Bank or the German
Government, or are collateraled by German securities or bills of exchange,
$25,126,842.
4.—Loans to German banks. These loins are not formally secured, but
depend upon the good name of the borrower, $1,339,326.
5.—Loans and credits to German Government and other public bodies.
The largest single item in this classification represents a participation in
Total
the banking credit of 1930 to the German Government. 313,737,833.
Total short-term, $68,925,748.
Equitable Trust Co.—
6.—Long-term obligations at their market value now held by the Chase Canada
National Bank, New York, $607,781.
Latin America
Germany
Holdings by Branches Abroad.
Other European
"The foregoing total of $69,533,529," Mr. Aldrich testifies, "represents Miscellaneous
the total German obligations held by the Chase National Bank at its New
Total
York office. For the sake of completeness, I wish to say that in addiHarris. Forbes & Co.—
tion to the foregoing, the London branch holds short-term German credits
Canada
amounting to $1,580.000. These are acceptances and loans of the same Latin
America
general character as at the head office.
Germany
"The long-term German obligations held by the London branch amount Other European
at market value to $14,452: the Chase Securities Corp. long-term holdings Miscellaneous
and the Chase Harris Forbes Corp. long-term holdings, as well as the
Total
short- and long-term holdings of the Chase Bank, Paris, amount at market Grand total
value to $3,535.346.
•After elimination of duplications
51,897,104,500 $44,567,031
$376,200,000
434,472,000
219,500,000
57,000,000
50,000,000
$270,000
1,191,528
822,887
128.157
149,000
$1,137,172,000 $2,361,572
$411,054,500
651,450,000
1,520,000,000
780.390.000
$777,968
2,531,994
1,443,788
1,202,077
33,362,894.500 35,955.825
*$5,084,749,000 $12.884,428
209
FINANCIAL CHRONICLE
JAN. 9 1932.]
Number of Issues—Originated, A, Participated in. B.
A.
38
14
20
Chase Securities Corp
Equitable Trust Co
Harris, Forbes & Co
Total
72
B.
54
36
91
181
The following table, in which is listed the foreign bond
issues in which the Chase Securities Corp., the Equitable
Trust Co. and Harris Forbes & Co. participated in organize,
tion, and (or) management, and under management of others
from 1917 to 1931 is taken from the New York "Times"
ORIGINATED AND (OR) MANAGED (1921-1930).
CoutUry.
Chase Securities Corp.—
Canada
Latin-America
Germany
Other European
Miscellaneous
Total
Equitable Trust Co.—
Canada
Latin-America
Germany
Other European
Miscellaneous
Total
Harris. Forbes & Co.—
Canada
Latin-America
Germany
Other European
Miscellaneous
Total
Grand Totals—
Canada
Latin-America
Germany
European
Miscellaneous
Participation in Organizing
Principal
Gross
Amount.
Profit.
Retired:
$526,200,000 $162,400,000
452,732,000
245,000,100
39,400.000
13,520,000
4,500,000
146,500
$727,000
1,504.000
181,000
17,000
$1,022,832,000 $421,066,600 52,429.000
376,200.000
3,000,000
50,000.000
162,400,000
3.000,000
25,506,000
50,000.000
270,000
120,000
295,000
$479,823
258.977
1,203,383
195,848
Total Principal
Amount of
Originations &
Participations.
with Others.
$526.200,000
582,854,500
177,650,000
410.400,000
200,000.000
$727,000
1,983.823
439,977
1,220.383
195.848
$874,272,500 $146,574,790 $2,138,031
51,897.104,500
$4.567,031
1,071,528
327.887
128,157
376.200.000
434.472.000
219.500.000
57,000.000
50,000,000
270,000
1,191,528
622.887
128.157
149,000
Participation with Others
Principal
ParticiGross
Amount.
Profits.
pations.
$130,122,500
138,250,000
405,900.000
200,000,000
431,472.000
169,500,000
57.000,000
$26,044,582
16,871,250
84,971,458
18,687,500
56,351,031
25,430,428
8,366,666
Total
Gross
Profits.
2.283,500
149.000
$479,200,000 1193.189.500
$834,000
$657,972,000
$90,148,125 11,527,572
$1.137,172,000
12.361.572
1.506.500
24,260,000
97.000
1,379,000
720,000
262.000
405,111.500
491.750,000
1,520,000,000
771,339,000
27,184,054
65,210,000
60,074,200
49.801,500
680.968
1,152.994
1.443,786
940,077
411,054,500
651,450.000
1.520,000.000
780,390,000
777.968
2.531.994
1,443.786
1.202,077
$3,188,251,500 5202.269,754 54,217,825
53.362,894,500
$5,955.825
5,943,000
159,700.000
9.000.000
5174,643.000
526,200.000
461,675,000
249,100,000
4,500.000
59,000.000
$26,486,500 $1,738,000
162,400,000
246.506,500
40,780,000
146,500
3,003.500
997,000
1,721,000
1,855,000
17,000
411,000
712,234,000
531,750,000
1,818,900,000
721,390.000
109,579,667
107,511,678
153.412.324
68.489,000
2,232,319
1,739,858
2,775,326
1.135,925
Total
*$1,300,475,000 $478,342.600 85,001.000 *$3.784,274,000 $438,992,669 $7,883,428
* After elimination of duplications.
*$5,084.749,000 $12.884,428
Elsewhere in this issue we refer further to the testimony of Mr. Aldrich.
Statement by State Department as to Its Attitude
Toward Foreign Loans—Security or Merits Not
Passed On—Letter in 1925 Urged Care by Bankers
in Financing German Loans Department of Commerce on "Over-Borrowing" of South American
Countries.
On Jan. 7 a statement was issued by the State Department at Washington in answer to criticisms before the Senate
Finance Committee as to its policy in the matter of foreign
loans; the Department asserts that it "has not passed on the
security or the merits of foreign loans." The Department
also says:
In various instances the Department, without assuming authority or
taking responsibility, has pointed out to banking groups features of contemplated loan arrangements which seemed obscure or unsound, or has
called ther attention to some feature of the financial or economic position
of the borrowing country or enterprise that might be overlooked; but all
this was done merely as information and without assumption of responsibility.
In its statement the Department embodied letters issued
to banking houses respecting German loans, in one of which
it said "the Department believes that American bankers
should examine with particular care all German financing
that is brought to their attention, with a view to ascertaining
whether the loan proceeds are to be used for productive and
self-supporting objects that will improve, directly or indirectly, the economic condition of Germany and tend to aid
that country in meeting its financial obligations at home and
abroad." From a Washington dispatch Jan. 7 to the New
York "Times" we take the following regarding the Department's statement:
"The Department believes that American bankers should examine with
particular care all German financing that is brought to their attention, with
a view to ascertaining whether the loan proceeds are to be used for productive and self-supporting objects that will improve, directly or indirectly,
the economic condition of Germany and tend to aid that country in meeting
Its financial obligations at home and abroad."
The document given out by the Department apparently was intended to
clear the air of controversies surrounding the flotation of such loans.
Nevertheless, it was termed a "wretched subterfuge" by Senator Glass of
Virginia, former Secretary of the Treasury.
For two years Senator Glass has conducted a campaign by speeches in the
Senate and statements against what he has called the practice of the State
Department in giving what he said amounted to approval to the issuance
of the bonds of foreign borrowers.
Senator Johnson of California. at whose instigation the Finance Committee has been conducting an investigation into the issuance of foreign
bonds with Senator Johnson in the role of interrogator of international
bankers, criticized the State Department not for its policy but for withholding from public notice a warning issued to bankers in 1925 concerning
the possible risk entailed in foreign bonds.
Department Explains Its Policy.
The State Department declared that its policy was not to pass upon the
Intrinsic value of a foreign loan, but merely to communicate to bankers
whether,from the standpoint offoreign relations, any objections were raised.
Senator Glass said that on a previous occasion the Senate had refused to
accept as adequate a similar explanation by the State Department for what
he termed its "lawless activities" in the "usurping of a banking function."
Referring to the practice of the State Department of passing on foreign
loans only be refraining from objecting to the flotation of bonds in the
United States, Senator Glass said:
"It was well understood by the bankers issuing these loans that the
failure of the State Department to object was tantamount to approval, and
the foreign bonds were sold to the investors of this country with the moral
sanction of the government."
The Department's explanation was made public in two sections, one
dealing with German loans and the other with foreign loans in general. The
former included a latter written to bankers in Oct. 1925, when Frank B.
Kellogg was Secretary, dealing with a loan for the city of Frankfort, Germany, in which reparations were cited and other factors considered.
The statement made no reference specifically to loans floated for Latin
America where defaults on issues in excess of $800,000,000 have occurred.
It also ignored the testimony before the Finance Committee yesterday by
Grosvenor M. Jones. Chief of the Finance and Investment Division of
the Bureau of Foreign and Domestic Commerce, who said that the State
Department overrode objections made by the Commerce Department in
1928 in regard to a loan of $23,000,000 for Bolivia and a short-term credit
of $20,000,000 to Colombia. .
.
The Department quoted one of the warning letters to American bankers
In regard to a proposed loan to the Free State of Bremen, in which it cited
Article 248 of the Versailles Treaty, which provides a first lien for the reparations on all German resources.
Later, in August 1925, in the case of a loan to the city of Munich, the
department admonished the bankers to examine carefully whether the money
was really intended for productive purposes.
Reich Disapproval Was Cited.
In the letter of October 1925, the Department also pointed out that the
placement of German loans in the American market had taken on very
considerable proportions and that even certain German Federal authorities
were looking with evident disapproval upon a tendency of German municipalities and States toward extensive indebtedness.
This was understood to refer to a conversation of Hjalmar Schacht
then President of the Reichsbank, with Secretary Kellogg concerning a
proposed loan of $100,000.000 to the Free State of Prussia for social purposes,such as the construction of playgrounds. As a result of this warning.
American bankers made a loan of only $30.000,000.
When the finance committee learned of the letter of October 1925,
Senator Johnson of California commended former Secretary Kellogg
for having written it, but sharply criticized the department for having
withheld it after the present investigation was begun.
Division among the Senators present, however, over the intent of the letter. Senator Smoot of Utah, Chairman of the committee, holding that it
probably referred only to obligations of the German Government. while
Senator Johnson maintained that it was a diplomatic warning to bankers
to go over the situation concerning all German securities. . • •
Joseph R. Swan, President of the Guaranty Co.. security subsidiary
of the Guaranty Trust Co., was being examined by Senator Johnson when
the letter came to light. He testified that he did not recall definitely the
1925 State Department letter, but added:
"Nothing in that letter would have caused us to have done more than
we were doing. We had been scrutinizing loans most carefully and the
loans we made in Germany have remained good."
Soundness Has Been Upheld.
All witnesses before the Committee have testified that no German private loans floated in this country have been defaulted.
Representative Fish said that the State Department had rendered a "disservice" to American investors and to the Republican party by not publishing the warning on overborrowing before to-day.
"It was excusable," said Mr. Fish, "that this letter was not submitted
to the Congress when the moratorium bill was being considered. The
State Department is now placed in the position, by the Democrats, as
having tried to protect and absolve certain bankers, to the detriment of
the public interest."
Mr. Swan testified that the Guaranty Co. had organized foreign loans
In the past 12 years totaling $540,686,000, of which $104,056,000 had been
retired, and on which a gross profit of $3,205,000 was realized. It also
participated in loans organized by others totaling $4,960,238,000, which
returned a gross profit of $9.358,000.
"Typical Reply" is Quoted.
Mr. Swan quoted to the committee a "typical reply" from the
State
Department in answer to an inquiry about an issue of Hungarian land
210
FINANCIAL CHRONICLE
[Vol,. 134.
mortgage bonds,in which the department gave its opinion that "in the light this was done merely as information and without assumption of responof the information the Department of State offers no objection to this sibility.
financing."
This attitude has perhaps been best stated in the report of the Secretary
C. I. Stralem, a partner in Flallgarten & Co., testified that since 1920 his of the Treasury of 1926:
"The question of the soundness of a particular loan is not one upon which
firm had originated foreign bond Issues totaling $314,716,500, of which
$74,770,000 had been retired. Net profit on this business to his company the Federal Government should pass, but it is'the banker floating the loan
was given as $670,200, after the deduction from profits of a loss of $104,000 In this country who must decide this question in the first instance, and it
on an issue of $25,000,000 worth of bonds for Columbia in 1925, the first Is the investor using his savings to acquire the security who must finally
direct loss on the flotation of a foreign bond issue to be described to the decide whether or not the risk is to be accepted."
committee.
Precautions Against Exploitation.
The loss, Mr. Stralem testified, resulted from unfamiliarity of the public
with Colombian bonds, which forced a reduction in the contemplated issue
Furthermore, the department has guarded against the possible employprice. Six months after this issue, he said, his company put out $35,000,000 ment by banking houses of the exchange of communications between them
and the department in such a way as to assist in the sale of securities. It
more Colombian bonds, on which it made a profit of $67,500.
Instructed all institutions that announcements offering foreign loans for
"Over-borrowing" is Stressed.
sale should not state that they are contingent upon an expression from the
James C. Corliss, Latin-American expert in the Finance Division of the Department of State regarding them and that prospectuses and contracts
should contain no reference to the attitude of the Department.
testimony
corroborative
Bureau of Foreign and Domestic Commerce,gave
Furthermore, as was stated in the report made by the Secretary of State
concerning the partially overborrowed condition of South American countries
which was described in detail yesterday by Grosvenor M. Jones. Mr. in response to Senate Resolution No. 293 (see Senate Document No. 187,
Corhas said that "at one time in Colombia there were something like 29 71st Congress, second session), in its replies the Department of State has
often been the spokesman of considerations advanced by other executive
representatives of American bond houses competing for loans."
There was inserted in the record a letter from Francis P.Garvan,President departments of this Government. For example, the Department of State
of the Chemical Foundation, who cited serveral foreign loans to nitrate carried out the policy recommended by the World War Foreign Debt Comand other chemical manufacturers abroad which he said encouraged foreign mission of objections to loans to nations which had not funded their national
competition with American chemical manufacturers and "have been made indebtedness to the United States.
by our bankers in direct hostility to American interest."
Term of Department's Reply.
Mr. Garvan listed loans by various banking groups in New York City.
In ordinary practice the form of words employed by the Department of
financed through bond issues in the United States that have depreciated
greatly. These loans included $16,500,000 to the Anglo-Chilean Consoli- State in acknowledging the advance notice of contemplated loan issues has
dated Nitrate Corp., $32,000,000 to the Lantaro Nitrate Co., $20.000,000 been, with immaterial variation, as follows:
"In the light of the information before it, the Department of State offers
to the Norwegian Hydro-Electric Nitrogen Corp.. $4,000,000 to the Ruhr
Chemical Corp. (Germany), $34,000,000 to the Chilean Nitrate Corp. and no objection to the flotation of this issue in the American market."
was
which
Or, in the very infrequent instances where some reason led the DepartChemical
Corp.,
American
I.
G.
the
one of $30,000,000 to
ment to the contrary judgment, the Department, usually after explaining
organized by the German I. G. Chemical Corp.
the reason therefor, employed in general merely the negative of this form:
Huge Loss is Predicted.
"You will, therefore, appreciate that this Department is not in a position
Mr. Garvan stated that the private foreign loans represent "the loss for- to indicate that it perceives no objection to the financing to which you
ever of a great part of the $15.000,000,000 loaned abroad," and the placing refer."
This form of reply was, after a first brief period, regularly supplemented
of this money in the hands of foreign competitors of manufacturers.
"All these evils can be seen in their intensified form in the international by the further paragraph:
"You, of course, appreciate that, as pointed out in the Department's
bankers' loans to foreign competing chemical industries," he added. "Our
chemical industry is faced, not only in our own country, but throughout the announcement of March 3 1922, the Department of State does not pass
world, with competitors whose pockets are filled with American savers' upon the merits of foreign loans as business propositions nor assume any
money, and with the ability to extend long-time credit based thereon, responsibility in connection with such transactions, also that no reference
competitors who either never intend to repay their loans,or who intend to to the attitude of this Government should be made in any prospectus or
otherwise."
buy them up in a depreciated market at 10 or 20 cents on the dollar.
Procedure was Expedited.
"The only defense these hankers have been able to suggest for themselves is that they were encouraging foreign trade," he went on. "The
Beginning August 1929, it was decided to expedite the procedure of contruth Is, the world borrows in our market and buys in the cheapest market, sulation with other departments of this Government, and to simplify the
or, in the case of a monopoly, in the only market."
forms used. Replies to bankers' letters were reduced merely to a brief
The statement given out by the State Department Jan. 7
is taken as follows from the "Times":
The Department of State has not passed on the security or the merits
of foreign loans. The sold aim of the department has been in the interest
of the citizens of the United States in connection with its foreign relations.
These ideas have been repeatedly communicated to the public and
the public has been made to understand that the department's action
carried no implication as to government approval of loans. In fact, it
may be said that no foreign loan has even been made which purported to
have the approval of the American Government as to the intrinsic value of
the loan.
The arrangement in accordance with which banks or other institutions publicly offering foreign securities for sale inform the American
Government of contemplated issues in advance of sale arose after the war,
when the American capital market assumed leading importance as a source
of financial aid and reconstruction.
paragraph of acknowledgment, followed by the sentence:
"In reply, you are informed that the Department is not interested in the
proposed financing."
In the case of Germany, where the German financial authorities endeavored to guard and control borrowing by public authorities and set up
for this purpose an advisory board which, however, under the German
Constitution could not be given mandatory powers, the Department took
cognizance of this situation and also of certain other special considerations,
and its replies to the bankers called attention to various special features of
the German situation.
The replies, therefore, took on a somewhat more extended form, preserving, however, the notice to the effect that the department did not pass
upon the merits of loans as business propositions nor assume any responsi bllity in connection with them.
A somewhat similar policy was observed with respect to Austrian loans
for a limited time.
Flotation of Foreign Loans.
At a conference held last summer between the President, certain members
of the Cabinet and a number of American investment bankers the interest of
the Government in the public flotation of issues of foreign bonds in the
American market was informally discussed and the desire of the Government to be duly and adequately informed regarding such transactions before
their consummation, so that it might express itself regarding them if that
should be requested or seem desirable, was fully explained. Subsequently,
the President was Informed by the bankers that they and their associates
were in harmony with the Government's wishes and would act accordingly.
The desirability of such co-operation, however, does not seem sufficiently well understood in banking and investment circles.
The flotation of foreign bond issues in the American market is assuming an increasing importance and on account of the bearing of such operations upon the proper conduct of affairs it is hoped that American concerns
that contemplate making foreign loans will inform the Department of State
in due time of the essential facts and of subsequent developments of importance. Responsible American bankers will be competent to determine
what information they should furnish and when it should be supplied.
American concerns that wish to ascertain the attitude of the Department regarding any projected loan should request the Secretary of State
in writing for an expression of the Department's views. The Department
will then give the matter consideration and, in the light of the information
in its possession, endeavor to say whether objection to the loan in question
does or does not exist, but it should be carefully noted that the absence
of a statement from the Department, even though the Department may
have been fully informed, does not indicate either acquiescence or objection.
The Department will reply as promptly as possible to such inquiries.
The Department of State cannot, of course, require American bankers
to consult it. It will not pass upon the merits of foreign loans as business
propositions, nor assume any responsibility whatever in connection with
loan transactions. Offers for foreign loans should not, therefore, state or
imply that they are contingent upon an expression from the Department of
State regarding them, nor should any prospectus or contact refer to the
attitude of this Government.
The Department believes that in view of the possible national interests
involved it should have the opportunity of saying to the underwriters
concerned, should it appear advisable to do so, that there is or is not objection to any particular issue.
Request to Bankers by Harding.
President Harding early in his administration expressed Informally
to American bankers the desire of the Government to be informed. In
order to clarify the Government's purposes and to establish uniformity
of procedure, the Department of State on March 3 1922, issued the public
announcement attached requesting that communications regarding loans
which the bankers proposed to issue, should be in writing and addressed
to the Secretary of State.
The procedure of consultation between various interested branches
of the Government has varied slightly from time to time, as well as the
range oflending activity of which the department has wished to take notice,
and the phrases employed in replying to the bankers. But the principles
expounded in this first public notice have remained fully in force and continue to represent accurately the basis, the purposes and the limitations of
department practice.
On the whole the department does not ask that it be notified of purchases of foreign securities without intention of public sale, nor of issues
of stock or listing of stock of foreign enterprises on American Stock Exchanges. Similarly, security Issues of American enterprises, the proceeds
of which are employed to acquire or operate properties abroad have generally
not been referred to it for notice.
The practice of notifying the department of contemplated issues of securities for foreign private industrial enterprises has on the whole been less
strictly observed and construed than that of notification of Government
security issues.
Purpose of the Practice.
The practice was first established with the idea of safeguarding essential
American interests that might be affected by the process of foreign investment: it has been maintained as an infcrmal, comparatively light and flexible check against the possibility that contemplated loan issues might run
counter to some governmental policy or aim.
At every opportunity the department has made clear to the bankers
and interested public that this practice of advance notification to the
department and the absence of objection and comment by .the department
must in no way be considered or portrayed as approval of the loan.
The department has never assumed responsibility for the wisdom or
worth of the loans of which it was informed. Its responses avoid all judgment of the matters of business risk involved, and in no way represent
In the Matter of German Loans.
measurement of the merit of any foreign loan as a business proposition
Prior to the putting into force of the Dawes Plan in October 1924,
either for the bankers or investors.
In various instances the department, without assuming authority or and the issue of the Dawes loan, there were no flotations in the American
taking responsibility, has pointed out to banking groups features of con- market of German loans payable in dollars, and in regard to the few public
templated loan arrangements which seemed obscure or unsound, or has offerings of mark securities of which the Department was notified by Antercalled their attention to some feature of the financial or economic position ican investment houses the Department merely reserved its complete liberty
of the borrowing country or enterprise that might be overlooked: but all of action in any contingency that might arise.
J.9 1932.]
FINANCIAL CHRONICLE
211
- Beginning in July 1929, after the publication of the report of the Young
Committee, June 7 1929, the Department discontinued the use of this
long form of response which referred to the agent general for reparation
payments and the transfer committee organization under the Dawes Plan,
and replied to letters regarding German loans in the same very brief formula
then adopted for other foreign loans, namely. "The Department is not
interested in the proposed financing." In response to advices regarding the
issue of the Young Plan loan, this formula appeared to be somewhat inappropriate and the reply was "The Department does not desire to interpose
objection to the proposed financing."
The formula "the Department is not Interested in the proposed financing"
remains the standard practice up to the present date.
The American slice of the Dawes loan, issued in October. 1924, was
the first German dollar loan distributed in this country. The Department in reply to the bankers' notification of this issue merely employed
the common "no objection" form given above.
With the first subsequent German dollar loans, in December 1924.
the Department began to call attention to various special considerations
which it believed should be taken into account in arranging German financing. The earllerst form used to convey these observations (as taken
from a letter written in regard to a proposed Issue for the State of Bremen)
was as follows:
"In connection with this financing, the Department has already invited
your attention to the provisions of Article 248 of the Treaty of Versailles
under which the cost of reparations and other costs arising under that
treaty and all agreements supplementary thereto are constituted a first
Footnote A.
charge upon all the assets and revenues of the German Empire and its
The two most important of varying forms in referring to the attitude of
constituent States, subject to such exceptions as the Reparation Commis- the Agent General for Reparation Payments
were as follows:
sion may approve.
(I) Used in the earlier period beginning in December 1925:
German Decree as to Loans.
"Moreover, it cannot be said at this time that serious complications
"The Department has also referred you to the provisions
of a decree in connections with interest and amortization payments by German borpassed by the German Government on Nov. 1 1924. providing
rowers
may not arise from possible future action, by the agent general
that authority must be obtained from the Federal Minister of Finance for the
flotation and the transfer committee. In this connection your attention is called to a
of foreign loans.
public statement by Mr. Gabert on Nov. 11 1925, to the effect that the
"The possible bearing of the Dawes Plan upon the future
service of transfer committee is not in a position to give assurance concerning the
German loans floated in foreign markets has also been brought
to your payment of interest or amortization on the German loans floated abroad.
attention.
While the Department of State does not wish to be understood as passing
"Subject to these considerations, and in the light of the
information upon the interpretation or application of the provisions of the Dawes Plan,
at hand, I take pleasure in informing you that this Department
or
upon their effect, if any, upon loans such as the one now under conoffers no
objection to the financing in question."
sideration by your firm, it believes that in the interest of yourselves and
of your prospective clients wou should give careful consideration to this
Subsequent Forms Employed.
question."
In February 1925, as exemplified in the letter written
as regards the
(2) Beginning in January 1928, the following was substituted for the
first issue of Saxon public works bonds,the form was reduced as
follows:
second
sentence in the preceeding form:
"The Department assumes that appropriate examination
has been
"In this connection your attention is called to the statement in the
made in connection with the proposed loan of the provisions
of
Article report of the Agent General for Reparation Payments on Dec. 10 1927,
248 of the Treaty of Versailles, and of the possible effect of
the Dawes Plan that with the one exception of the German External Loan 1924. the transfer
upon the transaction.
committee and the Agent General for Reparation Payments have always
"Subject to the foregoing considerations, I beg to inform you
the light of the,information before it, the Department of State that, in stated in answer to inquiries that they were not in a position to give any
offers no assurance whatever as to the service of loans of the German Reich, the
objection to the flotation of this issue in the American market."
States or the communes, or of German companies or other undertakings
During this period (October 1924-August 1925), in regard to the
flota- that might be floated abroad."
tion of loans by private German enterprises, the Department
used merely
the "no objection" formula in common use.
Statement on Reich Issues.
Beginning Aug. 11 1925 (in the case of a proposed issue from
the city James Speyer Before Senate Committee Details Foreign
of Munich) the Department developed the following
form, which, with
Loans Participated in by Speyer & Co.
variants, it continued until October 1925, to send to bankers
considering
the issue of all German loans:
James Speyer, of the banking house of Speyer & Co., on
"It is presumed that in considering the disposal of these
securities to Jan. 6 told the Finance Committee which is inquiring into
your American clients you have made sufficient
investigation into the foreign loans floated in this
country, that his firm issued
purposes to which the money proceeds will be devoted to
assure yourselves
that the loan will increase the productivity of
Germany in an amount foreign bonds totaling $276,000,000 in the United States,
at least sufficient to furnish, directly or indirectly,
the exchange necessary although $34,000,000 of these went back to customers in
for the service of the loan and to facilitate
payments under the Dawes Plan.
It is also presumed that, in connection
with the proposed loan, you have Europe, and that his firm had participated in flotations
considered the provisions of the Dawes Plan relating
to the control of the totaling $568,000,000 in Europe. A dispatch to the New
transfer of German payments made pursuant to
that plan.
York "Times" Jan. 6, reporting this continued:
"The Department of State does not wish to
express any view at this
A profit of 61,806,647 was realized on the American sales, he said, but
time as to the interpretation and application
of these provisions or as added later that his house had lost $1,457,000 through depreciation on
to their effects if any upon the service and
repayment of loans such as that investments in the same foreign bonds it sold in the United States. He was
In question, and the Department, of
course, reserves full liberty to take the first witness who would make an admission of the amount of his persuch action if any in the matter in the future
as may be appropriate. The sonal losses to the Committee.
Department feels, however, that it should call
these matters to your attention."
Warning to Exercise Caution.
Beginning in October 1925, a still more
extensive form of reply was
developed, which ran as follows (as exemplified
by the city of Frankfort
loan):
"Since the flotation of the German external
loan provided for by the
Dawes Plan, offerings of German loans in
the American market have
aggregated, according to the information
before this Department, more
than $15,000,000, and it appears that a
considerable volume of additional
German financing is now in contemplation.
In addition to the public
offerings referred to abeve,the Department is
informed that a large amount
of private bank and commercial
credits has been extended to German
interests during the past year.
"In these circumstances the Department believes
that American bankers should examine with particular care all German
financing that is brought
to their attention, with a view to ascertaining
whether the loan proceeds
are to be used for productive and self-supporting objects
that will improve,
directly or indirectly, the economic condition of Germany
and
that country in meeting its financial obligations at home and tend to aid
abroad.
View of the Authorities.
"In this connection I feel that I should inform you that the
Department
is advised that the German Federal authorities themselves are
not disposed
to view with favor the indiscriminate placing of German loans in the
American market, particularly when the borrowers are German
municipalities
and the purposes are not productive.
"Moreover, it cannot be said at this time that serious complications
In connection with interest and amortization payments by German
borrowers may not arise from possible future action by the agent general and
the transfer committee.
"While the Department of State does not wish to be understood as passing upon the interpretation or application of the provisions of the Dawes
Plan, or upon their effect, if any upon loans such as the one now under
consideration by you, it desires to point out that there is no objection to
the loan in question."
In the case of proposed issues ofloans for constituent States of the German
Reich, the Department added in the above form letter a paragraph regarding Article 248,similar to the one in use in the earlier periods. This added
paragraph ultimately read, with minor variants adapted to the particular
case, as follows:
Pact Provision Was Pointed out.
"A further point which the department feels should be considered by
you in connection with the proposed loan is the provision of Article 243
of the Treaty of Versailles under which a first charge upon all the assets
and revenues of the German Empire and its constituent States is created
in favor ofreparation and other treaty payments,subject to such exceptions
as the Reparation Commission may approve."'
This letter was the omission of the penultimate paragraph was stabilized
Nov. 211925, and continued in use with changes only in the introductory
paragraph and in the reference to the indications of the attitude of the
Agent Gencral for Reparation Payments, until July 1929, after the report
of the Young committee. (See tootnote A.)
From the "Wall Street Journal" of Jan. 6, we quote the
following:
Mr. Speyer said that loans, on which his company was the principal
handler in this country, had shown a spread between the price paid by issuing house and price to public as high as 7.46% in some cases.
Senator Johnson told the Committee he intended employing an auditor
to figure out just what the profits are to the international bankers so that
It can be made clear.
Reports Profit of 2-3 of 1% on Large Loan.
In a discussion of profits of Speyer & Co., the witness said they were
only 2-3 of 1% of $276.000,000. He said that Senator Johnson had the
impression that after the bonds were sold by Speyer & Co., their responsibility ended. He declared that his immediate family had holdings in foreign
issues which he had sold to the public which have depreciated $1,457.000
since their purchase. These bonds were bought in most cases at their
original price.
Mr.Speyer said the League of Nations Hungarian loans could not have
been sold without approval of the League. The spread on.these ranged
from 7.46% to 734%. In connection with the $9,000,000 Hungarian loan
just after the war, Speyer & Co.'s gross profit was $131.219.
Mr. Speyer was asked if he could give net profit figures. He said that
gross profits previously referred to were net profits with exception of various
permanent overheads and Federal taxes. Senator Smoot said it was unfair
to attempt to force a statement of absolute net profits because of the difficulty of making various allocations. Senator Johnson asked Mr. Speyer
If he was to understand that the profits stated could be taken as either net
or gross, and upon a hesitant acquiescence, Senator Jones stated this
would be highly unfair to the hankers.
Gives Spread on Various Loans.
Mr. Speyer stated that the gross profit on the Berne loan was $64,000.
The spread was 5%,94 to 99.
In March 1921, they handled a $10.000.000 loan at 8% for Sao Paulo,
Brazil. The spread was 90 to 97. Gross profit was $91,000 on 69,000,000
at 734% interest handled in this country out of a total loan of 170,000,000
for the Kingdom of Hungary. Over $60,000,000 worth of these bonds were
sold in Europe.
Questioning Mr.Speyer, Senator Johnson sought to learn how a comparatively small profit could have accrued to Speyer & Co. when the indicated
expenses of issuing bonds ran as high as 6% of the face value. Mr. Speyer
replied that the issues were broken up among many banking houses and that
his firm took no part in retail distribution.
Mr. Speyer's house has been in business in the United States for almost a
century. The family seat, he said, was in Frankfort, Germany. His
father was one of the European international bankers who aided in financing
railroads in the United States before and after the Civil War, when American
builders and Industry looked to Europe for capital.
Among the Speyer bond issues was one for $9,000,000 for Hungary,issued
with the moral backing of the League of Nations, Mr. Speyer said,
for
reconstruction purposes, and another for $5,500,000 for the
benefit of
Greece to aid in repatriating her nationals exiled from Turkey
212
FINANCIAL CHRONICLE
Clarence Dillon, of Dillon, Read & Co., Before Senate
Committee Says Private Foreign Debts to United
States Will Be Paid Unless Extraordinary Forces
Make It Impossible—Firm's Loans Put at $1,491,228,543.
Before the Senate Finance Committee, inquiring into
foreign loan flotations, Clarence Dillon, of Dillon, Read &
Co., stated on Jan. 5 that his firm had originated $1,491,228,000 of foreign loans since the World War. Mr. Dillon
Is reported as saying that private debts owed by institutions
or individuals abroad to institutions or individuals in the
United States will be paid unless extraordinary political or
economic forces make it impossible. The "United States
Daily" of Jan. 6, from which we quote, also stated:
[Vor,. 134.
Japan. 530,000,000,
A total of $1,189.000,000.
Only Defaults Listed in South American Group.
The only defaults are in the South American group, he said. $37.000,000
in Bolivia and $52,000,000 in two Brazilian issues. The latter will be
funded, the Brazilian Government has announced, as to interest, over a
period of not to exceed three years. This has been done before by that
government, in 1898 and in 1914, on both of which occasions payment was
resumed at the end of the three-year period.
Brazilian loans were made in conjunction with Brazilian bankers, who
have acted for many years on behalf of that government, Mr. Dillon
explained, and sterling loans were placed in London simultaneously with
the dollar loans here.
Senator Harrison (Dem.), of Mississippi, inquired as to the domestic
effect of American money loaned abroad. Mr. Dillon replied that it is
not only good business but essential business that we develop the buying
power of our potential customers and create a market for the products
of the United States.
"The more we loan abroad the more we contract credit here," Mr.
Harrison said, "and if we didn't have so much loaned abroad now we
would have more available for our domestic needs."
"The credit of the American Government cannot be compared to that
of any other country. It is pre-eminent," Mr. Dillon stated.
Debts owed by foreign governments or subdivisions of governments to
Individuals or Institutions In the United States are more susceptible to
political influence, Mr. Dillon stated, but will be paid, in his opinion.
a difDebts between governments, he continued, have always been "in
ferent class."
Senator Gore Cites Higher Interest Rates.
Reason for Payment.
Senator Gore, of Oklahoma, expressed a belief that higher interest rates
rather
declared,
he
"expediency,"
of
reason
by
They have been paid
paid or attracted American capital abroad, and that it was not altogether a matter
than "from the sanctity of the obligation." Whether they are
must of surplus funds available here.
not is primarily a political question, he asserted, and each country
Senator King inquired if Dillon, Read & Co. had loaned money on call
on
consider what effects payment will have on their general position and
in New York for foreign account during 1926, 1927 and 1928, to which
other debts. . . .
Mr. Dillon replied, "only small amounts."
Mr. Dillon told the Committee that the foreign security flotations
The Utah Senator inquired also about German purchases of their own
managed by his firm since the war totaled some $1,491,000,000 and that issues in this country, amounts, and the source of the funds. No detailed
German
the "gross receipts" or gross profits aggregated some $12,300.000.
of figures are available, the witness said.
loans constituted $252,000,000 of the total amount, he stated. None
A thorough and exhaustive inquiry into both the legality of the foreign
the foreign loans are in default except three South American Issues, he issues floated, and the economic position of the borrower Is conducted prior
explained.
to the purchase of the securities for sale here, Mr. Dillon explained in
An introductory statement read to the Committee by Mr. Dillon follows reply to Mr. King's questions.
text:
In full
"Then you were convinced," said Mr. King, "as to the economic sound"We must realize that our transition from a debtor to a creditor nation ness of the German nation I"
came very suddenly as the result of the war, and the change in our mental
"We were convinced of the soundness of the concerns to which we made
outlook has taken time and requires more time for a corresponding ad- loans," said Mr. Dillon. "We are equally convinced that they are good
justment. Over our histbry our needs have been such that all our surplus now
and that the bonds will be paid, unless some extraordinary economic
wealth has been needed to develop our own resources and pay interest and or political upheaval prevents."
principal on our debts. Consequently we have ingrained in us the attitude
Senator Shortridge (Rep.), of California, asked why the market value
of a debtor nation but now we suddenly find ourselves a creditor nation of
these bonds is at present low. Mr. Dillon answered that he wished he
with our own resources—both agricultural and manufacturing—overcould answer that, and pointed out that the same situation existed with
developed, producing far in excess of our own power of consumption.
to domestic securities.
"And as a creditor nation we are developing capital very quickly. In respect
the past, we could ship our surplus production to pay our debts. This
Does Not Recall Request to Stop Foreign Loans.
we can no longer do. Also, being a creditor nation, other nations are not
Senator Johnson he did not recall a letter from the
told
Dillon
Mr.
taking our goods, but, in paying us, will be pressing us to accept their
State Department in 1927 requesting issuing houses not to make further
goods.
neither did he recall a statement relative to a Prussian loan.
"So we must determine what we are going to do with that capital— foreign loans,
WOO not familiar, he said, with the view expressed in 1927 by G. Parker
certainly not at the moment to further develop our own resources, now He
Agent-General for reparations payments, that Germany had
largely overdeveloped, but rather to get rid of our surplus production, Gilbert,
but understood he had made such a statement.
both agricultural, mineral and manufactured. In order to do this we overborrowed,
Asked if his firm had made loans to Germany since 1927, Mr. Dillon
must take in exchange the products of other countries or make loans or
of some $30,000,000 made in 1928 to German Industry.
issue
one
cited
both. Otherwise we shall be forced to a curtailment of our own proSenator Johnson brought out through questioning the details of Bolivian
duction, with the corresponding lowering of our standard of living.
Issues floated by Dillon, Read & Co. now in default. Mr. Dillon gave as
"When we make a foreign loan, it very seldom results in the export of
the reason for default the falling off of revenue dependent upon the tin
United States currency, but is the means of payment of a debt to us or
market. They did not compete in South America for that loan, he conthe transfer of goods somewhere. Again, we must determine what is the tinued. the Bolivians having come to New York to seek the loan. He
most advantageous use the United States can make of her surplus capital added that this is the first Bolivian default in recent years.
in her own (not anybody else's) interest—certainly not in further over"Do you know that the Minister of Finance was accused of taking a
building and not in making bad loans, but in making good loans to countries bribe in connection with the Bolivian loans?" asked Senator Johnson.
who are potential buyers. This means to Europe, who are consumers "No," replied Mr. Dillon.
of our surplus in agriculture and minerals, and to South American coun"Was there a similar situation in respect to a loan to Milan, Italy?" the
tries, who are potential buyers of our manufactured products, and to the California Senator asked, to which Mr. Dillon replied: "My associate
extent that we make loans to South America we are going to be exporters tells me there were certain court procedures following that loan."
of goods.
Questioned on Loan to Brazilian Railroad.
Places Foreign Debts in Three Categories.
"In considering foreign debts. I think they should be put into three
distinct categories:
"1. Those owed to institutions or individuals of one country by institutions or individuals of another country.
"2. Those owed by governments or subdivisions of governments, such
as municipalities, to Institutions or individuals of another country.
"3. Those owed by one government to another government.
to
"As to the first category, I am certain the private debtors are going
pay unless extraordinary political or economic forces make it impossible.
larger
In every country the integrity of the individual still remains. The
-day solvent,
private corporations to whom we have loaned money are to
and wherever there is any difficulty in meeting their foreign obligations,
as in the short-term credits to this country, it is a question of transfer:
that is, their ability to get dollars rather than their solvency.
"As to the second category, of course, these are more susceptible to
political influence, but as to them I believe they will be paid. If you
cannot assume that, then there is no basis left for the continuation of our
civilization.
"As to the third, the debts between governments, these have always
been in a different class. Nations have not paid nations so much from
the sanctity of the obligation as from the expediency of the moment.
Whether these debts are paid or not paid is a political question, primarily,
In every country. If they are large enough they naturally have a reflex
on other debts, and each country must consider what repercussions its
handling of these debts will have on its own situation."
Since the war. Dillon. Read it CO. have handled foreign loan flotations
in the United States totaling $1,491,228.543, Mr. Dillon testified. In
addition, they participated for small amounts in loans handled by other
houses.
Of that amount, the witness stated. $270.000,000 was originally sold
abroad and some had been bought back since by nationals of the issuing
countries. In addition. 5301.000,000 has been retired through sinking
funds and calls. Thus, on Jan. 1 1931, $1,189.000,000 was outstanding,
divided as follows:
Canada, $499,000,000:
Germany,$252.000,000:
Holland, $115,000,000:
France, $22.000.000:
Italy, $32,000,000:
Poland, $27,000,000:
South America. $209,000,000:
Referring to a Brazilian Government loan of $25,000,000 for electrification of a railroad made eight years ago, Mr. Johnson declared that no
electrification had yet taken place, and no sinking fund provided for, and
the interest technically in default.
Mr. Dillon replied that only $8.000,000 was for electrification, and
tenders are now being asked for electrification estimates.
The total gross receipts, which Mr. Dillon declared should not be called
profits, on their total underwritings since the war were in excess of $12,000.000, Mr. Dillon said, or some 84-100ths of 1%.
Dillon, Read & Co. have no short-term German credits, either under
the StIllhalt agreement or otherwise, Mr. Dillon testified.
While his company has no foreign branches or offices, they do have representatives in some European capitals and South American cities who
keep them advised on conditions there, Mr. Dillon stated.
Germans Buy Back Bonds, Ile Says.
The German corporations sometimes buy back blocks of their awn
bonds floated here, Mr. Dillon said. They are doing so currently to a
limited extent, he added, and are glad to do so now, because of the low
quotations. "How can they do that?" Mr. Johnson asked. "Didn't we
have to grant them a moratorium?"
"There has been no moratorium on these private debts," Mr. Dillon
replied. Moreover, he pointed out, American corporations are doing
the same thing.
There is not very much, if any, short-selling of bonds, Mr. Dillon stated
in response to a question from Senator Couzens (Rep.), of Michigan.
Since a portion of foreign securities floated here is sold abroad, is it
inaccurate to say that the total represents a loan to foreign interests, Mr.
Couzens asked, to which Mr. Dillon replied in the affirmative.
At Senator Johnson's request Mr. Dillon detailed the German %SUM
floated by his company. While they are selling below par, he told Senator
Shortridge, they are fundamentally just as good as these of other countries.
Asked by Senator Connally (Dem.), of Texas, if his firm submitted
proposed foreign issues to the State Department to ascertain if there is
any objection to their flotation. Mr. Dillon replied in the affirmative. He
added that no objection had been interposed to any of their loans.
Dillon, Read & Co. does not represent in this country any of the foreign
governments or corporations whose securities they have underwritten,
the witness told Senator Johnson. They do act in the capacity of agent
for paying coupons on bonds, however, he added, it being the usual practice for the originating house to perform that function.
JAN. 9 1932.]
FINANCIAL CHRONICLE
Otto H. Kahn of Kuhn, Loeb & Co. Again Testifies
Before Senate Committee Investigating Flotation
of Foreign Loans—Opposed to "Managed Currency"
Proposal--Nothing More Dangerous Than to Put
Printing Presses to Work, He Says—No Peril in
Gold Standard.
According to Otto H. Kahn, of Kuhn, Loeb & Co., no power
on earth can get the United States off the gold standard,
except the United States Itself, if it so chooses. This declaration was made by Mr. Kahn in testifying on Jan. 4 before
the Senate Finance Committee investigating the flotation
of foreign securities in this country. Mr. Kahn added (we
quote from the New York "Times" dispatch, Jan. 4) that
he could see no reason why the United States should so
choose, expressed the opinion that there was no reason why
It should follow the example of England in this respect, and
asserted that France might withdraw the $500,000,000 of
gold it has here without impairing the ability of the United
States to maintain the gold standard. The same account
stated:
Mr. Kahn declared definitely against a "managed currency,"
and asserted
that the advocates of this sort of a currency never had put
forward a
definite proposal.
"So long as we maintain the gold standard we are limited in
our own
follies and extremes," he said. "I know nothing more
dangerous in its
possibilities than putting the printing presses to work."
Mr. Kahn had previously been heard by the Committee
on Dec. 21, and what he had to say at that time was indicated in our issue of Dec. 26, page 4240. As to Mr. Kahn's
testimony at the Committee hearing on Jan. 4 we take
the following from the "Times":
Valuation by a Hysterical Public.
Agreeing with Senator King, Democrat, of Utah, that there had been
too much "high-pressure" salesmanship in the sale of bonds in the past,
the banker made the point that the shrinkage in the prices of foreign
bonds was not surprising, since domestic bonds also had declined and
even United States Government bonds, which he characterized as the
best securities in the world, had decreased 15% in value.
"No one can be responsible for the valuation a hysterical public has put
on these foreign bonds," Mr. Kahn said. "The depreciation in the value
measures the utter demoralization that has come upon the people. In
1927 greed was in the driver's scat; now fear is in the driver's seat."
Mr. Rahn, thoroughly at ease on the witness stand in the face of sharp
inquiries, was questioned at length on his views concerning the gold standard,
Senators Johnson and Shortridge, Republicans, and Senators Gore and King,
Democrats, doing most of the questioning on this subject.
"You are looking for changing conditions in the world constantly?"
Senator Johnson asked, after a discussion of the floating of foreign loans
by American banking houses.
"Yes, Senator," said Mr. Kahn.
"Who could tell 10 years ago that France would be to-day sitting on
top of the world?" the Senator asked.
"No one could, so far as I know," was the reply.
Gilbert's Warning Recalled.
Senator Couzens asked if it were not true that S. Parker Gilbert had
predicted coming financial disaster in 1927. Mr. Kahn replied that his
recollection was that Mr. Gilbert's so-called prediction was in relation
to Germany only, and as a warning not to overdo the lending of funds
to that country.
Senator Johnson recalled that John Maynard Keynes, British economist,
made substantially the same prophecy in 1922.
"John Maynard Keynes has been a Cassandra ever since 1918, when he
left the British Commission for Negotiating Peace, threw up his job and
held that the world was going to the dogs unless 'my formula, my private
and patented formula is adopted,'" the banker replied.
"It was not adopted, and ever since he has been hollering about it. He is
a very able man, an exceedingly able man, for whose opinion I have great
respect; but, like many economists, he is apt to lose himself in his own
mental eloquence, and persuade himself of things perhaps to a greater
extent than the ordinary, average man would be able to persuade himself
as to his own infallibility."
As to Keynes and Bi-metallism.
Senator King asked the witness if he recalled that Mr. Keynes was for
many years "a strong devotee of gold, and denounced the use of silver,
particularly bi-metallism?"
"Yes," was the reply.
Q.—But in his recent book, In two volumes, in the last volume he has repudiated
those earlier views and said that gold Is a parvenu, and that It becomes necessary
—or at least that Is the Implication—that we should have the restoration of silver
to a monetary status In order to avert these catastrophes to which we have referred.
Would you agree with that view? A.—Senator. I have read his book, not very,
very carefully, and I have also read various other articles of his. They are all
tinged with the color of the tall of the fox which was no longer In the place where
It Intended to be. The fox had lost his tail and he wanted everybody else to lose
his tall, and he wanted the United States to lose Its tall: but I am wholly convinced
that the United States is going to do no such thing to accommodate them.
"The United States lost its head instead of its tail," suggested Senator Gore.
"I think that in 1929 there was a brainstorm, and all one can gay is
'Let him who is without sin first cast a stone,'" Mr. Kahn replied.
Senator Shortridge asked: "What does the metaphorical phrase mean
that you gave?"
"I mean that England has not by its own choice, but by necessity, gone
off the gold standard, and that is true of several other countries," was
the reply.
Against a "Managed Currency,"
"But his book was written two years ago," said Senator King. "That
was before Great Britain had abandoned the gold standard. You are not
insisting, are you, that Mr. Keynes predicated his book upon the assump-
213
tion that Great Britain had lost her tail or her head and was going off
the gold standard?"
"I rather think, Senator, he did, because he at that time was already
urgently in favor of so-called managed currency, which he has preached
ever since," Mr. Kahn replied. "Winston Churchill, in 1926, brought
the gold standard back to England, and ever since then Maynard Keynes
has preached the unwisdom of that action, and the inevitable necessity
of regaining or going back to what he called managed currency. I do
not understand that at present he is in favor of metallism. He is now
wholly in favor of managed currency and is wholly convinced that the
world has got to come ultimately to accept the British formula of managed currency."
"Do you think that is feasible?" asked Senator Gore.
"I do not," said the banker, "at least, it has never been proven that
it is feasible. I believe I said on the last occasion when I had the honor
of speaking before this Committee that the main purpose of gold currency
is to put certain restraints upon possible inflation, because your money is
gauged and measured by a metal which it is not within the province
of man to either increase or decrease and which the good Lord allots to
us within a certain definite measure. It does not vary very much. In
any event, it is beyond our power to increase or decrease, and therefore
as long as we maintain a certain relationship between—"
Advantages of Gold Standard.
Q.—Do you think the gold standard can be maintained If countries who contr.'
embargoes and control foreign exchange accept the international free use of gold?
A.—I believe It can be maintained by the United States. There is no scarcity of
gold at present. The total supply of gold In the banks of the world is twice as
great as It was In 1913- I can see no reason why the United States should permit
Itself lobe affected In Its own best judgment by what goes on in the rest of the world.
Q.—This is a little afield, but It Is a subject In which I am very much interested.
Mr. Morgan was in England at the time England went off the gold standard, and
he said it was an encouraging rather than a discouraging sign. A.-1 think It was
not only an encouraging sign, but it was an absolute necessity, because they had
come to the point where the maintenance of the gold standard had become impossible.
"So with Japan and the Scandinavian countries and more than 17 of
the countries of the world," Senator King suggested.
"Would the same advantages inure to the United States if it should go
off the gold standard?" asked Senator Gore.
"Those advantages, in my opinion, are to a very large extent disadvantages," replied Mr. Kahn, "how serious the disadvantages are the future
only can tell. No one can say, at least no one thus far that has the
wisdom to foretell, what is the degree of abuse of the printing press
which would occur when you get off the limitation that you have imposed
upon yourself by making your currency hold a definite relation to a
definite metal.
"There is nothing that stands between you and the use of the printing
press except your own self-restraint, the wisdom of your people, and the
power of the Government to withstand popular pressure. What would
happen in the case of countries who, not by their own choice, but because
they could not help themselves, were driven off the gold standard, is
beyond any man's wisdom to foretell. But the fact is that if they did not
have to get off the gold standard they would not have got off."
Says IVe Can Maintain Standard.
"Is it not a fact," asked Senator King, "that Paul Warburg and some
bankers
who suffer from the gold mentality, instead of standing
of you
by a gold reserve of 40%, have advocated and are advocating not only a
redistribution of gold, but a reduction of the reserves down to 10 or 20%,
on the theory of a managed currency, so that you would have more paper
money without gold reserve than you would have if you had bi-metallism
with silver behind your issue?"
"I do not know what Paul Warburg stands for," replied Mr. Kahn.
"I have never expressed myself in public on the subject except to say, as I
am saying now, that in my opinion the United States is amply capable
of maintaining the gold standard, or any other standard which, in its own
discretion, from its own choice, uninfluenced by any other country, it
chooses to maintain. Whether that be the gold standard or any other
standard is not, as I understand, now a question.
"I hope and believe that there is not any doubt whatsoever that the
United States is amply capable of maintaining the gold standard; and
if France chooses to withdraw all its gold that it now has here, the United
States is still amply capable of maintaining the gold standard. What it
chooses to do thereafter of its own free choice in making currency conditions--"
Choice Is Ours, Kahn Declares.
"How much gold has France here now?" Senator Gore interrupted.
"Roughly speaking, I should say something in excess of $500,000,000 ;
and I should say she is welcome to it."
Q.—Do you think the gold standard can be maintained in a true sense unless it
is allowed to flow freely In the settlement of International balances? A.—I am
entirely convinced that there is no power on earth that can get the United States
off the gold standard by anything which It may do or which all of them combined
may do, except the United States itself, It it so chooses. I can see no reason whatever why the United States should so choose. I can see no reasons why, to deal
With an emergency, which I hope and believe is impossible—.
Q.—The gold standard would lose a great many of its advantages If embargoes
were placed on it and it Is not allowed to flow freely where it is cemanded In the
settlement of International balances. If you Isolate the United States and Just
have a gold standard here, It is almost as bad as the other situation. A.—I do
not see that it would lose any of Its advantages to us. It might lose its advantage
to those who, not by their own choice, have been driven off It, but there is an Immense advantage to the country which is able to say that It has maintained, year
In and year out, for good and evil times, Its record for monetary integrity. That
kind of virtue ultimately finds its reward. It is the same reward which you get
for gaining the confidence of the people In whatever line of business you may be
engaged In. Confidence Pays. It Is a paying asset: and the confidence of the
People in the monetary integrity of the United States, in many years to come, will
pay us—by which I do not mean to say, Senators, that there are not certain things
which could and should, with advantage, be done now, In this particular emergency, to deal with the extreme deflation which prevails.
As to Printing-Press Currency.
Mr. Rahn was asked to give his definition of controlled currency. The
banker replied:
"I have never come across any one who advocated it who was able to
define to me, in precise words, what be means by it, except the old process
of setting the printing-presses to work whenever it seemed expedient. I
know of nothing more dangerous. I know of nothing more disastrous In
its potentialities than the process of setting the old printing-pres
ses
to work.
Q.—That would be uncontrolled? A.—The people of the United States fought
that fight at the time of the greenback craze, and they have made it plain,
beyond
Peradventure. that they do not mean to have a depreciated currency: that
they
do not mean to have cheap money.
Senator Johnson referred to the depreciation in foreign securities.
"I am afraid that a similar statement could be put into the
Congressional "Record" as to a great number of American bonds which
are selling
at the present time, not on the basis of their intrinsic value,
but on the
basis of unreasoning fear," Mr. Rahn observed.
214
FINANCIAL CHRONICLE
"So that you would make a comparison, or at least leave the implication, that United States Government bonds are in exactly the same situation as these foreign government bonds that have been floated," said
Senator Johnson.
"That they are in exactly the same situation, I would not say," replied
Mr. Kahn. "But I do say that the same fear which applies to foreign
bonds likewise applies to American bonds, and I should say that present
values as quoted do not in any way express the intrinsic value of foreign
bonds any more than they express the intrinsic value of American bonds.
"I would say that American Government bonds are in a class by themselves, and that a decline in foreign bonds or in ordinary American bonds
would not express themselves by precisely the same percentage of decline
as in American Government bonds. But the fact is that the last issue
of American Government bonds, Federal Government bonds, and surely
there is nothing better in the world, has declined within three months
by 15%.
Holds Salesmanship Overdone.
Senator King asked if many investment bankers and brokers, "the National
City among the number that I have in mina," had not "carried on a very
active campaign to unload upon the investing public not only stocks, but
bonds at very high prices?"
Mr. Kahn said he could speak only for his own house, but concerning it,
"for every bond that we issued we declined six othess, or nine or 10 others,
because we always want to be sure that what we offer is intrinsically
sound."
"As to the matter of high-powered salesmanship, to which you have
referred, that is something which has been exaggerated and overdone," Mr.
Kahn conceded. "There may be two opinions, but my opinion is that it
has been overdone. I think it would be desirable that more restraint be
practiced in the field which you have called high-pressure salesmanship."
The most important asset of a banker was public confidence in his
judgment, Mr. Kahn observed, and this was the best check against his
encouragement of sales of over-valued securities. He likened bankers to
dealers in "dresses," or "fruit and peanuts," who must conserve good-will.
"Should there not be some legal curb on indiscriminate selling of foreign
securities?" Senator Johnson asked.
"If it would not tend to diminish the responsibility of the banker, I
should say let's try some such thing," was the reply. "But I very
honestly believe there is no way by which that could be accomplished."
Borrowings Maintained Reparations.
Asked specifically about German loans, Mr. Kahn said that they probably totaled $10,000,000,000 throughout the world, of which about 13%
are in the United States. He did not know whether German borrowings
had been used to pay reparations, but "it is undoubtedly true that if
Germany had not been able to borrow money she would not have been able
to pay reparations."
Mr. Kahn also believed that a "relatively larger percentage" of German
short-term notes is held abroad than in the United States.
He refused to answer a hypothetical inquiry, as he termed it, as to
whether German private debts or reparation should have precedence.
Mr. Kahn was repeatedly questioned by Senator Johnson as to whether
of
his company had lost money on the final issue for the Mortgage Bank
Chile. Finally he said:
consid"We did go into the market. We did buy them. We did sustain a
erable loss on them in the case of the last loan."
Cites Profits of His House.
bond sales
The witness testified that his house, in 12 years of foreign
$3,109,000, "or an
since the World War, had made a gross profit of
our overhead,
average of $260,000 a year, from which must be deducted
taxes, and our rather expensive personnel."
fantastic figures
"I mention this," he continued, "solely because of the
but they
published in some newspaper reports. The profits were large,
in self-defense,
related to risks of $10,000,000,000. I am not saying this
to spread exagbut because I think in this time it does excessive harm
gerated reports."
testified,
The European bonds now extant in the United States, Mr. Hahn
of European money put
are not proportionately as great as the amount
1896, when conditions
into the United States after the Civil War and before
appeared very bad.
put up and more," he
"Those who waited got back all that they had
added.
foreign securities to a value
National banks in New York on Sept. 29 held
securities of $615,000,000, accordof $119,992,000, compared with domestic
the Currency, which Senator Johning to a statement by the Controller of
son put into the record.
these holdings might not have accounted
The Senator asked Mr. Kahn if
Mr. Kahn responded by pointing out
for some recent bank (allures, and
selling at high prices, particularly the
that many foreign securities are
French, which are above par.
Our Two Worst Counselors.
Mr. Kahn said:
In a concluding statement to the Committee,
way that the two worst counselors
"I think you can say in a general
and fear. In 1929 greed sat in
of any nation or any people are greed
in the driver's seat; and they are
the driver's seat, and now fear sits
And they are responsible for
the two worst drivers in the whole world.
for the extreme drop in values
the excesses of 1929, as they are responsible
which have taken place on the market."
Corp., modeled on the
He suggested that the proposed Reconstruction
fear."
War Finance Corp., "will go a long way to diminish
say that no
Another suggestion was for this country "to flat-footedly
standard."
gold
one shall drive the United States off the
choose, we
"At the proper time," he added, "in our own way, if we so
reassure the
will do what seems to us best—but for Heaven's saks, let us
authoritative than
people from authoritative quarters—and none is more
time will permit
the Senate—that no one will be listened to who at this
driven off that
the matter even to be discussed of the United States being
standard which we have chosen for ourselves.
because there is a
"I think that will go a long way to diminish fear,
lines. I think it should be
lot of almost treasonable attack along those
will do
emphasized that when we are ready for it, if we want to do it, we
not do it because we are driven to it; we
so in our own way, but we will
shall not be driven to it.
The International Banker's Place.
or at least
"Speaking of the international banker, that much-maligned
as one of them that Europe's
much-attacked individual, I would like to say
as it is to everybody
prosperity is as important to the international banker
or no less part and parcel, though
else in this country. We are no more
[VoL. 134.
engaged in one line of business while other people are engaged in other
lines of business.
"Europe is important. But the American banker's stake in America
is immeasurably greater than any possible stake that he may have or
ever did have in Europe. An advance of 2% in the value of American
bonds is as much as all the money that we have loaned to Germany. An
advance of 1% in the value of American stocks is probably as much as all
the money that we have ever loaned Germany.
"What I want to make plain is that whether a man is called an international banker or not, as long as he resides and works in America his
object is and must be beyond all other things America's prosperity—
not merely from the point of view of a patriotic and decent citizen, but
from the point of view of his own pocket. The international banker's
profit, as everybody else's profit, is made in this country and not abroad.
European prosperity is desirable; America's prosperity is indispensable."
From the "United States Daily" of Jan. 5 we take the
following regarding Mr. Kahn's testimony:
Tells of Competition in South American Issues.
Senator Johnson asked if there had been keen competition for South
American issues. Mr. Kahn agreed that some 25 or 30 banking houses had
sought that business.
Senator Johnson asked the witness to follow through the details of a
foreign loan, and took as an example the second French loan of 1924, for
$100,000,000, bought outright, as he said, by J. P. Morgan Sz Co.
It was bought at 94, he said, and transferred to a banking group of two
or three at 95. Then suppose it is transferred to a larger group of 25 or
30 at 96. These 25 or 30 allocate it to many banks throughout the
country at 100, he said.
"Six points is a very unusual spread," Mr. Kahn declared. Some
spread is justified to the underwriting group, he said, because of the
responsibility assumed to stand behind the issue.
4% is the usual spread given the retailer of bonds, Mr.
/
4 to 13
From 11/
Kahn replied to a question on that point from Senator Couzens. Sometimes wholesalers also retail securities and get a greater total spread,
lie said.
"Each large New York investment house has its typical syndicate, doesn't
it?" Senator Johnson asked, and read the names of firms which he understood constituted a typical Kuhn, Loeb & Co. syndicate.
"I do not recognize the family resemblance," Mr. Kahn replied when
the list had been read. "That is not a typical Kuhn, Loeb syndicate.
"The gross compensiation from all sources to Kuhn, Loeb & Co. is slightly
above 0.5% on their own underwritings. The average is 3% to the whole
out of which
underwriting syndicate. The gross spread is about 3°4%,
who
must come all expenses and overhead. The ordinary real estate broker,
takes no responsibility, gets 1 to 6%; the ordinary trustee in New York
gets around 3%.
Souse
"When bonds do not sell, we sit on them until they can be sold.
.
of them we still have on hand." .
by
Loans for military purposes, arms and equipment, have been declined
his firm and would be again, Mr. Kahn stated. That should be so, unqualidiffiwould be
fiedly, he added. He agreed with Senator Couzens that it
borrower,
cult, if not impossible, to trace the funds into the hands of the
and see what is done with them.
of
"Shouldn't there be some legal curb upon the indiscriminate sale
foreign securities," asked Senator Johnson.
Consideration of Loans by State Department.
way that is
"I do not see how it is possible," Mr. Kahn said, "in a
an extent it
effective and that will not do more harm than good. To
investing. It
would relieve the investor from educating himself before
or responsimight even produce a belief that there was a moral guarantee
agency." He
bility on the part of some government or semi-governmental
commissions
blue-sky
agreed with Mr. Couzens that the experience of State
confirmed his statement.
to protect the
Senator Johnson declared that there was an obligation
they have not been
public as well as to educate them, and added that
properly protected in their security purchases.
been any objection
Senator Connally (Dem.), of Texas, asked if there had
foreign loans placed by
on the part of the State Department to any of the
had been none.
Kuhn, Loeb & Co., to which Mr. Kahn replied that there
Senator
The witness stated, however, that no publicity was given that fact.
well understood that
Connally declared that the public, nevertheless, pretty
State Department, and
if a loan were floated it had been submitted to the
instances in recent
no objection raised. Mr. Kahn referred to one or two
years where objection had been raised by the State Department.
the hearings
Senator Johnson declared that it would be shown before
to discourage foreign
close that the Department of Commerce had tried
between that
lending and that there has been a difference of opinion
Department and the Department of State.
Chilean bonds,
Asked by Senator Johnson if his firm held any of the
detail specific bond
Mr. Kahn said he thought not, but preferred not to
disposed of to the
holdings of his firm. Even if all of the bonds are
moral obligation, he
distributing syndicate, the originating house feels a
one of the Chilean
said, to support the market, if necessary. In the case of
substantial block of
issues, Mr. Kahn said, the originating group bought a
the bonds, when it was not readily absorbed by the public.
or elsewhere been con"Have any recent bank failures in New York
foreign bonds?" Senator Johnson
tributed to in any degree by their holding
was not true, to his knowledge.
asked, to which Mr. Kahn replied that this
domestic bonds were larger than
Ile pointed out that their holdings of
foreign, and equally depreciated.
Proposed by Walter Layton,
Tariff and Gold Union
Barriers Prevent
British Economist—Says High
Debts.
onal
Internati
Payment of
trade stagnation would be the
A way out of the present
group of nations, according to
tariff"
formation of a "sane
"The Economist," and British
of
editor
Layton,
Sir Walter
conference of experts on
Basle
recent
representative at the
cablegram, Jan. 1,
London
a
from
quote
We
Plan.
the Young
continued:
which
"Times,"
to the New York
and
he told a conference of French
The key to future world prosperity,
of
might lay in the co-operation of a group
to-day,
here
students
English
g regarding money and a sensible
countries having a common understandin
tariff policy.
JAN. 9 1932.]
FINA.NCIA.L CHRONICLN
215
"it does not mean that every country has to be free trade," he added.
British Bank System Unimpaired by Crisis—May Suffer
"That may come some day. It probably will in the distant future. For
Through London's Loss of World Primacy.
the present we will have to aim at a group of sane tariff countries."
Sir Walter also declared there was hardly anybody in Europe who thought
In
Jan. 4 issue the New York "Times' published the
its
Britain could pull through the next year or so without having a very
serious phase of inflation. This statement was vigorously refuted to-night following from London, Jan. 1:
by other financial experts, who declared the fear of inflation in Britain had
One reassuring fact in a New Year survey of the situation is that the
little real foundation. On the other hand, these experts believe Britain is British banking system has not been impaired by last year's crisis. It is
more likely to suffer from too much deflation, owing to the policy of the admitted, however, to be now laboring at a disadvantage from the fact that
Bank of England in maintaining high money rates and restricting note London has ceased since its abandonment of the gold standard to be the
circulation.
international financial center. The year ended with unusually easy money
Illustrating how tariffs had "played havoc" with capital and "produced markets, requirements at the year-end being only about £.20,000,000, which
quite unexpected results regarding payment of debts and reparations," was less than half of the amount borrowed the year before.
Sir Walter said the commerce of the world was now down to something
The situation was somewhat influenced by the smaller amount of short
like half its volume of two years ago, the world's shipping was laid up, bills which had to be financed over the turn of the year and by excepocean
had
great
the
highways
over
and traffic
shrunk considerably.
tionally large disbursements. The occurrence of dearer money in the latter
part of 1931 was a favorable circumstance for the banks, but the year
may not have been profitable as a whole, owing to inability to employ
British Conversion Offering.
available funds fully in industry or on the Stock EXchange.
The following, from London, is from the "Wail Street
Journal" of Dec. 31:
Huge Intake Ahead in British Revenue—Collections
The British Treasury is offering holders of first series of War Savings
Certificates issued in 15s. 6d. units before April 1922, and maturing in
March next year, the privilege to convert into Ifs, certificates, or
conversion loan, or 4% national savings bonds. Alternatively, the holders
may retain their certificates until March 31 1940, at interest of ld. a
month per certificate. There were £150,000,000 of certificates outstanding
out of a total gross indebtedness of £446,095,616.
Sir Basil Blackett, British Bankers, in London Broadcast, Warns Economic Aid Must Come at Once—
Predicts Disaster if Relief Is Delayed.
for Present Quarter Must Be £420,000,000 to
Balance Budget.
The New York "Times' had the following to say in a
London cablegram, Jan. 1:
The national revenue account for the nine completed months of the fiscal
year shows decrease both in revenue and expenditure. The dificit for the
period has been nearly £204,000,000. To balance the budget for the fiscal
year, the final quarter, now beginning, must yield £422,000,000 in revenue.
Large Its this sum appears to be, the prospect is encouraging, since nearly
75% of the income and surtax payments, which bear a large proportion
of the extra taxation, are yet to be received.
The anti-dumping duties are not expected to produce large revenue, because, with the discount on sterling, they amount to practical prohibition
of all these selected articles.
World-wide political and economic disaster is not far off
unless drastic remedies are promptly applied to the existing crisis, Sir Basil Blackett, British banker and industrialist, declared on Jan. 3 in a radio address rebroadcast
from London by the Columbia WABC network and the Payment of Income Taxes in Great Britain—Hundreds
of Thousands Heed Plea to Help Balance National
Canadian Pacific chain. In the New York "Times" he is
Budget.
follows:
as
quoted
From the New York "Times" we take the following from
"The final clearing up of the governmental debts on common sense lines
is imperative if the economic storm of 1932 is not to be as much worse than London, Jan. 1:
1929," he declared. "Every one in
1931 as that of 1931 was worse than
The most amazed people to-day were the collectors of income taxes.
authority in every one of the countries concerned knows that this is so, and
Threelquarters of the year's tax, which was increased to 55. in the pound,
that a clean sweep of the lot of them would do more than anything else to
became due to-day, and scenes at the tax offices showed hundreds of thouset the machinery of world distribution of goods and services going again,
sands wished to pay within a few hours of the payment becoming due.
and would repay itself a hundred-fold to every nation, debtor and creditor,
Animated by a patriotic desire to help the Government to be early assured
in improved trade, renewed confidence, and nation-wide employment, and of a balanced budget, some taxpayers paid the whole year's tax in a lump
the fact that it had been agreed to do it would be even more important in
sum. It is estimated that 'already £76,000,000 of the E200,000,000
restoring the economic position than the mere doing of it. Yet we continue,
budgeted for had been paid.
for reasons of politics, internal and external, to go on living unhappily in a
world of make-believe because we will not or dare not face the facts."
Recovery in Silver—London Bankers Consider Present
Gold at Bank of England Lowest Since 1920.
Price High Enough.
A cablegram, Jan. 1, from London, to the New York
A cablegram, from London, Jan. 1, to the New York
"Times," stated that one outstanding feature of 1931, as
"Times" stated:
In view of London's abandonment of the gold standard last autumn, it is now recalled, was the year's early break in silver to a lowinteresting to know that the Bank of England's gold holdings fell at the record level, followed by its rapid recovery on the agitation
year-end to the lowest level in many years. From a maximum gold reserve
for some kind of remonetization. The cablegram likewise
of £164,000,000 on July 9, the present amount is £121,448,721, representing a note cover of 30.06%. The £121,353,000 of the preceding week said:
was the smallest since 1920.
The record of the year's gold movement out of London shows that the
largest total withdrawal during 1931 was £71,268,000 to France which
'losses
had taken only £53,543,000 in the previous year. The next largest
during 1931 were £27,375,000 taken by Holland and £14,970,000 by
imports
the
gold
into
year's entire
movement, gold
Switzerland. Surveying
England have been £95,270,000 and exports £.131,435,000. Since the
relinquishment of the gold standard on Sept. 21, gold valued at E11,520,000, arriving at London from the Transvaal, has been sold in the
open market to foreign buyers.
Bankers here are still unfavorable to any such proposal.
They believe that trade revival in the East would cause all necessary
stimulus to demand for the metal. At the moment it is considered that the
price of silver is high enough.
Bankers of London Fight French Stand—Press Sir
Walter Layton's Secret Report on British Cabinet,
Asking End of Young Plan at Once.
Under date of Jan. 4, a London cablegram to the New
London Stock Exchange Closed Jan. 2 and Dec. 26.
York "Times" said:
Sir Walter Layton's secret draft report which was rejected by the Bank
Stating that the London Stock Exchange was closed Jan. 2
for International Settlements advisory committee on the Young Plan at
Saturday
since Saturday openings were re- Basle is making trouble in the Franco-British negotiations on reparations,
for the second
sumed, a London cablegram on that date to the New York
It was learned to-night that the bankers of the city of London, including
Montagu Norman, Governor of the Bank of England, have adopted SIT
"Times" also said:
pressing it on the British
Walter's report as their program and are
Government with all their power.
They agree with Sir Walter that the complete and Immediate annulment of the Young Plan is necessary, thus directly opposing the French
Government's insistence that the principle of the Young Plan must be
Balance of Payments Adverse to England—Year's preserved.
Since Sir Frederick Leith-Ross last visited Paris the viewpoints of the
Reduction Large in Income from Foreign InvestBritish Treasury and the French Ministry of Finance have been brought
ments and Shipping Earnings.
closely together, but certain British Cabinet Ministers—among whom
In the yearly estimates of Britain's balance of foreign Stanley Baldwin and Neville Chamberlain are mentioned—are said to be
by the bankers' argument and reluctant to whittle down the
payments, it is expected that invisible exports will show a impressed
British position on the Young Plan.
large decline, said a London cablegram, Jan. 1, to the New
The result is that there is still no agreement and that when Sir Frederick
goes back to Paris the end of this week no latitude may be left him for
York "Times," from which we also quote as follows:
This should occur especially in income from overseas investments, but negotiation.
Premier Laval, however, has again let it be known in London that he
shipping earnings also are estimated below £80,000,000 as against £105,insist on the maintenance of the principle of Germany's responsibility
will
000,000 in the preceding year.
contained in the financial clauses of the Treaty of Versailles and expressed
normal
restrict
to
not
is
policy
tariff
country's
the
of
intention
The
in the Young Plan.
Imports but to bar the dumping of goods by foreign countries. That
Given this condition, the French Premier is understood to be ready to
will not, however, help the European situation, because many other
make the widest possible advance toward the British viewpoint, but othercountries, which have balanced their trade position through dumping on
wise he will simply lock up the French bill of exchange on Germany for
England and Germany their excess production, will now have less foreign
reparations in his safe and sit back to await developments.
credits on which to draw for payment of commercial debts or reparations.
The British Cabinet Ministers are dispersed throughout the country, but
It is true, however, that the severe restrictions now proposed in British
it is expected that Sir John Simon, the Foreign Secretary, will use
trade are designed to meet only temporary difficulties.
Last Saturday [Dec. 26] was part of the Christmas holiday period, while
to-day, after the new year holiday, the interior of the building was being
redecorated.
216
FINANCIAL CHRONICLE
the opportunity to discuss reparations and other problems with Philippe
Berthelot, permanent head of the French Foreign Office, who is now in
England.
H. Berthelot insists that his visit is not political and that he has come
merely for the exhibition of French art at Burlington House. The British
Foreign Office is aware that his interest in reparations is not considerable, as his time has been taken up with the details of the non-aggression
treaty between France and Russia.
There may, however, be discussions between M. Berthelot and the
British Ministers paving the way for a meeting between Premier Laval
and Prime Minister MacDonald. This meeting is still in the air, although
the prospects for its eventuating continue favorable.
Sir Harry Gloster Armstrong Suggests Great Britain
Pay Debt to United States in Goods—Says Only
Interest Should Be Kept on Dollar Basis.
The following, from London, Jan. 6, is from the New York
"Times":
Sir Harry Gloster Armstrong, former British Consul General in New
York, in a letter to appear in the London "Times" to-morrow advances a
suggestion that Great Britain be allowed to pay the principal of her war
debts to the United States in goods.
He declares none of the sum the United States lent to Britain was transmitted here in currency or bullion, "but the loans were for war materials
and food supplies at a time when prices were unusually high and there
would have been no need for us to have incurred this indebtedness if the
necessity of financing our allies had not existed.
"In other words," he says, "if the United States, upon entering the war,
In April 1917, had undertaken to finance our Allies we were in a position
to have paid for our own requirements without borrowing from the United
States, besides which a large portion of these supplies would not have been
necessary either for ourselves or for our Allies if the United States, upon
declaring war, had been in a position to assume her share of it, which was
not feasible for her to do for many months through the need of training
and organizing her forces and resources.
"As goods were received and not money my suggestion is that, upon
our debt to the United States being scaled down on the lines extended to
France and Italy, we should pay in kind and not in cash the principal by
exporting yearly manufactured goods of a market value to the amount,
say, of $50,000,000 over and beyond the goods ordinarily exported yearly,
while only the interest on the balance of the debt should be paid yearly
in dollars. An arrangement of this sort, if the United States would be
agreeable, could easily be financed as far as we are concerned and would
stimulate our manufacturing trades and assist our shipping."
