Full text of Commercial and Financial Chronicle : July 13, 1950, Vol. 172, No. 4924

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BUS. ADM.

ESTABLISHED IS39

UBRAKY

Tk a

<L

an

Chronicle

Financial

Re*. U. S. Pat. Office

Volume 172

New

Number 4924

Cents

30

Price

York, N. Y., Thursday, July 13, 1950

a

Cop}

EDITORIAL

Korean Lessons

As We See It
Asserting there is
The Korean

with Russia in foreseeable

plain ignorance to

affair has now gone jar enough
confirm beyond any question, and to ex¬

while past.

U. S.

before Pearl Harbor that

time

some

with

of his

one

we

in hand and

one

one

speak softly but

carry

has been

tion

Two feather

trious cousin Franklin

not remember

tion of°the

never

Franklin's

and

tactics,

forced at

(if he

once

ever

not

last

Asia, the Administra¬
a realistic and at

of

lack

was

Washington's

confidence

of

There

is

ability

to
the

with

a

up
Dr. Melchior

worshipped "Teddy."

to

Palyi

in the

"spontaneous uprising of local

glory or even credit upon any of us. Notwith¬
standing the disillusionment that came after
World War I, and despite the brutal behavior of

Soviets

sheer nuisance, the

trains
FEDERAL

INCOME

to

and

Hence

thors

offer

for a minor item in

A.

May

Geo. F. Sha.kan. Jr

behavior^

during World Wars I and II; this should at least furnis'-

helpful

disillusionment

regarding

widely-held

some

wartime investment fictions.
Our Entry Into Actual
As

periods

If they accomplish nothing but

initial

starting

States into

cost in American lives and dollars and
page

our

Military Conflict the Key Period

bases of

with

comparison

we

the actual entry

are

Continued

On page 11 we give the rates and schedules for
of the National Security Traders Association
Sept. 26-30 at the Cavalier Hotel, Virginia Beach, Va.

using the

the

of

Unite''

military conflict, in April, 1917, and at Pear]

20

CONVENTION?

from

factual

a

Russia's

patriots."

on

it

study of sectional
and overall mar-1
ket

from the Convention

held

Wilfred

5,000 miles

claim no part

Continued

the au-,!

deem

constructive 'to

to

25

be

to

widely used.

affected by their defeat. The
such reversals which they

accustomed

twist into moral victories.

GOING TO NSTA
PRESENT

are

|

evidently will

continue

Also, they were directly involved

prestige is not seriously

"friend" of democracy centered in the

ALL

would they risk everything

global strategy, and would they start it some

strange history which reflects little

FROM

it

Central European em¬

struggle for Berlin; in Korea, they

EXEMPT

in

finance,

and

try

far less serious

in the

pire,

back¬

to-period

an

ago.

of their

the||

including

differing period-

in

If the Russians gave
without a single shot their attempt
conquer Berlin,
a
thorn in the

flesh

/

a

matter, than the Berlin blockade was

two/fears

behavior

guide for o
present policy, ri

wits

expect
Soviets

life raft
pitfalls in the

emotional

its

for

torical
as

Actually, the Ko¬

showdown is

rean

heard of) the admoni¬

page

grasping

again

performance. Despite the manifest
way of using his¬

grounds in indus-

the visible future.

His illus¬

on

match

to

reason

no

conflict

armed

possibly does

Continued

is

break,
of past

about

with Moscow?

from their main base?

that great

confusion

and

Or could it be that what they

mirrored

the remainder of the world since the end of the
a

community, engulfed in a sea of worry
the
unexpected
Korean
out¬

The investment

leading

world's

the

rate, the Korean situation may be re¬
garded as but a consequence of long neglect of
precisely this type of policy. Our attitude toward
has

ket's

to adopt

\yorthy

nation.

At any

war

a series of articles on
significance of the stock mar¬
behavior during past wartime periods)

(This is the first of

partially honorable policy. But this country's almost
universal if short-lived scare, that the Korean upheaval
may mean war with Russia,
ip, no
tribute to our intelligence. The panic
on security markets and the rush on
commodity exchanges have mirrored
a
confusion in matters international

did believe in such

successor

unpredictable divergence between industry groups.

least

on

big stick.

a

shooting-wars shows: (1) great difficul¬

confronting the investor during initial stages; (2)
non-fulfillment of "War Baby" expectations, and (3)

ties

the facts and

world of national and international bandits was
to

actual entry into

is not possible because of U. S.-Russia antagonism.

After years of total bungling in

order?" What
ought to have been the deadly warning of this
epigram, evidently made little impression upon
the powers that be. It was not until Pearl Harbor
brought the universe down about our shoulders
that the almost total lack of correspondence be¬
tween our big talk and our picayune armament
struck the average man squarely between the
eyes.
President Theodore Roosevelt once re¬
marked that the way to comport oneself in this
dusters,

Study of past behavior of security prices at times of our

foreign policy. Looks for momentous financial con¬
from policy change, and contends genuine

peace

stop Hitler now?"

"With what?

own:

A..WILFRED MAY

By GEORGE F. SHASKAN JR., and

future, Dr. Palyi holds it is

assume

sequences

a

keen-minded editorial writer answered the then

persistent question: "Should

Stock Market Behavior

conflict

Russia might easily be pro¬
voked to war. Says chickens of Administration's China
policy are coming home to roost, and sees in announce¬
ment of all-out aid to Southeast Asia, a new departure in

emplify with disturbing clarity, the terrible
blundering with which the management of
our
foreign affairs has been cursed for a long

was

to expect an armed

no reason

to

It

Analysis of Wartime

By MELCHIOR PALYI

on

page

22

special
to be

State and,

TAXES

CITY OF

Providence, R. I.
2% Bonds
Due

July

Prices

1,
to

Funds,

1956-73

Municipal

Custodian

Franklin

ftA»0# Branches

inc.

^

A Mutual Fund

yield

COMMON STOCK FUND

1.35%—2.10%

across

Monthly Commercial Letter

PREFERRED STOCK FUND
when,

and

as

if

issued

White,Weld&Co.

THE NATIONAL CITY BANK

INCOME (BALANCED) FUND
Prospectus

York 5

FRANKLIN
64 Wall

Chicago

Boston

upon request

Bond Department

BOND FUND

UTILITIES FUND

40 Wall Street, New

Bonds

Canada

on

OF NEW YORK

request

^Canadian Bank
*$(llomm&ice
Head

DISTRIBUTORS, Inc.
Street, New York 5

Bond Dept.

Teletype: NY 1-708

Office: Toronto

JSetv York Agency:
Seattle

Ufie

CHASE

THE

NATIONAL BANK
OF

THE

CITY OF NEW YORK

20 Exchange PL

Portland, Ore. San Francisco

Los Angeles

CANADIAN

Bond Fund
OF

Central Vermont

Stocks and

Underwriters and

CANADIAN
BONDS & STOCKS

Public Service Co.
COMMON

Distributors of Municipal

BONDS

and

BOSTON

Analysis

Corporate Securities
Prospectui from authorized dealers

or

Goodbody

OTIS & CO.
VANCE, SANDERS & CO.
Ill

Established

BOSTON
New York

Grporaotoh

1899

MEMBERS

NEW YORK STOCK

40

Angeles




115 BROADWAY

New York

Chicago

Cincinnati

Columbus

1

Denver
Toledo

Dallas
Buffalo

105 W. ADAMS

Members New

Exchange Place, New York 5, N. Y.

other

111

ST.

CHICAGO

Teletype NY 1-702-3

WHitehall 4-8161

request

Boston

Yorff,Stock Exchange

Principal Exchangee

Broadway, N. Y. 6

WOrth 4-6000
NEW YORK

upon

IRA HAUPT&CO.
and

EXCH;

CLEVELAND
Chicago

Los

Co.

ESTABLISHED 1891

(Incorporated)

Devonshire Street

Doxmiox Securities

Teletype NY 1-2708

Telephone:

Enterprise 1820

2

The Commercial and Financial Chronicle

(158)

The

Leading Banks and
Trust Companies

Security I Like Best

A continuous forum in

different

participate and give their

a

group

on

(Warner

New York Hanseatic

The

Corporation

to

Teletype NY

BArclay 7-5660

1-583

the

c o m

1

p

of

not

cast

Specialists in

and

out¬

Swasey
of

one

is

Members

Exchange
York Curb Exchange

New York Stock

chine

BROADWAY, NEW YORK 5

rienced

a

the

boom

the

war,

markets

&

Churchill-Downs Inc.

in

the

year.

Kentucky Home Life Bldg.

77c

months

of

for

new

now

Bell Tele. LS 186

last

J

placement
been

for

of

'

this

and

J.

has

industry

since

the

production of automatic transmis-

CONTROL
on

Request

" '

their

order

new

*

♦

148 State St., Boston 9, Mass.
7-0425

:

Teletype

and

BS 259

pects

^

N. Y. Telephone WOrth 4-5000

Central

Illinois

Pub.

^

Serv.

National Gas & Oil
National Utilities

Kentucky Utilities
»

r\t

production

of

Toledo Edison

brightest.

models

of

pin drafting

V0GELL & CO., Inc.
37

Wall Street, New York 5

WHitehall 4-2530

Teletype NY 1-3568

mQr®

machines

{
t

recently

very

machines

released

were

a

it

three

The

release

Mexican

Railways

BONDS

of

this

Of

-

no

small

6

Swasey also produces an earthmoving grading machine under

the

Bought—Sold—Quoted

of

name

Gradall.

This

road

steel

Analysis

on

request

outstanding

ZIPPIN & COMPANY
208 South La Salle St., Chicago 4
Tele. RAndolph 6-4696




Tel. CG 451

aQ

be

made in

as-

sembly of this equipment.
No
and

dividend

only

a

paid in 1949
dividend of 25

was

token

Cyanamid

chemical

ducing

is

well-accepted

procjUcts

pro-

J. B. Mogaire & Co., Inc.

pro-

a

company

Members Nat'i Assn. of securities Dealers ino.

chemical

for

agriculture and inbiologicals and pharmaceuticals, dyesLuffs and intermediates, fumigants and insecticides,

—

dressing

chciriicsls

have

risen

of

of

from

A

Hartford, Conn.

that

the

Enterprise 6800

Open End Phone to New York Canal

didn't

exist

in

for example, peni-

as,

Vj A. i. i.

AX liJliL

.

Atlantic

6-te 13

11 Vi

City Electric

Harshaw Chemical

1st

cillin, aureomycin, UJ
VV/1UJ
synthetic horV4L4A

142

Enterprise 2904

snd

Philadelphia Electric Common

very large
being done

business is

products

Tele, bs

Portland, Me.

approxi¬

over

1949).

—--

plastics. Net

26.3%

of

volume

,

75 Federal St., Boston 10, Mass.

mately $76,500,000 in 1939 to over
$237,000,000 in 1949, (and the first
quarter of 1950 shows an increase
sales

—

Tel. HUbbard 2-5500

dustry,

mingrsl

?

Allan Wood Steel Com. & Pfd.
Penna. Power &

Philadelphia

Light Common

Transportation Co.

m0nes, resins and plastics.
And
this progress is due to an intelli-

■«

gent aggressive

Mathieson Hydro Carbon Chemical

velopment

research

Earnings

common

de-

® Edison Common

•

#

share

$10,000,000 in
$5.28

were

in

194,9

per

($6.15

if

equity in undistributed income of
all companies
is

Toledo Edison Common

'.*

program for which the

company spent over

1949.

and

owned

included)

while

50%

in

company

of $2.78 in

undistributed

included).

Members

123

the

companies owned

Henry B. Warner & Co., Inc.
Phila.-Balto.

Stock

less

or

the

South Broad St.,

Phila. Telephone

Bell System Teletype

PEnnypacker 5-2857
New

York

Exchange

Phila. 9, Pa.
PH 771

City Tel.: BOwling Green 9-4818

income

50%

Estimates

or

for

less
1950

sound

a

L

Twt

in

the

at

know

it

and

how

is

events

shares of the company's preferred
stocks will have been converted

into
The

by

comrnon
common

^e year-end.

stock at about 60

is

t i

v

*Lea Fabrics
"Winters & Crampton

selling at

"Plywood inc.

in

"Douglas & Lomason

conservatively caoitalized and
is in excellent financial condition
1S

in

the

the

with workin§ capital in

rate

of

and trucks,
i t

v

in

finance purchases

"Copeland Refriger'n

excess of

at Dec. 31, 1949.

nost

American Cyanamid $3.50

capital

annual

a c

TRADING MARKETS

many

relative to such ratios for other
chemicai complies. The company

i

automobile

cars

forecast

to

?fif eaS

pre-

on

request

Th"

"g at. 103' a

^
3.4%. The
£nXe*^lbl^ mt? fc0m^0nf
f,$7,2 per s,hare (i e*'
ab°ut
^n4 fhaf+s °J
stock) On

TV

*Information

aPuPear^

AETNA SECURITIES
Corporation
111 Broadway, New York 5
WOrth

4-6400

Tele. N. Y.

1-2494

B,,market fls1^

of/esl thaf ?.% ™ tbe event oif

and

Perhaps it

buildings.

paradoxical but to

me

sounds

these con-'

ditions indicate the probability of
correction. I have, therefore, selected
Best

as

for

"The

the

Security I Like
Future," a security

today
combines
possibilities with

enhancedefensive

further decline in the price of
the commYn ,stoc\A (. qV" tVe
ioVim?iP ^toc.^
^ a 2o A
? o'Q \ e Ser^es
at.99J
pTe 0

a rise ot

iuu/0

in

—
American Cyanamid
$3.50 preferred, Series B.
It is a

compromise, I admit, but I think
investor and

should

speculator alike

compromise.

Even

the

most

aggressive speculator should

keen

a

grade

protective

bonds

and

reserve

every

of

high
investor

tne

JT comma^ from 60 to
would cause the Series B
Tck ^ se? a aPV!d
' Tap
J
ga}n of
tS?
°n
C?S

Over-the-Counter

Quotation Services
for 37 Years

,

+

the

soon

Quoted

—

'

?'

„

^rices^inter

industry,

0f credit to

and it is expected that further in-

will

Sold

a Pi'ice-to-probable1950-earnings-ratio that is low

the

qualities

creases

—

automobiles,
television
sets,'
appliances of all kinds and homes a,

income proManufacturing production
has been stepped up considerably

ducers.

American

J01nve"i°n. privdege' thifi pre"
ferr«fd ®tock sh,?uld be ^°rt,h +cJose
to $11,00 per sbar,e so that }h<:T?

that

pany's

Bought

iong interruption.

investment basis, without the

ment

com-

Common

short

a

thp

and will soon be

of the

°activRv

spectacle of capacity operations in
•

aftsr

resumes

gressive

J™/we liM

machinery has been well received
one

,

of

•

importance, Warner

,

no

use

the

to

or

building industry, heavy construetion of plant and facilities by all
industry and rapidly expanding

anticipating the

machine

h.T

unprecedented

man-

trade.

.

respected
i*oweYer> w? an;

nearly 10,000,000

the

agement has complete confidence
in
this product and the entire
textile industry is

or

VJ.A4J.ll,)

'* ^
.

readjustment

war

production

yet too early to expect

is

performance report.

continues

late

bvyrecent

•.

of California

opportunity

run as
high as $10 per share
although it is too early to formu¬

°}

nnH

stock

one

have

Pb-nntt bl
participating
l^s been

the

Cleveland Worsted Mills Co. However,

gen-

,

stocks

0

the

to

d

and

is

secUritv

kotpjA

some-

and

trend

of

I

j

branch offices

our

that

for attractive profits if the rise

equity

industrial

JSS5S

based upon the principle of the
model made by Sulzer Bros.,
Ltd.,
of Switzerland. This machine has.

time

of market

reported earnings

A

having been made in January of
this year.
Of major importance* is
the
high-speed loom which
is

in

the
-

wires to

FILTROL CO.

impossible

•

securities

first quarter of 1950 against $1.51
last year,
($3.03 versus $1.51 if

.f1!

unusual

Mills has been in good production
for some time with first deliveries

successfully
Swasey plant for

-

and

£ 'JT

*

the

I have chosen

1939, such

ignore
.

ls weli round-

for carding yarns are being marketed
and
a
rayon
converter
which was developed by Pacific

Warner &

|

company

:

Several

been operating

•

&^owtJl

it is here that the pros-

appear

to

were

NY 1-1557

La.-Birmingham, Ala.

uai-

tj.vyi.iu

rev(Trsal

in

.

5 rtehxtaehemCa0chf„afbuhsL
ness

:

the

Con-

industry is
1 CI e 3 1
lOT

Swasey(js"best

rM»n/4nnfinn

lathes, etc., the company has begun
to
enjoy an income from
products that tend to lead to im-

^Rat/mom?£ Co.
Tel. CA.

fho

for

$3.50

Preferred, Series B)

grea..;' du
Pont is it. The

/\
-Pnr»

Cyanamid

Exchange
Exchange

St., New York 4, N. Y.

HAnover 2-0700

that should o£(er substantia, pr0_
tection Jn the eyent Qf

of

^an be caDed

reported
index at a new

While Warner &
nnum
known

Co.,

one company

Association

high.
•

en-

gines requires new machines. Recently the National Machine Tool
Builders

&

Stock

imporant question of timing, ray selection of
The Security I Like
Best for the
Future" would
be easy. The
choice would
be
du
F°nt de NemoursR any

mass

sions and higher compression

Levy

York

^ral price level and the

has

for

I

1

re-

part

great

a

J.

New

.

If

"

been

equipment

new

automobile

U. S. THERMO

vertible

■

sharp rise in busi-

very

Some

ness.

all

quarter

(American

the first of this year, the
machine tool industry has expea

LEVY

Exchange, New York City

products on which they
diversifying their output.
v

Robert

Members

addition, the company
heavy development expense

rienced

Analysis

Partner,

in

In

are

of

sales
ROBERT J.

1949.

approxi¬

a

synthetic resins and

a

for

resulted

of

share

per

of

plants

reasonable risk.

a

Since

LOUISVILLE 2, KENTUCKY

Long Distance 238-9

six

operations

for

Incorporated
1st Floor.

because

the

having
whose

sound,

management,

cspitfll £5din, if willing to sssuitig

became

F.
111.

ehg tnincodedul i,a2aab i nc1
mi be n ed

common stock might well reward
the investor with a worthwnile

WcirnGr

situation

circumstances

mately
had

of

cssg

closed

first

deficit

BANKERS BOND

the

that

These

Common

tho

troublesome

strike

Girdler Corporation

in

Swasey

moTe

Capital Stock

aggressive

sharp decline in busi-

a

3nd

ness

Common

fundamentally

is

flooded with surplus matools.
This, of course, re-

suited

American Air Filter Co.

I

long history. It wouid appear that here is a company that

and

25 Broad

New Orleans,

maintain

m

its

in

York Curb

New

e^ged bonds. Since this series of
articles does not call for the selection

cycle beginning for this
company that seems to be the best

Morten A. Cayne

tremendous

following

was

!L 1Siojk i!"

in¬

York Stock

M"m.bers

arJced between equities and gilt-

10

,

Memoer* hew

Mobile, Ala.

stock.

common

business

expe-

chine

capitalization
...

..

Steiner, Rouse & Co!

Direct

snouiu

n
."
50% qf the 1946 high witn a Sf
future

became

he

Sole

high at approximately 25% when
only a 50 cent dividend was paid.

the

C.
Chicago,

Co.,

Bought—Sold—Quoted

ais-

of $9.54

°YZ lhe £aCt toat
Portfolio,
sold

tools.

this

&

(Page 22)

book value of approximately

a

m a-

dustry

Tel. REctor 2-7815

assets

1946 the stock of this company

ur-

During
war

120

statement

Currently selling around

most

of

e r s

Vice-President,

Childs

current

807,275 shares of

important

PONNELL & CO.

Con-

Partner,
Robert
J.
Co., New York City,

sistant

of 1950.

year

the

manufact

payments

annual

net

~

nation's

New

the

$14.80.

Warner &

Since 1917

dividend

&

Louisiana Securities

B—Robert

strong financial position

a

closed

look.

Rights & Scrip

in

since

and

future

will definitely jus¬

further

was

brighter

a

Levy,

$3.50

Series

(Page 2)

As of Dec. 31,1949, the company

fore¬

current

J..

Pfd.,

S. Treasury Z'As of June 15,
1962/59—Donald L. Moffat, As¬

stances

which

Cyanamid

vertible

share. .First-half

per

during this

reflecting circum

American

Levy

tify

tely

e

cents

a

yet,

as

25

Jf continuance

at this time

is

market

Recently

earnings were not released; however, it is reported that business

Co., appears to me

be most attractive

since

York 5

Co.)

Swasey

stock o£ the War-

common

& Swasey

ner

1920

Established

&

paid in 1948.

was

the
company
declared
its first
dividend of 1950 payable July 27

Cayne & Co., Cleveland, Ohio

request

120 Broadway, New

cents

CAYNE

MORTON A.

Comparison

and

Morton

73rd Consecutive Quarterly

Available

Thursday, July 13, lP^O

Alabama &

Swasey Company—
A. Cayne, Cayne & Co.,
Cleveland, Ohio. (Page 2)

particular security.

a

Participants and

Their Selections
Warner

for favoring

reasons

.

.

This Week's
Forum

of experts
and advisory field from all sections of the country

in the investment

of New York

which, each week,

.

•

pf,T °\ 10d:. lbe Vre*en} lnsAta"
pility of markets emphasizes the
importance to investors of select!ng a good security with excellent
loPg rarJSei possibilities and yet
T
SUY defensive advantages as
preferred stock should afford,
Continued on page 22

National Quotation Bureau
Incorporated
Established

46 Front Street
CHICAGO

1913

New York
SAN

4, N.Y.

FRANCISCO

J

Volume 172

Number 4924

.

.

.

The Commercial and Financial Chronicle

(159)

United States Economy Will Expand

INDEX
f

In

dangerous inflationary pressures, and
tends business cycle is not inevitable.

address

an

on

the

at

Seagram

International Business Conference
Dinner

in

Montreal,

July

3,

Leon

man

of

Canada,

Presi¬

dent Tx

Keyserling,

Chair¬

Council

i

s e r

rate

ex-

is

spite the bur¬

than

dens

the

imposed
pres¬

1949

in

billion

the

Leon H.

Keyserling

situa¬

on

at

dollars,

at

our

vital than

more

before that the United States

Further,

a

previous

any

solid

time before the

business

tionship

at

role

in

world

af-

necessary to
the free
world

to

freedom

is

economic

compatible

stability

and se¬
curity, and to demonstrate to the
enslaved
that

in

rable

of

the

world

fiction

is

in¬

the

dogma that re¬
depressions are insepa¬

current

We

portions
monstrous

a

volved

from

in

longer

type of economy.

our

the

United

afford

States

to

can

tolerate

no

with

equanimity even those moderate
departures from maximum em¬
ployment and production which
were

the

as
a

once

erroneously

'natural'

dynamic

regarded

counterpart

power

learned since the

the

during

financial

The

the

infla¬
1948.

we

is

ex¬

among various groups
and points of view, despite super¬
ficial dsagreement on
minor or

peripheral

points.

United

together-,

When

States

have

we

and advancement of the economic

which

both for

Present

provides

support

Economic

even

to

Strength

show

the

modern

the

war

business

ening

whole

world

before

never

in

industrial

United

great

be checked; we
that they must

The

that

note

not

history of
following a

States,
and

combination

a

circumstances

so

of

threat¬

those of early 1949, did
there occur so rapid, vigorous, and
sustained a recovery after so short
as

and limited
no

downturn.

a

accident;
for

reasons

there
it

in

were

the

This

was

concrete

structure

of

the United States economy and in
the content of private and public

policy.

The best proof that these

concrete
even

of

the

reasons

existed

is

that,

curing the darker moments
those who had

1949,

situation

most

analyzed
carefully and

strength

that

of

the

is

but

United

States

the

prelude

Mr.

Keyserling

There
our

frontiers

is

to

ductivity
has

growth.

our

situation.

Our pro¬

man-hour

per

averaged

of 2V2 %

of

nothing 'stagnant' about

economic

worked

annual

during the last few

Will

Expand

Despite

Rise in Interest Rate

on

New

Survey

York

Secretary Snyder Reports

United

U./ S. Interest in Kor^a

Saulnier Analyzes Mortgage

Companies

Gold

years,

in

science

HAnover

•'

BO 9-5133




-

We

Bank

See

and

Business

It

6

1-3370

AIRCRAFT EQUIPMENT

(Editorial)

Insurance

Cover

Stocks

MANUFACTURERS

12

Foote Bros. Gear & Machine

Man's Bookshelf

...

21

._

Securities

:

Liberty Products

18

Texas
10

'No'

to

Schuman

8

Engineering & Mfg.

Continental Aviation & Eng.
Lear Inc.

Plan"

From Washington

Ahead of the

13

News—Carlisle Bargeron____

Indications of Business Activity __l

NSTA

6
29

Funds

16

Notes

Singer, Bean
MACKIE, Inc.

&

11

HAnover 2-0270

News About Banks

Bankers.

and

40

Exchange PI., N. Y. 5

15

Teletype NY 1-1825 & NY

Observations—A.
Our

Wilfred

May___

Reporter's Report

Our Reporter

I

35

Governments

on

1-1826

*

'

___•

Prospective

Security

14

Offerings

33

...

Utility Securities...

TRADING MARKETS

'

35

Securities

Central

21

should

The Security I Like Best
The State of Trade and Industry

Soya Co., Inc.

2

5

augment this rate of pro¬
ductivity increase in the years im¬

mediately ahead.
have

we

force,

a

quarters

Added

to

of

a

by

about

million

a

Securities

three-

on

Now

in

year,

page

Members

New

York

*Prospectus Available

(Walter Whyte

Says)

2-8200

*

See

-

William A.FuIIer& Co.

36

Members

article

on

cover

of Midwest

209 S. La Salle

page.

18

Published

Twice

Weekly

1

Drapers'

COMMERCIAL

U.

S.

B.

Park

DANA

Reentered

Office

COMPANY,

Publishers

to

25,

York,

8,

Place, New York 8, N. Y.
2-9570

E.

C.,

Eng.

by William B. Dana
Company
'

1950

1942,
N.

second-class

as

at

Y.,

the

under

post

the

matter

office
Act

Trading Markets

Febru¬

at

of

SEIBERT, Editor & Publisher

New

March

Thursday

plete

issue)

SEIBERT, President

8.

Pan-American

ir

'Dominion

of

Union,
Canada,

Countries,

$35.00

per

$38.00

$42.00 per

year;

per

of

statistical

issue

corporation
ritv

news.

news

—

and

Monday

every

Other

ad-

(com¬

market

quotation

bank

Bank

clearings,

news,

Ncte—On

the
Other

Chicago

Offices:

3,

111.

135

South

(Telephone:

La

Salle

State

St.,

0613);

Record

—

Monthly,

(Foreign postage extra.)

account

of

the

fluctuations

Lynchburg, Va. 6

in

of exchange, remittances for for¬
subscriptions and advertisements must

made

In

New

'

Scott, Horner &.
Mason, Inc.

rate

eign

be

—★—

year.

Publications

Quotation

$25.00 per year.

etc.).

Worcester

and

Rich., Fred. & Pot. D. 0.

year.

1950

(general

and

Natural Gas Co.
Dan River Mills

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

Other

Every

Alabama-Tennessee

Subscription Rates

WILLIAM D. RIGGS, Business
Manager

rertising

Tele. CG 146-V

Smith.

&

1879.

9576

Thursday, July 13,

London,

Exchange

'Illllllllllllllllllllllllllllllllllllllllllir
Copyright

ary

WILLIAM

Edwards

and

CHRONICLE
Patent

Gardens,

Stock

Street-Chicago 4

Tel. DEarborn 2-5600

records,

1-5

Schenectady

26

Exchange

50 Congress Street, Boston 8

-

*Spencer Chemical Co.

to

REctor

Curb

Koehring Co.

29

Washington and You

FINANCIAL

and Industrial

20

.

Registration

Tomorrow's Markets

to the oper¬
b^ter machines. And to

Continued

Salesman's Corner

this,

skilled and eager labor

growing

Hubbard

Glens Falls

Teletype NY

36

,

nology, quite apart from the pos¬
sibility of entirely novel applica¬
tions
of
energy
to
production,

2-4300

Chicago

Broadway, New York

28

Regular Featurea
As

tph
-

Incorporated

Bank

Securities

Teletype—NY

Albany

by

Settlements--.

tech¬

and

Spencer Trask & Co.
4

Quoted

—

J.F. Reilly & Co.
61

Movements Reviewed

World Bank Grants Loan to Turkey

offerings of

Exchange

Sold

—

19
and

for International

WILLIAM DANA

Stock

19

Lending by Life Insurance

..

Production, Prices

OERBERT D.

York

Bought
Monopoly

on

States Oil Investment Reaches
$30 Billion,

Railroad

vigorous

Street, New York

U. S. Sugar

12
12

Report Joseph E. Pogue and Frederick Coqueron
R. J.

preferred STOCKS

New

Higgins, Inc.

14

25

Broad

5

9

17

plant and equipment and constant
advances

High Grade Public Utility

Members

Jack & Heintz

Maurice J. Tobin Predicts No More
Major Depressions

Reg.

25

3

Slight

Results of Fiscal Year 1950

on

land c/o

interested in

Reveals

Merrill Foundation Finances
Harvard Study

The
are

Alegre

Events,

Business Loans

Robin L. Winkler Discusses Former

Public

of

We

World

.

of

this is higher than the aver¬
before the war. Large capital
investment in the most modern

ation

a

Punta

and

ing strength

the advent of

Remington Arms

17

Francis Adams Truslow Explains
Investment Function

more manpower

and

STREET, NEW YORK

9

_

Keyserling

Reserve

age

anp'y

foretold

Economy

Leon

Bank

increase

an

to

out-of-this-world

at an

8

Chicken Itself?—Gail F. Moulton

Cuts—Roger W. Babson.;

Einzig—"Britain's

objectively detected the underly¬
of the situation

States

Says

Mutual

last

WALL

8
or

current

"We have by no means reached

the

for

down

Telephone: WHitehall 4-6551

_

the

United

progress,

obsolete

aims

ccnrie

We'll still buy

7

Stern

Dealer-Broker Investment Recommendations

said:

can

'6

Coming Events in the Investment Field__

Further

Progress
To

you

bump?

Sugar

Canadian

aspirations."

Prelude

high-flying

Did

a

5

national security and

our

national

our

ment

also

Service

stand

to

we

strength

with

in

do so; and we will
stand together for the protection

have

policy. We have learned

Postal

underlying unity and capacity for

the

ycur

have

price!

Increase

...

Depression—Courtney C. Brown

Industry—Egg

agreement

further

should

4

—Bradbury K. Thurlow

government's

position

national tensions has revealed the

economy

learned

Thus

Market Bridge Is Being
Built—Edward W.

Petroleum

strong and
improving.
heightening of inter¬

the business world and in govern¬

checked.

and

stock?

earth

__

Period

you

The Market Outlook and Inflation
Hedges

recent

quickly checked and reversed by
prompt and intelligent action in

be

*

-

Did
that

Securities Analysis

of

is that

war

The

economy.

tremely

these moderate departures can be

only that they

Stock

moving

are

better balanced rela¬

a

than

general

The great¬

economy.

est economic lesson which

have

4

Market?—Rodger W: Bridwell.

Techniques for Avoiding

con¬

price stability has not
strength," the President's eco¬ been acheived, but
inflationary
nomic adviser asserted.
"This is trends are
spotty and are not yet
necesary not only to support the of
large current significance. In¬
heavy but inescapable obligations dustrial peace has been cemented
which are imposed upon us
by in strategic 'leadersnip' sectors of

with

Factors in

What's Ahead for Stock

Federal

and

Absolute

that

MOON!

i

Capital Gains Holding
Revenue—Elisha M. Friedman

any

tionary period of 1947 and

is .equally

DESTINATION

Social

Fundamen¬

war.

investment

buying

upward in

immeas¬

than

constantly expand its productivity

demonstrate

and

footing
time since

and

It

and

Economic

prosperity

economy maintain its stability and

historic

Exchange—Its

stable

more

more

sumer

"It has become

our

Money Market

and

annual

an

of the war, and

end

tal

tion.

"fairs.

Stock

Shorten

econ¬

peak quarter of 1948.

prices).

now

urably

interna¬

ever

York

—William W. Townsend

current

output is about $269 billion in
1949 prices ($270 billion in cur¬

rent

tional

$262

in

prospe ro u s

ent

The

At present, the annual rate of to¬

under

the

the

United States

tal

conditions de¬

by

New

Cover

99

about

con¬

p a n d

illustrate

of the

1939,

econ¬

to

tinue

to

total output of goods and services
was
about $152 billion
in 1929,
about $160 billion in

ex¬

will

omy

to

"Measured

pressed
the
view that the
nation's

facts

ol

s,

movement

a

Cover

Lessons—Melchior Palyi

omy:

Economic Adv

The

Keyserling next cited these

power

uxixaii s

Korean

con¬

heights."

Mr.

on

of

and

recovery

AND COMPANY

—George F. Shaskan, Jr., and A. Wilfred May

Functions—Edward C. Graynew

Page

Analysis of Wartime Stock Market Behavior

President's chief economic adviser
predicts 25% rise in living
standards within ne::t decade. Says current hostilities in Korea

bring

LicHTfnsTcm

"

Articlea and Newa

Despite World Events: Keyserling
need not

3

York

funds.

Tele.

LY

83

ID

33

.illlllllllllllllllllllllllHllllllllllllllUi

,

4

The Commercial and Financial Chronicle

(160)

ketability of

The New Yoik Stock Exchange—

ize, clear to
Both

a

Executive Vice-President, New York Stock

The Exchange,

because it is an

Exchange

and operation of the New York
Mr. Gray asserts its untrammelled existence
our capitalistic free enterprise system.
Stresses

its list.

on

is essential to

of

claim it provides an

obtaining capital for increased employment of individ¬
industry and points out necessity of having free mar¬

stressing significance of the

barometer

a

ing

provide liquidJy for investments and for registering
of securities. Reviews tax situation as it affects

three

be

to

hence.

Such markets

securities.

the New York

as

Stock Exchange can

exist only in
capitalistic country. You find
that wherever any other form of
political organization is set up,
a

The New York Stock Exchange

association

unincorporated

of

1,375 members, many of whom
are
partners in some
600-odd
member firms.

partners. Part¬
who

ners

are

riot

members

are

allied
of

members

the

Exchange.
member

A

facilities

first

the

of

one

free

is

eliminated

to

markets.

be

This

of
Member has happened time and again in
Firms administers the policies and countries that tried socialism or
rules concerning the conduct of communism,
because
either of
business by member firms includ¬ those forms of government car¬
ing financial control of securities ries a restriction of freedom.
and the segregation of customers.
To return to our consideration
Mr. Coyle, Director of that De¬
of marketability, let's take real
partment, is scheduled, as you estate as an example. If you have
know, to discuss his Department tried to buy a home or sell one,
with you next week.
:
you found that it takes a lot of
Our Department of Floor Pro¬ time and a lot of trouble. In the

3,700

are

change.
The

In those firms

there

preparation of the applications of
companies to have their securities
admitted to trading on the Ex¬
Department

.

can

the

go on

and

floor

the

ness;

al¬
A

cannot.

member is
titled

Edward C. Gray

have

to

members do not have that right;
they are, however, subject to the
same discipline as may, if neces¬

by the Exchange

sary, be applied
to a member.

Member firms have

1,600 offices

in 380 cities in the United States.
Members elect

Exchange.

policies of the

The Board of Govern¬

third of

ors—a

of gov¬

board

a

who set the

ernors

which

elected

is

each year

from the members and
allied members of the Exchangedetermines the rules and policies
of the
ses

Exchange and, also, posses¬

disciplinary authority of

the

the

Exchange. The Exchange is
self-governing, self-administering,
and self-disciplined.
The administration of the poli¬
cies of the Exchange rests in the
President and his staff.

The Ex¬

change and its affiliated com¬
panies have some 1,100 employees,
420 of whom work on the trading
floor. The Exchange operates the
entire block from

Street

Broad

Wall

from

and

New

to

Street

to

'

of

administrative

the

floor

de¬

when

Mr.

George F.

want to know
if the title is clear.
You may be
you

obliged to go to

lawyer's office

a

several times before the purchase
is cleared satisfactorily. Converse¬

July 24, takes care of the
consummation, by receipt and de¬
livery of securities and cash, of
transactions on the floor, is the
Stock

office

is true

the sales

side.

you on

you

and

sell your

stock.

To

ceeds.

the maintenance of

from

By and large, the Board of Gov¬
ernors

is set up somewhat like the

board

of

tion.

directors of

The

staff of

corpora¬

similar

is

to

corporation, which

a

the

ducts

staff

a

poration

operations
under

the

of

the
con¬

the

cor¬

directors

of

the board. The President, is the
directing head of the organization
personnel.

The

Exchange is a two-way
auction market, by that, I mean,
sellers
compete against sellers,
buyers compete against buyers.
The

buyers and sellers

the floor by the mem¬
the Exchange acting as

on

of

bers

are repre¬

ment, is to discuss its operations
with you later on in the course.

is

as

in

auction. The Exchange
"secondary" market. The

any

a

"primary" market, of course, is
the initial sale of the securities

sibility,
For

us

is

function

buildings.

In

few minutes

a

know the price. In three days
have a check for the pro¬

Company, which publishes trans¬
actions on the ticker tape, and the
Building Company, in charge of
our

the

on

You go to a broker's
give him an order to

Exchange.

you

the New York Quotation

on

sale of securities listed

Clearing, which clears stocks and
money;

same

Now, let's look at the purchase
or

Clearing Corporation. In¬
cidentally, the Exchange has three
subsidiary corporations, the Stock

their agents. The highest bid and
the lowest offer have the floor,

is in

buying, you are in¬
having the property

in

surveyed, and

ly, the

charge of stock
listings, and I understand Mr.
West, Director of that Depart¬
partments

event you are

terested

Muller, Vice-President, addresses

sented

Exchange Place.
One

about

more

Allied

rates.

member

at

the

on

A
subsidiary company of the
Exchange, which you will hear

en¬

business

s

done

name implies, ad¬
rules and policies

relating to trading
of the Exchange.

member

lies

h i

cedure, as its
ministers the

busi¬

transact

important respon¬

let's

moment,

briefly

deviate

I would

theme.

our

the

like to

for

need

in¬

the productive capacity
Industry's labor force
increasing, in the form of new

creasing

of industry.

is

workers, at the
thousand

a

rate

of

In

is
do

700-odd

profitable employment they seek,
industry's
capacity
to
produce
must increase, and the enabling
capital must come from new sav¬
ings and new funds.
Tax Policies Drying Up Venture

Capital
It is, I think, widely recognized

it;

John Q. Public.

don't

unable to

We

borrow

it; we hoard it;
gamble
it;
we
it,
but

we

with
lose

we

it;

spend

from

should do it

In

because he

or

a

did it

similar situation.

1934, for fexample, the gen¬
who

tleman

in

was

the

White

House, and who, if you recall,
stayed there quite a little while,
sold the idea that if the peo¬

was

one

ple had

more money they would
spend more money. Well, maybe
they
would
and
maybe
they

only

wouldn't. But

to

an¬

.

to

way

eventually he raised
price of gold and we shortly
found
ourselves
presented
with

get rid of it is

by

the

reversing

the processes

about

by

ever

which

it

created.

was

There

tant

what

of

country

Townsend

W.

W.

what you can

The

our

than
of our
doing with

economy

people

actually

are

monetized

was

into

banking system without any
offsetting earning assets. That is

million

150

That

of the
gold
history of the

the

in

the

the

to

outcome

three-fourths

mined

world.

isn't

anything
more
impor¬

their money, what kind of money
they have to do it, and how much
of it they have.
The

interesting
part
of
our
bank-figures
analysis
is
this:
Those figures are released every
the

of

as

preceding

do with gold.

public hadn't been interest¬

in

ed

spending the money they
they didn't care about the
money, but the bankers were

had and
new

confronted

with

mendous flood
which
and

perfectly

a

tre¬

of deposits against

they had

no

they actually

earning assets
tried to invest

that gold,
That
same

situation

as

exactly the

was

it would be if there"

were

Wednesday, and they are facts of
They involve no assump¬
tions whatever.
They constitute
a
preview of the statistics that
will be published by the various
corporations of the country in a

seller

few weeks

posit the gold in the bank in the

record.

to

me

that I

am

I

but

few months hence.

or a

would

It

for

be

difficult

a

thing

the implication

escape

economic forecaster,

an

despise

the

word,

"fore¬

caster."

Forecasting
implies a
prescience, of which we have ex¬

actly nothing.
possessors

were

We

are

merely the

of advance information.

much embarrassed by

very

Those

chines

past, have been a major source
of equity capital for industry, are
no
longer able to perform their

not

may

other, and the

hand

the

large incomes and
savings who, in the

The economist is
predict what he may or
do, merely because he

the last time in

th^ money
doesn'ty disap¬
pear. Impasses

policies
tending to dry up the tradi¬
tional sources of venture capital.
are

substantial

there

we

lend

money.

or

ours

of

that

outcome

of

election.

If

opportunity to
voting ma¬
quick look at
the figures before the tellers got
there, they wouldn't have been
they
run

had

had

the

an

around behind the
and

take

a

embarrassed.
An

bank

one

island

were

of

Ber¬

boats.

no

If

they tried to buy something with
that gold it would be out of the
bank about two hours because the

would

afternoon.
in

1934

run

around

and

de¬

However, the bankers
they were going
invest that gold, but

decided

to
try to
since their investments themselves

created money,

the gold remained
overlay, and when the trans¬
were
over, it was
still

as an

actions
there.
That

in

was

one

which it

public
and

was

was

of those instances

assumed that the

going to do something
opposite.

it did the

Just to carry the historical pic¬
ture

little

a

call in 1946
there

were

excess

farther,
1947

or

$6

in

re¬

found that

billion

reserves

Reserve banks.

you may

we

the

worth

of

Federal

All that amount¬

supervises

the

provides, corporations would find

after taxes,

their

department

in point is
for a week ed to was excess till cash. The
they
didn't
predictions bankers
wanttt to
a prominent financial
based on a perfectly plausible as¬ bother any longer with the com¬
editor,
"These
people
(the sumption—that the public is going petition for the relatively scarce
wealthy) are less interested in to rush to buy scarce goods, and securities. Gold had not produced
corporate stocks because the net
(the wish being father to the prosperity but its impact on in¬

it very difficult to be able to sell

That

the risks involved."

of
*A lecture

first in

a

Securities

given 9*1 July 10, 1950, the

series

of

Markets

\1

on

and

the

New

Operations,
sponsored jointly by the New York Se¬
curities Industry and the University of
Vermont's
Department' of Commerce &
Economics.

company.

The

York

their

a

the

Exchange is

economic

are

about

vital part of

Without the

country.

securities

Anyone
There

a

machinery

to

purchasing

the
a

of

the

market

it

public.

security is

riaturally interested in what facil¬

3,000 Listed Securities

plus funds
cording to

returns

Even where

sur¬

still available,

ac¬

from

structure

vision,

are

such
investments,
do not compensate for
Until the tax

undergoes a major re¬
of equity cap¬

new sources

ital will be necessary.

for cash in the event of necessity
choice.

The

25,000 Unlisted Securities

importance of

mar-

must

be

employed in

pro¬

ductive investment if the nation's

private capital markets to prosper.
So that necessity for the equity
capital must be met from the

Stix & Co,

makes

& Financial Chronicle
ture

the

securities

to

your

'

509 OLIVE

STREET

fea¬

firm

specializes in.
•

INVESTMENT SECURITIES

Place, New York 7




have

these

middle

days.

the

income

bulk

There

holders

of

are

groups

savings
85

some

Government

of

Savings Bonds, but, as the Federal
Reserve Board recently indicated,
some

MEMBERS

MIDWEST STOCK EXCHANGE

FINANCIAL CHRONICLE
25 Park

or

million

St. Louis 1,Mo.

/

THE COMMERCIAL AND;

lower

which

in The Commercial

full

of

a great many commenta¬ vestments produced the greatest
that they are actually do¬ bond price inflation in the history
ing it.
In some instances they of this nation. That, gentlemen, ise
we
got
cheap
may be, but you may be interested how
money.
It
to know that the banking figures, wasn't
a
matter
of
design.
A

thought)

tors say

horizon, showed a drop of 10% in
spending. Now, a 10% decrease
is a big drop.
I don't know yet
what the figures for this week will
disclose, but it is my guess that
those, figures will be off again for

.

active trading market.

Use space

case

newspapers

been

which

industrial plant is to grow and its

you
think your
pet issues will be remembered?

the

have

The coun¬
try is busy and wealthy; its ag¬
gregate savings are' at a high
point.
Some of
these
surplus

in which there aPDears to be an

What

that

funds

ity exists for its prompt exchange

or

normal function.

interesting

the

on

muda and there

In the fall of 1948 the forecasters

that the government's tax

with

land

nothing

with

we

To provide the

year.

fair

this

almost

Wednesday

essential facility.

an
a

discuss

the discharge of that

an

analysis and

security values,

on

as guides.
safety existing that
has not been anticipated as well as effects of change in basic
rate of money. Holds banking figures are valuable in analysis
of business trends and contends that through medium of mar¬
ket activity, tendency is for security price to approximate its
value. Say* timing in securities purchase is "awfully important"

months

six

to

market

money

Emphasizes principle of degree of risk

indication of

what the economic picture is go¬

asset value

Co.

&

discusses the limitations of statistics and formulas

Some

outlook.

business

the

be,

Town^nd-Skinner

Mr. Townsend in covering the held of investment

The Exchange is con¬

sidered by some to

kets to

By WILLIAM W. TOWNSEND*

President,

results and values of corporations

Stock Exchange,

uals in

Honey Market and
Factors in Securities Analysis

Market and a

auction market, reilects in
the prices of transactions on its
floor a measure of the operating

After describing organization

need of

The

/

.

Auction

an

open

By EDWARD C. GRAY*

an

Thursday, July 13, 1950

.

.

security is, I real¬

you.

Secondary Market

ItsEconomic and Social Functions

is

.

I

6 to 7 million stockholders.

That

estimate

University

Of

was

TELETYPE:

'

GARFIELD

'

'

0514

7 SL-80

the

for the
Other estimates

available

to

us

last

range no higher,however,
20 million, at the outside.

Continued

on

than
The

page 35

"planned
out to

three

the

self with

the

sult

days

Korean

of

business

situation

burst

after
on

economy"

often

starts

do something and finds it¬
an

entirely different

re¬

its hands.

on

Buying Right Security at Right
Price
All those items

are

part of the

figures.
We spoke of
monetary statistics and how use¬
the week.
ful they are in the whole, question
The economists of the country of security analysis.
What is it that we are after?
are forced by the nature of their
It seems to me that the thing we
work to argue from cause to con¬
are
trying to do is to find out
sequence, but in the middle of the
whether or not the security we
argument there sits the most un¬ are planning to buy is the right
predictable factor in the world— security. Is it selling at the right<

Michigan

Federal Reserve.
TELEPHONE:

made by

were

week and which had in them only

In

*A lecture given on July 10, the first
a
series of 17 on Securities Analysis

Sponsored jointly- by the New York Se¬
curities Industry and the University of
Vermont?# Department of Commerce. &
Egonomice,

banking

price, arid are
right time?
very

we

buying it at the

That time element is

important because fluctua'

Continued ori page 27

-

/

Volume 172

Number 4924

.

,

The Commercial and Financial Chronicle

.

Reports Slight Rise
In Interest Rate

(161)

r

Steel

The

on

Shorten Capital Gains Holding
PeiiodandthusIncreaseRevenue

Production

Electric Output

Carloadings

Business Loans

Trade

Retail

State of Trade

Commodity Pvice Index

By ELISHA M. FRIEDMAN *

Food Price Index

The

rate

average

interest

of

and

charged on loans to business con¬
cerns
by New York City banks
moved
slightly higher between
March

and

mained

approximately at

the

rates

1950,

June,

charged

in

but

by

received

according to reports

A mild

York from

the main offices of 12

New

City

15 of
larger branches. These re¬
ports
cover
all
business
loans
banks and

their

made

of the

during the first half of each
respective months.

The average rate on
loans

(those

within

due

year)

one

short-term
demand

on

was

or

2.34% in the
compared
first half of

first half of June, 1950,
with

2.28%

March,
the

the

in

2.33% during
1949. The

and

1950,

of June,

first half

moderately

most recent rates were

higher

than

the different

of

most

March,

in

for

1950,

size groups

of short-term

loans, but compared
period of 1949 they
were
generally lower despite the
virtually unchanged level of the
average rate. This seemingly con¬
tradictory
situation
reflected a
change in the composition of the
loans placed, namely, a reduction
from a year ago in the volume of
very large, low-rate loans and a
contrasting rise in the volume of
smaller
loans
carrying
higher
with the

same

The total number of short-

rates.

in the first half

loans made

term

considerably greater
of the earlier pe¬

of June

was

than

either

in

aggregate dollar
materially larger.

the

but

riods,

volume was not

loans
(those due in more than one year)
was
2.48% in .the first half of
The average rate on term

June, 1950, compared with 2.35%
in March, 1950, and 2.77% in June,
1949.
The June,
1950, rates on
smaller term loans (those below

showed no consistent
change
compared
either
witli
March, 1950 or with June of last
year.
The rates for the larger
$500,000)

moved in
rate
for term loans, being higher than
in March, 1950, but lower than in
June, 1949.
These larger loans,
loans,

term

however,

line with the over-all average

although relatively few in number,
always account for

large propor¬

a

of

tion of the total dollar volume

loans

term

thus

and

made,

rate fluctuations tend to

their

dominate

changes in the average rate.
The dollar volume of term loans

reported in the first half of June,
1950,

$65,000,000

rose

the

over

corresponding period in March to
$110,000,000 and
for

the largest

was

when such

since September, 1948.
totaled

loans

period

similar quarterly

any

of

number

loans

placed

the reporting banks also

sharply to 215 and
since June,

The

$145,000,000.

term

was

by

increased

the largest

1S48, when 225

Business Failures

Mr. Friedman, prime mover s'nce

the Fourth of July
Steel

at

phenomenal increase in

regarded

it

is

reported

close to 32%

that

the

latter

should be enacted to increase
I

According to this week's issue of "Steel," national metalworking magazine, the heavy demand that has kept steel producing
plants operating at or above capacity may become even greater
the

Korean situation

have

appeared,

with it

tax

the capital gains tax since 1938,

ing

on

filed briefs

or

the

this

for all

nation's
its

No.

when

1

consumer

leading
banking firms
Holland

requirements

of hot and

cited

cold-rolled carbon steel sheets and

strip continue to keep those products Under the most intense pres¬
sure for delivery.
/

the

United
Elisha

With the automobile industry—the
breakneck production pace

notice

a

from

States

Treasury
re¬
quiring the

M. Friedman

all the orders they care to

of steel—at

of

one

the

of

major products.

dur-

trip

a

abroad in 1936

consumption is currently down somewhat because of
metalworking plants' summer vacations for employees but there
is no let-up in pressure for steel; metalworking plants are sure

book

in

was

aroused

Steel

steel producers have

tax

ing

trade paper.

result

My

interest

or

being superimposed on an already heavy demand
for hard goods, can't help but be felt all the way back through
manufacturer to steel producer, if military necessity does not in¬
terfere with peacetime industrial operating schedules, states this

a

has
con-

so

tinously.

This buying,

As

that

done

nation's sales¬

they will need all the steel they will be able to get.

only wit¬

ness

place orders for automobiles, appliances and
other goods that might become restricted in supply in event of a
worsening of the international picture.
buy

firm's

vacations in indus¬
try have become firmly enough established to cut the steel indus¬
try's production rate.
In the week ended July 8, steelmaking
operations dropped below theoretical capacity for the first time
since mid-April.
A drop of 6V2 percentage points put the esti¬
mated national ingot making rate at 95% of capacity.

the Fourth of July and the

For

and

Steel

at 100%

weeks prior to

11

taking of

the holiday, states the American Iron

steelmaking

Institute,

summer

of capacity or better.

being operated

furnaces were

would

are

Curtailed by Industry's Vacation Schedule
under

way

this

week

to

back

the

plates and hot and cold-rolled sheets—items which are already
high on the scarce list. As long as the military holds strict con¬
trol over its manv departments in ordering steel for preferential
on

needs

there

will

As it affects

to

markets

where

tax

in

was

brokers'

no

effect,

income

trading

in

to

European
capital gains
thus reducing

and

Treasury

taxes.