Gold-Shortage Idea Rejected by Europe—"Redistribution" Doubted—London Believes Gold Should Be
Loaned Abroad Through Long-Term Foreign Investment.
A cablegram as follows from Amsterdam, Jan. 1, is taken
from the New York "Times:"
The theory that our present troubles are due to "maldistribuMon of gold" seems to Dutch experts to be inconsistent with
the fact that countries with huge gold stocks have suffered as much as
countries poor in gold. This sort of "monetary explanation" for the business cycle is not deemed adequate to explain the exceptionally severe disorganization in the production of real wealth which has occurred. Still it is
expected that 1932 will show further distribution of gold, especially when
superfluous gold stocks are becoming so very unprofitable a luxury in
the slack demand for credit.
Moreover, the "gold-exchange standard" has probably been eliminated
by the past year's developments, and holding of foreign bills as part of
the reserve of central banks will be greatly replaced by gold.
[Vol,. 134.
Commission Report to Council of League of Nations
Approves Statehood for Iraq—Sets Condition That
Nation Join League.
The following, from Geneva, Jan. 5, is from the New York
"Times":
Formal announcement of the Mandates Commission's approval of statehood for Iraq was made here to-day with the release of its special report
to the Council of the League of Nations. No one doubts that the Council,
when it meets Jan. 25, will also approve, thus allowing Iraq to become a
sovereign State this year, as Britain had planned, and also the fifty-sixth
member of the League and its second Moslem member.
The Commission approves statehood provided Iraq joins the League. It
holds that without the League Covenant's protection Iraq will not fulfill
the conditions requiring a budding State to be able to maintain its territorial integrity and political independence.
The report markedly lacks enthusiasm for the termination of the mandate and stresses that the Commission could not have contemplated this
had not the British Government formally declared that the moral responsibility would rest on London if Iraq proved unworthy of statehood.
Answering the Council's question, the Commission declares that it finds
that the Anglo-Iraqui treaty of alliance of June 80 1930 contains certain
provisions "somewhat unusual in treaties of this kind," but still does not
"explicitly infringe upon the independence of the new State."
In its regular report on other mandates, the Commission "notes with
regret that in 10 years the native population of the island of Yap has
decreased by about a quarter" under Japanese administration.
"While appreciating the mandatory power's efforts to ascertain the causes
of this decrease, the Commission would suggest that it is advisable to
study this question not merely from a medical but also a social standpoint,"
the report says.
The Commission hopes that all the mandatories will "continue to use
their best endeavors" to control the liquor traffic and "prevent the natives
from making clandestine distilleries." The Commission is specifically
worried about the alcoholic content of the native beer in Retina Urundl,
and also about the high infant mortality in that Belgian mandate.
Annual Report of Bank of France—Loss on Sterling
Deal—Put at $93,347,400—Gold Total $2,728,462,049, United States Exports Contributed 60% of
Increase.
United States Press advices from Paris Dec. 31, are taken
from the New York "Herald-Tribune" as follows:
The annual report of the Bank of France, made public to-day, showed
that the Bank had taken a loss of 2,282,000,000 francs ($93,374,400)
In depreciation of its holdings of pound sterling which had been made up
with a like amount of bonds given by the French Treasury.
When the pound went off the gold standard in September the French
Government requested the Bank to hold its sterling balances rather than
unload 7,800,000,000 francs of sterling at the start of the pound's slump
and risk a greater collapse. The pound sterling was written down to
current levels, about 85 francs to the pound. The average quotation of
sterling for the last 15 days was used. This average value will be unchanged for six months, when a new average will be taken and at that
time the Bank of France will either return money to the Government, if
sterling rises before July, or receive a second bond from the Treasury if
sterling continues to fall.
The Bank's annual report also revealed that the Bank of France now
has a total of 68,481,174,225 francs ($2,728,462,049) In gold, bringing the
ratio of gold to bank note circulation to 60.5%. Reflecting the writing
down of the depreciation in the pound sterling, the Bank's holdings of
foreign currency holdings dropped from 15,335,000,000 francs to 13,039,000.000 francs, a decrease of approximately $93,000,000 at the current
price of 3.092c. for the franc.
The annual report also revealed that more than 60% of the gold which
poured into Prance during the year came from the United States, 28%
from England and the remainder from Holland. Germany and Spain.
Much of the American gold came to Paris only to take the first available
plane or train for Switzerland or Holland, but the quantity remaining
represents one-fourth of all the monetary gold in the world.
Despite this greatly increased hoard, the Bank of France's vaults, built
especially to handle and protect against thieves and conquering armies
this great pile of yellow metal, are comparatively empty and less than half
the facilities are now being used to house these riches.
Pound Sterling to Recover Asserts Sir Philip Snowden.
Great Britain remains the greatest creditor nation in
the world, and in time sterling will resume its place as
the principal standard of international credit, according to
an official opinion given to the British Empire Chamber of
Commerce in the United States of America. We quote from
the New York "Evening Post" of Jan. 6, which further said: French Note Issue Rises—Year-End Increase of 1,019,These opinions are contained in a statement by Sir Philip Snowden,
000,000 Francs at-Year End.
Chancellor of the Exchequer in the House of Commons, and furnished to
Under date of Jan. 1 a Paris account to the New York
the British Empire Chamber of Commerce by the British Embassy in
Washington.
The Chancellor denies that abandonment of the gold standard in Great
Britain was a deliberate act, as suggested in reports. He declares England
did her best to stay on the gold standard, but was forced off by causes
entirely beyond bar control. Sir Philip said, in part:
"I do not think that people abroad altogether realize the situation in
this country to-day is entirely different from that which obtained, let us
say, in France or in Germany at the time of the depreciation of the franc
or the mark.
"There were large gape in the budgets of these countries. They had to
be met by the use of the printing press. There is not any ground for
imagining there is going to be any deficit in the British budget this year,
and still less in the budget of next year.
"I have every reason to suppose the Government will be able to meet all
obligations out of current annual revenue and at the same time make a
substantial contribution to the provision of debt redemption."
The Chancellor denied that withdrawals from England had been made
either by the French Government or by the Bank of France. There were
others, however, who removed their balances largely because of want of
confidence in their own countries.
"I fancy," he said, "those foreigners who have been taking their balances
away to-day at the present level of the pound, thereby incurring a loss, will
very much regret some day what they have done when they find, as I am
confident they will find, that their action was totally unnecessary.
"Do not let us forget that, although at the moment we may have some
difficulty in collecting our foreign debt, we still remain the greatest creditor
nation in the world, and when world conditions settle I have not the slightest doubt we shall find sterling resume its place as the principal standard
of international credit."
"Times" said:
Thursday's Bank of France return showed Increase of 653,000,000
francs in discounted bills, while advances decreased by 78,000,000. The
large increase of 1,019,000.000 francs in note circulation was manifestly
due to the year-end settlements.
Private deposits also diminished by 1,141,000,000 In the last week of the
year.
France Revises Surtaxes—Corn, Coffee and Other
Items Are Exempted by New Order.
The following Associated Press &dykes from Paris Jan. 1,
are taken from the New York "Times":
published an order exempting a number
The "Official Journal" to-d iy
of imports from the surtax intended to compensate for the depreciation
of foreign currencies.
The principal items of the list are corn, coffee, cottonseen oil intended
for the manufacture of edible fats, copper sulphate, nickel sulphate and
tanned single and double hides.
French Pay $3,200,000,000 into the Treasury This
Year.
The following Paris cablegram Jan. 3, is from the New
York "Times":
French taxpayers this year will pay to the Treasury $3,200,000,000,
according to the estimates of Lucien Lamoureux, reporter-general of the
Chamber's finance commission.
JAN. 9 1932.]
FINANCIAL CHRONICLE
According to his figures, ordinary revenue and expenditure will amount
to slightly more than $2,000,000,000, with a narrow margin of $100,000
on the right side.
The taxpayers will contribute to the State more than another $1,000,000.000 in postal and telegraph expenses, in special taxes allocated to the
sinking fund and In communal taxes.
217
hope has also been a disappointment—that with wages and other production
costs remaining unchanged, the domestic selling prices would rise.
For the guidance of Germany's monetary policy, Herr Lansburgh argues
that the British experience is conclusive, more so since he holds that the
results of such an "experiment" would be even worse for Germany, burdened
with a huge foreign debt payable in gold values.
"The reasons that determined Holland, the Union of South Africa and,
with some qualification, even Canada to resist the British propaganda," he
continues, "are valid for Germany in even greater degree. The advantages
following the abandoning of the gold basis are almost wholly Illusory, but
the disadvantages are so real that in all probability it won't be long before
England, too, will again—for the fifth time since 1844—try to hook
up to gold.
"And that would be at the old par, without any devaluation, notwithstanding anything to the contrary now announced even from authoritative
quarters."
"Germany's exports would gain hardly anything from an internationally
depreciated mark.
"With the mark off gold, Germany would have to add the amount of the
depreciation of its foreign exchange value to its heavy loan interest payments, and there is also to be considered the moral aspect of the question
and the repercussions on Germany's credit standing in the world."
President Von Hindenburg in Radio Message Warns
Other Nations That Germany Must not Be Subjected to Requirements Impossible of Fulfillment
—Also Declares Germany's Armament Rights Must
Be Recognized.
Declaring that the "magnitude of the sacrifices" of the
German people "gives us a right . . . to claim from
other nations that they must not impose upon us requirements impossible to fulfill," President von Hindenburg, in
a message broadcast from Berlin, on Dec. 31, added that
"the question of disarmament also is one where Germany
must not be refused what is coming to her." His New Year's
message, as translated into English by Dr. Max Gordon, German Interest Rates Decree Reducing Charges
European representative of the National Broadcasting Co.,
Provides 505,000,000 Reichsmarks Yearly Gift to
and rebroadcast in the United States, is taken as follows
Debtors.
from the New York "Sun" of Dec. 31:
From the "Wall Street Journal" of Dec. 31 we take the
"German men and women: My office as President of the Reich and the following from Berlin:
fact that as a man advanced in years, I have witnessed a relatively long
period of German history, gives me the right, I think, to say a few words
to you to-day at the end of a year fraught with destiny; a few words
which come from a devoted heart and which are meant to help you in
bearing the hardships of these times.
"I am fully conscious of the tremendous sacrifices which are being
asked from each and every one of us in order that we may be able to make
an effort to overcome this present period of trials through our own
strength.
"The German people deserve the sincerest gratitude and full appreciation must be given them for their readiness to make sacrifices and for
the patience they have shown in bearing all suffering and all burdens in
the face of dire necessity. This I want to say first of all on this occasion.
Refers to Other Nations.
"On the other hand, the magnitude of the sacrifices that we are making
gives us a right at the same time to claim from other nations that they
must not impose upon us requirements impossible to fulfill, and thus stand
In the way of our recovering.
"Likewise, the question of disarmament is one where Germany must not
be refused what is coming to her. Our claim to a security equal to that
of other nations is so obviously justified that it cannot be denied.
"I cannot help carrying my thoughts back to Tannenberg. Our situation then was difficult, just as it is to-day. Decisions had to be taken
which involved grave risks and a great deal had to be asked from our troops
to make success as certain as possible.
"Many a one may have misgivings in his own heart, but mutual confidence, true comradeship, deep love of our country and faith in ourselves
were the links which tied us closely together, and in the end, after several
days of heavy fighting, the outcome was in our favor.
"Again I am calling to-day in an hour which is equally earnest upon
the whole of the German people to stand together in faithful unity, no
matter what destiny may have in store for us. Let us face the coming
days and all their trials and sorrows, hand in hand, and let us not waver.
May none of us give up hope and each and every one have an unshakeable
faith in the fatherland's destiny.
"The Lord has often before saved Germany from deep distress. Nor will
He forsake us now.
"And now, from the bottom of my heart, I wish the entire German people
and each and every one of them, a happy and blessed new year."
Under the recent drastic Government decree, the municipal, industrial
and mortgage bonds paying interest of over 6% and amounting in all to
12,300,000,000 reichsmarks, have had the obligatory interest reduced by
one-fifth. Thus, the annual payments on the above sum have been cut
to 980,000,000 reichsmarks from 1,225,000,000 reichsmarks.
It is likely that interest charges also will be reduced shortly for ordinary
mortgages and other obligations not following in the above-mentioned
categories and affecting debits of 15,000,000,000 reichsmarks. The yearly
savings in this latter case would amount to 260,000,000 reichsmarks, making
the total "gift" from creditors to debtors some 505,000,000 reichsmarks
a year. Of this amount 300,000,000 reichsmarka, roughly, will be saved
by owners of town and city houses, or real estate; 100,000,000 reichsmarka
by farmstead holders, and 30,000,000 reichsmarks only by industrial concerns. The State and the municipalities will benefit to the extent of
20,000,000 reichsmarks.
Auction at Berlin—Stocks Placed on Block Bring
Record Lows—Bank Stocks Among Securities.
From the New York "Sun" we take the following from
Berlin, Dec. 31:
A year-end public auction on the Berlin Stock Exchange to-day brought
out large blocks of securities of several German and foreign firms at rock
bottom prices, in sane cases the issues selling at less than 2% of their
face value.
The sensation was a turnover of stock of the Bank fuer Handel und
Grundbesitz, an organization with capital of 2,000,000 marks. The securities, with a par value of 1,065,000 marks, brought 75 marks.
The buyer was unrevealed, but was believed to be a syndicate that has
sought control of the bank. The bank failed on Nov. 19. The stock involved
was piled in bundles in front of the auctioneer and required four men
to carry it off.
The so-called "silent quotations" on the Boerse, which are not published
in order to avoid discouraging public sentiment, showed a year-end pick-up
averaging 5% higher. This was due to the low prices, that are attracting
public demand, and also to reinvestment of 80,000,000 marks distributed
through redeemed industrial bonds.
Members of Directors of Deutschebank-Diskontogesellschaft Germany's Largest Bank to Be Reduced
to Effect Economy.
The Board of Directors of the Deutschebank-Diskontegesellschaft, Germany's largest bank, which hitherto has
consisted of 10 members, will be reduced to seven as a measure of economy, it was announced on Dec. 31, it is learned
from a Berlin cablegram to the New York "Times," which
went on to say:
Germany Finds Reason to Keep Gold Basis—Disadvantages Shown in Great Britain With Dropping
of Standard Viewed as Warning—Alfred Lanaburgh, Financial Expert, Asserts England Has
Reaped None of Expected Gains.
The determination of the present German Government to
maintain the reichstuark on the gold standard is more likely
nowadays to find the backing of German theoreticians and
The three members who will retire from the Board in the course of the
of general business judgment, said a cablegram, Dec. 31,from
year are Dr. Georg von Statue, Dr. Oscar Schlitter and Dr. Frans Anton
Berlin to the New York "Times," which also had the fol- Boner.
lowing to say:
Dr. Schlitter, who for more than 25 years was connected with the Deutsche-
Diskontogesellschaft.
This is because developments in England have begun to furnish a bank, was largely responsible for its fusion with the
Dr. von Stauss, who is a Reichstag Deputy as a member of the People's
practical object lesson on what would be actually involved were Germany
public duties. He
other
and
to "follow England's example," a course heretofore advocated in certain party, wants to devote his time to politics
organized the German motion-picture industry and the Lufthansa, the
quarters.
Alfred Lansburgh, a leading financial writer and editor, in analyzing German commercial air lines.
Dr. Boner used to be a partner in the Diskontegesellschaft.
the question of on or off gold, argues that Britain's abandonment of the
It was further announced that, beginning Jan. 1, there would be no
gold standard worked out to her loss, inasmuch as the expected advantages
measures of
had been realized only in a minor degree. On the other hand, he points more assistant members of the Board of Directors. These
economy are part of the program adopted when the two banks merged.
out, serious disadvantages developed which had not been anticipated.
"The need to remedy, as far as possible, the greatest of these disadvantages," says Herr Lansburgh, "is chiefly responsible for the great efforts Loans in Germany in 1931—Issues of Home Loans
made by official Britain to convert other countries to its own monetary
Reduced 1,351,000,000 Marks.
policy—which, as a matter of fact, is no policy at all, least of all that of
managed currency. It is, rather, mere drifting, with occasional weak
It was stated in a Berlin message, Jan. 1, to the New York
attempts at Steering.
complete report of loans floated in the
"While British retail prices barely show a rise, wholesale prices have "Times" that the
advanced materially, and therein is expressed an increased cost of imports German market during 1931 shows that the year's issue of
from gold standard countries, above all those raw materials and half- domestic loans aggregated 1,315 million marks, comparing
finished goods so essential to England. This is substantially pushing up
millions in 1930. The message added:
the production costs of British factories, hence Britain's propaganda to with 2,666
Foreign loans were placed only to the extent of 840 million marks; in
Induce other countries, notably Holland, Canada and South Africa, also
1930 they were 1,177 million.
to go off gold parity.
Issues of new shares by corporations amounted in 1931 to 780 million
"On the other hand, beneficial developments have been far below expectations. No export boom has materialized, even in coal. The second great marks ; they had been 558 million in the preceding year.
218
FINANCIAL CHRONICLE
10% Wage Cut in Ruhr Coal Mining District Followed
by Strikes.
Associated Press advices from Essen, Germany, Jan. 2,
stated:
The inauguration of a 10% wage cut in the Ruhr coal mining district
to-day precipitated "outlaw" strikes in two mines, where about one-third
of the men refused to work and molested those who did go to their jobs
until the police intervened. About 100 were arrested at Muelheim.
[Vol.. 134.
thorized to issue 63,5% 12-year bonds up to E1,000,000. Both these obligations are figured on the basis of $4.8666 per pound sterling.
The principal and interest are to be paid from gross income from the
enterprise with the repayment primacy before all other credits not excluding treasury demands, the report states.
Bank of Poland to Pay 12% Dividend for 1931.
The Bank of Poland announced on Jan. 4 (according to
Associated Press cablegrams from Warsaw) that it would
pay shareholders a 12% dividend for 1931.
Notice Issued by Dillon, Read & Co. Regarding Redemption of Holland's 6% Loan of 1922.
Dillon, Read & Co., as fiscal agents in the United States
for the Kingdom of The Netherlands 6% 50-year loan of
1922, have notified holders of the series A bonds that the
Government will redeem on April 1 1932 all of the bonds then
outstanding, amounting to 150,000,000 guilders (approximately 860,000,000. The operation will mark one of the
largest foreign government loan redemptions in some time.
Payment will be made at par in this country, through the
offices of Dillon, Read & Co., at the current rate of exchange
prevailing on the date of presentation. A portion of the 1922
loan was sold in this country through a group headed by
Dillon, Read & Co. •
Poland Imposes Temporary Import Restrictions on
Range of Agricultural Products and Manufactured Goods.
A Polish decree, published in the Polish Journal of Laws
on Dec. 29 1931, effective Jan. 1 1932, temporarily restricts
the importation of a considerable range of agricultural
products and manufactured goods, for the declared purpose
of safeguarding its national interest, according to cablegrams
received in the Department of Commerce from Charge
d'Affaires John C. Wiley, and Commercial Attache Clayton
Lane, Warsaw. The Department's announcement Dec. 31
stated that these restrictions do not affect goods shipped
directly to Poland before Jan. 1 and cleared by the Polish
customs before Jan. 30 1932, or goods which are now in
bonded warehouses in Polish customs territory.
Holland Will Redeem Public Loan on April 1.
"Times"
York
New
the
to
According to Associated Press accounts from Warsaw
2
Jan.
cablegram
An Amsterdam
have been designed
stating that the Minister of Finance announced that the Dec. 29 it is said that the new schedules
balance and to serve as
trade
1
April
on
favorable
par
at
to
protect
Poland's
redeemed
be
will
loan
public
Dutch
6%
a counter-move against tariff restrictions of other nations.
1932, added:
could The cablegram likewise said:
This loan, amounting to 300,000,000 guilders, or $120,000,000,
for three
have been redeemed on March 1 1932 under the legal provision
months' notice. The Minister, however, apparently would not attempt
situation.
the
credit
of
view
in
then
to proceed with the conversion
It is learned that bears have been selling important amounts of these
bonds at 99 to 99;1% since it became known that the conversion would
not be ordered for March 1.
The terms of the new loan contemplated are not known yet. It is
expected that a 4,54% loan will be put on the market the day of the redemption of the 6% loan.
The fact that the Government dares to undertake this conversion was
favorably commented in the Stock Exchange to-day and the action is
expected to have a stimulating influence on the rates for Netherlands
Government securities.
A later cablegram (Jan. 4) to the "Times" said:
Regarding the redemption of the 6% public loan, it was reported to-day
that only 150.000,000 guilders ($60,000,000) of the issue would be redeemed on April 1 under the present plans. If this conversion proves
successful, the remainder will be redeemed as soon as possible.
Apparently the United States will be unaffected by the new regulations,
the chief nations hit being Germany, Austria and Czechoslovakia. Special
facilities are to be extended to imports via the Polish port of Gdynia and
Danzig.
Finland's Budget Balanced—No Deficit, It Is Said,for
Fiscal Year 1932.
From Helsingfors (Finland), Jan. 2 Associated Press
advices stated:
Finland's budget for the fiscal year 1932 has been satisfactorily balanced,
and there is no deficit, as was erroneously reported by an Associated Press
dispatch Dec. 19.
Original budget estimates were thrown out of balance by $6,000,000 when
Finland suspended the gold standard, but that prospective deficit has been
overcome.
The Associated Press acknowledges the error and is glad to make the
correction.
No Gold Abandonment Foreseen in Holland—Gold Small Farmers in Finland Reported to Have Signed
Reserve Against Bank's Liabilities 73% and Trade
Mass Petition in Bankruptcy.
Balance Better Than 1930.
From Helsingfors (Finland), Jan. 3 Associated Press adFrom Amsterdam Dec. 26 advices to the New York vices stated:
Small farmers of Finland who said they were in distress decided to-day
"Times" stated:
Regarding the recent talk that maintenance of the gold standard in to sign a mass petition in bankruptcy.
The obligations of those who have signed the petition total 300,000,000
Holland is imperiled, it should be pointed out that the position of the Bank
The petition would be filed with the
of the Netherlands is extremely strong. At the present time the note Finnish marks (about $4,500,000).
deposits
Government whenever debtors owing a total of 100,000.000 marks had
circulation is 1,050,000.000 guilders and the total of notes and
1,229,000,000, but of these total demand liabilities no less than 73% is signed it.
covered in gold.
Even as concerns the country's foreign trade, although total volume Royal Decree Establishes Government Subsidy for
has been seriously reduced from 1930, the excess of imports is 129,000,000
Italian Merchant Vessels.
the
guilders less for the 11 months than it was a year ago. Imports for
,
1,753,000,000
to
from
fallen
2,253,000,000
have
1931
of
completed months
Associated Press advices from Rome (Italy) Dec.31 stated:
whereas exports have decreased only from 1,602,000,000 to 1,231,000,000.
A Government subsidy for Italian merchant vessels was established by
maintained,
well
been
On the markets, the State loans of Holland have
to-day for a period of one year beginning to-morrow.
uneasiness. royal decree
but municipal bonds have been hard hit by the recent financial
Graduated according to tonnage, it would amount to 33 cents per mile
at
quoted
are
Amsterdam
of
city
the
of
bonds
%
434
the
At the moment,
for a 4,000-ton vessel, or $1,300 on a trip from Naples to New York. It
85. No doubt
75, and the similar bonds of the province of Gelderland at
becomes less by 1% yearly for ships older than one year.
the
in
politics
of
this reflects measurably the very democratic control
larger cities.
Greek Merchants' Moratorium.
of
Col. IC,oc Appointed Government Commissioner
The following (United Press) from Athens, is from the
Bank of Poland, Succeeding Charles S. Dewey.
"Wall Street Journal" of Jan. 8:
Greek merchants and members of professions in various provincial
Associated Press advices from Warsaw Jan. 2 stated that
have proclaimed a moratorium on debts to individuals and banks.
towns
appointed
was
Finance,
of
Colonel Adam Koc, Vice-Minister
of many towns in the interior of Greece is desperate due to
situation
The
the
of
that day to the post of Government Commissioner
lack of food and extreme cold.
Bank of Poland, succeeding Charles S. Dewey of Chicago,
who has served as financial adviser during the operation of
Greece Seeks United States Wheat on Credit.
the American stabilization plan. Colonel Koc's appointPress advices from Athens Jan. 8 said:
Associated
ment, it is added, was interpreted as insuring close co-operainformed the American Legation to-day it will
Government
The Greek
quantity of American wheat
tion between the Bank and the Government.
negotiate in Washington for the purchase of a
on credit.
to
Canadian'Government named its commercial attache at Athens
The
Foreign Loans Authorized for Polish Communications. negotiate a commercial treaty with Greece.
The "United States Daily" of Dec. 31 reported the followMoney at Home.
ing announcement by the Department of Commerce at Greece Raises Visas to $65 to Keep
is from the Now
1
Jan.
cablegram
Washington:
The following Athens
Authority has been granted the State Post, Telegraph and Telephone
"Times":
York
enterprise of Poland to contract foreign long-term investment loans for
and therefore Greek money, at home, the Fithe extension and improvement of the telephone network and the production of telephone wires, according to a report from Consul Stewart E.
McMillin, Warsaw.
According to the law, the State enterprise, Polish Posts, Telegraph &
Telephone, may contract foreign long-term investment loans, either in
goods or cash, up to E650.000. In addition to this, the enterprise is au-
In order to keep Greeks,
raising the charge for a foreign visa to
nance Minister has issued a decree
the high rates of $13 to $65.
resort on medical advice can get a
A Greek visiting a foreign health
on a pleasure trip he must pay the
visa for $13, but if he is going merely
maximum.
JAN. 9 1932.]
.
FINANCIAL CHRONICLE
219
nate a deficit, cancel government debt to departments, complete some
Indispensable public works and amplify the credit of the Agricultural
Mortgage Bank."
"Brazil is in process of recovery, but it would not be fair to raise hopes
for resumption of payments in cash by the Federal Government in less
than three years. From January 1930 to June 1931, the entire gold
Jugoslav currency restrictions were increased to-day by a new decree reserves of the nation, amounting to $139,000,000, were dissipated. For
ordering all Jugoslays to report immediately to the National Bank the bond service and currency protection this amount would be needed yearly
until an adequate gold reserve is accumulated. With 75% of the debt
sums of money due them from abroad on Dec. 31.
Travelers are permitted to take out only $35.20 in Jugoslav currency. service burden eliminated, $100,000,000 yearly should suffice during the
three-year period, and this it is confidently expected will enter the counForeign postal orders are limited to $52.80. PM
try on balance of payments, thus equipping the treasury for renewal of
cash payments."
Jugoslav Credits Sought—Government Orders Report
on Money Due from Abroad.
The following Belgrade cablegram Jan. 1 is from the New
York "Times":
Danubian Federation Reported Abandoned—Prague
Newspaper Says France Gave Way to Opposition
from Germany and Italy.
From Prague Jan.5 a cablegram to the New York "Times"
stated:
In regard to the two principal states, Sao Paulo and Minas
Geraes, the study says that neither has missed a coupon
payment, but sinking fund quotas are falling short of the
usual requirements for Sao Paulo and the attitude of Minas
Geraes remains to be seen. Continuing, the report says:
The newspaper "Narodny PoMika" publishes a story to-day to the effect
"Bolivia paid foreign debt service to the bitter end of her resources,
that the Hungarian Minister to Paris has been informed by the French and it is an open secret that the government will never again pay 7 or 8%
Foreign Office that the project of forming a Danubian federation consisting interest on its dollar bonds. Apparently, the only reason why bankers
of Czechoslovakia, Austria and Hungary has been dropped by France, have not already appealed to bondholders for permission to cut these
largely on account of the opposition of Germany and Italy.
coupon rates in half is that the country is now unable to pay even 334 or 4%."
Philippe Berthelot, it is stated, fathered the project which had for its
The survey points out, however, that the Bolivians have
basic idea separating Austria from Germany and effecting a rapprochement
between Hungary and the Little Entente. M. Berthelot, however, became shown a keen sense of credit responsibility, and that the
convinced, it is stated, that it would be impossible to overcome the opposi- government is now in good hands so with the adjustment of
tion of Germany and Italy, each of which had its own conception of the
on a reduced scale
form the new Middle Europe should take. The opposition of Rumania its finances, resumption of payments
and Jugoslavia also was strong.
may be expected within two years. In the case of Chile,
which defaulted on its seven national government issues,
totalling $284,500,000, during July 1931, no provision has
been made for resumption of payments at any time or for
funding unpaid interest, says the study. While a first step
has been taken in the reorganization of its important nitrate
of soda industry, prospects for bondholders are not very
encouraging.
"If the Peruvian Government does not soon provide for
a partial resumption of payments on the foreign debt it will
be because the country is not yet rid of political turmoil
although the revolution started 16 months ago and gained
its objective in four days," states the report which points
out that the'chief difficulty in this country is its political
upheavals. The Peruvian foreign debt is not large in
comparison with the debts of most other South American
republics, being approximately $108,467,600, estimated with
the sterling debt calculated at par of exchange. "Statements
the government indicate that partial payment of bond
Speyer & Co. Purchased and Cancelled in 1931 Bonds by
service will be tendered in the full measure of any surplus
of Republic of Cuba to Amount of $604,000.
obtained after apportioning indispensable public expenses
Speyer & Co., as fiscal agents, announce that there have in accordance with budget estimates. It is therefore not
been purchased and cancelled in 1931 for the sinking fund unlikely that bondholders will receive some interest in 1932,"
$604,000 Republic of Cuba 4y% gold bonds due 1949. it is pointed out.
Of the original issue of $16,500,000 bonds there remain
Regarding Uruguay, the Association mentions the reassuroutstanding $11,395,000 bonds.
ing semi-official reports which reiterate that service on the
foreign debt will continue, in the face of the default of its
Over Half Billion Bond Issues of South American Dollar most important city, Montevideo, and the low quotation of
Loans in Default, According to Latin-American the Uruguayan peso. It is reported that the sinking fund
Bondholders' Association.
remittances for the retirement of the stipulated number of
Nearly fifty bond issues totaling about $550,000,000 of national government bonds of the issue of 8% of 1946 have
South American external dollar loans sold in the New York reached New York promptly, which would hold promise of
market have been subjected to suspension of cash service continued coupon payments. Concerning the market action
remittances at the close of 1931, and several more defaults of South American bonds, the Association says:
"A natural sequence to this line of thought is the topic of relations
are expected during the first month of 1932, according to a between
debtor government which pays through thick and thin, or conconditions
of
study of
default in South America by the scientiously protects bondholders in case of unavoidable delays, and the
bona fide investor who paid real money for his bonds.
Latin-American Bondholders Association, Inc., Jan. 4.
"If the two can be brought to understand each other, false market
Only the Argentine Republic in all South America is still values,
fabricated by speculative manipulations, may be disregarded or
able or willing to pay full service on all funded debt con- turned to good advantage by both debtor or creditor. But if the debtor
tracted in United States currency by its national govern- government forgets the existence of his best friend, the investor, and
defaults out of sheer disgust at the market reports he receives by cable,
ment, provinces and cities, the report states. It adds:
he enriches the speculators who have sold short, and ruins his friend.
$71,000 Bonds of Bulgarian 7% Loan Cancelled—
Receipts Pledged for Loan.
Speyer & Co. and J. Henry Schroder Banking Corp., as
fiscal agents, announce that there have been purchased and
cancelled for the semi-annual sinking fund, $71,000 bonds
of the Kingdom of Bulgaria 7% Settlement Loan of 1926.
This amount, together with $31,000 bonds retired the first
half of last year, completes the sinking fund operations for
the year 1931.
The receipts from the revenues pledged for the above
loan are reported equal to $3,359,000 for the 12 months
ended Nov. 30 1931, as against $3,487,000 for the same
period in 1930. Annual interest and sinking fund requirements amount to $337,500 and £180,000 respectively for
the dollar and the sterling loans.
"No interest or amortization payments are now being received from
the national governments or municipalities of Chile, Peru, or Bolivia;
departments and cities of Colombia will have to delay payments of dollar
bond service; the Brazilian Federal Government is paying interest in
scrip and many of the states and municipalities may be unable to remit
for coupon payments in 1932; Uruguay is still in doubt, but thS default
of Montevideo is of exceedingly bad portent."
In discussing the debt status of the various Latin-American
nations, the report points out that in the case of Colombia,
"the government has spared no efforts to avoid default, full
bond service on the national government obligations has
been maintained and the departments and municipalities
which may pay interest in national scrip for a short period
will resume full cash payments at the earliest possible date,
but bondholders should place no obstacle in the way of any
proposal to reduce interest rates on the 8%)7M% and 7%
bonds, or for payment of amortization by purchase in the
open market instead of by drawing at par or over par, since
these conditions are no longer equitable or even favorable
to the interests of bondholders themselves." The report
likewise says:
"Control of foreign exchange will be vested with the government bank,
which:will lend the national treasury the sum of 15,000,000 pesos to elimi-
Similarly, the investor who loses confidence and sells at panic prices, plays
Into the hands of the bears, punishes himself severely and helps to discourage his friend, the debtor government."
Responsibility for Loans to Latin America Laid to
State Department—Bolivian Issue, Now in
Default, Said to Have Been Approved Despite
a Warning by Commerce Bureau—G. M. Jones
Tells Senators of His Protest—Similar Case in
Colombian Issue—Senator Glass Criticizes Secretary Stimson.
The State Department at Washington was said to have
given indirect approval to the flotation of a Bolivian loan
of $23,000,000 in the United States in 1928 and the extension
of a short-term credit of $20,000,000 to Colombia late in
the same year, after the Department of Commerce had
informed it that these two countries had overborrowed, in
testimony on Jan. 6 before the Senate Finance Committee
by Grosvenor M.Jones, Chief of the Finance and Investment Division of the Bureau of Foreign and Domestic
Commerce. The advices to this effect are from a Wash-
220
FINANCIAL CHRONICLE
ington dispatch Jan. 6 to the New York "Times" from
which we also take the following:
The Bolivian loan, Mr. Jones said, was issued without official objection
after "reluctant consent" was given, "because at that time our LatinAmerican relations were upset" and a Pan-American conference was
pending.
The Colombia short-term credit. advanced by the National City Co. of
New York and two other banking houses, was permitted despite a report,
received from a Department of Commerce commercial attache at Bogota,
Colombia, in which the attache informed Dr. Julius Klein, head of the
bureau, that "Colombia is running wild on borrowing."
Glass Blames Samson.
When he heard the testimony given before the Finance Committee to-day
by Mr. Jones, Senator Glass of Virginia, in a statement charged that the
State Department was morally responsible for money lost by Americans
on foreign loans floated here.
"It is Impossible," he said, "to denounce too strongly this lawless and
unwarranted procedure on the part of the State Department.
"I pointed out to Congress two years ago that the State Department
was engaging in this lawless procedure and the Senate adopted a resolution
calling on Secretary Stimson to say by what right the department assumes
to approve or disapprove the loans.
"He made a reply that was idiotic and the Senate passed a resolution
calling upon them to desist. Stimson practically said the next day he was
going to ignore the Senate's action.
"The State Department is morally responsible for every dollar lost on
these investments. They had a clerk passing on the loans who did'nt know
any more about them than my cat."
The State Department never formally approved a bond issue floated in
the United States, it was explained. However, since the Harding Administration it has been customary for foreign issues to be submitted for study by
the State, Commerce and Treasury Departments. The State Department,
by custom, either disapproves or fails to disapprove an issue, in which case
bankers have been accustomed to proceed with the bond issues contemplated.
This testimony by Mr. Jones uncovered many new facts concerning the
financial situation in South America, the scene of bond defaults previously
shown to have totaled more than $800,000,000 in securities floated in the
United States.
His testimony followed lengthy examinations of leading international
bankers such as Thomas W. Lamont, Otto H. Kahn, Charles E. Mitchell,
Clarence Dillon and James Speyer, the last named a partner in the old
family establishment of Speyer & Co., who was heard this morning. .
[VoL. 134.
"I think that Colombia is going wild on borrowings. She has started
too many railroads and too many highways and she has not any idea
where she is going to get all the money, except that the money is,coming
so readily now that they just think they can borrow ad infinitum."
"Do you recall that subsequent to the publication of the facts," Senator
Johnson added, "the National City Bank, the Illinois Trust Co. and the
First National Bank of Boston, in 1930. made a short-term credit of $20,000,000 there?"
"Yes," responded the witness.
In response to further questioning by Senators Johnson and Shortridge
of California, Mr. Jones described the Barco oil concession in Colombia,
which he said eventually came into the control of the Gulf Oil Co. of Pittsburgh. The concession was forfeited in later political upheavals and.finally
restored, Mr. Jones added, several months after the credit was granted.
It has not been developed.
Mr. Jones said that while the circular on Colombia was being prepared,
Dr. Olaya, Minister of Colombia, called at the Department of Commerce
and conferred with Dr. Klein. He was shown a copy of the circular, Mr.
Jones added, and asked for time to refer it to his Government, but it was
considered that this would entail too much delay.
Rivalry for Issues Described.
Mr. Jones corroborated testimony by Mr. Klein that many investment
houses in the United States had competed strongly for South American
bond issues during the boom period, but said two notable exceptions should
be made, these being J. P. Morgan & Co. and Kuhn, Loeb & Co., who, he
said, "had followed the English tradition of the borrower seeking the
lender rather than the lender seeking the borrower."
A large part of Mr. Jones's testimony related to Cuban borrowings,
on which he qualified as an expert through having served for ten months
as economic adviser to Ambassador Guggenheim. He said that in Cuba
"there was quite a little competition"; that for a time the National City
Co. appeared to have the "inside track," but that the "Chase Securities
Co. really won out."
The Cuban borrowing was discussed in some detail. Mr. Jones described
a maze of financial arrangements resulting from a desire by President
Machado to build a highway the length of Cuba. Easy credit, he said,
brought added expenditures, including "a $20,000,000 Capitol with a gilt
dome, a fine seawall and all that sort of thing," with the result that Cuba
now owes about $100,000,000. This debt includes 840,000,000 in bonds,
$20,000,000 in Chase Bank credit, $20,000,000 in Treasury obligations
held by contractors and $13,750,000 serial public works certificates held
by the American public."
Colombia's Efforts Praised.
Asked by Senator Johnson if definite information on any Latin-American
country could not have been obtained from his Department, Mr. Jones
said that it could have been. He added that Dr. Olaya had enjoyed very
cordial relations with his Department. The witness paid a special compliment to Colombia for endeavoring to balance its budget and meet its
public debt obligations.
Jones Denies Concession Link,
When Senator Johnson questioned Mr. Jones he attempted to show that
there :night have been some connection between loans to Latin-American
countries and concessions granted to American firms by those countries,
but Mr. Jones pleaded ignorance of these business negotiations.
Bolivia has floated four bond issues in the United States, all now in
default, according to a record previously filed with the Finance Committee.
The first loan, of which $1,431,000 is outstanding, was issued by the Chase
National Bank in 1917. This house issued another for $23,267,500 in 1922. Panama Raises Duties—Highest Import Rates in
Dillon, Read 8: Co. were listed as the agents for two later loans, one for
Nation's History Decreed by President.
$14,000,000 in 1927 and another for $23,000,000 in 1928. The last loan
received the special attention of the committee.
The highest duties in the history of Panama were decreed
The Colombia loan Is not in default, according to the Finance Committee by
President Alfaro on Dec. 26 to meet the acute unemploytabulation.
Mr. Jones testified that, as in the case of most foreign bond issues. he ment situation, protect home industries and increase the
discussed the Bolivian loan of 1928 with Arthur Young, economic adviser revenues of the Government. A cablegram Dec. 26 to the
of the State Department, and that by coincidence a special study had been
New York "Times"from Panama City reporting this, added:
in the course of preparation by his department when these discussions
Until the abrogation of the Taft agreement by former President Coolidge
were being held.
of the United States, Panama's customs duties, except on liquors and
Tells of Warning Against Loan.
tobacco, were limited to 15% ad valorem.
"On this particular Bolivian loan," he testified, "I remember very disWhile local manufactures amount to little, the new rates are bound to
tinctly talking with Arthur Young or Mr. Livesey (Frederick Livesey, affect imports from the United States, particularly shoes and wearing
assistant to Mr. Young) over at the State Department and telling them apparel.
that we thought that Bolivia was borrowing too much in the market.
The Department of Commerce, at Washington had the
There was a good deal of hemming and hawing, and the upshot of it was
that we reluctantly gave our consent to it for the reason that at that par- following to say Dec. 30, regarding the new duties:
ticular moment our diplomatic relations with Latin-America were a little
A Panama decree to become effective April 1 1932 imposes now specific
upset.
rates in addition to the present ad valorem duties on some products, and
"Out government was under considerable attack for its Nicaraguan substantially increases the rates of import duty on a number of other
policy, its Haitian policy and so forth. There was shortly to be held. I articles, vor the declared purpose of protecting home industries and inremember, a Pan-American conference. As I recall, the State Depart- creasing revenue, according to a cable dated Dec. 28 1931, received by the
ment said that it might result in embarrassment if we turned down this Department of Commerce from Commercial Attache Robert A. Martin,
loan proposition."
Panama City.
Asked by Senator Smoot if the bankers floating the loan had been inThe following products, now dutiable at a flat rate of 15% ad valorem,
formed, Mr. Jones said no information was given to bankers unless re- are to be subject to new specific duties in addition to the ad valorem rates:
quested, and that "we were never asked by the bankers for any data"
ready-made clothing of all kinds, furniture of all kinds, trunks and suitAsked by Senator Johnson if any American companies have concessions cases, and building materials, such as wooden doors, windows, moulding,
in Bolivia, Mr. Jones said he knew that Standard Oil of California has a and metal eaves and troughs.
Bolivian concession, but that he thought it antedated the World War.
Substantial increases of import duty are effected on the following:
meats of all kinds, fish, butter and butter substitutes, milk, edible oils and
Peru's Defaults Laid to Revolt.
fats, rice, beans, fruits, aerated waters, shoes, hats, printed matter, such
Mr. Jones also testified that all of the bonds of Peru floated in the United as tickets, account books and the like, and alcoholic liquors.
States are in default, the total being placed by him first at $90,000,000,
but corrected after the hearing to $75.000,000. These bonds, he said,
were floated principally by the National City Co. and J. & W. Seligman.
Funds Received to Pay Overdue (Dec. 1) Interest on
The Peruvian defaults, he said, occurred early in 1931, "really as a seMontevideo 7% Bonds—Notice of New York Stock
the
Leguia
and
of
President
of
Government
the
overthrow
of
quel to the
Exchange.
political disorder that followed thereon, as well as of the collapse in the
prices of the principal commodities which Peru exports."
Dillon, Read & Co., paying agents for the City of MonteThe political situation in Peru was termed "very unstable" by Mr. Jones,
who said that Colonel Sanchez-Cerro, who overthrew Leguia, later was video, Uruguay, 7% bonds due 1952, announce they now
turned out of office and then reinstated through an election. He added have in hand funds for the payment of the interest coupon
that Peru has not repudiated its bonds.
Replying to an inquiry by Senator Johnson, Mr. Jones said he had which was due on Dec. 1 last, and that such coupons may
heard of allegations against former President Leguia and his son in con- be presented at their office. The announcement in the
nection with Peruvian bond issues, but added "we have seen no cormatter, issued in behalf of Dillon, Read & Co., also says:
roboration of this."
The City of Montevideo has requested them to state that the municiNo other allegations of corruption were cited in the hearings, but Mr.
delay in meeting this payment which
Jones testified that "with some few exceptions," in which he named Ar- pality greatly regrets the enforced
supply of dollar exchange available
gentina, Uruguay, Chile and some of the Brazilian States, the Department was caused by the shortage in the
Montevideo.
The municipality deposited
in
Republic
Bank
of
the
to
the
of Commerce had thought that Latin-American countries had overborwith the bank before December 1 an amount of Uruguayan pesos sufficient
rowed.
to meet the full payment, but it has only been possible for the bank to make
Facts Were Published, Says Jones.
transfers to New York in small amounts during the month.
He said that these facts were made public, but not "stated baldly." Inproper
limits
so
"within
that
he
printed
who
A previous item regarding the Dec. 1 coupons appeared
were
ran
might
stead, they
read."
our issue of Dec. 5, page 3722.
in
In the case of Colombia, Mr. Jones testified, a special circular was issued
Jan. 4 the following notice was issued by the New
On
commercial
attache
at
Bogota
had written
in the fall of 1928, after the
York Stock Exchange:
directly to Dr. Klein as follows:
JAN.
9 1932.]
FINANCIAL CHRONICLE
NEW YORK STOCK EXCHANGE.
Committee of Securities.
January 4 1932.
Referring to the ruling of the Committee on Securities dated Dec. 1
1931, Sec. 350: Notice having been received that the interest due Dec. 1
1931, on City of Montevideo, 7% sinking fund gold bonds. due 1952, is
now being paid.
The Committee on Securities further rules that said bonds be quoted exInterest 334% on Wednesday, Jan. 6 1932; that said bonds shall continue
to be dealt in "flat" and thereafter to be a delivery must carry the June 1
1932 and subsequent coupons.
ASHBEL GREEN, Secretary.
221
$10,000,000 per annum, while the floating debt due abroad amounts to
some $7.500,000 and at home to about $8,000.000.
Foreigners Produce Exports.
In analyzing the present situation in Peru, Mr. Cunningham said that
careful consideration must be given to the special nature of the country's
exports. "In 1929," he stated, "the exports amounted to some $135,000,000, but of this total $50,000,000 of petroleum and $35,000,000 of
copper were produced and sent out of the country by foreign companies,
which only spent within the country moderate sums for wages and taxes.
The balance was received in foreign currencies abroad and did not go
back to Peru at all. At present, with curtailed operations and lower
prices in these two commodities, the country has had to be satisfied with
reduced income from even these restricted sources."
"The bulk of the exports of the country are accounted for by cotton
and sugar shipments," Mr.Cunningham explained. "The former amounted
to $30,000,000 in 1929 and the latter to $15,000,000. With lower prices
now prevailing, despite low production costs and high quality for these
Peruvian products,reduced income is now being realized from these sources.
In addition about $5,000,000 is secured from hide exports under fairly
normal conditions. Much less is now being realized. . . .
"The Government's finances are in unsatisfactory state, with an indicated deficit this year, without debt service."
Moratorium Lapses on Uruguayan Debts—Deputies
Fail to Approve Extension of a Year Passed by the
Senate.
In the New York "Times" it was stated that Uruguay's
moratorium on foreign commercial debts terminated on
Dec. 31 without the Chamber of Deputies reaching action
on the Senate's recently passed bill spreading settlement
of payments over the next 12 months instead of 5 as
Peru Arranges for Internal Loan.
specified in the moratorium law. The advices to the
Government has arranged for a local loan
Peruvian
The
"Times" were contained in a cablegram from Montevideo
of 1,200,000 soles (about $336,000), according to Commercial
Jan. 1, which also said:
•
When the Senate, on Christmas Eve, passed the bill, drafted by the Attache Merwin Bohan at Lima, in a report to the DepartBank of the Republic and supported by government officials, it was be- ment of Commerce. The Department, in making this
lieved in political, banking and commercial circles that the Deputies would
Dec. 30, also said:
pass the bill as a matter of routine, but the effort to railroad it caused a known
stormy session and no action was taken. Strong opposition has arisen
in the Chamber against any future delay in the settlement of commercial
debts. There Is a determined movement in the Chamber, on the other
hand, that $10,000,000 worth of gold be withdrawn from the Bank of the
Republic's holdings to be remitted abroad to settle commercial obligations.
The failure of the Deputies to approve the Senate bill leaves the existing
law unchanged. It requires commercial debtors to make initial payment in January of 20% of the total of their foreign obligations and similar
monthly payments until May.
The Bank of the Republic has issued a new order forbidding banks
to sell drafts involving 1,000 pesos or more direct to clients, but only
through the intervention of registered exchange brokers, about 50 of whom
have complained of heavy losses as a result of the bank's restrictions on
exchange operations. The new regulation permits them to collect their
regular commission of one per mill.
The bureau of public credit has published a report showing Uruguay's
total public debt at the end of the year to be 238,765,350 pesos ($247,122,137) at par, of which 148,006,984 pesos ($153,187,228) is foreign. The
foreign debt was decreased by 5,438,211 pesos during the year and the
internal increased by 4,768,735.
The Treasury is to draw upon the Caja Depositos y ConsIgnaciones.
which then discounts the drafts with local banks, exclusive of branches
of foreign banks. The banks are then to rediscount the drafts with the
Central Reserve Bank of Peru.
The loan is to be secured by drafts of approximately the same amount,
drawn by the Government on the Guano Administration Co. These
drafts are already in the possession of the Caja which has been authorized
by the Government to hold them as guaranties.
The proceeds of the loan are to be used for the payment of current
expenses, especially salaries and pensions in arrears.
Latin-Americans Plan Link with Federal Reserve
System—Bolivia and Chile Moving Gold to New
York from London—Other South American Nations
Expected to Act—Professor Kemmerer Reports on
Parley.
According to Associated Press advices from Santiago,
Reference to the Senate action appeared in our issue of Chile, Jan. 7 the central banks of Chile, Peru, Bolivia,
Jan. 2, page 56.
Ecuador and Colombia plan to undertake immediately the
withdrawal of gold reserves on deposit in London for transfer
Nationalists in Uruguay Congress Favor Suspension to a gold standard country, probably the United States, it
of Sinking Fund Payments on Foreign Debts.
was said on high authority. The cablegram as given in the
A cablegram as follows from Montevideo Jan. 6 is taken New York "Times" went on to say:
Chile and Bolivia are more directly concerned than the others and already
from the New York "Times":
preliminary steps, it was said.
have taken
The banks intend also to establish closer relations with the Federal
Reserve System and with the Federal Reserve Bank of New York, more
for the sake of getting advice than credits. Such credits as are sought will
be negotiated individually.
These decisions were reached by representatives of the five banks at a
recent conference in Lima and although they were in the nature of a resolution, some difficulty Is expected in getting permission for the withdrawal
from the depositories.
It is understood that the five banks will stand together for maintenance
of the gold standard and in urging those banks which have suspended
the gold standard temporarily to make every effort to return to it.
In order that the gold standard may be maintained on the West Coast
the banks are determined to prevent padding of currencies with paper
issues
and to urge the governments that the Issuing power be left In the
Offering of Export Exchange Bills in Uruguay.
of the banks.
The following Montevideo advices Jan. 2 are from the hands
Chilean delegates to the Lima conference expressed gratification at the
New York "Times":
co-operation of Federal Reserve officials who attended. Nothing of a
For the first time in several weeks there were offerings of export ex- definite nature was arranged regarding any direct intervention by the
change bills to-day, and the two hours of trading before the banks closed Federal Reserve.
The five banks, it was said, have decided not to avail themselves of
at noon offered the most active exchange market seen in a long time.
The offering of export bills enabled the holders of the Bank of the Re- credits in foreign currencies except temporarily, thus precluding regular
credits
and leaving the Federal Reserve in the capacity of an adviser and
public's permits to purchase foreign drafts, which hitherto had been unemergency helper.
available because there were no sellers.
Except for sight changes in sterling and the lira, all rates were stationary.
The dollar quotation remained at 44.60 cents per peso, at which the official
Argentina Meets Interest—Foreign Debt Services
bank has it rtificially pegged.
Nationalist members of Congress, in a caucus last night, decided to
support the project to suspend sinking fund payments on the foreign
debt this year, but to pay interest promptly.
As the project was drawn up by the majority Colorado party, the promised support of the Nationalists assures the passage of the project, which,
it is understood, will be voted on in the next few days.
Suspension of the sinking fund payments will save something more
than 4,000,000 pesos ($1,784,000), which will be applied to the interest
payments.
The plan is to resume the sinking fund payments when exchange improves, removing the present heavy loss in remitting to New York and
London.
Settled—Cash Revenues Rose Last Year.
From Buenos Aires Jan. 1 the New York "Times" reports
Peru Debt Payment Seen as Obscured—Commercial the following:
Attache Cunningham Says Balance of Payments
Argentina's foreign debt services due to-day were met, notwithstanding
Prevent It.
several heavy payments made in settling short-term indebtedness.
imports decreased 29% the customs revenue fell off only 13%,
From the New York "Journal of Commerce" of Jan. 8 asAlthough
a result of successive increases in duties.
The Provisional Government started a system of prompt monthly pubit is learned that resumption of debt service by Peru depends
primarily upon a rise in prices of metals and agricultural lication of treasury movement figures, and complete returns for 1931
show that cash revenues amounted to $180,000.000, exceeding the previous
products which that country produces, according to Charles year's total by $2,100.000.
This increase was achieved in the face of a
drop in customs revenues from $74,787,000 in 1930 to 868,105,000 last
Cunningham,
who
has
Attache,
returned
Commercial
H.
as
well
as
year,
million
dollar
declines in both internal revenue taxes and
from a two-year stay in that country. In part the paper postal revenue.
from which we quote also said:
Short-term credits amounted to but $10,000,000, as against $130,000,000
Mr. Cunningham pointed out in an Interview that the Government of
that country has declared its intention to resume debt service when possible, but at the present time neither the budget nor the balance of payments permits of serious thought of early resumption.
Mr. Cunningham stated that the long-term dollar debt of Peru was
$89,631,141 at the end of 1930. In addition, there is approximately
$15,000.000 of sterling debt and $15,000,000 internal debt, interest on
the latter still being maintained. Charges on this debt amount to nearly
in 1930, and this abstinence from foreign borrowing is having a beneficial
effect on national economy.
The expenditures account shows the lowest outlay for administrative
salaries in many years, the total being $93,000,000, as compared with
$132,000,000 in 1930 and the previous four-year average of $110,000,000.
Financial service entailed an outlay of about $60,000.000, which was
$10,000,000 above that of the previous year. The reduction in general
expenditures was $9,000,000.
222
e
FINANCIAL CHRONICLE
[Vol,. 134.
The Committee further rules that all contracts, except "time option'
Extension of Credit of $20,000,000 by Bank of Brazil contracts,
in said bonds maturing on Monday, Jan. 4 1932, shall be settled
to National Coffee Council—No Further Trades on the basis of computing six months' interest only.
Contemplated.
ASHBEL GREEN. Secretary.
Referring to the extension on Dee. 31 of a credit of approximately $20,000,000 to the National Coffee Council Bonds of City of Porto Alegre Dealt in "Flat" on New
by the Bank of Brazil, to be used in paying for stocks (reYork Stock Exchange.
ferred to in our issue of Jan. 2, page 55) the New York
A notice issued Jan. 2 by the New York Stock Exchange
"Times" of Jan. 1 said:
said:
No Further Trades Contemplated.
While the National Coffee Council of Brazil will not entertain any
further trade by exchange for other commodities and will liquidate contracts of this nature already made, a campaign of advertising is to be
inaugurated, it was announced here yesterday by Sebastiao Sampaio,
Consul-General of Brazil.
Senhor Sampaio made the following statement, addressing himself to the
press, the New York Sugar and Coffee Exchange and all other coffee
organizations in this country:
"Complying with instructions received by cable to-day from Dr. Marcos
de Souza Dantas, President of the National Coffee Council of Brazil, I
have the honor to inform the New York Sugar and Coffee Exchange, all
the other coffee organizations of the country and in general the coffee trade
and the press of the United States, that in reply to various inquiries sent
to His Excellency, the President of the National Coffee Council of Brazil
authorized me to declare that the Council does not intend to enter into any
new transactions of consignment or exchanges of coffee for other commodities. The National Coffee Council of Brazil will limit its action in
this matter to the liquidation of the contracts already made.
"I have the pleasure of also announcing under the same instructions
that it is the intention of the National Coffee Council of Brazil to give a
great impulse to the promotion and advertising of coffee in the United
States, always in mutual accord with the coffee interests of this country.
To help in the expansion of our promotional activities, President Dantas
Instructed me to request the co-operation of all branches of the coffee trade
of the United States in the form of suggestions which I will have the honor
of receiving and transmitting to the Council where they will be studied
with all deserved interest and attention.
"President Souza Dantas hopes that the coffee trade of the United States
will receive this first step of the new reorganized Council as a demonstration
of the sincere desire of the Brazilian coffee industry for the further development of friendly co-operation and understanding which, with reciprocal
benefit, will certainly intensify Brazilian-American commercial relations."
Senhor Sampaio, who is also Vice-Chairman of the Brazilian-American
Coffee Promotion Committee of the United States, announced at the same
time that the Committee is already prepared to facilitate all coffee organizations and individuals of the United States by detailed information
on the present and past coffee promotional work in order to help the proposed plan for increased activities.
.
NEW YORK STOCK EXCHANGE
Committee on Securities
Jan. 2 1932.
Notice having been received that the interest due Jan. 1 1932 on City
of Porto Alegre 40-Year
% Sinking Fund Gold Bonds External Loan
of 1925, due 1966, is not being paid:
The Committee on Securities rules that beginning Saturday, Jan. 2
1932, and until further notice, the said bonds shall be dealt in "flat" and
to be a delivery must carry the Jan. 1 1932 and subsequent coupons.
The Committee further rules that all contracts, except "time option"
contracts, in said bonds maturing on Monday, Jan. 4 1932,shall be settled
on the basis of computing six months' interest only.
ASHBEL GREEN, Secretary.
634% Bonds of City of Rio de Janeiro Dealt in "Flat"
on New York Stock Exchange.
A notice issued by the New York Stock Exchange on Jan.
7 said:
NEW YORK STOCK EXCHANGE
Committee on Securities
Jan. 7 1932.
Referring to the ruling of the Committee on Securities dated Aug. 1
1931, SEC-266:
Notice having been received that payment of $10.06 Per $1,000 bond
will be made beginning Jan. 11 1932, on account of the coupon due Aug. 1
1931 on City of Rio de Janeiro 61,5% External Secured Sinking Fund
Gold Bonds, due 1953:
The Committee on Securities further rules that the bonds be quoted
ex-interest $10.06 on Monday. Jan. 11 1932; that the bonds shall continue to be dealt in "flat" and to be a delivery after Jan. 11 1932, must
carry the Aug. 11931, coupon stamped as to payment of $10.06 per $1,000
bond and subsequent coupons.
ASHBEL GREEN, Secretary.
Japan Said to Have Lost Heavily in Dollar Speculation
—$12,500,000 Must Be Paid by Central Bank to
Cover Private Purchases.
Chile to Float Loan—$24,000,000 Issue to Pay Off
Tokio
adviees as follows Dec. 21 are taken- from the
Debts and Meet Expenses,
New York "Times":
The New York "World-Telegram" reports the following
Viscount Takahashi, the new Finance Minister, has been investigating
(United Press) from Santiago, Chile, Jan. 7:
the extent of speculation in dollars by Japanese since the development of
The Treasury Department was authorized by Congress tonight to Issue the Manchurian issue and has discovered it was much larger than had
200,000,000 pesos ($24,000.000) in Treasury notes bearing 6% interest. been thought.
He has found, according to the Japanese newspapers, that Jonnosuke
The notes can be discounted through private banks or directly through
Inouye, the Finance Minister in the Wakatsuki Cabinet, underestimated
the Treasury.
The issue is to be used for part payment of the internal floating debt. the amount of dollars bought here when he put the total at 6167,000,000.
to continue public works projects and to meet the government payroll. Viscount Takahashi now puts the amount at $255,000,000, which was
bought between Sept. 20, following the advance of the Japanese Army in
Manchuria, and mid-October.
6% Bonds of Chile, and 63% Bonds of Mortgage Bank
Gold has been shipped to the United States to cover the $167,000,000,
of Chile Dealt in "Flat" on New York Stock Ex- but now $88,000,000 remains to be met. With the yen off about 15%,the
Yokohama Specie Bank, which controls the dealings in exchange, stands to
change.
lose about $12,500,000 through the purchase of gold with yen in order to
The following notices have been issued by the New York meet this demand, or more if the yen should fall further.
The Yokohama institution is covered in the transaction by a guarantee
Stock Exchange:
given by the Bank of Japan and the government is now considering what
NEW YORK STOCK EXCHANGE
It will do to co er the loss.
Committee on Securities
Mr. Inouye blames the present government for the situation in which
Dec. 31 1931.
It finds itself. He states that if the Cabinet had not so hurriedly reimposed
Notice having been received that the interest due Dec. 31 1931 on the embargo on the export of gold by ordering it the day after the change
Mortgage Bank of Chile Guaranteed Sinking Fund 6,1% Gold Bonds of In government, it would have been possible to put the loss on the specu1926, due 1961, is not being paid:
lators in dollar exchange and not on the country.
The Committee on Securities rules that beginning Thursday, Dec. 31
In publishing the above the "Times" said:
1931, and until further notice, the said bonds shall be dealt in "flat" and
Following the re-imposition of the gold embargo the Tokio "Aashi" estito be a delivery must carry the Dec. 31 1931 and subsequent coupons.
mated that firms which had been buying dollars in anticipation of this
ASHBEL GREEN, Secretary.
step would save between $30,000,000 and $60,000,000 through it. The
NEW YORK STOCK EXCHANGE
newspaper estimated that about $200,000,000 was held speculatively,
Committee on Securities
the principal holders being the Mitsui Bank, $50,000,000; the Sumitomo
Jan. 2 1932.
Bank, $20,000,000; the Mitsubishi Bank, $10,000,000, and various trust,
Notice having been received that the interest due Jan. 1 1932 on Repub- debenture and insurance companies making up the remainder.
lic of Chile Railway Refunding Sinking Fund 6% Gold External Bonds,
due Jan. 1 1961, is not being paid:
The Committee on Securities rules that beginning Saturday, Jan. 2 Japan May Use Bonds to Help Specie Bank—Wants
1932, and until further notice, the said bonds shall be dealt in "flat" and
to Extend New York Loan to Cover Purchases
to be a delivery must carry the Jan. 1 1932 and subsequent coupons.
The Committee further rules that all contracts, except "time option"
of Dollar Exchange.
contracts, in said bonds maturing on Monday. Jan. 4 1932, shall be settled
The Tokio correspondent of the New York "Times" reon the basis of computing six months' interest only.
ports
that a conference was held at the Finance Ministry
ASHBEL GREEN, Secretary.
Bonds Department of Caldas, (Colombia) Dealt in
"Flat" on New York Stock Exchange.
Under date of Jan. 2 a notice as follows was issued by the
New York Stock Exchange:
on Jan. 6 to determine whether $75,000,000 worth of foreign
bonds held by the Government Deposits Bureau shall be
loaned to the Yokohama Specie Bank to tide it over its
shortage of dollar exchange due to the recent abandonment
of the gold standard. The Jan. 6 advices continued:
The loan of these bonds would be intended to enable the bank to obtain an extension of a loan contracted with J. P. Morgan & Co. in New
York for the support of the yen on a gold basis when that was the policy
Jan. 2 1932.
of the late government.
Notice having been received that the interest due Jan. 1 1932 on DepartThe abrupt abandonment of the gold basis by the Government of Premier
ment of Caldas, Republic of Colombia 734% 20-Year External Secured Inukai has involved the Specie Bank in a risk of approximately 60,000,000
Sinking Fund Gold Bonds, due 1946, is not being paid:
yen ($21,720,000 at yesterday's exchange rate). The Government has
The Committee on Securities rules that beginning Saturday, Jan. 2 refused to indemnify the bank but the bonds may be loaned to carry it
1932, and until further notice, the said bonds shall be dealt in "flat" and along while it accumulates export bills in an effort gradually to correct
to be a delivery must carry the Jan. 1 1932 and subsequent coupons.
its position.
NEW YORK STOCK EXCHANGE
Committee on Securities
JAN. 9 1932.]
FINANCIAL CHRONICLE
223
A tentative draft of a bill, prepared by
Representative Jones (Dem.),
Forthcoming Financing of Federal Intermediate Credit of Amarillo, Texas, Chairman of the Committee,
which was before the
Committee for discussion, provided for distribution of 20,000,000 bushels
Banks Propose Offering of $12,500,000 Debentures.
stabilization wheat or such additional amounts as may be needed.
January financing for the Federal Intermediate Credit of
Mr. Denman estimated the use of that amount would cost the Farm
Banks will take the form of an offering early next week of Board's revolving fund between $6,000,000 and $7,000,000 to take up
$12,500,000 of collateral trust debentures, dated Jan. 15 the loans.
Representative Jones told the Committee he had talked with James C.
and due in four to nine months, according to Charles R. Stone, Chairman of the Farm Board, who had advised
him that if any
Dunn, fiscal agent. Since 1923 the Banks have sold in the great amount of the wheat were used, more funds would be needed by
open market over $1,000,000,000 of debentures and the the Board. Mr. Stone felt that otherwise the Board might be handicapped
financially, Mr. James said.
outstanding debentures as of Jan. 1 amount to approxiRepresentative Andresen (Rep.), of Red Wing, Minn., asked what
mately $79,000,000. This will be reflected in the annual would be the effect U the Board, instead of providing stabilization wheat,
went on the open market and bought the wheat needed. Mr. Denman
report which will be ready for distribution about the end said
it would have the same effect as if anyone else bought the same amount
of February.
of wheat. Mr. Andresen stated orally after the Committee hearing that
In spite of the unfavorable bond market last month, the he wanted the Board to buy the wheat on the market, thus strengthening
offering of $12,000,000 of debentures the early part of the price at the same time as it provided relief.
The Senate committee's action on the resolution was
December was very well taken, Mr. Dunn said. The law
provides that the Banks shall always maintain a 25% margin noted in our issue of Jan. 2, page 70.
of safety as they are only permitted to loan up to 75% of
the market value. The general practice, it is stated, is to Red Cross to Aid if United States Gives Wheat—
loan only 65% of the market value of commodities against
Chairman Payne Pledges Distribution of Stores
which the loans are made. The forthcoming financing is to
of Federal Farm Board to Needy if Congress
refund $17,500,000 of debentures maturing Jan. 15. The
Authorizes It—Replies to Representative La
December offering was referred to in our issue of Dec. 12,
Guardia.
page 3900.
John Barton Payne, National Chairman of the American
National Red Cross, told a House committee on Jan. 5
Senate Adopts Capper Resolution Providing for Dis- that if Congress makes available Government-owned wheat
tribution of Government-Owned Wheat for Relief the Red Cross will undertake its distribution to the needy.
Purposes.
An Associated Press dispatch from Washington Jan. 5 to
The Senate, without a record vote, adopted on Jan. 5 the New York "Evening Post" also said:
the Capper resolution which authorizes "the distribution
Mr. Payne was testifying before the Agriculture Committee which is conto that passed by the Senate yesterday to release
of Government-owned wheat to the American National sidering measures similar
40,000,000 bushels of Farm Board wheat for relief.
Red Cross and other organizations for the relief of people
think,"
Mr.
Payne said, "it is my province to speak as to
"I do not
in distress." The resolution proposes the distribution of whether Congress should enact such legislation. That is for Congress to
I assume you want to know whether we will accept it."
40,000,000 bushels of wheat of the Grain Stabilization decide.
"The Red Cross will accept that responsibility," Mr. Payne said.
Corporation, "or so much thereof as in the judgment of
Criticized by La Guardia.
the President may be needed" . . . "in providing food
Committee members listened attentatively as the Red Cross head outfor the needy and distressed people of the United States." lined his views regarding such legislation. Just before he took the stand
From a Washington dispatch Jan. 4 to the New York Representative La Guardia, New 'York Republican, bad criticized the
Red Cross attitude last year in refusing Federal aid as "a great disappoint"Times" we take the following:
ment."
The Federal Farm Board would be recompensed for the wheat at the
prevailing market price at the time of delivery.
It is estimated that the Federal Government would have to pay Into
the Board's revolving fund $16,000.000 to cover the cost of the wheat to
be given to charity.
Senator Borah opposed buying wheat from the Farm Board, declaring
that while he favored its free distribution, the wheat should be bought
from the farmers, who, he said, had 55% of last year's crop in their bins.
He insisted that if the wheat was so purchased it would benefit the farmers,
while taking it out of the supplies of the Board would not provide any real
benefit to the producer.
Senator McNary said that there was about 166,000,000 bushels of wheat
now held by the Board, purchased at an average of 81 cents a bushel, but
that the storage and insurance charges increased the cost to $1.17 a bushel.
Senator Robinson, Democratic floor leader, asked Senator Capper
whether the President would designate the Red Cross to distribute the wheat,
and the latter replied that he did not know.
"This partakes of the nature of a dole, which Is opposed by the President,"
Senator Robinson said. "It is well known that the President has not
recommended this measure."
Amendments provided that there should be no direct or indirect sale of
the wheat to pay for transportation or milling charges; that 5,000,000
bushels of wheat could be used for animals in the drouth sections and that
wheat also should go to the Indians.
Before addressing himself to the wheat bill, Mr. Payne volunteered an
answer to Representative La Guardia.
"Before you begin," he said,"I heard the gentleman before me speak with
reference to the Red Cross. If any gentleman here happens to reside in
one of the drouth States, I only refer to him for a complete answer to what
the gentleman said."
Mr. Payne recommended that provision be made to pay for the cost of
processing the wheat with the by-products.
"In our view," he said, "It is vital that the cost of milling, cleaning and
other processing may be paid for by the by-products. I know of no reason
why the by-products should not be used to pay this cost."
Mr. Payne estimated the cost of milling 40.000.000 bushels of wheat at
$5,000,000.
While Mr. Payne was giving his views to the House Committee, Representative Huddleston of Alabama was asking the Senate Manufactures
Committee to approve direct Federal appropriations for unemployment
relief. Mr. Huddieston is a Democratic sponsor of a bill to that end.
Senate Inquiry Into Federal Farm Board Ends—
Possibilitity of Wider Investigation—"Errors, But
No Delinquencies" Disclosed, Says Senator McNary
—$75,000 Salary to E. F. Creekmore—$50,000 to
G. S. Milnor—Amounts Owed Board by StabilizaWe likewise take from the "United States Daily" of
tion Corporation and Co-Operatives—Wheat Paper
Jan. 5 the following:
Described as "Dole."
Loss.
The question of whether the proposal would open the door to further
A complete investigation of the Federal Farm Board
appropriations for direct relief was debated several hours and there was a
by a Senate committee empowered to subpoena witnesses
lack of unanimity of opinion as to the possibilities
Discussion of provisions of the wheat distribution resolution had proceeded was informally predicted by members of the Senate Agrionly a few minutes before Senator Robinson, of Arkansas, the Minority
after comleader, "warned" the Senate to proceed "with caution" in legislation of the cultural Committee at Washington on Nov. 28
character under consideration. He asserted that, with a "Treasury that is pleting a series of hearings on operations of the Board
already bankrupt" the Congress must give thought to the direction which and agricultural
co-operatives under the Agricultural MarIt would be traveling in appropriations, and there was held to be no differketing Act. The ilispatch from Washington, Nov. 28, to the
ence whether it was wheat or money.
"There is no disguising this," said the Arkansas Senator. "It will cost New York "Times" went on to say:
the Federal Government $16,000,000. It's a dole though it is a miserable
Several committee members, among them Senators Norris of Nebraska,
amount.
Wheeler of Montana, Frazier of North Dakota and Thomas of Oklahoma,
Predicts Future Calls.
have been outspokenly critical of such matters as "princely" salaries paid
"The Federal Government can not conclude that it has discharged its
to the heads of co-operative marketing organizations. These included $75,000
obligation by such an action. We can not be blind to the precedent that it
annually
paid E. 0. Creekmore, General Manager of the American Cotton
lays down. I suggest that Senators proceed with caution unless they
recognize this legislation for what it is—a dole—and as the precedent which Co-operative Association, and the $50,000 salary of George S. Milner of
the Farmers' National Grain Corporation.
it will establish.
It was expected in at least one quarter that Mr. Norris probably would
Senator Wheeler (Dem.), of Montana, who joined with Senator Capper
in reporting the resolution, said there was really no difference in giving the move in the Senate for an investigation of the Board.
wheat to Americans and "a gift in the guise of a sale" to China. He asserted
Errors But No Delinquencies,
he never expected to see the Chinese pay for the 25,000,000 bushels purSenator McNary of Oregon, Chairman of the Agricultural Committee,
chased, although Senator McNary, of Oregon, the Assistant Majority said after adjournment;
Leader, had maintained that the sale was made on "what was presumed to
The hearings have rather determined the usefulness of the Marketing Act and
be good security."
disclosed some errors of administration, but no delinquencies. The committee
inquiry in Rouse.
generally seemed to disapprove of some of the excessively high salaries among the
subsidiaries.
Wheat held by the Grain Stabilization Corp. is encumbered by primary various
The hearings have been concluded, and the whole subject will be admitted to the
loans of 32.8 cents a bushel, which would have to be taken up by the committee at an early date for
consideration of possible modification of the Marketing
Federal Farm Board on any wheat donated for the relief of distress, C. B. Act and whether further hearings should be held with respect to the activities
of the
Denman, member of the Farm Board, told the House Committee on Agri- Farm Board.
culture Jan. 4. The Committee held hearings on proposals for free disThe concluding session of the Committee brought testimony from many
tribution of wheat to the needy.
angles, including descriptions of an alleged fund of $100,000, which oor-
224
FINANCIAL CHRONICLE
respondence showed was planned for use in a fight for repeal of the Marketing Act; a defense of trading in futures in wheat and cotton by a
market authority, and attacks on the Marketing Act by three "middlemen,"
who charged that Farm Board loans were in effect Treasury subsidies to
groups which competed with established enterprises.
U. 13. Blalock, President of the American Cotton Operative Association,
who said he served without salary, was optimistic over the cotton outlook,
and credited much of the criticism leveled against co-operative cotton
marketing to members of the private trade.
[VoL. 12.4.
Cotton Losses Given.
E. F. Creekmore, President of the Cotton Stabilization Corporation and
Vice-Prident-General Manager of the American Cotton Co-operative Association, who also testified before the Committee to-day, estimated "paper
losses" of the latter organization on the basis of the present price of
cotton at approximately $50,000,000. The "paper losses" of the Cotton
Stabilization Corporation are estimated to be around $75,000,000. In
the case of the first mentioned organization the $50,000,000 loss cannot
be accredited against the Farm Board as the American Cotton Co-operative
Association is an independently-owned concern which has as its membership cotton co-operative organizations.
Letter Asks for $100,000 Fund.
He inserted in the records a letter gent to all members of the New York
Cotton Exchange soliciting subscriptions to a fund of $100,000 to fight
The following regarding the hearing on Nov. 27 is from
the Marketing Act and to "enlighten the public as to the activities of the Washington account Nov. 27 to the "Times":
was
letter
This
the Federal Farm Board as at present conducted."
The salaries of Messrs. Manor and Creekmore were revealed Tuesday
signed by Leigh M. Pearsall, C. T. Revere and Gardner H. Miller.
Defending the salary which his association pays to Mr. Creekmore, Mr. (Nov. 24) in testimony before the committee by Chairman Stone of the
Farm
Board, but comment was withheld until to-day, when Mr. Manor
Blalock said:
"Ile was far too modest. We do feel that we have placed at the head testified to receiving $50,000 annually. Mr. Creekmore gets a salary of
of our organization a successful business man who knows the cotton busi- $25,000 plus a bonus of $50,000 a year.
"What is the average income of cotton growers?" asked Senator Wheeler
ness thoroughly from every angle."
In answer to a request, just before to-day's hearing concluded, Carl of Montana.
"I'd
say about $300 a year," replied Mr. Creekmore.
Williams, cotton member of the Farm Board, told the Committee that the
"And you, as the representative of these poor devils, are drawing down
Cotton Stabilization Corporation and the American Cotton Co-operative
the Senator.