My 1938 brief urged shortening
to six months the five holding pe¬
riods which then ranged from un¬
der one year to over ten years.

1942

I

brought to the hear¬

ings bankers from Belgium, Hol¬
land and France, then resident in
New York,
who explained why
their

countries

gains

tax.

Emil
to

also

I

Schram

join

Senate

in

and

interested

Mr.

persuaded him

before

the

Committee.

the

months in

creased

gains

capital

no

appearing

Shortening
to six

had

1942 greatly

receipts

taxes

period

from

I

in¬

capital

predicted.

Ap¬
proval by the Senate of the House

provision

as

for

three

a

months

holding period in H.R. 8920 will
undoubtedly produce even more
revenue.

Since the Korean expe¬

dition

the

of

UN

requires

more

funds from the United States, the
three
*A
f 1

the

months
brief

by

Srnnt?

Mr.

holding

period
submitted

Friedman

capital

Washington,

gains is essentially not

this trade authority

now

were

Continued

on

page

24

said:

"It

choice.

York

York

Commodity
Chicago

Curb

Cotton

Exchange

*

*

*

If the

other

Trade

of

decides whether

taxpayer

Laurence M. Marks & Co.

Exchanges

Members New

York Stock Exchange

Y.

Cotton Exchange

NEW
CHICAGO

YORK 4,

Unlike

DETROIT

GENEVA,

income is

gains,

capital

regular and recurrent. It may de¬

cline,

but

minus

year

in

becomes

never

However,

capital
For

it
may

looses

for

several

PITTSBURGH

SWITZERLAND




Corporate

capital loss
through the year 1923 totaling
about $3 6 billion. Then followed
six

capital

of

years

1924

and

1929

to

capital losses
four

gains

four

Home

49 Wall
July 7, 1950

Street, New York, New

York

Office

11 Marietta St., N. VV.

Atlanta, Georgia

from
of

years

1.930 to 1933; then

of capital gains,

years

three

and

37

1934capital

of

years

losses, 1938-40.
the

For

to

24

entire

amounted to

1917

years

capital

gains
about $6.1 billion but

the

1940,

fantastic

1925-29

of

boom

if

the

is

eliminated, then the remaining

19

show net capital loss of

years

cover

billion. The above returns
periods of prosperity and
The

depress'on.
most

for

averse

the

for

completely

that

net

offset

capital

income

to

for

Certainly,

1.917-1931
easy

periods

take

years

within

Continued

us

Stock

and

and

and

3% of the
period

it

on

Exchange
Exc'ian^es

Bonds

New

very

five or
the period

Distributors

Eastern

is

of

Atlanta office.

30 Broad

each

the

and has

Municipal

entire

gains were

insi^nfficant, less than
taxable

(de¬
tax)

generation, losses

a

so

other

income

trifling.

v/as

Over

gains

the

minus

were

from

the

and

pemod

receipts

average

years

ductions

National

Securities

years.

example, the net capital gain
1917 of $207 million was fol¬

lowed by s'x years of

our

Underwriters

a

capital gain in
be followed by

(Associate)

Bldg.

N. Y.

York

Other

not

or

realize the gain.

to

"Members

And

not sell,

tax." Only the

any

OS

New

New York Curb Exchange

N.

does

holder

do not get

you

Investment Bankers

General Partner in our firm.

a

the case of capital
choice; he does not

G

Inc.

New Orleans Cotton Exchange

And

a

pleasure in announcing that

Exchange

is

have to realize unless he wants to.

Exchange

Exchange,

Board

there

me

between

But in

gains he has

has been admitted as a

New

is

ordinary
income and capital gains. In the
case
of ordinary income the tax¬
payer has to pay it; he has no

Members

New

to

seems

H. GRADY BLACK, JR.

M§. CARL C. BROWN

the

it

was

We Are Pleased to Announce That

headquarters at

1850

most

of

that

equipment lost in Korea; (2) to replace material shipped from
the United States; (3) to build new material for Korea and the

H. Hentz & Co.
Stock

and

is

tax

is four-part,

points out: (1) To replace battle material and

We take

York

unique

characteristic

gains

differentiation

is associated with

New

the

be no trouble.
industry, the military problem

made.

Established

the

of

clearly
stated by Senator Connally, who

C.,

D.

if

rest

contingent. This view

more

F!iaacf

Capital Gains Tax,
July 11, 1950.

even

is aimed at reduc¬

The

significant

$8.3
holding

law

revenue.

one

shift

securities

•

United Na¬
tions' fight in Korea with the biggest steel potential in the his¬
tory of the world, "The Iron Age," national metalworking weekly,
states in its current summary of the steel trade.
While the in¬
dustry will be able to take care of unprecedented domestic
demand, there will be no hesitation to sidetrack such orders for
military needs when and if the word is given, it adds.
A new voluntary allocations plans for the steel industry is
likely in the very near future.
It has been learned that the
Department of Commerce is preparing to form an iron and steel
industry advisory committee—possibly this week. This committee
will be composed of men responsible for production, distribution,
transportation and raw materials. It will work closely with gov¬
ernment officials to insure speedy action on military orders and
fair distribution of tonnages available for non-military uses.
War goods includes a great deal more than guns, tanks, planes
and ammunition.
Now revived is a program for 100,000 freight
cars which would require 2.3 million tons of steel.
And pushing
ahead orders for such items as jeeps, trailers and Air Corps lock¬
ers will require speedy channeling of supplies.
Orders for this type of goods will place even greater demand
Plans

be

American

01.il wilich

income.

clients

on capital gains tax.
The firm suggested that I ask the
American authorities to look into
the problem, otherwise the effect

In

Steel Output

made

shelves the

Capital

to file returns

f

though steel demand exceeds supply the observance of

Even

be

Committee

develops from civilian reaction to United States
military action in Korea. Remembering shortages and allocations
to

should

Congress

That prospect

rooms

public

a

as

service, before the Senate Finance

next few weeks.

of the last war, many people have rushed into the

revenue.

year

ago.

in

ng period produced
exceeding his 1942 forecast

as

if

even

industry production held

above the level for the comparable week a

revenue,

"extravagant" by former Treasury Counsel. Holds
causes
shelving tax reductions in
H.R. 8920, capital gains provision for 3 months holding period

holiday.

production dipped about nine points to 92.6% of
while automotive output in turn declined some 7%.

capacity,

capital gains

rs vising

ing period. Showed past shortening of hold

was the order
working days stemming from

ingot

However,

1938 in

tax, urged Senate Committee's approval of three months hold¬

falling off in total industrial production

the past week as a result of fewer

the Federal Reserve Bank of New

York

Consulting Economist, New York City

re¬

1949,

June,

Industry

Production

J

below

or

Auto

Office

Street

York, N. Y.

page

26

6

The Commercial and Financial Chronicle

(162)

The

What's Ahead for Stock Market?

September 1946

of

most

last

The

major

panic selling in the stock mar¬
May 1940, with the pos¬

ket since

sible

excep¬

tion

of

the

Sept.

3,

1946
With¬

deluge.
in

the

brief

sive

evidence

clusion

favoring
the

that

the

market
from

in

when

events

Calm

haste.

it

and

them

leisurely

ap¬

praisal of the evidence after one
of these emotional sprees usually
dictates

attitude

rational

more

a

be adopted

regarding the ultimate
stock prices of such un¬

period of four

effect

days, between

expected events. -If we are corr
rect in assuming that the bulk of

June

30,

26

in

and

decline

a

stock

val¬

occurred

ues

amounting
almost

to

10%,

measured

a s

the

by

Jones

Dow,
Indus¬

ate

trial

Bridwell

Average.

The

W.

R.

immedi¬

of of the selling was the

cause

outbreak of

in Korea and the

war

fear in the minds of investors that
this
development
would
ulti¬
mately lead to war with the So¬
viet Union.
Many market an¬

alysts hold that the market was
an
overbought or weak tech¬

in

nical

position

able

than

and

usual

Whether

news.

vulner¬

more

unfavorable

to

not this view¬

or

point is justified is

an open ques¬

on

at

the

to

public, then we
the public is

that

especially adept at misjudging the
import of war developments.. In

to believe
that all the technical signals dear
there

fact,

is

unexpected
the

market

analysts

when war or other
developments are in

suspect

are

reason

of

heart

the

to

of being rationalized
by the public.
Contrary to pop¬
process

the

belief

ular

rationalize

market

the

past

to

seems

present

or

discounts

the

often

than

it

future, and

even

this rationaliza¬

more

tion

often

is

immediately

sold,
panic

pected

As

news.

rule

a

following the
decline caused

totally

other

or

war

this

of

stages

a

unex¬

be

less

That

period

the

The

Slump of 1939

drastic collapse has been
News of the outbreak of war
fraught with uncertainty for most
investors is indicated by the wild in Europe in the fall of 1939 re¬
price gyrations registered in a sulted in a mad scramble for
stocks.
Stock prices rose 15% as
majority
of
individual
stocks.
measured by the Dow, Jones In¬
Probably most investors who per¬
dustrial Average,
in just seven
sonally keep a close watch on
days.
(Incidentally, the
their portfolios have been con¬ trading
fronted with the perplexing prob¬ market completely misjudged the
of
lem of whether to reduce the pro¬ implications of the outbreak

portion of their funds in stocks in
•anticipation of a further sizable
Or, if

cur¬

rently in an underinvested posi¬
tion, to greet the lower market
level as a golden opportunity to
purchase securities for long-term
holding before the interrupted

underway again.

since it eventually
bearish for stocks.)
emotional
buying

war,
very

this

Market

Action

proved
When

calmed

down, the level of the industrial
Average was about 155. A slow
decline

immediately set in and
stock prices did not recover to the
155
level again until five years
had passed.
When

Past

German

the

Blitzkrieg

unleashed

against the Low
dealing with this problem it Countries and France in May 1940,
the market reacted with the worst
may
be helpful to review past
Stock values
market action following periods panic since 1929.
was

In

of sudden price change caused by
spur

-

of

the

-

-

moment emotional

buying

or selling. Examination of
the record reveals rather impres-

slashed

were

trading

STRENGTH

MEASUREMENTS

20%

in

just

When

days.

selling subsided,

a

low

eight
panic

the

estab¬

was

lished which held for well

over

a

and during the months fol¬

year,

KXXXIXXXXXXXIXIXXXXXXXXX

BASIC

justify

lowing

the

recovered

panic,
the

on

stock
average

prices
about

75% of the last ground.

also

bution

of

place

sold

in

and

440

distri¬

individual

out

the

at

More

week,

comprehensive appraisal of

a

the market

position of

the

general

market

our

Weekly

After

1948.

tember

November,,
during Sep¬

October

the

to

190

level, the market reacted 9% in
just six trading days. During the
following two or three months,
stock prices rallied back to the
182

of

level—recovering about
the

ber.

losses

While

levels

yielded

the

in

critical

established

in

half

Novem¬
downside

November

subsequently
violated
1949, this penetration
dured only five weeks and

in

June,

en¬

by the year-long unin¬
terrupted 1949-50 bull move.
of

Some

Lost

Ground

Expected
The severity of the recent June

new

Investor
standard

these

stocks

and

SEND

stocks

and

is

shown

in

investigate this
selecting
individual

market

THIS

the

To

future

market

action

of

basis

the

stock

of

analogy
similar
situations in
prior
is always a hazardous pro¬

with
years

cedure.

Invariably,

some

new

and different factor is overlooked

which largely

invalidates the

an¬

alogy.

Nevertheless, the reaction
mass psychology to
the unex¬

of

pected
low

On

broad

hered to
the

to

the assumption

pattern

once

following

fol¬

market:

will

that

be

ad¬

again, we can draw
conclusions about

the immediate

lows

seems

rather definite and reliable

pattern.
this

unknown

or

a

course

of the stock

(1) That the recent panic

of

the

market

will

not

be

seriously violated during the next
few months; and (2) That some¬
time
during
this period, stock
prices will recover substantially—
possibly two-thirds of the ground
lost

in

June.

This

presupposes

a

full-scale shooting war with Rus¬
sia will not
break out—a
con¬
clusion
view

the

which

of

justified in
imperfect record of

the

stock

Our

trends.

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over $260,000
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Cash
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itary

INVESTMENT

33 Journal
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WH 3-7788

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not

into all

move

this,

the

fellow citizens into

ordinary

course

the

of

shelters again.

of things and going by

minor mil¬

our

such as our two excursions into
Mexico, the Korean crisis should peter out after several months
and

past,

gradually be relegated to the inside pages of the

newspapers.

American boys will have been killed, our national debt will have
been

greatly increased, and nothing will have been accomplished.
come about that Communist China will get

Not

unlikely it will

seat

the

in

United

Nations with only passive resistance from
bruited about among the experts here in Wash¬
ington that this the bargain Stalin wants to make.
But what
completely baffles me about this international intrigue at which
we are now trying to play is that the Administration has wanted
for a long time to give Red China this seat, Britain being for it
a

is

us.

It

having long ago recognized the Red Chinese government, and
held back because public opinion did not seem sec for it.

being

has only

months

given

from now,

Chinese
of the

great

powers

has

Cruz

to

analogies:

are

make

old

and their stories filled

In

of showing this.

way

1914

salute

Huerta

of the time,

correspondents

itself fully established
Red China will have

shown

of the world.

miserable time in Korea by

us a

Maybe these
Vera

the propaganda will probably be that

government

landed Marines in
flag.
All of the big

we

the

including Jack

London,

along

went

the front pages for many months to come.

Finally their stuff became

dull, the Marines were quietly with¬
the flag but we did take the
money from the Vera Cruz customs house that accumulated dur¬
ing our occupation. American boys were killed but more Mex¬
icans were killed, so the story went and probably it was true.
Huerta

drawn.

Then in

into

tion

salute

1916 Woodrow Wilson sent

Mexico

to

avenge

Pershing

avenged;

the

raid

Pershing with
of

the

bandit

an expedi¬
Villa upon

It can't be truthfully said that this raid was

Columbus, N. Mex.
ever

did

never

captured

never

the

the

bandit though

story persisted that he was within hands reach several times. It
turned out that we wouldn't have known what to do with Villa
had he

been

captured but that

did happen

before the Nuremberg trials.

was

we sent after Villa was that
annihilated two troops of the
10th Cavalry. Our troops were greatly outnumbered we were told
and it was a bloody shame what this bandit did.

What

his

to the token force

ambushed and completely

men

hundred

Several

thousands

Guardsmen

National

of

were

back up Pershing on the
border and after it was all over, our people instead of being in¬
censed over the whole sordid business were propagandized with
called

out

because

this

during

that

to

leaders were really showing farsightedness
an army trained to take on the Germans.

our

they had

now

expedition

However, the people didn't think so well of Mr. Wilson and his
Democrats in 1920 and it maybe they won't be thinking

fellow
so

well of Mr. Truman

or

in

his fellow Democrats this November

and

can't tell.

You

1952.

Roosevelt
was

&

Co.,

still

was

reelected

and there

on

for the

fourth time

in 1944 but the

justification for the feeling

some

was

might

part of countless mothers and fathers that the war

the

delayed for

recall

60

Street,

Exchange, on July 20. Mr. Gronick
formerly a partner in Gilbert
J. Postley & Co.

few days if

a

very

a

clearly that in the Congressional campaigns of

1942, Roosevelt was trying mighty hard to bring off the African
invasion before that November election day. Through unavoid¬
the invasion came a few days later. Thus, the Repub¬
day captured more than 80 seats and came

able delay

licans on that election
near

to

getting control of Congress.

was

Reserve Oil

net

SPECIALISTS

the

operations

I
a

New York City,
members of the New York Stock

Orgain & Williams

interest

J.I. KISLAKwc.

do

we

change in Administrations oc¬
curred. I would have bet my last penny that the reaction would
certainly engulf Truman in 1948 and it would have had it not
been for the complete ineptness of the Republicans.

Reserve

amortization.

REALTY

if

in

as

Gronick

first

Already those impossible neighbors who served as air raid
in the last war are just itching to blow their whistles

In

war

Samuel

the

global

wardens

and order their

evaluating
the impact of similar situations in

Gronick

NEW GARDEN APARTMENTS

after

DEPT.

fracas.

seems

market

mo¬

and industry.
Here
disagreeable episode of

manpower

the complete

toward

the argument

analysis

global leader, her
active somewhere

were

domination by the government of the
people seeming to be almost irresistible even before the Korean

attempt to predict

the

on

of

at

are.

amazing
trend

one

record.

navy

leadership—it has been a perfect
joy to put out money—talking about calling up
all of our manpower and mobilizing all in¬
dustry
and
going
back
to
rationing
and
Chester
Bowles.
It
will, indeed, be truly

Bargeron

and

values in only four trading

Garfield Co. to Admit

30% NET
leases; Income

refunded

we
our

six

partner

should

judging

FOR

trend

for

bilizations

Red

stock

her

wise.

the

was

Wars 1 and II that she went in for all out

the

clipped from

was

worldly

so

Britain

sun a laree part of the time.
But it
only in such major undertakings as World

was

But

10%

influ¬

an

under the

that

full

Congress,

be

plenty more of them and if we
from going nuts we must train

become

troops and

panic is demonstrated by the fact
a

to

and

was

followed

Recovery

through

ceased

be

keep

When

Carlisle

in

rally

a

and

about

ourselves to look upon them as nothing more
the routine activities of a people who

levels then pre¬

upset

will

have

comparable to the present
was
the panic following

election

secondarily

has

leaders, they have got to learn to take
as
the Korean episodes in their stride.

to

are

on

Reports.

Every

such

situation
the

and

than

the past.

OVER

being global

upon

going to insist, through their col¬

are

affairs

rea¬

the basis of sound

on

people

commentators

international

There

vailing and held cash.

stocks.
Each

ence,

be

accumulation

taking

radio

in

to

difficult

very

REVEAL
Evidence

which

soning, since inflation, production,
industrial earnings, and dividends
all
steadily increased over the
two or three years following the
wide-open
break.
Accordingly,
the investor who bought stocks at
the post-panic lows in September,
1946, was considerably better off
in the long run than those who

on

-current

bull market gets

is

days—one of the fastest declines

following

decline in stock prices.

decline

not

sions,^ come readily to mind.

'?

overextended.

the

news.

war

it is wortn re¬

case,

If the American

umnists,

membering that after
breaking
15% in 10 trading days, over half
of the ground lost was recovered
by the following January.
This

sold,

bought, following a war-in¬
membered
that
equally
severe
spired dynamic upside surge. Ex¬
panic declines have occurred in amples supporting these conclu¬
the past when leading stocks were
much

this

corollary, to

should

stocks

of the News

By CARLISLE BARGERON

man

were

inaccurate.

Generally speaking, it appears
that stocks should be bought, not

by

speculative

or

conclude

must

relatively

moderate

in

least

tributable

tion, particularly in view of the
interest accompanying the rise up
to that time. It should also be re¬

emotional buying,
its later stages, is atr

panic selling

rather

market's attempt to ap¬

unexpected
in

Even

con¬

iud^e*

Washington

Ahead

recently

one

condition,

the

praise

tently misjudges the effect of cur¬
rent

the

essentially a cumulative af¬
fair
which
developed
from
a
slowly
disintegrating
internal

consis¬

market

to

or

was

develops.

war

wit¬

the most sensational wave

nessed

of

slump in

June

in

week

From

September, 1946,
the others

touched off by the Korean war. It

stock prices, Mr. Bridwell
recalls similar situations in past and holds stock market, be¬
cause of hasty emotional action, consistently misjudges effect
of events. Says stocks should be bought, not sold, immediately
following panic stage of a decline. Looks for some recovery
of lost ground during coming months in stock prices, provided
no

in

us

be compared to

cannot

discussed

recent

Thursday, July 13, 1950

.

Break

Strictly speaking,
the panic
which occupied the attention of

Partner, Investors Research Company, Santa Barbara, Cal.
on

.

,

By RODGER W. BRIDWELL

Commenting

.

BEAUMONT, Tex.—John C. Or¬
gain and Laurie L. Williams have
formed
offices
Bank

Orgain
in

the

&

Williams

American

Building to

securities business.

with

National

engage

in

the

formed

Oil

with

offices

has
141

Fifth

are

George G.
O.

at

Officers

Weber, President;

Bowman,

and Walter H. Morgan,

ident and Treasurer.

J. Arthur Warner & Co.

been

Avenue, New York City.

Marian

A. J. Aucoin Now With

Corp.

Corp.

Secretary;

Vice-Pres¬

J.

Arthur

announce

coin

ment

has
of

Warner

joined
their

120 Broadway,
was

Co.

Inc.

John

Au¬

&

Anselm

that

the sales depart¬
New

York

formerly with Van

Noel & Co.

office,

New York City. He

Alstyne,

Volume 172

Number 4924

.

.

.

The Commercial and Financial Chronicle

(163)

storing balance within the

Techniques for Avoiding
Depression

continuous

as

well

fiscal

from

policy, and revision of income distribution through wageas well as imposition of structural supports to

Stresses need for expansion of

markets

lions taken during periods of con¬

something that everybody can en¬ traction, even tnough their
dorse.
it
is -good.
may
be
\vc ail like sults
temporarily
it.
We all want to do L.ose things scured
by the optimism of
which
most

are

The second point that I want to

is

anyone

that

pax iicui any

all

it

sanguine

so

is

possible

business

very

level

of

total

after

ail

the

the

main-

tenance

stable

of

condi¬

Profits

tions.

time,

move up

maintained

down

level

many

at

approximately
credulity.

an

constant level strains

Nor

of

busi¬

stable as
other income shares.
In its
not

the

so

is

should

desirable

it

be

proximately
either

gate

with

an

constant volume,

the aggre¬

respect to

firms

I

afraid it is too

am

much

has

been developed in this

that

It is

sion.

a

word most often as¬

engineering.
It may be just
misleading, because it

little bit

a

too difficult.

suggests that this matter of poli¬

herent

prosperity and depression is more

coun¬

parts.

exact than it is in fact.

avoid

another possible mis¬

understanding, I think it should
emphasized
that techniques
used to aovid depression must in¬
taken

measures

in

the

during

pe¬

prosperity, as well as dur¬
ing periods of depression. Many
of the seeds of business disturb¬
riods of

planted in mistaken poli¬
taken
during a period of

Indeed

some

is
of

aggregate

variability

in¬
in¬
the
,

Dexter

be

clude

ates

Keezer

published

Static

a

Society

Except for natural catastrophes,
the Middle Ages had full

For

ment.
years

it

five

was

Research ".

.

.

-

desirability.

do not think that such

a

Just

the

as

business

a

These

strate

think

about

business

devices

that

business

of

be

cycles,

we

and

been

the

change;

dealing

when

have

influence

to

subject
in

keep

not

are

science

exact

an

ceived
of

should

we

One—we

with

con¬

direction

and two—we

hard-headed and pre¬

as

possibly can in the use
analytical tools, because
action taken, even though for
as

we

our

any

ciety is the kind of society we want an ostensibly laudable purpose,
today.
It is conceivable that we will have multiple results, some of
might achieve full employment which may be as unexpected as
same time, experience a
declining level of real income.
employment measures, par¬
ticularly when they are promoted
by special interests, may take the

prosperity that is
cited

they

of

fair

trade

arrangements

outlaw price

feather-bedding

competition, of
protection, or of

past

of

Such restrictive
of

measures

standards.

different

would find

a

I

are

and

For

reasons,

One

the

rising

somewhat

believe

you

situation of substan¬

of

is

the

frequently
of

both

outlays,

re¬

total

public

private.

Private
is

Investment

of

devices to maintain

stabilization

the

investment
and

production.

growth

socially undesirable.

are

Stabilization

Full

by law. A busi¬

as

business.

a

there

is

latitude

a

best

interest.

books

tell

Most
that

us

influenced

cannot exceed

preciation,

investment

business

by

number

a

things. The total that
the

plus

can

tially full employment at declin¬
ing levels of. real income in Eng-

new

is

of

prime

stockholder's

long-run

have

been

importance

J merest

ately confined new capital out¬
lays to those projects which would
increase

available

because

of

The

investment.
Or again, business outlays for
hospitals, schools, and other per¬

sonnel

civic

or

facilities, for

on

the

with

part of those associ¬
the

enterprises.

investment

equity capital, usually

may

sirable

in

one

long-run

look

such

interest

severe

one."

Avoiding Depressions a

business

management and

Continued

comments by one

of our

bility.
all

But

this does

possibility,

to

August 1, 1984, inclusive

after at

101

or

on

before August

1,

1975; and thereafter redeemable at par and

accrued

interest.

not

deny the

These Bonds,

to be issued under authority of Article 12 of Chapter 8, of the Code of West
Virginia 1949, in the opinion of counsel, will constitute valid and legally binding obligations
of The City of
Morgantown, West Virginia, and together with any parity obligations here¬
after issued, are
payable solely from the revenues to be derived from the operation of the
waterworks system of the
City, a sufficient portion of which revenues has been ordered set aside
and pledged to the
payment of interest on and principal of these waterworks revenue bonds.

of

Part

the

sometimes

emphasize this morning.

avoiding depres¬
sion should be a continuous job.
It is something that is of concern
to us during prosperity, as well as
during a period of decline.
It is
something we must be constantly
thinking about, because the effects
of mistaken actions taken in the
with

respect

to

buoyant years may be quite as
socially harmful as mistaken ac*An address

by

Dr^. Brown at the Sum¬

Institu*" for Social Progress,

Welles-

ley College, Wellesley, Mass., July 4, 1950.




to

of

wants.

consumer

called

This

pattern

a

is

of

and

in

called

Maturity

Yield

Amount

Rate

Maturity

Yield

$67,000

2 3/8%

1964

2.20 %

2I/2%

1974

2.45%

2 3/g

1965

2.20

91,000

21/2

1975

2.45

will

our

of

lack

Rate

Maturity

Price

2 3/4%

1953

1.25%

51,000

2 3/4

1954

1.40

69,000

52,000

2 3/4

1955

1.50

70,000

2%

1966

2.25

93,000

21/2

1976

100

54,000

2 3/4

1956

1.60

72,000

2 3/g

1967

2.25

95,000

2%

1977

100

55,000

2 3/4

1957

1.70

74,000

2 3/g

1968

2.30

98,000

2 Vn

1978

100

57,000

2 3/4

1958

1.80

76,000

2 3/g

1969

2.30

101,000

2%

1979

2.55*

$50,000

$88,000

58,000

2 3/4

1959

1.90

78,000

2 Vz

1970

2.35

103,000

2%

1980

2.60°

60,000

2 3/4

I960

2.00

81,000

2'/2

1971

2.35

106,000

2%

1981

2.60*

62,000

2 3/g

1961

2.05

84,000

21/2

1972

2.40

109,000

2%

1982

100

63,000

2 3/8

1962

2.10

86,000

21/2

1973

2.40

112,000

2%

1983

100

65,000

2 3/,

1963

2.15

120,000

2%

1984

100

(Accrued interest

It is also
equilibrium in

The bonds

economic text books.

Messrs.

or

balance

result

Amount

to

be added)

aggregate.

balance,
of

some

A

the

cr

Rate

wage-cost-price relationships that
will clear markets, both in detail

in

a

in

this

decline

or

sense
a

are

offered when,

as

and if issued and received by

us

and subject to the approval of legality by

Chapman & Cutler, whose opinion will be furnished upon delivery. The Offering Circular

be obtai)ied in any state in which this announcement is circulated from only such of the
undersigned and other dealers as may lawfully offer these securities in such State.

may

pro¬

decline.
A restor¬
ation of balance will help business
longation of

a

Mr.

recover.

Leon

Keyserling,

of the President's

Chairman

Eco¬

HALSEY, STUART & CO

INC.

BLAIR, ROLLINS & CO.
INCORPORATED

nomic

Advisory Council, has re¬
cently reaffirmed his view that
"The
most
serious insufficiency
in

mer

be

flexibility in the

permit it to adjust
to the complex and changing pat¬

behavior, point up the first char¬
acteristic of business cycles that I
Despite the fact that it is not an
exact science,
study -and action

should

effort

to

tern

to

Yield
Amount

previous

our

efforts

place

.

.

.

INCORPORATED

anti-depression

that they did not
emphasis upon re¬

was

enough

STIFEL, NICOLAUS & COMPANY
July 10, 1950.

THOMAS & COMPANY

de¬
the

stock-

page

Federal Income Taxation.

the desirability, of

or

better, of maintaining prosperity.

most careful observers of business

want

on

Redeemable August 1, 1960 or any interest date thereafter in inverse order of maturities at 102 and
accrued interest on or before August 1, 1965; thereafter at 101^ on or before August 1, J970; there¬

organ¬

cherished ideas of growth and

economy

These

the

of

a

for

cases

Without such flexibility,

maintain enough

Continuous Job

like

2Vs%,ao/fWater Revenue Bonds
dn
2/8% V2
serially August 1, 1953

The

de¬

City of Morgantown, West Virginia
Due

ex¬

designed to assure a
high level of well-being and mo¬
are

•

2M%,

and

supply

$2,500,000

.

a

supplies;

limited

a

of
capital, has den'ed investment in
those projects where large pay¬
outs could result, but without an
increase of supplies.
In such a
period, the public clamor for sup¬
plies denies the opportunity to
contra-cyclically withhold capital

profits,

exempt, in opinion of counsel, from all present

when

has deliber¬

.

of

It is likewise true, he eliminating the extremes of fluc¬
believes, ".
that a host of de¬ tuations in the
aggregate of ac¬
velopments during a business de¬
tivity—and it is to that purpose
cline, largely
unconnected with that I believe most of us address
what happened
during the pre¬ ourselves when we talk about
ceding 'prosperity', may convert
avoiding depression, or in alterna¬
what might have been a mild con¬
tive terms, which I personally like
a

interest is

times

American enterprise

pression."

traction into

sugges¬

a

During periods of short supply,
there

capital funds obtained in the

U:

overriding

recognized.

rale

of

the

immediacy in the profit¬
But
immediate
profit¬
may or may not be the
consideration
when
the

ability.
ability

ated

amount

text

our

There is

tion

of

retained

the

degree of

consideration.

be made

plus net change in debt, plus com¬
mitment of

lodge the dead wood of inefficient

developments

.

of

the

profitableness

ample,

or

in

interpretation of the stockholder's

sufficient to demon¬

are

of

mat¬

a

is

longer

But

introductory

two features of this

I

well

a

several

.

thoughts

cise

and at the

no

decline

so may the social
prosperity be limited
by the policies and action of a
preceding period of low activity.

benefit of

usually

That is

unprofitable for a
period of time will find that it is

ing prosperity,

hundred

But I
static so¬

of

cost

is

is compelled by common

as

that

ness

be determined in part by
policies and actions of the preced¬

must

six

or

ter that
sense

re¬

may

employ¬

uninterrupted.

enough flexibility to
enterprise and to dis¬

new

our

during prosperity
shape the character of a de¬

social

the
Do Not Want

to

analyze those policies to test their

talk

recently
called "Making

the

maintaining

cies

.

tant criteria.

associ¬

prosperity without much thought of of better things for more people,
depression.
To quote Arthur F. which in this country is a dream
Burns in his recently issued an¬ come true, would disappear in the
nual
report
of
the
National dry winds of a stratifying immo¬

.

thinking other equally impor¬

advisable

profitability

prime importance.

Work," in which they

emphasized
invite

his

and

book

a

Capitalism

izations.

Bureau of Eonomic

becomes

this,

McGraw-Hill

at

ance are

.

and

vision

our

are

But it cannot elimi¬

nate

cies and measures with respect to

To

then

mind.

from

stockholder's best interest, and in

employment policies

expansive,
begin to erode the wellsprings of material progress, and

careful,

exclude

wars.

The

primarily on
judgment of the

management's

they

of

employment. But
to suggest the possibility

two

gregate instability, by permitting
adjustments before they become

instability.
stability in the

•

their

a

sociated with the natural sciences
and

unem¬

in

in

restrictive rather than

that

living

and

high degree of try derives very largely from its
stability can be indefinitely main¬ flexibility, and flexibility is an¬
tained.
The title of this meeting other term for
change. Flexibility
includes the term "techniques"— of the
parts, may help prevent
techniques for avoiding depres¬ some of the worst phases of ag¬
expect

them

Certainly

antithesis

enterprises that
interest, business has an es¬ make
up the aggregate.
Progress
pecially large stake in the main-, has its
price.
The dynamic qual¬
tenance of stability.
ity of the successful economy that
But

desired

destruction

ap¬

with respect to the indi¬

or

vidual

at

own

to

guide

level

want

that

that activity

maintained

If full

ally

our

form

any

more

violently than
the general

are

that

At

expanding
contracting.
The
aggregate can be
are

some
are

idea

and

They

activity is

enterprise.

some

residual.

They

ness.

business

The

aggregate activity of

and

given

a

much

eliminate

different types of economic

many

effort

and

believe

as to

to

fluctuations.

much at stake

C. C. Brown

the

make is that I do not believe that

have

degree' of

which have been

assist

great world

a

is

criteria to

moment.

Business firms

are

ob¬

its

maintenance.

in

re¬

likely to

assure

It

that too many of us have made it
a
fetish that will, unless we are

and increasing prosper.ty.
Depression is bad. Prosperity is

the

make

social

I

oi slaoilizmg

as means

to

point.

it

timum

not necessarily harmful.

are

pros¬

like

its measurement, and despite the
difficulty of agreement on the op¬

chaotic markets. Contends business fluctuations result

progressive' changes, and

to

that is one
of the most important of the cri¬
teria, despite the difficulties of

price policy,
prevent

measures

taken

selection of

ployment
thinking.

investment stabilization,

as

priate

have

satisfied to let the level of

job and requires attention in prosperity periods
depression, Dr. Brown reviews and criticizes

proposed correctional devices, such

the

that

some

stability is anything but an easy
matter.
Most people, I believe,
would
deny this, and be quite

in

as

The

measure

(N. J.)

After pointing out avoiding extreme fluctuations in business is
a

would

of

organized security markets.

total business investment that will
be made will depend

if it were not for the
Plan, and other appro¬

maintain

to

introductory

this.

Head, Petroleum Economics Department,
Standard Oil Company

I

third

to

devices

proposed

perity,

COURTNEY C. BROWN*

By

turning

quantitative
been

land today,

Marshall

enter¬

prise system itself...."
Before

7

/

.

23

8

The Commercial and Financial Chronicle

(164)

the market

StockMarketBridgelsBeingBailt
By EDWARD W. STERN

trifling

conditions
stocks

be liquidated
losses

Describing market as having been overbought, then oversold,
and now struggling to regain its equilibrium, Mr. Stern be¬
stocks

Since
ftruck

been

first

the

June

on

panic

stocks have
subjected to

26,

alternately

frenzied

of

fury

and the hectic
bidding of

selling

bargain

hunt¬

ers.

Since

June

27,

weak

driven

uidate

very

issues

market lacks real recovery power

that they should plan to

and

soon.

This is

to

liq¬

It

seems a

pity

of

may

to be

the following literature:

part of that base.

Basic

ket

Consolidated Natural Gas Co.—

Strength Measurements—

comprehensive appraisal of

memorandum

mar¬

the

market

Also

—

dum

zone

(but not to the lowest point—204
the

Jones

Dow

Average—in

Crude
—H.

Oil

&

Co.,

60

available

is

N. Y.

memoran¬

a

Share.

Electric Bond &

on

study

Producers—analysis

Hentz

Hirsch & Co., 25

Cooper Bessemer Corporation—

Hayden, Stone & Co., 25
Street, New York 4, N. Y.

—

has

gotten down to its objective

—

Broad Street, New York 4,

of
440
individual
stocks
explanatory manual and
six weeks' trial subscription $5.00
—Dept. C-3, Investors Research
Company, Mihran Building, Santa
Barbara, Calif.
position

Broad

Technically,

for

an error.

from

those

to

continue to go
on a little longer.
It is the process
that is called making a base.
The
weak
upward
drift
eventually
It

on.

firms mentioned will be pleased

interested parties

reac¬

passed

This process is now

stouter heart.

send

to

series of

a

shallow

are

holders

weak-willed

investors that the

some

In

and

It is understood that the

two phases

are

thing.

shares

going

Recommendations and Literature

offerings.

of

bare

rallies

duration
and
carrying
power since the lows were made.
The very nature of the rallies has shows itself
volume,

convinced

few

same

tions,

Dealer-Broker Investment

a

can

without unexpected
market must b^

actuality, these

of the

peded into jettisoning stocks and
accepting what bidders choose to
offer is lesseningRallies have been poor in both

the
deluges of
selling
have

is

the

and

comparatively
In

posslng into strong hands and are headed
toward higher levels.

are

that there

know

a

two

—

Holders of

needed.

are

must

than

more

rally

broad market in which stocks

Herzfeld, Stern & Co., Members N. Y. Stock Exchange

lieves

have

can

evanescent

Thursday, July 13, 1950

...

Dana

Beaver

Corp.

memorandum—

—

Shearson, Hammill & Co., 14 Wall
Street, New York 5, N. Y.

Street, New York 4, N. Y.

that

possibility zone).
PressureAlso available are memoranda
Department Store Stocks—comgauge
readings show a market
on
Doehler-Jarvis
Corp.
and
Department
a week or so ago should
give up that was considerably overbought parison of May
ground;
the
Johnson & Johnson.
Stores, Federated Department
bulk
of the hope of materially better prices before
the
crash,
that /became
list
just because such prices have not oversold during the deluge, and Stores, and National Department
has
re¬
Fleetwood-Airflow, Inc. — an¬
Stores Corporation — Newburger,
fused
alysis — De Pasquale & Co., 25
stoutly yet been flashed across the trans- that is now struggling to regain its
Loeb & Co., 15 Broad Street, New Broad
lux.
'•
to give way.
Street, New York 4, N. Y.
equilibrium. Some of the frame¬
York 5, N. Y.
The market is now building a
On
the
work of the bridge is already in
Foremost Dairies, Inc.—memo¬
whole, the bridge — a bridge spanning the place—enough to make the 218Leading Banks and Trust Com¬ randum
Moore, Leonard
&
Edward W. Stern
market
has chasm between the top-lofty opti¬
mism of early June and the stark 220 zone probable, with 224 a not panies of New York—73rd consec¬ Lynch,
Union
Trust
Building,
disclosed
a
utive quarterly comparison—New Pittsburgh 19, Pa.
'
It is the unreasonable possibility.
sizable number of buyers wnen- panic of the war scare.
Such
York Hanseatic Corporation, 120
unknown that terrifies—and
in¬
ever bargain levels were reached.
levels
would
probably imply a
Flying Tiger Line, Inc.—analy¬
Broadway, New York 5, N. Y.
vestors have been terrified, not by
Support around the 206 level of
sis—Fahnestock & Co., 65 Broad¬
sprinkling of stocks at new highs,
the industrials has been consist¬ the fear of defeat, but by the im¬
Oil Companies — Financial an¬ way, New York 6, N. Y.
and
would certainly imply ma¬
ently good. The lessening of vol¬ ponderable impact of war upon
alysis of 30 oil companies for 1949
the economy.
terial improvement in the
ume and the slower
low

new

that those who

clearheaded

were

—

price

of trad¬

pace

Petroleum

—

ing

successive

on

significant; it
ber

downthrusts

that the

seems

of holders

that

is

num-

be stam-

can

A

Base

build

To

such

a

level of most industrial stocks.

Being Formed
such

bridge—and
bridge must be built before
a

this

point,

nothing

more

At

less

or

of New

Heywood Wakefield Company—

The

study—May

of the City

York, Pine Street

of Nassau,

probable.

seems

Department,

National Bank

Chase

&

Gannon, Inc.,
Street,
Boston

Devonshire

corner

Kelsey-Hayes
bonds

except redeemable savings

all- investment

bonds,

And Inflation

Hedges

the

Partner, Minsch, Monell # Co.

flation

the New

Stock

York

Exchange

should

and

Thurlow, contending recent market break is merely inter¬
ruption in a year-long rising trend, notes, however, due to all-

the

for

buying should shift from investment to inflation hedge. *

obsolete.

grow

just before

we

of

said

ours

will

tions

conclusion,

elsewhere

as

no

possibly

is

importance,

rising
1949.

trend

psychologically unsettling but does
necessarily bring any nearer

General

investors

enough

a

who

year

Sheet

probably

lack

of

the

low

60s

nation.

by the fear of

such bourgeois customs, particu¬
larly when they have much to win

sudden shifting from

the

ness

boom and

busi¬

and

of

this

suggests

States

undertake

out

restore

mechanism

in

this is done without

anticipation

shows

there
than
in

It

a

that

is

B.

K.

way

of making

money

Wall Street.
To

predict what the

going

do

to

seems

even

sillier

does when there is

no news.

higher.

On

it

Tech¬

"blue-chip-itis" evidexit in
early June. Most stocks are sell¬

ing where they were three months
ago and slightly higher than when
they were in the doldrums early

strongest stimulus in
Production
has

use

been

sold
arial-

of

goods

for military

economic

an

become
money

effect

de¬

tions

valuable

more

less

so.

for

argue

These
a

the

and

considera¬

continuance

of

lytical

reasons

and precedent sug¬
gests that when the sellers repur¬

high dividend yields and the prob¬
ability of rising stock prices as

chase

their

the

shares

higher prices.
suggest
go

bad

All

it

of

will

be

unless
of

there

at

this would

that the market will

lower

is

not

further

public becomes psychologically

attuned

the,

to

now

the

newest

Under

come

For the longer term the cutlook
is clearer. The outbreak of quasi-

investor

should

hold.

the should not

guerrilla

we

in




Aha

and

phase

circumstances

unless.

hostilities

'

and

available

Also
and

is

Company

ATLANTA, Gg.—Courts & Co.,
Marietta Street, N. W., mem¬
of

the

change,

New

York

announce

Stock

that

H.

Ex¬

Grady

Black, Jr. has become associated
with

them.

Mr.

Black

was

Also

(Special

a

the

few

In

should

there

ideas which
concerning what the

place

and

all

should

The

Financial

BOULDER,
Colo. — John
Hopkins has joined the staff
Waddell

&

Reed,

5, N.

Chesapeake

&

is

leaflet

a

Ohio

and

on

Nutrine

the Al¬

not

No

To

South

War

Be
—

Purchased,

category

investment

FT.

list

of

interesting

dell &

Mo.

now

of

La

Republic

Co.—memoran¬

Natural

Co.,

of

three

Vulnerable— discussion

Mercantile

much

mean

stocks in the

for

current

near

prices

Co.

Building,

Cement

Co.—N

dum

on

a

brief review

future—send $1

Bulletin

available

and

next

U. S. Thermo

4

is

a

—Raymond

&

Control—Analyst#
Co.,
148
State

Street, Boston 9, Mass.

Your

memoran¬

Kelsey-Hayes Wheel Co.

,

Haupt

&

RED

Co.,

Broadway, New York 6, N. Y.

L.

Reed, Inc., of Kansas City,

Railroad

—

alysis—Stanley

CROSS

Also available
current

must carry on

comprehensive an¬
Heller & Co., 30

Pine Street, New York

the

e w

of the Cement Industry.

for

Broadway, New York 5, N. Y.

Also

—

Southwest

Bank

Also available is

which could

lower

Gas

First

analysis—Lerner & Co., 10 Po»l
Office Square, Boston 9, Mass.

international

important

economic trends

and

—

Dallas 1, Tex.

Riverside

fic

connected with Wad¬

on

E.

Chicago, Rock Island and Paci¬

Chronicle)

Colo.—Fred

circular

a

King & Co., 39
Salle Street, Chicago 3,

memorandum

Central Vermont Public Service

COLLINS,

is

War

ranging from low to
high priced, and of blue chips—
Bruns,
Nordeman
&
Co.,
321
Broadway, New York 7, N. Y.

Waddell & Reed Add

Hull is

Candy

dum—Thomas

Inc., of Kansas

Financial

available

Ill-

Ill

The

memo¬

—
Cohu & Co., 1 Wall
Street, New York 5, N. Y.

Y.

Co.—Analysis—Ira

tc

—

Mericka

National Gas & Oil Corporation

leghany Corp.

120

S.

City.

(Special

Rubber Co.

memorandum—Sutro Bros. & Co.,

Chronicle)

of

general

to mind

to

and

—analysis

Hickey, 49 Wall Street,

for¬

With Waddell & Reed

Lomason

Bingham-Herbrand Corp.

available

Also

&

Refrigeration.

& Co.,
Building, Cleve¬
14, and 150 Broadway, New
York 7, N. Y.

Railroad Income Bonds—leaflet

York

111

information

land

phia Bonds.

New

Douglas

randum—Wm. J.

appraisal of City of Philadel¬

—Vilas &

is

Union Commerce

valuation

a

Street,

information—

—

available

Mohawk

appraisal

Company, Inc., 123 So.
Broad Street, Philadelphia 9, Pa.

Stocks

36-year-old, struggle for

are

a

•' 1

three months

Grady Black With
Courts &

the world.

surprising nature.
But this, of course, is a very large
news

H.

other

many a year.

,

Equipment Trust Cer¬

weekly issues on trial—Bondex
cidedly similar to the outright merly with The
Robinson-Humph¬ Incorporated, 654 Madison Ave¬
giving away of printed money. It rey Company and more
recently nue, New York
21, N. Y.
places additional money in circu¬ with Morgan
Stanley & Co. in
lation without adding a compen¬ New York.
sating amount of goods in circu¬
Celanese
Corp.
of America—
lation. Therefore the goods must

recently

than

no

business, particularly heavy

in the year. Much of the stock sold

rather

the

or

■

.

tificates—valuation

for

reasons

■

—Stroud &

significance,

that the

three weeks

t-f

Wall

Mexican Railways — Analysis—
Zippin & Co., 208 South La Salle
Street, Chicago 4, 111.

X

.

36

N. Y.

Fabrics

Copeland

Meeds,
120
York 5, N. Y.
Railroad

Co.—memorandum

Co..

Winters & Crampton, Plywood,

Inc.,

and

Stocks—Laird, Bissell
Broadway, New

&

Or

will

taxes

City; Bank

&

Securities Corporation,

Also

speculation

11

of the

has evidently

there is

that

means

New

Broadway, New York 5, N. Y.

Street, New York 4, N. Y.

Stocks

bers

decline which has corrected much

emotional

of

If

entering

Lea

Aetna

an

Comparison

Wells

New York 5,

Analysis for 19 Leading New York

phase to
is

Street,

Bache

on

ago.

old bogey of inflation receives its

point of

a

believe

were

is

than

now

defense

investment

which

term

near

nically it has reached

fo;*

one

conflict

our

the

unquestioned economic and there¬

industry, will probably remain at
extremely high levels, while the

market

the

over

to

hand

going to

strength.
our

much

be

more

one

1945

its

declared state of war,

reason

Thurlow

to

the

that

is finally

to

of the market

thereof.

hand

buying and selling stocks will be
different today from what they

United

early July
was

other

our

fore

All

Lane

yield and market performance

Front

better,

toward

fronts.

collapse. He
predicted
a
"peace scare"
and

by diversionary

of

or

tactics which spread our military
force
thinly over a number of

market would

for

little to lose

another

the

their

of Russia's

friendship
On

buy

Youngstown

aware

munist countries do not believe in

astute

were

and

tainly

initiative. Com¬

overall

Broad

—

Stern,
York 4,

Y.

—

eleven-year period—Na¬
tional Quotation Bureau, Inc., 4G

in June,
likely that

to

ago

Motors

in

the
than

more

in the

hoarding
urge
inspired
war

to

over

established

were

on New York City.
Formal
if it comes, will almost cer¬

come on our

much

so

interrup¬

an

We think it quite

those

not

of

war,

the

certain

consider

we

tion,
minor

bombs

without

If

all three,

as

break of late June

that similar erup¬

occur

industries.

qualify

the much dreaded shower of atom

Three weeks ago,
left on vacation, a

bearish friend

that

the suggestion

30

N.

Co.

&

industrial stocks used in the Dow-

better.

In

defense program and its inflationary potentialities, motive

It is extraordinary how quickly
on
the stock market can

showing an up-to-date com¬
parison between the thirty listed

Quarterly

out

ideas

place in¬

we

hedges, heavy industrials,

war

stocks

Mr.

category

Wheel

memorandum—Herzfeld

let

stocks, many public utility common
Jones Averages and the thirtystocks, and such industrial com¬
five ;> over-the-counter
industrial
mon
stocks as are primarily held
stocks used In the National Quo¬
for stable income during periods
tation Bureau Averages, both as
of declining business activity.
In

By BRADBURY K. THURLOW

Members of

preferred

10,

Mass.

New York 15, N. Y.

Over-the-counter Index—Book¬

The Maiket Outlook

161

is

market

an

5, N. Y.

analysis of

situation.

;

Volume 172

Number 4924

The Commercial and Financial Chronicle

..

.

(165)

tional prosperity, but we can have

Petroleum Industry-

doubt

no

oil

in

in

at

several

duction

and

troleum
United

decades

the

consumption
its

and

States,

dustries,

pe¬

be

on

used

by

woman

and

one-

symbol

of

of

of

States

a

nearly every man,
child, are at least the

the

greatness

of

our

economic

system,

its

sire.

All

tion

of the

the

petroleum industry, and proud

been

about

twice

that

of

the remainder

the

of

world.

both
as

of

of

if

not, indeed,
partisans of

us,

achievements

its

our

contributions

own

well

as

its

to

progress, will doubtless agree that
an
abundance of oil at low cost
to

Accordingly, it

the past three to
four decades has been the funda¬

is

mental

appropriate

the

factor

progress

this

enormous

ilar group

use

of

in

various

for

user

to ask whether

energy

of

the

in

economic

A sim¬

country.

our

from another industry

probably would have an equal
feeling that theirs was the funda¬
achievement

which

forms, and
Gail

F.

mental

mainly
m£et the

Moulton

opportunity to the rest of

to

in¬

dividual

de¬

sires of the average citizen, is the
cause

the result of the greatest

or

prosperity known in the history of
the world.
Nobody will deny that
the petroleum and automobile in*An address

by Mr. Moulton before the
Rocky Mountain Oil and Gas Association,
Cody, Wyoming, June 30, 1950.
The
opinions expressed are those of the author
and

do not

necessarily present the opinion

of The Chase

as

program
economy,

the

On

of

We

Un¬

chicken

before

came

after

or

the egg,

the role of petroleum in
the development of our economy
cannot
be
demonstrated
beyond

that

We

concede

can

whether

doubts

the product of our na-

or

radio

pro¬

"is

of

example

an

We

for

the

of

week

than 100 radio sta¬
tions

in

ing

lead¬

cities

the

of

nation,

Francis
Adams
1

o

w,

P

Trusr e s

of

dent

i-

the

Curb

Ex¬

change,

dis-

cussed the

conflict which

divides

the

today,
in

and
course

the

of

his

talk

asserted

that
A. Trusiow

the

in-

vestment
process

to

is

American

our

since it is the

process

of

working,

earning,
saving
and
putting the savings to work
again.

then

fundamental

conflict

said, "is

question: Whether

over

in

this

and I and

you

everybody, as individuals, shall be
permitted to select the work that
will

we

that

do,

our

manage the earnings
work
produces, deter¬

mine what part we shall save, and

how

shall

we

work for
lie

put

us—or

compelled

to

shall

we

surrender

powers of choice to
organization of a few

The

savings to

our

whether

these

some

super

men

called

State."

When

What

"have-not"

by

inter¬

to our American productive

process,

Mr. Trusiow likened the

greatest dangers to the gentle
undermines

sion

that

of

stream.

a

was rich, and
continuing discov¬

then

able

countries?

deposits to

there

vast

the

of

because there

poor

determined

was

Are

are

no

discover,

mineral

poorer

they
valu¬

or

the

awaiting
exploration
discovery
and exploitation by modern tech¬
nology? These are geologic prob¬
ciates

can

Geologists
have

recoverable
ods

now

fields

of

in

en¬

estimates

made

oil

proven

petroleum

and

and

gas

of

reserves

by production meth¬
use

the

for the

producing
Outside

world.

Russia, data available permit
sonably close estimates.

of

rea¬

In addi¬

estimates

to

of

proven

re¬

serves,

certain

attempted

of

my

colleagues

ultimate

the

estimate

to

production

of

application of factors based

the

volume

and

character

of

vast

counti

table,
Production,

tion

Resources,"

with

Proved
is

of

States,

The

resources.

Oil

Reserves and

data

relates

and

of

Noteworthy

my

ence
ours

production,

oil

and

reserves

the United States to

of

the rest of the world.