Association together owe the Farm Board about $194,000,000, secured by $75,000 a year?" exclaimed
From Mr. Creekmoie the Committee learned that the cotton associa3,300,000 bales of cotton.
tion, formed of eleven co-operatives operating in thirteen States, had
The Stabilization Corporation owned by the Farm Board, owes $93,paid Harris & Vose, New York cotton dealers, "approximately $450,000
862,000 to the Board, $14,615,000 to Federal Intermediate Credit Banks,
or
more" to handle sales on the New York Cotton Exchange, in addition
and $8,440,000 to primary banks. The Co-operative Association, owned
to other business transacted in New Orleans by other brokers.
by cotton co-operatises, owes $63,737,000 to the Board, $69,432 to Inter:
Contributed Cotton Exchange Seat.
mediate Credit Banks, and $14,146,000 to primary banks.
Mr. Creekmore testified that he had contributed to his position, which
Thomas to Ask Amendment of Act.
he said he acceptetd reluctantly, his seat on the New York Cotton Exchange,
After the hearing Senator Thomas declared that he will ask an amendwhich had cost $27,000, and this had enabled him to get a 50% discount
ment to the Marketing Act to stop stabilization operations by the Board
in
commissions on the sales and purchases of cotton.
and to relieve co-operatives of their debts to it.
The committee developed that the American Cotton Association owes
"The Farm Board admits that its efforts to stabilize farm prices on the
the Farm Board $63,000,000, borrowed to make loans to cotton producers;
Exchanges, based on present prices, have cost over $200,000,000," said
that it had lost about $40,000,000 in the decline of prices, and that
Mr. Thomas.
had lost in the last year an additional $10,000,000 above their
"Evidence before the Agricultural Committee convinces me that the growers
association.
Board should cease all further efforts to peg or stabilize wheat or cotton indebtedness to the
The association in two years had handled 2,100,000 bales of cotton,
prices by operations on the Exchanges.
Mr. Creekinore said, of which 1,750,000 were on hand and pledged not
"Evidence submitted shows that not only has the Farm Board suffered
31, next year, in line with the cotton stabilization
great losses but, in addition, the several co-operative associations and to be sold before July
even the individual members of such organizations have great debts program.
Henry G. Stafford, the Association Vice-Presithat
Mr. Creekmore said
charged up against them.
received a salary of $35,000 a year and C. 0.
"The Farm Board admits that the policy of the co-operatives has been dent in charge of sales,
and Secretary, $15,000. Twenty-three employees get
dictated by such Board, hence such policies and activities leading to such Moser, Vice-President
$5,000 or more a year, sixteen between $4,000 and $5,000 and fifty-six
losses are responsible either directly or indirectly for such losses.
between $3,000 and $4,000. The monthly payroll totaled about $70,000,
Never Authorized by Congress.
which Senator Shipstead of Minnesota figured at "around $1,000,000 a year."
"The attempted stabilization or efforts to control prices through the
Heavy Load for Cc-operatives.
Exchanges was never specifically authorized by Congress. The practice
"You naturally feel that you should save the people as much as possible
should be stopped by an amendment to the Marketing Act. In closing
the loss they would sustain in liquidation of this cotton?" asked
this phase of activities the Farm Board should assume the losses occa- from
Senator Norris.
sioned by its policies and the individual cotton and wheat growers should
"Yes," replied Mr. Creekmore.
be absolved from any further demands for funds to meet losses already
"In fact, if the business were closed the Association would be bankrupt?"
incurred.
think most of thorn are bankrupt now," the witness said.
"I
"I will ask the Agricultural Committee to consider such a program
"Then, even if the Elm Board stands the $40,000,000 loss, they can't
of adjustment."
stand the balance?" Senator Norris continued.
C L. Poole, a commission merchant and President of the New York
"I don't think so. If we don't work it out eventually at a profit, it
Mercantile Exchange, criticized sharply the policy of lending Federal money
will be a heavy load for co-operatives," Mr. Creekmore conceded.
to co-operatives, although he said he favored the development of co-operatives,
"Then," said Senator Norris, "having in mind the need of these people
of which he has some for clients.
and the fact that they might have sold their cotton at a profit had they
"We are unalterably opposed to the Federal Marketing Act," he
not followed your advice, don't you feel some of the officers of this banktestified.
rupt corporation ought to cut down the salaries they receive?"
"We feel that the fundamental provisions of the Constitution, liberty
"I don't concede until July 31 1933, that the A. C. C. A. is bankrupt,"
and justice, have been overlooked in it.
said Mr. Creekmore. "In my opinion this isn't a question of salary.
Treasury
take
to
from
justice
money
Federal
the
is
it
that
"We don't feel
The volume involved and the responsibility is so great that a salary,
and loan it to a group of men to help out private individual merchants. more or less, is of little significance. The co-operatives should be conWe feel that the law of supply and demand is being sidetracked.
cerned about the ability of the management."
Trading in Futures Defended.
"But don't you think that the men who have run no risk and who have
"None of our organizations are opposed to co-operative marketing, but been getting princely salaries from the toil of these people should extend
we cannot compote with these co-ooperative selling organizations if they the principle of co-operation to themselves?" Senator Norris asked.
"If I reduced all of my salary it would not amount to 2 cents a bale,"
are to be financed with funds out of the Federal Treasury."
F. M. McIntyre of Potsdam, N. Y., head of the Eastern Federation of replied Mr. Creekmore. "I wonder if maybe some of your constituents
salary?"
Feed Merchants, and J. L. Roberts of Philadelphia, member of the ad- in Nebraska don't feel the same about your
"I believe they do," the Senator replied.
visory board of the National League of Commission Merchants, testified
Agencies Share Salary Roll.
in similar vein.
The Committee also heard a defense of trading in futures in the testimony
Mr. Creekmore also is President of the Cotton Stabilization Corporation,
on
Committee
a Farm Board agency which bought in its stabilization program more than
of Siebel C. Harris of Chicago, Chairman of the Grain
National Affairs, which includes in its membership most of the Boards of 1,000,000 bales, sustaining a paper loss at current prices of $75,000,000.
trading.
commodity
for
facilities
Ile said that neither he nor other officers received extra compensation
Trade which supply
Mr. Harris cited an opinion by Associate Justice Holmes of the Supreme for this work, but that the Farm Board, through the stabilization corporaCourt upholding the legality of this practice. He also quoted a report tion, shares in the cotton association's executive salary roll.
rendered in 1907 by a New York Commission appointed by Charles Evans
In a statement which he read to the committee, the witness said he
Hughes, then Governor and now Chief Justice of the United States, which believed that stabilization of prices by the Farm Board, accomplished in
is
which
price,
in
steadiness
found that "short-selling tends to produce
1930 by loans of 90% of the market value of cotton to growers in the
an advantage to the community."
co-operative fold, had probably defeated to a certain extent the work for
Ile upheld the stabilization policy through governmental
An actual profit of $2,418,300 realized by the Farmers acreage reduction.
purchase of surpluses, however, asserting that Southern bankers have
National Grain Corporation since its creation in Nov. 1929, joined in this plan by voluntarily aiding to carry over 3,100,000 bales
and a "paper loss" in wheat stabilization operations by on which they have made loans until July 31 1932.
"Five hundred million dollars is an awe-inspiring amount," said Mr.
the Grain Stabilization Corporation of $110,000,000 were
Creekrnore, speaking of the Farm Board's revolving fund, "but, in my
related at the hearing on Nor. 27 by George S. Milnor, opinion, not commensurate with the volume of business in stabilization
nor commensurate
General Manager of both organizations, in testifying before corporations, and loans made by the Board to co-operatives,
with the benefit agriculture has and will receive through the administration
"JourSenate
York
the
Agricultural Committee. The New
of the Agricultural Marketing Act."
nal of Commerce" in its account of the hearing that day,
said in part:
Raising the previous estimate of the "paper losses" of the Grain Stabilization Corporation by $8,000,000 over the $102,000,000 revealed by Chairman James C. Stone of the Federal Farm Board last Wednesday (Nov. 25)
Mr. 3filnor disclosed that wheat holdings of the Farmers National Grain
Corporation on Oct. 31 totaled 12,184,047 bushels. He said that this
was the first time holdings of the Farmers National have ever been made
known and expressed the belief that the holdings to-day are approximately
the same as on Oct. 31.
Tells of the Grain Corporation.
hearing, prinMr. Mi'nor testified during the greater part of to-day's
is President
cipally on the ramificatioas of wheat marketing. Ile also
Corporation, which paid
and General Manager of the Grain Stabilization
all of it
$36,000 of his $50,000 salary up to July 31. Now he receives
from the Farmers National Grain Corporation.
grain
The Farmers National, he continued, is owned by twenay-seven
co-operatives, having been incorporated for $10,000,000, of which $682,072
Manor said,
In stock was issued. Since its inception in April of 1930, Mr.
in all grain
the Farmers National, acting as broker for the co-operatives
J.9 1932.]
FINANCIAL CHRONICLE
225
markets in the United States and becoming the largest grain house in
the world, made a profit of $2,419,300 up to Oct. 31 1931.
This Corporation owes the Federal Farm Board $16,185,358 as of
Oct. 31, and has debts to banks of $2,194,245.
Mr. Milnor said he did not believe that any profits had yet found their
way into the pockets of the individual members of the grain co-operatives,
as $332,053 in profits had been applied to capital stock purchases by cooperative groups, and the remaining money probably had been used to
create working capital. He estimated that the co-operatives in the corporation have 300,000 members, compared with an estimated total of
2,000,000 grain growers in the United States.
Senator McNary of Oregon asked what salaries were paid to other
officers of the Farmers National. The witness said that E. C. Huff, President, receives $15,000 annually; J. M. Chilton, Vim-President and Assistant
General Manager, $32,500; W. I. Beam, Treasurer, $30,000; Henry W.
Collins, Vice-President in charge of Business in the Northwest, $25,000,
and R. L. Burrell, Comptroller, $833 a month.
statements that they had "neither rediscounts nor money borrowed." Aff
a result of the program the general public, unfortunately, became educated
to a point of viewing the appearance of rediscounts and borrowed money,
in a commercial bank statement, as a sign of weakness, when, as a matter
of fact, rediscounts and borrowed money by a well-managed bank may well
be a badge of merit indicating a desire to render service to the community
to the best of its ability. This prejudice has become so deeply lodged in the
minds of the depositing public that it is questionable whether or not commercial banks will ever rediscount more than is absolutely necessary,
regardless of what facilities are provided therefor.
How, then, can this distribution of credit be accomplished? By credit
corporations affiliated with country banks, or by using a portion of the
capital stock provided for commercial banks for the purpose of creating
community credit corporations.
Recently much more interest has been manifested than formerly by
country banks in establishing agricultural credit corporations. In many
instances, the banks in an entire county or in a trade territory embracing
several counties have jointly supplied both the capital and the management.
This insures competent personnel, trained in the business of granting
Private Profits Range Higher.
Senator McNary sought a comparison of the profits of other grain credit, and assures each stockholder that loans made will be of such high
character
as not to jeopardize continued operations. It also gives the
dealers.
"I think our profits range smaller, in regard to the business done, than corporation sufficient volume and profit to secure good management.
The organization of a community credit corporation brings into such a
those of other corporations, but they are .larger than any other in the
community additional funds from the outside and at the same time permits
aggregate."
the local commercial banks to maintain their desired liquidity. A credit
"What business was done from May to November of this year?"
corporation, organized in a local community by one or more of its banks,
"I would say tentatively," replied Mr. Milner, "that during the first
should be just as acceptable in our financial structure as the investment
sixty-day crop movement after June 1, the Farmers' National Grain Cor- affiliates of our larger commercial banking institutions.
poration bought over 1,000,000 bushels per day."
Another factor necessary to amplify the services of the Federal Inter"How much have you now?"
mediate Credit Banks to country banks is a more practical and workable
"On Oct. 31 we owned 12,184,047 bushels of wheat, 179,832 bushels arrangement with respect to interest rates. It is, of course, wholly deof durum wheat, 742,425 bushels of corn, 1,079,605 bushels of oats, sirable and essential that adequate funds at low rates of interest be always
908,699 bushels of barley and 83,699 bushels of rye."
available to agriculture, but that should not let our desire to supply this
Standard brokerage fees are charged to co-operatives for the handling low-cost credit lead us into the practice of insisting upon such low costs
of grain, the witness explained, but the Farmers' National differs from as would not be commensurate with the risk involved. To do so would be
other dealers in that it endeavors to pay the highest possible price to to disturb the interest structure of a whole community,gain the antagonism
of all financial institutions operating therein and preclude the ability to
co-operatives instead of trying to "buy low and sell high."
accumulate adequate reserves. Moreover, the price of money rises and
Pride in Secrecy of Plans.
falls in a manner not dissimilar to that of other commodities, and fluctuates
Senator Wheeler asked whether the knowledge of the huge deals of from causes beyond local control. If the Intermediate Credit Banks are
the Farmers' National had not enabled some of its officers, or the heads to be operated on a sound business basis, their rates must be reasonable.
of co-operatives, to engage in large speculations.
The aim should be to stabilize rates by supplying funds at reasonable levels
"We have considerable pride," Mr. Milner replied, "in the fact that, in but rates that are abnormally low invite dangers equally as potent as rates
spite of the fact that we have had the greatest grain operations in the which are abnormally high.
history of the country, there never has been any leak of information."
Adequate profits are necessary to any financial institution if It is to
Questioned at length about deals in futures, in which the grain corpora- build responsible reserves and remain sound. The first obligation any
tion and Farmers' National both have engaged to maintain their market financial institution owes is that of remaining sound and solvent.
Interest rates cannot be successfully maintained at uniform levels,
positions, Mr. Milner said he would gladly see them eliminated, but that
competition forced the practice on the part of his company and the such a large and diversified country as these United States. Interest rates
in various localities are predicated on the cost of doing business and are
government agency.
He recommended that legislation be enacted to keep foreign traders commensurate with the risk involved, size of loan, distances to be traveled,
from operating in futures in American markets, such as the rule invoked density of population and many other factors. Most States have recogagainst Soviet Russia when she sold wheat short in the United States. nized this old and sound economic principle by fixing the maximum interest
He declared that Canadian merchants in Winnipeg may buy as much as rates which may be charged, and no system of finance Which tails to recogn:ze it can meet with full measure of success. Therefore,it is my conviction
20,000,000 bushels of wheat in Winnipeg and on the same day sell the
that any loan, otherwise eligible, which does not bear an interest rate in
equivalent amount of futures "short" in Chicago in legitimate "hedging"
contravention of the laws of the State in which the loan originates, should
operations, but to the detriment of the American market.
be eligible for discount, with such limitations, of course, as would prohibit
excessive charges.
Raises Estimate of Paper Loss—Sales to Foreign Governments.
In conclusion, therefore, I would recommend intensive study to be
Mr. Milner also touched upon the operations of the Wheat Stabilization
given these two major questions, the solution of which will mark further
Corporation, which, Chairman Stone had testified, now holds 189,656,187
material progress in extending the usefulness of the Intermediate Credit
bushels after sustaining paper losses of about $102,000,000. Mr. Milner
Bank System, namely:(1) a plan for the further development of the local
placed the paper losses at $110,000,000. The witness's figures would raise Institution to contact the farmer in the rural community; and (2) such latithe total paper losses of the Farm Board on wheat and cotton to $185,- tude with respect to interest rates as would keep the Federal Intermediate
000,000 against the $177,000,000 estimated by Mr. Stone.
Credit Bank rates commensurate with the risks involved.
A statement submitted by the witness showed that since July 1 the
total sales of cash wheat made by the corporation had been as follows:
"To foreign governments (Brazil 25,000,000; China, 15,000,000; Ger- New York Stock Exchange Calls for Information from
many, 7,500,000), 47,000,000 bushels.
Members Regarding Transactions in Eitingon
"Other domestic and export sales, 57,812,565 bushels.
Schild Co. First Preferred Stock—Break in Stock.
"Making the total wheat sold since July 1 1931, 105,312,565 bushels.
"Against the above sales, however, the corporation has purchased
Under date of Dec. 31, Secretary Green of the New York
10,484,181 bushels of new crop cash wheat and 27,348,000 bushels of
Stock Exchange addressed the following letter to members
wheat for future delivery, or a total of 37,832,181 bushels.
"Thus showing the corporation's net sales for the four months, 87,480,384 calling for information bearing on transactions in the first
bushels.
Preferred stock of Eitingon Schild & Co.:
"Of the 87,480,384 bushels sold, 47,500,000 has been to foreign governments
NEW YORK STOCK EXCHANGE,
"Leaving 19,980,384 bushels net domestic and other foreign sales, for
the four months' period.
COMMITTEE ON BUSINESS CONDUCT.
"The average price of all cash wheat sold by the corporation (exclusive
Dec. 81 1991.
of the Brazilian contract and the unshipped portion of the Chinese contract) To Members of the Exchange:
is $0.647 per bushel."
The Committee on Business Conduct directs me to ask you to furnish
it by noon Tuesday, Jan. 5 1932, with the following information concerning
References to the hearing appeared in our issue of Nov. your transactions and positions
in Eitingon Schild Co., Inc., first pre28, pages 3556-359.
ferred stock:
(1) A list of all transactions had by you between Nov. 16 1981 and
Dec. 31 1931, giving
volume, the prices, the names of the members or
Increasing Usefulness of Intermediate Credit System firms with whom thethe
transactions were made, the names of the persons
Discussed by Wood Netherland, President Federal for whom you acted, and whether the transactions were for long or short
Land and Intermediate Credit Banks of St. Louis. account. Kindly use trade dates and not blotter dates.
(2) The long or short position of each person interested in the stock at
In an address at the Land Utilization Conference on the close of business on each day during this period.
Please send this information in a sealed envelope addressed to the
Nov. 20, Wood Netherland, President of the Federal Land
and Intermediate Credit Banks of St. Louis had the following Committee on Business Conduct, Room 609, 11 Wall Street, New York City.
ASHBEL GREEN, Secretary.
to say:
From the New York "Times" of Jan. 3 we take the
The record of the Federal Intermediate Credit Banks shows that since
organization they have loaned or discounted in excess of a billion and a following:
quarter dollars and the total charge-off has been only about 3-10ths of 1%.
As a result of the drastic decline in the first preferred stock of the
More than 118 co-operative marketing associations, with a total member- Eitingon
Schild Company on last Wednesday, (Dec. 30) the New York
ship of 1,500,000, have been served by these banks since organization.
Stock Exchange began yesterday a formal inquiry into trading in the
How can the services of the Intermediate Credit Banks be further exstock since Nov. 16.
tended into the rural communities and assist the individual farmers and
The break in Eitingon Schild first preferred was one of the sharpest
thus, indirectly, the country banks? As deposits in country banks have
contracted during the past two years, the officers and directors of these in any active issue on the Exchange in 1931. After opening at 52%,
declined 2 to 5 points between sales and closed at 7%, a net loss
banks have become more interested than ever before in agricultural credit the issue
,
1 points. It advanced % point on Thursday and % point yesterday,
corporations and have organized these corporations as valuable allies of 44
closing at 9.
to their institutions.
Officers of the company mid yesterday that the break had been caused
For a number of years commercial banks have educated the depositing
by
stock-market conditions and not by any news concerning the company's
the
public to
belief that the ack of rediscounts or tho lack of borrowed
money by a commercial bank was a badge of merit. This idea was carried business operations. The company reported for the six months ended
to the point where banks advertised with much emphasis in their financial on June 30 last, a net profit of $320,500, equal to 98.83 a share on
226
[VOL. 134.
FINANCIAL CHRONICLE
46,918 shares of first preferred stock. In the corresponding period of
1930 the net profit was $218,102, or $4.65 a share.
Brokers who followed the market action of the stock said the immediate cause of the decline seemed to have been the withdrawal of large
supporting bids which had held the stock in a narrow range for weeks.
The first preferred stock has not paid dividends since March 15 1930.
Six Veteran Employees of New York Stock Exchange
Retired Under Pension Plan.
Six veteran employees of the New York Stock Exchange
and its affiliated companies whose periods of employment
run as thigh as 50 years retired on Dec. 31 under the
pension plan of the Exchange. Those retired are:
John S. Bennett, 68 years of age. Mr. Bennett was employed by the
Exchange on October 12 1886; at the time he retired he was a superintendent of bond reporters, a position held, by hint for the last three
years.
Richard T. Campbell, 71, who completed 50 years of service last
July, at which time he was given a three months leave of absence with
full pay; up to the time he was granted a leave he was superintendent of
employees in the bond department.
William J. Connaughton, 67, who had been an employee of the Exchange
since 1884; for the last three years he was a supervisor of the floor
department.
Gustav A. Flechtner, manager of the New York Stock Exchange
barber shop. He has been connected with the barber shop since its
opening in the old Stock Exchange building in 1903, but has been on
the payroll of the Exchange only since 1922, when the barber shop was
taken over by the Exchange. He is 63 years old.
Clarence L. Healy, 72, the oldest of those retiring at this time, has
been an employee of the New York Quotation Company which operates
the Stock Exchange ticker service, for 42 years.
John H. Hutchinson, superintendent of the Quotation Department for
three years, has been an employee of the Exchange since 1896, most of
which time was spent on the floor of the Exchange. He is 69 years old.
Under the plan of retirement these men will be given
full pay up to the time of expiration of their respective
accumulated sick leaves. In some cases this accumulation
Is sufficient to continue full pay for a year and a half.
At the expiration of the accumulated sick leave, they will
be placed on the regular pension roll, receiving approximately 50 to 75% of their full salaries, depending on their
length of service.
At the retirement services held Dec. 31 in the Governing
Committee room, Oliver C. Billings, Chairman of the Committee of Arrangements of the Exchange, presented a
gold watch to each of the men on behalf of their associates.
Time Loans
5966,213,555
1,040,744,057
966,812.407
865,848,657
780.084.111
700.844,512
714,782.807
778,286,686
799,730,286
821,746.475
799,625.125
751,178.370
Total Loans.
53,513.174,154
3.536.590,321
3.000,096.167
2435,718.509
2.767.400,514
2,926,298.345
2,996,759,527
3,142,148,068
3,218,937,010
3.111,176,925
3.129,161,675
3,292,860,253
2,328,340,338
2,475,498,129
2,504.687,674
2,541,305,897
2,673,993,079
2,756,968493
2,764,511,040
2,745,570,788
3,107474.325
3,023,238,874
3,134,027,002
3,480,779.821
810.446,000
780.961,250
785.093,500
799.903.950
783,875,950
811,998,250
877.184,250
928,320,545
896,953,245
922,898.500
957.809.300
952,127,500
3,138,786,338
3,256,459,379
3,289,781,174
3,341.209.847
3,457,860,029
3.568,986.843
3,641,695,290
3,673.891,333
3.914.627.570
3,946,137,374
4.091,836.303
4.432,907,321
1928—
Jan. 31
Feb. 29
Mar.31
Apr. 30
May 31
June 30
July 31
Aug. 31
Sept.30
Oct. 31
Nov.30
Dec. 31
3.392,873,281
3,294,378,654
3,580,425,172
3,738,937,599
4,070,359,031
3,741,632,505
3,767,694,495
4,093,889,293
4,689,551,974
5,115,727,534
5,614,388,360
5,722,258,724
1,027,479,260
1,028.200,260
1,059.749,000
1,168,845,000
1,203.687.250
1,156,718482
1,069.653,084
957.548,112
824,087.711
763.993,528
777.255,904
717,481.787
4,420.352,514
4,322,578,914
4,640,174,172
4.907,782,599
5.274,046.281
4.898,351,487
4.837,347479
5,051.437,405
5.513439,685
5,879,721,062
6,391,644,264
6,439,740,511
1929—
Jan. 31
Feb. 28
Mar.30
Apr. 30
May 31
June 29
July 31
Aug. 31
Sept.30
Oct. 31
Nov.30
Dec. 31'
5,982,672,411
5,948,149,410
6,209.998.520
6,203,712.115
6,099420.475
6,444.459,079
6,870,142.664
7,161,977.972
7,831,991.369
5,238,028,979
3,297,293,032
3,376.420,785
752,491,831
730,396,507
594,458.888
571.218,280
565,217.450
626,762,195
603.851.630
719.641,454
717.392.710
870,795,889
719,305,737
613,089,488
6.735,164,241
6,678,545,917
8,804.457,108
6.774,930495
6.665.137,925
7,071,221,275
7,173,794,294
7,881.619,426
8,549.383,979
6,108.824,868
4.016,598,769
3489,510473
1930—
Jan. 31
Feb. 28
Mar.31
Apr. 30
May 29
June 30
July 31
Aug.30
Sept.30
Oct. 31
Nov.30
Dec. 31
3,528,246,115
3,710,563,352
4,052.161.339
4,362,919,341
3,968,873,034
2.980.284.038
3,021,363,910
2,912,612,666
2,830.259,339
1,980,639492
1,691,494,226
1,519.400.054
456,521,950
457.025.000
604,141,000
700,212,018
780,958478
747.427,251
868.118,387
686,020,403
651.193,422
589.484,395
470,754,776
374,212,835
3,984,768,065
4,167.588,352
4,656.302,339
5,063,131,359
4,747.831,912
3,727,711.289
8,689,482,297
3,598.633,069
3,481.452,761
2,558,124.087
2,162.249,002
1,893.612,890
1931—
Jan. 31
Feb. 28
Mar.31
Apr. 30
May 29
June 30
July 31
Aug. 31
Sept.30
Oct. 31
Nov.30
Dec. 31
1,365,582,515
1,505,251,689
1,629,863,494
1,389.163,124
1,173.508.350
1,102,285,060
1,041,142.201
1.089,280,033
802,153.879
615.515.068
599,919.108
502,329,542
854,762,803
334,504.369
278,947,000
261,965,000
261,175,300
289.039,862
302,950.553
284,787,325
242 254,000
180,751.700
130.232.800
84,830,271
1,720,345,318
1,839.756.058
1,908410,494
1451,128.124
1,434,683.650
1.391.324,922
1,344.092,754
1,354,067,350
1.044.407.879
7911.268.768
730.151408
587.159,813
1926—
Jan. 30
Feb. 27
Mar.31
Apr. 30
May 28
June 30
July 31
Aug.31
Sept.30
Oct. 31
Nov.30
Dee. 31
Demand Loans.
$2,516,960,599
2,494,846,284
2,033.483,760
1.969,869,852
1,987,316,403
2,225,453.833
2,282,976,720
2.363.861,382
2,419,206,724
2,289,430,450
2,329,536,550
2,541,682,885
1927—
Jan. 31
Feb. 28
Mar.31
Apr. 30
May 31
June 30
July 31
Aug. 31
Sept.30
Oct. 31
Nov.30
Dec. 31
Boston Brokerage House of J. Murray Walker & Co.,
Inc., in Bankruptcy.
petition in bankruptcy has been filed in
involuntary
An
the Federal Court, Boston, Mass., against the brokerage
firm of J. Murray Walker & Co., Inc., of 75 Federal St.,
Boston, Mass., by three of its creditors, according to the
Value of Bonds Listed on New York Stock
"Boston News Bureau" of Dee. 31, which furthermore said: Market
Exchange—Figures for Jan. 1 1932.
The petitioning creditors allege that the corporation is Insolvent, and
that on Dec. 24, while insolvent, committed an act of bankruptcy, transthe New York Stock Exchange issued the Jan. 1
8
Jan.
On
ferring a portion of its property to one or more creditors, whose names
and the average market
are unknown to the petitioners, with intent to prefer them to the other pre-release of the total market value
creditors.
price of all listed bonds as follows:
As of Jan. 1 1932 there were 1,601 bond issues aggregating $52,360,Officers of the firm are J. Murray Walker, President and
par value listed on the New York Stock Exchange, with a total
Treasurer; David M. Claghorn, Vice-President, and L. M. 023,801
market value of $37,848,488.806.
Stuoklen, Secretary and Assistant Treasurer. The firm
In the following table listed bonds are classified by governmental and
industrial groups,with the aggregate market value and average price for each.
maintained a branch in Springfield, Mass.
Outstanding Brokers Loans on New York Stock Exchange at New Low Figure—Total Dec. 31 $587,159,813—Decrease of $142,992,095 in Month.
A new low figure for brokers' loans on the New York
Stock Exchange was established on Dec. 31, on which date
the total amount outstanding is reported as $587,159,813.
This is $142,992,095 below the Nov. 30 figures of $730,151,908. The latter total showed a decrease of $66,116,860
below the Oct. 31 figures. The latest figures (Dec. 31) are
made up of demand loans of $502,329,542 and time loans of
$84,830,271. The Dec. 31 figures were announced as
follows by the Stock Exchange on Jan. 5:
Total net loans by New York Stock Exchange members on collateral,
contracted for and carried in New York as of the close of business Dec. 31
1931, aggregated $587,159,813.
The detailed tabulation follows:
Demand Loans. Time Loans.
(1) Net borrowings on collateral from New York
Banks or Trust Companies
$373,972,813
(2) Net borrowings on collateral from Private Bankers,
Brokers, Foreign Bank Agencies or others in the
City of New York
128,356,729
$80,704,871
4,125,400
884,830,271
Combined Total of Time and Demand Loans
$587,159,813
above
the
of
The scope
compilation is exactly the same as in the loan
report issued by the Exchange a month ago.
$502,329,542
United States Government
Foreign Government
Railroad Industry (United States)
Utilities (United States)
Industrial (United States)
Foreign companies
All bonds
Market
Value
$14,648,59ii,888
9,883,032,1)22
6,836,733,763
3,077.603,244
2,227,978,388
1,194,541,901
Average
$37,848,488,808
$72.29
$06.63
59.90
63.13
81.82
60.88
48.07
The December statement (given in our issue of Dec. 26,
page 4256) showefl 1,602 bond issues aggregating $52,547,476,192 par value listed on the Exchange on Dec. 1, with a
total market value of $39,512,398,607.
Market Value of Listed Shares on New York Stock
Exchange Jan. 1, $26,693,836,532, Compared with
$31,105,267,133, Dec. 1—Classification of Listed
Stocks.
As of Jan. 1 1932 there were 1,278 stock issues aggregating
1,318,729,621 shares listed on the New York Stock Exchange,
with a total market value ot $26,693,836,532. This compares
with 1,281 stock issues, aggregating 1,318,731,573 shares,
listed Dec. 1 on the Exchange with a total market value of
$31,105,267,133. In making public the Jan. I figures on
Jan. 6, the Exchange said:
As of Jan. 1 1932, New York Stock Exchange member borrowings on
security collateral amounted to $587,159,813. The ratio of security loans
to market values of all listed stocks on this date was therefore 2.30%.
The compilation of the Stock Exchange since the issuance
As of Dec. 1 1931, Stock Exchange member borrowings on
of the monthly figures by it, beginning in January 1926,
collateral amounted to $730,151,908. The ratio of
security
follows:
JAN. 9 19321
FINANCIAL CHRONICLE
security loans to market values of all listed stocks on that
date was therefore 2.35%.
In the following table,listed stocks are classified by leading
industrial groups, with the aggregate market value and
average share price for each:
January 1 1932.
Markel
Price.
$
Autos and accessories
1,628,932,773
Financial
716,798.131
Chemical
2,217,733,854
Building
180,059,031
Electrical equipment manufacturing._
881,831,747
Foods
1,893,194.419
Rubber and tires
152.850,478
Farm machinery
260,390,478
Amusements
145,959,787
Land and realty
52,070,133
Machinery and metals
671,194.494
Mining (excluding iron)
652.903.796
Petroleum
2,047,654,221
Paper and publishing
190,465,807
Retail merchandising
1,566,813,863
Railroads and equipments
2,799,255,601
Steel, iron and coke
1,155,468,259
Textiles
111,203,137
Gas and electric (operating)
2,420,486,104
Gas and electric (holding)
1,713,094,673
Communications(cable,tel,and radio) 2,592,410,086
Miscellaneous Utilities
153,193,859
Aviation
105,839,742
Business and office equipment
168,650,152
Shipping services
14,552,113
Ship operating and building
14,684,783
Miscellaneous business
72.190,254
Leather and boots
192,586,686
Tobacco
1,137,011,126
Garments
11,802,184
U. S. companies operating abroad
367,805,079
Foreign companies (incl. Cuba de Can.) 404,749,682
All listed companies
26,693,836,532
December 1 1931
Aver.
Price,
Markel
Values.
Ater.
Price.
15.05
12.30
32.89
11.36
21.68
26.54
12.44
23.19
7.44
9.92
13.52
11.12
11.71
11.85
22.02
24.37
29.46
9.99
34.64
17.90
69.02
15.09
5.93
16.15
6.97
4.17
12.36
27.41
35.72
6.18
10.53
9.17
1,787,691,069
894,976,561
2,443,482,419
226,901,826
1,009,979,094
2.129,114,564
173,348,855
294,419,161
192,028,140
58,818,738
796,361,035
813,824,350
2,547,661,222
236,660,664
1,824,260,390
3,315.267,635
1,471,206,034
125.517,103
2,794,081,132
1,985,005,960
2,905.338,941
173,600,264
119,034,101
206,658,719
18,773,208
16,440,998
91.433,430
230.581.508
1,233.411.074
14,108,170
495.710.402
479,570,366
16.45
15.37
36.24
14.31
24.83
29.84
14.11
26.22
9.05
11.16
16.09
13.86
14.58
14.71
25.64
28.85
37.50
11.26
40.82
20.79
77.35
17.10
6.67
19.79
8.99
4.67
15.66
32.80
38.75
7.39
14.19
10.93
20.24 31.105,267,133 23.59
Hearings Before House Committee on Short Selling
Scheduled to Begin Jan. 18.
On Jan. 6 the House Agricultural Committee fixed
Jan.
18 to begin its hearings on legislative dealing with
short
selling on the commodity exchanges. Several bills are
pending, ranging from regulation to abolition of the
exchanges
Gurnett & Co. Suspended by New York Stock
Exchange
-Indebtedness Estimated at Approximately $2,000,
000, Most of Which Is Said to Be Secured.
On Jan. 5 Allen L. Lindley, Vice-President
of the New
York Stock Exchange, announced from the
rostrum of the
Exchange at 10:04 a. m. that the firm of
Gurnett & Co. had
been suspended for insolvency, having notified
the Exchange
that they were unable to meet their obligations.
The firm is composed of the following members:
Daniel
W. Gurnett, Edward F. Gurnett, Edward
F. Goode, Carleton
F. Wright, Walter E. Leary, Henry R. Coons
(floor member
of New York Stock Exchange), and Edwin
Corning, Neile F.
Towner and Estate of E. Palmer Gavit, special
partners.
The main office of the company is at 39
Broadway, this
city, and it has branch offices in the following
places in
New England: Augusta, Me.; Bangor,
Me.; Boston, Mass.;
Lewiston, Me.; Portland, Me.; 'Providence, R.
I., and Woonsocket, R. I.
Following the firm's suspension by the New
York Stock
Exchange, the New York Curb Exchange, of which
the firm
was an associate member, took similar action.
According to the New York "Times" of Jan. 6, the
law firm
of Menken, Ferguson & Hills, counsel for the
failed firm,
made the following statement:
"The suspension of Gurnett & Co. is entirely due
to the fact that customers
Indebted to the firm and whose indebtedness was
secured by unlisted securities failed to meet calls for margins. It is the confident
belief of the firm
that, with fair liquidation, they will be amply solvent. The
firm's indebted.
nese, most of which is secured, is about 82,000,000."
The same paper, in its report of the failure, also
said
in part:
William Danforth, of Newton, Mass., who is rated as one of the
spectacular of the newer generation of market operators, made his most
headquarters at the firm's offices here. He is reported to have been at
one
time an active trader there. . . .
The firm was organized in February 1928, when it took over the business
of Richardson, Hill & Co. Mr. Coons was admitted to the Stock Exchange
in 1925. Daniel W. Gurnett, head of the firm, lives in Boston. . . .
Gurnett & Co. had been interested in several stocks, and their suspension
resulted in heavy liquidation of at least two of these, Waldorf System, Inc.,
and Ludlum Steel. The firm is reported also to have been interested in
General Alloys on the Curb. Waldorf broke yesterday from 17, at which it
opened, to 11 14, and then closed at 13%, with a net loss of 8% points.
Ludlum fell from 4 to 1%, and then rallied, closing at 8, with a net loss
of 1% points. Ludlum preferred dropped from 10 to 6, and then rallied
to 10. Liquidation of the issues is said to have been conducted by other
houses.
It is understood that efforts were made recently to prevent the suspension
by bringing about a merger of Gurnett & Co. with one of several houses
with which negotiations were conducted.
227
Boston advices on Tuesday to the New York "Times"
stated that an involuntary petition in bankruptcy against
the company and its six co-partners was filed in that city
on behalf of three Brookline, Mass., creditors on that day,
namely: Max W. Robinson, Walter J. Klein and Amelia
Klein. The petition named Daniel W. Gurnett, Edward F.
Gurnett, Edward Goode and Walter E. Leary, all of Boston,
and Carlton F. Wright and Henry Coons, both of New York,
as co-partners.
The petitioners charged the partners and the firm with
transferring property while insolvent to other unidentified
creditors with intent to prefer the unidentified creditors to
the petitioners, the dispatch stated.
Savings Deposits in Banks and Trust Companies of
United States $28,214,907,000 on June 30 1931Decrease of $270,085,000 in Year-Survey by W.
Espey Albig of American Bankers' Association.
In a survey of savings deposits, W. Espey Albig, Deputy
Manager of the American Bankers' Association, states that
at the close of the year ending June 30 1931 savings deposits
in banks and trust companies of continental United States
stood at $28,214,907,000, a decrease of $270,085,000 as compared with the preceding year, according to reports received
by the Savings Division, American Bankers' Association.
In part, the survey continues:
Thus for the second time in the last 20 years, and with only a year
Intervening, savings deposits show a decline, having decreased by $195,000,000 in 1929 as compared with 1928. This year they are less by almost
23,000,000 than in 1929, thus constituting a recession beyond anything
before experienced in time deposits.
This decline in savings may appear surprising in view of the current
reports throughout the year of great gains in savings deposits in certain
areas of the country or in some banks. The explanation lies in the shift
of deposits among institutions, of which no mention is usually made, and
also the actual gain in some parts of the country with overbalancing
recessions in other regions.
So many unusual and non-recurrent features affected savings in banks
this year that real difficulty is experienced in trying to separate them from
the natural factors entering into the increase or decrease of savings.
Normally the recession in manufacturing, the lessened prices received
for agricultural products, the low yield in livestock, the stagnation In
mining, the eclipse of foreign export trade, and the diminution of freight
and passenger traffic on transportation lines, would serve to decrease the
amount of money available for deposit in savings in banks. Offsetting that
to some degree is the money no longer needed in industry and investment
funds which might seek temporary repose as savings in banks.
Does Industry Reduce Savings?
As to how much money enters savings from industry during unusual
dullness, there has always been much discussion and little agreement. The
belief is generally held that in times of least demand for money in business,
commercial funds go into savings and that during normal prosperity these
sums are withdrawn. Whether or not this belief is correct, a period of
recovery in the United States has never yet operated to decrease the
amount in savings.
Rarely if ever has the United States witnessed such another era of commercial activity as that which occurred with slight interruptions during
the years 1925 to 1929. During that time savings deposits increased from
$23,000,000,000 to $28,000,000,000, an increase of $5,000,000,000. Depression marked the years of 1921 and 1922. Then it might have been
expected that demand deposits would find their way into savings to a
marked degree and the rising tide of business in 1923 would have drained
out the increase of the preceding years and brought about a reduction in
savings. Such was not the case, for 1923 showed an increas sin savings
of more than $2,000,000,000 over 1922, and 1924 topped 1923 by $1,600,000,000. Preceding eras of business expansion leave no room for belief
that our next period of normal industry will to any perceptible degree
reduce the amount of money now found in savings.
That there is a considerable volume of investment funds in savings at
present no one doubts. The sum is likely very little greater than the
normal amount invested in savings. More attention is simply being paid
to it now in an effort to explain why savings remain at a high point in the
midst of a far-reaching depression.
Hoarded Money Increases.
In normal times, it is estimated, about $416,000,000 is hoarded. Hoarding consists of taking money from actual circulation and hiding it, not for
use, but for the personal gratification of seeing it or keeping it from loss.
At present the claim is made that money has been physically secreted in
an amount between $800,000,000 and *1,000,000,000, or more than twice
the usual sum. The change in the amount of boarded money in the
United States has been so negligible during the past decade that the
increase of hoarding at this time would be surprising were it not for the
knowledge of the widespread hysteria which during the year seized the
people of the United States in their relation to banks, and the people of
foreign countries in their relation to the gold holdings of the United States.
Under the present monetary system in our country the supply of money
In circulation is readily responsive to the needs of increased or diminished
business. When industry is at flood the amount of money in circulation
tends to increase. In quieter periods the supply dwindles.
In keeping with this rule the amount of money in circulation in 1929
dropped sharply until by June 30 1930 it had almost touched the asark
established in 1922, the lowest since the World War. During the current
year it might have been expected to recede further, but, on the contrary,
by June 30 1931 it had reached a point almost $300,000,000 above
that
registered one year earlier. This added volume is necessary to repleniab
the circulation depleted many millions of dollars by hoarding, occasional
sums by misers, more substantial amounts by people obsessed by fear
of
impending financial calamity.
228
FINANCIAL CHRONICLE
[VOL. 134.
to
What effect a recreation of confidence on the part of the owners of this doldrums for lack of demand. It is believed that the action will serve
of
money would have had upon the present volume of savings deposits is strengthen the country's banking structure by affording sone means
circumstance
the
simply a fruitless speculation. Information available since the date when protecting any bank that finds its solvency threatened by
actually
as
regards
Comptroller
the
that
values
off
the material in this statement was collected indicates a rapid improvement of having to charge
In the financial hysteria which has swept over the country. Present existing but that are not reflected in quotations.
Some time ago the Comptroller's office ruled that the banks were recurrents of public sentiment are running toward a revival of confidence
to charge off 25% of the depreciation which any bonds held by them
in banks and a return of funds from unsafe hiding places into the safeguards quired
had suffered. This enabled a new rating of values, but is was found to be
of established financial institutions.
cumbersome and worked a hardship on some banks which held securities
That the feeling of apprehension which caused the hiding of money was
Issued locally and which were in many respects better investments than
widespread is further evidenced by the general growth throughout the some nationally known issues. Likewise with changing conditions from
country in postal savings deposited in banks which during the year increased day to day, trying to rate bonds by statistical records of the present years
from $171,497,000 in 1930 to $298,510,000 in 1931. Of course the interest was found a difficult task.
rate paid on savings by banks in some cases was no greater than that
To get at intrinsic value, it was thought better to apply the rules of
afforded by the post offices to depositors in postal savings. In ordinary common sense about the solvency and stability of companies that are
times the rate of interest paid on savings deposits is a very important going concerns. A company that has had a good record of earnings and
factor in determining where money will be deposited. The concern of Is engaged in a business which is essentially sound would, as a rule, have
depositors now over the safety of deposits has possibly caused most of had thorough investigation when its bonds were floated and usually
banks have bought only the bonds of companies that could earn their
them to be more indiffirent than usual to the rate paid. . . .
Interest charges from two to four times over every year.
Sharply.
Decline
Individual Deposits
But with distress selling one bond Is affected by the price paid for anThe decline in savings deposits is slight in comparison with that of other. Thus railroad bonds, which normally are gilt-edge investments,
conseIn
year.
last
below
$2,960,821,000
are
depressed because of the drop in current earnings. When railroad
Individual deposits, which stand
quence, the relation of savings deposits to individual deposits, which a year bonds go down it affects bonds of other concerns that really haye not
ago was 56%, is now 59%, the highest percentage reached since tabulations been injured in the matter of earnings.
The Comptroller's office feels intrinsic value is the only real guide, and
were begun in 1910.
inIndividual deposits, which are made up of time and checking deposits, hence when banks make up their quarterly statements they can truly
intrinsic value of the securhave shown a tendency to decline since 1928. Checking deposits have sert with the authority of the Government the
Indicated a sagging tendency since 1927. For the current year, although ities they have bought.
1926,
individual deposits are in approximately the same position as in
checking deposits have decreased 14.8%, while time deposits have corre- Review of Banker's Acceptance Business in 1931 by
spondingly increased 14.4% over 1926.
Robert H. Bean, of American Acceptance Council
It is naturally to be expected that in a time of lessened activity checking
—Average Outstanding Volume at $1,301,893,077
deposits would diminish, since in many cases they represent discounts
necessary in the conduct of business. This decrease is possibly augmented
Compared With $1,470,681,255 for .1930-1930
by
by the seepage of some commercial deposits into time deposits and
Average
Greater Than 1929—Federal Reserve
caused
that
hoarding, which is without doubt one of the greatest factors
Banks in Bill Market.
the money in circulation to increase by about $300,000,000 during the
current year.
In presenting a review of the bankers' acceptance busiIt is well known that during the period of inflated prosperity which
Executive Secretary of the
came to such a sudden end in 1929 many corporations provided themselves ness in 1931, Robert II. Bean,
with working capital to various degrees through security issues rather American Acceptance Council, states that "we have made
than through commercial bank loans. These bank loans would otherwise real
progress in the American acceptance business in about
have been reflected in the volume of bank deposits. The result of this
individual
in
decrease
drastic
the
as
part
in
a year as the banks and dealers ever had or
explains
difficult
practice
in
change
deposits since 1927. Two years ago some of those funds not necessary in will ever encounter again." According to Mr. Bean, "the
regular business channels found their way into the call money market.
York City banking institutions, in the
The lessened demand for funds there with the low rate of interest, joined position of New
with the comparatively slight need in industry, has caused numerous country's dollar acceptance business, grows more important
corporations to use this money in retiring or purchasing the securities each year. During 1931 the average outstanding volume
which in part originally created the funds. It is, of course, impossible
77% of the average for all
even to estimate what part of the decrease in checking or time deposits amounted to $1,006,400,000, or
was brought about during the year through this action.
banks and bankers in the United States, an increase from
Deposits in Closed Banks.
An unusual factor affecting the total of savings which can not be
tablated has to do with time deposits in closed banks now being liquidated.
No information is available as to the sum total of these deposits at any
specified date. As the assets of the banks are converted into cash it is of
course redeposited in going banks, later distributed to the owners, and
thus included in their deposits in other institutions. While there was a
considerable volume of money tied up in this way on June 30 1931, the
amount was not nearly as great as would be indicated by the total savings
deposits in the banks at the time of their closing. The aggregate reached
by such estimates would be a forced figure rather than a voluntary
one. . . .
With only occasional exceptions the tendency in the last 20 years in the
United States has been toward an increase in time deposits in relation to
individual deposits. During that era the increase has been from 51% of
individual deposits in 1911 to 59% in 1931. Thus, in 1911 demand deposits
comprised 49% of individual deposits and in 1931 but 41%. During those
years individual deposits have increased from over $15,000,000,000 to
$47,000,000,000, a gain of $32,000,000,000; checking deposits from over
$7,000,000,000 to $19,000,000,000, a gain of almost $12,000,000,000;
while time deposits have increased from almost $8,000„000,000 to over
$28,000,000,000, an increase of $20,000,000,000.
Intrinsic Worth of Bond Holdings of National Banks
Basis of Valuation Comptroller's Instructions to
Examiners.
In addition to the item published in our issue of a week
ago (page 61), regarding the notification sent to National
banks by the Comptroller of the Currency in the matter of
the valuation of the bond holdings of the banks, we quote
the following from the "United States Daily" of Jan. 2:
The intrinsic worth of bonds held by National banks, Instead of bond
market quotations, hereafter will servo as the basis upon which their
value will be included in bank assets under an informal ruling announced
orally, Dec. 31, by John W. Pole, Comptroller of the Currency.
By the terms of the ruling which has gone out to national bank examiners
In the form of instructions, the banks are to be permitted to carry as assets
on the new basis any bonds that have not been in default as to interest
payments. Mr. Pole explained, however, that the ruling may not be
described as of a general character but represents more a policy of liberality in giving consideration to questions of bank solvency.
"What we are interseted in primarily," he said, "is the solvency of a
bank. After that, we are interested in its liquidity. There are many
fine companies which have issued bonds, and there is every reason to believe they will meet their interest charges and pay the principal at maturity.
"Why should we ignore those facts, ansdtake quotations from a blackboard where there are more sellers than buyers? We wish to protect
banks that have bought good bonds from any such situation, and while
every case will have to stand on its own merits, it is our plan to regard intrinsic worth as the basis for valuing the securities held by banks.
Additional information was supplied by Mr. Pole as follows:
The position now taken by the Comptroller's office represents conclusions reached after many months of study of conditions and developments
since the low level of business activity forced the bond market into the
73% for the year 1930." Mr. Bean's review for the year,
made available Jan. 4, states that "while the average outstanding volume of acceptances throughout 1931 fell to
$1,301,893,077, compared with $1,470,681,255 for the year
1930, this total was nevertheless $4,000,000 higher than
the average for 1929." Mr. Bean's review follows:
Looking back over the year 1931 we find abundant evidence that the
bankers' acceptance, as a credit instrument held remarkably well to the
strong position acquired during recent years.
The effect of a constantly falling volume of business of a domestio
nature, the decline in our national imports and exports, exceeding that for
any year in a generation and the enforced curtailment of credit abroad,
due to demoralized economic circumstances in the countries ordinarily our
best customers, has been of such a serious nature as to cause wonder, that,
throughout the year American banks have maintained at all times an outstanding volume of acceptances averaging $1,301,893,077.
While this average was strengthened by the large volume carried over
from November and December 1930 and continued for some months, until
the sharp break in world business affairs, beginning in June, it is nevertheless a commendable record that the volume of bills has in no month
of the year fallen below $990,000,000 and in all except this single instance,
in September—a normally quiet month in any year—the total was always
considerably over $1,000,000,000.
The German Experience.
Far from being a calamity, our experience with dollar credits in Europe,
and particularly in Germany, must be considered a blessing. Out of the
collapse of the credit structure in several Continental countries, valuable
lessons in credit granting were learned that should serve as a guide for
those responsible for placing contracts in the future, to supply the resources,
good name and prestige of American banks for the purpose of financing
foreign business.
Too much was taken for granted. In the desire to make a good showing
in foreign credits, too many American banks with little international
experience, neglected the fundamentals of credit analysis and went after
volume.
the
The dollar acceptance credit business in foreign countries should, in
future, be left to the large American banks, banking houses and acceptance
corporations with an international reputation, with established foreign
banking credit practices.
branches, and with a thorough knowledge of foreign
the taking of all that
But the penalty for offering too much credit and
country with an imperilled
we offered, by the banks and industries of a
London as well, with her much
credit standing, was not ours alone.
that there are occasions when a man
longer experience, was also to realize
by giving him or it too much money or
or country may be made poor
acceptances, they have to be repaid at
credit—if, as in loans of cash or
'
maturity.
amount and type of credit offered, which is
If we went too far in the
the fault was with the judgment exercised and not with
admitted,
frankly
the instrument employed.
dollar commercial credits in Germany will
We have confidence that our
obligations were assented to by our
be liquidated in time. If short-term
and business men when longbanks and taken readily by Germany's banks
circumstances of the business
term loans were more in keeping with the
business financed can pay its
Involved, we shall have to wait until the
and
debts. By just the ratio of the amount of proper short-term credits
JAN. 9 1932.]
FINANCIAL CHRONICLE
229
The position of New York City banking institutions, in the country's
dollar acceptance business, grows more important each year. During 1931
the average outstanding volume amounted to $1,006,400,000, or 77% of
the average for all banks and bankers in the United States, an increase
from 73% for the year 1930.
The Discount Market.
The discount market for bankers' acceptances experienced a moderately
satisfactory year despite the many disturbing factors facing the money and
investment markets in general. A good demand for bills prevailed generally
throughout the year, and on several occasions over a period of several
weeks, the orders for particularly prime bills exceeded the supply on hand.
Although the average portfolio of the dealers in acceptances amounted to
$90,000,000—approximately the same average as in 1930—there were
occasions when the volume of bills on hand amounted to as much as
$125,000,000, and to the other extreme there was a period in November
when the combined supply of bills in the dealers' hands fell to as low as
$13,000,000.
The position of the discount houses has been particularly important in
this year of unusual acceptance problems. The dealers have rendered quiet
but very effective service to the accepting banks and have been in closer
co-operation than ever before with the Federal Reserve banks. Despite
the certain knowledge of the strengths and stability of a bank or banking
house it frequently happens that it is the dealer who must satisfy the
have been
investor that rumors are not facts. In this respect the dealers
one hand,
constantly the watchdogs of the bill market, knowing, on the
the other,
the exact situation of every accepting bank or banker, and, on
the unusually sensitive attitude of the investor.
will remain
It would have been better, and until the need is supplied it
had been
an element of weakness in our bill market organization, if there
capital to
sufficient
one or more additional, strong discount houses with
non-member
insure their ability to endorse the bills of interior banks and
market
bankers and thus give them a more influential standing with open
Federal
investors as well as to make possible their acceptance at the
financiers.
To the British bankers it is an old story. They recognize that credit Reserve bank.
the
take them
The bill market experience of the past year has clearly indicated
difficulties and even losses are occasionally inevitable, and they
discount-endorser corporations.
additional
through
ride
and
for
demand
countries
afflicted
the
to
vigorously
with courage, go back
Bill Distribution.
with them to better times. Thirnis the admirable course that for generations
has given England her leadership in world trade financing.
distribution of bills in 1931 was not as general as in previous years
The
interremain
and
the conWill American bankers profit in this present crisis
for several reasons which were obviously due to conditions beyond
money
national in action as well as in throught?
trol or influence of the dealers. A long period of extremely easy
May 19
Acceptance Volume Declines in 1931.
kept bill rates at a record low point of 1% bid, 743% asked, from
indias
such
in to Sept. 22. Such a low rate does not attract purchasers,
The year 1931 opened with an outstanding volume of $1,555,966,201
based on goods viduals, interior banks, corporations or savings banks.
were
86%,
$561,000,000,
which
of
bills,
of
all classes
27%,
At no time in the year did rates for bills up to 90 days exceed 314%,
stored abroad or shipped between foreign countries; $415,000,000,
goods in ware- and the average for the 12 months was only 1.506%.
were based on exports; $271,000,000, 17%, were based on
on imports ;
Just as the largest banks feel the effects of a surplus fund situation to a
houses in the United States; $220,000,000, 14%, were based
2%, greater degree than smaller banks, so they are in such periods the heaviest
$52,000,000, 3%, were to create dollar exchange, and $34,000,000,
investors in bills, even when the yield is less than 1%.
were to finance domestic shipments.
30—the
The accepting banks, alone, numbering about 140, have carried in 1931
From the most recent survey of the acceptance business—Nov.
divided as to an average volume of purchased bills amounting to $317,225,699, and in
total volume was found to have declined to $1,002,000,000,
80%; August, during the period of the greatest inactive money supply, carried a
uses as follows: Foreign storage or shipments, $298,000,000,
24%; total of $438,500,000, or about 40% of the total outstanding volume.
exports, $254,000,000, 25%; domestic warehousing, $239,000,000,
and domes.
The large number of bank failures throughout the country also had the
imports, $158,000,000, 16%; dollar exchange, $24,000,000, 3%,
natural effect of disturbing the mind of the possible purchaser of bills,
tic shipments, $18,000,000, 2%.
the first although to prove the unsoundness of such misgivings it should be recorded
This is a reduction in total volume of $553,000,000 since
the six classified that not one bank or banker with bills in the market failed during 1931.
of 1931. The loss in volume, by comparing the totals of
and shipment
The general nervousness in the investment market reacted unfavorably
groups, is found to be borne principally by foreign storage
reduction, fol- on the names of perfectly good interior accepting banks to such an extent
bills with a drop of $263,000,000, or 47.50% of the total
off $62,- that at times it was difficult to move their bills even in New York, the
lowed by export bills off $161,000,000, 29.12%; import bills
center.
000,000, or 11.40%; domestic warehouse bills off $32,000,000, or 5.80%; greatest bill purchasing
shipment
Finally, the wide publicity concerning the German credit situation and
dollar exchange bills off $18,000,000, or 3.28%, and domestic
drawn under foreign credits, much of which press
bills
many
of
the fate
bills off $16,000,000, or 2.90%.
in other discussion was misunderstood or misinterpreted by the public, outside of
With the exception of the foreign country bills the reduction
the general state the banks directly involved, added to the confusion and made the task
classes of acceptances was remarkably small, considering
prices of the dealers snore difficult.
commodity
domestic
in
decline
great
and
the
volume,
in
of trade,
a
Despite these abnormal difficulties the dealers nevertheless recorded
within the past year.
turnover in volume in excess of $7,800,000,000, kept the market cleared
Comparison With 1929 Favorable.
1931 of unsold bills, and performed meritorious service for both acceptor and
While the average outstanding volume of acceptances throughout
fell to $1,301,893,077 compared with $1,470,681,255 for the year 1930, investor.
The Federal Reserve Banks in the Bill Market.
this total was nevertheless $4,000,000 higher than the average for 1929,
a year of high commodity prices and active business conditions. Applying
The function of the Federal Reserve banks is neither to dominate the
an
be
would
equivalent
proper
the
1931,
1931.
to
rule
level
price
1929
the
discount market nor to neglect it. This was especially its policy in
averaged
average for the latter year of approximately $1,500,000,000.
The holdings of bills purchased for the System's own account
Volume of Business Financed.
$236,217,000, which we compare with the average purchased holdings of
With the exception of a
The volume of business of every nature, financed by dollar acceptance the accepting banks amounting to $317,034,078.
Federal Reserve System particularly required
credits in the past 12 months amounted to $8,592,494,000. For the three period in October, when the
the time of heavy gold withdrawals,
preceding years the figures were $9,706,496,000 in 1930, $8,565,625,000 in eligible paper and acceptances, during
the average
the Federal's portfolio of "own account" bills was below
1929, and $7,083,494,000 in 1928.
It is this comparison of yearly volume of business financed that gives for 1930.
purchased and
On the occasion referred to—Oct. 21—the System had
the best evidence of the stability and constant usefulness of acceptance
largest amount on record—out
credits in good or poor years. Even the extraordinary depression of 1931 was carrying a total of $769,000,000—the
$1,039,000,000.
did not affect the acceptance credit business to anywhere near the degree of a total of all bills amounting to
For several years one of the best customers of the American bill market
suffered by commercial paper or other forms of business obligations.
has been the group of foreign central banks for whom the Federal Reserve
Concentration of Bill Business Continue&
banks act in the purchase and custody of bills. During 1930 these banks
The business of creating acceptance credits continues to go principally were unusually heavy buyers, carrying an average in excess of $475,000,000
to National banks and trust companies. On Nov. 30 their acceptance in dollar acceptances throughout the year.
liability for bills created amounted to $825,000,000, or about 82% of the
In 1931 the volume of bills held by the Federal Reserve banks for the
total volume. This left only 17%, or $176,000,000, to the credit of private account of these foreign correspondents maintained an average of over
bankers, acceptance corporations, foreign trade banking corporations and $400,000,000 until the end of June and the beginning of serious trouble
American branches of foreign banks. On the same date in 1930 the volume abroad. From that point on maturing bills were not always replaced by the
for National banks and trust companies was 77%, and 23% for the private purchase of new paper, and the volume fell rapidly to $40,000,000 on
or non-member group.
Oct. 14, after which purchasing was resumed, bringing the holdings up to
As this process of concentration into the member banks continues there $168,000,000 on Dec. 9, with the present prospect of further increases each
of
of
number
the
institutions
in
reduction
steady
Is also to be noted the
week, as confidence is restored abroad and funds return to this country.
all kinds that are now handling the large volume of acceptance business.
Strong Foundation for Future Growth.
For example, the November total of $1,002,000,000 was created by 102
For several years, since the volume of bankers acceptances reached
National hanks and trust companies and by 82 private non-member bankers,
at the end an average of $1,000,000,000, observers have raised the question of the
a total of only 134, whereas in 1927 an almost equal volume,
ability of the acceptance business and discount market to successfully
of the year, was created by nearly 300 banks and bankers.
is found in the meet just such a situation as has prevailed during the past year.
A further illustration of this trend toward concentration
acceptors.
Would the banks, in a depression period, with a large amount of surplus
figures for the First Forty institutions in the list of principal
banks and cash and a reduced credit demand, continue to use their acceptance
This group which, on Nov. 30, was composed of 30 National
and privilege and if they did, in moderately large volume could the dealers
trust companies and 10 private bankers, acceptance corporations
market for the bills? What would happen if the Federal
branches of foreign banks, had outstanding a total of $896,378,424, or 89% find an investors
this Banks ceased to buy regularly and in large volume for their own account?
of the whole volume. Also, of the 40 leading accepting institutions in
the effect of the sudden and practically complete liquidalist, 24 were located in New York, four in Boston, four in San Francisco, What would be
volume of bills held for the account of foreign central
three in Chicago, three in Cleveland, one in Philadelphia, and one in tion of the huge
banks?
Buffalo.
will
the amount of proper long-term credits to the total volume involved
to our
be the progress of paying off until the entire commercial debt
banks is extinguished.
Rapid Reduction in German Bills.
The progress already made in clearing up these foreign acceptance credits
problem
Is the best proof of the thorough and vigorous manner in which the
was attacked, once it became apparent that we were creditors of the
business of a country or countries dangerously near the condition of utter
collapse. On June 30 dollar acceptance credits in Europe—approximately
85% of which were in Germany—amounted to $493,643,884. By July 31
this total had been reduced to $423,293,070, and by Aug. 31, when the
"Stillhaltung," or Standstill agreements, were at the point of operation
the total had been brought down to $391,334,967, a reduction of $102,000,000 in two months. On Sept. 30 the total was $338,405,275; on
Oct. 31, $330,483,271, and on Nov. 30 only $298,365,420, which was nearly
$200,000,000 less than was outstanding on June 30.
Furthermore, concerning the remaining acceptances outstanding, on
German and other European credits, the most complete knowledge of the
collateral security, guaranties and the prospects of the borrower to pay,
is now in the possession of American banks involved as acceptors of
the bills.
Leadership in Crisis.
It is to the credit of our American acceptance bankers that the problem
was calmly and coolly faced, once the crash occurred. Unanimous agreement on this side on the ways and means out of the dilemma and the
presence in the foreign conferences of Mr. Wiggin and Mr. Stewart, further
emphasizes the growing international spirit of the American bankers. If we
did not fortunately have this attitude in our leading bankers in such
crises we would be better off at once to go back to provincial banking
of the old days and retire completely from the foreign field.
Our bankers are now coming through the first real test they have had,
in foreign trade acceptance banking, to prove their calibre as international
230
FINANCIAL CHRONICLE
These problems and others have au been met and successfully
solved
in the year being reviewed.
We have made real progress in the American acceptance business
in
about as difficult a year as the banks and dealers have
ever had or will
ever encounter again. Notably, with respect to our acceptance business
In foreign countries, our bankers have acquired valuable experience
that
will not be forgotten in their future operations with
foreign takers of
our bank credit.
Contemplating our impregnable position as a gold standard country, the
strength of our large internationally equipped banks and our growing
understanding and facility in foreign trade financing, we may confidently
look forward to a great and useful future for the dollar acceptance credit
in domestic and foreign banking.
Never since the passage of the Federal Reserve Act when banks were
first empowered to accept, have we had the opportunity for world wide
credit service such as is now confronting us.
The following statistics are furnished by Mr. Bean.
BANKERS AC het ANCE AND BILL MARKET STATISTICS.
High volume for 1931
$1,555,966,201
Low volume for 1931
996,365,078
Average volume outstanding
1,301,893,077
Classification
of Total
% of
Dec. 31 1930.
Total.
Imports
$220,971.590
14.2%
Exports
415,140,975
26.6%
Domestic
34.725.531
2.2%
Warehouse credits
271,483,592
17.4%
Dollar exchange
52,201.951
3.3%
Foreign storage or shipment
561.442,562
36.0%
Total
Imports
Exports
Domestic
Warehouse credits
Dollar exchange
Foreign storage or shipment
81.555.986,201
Classification
of Total
Nov. 30 1931.
8158,058.271
254,101.099
18.483,192
239,229.873
34,066.850
298,365.420
[VOL. 134.
The year closed with several bank stocks well above the
17 lows.
Find National showed a net gain of 330 points; Central Dec.
20:
Guaranty Trust, 17; Bankers Trust, 12%. Other issues toHanover
were Commercial National, Manhattan, Empire Trust, Cornclose higher
Exchange,
Chase, City and New York Trust.
The range for the year 1931 was as follows:
Open
High
Low
Close
2.
Feb. 21.
Dec. 17.Jan
Dec. 31.
Bankers
10931
50
12331
6231
Brooklyn Trust
460
557
160
162
Central Hanover
230
272
115
135
Chase
88
108(
29
2431
Chatham Phenix
70
85
16
17)1
Chemical
4451
5131
2331
25)
City
893(
10831
34
38
Commercial
250
330
143
150
Corn Exchange
115
13431
57
6131
Empire Trust
58
4831
1931
24
First National
3575
4100
1590
1920
Guaranty Trust
448
566
244
261
Irving
3331
40
1431
17)1
Manhattan
7831
95
233
29
Manufacturers
2931
5331
27
2731
New York Trust
149
191
68
72
Public
47
6231
19
20
Weighted average
93
114
44
51
Decline, Feb.21-Dec. 17----61%
Recovery, Dec. 17-Dec.31----16%
1931 Range for Leading Insurance Company Stocks.
Paralleling the decline in all security markets, insurance
stocks were generally lower during 1931, Hoit, Rose &
Troster state in their annual review of the insurance stock
market. They add:
% of
Total.
15.7%
25.3%
1.8%
23.8%
3.3%
29.7%
From the high point of 71 established on Feb. 26, the
of 20 Issues declined to 24 on Dec. 17. a decline of 66%.weighted average
Several issues, notably the Hartford stocks, closed the year
higher as
compared with the low point on Dec. 17. Travelers,
Phoenix, Aetna
Life, Hartford Fire. Aetna Fire and Aetna Casualty & Surety
all
closed
higher, as did Globe & Rutgers, Home, Great American,
Hanover, U. S.
Casualty and Westchester.
Based on closing bid prices, the range for 1931 was as follows:
High
Low
Open0
Close
an.2
.. Feb. 26. Dec. 17. Dec.31.
Aetna Casualty & Surety
68
90
25
30
Aetna Fire
45
5031
22
273.1
Aetna Life
50
58f.
18
24
American (Newark)
16
17
734
9
Continental Casualty
30
34
14
11
Globe & Rutgers
530
685
205
210
Great American
22
2912
Halifax
17
2031
Tg
831
Hanover
27
3831
14
16
Flarmonia
23
27
9
10
Hartford Fire
54
66
28
34%
Home
31%
38
10
1331
National Casualty
16
19%
7
751
National Liberty
731
834
2
23.1
Prov. Washington
39
54
21
2231
Phoenix
69
71
3334
40
Travelers
905
1080
390
415
U. S. Casualty
48
52
8
10
II S Fire
42
57
17
16
Westchester
33
4934
1631
1831
Weighted average
57
71
24
27
Total
$1,002,304,705
Volume of business financed 1929
$8,565,625,000
Volume of business financed 1930
9.706.496.000
Volume of business financed 1931
8,592.494,308
Classification and Percent of Business Financed.
Average
% of Total. Outstanding.
Imports
8195.706,987
Ex ports
2,228.547.717 25.94%
337.658,745
*
Domestic
199,829.071
2.32%
30,277.132
Warehouse credits
1,499,615,548
17.45%
227,214.477
Dollar exchange
369.433.950
4.29%
55.974.843
Foreign storage or shipment
3,003,401,893 34.95%
455,060.893
Bill Rates-90-Day BillsBid.
Ask. I
Illgb for year-Oct. 16 to Nov. 5
334%
3M%
Low for year-May 19 to Sept. 22
1%
34%
Average-Dec. 1 to Nov. 30
1.506%
Call LoansStock Exchange average Dec. I to Nov. 30
1.702%
Commercial Paper Rates1930 Average-Nov. 1 to Oct. 31
3.44%
1931 Average-Nov. 1 to Oct. 31
2.29%
Bills Created By-Nov. 30 1931National banks and trust companies
$825,363,994 82.32% The Hoarding of Currency-How Much Was Hidden
Private and non-members
176,940.711 17.67%
Away Last Year and in Other Years.
Bills Created in New York City-Nov. 30 1931The following is from the New York "Times" of Jan. 1:
% la
Grand to N. F.
Estimates of the amount of currency hoarded in safe deposit vaults by
Total. frightened American citizens in
Total.
1931 vary widely and are largely conjectural.
National banks and trust companies
8821.639.099 62% 81.9%
The
hoarding mania became noticeable last August and, since the amount
non-members
Private and
163,010,651
16%
18.0%
of reserve note currency taken out since the end of July was
Number of Accepting Banks-Nov. 30 1931
$539,000,000
134
National banks and trust companies
102 greater than a year ago (notwithstanding the extremely light demand for
Private and non-members
32 payrolls and pocket money) the estimate that $600,000,000 was thus hidden
First Forty Total-Nov. 30 1931
$896,378,424 away has been very general. During the October recovery in the markets
there were signs that the currency was coming out again; but huge
No.
Amount.
amounts
National banks and trust companies
30 8759.724,060 must still be secreted.
Private and non-members
10
136,854,364
Three months after the panic of 1907 the Docretary of the
Treasury
estimated in a special report to Congress that $296,000,000
Bills Holdings of Acceptance Bankscurrency had
High.
Low.
been hoarded by our people. It returned to the markets
with great rapidity
$149,728.278 $231,687.011
Own-(Average)
$89.645,812 during 1908.
July 31 1931
Dec. 30 1930
others-(Average)
$317,234.078 $438,478,419 8118,076,621
Aug.31 1931
Oct. 31 1931
Federal Reserve Holdings-Own AccountNational City Bank of New York on Dividend Cuts by
1931 High-Oct. 21 1931
$769,066,000
Railroads in 1931.
1931 Low-Aug.5 1931
66.074,000
1931 Average December to Nov. 30
236,217,000
Discussing
the
"outlook
for the railroads" the National
1929
392,209,000
31
High-Dee.
1930
102,313,000 City Bank of
1930 Low-June 25 1930
New York in its January "Bulletin" presents
217,286.000
1930 Average Dec. 1 to Nov. 30
the following with regard to dividend cuts by railroads in
Federal Reserve Holdings-Foreign COrresPondeMs8482,261,000 1931:
1931 High-March 4 1931
40,571,000
1931 Low-Oct. 14 1931
Common stocks of 46 important railroads are listed on the New
321,743,000
1931 Average Dec. 1 to Nov. 30
York
547,962.000 Stock Exchange, of which 31 were paying dividends at the beginning of
1930 High-Dec. 31 1929
426,541,000 1931. Of this number, only six were able to
1930 Low-Nov. 12 1930
maintain the same rate of
478,877,000 dividend during
1930 Average Dec. 1 1929 to Nov. 30
the year, including the Atchison, Topeka & Sante Fe,
Bangor & Aroostook, Chesapeake & Ohio, Delaware & Hudson, Norfolk
&
and Union Pacific.
Range for New York City Bank Stocks in 1931-Average Western,
The 182,073 shareholders of 17 railroads had a 100% cut in their rate of
Recovers 16% During Closing Weeks of Year But income from these sources some time during the last year when dividends
Ends With Substantial Drop Compared with 1930. were omitted entirely, as shown by the following list giving the rate prevailing at the beginning of the year:
1
During most of 1931, New York City bank and trust
company stocks sympathetically followed the general declining trend, according to a survey of the 1931 bank stock
market prepared by Hoit, Rose & Troster, bank stock
specialists. They note, however, that in responding to
influences especially affecting bank shares, such as the
higher money rates and constructive banking news from
Washington, bank stocks led the general market in several
important rallies. They also state:
On Oct. 6 news of formation of the National Credit Corporation stimulated an advance in bank stocks which by the end of that week. Oct. 10,
netted an average advance of 28%. Later in October. bank stocks extended their gains on the higher money rates. From Oct. 5 to Nov. 9
bank stocks scored an average advance of 43%.
On Dec. 18 news from Washington that American banks are not "loaded
up" with German short-term credits started a rally in bank stocks that
by Dec. 19 totaled on the average. 23%.
CompanBaltimore dr Ohio
Boston & Maine
Chicago & North Western_
Chicago, Rock Island & Pacific
Colorado Sc Southern
Illinois Central
Kansas City Southern
Lehigh Valley b
Missouri-Kansas-Texas c
New York Central
New York,Chicago Sr St. Louis
New York, New Haven dr Hartford
Pere Marquette
Pittsburgh & West Virginia
St. Louis-San Francisco
Southern Railway
Texas Sc Pacific
a Partly extra. b Par value $50. c No par value
Rate
Shareholders
Jan. 1 1931. Dec.31 1929.
87
4
4
7
3
7
5
a4),
3
8
6
6
a8
6
8
8
5
34.733
2,659
14,448
5,243
479
14.994
858
8,291
2,768
54,122
1.638
19,002
1,759
515
8,931
13,139
496
JAN. 9
1932.]
FINANCIAL CHRONICLE
In addition, 354.945 shareholders of eight other railroads had their rate
of dividends reduced as follows:
Company--
Reduction
1931.
2610 to 54
Atlantic Coast Line
a7 to 2
Delaware. Lackawanna& Western c
5 to 2
Great Northern pret. b
Louisville & Nashville
7 to 4
Northern Pacific
5 to 3
4 to 2
Pennsylvania c
4 to 2
Reading Co. c
Southern Pacific
6 to 4
a Partly extra. b No common outstanding. c Par value $50.
Shareholders
Dec. 311929.
4,479
6.943
42.085
6.490
38,359
196.119
4.682
55.788
Of the 31 common stocks paying dividends at the beginning of 1931 the
average rate was $7.26 per $100 share, while the average at the end of the
year was $2.81 representing a cut in income to shareholders of 61%.
Many of these omissions broke a continuous record of dividend payments extending back for a long period, in some cases 50 years or more,
Including such roads as the New York Central, Chicago & North Western
and the Illinois Central.
In addition, a number of preferred dividends were discontinued in 1931
after a continuous record extending back many years. including:
Chicago & North Western 7% pref.
Missouri Pacific 5% pref.
Chi., Rock laid. & Pan. 7% pf. & 6% rif. New York, Chicago & St. Louis 6% pref.
Erie 4% 1st pref. & 4% 26 pref.
Pere Marquette 5% prior prof.&6% pref.
Gulf, Mobile & Northern 6% pref.
Southern Railway 5% pref.
Missouri Kansas Texas 7% pref.
Wabash Railway 5% mef.
Aside from the sacrifice in income last year, railroad shareholders suffered
a severe decline in the market value of their investments, in some cases
amounting to a virtual collapse. Aggregate common stock of the 46 listed
companies amounted to $5,673,000.000 par value, and at the 1931 high
quotations, reached In most cases during February, the aggregate market
value was approximately $4.600,000,000, whereas at the 1931 low quotations in December the market value was but $1,100,000,000, representing
a shrinkage of $3.500.000000 or 76%. Expressed on a per share basis.
the average price declined from $81 to $19; in other words, capital in the
railroad industry sold down to 19 cents on the dollar investment at par,
not counting in the corporate surplus.
J. Stewart Baker, Before New York State Bankers'
Association, Urges That Corrective Measures in
Banking Be Developed within Ranks—Recommends Creation of Regional Clearing Houses in
State Empowered to Require Periodic Reports of
Members—Proposals in Behalf of Depositors of
Closed Banks.