Our

of

1949

about 63%

had

accounted

about

oil

Here

one-third

about

57%

have

sources

the

of

about 10%

of the oil

countries.

that

proven

the

the

Middle

discovered

field

1949,

in

total

of

East

These
the

as

of

9,000

over

of

combined
and

for

the

mineral

about

2.5

other

countries

similar

In

to

reserves

ing

the

drilling
These

few

past

of

data

superior

less

by

years

than

100

the

wells.

explode the myth of

endowment

by

they

either

alone

restricted
mitted

Althoug

production

oil

of

of

return

perspec¬

accumulation

which
•

nature

of

capita'

undertaken

to

Continued

on

ing

ourselves

then

appear

the

ero¬

banks

"Taxation," he said,




pay

a

NEW

it.

If

as an

offering

any

$20,000,000

Dated June 1, 1950

Due June 1, 1975

'

"Ignorance—of what

blindly to demand

Price 99.11% and accrued interest

Ignor¬

work.

ance—of the wage earner

led

circumstances to be construed

2%% Debentures due 1975

system

our

no

solicitation of an offer to buy,

debts,

its

should fear, Mr. Trus¬

we

or as a

Panhandle Eastern Pipe Line Company

Asked by Mr. Slater what other

things

buy,

ISSUES

fraud of inflation.

iow replied:

to

the

on

our

loses

money

offer

taxation

generates

to

or as an

value
earnings and savings dis¬
through
the
monstrous

our
our

oj record only and is under

appears as a matter

of such securities. The offering is made only by the Prospectus.

extravagance
and
waste, and borrow instead of tax¬

and

announcement

who is

more

pay

for less work until he destroys his

employer—and his
norance—

of

the

job.

own

statesman

Ig¬

$15,000,000

who

doesn't realize that he is spending
and

the

taxing

system

2%% Serial Debentures

death.

to

And the citizen who doesn't real¬

ize

that

his

to-grave

security
gain

freedom

rity.

demands

and

for

can

him

cradle-

lose
no

And men of greed and

(due $1,500,000 each June 1, 1953 through 1962)

his

Dated June

secu¬

distrust of
In

our

take to meet the

face,

the

securities

Due

Yield

Amount

Due

Yield

1953

1.85%

$1,500,000

1958

2.40%
2.50

1,500,000

1954

1.95

1,500,000

1959

it

will

1,500,000

1955

2.05

1,500,000

1960

2.60

we

what

'dangers

Due June 1, 1953-62

Amount

must

1,500,000

1956

2.20

1,500,000

1961

2.625

head

1,500,000

1957

2.30

1,500,000

1962

2.65

Slater's

Bill

to

regarding

"""

_

$1,500,000

system.

response

question

1, 1950

arro¬

who profit, temporarily, by
creating dissension and ignorant

gance

market

said: "First, we must rekindle the

flame
the
an

that lighted our liberty—
passionate belief that man as

individual—not

the

Copies of the Prospectus

State—is

announcement

supreme.

tion

not

And then

we must

have

ing the undersigned,

and steadfast determina¬
to

lose

our

freedom

may

be obtained in

is circulatedfrom
as may

any

State in which this

only such of the underwriters, includ¬

legally offer these securities in such State.

by

direct

assault
or
through
the
creeping paralysis of compromise.
We must submerge our selfish,

penywise fears lest we lose the
greatest
of all treasures—free¬
dom."

-

Kidder, Peabody & Co. Merrill Lynch,Pierce,Fenner & Beane Halsey, Stuart & Co.Inc.
.

July 12,1950.

'(

'

sim-

page

Of

tolerate

we

/in

i

un¬

capital and provided im¬

portant
with

which

resources

the rapid

ulative

in

or

wasteful, the early

probably

additions
dur¬

de¬

and

speculate in petroleum

they had accumulated.

some

have been made

of

contracts

whomever

exploration with

bar¬

according to American Petro¬

leum Institute estimates.

be¬

chose, and the right of other in¬

re¬

billion

of

the

to

right

exploration
with

velopment

the

make

to

owners

groups, to

of

deter¬

minerals

surface,

dividuals,

serves

the

respect

including

during

rels

a

the private ownership

on

land,

these

A

new

with

resourcefulness

With

citizens.

neath

exploratory

provided

success

political and social cli¬

wells drilled in the United States

1949

economic

is the result of

tinuing growth in this country is

drilled,

were

the

country

founded

new

discoveries.

that

industry, there can be
little doubt that its early and con¬

country,

4,500

our
prosperity, or the
itself, there can be littlj

petroleum

hundred

our

wells

506

its

of

few

Egg?

or

of

mination

reserves

a

country am
preeminence in
well as in our

as

,

the

mate

has

result

a:l

prosperity — it is no.
difference in our lan¬

a

favorable

substantially

nearly

wildcat

resulting

of

we

In

of

wells.

during

doubt

re¬

resources

reserves

drilling

oil

Further,

greater than ours.
were

of

chicken

discovered, as
the discovery of

with

note

production

chicken

the

been

contrasted

foreign

of

Cal

for

Whether the petroleum indus¬
try is the golden egg laid by th..

of the world.

reserves

o

that
our

Chicken

of total world oil pro¬
had in its producing

proven

of

lesson

a

guages.

for

duction and

fields

State

the

between

of the world, at the

resources

end

of

comparable

this

explains

merely

try, with about one-fourth of the
oil

be

There is
in

level

coun¬

produc¬

contrast, for it i.
opinion that the basic differ¬

items

proven

of

reserves

to

of

those

us

shown in the table relate the past

resources.

rates

proven

believed

fornia.

cumulative

production to proved reserves and
oil

current

and

are

compilation of the best avail¬

a

able

of these securities for sale,

result not

fear

attack

our

which

x

'

being material! '

as

greater than those of the Unites

oil

•

have

this

my

called

wildcat

dence.

of

estimated

•are

poi;.
Whereas the

clearly.

more

resources

various

*

illustrate

to

serve

even

geo¬

moment of considera¬
situation of Russ

a

the

of

will

and
regions
of
the
world, and in this discussion are

lems which my

professional asso¬
approach with confi¬

Perhaps
tion

countries

are

resources

sedimentary rocks in general suit¬

erosion.
a

should

center

spending

courage

questioned

viewer Bill Slater about the dan¬
gers

but

makes

world

he

oil

endowment

our

eries.

on

Exchange in transcribed radio
says
investment process is fundamental to our
but is threatened by "erosion of its banks" through
growth of statism.
taxation is

world"

of

case

of

hydrogen

a

New York Curb

cause.

the

the

to

as

great industry is the

our

course,

"The

it

anticipate

we

tion

released

economy

of

doubt.

entitled ''Americans, Speak

fundamental

in

minds

statements.

have found many ad¬

when

pected

gineers

gram

Francis

nation.

ditional valuable deposits not sus¬

the

are

Explains Investment Function

transcribed

more

appraisal

na¬

gave

us.

only in the natural
rigorous and mathe¬
matical proofs possible, and lrke
the classic argument as to whether
the

such

of

that

know

the

in

were

and gas we

sciences

Up!"

July 9 to

of

favored

most

a

authors

probable

President

endowment

establishing the United

usefulness
the

oil by

Trusiow

state¬

many

only the mineral de¬
posits then exploited to a state of

fortunately,

source

National Bank.

"unusual

ture" thus

populahas

interesting that economic
contains

logic

informed

of

measure

"Summary

explaining mineral produc¬
tion in this country as the result

the

world,

see

in the

ments

only in this
scale as to

large

so

having

fourteenth

is

It

government

developed

country

the

about

and

in progress

now

a

resources

in

country

a

pro¬

impor¬

Obviously,

of

products

most

development

literature

operation.
For

de¬

can

both here and abroad.

petroleum is not only corner¬
stone of our
prosperity, but is fundamental to it, and warns
unless oil producers are permitted to make
profits and have
capital to explore new development, prosperity may be cur¬
tailed. Says Federal Government now owns bulk of unexplored
attempts

factors

its

social revolution

for 2 million workers. Holds

in

we

whether they are involved

Moulton, in describing importance of U. S. petroleum in¬
dustry, reveals its investment of $30 billion, providing employ¬

and cites failures

the

violently than

bomb!
,

of

are

termine

Mr.

more

favorable
areas
is relatively
complete.
These
estimates
of
probable ultimate oil production

tant

reserves,

for the accumulation of oil,
experience in portions of the
United States where exploration
and

try in the hope that

Second Vice-President, Chase National Bank, New York

oil

worth

more

while here

our

By GAIL F. MOULTON*

ment

present

our

able

today to consider
the past and future of our indus¬

Chicken Itself?

or

importance of

maintaining
Perhaps it is

status.

Egg

to the

as

9

'

..

'

25

10

The Commercial and Financial Chronicle

(166)

yet traded, has an indicated value
of

COMING

Pennsylvania Brevities

EVENTS
In

Investment

for Pittsburgh

Homestretch

Rys.

Field

After

12 years

direction

the

der

tion Trustees,

of operation un¬
of Reorganiza¬

the complicated and

(Portland, Ore.)

July 21, 1950

entangled transportation
system
Portland Investment Bond Club serving the metropolitan district
of Pittsburgh and adjacent sub¬
annual summer outing at Mt. Hood
urban areas is about to emerge as

Golf Club.

a

Sept. 8-9, 1950 (Portland, Ore.)

ing

single, fully integrated operat¬
company with a simple cap¬
Present unification

ital structure.

Pacific Northwest Group

Association

Bankers

Investment

of the

meeting at Gearhart Hotel,

annual

Day

criss-crossed stock

and

own¬

ership

(Philadelphia, Pa.)

Bond Club of

entities and the
of leases, subleases, guaran¬
corporate

maze

tees

Gearhart-by-the-Sea, Ore.
Sept. 15, 1950

proceedings will eliminate 52 sep¬
arate

by which the component
companies are bound together.
At

Philadelphia Field

at the Manufacturers Coun¬

system

in

time

one

to

bonds)
new

of

scheduled
in

cash

is

receive $5

plus

4.2

admitted

statistical

alleged

per share

shares

of

new

that

exist

certain

might

favor

in

fails

plan

between

values

to

the

that

differentiate

to

are

for each $50 of par value.

common

It

stocks

system

to

Public

stock.

common

holders

new

plus varying amounts

of

be
one

security against another, but it is
conceded
ment

that

overall

the

realistic and

is

be

can

con¬

Final Steps

companies

Bauer, Reorganization

joined
by
an
even
complication of

elaborate

more

-

Dallas

Bond

Club

Annual

Fall have

been efficiently

operated

on

unified

hearing in Washington on July 20
for what may be described as a

basis, but the continued
Meeting.
existence of
underlying "ghost" gathering up of the loose ends
Nov. 26-Dec. 1, 1950 (Hollywood, companies, each insistent upon its preparatory to issuance of an ef¬
full contractual rights, resulted in fectuating order.
Matters to be
Fla.)
a
second period of receivership, determined include:
Investment Bankers Association
beginning in 1938, which could
Whether
more
cash
than
the
annual convention at the Holly¬
a

only terminate in

wood Beach Hotel. '
Dec. 8, 1950

sociation Silver Anniversary Din¬
ner

at

the Waldorf Astoria Hotel

been

U.

approved

S.

which

plan,

present

District

the

by

Whether

SEC,

for

Court

has

the

Western

shall

-(Special to The Financial Chronicle)

Futral, Jr. is
Merrill

Ga.—Herschel

now

Lynch,

be

when
shall

Public

"fair

Utility

and

Commission

equitable,"

the surmounting of

as

Represents

realr^ formid¬

able difficulties, including a round

E.

connected with

Pierce, Fenner &

Beane, 32 Drayton Street.

trip to

U.

the

Foremost

on

not

Supreme

the

most

Court.

underlying

of which

"stood

their corporate rights.

It

until

of

1946, after

years

bitter argument and recrimination,

inquiries in

E. & G. Brooke Iron

Riverside Metal

that

the

A. B.

Pulley

Farquhar

Houdry Process
General Manifold &

S.

Court

of

CHESTNUT

STREET

LOcust 7-6619




$6,000,000
plan and

interest

the

on

begin to

bonds

new

Whether

and

in

what

amounts

fees and expenses, paid or sought
for in connection with the pro¬

legal

concept

recognition
of

separate

of

the

entity.

An

application to the
Supreme
Court to review the decision was
denied.
difficult problem was

phia Company, controlling Pitts¬
burgh Railways Co. through 100%
stock ownership. Claims of Phila¬
delphia Company against Pitts¬

stock,

had

Philadelphia Company

acquired,

years and

ership

Whether

tax

re¬

the

provisions

terms,

conditions

contained

in

the

proposed trust indenture, charter
and by-laws of the new
company
are

appropriate.

The

SEC

of

of

means, own¬

approximately
twooutstanding system

all

securities.
that

period

a

Public

holders

held

Philadelphia Company claims

should

be

subordinated,

theory
that* Philadelphia Company stub¬
bornly
rejected. .Certain
wella

organized groups of public holders
probed deeply
into the
alleged
self-interest with which Philadel¬

phia. Company
affairs

of

directed

had

the

Pittsburgh Railways in

past years. It was apparent that
such charges could be
resolved, if
at

all, only after

innumerable

an

series of individual

court

which

the

would

defer

action

ducive

as

to

the

reserves

for hearing

the

any of
set
forth

issues

or

such

or

questions

and

actions

control of

the

new

company (50.9%)
and a release
of its guarantees in full settlement
of its

claim^.

plan provides that

holders

of securities
guaranteed by Phila¬

delphia
cash.

Company

Public

Kaelin

hasty

The

tion

could

be

year.

month,

by

measure

hopes

to

as

11

which

would

entail
to

P. T.

no

and

public.

"hard¬

dividually.

Quill

and

that there

Kaelin

was

maintained

mention of

no

union
than

breach

meeting

of

walked

called

in

an

fewer

than 10,000

were

out

of

of

as

attempt at negotiat¬

Normal
are

countered by fil¬
ing suit against the union charg¬
a

flat violation of the

ent

union

against
for

violation

and

of the

ters

are

of

about

three
is expected that the
company will continue to spend
from $20,000,000 to $30,000,000 an¬
nually for new construction with¬
out
necessity for further debt
capacity

generating

other

leaders

union

consti¬

operational

strictly

management,

the

the

mat¬

function

of

the

and

press

every

It

years.

financing.
Benefit of capital

in

already

revenues

010,000 recorded

high

new

than

in

improvements
are clearly
of $70,-

operation

Total

apparent.

1949 were at

in

recorcf,

1948.

6%

Current

greater
revenues

reported to be running about

are

10%

ahead

reach

of last year and may

$77,000,000 for 1950.

Pennsylvania Power & Light
cently raised its
rate

to

estimated

share, "or
dend

common

$1.60 annually.
more,"

increase

distinct

at

$2.50

per

further divi¬

a

is

regarded

as

under

the

*

*

■

A group

public sided overwhelmingly with

of New York and Con¬

necticut holders of United Gas Im¬

provement Co. common stock, ag¬

10,000
SEC

ownership

shares,
order

to

divest

has

itself

of

about

petitioned

the
of

company

Holding

regarded
the

as

a

outcome?

but tem¬

necessary

expedient.

porary

What

Unless

is

the

to

Railroad

phia

Company, within a
time, must dispose

able

Equipment Trust Certificates

divest¬

ment order is rescinded, Philadel¬

City of Philadelphia Bonds

reason¬

its

of

as

transportation

company
stock.
This might be accomplished by a

distribution to Philadelphia Com¬
pany stockholders or by the sale
the

event,
of

property.
experts

the

In

point

to

the

of June 30, 1950
^

v

Our

latter

current

Please

publications will be
mention

which

sent

group—or

on

request.

both.

City

Pittsburgh as the logical buyer.
forma, assets of the new com¬

be paid

holders

of

off

in

unguar¬

pany
per

are

equivalent to about $40

share book value for the
stock.

common

If

the

Pittsburgh could buy the

new

City

of

company

for $20 to $25 per share and
oper¬
ate it free of the burden of the

corporate

income

well

STROUD & COMPANY
Incorporated

profitable undertaking.

be

Based

prices
new

a

on

of

the

taxes,
current

system

company

it

could

market

securities,

common

the

stock, not

PHILADELPHIA 9
ALLENTOWN

•

PITTSBURGH

NEW

to

assets, including some $20,000,000

Valuations and Appraisals

be

the

non-integrated

divest

Company Act. Thus Philadelphia
Company's control of
the
new
transportation company must be

a

U. G. I. Under Fire

itself of its gas and transportation

properties

re¬

dividend

With 1950

possibility.

gregating
that

kilowatt

100,000

unex¬

tution.

Holding

requirements

stimated to necessitate the ad¬

dition

insurg¬

which filed suit

group

Kaelin

reserves.

*

and

been

earnings and

growth

earnings

scheduled.

company

ing it with

through

has

Balance

retained

depreciation

meeting

a

therefor
$57,-

Some

raised

been

common.

present.

ing differences, leaving the strike
The

&

2%% bonds, $15,000,000
preferred stock and $13,000,000

taken from

a

called

more

greater

Power

financing

provided.

has

000,000

was

which

at

members

Quill

contract

hastily

a

2,000 of the

union

of

Strike action

at

Pennsylvania

of

one-

trolley
operation
in
the
agreement reached last February
and
that the
proposal therefore
a

E. Oakes,

the

the sale of

man

was

to

to be

were

specific

any

of

Moreover,

would be adjusted in¬

cases

President,

one-

routes

an

order

1,

en¬

curtailment

no

the

$165,000,000

to Charles

According
company

Saturdays

"no strike" clause and

new com¬

trol¬

July

certain

C. employees

off

ship"

of

total

to

through 1952.

been

it

company

closed

operation

postwar
expansion pro¬
expenditures for which are

scheduled

necessary

business

many

were

important

has

one-man

The

routes.

over

the

$38,000,

out that banks, insurance

service

which
will
cost
$60,000,000, are
segments of the com¬

units,

company

the

about

save

during the summer and that
man

The

Light's construction program andl

Saturdays, starting

14

on

for completion in

economy

an

announced that

was

is under construction,
1951.

plant

part

ley operations would be instituted
on

watt

scheduled

gram,

taken.

11,

one

Last

the largest anthracite-fired
of
its
type
in the
An additional 100,000 kilo¬

bury,

installation
world.

pany's

rank

a

facts,

for

of its 150,generating sta¬
Sun-

tion at Shamokin Dam, near

before

vote

Feb.

*

*

Lt. Marks Growth

&

ALLENTOWN—Late last month

something

briefly, were these:
the company and
the
union signed
an
agreement
which prohibited any strike ac¬
On

*

Pwr.

Penna.

reopened
arrived
at an
which rescinded the
even

he

record for back-pedal¬

ing.

promptly

pectedly supported by

in the hands of Philadelphia
Company which is already under
SEC

membership

and

order

file

and

local

opera¬

believed

is

It

dedicated the opening

the other by insurg¬

and

negotiations
"agreement"
strike

set

a

trolley

one-man

schedule.

as

action
by
antipathy and
by two court suits, one instigated
by the P. T. C. for breach of

itself,

proposed
tions

Pennsylvania Power & Light Co.

public

ents within the union

He

with

terms

to

000 kilowatt steam

to

fire.

of

may.

Spurred

his

pull

to

the

of

Pro

As a practicable solution, Phila¬
delphia Company agreed to accept

The

union,

left

was

out

same

in

president
to save face

take

pany

previous

force,

Kaelin,

con¬

will leave control of the

Quill,

interference

or

the
company,
obtaining a concession
lopping off one Saturday from the

leaving

prompt

orderly,

and

retired

to

And Then?

of

indefinitely.

stock

he

has

appear

may

economical disposition.

consum¬

mation of any reorganization plan

common

local

best

date set

order

disposition,

a

of

thirds

over

by various

the

J.

"authorized"

Whether any requested

task

silence,

by the P. T. C.

burgh Railways Co. and under¬
Consummation of the Pittsburgh
lying companies aggregated some¬
Railways plan, as proposed, is ex¬
thing over $80,000,000. Besides its
pected. This, however, as noted,
ownership of Pittsburgh Railways
Co.

Andrew

represented

right to separate,

A second

and

ceedings, should be approved and

and

overrode the argu^

the

(CIO),

confusion

allocated.

factual unity"
for

Union

ers

laid

accrue.

accounting, entries to

be made by the new company and
Philadelphia Company are appro¬
priate and proper.

Appeals

posed by the position of Philadel¬

1421

the

citals are proper and appropriate.

Printing

HERBERT H. BLIZZARD & CO.

new

rather arbitrarily ruled that "pub¬
lic necessity" and "many years of
ments

American

U.

than

less

Whether

question of ju¬
the

over

companies,
pat"

S.

was

risdiction

was

We solicit

for

of

amount

off

come

one-man

Michael
J.
Quill,
international
president of the Transport Work¬

terprises
the

provided for under the

nia

Joins Merrill Lynch Staff
SAVANNAH,

available

bonds to be issued under the plan

Pennsylvania and the Pennsylva¬

(Starlight Roof).

,

is

distribution.

The

York's

companies and

Compromises Indicated

Security Dealers As¬

didn't

Saturday,
New

pointed

plan

Phila¬

become effective last

to have

was

$17,000,000 minimum provided for
the

paralyzing

against the

delphia'Transportation Co., which

under

thorough corporate overhaul.

(New York City)

New York

complete and

a

ordered

contract

Elmer E.

Trustee, has mailed ballots to all
known
public securities holders
returnable to him by July 7. On
inter-company security holdings,
Sept. 26-30, 1950 (Virginia Beach, or
each ballot, holders are asked to
leases, or both. Some progress
Va.)
toward
simplification was designate securities owned and to
vote for or against the plan. Over¬
National Security Traders As¬ achieved in a
former period
of
acceptance
is antici¬
sociation Annual
Convention at receivership, from 1918 to 1924, whelming
but the job was not completed. pated.
the Cavalier Hotel.
For
almost
50
Following tabulation of the bal¬
years,
physical
Oct. 12, 1950 (Dallas, Tex.)
properties and pooled equipment lots, the SEC has scheduled a
try Club.

PHILADELPHIA—A
strike

unanimous

its

assistance

chestnuts

without

Kaelin,

company.

from

treat¬

summated.

the

further

*

Thursday, July 13, 1950

.

.

quickly

acjcept

(part in cash and part in

5%
of

8.

*

About Face for P. T. C. Union

asked

are

and

%

par

history, the
composed of some 200

was

bonds

anteed

7

between

.

YORK

SCRANTON

•

LANCASTER

[Volume 172

Number 4924

.

.

The Commercial and Financial Chronicle

.

(167)

in securities of other utility com¬

Pullmans

panies.

Principal
petitioning

6:00

vorced

Gas

the

Luzerne

County

Elec.

Corp., the Delaware
Coach Co. and the Utilities Realty
Co., the latter company owning
the Philadelphia office building
which the U. G, I. partly occupies.
involved

Not

*

Philadelphia

in

Gas

town-Bethlehem

action

of

are

Co.,

Con¬

Reading, Har-

Co. and

Co.

Lebanon

Valley Gas

.

'

!<£

Philco

Some

Corp.

distributors
and
5,000
dealers,
attending
Philco
Corp.'s largest national sales con¬
vention in company's history, held
at Atlantic City last month, were
told that total sales of all products
1,200

for 1950 would

ord

volume

likely attain

of

a rec¬

Last
year's sales were $214,884,306.
Company aims for the produc¬
tion
of
1,000,000 television sets
this year and plans to spend $25,000,000 for promotion of sales and
advertising this line.
$300,000,000.

Despite
strikes

*

*

■r

of

effects

other in¬

and

coal

curtailment
firemen's

the

to

traffic

in

Railroad

Pennsylvania

able to show black

figures for the
The rail¬

590,168

charged

reported

was

part of

better than in any

as

last December.

month since

the
to

National

rates and

be held

Security

the

Sept. 26-30 at the Cavalier Hotel, Virginia Beach, Va.

Station

3:40

at

Sunday Sept. 24. Special Cars will
leave New York and Philadelphia late
Sunday evening arriving
Washington Monday morning. All Baggage and Personal effects

attributed

is

Boost

cost of

be left in the Pullmans while in Washington on Monday, but
Pullmans will not be available for occupancy during the
day.
Chartered

day at 9:15
tions.

for

a.m.

stop at the Capitol, Smithsonian Insti¬
Lincoln Memorial, also visiting Arlington
Cemetery and

Tomb of the

will

be

Soldier.

.

Following

Dinner the

group

and will leave at 2:30

Norfolk at 7:45

Tuesday morning arriving

a.m.

Immediately

a.m.

arrival

upon

our

will

Buses

leave

The

of

cost

*

Forge Co. and its subsidiary, Erie

11:30

includes

Tour

and
baggage between
Hotel, Virginia Beach.

All Expense Tour Rate

Norfolk

Terminal

larger fourth pe¬

One in.

New

.

.

Stockholders

may

.

.

.

Expands
Trading Dept.

way,

&

120

Co.,

Broad¬

New York City, members of
York Stock Exchange,

New

the

greatly expanded the facili¬
ties of their trading department.
The firm acts as stock
brokers,
have

land

7:50 p.

The

.

.

distributors

dealers in bonds and

Penna. RR.

9:10

p.m.

Arrive Pittsburgh

Penna. RR.

Luncheon and Dinner
Leave

Each

Duplex

Each

$141.18
123.29

132.14

95.60

93.29

99.27

114.14

117.43

114.03

122.88

73.84

78.26

81.25

78.49

85.73

63.11

66.96

69.49

66.95

73.92

.

85.16

89.24

91.78

89.19

95.91

.

Arrive Cleve¬

leave Washington Oct. 1, 8:10 a. m.

to

from intermediate points quoted upon request.

to and

to Virginia Beach

All

Expense Tour Rate Chicago
Railroad Ticket not included.

Two in

Roomette

Each

Between Washington and

Dr. Rm.

Each

Duplex

Each

$61.83

$65.97

$61.43

$54.75

$72.70

a.m.

Arrive

Chicago

Penna. RR.

a.m.

Arrive

Cincinnati

Penna. RR.

7:40

a.m.

Arrive Detroit

Penna. RR.

8:10

a.m.

Arrive St. Louis

Penna. RR.

For further information those

tion

should

Virginia Beach and Return

Two in

Two in

One in

Bedroom

Including

Rail

Without

Ticket

Rail

Ticket

.
...

contact

New York

AD

City;

Edward H. Welch, Sincere & Co., Chicago, 111.

or

LIBBING

is

President

also

announcing

Colo.

Detroit, Mich.
Kansas
i Via

22.86

25.16

25.04

Beach

Los Angeles, Calif.

York, N. Y. .
.
Philadelphia, Pa.
Pittsburgh. Pa.
$St. Louis, Mo. .
.
.
San Francisco, Calif.

scrips

110.17

.

.

31.11

.

63.31

..

City, Mo.

.

46.06

tember,

Twin Cities, Minn.

.

Columbus.

should

•

''

.

THE

3:40

p.m.

Leave

Dinner

on

p.m.

8:35

(Special to The Financial Chronicle)

Fenner &

Merrill

a.m.-




valuable to advertisers and

H.

N.

for

Bernard, Jr.

served

to

find

Los Angeles

our

with

us

before

time

some

to

and

do

in

the

Convention issue.
Only
more contracts through

yesterday A1 requested
his

New

York

office.

like

Looks

Sept.

10 will

be

the

deadline.

Many thanks, Al!
May we, the Committee, again thank Lou Walker of the
National Quotation Bureau for his authorization for a half page.
This appears to be the largest ad received to date and we do
want to recognize Lou, an old-time tested friend and member.
Perry Brown of New Orleans acknowledged our letter of
22 by saying he had already forwarded copy for his ad.

June

National Association.

See you

seem

to lose interest in the

in September, Perry.

Henry Isaacs of Virginia Securities Co., Norfolk, Va., sure
proved his ability to solicit advertising.
It seems a shame
that Hank does not have an affiliate membership because his gross

has

to date is greater

better

do

than

than many quotas.

Swell job, Hank! You should

$500.

the other day with Charles Mountcastle
with J. F. Reilly & Co.
He never can get
his blood, so when you are using Freeport's
great fishing center call on Monty at South Grove Street, Freea

fine

visit

(Monty), formerly

the

"Street"

out

of

He will be glad to see you.

port.

HAROLD

B. SMITH, Chairman
Advertising Committee
Pershing & Co.
120 Broadway, New York 5, N. Y.
NSTA

This

announcement

buy any of

is

neither an

these shares.

offer to sell, nor

solicitation of offers to

a

The offering is made only

by

Prospectus.

480,000 Shares

106.66

American Cladmetals

Company

Corporation)

,

Common Stock
(Par

Value

$1.00)

Price $1.50 Per Share

Copies of the Prospectus may

Penna. RR.
Penna. RR.

Arrive Washington

September 24

be obtained

from the undersigned

UNDERWRITERS

Train

Graham & Company
313

affili¬
Pierce,

on

Sixth

Pittsburgh
8:00 p.m.

Monday.

2:00

a.m.

Penna. RR.

Leave New York

Leave Philadelphia

September 25
,

.

;

Penna. RR.

a

Los Angeles will be well accounted

ads

by

has

Avenue

Graham, Ross & Co., Inc.
82

Beaver

Street

FROM THE EAST

Beane, 6361 Hollywood

Boulevard.

more

(A Pennsylvania

September 25,

Leave Pittsburgh

Sunday,

Calif.—William

Lynch,

issue

ads of our members who
markets which will make

many

seems

job forms.

Penna. RR.
Penna. RR.
Penna. RR.

Detroit
Leave Cleveland

Breaklast

With Merrill Lynch Firm

with

convention

Train

Monday,
12:41

ated

carry

fundamental

always

Penna. RR.

p.m.

the securities business.

become

and

Virginia
in Sep¬

Albert M. McCready of Geyer & Co., Los
Angeles, is Chairman of the NSTA Advertis¬

1950

24,

Chicago

Leave

has

at

Convention

WEST

September

Leave Cincinnati

McCauley

England

yearbook

our

this number

Detailed Tour Schedule

p.m.

M.

New

National

our

"Commercial and Financial Chronicle"

of the

98.96
206.00

Pittsburgh in both directions. JVia Chicago in both directions or return-

ing via Pittsburgh and

p.m.

States

Association.

Traders

$206.00
40.40

.

148.81

.

.

.

New

55.78

.

8.40

HOLLYWOOD,

for

29.30

72.57

Cleveland, Ohio

and

United

from

attendance

$46.59

79.35

.

.

•(Cincinnati, Ohio
Denver,

$42.33

$ 66.27

.

111.

5:15

the

Securities

My compliments to you for your ready accept¬
ance to serve with us.
With an expected large

Federal Taxes included.

Boston, Mass.

5:40

of

1950 NSTA

Schirmer, Atherton & Co., Boston, who

Boston

Fach

$42.45

.

the firm declared its belief in the
future

our

se¬

expansion

the

the

of

Trip Railroad Fares from Principal Points to Norfolk

shown below.

Chicago,

E^ch

$40.15

.

.

.

.

Dr. Rm.

Compt.

Roomette

Each

reorganization securities.

In

planning to attend the conven¬
Herbert H. Blizzard, Herbert H. Blizzard &

Co., Philadelphia; Walter F. Saunders, Dominion Securities Corp.,

Had

Including Sightseeing, Luncheon and Dinner in Washington.
Pullman and transfer from train to The Cavalier.

FROM

rights and

p.m.

Our former National Presidents never

and

Two in

Compt.

One in

One in

Bedroom

Sunday

specializing in

7:50

7:10

$152.05

126.69

.

quoted

and

unlisted

a.m.

Monday, October 2

curities and mutual funds shares,

and

Cleveland

Train

on

Washington 8:10

Arrive

Dr. Rm.

93.35

.

.

Rates

m.

Compt.

123.40

.

.

rate

>,

89.96

4

participating

Philadelphia and New York
Leave Washington

he

118.17

.

.

■"Cleveland

Round

McDonnell

to

p.m.

Two in

$145.32

ex¬

pect a distribution of $2 this year,
compared with $1.80 in 1949.

McDonnell

enroute

affiliate." A1

$140.78

.

.

York

One In

Roomette

this

make

conditions

Penna. RR.

served

ing Committee representing

108.91

.

Cleveland

the common
quarters with

riod dividend "if profits and other
financial

York

1:10

The

$134.10

.

.

.

of

rate

and

Two in

Each

From

40 cents per share on

possible."

New

Breakfast

Round

-

Bedroom

Pennsylvania Salt
indicated
intention of

a

Arrive

to Virginia Beach and Return,

Two in

of

three

a.m.

Including Rail Tickets, and All Taxes Via Complete Tour

Steel Co., to New York
reported under way.

first

10:55

Introducing two more outstanding" members of

p.m.

Two in

the

Penna. RR.

Hotel Rooms at The Cavalier and gratuities are not included.

return.

for

Philadelphia

readers alike.

are

anticipation of

Arrive

make

Cincinnati

dividend

a.m.

Hubert Bernard, Jr., of

Cavalier at

The

Each

.

a

R. F. & P. RR.

9:17

Norf. & W. RR.

Trip Rail and Pull¬
including Federal Taxes, Meals on the Train as Specified,
Sightseeing, Luncheon and Einner in Washington and transfer of

Pittsburgh

have

Arrive Washington

man

Negotiations for the sale of Erie

Co.

Leave Norfolk

a.m.

Advertising Committee:

Saturday, Sept.
Special Train will leave Norfolk at 12:30 a.m. Sunday
Oct. 1 arriving Washington early in the morning, Philadelphia
at 9:17 a.m. and New York at 10:55 a.m. Those going to Pittsburgh
and other points west will leave Washington Sunday at 1:10 p.m.
arriving Pittsburgh 9:10 p.m. and Cincinnati, Detroit, St. Louis
and Chicago Monday morning, Oct. 2.

.

maintaining

a.m.

6:00

and the

Philadelphia

Directors

party will be

Returning
30

Norf. & Sou. Bus.

12:30

driven in Special Buses to The Cavalier for Breakfast.

Sharon, Pa., early this month.

interests

will

return to Washington by
Chartered Bus and the Special Train will be ready for occupancy

Detroit

Forge &

Commonwealth

Club, Alex¬
andria and following Luncheon we will visit ^the George Washing¬
ton Memorial and Mount Vernon
returning to the Kenwood Golf
and Country Club for Dinner.

sidiary of U. S. Steel, will begin
modernization
of
its
plant
at
*

the

at

served

30

7:20

*

f

September

Hotel

Sunday, October 1

a

Unknown

Luncheon

Chicago
*

Steel Products Co., a sub¬

*

Cavalier

Leave

p.m.

Tour of the Residential and Business Sec¬

a

This will include

tute and

the higher

to

*

Norf. & Sou. Bus.

will leave Washington Union Station Mon¬

Buses

year.

wool.

raw

❖

U. S.

this

advance

Arrive Cavalier Hotel

p.m.

may

17, James Lees &
Sons, Philadelphia, carpet manu¬
facturers, announce an increase of
5% in the price of wool carpets,
fourth

Association is announcing
special trains for the Convention

Special Train enroute to the National Security Traders
Association Convention at Virginia Beach will leave
Chicago,

Effective July

the

a.m.

Traders

schedules for

The

Cavalier

*

*

*

Norf. & W. RR.

8:45

R. F. & P. RR.

individuals

prior

in

addition, June business

In

years.

re¬

May, reflecting

over-accrual

an

$3,-

tax

in

adjustment
in

serves

a

with

itself

credited

be

Arrive Norfolk

-

The

due

May,

may

first six months of 1950.
road

in

strike

Leave Washington

a.m.

11:30

TRAIN SCHEDULES FOR NSTA CONVENTION

dustries early in the year and the
severe

a.m.

7:45

RETURNING

at 10:00 p.m.

adverse
the

in

Notes

Saturday,

Union

:Js

Penna. RR.

2:30

NSTA

risburg Gas Co., Lancaster County
Gas

p.m.

Tuesday, September 26

Allen-

Works,
Gas

Gas Co.

sumers

the

10

open

Washington

group seek to have di¬

are

&

Arrive

a.m.

properties which the

/

11

Telephone:

22,

ATlantic

York

Pa.

New

1-7380

Telephone: DIgby 4-2946

5,

N. Y.

\

12

The Commercial and Financial Chronicle

/

(168)

LETTER

TO

Thursday, July 13, 1950

.

.

in

ing into the islands of Japan

EDITOR:

THE

.

the

south, Korea is, alone, in the
position of acting as a buffer be¬
tween the power structure of Rus¬

Former U.S. Interest in Korea

United

L. Winkler

Robin

capital

points out from 1883 to 1905 American

States.

to

United

the

States

America has failed

Editor, Commercial and Financial
Chronicle;

was to recognize Japan s
mount position there.

para-

as

This

model

a

Despite the fact that

guide.

and

ther

several

on

June

invaders

rean

represents

a

continuation
o

America's

f

attitude

to-

ninsular state.
occu-

i.orea

pies

an

tremely

exs

niticant-

i g-

posi-

lj°n *
Far

*

and made it

States

cordially recognized the new state
of affairs.
As

United

The

*

long as support of Korea by
United
States
continued,

the

Winkler

interests

American

But

secure.

as

in

soon

Asia

Arr

nf

p'riran

When
When

Asia
Asia.

tofs
tnis

were

this inter-

as

in-

supsup

port is removed, American interest will decline. Today, especially,

:

./

shown

-

of American

removed, American power
Asia
was
gradually replaced

was

in

P°wer. of

the East. Once again the question
has been raised: Is.Kore? of im;
upholding

ti

these investments and more, were

in Asia

of

(3)

Creation

In

statement

a

suits

for

the

the

by

June 30,

1950,

Bank

Korea by

in

the belligerent powers.

Two years later the United States

Point

Secretary

000,000

amounted to

com¬

as

with

year,

the

State

of

New

in

as

John W. Snyder

com¬

with

pared

balances, and cash items
of cchecLon
$1,275,3C9.4C
Government

States

183,4-31

2.56

742,473

740,470

40.36

37.38

627,936

575,531

9.40

9.40

0.70

0.67

2,335,397
1,068,962

2.55

ical

*

Guaranty Trust
Irving Trust
*National

Other

ASSETS

$!*,9.817.?8

liabilities

1,062 623.48

TOTAL LIABILITIES

<n* in-

eluding subordinated oblga-

.

\ tions shown below)......., .$1,192,500.76
AC A

P I

T A L

ACCOUNTS

Cap vt alt
Surplus fund
Undivided profits....

'

$500,090 0J

325,000.60
232,964.45

TOTAL CAPITAL ACCOUNTS $1,057,964.45

'

r

TOTAL

LIABTT

CAPITAL

The

on

$40,057

the

the

ACCOUNT':......$2,-50.465.21

ing

and

investment

during

the

fiscal

1950

tTliis

institution's
stock

common

with

r*"V*a!
conclsts
total
par
value

of

of

Assets

plederd or a-s'gmd to
liabilities and for -ot^er.

]

was

soecial

purposes

shown
deduction cf r-sorv^

Securities
after

$101,178 94

issues

tional

Service

held

as

I, Charles J. Ski hit.
/above-named institution,
above statement
—ue

,'the

'my

knowledge

and

8X04 TO

Fund in

by

Life

the

to the best

Correct—Attest:

cf

»
.

as

1949

during

and

1950

classes of the

the
in

Na¬

Insurance

fiscal
the

years

various

public debt is shown

in the attached table.

cases some

cause

with

declines

a

in

decline

a

where

one

bank

Con¬

reported.

were

is usually

above

variations
a

seasonal

loans, the showing

year

between

ago

as

a

condition simi¬

a

banks.

result

In

of

most

cases

increase

an

in

For the second quarter however,

securities

between

March

31

and

June

30

of

this

year

shown below.

Discounts

U. S. Govt. Securities

March 81,
195©

June 30,

March SI,

195©

195©

30,

1950

(000s Omitted)

Bank

of Manhattan

Bank of N. Y. &

Bankers
Central

Chase

$430,004

126,514

113,850

161,453

$323,594
165,861

572,899

567,712

521,403

512,254

422,762

444,507

Trust

Hanover

National

Chemical

480,140

National

45,404

Corn

Echange

78,816

First

National

155,153

Guaranty Trust

resufts

982,767

Irving Trust
Manufacturers Trust

'

U.

405,488

371,414

436,218
415,149
551,656 1,005,985 1,024,818
1,375,617 1,860,935 1,769,175

580,364

National City
New York Trust

1,333,231
243,718

S. Trust

$323,432

649,504
530,961
1,379,485 1,671/781 1,655,732
468,285
511,288
528,922
41,361
93,882
92,880
76,078
464,294
468,003
13-3,495
315,477
315,801
964,941 1,079,906
938,423

1,404,655

Bank

Commercial

ex¬

$427,795

Fifth Ave.

244,608

52,799

Join
(Special

Tucker, Anthony
to The

55,639

314,962
59,090

253,899
57,859

debt

Bird
are

reconciles

with

III

with

and

Total

Mass.
John

Charles

—

L.

Thorndike

Tucker, Anthony & Co.,

of

receipts

in

th

582

in

or-

&

-

j

heart attack at the age of 52.

Fund

increase

into

2.047

:.

in

the

•.

account

___

$4,587

the

Reserve

Banks.

summary statement is being released prior to the publication of
information

in

the

June

30, 1950 issue of the Daily Treasury

has joined the staff of Waddell

son

& Reed, Inc., Lafayette Loan &
Trust Building.

Statement, whith

Gillis & Co. Formed

was

£

Co., died of

2,540

;

General

Hendrickson

Secretary Snyder said that this

detailed

Chronicle)"

LAFAYETTE, Ind.—Floyd Carl-

Joseph H. Hertel
Joseph Henry Hertel, associated

clearing
ac-.
count
for
outstanding
checks,
iat-rest
coupons,
and
telegrapliic
reports
from
Federal

(Special to The Financial

S.

74 State Street.

$3,122

accounts, etc.*

public debt
"Takes

With Waddell & Reed

Financial Chronicle)

connection with payment

Directors.




were

with

June

re¬

+1,311

balance

dividends amounting to
$2,633,000,000
during
the
year
just ended. A comparison of the

changes

CHARLES J
c"r,T»T-TT7.r>
«-iirer.
OAKT.EIGH !•
TH^,
NORM4w T
•"•"IN,
RAYMOND NUV.'M

totals

loans

variation

deficit in the follow-

excess

Increase

of special

Relief.

considerable

favorable.

was

ac¬

due to redemptions of

secure

r

1950

showed

increase for the year and since the end

Louns and

a

compared with an increase of $2,564.000,000 in 1949. The decrease
in

MEMORANDA

an

^Indicated earnings.

Comparisons of loans pnd discounts and holdings of U. S. Gov¬

$4,587,000,000 in

Subtotal

*

■$500,000.00.

to bank

ernment
are

(in millions):

way

trust

$420,000,000
.year

120,093

t20.89

the changes were very minor.

+$110

1,811

public

Less

savings notes
and
United
savings bonds; marketable
debt increased by only $172,000,000. Special issues to government
decreased

115,740

f20.ll

earning assets during the period.

—1.201

Budget deficit

States

funds

4,688,598
687,471

Holdings of government securities reflected
lar

with 1949.
-

38,246

the budget

ury

trust

3.09^

compared

Year 1949

The increase of

June

1950 amounted to $257,357,000,000, an increase of $4,587,000,000 during the year. The change
during the year was accounted for
primarily by increases in Treas¬

counts

AND

loans

In other

for the quarter

millions):

Fiscal

3,122

public debt

gross

30,

deposits of individuals,

changes in

experiencing

considerations often

by $3,130,000,000, and

comparison of budget

_

____

cf last quarter.

Jan¬

—

_

sidering the fact that the period

lower than

January

2,100,794

1.62

3.4-3

__

_

Trust

BOSTON,
Deficit

$2,250,465.21

LIABILITIES

Other

_

133,891.57
311,035.30

partnerships, and corporations

I

The

None;

assets

TOTAL

Demand

;

in

_

Trust

S. Trust

number

$3,122,with a def-

were

2.33

1.69

2,189,814
976,919
2,128,289
4,622,011
592,744

__

♦Including figures of City Bank Farmers Trust Company.

6D.0C0.00

i

I

1950

$40,167
37,045

Expenditures
receipts

Net

50,562.14

'

i

U.

__

City

New York

to

Both expenditures and

Year 1950
419,636.80

subdivisions

Corporate
stocks
Banking premises own d,
furniture and fixtures

.

compared

Fiscal

obli¬

gations, direct and guaran
ed
Obligations of States and polit¬

1,390,485

___

Bank

Change, 1950

process

United

1,304,930

4,298,937

National

table below (in

receipts of $38,246,000,000 for
the fiscal year 1949.

1,399,854

1.23

Exchange

ilar data for 1949 is shown in the

net

t3.00

1.39

First

estimated

A

York.

ASSETS

Cash, balances with other bank¬
ing institutions, including re¬
serve

000

f3.00

National

369,523

1.64

for the fiscal year 1950 with sim¬

$37,045,000,-

1,348,036

1.42

'

-

receipts by $718,000,000.

amounted

1,338,751

1.42

amounted

penditures

end

1.31

1.44

the President's budget in

was

year

1.33

_

2.69

■'

1949.
"nAn

ceipts for

receipts

of 120 Broadway, New Yora 6, Nrw York, at
the
close
of
business
on
June
3C,
i95lt,
published in accordance witn a call made
by the Superintendent of Banks pursuant
to the provisions of
the Banking Law of

as

year

uary.

the

in

previous
cal

the

in

$1,042,607

Corn

.

000 less than the deficit estimated

the

$1,069,344
396,005

Commercial National

genera] for-

icit of $1,811,000,000 for the fiscal
~1

$1.00

'+9.27

wtmk-t ttt?

Dr0gram

1950

year

the

$L21

£ WINKLER
Drive

a;d

The budget deficit for the fiscal

announced

195©

fio:62

Fifth Ave.

Trust

Chemical

Fiscal Year Results

of

Manhattan

of

Manufacturers

$40,057,000,-

i V

of

as

March SI

nm©

4,224,990
1,340,032
169,945

270 Riverside
New York 25, N. Y.
July 8, 1950

Government

000

THE;

Deposits
June SO

iy 4©

(««©s Omitted)

Central Hanover

of

Four

$40(167,000,-

of

pared
REPORT OF CONDITION OF

,

,

Share-Earnings

IU5©

Bank of N. Y. &

Chase

Korea, ■-under

„7n

United States

.

supremacy

.

.

>

in

000

the Russo-Japanese War, and rec-

Japanese

....

United

This increase m
m '
1
the deficit of $1,311,000,000 is ac¬
counted for almost entirely by the
reduction of $1,201,000,000 in net
budget receipts. The deficit for
the fiscal .year 1950 is $2,411,000,-

itures

,

,

compared with those

are

C Mos. to June SO

Bankers

Rnmw'T

budget i*eyear
ended

on

fiscal

signed in the United States, ended
.

In

Chase and Guar¬

*

(4) Guarantee of, and safeguard
for American private investments

American

undeniable.

ing Korea began to change. The Treasury Snyder has
Treaty of Portsmouth, although that
expend-

ognized

~

deposit totals

.

eiffn

^

tQ

Snyder Reports

policy regard-

earnings.

Per

-

American investors Deninsula bordering the Maritime EDITOR'S NOTE—Mr. Winkler is
entered the land so long described Province of the Soviet Union and Consultant to the Library of Conas the Hermit Kingdom.
Ameri- Red China at one end, and point- gress on Korea,
can
money built the first water
~
supply works in Korea; American
capital constructed the first elec¬
tric light system there; American
on
money backed the first railroad
Treasury Secretary announces revenue receipts at $37,045
in the little Kingdom, from Seoul
millions compared with $38,246 millicns in
to Inchon (the harbor); the first
previous year.
trolley car line in Korea was built
Expenditures slightly higher, resulting in 1950 fiscal year
and operated with American cap¬
deficit of $3,122 millions.
ital and American engineers. All

In 1905 American

the operating

are

agricultural, economic and political advisors to Korea;

£,?rt?"ce to.ls Atmerlc?n lntetrest? President Truman's
That j£0rea
of great imp0rtance

any

1883 and 1905.

shown below.

are

Bankers Trust,

as

of March 31 of this year.

Korea in 1883,

made between

banks such

some

In the same tabulation

Appointment

(2)

of

case

"

est

diminution *
b
of American importance in Asia.
Korea is not a rich land. But
After the establishment of treaty its strategic significance is great
relations with the
Kingdom of in Asia. Especially now, with the
cannot afford

we

Continuation of American

(1)

first six months of the

period compared with those of 1949

anty, reported earnings also include security profits. For Central
Hanover, Bank of N. Y. & Fifth Ave. and U. S. Trust, the earnings
shown are those indicated by changes in the statements of undi¬
vided profits during the period. For the other banks, the figures

by that of the Japanese.
States of scholarships for Koreans
Today the Soviet Union is rap- to study in this country; and,

mpant

raitv

r
'

the

deposit totals

31.

The per share earnings reported for the

present

aid to Korea;

Most institutions showed some increase in

current

comprise:

1910.

in

an upward trend primarily because of
financing operations of the Treasury during the past 12

from those published on March

North and South/This plan should

ince

good increase in net income was

a

Deposits also showed
deficit

unfortunate and entirely
unwarranted conflict between

an

Last^Suph°Il hi^mrl- idly be®0™"* the .first

.

m

imperial prov-

rea

number of instances

by the publication of results last week.

months.

the successful intervention in the

that pe¬

ward

t^rpc? !n
terest

in the East. Japan took over Ko-

banks for the six months ended
generally favorable in comparison with those cf

were
a

revealed

support
which the American people have

L.

In

unanimous

almost

Robin

30

1949.

to
favor the United States before all

Since that time, with but minor other powers. Of this we must
exceptions, American investments make the most,
given the U. N. resolution calling and interests in Korea dwindled
it would be highly desirable if
for all-out aid to the Republic of to almost nothing. And with this a
concrete postwar program
in
Korea against decrease
in American interest, respect of Korea could be evolved
the North Ko- Japan rose to be the first power today and
put info effect after
The

Week—Bank Stocks

Reports of New York City

continue

Koreans

occasions,

JOHNSON

By H. E.

Traditionally Korea has looked

of the

predominant in economic development
erstwnJe Hermit Kingdom.

was

Bank and Insurance Stocks

sia and the power structure of tne

avail-

able in printed form on July 5.

*

n -n

r-^ vPIT?' Kfns'

A-

Gillis & Co. has been formed here
engage

ness.

in

the

securities

busi-

Volume 172

Number 4924

.

.

The Commercial and Financial Chronicle

.

j-+

to

Britain VW'to Schuman Plan
By

almost irrevocable surrender of two of Britain's most vital

an

industries to the
the Schuman

in

and unwill ngness to

before the horse.

permit irrevocabb loss of authority

and steel represent a small item.

over

diplomacy had handled this matter
join in sooner or later, even
though she remained aloof from the Paris con¬

participating governments. It
widely assumed that, although the British

in

the

refused

the

to

itself

commit

to

in

From the

vious

on

debates in

both

Laurence

entirely unacceptable

Wall

Exchange,
Brown

Western

a

scope

Conceivably

Marks

& CO., 49
York
City,

New

members of the New York Stock

integration would stand

limited.

M.

Street,

firm

chance of succeeding.

Brown

eight

political

come

admitted

been

general

a

has

the

as head of its public
department and previ¬
ously he was with the Securities

years

Exchange Commission in the

and

In exist¬

Public Utilities Division.

Mr.

considerations

firm

to terms in respect

Brown's

admission

previously

was

to

about

participate in the scheme

ever,

the "Chronicle" of June

in the absence of further progress

even

integration. As far

29.

Ginther Co. Adds

Britain is. concerned, how¬

as

she is bound to keep aloof from the plan.

the object of French diplomacy.

M. Schuman

Possibly this
may

prefer

a

Ohio— Fred .1il

CLEVELAND,

firm

Hatch h

become connected with

s

participation to

participation,

coal and steel is concerned. Time alone will

Building.

right.

Bache & Co.

far

as

show whether he

as

was

a

loose union with British

Ginther &

Co., Union Commerce
He was previously withe
r

:

-

Houses of Par¬
Dr.