'Contending that "leadership must be developed from
within, not imposed from without," J. Stewart Baker,
President of the Bank of Manhattan Trust Co. of New
York, addressing as President, the New York State Bankers
Association, at its mid-winter meeting on Jan. 8 in New
York, said:
I regard banking as entitled to a professional viewpoint and feel that
methods of self-correction within our ranks may well be considered. I
submit that groups of banks should exercise control over members of the
group—ethically and technically—not as a means of oppression, but for
self-protection and for the maintenance of high standards.
Mr. Baker observed that "if there is one lesson that the
present situation teaches the bankers—and they should
never forget it—it is that in co-operation there is strength
Self-interest demands co-operation. I feel no hesitation
in urging this upon you for here in New York City we are
practicing what I am now preaching."
One of Mr.Baker's proposals was that there be established
within the State regional Clearing House Associations, and
in calling attention to the fact that "one of the most distressing results of the present situation is the locking-up
in the closed banks of the country of almost $2,000,000,000
of depositors' money, he proposed arrangements for the
issuance of transferable certificates to depositors for a portion
of their deposits. In part Mr. Baker said:
Within the last few months we have seen a great corporation organized
with funds of approximately $500,000,000, supplied by the banks of the
country, to assist individual banks that may be in need of help. In this
State the banks have been divided into groups which through committees
pass on the applications for loans from this corporation. If approved,
the member banks of the group automatically guarantee such loans. The
willingness of the banks of the State to join in such an undertaking shows
that they realize how much their own welfare is wrapped up in that of
their neighbors, and that they can best meet the dangers and problems
that confront them by united effort.
I do not know whether all of you are familiar with the history and organization of the New York Clearing House Association. This association was
founded 78 years ago and has had an honorable and useful career. It
has a constitution and by-laws which govern its activities, and its membership consists of 22 banks and trust companies. It functions through its
various committees, made up of representatives of its members, elected
annually. Co-operation is its watch-word. Its mechanical operations,
though valuable, seem to me to be its least important contribution.
When problems have to be faced and when concerted action is necessary,
the instrumentality already exists through which the member banks can
effectively function. I wish you could know how often and how smoothly
it has acted, especially during the past year, for the benefit of its members
and the general banking situation in this city. There have, of course,
been honest differences of opinion, but individual opinions have given way
before the desire for common action in some constructive and helpful move.
I would recommend the establishment of 15 or more regional groups
or regional clearing house associations which would cover the entire
State. If the clearing of checks can be expedited through these groups,
there is value in constituting them as Clearing House Associations, for
their mechanical usefulness will tend to keep them alive and will be an
everyday reason for their existence during times when there are few real
231
problems to be dealt with. These associations should have their own rules
and regulations, but their constitutions and by-laws should be similar so
that there will be uniformity of purpose and equality of standards. The
affairs of these associations should be in the hands of committees elected
by the members, who would agree to abide by their decisions. The associations should have the power to examine the members and require periodic
reports as to their financial condition. They might maintain complete
credit files for the use of their members covering the borrowers in the territory and could make investigations of commercial paper names. Detailed
information in regard to securities could be assembled and a general service
maintained to assist the members in the operation of their bond accounts.
I am rather of the opinion that the State Banking Department and the
Comptroller of Currency would be willing to assign examiners permanently
to these associations, which would result in the closest kind of co-operation.
As you know, the American Bankers' Association has been working on this
idea for some time, but you may not know that it has been in successful
operation in several States in the Middle West and that the banks report
most satisfactory results. The expenses are small. What each contributes
Is infinitesimal compared to what it gains. I would like to see the New
York State Bankers'Association take the lead in setting up these associations
and then have it carry on its activities through them. It gentlemen, this
suggestion of mine meets with your approval—and I would like to hear
from you after you have had a chance to think it over and discuss it with
your associates—I purpose to appoint a special committee to study this
whole question carefully and report, if possible, at the convention in June.
One of the most distressing results of the present situation is the locking
up in the closed banks of the country of almost $2,000,000,000 of depositors'
money. Experience has shown that the liquidation of these deposits is
a slow and costly process and that the liquidating agencies have no choice
but to sell the banks' assets for what they will bring, usually below book
value, and often less than intrinsic value. The wholesale dumping of
securities, mortgages and real estate depresses prices and destroys values,
and the indiscriminate calling of loans works a hardship on individuals,
firms and corporations, which often results in forcing them to realize what
they can on their assets. It is a vicious circle. Meanwhile, the depositors are without funds to carry on their daily operations, many communities are without banking facilities to handle their financial transactions
and the good-will and invested capital of the banks have been wiped out.
It seems to me that some means could and should be found to deal with this
situation more scientifically and more sensibly and, at the same time,
protect the interests of creditors and provide for the uninterrupted payment
of deposits to the extent practicable. Without going too much into detail,
may I outline what I have in mind.
When in the opinion of the proper governmental authority a bank should
not be allowed to continue to operate, the law should give that authority
the alternative either to close it, as at present, or to reorganize it along
the following lines. Transferable certificates would be issued to the depositors for a portion of their deposits so that the remaining deposits
would, in the opinion of the Superintendent of Banks or the Comptroller
of the Currency and the board of directors, be covered by sound assets at
current values amounting to not less than 120% of such deposits. These
remaining deposits and any new deposits would share alike in the assets
of the bank. The holders of the certificates would receive interest semiannually, not to exceed 4% per annum, if earned after necessary and
proper charge-offs, and if approved by the Superintendent of Banks or
Comptroller of the Currency. This interest would be cumulative up to
4% per annum, and no dividends would be paid on the capital stock while
any certificates are outstanding.
Whenever, subsequently, an official examination should credit the
institution with net sound assets, at current values, greater than the
amount by which they exceeded the marked-down deposits at the time
of reorganization, such increase would be used to pay down the certificates
proportionately. The certificate holders would have the option, at any
time, to convert their certificates into stock at the book value as shown
by the last official examination.
A stockholders' meeting should be held shortly after the date of reorganization for the election of a new board of directors, who would elect
officers. Former directors and officers would be eligible to succeed themselves. Each certificate holder would have the right to vote as though the
face value of his certificate represented par value of stock. The double
liability of the old stockholders should be preserved while any certificates
are outstanding.
I am quite well aware that a reorganization would be futile unless the
reconstituted institution has the confidence of the community and the
support of its depositors and should not be undertaken unless the management is efficient and honest. I believe that there are instances in which
such a reorganization could have been worked out and would have prevented banks from closing; perhaps it would permit the opening of some
that are now closed. At any rate, it seems to me that some such plan is
worth trying, for if it succeeds it will accomplish much, positively and
negatively, and at the same time the interests of creditors will not be
jeopardized.
You were undoubtedly as disturbed as I was when you read that portion
of the Governor's annual message to the Legislature which was devoted
to the banking situation. I feel that it is my duty, as your President, to
emphatically protest against his accusations which cannot help but be
Interpreted as applying to banks and bankers generally. Out of respect
for the great office which he holds. I shall refrain on this occasion from
making any answer except to say that the bankers of this State yield to
no one in their desire for the maintenance of high standards, for the furtherance of sound banking practices and for the safeguarding of their
depositors' money. As a matter of fact, they are generally to be found
in the vanguard of those who may be counted on to support measures which
contribute to the welfare of the people of the State.
Governor Harrison of Federal Reserve Bank of New
York Contends Deflation of Credit Must Stop if
an Early Turn in Tide of Depression is to Occur.
Referring to the "severe and distressing depression"
through which all of the world is passing, George L. Harrison, Governor of the Federal Reserve Bank of New York,
at the mid-winter meeting in New York yesterday (Jan. 8)
of the New York State Bankers Association, stated that
"one thing is certain—that deflation of credit must stop if
we hope to see an early turn in the tide." "As I see it,"
he said, "the machinery to stop this deflation and gradually
to build up a structure of sound values and sound business
is available. What we need is to release the brakes;. . .
232
[VoL. 134.
FINANCIAL CHRONICLE
we need a restoration of confidence in ourselves and the
courage to go ahead." We give herewith what Governor
Harrison had to say:
I am greateful to you for the opportunity you have given to me to meet
with you. I feel particularly happy that this meeting takes place in the
Federal Reserve Bank, to which I am glad to welcome you. This I do as
earnestly as I can and with the hope that you will always consider it your
meeting ground in New York, not merely because we invite you to do so
but because it is yours as a matter of right.
We are in no sense a competitive commercial institution. Chiefly, we are
a service institution with powers and privileges designed to serve your
interests and through you your depositors and the country as a whole.
When I first assumed my present office I found in my desk a little slip
of paper with the following words written on it:
"To the Governor of this Bank:
Never forget that it was created to serve the employer and the working
man, the producer and the consumer, the importer and the exporter, the
debtor and the creditor—all in the interest of the country as a whole.'
This sounds like a large order but at least It is a graphic statement of the
conflicting nature of the different interests that are affected by any Federal
Reserve policy. It emphasizes that whatever we do—whether our influence
Is towards making credit more plentiful and cheap, or whether it must be
towards making it more scarce and expensive—some one is always benefited
and some one always injured, at least for the time being. It has always
been so with banks of issue. It probably always will be so. One consequence is that banks of issue, even Federal Reserve Banks, are apt to be
subject to criticism rather continuously from one interest or from another.
But that we must expect.
Unfortunately, however, this criticism is not always confined to the
BANK SUSPENSIONS.
[Banks closed to public on account of financial difficulties by order of supervisory
authorities or directors of the bank. Figures of suspensions include banks subsequently reopened.'
Federal Reserve Board on Bank Suspensions—Number
of Banks Closed in November 169, Compared with
522 in October—Eleven Months Figures.
The number of bank failures in November, according to
the December number of the Federal Reserve Board's
"Bulletin," was 169, compared with 522 in October. The
amount of deposits involved in the November suspensions
was $83,409,000, against $493,751,000 in October. With
regard to the Reserve Board's figures, the "United States
Daily" said:
Of the 169 November suspensions, 34 were of National banks, with
deposits of $34,340,000; eight were State bank members of the Federal
Reserve System, with deposits of $6,374,000, and 127 were State bank nonmembers, with deposits of $42,695,000. Twenty banks were reopened
during the month, with deposits of $9,947,000.
Total bank suspensions for the year to the end of November are given
as 1,932, with deposits of $1,468,122,000. National bank suspensions
account for 345 of these, and $381,726,000 of the deposits; State member
1929.
1928. 1929. 1930. 1931. 1928.
53
60
66
43
29
28
24
21
20
41
72
44
January
February
March
April
May
June
July
August
September
October
November
December
Year
491
54
60
51
29
112
48
69
17
39
43
68
52
1930.
1931.
10,983 16,413 28,903 78.130
18.352 21.746 32.800 35,123
99 202
85 77
76 86
96 64
55 89
66 167
65 93
67 158
66 305
72 r522
254 169
344
16.953
8.190
6.394
13.496
5.368
6.147
7,888
9.011
24,784
11,076
9.002 23,769 35.285
7.790 33.388 42.417
24.090 19.315 43.963
19.219 70.566 195,951
66.161 32.333 41.334
8.532 21.951 185.902
10.050 23.666 r236511
13,153 24,599 r493751
22.646 186.306 83,409
15,730 367.119
138.642 234,532 864.715
642 1.345
Baut ftpures.—See Annual Report for 1928 (Table 64). r Revised.
BANK SUSPENSIONS BY DISTRICTS.
[Banks closed to public on account of financial difficulties by order of supervisory authorities or directors of the bank. Figures of suspensions include banks
Subsequently reopened. Figures for latest month are PreliminarY.1
Banks Suspended.
Deposits Mt Thousands of Dollars).
Number.
Federal Reserve
District.
Members.
Members.
All
Non
All
Mem- Banks.
Banks Na!tonal Stale. bers.
Federal Reserve banks. It frequently relates itself to the commercial
banks, especially in times of stress such as those through which we are
now passing. In such a period of depression, when market prices of goods
and Securities continue to decline, when incomes are cut, wages are reduced, jobs are lost and loans are called, we see that people's judgments
become warped, their emotions cut loose and their tongues untied. Idle
gossip leads to baseless rumors. These in turn arouse unreasoning fears
which tend to provoke a state of mind bordering on panic. A vicious,
senseless circle from which we all suffer.
Now, it is true that we are having hard times. All of the world is in
the midst of a severe and distressing depression. These facts we must
face. But after all, such a period cannot last forever. Some day the
market prices of goods and securities will adjust themselves more nearly
to real and intrinsic values; margins will be revived and many loans that
now seem slow or doubtful will become liquid and good. Whether the
turn will come sooner or later depends in part at least upon you gentlemen
and your own faith in fundamentals.
What are the facts?
The total volume of bank credit in the country has declined over (”i
billion dollars in the past two years; over 4 billion dollars in the past year,
and probably over 234 billion dollars in the past three months alone—a
terrific deflation of loans and investments at increasing momentum. Incidentally, this is perhaps the main reason why you have had such a rapid
reduction in bank deposits. Now, one thing is certain, that deflation of
credit must stop if we hope to see an early turn in the tide. The Federal
Reserve banks alone cannot check it. You alone cannot check it; nor can
the public alone check it, but all of us combined can do so and must do so
It is largely a question of confidence in ourselves and in one another.
There are over 8 billion dollars of eligible assets in the member banks
of the country. Even assuming that some of these assets may be badly
distributed, nevertheless, the Federal Reserve banks are in a position at
the present time and on the basis of their present gold supply to expand
Federal Reserve credit to their members by some 33,5 billion dollars, which
could mathematically form the base for an increase of as much as 35 billion
dollars in bank credit—a stupendous sum. For those banks whose supply
of eligible paper is not adequate, or for banks which are not members of
the Federal Reserve System, the Reconstruction Finance Corporation,
which it is hoped will be enacted into law promptly, should prove a great
bulwark of strength. Between the two, supplemented by the National
Credit Corporation, it seems reasonable to expect that every sound bank
can procure any necessary accommodation as soon as the demand for the
Increase in credit arises.
So, as I see it, the machinery to stop this deflation and gradually to build
up a structure of sound values and sound business is available. What we
need is to release the brakes, to dispel the wholly unreasoning fear that
grips the world—we need a restoration of confidence in ourselves and the
courage to go ahead.
Deposits(in thousands ofdollars).
Number of Banks.
Month.
Jan.-Nov.1931—
Boston
New York
Philadelphia_ ____
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Total
Nov. 1931—
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
7
7__
8
23
22
43
35
24
63
28
43
17
32
15
52
93
165
164
117
536
210
254
192
87
55
6
15
5
5
28
8
1
8
6
21
85
107
124
88
445
174
210
175
47
34
16.553
121,369
149.965
399,162
93,044
47.059
393.617
59.403
57,047
46,345
53,604
30,954
NaMonet.
Non.
Members
State.
16.553
35.372 51,255 34.242
18.772
8.706 122,487
121,752 104.710 172.700
26.761
5,024 61.259
23,470
1,817 21,772
79.541 89.822 224,254
18,088
4.262 37,053
11,937
496 44.614
8,143
38,202
23,671 12,775 17.158
13,719
2,547 14.688
90 1,497 1468122 381,726 281,414 804,982
1,932 345
6
4
9
11
15
32
29
19
28
10
6
1
2
4
3
3
2
6
5
3
2
3
- __
1
1
Total...... ___ 169
34
8
5
1
4
7
12
30
20
14
25
7
1
1
1
3
'2
6,015
3,090
10,397
12,188
8,063
12,614
10,094
4,676
7.721
5,q t 7
,1 71
127 i 53
tr; 1
2,184
2,276
3,364
6,379
4,976
1,841
1.6',3
1,0:19
1,722
2.577
3,243
_ .. _,
447
224
10.776
3,164
3.640
Loss
1,993
t 104
74,710 1
6.374
12 tt05
510
2,588
354
2,751
3,831
304
4.44.5
3,455
Banks Reopened.
Depos-tts.
Number.
Federal Reserve
District.
NonAll Mem- Metn- AU Ban
Banks
bers.
Jan.-Nov. 1931—
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Total
Nov. 1931—
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
2
3
1
3
52
12
30
95
20
12
12
242
2
2
1
4
2
1
11
2
a
28
2
5
1
3
1
3
3
3
2
1
1
3
48
10
29
84
18
12
7
$
5,206,000
24,423,000
229,000
1.296,000
19,321,000
9,144,000
19,320,000
44,416,000
5,971,000
3,273.000
3,670,000
Members.x
NonMembers.
3
21,740.000
239,000
5,206.000
2,683,000
1,535,000
1.296.000
13,277,000
3,663,000
11.818,000
34,839.000
4,702,000
3,273,000
2,135,000
214 136,279,000
53,387,000
82,892,000
2
4
884,000
4,649,000
2,152,000
884,000
2,497,000
3
678,000
125,000
1,419.000
1,627,000
565.000
1,269,000
3
2
6,044,000
5,481,000
7,502,000
9,577,000
1,269,000
678,000
125.000
263.000
150.000
1,627,000
302,000
6.283.000
3,684,000
Total
20
4
16
9.947,000
x Represents national banks only, except as follows: January-November. 1 State
member in New York district with deposits of 318,801.000; 1 State member In Richmond district with deposits of 52,152.000; 3 State members in St. Louis district with
deposits of 56,313.000, and 1 State member in Minneapolis district with deposits
of 5496,000. November, 1 State member in Richmond district with deposits of
$2,152,000 and 1 State member in Minneapolis(Harlot with deposits of $496,000.
Back Figures.—For district figures back to 1921 see "Bulletin" for February 1931
also annual reports for 1030 (Table 117), 1929 (Table 111), 1928 (Table 115). 1927
Table 111), and 1926 (Table 98).
Senator Kean Details Aims of His Bank Plan—Proposes
to Establish Uniform Currency in United States
banks suspending number 90, with deposits of $281,414,000, and nonand Canada—Would Name Canadian to Federal
members are 1,497, with deposits of $804,982,000.
Reserve Board.
There were no bank failures in the New England States during November,
and there were none in Delaware, Virginia, New Mexico, Utah, Nevada,
A common banking system and a uniform currency north
Oregon and the District of Columbia. Nebraska led with 17, and Missouri
of the Rio Grande is the idea behind the measure offered
came second with 16.
The only States without bank failures during the first 11 months of in Congress by Senator Hamilton F. Kean, Republican, of
1931 are New Hampshire. Vermont, Rhode Island, Delaware and the
which proposes to place a Canadian on the
District of Columbia. For the 11-month period Illinois leads with 189 New Jersey,
Federal Reserve Board, it was stated in the New York
and Iowa comes second with 183.
Reopenings for the 11 months number 242, with deposits of$136,279,000. "Times" of Dec. 31. A reference to the proposal appeared
The following tables are reproduced from the Reserve in our issue of Dec. 26, page 4256. Concerning the Senator's
Board's "Bulletin":
resolution the "Times" says:
JAN. 9 1932.]
FINANCIAL CHRONICLE
'In a statement explaining his resolution, Senator Kean said yesterday
(Dec. 30) that the recent decline in the Canadian dollar to a discount of
20% in terms of United States dollars had created many problems for
American and Canadian merchants who deal with one another. He proposes that Canada, by treaty with this country, arrange for the admission
of her banks to the Federal Reserve System and for the use of Federal
Reserve currency. Such a plan, he asserted, would make one banking
system north of the Rio Grande and would be an aid to Canada
and also to
the United States. His statement follows:
"For more than 3.000 miles our border touches Canada. All along
the border our citizens and their citizens have been accustome
d to receive
a Canadian dollar as the equivalent of an American dollar.
Suddenly
exchange has affected the Canadian dollar so that it is
selling for 80c
as compared with the American dollar. Our merchants
have large dealings with individuals and merchants in Canada. Canadian
merchants
have large dealings with merchants in the United States.
"When a merchant in either country sells a bill of goods
to a merchant
in the other country, if it is payable in American dollars,
what is the Canadian going to have to pay in his dollars for American
dollars? If it is
payable in Canadian dollars, what is the merchant in the
United States
going to receive for his goods, and is the rise and the fall in exchange
going
to make him demand either an excessive profit or is it
going to cause him
a loss.
"The Canadian Government, electric light companies,
railroads and
other agencies have floated large amounts of bonds
which are held in
the United States. These bonds are payable in gold
dollars of the present
rate of weight and fineness. At the moment Canada
would have to pay
81.20 for each dollar of these bonds. Undoubtedly Canada will
come into
this market to borrow additional money to develop
her country. If
exchange continues as it is now, she would receive 80c. for
each dollar she
borrowed. How to remedy this situation so that both our
peoples can
trade as heretofore is the problem.
"The Federal Reserve Bank is a corporation chartered by the
United
States Government to receive deposits from the member banks
(this means
all national banks and many of the trust companies) in the
various cities
and towns of our country. With the consent of Canada
and by treaty
with the United States her banks could be admitted as members
of the
Federal Reserve Bank and the currency issued by the Federal
Reserve
Bank could be used by Canada as well as the United States."
Walsh Urges Haste in Aiding the Banks—
Asserts Government Must Act to Build Confidence
of Depositors—Fee "Exploitations" Hit.
Senator David I. Walsh warned on Jan. 2 against the
danger of depositors of closed banks being exploited through
payment of large fees to agents engaged in salvaging funds
of the institutions. Associated Press adviees from Boston,
Jan. 2, to the New York "Times" continued:
Senator
He said that liquidation of such resources was a public service
and
should be performed by public officials, probably temporaril
y appointed
for the purpose, and paid out of public funds at salaries similar
to those
paid assistant attorneys in the Attorney-General's office.
Speaking before the Massachusetts State Democratic
Committee,
Senator Walsh predicted the election of a Democratic governmen
t in 1932.
With "Republican defect inevitable, regardless of issues or
candidates,"
Mr. Walsh said, "the Democratic party should prepare
to assume the
serious problem of meeting the great national deficit that
will be inherited
from the present Republican administration," and the
consequences of
the depression."
There are $2,000,000,000 of frozen assets in the closed banking
institutions of the country, Senator Walsh said, $100,000,0
00 of which is in
Massachusetts. To set up reconstruction financial machinery
to restore
public confidence in the banks, "to the end that the public
will be seeking
to deposit their money rather than to withdraw their money
from commerce and industry," the Senator said, the political leaders
of both parties
must co-operate with all political elements in Congress.
He said there must be no delay in this work, remarking
that "government support for tottering financial institution
s of the country should
have been provided for long ago."
"Let us have no $100,000 attorneys' and
receivers' fees in connection
with this highly important public service," he
urged. "Such and even
more outrageous fees have been discovered in
the investigations of numerous scandals connected with the slovely and
exploitative manner in which
creditors have been robbed of the assets of debtors
in the bankruptcy courts.
The courts who fix these fees, therefore, have
a responsibility in these
cases, as well as all other public officials.
"If the government could not stop the depression it
can at least stop
scandals and prevent disgust caused by the inefficienc
y
government agencies to guard the savings and proper and neglect of
distribution of
funds of which it has assumed the administration.
"Briefly, the task before us is to provide the
government machinery
to release the frozen assets in our closed banks,
strengthen the assets in
all existing banking institutions and provide for newlj
appointed public
officials to administer the affairs of the closed
banks. . . .
"Failure to enact such a program immediately wifl
not
only result in
continuing the depression but make the situation
more desperate. This
action will assure our hard-working and industrious
people, whose confidence in our institutions led them to deposit their life
savings, that the
government does not intend to permit them to be
exploited and their
distress increased, but diligently to return to them their
money free from
unnecessary delays and from exploitations of every kind.
This is unquestionably the first step in restoring confidence and
reviving business
throughout the nation."
233
stock, which bond shall inure to the benefit of
its depositors. And any
trust company chartered after the passage of
this act and maintaining
a savings department shall, until its guarantee
fund reaches the maximum
of 5%,file yearly with the Commissioner of
Banking a bond guaranteeing
indemnity to inure to the benefit of its depositors in
such amount as the
Commissioner of Banking shall deem satisfactory.
"Any trust company which has within five years
preceding the passage
of this act had its affairs taken over by the
Commissidner of Banking
shall, before reopening for business, comply with
the provisions stated
above.
"Savings banks opening after the passage of this
act
with the Banking Commissioner a bond as guarantee shall yearly file
of indemnity to
inure to the benefit of its depositors in such amount
as the Commissioner
shall deem necessary until the guarantee fund shall
have reached the
maximum of 5%."
Illinois Bankers' Association Names Committee
to
Draft Changes in State Banking Laws.
Recognizing that the laws governing the banks of
the
State and their supervision should be strengthened a committee of the Illinois Bankers'Association has been appointe
d,
charged with the preparation of a draft for a revised banking
act to be presented to the next regular session of the General
Assembly. President Paul S. Abt, of East St. Louis, in
making this announcement at Chicago on Nov. 27 said:
The experiences in Illinois during the last two years have demonstra
ted
that the banking laws need revision to insure greater protection
of deposits,
and the bankers who recognize their responsibilities are willing
and ready
to assist in enacting such measures as will achieve this object,
provided
they do not unnecessarily hamper or unduly restrict the natural
flow of
business. It should be remembered that proposals for remedial
legislation
must be carefully considered, lest in our eagerness to correct a fault
We
obstruct the economic machinery and do more harm than good.
At the last meeting of the Council of Administration of the Associatio
n
a
special committee of five prominent bankers was appointed to
draft a new
banking act for presentation to the 1933 General Assembly.
When this
has been done and the draft approved we shall make its provisions
known
to the public in order that it may be fully advised.
The Association has for years endeavored to bring about the
creation of
a department devoted solely to the supervision of State
banks with an
appointed head and free from political entanglements, but
without success
thus far. We have believed that banking interests of the
State are of
sufficient importance to justify such a department and we
hope that these
efforts will now meet with greater support than heretofore
.
While there may be instances of mismanagement in some
of the institutions which have suspended, many of them were
closed by their own
depositors. These banks could have continued in business
and have met
all normal demands, but for rumor-mongers and malicious
slanderers who,
by their whispering campaign against all things financial,
caused unwarranted fear and hysteria on the part of the depositing
public. This
state of mind brought about the very condition
of which it became
apprehensive.
A bank cannot perform its functions of financing business
and aid in the
development of the community and at the same time be
in a position to
pay all depositors at once without notice and without
opportunity to
realize on the loans and investments made. Many
communities, outside
of the larger centers, have seen their population decline and
business move
away because of economic influences, and the banks located
therein were
obliged to cease operations as a natural consequence.
We have no desire to minimize the distress which has been caused
by
the temporary tying up of bank deposits or the partial loss which
may
result thereform. but we do want to emphasize the fact that
the entire
banking fraternity should not be censored for conditions which
brought
about the world-wide deflation and over which we had no control.
To the
credit of our profession be it said that during this period
of unparalleled
depression the vast majority of banking institutions in the
country, over
95%,have courageously and sucessfully met their difficulties and obligations.
It is true that certain weaknesses in our banking structure
have been
exposed and we are committed to use our utmost efforts to
remedy these
faults and, insofar as it is possible, to prevent their recurrence
by legislative means as well as by causing the elimination of poor or dishonest
management.
We have no sympathy for those who may have wilfully violated their
trust or deliberately transgressed the banking or criminal laws. There
are statutes providing for punishment in such cases, and the authorities
should see to it that these are enforced. Our Association policy has always
been to co-operate with and assist the law enforcing officials in the prosecution of all offenders against the law.
At the last meeting of the Council of Administration the National Credit
Corp. was endorsed. It is believed that the greatest contribution that
can be made to confidence is to have the public understand that banks
may be assured, through the National Credit Corp., of being able to convert sound slow assets into cash when necessary. The Corporation deserves
the support of all the banks and we have urged the members of the Illinois
Bankers Association to subscribe their respective quotas.
The committee consists of W. J. Rathje, Chairman of
Chicago; Mr, Abt, East St. Louis; Charles W. Boyden,
Sheffield; W. R. McGaughey of Decatur, and Earl H.
Reynolds of Chicago.
Bill of Representative Sawyer Aims to Protect Massa- Priority Claimed by State in Funds of Failed Banks—
Treasurer of West Virginia Asserts Such Rights
chusetts Depositors—Would Have Trust Companies
Over Its Deposits in Closed National Institution.
and Savings Banks File Guarantee Bond.
The method of,bandling State accounts and cheeks drawn
From the Boston "Daily Transcript" of Dec. 22 we take
against them in closed National banks in West Virginia is
the following:
the subject of a letter addressed by State Treasurer W.
413111 seeking to better protect depositors in trust companies and savings
S.
banks which may hereafter be opened for business by requiring that before Johnson to the Comptroller of the Currency, John W. Pole.
receiving deposits from the public such banks shall file with the
State Noting that, Mr. Johnson describes the situation as "inBanking Commissioner a bond as guarantee of indemnity equal to twice
tolerable." A dispatch Dec. 4 from Charleston, W.
the amount of its capital stock, which shall inure to the benefit of the
Va.,
depositors, was filed with the clerk of the House of Representatives
to the "United States Daily" gives the letter of Mr.
to-day
Johnson
by Roland D. Sawyer of Ware. The text of the bill reads:
as follows:
"Any trust company chartered after the passage of this act shall, before
receiving deposits from the public, file with the Banking Commissio
ner a
bond as guarantee of indemnity equal to twice the amount of its capital
Mr. Comptroller: An intolerable situation has developed
in West Virginia
in connection with the handling of the accounts of the
State by your receivers of a large:number of defunct National banks.
234
FINANCIAL CHRONICLE
[VoL. 134.
The other banking bill introduced by the Committee would revise the
supervision and control of the State Banking Department over State banks
and provide for the reorganization of the Department, adding an Advisory
Council.
Local Clearing Rouses.
The group bank bill proposes local clearing house associations to which
banks, both State and National, must belong in order to receive State
"privileges," and to which they would not be permitted to belong if more
than 10% of their capital stock is owned by a holding company.
The section of the Governor's message dealing with reorganization of the
Banking Department follows in full text:
There are people to-day who urge that this is not a proper time for the
enactment of legislation relating to the subject of banking. It is better
to call the doctor before someone is sick and avoid the sickness entirely.
but if we have failed to do that and the sickness comes upon us, we need
the best medici attention that can be provided. Banking more than any
other occupation is founded on confidence. The public generally is fully
aware that all of our economic institutions, including banks, have felt the
effect of this depression.
We do not help the banking situation by attempting either to ignore it
or to do nothing about it. We cannot in one year correct the mistakes
of the past 20 years. But we can do all within our power to prevent the
consequences of the past 20 years from doing any more damage than is
Preference Claims.
the
character
necessary, and we can learn by our mistakes in the past and do our best to
this
of
cases
in
It has always been my understanding that
all guard against them in the future.
funds set aside constituted a trust fund which had a preference over
hold otherApplying Best Remedies.
other claims. The receivers, however, or some of them at least,
Information
wise, and some of them inform me that they can give me no
I believe we can make no greater contribution to the stability of our
State
the
that
me
tell
them
of
Some
regarding the status of such funds.
banking system than for the public to know and understand that we are
will have to file a special claim for these items.
in which not ignoring this vital problem. We inspire confidence, not by putting
Some of these banks have been closed more than two months
but by convincing the public
money are tied up. our heads ostrich-fashion into the sand,
a large number of checks, aggregating a large sum of
for their that we understand our problem and are applying the best available
The people to whom the checks have been given are clamoring
remedies.
in which
money. They have had to make the checks good with the banks
It is just to say that the general condition of the great majority of the
affects
they were deposited or by which they were cashed. This situation
opinion banks in Wisconsin is better and stronger than that of any other State
my
to
what
causing
a large number of employees of the State,and is
similarly situated. It is our duty and our privilege to make that position
Is an unnecessary and uncalled for hardship.
to you by the
all have better, both now and in the future. The two bills presented
should
receivers
these
that
Comptroller,
Mr.
me,
to
It occurs
that they Interim Committee on Banking show that that Committee faced and
definite and detailed instructions regarding their duties, and
I
have
which
described.
out such dealt with the problem of banking in the attitude
should be men of sufficient intelligence and experience to carry
The Interim Committee on Banking composed of able representation
caused
instructions promptly which would obviate the chaos and confusion
banks of this State presents a comprethe
of
and
this
from
Legislature,
by a lack of prompt and intelligent action upon their part.
hensive and carefully prepared program representing their mature judgment. I know of no higher compliment that could have been paid to their
Legality in Doubt.
efforts
than the reception that has been given to the bills which they have
cannot,
checks
State
aforementioned
the
received
The closed banks that
prepared.
credit
take
to
right
a
have
imagination
of
stretch
any
by
opinion,
my
in
While there are objections to their program,the objections relate to underaside
for same,refuse to pay them and at the same time keep the money set
lying matters of public policy. No question or suggestion has been raised
for their payment. Such a course would not bear the searchlight of justice that their program is ill-considered or poorly drawn. If you agree with
and equity.
the objectives which these bills seek to obtain, you will agree with the
In my opinion, if you should hold that such items do not constitute a banking program. If you disagree with the objectives desired by the
preferred claim payable immediately, then you should instruct your re- Interim Committee on Banking, you will oppose one or both of these bills.
ceivers to credit the State's account back with all such items and return
By
Stronger Supervision.
the checks through the regular channels as dishonored and unpaid.
The first bill revises and strengthens the supervision and control of the
this procedure when such checks were properly presented to me, new
would
This
State Banking Department over State banks and provides for the reorganichecks drawn on solvent banks could be given in lieu thereof.
zation of the Banking Department. It broadens the definition of banking
enable the State to promptly discharge its obligations.
as
up
tied
are
State
the
of
employees
the
of
many
of
checks
salary
The
to include those corporations and individuals who are in fact in the banking
hereinbefore explained. While the State has issued checks to them, they business, but are not now under the control or supervision of the Banking
deposited
Department.
have not really been paid, because the banks in which they were
The banking laws of Wisconsin were last revised in the Legislative session
or cashed have been unable to make collections on them and have been
State
the
whom
contractors
Many
back.
them
charge
to
of 1905. Since that time vast changes have taken place in every phase
compelled
attempted to pay by Issuing checks to them have not in reality been paid. of our life. It is clear we need thorough revision of the legislation relating
of to banks. This first bill relates to the revision of this part of the banking
The treasurer, however, cannot issue duplicate or new checks in lieu
the ones heretofore issued and tied up, as before stated, until such checks law. It recognizes that three factors have been primarily responsible for the
difficulties of our financial institutions: (1) the economic depression,
are returned to him.
Slate Amply Protected.
(2) management and (3) overbanking.
This bill recognizes that the Banking Department can do a great deal,
The State cannot, as suggested by some of the receivers, entertain the
in the matter of bank managethought of filing a special claim against the closed banks for these items. if given adequate personnel and authority,
Heretofore the Banking Commissioner's powers
The State is protected for all State funds in the closed banks by depository ment and over-banking.
practically to closing banks. But closing a bank is not
bonds given it by the banks. The State has instituted action against the have been limited
proposal in this bill is to improve the personnel of the
bondsmen of each National bank to collect from them the amount due the a remedy. The
by placing its personnel under the protection of the
Department
these
Banking
State. If the State should file a special claim against the banks for
and to provide 'adequate compensation so that the
items, the claim would be against the bank only and not against the bank Civil Service Law,
services of men who have the experience, the character
and its sureties jointly. If the State should file a special claim against State can obtain the
adequately the responsibility of this important
the banks, it would likely be several years before the banks would be and the ability to discharge
department.
liquidated.
Advisory Council.
It is imperative that prompt collections be made from these closed banks
will
This bill gives to the Banking Department wider authority over the
within this fiscal year, as every dollar of the revenue estimated that
and if there management of the banks and over the individuals who conduct them.
be raised during the fiscal year is specifically appropriated,
would simply Recognizing that no one individual should have either the authority or the
are any amounts uncollected at the end of the fiscal year, it
appropriations.
of
expenditure
responsibilty to discharge these widened powers, this bill creates an Advisory
the
of
mean a corresponding curtailment
adjust- Council composed offive members to be appointed by the Governor and conWe do not have any trouble in securing a prompt and equitable
adjustments are firmed by the Senate. This Advisory Council would be composed both
ment of similar situations with our State banks. Proper
see no possible of bankers and representatives of the economic interests of the State. It
Immediately made upon a request from this office, and I can
are subjected is their duty to advise with the Banking Commissioner and likewise to act
we
which
to
action
excuse for the delays and uncertainty of
as a board of review to enable any bank or individual aggrieved or disby the receivers of National banks.
which is caus- satisfied with the action of the Banking Commissioner to present his case
To the end that this intolerable situation in West Virginia,
up
cleared
promptly
and obtain, if he is entitled to it, a reversal of the order of the Banking
ing endless chaos, confusion and hardship, may be
•
situation your immedi- Commissioner.
and adjusted, I am going to suggest that you give the
all have definite
The problem of over-banking has nothing to do with Independent banking,
ate personal attention, and see to it that your receivers
are promptly chain banking, branch banking or group banking. Over-banking has been
instructions what to do,and see to it also that such instructions
caused by the granting of too many bank charters and by changes in our
complied with.
by other methods of transportation. Twenty-five years ago a community may have
government
of
I dislike very much to criticize the administration
of the been in position to support one or more banks, while to-day—with the
Officials, but I feel justified in doing so on account of the conduct
shortening of distances by automobile transportation—it may not be able
affairs of the closed National banks in this State.
to support adequately the number of banks that it now has.
This bill stabilizes the policy of the Banking Department by providing
of bank charters.
Revised Control of Banks Asked for Wisconsin—Crea- appeals to the courts in the granting or refusing
Joint Responsibility.
tion of Advisory Group to Co-operate with DepartThe Interim Committee on Banking takes the position, with which I
ment and to Act As Board of Review Urged—
heartily agree, that bankers as a profession and the State as a whole owe a
of any bank
Governor's Message.
joint responsibility in the conduct of banking; that the failure
upon not only every other bank, but upon the whole
The concentration of control of credit through chain or causes hardship
economic life of the community affected. In a large proportion of cases
group banking is the subject of one of the two banking bills this problem of over-banking can be worked out, without loss to the deconfor
Banking
on
positors, by gradual liquidation, consolidation with other banks or imprepared by the Interim Committee
of management.
sideration by the special session of the Wisconsin Legislature provement
But this problem of over-banking can only be met by some constructive
which convened Nov. 24. The proposed measure offera a action. If left to itself—without help, supervision or direction—It means
"constructive solution to the problem," Governor Philip F. that many banks in the United States will sooner or later close, with the
loss to the innocent depositor. This problem is met by giving
La Follette told the Legislature in his message. This is consequent
the Banking Commissioner greater authority over management and by givlearned from Madison (Wis.) advices Nov. 25 to the "United ing him authority, under proper safe-guards, to order consolidations of
banks.
States Daily," which also had the following to say:
Lack Uniform Policies.
They do not seem to have any uniform policy of procedure. They give
conflicting interpretations as to their rights and duties. The action of your
receivers, or rather a lack of action upon their part is causing endless confusion and hardships upon our citizens, and is seriously handicapping the
State in an orderly conduct of its business. Many of your receivers apparently do not know what to do and cannot give an intelligent answer to
questions of an elementary character.
Prior to the closing of these National banks, I issued a large number of
State checks paying sundry and various obligations of the State. Among
these were a large number of salary checks. These checks were received
by the banks upon which they were drawn and charged to their respective
accounts of State funds. The money was set aside by the banks for the
payment of these checks. In most cases remittances were made to the
branch of the Federal Reserve Bank front which the checks were received.
Before the remittances or advices to pay reached the Federal Reserve
Bank they had notice that the banks from which such remittances or advices were received had closed and the acceptances of such remittances
were refused.
of
In such cases the closed banks have both the credit for the payment
the checks and the money that was set aside by them for such payment.
JAN.
9 1932.]
FINANCIAL CHRONICLE
No one contends that if this program is adopted there would never be
any bank failures. We do contend that if this bill is adopted together
with the bill providing for the establishment of clearing house association
s,
there would be far less bank failures than if the situation were left without
leadership or direction. I commend this first bill of the Interim Committee on Banking to your earnest consideration and call your attention
to
the fact that it has the almost unanimous support of the banking profession
and Is free from any partisan question, and that it can bo adopted even
though two-thirds of both houses of this Legislature are not in agreement
with our position upon chain banking.
New Plan Asked in Wisconsin for Clearing Houses—
Local Systems Would Bar Banks With More Than
10% of Stock in Holding Companies.
A system of locally organized clearing house associati
ons
which both State and National banks in Wisconsin would
be
expected to join was recommended in the message which
Governor Philip F. La Follette gave to the special session
of the Legislature, said advices from Madison, Wis. Nov.27,
to the "United States Daily" which further said:
• "All
235
Chain banking in Wisconsin is conducted, We any other banking
business,
for profit. The banks In the chain system have made loans
to other banks
in Wisconsin. As of Sept. 29, the parent bank of our largest
chain system
had loaned approximately $3,250,000 to other banks.
On the same date, however, it had between $25,000,000 and
1630,000,000
that belonged to the banks of Wisconsin. The loans which
this bank has
made to the other banks have been amply secured with
the best collateral
and interest paid in advance. This bank has never loaned
to the other
banks any substantial part of the money which the other banks
have themselves had on deposit.
Security in Chains.
It is essential that we understand clearly that there is nothing in
the system of either independent or chain banking that in and of itself makes
for
security of deposits. Benjamin Anderson, chief economist for the
largest
bank in the world, quotes with approval the following statement;"'After
all, good banking is not a matter of size. A properly conducted
small
country bank can be as safe as a large city institution with many
branches.
Success in the banking field depends on good management whether
the unit
be large or small. . .
"
The issue between chain and independent banking does not mean
that
those who oppose chain banking are not in favor of strong and
stable banks.
Every sensible person wants just that and every careful student
of the
banking question freely acknowledges that strength and stability of
banks
are not determined by whether the bank belongs to a group, is a branch,
or
is independent. It depends first, upon certain economic factors, and
second, upon management.
the privileges within the control of the State"
would be granted
exclusively to members of the associations, and
membership would be
denied to banks more than 10% of whose stock is
owned by holding companies. The program outlined, according to the
Ownership and Control.
Governor, would give
to the banks "a great deal more than is offered by
The issue involved in chain banking is: Who is to own and control
any program of chain or
the
group banking."
money that the people produce? Is it to be owned and controlled by that
The bill transmitted to the Legislature was
communit
y
or
is
it
to
be
owned
and controlled by individuals and corporaprepared by the Interim
Committee on Banking.
tions a long way off? Are we to have democratic or autocratic control
of
our credit system?
Control of Credit System.
If we were actually confronted with the alternative of the loss of every
The section of the Governor's message, dealing
with clearing house dollar
we now own as against the control of our future earning power, I
associations and chain and group banking follows in
full text:
would have no question in deciding in favor of the control of our future
The other bill recommended by the Interim Committe
e on Banking earnings. The
offers a constructive solution to the problem of the
total number of dollars in all of the banks of Wisconsin
concentration of control to-day represents
of our credit system through chain or group banking.
less than half of the income of the people of Wisconsin
in a single year. Regardless of the rights of our children we of to-day
The majority of the members of this Legislature and
all of the State would
be making a very poor bargain to sell the control of our economic
Officers were elected upon a platform which pledges
us to use the powers
future for a price amounting to less than half of one year's income.
possessed by the State to enable the people of Wisconsin
to keep control
of the credit which they have created. This bill fulfils
Strong Banks As Objective.
that platform commitment. I recommend its adoption, not alone because of
our
But we confront no such choice. The chief objective of the banking
obligation to the voters of this State but because the remedy contractual
it proposes program here recommended Is to give Wisconsin strong and stable
Is right and in the best interests of the people of Wisconsin.
banks
and at the same time to keep the control of our own money. If this program is adopted Wisconsin takes the position that alien ownership and
Clearing House Proposed.
stock
speculation are to have no place in the public banking system of
This bill authorizes and directs the Banking Commissio
this State.
ner to establish
This banking program is in keeping with the basic program we are trying
in the State of Wisconsin clearing house associations
composed of both State to pursue, namely of enabling the
and National banks. This would divide the
various parts of our economic life to
State into natural commercial construct machinery that
will enable them to govern themselves. It is
and business districts and unite the banks
within such natural districts again an applicatio of America's
n
experience and tradition to the problems
Into homogeneous groups with common economic
interests.
which we face.
At the outset, every bank in this State would
be eligible to membership,
subject to the limitations I shall call to your
attention. Once established
it would mean that all of the banks of this State
would be grouped together Proposal for Legislation to Fix Commodity Prices at
Into local associations. Each group is given
the machinery and the author1926 Level Through Currency and Credit Reguity,subject to common supervision by the Banking
Department, of governing and regulating the conduct of its members.
lation by Federal Reserve Board.
From
time
to
time
these
several associations will be able to establish
and enforce standards and
Coincident with word from the office of Comptroller of
regulations which will insure the highest
degree of stability and security
for the depositor.
the Currency Pole respecting the valuation of holdings of
Through a relatively small contribution
by each of the member banks each bonds by National banks, it was learned (according to a
will be able to receive and be guided by
research, information, advice and Washington Dispatch, Dec.
31, to the New York "Herald
suggestions heretofore limited to only those
institutions with great aggregations of wealth. It would enable the
member banks to participate in Tribune"), that the American Farm Bureau Federation,
the underwriting and the sale of the
safest and most desirable securities at the National Grange and the National Farmers' Union are
the best possible prices. This plan will
give to all of the banks of Wisconsin behind a movemen
t to press for legislation in Congress next
every benefit and a great deal more than
is offered by any program of chain
or group banking.
month to fix commodi
Membership Limitations.
The limitation upon membership in
these
become a member where 10% or more of associations is that no bank may
its
pany. This limitation is inserted, first, stock is held by a holding combecause the holding company is
the device used for the creation of
chain or group banking and, second,
because the ownership of bank stock by
holding companies Is the method
by which stock speculation is interjected
into banking. If speculation in
stocks has any justification in other fields,
it certainly has no place in the
banking profession.
One of the substantial evils of chain or group
banking is that it introduces
stock promotion into the ownership of banks.
Banking deals primarily
with other people's money. Those that are
to by speculative
profits and various forms of gambling have appealed
no place in and should
be
ruthlessly excluded from banking.
Plans for Control.
In order to encourage and foster independent
banking, eliminate stock
promotion and eventually bring about a
complete restoration of local
ownership and control of credit in Wisconsin, all
of the privileges within
the control of the State are granted exclusively to
those banks that are
members of the clearing house associations.
Putting this program in the simplest terms, its
adoption would mean:
The State agrees to give those rights and privileges over
which it has control
to the banks in this State that agree:
(a) That they will co-operate and work one with another
to give Wisconsin a strong safe and stable banking system.
(b) That so far as humanly possible stock speculation and
promotion
are to be eliminated from the banking system of Wisconsin.
(c) That they will agree that the ownership of banks should
be in the
hands of individuals who primarily reside in and are a part
of the community life whose money is deposited in their banks.
(d) That they will stand together and discharge the obligations of
their
profession toward the public by recognizing their responsibility not
only
for their own individual banks but for the other banks within
their own
territory.
Claims Discussed.
The people of this State have spoken In unmistakable terms in opposition
to the establishment of any system of banking which cans loss of the
control of their own money. It is now argued by some, however,
that in
view of the economic depression nothing should be done with
reference to
the chain banking question. They argue that the chain banks
are more
stable; that the chain banking system is not now doing any harm,
but, on
the contrary, it is being helpful to other banks in this State
through the
snaking of loans to those institutions: and that it would, therefore,
be best
to do nothing about the matter at the present time.
ty prices at the 1926 level through the
regulation of currency and credit by the Federal Reserve
Board and other agencies. The dispatch went on to say:
Measures for this purpose will be taken up both in House and Senate
committees, it was said to-day by Representative C. W. Ramseyer,
Republican, of Iowa, who is a member of the American Farm Bureau Federation
committee on stabilization of the unit of value. As the sponsor of a
bill on
the subject, he gave out a statement to-day urging price stabilization legislation and the need of moderate inflation and holding that Congress should
start the new year by giving attention to this as "the key log in the jam."
Moderate Inflation I. rged.
"A moderate and controlled inflation to restore the commodity!price level
is absolutely necessary," said Mr. Ramseyer. "Such a restoration of the
general price level is fundamental to economic recovery. That would
restore debt paying and purchasing power to the farmers and in turn would
create a demand for commodities from factories now idle to be manned by
laborers now unemployed.
"Much has been said about overproduction being the cause of depression.
Facts and statistics do not warrant such a conclusion. The best economic
thought of the country is coming more and more to the conclusion that economic depression is a money and credit trouble and is not a result of overproduction.
"Additional capital to enable the Federal Land Banks to function again,
adequate finances for the Reconstruction Finance Corporati
on and the
establishment of Federal Home Loan Banks will help to expand credit and
to restore confidence. Then the Federal Reserve System must
either adopt
or be given a definite yardstick or standard
to guide its future operations
such as is provided in my bill, H. R. 128,
directing that system to use all
its powers to restore the general level
commodit
of
y prices to that for the
year 1926. And thereafter to stabilize
as nearly as possible the general
average of commodity prices on such basis."
Offering of $50,000,000 or Thereabouts of 91-Day
Treasury Bills.
A new issue of 91-day Treasury bills, to the amount of
or thereabouts, was announced by Secretary of
the Treasury Mellon Jan. 6. Tenders for the new issue will
be received at the Federal Reserve Banks and their branches
up to 2 p. m. Eastern standard time on Monday, Jan.
11.
The bills will be dated Jan. 13 1932 and will mature
on
April 13 1932. The face amount will be payable
on the
$50,000,000
236
FINANCIAL CHRONICLE
maturity date without interest. The bills will be issued in
bearer form only, in denominations of $1,000, $10,000,
$100,000, $500,000 and $1,000,000 (maturity value). The
bills are sold on a discount basis to the highest bidders.
According to Washington advices Jan. 6 to the New York
"Times" bills are now outstanding in the amount of $576,387,000, maturing in January, February and March.
Secretary Mellon's announcement follows:
The Secretary of the Treasury gives notice that tenders are invited for
Treasury bills to the amount of $50,000,000, or thereabouts. They will
be 91-day bills; and will be sold on a discount basis to the highest bidders.
Tenders will be received at the Federal Reserve Banks, or the branches
thereof, up to two o'clock p. m. Eastern standard time, on Monday.
Jan. 11 1932. Tenders will not be received at the Treasury Department.
Washington.
Aprll 13
The Treasury bills will be dated Jan. 13 1932,and will mature on
payable without
1932, and on the maturity date the face amount will be
or deamounts
in
and
only,
interest. They will be issued in bearer form
$1,000,000
nominations of $1,000. $10,000, 6100,000, 6500,000, and
(maturity value).
and forwarded In
It is urged that tenders be made on the printed forms
the Federal Reserve Banks
the special envelopes which will be supplied by
or branches upon application therefor.
will be considered. Each
No tender for an amount less than $1,000
price offered must be expressed
tender must be in multiples of $1,000. The
three decimal places, e. g., 99.125.
on the basis of 100, with not more than
Fractions must not be used.
deposit from incorporated banks
Tenders will be accepted without cash
and recognized dealers in Investand trust companies and from responsible
be accompanied by a deposit
ment securities. Tenders from others must
Treasury bills applied for, unless the tenders
of 10% of the face amount of
payment by an incorporated
are accompanied by an express guaranty of
bank or trust company.
of tenders on Jan. 11 1932,
receipt
for
hour
Inunediately after the closing
Banks or branches thereof up to
all tenders received at the Federal Reserve
announcement of the acceptable
the closing hour will be opened and public
probably on the following
prices will follow as soon as possible thereafter,
expressly reserves the right to
Treasury
the
of
morning. The Secretary
allot lees than the amount
reject any or all tenders or parts of tenders,and to
shall be final. Those subapplied for, and his action in any such respect
rejection thereof.
mitting tenders will be advised of the acceptance or
be made at
Payment at the price offered for Treasury bills allotted must
available funds on
the Federal Reserve Banks in cash or other Immediately
Jan. 13 1932.
interest, and any
The Treasury bills will be exempt, as to principal and
be exempt.from all
gain from the sale or other dispostilon thereof will also
or
taxation, except estate and inheritance taxes. No loss from the sale
deduction, or
other dispotition of the Treasury bills shall be allowed as a
imposed
hereafter
or
now
tax
any
of
otherwise recognized, for the purposes
by the United States or any of its possessions.
preTreasury Department Circular No.418, as amended,and this notice
conditions of their
scribe the terms of the Treasury bills and govern the
Reserve
Federal
any
from
obtained
be
issue. Copies of the circular may
Bank or branch thereof.
[Vol.. 134.
1933 the Ways and Means Committee will be prepared to act on the tariff
intelligently."
Committee Explains Measure.
The statement of the policy committee emphasized the conviction of the
Democratic leaders that "best results relating to the tariff" could be accomplished at this time by directing the Tariff Commission's cost investigations to be sent to Congress for action.
"Section 4," continues the statement, "looks to the lowering of excessive
tariff duties and the elimination of idscrinilnation and other unfair trade
practices and other economic barriers affecting international trade and
finance. It authorizes and invites an international economic conferecne
to be called by the President for the promotion of these purposes. The
committee does not undertake at this time a further or complete definition
of policy respecting tariffs.
"The committee decided that it is sound public policy to proceed as
speedily as it is practicable to balance the budget, but for the present announces no detailed plans as to rates."
Lewis Offers Measure of Own.
Representative David J. Lewis, Democrat of Maryland, and a former
member of the Tariff Commission, acted independently of his colleagues
and introduced his own bill dealing technically with the operation of the
flexible tariff. Outstanding in Representative Lewis's proposal was the
provision that failure of Congress to reject a recommendation of the Tariff
Commission within thirty days would result in the new duty becoming
effective. He would restrict the Commission to increases or decreases of
a maximum of 40%.
Minority Leader Snell characterized the bill as "A perfect Democratic
document with no beginning, no direction and ending God knows where."
Warning against the measure and its change in the flexible tariff also was
issued by H. L. Derby, Chairman of the tariff committee of the National
Association of Manufacturers.
The text of the bill, as introduced, follows:
A BILL to amend the tariff Act of 1930, and for other purposes.
Be it enacted by the Senate and Rouse of Representatives of the tailed States
of America in Congress assembled, That Section 336 of the Tariff Act of
1930 is amended to read as follows:
Sec. 336.—Recommendatfons for adjustment of duties. •
(a) Upon its own action or upon application of any interested party
showing good and sufficient reason therefor, the Commission shall investigate and ascertain the difference in the cost of production of any domestic
article and of any like or similar foreign article.
If the Commission finds it shown by the investigation that the duty
imposed by law upon the foreign article does not equalize the differences
in the cost of production of the domestic article and of the foreign article
when produced in the principal competing tountry, or countries, then the
Commission shall report to the President and to the Congress such increase
or decrease in the duty upon the foreign article as the Commission finds
necessary in order to equalize such differences in the cost of production.
Any such increased or decreased article from the dutiable list to the free
list or from the free list or from the free list to the dutiable list, a change
in the form of duty, or a change in classification.
The report shall be accompanied by a statement of the Commission
setting forth the findings of the Commission with respect to the differences
in costs of production, the elements of cost included in the cost of production of the respective articles as ascertained by the Commission, and any
other matter deemed pertinent by the Commission.
The President, upon receipt of any such report of the Commission, shall
promptly transmit the report to the Congress with his recommendations,
New Democratic Tariff Bill Introduced in Congress by If any, with respect to the increase or decrease in duty proposed by the
Representative Collier—No Changes in Rates Commission.
Any bill having for its object the carrying out, in whole or in part, of the
Proposed—Provides for International Conference
recommendations made by the Commission in any such report shall not
on Tariffs and Negotiation of Reciprocal Trade include any item not included in such report; and, in the consideration
Agreements—Cuts Power of President to Alter of such bill, either in the House of Representatives or in the Senate, no
amendment thereto shall be considered which is not germane to the items
Rates—Consumers Counsel Among Proposals.
included in such report.
(b) No report shall be made by the Commission under this section unless
On Jan. 4, when Congress reconvened after the Christmas
determination of the Commission with respect thereto is reached after
holidays, Representative Collier, Chairman of the House the
an investigation by the Commission, during the course of which the ComWays and Means Committee,introduced the Democratic mission shall have held hearings and given reasonable public notice of such
Washing- hearings,and reasonable opportunity for the parties interested to be present,
tariff program, confined chiefly [we quote from the
the produce evidence and to be heard. The Commission is authorized to adopt
ton account to the New York "Herald Triburke") to
such reasonable rules of procedure as may be necessary to execute its funcobjective of eliminating high duties and removing trade bar- tions under this section.
(c) Ascertaining the differences in costs of production under this secriers by means of an international economic conference and tion,
the Commission shall take into consideration in so far as it finds
The
the negotiations of reciprocal commercial agreements.
practicable:
say:
to
on
went
quoted,
paper
differences in conditions or production, including wages, costs
1.
The
dispatch to the
composed of Democratic of materials and other items in cost of production of like or similar articles
Approved by the party's policy committee,
immediate
downward
no
provides
In the United States and in competing foreign countries;
leaders in the House and Senate, the bill
administration of the flexible
2. Costs of transportation;
revision of the rates; proposes to take the
in
Congress,
operation
its
lodge
and
President
the
3. Other costs, including the cost of containers and coverings of whattariff out of the hands of
to carry the ever nature, and other charges and expenses incident to placing the article
Congress,
to
responsible
counsel,
consumer's
and creates a
The
policy
Tariff Commission.
in condition, packed ready for delivery, storage costs in the principal marcase of the consuming public before the
define further the Democratic ket or markets of the United States and of the principal competing country
committee did not undertake at this time to
or countries, and costs of reconditioning or repacking wherever incurred;
tariff policy.
to call an international
4. Differences between the domestic and foreign article in packing and
With the addition of the request of the President
"to negotiate reciprocal trade containers, and in condition in which received in the principal markets of
economic conference and authorizing him
elaboration
an
is
measure
the United States;
agreements and a policy of mutual tariffs," the
amendments eliminated in
5. Differences in wholesale selling prices of domestic and foreign articles
of the so-called Simmons-Norris and the George
1930.
in
law
tariff
in
-Smoot
the principal markets of the United States in so far as such prices are
Hawley
the conference on the
tariff with the Presi- Indicative of costs of production, provided such costs cannot be satisfactorily
Instead of reposing the power to exercise the flexible
Collier
the
obtained;
dent the recommendations of the Tariff Commission, under
6. Advantages granted to foreign producer by a foreign government
bill, would be passed on to Congress for approval or rejection.
Hawley
the
on
debate
the
in
legislation
or by a person, partnership, corporation or association in a foreign countariff
What was called "pop-gun"
Smoot bill, would be resorted to by limiting the action of Congress in each try; and
7. Any other advantage or disadvantage in competition which increases
instance to the specific commodity upon which the Tariff Commission
had reported, thus avoiding a general tariff revision every time a rate change or decreases in a definitely determinable amount the total cost at which
domestic or foreign articles may be delivered in the principal market or
was proposed.
Hearing to Begin To-day.
markets of the United States; and
8. Definition of costs of transportation; costs of transportation for the
The measure, immediately brought under the fire of Representative Bersection shall be held to include, in so far as applicable:
trand H.Snell, of New York, Republican leader, as a mere political gesture, purpose of this
(1) Foreign charges and all charges incident to transportation, including
will be given a brief hearing by the Ways and Means Committee to-morrow.
costs of loading and unloading, and port charges and
Every effort will be made to put it before the House Wednesday and rush transit insurance,
landing charges. These costs shall be computed to such principal market
it to a vote before the end of the week.
United States as may most nearly insure equal centthe
Representatives of the State and Treasury Departments and the Tariff or markets of
to domestic articles and like or similar foreign articles
Commission, Chairman Collier said, will be heard, and the proposed legis- Petitive opportunity
consuming region or regions of the United States. If this
lation will be reported to the House as privileged revenue legislation from the in the principal
accomplished thereby, such costs on domestic articles
Ways and Means Committee. The White House was informed by Mr. purpose may be best foreign articles shall be computed to different prinCollier to-day that any representatives of the Government would be heard. and on like or similar
United States.
"The chief purpose of this plan," said Speaker John N. Garner, "is to cipal markets of the
(2) (a) In the case of Imported articles the cost of transporting such
get Information on the difference in cost of production at home and abroad,
of substantial production in the principal competing
areas
so that when a Democratic President, House and Senate are in power in articles from the
JAN. 9 1932.]
FINANCIAL CHRONICLE
country to the principal port of importation of such article into the United
States; and (b) in the case of domestic articles, the cost of transporting
such article from the areas of substantial production that can reasonably
be expected to ship the article thereto to the principal port of importation
into the United States of the like or similar competitive article.
Sec. 2. All uncompleted investigations instituted prior to the approval
of this Act under section 336 of the Tariff Act of 1930 prior to its amendment by this Act, including investigations in which the President has not
proclaimed changes in classification of in basis of value or increases or decreases in rates of duty, shall be dismissed without prejudice, but the information and evidence secured by the Commission in any such investigation may be given due consideration in any investigation instituted under
the provisions ofsection 336 of the Tariff Act of 1930 as amended by this Act.
Sec. 3.—Consumers' Counsel.
(a) There shall be an office in the legislative branch of the government
to be known as the Office of the Consumers' Counsel of the United States
Tariff Commission. The office shall be in charge of a counsel to be appointed by the President, by and with the advice and consent of the Senate.
No persons shall be eligible for appointment as counsel if such person has
at any time acted in tariff matters, before Congress or the United States
Tariff Commission, either on his own behalf or as attorney-at-law or in
fact or as legislative agent. The counsel shall be appointed for a term of
four years and shall receive a salary of $12,000 a year. The counsel shall
not actively engage in any other business, vocation or employment than
that of serving as counsel.
(b) It shall be the duty of the counsel to appear in the interest of the
consuming public in any proceeding before the Commission, and to conduct such independent investigations of matters relative to the tariff laws
of the United States as he may deem necessary to enable him properly to
represent the consuming public in any proceeding before the Commission.
In any proceeding before the Commission in which the counsel has entered
an appearance the counsel shall have the right to offer any relevant testimony and argument, oral or written, and to examine and cross-examine
witnesses and parties to the proceeding and shall have the right to have
subpoena or other process of the Commission in his behalf. Whenever
the counsel finds that it is in the interest of the consuming public to have
the Commission furnish any information at its command or conduct any
investigation as to differences in cost of production or other matters within
its authority, then the counsel shall so certify to the Commission testifying
in the certificate the information or investigation desired.
Thereupon the Commission shall promptly furnish to the counsel the
information or promptly conduct the investigation and place the results
thereof at the disposal of the counsel.
(c) Within the limitations of such appropriations as the Congress may
from time to time provide, the counsel is authorized (subject to the civil
service laws and the classification Act of 1923 as amended) to appoint and
fix the salaries of such assistants and clerks and is authorized to make such
expenditure as may be necessary for the performance of the duties vested
in him.
Sec. 4.—Isternational Economic Conference.
That the President is respectfully requested to initiate a movement for
a permanent international economic conference with a view to (a) lowering
excessive tariff duties and eliminating discriminatory and unfair trade
practices, and other economic barriers affecting international trade and
finance; (ln preventing retaliatory tariff measures and economic wars.
and (c) promoting fair, equal and friendly trade and commercial relations
between nations; but with the understanding that the question of the cancellation or reduction of inter-governmental debts shall not be considered
or discussed by the representatives of the United States in such conference:
and
That the President be, and be is hereby, authorized and requested at as
early a date as may be convenient to proceed to negotiate with foreign
governments reciprocal trade agreements under a policy of mutual tariff
concessions.
237
them Is a military fortification of importance, and it is easy enough to get
international agreement that they will never be so fortified against us.
In short, Representative McFadden's proposal is hurtful to us, would
almost certainly be rejected by the natives of the colonies which he seeks
to transfer, and would arouse ill-will and resentment in both Great Britain
and France, which
and resentment are dangerous both to Peace
and prosperity.
When Representative McFadden admitted that Germany should not
pay any more reparations and suggested that the Allies pay their debts
by transferring colonies, he virtually abandoned the most important part
of his original case against the moratorium.
NORMAN THOMAS.
New York. Dec. 28 1931.
The above is published by us because of the fact that
space was given in our Jan. 2 issue (page 60) to an account
from the "Times" of a debate between Representative
McFadden and Mr. Thomas, bearing on proposals respecting war debts.
Congress Convenes After Christmas Holidays.
Congress came together again this week after the Christmas holidays. On Dec. 22 the Senate agreed to the resolution passed by the House for a Congressional recess from
Dec. 22 to Jan. 4. In reporting the Senate action a Washington disptach Dec. 22 to the New York "Times 'said:
Fight Out Adjournment Issue.
After the final vote on the moratorium, the Senate fought its out differences over whether to return from the holidays on Jan. 4, as the House has
arranged to do,or to come back here Dec.28,in order to deal with President
Hoover's economic program. Including formation of the 3500,000,000
Reconstruction Finance Corporation, and an appropriation of 3100.000,000
for the Federal Land Banks.
Senator Borah forced a vote on his motion for a shorter recess more than
a week after the first announcement of his intention caused a flurry in the
Senate, due to the fact that Senator Watson (Rep.), and Senator Robinson
(Dem.), already had agreed with leaders of the House that Congress should
take its customary holiday.
Senator Borah had said it was a "crime" to adjourn for such a leisurely
vacation when so much distress remained to be relieved. Senator Reed
to-day supported him principally on the ground that railroads will suffer
if they do not receive immediate relief through legislation.
Senator Brookhart of Iowa reminded Senator Reed that he had opposed
a special sessilon of Congress last fall and said: "Yet now he comes up with
crocodile tears on behalf of the railroads. I didn't hear any crocodile tears
falling when the plight of the farmers was being considered."
On a roll-call, Senator Broah's amendment to make the holiday recess end
on Dec 28 was defeated. 39 to 33. The House resolution which provides
for returning Jan. 4 then was agreed to and the Senate adjourned at 11
o'clock.
Passage by Senate of Resolution Providing Additional
Appropriation of $200,000,000 for Loans on World
War Veterans Certificates.
The House resolution appropriating an additional $200,000,000 for the payment of loans on soldier bonus certificates
was passed by the Senate on Dec. 19. The resolution also
Democratic plans to rush their tariff revision program carried an item of $3,925,000 for adjusted service and dethrough the House failed on Jan. 5 (said a dispatch to the pendent pay. The legislation was the first of the Demo'Herald Tribune") when a Republican minority forced cratic House to be acted upon by the Republican Senate,
the Ways and Means Committee to postpone hearings on the
legislation until the White House and Treasury have had Vice-Chair
man Ray of Legislative Committee of Vetertime to present adequate arguments against the plan.
ans of Foreign Wars Says Full Payment of Soldiers'
Yesterday (Jan. 8) Associated Press accounts from
Bonus Would Increase Circulation of Money.
Washington said:
Associated Press dispatches from Washington, Jan. 8,
A test vote in the House showed to-day the strength the Democrats
can command to pass their tariff bill.
said:
By 214 to 174 the House voted to take up the measure, which would
make administrative changes in the present law but would leave the HawleySmoot levies where they now stand.
The vote, which decided that the House would take up the bill under
regular procedure without limiting debate, came after opening word
skirmishes between Democrats and Republicans.
Vice-Chairman Ray of the Veterans of Foreign Wars' National Legislative Committee estimated to-day that full payment of the soldiers' booms
certificates would increase the circulation of money by $18 per capita in
this country.
In a statement supporting the bill of Representative Patman, Democrat,
of Texas, calling for full payment, Mr. Ray said his organization Woad
renew its efforts to obtain enactment of the bill.
"A poll recently made indicates that many Congressmen, previously
neutral or opposed, are now committing themselves to the support of the
bill," he said.
Disputing Mr. McFadden—Norman Thomas Would Not
Have War Debts Paid in Men.
The foilowing addressed to the Editor of the New York
"Times" is from the Dec. 31 issue of that paper:
9,000 Measures Presented in New Congress-6 Passed.
Newspapers generally, and quite properly, give publicity this morning
In four weeks of only 14 working days, members of Conto the fact that Representative McFadden, in a debate with me yesterday
over WOR on the debt situation, suggested in his second speech that Great gress have introduced 9,000 bills,
a record for the time, said
Britain and France turn over to the United States their Caribbean colonies
Associated Press advices, Jan. 2, from Washington, from
as payments for the war debts.
Since this suggestion was made in a second speech, which I had no which we also quote as follows:
opportunity either to anticipate or answer,I should like to say how unalterably I am opposed to it. I do not think the American people have reached
the stage where they want money debts paid in men, and to turn over
these colonies to us without even a referendum would be a payment of
debts in men. Any one who knows the conditions in these colonies and
who is aware of the discontent of Porto Rico and the Virgin Islands under
American rule knows that in almost all of them a referendum would go
against transfer to America. The Negroes of Jamaica, for instance, have
no reason to want to live under the tender mercies of our race prejudice
They have the same right to self-determination that Mr. McFadden grants
to Canada. His whole proposal would simply create new trouble In the
troubled world.
Not only do the natives of these colonies not want to be transferred
to the United States, but we have no reason to want them. Properly
administered they would be a source of expense rather than of revenue.
Neither is there any danger at all that they would be useful bases for our
enemies in another war. Rather, like Canada, they would be hostages
against the likelihood of war, since they are easily capturable. None of
Returning to their desks after the holidays, they face this mountain of
printed paper. Ordinarily such a pile would be the accumulation of three
or four ,months.
In the House 6,659 bills have been presented, and In the Senate 2,419.
Only a scant handful has gone even half way toward passage. Among
these is the proposal to increase the capital of Land Banks, passed by the
House and now in the hands of the Senate Banking Committee. Thousands
will die of neglect and others will be pushed aside. So far, only sir
resolutions and bills have been approved and passed.
These include approval of the international one-year moratorium, the
appropriation of $200,000,000 for the Veterans' Administration, a much
smaller grant of funds for the Employment Service, permission for Olympic
athletes to enter free of immigration restrictions, extension of the War
Policies Commission, and a bill by Senator Norris of Nebraska amending
the penal laws.
The first 10 bills in each branch are first on the list for consideration
when Congress reconvenes to-morrow. Five of the first 10 in the House
238
:e'INANCIAL CHRONICLE
bear the name of Representative La Guardia of New York. Senator King
of Utah submitted four of the first 10 Senate bills.
[Vox.. 134.
This does not mean that we are insensible to the welfare of other nations
or that our own self-interest is not involved in economic rehabilitation
abroad which would restore the markets for our agricultural and other
commodities. But it is our duty to devote ourselves to the problems of our
own internal economy not only as the first necessity to domestic welfare, but
as our best contribution to the stability of the world as a whole.
Action in these matters by the Congress will go far to re-estbalish confidence, to restore the functioning of our economic system and to rebuilding
of prices and values and to quickening employment. Our justified hope and
confidence for the future rest upon unity of our people and of the Government in prompt and courageous action.
HERBERT HOOVER.
The White House, Jan. 4 1932,
President Hoover in Message to Congress Urges Action
on Legislation Recommended in Annual Message.
In a special message addressed to Congress on Jan. 4,
following its reconvening that day after the Christmas
recess, President Hoover urged immediate Congressional
action on measures recommended for enactment in his
annual message Dec. 8. The measures on which the President has urged action without delay call for:
President Hoover's Address at Conference on Home
Strengthening of the Federal Land Bank system; the bill has already
Building and Home Ownership—Purpose of Which
passed the House.
Is to Stimulate Individual Action—Advocates MakCreation of the 8500,000,000 Reconstruction Finance Corporation.
Creation of a Home Loan Discount Bank.
ing Home Available Through Installment PurEnlargement of the rediscount facilities of Federal Reserve Banks.
chases to Those Whose Initial Resources Are
Development of a plan to distribute to depositors money in closed banks.
Revision of laws relating to transportation as recommended by the
Limited to 25%.
Inter-State Commerce Commission, to "restore confidence in the bonds of
Addressing,
in Washington, on Dec. 2, the President's
our railways."
Conference on Home Building and Homo Ownership, PresiRevision of banking laws in order to better safeguard depositors. •
Reduction of Federal expenditures "adequate increase of taxes" and dent Hoover stated that "this conference has not been
called
"restriction of issues of Federal securities."
primarily on legislative questions." "Its major purposes,"
In his message this week the President says "action in he said, "is to stimulate individual action." In part the
these matters by the Congress will go far to re-establish President added:
confidence, to restore the functioning of our economic
It seeks a better planned use of our nation's energies and resources, espesystem and to rebuilding of prices and values and to quicken- cially those that are rooted in neighborliness and mutual help, and those
that find expression in our great national voluntary organizations, in our
ing employment." The message follows:
At the conveing of the Congress on Dec. 7, I laid proposals before it
designed to check the further degeneration in prices and values, to fortify
us against continued shocks from world instability and to unshackle the
forces of recovery. The need is manifestly even more evident than at the
date of my message a month ago. I should be derelict in my duty if I did
not at this time emphasize the paramount importance to the Nation of
constructive action upon these questions at the earliest possible moment.
These recommendations have been largely developed in consultation with
leading men of both parties, of agriculture, of labor, of banking and of
industry. They furnish the basis for full collaboration to effect these
purposes. They have no partisan character. We can and must replace
the unjustifiable fear in the country by confidence.
The principal subjects requiring immediate action are:
1. The strengthening of the Federal Land Bank System to aid the farmer
and to maintain at the highest level the credit of these institutions which
furnish agriculture with much needed capital. This measure has passed
the House of Representatives and is now before the Senate.
2. The 'creation of a Reconstruction Finance Corporation to furnish
during the period of the depression credits otherwise unobtainable under
existing circumstances in order to give confidence to agriculture, industry
and labor against further paralyzing influences. By such prompt assurance
we can reopen many credit channels and re-establish the normal working
of our commercial organization and thus contribute greatly to re-establish
the resumption of employment and stability in prices and values.
3. The creation of a system of Home Loan Discount Banks in order to
revive employment by new construction and to mitigate the difficulties of
many of our citizens in securing renewals of mortgages on their homes and
farms. It has the further purpose of permanent encouragement of home
ownership. To accomplish these pruposes we must so liberate the resources
of the country banks, the savings banks and the building and loan associations as to restore these institutions to normal functioning. Under the
proposal before the Congress most of the capital of these discount banks
would be subscribed by the institutions participating in their use and such
residue as might be necessary for the Federal Government to supply temporarily would be repaid in time by such institutions as in the case of the Farm
Loan Banks when they were first organized.
4. The discount facilities of our Federal Reserve Banks are restricted by
law more than that of the Central Banks in other countries. This restriction in times such as these limits the liquidity of the banks and tends to
increase the forces of deflation, cripples the smaller businesses, stifles new
enterprise and thus limits employment. I recommend an enlargement of
these discount privileges to take care of emergencies. To meet the needs
of our situation it will not be necessary to go even as far as the current
practice of foreign institutions of similar character. Such a measure has
the support of most of the governors of the Federal Reserve Banks.
5. The development of a plan to assure early distribution to depositors
in closed banks is necessary to relieve distress among millions of small
depositors and small businesses and to release vast MIMS of money now
frozen.
6. Revision of the laws relating to transportation in the direction recommended by the Inter-State Commerce Commission would strengthen our
principal transportation systems and restore confidence in the bonds of our
railways. These bonds are held largely by our insurance companies, our
savings banks, and benevolent trusts, and are therefore the property of
. nearly every family in the United States. The railways are the largest
employers of labor and purchasers of goods.