Paul

Einzif

MANUFACTURERS

mit herself in advance but to her

unwillingness to commit herself
at all.
This was already indicated by the statement issued by the
Labor Party National Executive on European
Unity, and if any
doubts were entertained whether that document represented gov¬
ernment policy such doubts were completely disposed of by the
speeches made by the Chancellor of the Exchequer and the Prime
Minister during the debate. From these speeches the fact emerged
British

Government

would

in

no

circumstances

be

Condensed Statement

of Condition

pre¬

intra-European body.

an

in

a

Conference

national

based

Hence the unwillingness to take part
the assumption of such surrender of

on

close of business June 30, 1950

$ 512,796,848.00

Cash and Due from Banks

sovereignty.

This attitude

as at

RESOURCES

pared to submit the British coal and steel industries to the control
of

COMPANY

TRUST

U. S. Government Securities

U.

feelings of the overwhelming majority of the British people. Many
Conservatives share the Socialist Government's views, and their
number has increased considerably after the publication of long-

Stock of Federal Reserve Bank

overdue

details

become

clear

of

the

that

authority would be

Schuman

the

powers

Plan.

of

From

the

Other

details it has

these

proposed

Securities

22,405,213.16

Other Real Estate

Equities

11,9/6,137.33
10,852,287.76

•

•

262,630.16

.

6,042,994.83

".

for Acceptances

Accrued Interest and Other Resources

6,348,452.26

.

.

$2,271,810,894.07

during the debate the government
Opposition's motion by an overwhelm¬
ing majority, for very few Tories would have supported it. Even
though it is arguable that Britain ought to have participated in the
Paris Conference precisely in order to prevent the emergence of
such absurd provisions, the mere indication of the kind of scheme

LIABILITIES

the

j

$45,000,000.00
60,000,000.00

Capital
Surplus
Undivided Profits

people in Britain to the conclusion that it would have been
of time even to try to come to terms.

a

Dividend

Having said all this, it is necessary to point out that the British
Government, in refusing to participate in the Schuman Plan, is
doing the right thing for the wrong reason. When it decided not
to take part in the Paris Conference, and to reject the principle on
which that Conference is based, it had no means of knowing the
nature of the Schuman Plan.

Unearned Discount, Interest, etc.

Reserves for Taxes,

waste

Liability

/

Endorser

as

Cash held

Deposits

On the basis of the then known facts

.

as

on

Collateral

^

1,350,000.00
6,589,638.27
2,715,288.29

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

Acceptances and Foreign Bills

or

.

.

7,642,571.46

in Escrow

2,100,793,827.7o

.

.

139,992,898.67

12,726,669.63

.

Payable July 15, 1950

Outstanding Acceptances

$

34,992,898.67

........

.

that is in the minds of its French authors is sufficient to lead most

the

530,363,891.61

....

•

Customers' Liability

Luxembourg were to have
Britain's decision to withdraw from the plan!

defeated

3,150,000.00

.

Banking Houses

It would indeed be fantastic if

have

48,160,963.90
33,466,560.55

•

.

.

Had these details been available

would

.

.

Mortgages

very

the, power to veto

.

.

Municipal Bonds

Loans, Bills Purchased and Bankers' Acceptances

supra-national

extensive, and its control by the proposed
Parliamentary body would be inadequate. What is even more im¬
portant, a participating government would not be entitled to with¬
draw from the scheme except with the permission of all other
members, and on terms appproved by them. This condition alone
appears to justify the British Government's refusal to join the
scheme.

JS. Government Insured F.H.A. Mortgages

State and

1,005.984,914.51

...........

subject to much criticism by the Opposition
—it was described by Mr. Churchill as "Palmerstonian Jingoism"
on the part of Mr. Attlee—but in substance it
truly represents the
was

Opposition appeared to begperfectly right in maintaining that
ought to have taken part, since it could have with¬

$2,271,810,894.07

the government

drawn if vital British interests should be threatened.

At that time

the government was

not in a position to answer that withdrawal
from the Plan would be practically impossible, for it had no means
The

government's

unwillingness to

participate

non-Socialist majority.

It

was

non-Socialist

unwilling to surrender the control

One

is

inclined

long

to

as

most Western European countries

have

T?

to

similar attitude.

But for American assistance,

and the Socialist Government would have
at the general

Savings Bank

M.

.

m v i

._

JDHNP. MAGIJJRL

Director, Cluett Peabody & Co., Inc.

Co., Inc.
HARVEY D. GIBSON
President

GEORGE J. PATTERSON
President, Scranton Jk Lehigh
Coal Co.

Head Office: 55 Broad Street,
OO

It

now

British Socialists have
was

r

r

Chairman, Board oj Directors

ALBERT N. WILLIAMS
President, Westinghouse
Air Brake Company j

election.

provided for it a legitimate excuse for keeping aloof from the

Schuman Plan.

T,

C" V®N ,EL'T.

C. R. PALMER

Fortunately for the Socialist Government, French diplomacy
has

vAiirMAN

Director, Western electric Co., hie,

OLKLl

President, Certi A

been swept out of office

w

.

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

iv

FRANKLIN

,

,

PAOLIiSU

eco¬

considerably,

President, National Dairy

Products Corporation

^

rnv

President,UnitedStatesLinesCompany
_

a

nomic conditions in Britain would have deteriorated

\

C.

..

JOHN

L. A. VAN BOMEL

President, Emigrant Industrial

v

Chairman Trust Committee

Hoard of Directors

JOHN T. MADDEN

FLAMCAN
Vice-Chairman, Board of Directors

Vice President

President, Home Insurance Co.

of America

/

r>

■

WILLI<>; " ABE

ERNEST STAUFFEN

F. MacLELLAN

President, United Biscuit Company

Chairman, Dana Corporation

Britain and to the British Socialist Government if the United States
had adopted

KENNETH

s'nxNXlUllCT C°mpany

are

happened

secure

pcrmMed by luw.

HAROLD V. SMITH

L. JOHNSTON

Simpson Thacher & Barllelt

•

R. CRANDALL

LOU

HORACE

speculate what would

OSWALD

"
Home

Corporation

Products

non-Socialist Governments.

so

Lines

Steamship

BRUSH

C.

Chairman, American

And, as»the statement by the National
Executive clearly indicated, the Socialist Government is in any case
opposed to wholehearted cooperation and pooling of resources with
Europe

Atlantic, Cutf and

Indies

West

ALVIN

institution.

ruled by

or

pledged to

HAROLD C. RICHARD
New York City

JOHN L. JOHNSTON
Director, Lambert Company

BLOOM

S.

Chairman,

industry, which is nationalized, and the British
industry, which is expected to be nationalized, to a

Western

FREDERICK CRETSCH
ThcSperry&HulchinsonCo.
Chairman, Lincoln Savings Hank

Chairman,

EDGAR

of the British coal
iron and steel

required

EDWIN J. BEINECKE

spired by ghe fear that on any international organization in charge
of the Western European coal and steel industries there would be
a

purposes as

are

DIRECTORS

in^

was

other

public funds and trust deposits and for

of knowing that the Schuman Plan intended to rule out any escape
clauses.

carried at $95,563,130.48

United States Government and other securities

superfluous.

appears

no

that the candid admission that the

the National Executive been delayed it

IN

New York City

GREATER

NEW

YORK

Far Eastern

Member

Representative Office: Naka 7 Building, 3-ckome, Marunouehi, Tokyo

Federal Reserve System *

Member New York Clearing House Association • Member Federal Deposit Insurance Corporation

might have become entirely

superfluous. Almost everybody in Britain would be firmly opposed




OFFICES

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

desire to work with non-Socialists abroad

Had the publication of the ill-fated statement by

RANKING

s

SAVE FOR YOUR

INDEPENDENCE

—

,1

was

union without British

June 27 and 28 it has become ob¬

the

reported in

that

the

Mr.
firm

steel, and other Continental countries might be willing

Anglo-French disagreement is not
one of procedure but one of
principle. Britain's non-participation
in the Paris discussions was not due to her unwillingness to com¬

that

the

to

partner.

with

been

utilities

of economic integration is bound

overriding

that Carl C.

announce

has

as

(Special to Tfte Financial Chronicle)

due to
disapproval of the French method of trying to
force Britain's hand and demanding a blank
cheque, rather than disagreement with.,; the
principle of the Plan.
liament

be

13

lit Laurence Marks

There is

ing conditions, however, the

towards political

believed to have been solely

was

economic

to

ad¬

its nature, it would be willing to accept that
Plan after it has emerged from the Paris dis¬
cussions in its full details. The British objec¬
tion

integration of

of coal and

principles of the Schuman Plan;

absence of adequate information

are

might induce France and Germany to

the

Government

They

(169)

poweriui

Europe are inclined to put the cart
ample scope for economic integration
far beyond the limited scope of the Schuman Plan, but it has to
come as a result of a
progress of political integration. If and when
the countries of Western Europe should unite themselves into a
Federation, or at least into a Confederation, then and not before

to

would

vance

more

Once more it has become obvious that those anxious to achieve

French

of

mucn

existing conditions to Britain.

the

nation's vital industries.

was

a

acceptaole to countries in the national economies of which coal

LONDON, Eng.—It is now clear that there is no likelihood of
a British
participation in the French plan for the pooling of West¬
ern European coal and steel industries.
Until quite recently it ap¬
peared probable that in spite of the aggressive way in which

ference

constitute

argument against British participation than all the tortuous argu¬
ments of the National Executive's statement. Those terms may be

PAUL EINZIG

Asserting it is now clear Britain will not participate in plan to
pool Western European coal and steel, Dr. Einzig ascribes it to
unwillingness to surrender national sovereignty. Lays opposi¬
tion by British Labor Government to faulty French diplomacy

Britain

themselves

f

Carl Brown Partner

authority proposed by M. Schuman. The terms of

Plan

M'it"

BUY U. S. SAVINGS BONDS

O

14

The Commercial and Financial Chronicle

(170)

Our

Reporter

Major Depressions
International

before

talk

Switzerland, Secretary of Labor

guard
In
labor

of

International

the

ference

at

Con¬

Labor

Switzerland,

Geneva,

June

on

on

Tobin

ex¬

ments

this

d

e

direction

never

who

experi¬

ence

"such

as

had

"W

e

1922, which was largely the result
of

ability to
a major

J.

Maurice

Tobin

of

the

advances

great

have made in

social and

our

we
eco¬

nomic

legislation since 1933," the
Labor Secretary stated. "The sup¬
ports

States.

institutional reforms in the United

last 20 years,

the

States

in

is

which is too little appre¬

onex

but it

ciated.

because
need

of

very

turned

it

mainly

helpful in protecting our economy
against serious recession in the

Inventory accumulation was not
only stopped; inventory liquida¬

ahead. They are both a de¬
terrent to depression and concrete

tion actually took place on a

years

evidence

the

of

determination of

the American people
not have

that

shall

we

repetition of that tragic

a

inventories

scale.

As

carried

was

declined.

However,

this did not result in general eco¬
nomic

contraction,

"Consumers maintained

era.

"Among
economy

the

are

bulwarks

of

our

system of old-age

a

survivors'

and

insurance,
free
public employment services* and
unemployment insurance system,
insurance of bank deposits, and

minimum wage and hours legisla¬

tion.

Agricultural

price support
programs removed one of the se¬

itures
the

throughout
volume

same

.

expend¬

in about
in the preced¬

as

prices.

v

p]Lant

♦

•

maintained

"Businessmen

their

expansion

equipment

and

planned. Investment
purpose
declined only

programs

as

this

for

purchasing
power of an important group of
our people. Resource development

moderately in 1949, as had been
expected. Profits remained very
good
during 1949, and. business
generally saw no reason to cut

such

back their

rious instabilities
sustained

and

in the economy

the

the TV A and

as

elec¬

rural

trification contributed to the

eco¬

grams..

of

investments

ward

moving

are

to

strengthen

steadily
our

for¬

economy

still further.

At this session of the

Congress

have raised the min¬

imum

are

to 75 cents

wage

$30

or

we

for

in the process of

now

hour,

per

40-hour week.

a

We

broad¬

ening the

coverage and increasing
the benefits of our Social Security

system.

Legislation accomplishing
this objective will soon be on the

President's desk for signature. The

President
tion

to

has

also

expand

increase

the

the

requested

and

benefits

strength

has

of

the

of

our

un¬

proved the great
free

and economic programs.

enterprise

and

omy

The

com¬

free enterprise

a

liberal

social

econ¬

and

eco¬

nomic legislation has permitted us
to maintain a high level of eco¬

nomic activity during the postwar-

period. We have avoided a col¬
lapse of prices, credit contraction,
bank failures, any large number
of

business

bankruptcies,

of confidence
ness

and the

on

The

or

eligible issues

receded

is this: It did not spiral in

whole economy.
of

was

business

^etfts
ited

were
to

a

cumu¬

throughout
The

cause

the

of the

cautious liquidation

inventories.

The

ef-

the manufacturing

indus¬

by curtail¬
ment of purchases by business for
purposes.

"It is important to note that the
very

carried forward to meet

were

social need's of the American
....

•

.

result, the decline in gross

national

product

equivalent

was

only to the net reduction in busi¬

purchases for
inventories;
by mid-summer 1949, there

ness

and

indications

were

of

Bank

than 2xk

rise

a

in

em¬

the

checked. In

was

volume of
million in the pre¬
of full employ¬

years

As

year.

the

of

present

time, unemployment is at
of about 3

million,

or

3

million

are

core

unemployed
of

jobs

or

rarily out of work.
seasonal
for

a

level

ment later this

only tempo¬
Allowing for

of

is

unemploy¬

year."

appear

7

age

at

of

Prior

his

summer

home

80

after

long

to

Thomson
ducted
ness

his
&

his

a

fact which led to the decline

operators.
due to real

in business activity in 1949—a ra¬




cess."

Its

known

the

sheets

he

con¬

investment

busi¬

of

conel

clad

clad

metals,

metal

with

side

steel

inconel,

sheets

of

product

a

Nickel

of

Co.

a

in-

and

copper—copper

with

are

copper

—

each

on

stainless

Can¬

to
utensils,
ironers, processing vessels, evapo¬
rators, and other heat conveying
and heat dissipating articles.
Ltd.

Products
of

iafB|I«

sold

are

cooking

...

.

....

Mf|lij'|gM WpflfH MMllf
■■mm iwmiiii

Shearson, Hammill
(Special to The Financial Chronicle)

Hammill

Green Street.

&

was

Vice-President of

merly

348

Co.,

Mr. Wendt

for¬

R.

Geo.

Miller & Co.

With Daniel Reeves
(Special to The Financial Chronicle)

BEVERLY

to

ciated
398

South

has

become

Beverly

formerly with Cantor,
Co. and

Merrill

Co.,

Drive,

mem¬
and Los

York

New

Angeles Stock Exchanges.

&

asso¬

Daniel Reeves &

the

of

bers

HILLS, Calif.—Noel

Jr.

with

by investors and not

Prices of
Federal,

in

Ineligibles Kept in Hand

addition

He was

Fitzgerald

Leo Schoenbrun.

Lynch Adds Twov

(Special tQ The Financial Chronicle)

ATLANTA, Ga.—Joseph D. Rat-

have

selling the Vies, has been supplying
the 2%s due 1959/62, the 1962/67's and the
1963/68's, because
there has been some stocking of these securities evidently for a
trading turn. It seems as though the Central Banks do not want
the ineligibles to get out of line for the time being at least, and
are
evidently making securities available to keep prices within
desired limits.
The feeling seems to be that Federal will keep
to

the market around current levels until
can

be

appraised

more

ernment securities

fully.

the international situation
affair and

has put the pressure on the otherside of the market.

Banks have made securities available to
have

been

not

23

the

joined

Lynch,

Pierce,

North

staff of

Fenner

&

Merrill
Beane,

Pryor Street.

Ames, Emerich Adds
(Special to The Financial Chronicle)

CHICAGO,
has

been

111.

—

Abe

to

added

the

Kritzer
staff

of

The demand from buyers for gov¬

has increased since the Korean

sellers, which

that has been in vogue for

some

meet

The Central

this demand,

is more or
time now.

this

when

less the

Ames,

Emerich

South

La

Salle

of the Midwest

Inc.,

Co.,

&

Street,

105

members

Stock Exchange.

pro¬

There is,

however, less evidence of the authorities wanting to
at this time. This could be just a flash in the
however, because if the inflationary forces are to be more

force- prices down
pan,

pronounced
will

in

most

methods

the

likely

pressure

with

renewed

this

used

are

the

future,

be

be

would

on

the

markets

money

vigor.

Unless more direct
expressed in somewhat higher

u. s.

TREASURY

yields for Treasury obligations.
★

★

★

Short-Terms Enjoy Good Audience
The near-term end of the list has been acting very well with

considerable

funds

going

main until there is.more
the market

as

a

whole.

into these

securities,

apparently

to

re¬

BILLS

CERTIFICATES

evidence of what is going to happen to

Buying of these securities has been quite

general, with the small banks

as

well

as

the large

ones

taking

on

NOTES

BONDS

short-term issues.

partially-exempts,

since the tax

which

have

bill went through the

away

to have

a

by

the

larger

been

House,

better demand

deposit*banks.

Reports

are

under

a

This

shadow

nonetheless being
buying

than the other two issues.

has

been

appear

is

considerable

I

continue to be made,
are

accumulation

with most of the

swops

the

being made by insti¬

letting out the shorter bonds to
on

of

Switches within the ineligibles

go

into the Vies.

the longest eligible issue, there has

Aubrey G. Lanston
8c Co.
IN CORPORATED

—

offices

there

IV2S of 1955, and the l%s of 1954.

not been any

The
Security Company of
Kendallville is engaging in a se¬
Ind.

indicate

Despite the split opinions

American

132 South Main Street.

clad

sheet

by the quick-turn
Also a good part of the recent price recession was not
liquidation in volume, but to a quoting down of prices.

tutions that

from

Rosslyn

clad

illness.

American Securities Co.

business

"Kinney Pro¬
principal
products,

as

stainless

clad

the

terree and James J. Williamson II

with

KENDALLVILLE,

8

an

mainly in the last three maturities although the 1960/65's

for 33 years.

curities

under

McVickar,

put

at

machinery

The company manufactures

Shearson,

be

with

association'

McKinnon

own

might

1925,

associated

Bruns,

Thomson & McKinnon since
died

be

well taken

were

The

Edwin

maturities

10-year maturity in the com¬
ing financing does not seem to make any difference to some
money-market followers,, as far as the longest 2^% is concerned.
They feel this bond is out of line with the general level of quota¬
tions and it is believed switches and outright sales will eventually
push it down to lower prices. This could happen; but there is
also a fly in the ointment,.and that is the limited floating supply
of
this
particular security.
Even
when
prices
went
down
recently, not very many come into the market, and those that did

the

Edwin G. Bruns

additional

working capital.

PASADENA, Calif.—William T.

^

Whether there will

a

many

the outlook

variation,

lower

intermediate

cents

22

Wendt has become associated with

Eligibles Provide Market Action

bond.

these
not

are

install

and for

time.

same

level

a

unemployment;

between

There appears to be rather
market followers that the

share, less

of

discount

The net proceeds are to be used
to

1956/59's, with buying especially good when
prices have been shaded. On the other hand, it has not added
anything to the September 1967/72's because some believe an 8 to
10-year maturity might take part of the demand away from this

less than 5%

of the labor force. Moreover,
hard

money

common

the 1956/58's and the

average

and 3.6 million in the second half
of

among

now

is a matter of
conjecture, but the guesses are 7 to 9-year l%s and 8 to 10-year
l%s. It is on these ideas that the market is evaluating the out¬
standing bank issues. This has brought buying and selling into

gram

unemployment

less

demand

September financing.

be done at the

the

480,000 shares of

fabricators

their equilibrium:

recovering

be

to

seem

good

Graham,

publicly of¬

are

(par $1) of American Clad¬

International

Certificates Likely

on

Offered

and

share.

per

obligations and intermediate-term securities will be used to take
care
of the September maturities.
Some deficit financing may

What

Co., Inc.

dealer's

a

certificate rate will not go above 1V4%. This should be confirmed
with the early fall operation.
Which probably means one-year

in

ceding three

the

general agreement

outsiders

contrast to an

issues.

which apppeared when prices
(b) the opinion that no high-coupon obligations will

and

ployment and production. The rise

almost completely lim¬

tries directly affected

inventory

re¬

activi¬

the

consuming public.

fashion

public

Necessary

a

of

be offered in the

lack

"The significant fact about the
in economic activity and
the rise in unemployment in 1949

decline

Fed¬

—

ties

"As

short-term

.

Government

people.

the

in

because

Co.

metals

1V4% Limit
(a)

&

metals Co. at $1.50 per

ada,

the part of busi¬

decline

lative

\

.

ment, unemployment averaged 3.2
million in the first half of 1949

system buttressed by sound social
bination of

trench.

ac¬

coverage

employment insurance system.
"America

v

stock

pattern

Until more is known about what is likely to come out of the
complicated international picture, the government market will
probably remain in a restricted range. There will undoubtedly
be enough selling by Federal to keep prices from going up, al¬
though not the. same pressure as in the recent past to move quo¬
tations
continuously
downward.
This
wait-and-see
attitude
which is expected in the market will most likely result in larger

pro¬

eral, State and local—did not

country.

our

"We

capital investment

"Likewise

nomic development of large areas

policy and

1949

ing postwar years. Dollar volumes
were slightly lower, but so were
consumer

It would be

long time.

a

of determining the

minor problem

a

far.

too

large
employment

result,

a

incomes

and

an
enlarged struggle, the money markets would not
much converting. They have been under more or less

be followed.

to

policy of business with respect to

years

more

&

fering

out, the cautious

stood us in good
stead in 1949. They will be equally

these

in

on

complete control of the authorities for

also

"As

put under our economy

we

United

of the important

This is oniy one

depression be¬

could

speculation,
the

in

occur

serious proportions.

If there should,
however, have to be all-out mobilization of the nation's resources,

it

commodity

now

situation should take

reason

e

r

avoid

cause

this

For

is hardly possible that
the type of economic recession the
United States experienced in 1921 -

of

a

confident
our

inven¬

of corporate

policies.

alone,

the

'30s."

early

agents,

play an important role
corporations, in the

now

tory

we

in

purchasing

of

management

ssion

p r e

in the

American

in

major

a

develop¬

in the United States

past 20 years is the introduction
of scientific methods, under the

that

nation

again

One of the

institutional

significant

the

will

American economy

and in the future.

now

pressed

opinion

in the general sta¬

of the

bility

of

Labor Maurice

J.

The government market continues to move in a narrow trad¬
le
ing range, under moderate pressure selling by the authorities. No
important change in policy is looked for, unless the Far Eastern

practices and policies by business¬
men—is one of the factors making
for confidence

21,

Secretary

with

tude

Graham
Ross

non-speculative atti¬
respect to inventory

and

tional

Stock Publicly

Geneva,

at

social security lav/s

says our

Governments

on,

By JOHN T. CHIPPENDALE, JR.

our economy.

United States
progress at the 33rd Session

reporting

Conference

Labor

Thursday, July 13, 1950

.

.

American Cladmetals

Tobin Pzedicts No More
In

.

at

in

the

Vies

tember

unusual rush by holders of this obligation to switch

even

1967/72.

of

the

to

have

stock
gone

with

Quite

market to

the
a

price betterment in the 2V2S of Sep¬

bit of the

find

a

haven

45 Milk

Street

which has

NEW YORK 5

come

HAncock 6-6463

out

governments is reported

into the 59/62's and 62/67's.

BOSTON 9

WHitehall 3-1200

money

in

15 Broad Street

Volume 172

Number 4924

.

.

The Commercial and Financial Chronicle

.

(171)
r

The bank, with

lien Oaks

three offices, re^

ports resources over $157 million.
*

News About Banks

*

$

Announcement

is

,

made

Manufacturers Trust

CONSOLIDATIONS

Co.

,

of

New

York that William

NEW BRANCHES
NEW OFFICERS,
REVISED

Goldfine, Vice-

President

Bankers

and

ETC.

.

bank's

of

the

Melrose

office, 360 East 149th Street, has
been named Officer in Charge at
that office, as well as Supervising

CAPITALIZATIONS

Glen

will

;ns,

JtSf 14.

NEW

TRUST

COMPANY,

YORK

Mar. 31,'50

$

S

Total resourcei_

1,205,513.499

1,114,242,364

Deposits

1,068.961,562

976,918,624

and

eight locations in Man¬

our

hattan,

June 30,'50

Cash

all of

The

White

P la i

Queens

Brooklyn,
Island,
Riverhead, Long Is¬
Bronx,

and

Staten

n s.

the

fice opened

S.

due

banks.

Govt,

*

curity
Loans

311,956,317

_

*

*

Robert W.

hld'xs..

and

436,218,284

415,149.650

405.483,334

371.413,652

bills

discountju
Undivided

appointed

'•

14

pro*'.

113,398

13,558,578

Trust

the figures of

for

,

June

30

published in

were

(page 74),

sue

the Irving
and March 31
July 6 is¬

our

take occasion to

we

insert the

figures again the pres¬
week, inasmuch as the March
figures of undivided profits

ent

New

York,

31

contained

having

typographical error,
as
$13,553,578.

a

appeared

instead of $13,558,578, as correctly
shown above.
*

*

At

of

the

of

board

di¬

rectors of The National City Bank
of

New

David

held

York

July

on

11,

D.

Brown, Jr. and Charles
V. O'Connell were appointed As¬
sistant Cashiers.
*

*

*

to

according

Harold

by

an

formerly

be

sonal

an¬

Mr. Sinsa¬

was

with

associated

Trust

the

Per¬

the

of

Department
*

*

*

bring the advantages of the
Common Trust Fund to a larger

Marine

Co.

Trust

Legal

for

such

which the bank acts

in

trusts

trustee

either

Fund

Trust

of

Credit

the

Cash

,U.

Union

Bronx

office of the Underwriters

Trust

Co.,

joined the National
Safety Bank in 1934, and became
Vice-President

a

of

the

National

Bronx Bank ten years later. When

institution

absorbed

was

in

as

1949,

a

Co.

Trust

Mr. Goldfine continued

by

Vice-

President of the latter institution.
*

*

*

and

S.

due

Brooklyn Trust Co. of Brooklyn,
Y.,

that

announces

its

new

Apr. 24,'50

the

13,872,075

9,855,900

20,842,947

20,865.700

2,430,249

2,209,800

8,115,607

8,335,900

of

secur¬

&

discounts.

Surp.

&

Knapp,

Auditor of

The Dime Savings Bank of Brook¬

N.

lyn,

with

years
on

Y.,

and

veteran

a

the

bank,

will retire

Bank.
ber

of

the

institution.