7. Revision of banking laws in order to better safeguard depositors.
8. The country must have confidence that the credit and stability of the
Federal Government will be maintained by drastic economy in expenditure;
by adequate increase of taxes, and by restriction of issues of Federal securities. The recent depreciation in prices of Government securities is a serious
warning which reflects the fear of further large and unnecessary issues of
such securities. Promptness in adopting an adequate budget relief to taxpayers by resolute economy and restriction in security issues is essential to
remove this uncertainty.
Combating a depression is indeed likes great war in that it is not a battle
upon a single front but upon many fronts. These measures are all a
necessary addition to the efficient and courageous efforts of our citizens
throughout the Nation. Our people through voluntary measures and
through State and local action are providing for distress. Through the
organized action of employers they are securing distribution of employment
and thus mitigating the hardships of the depression. Through the mobilization of national credit associations they are aiding the country greatly.
Our duty is so to supplement these steps as to make their efforts more
fruitful. The United States has the resources and resilience to make a
large measure of recovery independent of the rest of the world. Our internal
economy is our primary concern and we must fortify our economic structure
in order to meet any situation that may arise and by so doing lay the foundations for recovery.
schools and colleges, and in our research laboratories. . . . The basis
of its (the conference) action is to collate the whole of our experience to date,
to establish standards, to advance thought to a new plane from which
we may secure a revitalized start upon national progress in the building
and owning of homes.
We have, in normal times, through the savings banks, insurance companies, the building and loan associations and others, provided abundant
and mobile finance for 50% of the cost of a home through the first mortgage. But the definite problem is not presented by those who can find 50%
of the cost of a home. Our chief problem in finances relates to those who
have an earnest desire for a home, who have a job and, therefore, possess
sound character credit, but whose initial resources run to only 20 or 25%.
These people would willingly work and apply all their rent and all their
savings to gain for themselves this ndependence and security and social
well-being.
Such people are a good risk. They are the very basis of stability to the
nation. To find a way to meet their need is one of the problems that you
have to consider; that is, how we can make a home available for installment purchase on terms that dignify the name credit and not upon terms
of risks comparable to the credit extended by a pawnbroker.
In full the President's address follows:
Ladies and gentlemen:
I wish to extend to you a heartfelt welcome to this conference.
You have come from every State in the Union to consider a matter of
basic national interest. Your purpose is to consider it in its long view
rather than its emergency aspects. Next to food and clothing the housing
of a nation is its most vital social and economic problem. This conference
has been called especially to consider one great segment of that problem;
that is, in what manner can we facilitate the ownership of homes and how
can we protect the owners of homes?
The conference also has before it some phases of that other great segment
of housing; that is, the standards of tenement and apartment dwellings.
While at this time we give primary emphasis to home ownership in city,
town and farm,we are all of us concerned in the improvement ofcity housing.
I hope we may at some future time subject the question of city housing to
more definitely organized national intelligence, through which we shall
further establish standards which will give impetus to public understanding
and public action to this, the question of blighted areas and slums in many
of our great cities.
I am confident that the sentiment or home ownership is so embedded
in the American heart that millions of people who dwell in tenements,
apartments and rented rows of solid brick have the aspiration for wider
opportunity in ownership of their own homes. To possess one's own home
is the hope and ambition of almost every individual in our country, whether
he lives in hotel, apartment or tenement.
While the purpose of this conference is to study and advise upon the very
practical questions of home design, of materials, of building regulations,
ofzoning, of taxes, of transportation, offinancing, of parks and playgrounds
and other topics, yet behind it all every one of you here is impelled by the
high ideal and aspiration that each family may pass their days in the home
which they own; that they may nurture it as theirs; that it may be their
castle in all that exquisite sentiment which it surrounds with the sweetness
of family life. This aspiration penetrates the heart of our national wellbeing. It makes for happier married life, it makes for better children, it
makes for confidence and security, it makes for courage to meet the battle
of life, it makes fcr better citizenship.
There can be no fear for a democracy or self-government or for liberty
or freedom from home-owners, no matter how humble they may be.
There is a wide distinction between homes and mere housing. Those
immortal ballads, "Home, Sweet Home,""My Old Kentucky Home" and
"The Little Gray Home in the West," were not written about tenements
or apartments. They are the expressions of racial longing which find outlet
in the living poetry and songs of our people. They were written about an
individual abode, alive with the tender associations of childhood, the family
life at the fireside, the free out-of-doors, the independence, the security and
the pride in possession of the family's own home—the very seat of its being.
That our people should live in their own homes is a sentiment deep in the
heart of our race and of American life. We know that, as yet, is not universally possible to all. We know that many of our people must at all times
live under other conditions. But they never sing songs about a pile of rent
receipts. To own one's own home is a physical expression of individualism,
of enterprise, of independcnce and of the freedom of spirit. We do not in
our imagination attach to a transitory place that expression about a man's
home being his castle, no matter what its constitutional rights may be.
But to return to our practical problems. Over 30 committees embracing
the collective skill and experience of our country have been voluntarily
engaged for the past year in collecting the best of national experience from
every part of our country, in collating it into definite recommendations for
your consideration.
JAN. 9 1932.]
FINANCIAL CHRONICLE
239
Like the solution of all practical problems, the facts first must be dis- counts from Washington Jan. 5 the Senate sub-committee
covered; they must be assembled in their true perspective: and the con- decided not to amend the bill to permit loans to closed
clusions to be drawn from them must be the inexorable march of logic.
banks. This type of aid, it was agreed, should be underConference Intended to Stimulate Individual Action.
taken in a separate bill. The sub-committee, it was further
questions.
legislative
called
primarily
on
This conference has not been
Its major purpose is to stimulate individual action. It seeks a better said, decided against permitting the debentures of the
planned use of our Nation's energies and resources, especially those that Corporation to be eligible for rediscount through the Federal
are rooted in neighborliness and mutual help, and those that find expression Reserve System. The original bill contained provision for
in our great national voluntary organizations, in our schools and colleges
such rediscounting. In giving a letter indicating objection
and in our research laboratories.
The conference represents a place for our mastery of the forces that on the part of Secretary of the Treasury Mellon to the
modern science and modern technology place at our disposal. It is not
provision for the relief of depositors of closed
to set up Government in the building of homes, but to stimulate individual inclusion of a
endeavor and make community conditions propitious. The basis of its banks, a Washington dispatch Jan. 7 to the New York
action is to collate the whole ofour experience to date,to establish standards, "Times" said in part:
to advance thought to a new plane from which we may secure a revitalized
New Bid to Aid Closed Bank.
start upon national progress in the building and owning of homes.
Senator Walcott explained that the measure was not intended to aid
About a year ago we held in Washington such a conference as this in
relation to the health and protection of children. That conference estab- suspended banks, but that another measure to care for insolvent banks
lished new standards and a now and higher plan of understanding and was to follow. While there had been a strong effort to include aid to
action. It presented a set of standards and conclusions, and those con- suspended banks, the Senator said that the Committee had not done so
clusions, I am informed, have now been printed in literally millions of because of objections from Secretary Mellon.
copies—through the associations which were interested, through State
Secretary Mellon's objections, as stated in a letter to Senator Walcott.
authorities and municipal authorities. They have penetrated the thought were read to the Se,ate as follows:
and permeated the practice of the Nation.
"I understand that the suggestion has been made that provision for
Many conferences have been called by the Governors of many States, relief of depositors in closed banks should be incorporated in the bill creating
by the Mayors of many cities, to consider and apply their conclusions. the 'Reconstruction Finance Corporation' and that the sub-committee
of which you are Chairman desires the opinion of this Department as to
Their actions have already wielded a powerful influence in the adminis- the
advisability of doing so.
trative functions of government from the Federal Government down to the
"The Reconstruction Finance Corporation bill as originally conceived
smallest community. They have been made the basis of legislative action. and drafted was intended to create an instrumentality through which
which the genThey have lifted the sense of public and individual responsibility in the assistance could be given to going concerns and through
eral credit structure might be supported by making available the means
Nation. And it is a result of this kind which we are confidently expecting for
bringing immediate relief at any threatened point, the general idea
from this conference.
being that the mere existence of this powerful instrument, with ample
I notice that some—not the members of these committees—have con- resources, would serve to restore confidence, which is the element most
factors.
tended that the development of city and urban life necessarily has driven needed to reverse the present depressing and inflationary
Mellon Holds Problems Distinct.
us to less and less possible ownership of homes. I do not agree with that.
"I do not believe that the main purpose of the proposed measure would
The very development of transportation; the advantages of distribution
amendment. In fact, it would in all probof industry to-day make the ownership of homes far more feasible and be furthered by the proposedproblem
of extending needed credit to going
ability be weakened, for the
desirable than over before.
concerns is very different from bringing relief to depositors in banks that
But it involves vast problems of city and industrial management which are being liquidated.
'This Department has viewed them as separate and distinct problems.
we should have courage to face. It involves also a great problem of
We have felt that the second and very important problem could more
finance. The newly married pair setting out upon the stream of life properly
and adequately be dealt with through a separate measure and
seldom come to their new state with sufficient resources to purchase or I understand that bills have already been prepared and others are in course
home.
of
preparation.
enter upon that great adventure of life of building a
"While recognizing, therefore, the desirability of some action looking
It has long been my opinion that we have fairly creditably solved every
to the relief of depositors in closed banks, I do not feel that there is anyother segment of our credit structure more effectively than we have solved thing to be gained by confusing the two programs and by incorporating
this one. In normal times the Federal Reserve System has given mobility in a carefully thought-out plan, intended to attain a definite objective,
to financing of commercial transactions. The agricultural banks and the a hastily improvised measure for taking care of a totally different situainsurance companies have given mobility to farm credit. The public tion.
"Relief for depositors in Closed banks is by no means a simple problem,
exchanges have given mobility to the financing of industrial credit through particularly if it is intended to include all State non-member banks that
stocks and bonds. Through various discount companies we have estab- are being liquidated under 48 different laws, which vary greatly.
"More time is needed for adequate consideration of that problem, and
lished mobility for the sale of automobiles and radio sets and fur coats
feel that the public interests will be better served by the further study,
on the instalment plan, where 20 or 25% cash payments are gratefully I
rather than hasty action at this time."
accepted.
Senator Walcott, replying to Senator La Follette, said that the bill might
Problem Concerns Those of Limited Resources.
be interpreted to give aid to qivestment trusts but not to private banks.
We have in normal times, through the savings banks, insurance companies, the building and loan associations and others, provided abundant
Atthe time (Jan.5)the bill was ordered favorably reported
and mobile finance for 50% of the cost of a home through the first mortgage.
the Senate committee the "United States Daily" of
by
But the definite problem is not presented by those who can find 60%
of the cost of a home. Our chief problem in finance relates to those who Jan. 6 said:
have an earnest desire for a home, who have a job and therefore possess
The Committee action followed four hours of discussion of the measure
sound character credit, but whose initial resources run to only 20 or 25% as drafted and submitted to the entire membership by a subcommittee
These people would willingly work and apply all their rent and all their headed by Senator Walcott (Rep.), of Connecticut, author of the bill.
savings to gain for themselves this independence and security and social Announcement was made following the executive session of the entire
well-being. Such people are a good risk. They are the very basis of stabil- Committee that only minor changes had been made in the subcommittee
ity to the Nation.
draft.
To find a way to meet their need is one of the problems that you have
Issuance of Debentures.
to consider; that is, how we can make a home available for instalment
As the measure will go to the Senate in a formal report, Jan. 6, it will
and
purchase on terms that dignify the name credit and not upon terms
provide authority for the Corporation to issue 81,500,000,000 in debentures
risks comparable to the credit extended by a pawnbroker. Our building which may be purchased by the Treasury from the proceeds of the sale of
and loan and many other associations have made an effort to find a solution Treasury bonds.
for this group, but it is as yet largely unorganized and the question subThe Corporation will be under direction of a board of seven members of
stantially unsolved.
whom three will be the Secretary of the Treasury, the Governor of the
I recently made a public proposal for the creation of a system of home loan Federal Reserve Board and the Federal Loan Commissioner.
discount banks. That proposal is familiar to you, and I will not traverse
Attempts to include a provision that would broaden the scope of the
its details at the present time. It was brought forward partially to meet the measure and allow extension of credit to other than steam railroads failed
situation presented by the present emergency to alleviate the hardships that In the Committee.
exist among home owners to-day and to revitalize the building of homes as a
Prior to the meeting of the entire Committee member.hip, Senator
factor of economic recovery, but, in its long-distance view, it was put
Walcott's subcommittees issued a statement outlining provisions of the
forward in the confidence that through the creation of an institution of
bill as reported to the main Comniittee.
this character, we could gradually work out the problem of systematically
Subcommittee Statement:
promoted home ownership on such terms of sound finance as people who
have the home-owning aspiration deserve in our country.
The subcommittee's statement explaining the terms of the bill follows
And there are many other problems involved in your investigations in full text:
which bear equal importance to the problem of home financing. The
The sub committee of the Senate Committee on Banking and Currency
surroundings in which such homes are to be built; the very method of their of which F. C. Walcott of Connecticut is Chairman, has reported to the
building; transportation and other facilities which must be provided for committee itself the bill, Senate 1, to establish a Reconstruction Finance
them; and the protection that must be given to them from the encroach- Corporation, which was introduced by Mr. Walcott at the beginning of the
ment of commerce and industry. All of these,and many other subjects session.
you will compass. You should be in a position when you complete your
Railroads May Borrow from Corporation.
work to advise our country of new standards and new ideals for our country.
The essential features of the bill as originally drafted have been retained
I wish to express our gratitude, in which I know you will all join, to the by the subcommittee. The measure establishes a corporation with $500,hundreds of committee members who have labored so devotedly and capably 000,000 capital, all owned by the United States, whose purpose it shall be
in preparation for your conference. I assure you of my appreciation for to extend credits and loans to banks, insurance companies and other bona
your coming and my confidence of the high results that will flow from your fide financial institutions in need of such accommodations. Steam raildeliberations,
roads are also included among the institutions which may borrow from the
corporation. In order to provide the new enterprise with necessary funds
over and above its capital, the corporation is authorized to issue three times
Reconstruction Finance Corporation Bill Favorably the
amount of its capital in the form of reconstruction bonds, or other obliCommittee—Secretary
Mellon
gations, and will have available funds of $2,000,000,000 if and when needed.
Reported by Senate
Not in Favor of Provision in Bill for Relief of Depositors of Closed Banks—Views on Bill by Ogden
Mills, Eugene Meyer of Federal Reserve Board, and
Representative McFadden,
On Jan. 5 the Senate Banking and Currency Committee
voted to favorably report the bill providing for the creation
of the Reconstruction Finance Corporation. The introduction ofithe bill in Congress was noted in these columns
Dec. 12, page 3910, and its text was given in our issue of
Dec. 26, page 4262. According to Associated Press ac-
Subcommittee Change.
The subcommittee has altered the measure so as to provide that such
reconstruction bonds may be purchased and sold by the Treasury Department by using the proceeds of bonds of its own, which may be sold for the
purpose of obtaining the means wherewith to sustain the market for reconstruction bonds of the new corporation, should such an operation be necessary. The reconstruction bonds themselves are not to be eligible as collateral security behind member bank notes discounted to Reserve banks,
nor may such notes be used to protect issues of Federal Reserve currency.
They may, however, be purchased by the Federal Reserve banks upon
the same bash; as other non-government securities which have in the past
been included among the paper eligible for purchase by Federal Reserve
banks. As the corporation is left free with the approval of the Treasury
240
FINANCIAL CHRONICLE
[VOL. 134.
Department to establish rates of interest upon its obligations as may be
Says Measure Expresses Administration Views.
deemed best and as the obligations of the corporation are tax-exempt,
Asked if the Federal Reserve Board advocates the pending measure,
it is believed that they will be readily salable under ordinary market conwhich Representative Strong introduced, Governor Meyer said the Board
ditions, and that support from the Treasury Department will not be neceshas not acted upon it, that he personally advocates it with several amendsary except under unusual conditions.
ments, and that he would say it is what the Administration wants. RepreThe new Corporation will be able to extend aid and fresh credit to financial
sentative Busby (Dem.), of Houston, Miss., said he understood that "we
institutions and steam railroads that need such assistance and are unable
were trying to save live banks as well as those that are closed."
to obtain it elsewhere.
Governor Meyer said that time is important but he would not feel that
The Committee has enlarged the proposed Board of Directors to seven
is an improper question. Mr. Busby said that the matter is not one that
members, of whom four are to be appointed from outside the Government.
is incorporated in the bill. Mr. Meyer replied that he had heretofore
Of the seven members of the Board, not more than four shall be members
given his reasons for that and that such legislation should be separate.
of any one political party, thus insuring a non-partisan board.
Mr. Busby said that "we ought to go ahead with legislation to give conThe Committee has left for later action in a subsequent bill the question
fidence and strength to banks which still keep their doors open and are
of relieving depositors in insolvent banks already closed.
struggling to do business."
The bill was ordered reported to the Committee on Banking and burMr. Meyer said there is "no particular relation" between the National
rency at a meeting called for 3 p. m. to-day.
Credit Corp. organized by the private bankers and the proposed ReconAmendments Offered By Eugene Meyer.
struction Finance Corp. except that the proposed Corporation will be doing
Amendments to the Reconstruction Finance Corp. bill (H. R. 5060— the private corporations business in a much broader way. He said he
S I), with its $500,000,000 for Federal subscribed capital stock and $1,- understood that the private credit organization of the Bankers, at the
500.000,000 more of debentures and other obligations to provide emergency time it was organized, was only intended pending action by Congress.
financing facilities for banking institutions and others, were submitted
Asked if the private Credit Corp. would continue, he said it probably
to the House Banking and Currency Committee by the Governor of the would not be making new loans to any large extent because applicants
Federal Reserve Board, Eugene Meyer. Jan. 5. The Chairman of the for loans would be coming to the new Federal sponsored corporation,
Committee, Representative Steagall (Dem.), of Ozark, Ala., indicated because of the broader powers. He, however, paid a tribute to the Psythat the disposition is to accord full hearings without unnecessary delay chological service rendered by the private organization of the bankers and
and that there would be some revision of the measure before it is reported said it necessarily, being a on a nation-wide scale, was late in effecting
organization.
to the House. The same bill is before a Senate Committee.
Representative Hancock (Dem.), of Oxford, N. C., asked what proporOdgen L. Mills, Undersecretary of the Treasury, appeared as a witness
In the afternoon before the House Banking and Currency Committee. tion of the $2,000,000,000 total in the bill would be necessary for aiding
railroads.
Mr. Meyer replied that he had no idea. He said the fact of
He was in accord with Governor Meyer in advocating the approval of the
amended bill, and in the psychological effect which its enactment would the availability of the funds in the bill is more important than the funds
and that the railroads have been helped by freight rate increases and a
have.
Undersecretary Mills said the Treasury Department is in full accord credit pool.
"Don't you think there should be something more than a knowledge of
with Mr. Meyer's attitude. He said the legislation isimmediately necessary.
He could not say how long it would take to effect the organization, as it availability?" asked Mr. Hancock. "Yes," replied Mr. Meyer, "you've
could not be done overnight. "In the mere knowledge, however," he said, got to loan money."
"that this institution is created with the $2.000,000,000 there will be a
Chairman Steagall agreed with Governor Meyer that the work of the
strong psychological effect in restoring confidence." He said a good deal private bankers' credit organization has been constructive, but he added:
of the information necessary would be accessible from the bankers Na- "It does seem that the National Credit Corp. has not been able to deal
tional Credit Association which had been functioning several weeks. effectively with the difficulties contemplated when they started."
He said the full amount of the $500,000,000 of capital stock of the
Mr. Meyer said that while that organization had rendered valuable
corporation should be appropriated Immediately upon enactment of the service he felt that if it were all that were needed,there would be no necessity
resolution.
for the pending legislation. Mr. Meyer explained that the amendment
Mr. Mills said he does not visualize the Corporation as one that Is to ho quoted regarding Federal Reserve bank powers covered the Treasury
called on to loan vast MUDS to put the country's credit structure on its feet. Department views as to Treasury participation in buying the obligations.
The psychology ofthe legislation, he said, will play a large part in the present Mr. Steagall agreed with him that the change would help.
emergency. He said he did not anticipate anywhere near the $1,500,Representative McFadden (Rep.), of Canton, Pa., said the National
000.000 of debentures and other obligations would be called'on, but said they Credit Corp. had not been very active and suggested that those private
should be authorized. He said there Is no need of including public utilities bankers who did not want to take the
risks and preferred to defer the
in the scope of the bill. He expressed the belief that within 12 months the risks go to the Reconstruction Finance Corp., which,
he said, is really
need for the Corporation would disappear. He opposed increasing the the back door of the Treasury, for the
advances.
total of $2,000,000,000 in the bill. The Committee adjourned until Jan. 6.
Mr. Meyer defended the private organization, saying that $500.000,000
Mr. Meyer in the course of his testimony said that the intermediate is not assembled
over night as a national-scale enterprise and cited its
credit banks, among others, would be included in the loan powers of the psychological
effect on business. He suggested certain changes in the
proposed Corporation, although not specifically named. He said it is for language of section
5. He said he would not consider loans to railroads
domestic and not international relief, and elaborated on a previous state- as a "principal"
function proposed in the bill. Asked what loans the
ment before the Committee. He offered no prepared statement but an- Corporation would
"take over," he said: "There is no undertaking to take
swered questions of members. He said the National Credit Corp. organized over anything;
I would say there would be no undertaking to take over
by private bankers last summer had rendered valuable service, particularly any loans from
anyone."
In psychological effect on the country, but predicted that new business
"Could this Corporation purchase assets from any bank?" asked Mr.
in the way of applications for loans would go not to that private organiza- McFadden.
tion but to the Reconstruction Finance Corp. because of its vastly broader
"No," replied Governor Meyer, adding that he assumed Mr. McFadden
powers and facilities.
meant "without recourse."
One of the amendments offered by Mr. Meyer was with respect to the
"Would the Corporation have authority to go in the open market to buy
debenture issue authorizing section 9, of the bill, to make clear the use of acceptances?"
the Corporation's securities as public debt transactions of the Treasury.
"No," he replied.
He proposed a change In the existing language which states that Federal
"Government bonds?" insisted Mr. McFadden.
Reserve Banks shall have the same powers to discount notes, drafts, and
"I think not," the witness replied.
bills of exchange secured by obligations issued by the Corporation, to make
Governor Meyer said Federal Reserve Banks do not need to borrow, that
advances to member banks on their notes secured by such obligations, they do not ordinarily sell
acceptances but allow them to mature and run
to use all paper so acquired and to purchase and sell such obligations, as off. He said that,
speaking for the period since September 1930, no Federal
they have now with respect to United States bonds or notes, including Reserve Bank ever has sold
any acceptances. He said that while the bill
the proviso that their discount or advance rate shall be 1% a year above does not mention
specific institutions, loans under it could be made to
their discount rate on 90-day commercial paper in effect at the same time. intermediate
credit banks and to joint stock land banks, under its general
In place of this Mr. Meyer submitted the following amendment for com- powers.
Mr. Steagall said he thought land banks stand in a separate
mittee consideration later:
category and should not be included but that intermediate credit banks
"(b) The Secretary of the Treasury, in his discretion, Is authorized to
purchase any obligations of the Corporation issued hereunder, and for should be specifically included. Mr. Meyer said he had no objection to
such purpose the Secretary of the Treasury is authorized to use as a public that but that it is unnecessarily specific.
debt transaction the proceeds from the sale of any securities hereafter
Answering other questions, he said the bill is not particularly designed
issued under the Second Liberty Bond Act, as amended, and the purposes to give credit to intermediate credit banks, and that no one can specifically
for which securities may be Issued under the Second Liberty Bond Act, answer
whether it is contemplated that there shall be a very largo use of
as amended, are extended to include any purchase of the Corporation's
obligations hereunder. The Secretary of the Treasury may, at any time, the proposed Corporation's debentures for public deposits and said he did
sell any of tne obligations of the Corporation acquired by him under this not foresee investment of postal savings in the Corporation's securities.
subsection. All redemptions, purchases and sales by the Secretary of the Mr. McFadden referred to the broad powers of
section 5.
Treasury of the obligations of the Corporation shall be treated as public
"The existing financial agencies have broken down to such an extent
debt transactions of the United States."
that the Government must step In?" he asked.
Discuss Loans to Aid Depositors of Failed Banks.
Mr. Meyer replied that he already has testified regarding the exceptional
Governor Meyer said there is a good deal of merit in the suggestion of conditions now and
added that it is logical to create a temporary institution
consideration of legislation to enable depositors in closed banks to get some to deal with the
emergency. He said the existing agencies were not built
relief but it was felt that such a proposal should be separate from the en- to
deal with these emergency situations.
actment of the pending measure. Mr. Steagall said he could understand
"If this legislation passes," he was asked, "will it mean virtual abandonthat it might be more important to avert a bank collapse than to attempt ment of
the National Credit Corp. organized by the bankers?"
relief of those affected by a bank collapse.
"I should think the new business would come to this Corporation,"
Mr. Meyer said he had recently written a letter to the Governors of the
Mr. Meyer replied. He referred to several amendments that might be
Federal Reserve Banks regarding the subject of advances to closed banks,
made, Including one In reference to the railroads based on an interstate
based on assets. He said such a subject should be a matter for permanent
commerce law.
not temporary legislation like the Reconstruction Finance Corp.
Representative Strong said he hoped that by the time the Reconstruction
On Jan 6, when the bill was favorably reported to the
Finance Corp. terminates its functions the country will be approaching
Senate,
its immediate consideration was blocked by Senator
the end of the period of bank failures. Mr. Meyer said he certainly hoped
Blaine, Republican insurgent of Wisconsin. The "Times"
that is true.
Mr. Meyer then explained that in the letter to the Federal Reserve stated:
Governors he had mentioned he had asked them, not strictly as Federal
He asserted that it would not help the poor man, and was designed to
Reserve business, but addressed to them as leaders of the banking world,
bolster the stock market and banks, which, he declared, were responsible
to interest themselves in obtaining co-operation from private bankers
for
the present depression.
in dealing with the present emergency.
Under the Senate rules, unanimous consent was necessary for immediate
Representative Stevenson (Dem.), of Cheraw, S. C., suggested that the consideration.
relief of depositors in failed banks would be more properly handled in the
In stating that attacks upon specific provisions of the
office of the Comptroller of the Currency so far as national banks are concerned. Mr. Meyer replied that any legislation should give the receiver bill by Senators and submission of numerous amendments
of a failed bank the power to borrow. Chairman Steagall asked if
legisla- marked the opening of debate upon the measure on Jan. 7,
tion to set up new machinery for that purpose In the Comptroller's
Office
might meet with the difficulty of dealing with both national and State the Washington account on that date to the New York
banks. Mr. Meyer said both could be dealt with.
"Journal of Commerce" said:
JAN. 9 1932.]
FINANCIAL CHRONICLE
IT The bill also ran into snags in the House, where it was referred to a subcommittee of the Banking and Currency Committee for study. According to Speaker Garner,it will not be ready for a report by the full committee
until early next week.
Reed, Colleens Balk Action.
The main opposition to certain sections of the bill as reported to the
Senate came from Senators Reed of Pennsylvania, regarded as an Administration spokesman; Couzens (Rep.. Mich.), who was responsible for the
clauses giving the Inter-State Commerce Commission discretionary power
in the matter of loans to railroads, and La Follette, Wisconsin Insurgent.
Noting the tax exempt provisions of the bin, Reed declared he would not
vote for it unless it was specified that the $1,500,000,000 of bonds authorized were made subject to estate and inheritance levies.
Senator Jones (Rep., Wash.), co-author of the Merchant Marine Act of
1928. submitted an amendment of vital importance by which loans might be
extended to American steamship companies upon approval by the Shipping
Board. Walcott explained such a provision had not been included because
ship corporation securities have not enjoyed wide distribution among
banks, insurance companies and the public.
Senator Walcott (Rep., Conn.), who wrote the bill and championed it all
afternoon against Senate assaults, explained that the bond issue
was Patterned after the first Liberty Loan, in which the Government obligations
were free of all taxes.
Reed insisted, however, that the issue should come under rules applying
to the Third Liberty Loan, of which the bonds were made subject to estate
and inheritance dues.
La Follette Raises Objection.
La Follette objected to extension of the relief powers of the corporation's
directorate to organizations coming under the general category of "other
bona fide financial institutions in the United States," and offered an
amendment striking out this line of the bill. "The language is very general
and broad," La Follette said in asking the modification. "It would include investment trusts, private banks, investment banks and those
organized primarily for floating securities issues." Such organizations
should not be included, he declared.
Couzens inveighed against inclusion of a provision by which the corporation directorate would be enabled to give assistance to "closed banks whose
assets are adequate to permit of restoration to solvency," though Walcott
explained that this clause referred only to institutions whose main financial structure was sound and which had been closed merely to prevent disastrous runs of their assets.
Couzens maintained, however, that the clause was at variance with a letter read into the record by Walcott. which Secretary of the Treasury Mellon sent to the Connecticut Senator Tuesday before the bill was reported,
when his opinion was solicited in regard to inclusion of a broad provision
for reviving banks and unlocking depositors' funds.
241
borrowing banks within four or five hours, transfers of funds being made by
wire through the Federal Reserve System. This is partly due to the fact
that the documents and papers relating to loans have been standardized and
the entire transactions have been handled by the loan committees of the
local associations in such an efficient way that prompt action by the home
office has been greatly facilitated. The whole machinery has been so
organized that any situation requiring the credit facilities of the Corporation
can be promptly and effectively met. In certain emergencies, for instance,
funds have been started toward points of need prior to the receipt of loan
papers at the home office and the moneys held at focal points to be released
quickly to the borrowing banks as soon as the documents have been approved
by the home office.
Through the co-operation of large banks in New York City the National
Credit Corporation has been enabled to borrow locally sufficient funds to
cover all loans applied for thus far without the necessity of Issuing a call
for payment by member banks of any part of their subscriptions to the
Corporation's gold notes When these borrowings increase to an amount
substantial enough to warrant it the officers of the Corporation are authorized to issue a call for funds from subscribing banks, the proceeds of which
will then be used to extinguish the borrowings of the home office. This
method of providing funds for advances to associations of member banks
serves,for the present at least,to relieve small banks throughout the country
of the necessity of making any payments on their subscriptions. This procedure is generally known throughout the country and has met with universal favor. The directors desire to emphasize, however, that although
the necessity has not yet arisen for issuing a call on account of subscriptions,
ample funds are and have been available to meet the requirements of the
credit plan.
The Board decided unanimously to restate its already adopted policy of
not giving any publicity to the amount of loans made to associations of
subscribing banks, the districts concerned or the names of the borrowing
banks themselves, it being the opinion of the Board that the relationship
between the National Credit Corporation and the local associations and
individual banks is essentially a confidentia' one.
National Credit Corporation Had Been Lending Freely
to Peoples State Bank of Charleston and Other
Institutions in Richmond Federal Reserve District,
According to John M. Miller Jr.
From the Richmond (Va.) "Times-Dispatch" of Jan. 3
we take the following:
The National Credit Corporation, with a backing of $500,000,000, is
exerting its best efforts to relieve the distress of banks, but to operate at
highest efficiency the co-operation of banks in applying for loans before
encountering a full emergency is imperative, according to an announcement yesterday by John M. Miller Jr., director for the Corporation in
National Credit Corporation Calls for Payment of 10% the
Fifth !Richmond] Federal Reserve District.
of $500,000,000 Subscriptions to Gold Notes.
Commenting on the failure of the People's State Bank of Charleston,
with
odd branches, to open for business in South Carolina yesterA call for an initial payment of 10% of the subscriptions day, fortyMiller
said the Corporation had been lending freely to the bank
Mr.
of approximately $500,000,000 to the gold notes of the and was ready to furnish additional cash, it only being necessary for the
Association No. 6, of South Carolina, to approve the
Credit
National
National Credit Corporation was issued on Jan. 2 by
and assume its proper liability.
Mortimer N. Buckner, President of the Corporation, who collateral
"I was in touch over the telephone last night with officials of the National
is Chairman of the New York Trust Co. and President of Credit Association of South Carolina," he said, "and it appeared that the
officers
of the People's State Bank of Charleston were unable to get together
the New York Clearing Rouse Association. Payment was
promptly the collateral necessary to make additional advances. The
called for on Jan. 7. In referring to the 10% payment People's
State Bank and its forty odd branches are scattered over the
called for from banks in all parts of the country, the New entire State of South Carolina, which made it difficult, if not impossible,
promptly the securities necessary for additional large
together
to
get
York "Journal of Commerce" of Jan. 5 said:
sunis, which would be necessary to carry on the business of its forty odd
It was stated that the cash raised through this call will be used to repay
branches."
New York banks which up to the present had advanced their funds to the
The association already has lent substantial amounts to banks in various
Corporation. At the same time, it was indicated that loans already issued
sections of the district, averting threatened embarrassment, and is preby the Corporation approximate $50,000,000.
pared to render similar assistance to other banks, when necessary, on
In local banking quarters, it is anticipated that the bill to create the resound collateral. The corporation, said Mr. Miller, is 'anxious to lend
construction corporation soon should pass and that with this corporation in
to banks needing assistance:but"when applying banks delay to the eleventh
operation It will become possible to make advances to banks in the interior
hour and fifty-ninth minute it is sometimes impossible to render assistance
without at the same time tying up banking assets.
In time to meet the emergency."
Scheme of Operations.
Under the present scheme of operation the National Credit Corporation
is advancing new funds as loans by borrowing from the strong institutions in Governor Ely of Massachusetts Proposes State Finance
New York City. As loans of the Credit Corporation increase, calls upon
Body—Recommends Creation of $20,000,000 Corsubscriptions are made and the New York banks repaid.
poration for Freeing Frozen Assets—Also Central
During the past few weeks the National Credit Corporation was called
Credit Banks.
upon to increase its loans to banks. Naturally, no public statements are
issued giving exact amounts of the volume of loans by the corporation and
Creation of a $20,000,000 credit corporation to release
the identity of borrowers is, of course, never revealed. Borrowings, it was
frozen bank assets, especially first mortgages on homes
stated, have been entirely from interior institutions.
Upon payment of 10% of their subscriptions the subscribing banks will held by closed trust companies, and a reduction of 10% in
be given gold notes which bear 6% interest if that amount is earned. Be- all State salaries
above $2,000 as a step toward bringing
hind these notes are the obligations of the borrowing banks and in addition
the indorsement of their notes by the banks in their localities. In order to the cost of Government to the lowered price level, were
carefully guard the institution, this plan was devised in the issuance of recommended by Governor Joseph B. Ely of Massachusetts
loans by the corporation.
in his annual message to the Legislature on Jan. 6. In
It is expected that the policy of advancing new funds to interior banks
making this known a Boston dispatch Jan. 6 to the New
still will be carried on on the basis of loans by New York City institutions
It was pointed out that this method is much more elastic and at the same York `Times" also had the following to say:
In recommending other measures for assisting banks, relieving milk
time more economical than the issuance of calls upon subscriptions when
producers and assuring the financial stability of the State and its municismall amounts are needed.
palities, the Governor suggested that the 1-3c. on the gasoline tax be
At the time the National Credit Corporation started continued until
April 30 1936, and that an additional Mc. of the tax be
functioning, a statement issued Dec. 4 by Mr. Buckner, turned over to cities and towns.
He also proposed the formation throughout the State of central credit
President of the Corporation, said:
banks for savings banks and co-operative banks respectively, to which
Directors of the National Credit Corporation met to-day at the Federal each clash might subscribe, and legislation to authorize the Commissioner
Reserve Bank building in New York and reported that the credit plan of Banks, in the event of liquidation, to issue certificates, secured by the
established by the corporation several months ago is now functioning in notes, mortgages and securities of such banks.
every one of the 12 Federal Reserve Districts where continued progress is
Saying that an average of 10% cut in all State salaries would amount
being made in the organization of local units of subscribing banks. This to more than $2,000,000 a year, the executive added:
was the second monthly meeting of the Board which took occasion to express
"During the last several years the current administrative expenses of
its appreciation of the wholehearted co-operation of banks throughout the the government have increased annually by approximately $2,000,000.
country which have impressively demonstrated a spirit of helpfulness and If the State should reduce salaries for the coming year as a temporary
active support to this national undertaking.
expedient for the relief of the tax burden upon real estate, created beThe national officers of the Corporation reported that applications for cause of the decline in the State income, we would only fall in line with
loans to associations of subscribing banks have been received daily since the cut in wages which the laboring man has so generally accepted
during
about Nov. 1 and that thus far no applications for any loans have been the last 12 months.
refused. The organization is operating so effectively that loans are being
"It is a glorious commentary upon the loyalty and Integrity of
labor
accepted and funds remitted to the local associations for borrowing banks that it has almost universally expressed its willingness to
support the
on the same day on which the loan applications are received. In some commercial and industrial integrity of the United States
by bearing with
instances loans have been arranged and funds placed at the disposal oi courage and fortitude the necessity of decreased earnings.
Is it not right
242
FINANCIAL CHRONICLE
and fair that we who are paid at the public expense should share in this
deflation of earnings? Public employment is for the most part steady
employment, unaffected in its security by changes in business conditions."
The Governor recommended the appropriation of $400,000 for emergency unemployment relief work such as clearing forests, public highways
work and minor improvements in public buildings.
Annual Message of Franklin D. Roosevelt to New York
Legislature—Increases Proposal in Personal Income Taxes, Gasoline and Stock Tax—In Behalf of
Railroads Asks Tax on Motor Trucks and Buses—
Need For New Banking Laws—Says Public Asks
New Leadership and Action by National Government.
Regarded as placing him definitely in the ranks as a
Democratic candidate for President, the annual message to
the Legislature of Gov. Franklin D. Roosevelt this week
dwelt upon the problems confronting the Nation, and said:
Business and industry have been toiling and are toiling to salvage the
old structure. They need more than just to be let alone. The public asks
that they be given a new leadership which will help them and at the same
time give definite recognition to a new balance based on the right of every
individual to make a living out of life.
The Governor went on to say:
It is true that in any State of this Union of States the complete solving
of those economic problems which are National in scope is an impossibility
Without leadership and a plan and action by our National Government.
Perhaps that will come, but in the meantime we in this State have a very
positive duty to do what we can to help ourselves.
As to new legislation Gov. Roosevelt referred to the need
of "new laws to give to the Superintendent of Banks and
his Department the benefit of assistance and advice in
meeting a situation which is abnormal and without precedent." He expressed approval for that purpose, of the recommendation of the Superintendent of Banking that such
an Advisory Council be created.
In taking cognizance of the railroad situation the Governor
noted that the railroads are heavy sufferers, "from a new
competition by great trucks and buses on highways built by
the State," and added:
In view of the fact that the taxes paid by the railroads have helped and
are helping to build these highways and that the trucks and buses now use
them almost taxfree. a better equalization of taxes is called for in all fairness. I shall ask in my budget message for a tax on heavy motor vehicles
commensurate with their use of the costly highways of the State.
[VOL. 134.
"Such an organization," he said, "would afford the means for expert
but disinterested analyses of our fundamental economic problems, and the
formulation of sound, constructive policies for the guidance of our economic
and governmental agencies."
Cites Plight of Coal Mines.
He said the chaotic condition of the bituminous coal industry had convinced the mine workers and many of the operatives that the industry
cannot govern itself, "that it must be stabilized under Government supervision." Efforts will be made to secure the passage of a bill to that effect
in the next Congress, he added.
The proposed bill provides for licensing of all coal companies engaged in
inter-State commerce, and would encourage mergers, selling pools and
marketing agencies, all to be under regulation of a Federal coal commission.
Mr. Lewis recalled that Albert H. Wiggin of the Chase National Bank
had stated before the Committee that depressions were inevitable, and
characterized the view as a "dismal economic philosophy."
He warned, however, that unless the nation recognizes recent economic
changes and tendencies, "our existing troubles will grow in volume and
Intensity, and the future will be filled with recurrent disasters."
Says Business Hasn't Learned.
Factors for an "unprecedented boom" in business are at hand, the Committee was told by Virgil Jordan, Economist of the McGraw-Hill Publications of New York.
Mr. Jordan said business had not learned its lesson from the 1929 deflation and that no interests stand ready to-day to check the inflation which
he foresees.
"We are going to have at least one and perhaps several booms," be said;
"perhaps shorter and sharper, but not materially different from that
preceding 1929.
"It is ready to start from a spark of psychological change. The factors
for an unprecedented boom are at hand.
"I refer to the condition of our banking system."
Points to Available Credit.
He said gold reserves in the United States, hoarded currency and credits,
the relatively low volume of borrowing by Federal Reserve member banks
and the non-excessive holdings of Government securities by reserve banks
would "enable a very rapid expansion of bank credit."
He estimated that there was $1,500,000,000 of unused credit available.
Mr. Jordan said issues of investment trust securities and similar financial
paper had diverted money in 1928 and 1929 from wages, thereby reducing
consuming power while productive capacity was increasing.
He said testimony before the Committee had "demonstrated the extreme
and chronic instability of American business," and he advocated creation
of a national economic planning council as an experiment in behalf of
stability.
"There have been no net gains for business stability as a result of the
depression," he said.
Warns of Overinvestment.
Mr. Jordan said testimony of several important industrial figures before
the Committee that nothing can remedy depression and that the proposed
Council would be ineffective "had shocked constructive small business men
more than anything else in this depression."
"There are many members of the business community," he continued,
"who feel very deeply that something can be done."
The job of the Council, he said, would be to protect industry, agriculture and labor from the effects of financial forces. He said periods
of overinvestrnent must be prevented.
He advocated strengthening the Federal Reserve System by setting up
insurance reserves to protect depositors any by extending classes of paper
eligible for rediscount.
Mr. Jordan recommended taxing away a large part of surplus profits
which otherwise would be used to increase production. These funds, he
said, would be returned to the public as "free social income" in the form
of public improvements.
In addition to the motor vehicle taxation, Gov. Roosevelt
asked that immediate consideration be given to three
further taxes, in order that the four may be enacted as soon
as possible without waiting for the closing days of the legislative session. These taxes, he added, are increases in the
existing taxes (1) on personal income. (2) on gasoline, and
(3) on the sale of shares of stock.
"It is my thought," said the Governor, "that these taxes
shall be treated primarily as emergency measures, and it is
my hope that at the end of the fiscal year ending June 30
1933, it will be possible to discontinue these emergency President Green of American Federation of Labor Hails
taxes."
Check in Idleness Spread—Abnormal Rise Held Up
With regard to reforms respecting labor, the Governor said:
for Two Months—Industrial Unemployment Has
There still remain several reforms which I have urged in previous messages
Reached 20%—Relief Called Inadequate.
and which seem to use to be the very minimum which the laboring classes
of our State are entitled to insist upon. These include:
Declaring that unemployment in industry has reached a
1.—Extension of the Workmen's Compensation law to cover all occunew peak with trade union figures showing 20% out of
pational diseases.
work, William Green, President of the American Federation
2.—The State regulation of fee-charging employment agencies.
3.—The declaration by law that the labor of human beings Is not a of Labor, predicted on Nov.26 that if unemployment increases
commodity.
4.—The establishment for women and children of an advisory minimum as much in the next two months as it did in the years 1928
fair wage board.
and 1929, there will be 7,500,000 persons out of work by
January. The foregoing, from Washington, Nov. 26, is from
John L. Lewis Says Business Needs Courage—Tells the New York "Times," whin likewise said:
Senate Committee Old Remedies Are No Longer
Mr. Green also stated that as yet relief funds collected were "totally
Effective—Virgil Jordan Foresees Boom—Declares inadequate." The community chest drive, he said, had brought in $36,000,000,
of which all but $11,000,000 was needed for "normal expenses" of
Spark of Psychological Change Will Start It.
the member organizations of the chest. He put the loss of wages through
Courage is all that is needed to put an end to the present unemployment in the last year at $11,000,000,000, and said that as a
that
business disorganization, in the opinion of• John L. Lewis, result there were many cases of undernourishment and starvation, andhuman
children were being born without the energy to develop into normal
President of the United Mine Workers of America. Mr. beings.
In comparison with the 20% unemployed persons as of Nov. 1, Mr. Green
Lewis, invited to testify, on Dec. 4, before the Senate Ecoof work in January 1931. Comparative figures
nomic Planning Committee, took the stand that old remedies said there were 19.8% outAugust,
19.2; September, 19.4; October, 19.5.
for recent months were:
would have no effect under present conditions and that Con"One encouraging fact appears from our weighted figures," Mr. Green
gress would have to overcome a natural aversion to sweeping said. "Unemployment in November has increased no more than is usual at
this season, even in the most prosperous years. In October also the increase
changes if it expected to cope with the situation. United in
industrial unemployment was no more than seasonal. Thus for two
Press advices from Washington, Dec. 4, published in the months in succession it appears that the abnormal rise of unemployment
has been checked. This is the first time since February that unemployment
New York "Sun," reported this, and added:
more than normally.
The present depression, he continued, can be most effectively stopped by
stabilization on a domestic basis. He pointed out that about 90% of our
trade is within the borders of the United States and recommended that we
forget for the time being the small volume of our commerce which deals
with foreign countries.
Mr. Lewis, the second labor leader to be called in as many days, agreed
with President Green of the American Federation of Labor that an Economic
Council such as that proposed by Chairman La Follette could be of
great value.
has not increased
Farm Employment Holds Up.
"On farms the number laid off by the first of November was less than
usual. Thus the total increase in unemployment by the first part of
November was less than expected by about 200,000.
"This check in industrial unemployment may be due largely to efforts
to keep men at work. It is worthy of note, especially since trade and industry
were declining during October, that it has been possible to prevent employment frau declining ccrrespondingly. since our figures are based on
JAN. 9 1932.]
FINANCIAL CHRONICLE
reports from trade unions, this has doubtless been due also to the efforts
of unions to provide for their members. There have been only five other
months since October 1929 when unemployment did not increase more than
normally.
"Although this brightens the future outlook a little, it does not alter the
fact that the present unemployment crisis will far exceed any we have
experienced in this or any other depression in recent years. Already there
are 6,000,000 out of work. Unemployment in industry increased by
120,000 last month, and 300,000 were laid off on farms (the usual November
layoff is 480,000).
Estimates Increase in Jobless.
"If unemployment increases as much in the next two months as it did
in
the years 1928 and 1929 on the average, we may expect from 800,000
to
1,000,000 to be laid off from farms and industries in December, and from
500,000 to 700,000 in January. Unless these layoffs can be prevented
by
increased efforts to keep men at work, Borne 7,500,000 persons will
be out
of work by January.
"Following are the Federation's unemployment figures for 1931:
January
February
March
April
May
June
July
August
September
October
*November
Total,
AU
Trades,
Total,
Building
Trades.
Total,
Metal
Trades.
Total,
Printing
Trades.
Total,
AU Other
Trades.
"I °;CI
OCAO0b.C.00,100.ACAC
Month—
51
52
52
50
48
48
50
51
52
53
54
28
29
27
29
28
31
32
30
31
31
32
10
10
11
12
11
12
13
14
14
14
15
19
17
16
16
15
16
17
16
16
16
17
*Preliminary.
President Green of American Federation of Labor
Before Senate Committee Asks Time Cut to Absorb
Unemployed—Calls for 7-Hour Day, 5-Day Week
in Industry—President Woolley of American Radiator Standard Manufacturing Corporation Opposed
to National Economic Council.
Establishment of an industrial week of five days of seven
hours to take up the slack in unemployment and give every
man and women a job was the proposal made by William
Green, President of the American Federation of Labor, before the La Follette subcommittee of the Senate Committee
on Manufacturers,in Washington, on Dec. 3. The New York
"Times," in its dispatch, stated that he deplored the fact
that President Hoover did not call the National Employment
Conference which Mr. Green suggested in July, and said that
the conference should have met and granged a shorter
working week on a national basis. Industry, he
asserted, must
accept changed conditions or "accept something in
the way
of legislation which it will find burdensome all
its life."
The dispatch added:
243
business, labor, finance, agriculture and politics, in accommodating themselves more confidently and wisely to shifting economic circumstances."
When the Sherman Anti-trust Act was passed, Mr. Wooley said, 43% of
the people were engaged in agriculture and 26% in manufacturing and
mechanical pursuits, and now the comparative percentages are 22 and 29.8.
The passage of the Act, he said, was "an expression of fear on the part of
an agricultural people against the rising tide of industrialism."
Asserting that the sentiment and judgment of the country oppose price
agreements, Mr. Wooley said he would not recommend any legislation of
that character.
President Hoover Sustained by District of Columbia
Supreme Court in Naming George Otis Smith As
Chairman of Federal Power Commission—Court
Contends Senate in Approving Nomination Sur.
rendered Right to Reconsider.
In the District of Columbia Supreme Court on Dec. 5,
Justice Peyton Gordon upheld the right of George Otis
Smith to hold his office as Chairman of the Federal Power
Commission, despite the Senate's demand upon President
Hoover for reconsideration of its action in consenting to the
nomination of Mr. Smith.
In its account of the decision the "United States Daily"
of Dec.7 said:
When the Senate, in conformity with its own rules, unanimously ordered
notice of its consent to the appointment of Mr. Smith to be sent to the
President, it surrendered its control of the matter and its right to reconsideration of its action, Justice Peyton Gordon ruled in his opinion. The
Executive was then free, he declared, to make a constitutional appointment.
Petition of Senate.
The Court's decision was handed down in the case of United States of
America v. George Otis Smith, No. L. 79553. The Senate of the United
States was denied its petition for a writ of quo warranto against Mr. Smith
by which it sought to require him to show by what right he holds the office
of member of the Power Commission.
The Senate's petition to the Court also requested that if it be shown that
he "usurped, intruded into and unlawfully holds the said office that he be
ousted and excluded therefrom." This request was refused by the Court.
(The full text of the Court's opinion is published on page 4 of this issue.)
Senator Walsh (Dem.), of Montana,stated orally after the decision was
announced that an appeal would be taken to the Supreme Court of the
United States.
Position of Senate.
The notification to President Hoover that the Senate had consented to the
nomination "was intended to inform the President," it is stated in the opinion, "that the Senate had discharged its constitutional function and had
unconditionally approved the nomination, and that the President was free
to discharge his constitutional function in the matter."
Review of Facts.
The facts in the case, according to the Court's opinion, showed that
following the nomination of Mr.Smith to be a member of the Federal Power
Commission on Dec. 3 1930, the Senate on Dec. 20 1930, in open executive
session,and by a vote of38 to 22,advised and consented to the appointment
of Mr. Smith to the office. On the same day it was ordered by the Senate
that the resolution of confirmation be forwarded forthwith to the President.
Among the causes of the economic depression, Mr.
Green listed the At the close of that executive session the following order was entered upon
following:
Journal: "Ordered, that all resolutions of confirmation this day agreed
the
Emphasizing production out of all proportion to the consuming
market, to be forwarded forthwith to the President of the United States."
failure to develop purchasing power commensurate with
production, inThat order was entered late in the evening of Dec. 20, and later the same
equitable distribution of the earnings of industry, failure to
adjust working day the Senate adjourned in accordance with a concurrent resolution of the
time in comparison with production, the world-wide
disturbance, and, per- two Houses of Congress until noon of Jan. 5 1931. On Dec. 22 1930 the
haps, the monetary system.
secretary of the Senate executed the order of Dec. 20, and sent the confirmWoolley Opposes La Follette Plan.
ation resolution to the President. On that same day the President signed
Clarence M. Woolley, of the American Radiator Standard
Manufacturing and delivered to Mr. Smith a communication purporting to appoint him
Corp., stated that he thought it too early to create a
a
member of the Federal Power Commission and designating him as chairNational Economic
Council, as Senator La Follette had urged.
man. Mr. Smith on the same day took the oath of office and undertook to
He suggested that the President's conference on recent
economic changes enter upon his duties of the office.
spend another year gathering statistics and show what it
On Jan. 5 1931, which was the next day of actual executive session of the
can do in finding
a cure for economic disturbances.
Senate after the confirmation, a motion to reconsider was duly made and
adopted, and another motion to request the President to return the resoluReferring to the shorter working week, Mr. Green asked:
tion of confirmation also was made and adopted. The President was duly
"Wouldn't that be better than to have 6,000,000 or 7,000,000
running notified
of this latter action, but replied to the Senate that the appointment
up and down all the time unemployed? The slack could be taken
up and had been made following
his receipt of the Senate's resolution of confirmaevery man given work. There is work for all under that plan, perhaps
not tion, and that he refused to accede to the Senate's latest request.
continuous work, but work. Yet there are some giant industries
still
"The sole question for the determination of the court," according to the
trying to work 52 hours weekly.
decision of Justice Gordon, "is one of law, namely, was the respondent
Prepare for Work, Not Idleness.
George Otis Smith, appointed by the President by and with the advice and
"Mechanical development should create opportunity for leisure, not
for consent of the Senate, or did the Senate in strict conformity with its rules
unemployment. The National Council should have been held and the whole refuse that advice and consent?"
thing worked out on a national basis, with the Government furnishing the
Argument for Senate.
necessary statistics. The fight to work is fundamental.
John W. Davis, attorney for the Senate, had argued that in view of the
"The Government does not owe every man a living, but it owes every
man and women an opportunity to gain a living. The mechanical absorp- rules of the Senate, "the Senate order that the resolution of confirmation
tion of work is a great social problem. We should not prepare for idleness be sent to the President forthwith did not preclude reconsideration within
two days of actual executive session next succeeding the vote, and that
but prepare for work, or rather the opportunity to work.
"Yet we are told in a sort of fatalistic tone to expect future unemploy- such notification was not tantamount to a warrant to proceed forthwith
ment. That is an indictment of our social system. I believe we can find to issue the Commission, and that it did not waive or suspend its rules, nor
could it suspend its rules except by unanimous consent."
opportunity for all. Industry must recognize this."
"It clearly appears from the record of the proceedings in the Senate that
Analyzing the depression causes, Mr. Green said "there was far too much
the Senate did not advise amid consent to the appointment of the respondent
emphasis on production, which centered on building up a marvelous pro- to the office
of member of the Federal Power Commission," Mr. Davis had
ducing machine," and that unemployment was increasing in a most alarm- pointed out further,"but on the contrary
that the Senate by its action duly
ing way" even before 1930.
and regularly taken, in accordance with the standing rules, refused to
advise
consent
and
to
his
appointment."
Would Modify Sherman Law.
"Of course, as a working man, I believe in higher wages and that increasContentions for Mr.Smith.
ing efficiency should be so recognized. I think the American people are
George Whaton Pepper, attorney for Mr. Smith, had argued that "when
ready to see a more equitable distribution either through wages or taxes.
the Senate advised and consented to the nomination and notified the
We can't increase wealth on the one hand among the few and reduce wages
President of its action, that legislative branch of the Government parted
among the many."
with its control over the subject matter which thereupon passed into the
Mr. Wooley, after declaring that the conference on recent economic changes hands
of the Executive, and that thereafter there could be nothing upon
is doing efficient work, continued:
which the legislative body could take further action, unless and until the
"Past and present investigations become part of a continuous process of Executive at or without request should
restore to the Senate the control
fact-finding. The facts, in the form of statistics and significantly grouped with which it had voluntarily parted: and that
the Executive, after appointpertinent economic trends, from which, eventually, controlling and predict- ment, could not restore the control to the
Senate without violating and
able forces may be disclosed, are made available for the use of men in infringing the rights of the appointee."
244
FINANCIAL CHRONICLE
Opinion of Court.
"Can any other interpretation be given to the notification," Justice
his
in
"than
that it was intended to inform the Presidecision,
Gordon said
dent that the Senate had discharged its constitutional function and had
unconditionally approved the nomination, and that the President was free
to discharge his constitutional function in the matter?
"It would be illogical to construe the Senate communication to the President as merely a message of encouragement, and to advise him of the fact
that there had been a test vote and that a clear majority favored confirmation of the nominee. When it is reflected that several months may elapse
before the second day of actual executive session expires, it will be seen
that unless the Senate meant the President to act upon its notification the
sending of it was futile and even misleading.
"Constitutional theory, parliamentary usage, Senate rules, Senate precedents and considerations of practical procedure alike lead to the conclusion
in the instant case that when the Senate, in conformity with its own rules
unanimously ordered notice of consent to be sent to the President it once
and for all surrendered its control of the matter and its right to reconsideration and left the Executive free to make a constitutional appointment.
When a commission was signed and sealed, and irrespective of the steps
taken by the appointee to qualify, the President conferred upon him title
to the office in question, and of it he cannot be deprived unless removed
by the President according to law.
"Therefore the petition for a writ of quo warranto will be denied."
Court Suspends Sentence of Employee of New York
Assay Office Accused of Taking $4,000 Gold Ingot.
Because of his previous good reputation, Charles A.
Muche,employed at the New York Assay Office for 10 years'
received a suspended sentence when he appeared before
Federal Judge John C. Knox on Dec. 7 on a charge of
having taken a $4,000 gold ingot from a hand truck in the
Assay Office. Arrested at his home at Staten Island on
Nov. 30, he offered no explanation of his action when
arraigned before Judge Knox by Federal Attorney George
Z. Medalie on Dec. 1. The New York "Times" of Dec. 2
said:
Judge Knox refused to permit him to plead guilty to an indictment
which the Federal Grand Jury had returned earlier in the day, until he
had an opportunity to consult a lawyer and be informed that the charge
against him, theft of Government property, is punishable by a maximum
sentence of 12 years.
In the absence of an attorney, Alan G. Straight, head of the Secret
Service here, who caused his arrest after two weeks of Investigation, pleaded
with the court in his prisoner's behalf, explaining that his case was "just
one of those things that happen" and that Muche, until the theft, had
had a perfect record.
Muche, according to Federal investigators, was 22 years old when
he entered the employ of the Assay Office at Nassau and Wall Sts., adjoining the Subtreasury Bldg., for $4 a day. Though he worked faithfully for the Government as electrician of the office, it was not until two
years ago that his pay was increased to $6 a day.
On Nov. 19, during lunch hour, according to Mr. Straight's men, Mucha,
unwatched, walked into the room on the first floor of the Assay Office,
where gold is weighed and tested. Since he had a clean record in the
service and had weighed ingots on occasions, it was not difficult for him
to remove a 225-ounce bar from a hand truck and slip it into his pocket.
What impulse prompted him to do this, he could not explain, but once
the gold was in his pocket, though he would have "given his life to undo
the wrong," he found no opportunity, he said, to return the ingot without
detection,
Later he went to a dealer in old gold on Bayard St., he explained, and
left the brick with him. The dealer paid him $100 on account and told
him to return Monday to receive the balance after a test had been made.
Secret service men, it is understood, were notified by the dealer that
a man of Muche's description had left the gold at his shop. Louis Mead
Treadwell, acting head of Mr. Medalie's criminal division, obtained the
indictment. Niles R. Becker, Superintendent of the Assay Office, appeared before the Grand Jury. Then Muche was arraigned. ...
The court consented to bail of $1,000.
[VoL. 134.
company issuing two policies of title insurance on the supposed real estate
Involved. Checks for the loans were paid by a bank on forged indorsements.
The insurer sought to recover by subrogation from the bank.
The decision of the Cicuit Court,given effect by the refusal of the Supreme
Court to review, held that the insurer did•not insure against the forgery of
indorsements on the checks, but that its contract was confined to the titles
of the purported borrowers.
Wage Cut of 10% Accepted by 8,000 Employees of
Southern Pacific Lines in Texas and Louisiana.
About 8,000 employees, or approximately one-half of the
personnel of Southern Pacific Lines in Texas and Louisiana
have, in their own behalf or through their accredited representatives, accepted an unconditional 10% reduction in
wages, effective Jan. 1 1932, according to A. D. McDonald,
President, Texas & New Orleans RR. who further states:
The negotiations, which were initiated by the management, were but
recently concluded with representatives of the various shop crafts, railroad
train dispatdies, yard masters, supervisory foremen in the mechanical
department, clerical employees in the general offices, dining car employees, and passenger train porters. These employees were found to be
very conversant with the economic problems and difficulties of the property, and realizing that the long continued decline in traffic and the resultant decreases in revenue necessitated a reduction in expenses, cheerfully accepted this wage cut as their contribution to meet the situation.
The conferences were conducted harmoniously, and the employees in the
branches of the service mentioned are to be congratulated and much complimented for these evidences of their loyalty and their co-operation with
the management, whose officers accepted a like salary cut, in the effort
to bring about better conditions.
Throughout the past year these lines have endeavored to carry on their
maintenance of way and maintenance of equipment work in such manner
as to cause the least possible distress from unemployment. This was accomplished by keeping all of their principal shops open continuously on
a basis of four or five working days per week, although with somewhat reduced forces; and also by providing work continuously for a large number
work
of the maintenance personnel, by means of spreading the available
among as many employees as possible.
Last week the Southern Pacific negotiated a voluntary
wage reduction of 10%, affecting some 15,000 employees on
the lines west of El Paso. These employees were mostly
shop craft and shop clerical employees.
Opening of Southern Pacific Co. Shops.
According to San Francisco adviees to the "Wall Street
Journal" 5,560 locomotive and car shopmen of the Southern
Pacific Co. have returned to work on a four-day-week basis
at shops throughout the.Pacific system. The order affects
1,600 workers of Sacramento, 1,100 at Los Angeles, 700 at
El Paso, 600 at South San Francisco, 400 at Oakland, 300
at Ogden, 250 at Portland, 200 at Tuscon, Dunsmuir and
Sparks, and 100 at Roseville. Employees of this class have
accepted 10% wage reductions, effective Jan. 1.
Auto Transport Control by Inter-State Commerce
Commission Favored—Examiner Holds Step Is
Needed to Unify Transportation.
Asserting that "co-ordination of railways and highway
transportation should be accomplished so as to permit the
use of each of these agencies, in such a way as to give the
public maximum service at minimum cost," Examiner Leo J.
In reporting the suspension of sentence on Dec. 7, the Flynn of the Inter-State Commerce Commission has sub"Times" of Dec. 8 said in part:
mitted to the Commission a proposed report including comAlan G. Straight, head of the Secret Service in this district, who had
caused the electrician's arrest after tracing the ingot to an old gold shop prehensive recommendations for legislation to bring the
on Bayard St., where Muche had attempted to sell it following its theft entire field of inter-State motor transportation for hire on
on Nov. 19, pointed out that for years his prisoner, a $6 a day employee
In the Assay Office, had had access to the weighing and assay rooms. the public highways within the scope of the Commission's
His record until this unfortunate incident, he said, had been perfect.
regulatory jurisdiction. The "Journal of Commerce" of
George Z. Medalie, United States Attorney, agreed that Muche had
6 refers to the matter as follows:
Jan.
Fred
premeditated.
sense
no
in
was
crime
acted on impulse, that his
Muche, the prisoner's brother, who owns a music store in West New
Brighton, promised the court that he would give Muche a job if he got
another chance. John M. Cashin, the defendant's attorney, added his
plea for mercy. Then Judge Knox addressed the prisoner.
"How did you happen to do this?" Muche answered, "I don't know
how it happened."
"I'm going to suspend sentence on you," Judge Knox said. "I will
put you on probation for five years. You have always had a good reputation. I believe you acted on the impulse of the moment. The fact
that YOU thought you could take a gold brick from the Assay Office, leave
It with a dealer and get away with it is your best defense."
United States Supreme Court Rules on Right by
Subrogation to Recover from Bank on Forged
Indorsements.
From the New York "Journal of Commerce" we take the
following from Washington Nov. 30:
Issuance of title insurance policies to protect loans later found to have
been fraudulently obtained does not give the insurer the right by subrogation to recover from a bank which, on forged indorsements, had paid the
checks Issued by the insured lender, it was held in effect to-day through the
refusal of the U.S. Supreme Court to review a decision to that effect by the
Court of Appeals for the Eighth Circuit.
Petition for review was filed by the New York Title & Mortgage Co.
Two loans were granted by the Farm & Home Savings & Loan Association
of Missouri on applications later found to be fraudulent, the mortgage
The report was made following a comprehensive investigation of the coordination of motor transportation ordered by the Commission and conducted by Commissioner Brainerd and Mr. Flynn as the result of which the
Commission expects to make recommendations to Congress for the necessary laws. Oral argument on the report will be heard by the Commission
on March 1, 2 and 8.
This report follows an earlier investigation by the Commission in the
subject of motor transportation after which it urged Congress to provide for
the regulation of bus transportation. The later investigation, however, was
aimed particularly at the co-ordination feature of the subject and the Flynn
report proposes not only regulation in varying degrees of truck transportation of freight, including the fixing of minimum rates for contract trucks,
but also legislation specifically authorizing railroads to engage in motor transportation under the supervision of the Commission.
Co-ordination Need Stressed.
In a series of fifty conclusions summarizing the report, Mr. Flynn says
machine cannot function with progressive
transportation
that "the national
efficiency, part regulated, part unregulated," and that "co-ordination of
transportation agencies cannot reach its economic possibilities under this
anomalous condition."
Among the recommendations, which are along the lines of President
protected
Hoover's recent recommendations to Congress that the railways be
against unregulated competition, are:
"Carriers subject to the Inter-State Commerce Act should be specifically
authorized by law to engage in inter-State transportation by motor vehicles on the public highways, and thereafter such motor vehicle operations
should be subject to the provisions of the Inter-State Commerce Act.
J.91932.]
FINANCIAL CHRONICLE
"Railways and water lines should supplement their transportation services by using motor vehicle transportation in co-ordination with their rail
and water services wherever this will result in economies of operation or
betterment of service or both.
"Railroads should consider whether economy and efficiency could be promoted by utilizing the Railway Express Agency as a medium for handling
all less than car load freight with expedition in service and reduction
in charges to the shipper.
"Congress should declare that the business of operating motor vehicles
for hire in inter-State commerce on the public highways is affected with public interest and is so interrelated with transportation by other agencies that
it must be considered a part of the national transportation system.
"Regulation of the transportation of persons by motor vehicle for hire
should be provided for by law.
"Regulation of inter-State transportation of property by motor vehicles for
hire operating on the public highways in inter-State commerce should be
provided for by law. Classification for the purposes of regulation should be
made.
"In determining whether or not public convenience and necessity require
the granting of a certificate to operate motor vehicles in inter-State commerce, reasonable consideration, among other pertinent matters, should
be given to available transportation service by any other existing transportation agency operating in the same territory, and to the effect which
the proposed service may have upon such transportation agency, the continued operation of which is important to the community served by it.
Would Allow Joint Rates.
"Common carriers by motor vehicle should be authorized, but not at this
time required, to participate in through routes and joint rates with other 'Common carriers by motor vehicle or with steam railroads, electric railways or
water lines subject to the Inter-State Commerce Act.
"The law should require that the inter-State fares and charges of common
carriers by motor vehicles should be just, reasonable and not unduly discriminatory, unduly preferential, or unduly prejudicial. Requirement should
be made that tariffs be filed and posted."
The report points out that the Commission has no jurisdiction of matters
of taxation but that it should direct attention to the necessity for ascertaining whether or not motor carriers operating on the public highways for
hire are contributing toward the construction and maintenance of the public
highways used by them an amount commensurate with their use of such
highways as a place of business.
Rail Revenue Pool to Give Help Early—Credit Corporation's Directors to Meet Jan. 21 to Estimate
Amounts of Advances—Lines May Discount Paper
and Get Use of Funds Without Waiting Until
March 15.
The directors of the Railroad Credit Corp. will meet on
Jan. 21 to approve a plan whereby railroads sharing in the
revenue pool which the corporation is to administer will be
enabled to anticipate their advances. The effect of the plan
it is said, will be to put immediately into the treasuries of
participating railroads funds for which they would otherwise have to wait until March 15. The plan provides that the
corporation's directorate may estimate the amount a railroad would receive from the pool after that date and issue
a certificate to show that the road may expect to receive
the amount stated at the proper time. This loan certificate
the railroad would then discount at its bank. The New York
"Times" of Jan. 5, in discussing the matter further, adds:
245
The record before the Commission was closed, Chief Justice Hughes explains in his opinion, in September 1928. In
September 1930, and again in February 1931, the carriers
sought a rehearing of the case, but their petitions were denied
by the Commission. The orders of the Commission reducing
in general the freight rates on grain and grain products in
Western territory had not in the meantime gone into effect.
A loss in revenue amounting to $25,000,000 per annum, the
carriers estimated, would result from the order. In reporting the matter the "United States Daily" further states:
Different Economic Era.
"It is plain," the Court held by a unanimous decision, "that a record which
was closed in September 1938—relating to rates on a major description of
traffic of the carriers in a vast territory—cannot be regarded as representative of conditions existing in 1931. That record pertains to a different
economic era and furnished no adequate criterions of present requirements."
The Court took judicial notice of the change in condition upon which the
new hearing was asked. "It is the outstanding contemporary fact," Chief
Justice Hughes said, "dominating thought and action throughout the country. As the Inter-State Commerce Commission said in its recent report
to the Congress 'a depression such as the country is now passing through
is a new experience to the present generation.'" The Commission was also
said to have recognized in its report "that in such depressions the railroads suffer severely. Their traffic is a barometer of general business conditions."
Second Petition Cited.
While the effects of the widespread economic disturbance have had a
progressive manifestation, the Court noted, it was found that "they had
been sufficiently revealed in February 1931, when the second petition for
rehearing was made, to compel the conclusion that a record of 1928 afforded
no sufficient basis for the order of the Commission." The facts were set
forth in the carriers' petition, it is stated.
In reply to the contentions of the Commission that it had held a full
hearing on the matter, and that "the Commission necessarily projects into
the future the results of a decision based on the conditions disclosed in
the record," the Court said that "these suggestions would be appropriate
in relation to ordinary applications for rehearing, but are without force
when overruling economic forces have made the record before the Commission irresponsive to present conditions. This is not the usual case of
possible fluctuating conditions but of a changed economic level."
Denial of Right Held.
In the discharge of the Commission's duty, a fair hearing was said to
be a fundamental requirement. "In the instant proceeding, the hearing accorded related to conditions which had been radically changed, and a
hearing, suitably requested, which would have permitted the presentation
of evidence relating to existing conditions, was denied. We think this
action was not within the permitted range of the Commission's discretion,
but was a denial of right. The order of the Commission which was thus
made effective, and the ensuing supplemental order, cannot be sustained."
The Court, in view of its decision, did not find it necessary to consider the
contentions of the parties with regard to the authority of the Commission
to enter the order, irrespective of the matter or changed conditions.
New York State Chamber of Commerce Protests to
Inter-State Commerce Commission Against Change
in Existing Rail Freight Differentials Between New
York and Baltimore.
It was announced on Jan. 1 that the Chamber of Com-
It is considered posible that the corporation may advance funds due
a railroad directly to a bank that discounts its certificate. The cor- merce of the State of New York,through Parker McCollester,
poration would charge the same interest as the New York Federal Reserve who represented the Chamber in the New Jersey lighterage
Bank rediscount rate, and it is believed that the banks would make every case, has protested to the Inter-State
Commerce Commission
endeavor to charge as low a rate as possible in rediscounting certificates
against any change in the existing rail freight differentials
Issued by the corporation.
The procedure is necessary because the corporation's charter provides as between New York and Baltimore, as proposed by the
that it may borrow funds only to defray its own expenses, which funds State of Maryland, City of Baltimore
and Baltimore comwould be nominal, because interest charged on advances to railroads would
be applied against the corporation's expenses. Under the charter first mercial interests. Mr. McCollester on Dec. 31 in a telegram
considered for the corporation, which was on the broad lines permitted to the Commission opposed the change on the ground that
by Delaware laws, the corporation would have been free to make loans irreparable injury would result to New York if Eastern Class
generally. However, members of the Association of Railway Executives,
which approved formation of the corporation, insisted on limiting its Rate relationships were made applicable to import and
export traffic, even if only for a temporary period.
powers in this respect.
At one time a proposal was made in banking circles that the Railroad
Credit Corp. borrow in its own name funds to be advanced to needy rail4,500 Employees of Mechanical Department of New
roads, but E. G. Buckland, Chairman of the New York New Haven dc
Haven Road Accept 10% Wage Cut.
Hartford RR. and of the corporation, pointed out on Dec. 16 the way in
which the corporation was restricted in this respect
Officials
of the New York New Haven & Hartford RR.
which
will
rates,
freight
supply funds for the corporation,
Increased
went into effect Jan. 4. The proceeds from the higher rates will be ac- announced Jan. 8, that about 4,500 men employed in the
crued and payable around March 11 and will have to be paid on or about mechanical department had accepted voluntarily a 10%
March 81 under penalty of an 8% interest charge.
reduction in wages, effective Jan. 15. Officials said
Railways in West Held Entitled to New Rate Hearing—
Supreme Court Holds Inter-State Commerce Commission Improperly Refused Petition of Carriers
in Grain Case—Changed Economic Conditions
Cited—Record Closed in 1928 Cannot Be Regarded As Representative of Situation in 1931,
Opinion States.
Taking cognizance of the economic conditions facing the
railroads of the country, the United States Supreme Court
declared on Jan. 4, that the Inter-State Commerce Commission improperly refused the petition of Western carriers for
a reopening of the so-called Western grain rate case for the
purpose of considering the material changes which had taken
place since the proceedings in the Commission were closed.
the
subject had been under consideration for some time and that
in accepting the reduction the employees felt "it was to the
best interest of the public, the railroad and themselves."
A similar reduction in wages of the clerical force, officials
said, may come at a later date.
ITEMS ABOUT BANKS, TRUST COMPANIES, &C.
Arrangements were made this week for the sale of two
Stock Exchange seats at $132,000 each, up $10,000 from the
previous sale.
The New York Cotton Exchange membership of the late
Harry B. Schloss was sold this week to Julian A. Acosta, for
another, for $15,000. The last preceding sale was for
$14,500.
246
FINANCIAL CHRONICLE
Anouncement was made Jan. 1 of the election of George
C. Haigh as Vice-President of the Bank of Manhattan Trust
Company. Mr. Haigh started his banking career in 1893
with the American Exchange National Bank Upon the
merger of the Irving Trust Company and the American
Exchange National Bank in 1926, he became a Vice-President of the Irving Trust Company, at 1 Wall Street.
The Bank of Manhattan Trust Company of New York
announced on Jan. 4 the following changes and promotions
In its official staff:
Graham B. Blaine and John A. Milholland, formerly with the International Manhattan Company, Inc., became Vice-Presidents.
John Collins formerly with the International Acceptance Bank, Inc.,
was made a Vice-President.
Benjamin Strong, Jr., was promoted from Assistant Vice-President to
Vice-President.
E. Arthur Carter, John E. P. Morgan and A. Suehsdorf, Jr., formerly
with the International Manhattan Company, Inc., were made Assistant
Vice-Presidents.
James 0. Safford, J. H. L. Janson, Jr., H. B. Keen, Wm. S. Maeder
and Horatio W. Turner, also of the International Manhattan Company,
Inc., were made Assistant Secretaries.
John B. Reboul and Leonard J. Cushing of the New Business Department were made Assistant Treasurers.
Jerome A. Thirsk and Charles G. Young of the Credit Department were
made Assistant Secretaries.
[VoL. 134.
are reported as $1,459,114,000. In the bank's report it
was shown that in accordance with their customary policy
of conservatism the directors had transferred $21,000,000
from the bank's surplus to its reserve for contingencies.
H. Nelson Walker, a membe- r of the firm of Clark, Dodge
& Co., of New York died after a week's illness on Jan. 3.
Both he and his father had beet identified with the firm
for many years, his father having served as Cashier for
nearly 50 years. He worked with his father as Assistant
Cashier, and, after having been employed in trusted positions for about 35 years, became a general partner of the
firm three years ago. Mr. Walker, through his many
years of activity in Wall Street, had become well known in
the financial community.
The condensed statement of the Guaranty Trust Co.
of New York, shows total resources of $1,494,040,051, compared with $2,022,425,111 on Dec. 31 1930, and deposits
of $1,025,04%550, compared with $1,263,591,244 a year
ay. Surplus and undivided profits of $194,959,038 compared with $207,442,797 a year ago, or a decrease of $12,483,759, which was caused by amounts taken out of unThese changes follow the announcement last month of divided profits
account and added to the.company's reserves.
the proposed discontinuance of the securities affiliate,
the International Manhattan Company, and the carrying
In its issue of Dec. 24 th- e New York "Times" stated
on of its activities by the Bank of Manhattan Trust that Judge Levine in General Sessions granted on Dec. 23
Company. The announcement, as we indicated in our issue another postponement of sentence on Raffaele Prisco, Presiof Dec. 12 (page 3913) followed meetings of the directors dent and founder of the closed Prisco State Bank at 73
of the Manhattan Company, the Bank of Manhattan Trust Mulberry Street, this city, and his son, Joseph W. Prisco,
Company and the International Acceptance Bank, Inc.
a Vice-President, in connection with shortages aggregating
The International Acceptance Bank, Inc., announces the $175,000 in the bank. The "Times" added:
following changes in, and additions to, its official staff
The Court fixed Feb. 10 for sentence on both men after their counsel
had made the request for the postponement with the statement that they
effective as of Jan. 1 1932:
Richard T. Giblin and Joseph J. Moran, formerly Assistant Treasurers,
were promoted to Assistant Vice-Presidents.
Orman M. Crocker, James L. O'Keefe and John II. Squires were appointed
Assistant Treasurers.
Franklin Field and Herman Henninger, Assistant Secretaries.
The newly created officers are all former members of
the Manhattan company group.
were aiding the State Banking Department in liquidating the bank's
affairs. The attorney said that 80% of its resources already had been
paid to depositors and that through the help of the two defendants it
was expected additional money would be obtained for the depositors.
"I expect you will do everything possible to aid in retrieving more
money for the depositors," the court said to the Priscos in granting
the adjournment. "Your co-operation with the Banking Department
will be taken into consideration by me in the sentences I shall impose
on you."
The Prisco State Bank was taken over by the Banking
At the regular meeting of the executive committee of
The National City Bank of New York, on Jan. 5, Boudinot Department on July 28. Items regarding it appeared in
our issues of Aug. 1, page 731; Aug. 29, page 1394; Sept. 26,
Atterbury was appointed an Assistant Vice-President.
page 2029, and Dec. 5, page 3727. Early in November the
Elmore F. Higgins, until r- ecently Vice-President of the Banking Department announced that checks totaling more
National City Bank, of New York, was on Jan- 4 elected than $1,250,000, representing a dividend of 70% were being
President of the Exchange National Bank of Tulsa, Okla- mailed to the 6,028 depositors. On Dec. 22 the Department
homa. Mr. Higgins succeeds H. H. Rogers, who becomes stated that a further dividend of 10% wOuld be distributed
Chairman of the Board. The new President of the Exchange in the course of the week.
Bank came originally from the section to which he now reAmong the 46 courses in banking and investments offered
turns. He was born in Dallas, Tex., some 48 years ago.
Mr. Higgings' banking experience covers a period of 35 by New York Chapter, American Institute of Banking,
years, beginning with his first job as a boy in the are three new courses: "Bank Secondary Reserves and
Merchants and Planters National Bank of Montgomery, Investments," by Dr. Paul M. Atkins, Vice-President of
Linder & Co.,Inc.;"Foreign Exchange Accounting,"
Alabama. He continued with a successor institution, the Cornell,
byJ.
Wilbur
Tovell, Assistant Manager'of the Foreign DeFirst National Bank of Montgomery, until 1912, when he
partment of the Chase National Bank; and "Savings Bank
Bank
Fourth
National
with
the
position
a
resigned to take
Administration," by Edwin C. Estes, Assistant Vice-Presiof the same city. In 1912 Mr. Higgins became a bank cent and Secretary of the South Brooklyn Savings Bank.
Clearing
House
Orleans
the
New
with
starting
examiner,
Registration for the spring semester takes place during the
Association, and later serving as national bank examiner week of Jan. 18 at the chapter office in the Graybar BuildRichmond
the
Pennsylvania,
Chicago,
In Georgia, western
ing, 420 Lexington Avenue.
Federal Reserve District, and finally as chief national bank
The Central Hanover Bank 86 Trust Co. elected Walter
examiner for the Sixth (Atlanta) Federal Reserve District.
This position he resigned in April 1919, to become an L.Schnaring a Vice-President. Mr.Schnaring was formerly
officer of the National Bank of Commerce in New York. an Assistant Vice-President.
After successive promotions, he resigned as Vice-President
Michael H. Conway has be-en appointed a Vice-President
of the National Bank of Commerce to accept a post as and William H. Logan an Assistant Vice-President of the
Vice-President of the Bank of America, N. A. When, in Sterling National Bank & Trust Co. of New York. Both
November, last year, the Bank of America was merged Mr. Conway and Mr. Logan, who were former executives
with the National City Bank, Mr. Higgins was appointed of the Industrial National Bank, will be connected with the
a Vice-President of that institution.
39th Street office of the Sterling National.
5—
In order that he may devote more time to the general
The statement of the Chase
- National Bank of New York
as of Dec. 31, made public Jan. 5, showed total resources administrative work of the bank, the Bank of New York
of $1,988,669,000. The combined capital, surplus and un- & Trust Co. has relieved Dave H. Morris Jr. of the duties
Morris, who is also a Vice-President
divided profits are given as $291,075,000, the capital alone as Comptroller. Mr.
continue to hold that office. R. W. Kaiser,
will
bank,
the
of
as heretofore being $148,000,000. Cash in the bank's vaults,
Comptroller, has been appointed to sucFederal Reserve Bank and other banks is shown as $333,- formerly Assistant
as Comptroller, and R. A. MacLeod has
Morris
Mr.
ceed
571,000. Investments in United States Government securiAssistant Comptroller.
ties were $162,946,000. State, municipal, other securities been appointed
and stock in Federal Reserve Bank total $165,155,000. Loans
Charles Oliver Iselin, a son of Adrian Iselin, founder of
and discounts amounted to $1,154,633,000. The total deposits the banking firm of A.Iselin & Co.,and a grandson of Adrian
JAN. 9 1932.]
FINANCIAL 'CHRONICLE
Iselin, a Swiss financier whose importing firm founded the
family fortune in the United States, died at his country home
in Glen Head,L.I., on Jan. 1. Mr.Iselin, who was 78 years
old, had suffered two paralytic strokes. For many years
he was connected with his father's firm and was the holder
of many directorates. He retired from business some
years ago.
The Brooklyn Trust Company's statement of condition
as of Dec. 31 1931, issued Jan. 5 shows deposits of $116,774,588, against $115,711,020 on Sept. 30, the last preceding
call date, an increase of $1,063,568. The statement gave
effect to a transfer of $2,250,000 from surplus and undivided
profits to reserves, which was explained as being due to
fluctuations in market value of securities held. Of this
amount, $2,000,000 was taken from surplus, which was
reduced to $10,000,000 from $12,000,000, and $250,000 was
taken out of undivided profits, which stood at $2,893,065
on Dec. 31 1931, against $3,081,177 on Dec. 31 1930, and
$3,127,672 on Sept. 30 1931. Indicated earnings for the
year 1931, before reserve adjustments, were $1,701,888,
equivalent to $20.75 a share on capital stock, from which
$1,640,000 was paid out in dividends. Reserves totaled
$10,659,582 at the year-end, against $8,929,734 on Sept. 30
1931, and $3,248,409 at the end of 1930. Total resources
were $158,863,372 against $156,008,335 on Sept. 30 1931.
247
on Oct. 6 for the protection of depositors, would be reopened on Saturday
morning. They said this action had been made possible by the co-operation
of depositors, who released a share of their deposits to the bank, and
stockholders, who agreed to accept no dividends until the depositors were
repaid.
The following with reference to the reopening of the institution was contained in a dispatch from Rochester, N. Y. by
the Associated Press on Jan. 6:
The approval of Supreme Court Justice William F. Love was given today to an order of the State Banking Department granting permission to
the Ontario County Trust Co. of Canandaigua to reopen.
r
Smith O'Brien, representative of Joseph Broderick, State Superintendent
of Banks, said that only eight of the bank's 3,800 depositors had refused
the request to contribute 25% of their respective deposits to the bank.
The stockholders and directors of the bank, said Mr. O'Brien, by assessing themselves heavily, also contributed to the reorganization fund, which
reached the total of $1,068,433. Assets at the reopening would exceed
liabilities by a half million dollars and would be 85% liquid, far above
the requirements of the law.
In stating he would sign the' order of approval, Justice Love said he
was most gratified to do so. "Who knows," he said, "but that this is
the turn about in conditions.
on Dec. 30 that two New Haven
Announcement was made
banks, the Union & New Haven Trust Co., and the Congress
Bank & Trust Co., had consolidated following a week of
negotiations. Associated Press advices from New Haven,
reporting the matter, furthermore said:
The Union & New Haven, capitalized at $1,458,700, reported assets of
$18,193,008 in its last statement issued in September, and deposits of
more than $12,000,000. The Congress Bank is capitalized at $500,000 and
puts deposits at $1,624,000.
The Bank of North Hempste- ad at Port Washington, L. I.,
George J. Bassett, State Bank Commissioner, endorsed the merger.
was taken over on Dec. 28 by Joseph A. Broderick, State
Superintendent of Banks for New York, at the request of
its directors. The reason given for the action was the non
liquid condition and depreciation in the value of the institution's assets. The deposit liabilities of the institution at
the close of business Dec. 26 1931 were approximately
$2,100,000. A dispatch from Port Washington to the New
York "World-Telegram" on Dec. 31 stated that all depositors would be paid in full, in the opinion of Clarence L.
Thompson, Vice-President of the institution.
The sugension on Jan. 2 of the Unionville Bank & Trust
Co. of Unionville, Conn., (Hartford County) was reported
in a Hartford dispatch to the New York "Journal of Commerce" on Jan. 3. The directors had voted to ask for a
restraining order. The closed bank had sizable deposits in
the City Bank & Trust Co. of Hartford (which had closed
Jan. 2), the dispatch stated.
-Co. of East Hartford, Conn.,
The East Hartford Trust
with deposits of approximately $3,500,000, was closed on Jan.
Joseph A. Broderick, New
-York State Superintendent of 2 after heavy withdrawals. A dispatch by the United Ppss
Banks, announced on Dec. 31 that he had on that day taken from East Hartford in reporting the suspension said:
The bank was capitalized at $200,000 and had surplus and undivided
possession of the business and property of E. C. Brewer &
The savings department contained $2,000,000. Fred
Co., private bankers, of Gilbertsville, N. Y. The action was profits of $285,000.
Holt, President of the City Bank & Trust Co. of Hartford, which closed totaken at the request of the partners of the company in order day, was a director of the East Hartford Trust.
to insure an orderly liquidation of its affairs and to conBusiness of the Home Bank & Trust Co. of South Manserve the assets and protect the interests of the depositors.
The deposit liabilities, as shown by the books, as at the close chester, Conn., has been divided between two other institutions in South Manchester, according to a dispatch by the
of business Dec. 30 last, were approximately $196,000.
Associated Press from Hartford on Jan. 4. The Manchester
Andrew Horvatt, former P-resident of the defunct State Trust Co. took over the commercial and trust departments
Bank of Binghamton, N. Y., who had been a fugitive from of the institution, while the savings department was turned
justice since the closing of the bank of Dec. 15 1930 until over to the Savings Bank of Manchester. The deals, which
his surrender on Dec. 28 last, at Sidney, N. Y., was sentenced took effect at the opening of business Jan. 4, were approved
on Dec. 30 by Justice Daniel V. McNamee to from 12 to 18 by the Hartford Clearing House Association, the dispatch
years in Auburn prison at hard labor, and was immediately stated.
taken to the prison. A Binghamton dispatch on Dec. 30 to
William A. Hitchcock, a director of the Farmington Savthe New York "Herald Tribune," in its report of the matings Bank, Farmington, Conn., since 1916, was appointed
ter, said in part:
Horvatt had pleaded "guilty" to six indictments charging second degree President of the institution on Dec. 29, to succeed the late
forgery of notes held by his bank. There had been 30 indictments drawn Herbert Knox Smith, whose death occurred recently. At
up against the banker who in his years in Binghamton had built up a
the same meeting, Robert Porter Keep, Principal of Miss
vast banking business'
in the foreign section of the city. .
The sentences were imposed on the first three indictments read. Sus- Porter's School, was made Vice-President. A dispatch from
pended sentences were given on three other similar indictments to which Farmington on
Dec. 29 to the Hartford "Courant," from
Horvatt pleaded "guilty."
which the foregoing is learned, went on to say in part:
On the first indictment Horvatt was given five to seven years;
on the
second, four to six, and on the third, three to five, the terms to ran
consecutively.
Horvatt was led through corridors crowded with men, women and children
whose savings were lost when the State Bank of Binghamton collapsed with
losses totaling more than $2,500,000. The State has charged that the
failure was due to Horvatt's manipulations.
A dispatch by the Associated Press on the same date contained the following:
Mr. Hitchcock is a native of Cornwall and came to Farmington in 1868.
In 1874 he started in the employ of the Upson Co., became it. President,
and remained at the head of the firm until its sale to the Republic Iron &
Steel Co. He has been a director of the Collins Co. of Collinsville, the
Taylor & Fenn Co. of Hartford, the Union Electric Light & Power Co. and
the Farmington Water Co. He was elected a corporator of the Farmington
Savings Bank in 1915. Mr. Keep, also a director of the bank is a director
of the Farmington Water Co.
When Andrew J. Horvatt, former President of the State Bank of
Binghamton, steps out of Auburn prison after serving the sentence imposed
upon him to-day, he will face rearrest under a writ of capias forwarded to
that prison to-day by officers of the Federal Government.
The capias, sent from here by Clarence W. Weaver, Deputy United States
Marshal, says that Horvatt is wanted for violation of prohibition laws for
which he was indicted last year.
On Jan. 2, the City Bank & Trust Co. of Hartford, Conn.,
was closed by the State Bank Commissioner, George J.
Bassett, at the request of its directors, according to advices
by the Associated Press from that city. Heavy withdrawals
aggravating a "frozen" condition caused by a depressed
securities market necessitated the closing of the institution,
The reopening to-day, Jan. 9, of the Ontario County Trust Mr. Bassett said. The following statement was issued by
Co. of Canandaigua, N. Y., which has been closed since Oct. the Commissioner:
The failure of the City Bank & Trust Co. of Hartford to open this
6 last, was indicated in advices from Canandaigua to the
morning was due to their inability to secure sufficient cash to meet
New York "Times" on Wednesday of this week, Jan. 6. The steady and heavy withdrawals. They had reached
the limit of their
dispatch said in part:
liquid resources and would have been unable to dispose of their securities
Officers of the Ontario County Trust Co. here announced to-day that
the bank, which was placed in the hands of the State Banking Department
at this time except at a great sacrifice due to abnormal conditions in
the security market.
248
FINANCIAL CHRONICLE
Efforts have been made during the last few days to effect a reorganization which would supply sufficient liquid capital to meet all demands,
but lack of time made such a reorganization impossible. Their directors
therefore, decided at a meeting last night that in justice to all the depositors
they should ask the banking department to place a temporary restraining
order and this was done this morning
Their large assets, although at the moment in a non-liquid condition
should, it is believed be sufficient to eventually pay all their depositors.
In the meantime, it is understood that the reorganization plans will be
carried forward with the hope that such reorganization may be effected
in the near future.
The City Bank & Trust Co., one of the largest banks
In Hartford, was established in 1851. It has a capital of
$1,000,000, with surplus and undivided profits of $2,142,972
and has deposits (according to its last statement Sept. 29
1931) of $23,464,482.
rirou 134.
The consolidation will be effected through purchase by the Western
Savings Fund of all the assets of the First Penny Savings Bank. Depositors
in the First Penny will be credited Jan. 1 on the books of the Western
Savings Fund with the full amount of their deposits in the First Penny.
This consolidation greatly broadens the sphere of usefulness of the Western Savings Fund. It gives the Western three new branches—the main
office of the First Penny at Juniper and 0hestnut Streets, and the First
Penny's other offices, at 21st and Bainbridge Streets and 520 South 9th
Street. All of these will be maintained and depositors who have been
using them will be required to continue to do so.
The Western Savings Fund will benefit especially through the acquisition of a central-city branch in Chestnut Street near Broad, which is now
the main office of the First Penny.
By the consolidation the Western increases the number of its depositors
to 154,000.
•
•
•
The officers of the Western Saving Fund will continue to direct its
affairs. They are Robert J. Brunker, President; F. F. Hallowell, VicePresident and Treasurer; J. R. Faulty, Vice-President and Assistant
Treasurer; 0. A. Wheeler, Vice-President and Secretary, and 0. P. Humphreys, Assistant Treasurer. Robert M. Coyle, now President of the First
Penny, will act in an advisory capacity.
The First National Bank of West Point, Mass., with
capital of $100,000, and the First Savings Bank of that
place, capitalized at $25,000, were consolidated on Dec. 29
1931 under the title of the First National Bank of West
On Monday of this week, Dec. 28, four former officers
Point. The enlarged institution has a capital of $125,000, of the closed
Girard Avenue Title & Trust Co. of Philadelphia
with surplus of $50,000. The approaching merger of these were sentenced by Judge Horace Stern in Quarter
Sessions
3917.
issue,
page
12
our
Dec.
noted
in
banks was
Court to prison terms of 10 to 20 years each, following pleas
of "guilty" in each ease. Those sentenced were Edward
At meetings of the respective shareholders of.the United
A. McVeigh, Secretary & Treasurer; George M. Ryan,
States Trust Co. of Boston and the Bank of Commerce•&
Assistant Treasurer; John F. Gibbons, Assistant Secretary
Trust Co. of that city, held Jan. 4, a merger of the latter
& Treasurer, and Edwin J. Logue, teller & bookkeeper.
institution with the former was ratified. In reporting this,
The Philadelphia "Ledger" of Dec. 29,from which the forea dispatch from Boston on Jan. 4 to the "Wall Street Jourgoing is obtained, went on to say in part:
nal" said the stockholders of the United States Trust Co.
With their departure for jail it was said the State Banking Department
had approved a reduction in par value and an increase in now will turn its attention to recovery of several hundred thousand dollars
the authorized shares to 140,000 from 100,000. The addi- the embezzlers gambled and lost in brokerage houses, using the Bank's
tional 40,000 shares of United States Trust authorized will own checks.
* * *
be issued in exchange for the assets of the Bank of Commerce
They were charged in indictments to which all but Ryan pleaded guilty
& Trust Co. Subsequent advices from Boston, Jan. 8, last Wednesday (Dec. 23) with embezzling $441,750. Ryan who is a son
of Michael J Ryan, former City Solicitor and the President of the bank.
appearing in the Brooklyn "Eagle" contained the following changed
his plea to guilty yesterday (Dec. 28) before Judge Horace Stern
additional information:
in Quarter Sessions Court.
Assistant District Attorney Franklin E. Barr said the four defendants
misappropriated a total of approximately $1,000,000, nearly all of which
was lost in stock speculation.
The indictments revealed that the proceeds of one draft were used by
the brokers to support two and three different accounts conducted under
the
assumed names.
In noting the proposed absorption of the Bank of Commerce
In fixing the same length sentence for each defendant, Judge
& Trust Co. by the United States Trust Co., the Boston heeded the suggestion of Edward A. Kelly. who, with John R. J. Stern
Scott
and John King, acted as defense counsel. Mr. Kelly said the accused
"Transcript" of Dec. 26 said in part:
worked
together,
were equally guilty and there should be no discriminaHon. A. C. Ratshesky, now President of the United States Trust Co.,
will be Chairman of the board of directors and at the head of the combined tion in the punishment to be meted out.
* * *
Solomont,
now President of the Bank of Commerce & Trust
banks. James
Assistant District Attorney Barr's portrayal of the fraud and its conCo., will be President of the combined banks.
sequences
was
not
optimistic
of the depositors' chances of getting much
Both banks are members of the Federal Reserve system and of the Boston
of their deposits back.
Clearing House Association. The United States Trust Co. was founded in
"Exclusive
of
some
real
estate
and some mortgages," Mr. Barr said. "the
of
Commerce
Bank
&
Trust
Co. in 1919. The consolidated
1894 and the
amount of which I am unfamiliar with, there are no securities left that
bank will continue under the name of the United States Trust Co.
belonged to the Bank and no cash. The securities the Bank did own
were pledged with other banks by these degendants. The Bank to-day
Another Monmouth County, N. J., bank, the Freehold has not very much to pay depositors. It seems to be pretty hopelessly
wrecked."
Trust Co., at Freehold, was taken over by the New Jersey
Mr. Scott, attorney for George M. Ryan, interrupted Mr. Barr to disState Department of Banking and Insurance on Jan. 4 at agree with that statement. "That isn't
a fact as I understand it," Mr.
the request of the directors. Trenton, N. J., advices to the Scott said. "The receiver is very optimistic and expects to realize on
considerable of the securities. It is a rather disappointing statement to
New York "Times," on Jan. 4, reporting the closing, said:
depositors for Mr. Barr to make when there may be a very large dividend."
Officials of the Freehold Trust Co. said business was suspended to protect
Resuming, Mr. Barr began to read from a letter stating that 70 persons
the interests of depositors after heavy withdrawals. They expressed the had gone to the poorhouse because of the wrecking of the Bank, but was
again interrupted by defense attorney objections.
belief that the depositors would suffer no loss.
Except for a house that Gibbons paid $10,500 for, which has been deeded
A Trenton dispatch to the New York "Herald Tribune," back
to the Bank, there has been no restitution, Mr. Barr explained.
The merger of the Bank of Commerce & Trust Co. with United States
Trust Co. having been effected, directors of the enlarged institution declared a dividend of 25 cents, payable Jan. 12, record Jan. 7, payable on
increased capital of 140,000 shares, 40,000 having been issued for assets
of the Bank of Commerce & Trust Co.
on the same date, gave additional information, as follows:
The company is capitalized at $100,000, undivided profits $9,000,
demand deposits $401,000, bank deposits $5,000, and time deposits $768,000,
according to a recent statement.
Lewis R. Dick, lawyer and retired banker, died at his
home in Overbrook (Philadelphia, Pa.), on Dec. 29, in his
seventy-third year. Vice-President of the Corn Exchange
National Bank & Trust Co. of Philadelphia at the time of
his retirement, Mr. Dick was United States Attorney in that
city during the Administration of President Arthur. Born
in Philadelphia, Mr. Dick was educated at the University of
Pennsylvania, and after graduation studied law with Benjamin Harris Brewster. His legal practice drew him into
contact with leading financiers, and he became President
of the German-American Bank, now the Liberty Title &
Trust Co. Later he was successively President of the Third
National Bank and Vice-President of the Corn Exchange
National Bank & Trust Co.
On Jan. 1 the Central Trust Co. of Altoona, Pa., took over
the assets and assumed the liabilities of the Lincoln Deposit
& Trust Co. of that city.
The consolidation of three Greensburg, Pa., banks, the
First National Bank (capital $150,000), the Merchants'
Trust Co. (capital $300,000) and the Union Trust Co.
(capital $400,000) became effective Dec. 31. The new
organization is known as the First National Bank & Trust
Co. of Greensburg and has a capital of $480,000 with
surplus of $320,000. Items with reference to the proposed
merger of these banks appeared in our issue of Oct. 24
and Oct. 31 1931, pages 2712 and 2868„ respectively.
The Miners' Bank of McAdoo, Pa., failed to open on
Jan.4,and its affairs were turned over to the State Banking
Department, according to a dispatch by the Associated Press
from McAdoo. The closed bank was capitalized at $50,000
The First Penny Savings Bank, of Philadelphia, an instiand had deposits of $249,492, the advices said.
tution founded by the late John Wanamaker, was acquired
by the Western Savings Fund Society of that city, effective
The Ohio Banking Department on Dec. 30 took over for
Jan. 1, giving the latter resources of approximately $92,liquidation the Citizens' Bank of Butler, Richland County,
000,000. The Philadelphia "Ledger" of Dec. 30 last, in reaccording to Associated Press advices from Columbus, Ohio,
porting the then approaching consolidation of the instituon the date named, which furthermore said:
tions, said in part:
"Frozen" assets and decline in business was given as the
reason for
JAN. 9 1932.]
FINANCIAL CHRONICLE
closing. The bank had capital of $25,000 and resources of $204,257.
J. H. Stahl was President.
The Hebron Bank Co.
at Hebron, Ohio, capitalized at
$30,000 and with resources of $274,000, has been taken over
by the Ohio State Banking Department for liquidation,
according to Columbus, Ohio, advices on Jan. 5 to the "Wall
Street Journal."
Upon request of its directo- rs the Ohio Valley Bank of
Portsmouth, Ohio, was taken over on Jan. 5 by the State
Banking Department for liquidation according to Associated
Press advices from Columbus, Ohio, on that date. The
institution was capitalized at $250,000 and had resources
of $1,145,773 the dispatch stated.
The First National Bank o-f Gary, Ind., closed on Jan. 5
following a "run" which began with the closing of two
Hammond, Ind., banks on Jan. 2 and continued with the
closing of the Bank of America of Gary on Jan. 4. Advices
from Gary to the, New York "Times", from which we
have quoted above, furthermore said:
F. R. Schaff, President of the bank, announced the closing was voted
by the directors as a preliminary step toward reorganization and to
protect the interests of depositors.
The report of Dec. 31 showed resources of $4,800,000 and deposits
of
$2,900,000. There was $300,000 in cash in the vaults when the bank
closed. President Schaff said depositors will lose no money. The closing
leaves Gary with a population of 100,000, with one bank, the Gary State
Bank, an $8,000,000 institution.
249
ment has long been desired by the management in public recognition of his services, as well as for the purpose of assuring
the continuance of those services.
Mr. A. M. Johnson, Chairman of the board of the National
Life Insurance Co. of the U. S. A., was elected to the Board
of Directors of the bank and at the meeting of the directors,
after the stockholders' meeting, the following changes were
made in the official roster of the bank: Mr. Herman Waldeck was elected Executive Vice-President; W. B. Allen,
Lester T. Boe, Spencer L. Hart, Woodbury S. Ober, H. P.
O'Connell, Joseph L. Overlock, E. F. Reiter, John H. Rumbaugh and Anthony von Wening were elected Second VicePresidents, and Mark P. Collor, Leland S. Ford, J. J. Johnston, Fred M. Naber and Clifton L. Nourse were elected
Assistant Cashiers.
James It. Leavell, President of the Continental Illinois
Bank, was elected President of the Continental Illinois Co.,
succeeding Arthur Reynolds in that office. Mr. Reynolds was
elected Chairman of the Board of the Company, now holding the same office in both the bank and the company.
Charles Z. Henkle was elected 'Secretary and Treasurer of
the company.
Thomas A. Fitzsimmons was appointed President of the
North Avenue State Bank of Chicago at the annual meeting
of the directors on Jan. 5, according to the Chicago "Journal
of Commerce" of Jan. 6. Mr. Fitzsimmons succeeds the late
L. C. Rose whose death occurred recently. At the stockholders' meeting on the same day, Clement Quinn and William P. Ellison were elected directors to succeed L. C. Rose
and Russell Whitman, it was stated.
The Peoples Loan & Trust
-Co. of Petersburg, Ind., failed
to open its doors on Jan. 4 following a meeting of the directors the previous day, when it was decided to liquidate the
company's business. Heavy withdrawals on the evening
of Jan. 2 depleted the cash reserve. A dispatch from
Consolidation of the People's Wayne County Bank of
Petersburg on Jan. 4, to the Indianapolis "News" reporting
Detroit, Mich., and the First National Bank in Detroit to
this, further said in part:
The latter was the latest bank organized and at the last report made form the First Wayne National Bank became effective as
Oct. 7 showed total resources of $269,282.64. The bank was capitalized of the close of business
on Dec. 31. The institutions have
for $25,000 with surplus and undivided profits of $10,772.37. The
bank's resources are believed to be sufficient to pay the depositors in full. been under the same ownership and virtually the same management since the formation of the Detroit Bankers Co. on
Advices by the United Press from Gary, Ind., on Jan. 4 Jan. 8 1930. The
First Wayne National Bank will have
reported that the National Bank of America of Gary, a capital of $25,000,000,
surplus of $25,000,000, and undivided
small bank with deposits of $245,000 and assets of $800,000, profits in
excess of $7,000,000. Total resources will be
had closed on that date.
approximately $600,000,000. The officers, managers and
The Hammond National Bank & Trust Co. of Hammond,' staff are to be maintained, as are both main offices and
Ind., with combined capital and surplus of $500,000 and branches. At the organization meeting of the Board of
deposits of $2,000,000, has been closed and its affairs placed Directors of the consolidated institution the following
in the hands of R. L. Hopkins, a National Bank Examiner, officers and directors were elected: John Ballantyne,
according to Associated Press advices from Hammond Chairman of the Governing Committee; Wilson W. Mills,
Chairman of the Board; John R. Bodde, Vice-Chairman of
on Jan. 2.
the Board; Herbert L. Chittenden, Chairman of the ExecuThat Taylorville National Bank at Taylorville, Ill., tive Committee; T. W. P. Livingstone, Vice-Chairman of
capitalized at $150,000, was placed in voluntary liquidation the Executive Committee; Donald N. Sweeny, President,
on Dec. 16, last. The institution was taken over by the and William J. Gray, Counsel.
Farmers' National Bank of Taylorville, Ill.
Announcement was made by the West Virginia State BankOn Dec. 31 William G. Edens retired as a Vice
-President ing Department, on Jan. 2, that the Bank of Williamsburg,
of the Central Republic Bank -& Trust Co. of Chicago under at Williamsburg, W. Va., had
closed, according to Charlesthe provisions of the bank's pension fund at the age of 68 ton, W. Va., advices on Jan. 2 by the Associated
Press.
years, after having spent 26 years with the institution and
A
small Kentucky bank, the First National Bank of
its predecessor. The Chicago "Journal of Commerce" of
Dec. 31, in noting Mr. Edens's retirement,furthermore said: Hazard, with deposits of about $600,000, failed to open for
business on Dec. 30, according to Associated Press advices
Mr. Edens joined the staff of the then newly-organized Central Trust
Co.
of Illinois on Sept. 13 1905. Prior to entering the banking field,
he from Hazard on that day.
spent 20 years in
railroad service and was one of those who laid the
foundation for the Brotherhood of Railroad Trainmen. Following this
he
spent seven years as an official of the Post Office Department in Washington.
During his service with the bank Mr. Edens pioneered in the good roads
movement in Illinois and saw the fruition of that work in the adoption of
the $60,000,000 road bond program. At all times he was active in the
affairs of the Illinois and American Bankers' Associations, serving on the
executive councils of both.
is learned from the Chicago "Post" of Jan. 2 that the
It Is
First State Bank of Chicago Heights, Cook County, was
closed by Oscar Nelson, State Auditor of Illinois, at the
close of business Dec. 31 1931. The bank was capitalized
at $200,000, with surplus of $50,000 and its deposits as of
June 30 last totaled $2,000,000. The closing was at the
request of the directors, it was stated.
At a meeting of the Board of Directors of the Continental
Illinois Bank & Trust Co., Chicago, Jan. 5, Mr. Stanley Field
was elected Chairman of the advisory committee. Mr. Field
has been closely identified with the bank as a director and
as a member of the executive committee and has been of
active assistance to the management. Mr. Field's appoint-
The Central Trust Co. of Owensboro, Ky., failed to open
Its doors on Jan. 2 and its directors posted a notice saying
that the institution had been placed in the hands of the
Kentucky State Banking Commission for liquidation.
Owensboro advices by the Associated Press, on the date
named, continuing, said:
"Frozen" assets were said to have caused the closing. The
bank, established 43 years ago, had capital stock of $400,000 and deposits
of $2,481,124.
W. L. Reno was President. The two other banks here
were reported
unaffected.
The probable reorganization of the closed Central Trust
Co. of Maryland, of Frederick, Md., is indicated in the following dispatch from Frederick on Dec. 30 to the Baltimore
"Sun":
At a meeting of approximately 1,000 depositors at the
Courthouse to-night,
a plan prepared by Marbury, Gosnell de Williams, corporation
Baltimore, was adopted in principle to reorganize the Centralattorneys of
Trust Co.,
which closed its doors Sept. 3.
A committee, representing the Frederick bank and its 11
branches, was
appointed to work out the details of the plan or some other plan.
The proposed reorganization calls for $375,000 capital stock and
$125,000
surplus.
250
FINANCIAL CHRONICLE
The closing of the Central Trust Co. was noted in our
Sept. 5 issue, page 1559, and reference made to its affairs
in our issue of Sept. 19, page 1871.
Advices from Baltimore, M- d., on Jan. 7 stated that
Waldo Newcomer, Chairman of the Executive Committee
of the Baltimore Trust Co. of Baltimore had tendered his
resignation effective Jan. 12. He will remain a member of
the Executive Committee and the Board of Directors, it was
stated.
That the Bank of Walston- burg, at Walstonburg, N. C.,
has decided to go out of business is indicated in the following Associated Press dispatch from that place on Dec. 29:
The Bank of Walstonburg was refusing to accept deposits to-day, while a
posted notice told depositors to withdraw their money.
The Bank of Colerain, at Colerain, N. C., failed to open
for business on Dec. 23, according to the Raleigh "News and
Observer" of the next day, which furthermore said:
The bank, at the time of its third quarter statement, reported deposits
of $278,000 and total resources of $433,700.47.
Organized in 1909, the bank had capital of $38,550, and surplus and
undivided profits of $21,256 on the last call date. It also showed loans
and discounts totaling $294,986.83, and bills payable of $55,000.
L. A. Nowell was President and D. R. Britton was Cashier.
The Merchants' Bank of Durham, N. C., one of the smaller
banks in that place, failed to open for business on Jan. 4,
according to Associated Press advices from Durham. The
bank's last statement listed deposits at $1,490,000, the dispatch said.
The closing of two North Carolina banks on Jan. 3, the
First National Bank of Henderson and the Farmers' Bank
& Trust Co. of Madison, was reported in Raleigh advices on
that date to the New York "Journal of Commerce."
[VoL. 134.
"With this situation the bank was faced with the double necessity of
realizing on its receivables without a sacrifice of the interests of Its
customers, many of whom are small farmers and business men, for whose
benefit the system was devised and for maintaining its margin of liquidity
under the continual drain of withdrawals of the deposits for the living
expenses of its depositors.
"It was, therefore, felt that the bank should add substantially to its
capitalization. Plans to this end were progressing when the sources from
which the bank expected assistance found their own plans disturbed by the
general economic conditions, resulting in the delayed consummation of our
program for the strengthening of our capital position. The resources of the
National Credit Corp. were sought to be utilized in the meanwhile, but this
source has also been found inadequate under the conditions controlling
the allocation of the credit funds represented by this corporation.
"In view of all these conditions, it has been determined, with the utmost
reluctance, and only after all efforts to avert this step had been exhausted,
that the bank suspend operation, in order that the plans for reorganization
should be carried forward free from the pressure of withdrawals that the
constant stream of bank failures in this section and elsewhere have
recently aggravated. With the co-operation of the depositors and the
facilities that the bank expects to become available to it In the near
future, we feel very hopeful that the situation can be worked out to the
protection of all deposits and the restoration of the usefulness of the bank
throughout the State."
According to the Columbia, S. C., "State" of Jan. 3, the
work of making closing reports of the 44 branches of the
closed institution was to begin on Jan. 4, Albert S. Fant,
State Bank Examiner, declared. We quote from the paper
mentioned, as follows:
Mr. Fant returned yesterday to Columbia from Charleston, where he had
been in consultation with the directors of the system, which had branches
in 41 cities and towns in every section of the State.
Asked what were the prospects for early reports on the banks, Mr. Fant
said: "The classification of assets of the People's State Bank has not yet
been made.
"We have more than two score banks closed and have only seven
examiners, so it is a matter of physical impossibility for us to get to all
of these banks simultaneously. I have had offers of assistance from bankers
in various parts of the State who are ready to help in drawing up the
reports.
"Proper assignments to all assistant bank examiners have been made and
the work of making closed reports ef the closed banks will begin Monday
morning."
The same paper printed a statement issued by Governor
The First & Citizens' Bank & Trust Co. of Smithfield, N.C., Blackwood, of South Carolina, the night of Jan. 2, which
on Jan. 2 took over the Farmers' Bank & Trust Co. of that read as follows:
place and also opened a branch in Louisburg, N. C., according
"As the Governor of South Carolina, I call upon our people to think of
their State in this hour of fear and loss of confidence.
to Associated Press advices from Raleigh on that date.
The
of South Carolina, head office
The People's State Bank
Charleston, with 44 branches in 41 towns, and one of the
oldest banks in South Carolina, failed to open for business
on Jan. 2. The closing followed an announcement made
late the previous day that the directors had decided to place
the system in the hands of the State Bank Examiner for a
period of 30 days. The institution is capitalized at
$2,000,000, with surplus and undivided profits of $466,942,
and its last statement, Sept. 29 1931, listed deposits of
$24,704,503. Associated Press advices from Charleston, on
Jan. 1, from which the above information is in part taken,
went on to say, in part:
"You can wreck your State if you give way to unreasoning fear.
people of the State have suffered a catastrophe in the closing of the People's
State Bank, but this is no reason why we may not carry on. It is just
as necessary that our people show their courage now as in time of war.
"At this time no patriotic citizen should rush to the bank for his
deposit. If we wreck our banks, our homes and our property will become
valueless, and I appeal to our people to go about their affairs in an orderly
way and our troubles will soon be at an end.
"I have reason to believe that our banks are sound and can meet all
demands, and the citizen in these times who gives way to selfish fear is not
serving the best interests of himself or his State.
"Let us show our courage and all will be well."
Subsequent advices by the Associated Press from Columbia, S. C., Jan. 7, stated that announcement was made that
night by Mr. Pant, the State Bank Examiner, that he had
completed arrangements for the reorganization of the closed
with a syndicate headed by Buist & Buist, attorinstitution
500-word
statea
issued
the
Board,
R. Goodwyn Rhett, Sr., Chairman of
it
been
why
had
and
and New York financiers. Mr. Fant
plan
bank's
reorganization
the
Charleston,
explaining
ment
neys, of
retarded. . . .
saying that August Belmont & Co. and Pomeas
quoted
was
Jerre L. Dowling, former New York banker, is President. He succeeded
in
Rhett, Jr., of Charleston, about six weeks roy & Salmon of New York City would be associated
In that position R. Goodwyn
ago. R. Goodwyn Bildt, Sr., is Chairman of the Board.
The People's Bank has three offices in Charleston, two in Columbia and
other branches in the following cities and towns of the State:
Anderson Batesburg, Bennettsville, Cbesnee, ClemAbbeville, Allendale, Anderson,
Ehrhardt, Estill, Florence, Gaffson College, Darlington, Dillon,
ney, Georgetown, Greenville, Greeleyville, Greer, Hemingway, Johnsonville,
Kingstree, Lake City, Lamar, Lexington, Manning, McColl, Moncks Corner,
Newberry, Giants, Ridge Spring, St. George, St. Stephens, Seneca, Springfield, Summerton, Summerville, Swansea, Timmonsville and Varnville.
Mr. Rhett's statement, as contained in the dispatch, was
as follows:
"The Board of Directors of the People's State Bank of South Carolina
reached the conclusion to-day that in the interests of depositors it had
become essential to suspend operations of the bank for a period of 30 days
In order to conserve the assets of the bank, pending consummation of plans
for reorganization, that have been necessarily interrupted by reason of
the abnormal conditions prevailing generally.
"The period of expansion of the People's State Bank system culminated
at just the time general conditions became acute. The primary purpose of
the system has been to stabilize banking conditions in the rural communities
of South Carolina, placing behind the rural banks the resources of a central
system, that by reason of the diversified situation of the several sections
would not be disastrously affected by temporary reverses at any one point.
"Advantages of the plan have been generally indorsed by the attitudes
of the communities that have desired to be served by the system. The
system now serves 43 communities located in all parts of the State.
"Unfortunately the past year has witnessed the practical failure of the
truck crops in the Charleston section; the price failure of tobacco crops in
the Pee Dee; the low price and slow movement of cotton crops in all parts
of the State, and the general depression affecting industries. The result
has been that the system has felt the strain of unfavorable conditions In
every section that it serves. At the same time the general market for
bonds that the bank has been obligated to pledge against deposit of public
funds has been consistently depressed, even United States Government
securities falling off substantially in market value.
the reorganization enterprise.
of the Bank of Travelers' Rest,
The closing, on Jan. 2,
at Travelers' Rest, S. C., was reported in a dispatch by the
Associated Press from that place on that date. A notice
on the doors merely said that the bank would be closed
until further notice, the dispatch stated.
The First National Bank of Florence, S. C., was closed
on Jan. 2, according to advices from that place to the New
York "Journal of Commerce" on Jan. 3, which added:
of
Directors announced that the institution would be placed in the hands
National Bank Examiners.
Two Dawson, Ga., banks, t- he City National Bank, capitalized at $100,000, and the Dawson National Bank, with
under
capital of $200,000, were consolidated on Dec. 29 1931
capital of
the title of the Dawson City National Bank, with
$100,000 and surplus of $50,000.
Tenn.,
The East Tennessee Savings Bank of Knoxville,
of
and
liabilities
assets
having
and
ago
years
20
organized
approximately $5,000,000, has been absorbed by the East
Tennessee National Bank of Knoxville, with which it was
affiliated. A dispatch by the Associated Press, reporting
this, went on to say:
longer
"The reason for operating the East Tennessee Savings Bank no
it was organized,
exists," said J. P. Gaut, Chairman of the Board. "When
JAN. 9 1932.]
FINANCIAL CHRONICLE
national banking laws did not permit National banks to deal in real estate
notes. So directors of the East Tennessee National Bank obtained a State
charter and organized the savings bank.
"Since then, however, national banking laws have been so amended as to
permit us to absorb the savings bank."
Mr. Oast said the city branch of the East Tennessee National Bank
probably will be eliminated within the next 30 days and placed under the
roof of the main bank as an economy move.
This will wipe out the last of the old City National Bank, which was
organized in 1888, and which merged with the East Tennessee National Bank
about a year ago.
251
The New Belle Bank is the ninth St. Charles County bank to close
within a year, and the ninth in the history of the county to close.
The Vandeventer National Bank of St. Louis, Mo.,
capitalized at $250,000 and with deposits of approximately
$1,250,000, was ordered closed by its directors on Jan. 4
and an Assistant National Bank Examiner was requested
to take charge of its affairs, according to Associated Press
advices from St. Louis on the date named, which added:
There had been a slow run on the bank for
several weeks, the directors
That the assets and liabilities of the First State Bank of said.
Barry, Tex., had been assumed by the State National Bank
of Corsicana, Tex., at the close of business Dec. 19 last, was
That the City National Bank of Colorado Springs, Colonoted in a dispatch from Corsicana under date of Dec. 21 rado, had merged with the Colorado Springs National Bank,
to the Dallas "News." The advices went on to say:
effective Jan. 2, was reported in advices by the United Press
The State National Bank assumes all liabilities to depositors, and will
handle all accounts in Corsicana as they have been handled in the past at from Colorado Springs on that date. The new institution
Barry. Other affairs of the Barry bank will be liquidated as rapidly as opened for business on Jan. 2, it was stated, following an
possible, and all business will be conducted in the quarters of the State announcement by the directors of both banks the previous
National Bank.
Capital stock of the Barry bank was 625,000. with a surplus and undivided day that the merger had been definitely completed. The
profit total of approximately 61,500, and deposits ranging between $16,000 dispatch, continuing, said:
and $17,000. The bank was established in 1909. R. W. Verne11 was the
President, and W. T. Woodruff, Cashier. Mr. Woodruff will make his
headquarters in Corsicana for the time being.
The closing of the First National Bank of Oconomowoc,
Wis., was indicated in a dispatch from that place on Dec. 31
to the Milwaukee "Sentinel," which adds:
Because of heavy withdrawals and to conserve assets, the First National
Bank of Oconomowoc has been placed in the bands of the Comptroller of
the Currency at Washington, it was announced by directors Thursday
(Dec. 30).
Business interests of
The closing affects some 2,000 depositors.
Oconomowoc will participate in reorganization of the bank as soon
as possible, and it is believed, according to officials of the institution,
that the bank can be reopened without depositors sustaining any loss.
Withdrawals in the last few days exceeded $100,000, according to an
estimate Thursday. These started about a month ago, on rumors concerning
possible insolvency of the bank.
Present deposits are put at about $1,400,000, compared with $1,700,000
last March. Capital is $100,000 and surplus and undivided profits $30,000.
Consolidation of two Shawano, Wis., banks, the Wisconsin
National Bank and the First National Bank, has been approved by the respective stockholders of the institutions,
according to advices from Shawano on Dec. 29, appearing
in the Milwaukee "Sentinel." The dispatch went on to say:
Plans for the consolidation, subject to approval of the Comptroller of the
Currency, call for a capitalization at $100,000. The corporate name of
the new institution would be the First Wisconsin National Bank. Both
have been in continuous operation 30 years.
The Empire National Bank of St. Paul, Minn., announces
that it has changed the name to the Empire National Bank &
Trust Co. and inaugurated a trust department. The following officers and directors compose the Trust Committee
which will determine the policies of the department and
supervise the investment of all trust funds: Thomas D.
O'Brien, Chairman, attorney at law; J. B. Forrest, VicePresident and Treasurer, Bannons, Inc.; F. L. Paetzold, Secretary and Treasurer, Great Northern Ry.; John A. Seeger,
President, Seeger Refrigerator Co.; D. C. Shepard,President,
Empire National Bank & Trust Co.; H. W. Blake, VicePresident and Trust Officer, Empire National Bank & Trust
Co., and C. V. Smith, Vice-President and Trust Officer, Minnesota Loan & Trust Co. The institution is affiliated with
the Northwest Bancorporation.
Closing of the New Melle Bank at New Melle, St. Charles
County, Mo., on Dec. 31, following within a week the suspension of three other small banks in that county, namely,
the Bank of Augusta at Augusta, the Farmers' Bank of
Hamburg, and the Bank of Defiance at Defiance, was reported in the St. Louis "Globe-Democrat" of Jan. 1, from
which we quote as follows:
Unrest caused by the closing of three other St. Charles County banks
within a week, causing heavy withdrawals and a reluctance on the part of
customers to renew time deposit accounts, yesterday (Dec. 31) resulted in
the failure of the New Melle Bank to open its doors for business.
The decision to close and to place the institution in the hands of the
State Finance Commissioner for liquidation was reached Wednesday night
by the Board of Directors.
The withdrawals amounted to approximately $10,000, according to
Cashier Edwin Wessler, who expressed the opinion the bank was solvent
and that depositors would eventually be refunded 100 cents on the dollar.
After the closing of the Bank of Augusta, the Farmers' Bank of Hamburg
and the Bank of Defiance—all within a week—rumors of unrest reached
the banking staff and it was noted that time depositors, with expiration
of contracts which necessitated a 30-day notice before a withdrawal, were
not making renewals. Wednesday witnessed one of the heaviest withdrawal
days in the 23-year history of the bank.
The balance sheet of last September, according to Wessler, showed assets
and liabilities of about $348,000, including deposits of about $306,000.
Wessler said the assets included $40,000 in farm loans, $88,000 in personal
loans, and $190,000 in bonds, all figures being approximations.
Martin Drake, President of the City National, will assume some official
capacity with the new Colorado Springs National, and Willis B. Armstrong,
President of the old Colorado Springs National, will remain the President
of the new institution.
Deposits at the City National were estimated at $300,000, and of the
Colorado Springs National, $1,700,000. Both banks have long been affiliated in business relations, with an interlocking directorate.
A dispatch from Whitewright, Tex., on Jan. 1 to the
Dallas "News" stated that under a merger agreement effective on that date, the First National Bank of Whitewright
took over the assets and affairs of the Planters' National
Bank of that place. We quote furthermore from the advices,
as follows:
Guy Hamilton, President, and H. G. Webster, Cashier, of the liquidating
Institution, will be associated with the consolidated bank, the former as
active Vice-President and the latter as Assistant Cashier. W. H. King will
continue as President of the First National Bank, with the positions of all
other officers and directors of the bank undisturbed.
The Planters' National Bank was chartered as a private bank in 1889
and nationalized in 1903. The First National Bank began business in
1892. The bank's capital of $100,000 and surplus of $100,000 will not be
changed under the new arrangement.
That the Texas State Bank & Trust Co. of Corpus Christi,
Tex., which closed Oct. 14 last, would reopen Jan. 2 was
reported in a dispatch by the Associated Press from Corpus
Christi on Dec. 20, which added:
Officers said it would resume business under the same charter and
management. The bank was capitalized for $150,000.
The First National Bank of St. Merles, Ida., capitalized
at $25,000, was placed in voluntary liquidation on Dec. 22
1931. The institution was absorbed by the Lumbermen's
State Bank & Trust oC. of St. Diaries.
Announcement is made by the Bank of Montreal that
B. C. Gardner, Superintendent of Foreign Branches, has
been appointed second agent at the New York Agency in
place of P. C. Harrison, who will assume executive duties
at the head office of the Bank of Montreal. Mr. Gardner
comes to New York after a diversified banking experience.
Beginning his banking career in England, he went to
Canada in 1906 to join the Bank of British North America,
which in 1918 was amalgamated with the Bank of Montreal.
During the war he rendered distinguished service with
the Canadian Forces in France, and on his return was
stationed at the head office, later becoming manager of
the St. John's Newfoundland, branch. He is a Fellow of
the Canadian Bankers' Association. Mr. Gardner assumes
his duties at the New York agency immediately.
According to cable advice: received at the New York
representative's office of Barclays Bank Limited, London,
which is widely known as a prominent member of the
"Big Five" English banks, the usual dividends of 10% per
annum on the "A" shares and 14% per annum on the "B"
and "C" shares have been declared for the year ended
Dec. 31 1931. These rates are the same as those which have
now been paid for many years past.
The net profit for the year 1931 amounted to £1,794,825,
added to which there is an amount brought forward of
£559,363, making a total of £2,354,188. It is understood
that an amount of £200,000 has been appropriated to contingency account while the investments of the bank are
quoted at or below market price as at Dec. 31 1931, full
provision having been made out of investment reserve account.
N.
252
FINANCIAL CHRONICLE
The thirty-first annual statement of the Provincial Bank
of Canada (head office Montreal), covering the fiscal year
ended Nov. 30 1931, has just recently been published. It
shows that while net earnings were somewhat less than
in the preceding year, there was a substantial increase in
point of liquidity. Net profits for the period were $467,440
(as against $511,458 last year), which, when added to
$463,183, the balance to credit of profit and loss brought
forward from the preceding fiscal year, made $930,623 available for distribution. Out of this sum the following appropriations were made: $360,000 to pay four quarterly dividends at the rate of 9% per annum; $63,761 to take care of
Dominion Government taxes on bank note circulation and
[Wu 134.
provision for income tax, and $40,000 written off real estate,
leaving a balance of $466,862 to be carried forward to the
current fiscal year's profit and loss account. Total resources
of the bank are shown in the statement as $53,216,270, of
which $29,817,652 are liquid assets, or equal to 63% of the
bank's liabilities to the public, as compared with a ratio of
58% a year ago. Total deposits are shown at $39,681,727,
of which $34,698,414 are interest bearing deposits. The
bank's paid-in capital is $4,000,000, and its reserve fund
$1,500,000. The Hon. Sir Hormisdas Laporte is President
of the institution and Charles A. Roy, General Manager.
The general annual meeting of the shareholders of the Provincial Bank of Canada vill be held on Jan. 27 1932.
PRICES IN 1931 AT THE NEW YORK STOCK EXCHANGE.
The tables on the following pages show the lowest and highest prices at the New York Stock Exchange
of Railroad, Industrial and Miscellaneous bonds and stocks, and also of Government and State securities,
for each month of the past year. The tables are all compiled from actual sales. Under a resolution of the
Governing Committee of the Stock Exchange, prices of all interest-paying bonds since Jan. 1 1909 have
been on a new basis. The buyer now pays accrued interest in addition to the stated price or quotation.
Previous to 1909 the quotations were "flat"—that is, the price included all accrued interest. Income
bonds and bonds upon which interest is in default are still dealt in "flat."
COURSE OF PRICES OF RAILROAD AND MISCELLANEOUS BONDS.
1931.
BONDS
8.,
Oui
Novetnber December
March
April
May
August September October
January February
June
July
Low High Low High Low Nigh Low High Low High Low High Low High Low High Low High Low High Low High Low High
RAILROAD BONDS.
ti
Ala Gt Sou 1st Ss ser A__ _ _1943 ___ ____ 10312 10312 105 105 --------10214 10234 104 104 104%10512 10518 10518 105 105 105 105 -_-_ ____ -___ ____
1943 --------------------------------94 94
lst cons 48 series B
9434 9434 9414 9414 ------- ---- r_.1- ...... -.
9234 93
-_ 82 -83 -,9034 -_-6066
-Albany & Susq 1st go 314s1946 8918 91
89'8 8914 8912 8934 897 9034 91,8 9214 9134 9134 00 90 9034 90% 0034 ---Allegh & West 1st g gu 4s 1998 86 86% 8614 8912 ---- -__ 90 9014 --------9014 9014 8912 9014 9014 9014 -------- 88 -81
76 -88
97 9858 9712 9812 85 97 88 10
Mica Val gen guar 4s
1942 9818 98% ____
. 9714 -9738 9678 9812 99 9912 99 99
99 100
4014 4618 14
45 45
45 54
5412 60
8014 78 8018 74 7712 7212 74 68 71 __-_
Ann Arbor tat g 4s___July 1995 7934 8014 80 --1714
09 10034
-- _- 9834 10012 934 100 878 97 8812 9234 8112 894
98%101
9878 101
1995 975 9914 9818 9912 9814 9914 98%100
Atch Top & S F gen a 4s
90 90 83 83
9834 8912 94
Registered
9834 9918 98
1995 96 98
98 9812 9812 99
96% 97 96 97
9812 9812 9812 99
9312 9514 96 978 957 9713 9512 c9912 947 9512 921 95 85 88 82 8412 80 81
Adjustment a 4s---July 1995 95 98% 948 9612 0118 96
81
9114 7818 8658 74 81
Stamped
94 9512 9434 9812 95 9714 96 9712 947 9612 86 96
July 1995 9413 9714 9412 9612 9434 98
Registered
8 iii "91 - Cony g 4s of 1909
1955 95% 9518 96 96
—. --- iiii II%
4 Pi -9-i14 iii -917-59512 9614 943 9518 9434 9512 iliti4 16-3715 -9-1-- -8012 -85
71 8212
9714 9758 9412 9878 ;
Cony g 4s of 1905
1955 9414 9712 96 9712 96 9712 9434 9812 9434 9614 95 97
97 98
Cons g 4s of 1910
_ 95 9512 -----------------------_ ---__-—
---1960 ------------------------9414 9414
Cony deb 4488
9834 105
1113 11414 103 112
- 114 11114
112 11634 11134 1-16
1948 11234 12014 11712 122 11314 11812 11134 115 -------8412 9812
98 103
Rock Mtn Div 1st 4s ser A1965 94 96
03 9312 8412 8712 --------86 88
9413 97
9734 9734 __-_
95 9512 9618 9612 9612 98
9334 98
Trans-Cont Short L. 1st 48'58 95 9612 9612 9712 96 97
9934 95 9878 90 9612 --------89 89
9878 9914 9878 ---9514 9818 97 9938 981,100
83% 8718
93 100 93 98
Cal-Ariz 1st & ref 418s A_1962 102 105 103 105 10334 1058 10312 1043 103%106 104%105 10412 1047 103 10512 9712 103
____
.-....
........
- _ ---- -___ ...,.
Atl Knox & Nor 1st g 58._ _1946 103',10312 10312 10312 ---.---- ___ ---- ----- ---- - ---_ .____
9914 -------- 90 -9-0 -9914 98 -9914 9014 -9934 90 ---- 9958 -99:18 9938 -9978
At l& Char A L 4488 ser A I944 97% 98 --------9938 -85
-- - - 75 --_-:0
1st 30-yr 58 series B
1944 103 1 312 103 10458 10358 10412 10212 10412 10318 10312 103 10314 103 10318 101 10378 95 10134 9112 98 939418
76 8014
92 99 86 9314 84 89
Ati Coast L 1st g 48July 1952 95,2 9714 958 9634 9618 9714 95 9612 96 98 95 9738 9634 9734 95 98
77 81
99 100
99 10078 99 10014 10014 101 100 101
9912 10034 10012 10112 9612 10012 9614 9814 80 80
Gen unified 4 As ser A 1964 99 102
67 7412 _ _
70 77
8638 90 748 84
90 9234 88 9114 87 88 8612 8812 88 91
Loulsv & Nashv coil g 48_1952 89 9212 9012 92
27 35
H --2634
44 4912 44 4812 3614 4334 27 31
40 4414 4258 44
46 52 4614 51
45 50
Atlantic & Dan, 1st g 49_1948 42 51
3614 39 --------27 30
39 41
15
15
3112 40
36,
4 38% 39 39
- 39% 40
1948 ---30% 3012 30 35
2d 4s
70 70 ____ --__ 6014 69 65 65 64 64
-- 71 71
72 75
72 73
Ati & Yadkin 1st gu 48_ _1949 65 -71
1941 10114 10114 ----------------10314 1037 104 10414 - --- -Austin & NW 1st Ss
t 914 98 9712 9714 99 57 ii 9714 ii Oi -68-14 8653 973155r4 114 iii, 917 74 1313
s 84
1948 96 98%
Bait & Ohio 1st g 4s
_ _ _
_ _ _
_ ____
_
_ 9512 9812 9518 0538 92 94% 95 96
9514 9712 --------92 0212 _ __
Registered
7114 1-61-12 100%10134 10078 10112 100 10112 100 10114 98 100% 100 10118 93 100 il -Iii14 92 -9-i12 il3r2 -9-3-12 Iii -ii
20-year convertible 434s..1933 51.
88 10012 79 9312 78 85
9978 101
9914 10212 9934 102
4812 68
6712 84
Refund & gen 58 series A 1995 101531124% 103 10412 102 10434 9734 103
__
----------------103 103 - — _ ___ ---__ ---_ __ 9912 9912 88 88 --------80 80 -___ . _ _ _ _
Registered
- - 106 10712 102% 10558 100 10778 97 10234 9412 10114
- - 80 -97
108 108
-- 104% 10734
1st g 58
1948 1 38 10878 10618 10814 107 109 10518 107%
5312 76
Ref & gen 6s series C_
1995 10712 11014 108%110 10812 11012 10712 10978 10712 10912 10512 10812 106,8 10934 100 10634 9514 10334 9112 9712 87 98
92 9818 8618 937 79 874 79 8734 6234 82
97 98% 97 98
P L E & W Ya Sys ref i4s 1941 951 978 9612 c9834 96,4 9818 9612 978 9678 99
5334 82
93% 10518 9312 10134 83 c97 8012 93
Southwestern Div 1st 58.1950 102,2 10512 1035310434 10334 105 10018 10418 10234 104 1021,104 103 c105
70 77 65 7118 6478 7014 5012 60
83 8612 7934 85
Tol & On Div Ist8cref 4sA '59 83 868 8518 867s 84 8612 83 8512 83,4 8614 84 85
50 69
2000 1018i 104 10213 10434 10134 10434 99 10314 100 10258 99%10134 9912 10178 88% 9934 8058 9314 77 84 68 84
Ref Ss series D
34 5414
511 72
6112 75
9414 9712 9112 977 90% 933 88 927 86 9112 8512 9134 75 87 60,2 81
1960 921 c99
Convertible 4 38s
Bangor & Aroostook 1st Ss 1943 103 10314 104 10434 104 104 10412 105 105 105 10312 103l 1034105 10338 105 10314 10314 ----------------80 93
9212
8814
91
8
90
93
94 69 70 60 6034
84
9212
91,
8
933
8
913
8
92
9058
903
9212
877
8612
8912
90
,
4
921
1951
Con ref 4s
Batt Crk & Sturgis 1st gu 35'89 --------71 71
1936 it 812 --------9812 "Oil, 55E8 Iii 98i4 116 105 166 100'4 1004 100is iiii 1001216612 --- ____ -___ ____ ____ ---Beech Creek 1st gu 4s
9513 984 9712 971 9534 953 98 100
__ 86 87
854 90 ---96 98 88 94
1944--- -__ 94% 9478 - -- _
Blg Sandy 1st 4s
- -- 99 10134 98%10158 9718 99 9814 101
92 100 8018 948 77 85% 62 12 6212 72
Boston & Maine 1st 55 A C_1967 99%102 9934 10314 15112 10278
98'2 10038 8934 100 82 937 7912 84 80 82 60 71
943 99
1955 9914 102 9912 10314 1005 10212 99 10118 9938 102
1st mtge 58 series 2
71,8 84 62 80 55 82
_ :,. .- ...„.- -_ _ ..,,..
94% 947 9434 9614 8318 9414 7914 90
1st gold 4,series J.7_1961___
8214 8214 8214 8214 81
83'ss 8-3
8112 ----------------58 61
14 83 85
8212 _8212 8234 8-2 -,,-81 0218 -85
Boston & NY Air L 1st 4s.1955 81 --98,8 98,4 98 98 ------------------------88 88
Brunswick & West 1st gu 48'38 ------------------------ -98 98
103 10112 10314 10314 10314 10314 10314 10234 10234 91
03 10234 10234 10214 10314
86 8812 86 17 83 13
91
Buff Roch & Pitts gen a 58 1937 101% 10158
33 52
67 7812 55 73 49 60 52 60
85 8912 8212 8518 7234 8412 7312 7858 77 81
1957 85 90 8338 90
Consol 434s
102%10238
102 10234 100 102 102 10212 100 10234 9934 10018 97 100 90 90__ 102
10214
10214
102
Bur Ced Rap & Nor 1st 53_1934 101 102
901 9814 95 9712 65 -8812
Canada Sou cons gu Ss A1962 105 10818 10612 10812 10712 10812 10612 107% 107 108 10612 10712 107 107 104%108 100 104
8038 9934 78 87 80 85 694 7875
Canadian Nat 448s_Sept 15'54 98 9984 98'8 9914 9918 10038 100 10013 100 10214 100 10213 100 10214 9913 101
68 788
Gold 45,8s
1957 9712 9984 9714 9912 99% 10058 99%100% 100 10258 10018 1013 100 10138 9978 101% 76 10038 76 88% 7812 86
7834 8514 68 80
Gold 434s
1968 9712 9953 98% 9912 9914 10034 9978 10058 100 1021_ 9934 102 100 10133 100 10034 74 10014 7814 88
755 8472
903
4
8514
83
92
,
2
8312
1048
i
10412
106
10514
10678
8
107
1055
iO612
10814
10614
107
107
105
104
1053
8
104
105
5s
1969
8412 9238 85 c9078 76 85
Guar gold 58
Oct 1969 103%105,8 104 10534 10538 107,2 10614 1067 10838 10814 10558 10738 10514 10678 104'2106'2 843 105
Guar gold 58
1970 104 10514 10418 106 10534 10714 10818 107 10638 10734 106 10738 10514 10612 10434 10612 85 10538 8312 93 87 9112 75 83
70 8114
7714 10134 80 8812 8112 87
Guar g 438s____June 15 1955 1003310238 10058 109 1013410312 102 10314 10233 104 102 104 10153103 10118 103
8518 88% 79%
Guar gold 43.6s
1956 ----------------------------------------100 100% 9912 10114 75 10012 777 8512 7958
96 102
8512 96%
4 112 113 11234 11312 1123811338 11212 11338 93 11318 95 102
4 1121
Canadian Nor s f 78
134 112%
1940 11018 11114 11034 112
9934 105
88 100
98 11914 97',108
25-year deb s f 648s g_ _1946 11512 118 11612 118 118 1197 11912 11934 11912 120% 119 121
1834 119% 118',120
10-yr 451s
Feb-1-5 1935 0012 10112 10018 10112 10078 10214 10134 10214 102 103 102 10358 1014 103% 10112 10234 8912 10158 86 91% 8934 9512 8434 91
57 8314 5738 68% 64 7312 57 6534
84
Canadian Pac 4% coup deb stk 87 8914 86% 87% 87 8838 874 8812 8714 8912 85 88 83 8614 81
5858 71
75 85
7212 80
9612 10012 75 98
9914 100
Coll trust 4485
9812 10014 98 102
1946 9034 10112 10038 10112 10014 10112 984 101
9412 10312 88 98 88 95
74 9284
102
10518
105%
Ss equip tr temp c0s
1944 102 10514 102 10434 10414 10614 1048 106 10518 107 10412 10634 1O44
1954 1021 1037 10112 1041 10312 10512 1031 10434 10212 10438 10134 10312 1O08 103 10018c10212 76 10114 757 8558 7713 87 6012 c7784
Col trust 5s
59
72
71
84
65
7718
9614
67
98
95%
5
9812
Col trust 448s
1960 9814 100
9714
98% 991 9914 9978 9812 9934 9812 100
97 100
1
45 4514 40 42
Carolina Cent 1st con g 4s.1949 68 75
68 68 ---------------50 5514 45 4 50
75 75
70 70
70 75
0112 10312 101',102', 10018 10112 0012 1-01-12
Carolina Clinch &0 lst 5s 1938 02 103 102 103% 02%10312 103 103'8 103 104 103 104 103.8 10312 03 104
1st & con 6s series A... 1952 1073310912 108 10914 10712 10818 10818 10812 10814 109 m778 10814 108 10814 108 109 9378 108 100 104 100 10212 80 97%
91 -------- -------- 92 92 ----------------88 88 ----------------80 80
Carthage & Adis. 1st gu 48_1981 91
Cent Branch Un Pac 1st 4s1948 80 82 82 8334 ----------------78 78
_—
..-.“PI
4 10334 1-033-4 ---- --__ 957 100% 90 90 91
.
_ 103%10312 10312 1-03
Cent of Ga Ry 1st g 58 Nov 1945 01 101 10114 10114 02%10218 -70 75
37 -50
9434 9512 77 9412 74 867 75 75
1945 9912 10112 100 101% 00 10178 97 1-02-14 95 100% 94 98
Consol gold 5s
20 26
85% 854 5212 7014 56% 57 47 50 47 49
0714 9912 90 9912 91
90 9218 857s 86
95
1959 98 100
Ref & gen 5488 ser B
33 4512 18 3134
Ref & gen 5s series C
1959 90 95,8 91 92
8812 93 8714 88% 8612 8712 73 73 70 7934 70 70 --------40 47
Chatt Div pur mon g 48_1951 --------87 87 88 88 8714 87,4 8712 8712 ------------.
_z- 74
101 101 ____ ____ 9314 4.4 ----------------------------------- ___
Macon & Nor dl, 1st 58_1946 100 102 1001 10012 01 102
Mobile Div 1st a 58
c Cash sale.
a Option Bale.
253
FINANCIAL CHRONICLE
JAN. 9 1932.]
1931—Continued.
BONDS
August September October
November December
July
June
May
April
March
January February
Low High Low High Lou High Low High Low High Low High Low High Low High Low High Low High Low High Low High
7312 6712 7612 63
803s 8512 694 93 69
Cent New Rug 1st gu 45_1961 85 88 8614 88 86 8858 8678 8812 87 8914 87 8834 853 89 --------8812
8812 ----------------35
96 9712 95 95 9412 95
Cent RR &Bkg of Ga col g 55'37 97 97 9612 9914 9512 9812 97 97
10814
100
11318
107
99 105
10814
1134
107
93
114
11318
11314
115
11312
1
114
1124115
8
11212
114
4
1127
11412
113
Central of NJ gen a 5s----1987
110 11412 --------10912 11214 112 11218 11218 113 11212 113 11258 11258 ------------------------100 100 ____
Registered
r._ -..,_
-_ -,r_
9712 9812 9714 973 --------9735 9738 -„,..
1987 9712 9712 9712 98 --------8712 97
General 4s
9812 82 -93
80 -875 71
9614 9714 96 9714 9634 99 9614 9812 9758 9834 9612 9812 9012 -Central Pac 1st ref gu 45_1949 --------9513 97
,
r - ---- ---- ---- -___ ____
9614 961
/
4 ---96 96
9514 9514 95 97
9534 96
95 95
Registered
___ ____
---_
95'2 954 ---- 9814 -,,,97 97 96 --9514 9512 96 9618 9658 98
Through St List gu g 48 1954 9538 9658 --------96 96
8312 -927
-8 8018 -90 6012
1960 102 105 102%105 104 10518 10234 10412 1017810458 9941022r 102 10418 96 10314 95 101
Guar 6 Ss
6712
50
9812
____
14%
____
.. _
-81
chg., & Ohio 1st cons il 55_1939 10434 106 105 10534 105410658 10512 107,8 10618 10712 105% 107 106410712 107 108 10312 108 10012 104 10134 1047s 97 103
-- ---- Registered
101 1031 10314 10314 10314 10314
1992 103,8 1067 10312 105% 10418 106 ioi ff6-3-4 16.-1r4 116-3-4 HP-1E8 1-(Iii14 loig8 1-0K itii ciii 6A58 fiii 6Oia 12114 6ii4 -ii 7738 -Oils
Gen gold 43.6s
80
_
----------------102 102 10218 10218 102%102% ____ _ _ 10412 10412 --------------------------------80
Registered
1
75 81
85 95 85 4 90
90 99
Ref & impt 4 Hs ser A-1993 9938 10214 1134 1017 10012 101% 9812 10112 10018 10318 1001210-2- 100 1028 97 101
84
84 8914 71
89 9812 83 94
1995 9912 10212 10014 10134 10018 10158 100 10112 10014 10234 10012 102 10012 10214 96 101
Ref & imp 434s"B"
1
10014
Craig valley 1st g 5s-- —1940 10214 10214 ----------------103 103 10312 10312 --------10158102 10314 10334 103 103 100 4 10014 10034 10014 10014
___
__ ---- -_-_ ---- -- ____
__ _ _ 9412 9412 ---------------- 9558 953 954 9514 9458 948 ____
_
Potts Creek Branch lat 4s'46
9314 964 963)0102 98% 9858 97 9912 96 9712 9314 -95 ----------------71 -7514
4 9534 -91i 9512 97
Rich & Alleg Div 1st con 45'89 944 16394 93 93 --------80 80
1989 9214 9412 93 93 93 93 ----------------925 9312 9414 9414 94
2d cons g 4s
- --- -- -- Warm Spr Val 1st g 55__ _1941 -------- ------------------------1043410434 --2 1138 )) 1018 91 100
.61 -661s 56i2 9712 Tii -9214 75 -8812 78 -8914 56172 ii
/183.4 9814 9
Chesa'ke Corp con 58 may 15'47
2 1 12
9 12
36
46
45 6012 4512 54
6812 6912 6712 6912 6712 6934 647 69 60 65
Chic & Alt RR ter 6 Ss__ _1949 6912 73 6712 72 7034 7134 69 71
45 4912 3812 45
67 6714 65 6518 65 65 --------38 4514 --------7914
6714 6812 67 68
68 68
Ctfs of dep stpd Apr 1'31 Int 70 70 69 69
8
7934
4 7934 7934 7934 7934
Chic & Alt Ry 1st I 3 30..1950 7934 7934 7934 7934 7924 7934 7934 7934 7934 7934 793 793 7924 7934 79 793
933 905 933 90 93 8025 92 82 8358 7912 8312
91
90 91,4 9058 904 89 9158 9018 92,2 9118 92
Chic Burl & 0--Ill Div 33.'4'49 9012 92
1949 91
91
Registered
- 12 9158 14 9012 9112 Oi -02
. 66i4 11614 9vis 166 995,10058 651,1 1-663-8 55 -26
Illinois Division 4s___ _ .1949 9658 9812 1/ait -9112 57 -9112 67 -6-2
1
4 86,2 9534 88 9118 82 894
9824 9934 96 9934 9218 97/
'09 100
General 45
1958 9678 9812 9678 9812 974 9814 9612 9814 98 IOU
8
89 9434 82 89
9012 97
10112
97
s
100
1033
8
10212
1037
1st & ref 434s set B
1977 100 10314 10158103 10158 10278 10112 10214 1028410 112 102 104
99 10314 9312 100
9834 104
1st & ref. 5, ser A
1971 108 110 107%10912 10918 110 108 10912 109 114 10958 1101, 1104 11034 10512 10914 10014 107%
90
90 70 7514
85
90
93
92
93
----------------85
10112
99
9918
100
101
----------------100
Chic & East III 1st con 65_1934
1612 2934 74 18%
1612 26
24
3612 32 3512 24 3234 16
38 4612 4234 4612 30 424 32 3512 31
Chic & E III (new co) gen 58.51
,1044 10658 102 1071g 928 9812 9212 984 75 97
/
4 106 10458107 10412 108 106 10712 106 106 105 10612 10612 1065
Chicago & Erie 1st gold 5s 1982 1041
50 5712 3512 5012
4912 58
50 66
6112 66
53 6624 6514 c68
1
4 6814 61 67
Chicago Gt Western 1st 4s 1959 6318 6924 6622 6912 66 69,8 65/
Chic Indianan &Louisville
1947 110 110--------105'i 106 105 10558 10173 10614 10514 10534 10512 10
Ref g 6s
1947 100i102i 1011210112 101 102 101 101
Refunding gold Ss
--1
4 9334 91 91-,,,,,
- 93/
1947 _ __ __ __-Refunding 4s series C
z9.2 -33
4212 4124 3612 iti
31 -46
50 -50
6 -75
75 8012 75 -7712 --------6
4 87 -8-9-18 80,4 87
1966 ii778 -9031st & gen 5s ser A
3912 3912
36 50 40 48
60 60
8 7 2 75 774 73 75
8678 87
9712 984 9612 100 87 91
1st & gen 6s ser B___May 1966 964 100
91
91
934 94 934 9334 95 95 -------- -9084 91
Chic Ind & Sou 50-yr 4s.,_..1956 94 94 95 9512 96 96
__ 00 10012 9912 994 9912 -9912 -------- 93 -93
Chic Lake Sb & E 1st 434s 1969 100 100 10034 10034 100%10078 9958 19118 1005,10058 1001/4 10012 -7.,
/
44 655, 5014 59
, 60 7418 601
7212 797
7914 84
81
8412 824 -8312
Chic M il & St P gen 4s A1989 834 8618 8514 8734 8414 874 7934 81% 8012 84
47 50
55 55
727 7278 --------55 56
7512 7512 694 7414 71
7314 71% 7314 72 72
Gen g 314s ser BMay 1989 7412 7534 734 75
5258 6412
65
69
74
6714
76
8
9014
923
8
92
3
8
9112
7
1989 9312 9558 94 96
95 91311 90 9012 90 925, 90 9358
Gen 4 36s series C
55 65
9324 94 8914 9234 76 8934 6712 7678 6514 72
94 9624 954 9612 89 9112 8812 9312 9112 94
Gen 41.6s ser E___May 1 1989 9312 96
58 6514
77
64
84
69
92
87
97
935
8
9612
9512
963
8
95
95
,
95
96
96
975810014
99
100'2
101
May 1989 9734
454s series "F"
24 3512
57 6312 52 531, 50 6612 564 67 45 5618 35 48; 2814 4212 28 41
70 737 63,8 72
Chic mil St P & Pac 5s____1975 6814 76
1112 181, 84 1514 94 151.. 57g 952
17 21
164 244 15 284 20 28
2735 3358 2512 3012 22 21
2000 26 35
Cony ad) 5s
75,4 777 735 7713 73 731, 6118 69 61 647, 45 5512
/
4 7978 7514 79
78 79'2 79 8058 77 7912 761
Chic & No West gen' g 3%111'87 76 81
Registered
55 1212
- 76 -7-6
'
8938 91 ;714 1T0-2-4 gins -i6.14 58i8 -ii&-s Aiis -ii3-4 Ai -if 76 -ifs,
General 4s
1987 86 8978 8914 91
67 67
_ 87 88 ----------------70 74
90 9012 8738 884 48 88_ _
91 91
1987 8612 90
Stamped 4s
85
85
982
4
983
.
1003
4
10214
1012
4
10212
12
id0.12ef63
103
102.
10258
10212
8
102%
1025
1023510235
10212
10314
Inc
tas
'87
Gerd 43.4s stpd Fed
85 8718 8658 -861. 70 -7114
98 c108
Genl 55 stpd Fed inc tas 1987 10658 10734 10812 10912 106 11012 107 1101, i -e, I,)7'. 10612 10718 105 108 1035,107
65 7518
Sinking fund deb 58-1933 100 10112 101 10212 10112 1024 10214 10234 10038 1o23, 101 10112 102 1024 98,2 10012 98 100 ---- —_ ---- -.....
- -99
--------1011210112
1001
-------------------------------10012
99
Registered
65 1-61-58 ii 166
1022 10212 1012 106 108 10614 1-67 165i4 10-7i4 156 165
18 10834 1091
15-yr secured g 6 ms
i4
r4 1
50 6212 3012 50
74 8424 6212 87
May 2027 101 102% 102 103 97 10178 94 9722 95 99 88 9414 90 9314 8478 92
ref a Ss
5322 60 60 5712 25 50
71 80 6512 75
92 94 88 9212 83/
May 2037 93 96
1
4 8758 8312 88,2 80 8134 82 83
1st & ref 434.
3
28
46
45 58
504 63
1st 8c ref 4335serC—May 2037 918 957 9212 948 87 93 8412 8718 8358 89 8 78 82 8012 8312 704 7884 64 77
2814 4912 23 3112
48 6434 4314 54
564 68
764 81
Convertible 4045 series A1949 8712 93 875s 9134 8012 91
6612 8224 65 7923 67 82
6258
73
795
8
73
8312
88
7012
79
90
89
86
0012
9535 90 9112 90 9338 86 9034
Chic R 1 & Pac Ry gen 45_ _1988 92 96
9158 9312 91
71
71
85 88 ----------------72 75
_
_
._ _
91 ____ ___ -,..., ., ...,..
Registered
91
9 9112 7712 914 73 8312 56 83 40 19
.Erg 9414 9012 95
8 -8
Refunding. gold 4s
1934 984 992 9812 -99,
. iii 1f78 9838 -99-'2 96 -66
-- -- --- 984 9812 961
Registered
-- -- /
4 9614 - -- 8412 87 '83
. -8-8- 75 -ii 77 -21 65,2 -filz 56 -ii 65i2 -8-6 Ai -ii 5A -ii
2538 22 94 855
1952 21
, 93
Secured 4)45 ser A
25 4018
38 58
5214 67% 48 61
71 8112 5935 72
80% 8958 77 83
714 85 6512 80
Convertible gold 430-1960 8612 9212 874 91
Chic St L & N 0—
85,a 851s ---- --- _ 10278 1027s 102 10338 9914 9912 88 88
_ 10312 10358 ---- ---- 10312 10414
1951
Gold 5s
Registered
Gold 336s
r
,
,
-70
1951
65 Ili 90 9112 ------------------Memph Div 1st 4s
4 10112 102 --------82 1-(11- 67118 -9112 ---- --.Chic S L & Pitts 1st con 55_1932 101 10134 --------101 10134 101%10178 ____ ---- ---- -- 10124 1011
Registered
7485
4358 If ii 16
.
4 44 668-4 45 -5
Chic Terre 11 & S'east 1st 58'60 834 854 85 8814 ii -8-i52 66 -08 66 -i614 6/ ii 75 -7558 05T4
22 32
35 39
25 35
5678 5714 35 40
53 644 65
51
Income gust 5s
1960 69% 7014 7018 73 68 72 63 6812 68 65
84 92
93
97
92
997
8
97
1023
4
105
10212
4
105
1033
1038
4
10514
10314
105
10312
105
1033,104
103
10358
1023,105
Chic Union Sta 1st 43-4s A 1963
94%102
1013
4
10418
1037
8
100
8
105
1063
10614
10512
106
1063
8
1963 10458 106 10518 10558 1054 106 10512 10612 106 10624 106%1065,
1st 5s ser B
98 10034 9412 100
98 102
1944 104 10518 103%10512 1041
Guar 4 55
/
4 105 10435 105% 10412 105'8 105 10514 105 106 10524 10634 105 106
1104
10518
1121
11112
115
11012
111
11612
115%
11812
11512
11672
11424
116
115
1163
8
11514
11634
1st 63.4s ser C
1963 11458 11634 115 11558 11538 11612
70 7658 5458 7418
9012 9134 82 9214 76 8714 717s 82
Chic & 3/Y I cons 50-yr 45_1952 8712 92
8912 904 00 9158 90% 0114 894 9114 89 91
9414 100/
1
4 90 9358 68 93
1st & ref 5 3gs ser A
1962 10212 10535 10412 10512 105 10534 10414 10578 10424 1051 1003510478 105 10512 9912 105'2 91 101
Choctaw Okla & G cons 5s1952 10134 103 102410218 ____ ____ 10312 10312 ____ ___ ____ ____ 10312 10312 102,2 105
ai -i-i
aus -ii
1st &
95
100 100 ----------------9558 9712 96 96 191
_ — _--- 99 99 9812 100
9914 991
/
4 9914 994 991 9818 9818 98 98 9212 9212 89 89
---- ---- ---- ---- 99 99
98'
2 99 9912 1172 991
98'g 98'8
9414 14-1-4 Oa- -9.-6 __„ „. 65 -iii iii2 -2112 6iT2 -2112
,
- S'
-:10234 10478 10441044 104 4 1-05 105 106 10514 106 10378 106 10124 1-041 98 1-03 95,8 1-01-7i 93 -9712 87 IV
___ 9712 98 95% 9758
____ ____ _-__ ____
--9814
77 80 70 75
- 6i -gi 65 -61 9214 943
Clev On Chic & St 1, gen 45 93 552-4 1678
: 1:1.i -I:3118 -I-17- 1412 -61.i4 -93.1-4 -iii4 -2-2-2-2 -g434 9-0 - 78 84
1993 --------1095,110
General 5s ser B
-- :::: 11374 fiii- -_-_-_-_ - --_--_-1941 1.18 14 10458105 10414 1045, iOiikt 165 - --------104- ioi i54
Ref & Imp 6s ser C
-121-641-2 iOi- 1-641-2 ioi- 1-0-4-- --::
Ref & imp 5s ser D
1963 103,2 105 10412 1047 104 1044 1035s 105 10358 10434 10312 105 10312 10434 9812 10314 978 991 86 90 89 9014 5112 -89%
9384
85 69 8234 50 6858
1977 9812 10134 99 101
79
9914 10034 9612 100
80
Ref & Imp 4 36s ser F
96
89
,
2
9512
9812
97 100 964 0914
__ ------ __ __-_ --100 1014 ---- --- ---When issued
-- ---- - - --15 84 9512 754 80
9814 -9814 97 -9-9 97 98-12 -9818 11-2 -iii4 -9-9-1-2:2::::: -ijii8
Cairo Div 1st gold 4s__ _ _1939 9712 98
65 66
71
71
7912
7912
--------9158
91 9214 9112 93 93 93 9358 94
913
4
Cin Wab & NI Div 1st 45_1991 923s 93
92 9312 9134 92-34
71
91 91% 9114 9312 90 93 -------- 88 90 83 8634 75 8234 --------71
St Louis Div 1st col tr 451990 9234 927 9214 9214 90% 91
___ '76 75
Spring( & Col Div 1st 45_1940 9514 9514 9534 9534 ---_ ____ ..
_
__
White Wat Val I)lv 1st 4s 1948
__—___
—
_ jaiI-8 1-6.i18 10418 10414 HIU8
1934 floir2 114-14 _ _ _
Cleve Col On & In 6s
10414 10514 105 105 103 10312 102 102 --------04 94
1-6i1-2
98 98 ---- -. 101 18 1025 --------100 10018 100 100
Cies Lor & W con 1st 6 5s_1933 101410134 10138 1-0-1-58 101%101% 10158 10134 ---- 192S 101 101 -- _ _ ----___ ---- ____ 10118 1-01-1; __-- ---__ 10112 1017,101 101 101 2105 ---- ---- ---- ---- ---- -- -Cleve & Mahon Vat g 5s
9912 9912 ---- ---- ---- -- -1021 1021 1001 101
Cleve & Marietta 1st 4 Ms_1935 10012 10012 101 1-01- ----------------10012 10012 -- -Cleveland & Pittsburgh1948 9258 9258 ---3 Hs ser C
-- ---- --- ----,,- ---- ---- ---- -_ --,- -- --7, -r
1977 10312 10434 101 1-0-412 10278 1-04 10258 1-04 10312 105 10341-04 - 10312 1-04 - 1011213
- - --:---- r
Gen 4)4s series A
---- ---- ---- ---- ---- - - -Cleve Short Line 1st 430 1961 10214 104 10212 10412 103%10412 10234 10414 10224 104 1034 104 10312 10412 103 104 10014102-1-2
'..-...Cie, Un Term 1st a f 5 Hs A 1972 10858 110 10814 10924 10978 111 11012 11114 11034 111 110 11114 110'8 11114 108%111 104 10934 1024106 —95- 1-05 - -9174 100 95 1034 90 9618
1973 1054106% 106 107 10612 10714 10514 10724 106 10912 10412 107 10612 10734 10614 10614 10412 10612 100 101
1st s f 55, ser B
8
10312
8812
9512 89 93 80 9012
58
1023
1015
4
1041
103% 102 1041. 1035,10424 10234 10412 102%10334 10134 10312 9512 10212
1977 10118
lit s f guar 4 14. C
958 9818 92 92 _
9514 96
_ 92 95 92 92
_
1945
Coal Riv Ry 1st gu 4s
74 01-4
91
95
8 -6i- -ii 9212 95
8 —65i4 167Colo & So ref & eit 4)4s1935 ioi 1-61-3-4 10118 10134 101 101% 101 102 laiii4 fiii;'OF 1-6114 iii-o- 161560 7134 54 6312
4912 64
6112 73
Gen mtge 4)4, sreies A 1980 93 9734 93 0558 93 9524 92 9312 897s 937 8558 8712 86 87 84 84
/
4 955 955 9678 967,3 9514 9514 ----------------------------------------75 75
9534 9534 9558 961
Col & Hock Val 1st est g 45 1948 92 95
_
___ 9412 941 -------- 951., 9614 ----------------------------------------- -- -Columbus & Tol 1st est 45_ 1955 9312 9312 954 9518 __
67 67 5454 5466---- „r 73 74
7258
74 74
723 4 74
70 7414 7214 -7412 7332 74
723
Consol Ry non-cony deb 9s '54 69,4 72
7 7314 72% 7414
69 8414 5612 5718 --------4 -45
734 7314 74 74
12 76
7112 718
Non-con. deb 45.3 & 3._1955 68 714 71
/
4 727 72 72
_-__ 711
Non-cony deb 4s...A & 01953 --------70 70 --------7234 7234 - —
73 73 -_-- - -- - 41112 -5612 44 -4.1
7112 74
Non-cony deb 4s
1956 6838 70 --------7158 72 --------7114 13- -,iii, 7481 -7312 -i5
On Ham & Dayton 2d 4366 1937 98 98
CirtIndianap St L & C 1st 45'36 98 98
Registered
Cln Lob & N 1st con gu 45_1942 ____ -_-_-_
-0514
Cin tin Ter111 1.1t 4t6 s__ _2020 10224 1
1st mtge 5s series B w 1 —2020 ____ ___
-iiii8 -iiT2 iii; -iiii2
jaii4 fewh-
28
3712
41% 42
3512 45
3612 44
38 42
3512 39
4134 46
4234 47
1942 40 44
Cuba Nor Ry 1st 534s
5312 6212 37 56
6112 65
45 60
13314 7012 60 575s 55 64
Cuba RR 1st 50-yr 5s g1952 537 5812 5612 67
58
60
72
7314
58
72
7412
7714
774
78
7112
75
8018
7714
78
72
1st I & ref 7 Ha. ser A
1936 70 78
495 5514
58 64
59 65 66 704 6712 6758 6634 675k 6412 7014 70 72
1st 1 & s f 6s ser B
1936 59 65
7
1
4 9058 9558 90 9378
1
4 9758 953 975 9634 9758 96 971 97 9914 9618 9814 94 97/
Del & Hud let ref 4s
1943 95/
--------992
3103
10512
10512
10312
106
103
1034
1OSSs
103
1031s
30-year convertible 5s
1935 10012 10112 101 10112 10112
1
4 102 10534 991,102
15-year 5 Hs
1937 10414 10512 10312 10512 10312 106 10412 1057 10512 10612 104 106 104%105/
98
98
--------9012
----------------------------100
98
98
98
98
45-1936
Del RI• RR & nage lot
94% 82 911 77 8618
91
8914 94
Dens & Rio Gist eons 46.'.1936 95 97 9612 99 9612 9734 9558 973 9112 98
90 941 82 88
9412 96
9312 95
Consol gold 434.
1936 9712 99 9912 100 9912 10012 99%100% 97 101
5658 28 4818
58 6434 41
53 674 42 63
7518 8114 0514 75
Den & R G West gen 5s Aug'55 7518 8114 75,2 83
397k 6412
6212 7314 50 62
68 73 65 71
5.series B
1978 7653 85% 78 8355 80 8312 7238 80
•Cub sale.
,Option sale.
25 3478
29 47
48 49
45 49
84
92
991
/
4 105
9914 102
90 90
71
7558
818 8178
21
35
20
43
25 33
357 52
45 4912
4518 4712
76 8634
994 9914
94%100
577
60
2414
35
15
32
35
3714
7414
83'4
8412
26
411
4018
4312
8012
9914
90
-74.34 45- (4741
. 59 62
99
3612 15
52 3258 4314
254
FINANCIAL CHRONICLE
[Vol,. 134.
1931-Continued.
BONDS
January February
April
March
June
May
July
August September October November December
Low High Low High Low High Low High Low High Low High r,ow High Low High Low High Low High Low High Low High
Des Moines & Ft D 1st gu 4s'35
8
8 ------30 3012
Temp ctf of deposit
8
5
6
8
5
6
3
4
Oct &Mackinac 1st le 4s_1955
35 35
Detroit River Tun 1st 450 1961 46574 104 io5- 104 io5;foi 10232 10372 1[55216i'; 102
fa; 105F4 163]; la- 165(8 991210038 -55; 16- -56- -6/- -56- 161-4
Dui Missabe & Nor gen 58_1941
104,8 10418
10412 1041 10454 10454
Dul & Iron Range 1st 5s1937 1021663; 465- 1034 405F416612 1155;1-6i- log41-6614 10314 10334 10312 10414 10414 1-64; 46521-6i 98 10134 5512 10014
-58- -Ws
Dui So Shore & Atl g 58_1937
42 47
3612 45
60 6018 5212 5212
46 46
46 46
---- 3978 3978
East Ry Minn No Div 1st 48 1948
9678 9712
97 97
9684 967s
---East Tenn Va & GaCon 1st g 5s
1956 10434 108 107 107,8 10733 108 10738 108 10714 10714 10713 10712
100 105,2 10114 104
87 9934 87 87
Elgin Joliet & East 1st g 5s 1941 10412 10413 104 104 10312 104
10414 10712 1043s 107 101 105,2 98 10258
8812 8812
El Paso & S W Ist & ref
1965 10218 10314 103 103
104 10634 10434 10434
104'z
10534
465;1611;
98 98
Erie 1st con g prior 48
1996 85 8814 8414 87,4 -55; I9-3-4 8514 89,2 8638 89
8634 8812 85 89 -55 -86777/8 8734 7014 76
4
161-4 53 -6/18
Registered _______________
82 82 8634 8712 84 84 8478 87
8012 84
1st cons gen lien e 4a
1996
/61.
-4 74 78
7112 7514 70 7213 70 7634 70 77
75 7878 -55- 76 -852 -7j-74 5484 61 -45- 61 -55- -ifRegistered
5712 57,2
Penn coll trust e 4s
1951 9814 100
9814 100,8 9938 10034 9918 10118 9932 101
59;1-66- 1003810114 100 1-66- ion- 1-66- 9912 100 -55; 6112
50-year con g 4s ser A
1953 7434 7813 76 78
7312 77 6913 72 6812 7534 6934 7212 7114 76 65 7112 5-5 68
52 60
44 56
30 42
50-yr con g 48 ser B
1953 7314 7878 76 78
70 7114 71
72 77
73 68 7512 74 76
71
5834 6812 52 00 42 5534 29 42
63
Gen con,48 ser D
1953 7112 72 7012 70,2 7012 707s 72 72
7312 7312
7513 75,2 6718 67,2
Ref & inapt 58
1967 7734 8412 79 84
72 8212 7114 7434 7214 7978 6512 80
7412 8158 6412 75 -85; -7514 -86- 59 -55- -66Ref & imp 58 of 1930_ _ _1975 77 84
7112 7412 7112 7958 66 80
77 83
72 81
74 8114 6434 7414 5213 701_ 49 59
39 5934 26 4134
Erie & Jersey 1st at 68..1955 109 11012 10914 11012 110 112 11012 112 11134 11218 11113 11214 11178 11238 108 11212 102 11134 96 98
98
Genesee Riv RR 1st s los 1937 10618 110 10858 110 1087s 110 11012 113 112 114,2 11034 11412 III 11213 108 112 100 11012 95 9834 96 100 80 82
99
75 75
Erie 2. Pitts gen guar 1 14s B'40
935g 93%
9712 9818 _
_
Gen guar 330 series C 1930
9.514 95,8
_
Fla Cent & Pen cons gold 55'43 81 85 89 8913 90 93 89 90 85 8612 8478 8478 85 93 83
76 81
85
65 65
4212 4212
Florlua East Coast ist 4 558 1959 77 80
77 78
7958 80
77 80
57% 76
7212 7212 75 75
6.5 7312 6012 63,4 51 6014 45 50
74 75
1st & ref 5s ser A
1974 2112 31
20 2118 1718 21
20 29
2018 25
17 23
19 2212 15 2212 834 16
7 10
8
,
e
1013
3
812
Certificates of deposit
252 6
Fond. Johnst & Glov 4)45.1952 24 28,2 2478 29
1978 25 20 2012 17 2018 17 18 -45- -16- -15; 15
-16- -121-4 812 10
7 15
Fort St U D Co 1st g 45fs -1941
---- -06 96
96 96
96 96
Ft Worth & D C 530
1961
10-8;166 15-5i41-6/1-4
10512 105,2 105 105 100 105 iOO- 1-66- 97 98
From Elk & Mo V 1st 63
1933 1044 10483 155;10338 10312 104 104 10418 ioi- 1-6612 104 1041a 10414 fai4 104 104,4 10034 10213 10038 10012 907410012
1931 10012 10013 100112
G H & S A. lal & P 1st 5s
210 10012 10014 10035 100 10018
---1931 10038 10034 10034 10034 10012 10034 10018 10058 9912 100,4
2d guar eaten 5s
Gals bus & Hen 1st 5s
1933 98 100
9934 9934
9934 9934 97 9912 -58; -65-1;
9612 97
_
5112 5712 55 55
Ga & Ala 1st cons 5s__Oct 1945 55 55
31 3214 30 35
35 4512 3513 45 -55- 3512 1713 2515 1213 -ff54 1238 1514
Gs Caro& N 1st gu g 5sJuly1154 85 9412 92 95 875s 92 86 86
86 86 86 87
86 86
45 45
30 54
50 50
Georgia Midland 1st 3s_ ..1946 73 73
Gouts &Osvregatch 1st gu 52'42
10412105 1155f2 1031-2
Gr R 8c I ex 1st gu g 4 30_1941 -55; 163; -55;f61- 10114 10112 10118 10118 46541-611-4 10138 1015,, ioi;161-3; ioo- 1-66- ioo- 1-66Grand Trunk Ry at 7s__1940 11018 11114 110 112 1111211214 111 112 112 1131s 11212 11314 11214 113 ii 12 1162 9434 1133 55T4 1614 9512 102
-58- -667-4
4
-4
,4
15-year s f 6s
1936 10514 10614 106,4 10734 10714 108 10712 10812 10778 10834 108 10834 10712 1087
9212 987s 5314 93
8 107 10778 8412 10711 85 98
Gt Nor gen 7s CB & Q coil A'36 10918 11112 11038 112 11013 112 110 111 1103$ 11134 10814 111 10958 1101z 10318 10913 9812 1071 981s 10513 95 104
:
83 93
Registered
109 109
110 110 10912 10912
9713 9718
1st & refund 43.s ser A__1961 99 1017s 99 10112 9918 10114 99 10038 99 102 -55;1-55;1661-5890 9512 89 92
2
-5816
675 82
6612
Gen g 530 ser B
1952 10778 111 10813 110 10938 11014 10734 10934 10858 111 10734 110 10714 10834 97 1057 8513 1007, 85 93
78 96
66 8134
s
Gen 5s series C
1973 10312 106 10518 106,2 105 106,z 102 10534 10214 c108 101 104 10118 10314
913
70
84
81
101
79
82
8714
6812
75
Gen 434s series D
1976 9712 100
9838 9912 98 9912 9512 9712 9534 9912 9538 9812 94 96,8 8518 94
65 80 70 80 56,4 68,2
71
88
Gen 430 series E
1977 96 9934 9613 987s 9618 993s 95 9714 961s 9834 953g 977
8 944 9612 8238 9412 63 86
6458 82 65 82 5638 6812
Green Bay & West deb ctfs"A"
6713 6713
_
Deb certificates B
15 21 - -16 16- 1418 15
6
72 1114
81. 7
7
5l
553 5
514
Greenbrier Ry 1st gu 4s___1940
9538 953s
Gulf Mob & Nor 1st 5558_1950 -552 -667; -5712 11- -65; lir
_
57
-84
-15312
57
- 59 -56- -661-2
1st m 5s ser C
1950 90 92 87 91
8612 8734 87 8912 -552 -66ii
1/
12
80
653
83
8 50 57 5,-1; 55
55
45 5238 39 39
Gulf & S I 1st ref & ter 58 1952
10314 104 10334 10434 10358 10414 10358 10358 10158 10158
100 100
98 98
s65 s65
Hocking Val 1st con 4558_1999 101,g 10678 10218 105 10334 10414 10314 10414 104
106
10312
1043
8 10338 10434 10018 10478 92 10114 8338 9258 88 91
7918 90
Registered
10012 10012
Housatonic RR con 5s
1937
-55- 166-4 10578 1-0-61s 10034 10034 100'z 10114 H15;1-663-4 -5541-66- H1541-661-4 ioo- 1-66-4
-55- 93
Hous & Tex C 1st 5s int gu_1937 100 1-66 101 101 10114 10138
10114 10112 10158 10158
102 102 100 10012
75 75
Houston Belt & Term 5s___1937 10014 10034 10014 101 10034 102,8 102'3 16614 10212 103 102
103 ioi- 10212
100 100
---Houston E & W Tex 1st 58_1933
10038 101
10114 10114
102 102 ion- 166100
____
1661st gu g 5s redeemable...1933 lOo- 1-61-12
1015910119 1011210112 10l1 10112 10178 102 10114 101,4
98
100
Hud & Manh 1st & ref 51_1957 98 101
98 1001s 992 1024 9818 100
99 100
9814 100
9814 100
94 100 -77585 92 86 91
70 86
Adjustment Income 5s__1957 74 79
77 7938 77 7812 7578 7834 7618 7912 765s 7912 7712 7934 70 78,4 6214 72
54 6314 57 67 49 59
-La-
Illinois Central-Ist g 4s--1951
---- -- 9318 98
9434 9434 9434 9434 9434 95
9178 92 85 8612 83 85
1st gold 350
1951
-58- 85 -5E- -16- 8512 8513
-554 -163-4 8518 85,8 8212 8512
81 81
77 77
70 74
Registered
55; W13-1;
_
Extended 1st gold 334s._1951
87 87
86 16" -02 16-58; -66,-4
Collateral trust g 4s____1952 90 96
9114 9312 90 9218 8714 91
8714 89 845g 87 857.8 861s 84 88 -55; 13-3-1-2
5- 62 -343 '1E;"4.
1st refunding 4s
1955 9034 9234 9038 9218 88 93 851s 8734 8418 88
7613 84
81
83 6814 7958 55 7112 67 60 54 62
35 54
P.rchased lines 330
1952 80 80% 84 8714 8518 88,4 8212 84,4 837s 85 8478 853 8414
,4
1953 85 8812 83 89,2 8758 9014 82 89 78 8234 73 80 4 74 84
Coll tr g 48 L N 0& T
7812 6412 7512
-45; 60 52 59 -55- -461955 105 106 10412 100 101 10513 100 102 9912 102
Ref 5s
9513 98
91338 9912 8813 9513 8034 9034
70 70,4
15-year secured 650_ _ _ _1936 107 110 108 110 10918 110 10734 10971; 107 108 106 10778 106 107 99 106
85 102 83 8812 8238 89 -86- -66Aug 1 1966 9558 100
40-year 43f s
9638 9812 90 963s 8412 9118 7312 89
7112 8334 73 8334 6218 7334 44 65
4112 57,8 3534 547s 24 3712
Cairo Bridge gold 4s__ _1950 92 93
9012 92
90 91
_ 79 82
---1 itchfield div 1st g 33-1951
77 7812 -7512 7584 778 778
-i512 7734
70 70
---- ------Lou',div & term'l g 3345 1953 -55; 84
8412 -6f1-3 8418 85,4 8378 8378 8418 85 8318 8312 8234 84 -7
7
313
77 70 70 ____
------Omaha Div 1st g 38
1951 77 78
7512 78
-76 76
7613 7612 7713 7934 7138 7132 65 65 ---St L div & term g 38
1951 77 77 75'2 78
7613 76,2 7513 75,2
7518 7612
7212 72h
---- -45- -46Gold 314s
1951
8414 8414
8112 8112 8134 82 84 84 -5-0rs -161;
---Springfield Div 1st g 3501'151
85 85
-55;
79
85
Western Lines 1st g 48_.1951 9014 90,4 -55; 93 -65;3
92 92 -5514 164 -91- -6280 80 60 60
Registered
9012 5012 9114 -6171;
III Cent & Chic St 1.& N
1%1 99 102,8 10114 102,4 98 10134 9018 96 89 9612 8612 90 84 89
Joint 1st 5s ser A
70 8334 53 72,2 5212 62
44 5734 31
45
1963 9412 96
1st ref 40
1
ser C
91
94 96
93 87 92 82 8534 79 80
7478 80,2 62 75 49 65,2 46 s50 47 53
24 41
Ind BI & West 1st cud 4. 1940 9138 9138
89
89
75 80
Ind III & la 1st gold 4s__ _190
-55r4 97 -58; 9712 96'2 9714 -54; -66- 96'2 9612 -58; -665; 9114 9114
Indianan & Louis 1st g 48_1956 8434 8812
-16.172
-58- 1E- -55- IIInd Union gen & ref 5s A..1965
;465;1-621; 1551i4 1E3-4 io5;166- 103- 1-66- -58- 1-66110238 1-033
661-4 9314 98 __
10338
4 101 11965 10314 10384 104's 104'2
Gen & ref 55 ser B
10238 103 10212 103 10278 10278
10234 10234 10278 10278 10318 10318
1952
Int & Gt No 1st 6s A
7772 89Is 84 891ii 82 90
801s 90
79 88,3 -5E14 -5-174 7658 87 68 80,2 58 6813 58 72 -58- -Ws
1952 37 56
Adjust m 68 ser A
50 65 48 6112 58 6134 49 63,4 47 5712 4912 601 44 60
2812 45
18 35
30 37
12 23
1956 65 78
1st 58 ser B
7114 76
71
7612 81
78
7312 7912 71 78
72 7814 6312 7278 61
6514 3934 856 50 5612 29 3912
1956 65 65
1st 5s ser C
7434 8012 7012 75
703s 7834 7434 7958 71
77 7634 78, 65 72 6018 64
45 6212 44 54
35 45
Intern Rys Con Amer 1st 5s '72 69,4 70 69 70 6813 73 675a 6812 66 6778 6712 6758 66 6714 5514
6614 5312 65
2512 4014
35 6412 43 63
1st col tr 6% notes
1941 71
74 82 7913 83,4 7212 77,2 66 72 66 75 60 7214 61,2 66
75
40 62 40 48
45 55
35 5018
1st I len & ref 650
1947 70 723s 69 74
72 7313 63 7034 4778 59
72 73
51
54
4938 53 4712 4934 3812 46
3813 421s 19 28
Iowa Central 1st g 5s
1938 14
1214
15
15,
15
16
s
15
15
1214 12,4 10
10
9
9
538 638 5
53s 5
532 343 532
Certificates of deposit
15
15
1312 14
12 13
10
10
658 658 6
518
6
212 3
5
Refunding gold 4s
1951 35s 6
5
3
438 5,4 3
3,s 3
213 -17-13 2
318
114 112 1
3
114 112 112 2
132
James Frank! & Clear 1st 4.'51 94 9638 94 9672 9538 9614
95 9678 9612 987s 9612 9613 9458 9458
Kai Allegan & G R 1st gu 5s '38
103
103
Kanawha 82 Mich 1st gu 4s _'90 90 9212
-55; 92
89 8912 -55;
4 -5514 -0-63-4 -55- 90
KC Ft S& H Ry ref g 0_1936 9534 97,2 554 -6E14 9712 9912 55; -gi
g 87 9758 87 16393 9058 93 80 9058 go- -5:i" 74 79 -58- 76 -io; 60
Kan City South 1st g 3s__ _1950 773s 81
79 7932 78 8158 7578 7812 77 79
73 7712 7712 81
69 7712 6114 6812 6014 6538 5714 6112
76 81
Ref and improv 5s_Apri1 1950 9938 10173 997s 10238 93 10234 94 97,2 8734 100
83 9412 90 9434 77 8812 70 8312 68 7978 58 7512 48 631s
Kan City Term 1st 4s
1960 9314 9512 9438 95,2 95 95,2 9412 9558 95 9734 97 98,8 971s 98,s 9638 9818 90 9713 83,4 92 85,4 9038 81 8812
Kentucky Central g 4s
1987 9134 94,2 9112 9314 9314 94
9314 9438 9313 9434 9358 9353 9314 9314
_
8278 8278
8358 83
Kentucky & Ind Term 434s '61
84 84
93 93
Stamped
1961 90 91
94 94 -51 2i- -55f8 94 -5152 -91-1-2
93
-894
Lake Erie & West 1st 53
1937 103 103 1011s 103 102 10218 10258 10314 10134 103 10112 1-61-3-4
1-661-2 -55- 66- 75 89 -55; 76
101-38102 102 16i- 91
2nd gold 58
1941
100,4 10012 10034 10034 10034 10034 10034 10034 10014 10014 10014 10038
9512 9512
75 75
Lake Shore & M Sou a 350 1997 8412 871s 8512 8512 85 86 84 86 8512
8112 82
84
72 8214 7312 7718 70 7312
81
863
4
8612
841s
83
5
8
85
,
2
Registered
1997 85 85
72 72
79 79
83 83 8413 85 8334 8334
25-year gold 4s
1931 10014 10038 10014
100 10014 100 100
Leh Val Harbor Term 1st 5s '54 104 105 105 17665;
105 10358 105 10414 10514 lO3z 10713 108- 1-661; ioi- 1-66- 1155;1-6i- 9713 1-614 -55- 1-66- -54- -5-61-2 95 95
Leh V (N Vi 1st gu e 4)'0_1940 100 10112 100%101 1001:101
97 9812 5134 9134 90 91
9912 100,2 100 101
99 10038 9912 1003s
Lehigh Val (Pa) gen con 4s2003 8534 8934 87 9018 8518
8834 84 8714 8414 87
8378 8712 85 8734 777s 85,4 6713 8013 6012 68 60 6712 40 02
Registered
86 86
64 64
83 83
General consol 4)4s_-2003 9714 10034 -9'7;1063-4 -5i 1007; -55; -663-4 97
-55;1663; -55; -661-4 -55;1-663-4 74 9334 -55; 75 70 74 -45;IC
Lehigh Val RR gen con 58_2003 103 106,4 104 106,8 105 10634 10334 1053 102 101 10312
90 100 83 90 80 8312 4812 70
10514 9914 103
1023
4
10412
4
1043
4
Leh V Ter Ry 1st gu g 5s-1941 1041210412 102 104 1021s 104 102
85 85
4 10158 10158 102 102 104 105 10334 10334 102 102
Lehigh & NY 1st gu g 0.1945 8534 867s 9013 90,s 9112 92 84 1023
-55- -6i_- 9514 9514
92
9414 9414
915s 96
Lexington & East 1st gu 5s1965 10934 110
Little Miami gen 4s A
1962 ____
Long Dock con g 6s
11-Z.5 101 10513
c 4../ash sale. 8 Optical sale.
110 110 108 109,2 108 110 108 111
9118 91,s
9112 9313
10714 1071.1
1061g 108 155- 106
109 1095/3 109 109
10218 105
iaa- 1661-4 103':105
105
1-66-
99
99
FINANCIAL CHRONICLE
JAN. 9 1932.]
255
1931—Continued.
BONDS
August
September October
November December
January February
April
June
July
March
May
Low High Low High Low High Low High Low High Low High Low High Low High Low High Low High Low High Low High
Long Island 1st con Ss July '31 101 101
10014 10058 10012 10012 10018 10012 ---- -6712 6712 9784 9784 "9734 98 -67- -9-7-4 -87i2 -67
1938 95 9614
71-2 88 16- -ars
Gen gold 4s
9712 98
_- 9812 98
9712 10034 9858 100
1932 __-- -- 9812 9812
99 99 100 100
Gen gold 45
99 99
9878 9878
93 9412 9212 9212
93 93
gold
45
1949
-ggi2
923
8
93
Unified
9212 9212 9078 9338 gg F2 -95-1-2
1934 101 101
Deb gold Is
10134 102 10112 102 10112 10112 ioi- 101 10134 10134 10118 10138 10034 10114 0912 9912 -66- -9-6 89
1937 9812 10012 iOi- fa- 10114 102 10034 10134 10114 102 102 103 10112 10214 10214 10234 10018 10214 9378 9812 9312 6312 75
20-year deben 5s
9412 8214 8812 85 88
1949 9212 94 92 9412 9418 951 9334 9478 935.8 9512 9518 97
71
9512 9634 94 9638 91
Guar ref gold 4s
99 10118 9912 10014 9834
10012 101
NSh Bch 1st con gu Ss Oct'32
10012 1007s 101 1011
10112 10112 10058 10134 101 101
5012
4614 3638 4718 41
Louisiana lic Ark 1st 5s A 1969 61
7112 66 70
39 55,4 6212 57 42 5312 3(3
63 75
5478 65,8 41713 80
85 88
94 9418 9312 9358
95 95
Lou &Jeff Bdge Co gu g 45 1945 94 964 9478 9512 9814 971 94 96,4 941s 9414 93 94
ia- 1-66- 95 98
10114
10112
Loulsv & Nash gold 5s.. ..1937
1027
8
1033
8
1033
8
1033
8
103
10313 10318 103
9814 9812
When issued
_
1940 9712 9912 9714 99 -6iia -66- 984 16378 -55i8 1-667Unified gold 4s
-cia -66- 1-661-4 94 9914 9312 9812 8912 9212 -9028 -668
____
97 97
_
Registered ----------------1931 101 101 10-1- 1-61-1-2 1011s 1-611-4 ioiia
Coll trust gold 5s
io6‘1168; 10012 10012 103 103 la- 1-66Mils 1662003 10412 106 105 10658 1047s 106 10158 106 103 105 1037s 105' 10412 106 103 10414 9714 10138 9818 10014 66.12 19.1st & ref 5 34s ser A
94 94
2003 10412 106 1044105 10434 10534 10458 10512 1031s 10434 10318 10434 10178 10318 97 10212 88 9914 8612 88
1st & ref 55 ser 13
85 82 85
2003 99 10214 99 10138 991s 101- 9638 100
1st & ref 434s ser C
8 96 9814 8818 9512 8014 9112 81
97 9834 97 98,
9712 101 9612 C10134
55 interim receipts
1944
Paducah & Mem Div 45 1946
93 93
St Louis Div 2d gold 3s_1980
4 -a- -a6728 -66168 69
684 7014 6814 69
-a- 67 67'2 1/1-2
16- 67
9212 9212 871z
Mobile & Alontg 1st g 4t4ti '45
9712 101
95 95
10058 1005s
1007s 10078 10114 10134
8278
Southern Ry joint Mon 48'52 86 93 894 9234 ggis 95
88 88
8738 884 88 88
8734 90 8734 9212 874 89
,
Atl Knox & Cm n Div 4s_1955 96 9634 8914 9614 9512 9612 95 9628 95 9612 9412 9412 9412 9712 9178 9412 8312 90 -ars -alLouis Cm n & Lox g 4 Hs1931 100 100
10012 10012 10038 1003a 10038 101 10058 10034 10058 10055 10038 10058 100 10018 9912 9912
____
Mahoning Coal RR 1st 5s_ _ 1934
10114 10114
102 10218
-- 102 102
102 102
Manila RR Sou Lines 1st 45'39 737 7714 7418 75
8 -Li- -a- 52
7412 75
- 75 7678 644 6514 65 6514 -Li- 1677434 7434 _
1st extended 4s
1959 67 6712 67 70
65 65 65 65 ---- -7212 7212 68 70 65 65
Manful S W Colonls g 5s_ _ _1934 9812 9912 9812 9912
9812 9914
9934 9934 9934 100
9912 100
99 100
100 100
ManGB&NW 1st gu 3s 1941
_ 8714 874 8918 8918 8712 8712
---- 9012 9012
90 90
Mich Cent Der & El C 5s_ _ _1931
9978 9978 ---9712 9914
Michigan Air Line 4s
9712 9..1
"a" -6.61-8
1940 -674 1/3-5iEs
4 9734 9734
1st gold 330
1957 8512 8512 89 8938
89 90 9014 91 "66- -9-6163-8 -66i2 16 8912 9U5s
Ref & faint 430 series C.1979 10258 10234 102 10438 10058 104 10034 1024 101 10234
10228 102 10212 100 1015s 9738 97313 iois
72 8214
7618 78
9914 10012 c108 c108
96 9612 90 9012
90 90
8 92
88,
10
1212
15 18
9
9
234 512
5
5
312 8
Mississippi Central 1st 5(4_1949 90 97
Missouri-Illinois RR 1st 55 A '59 60 6514 62 65
Mo Kan & Texas lot 4s
1990 884 92
8934 9134
Mo-Kan-Texas RR 5s A_1962 1001210334 10114 10312
Prior lien 4s ser B
1962 88 9012 87 8938
Prior lien 434s ser D
1978 9434 97
9578 9778t
Cum adj 5s ser A
1967 89 9434 9012 95
Missouri Pacific RR 1st 5s A '65 9412 100
9414 9712
General 4s
1975 69 75
7014 7258
1st & ref Ss ser j7
1977 9318 9912 93 95
1st & ref Ss ser G
1978 9312 99
934 9478
Convertible gold 5 Hs _1949 93 101
9712 101
1st ref gold 65 series II
9314 99
9314 95
1st & ref 5s series "I"--1981 95 9514 95 9538
3d 7s, ext at 4%
1938 9558 955s 98 99
90 90
4978 52 -ii50
7712
8558 89
90 c95,
4 8112 92
80 8238 65 6712
68 68
51
7812 55 70
73 8612 66 79
4012 57
5112 59
7812
73 8212 61
7238 8112 6218 75
40 6314
60 76
7338 82 6114 79
7212 82 60 79
9512 9512
-e33-s
59'z 62
9014 91,2
9912 10328
8758 92
9614 98
88 94
91
96
6118 71
89 9478
8718 9434
89 9914
88 9514
88 9518
97 99
55 59
87 9114
9734 1001
83 89
9434 9718
79 85
8612 9114
5714 621
8112 901
8238 901
785s 8912
81
91
8158 9012
9512 9714
88 8818
53 54
87 90
8414 100
8012 8458
91 9514
7212 8114
8178 89
5714 6638
7812 8814
0
88
012 804
93
18
50 16
8712 89
8218 9612
77541 C85
6912 111-2
86 8814
54 6414
7612 86s
7578 8634
59 7934
81 8814 7612 8634
791s 888 761s 87
97 97
88
50
8734
9412
82
87
7812
8434
5912
82
82
75
82
8178
9418
53
89,
8
9878
85
8834
82
8934
6512
881_
8834
82
8812
8834
62 72
54 62
68 80
9912 100
40 40
90
95
8828
95
9212
7938
995s
35
4812
90
16.-
77
8633
73 -a"
70 70
6934 7812
9412 9634
----
-776i
Midland of NJ 1st ext 55_ A940 -_-- -78 81
8712 8712 80 80
Mil & Nor RR lot 430(1880)'34 9812 9812 -552 1678 -655.4166- ioo 10018 10014 10134 10114 10214
Con ext 430 08843
1934 97 9712 97 100
9914 9934 99 9978 9834 9978 97 9812 -9628 97
Mil Spar & NW 1st gu 48_1947
94 95 9214 94
94 9412 923s 9212 9212 93
95 95
Minn & St L 1st cons 55_ _1934 1712 1712 1818 1818 20 20
15
1814
15
18
14 16
18
18
Temp ctfs of deposit
11
13
20 30
21
1612
18
161s 20
21
16
18
1st & refund gold 4s____1949 5
4
8
638 8
3
4
4
6
634 4
9
4
6
Ref Sc. ext 5s ser A
1962
8
8
8
8
Certificates of deposit
M St P&SSM cons 4s stpd '38 83 8814 8612 8914 87 89
7812 79
8518 8818 8134 87 8014 85
1st consol 5s
1938
80 8412 76 803s 75 7812 7412 76 60 70
68 70
1st cons 5s gu as to ins. 1938 94 9412 92 9314 89714 9414 8912 92 8978 9112 83 8512 79 8012
Col tr h3s
1931 984 100
997a 10012 984 100
9018 9912 00 9812 98 100
9912 100
1st & ref fis ser A
1946 81
84
89 87 87 8214 854 81
25-year g 530
1949 6334 67 6212 6614 6328 66
6212 6412 -ars
-LC -a- "rig- IA
1st ref SH's series B
1978 97 9934 9714 98,
9834 96 9858 9212 97
9238 94 85 93
4 91
-163-8
-671-2
87'2
8278
-------
---51
63
---- 59
96
52
59
96
-------
-77g11
8 12
9
9
212 212 212
8
8
8
78
12
-11-2
8
43 62 -48
50 54 36
70
65 65
---- -35
3978 47
40 40
79 9012 70
-54
50
70
-i6-
38
"a- -66-.7i- -a-
75
75
7728
57
38 50
5012 65
72
75
7414 78
7214 78
75 8312 73 82,
60 661 65 67
5014
57
3812
55
53
4518
55
551s
59 -;10i4
5514
68
4912 3412
6812 5012
6712 5114
38
57
6712 52
68
5012
55
6834
4938
6812
68
5712
6812
6812
734
7
2
8
8
35
3334
45
10
8
212
8
8
4912
474
504
18
26
35
20
20
62
72
2018
8834
51
40
4312
34
4314
23
4212
431s
24
4318
43
72
29
77
6612
60
56
4712
5684
3714
54
5312
4112
54
5414
Mobile & Birm pr lien g 5s_1945
--_95 95
Small
____
97 97
97 97
98 97 -56- -a---Mortgage gold 4s
-a- -66WI;
1945
80 8118
_-_- "8884 92 8938 8938
gOT4
---Small
8712 8712 81
81
79 88
____
80 80
Mobile & Ohio gen gold 4s_1935
80 -66
Montgom Div 1st g 5s__ _1947 65i81-661-9-61-2
8 ia" 102 -50f2 161-4 -09T2 W1.2
---2814 1712 2514 8 15
Ref & impt 4.4s
29 3212 18
1977
47 191-4 39 39
69,
8 69,
-- --- 35 35
8 6712 6712 ---Sec 5% notes
1938 85 9034 75 8114 7458 81,
3514 5214 35 4178 25 3012 25 3118 1012 25
53 56
73 80
4 7412 77
75 75
Mob & Mal 1st gu g 4s
85288528
9314
1991 92 92
9314
9314
93
93
9314
911s 9118 9318 931s 88 9314 9012 90,
3 -9028 -664
1111-14
Montana Cent 1st gu465
1937 105 10612 108 108
10838 10828 1087s 109,4 10812 10812 10878 10878 10878 10878 10434 10434
1st guar gold 5s
1937
104 104 104 104
10214 1024
1033810338
65 7
Morris & Essex 1st ref 3355_2000 8418 86
8412 854 84 8412 8333 84 8312 8512 8312 85 8314 844 -a- -a- 78 84 -66is
99 10034 c9534 10034
Constr m Ss ser "A"
1955 107 10834 107 10814 107 10738 10612 107 10634 10712 106 10634 107 107 103 10734 102 102
Constr m 4 35s ser "B"_1955 101 103 101 10254 101 10212 10034 10158 101 10234 1001210218 1004 1014 95 10114 9518 9718 90 9314 91
93 84 8934
Nash Chatt & St L 4s
1978 933s 95 94 9412 9458 9534 9112 05 93 9534 95 955s 9314 9438 90 9212
Nashv Fla & Shef 1st gu 5s 1937 10218 10214 10214 10412
10418 10418 1044 1044 10218 10218
10334 10334
Nat Ry of Met prior In 43s 1957
Ass't cash war&scr retNo.3on 4
24 214
312 458 3
434 312 4
2
228 212 3
3
378 2
Guar 70-years f 4s
1977
_
_ 3
3
-- -Ass't cash war&scr retNo.3on 4
5
44 4,4 318 318
42 412
Nat RR of Met pr lien 43451926
Ass't cash war&scr rctNo.3on 6
7
5
4
4
4
4
6
2
4
5
5
512 4
534 6
1st cons gold 4s
1951
Ass't cash war&scr rctNo.3on 313 414 3
2
334 313 4
214
31s 314
2
218
Naugatuck RR 1st 4%
1954
87 87 86 86
New England RR cons 5s...1945 ioo- 100 -6634 1-61-171
101 101 igi- 101 ioi- 1661-2
1945 88 89 8838 9012 915s 92 914 9212 9058 93
Cons guar 4s
91
N 0 & Northeast 4 30 A 1952
-85 85
85 85
7618
New On Term 1st 4s ser A.1953 90 9212 -56T8 161-2 -61- -661-2 90 92 9014 9034 85 90 90
New On Tex & Mex Ss ser A 1935 98 10038 10038 10038 9878 10038
1954 92,8 9334 9314 9312 83 87
1st 55 ser B
82 82 -Li- -ill; -Li- -al; -6928
1956 9278 9458 8912 9112 87 92
1st 5s ser C
85 85
6328 8458
1956
1st 430 ser D
50 72
50 68 65
1954 98 1-61-4 -97- 1-61- 893 111.4
1st 5 Hs ser A
11- 84 8734 62 79 74
5412 6412
-66- 16112
2
214
2,2
112
112
1
112
--112
112
134
2
114
2
212
212
134
3
66
ioi- 10-2 ioo- la-
9114 914 9134 ma 90
7618 7614 7614
9312 86 9112 747 784 7434
75 -Li64
45
65
8258 63
-53-4 -7028
-ii- 1E- 43
38 45 4312
2
66
-ai- 63-
7434 59 7034
26 26
2378 42
49
-i6
58
-7-61-2
45 c47
50
4912 56
70
47,2 28 38
3412 4014 41
37 50
55
7414 45 6314 38 487s 4234 5712 2014 4214
'45 96 100 974 9714
Npt & Gin Bdge gen gu 4
100 100 100 100 100 100 100 100 100 100
NY Ilklyn & At IS con 53_ _1935 10134 10134
jai is 16114 ioi- 1-6f94 98
98 10134 95 95
10134 10134
3 106410734 106 107
NY Central RR cv deb 68_1935 10618 107 10634 16i585 10258
95 10614 98 101
10728 10312 1-66- 10518 10712 10628
1998 95 9758 9512 9714 9434 9634 9278 9518 9314 95,
Consol 4s series A
75 84
8 9234 95 93 95 87 94 84 9012 79 87
Ref & leapt 4 SiS ser A...2013 101 104 100 102 100 101
97 10012 95 10014 9412 9914 96 98,
63 8312
76 87
4 8934 9638 82 94
100 10014 9738 c10038 9414 100
When issued
9411 75 8634 6112 8312
9378 99
95 9878 8958 9633 81
2013 106 109 10612 1074 10634 10734 10518 107 10434 107,4 10214 10512 104 10512 99 10478 92 10134 82 9478 71
Ref & impt 50 ser C
92
NY Cent & Hudson 330_1997 8412 8714 8458 86 8434 8578 8334 86 84,
8 8612 84 8558 83 85 8114 8358 80 84
7112 8012 7112 77
Registered
1997 8478 85 8538 8538 84 84
84 85 8314 84
7012 7012
1934 10018 10034 100 10078 10014 101 I.130'4 10-4 101 10134 10078 1015(1 ioois 10214 "ail, Coil; 9728 997 94 9812 -664, -sii
Debenture gold 4s
9812 9812 9812 10014 9912 10158 96 9612 96 9814
30-year deben 4s. _1912-1942 9734 9834 98 9878 98 9812
85 85
Lake Shure coil a 33.s. _1998 8238 85 8212 84 8312 8414 8218 8418 83 84 8234 8314 82 8318 7518 84
7612 80 -77612 76I-2 68 7418
79 8158 7858 8112 81 8138
Registered
1998 76 8212
7178 72
70 70
8338 84 82 83 8334 8484 84 161Mich Cent coil g 3 30_ _ _1998 82 8512 -giTs
4 8428 844 75 78'z 771s 78 70,8 77 68 70
8212 8212
Registered
1998 80 84
5- 90 -8034 16N Y Chic & St L 1st g 4s....1937 9712 100 66- 9914 -65- -663-4 -68- -661-2 987810012 9834 161-2 9828 10012 -68- 99 89 97 -g.
25-year deben 4s
1931 1001a 10028 9734 10038 1004 10(Ps 100 100
go- -66" -L5i4 74 29 94i
6% gold notes
1932 9978 102 101 10134 10112 10178 100 10112 -6614 1-665; 88 96'2 86 98'2 75'2 86
9278 5712 77 5412 73 48 62
8478 90,2 81
3412 57
Ref g 530 ser A
1974 102 107 103 10614 104 1064 9538 10458 90 98
Refunding 5 Hs ser 8_1975 106 106,4
-a3-4 -a- -a- -66- 11- -Lois 16- 47 80 "ais 5.211 ---- ----661-4 7414 87
Ref 430 ser C
1978 871s 9228 8S4 93
10614
2
--lig -Ili
10734
70 "ifai
60 77
5412 67
55 67
58 7712
69 73
78
81
65
16-14
81
68
68
68
-r7528 83
-14i2 12-1-2
1858 33
-17
7- -gra
86 98 881s 9112 8312 90
NY Connect RR 1st 4 As A 1953 102 10314 102 103 102 10314 102 103 10218 10334 102 1034 10212 10328 9834 10138 98 101
10412 105 10318 10412 93 9912 98 98
10478 10514 105 1051s
lot gu 5s ser B
1953 104,8 105 10414 10414
-gi- 81
--------- 9228
N Y & Erie —1st ext a 44.„1947
ia- 166____
---3d ext gold 43.s
1933
91
---- 91
-6611
NY & Greenw L gtd g 58_1946 9618 9712 96 9734
----i6- 7212
-66- 88 -ii- 88
N Y & Harlem g 3 Hs
2000
-95- -66.
N Y Lack & W 1st & ref 53 A '73
103a 103'&
-a- 1Eia- 1-66- io6- 102
1st & ref 44s ser B
1973
New York &Jersey 1st Ss. _1932 -1-190i2 101 iOEn8
10128 1013i 10112 10184 10128 10228 10128 icif/71 10114 10112 10078 101 10014 1-61-18 9912 1001 56i81161-8 lob— 1661-2
8412 8412
94 94
NY & Long Branch gen 481941
wi5-8
C Cash sale. 'Option sale.
256
FINANCIAL CHRONICLE
[VoL. 134.
1931-Con tin ued.
BONDS
January February
March
April
June
May
July
August
September October
November December
Low High Low High Low High Low High LOW High Low High Low High Low
High Low High Low High Low High Low High
NYNH&H non-cony 4s1947
_
89 90,8 8912 90 8934 894 8918 894 87% 8912 8734 8734
_
--_Non-convertible 3hs_1947 8134 83,2 814 8312 84 84 81
8118 8338 8312 81 8312
8314
7084 -fi- 48 48
____
Non-cony deb 3s
1954 73 79,4 7812 7958 7934 8112 7818 80% 7914 8012 7834 8034 8012 8012 7518 8314
76
7612
50 50
Non-cony deb 4s
1955 83 8518 85 87 8634 88 844 8538 8558 88
85 88
8534 8534 8134 8614 81
8414 -io- -i6- -55E4 -f6- 47 61h
Non-conv deb 45
1956 8012 87 8418 87 8612 87,2 8478 8634 8538 8712 8412 8612 8534 87 82
8634 8012 8614 60,2 70 61
70 50 60
Convertible deb 3115
1956 70 7814 79 81,2 7912 83
7812 8078 78 8012 7712 79
783
4
80
5718 65 63 6674 48 51
Convertible deb 65
1948 11412 11884 115 1184 116 11712 11212 117 113 117 110 11712 1141- 11712 7312 7758 70,2 76
110 115,4 98 111
99 105
90 103 75 92
Registered
114 114 114 114 115 11512 11112 11112
-- 110 110 115 115
100,2 100,2
Collateral trust 65
1940 10434 10612 10514 106 10514 106 105 105,2 10434 10558 1054 10512 10518 10534 i5i- 1055,
-97- 1-6i- 98 1-61-195 9914 75 8412
8
Debenture 4s
1957 7134 76
73 7712 74 7714 7112 7334 7134 7778 7134 734 7212 7513 72 72
70 70
33 60 45 5518
1st & ref 434s .or of 1927_1967 91,4 9534 9214 95
9234 9478 90% 934 9178 9412 91% c9458 9234 9412 86 93% 7833 8934 72 83 6712 82
5934 7032
Mar Riv & Pt Ches 1st 45 1954 89,4 92
9512 9512 9512 95% 9414 9412 81
02 9212 93% 9358 94 94
9418 96
9334 94
79 79
8334 81 86
N Y Ont & West 1st g 4s
1992 4015 46,2 37 44
42 4534 43 46
45 53 4812 60
56
6012
5612
45
5838
4212 5238 464 51
58
3712 46
General 45
1955 31,8 38,2 3612 37 32 38
384 44
36 38
42 50 50 52 50 52 31
51
31
45 4214 50
3512 4312
NY Prov & Boa gen 4s
1942
96 96
_
N Y & Put 1st con en g 45_1998 9218 9312 9512 96
95 9614
-58- ii" -5i- 94 -5i- 94
771-4
-51 85 -55- 80 io_
-iiis
NY Susq & West 1st rel g 55'37 70 76
7138 77
72,2 78
74 77,8 72 77
74 80
7412 77,2 72 77 60 72 49%
4234 50
68
General gold 5s
1940 58 58
58 61
68 61
55 5512 50 5358 5112 53,2 50 5412 40 50 40 6714
55 59
4634 47 50
30 45
Terminal lot gold 55.....11943
99 99
9812 9914 9934 9934 99 101
98% 9818
NY Westch & Boa lit 4 Yis I '46 7S5 87 8312 87 83% 8712 7712 8512 784 83,2 771 73 81'2
83 -77534 Ili; 68 7614 -Li- 15.1-2 -55- /61-2 41 6
- 1-2
Nord Ry esti f g 6 yis
1950 105 107% 10634 106$4 10614 106% 106 107,8 106% 108 10534 107 105 108
1044 106 100 10718 94% 102 10114 103
93 103
Norf & Sou 1st & ref 5s A 1961 36 45
38 4113 36 40
19 3318 1912 21% 19 2734 2018 30
2014 2612 20 22,4 1938 2212 20 254 10 194
1st gold 5s
1941 77 77 81 81
85 85
7133 7358 74 74
6512 654
Nor(& West RR gen g 65_1931 10078 10078 10034 10114 100r2 1-0T61-2 9834 100,4
-Improvem't & eat g 65_1934
10414 10414
1043 1-65- ioi- 104 10412 10412
104E81
8
100r8
643162I2 Rif 1621-8 J011a 1-6ti"
---New River tat g 6s
1932
10214 10238 10214 10258 10233102-33
101 101 100 101
100 10012
Norf & West Ry tat cons 4s 1996 9644 99
96a 9812 -554 -611-2 9818 992 9834 10034 9912 10034 99 100,2 ---9912 10014 9414 10014 8714 c99 89 95 84 9212
Registered
1996 9612 97,4
96 96
97,4 97,4
Div tat lien & gen g 43._1944 9738 99 9712 9812 -9712 99 -5iEs 16- -55E4 1-66- 9914 100
9912 10012 -5678 1-66;
102 -5i- 97 -61 1,114 91 9433
Poca C & C joint 4s
1941 96 100
9634 98 9718 9734 98 98% 9812 9958 9838 99% 9852 9834 9834 993
984 99,
4 92 9912 94 95 85 92
Northern CentralGen & ref 4 yi s A stmpd_1975 10212102,2 10178 103
10234 10234
103 103 10312 10312
104 104
Northern Ohio 1st au g 55.1945 90 97
9312 9414 9414 9414
80 80
7823
.3-8
Nor Pac prior lien g 45-.1997 93 97
93 954 94 95,4 9212 0418 -55E8
-55E4 -6I78 9314 96 -551.8 94 8833 93 78% V3
c89 78 87 -ii- 81
1997 94 95
Registered
924 9384 914 9234 91
93,4 92 93
94 9514 9314 9412 - 72 73
-- 8834 8834 7518 7518
Jan 2047 6918 69,4 6714 6878 6778 6834 654 68% 6514 6812 674 6834 67 6874 623
Gen lien g 3s
8 68,2 60 8412 5712 6034 572 1618 4634 58%
Registered
Jan 2047 67 67 65 6512
6538 6538 65 66 66 6612
_
5018 50%
2047 9734 101
Ref &Impt 4 As A
984 9924 -9612 981 95 97
9434 97
94 9614 55 9014 -51 Ii34 78 84 -55- -i63-8 -51 -8-6- 5718 5834
2047 111 11338 111 11338 1124 11333 111 11278 11034 11212 10734 111 10934 11074 100 11012 9212 10314 90
Ref & Imp 65 ser B
9012 80 97 70,2 82
2047 102410512 10218 10314 10314 105 10312 104 101 104
Ref & imp 5s ser C
9814 10278 9974 10412 86 88
70 74
77 82
84 01
2047 10214 10512 102 10412 10314 10412 100,8 10358 101 103 100 102 100 103,4 88 88 8474 9033 7633 9833 77 7712 70 7253
Ref & imp 55 ser D
6234 68
Nor P Term Co 1st 65
1933 10512 10512 105 105 10512 105,2
10634 10634
10712 108
106 106 10332 10334
10012 103,2
No Ry of Cal guar told 55_1938
10238 10212 10358 10338
95,4 95,4
-ia-
Og & L Ch Ist gu g 4s
1948 77 77 7512 77
6912 7014 7074 7634 60 6978 6718 69
51 60
60 00 55 60 50 56
Ohio Connecting Sty 1st 451943
---97 97
1936
Ohio Riv RR 1st g 5s
IOl7s 1-61-7
;10233 10233
i55- 103 i(55E8
1651031
651
651937
Gen gold 5s
102 10215 10214 10214 10212103 i55- 103
-85" -661
If_ 98 98
4
Ore RR & Nay cone 45__ _1946 92 973 95 96
9212 9712 96 9612 9514 9734 -55r4 98 -55.78
967s 974 -56'8 -6/3-1
-6f18 86 90 -79" IfOre Short L 1st cons g 55_1946
- 107 108 10712 109,8 10714 10858 10858 109 10812 109 10812 109,2 10778 10834 100 1011 ;5595 10112 99 101 10012 10075
1946
lit con 58 guar
107 10815 10758 108% 1074 1084 10834 10914 10914
4 10934 108 109 10518 108
98 102 10112c107 95 104
Oregon-Wash 1st & ref 45_1961 9212 9534 9234 9518 9458 9512 9414 95 9414 98 94 10078 1083
7734 8712 75 83 6778 79
9618 94% 95,
4 9112 9512 84 94
Pacific Coast Co 1st g 55- _1946 50 53
45 45
37 41
3214 3234 30 32
14 20
1718 20
30 30 2512 30 23 23
2614 30
20
20
Pac RR of Mo 1st ext e 45_1938 964 9614 9518 97 9558 9678 964 98
97 08
9634 98,4 9814 98,2 97 9838 97 07
90 94
8934 9014 80 8712
2d extended gold 55
1938 101 10114 10112 10112 10178 102
10134 10178 10118 10118 10014 103
87 87 86 86
95 95
Paducah & III 1st s f 4115_1955
1004 10018
101E8 1-61-38
3
100
1013
100,
8
10112
997
100
Paris-Lyons-Med RR eat 65 1958 104- 16178 10412 105 10412 105 10415 105 1045
,105 154i2 105 1102i2 1041
9412 103 100 1-15.1-1.2 -55- 1-661-2
4 10314 10414 9314 104
Eta s f 75
1958 1083s 107,4 10834 10714 113612107 10614 10714 10658 10714 10614 10712 104 107 10312 1074 9535 106
0558 10334
96 103 102 104
Paris-Orleans RR est s f 5 lis'68 10112 103% 10234 104 103 105 10214 1044 10134 10414
10134 105 10012 104 10184 1004 9012 105
92 9738 9534 10214 8974 9734
Paulista Ry 1st & ref 75-1942 92 93
93 95
93 9518 94 97 85 9512 7634 78
77 SO
79 90
80 85
85
75 75 65 79
51
Penn RR con g 45
1943
9812 9814 9754 9734 08 9812 987
, 9878 9914.10112 101 101% 9838 100
911s 9115 88 9032
99 9914 99 99
Con gold 4s
1948 98 9834 9818 9958 9758 9918 9812 9934 9934 1004 98 101
98 10114 98,4 10114 9434 100 89 95 8812 95 84 92
Sterling stamped dol bds__ 9814 9878 98 99
9812 9834 9812 9934 9833 10033 10014 10014 9934 100 101 101
94 94
8914 9112 8912 92
85 8912
1960 105,4 10714 105 106,
Coast,' 4SO
4 105 10612 10534 107 106 10718 10558
10434 10612 1034 105 101 10438 96 102
93 100 90 96,
2
1965 102 105 10112 10318 10114 10234 100 10214 10078 103 10018 107 100%
General 43-is ser A
10214
97
100
10118
8274
8212
4
10212
90
9212
95
65%
823
11114
General 55 ser B
1968 10758
10878 11118 109 11012 10712 10978 10814 111 107'3110 108 10914 104 10834 93 10512 9412 1021g 9212 9974 771s 9412
15-year secured 65-15
1936 10834 110 10918 110 10914 11014 10934 11012 109 11012 109 11014 10918 11034 105,1105,
104 1081g 101 106 10034 10434 9414 10078
Registered
10914 10914
1964 104 1053-4 10434 10512 10484 105'2 102 1-6E1-8 10212
40-year secured g 5s
10212105 155E8 15674 -57- fOi- -50 167172 -6578 9733 69 -11"
8 -56E2 16431970 96 99,8 97 9812 9618 98
Deb g 4SO
9338 9712 904 957 9414 0012 8918 9434 7714 9214 7212 824 6512 81
9414 c97
55 69
1981
Gen 4;15 ser "D"
9512 9714 9434 97 95 98
95 973 95 9678 9012 9614 8534 9314 78 8812 80 8512 62 80%
Penn Co coil tr 33-Is ser A_ _1937
94 94 88 88
Gu 334s coil tr ctfs B_1941
9078 9078 9112 9112
-5558 -6i1-4 -55- WI; 88 -1;81-8
Guar g 3/111 tr ctfs ser C.I942 -57E8 -6/;
3
87 87
1944
Gu e 3SO tr ctfs ser D
89% 8938 8912 9034 9014 9114 ____
-9
53
61i2
8 -'953
6%12 : :-91- -6f86'2 86'z
1931 100's 16914 10018 10014 100 100,8
Guar g 15-25-yr 4s
1952 92 95
Guar 4s series E
9314 9334 9334 95 -51 9433 -9433
-5L- -6E- 977 97a -55- 95
84 815
-7512 7714
1963 100 102 100 102 10012 10212 100 10078 1001210212 10018 101% 10034 10212 98 10175 8733 99" 8058 864 85 c94 60
Secured gold 4/Is
83
Pa 0& Oct 1st & ref 4;is A 1977 9874 102,2 100 c101 9812 10012 9834 9934 9914 10112 9914 10012 99 100,4 93 99% 90 97 83 8918 85 8674 73 75
Peoria & East 1st cons 45_1940 80 86
85 88 8514 87 85 8612 84 87 84 84,
5514 774 56 57% 56 58
4 75 75
55 57,8 33 4514
1990
Income 4s
13 13
1212 121z 74 712
-- 3
7%
Peoria & Pekin Un 1st 53-1.1974 155- 11i- 105- 115.1-63-1-2 155- 10
8114 117
- 4 10233 la; i55- 103 103 10312 1024 103
4
Pere Marquette 1st 5s A 1956 1034 10514 104h 1048 102'2 164-3-4 100 103 8712 10212 86,8 98
90 98 80 89 55 80 49 68 50 73 -3
.4ia
1956 94 95% 92 9534 9214 94,2 87 9134 89 90
let 4s series B
7912 8512 80 8512 6712 80 65 65 45 50 45,2 55 30 4538
1980 98 101,2 99,8 10012 92,s 99,2 9134 95 80 94
1st 4SO ser C
79 8934 86,4 90
71
86
45 56% 46 66
55 71
31 4818
Phila Balt & W 1st g 45_1943 9834 9834 97 97 9734 98
98 98
9818 100 100 100 100 100,4 993310033 9734 98
92 9478 90'4 95 8918 92
1974
Gen 5s series B
10912 10912
109 10914 109 109,8
109 109 109,4 10914 108 10812
1977
Gen 41,15 ger "C"
104 104 1031.1 1037
103
,
10412 984 103 10114 10112 90 99 -55- -661-4 -55E4 I914
Philippine Ry 1st 30-yr 5 f 45'37 23 25
22,4 23,2 2214 24
22 23
23 23,4 23 24
2118 2278 224 25
1912 24
194 20s 1914 2318 18 23
1932
Pine Creek reg guar 6s
10258 10234
10234 10234
Pitts at West Va tat 4115_1958 94 94 -55- -6i- 9512 9512
93 94
_
-iL- 5233 61 65 -514- 53
1959 0212 9412 944 94'2 9334 9514
ber B
1st m 4
93 94 -5i- 92 -55- 92
61 -61
38 53
65 65
1960 93% 95
,
4 93,2 93'2 9412 95% 93 9518 92 94,2 88 93
Ist mtge 4its ser C
86 89 '
77578 86i33 59 63 4,5 64 51 7312 421s 55
PC C & St L gu g 43
-Is A.1940 10138 10112 101 10112 10238 10234 10134 103 10212 10212 10218 1024 10112 102 10212 10234 99 101,4 98 100
9618 9714 96 96
1942 99 101,4 10134 10254 10234 10234 101 10112 102 103 10112 10112 10112 10134 10114 10134 99,2 1013 9474 97 96%
Con gu g 43-is ser B
9615 87 95%
8
1942
Con gu e 431 ser C
---102 102
95
9512
97
97
1945 -53% 9578
Con gu g 45 ser D
---- _---55- -9-i_ 98% 98%
98 98
---series
g
1953
F
guar
Cons 4s
---_ -_-97% 97%
-55- -6698 98
1957
Con gu g 4s ser G_
____
- _ 982101',
977 99
-55E8 9833
91
9712 -55is 92 -55E8 114
Con go g 4s series H --1960
-9814 98,4
9734 9734 9712 9712
---1963
Con gu g 4 lig ser I
la- 1E- 105 105
10334 10334 155E8 165-3;
16112 10374 ---1964
Con gu g 43.4s ser J
10014 103 103% 103% 10333 10334 1052 CO-2
99 99
1970 ioiE41-1-64 108 11014 109,2110,4 108%10914 10814 110 108 1-66;
General 5s series A
3 108'4 109 10134 166- 100 105
97 100 -55F2 1614 85 95
1975 Josh 11012 10838 109% 10812 11014 108%108% 10812 1094 10712 10834 108l 10918 10012 10334 100 10334 97 100
Gen mtge 5s series B
9412 99 85 94
1977 9934 1023
Can 41-4s series C
, 9934 102 100,2 10178 9914 10112 10034 1021 1 1004 102
9914 10112 9738 10012 90 10012 85,2 95
74 8634
8534 91
Pitts McK & Y let gu 65_1932
10234 103
10278 10278
9974 9978
2d guar 65
1934
i aEs 1-033-8 ioi- 104
100- 1-66
---Pittsb Shen & L E Sat g 55_1940 101 101
103 103 16518 10318 103- 103 155E8 10333
i55- 103 -55i2 1-61- -55- 16
---- ---Pitts Va & Char Ry 4s
1943
98339858 9838-_
---- ---Pitts Y & Ash 1st aC11 4s A_1948
-_-_-_-_
--- -9514
_
-5i- .6/9533
---- ---1st gen 55 ser B
1962
1001210812
1054 10534
-55E2 -6E5-2
---Providence Secur deb 4s1957
75 75 -7534 733
68,2 68,2 7184 7133
---Providence Term 1st 4s_1956
894 89,8 89's
8712 8712
8978 91
-55E8
----
Jai 1-66-1.
Reading Co Jer Con col 45_1951 95 98 9538 987
, 954 9658 95 9614 95 97
9234 97 92 94 80
95 9812 9512 97
Gen & ref 431s ser A
1997 10034 10318 101 10238 1014 103 100 10138 101 10278 10012 10212 10034c10234 9412 10112 88 9834 82
Gen & ref 43t s series B 1997 10078 103 10034 102% 10134 10212 10014 10112 1011,103 10012 1024 100,
9434 100% 90 98 84%
8 102
Richmond Ter Ry 1st gu 55 _'52
_.Rio Grande Jet 1st go g 55_1939
98 98
ioo- 100 100- 100 ____
-5E- Ili- 85 Ii3-4
_
Rio Grande South 1st g 45--'40
_
2
2
2,4 2,4
Rio Grande West 1st g 45_1939 92 954 95 9634 -61 97
8 -55- -9-1-1-2 -5595 93 96
o
92 95 -54is I53-4 -55- -6E31st cons & coil tr 45 A.1949 80 85 83 84% 83 8612 82 85,4
70 70 864
79 80
844 7875 8112 7818 so
R I Ark & La 1st 4 y15
701s 85 69
1934 9812 10058 99% 10034 10014 10034 08 101,4 9378 100
8134 934 8978 92'2 75 90
Rutland-Can lit gu g 4/4_1949 ---- -4114
71
75 75
71
74 74,8 69 69
744 75
65 72
Rutland RR 1st cons g 4/151941 8512 8512
65,4
7412 80
9112 014
8214 92
St Jos & G 1st 1st g 45
1947 8812 8812 90 90
92 921 8778 91
92 93 -55E2 93 93 93 -9214 92 -iiE2 -93- 82
St Law & Adir 1st gold 5s_ 1996
_-_101 101
95 95 9595
2d gold 6.
_-__
/996 101- 1-61--1-)157-8
1O1'2 103
100 100
St L Iron Mtn & So RyGeneral 55
1931 10014 100,2 004 10038 100 1001
River & Gulf di,1st g 45.1933 9812 100% 99 100% 100 10014 97 100,4 -55E8 I91-4 88 97 -55E4 I7i-2 87 96
88 92's -51E4
St L-San Fran pr lion 45 A.I950 8538 89,2 8518 8714 80
4712 58
3814
5012 65
8612 73 8134 5814 7612 5018 69/4 64 72
Con mtge 4 SO ser A
23
3814 52% 30 47
511s 63
1978 7934 86 80 8334 70 8114 594 70% 4312 8812 40 60
4212 4212
Registered
5 6934
69,
Prior iien 9. ser K_ _ .1990 10012 102 9934 1017s 89 1013s
927-8 -5512 Ili"
-75- 8234 60 75 54 6712 49
e Cash sale. a Option sale.
86
8014 8412 74,2
02
78 86,2 68
93% 79 8534 71
96
04 94
88 -5LF2
75 6112
7512 60
4114 41
65,4
82 -55_
76
79
79
96
-5711 58
754 40 605,
32 5712
76
41 ---- -4612 4612
-ii- 75 75
.
58 -Li- -i6-66- 75 16.
,5 3112 4512 23 34
52
2014 3512 1414 2314
35
61
3,5
538
25
39
JAN. 9 1932.]
FINANCIAL CHRONICLE
257
1931—Continued.
BONDS
January February
March
Juty
April
May
June
August September Octob.r November December
Low High Low High Low High Low High Low High Low High Low High Low High Low High Low High Low High Low High
St L St San Fran Ry gen 62_1931 10034 10112 10113 10118 10034 101 10012 10034 9714 10012 9834 10012 ---- ---- ---- ---- ---- ---- ---- ------- ---- ---- ---General g Ss
1931 100%101 10034310212 10053 10034 100%10012 9714 10014 99 100
1948 104 10532 --------103 10872 ----------------10212 10412 10252 10434 105 105
St L Peo & N W 1st 5s
St L Southern 1st gu g4a.-1931 ---------------- ---------------- ---- ----99 100 --- -1989
St L Southw 1st g 42
2 8143i t
8 a
8127112 ao 7414 -7612 7 44 -fits ii Vilz ili- -12 - -Li- -ei- -Lois "L'E2d g 45 Inc bd ctfs__Nov 1989 --------7614 78/
1
4 7712 7712 72 72 --------52 83 --------45 50 48 60
30 3512 3334 3712 25 32
Conant gold 42
1932 9912 10014 100 10012 100 10012 9432 10012 6012 95 82 85
78 83 8252 75 65 8234 86
72
4114 70
3013 467
1st term & unify 52
1952 92 971 8584 9212 82 00
78 8712 7112 75 448 85 60 6812 4514 55 42 60 40 50
314 45
15 2934
St P & K C Sh L let 4yis_1941 9472 98'2 98 9812 9812 9812 95 9712 894 9514 8412 8972 84 88
75 84
7414 7712 65 73 80 6812 40 63
St Paul & Duluth lit 52_1931 --------1001210058 100 100 10052 100% ------------9158 „
,
-----„,:
,..
zz,
,„,
93
,
..,
52
------93
'
2 9312 ---- ------1st cons g 42
1968 89 89
9112 9112 9152 9152 --------92 93
9214 9914 •i'S "'S 113'2 c'11 -.,,- --2" -1,- ---,- ---- ---- ----=',- ,-,St P Minn cic Man cons 43..1933 9812 981 987 9873 9914 9914 100 100% 100%100% 10012 102
10014 10053 9934 101
97 -9934 95 -9712 --------93
-95
1st consol a 62
1933 10312 1031 10312 10414 10334 104 10434 1054 10441054 10412 10452 10334 105 1034 10453 9934 10314 9512 10114 101 102
974101
,2
Gold 62 reduced to 4;0_1933 10034 lOO7s 10072 101 10112 10112 10114 10152 10152 102 10053102 100 10212 10114 10134 294 10112 95 9834 9534 10112
95 974
Registered
-100 100
Mont ext tat gold 42_......1937 92 921 --------obr4 18-14 9852 9852 9812 -6112 9614 1914 9912 9934 9914 9934 9934 9934 90 00 90 90 -- — _
Pac eat sterling gu 4s___1940 93 93
---------------- 941
9414 9432 -------------------------------- 80 80
96
77 -6414
St Paul Un Den lit & ref 581972 10912 11024 10934 110't 110 111 110 11012 11032 11132 11058112 11114 11134 11034 11134 103 107 101 10212 100 103 91 100
S A & A P 1st gu 848
1948 93 987 9312 9614 9513 984 94 984 944 904 9112 9814 9334 95 9314 944 8012 934 75 81
74 8212 65 7012
Santa Fe Free & Phoenix 521942 ------------------------10218
_
— 10112 10112 --------95 95
10212 10312 10514
sav Fl & W 1st g 6s
1934 ,
1 1
2 ii2 _i6ii
2 1434
____ __ __ 21614 i6ii2 114'12 jai 1-64-12 ;inivicifis --,- 2. - ---- ---- ---- ---lit a 55
1934 10012 10012 1015810153 --------10184 1-611
____
___
4
____ ___ __-_ ____ 1004 10014 10072 10078 101 1-01-12 -,,,, _-_-- -,- ,
,
Scioto V & NE 1st gu 4s
1989 94 9712 95 9814 98 97
95 9712 974 -9812 9712 -98 --------9758 9752 98 98 ---- ---- 8014 -89 76 -81'4
Seaboard Air L Ry g 4s_....1950 46 4812 48 5412 374 50
_
1132 14
2834 c44 254 2512 --------50 50 ----- ---- --- ----- ---Stamped
5434
403s 52 4312
3012 4312 24 31
27 34
26 -2-8
15 -28
1614 -1-914 14 -1-93-4 10 15,
24 28
23 38
2
Certificates of deposit
-1--10
-19 21
10
Adjustment Si
14.i; b
:4 i 5i2 1 i 1 512 112 ii4 -34 3r2 1 --------214 -6 112 112 1
-i
12 114
Refunding 43
1959 17 2012 15 18
12 18
10
94 234 6
12
912 4
834 514 853 2
10 12
54
94 1612 1344 16
Certificates of deposit __. ____
_
__
_ ---412 734 114 5
- 912 1084 9 1112 972 15
13 13 ____
__ 6
712 8
9
lit & cons 62 ser A
1945 1512 19 - -15- 18-13 1012 1710
-32 1012 127 10 1334 934 17
9
13 16
1114 -4/
24 11
1
4 8
13
7 1114 8
Certificates of deposit_
_ _ __
__ 1134 141 10 1112 9 13
4
212 5
7
912 1612 1234 1612 1012 1934 74 11
553 8
Atlanta & Birm 1st 42_1iii iii2 -61" i734 "8-0 40
2912 42 20 20
197 20
bl
10 20
4314 44
4212 44
49 50
41
35 55
50
Seaboard All Fla 1st gu 62 A '35 853 124 912 12
213
1
6 1012 6
24 3
74 212 4
7 10
7
74 6% 71g 7 12
712 3
Certificates of deposit ---- ---- --- ---- ---- ----- ---- -___ ___- ____ ____
112 217 I
__ ____ ____ ____
1
214 112 3
__
212
Series 11
1935 74 19 --------8 --9,4 6% 64 634 7
14 3
1
114
7 _-814 -------- 7 _-7 --------258 27
So &No Ala—
Gen cons gu 52
1963 10918 110 10912 10912 110 11112 --------10934 110 109%11012 10914 10934 1094 10912 10013 1054 104 104 100 100 ---- ---.
So Pac Co Cent Pac coll 42_1949 92 97
94 97
95 97 92 9434 9212 9434 9212 9312 92 93
55 70
68 79
9112 925 75 86
6812 79
1st 4s(Oregon Lines) A '77 99 10258 9912 10112 99 10114 9812 10012 99 10114 9314 10034 99 1004 934 9912 88 963, 8458 924 83% 89
70 8451
Convertible 5s
1934 102 103 10214 10912 10214 10312 1025310312 10234 10334 103 10314 10312 10334 10312 10372 9912 1031. 974 9912 98 991k 91
99
Gold 4352
1968 9612 9912 954 9878 964 983 93 98
914 9512 90 9312 924 9712 8412 9353 76 871 70 79 65 80 53 6814
Gold 4s w I____May 1 1969 9758100
9758 994 9812 9912 93 97
90 98 88 95 9212 9872 85% 94
74 89
86 8012 65 80 53 27
Gold 4;4s
1981 ------------------------91 c9334 8712 9472 8512 9212 903 9334 83 9132 73 87
87 8012 65 79% 5312 89,1
San Fran Term 1st 42_1950 9412 97 945 9812 9558 9714 994 9412 9453
95 9812 9212 984 9112 941 7912 90 80 85 72 84
9812 9514 98
So Pac of Cal 1st con gu 52_1937 102 102 10212 104 103 310872 10313 10318 10341034
----------------104 104 10214 103 ----------------95 97
Sou Pac RR lit ref gu 42_1955 9534 9712 95 9734 95 9712 95 97 9534 99 9512
8158
814 89
9772 9512 9712 9152 9534 874 95
Registered
9558 9614
Southern ily bacon 5s.,_1994 10812 111 10812 110 109 11012 155,-2 1-664 Hairs
14 iifiiig3 1-6612
66
1
6i
1-64"k
"ii84
65
Registered
1994 ____ -_
_ 10514 108 108 10812
--------104 104 ---- ------- ---Devel & gen 42 sir A__1956 8412 8812 88 8834 81 8814 --------10511051
79 8212 7712 8172 7514 82
54 18
7813 834 82 19
5012 -6-0 51
Devel & gen 62
1956 11012 113 11134 11314 1104 113 103 11012 10312 100 100 10534 102 10534 85 10312 7514 85
70 81
58
Devel & gen 634s A
1956 115 11712 115411772 114 11712 108 11458 10658111 10414 110 105 110
61
4
95
83
8412
78
713
107
Mem Div let g Is
1996--------102 102 ____
_ 1004 102 102 102 -___
102,4 10214 1011 10112 10172 101' ._-- -_-_ 93
_
St Louis Div 1st gold 42_1951 8912 9212 9134 924 9152 -9214
_- 90 93 894 91
8852 -91-43 9112 9134 894 9132 83 85 --- ---- ---East Tenn reorg lien 52_1938 --------9334 9934 -- -- _
_ 10012 1004 10132 10132 _ _
_ 9812 101 .
_ - _
Mob & Ohio coil tr g 42_1938
93 9512 Oir4 -Iiii iii -id% 6:I "ii --------80 82
ib -ii 4718 72
iiTs ii LO
Spokane internat 1st g 52_1955 4412 47
47 47
4012 47 354 404 35 40
397 42 30 3512 31
50 50
3912 203
38 4
iiiii8 foi Jar.1-66-3-4 15A,
85'4 74
83
-66 8718 813,
---•
27 503.
'61 - ---78
347
8012 40
96'4 ------- ---_ - -
63
63
--..•
--•
•
WI 56 -el,
28
---- ---•
Tenn Cent let 62"A"or"B"'47 89 92
9034 92
90 92 852
's 91
44 46
30 36
85 8752 847 85 80 8372 --------40 54
44 44
Term Assn of St List g 4545'39 9912 10012 10012 10112 10112 102 101
10134 --------102 102 ---- ---- ---- --- _ 924 10134 10113 1014 f 7' r,- ........'
1st con g 52
1894-1944 105 10514 10434 104% 1055310553 10512 10512 ia14
10514
1025810212
100
1
00
10514
----------------Gen ref s f gold 42
1953 921s 9314 914 93 9253 9352 9258 9314
ii lit
86
94
924 95 90 9414 8872 88% 81
93 95 9372 95
Texark & Ft Sm 1st 5542 A_1950 10214 10558 104410834 105
10812 101%104% 9834 104
904 9512 834 91
71
68 83 614 69
81
91 9832 9512 101
Texas & N 0 cons 52
1943 10041004 10012 10214 ----- ---- ------ ---- -_-_ ---- ---_ ---- ---.
Texas & Pacific tat a 56
2(100 109 113 111 11212 11012 1-1-214 10912 1-1-1 - 10812
i65" fa'-66- 106 94 100 95 9872 85 875.
4
1-1-1-- iiiE2 1-661-2 i66" 1663Gen & ref 5. sir B
1977 97 100
97 9934 95 100
9012 95 92 9534 8812 94
9112 95
79 9012 72 8572 88 7512 69 7512 54 871
Gen & ref 52 series G
1979 974100
9714 9914 94 9924 91
94
79 91
67% 8512 88 76
8312 75 60 65
9558 90 9812 8412 934 91
Gen & ref Si set "D"___.1980 9814 9834 95
7 101
9314 994 9034 954 9112 96 89 947k 92 9452 79 9212 88 85 67 76
56 681
88 75
Tex Pac.M0 Pac Tar 5 As 1964 10072 10212 106
1081 106 107 105 108 10212 105% 101 103
9953101
90 85 901
99410112
8953
90
92
894
90
Tol & Ohio Cent 1st g 52_1935 101 101
101
10213 10314 100410333 100,2 102 10134 1024 101 10212 --------09 10212 95 98% 93 95 ---- ---.
Western Div 1st g 52.- —1935 ____ ____ 100 10118
100 10014 10014 _ 100 100 ____ ____ 100410012 100%10072 ---- ---- ---- ---- ---- --Gen gold 52
1935 - _ _
__
-_ _ 1004 10052 -- -- -- --7_ .1.81314 1-66 10034 101 ---------------95 95
..7' ,7........
.
'
. ..r01 St L & West 50.yr 848_1950
90" -92 - -92- 14 --------9312 1312 88 90 89 9014 91
924 9172 94
744 9032 7418 -82 - -74 -74
T01 WV&01stgu454.AA931 100 100
.. .... -..
....
---1st gu 42 sir C
1942 9512 9512 --- __ 95% 9534 ails -984 ---- —
--- --- -7,- -- -,,- r-- -,--- ----- -,7
Toronto ilam & Buf lit 43_1946 91 9112 89 -90
.- -- - -3,- -92
---.7" --95 97
9414 9.5
88 -1313
9414 -941-2 -9412 1412 9458 -9452 9453 -9452 94 -9512 92 -92
. 138
Ulster & Del lit con g 5s_A928 9052 9052 ---- —
--- Stpd ..to payt Dec 1930 int. 75 76
7958 -797-2 -74- -75 - ------ --_-: -bi- -8-6- -Holz 794 663e 71 --------8014 65 60 8012 ----------63
Ctrs of dep stpd Dec'30 lot _ 7312 78 ---- -69- -69 65 65 64 73 644 85 - _ 604 66 --------6158 651 58 627
lit refunding g 4s
56 1614 ____ ____3514 38 --- -Upton Pac RR &Id get g 42 1947 96 100
985310053 977 997 9812 100 99%10212 9934 C102 10012 102
9934 10152 96 1024 91
9712 92 90
5525 921x
Registered
1947 ___- _-- 9612 9814 ---- --9412 9412 ---- - _ 85 381
9712 9912 9934 9912 9912 ---- __ -_-- — ---lit & ref 42
2008 931. -98 94 9658 9458 -9812 974
94'2 9512 953 984 96 9814 98 -977-2 95 -9772 87 ---8112 -66-4 70 81
9634 8012 91
Gold 434s
1967 99410214 10012 10232 101 102 10012 1013
2 101 10258 10112 1027s 100 10212 984 10114 90 101
8714 9512 88 92 68 85
1st & ref 52
2008 11053113 110 11212 11112 1127s 11034 111 111 1123
8 11053112 11014 11234 11012 11012 10312 110 10912 1044 98% 964 93 991
40-year 45
1968 924 9414 924 944 9212
9438 924 93 9324 95 9212 9434 923 944 89% 9414 82 9212 76 8712 7514 82 65 79
Untd N J RR & Can gen 42 1944 98 98 ---- ____
9734 981,2 ------------ ---- 99 99
9972 9978 --------99 99
94 96 ----------91 91
Utah & Northern lit ext 4.'33
Vandalla consol g 42
1955
06 _-96
Consol 42 ser "11"
1957
9612 oa
o812 "Iii ____ __
_
_ __
____ __ 65T2 lit __-_ __ ---- ,- ---Vera Cruz & P asstg 1st 4j42'34 452 452 ------------------------214
- —
"1- --3- --4 - —914 —2-1112 2
_
4 -_-_
113 --2
112 --3 ---V. Mid 52 set F
1931 --------100 100
103 103 10234 10234 --------------------------------92 92 -General 53
1936
i4 1
10212 10313 i52i4 1121
4 -------- -------- 10112 1
---_
.4 11 ----------------9514 Id ibis
Vi & Southwest 1st gu 52_2003 --------99 10012 100 1001 9872 9872 10(2
12 97 03 97- -9-8 ----------------00 904 85 88 -rrlit consol 50-yr Is
1958 75 77
6712 72 69 6912 --------50 5312 50 60
59 65
19 80
34 4012 3514 40 39
42 58
Virginian Ry 50•yr ser A Is 1962 10512 10314 105%107% 108410814 10412 10612 10512 103 102
10814 105 10672
4 105% 9552 104
93 99 85 974 77%
lit mtge 45isser B
1962 99 102
99%10014 100 1004 98%10034 9914 10014 99 10078 10034 101 1013
98 10012 9712 9752 9012 9012 8712 8712 894
Wabash 1st g 52
1939 10252 105 10352 10412 103 10412 10212 10434 1011s 104
10112 10312 9812 1027 93 10114 82 95 85 92
59
2d gold 53
1939 0912 10212 9912 10172 101 10212 101 10212 9912 1023g 1005210214
95 9912 98% 998 974 9912 93 98
7414 7414 86 8112 3412
Ref 2 f SAs ser A
1975 9714 10212 9812 100
9412 984 --------60 821 60 75
76 7812 56 74
304 4414 84
31
30 42
55
lit lien 50-yr gold term 42 '54 9412 9412 8613 8613 ---------------- --------------- 81
81 __-- __
__
---- ---- --,
Dot & Ch Ei 1st 8 Ss__-.1941 102 102 102 102 102 102 102 102 10141017s --------101 10212 1004 1-0012 -98- -9-8 - ------------------60- Des Moines DIv 1st g 42_1939 91
91
91
91
88 904 8812 90
_
____ ____ ____--Omaha Div 1st g 3%a___1941 874 8712 90 90 874 8012 8512 8712 82 82 82 "ii- --------70
---- -/ VI- ----- ---- ----- ---- ---- ---- ---Tol & Chicago Div lit g 42'41 927 9272 0212 9212 924 9212 91
9114 90 90
9053 9058 9112 914 9058 9212 _ _-_
-- --____ --_
__ '
- -___ -_-- - -- ---Ref & gen 52 "ti"
1976 93 984 91 93 88 91 - _ ___ 65 70
5812 73
8712 75
467g 6678 33 4712 30 40
25 4-312 812
Ref & gen 43.4s C
78 8552 bi -72
1978 84 8012 8412 86
5812 87 5512 6712 81 c89
4213 61
30 4414 2814 37
2312 38
8
Ref & gen 52 series D
9112 934 874 92 84 84
1980 92 96
70 70
58 71
62 70
45 83 33 47
2972 4612 25 42
934
Wash Cent Ry 181 g 42
1948 --------883 8852 -------------------------87 8912 _ -_ ____
_ __
__ ____
___ ---Wash Term 1st gu 3 352-- —194. 904 9114 91 91 -- 9012 912 924 9232 9214 934 9058 93
i1 -9-1- 90 -9-8- 8412 -8-552 8412 -8412 84
c:gif2 "9-012 9558 9052 87 87
1st guar 40-year 42
1945
92 92
97 97 __ —
___ 974 974
_ ----- 80
West Maryland 1st g 42...195 7834 84
78
83
8112
8053
7614 81
79 8214
75 78
7712 87 66 -78 60 72 ------54 63
5214 -39
63
list & ref 530 A
96 8912 93 8752 9452 82 8934 88 90
1977 9212 9652 9313 07 91
73 88
55 7812 53 6314 6012 88
35
West NY & Penn 1st g 52_1937 10252 10252 10272 10312 103%103% 10314 10414 10412 10412 103%104% 103%10452 10234 104 100 10234
95 98
96 9712 85
General g 4s
9612 9758 97 9714 9612 9814 96 9712 91
95 98
96 984 9812 97
1943 9212 96
95 --------80 80 80
Western Pacific RR lit 58 A *46 9213 97
75 90
7434 834 6814 7812 76 81
92 95 8878 95
65 7612 57 65
53 63
4812 6034 30
West Shore 1st 4s gu
2361 91
9312 904 9312 904 924 9114 9353 9012 9312 9012 93 8452 9112 80 88 8114 8514 74 834 811g
944 91
Registered
8932 93 89 894 8858 8834 8812 8812 7912 83
2361 90 02 884 93 89% 9114 8934 90
78
7818 74 79
5934
Wheel & L E ref 41,52 ser A_1966 90 90 90 924 93 96
9414 9511 9412 9912 9814 9734 947 9812 ----------------8212 8212 ----------50
Refunding 52 set B
_ 99%10214 1004 10012 --------1005810038 --------981210018 ---- ---- --- - -___ -_-_ ____
1966 ---- ----—
Wh & L ERR 1st con g 42_1919 88 -88 8812 -14 9072 91
904 9014 ----------------------------------45
8934 90 9312 90 92 9
Wilk & East 1st gu g 52_1942 42% 4853 50 5314 44 4912 4512 50
45 4912 42% 4612 46 5144853 49
35 4234 3414 41%24's 3412 1734
Willmar & S F let g Is..._ _1938 ---- ---- ------ ---- ---- 102'4 iO2li
Winston•Salem S lilac 44_1960 --------92
bi) -6i 95 974
9312 ---- - - 9812 97
-- ---9234 9312 -Wisconsin Cent 1st gen g 42'49 518 854 63% 6812 594 86
47 -81- 474 8312 51 5612 50 6812 40 6052 42 BO
35 16
38 -444 251
Sup & Dul Div 1st 42_1936 75 80
55 8178 568 8112 38
75 78 8472 75
5812 87
57
76 78
48 53
38 44
3514 42
28
C Cash sale.
300tlon sale.
--ii'
_-_
-3;
86
691
821
461 4
30
-,
BO
-----9-5
25
26
--84
89
54
65
95
90
49'
77'a
68
55
-52 -2
25
39
34
1
258
[VoL. 134.
FINANCIAL CHRONICLE
1931-Continued.
BONDS
November December
May
July
January February
April
June
August September October
March
Low High Low High Low High Low High Low High Low High Low High Low High Low High Low High Low High Low High
MANUFAC. & INDUS. BONDS
Abitibi Pow & Paper 1st 55.1953 70 78
4412 58
3514 5412
53 57 52 55
4712 57
7512 77% 7412 7734 4512 77
Abraham & Straus deb 5)0'43
with warrants
90 98%
98,
8 10014 08 9934 97% 99
96 10014 9934 101
93 97
9018 96
95 96
Adams Express col tr g 45__1948 84% 8712 8634 88 83% 88
1
4 8412 89
4 8612 80 84%
84,
8 8712 86 8712 84,
8418 88/
80 9134
Adriatic Elec Co est 7s____1952 86 96
9812 99% 97 99% 9812 10012 9418 9914 95 9912 90 94
9714 99
Ajax Rubber 1st 15-yr s f 8s 1936 8 12
-- _
---14
14
514 514 514 10 --514
Alaska Gold deb 6s A
1925
_
5
8
5% 7
52 7
---512
5
Cony deb 6s ser B
1926 514 514
534 6
514 7
6
6
54 68%
60 60 61 65
50 55 -Li- 55 52 58
Albany Pert Paper 6s
1948
73% 75
78 78
5718 78
60 67 40 6314
Allegheny Corp colt tr 5s1944 65% 79
7,5E2 IA 8112 8712 7912 853 72 8012 60 78
52 6412 3712 5512
79% 5612 75,2 51
7512 66 76
71
Collateral & cony 5s1949 80 84
81 8512 78 84
28 5158
Col & conv 5s
1950 80 8314 8012 85
75
50 63
63 74
77% 831 70 7912 55 74% 50
Allis-Chalmers Aug deb 55_1937 10014 10234 10012 102% 10134 1023 101 102 10012 10212 10012c10214 10012 103 10114 c104 9612 102
69 80 5412 7312
94
Alpine Montan Steel 1st Is 1955 86 8814 88% 9212 91
83 88 82,2 86% 75 7978 7012 78
/
4 10414 10212 104 1021
/
4 10234
Am Agric Chem 1st ref 7445 1941 10314 10412 103%104% 10438 1051 10312 105 1031
LL 38 -Li- 1625,2 31
30 31
3034 35
Amer Beet Sug cony deb 6s 1935 42 47 42 4478 401s 451 40 43
98 10158 9878 101
98 10012 99 100% 9614 9912
Amer Chain Co deb s f 6s 1933 98 10012 99%102 10012 102 10112 102
/
4 1001
Amer Cot 011 deb 5s
1931 100%1007s 10012 100% 1001
26
40
3534 48
534
6
5412
40
3414
28
87
53
7
6
56
5012
46
3912
94
53
iL9234 96
2312 39
6
814
52
33
34
26
87
35
614
614
5412
5234
44,
4
40
95
41
75
63
73
2
638
638
44,
8
25
18
1114
79
3712
25I
92
30
93
17 25's
8714 92
88 9212 8834 93
71
78
70 75
79 84
7314 82
89
7212
81
2
7
10
55
35
32
26
90
45
8334 88 86 89 86 90 85 9014 8178 85 82 88
6914 82
1942 93 94
94 951 90 9414 Li 91
92 96
Mafia Cyanamid deb 5s
4934 6934 46 60 49 6312 30 51
72% 8314 69% 74
74 81
7634 84
Amer & Forman Power 55.2030 76 c851 8114 86
8312 88 8112 85
60 71
76
68% 73 67 70
71
71
78
84
1953 83 85 81 83/
1
4 79 843 80 8212 79 8412 74% 8412 81
Amer Ice s 1 deb 5s
70 c81% 52 70
94 9714 75 95 60 78
9612 10014 9678 101
9914 10114 99 102
Amer 1 G Chem 594s w 11949 98 10114 9812 10012 100% 102
73 7812 68 73
74 78
Amer Internat Corpconv5123'49 89 94
9012 9412 91 953 8812 9318 8612 90 8434 90 8212 8812 8112 83% 7314 82
1939 10414 104%
10412 105 10412 105 105 1051s 10412 106 105 105 106 106 10412 106,8 103 104 103 104 10212 103
Amer Mach & Fdy s f 6s
1934 91 9314 -554 94355 72 63 6912 60 7712 4312 60
74 85/
78
91 93% 85 91
71
8 9312 95
1
4 77 85
Amer Metal 5 44% notes
8 15
10 20
6
9
17 31% 818 21
15 23
16 20
1012 26
3
7
Amer Nat Gas Corp deb61251942 36 5112 30 38% 25 33
97 100 85% 99%
9834 103,4 9612 100
Amer Smelt & Ref 1st A 55_1947 102 10412 102 103% 10214 104 10214 104 102%10312 10112 102% 102% 10312 10214 104
/
4 10112 10314
Amer Sugar Ref 15-year 6s_1937 10318 105 10334 105 103% 105 104 105 103 105 10312 105 10312 10514 10414 10512 102 105 102 103,2 10214 1031
9714 105% 9834 101% 96% 10218
A936 100 101
9934 101% 10112 1021 10258 103 101 103 10214 10318 103 10312 103 10412 104 106
Amer Tel & Tel cony 4s
10558 10712
1933 10012 102 100 10134
20-year cony 434s
/
4 102% 10612 101%10478 9634103
1946 105 106% 10512 107 i0618 10714 10618 10814
106 107 - 106- 1-0i4 10678 10814 10512 1081
30-year coil trust 5s
1960 10478 10712 106 107 106%10812 10758 10814 10734 f6638 107 108% 10714 10834 10812c10978 1021109¼, 9614 10434 10118 103% 9414 101,
4
35-year s f deb 55
1943 10734 10912 1081
/
4 10912 108% 110 10934 11012 10934 111 10912 111 109% 11034 1101 11138 105 11114 10412 10734 105 c10858 99 105%
20-year a f 5445
96 11214
1939 12012 130 12658 135 12714 135 126 131 12712 13314 12634 13412 131% 136 12734 13112 114 12718 109%11934 111 118
Convertible deb 434s..
1965 10514 10734 106 107 10634 107% 10713108's 10778 10914 107% 109,4 107% 109 10834c11014 102 c10934 100 10414 10034 10314 94 10112
35-year deb 55
9618 100 98% 9918
Amer Type Founders deb 6s'40 10312 10434 10434 10512 10412 106 105 10512 10012 10514 9912 102 101 103 100 105 10012 10112 97 102
94 97 68 94
9558 102% 93% 98
5s
'34 10112 104 101 1027s 102 10314 10234 10378 10214 10314 102 104 101% 102% 10134 103
Elec
col
Wks
&
Wat
Amer
1975 102 104% 1031
/
4 106 10318 106 105 106% 104 10534 10118 105 104 106 100 10458 88% 100% 78 89% 83 92 6312 83
Deb g 6s ser A
3812 45 30 40
10 30/
1947 59 68 67 77
57 64 57 5918 57 63 49 5714 40 49
1
4
70 7012 55 70
Am Writ Paper 1st 6s
13 2512 712 15
20 25
75 80 63 76
79 87
53 5734 40 52
56 61
59 64
Angio-Chil Nitrates f deb Is'45 63 7112 72% 80
---15
15 - 10
1512 1512 15
16 20
161
/
4 1612 1638 1612 10 1612 15 26
Antilla (Comp Az)7 Hs A1939 14 20
- -1412
13
Certificates of deposit
885 9
-LL- 88
10134 10178 97 99 97 101
Ark&Mem Ry Bdge&Ter 5s '64 i51.18 10114
98's 98's 101 101 -60r8 -9912 -oir4
73 -7612 64 74
67 7634 6512 77
1939 8612 92
7612 8238 70 82
012
87 9018 7878 87
89 91
7734 8214 75 81
Armour & Co 1st 4445
53 611 56 6512 60,8 6512 53 6458
53 7412 6918 74% 5812 74
Armour & Co (Del) 1st 5 SisA'43 7214 8012 75 78'4 69 76 68 73 61 75
797
1
4 8658 71
87 8934 86/
89,
4 92
91
9312 9234 9314 93 9434 92,
9134 93
9134 95
Armstrong Cork Cony deb 55'40 9314 98
4 9414 9114 93
8 10412 101 102% 101 10212 98 10118
Associated Oil 6% notes 1935 102 10234 10234 104 10238 104 10314 10358 10212 10338 102 10258 10212 10314 10234 10312 101,
_
95 95
103%10338 ---- _- 10338 104
Atlanta Gas Light let 55-1947
45 4934 -3934 151-4
40 45
7612 54 -;I"
551
/
4 60,4 50 5812 52 58
Atl Gulf & W I SS L col tr 5s'59 6112 88 -Lirs 654 5834 63
4 1937 101 10278 10112 103 101 10278 10012 10314 101 10212 10012 10214 10114 102 10112 10212 98/
/
4 96 97% 89 9614
1
4 10212 9434 981
Atlantic Ref deb g 5s
Baldwin Loc Wks 1st if 5s_1940 1061210634 10612 10612 106%107 107 107 107 107 107 10738 107 107 107 10738 98 107% 101 10312 10218 10234 100 103
8
8
9
7
9
15
15 22
Baraqua (Comp Az) 734s1937 30 48
26
20 2518 25 25
35 4514 30 40
44 44
21
/
4 84 -7258 75% 9512 76 8214 781
Batayian Petro deb 4445_1942 93% 95% 94% 96% 95% 9678 9212 96
5
1-2
9234 94,
3 94 9618 9434 9658 9338 95
1936 88 90 8612 88% 8612 89
Beicling-Heminway 6s
89 901
9414 97% 97 9912 99 9912 94 9938 85 90 84 88
/
4 9014 92
91,
8 95
Bell Tel of Pa 1st & ref 5s1948 10714 109% 107 108% 10812 10912 10812 10912 108%11012 10712 10934 10814 11014 110 11114 105 11058 10214 110 1021,10512 100 10412
1960 11012c114 110%11234 11212 11334 113 115 113 115 112 115 11214 114 113 114 10678 11434 10258 10818 1048i 107
9934 106
1st & ref 5s A &0
72 83
7934 85
9812 9812 9818 98,2 98 c99,2 9612 9858 78 97 80 85
Beneficial Indus L'n deb 651946
25% 381
2812 4212 39 50
3112 56
77 881s 82 li12 7318 8312 6612 e8214 57 7978 5518 64
Berlin City Eiec Co 6445_1951 -56i8 75
70'1 78
1959
3112 4278 3112 4912 20 311,
Deb s f 6445
78 86% 8012 8434 73 83 62 75
71
681
/
4 75
54
7414 50 6412 32 54
77
1955 64,4 69% 66% 71
Debenture 6s
26 4112 1818 2714
47 52,4 2314 4678 25,
8 38
71 80% 7734 80 66% 7812 57 71
50 69
3212 50' 20 29
Berlin Eiec Elev 1st 6 34s...1956 6814 75
30 45
48
7112 8234 6018 75
71% 76% 77 85% 8118 85
7434 45 53% 2634 50
86 10012
9914 103
Beth Steel 1st & ref 55 ser A '42 10212 105 103 104 103 105 103 10518 104 106 10214 104 104 10618 103 104% 9978 10412 98 101
1936 10138 103 101%103 102 10312 103 10334 103 104 103 10334 103% 104 102 104
8978 99
Purchase money 5s
9934 10314 96 10258 9612 101
1950 78 8112
3514 24 3514
31
56 56
60 64
70 71
77 77
8218 8258 8258 8312 8212 83
Bing & Bing deb 6445
15 2712
2712 23 25
30 3612 20 3114 19 2812 27 29
25 36
26 27 .24
29 3214 25 29
Botany Consol Mills 63-4s1934 30 35
23
Bowman-Biltmore Hotels 75'34 97 10014 100%105 100 105
57182 757%,
5,8 422
60 60 643
3 744
65 65
94 95 83 86
94 99
75 83 65 81
4
4
618 4
6
9
5% 4
5
6
6
6
5
312 5
534 5
B'y & 7th Av 1st con g 55-1943 5
51
/
4 5
5
5
4
4
Certificates of deposit
65 67
65 -7-6 -LLTI 70 668 71
76 16- 80 8212 7712 78
Bklyn City RR 1st 55_1916-'41 85 86 85 87 85 8512 -La- -8-61-2 -L1 83
,
8 10612 10712 10614 107% 10478 10814 103 10714 104 107 100 105
/
4 107 106 107% 106 10712 106 107
/
4 10714 1061
Brooklyn Edison gen 55__ .1949 105%107 1051
92
9038 958 81
/
4 94
Bklyn-Man Traces 1 6s____1968 9834 101 100%10112 10034 101% 10014 10214 100 10212 10078 10214 101 10212 100 10134 884 10012 861
53 55
55 55
56 64
59 65
63/
1
4 6312
62 62 69 69
63 65 62 63
Bklyn Q Co & S gu g Is stpd '41 64 64% 63 64
5614 561
62 6312 56 56
1941 6612 6612
/
4
1st 55 stamped
1950 85 88
4 -5ors -661; -558 -611-2 -5518 -61-3-4 -Tnis if- 7434 84 80 85 68 8312
85 8812 -85 88¼ 88¼ 90" 00 -61-1Bklyn Un El 1st 94-Is
109's 11034 109% 111 111 11212 111 112 110% 11112 103',,113 10314 10734 10334 10618 100 105
1
4 110,4 10958
Bklyn Un Gas Co 1st ext g 55'45 10714 107% 10738 10814 108/
12118
114 114 106 10718
8 12078 12012 121 12118 12118 121
1947
8 12112 120,
/
4 11934 120% 120,
11712 1175s 1173.1 120 121 1211
1st lien & ref 6s A
_ 150 150
1936 218 218
Cony deb 534s
---- -105 16654 H6141-66- 1E22 1-1151-2 -68- 1661-2 100 fOil2
1950 1021
/
4c10434 103- 1-6A iiii- 1044 10438 10478 10434 f66Convertible debs 5s
94 94
-3
-4
96 96 23
9418 9418
Buff & Susq Iron 1st s f 55_1932 96 96
1952 83 83
-93 93 90 92 91 93 -55- -91- -56- -66- -50T8 -9-(11-8 8138 9118 84 85 79 80
90 93
Bush Terminal 1st 45
65 69
69 78
78 85
82 89% 72 81% 84 90 84 89 82 85
1955 9812 100
97,
8 10114 99 100
Consol Is
1-66- 9612 10114 9312 99 98 101 97 100% 92 99 85 94 87 91 83% 92
Bush Term wags stpd 1st 55'60 101 103% 100 103 10134 103
94% 99
98 101
Buff Gen Lice 4445 ser"B"1981 101 101 101 10178 101% 104 103% 105 10414 107% 10518 107 10538 106,2 10534 10612 10012 107 98 104
97 98
59 664
68 68
97 98
By-Prod Coke 1st 5 Ha A_1945 100%10214 10134 10312 102 104 10112 102% 10012 10214 9714 100
1
4 105 10518 10512 105 106 105% 10534 10512 105% 101 105% 101 10212 98 10212
Calif Gas & E unit & ref 58 1937 10318 10378 103 104,4 103%10378 104%104% 104/
78
9014 95,
57 71
93 96
4 80 9212 74 8434 71
9214 94
9834 9934 90 99 89% 93
/
4 100
Calif Pack cony deb Is___ _1940 9634 9912 981
58_1939
- 57 80
79 8212 79 811s
7718 85
90
93
943
1
85 85 85
84
90 81
4
98%
cony
deb
a
987
95%
97
,
4
9612
Petrol
8
Calif
1938 100 101 10014 10078 97 10034 90 9612 90 9212 89 91% 90 91
87 90 87 8712 62 88
89 91
90 92
Cony deb s f 5;is
4
13 1712 5 12,
17 18
2018 25
17 22
30 30 25 3012 1412 24
25 28
30 3714 15 29
Camaguey Sugar 1st sf 75_1942 40 45
37 3718 30 30
27 30
,
4 90
49 6312 49 5534 42 4918 37
5734 60
56 66
Canada S S Lines 1st 65..„1941 55 5714 62 7038 6914 70
1
4 10518 10518 10514 106 105% 106 105 106 10512 106 104 10614 10034 104 10112 10312 100 103
Central Dist Tel 1st 5s_ _ _1943 105 105 105 105 10518 105/
94 c100
84 8412 85 89
50 7014 59 74% 6912 72
50 54
33% 55
70 83 8412 87
54 65
Central Fdy 1st s f 20-yr 65.1931
105 10618 10158 101%
Cent Hud G & E 55-Jan 1957 i043 10434 104% 105 10518 10512 105% 106 10512 106 10518 105%
62 83i
96 9918 88 9634 85 90 -Lor4 88
96'2 98
Cent Ill Lice & Gas 1st 55 1951
1941 111s 113 112 114 iiii2 11314 11114 114 109 114 1011116678 10978 115 10712114's 9312 105 93% 99 9334 97 80 92
Central Steel 1st s I 85
30 4612
45 50
44 54% 40 49
4958 60
43 60
Certain-teed Prod 5;28 A 1948 3112 36% 3414 3712 3212 4414 37% 4212 3412 4112 35 48
/
4 6
41
6
6
1012 15
11 18 15
Cespedes Sugar Co 1st 7445 '39 59 59
-iiT8 1/
(
8
-3914 16- 37'2 37'z
Chicago City & Con Ry 55_1927
-56- 10-4
4 l027 1-1 3-4 99's 10334 i5iChic Gas L & C 1st gug 55_1937 jars 11i31-2 103'4 103i 10358 105 10414 105 105- 1-66- 105 1-6612 105,8 105'4 i L 1-6634712 50
53 55
5814 6118 57% 5814 39% 51
60 70 6034 66
57 63% 6118 63
Chicago Rys 1st 20-yr 55_1927 63% 70 6414 67 67 74
70 77
75 83
70 7434 71
83 8214 83
1943 8018 82
761s 63 7114 6812 6612 5734 63 60 6612 48 6412
81
Childs Co deb 5s
5912
,
8 55 7534 55 6978 55% 7412 41
,
4 8814 9478 86 90% 79 891
/
4 87 8912 76 87
Chili Copper Co deb 5s_ _ 1947 90 94,2 9212 9512 9414 95
94% 96
9734 88 93,2 8812 89% 8318 88%
/
4 97 9658 98,
9518 98,
8 961
9234 95
8 91
/
4 9834 961
93
On Gas & Elec 1st mtge 451968 90 9314 91
2934 3318
2934 36
20 34
42 52
45 55
37 55
4434 64
3612 50
5212 55
70 60 67 62 68
Colon 011 6s cony debs-1938 51
55 80
73 75
75 78
9212 95
90 9334 85 87
9434 96
85 8712 80% 86
87 88
Colorado Fuel & I gen s f 551943 9514 99% 9478 96
65 6612 6112 65
82 74 65 67
92 93 85 9378 8012 8612 80 81
76 76
78 83
Colorado Indus 1st coil tr 5s'34 90 9412 92 93
625
8 85
83%
9012
82
9012
99
9812 10018 85
9734 100
1952 97 10138 9612 9912 98% 10012 9914 10014 9614 100
9412 98
Columbia G & E deb 55
90 9238 72 84
98 10018 99 10018 83 100 85 92
/
4 10118 9614 987s 9512 98
Debenture 55 April 15 1952 98 10114 97 9914 9914 10018 981
8012 90 82 89% 63 8312
9818 9914 9612 100
9412 9738 97 9918 9718 9918 82% 98
Deb 5s
Jan 15 1961
94 94
95 95
/
4 981
Columbus Gas 1st g 5s____1932 -9512 96 -5-5578 WI; -5738 -66'2 9818 98% 961
/
4 98 98,4 9818 9814 98% 99
8312 93
9912 10034 94 10014 89 95% -55- 95
9712 100
9734 101
99 101
Columbus Ry P & L 434s1957 94 96% 94 9712 9612 9814 97 93
93
94%
91
92
8
95
917
102
9614
101
101%
100%101
100
4
10014 100 101 10038 10012
Commercial Credit s f 65_1934 98 99,4 97 993 99 10014
8912 90 87 90,2
1
4 96
9612 981
/
4 9812 9934 9614 98'4 89/
96 9818 96 9712 96 97
Coll tr s f 544% notes___1935 93,
9612 97
8 9612 95 96
CommlInvest Trust deb 68 1948 104,
8 104,
8 10412 104%
-551297 8912 94l '55- -661; -ig- -0-6Cony deb 534s
1949 9112 9712 9312 9812 97 99 -55- f66- 97 1-66-2 -98- 1-66- -5734 -661-2
/
4 105 108 105 106% 105 106 10558 107
Comput-Tab-Rec 30-yr at 68'41 10518 106% 105%106,2 10512 106,2 10612 106% 10558 10634 10614 108 10612 108 10614 1071
101%
1015
8
Conn Ry&Lt Ist&gen 430 1951
/
4 9912 10034
9914 991
95 -6614 -53i2 161-2
-66- -58- 161-1-2 -95- -66102 1661,, 102 103 ioir21
100- 1-66- 102'4
Stamped guaranteed
/
4
99's 10112 9914 1011
/
4 2712 42
14% 28/
1
4
46 5034 2834 4938 27% 391
Consol Agri La 634s
1958 67 74% 72% 79
,
4 78% 83s 7612 82% 70 79 6218 7334 45 73
Consol Hydro El Works of
40 5012 3112 3934
44 6812 34 50
Upper Wuertemburg 78_1956 82 85 8434 90
9013 93% 90 93% 8912 92% 82 8912 70 90 62 67
24% 2812 2014 2714
2314 3312 24 27
35 3712 33 37
2678 40
Consol Coal 1st & ref 58_1950 24% 28
25 35% 25 45% 37 4818 35 43
10478 106
99,
8 10512
/
4 10812 10614 10712 107 108 107 108 105 10712 10414 10712
Consol Gas(N Y)deb 5;0_1945 103 10712 105% 106% 106 107 10614 107% 1061
9714 99% 8912 9784
95 101
97 104
1
4 103 104
10118 101% 101 10212 10112 103/
Deb gold 43-4s Wi
1951
99% 101 100 100,
104
4
1055s
10412
105
105%
105
10512
10414
/
4
104%
Consum Gas Co 1st gu g 5s 1936 10318 10334 1031
/
4 103% 10338 104 104 10412 1041
9812 10212
/
4 103 10678 i5612 16i- 10012 105
Consum Pr 1st I & unit 5s C'52 103 10512 104%10514 105 106 105%1061
/
4 10558 10614 104 10678 10514 106 103% 1061
42 5414 40 55
4414 56
25 3912
48 5714 56 6312 55 61
53 60
Container Corp 1st 6s
60 67
1946 85 85
84% 84% 63 71
3414 27 3212 20 25
20,4 28'8 21
25 34
20 3312 3014 40
15-year deb g 6s
21
35
33 47
4612 57
1943 60 64
59 63
Copenhagen Telephone9814 10111 78 100
75 8012 65 75
61
79
Esti s f 5s
1
4 100 10114 9914 10114 100 10212
Feb 15 1954 97 89914 97 99 981.01007s 99 100/
102 10234 100 10234
Corn Prod Ref 1st 25-yr s f 55'34 10212 10412 10212 103% 103 10334 102 1041
/
4 104 105 105 105 10558 10558 103 10558 102 105 100 103
92IR 84 90
90
78 85
93 96
93 95
Crown Cork & Seal 1st at 6s"47 9712 99
4 9914 9514 98% 95 9612 90 95% 92 94
9712 9812 97,
-oa- v6-
C Cash sale. s Option sale.
JAN. 9 1932.]
FINANCIAL CHRONICLE
259
1931-Contin ued.
BONDS
ast
?January February I March
June
April
August September October
July
May
November December
Low High Low High Low High Low High Low High Low High Low High Low High Low High Low High Low High Low High
Crown-Willamette Pap 65_1951 95 9634 8434 95 86 9312 70 86
89 9113 804 91
8134 87 8514 90
7358 91
Crown Zellerbach deb 6s w w__ 744 85
74 82 6012 75 61 6812 60 6212 60 654 65 6912 67 6914 5778 70
Cuban-Amer Stift 1st colt Os'31 8972 9978 97 994 9938 10012
Cuba Cane Prod deb 6s_ _1950 7 10
52g
712 9
64 934 7 11
-117-8 94 1118 434 913 4
54 8
Cuba n-Domin Sug 1st 1,4s 1944 15
16
---- 8
7 1434 713 1414 74 934 6
7
7 10
812 712 8
Certificates of deposit_.
---6 10
10 10
74 8
Stamped
6
8
---- -Stpd with purch wart attach 14 17
11
213 10
15
6
612 758 --712 15
9
5
8 10
5 11
8
Ctfs of dm,stpd & unstpd _
512 8
Cumb`I'd T & T 1st & fee 55'37 11.12i4 104;
1 10513 1-641
;104 1-6i4 11-)414 1061-4 10458 106 lOK 106 ioi- 16E4 1.15514 1064 10312 106
Cuyamel Fruit 1st s f ha A_I940 10218 104 10312 10414 104 10412 10318 10512 10434 1054 10414 10434 10414 10558 10412 10534 103 105
Dela Pow & Lt 1st M 43s A971
---10014 101 10012 10112 9378 101
1969
1st mtge gold 454s
---99 100
7734 80
54 59
79
54
82 65
6312 45
80
5534
33 cS
1
38
612 6,4 3
3
---------_ ----5
6
6
7
2
3
34 8
44 6
214 5
10034 1031 10118 103
98 1021s
9912 104 100 102
95 1(1113
9312 98,4 93 97
92 9414
9312 974 94 94
6
7
Denver Gas & El 1st & ref Is'51 100 10214 10052 10214 101 103 10112 103 1034104 10358 105 1024 10412 1034 104 101 104
9512 9934 96 101
95 95
Stamped as to Penns tax__ _ 9958 10214 10158 10212 10214 10318 10258 10312 10314 10334 10314 10412 10314 10412 10234 10334 10358104' 9512 10212 96 1014 93 93
Dery(D G)Corp 2d f 72 sty '42
8
1
1
8 15 415
Detroit Edison 1st cot tr Is 1933 10212 10312 ioi- f6S- 10212 1031. 153- 1-661-2 10312 10412 10338 10414 10358 1043-4
4 1(-)14 1021-3 100 10212
10012 C6E5-2 10014 1E1
1st & ref 58 ser A
1940 1034 10512 10478 10513
101 10814
Gen & ref Ss ser A
1940 10434 107 105 107 10512 10712 i5Oi01661-2 iOOki f6E- ioi- f6E- 15e8 1-6613 107'2 10814
jai- 1-6E1
2 151- 1-6112
1st & ref 6s ser B
1940 105 108 105 10558
107 108
Gen & ref Ss ser B
1955 1054 1064 105 107 10613 10713
10714 1-66- 10718 1O8'o i5i- 1073., 1O7' 10784 107'4 108'4 ioi- 105 ioi- 16E14 96 102'g
Series C
196 10552 107,2 10514 10732 107 10734 Unit 1-661-4 10713 110 10752 1074 10712 10758 10714 108 105 108 100 105 10152 104
97 102,4
Gen & ref 43.4s ser "D" 196 9934 10158 100 1014 10112 10314 10278 10372 10314 10534 10332 10512 1034 10412 10334 1044 984104,4 9414 101,4 95,4 9814 8918 973
3
When issued
10314 104 10314 104
DetUnitedRyl5tconsg434sI932 -9714
oi" 16" 98 16,
94 085 -55- -6E- -6E1 WI;
1- "9812 9913 9913 100
-5i- 98
9912 9934 9834 99,2
Dodge Bros deb 6s
1940 8218 9134 8812 90 89 91
7314 86
9018 9212 92 9318 82 9213 7913 8812 85 91
85 91
85 87,2 844 91
Dold (Jacob) Pack 1st 6s_ A942 604 66
65 704 69 70 55 6814 5612 60 5634 57 63 73
6018 70
50 58,
5714 61
534 65 53 58
4
Dominion I & S con s f 55_1939
90 90
100 100 84 84
Donner Steel 1st & ref 75 AA'42 90 94 -9312 94 100 101
9484 06- 95 9658 96 96 -5:63 "g" -92 042
95 100,2 -oi- 98
78 83
Duke-Price Power 1st 6s A.1966 102 10414 1035 10432 10412 10613 10413 106 1044 105 103 104 103 10414 10312 105 80 10312 75 87,
4 80 88,2 68 814
Duquesne Light 1st 4 As_ _1967 10212 10472 10212 10418 10312 10413 10412 10434 10414 10534 10312 106 104 410634 10452 10512 101 10.5,4 99 10412 100 4103
93 101,4
Eastern Cuba Sug s f 7)45_1937 30 41
28 42
29 33
914 10,
25 3434 3452 3734 1513 37
32 37
6 10
10 13
20 30
2 314 9
Stamped as to sk fd guar ---9
9
3,8 64
Ed El 111 Bklyn 1st cons g 45'39 -OW -6
734 .611-4 -6674 1-661-2 -9958 106;
,61.
-1 -9.
9018 9813
98 110
0613 98
15512 1-661-2 100T.,16614 ioii2 1618 i5i1
Ed El III (NY) 1st cons 55_1995 11514 11514 11534 11534 11714 1174 117 119 12312 11E4 122 122 1204 12034 122 123 12372 1234 11814 118,4
10738 112
Edith Rockefeller McCormick's
Trust colt 6% notes
1934 100 10134 10034 10134 10132 102 10114 102 101 102
El Pow Corp(Germany)6 As '50 77 80
83 87 86 89
7812 81
3213 57
32 43 -i5f2 16- -254 I61-3
76 8714 -iirs 16- -LK 78 -Li- 64
1st s f 6)4a
1953 71 80
774 814 8278 87 8114 87,4 75 83,
,
4 23 34
4 7018 774 55 77 50 6178 32 524 3238 4218 3012 50
Elk Horn Coal 1st & ref6 As'31
70 70
70 70 50 81
20 25
20 24
40 40
56 56
--Deb 7% notes (with war)1931
10 20
15
15
Eqult Gas Lt N. Y 1st 55_1932
1-61-371 ioi- 1615-2 jai- 1-61-- 10112 101-1;10114 102 10112 10134 1634 1-61-3-4 101 10134 10058 101 1.614 1-61-- iools 1661-4 -5eis 1-66
Ernesto Breda Co 1st m 75 1954
With stock purch warrants 5514 65,2 6434 7012 6712 76 6414 73 6514 73 61 6513 6212 64 6214 654 50 62,4 35 49
3312 47
46 449
ia5.1-6i5;
-ia- 10i21;
FederalLt & Trac 1st I 55_1942 9178 95 9412 9513 9558 9714 9658 98 9534 98 95 98
1st lien s f Ss stamped_ 1942 92 9412 9434 95
95 9652 944 97
95 9512 9118 95
let lien .f 65 stamped_ 1942 99 102,4 102 1034 101 10212 10032 103 100 10312 97 10014
30-year deb 6s ser B
1954 9612 100
9612 9612 9013 9412 90 92 90 94
98 99
Federated !details f 75_ _ _1939 9312 9538 93 95
9212 93 92 9234 89 92
88 90
Flat deb 75 (with warr)....1946 7934 90 8614 90 88 92 8612 93 87 89,2 7934 86
Without stk purch warr____ 7913 87,4 8534 89 87 9234 8618 9213 84 89 80 88
Fisk Rubber 1st s f 85
1941 28 34
3078 2114 28
3418 3738 30 374 21
2138 25
Framerican Ind & Dad 7)45'42 10412 10612 10612 108 10778 109 10712 10812 10118 108 100 105
Francisco Sugar 1St f 74s'42 61 61
45 50
60 6912 55 55
4012 52
941 9634 95 971
9212 9412 9412 95
0734 9834 99 10114
90 92
90,4 9014
88 8814 88 90
87 88
8712 88,4
8712 89
30 4312
2552 28
10118 1054 10112 10214
50 60 41
504
95 96
89 94
96 100
85 9112
85 88
75 89
8612
89
88
7614
84
7113
9558
9312
96
85
85
80
78 7812 65
7614 7618 65
8234
8278 88
63
7434
84 84
7318 78,2 744
29 31's 22 16'Yei" 20
89
91
90 1024 8934 94
97
21
41
44
2312 2112 2112 15
Gannett Co deb 6s
1943 75 82
7213 7412 74 77,- 73 80 69 8134 80 90
78 8112 74 79
80 86
73 81
73 75
Gas & El Bergen Co con Is 1949 ____
1054 10518 103410312
10713 10818 1034 10818
Gelsenkirchen Mining 65_1934 89 92
90 94 9334 9434 93 9434
11 06131 -E638 81 161-2 -6234 16- 59 7234 46 63 -3912 53
4
Gen Amer Investors 5s. _1952 83 88 86 8912 8812 904 90 9112 86 9113 88 88
85 87
85 8734 8112 88 81
83 8012 8212
General Baking deb at 545s '40 9412 0834 94 9478 9312 97 9538 9614 9312 9734 9713 99
98 9914 9812 99
9534 9814 93 9614 95 97
General Cable lets f g 5)45'47 7978 0234 7714 8478 83 87 80 8634 69 80 65 7612 70 79
72 75
50 62
57 72
57 6513
General Elec deb 3 A s _ _ _ _1942 9514 9514 95 96
9513 9534 9612 9612 98 98
9912 9912 994 9914
9912 9934 96
96
9834 9(3
Gen Etec(Germany) 20-yr 75'45 91
gg
98 101
9912 104 100 10112 82 9612 75,8 9312 iLT2 81
97 101
48 79 404 5612 35 53
S f deb 6145 without warr '40 9012 92
94 98
9034 94
9412 9712 9534 97 81
96,4 654 8934 70 77 43 74
344 50,4 38
50
Sinking fund deb 6s_ _ 1948 82 89
85 88 8712 92 87 9014 8334 89
71 84 60 8234 6018 67
4112 83
334 51,4 3212 484
Gen Mot Accep Corp deb 65'37 10178 103,2 10212 104,4 103 10434 10334 10412 10312 10412 10212 104 1034 1045
8 103 10414 10034 10334 9834 102 100 10212
Gen Petrol 1st s f 55
1940 102 10234 10212 10234 10212 1034 102 103 102 10234 10212 10358 10212 10358 10234 10334 101531031., 100 10212 100 102,2
Gen Pub Sera, deb 5 A s
1939 93 95
93 95
9312 95 9334 95 9334 95 92 9412 9234 9512 9418 961 85 9712 81
8934 83 86
Gen Steel Castings 1st 53.451949 89 95
94 961.t 92 96 8812 93 84 90 80 91
86 9012 8212 87,2 67 8258 61
59 69
67
Gen Theatre Equip deb 6s_1940 51
7378 69 74 614 73
28 4713 23 4714 29 41
40 66
614 12
1014 18
13 25
1812 30
Good Hope Steel & I sec 78 1945 82 494
87 9114 9013 9434 90 9678 83 9012 75 87
40 6412 39 4712 35 48
61
68 489
70
Goodrich (II F) Co 1st 6 As 1947 9978 10213 99 100
9918 10014 97 100
9518 9714 9312 9812 96,2 9812 97,8 98,2 85 9812 67 8134 76 84
Convertible deb 6s
1945 67 76
65 69 50 67
67 71
5313 6612 60,
51
61
49 56
4 66,2 59 6278 46 6012 4113 51
Goodyear Tire & Rub 1st 5s'57 87 90 88 904 904 92 86 9178 8714 91
83,4 92
77 85
90,4 9212 9034 914 794 9114 75 83
Gotham Silk Hosiery deb 6s'36 75 7812 80 80,4 8014 87 8512 90 83 90 8112 89 86 90 88 8838 83 90
Gould Coupler Ist s f 62_ _1940 68 6812 68 6852 65 68 61 66
41
53 57
33 35
4834 38 41
Gt Cons El Pow (Japan) 75 1944 9334 9878 9812 10014 99410114 9914 10012 -6514 166- 9914 10013 97 10038 96 100
72 9634
1st & gen f 6 As
1950 8512 9234 9212 954 94 95 9414 95
9134 9478 9134 94 92 94
9018 93 634 92
Gulf States Steel deb 514s 1942 89 90 8778 90 89 90 8834 89,2 55 74
52 60
48 5318 35 48
544 62
Hackens4ca Water let 45_1952 90 90 8878 91
9138 9113 92 92
9353 934 9418 94,4 94,2 9413 9478 9513 9458 95
Herpen Mining Co 63 w w_1949 77 82
79 8212 8134 84,2 8112 8212 7914 8138 63 7812 58 75
4814 55
4834 58
Hansa SS Lines Os with war '39 70 7778 7512 81
81 86% 80 85,2 67 81
60 7012 40 6934 30 40 30 421
Havana Elec ity cons g 55_1952 4513 531 474 52
51 51
51
43 45
5134 38 49
40 43
30 32
ser of 1926
Deb 5
1951 23 3012 2218 26
23 2713 1912 254 1213 20
16
10
14
14
16
1013 1158 15
Hoe(R)& Co 1st 6)45
1934 60 65
51
52 59 59 68
59
47 5778 40 54
51
51
58
55
43 54
Holland-Amer Lines f 65_1947 59 60
5734 65 58 60 5512 58
56 62,4 60 60
56 60 59 59
Houston 011 skg fd 5345_1940 90 9314 9112 94 9134 93,3 90 9234 89
92 834 904 88,2 90 8634 90
28 88,4
Iludson Coal 1st s f 55 A_ 1962 51 63
5718 63
5812 6213 58 6152 5512 5872 55 614 60 62
41
59
5812 60
Hudson Co Gas 1st g 55_1949 10472 106 105 10612 10534 10638 10552 10652 10612
108 10712 108 10814 10858 10312 107
Humble Oil & Ref deb 5144 1931 10178 10234 102144104 10241025g 10214 10212 1021 10632 107
2410414 101 1027 102 10234 10214 103 100 1021
Debenture 0 Is
1937 101 102 101 10214 10114 10214 102 10252 10014 102 10034 102 10112 10318 10252 1035
8 100 1033
71
65
7614
85,
4
76
844
76,
4
28kg
9712
2113
78
2713 01;
1
74 8012
89 95
40 5812
96 96
29 3934
25 35
214 3113
9712 102,4
96 10012
80 84
58 6234
2
613
23 3434
55 76
33 51
64 78,4
7738
71
7714 78
78 83
23 25
23 2734
30 34
7434 7713 6612 7314 504 7453
60 69,2 61 6514 41 6513
26 39
36 4012 39 43
90 9012 85 88 8012 82
22
36
38 54
3934 55
26 3912 1512 29
25 36
2713 27,2 25 26
12
9,2 1112 8
44 50 20 43
4314 52
3478 3478
74 8412 72 80 -Li- 72
42 47
3612 46
3812 48
,
4
100 103,2 10314 10312 100 103
100 101 100 10112 9834 10012
96 10014
0772 101,3 100 101
Illinois Bell Telep 1st Ss A_1956 105 10634 105 106 10514 10634 106 107 10534
107 10513 1063 106
106,2 10753 104 10753 10114 106 10258 10512 9912 104
Illinois Steel deb 4)45
1940 10012 1031 10018 102 10114 103 102 10378 10358 10412 10234 1041 102 107
97 10012 9334 3938
95 100
10378 1034 10372 99 104
Ilseder Steel 6s int ctfs w I 1948 71 7612 7214 76
76 82
7812 81,2 6734 7714 61 69
4313 6812 4014 53
32 473 28 464, 3112 394 1713 2452
Indiana Limestone 1st s f 65'41 48 5114 50 69
55 6034 33 564 35 53
33 381 25 33
1258 1214 2218
12
10 22
15 25
234 27
Indiana Nat Gas & Oil ref 5536
10014 10014 1004100,4 10014 10014 10034 10034 10034
97 97
97 97
10134 10134 10214 1024 102 102 100 100
Inland Steel s f 43.45 A
1978 9514 9784 9514 98,4 9514 9652 94 49534 934 9534 9334 1003
727s 8412
953 9414 9612 9334 95 8458 95
8018 88
8412 89
1st M•f 4)4 ser "B"
1981 9614 9658 96 9612 9434 9634 9214 9438 9234 9434 91 941 94,
73 8334
82
8814
80
84
9312
8
884
941
943
4
954
Inspiration Con Copp6 As 1931 99 100
9534 100
_
---Inter-5Ietrop coil tr 4 345_ _1956 94 912
1018 -101
---- ----_--le);
Certificates of deposit
94 913
---- -Interboro It. T 1st & ref 55_1966 6852 47078 is§r4 72
71
73 -6567 71
644 7784 -i5- 7334 65 7112 51 60 -Lo- 1E- 4612 59,2 373 50!
Stamped
6814 701 6834 72
7013 73 6858 75 6658 71
6414 78
3712 51
46 .59
49
704
7113
733
4
6412
50
583
685
4
8
10-year 6% notes
1932 53 57 54 574 5112 59 50,2 6434 5452 60 55 6212
2612 34
284 42
2412 41
51
54 62
2312 52
58
10-year cony 7% notes _1932 8914 93
90 9134 91 9412 9() 95 9012 9234 9012 95
56 68
9012 924 864 9014 70 874 70 79
6414 77
Interlake Iron 1st Ss ser B A95I ---- -49
87
59
55
613
4
87
65
81,
4
6512
79
79
86
,
2
Int Agric Corp 1st & col tr 55'32 9834 99
9812 98'2
-5872 06;
3 -65- 99
9852 98
9858 994 99 99
9912 9912 9912 9914 99 9912 99 99,3
Stamped extended In.. _ _1942 75 76,8 74 764 7314 75
7234 73,4 67 77 65
75
50 50 z 38 45
62 62
72
50
65
55
Internet Cement cony deb 55'48 95 99 9514 100
9812 100 8913 9912 .81
90
8012 89
85 88 804 85 67 83 60 7213 7212 80 46034 75
Int-Hydro Elec 6s
1944 8612 03 8712 9314 90 92 83 9012 65 86
66 80
78 82
48 73 4012 6112
73 79
Interest Match deb a f 55_1947 8913 9913 8938 9212 9114 9438 91,4 9318 8812 93,4 85 91,2 834 0213 7312
844 53 76
5412 68
Convertible deb Ss
96 100
95 9714 9113 9678 90 9614 8612 9613 744 49213 53 82
1941
50 6912
let hi M 1st col tr a f 65 1941 Ol7s 07 -51 -6E1-2 84 91
7934 85
77 83
75 81
731, 76
72 7358 51
51
7214
58
Inc Paper 1st & ref cony Ss A'47 7318 77
7152 7678 7212 7612 72 75 624 724 62 7212 70 7214 65 70 58 6914 59 63
Ref s f 6s ser A
56 654 40 5734 40 57
1955 60 6938 6012 64 6214 66
46 57 40 49
52,3 56
3934 42
Inc Tel & Tel deb g 434s_1952 7118 8158 7914 82,2 8012 8412 7418 8212 6972 80,4 66 8114 7613 8234 68 784 461. 7018 46
58
Cony deb 4)45
9112 8858 95,2 9212 96 884 94,3 87 9072 8212 944 90 9534 8234 9112 59 84
1939 81
5134 69
Deb Ss when issued
89
77 8612 7134 87,4 84,8 9112 75 851 5413 754 51
1955 76 8614 8014 853s 8413 90,4 81
634
Investors Equity deb 55 A_1947
73 74
70 72
73 75
70 70
70 7214
---64 71
60 63
Deb Ss ser "B" with warrants ____
73 76
70 72
73 76
70 7012 72 72
70 70
70 71
60 62
Without warrants........
73 75
71
71
72 72
7314 74
70 70
70 70 60 60
Kan City P & L 1st Is ser A 1952 10412 106 ioUggg,z 10234 1054 105 105
1st 4(4,series B
1957 1014103,2 10112 10212 102 10318 10118 104 lairs 11161-8 10412 1661; 1044 1043 104' I048 1013T8 1-66
(
4 -9514 10212
1st M 4(45
10334 10455 10418 107 104410634 104,2 10634 10573 10812 9934 10638 9714 102,
1961
4
Kansas G & E let mtg 4)4s 1980 9312 49638 9334 95/
9314 100 8514 934
1
4 9478 974 9614 974 9612 9918 9658 9834 9514 99,4 9838 100
Karstadt (R) 62
1943 5934 6814 62 68 68 754 664 713 (3012 6914 4812 6334 3512 5638 2812 3773 22
3672 20 3414
Keith (B F) Corp 1st 6s_ _194(, 76 78,2 75 7634 75 7634 75 76
74 75,2 62 66
6434 70 654 68
47 52,4
53 70
Kendall Co 5345 with warr 1948 39 57
5553 6012 60 6814 60 67 4538 65,4 50 59
Keystone Teieph 1st 5s.. _ _1935 74 82 82 82
7612 7612 76
74 75
70 73
76
Kings Co El L & P Lit g 55_1937 10338 104 10334 104,4 10458105 10434 105 105 10534 105 10514
Purchase money 65
1997 134 13812 ---- -- 1344 13414 13714 139
139 139
Kings Co Elev RR 1st g 4sA949 78 80
7934 83 83 843 84 851 8112 85
7812 80
c Cash sale. s Option sale.
7018
75
75
594
6412
5338
66
7712
6934
6072
604
38
3912
3958
43
44
26
344
3512
35
59
61..•
56
6114
62
54
6012
4018
4913
5814
57
59
614
U7's 9958
984100,4
86 904
23,8 35
45 51
9312
92
80
13
35
9783
99
85
25
44
55
5834
60
5213
60
4058
444
54
52
60
6012
48 7013 4313 61
5934 66
46 5514
70 7234 70 7012 70 7013
73 73
10534 10578 10478 1054 10134 10278 10014 10318
13878 139 138 11612 13534 140 120 135
120 130
824 844 8134 831, 7912 83
74 '7672 - 7213 761 6134 6713
5514 7014 68
70 70,4 74
71
74
260
FINANCIAL CHRONICLE
[VoL. 134.
1931—Continued.
BONDS
January
June
July
March
April
May
November December
February
August September October
Lew High Low High Low High Low High Low High Low High Low High Low High Low High Low High Low High Low High
Kings Co Ltg 1st & ref 5s_1954 10512 10512 10414 10512 1047g 10478 10458 10452 10712 10712 10758 10758 107% 1075g 106 106 10734 10734 --------103 103 ---- ---1st & ref6 As
1954 1184 11812 119 119 118'4119 11812 11858 119'4120 119 119 118'2119 ____
___ 11812 119 110 110 --------105 112
Kinney(G 11) co cony 734s 1936 87 90
80 84 --------55 6938
7934 88
7534 80
8212 91
90 -96
88 9018 80 89 72% 7614 7512 80
Kresge Found cal tr 68
1936 102 10212 10112 10212 10134 103 102 103 10134 10212 101 103 10134 103 102 103
8978 97
938
9914 10278 94 994 .17
Krueger & Toll 58 with warr'59 88 93 8984 9314 9134 9414 924 9458 9134 94 89% 94
5312 6138 37 5612
85 9334 73 87 48 07834 48 61
Lack Steel 1st cons 5s ser A '50 102 10312 10212 10358 10212 104% 102 10434 10134 103% 10212 103 10218 10318 103 10412 109 105
95 100 9614 9734 9313 97
Laclede Gas L ref 1st g 58-1934 10112 10334 102 10258 10218 10312 10284 10312 10312 10412 10234 104,8 102 10312 103 10314 97 10234 9424 9912 97 100 88 9812
Col St ref 5 3.4s ser C
1933 101 103 102 1037 100 10312 101 102 101 103% 100 10112 100 10214 10012 10218 89 102 8718 92 85 c93
64 85
Col & ref 594s ser "D" 1960 10114 1034 10134 10314 10138 10334 100%10212 101 103,4 100 10112 10014 10154 100 10158 90 10014 80 93 87 9012 65 8712
Lautaro Nitrate Co 68
1954
Without warrants
10 184 7 1334
19 3214 6 2434 10 15
43 594 55 63 6014 754 50 6912 4014 564 34 52 33 46
Lehigh C & N con s f 4)8 A '54 9812 101
9938 101 100 10058 99 9978 99 101 10014 10114 101 101 102 102 102 10214 93 9514 914 93 88 9112
9858 10034 10014 101 10078 101 10034 10158 101 10214 92 95 92 94 88 9214
Cons 8 f 43s "C"
1954 ---------------- -------- 99 100
Lehigh Val Coal Co 1st 41 58'33 10058 1014
12i 100 102 1014 10258 10112 10278 10118 102 1014 102 99 10112 95 99 94 954 89 954
1st 40 yr lot red to 4% I933 ----------------9858 9934 --------9912 9912 10212 10212 --------9913 994 ____ 9712 9712 ____
__ 94 94
951 9512
lit & ref s f 5s
98
__ 0014 10012 10012 1-0012 9912 99'z 98 -9912 9912 10034 10034 10012 10034 ---- ---- 10041004 ____
1934
1944 7784 iS
1st & ref 8 f 55
70 50 55 55 55 --------50 50 44 50
7738 7734 774 7752 75'2 77 ----------------6973 -50 5218
let & ref s f 5s
1954 ---------------- 52 52 43 43 ---- ---- 4712 4712 52 52 __-- ___ 42% 43 40 42 40 51
1st & ref 5s
1964 -------- 50 50 52 55 ----------------50 50 --------491, -4912 ------------------------40 4948
1st & ref 5 f 5s
1974 50 55
52 52 _ _ _ _ _ _ _ 48 53 50 53 50 50 ------------------------41 48
53 55
55 57
12134 125 12112 12412 23%12412 120 12414 11572 120 116 1912 III 118
Liggett & Myers Tob 78-1944 12078 19312 12018 12118 11838 12114 121 12212 122 125
58
99 103 1004 1044 95 10312
1951 10414 107 10472 10612 10512 107 10512 10612 106 10814 108 10838 108 10814 108 1084 104 0110
70 9012
82 89 89 94
97 99 8434 98
Loew's Inc deb 68 with war '41 100 10518 102%11012 100 109 0102010412 ----------------97 99
98
Without stk purch warrants 9612 99
9858 9934 9412 9934 94 972 12 9 12 :+
4 5912 -8078 54 -757-2 65 -7318 54 -6458
77 -87 7714 - 93Lombard Elec 1st 7s w w_1952 7658 90 8812 947 92 954 9114 94 884 947 8534 88
_
51
7578 69 7212 _
75 8412 55 80
75 89 8812 9212 91 95 90 93 88 94 84 8734 7612 88
without warrants
1944 10234 109 10712 110 111 11214 111 113 111'2114 11212 114 113 1144 11234 115 104 114 10214 112 105 1074 iii2 1ii
Lorillard (P) 75
1951 82 89 8654 907 8938 91
9512 9912 94
9012 9212 91
9214 9514 934 9534 86 9412 85 9118 88 9318 77 87
58
1937 86% 9512 9314 9752 94 9634 9412 9712 9434 9812 93 9812 9814 101
9714 10014 854 9912 9114 99 9878 101% 10114 10135
Deb 53.45
Louisv G & El 1st & ref 55_1952 103'105'z 10312 10512 105 10718 105 1064 105 108 106 108 106 10712 1054 10714 100 1074 100 100 10114 10314 92 102
Lower Austria Hydro Elec Co1944 76 82 83 8634 854 8712 81 8512 8112 8514 78 83
5634 30 32
3778 41
3718 4212
7112 83 60 6312 51
1st 5 f 63.48
McCrory Stores deb 53.4s._1941 9378 9518 94 95 97% 9914 98 100 9712 994 9812 994 9834 100
9712 9934 90 9712 88% 92,2 88 9012 74 87
79 8212 7618 8212 6812 78 6212 78
52 65
632 6858 46 6414
74 7734 58 75
75 78
McKesson & Rob deb 53.42_1950 787 8412 79 81
20 26
2114 03212 2184 2834 2614 30
2714 35 2184 31
2212 25
25 25
25 28
Maned Sugar list 8 f 73.4s....1942 2612 40
29 32 20 2518 1912 2412 20 23
20 2014 1218 17 ----------------413 -7
Stpd April 31 coupon-1942 ---- ------------ 2515 35
manbat Ry (N Y) con g 45-1990 554 6712 5512 5712 53 5812 52 5712 50 5612 5312 6212 64 60 50 5414 38 528 3514 42% 384 4034 27 39
2013 48 48 474 474 45 45 45 50 49 50
48 51
32 32
354 45
50 51
304 36
45 45
2d 48
95 95 96 96 --------96 97 98
95 95
98 ---- ---- --- -___ ____ __ __
Manila El Ry & L Ist&col 58'53 98 98 97 9712 97 100
Mfrs Tr Co ctf of partic In A I
9212 94
9212 94
9234 94 932 94
9212 9412 9212 9338 89 .9212 89 90 83 89
Namm & Son 1st 8(68_1943 921 9412 92 93 9212 94
35 4278 3612 41
3912 45
37 424 36 3612 38 42
30 3212 25 2534 2514 3212 21
35 41
26,4
Marlon Steam Shovel• 141 68'47 42 47
8712 9114 878 90
924 95
96 97 94 98
79 8834
92 9578 95 9714 934 954 84 94
Market St Ry lot Is sec A 1940 93 97 9534 98
1945 847 90 85 8712 87 88
48 59
87 8958 7312 864 6812 72
3712 48
72 7312 6712 72 60 6712 55 60
Mead Corp 68 A
9934 1004 96 9934 9412 984 88 947 78 9212 77 8978 84 874 76 77
9914 100
9672 9812 9812 100
Merldionale Elec 1st Is A_1957 84% 90
98 100
Metrop Edison 1st & ref 55 C'53 104 105 10212 105 10412 10512 10478 10514 105 10512 10514 105% 10434 10534 10534 10534 100% 10554 97 10284 99 102
84 8018
1968 991 102 100 101 10118 10314 10114 103 102 10432 10014 10234 10018 10114 10012 10134 9512 10132 89 101
87 94
1st g 41-is scr "O"
25 44
38 524 28 38
43 54
30 44
42 57 50 61
45 53
Metr Wat Sets & Dr Sc..-A950 70 75 6614 73 6334 7238 53 65
70 70 --------604 604 ----------------481 4838 Met-West Side El (Chic)42 1938 71% 77 --------73 7634 70% 707 687 71
32012 35 ii; -3-6
t4412 4412 .2
Ming Mill Mach Is with wart'56 75 754 --------70 7514 74 84% 68 81
6612 68
__ ____ ____ ____ -_-- -___ -_-- ---- ---- ____ ____ ____
Without warrants
Midvale St & Ord cons at 58'36 100%103 10012 103 10218 103 10214 10318 10214 1037 102 10338 10212 10414 10278 10414 98 10318 964 9938 95,8 100 854
96%1011_ 95 100 84
MU El Ry & Lt 1st & ref 58 B '61 994102,4 9978 10184 10114 103 102 10314 10212 10478 10318 10418 10314 10412 10353 1048 9712 104
1971 ---------------- -------- -------- 1035810414 103 10514 103,2 10414 104 10458 9778 104
9412 10058 93 9912 80
1st mtge gold 55
Montana Pow 1st 55 ser A-1943 103 10434 10318 10
10434 10534 104 10514 10412 10532 105 10512 10118 106
l)11 18 .12 1(
9414 100
97 10214 85
1962 99,2 103 99 10114 101 104 101 104 101 10312 10218 10212 1024 103 1024103 927 10234 8838 991 85 90
Deb 5s ser A
73
Montecatini Min & Agr—
1937 9112 9534 96 99 9778 10032 9734 10012 97 9972 94 997 934 97 894 9512 87 9512 6938 85 80 8532 6712
Deb 78 with warr
92 9514 9338 97 96 984 9614 9958 9634 99 9312 9912 93 9714 8958 098
Without warrants
74 851 79 8512 6672
83 95
Montreal Tram 1st & ref A 55'41 9812 10018 9914 100 99% 10132 100 10158 100 101
72
99%101 10014 10034 10034 10114 99 10034 8614 864 85 85
92 9438 --------95 96 934 94 93 93
Gen & ref a f 58 ter A___1955 9054 92
9252 93 --------9278927 ----------------60
1955
0312 94
Series 13
__
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____
3i77
8
0
8
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I955
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f
4
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Gen & ref
i
9638
9334
94
98
8378
78
77
72
60
-ils
I ii" -16i;
71 ii i23 al
id-i4 -ii2ii
liT
i- ----------
6 -1118 70 72%
i
8234 ii -i7
10ttIS&CO1St•f430
1939 7912 82 ii --ii2
i -/
Mortgage Bond Co1966
45 ser 2
1931 ------------------------------------------------70934i4
10-20 year
@FedFRASER