Mr.

resulted

He also worked for

a num¬

from

At the

sale

of

93rd

Annual

Meeting of

cut

Savings Bank of New Haven,

Conn., held

Connecti¬

July 10, Theodore S.

Continued

on

page

as

the terms of the trust

by

by choice, investments are re¬
stricted
to
those
qualifying
as

or

legal securities for trusts in New
State.
This Fund, with the
Marine's
Discretionary Common
Trust Fund established some time
York

The directors
Co.

of

of Bankers Trust
announced

York

New

on

July 6 that in view of the proposal
of the Title Guarantee & Trust Co.
York

New

of

its

discontinue

to

ago,

makes available to the smaller
a
means
of obtaining the

trusts

Bankers Trust Company

stability of income and
commercial banking principal values which are usually
business, Bankers Trust Co. is ar¬ available only to large estates and
ranging to assume deposit liabili¬ trusts through wide diversifica¬
ties of that institution, contingent tion of investment.
In both the
deposit

and

Title

the

by

transfer

the

upon

of certain banking prem¬

company

ises, facilities and other assets to
Bankers Trust Co.
Such a trans¬
of

holders

Legal Common Trust Fund and
the Discretionary Common Trust
$50,000 for any one trust.

Bankers

Trust

said

also

CONDENSED

"Bankers

Co.

Trust

will

agree

substituted, under the terms

ASSETS
Mar. 31, '50

June 30, '50

Total

DIRECTORS

Cash

and upon proper
approval, as the fiduciary in
certain personal trusts, guardian¬
ships, and in certain other trust
relationships now on the books of
& Trust Co.

Title Guarantee

no

transfer, Bankers Trust Co. will
operate additional banking offices
in the Bronx. Brooklyn, Jamaica,
purchasing

the

present buildings in the Bronx
and Long Island City, and leasing
space

in the other locations.
that

estimated

Bankers

It is

in

obtained it is an¬
ticipated that Bankers Trust Co.
will
begin
its
new
operations
during August."
approvals

Undivided

38,173,834

37,844,955

"merger,"

but rather an outright

purchase by Bankers Trust Co. of
certain business of the Title Guar¬
&

Trust

Co.,

continue to operate as

which
a title

will
com¬

after divesting itself of its
banking business.

pany,

Barnard Townsend, President

Trust Co.,
statement saying in part:

Guarantee
a

of

and

BANK

NATIONAL

COMPANY

&

TRUST

YORK

NEW

OF

June 30,'50

Mar. 31,'50

Total

Cash

139,898,595 141.090.401
131,681,046 132,948.212

resources

Deposits

___

and

dye from

Govt,

S.

70.511,522

Undivided

70,877,530

36,162,612

to

Chairrncin,

.

.

572,898,921.03

.

25,608,912.85

Municipal Securities

Other Securities and Investments

$

28,122,642.36

....

13,298,139-94

Banking Premises

3,964,174.84

.

Union Dime Savings Bank

Customers'

Liability

on

Acceptances

.

.

11,056,592.71

.

President, American Brake
Shoe Company

$1,531,687,023.60

JOHN W. HANES
President anil Direr lor,

Vice

Olin Industries,

Inc.

Chairman, Executive Committee,
United States Lines Company

4

4

WJLLIAM H. JACKSON

LIABILITIES

Partner, J. II. Whitney Ji Co.

OF NEW YORK

NATIONAL BANK

GRACE

June 30,'50

Mar. 31,'50

107,398.673

98,799,874

26.414,665

-

and

due

Govt,

S.

ity

Steamship Company

45.072,683

44,002,982

.

....

Surplus

.

.

.

$30,000,000.00

.

.

.

.

Undivided Profits

.

.

100,000,000.00
38,173,833.82

25,630,703

THOMAS A..MORGAN
President and Chairman of the Board,
The Sperry Corporation

4,632,379

4.738,283

profits

168,173,833.82
1,500,000.00

Dividend Declared
28,784,102

$

New Jersey

PAUL MOORE

bills dis¬

undivided

&

.

WARD MELVILLE

President, Melville Shoe Corporation

counted

Surp.

President, American- Hawaiian

secur¬

holdings:

Loans and

Capital

LEWIS A. LAPHAM

from

banks
U.

President, Council of New York
University

92,473,750

34,649,242

Deposits
Cash

118.119,254

resources

FRED I. KENT

$

$

Total

1,338,751,314.43

Deposits

JOHN M. OLIN
,

its "Open House"
promotion, the Westchester Square
of

part

office of the Bronx Savings Bank
of

New

a.m.

York

until

8

was

p.m.

June

24. when

was

arranged

were

open

on

from

9

Saturday,

tour of its office

a

visitors
permitted behind the scenes
whereby

to see the bank in

President, Olin Industries, Inc.

DANIEL E. POMEROY

display and in
it is said,

equipment

was

operation,

considerable
and

women

new

interest
as

well.

among

Acceptances Outstanding

PHILIP D. REED
Chairman, General Electric Company

Not

Chrysler Building, New
B. A. TOMPKINS

Senior Vice

York

was

an

6,095,144.20-

Portfolio

$12,888,622.33
1,448,288.84

11,440,333.49

Other Liabilities

5,726,397.66

$1,531,687,023.60.

THOMAS J. WATSON, JR.
Executiee Vice President,

International Business Machines Corp.

JUSTIN R. WHITING
President, Consumers Power Company

prizes,

Securities in the above statement are carried in

among

RCA television

set.

accordance with the method described in the

stockholders, dated January 17, 1950. Assets carried at $86,047,847-22 on
June 30, 1950, have been deposited to secure deposits, including $50,017,751.63 of United
States Government deposits, and for other purposes. On December 31, 1949, the corre¬
sponding amounts were $77,307,194.74 and $54,111,903 45.
annual report to

the

part of the "Open House" promo¬

door

Less Amount in

Ijgtsidtnt

having

office to attract visitors,

five

.

GEORGE A. SLOAN

men

bank, it is announced, offered, as

tion,

Taxes, Accrued Expenses, etc.

A't'U! Jersey

attracting,

on

Reserve for

action. ^Various

distributed to each new customer.




.

Accrued Interest and Accounts Receivable

WJLLIAM L. DtBOST

958,703

profits—

business at

exnect

President

S. SLOAN COLT

36,095,743

580,007

_

continue operation

principal business since 1883.

.

HENRY J. COCHRAN
President, The Franklin Savings Bank

bills dis¬

counted—-

visitor on "Open House"
day was given a door prize ticket;
in addition, ball point pens were

title insurance

State and
ELLSWORTH BUNKER

WILLIAM B. GIVEN, JR.

Every

We

521,402,606.66
.

secur¬

holdings-

ity

Loans and

which

our

FRANCIS S. BAER

31,604,958

31,879,836

banks
U.

has been

of

Loans and Bills Discounted

$

$

centrate our efforts and resources

our

355,335,033.21

Senior Vice President

prof.

STERLING

a

title insurance which

U. S. Government Securities

ARDREY

Refining Comimny

"Acquisition by Bankers Trust
Co. of the banking
division of
Title Guarantee
and Trust Co.,
will enable us vigorously to con¬
on

$

Chairman, The National Sugar

As

by the Bankers
Trust that the transaction is not a

issued

567.711.929

discounted

are

It is pointed out

Title

572,898,921

ALEX H.

......

Executive Vice President

gain

000,000

antee

512.254,311

bills

and

Loans

404.193.205

521,402,607

Cash and Due from Banks

se¬

hldgs._

Trust

approximately $50,deposits from 21,000
customers,
including those cur¬
rently served by Title Guarantee
as special
interest and Christmas
Club depositors.
If the necessary
would

355,335,033

tanks—

Govt,

curity

Long Island City, and two offices

Manhattan,

S.

1,574,824.472
1,348,036,281

The

longer
accept
trust
appointments,
re¬
maining actively in the title bus¬
iness.
Upon completion
of the
would

company

1,338,751,314
due

and

from
U.

s

1,531.687,024

resources-

Deposits

the proposal

court

Title

STATEMENT OF CONDITION, JUNE 30, 1930

YORK

NEW

$

to be

in

to

v

>

BANKERS TRUST COMPANY,

in

part:

of

limited

is

Darticipation

Fund

announcement by

The

Co.

Trust
the

NEW YORK

approved by stock¬
Title
Guarantee
&

be

must

fer

greater

Member of

the Federal Deposit
Corporation

Insurance

addi¬

*

Corporators of the

and

bookkeeper

the

the

on

teller,

$625,000 to $750,-

#

years

of

30

tional shares

May 29, 1917. Serving
various
capacities
including

those

trom

with the old Oriental

with the Williamsburgh Trust Co. and joined "The
in

June

resources

000; of the increase $62,500 was
brought about by a stock dividend,
while the further $62,500 increase

Knapp started his banking career
56 years ago

total

as

Buf¬

$21,657,089, deposits of $19,726,and
capital and surplus of

increased

August 1, it was announced on
6 by George C. Johnson,
of

its

in

of

of the Niagara National Bank was

32

of

July

President

bank
showed

known

Bank

$750,000 each.
Herbert J. Vogel¬
sang is President of the bank. In
the July 3 Bulletin of the Comp¬
troller
of
the
Currency it was
noted that on June 29 the capital

undivided

profits

C.

be

127

holdings

William

The

statement

Loans

•'

would
National

First

falo,

39,214,900

from
_

Govt,

ity

Dime"

N.

institution

Y.

43,820,715

Deposits

of

in the

"Evening News" of July
1, that effective immediately the

$53,412,998 $48,911,700

resources

Bank

Y., announced

wherein,

co-trustee,

or

President

City

of

New York has established a

Common

elected
York

Manufacturers

To

the

the

even¬

now Hon¬
President, entered the bank¬
ing
business in 1929 when he
helped
to- organize
the
Union
Bank of Bronx County.
In 1931
he
was
made
Manager of the

that

bank.

a

with

N.

June 30,'50
Total

orary

Helm,

H.

who

League, of which he is

Financial
Secretary of the Firemen's Insur¬
ance
Co. of Newark,' N. J.,
in
charge of their investments
He
baugh

group

#

meeting of the Executive

a

Committee

tually
New

of

Co.

Trust

&

President of the bank.

will

identified

was

of

Officer

Trust

Bank

nouncement

While

»

Sinsabaugh has been
a

Chemical

...

Goldfine

banks

271,217,918

se¬

earlier

Mr.

credit union movement and

land."
,

from

U.

BROOKLYN,

Bank.

'

National

Buffalo

KINqS COUNTY TRUST COMPANY,

formerly constituted the National

retirement

officers

if.

:js

Niagara

Buffalo, N.

*

*

his

and

#

The

year.

:|t

ap¬

engraved.

new

this

employees

was.

.of
"The Dime" presented Mr. Knapp
with a Hamilton watch suitably

the company
banking of¬

of

second"

he

May 15, 1941.

on

commemorate

the

new

office

banking

of Manufacturers Trust Co. which

Bronx

To

for business on

office will be
in charge of Nils S. Mathisen as
Manager and Henry W. Bason as
Assistant Manager. It is the 26th
and

bookkeeper,

pointed Auditor

Village,

Oaks

open

The

Credit Officer of the four branches
Correction—IRVING

head

office, at 253-15 Union

jipike,

by the

15

■

21

16

The Commercial and Financial Chronicle

(172)

the

advantages of using certain
gift opportunities while
they are still available. As Bul¬

heirs.

comments:

"$33,000
By ROBERT R. RICH

yet,

Warned

Dealers

About Women

Prospectus
your

request

upon

investment dealer, or

NATIONAL

from
from

SECURITIES

&

CORPORATION

RESEARCH

120 BROADWAY, NEW YORK 5. N.

Y.

Bartholet,

investment

asks

women,

participating
heed

the

in

dealers

to

program

club-planning

women's

the

warning that "Women's
resent aggressive

agency's

members

sales

If dealers sub¬

approaches.

ject those present at meetings to
sales solicitation, they will do trie

has

that dealers refuse to discuss

urge

particular securities or funds at
any meeting where they may be
guests—but rather encourage the
enquirer to consult thern on some
It is apparent

that, in a program
already involving some 2,000 odd
associations,

clubs and

prospectus from
your

in

investment deolef

selling

any

will

strategy

errors

2, PA,

by

be

mag¬

prices
Jones

highest peak in 20
cline

in

the

these

schools

of

presented

shed

some

light

The

Industrial

recent

its

high

1946

above
In¬

90-Stock

and the New York Times

dex

Index

Stock

Even
of

Poor's

&

its

at

whereas

of 212.50,

peak

Standard

Average

about 8%

was

listed

York

Stock

below

its

of

(the

when

data)

before the

cL5on

ation,

investors were sitting
sidelines
because
they

some

the

on

that

feared

selling
W<<

&

an

■

only

reason

no

thus

has

far

in

trial

Ayerage

stocks

many

brief

at

prices

1946 peaks.

below their

tabulation

indica¬

is

below

The

tive of this factor.

Percentage
June 2L '50

Grade Commons

135.5

Commons

281.8

Change

22^53

Average—

beneficiaries

The

the

of

the

investment

+

"As

solution

a

the

heirs may
mutual funds

to

+

vestment

program

with

needs."

their

—42

keeping

in

person

gift tax.
and

result

of

changes in

made

in

York

New

1948

Incorporated

the

extending
property prin¬

Trustees

Face Important

Wife

Parker

Decision

Open-End Investment
Company

High

23

Low

Priced

Standard
&
Poor's
Index comprises the

Although
Low-Priced

dustrial

has

Average

letter, pre¬
erudite
decision facing

Corporation

exemption, may give his or
her spouse $66,000 ($60,000 gifttax exemption plus $6,000 annual
'exclusion') during the year 1950

remarks:

volving

hundreds

without

dollars.

Passage

paying

any

gift tax.

"Assuming
the

additional
based

in

gifts

of

future

may

be

same.

on

current

gift

which may, of course, be
It is generally assumed

gift tax rates

are

changed.
that, if
revised, the re¬

be

less

to

act

will

now.

man"

of
of

chase. How

added

has

law

trustee may pur¬

a

they decide to

use

In

the movement of

essence

the trustees

the stock

are

(1) To invest in common stocks
now.

To refuse to

(2)

buy

common

stocks at all.

of

investing

To postpone

Let
of

gifts but are also vitally concerned
about making adequate provisions

Act

a

buy

us

examine first the position

who

trustee
common

decides

not

permitting

at

Qfl anltaiian

s one/ C^Ainc/, (Qrtc.

tlso many
xWitt

Prospectus
your

11

may

be obtained from j-jiilri:;

authorized dealer

or

HUDSON DISTRIBUTORS

gift

1®

their

Even

Principal Underwriter

Chicago 3, Illinois

1946

115

RF.cior 2-8356
TTt pe:NYl-3347

and

earlier

boom

with those of the

1929

11.02

the

in

years

table

381.17

19.3
19.3

5.2

9/27/30

11.49

1937

High

194.40

16.9

1946

High

15.6

6/27/50

9.0

yet,

there

serious

no

are

signs of a let-down in business
activity—but current stock prices
would
not
necessarily be high
if

even

earnings dropped
Industrial

the

ratio

$15

to

The

Average.

then

would

14.1, which is not high by past

-

IN

Purchasing Power

is up sharply;

tion

all goods
services,
and
investment
media—than in any of the years
less

in

their

not

the

case

with

of

There

but

are

the factors that should
into

account

of the level,

in

a
oe

judg¬

any

Industrial Average or by
other index. Thus the market

to reflect the

adjusted

chasing

power

would

be

as

1930

pur¬

of the dollar

was

at current

(last

levels)

Comments"

Gift Tax Exemption

follows:

ions

1946

High

High

6/27/50

371

222

226

182

150

Long-Term Trend

Prospectus

may

Ins obtained front

long-ierm
has

Tke Keystone Company
of Boston
50

Congress Street

Boston 9, Massachusetts




have

trend

been

of

necessary,

Many

the

of

event

trols and

points

upward.

for

later

there

is

versal

of this

There

no

kept, the

in
re¬

physical

con¬

will be

nec¬

allocations

to prevent further inflation

which already has
bottleneck, increasing in¬
and near-full employment.

an

economy

is

no

secret

little

to

that

spare

our

in

has

prices

of

And
a

re¬

long-term trend.
been

a

INVESTORS

economy

productive

enlarged def¬
will be pure
prices.
To forestall

Consequently
icit

this

fiscal

pressure

on

an

year

chart

advances.

indication

Los Angeles

factors for rearmament.

stock

The

Co.
—

steel

come

It

modest

a

of this, Calvin Bullock, in its month¬
the Dow-Jones Industrial Average ly Bulletin, notes that Treasury
shows that the peaks of earlier officials currently are considering
additional ways to increase tax
years eventually became, after a
lapse of time, the supporting low receipts in order to obtain addi¬
been

Atlanta

the opin¬

foresee that,

even

armament program,

a

For the last 50 years that accu¬
records

—

of experts and "insiders" are

troubling.

in
l»:i7

9/24/30

rate

Chicago

—

after the usual "discount¬

ing" which is

has

(Series S1-S2-S3-S4)

Lord, Abbett
New York

and Annual Exclusion
Even

essary

High

COMMON STOCKS

Investment Managers

of stock prices.

"General

Dow-

Jones
any

upon request

ABBETT & CO.

stocks,

the

by

Prospectus

LORD

Whitehall Fund's

From

Tnis is

common

measured

Shares, Inc.

working capital

net

tremendously.

almost

shown in the above table.

mtt

(Series K.1 -K2)

ONLY

BONDS

American Business

ca¬

larger; and corporations have in¬
creased

Today's dollar will buy consid¬

erably

productive

pacity has been greatly expanded;
individuals'
savings
are
inucn

ment

(Series B1-B2-B3-B4)

PREFERRED STOCKS

IN

late twenties and thirties. Popula¬

taken

Lowered

lime market

BONDS

—-

INVESTMENT

INVESTING

of the United States since the

omy

lew

standards.

levels shown in the previous table

their capital

REGISTERED

COMPANY

6.0

whether

investing

prospectus and other de¬

scriptive material about

and

Certificates of Participation In

Company, Inc., 48 Wall

3.5

23.54

212.50
212.07

be

INVESTMENT FUNDS

Hugh W. Long

4.5

13.63

price-earnings

Funds

local investment

to

A

cial

3.3

212.52

High

1937

.or

Custodian

your

or

Yield

P/E Ratio

1946

As

Keystone

and

to

St., New York 5, for the offi¬

1949

t

Write
dealer

below.

—Market Level—•

$19.74

1£30_

:&&:

Price-Divs.

Earnings

1929

New York 6, N. Y.

Teletype: CG 114 I

present figures

though the Dow-Jones In¬

Year

Broadway

Financial 6-3223

highs.

Price-Earnings

Inc.

135 S. La Salle Si.

be

can

marked

growth trend in the over-all

econ¬

tional

revenue

and

curb

a

comments

that

Diversified Investment Company

Prospectus

be obtained from

your local
Corporation,
200 Berkeley St., Boston
16, Mass. •
may

investment dealer

or

The Parker

pre¬

dicted increased inflation.
Bullock

A

inves¬

tors, in the face of increased tax¬

ation, might give more thought to

J*w £ N T Y

-

FIFTH

ANNI V E RS AR Y

to

all. The
investment
in

stocks

Bond
Investors/

in

stocks in the expectation

substantially lower stock prices.

ATTENTION,

the last year, it is at an histori¬
good-grade stocks that cally low level in relation to earn¬
bought substantially below ings and dividends. Compare the

faced

three alternatives:

with

common

planning to make gifts

tanced the market as a whole for

this

market itself.

during their lifetime are not only
interested
in
making
tax-free

put-dis¬

in¬

millions of
so-called

a

stocks with certain quali¬

curities which

(3)
"Using Mutual Funds
"Persons

decision

important

an

favorable.

individuals will want

many

Incorporated

fications to the "legal list" of se¬

legislation

tax

trustees.

,

During July New York trustees
face

affect

"The above information is based
on

the

of

York

New

and

permission will not only affect
their beneficiaries, but may also

Revisions

"Tax

discussion

common

continuation

the

'exclusion'

annual

persuasive

a

"prudent

Gifts

"Future

speculative issues, there are

more

its

in

Investors,

1

161.3

this problem,

be given shares in
as
a
complete in¬

5

135.8

manage¬

ment.

common

available

were

well

in

of

'community
ciple,' a husband or wife, who has
not previously used any part of

Thus

Despite the level of the Indus¬

pro¬

needs

sents

Dow-

disparity

this

materially

212.50

Industrial

give

visions

that

believe

the

be

income

produce

standard & Poor's Indices:

INC.

12

fc*S5?.

And

J

kvi#
An

were

prices.

laws

any

his

of

may

Husband

by

the

made

1950.

High
May 29, '46
Dow-Jones

111

stocks

common

too-high

at

a

at the
recent

the

And there is

below.

changed

prices caused by the Korean situ¬

tax

23%

Jones Industrial Average was

sharp break in

part

another

to

paying

"$66,000
"As

'exclu¬

50-

ma.

Even

without

years,

was

high
most

1946

May

annual

individual, who has not

$33,000

away

New

the

on

Exchange

1949

$3,000

previously used any
exemption,

only

their 1946 highs.
significant, the index

stocks

the
one

lifetime

above

more

all

both

were

using

will

capital

with

the

should

here

this.

on

utilizing the $30,000 giftexemption in one year and by

sion'

of

prices

changed
which of
thought is right.

data

to

Right?"

stock

The

5%

"Who Is

The de¬

basic question as to

available

Whitehall Fund Asks

per¬

the past two days has not

selling strategy should be mapped

carefully, and related in detail to

that

recent

years.

common

end

dealers.

the

in

trend
of stock
whioh
carried the DowIndustrial Average to its

nified considerably. Mutual Funds

or

PHILADELPHIA

not

upward

slightly

other occasion."

~

were

evidenced

is

as

resulted

sistent

Institute, its members and them¬
selves more harm than good. We

7+r

fearful

the continued strong demand

whose Mutual
Fund Institute is sponsoring an
investment education program for
Paul

club

WELLINGTON
4>FLN0

other investors

many

all

at

keeping

problems of

"By
tax

the
and

gifts may be inexperienced in the

Gift

Tax-Free

that

Thursday, July 13, 1S50

.

.

tected

lock

Mutual Funds

so

tax-free

.

YE

AiT

Volume 172

Number 4924

stocks

common

vestment

be

securities

(173)

provides that in¬

made

only

of

men

discretion

and

the
sor

Finances Harvard

By ROGER W. BABSON

*

intelligence in such matters who
seeking

are

reasonable

a

income

Calling Postal Department service cuts "silly," Mr. Babson

and the preservation of their cap¬
ital.
This
is
substantially
the

wording

same

ent man"

While

the

ing is permissive only,
must

consider

behind
It

the

implications

it.

would

be

buy

stocks

have

bought

without

losses.
to

chase

that

that

does

because
—he

not

it

carries

rain.

The

soning is
•

-

pur¬

it

same

it

stocks

for

"a

examples

reasonable

income

in history

securities

serious loss in
The

trustee

income

ing

but

where fixed

have

suffered

purchasing power.
purchases noth¬

who

fixed

when there

income

is

securities

legal barrier to

no

his purchasing equities is, under
ordinary circumstances, courting
danger just as much as the trus¬
tee
who
purchases nothing but

stocks.

common

Let

then

that

trustee will decide that
tion

be

the

some

of

his

trust

should it

be

of

on

income from

tne

curities.

this

now,

substantially
*

prices?

on

placed

Should

made

People do not live
but

por¬

or

be postponed in the ex¬

pectation
stock

must

stocks.

common

investment

Can,

is

ered

to

day

rather

There

then,

lower

also

deliv¬

now

once

a

a

day.

than

better

a

mail

your

only
twice

than

of¬

even

til afternoon.
in

ness

If you

in

have

these

of

one

is located

busi¬

a

cities

which

so-called "business

a

area" you may get more deliver¬
ies. However,
if your office or

business

is located

in

"residen¬

a

tial area," you must struggle along

with

single daily delivery.

a

Of

course,

those

se¬

however, control its omy was announced by Dean Ed¬
own
employees and ought to re¬ ward S. Mason of the Harvard
vamp
its procedures before re¬ Graduate School of Public Admin¬
istration.
The study will be fi¬
sorting to curtailing services.
nanced by a $90,000 grant from
P.

can,

O. Cuts Mean Higher Prices

The

slowdown

outskirts
and

beyond

areas

the cities

of

and

the

towns,

farms, are glad to get their
mail only once a day.
But in ad¬
dition to curtailing delivery serv¬
ice, the Post Office Department
on

has

made

sweeping cuts in

pick¬

ups

from street letter boxes in cit¬
and

much

It

towns.

the

of

also

night

mail

in

work

Mail

ters.

dustrial Average

Dow-Jones In¬

yield

almost

was

great

the most and
is bound to

turn

is

2^4

income

is

bonds.
to

be

stocks

common

sirable addition
As

times the

high-grade

on

tainly if

terion,

about

to

regards the

re¬

Cer¬
a

are

cri¬
de¬

a

trustee's list.

a

maintenance of

these
dividends,
the
low
per¬
centage of earnings that are cur¬
rently being paid out is something
of

a

on

the

safeguard.

The

following
table showing the dividends paid
stocks

in

the

Dow-Jones

Industrial Average and the per¬
centage of these dividends to net
income after taxes,

illustrates this

point.

in

1939

tablishment

service

Why?

6.57
12.79

54

one

predict

can

fluctuations
may occur

ments in
tees

of

as a

the

the
the

capital, no
to day

day

market

that

result of develop¬

Korean

war.

Trus¬

only hope to determine
if they are paying a fair price for
can

their

properties at the time of
purchase with due regard for cur¬
rent earnings and future prospects.
When the common stocks of sound

companies with a long history of
dividends and earnings are avail¬
able at high yields
low

as

five

times

apd selling
current

as

earn¬

ings, it should be possible for men
<of

and intelligence to
place for equity investments
present time.

prudence

find

a

at the

Leavitt &

Bry Forming

B. Leavitt and M. Ed¬
win
Bry, both members of the
JNTew York Stock Exchange, will
form Leavitt & Bry with offices
at 61 Broadway, New York City,
as of July 14.
Both have been ac¬
Phillip

tive

as

individual floor brokers.




on

that the

told

to

save

ment

budget

ers.

within

by

suggested

This will result

drop in postal
conceived

eventual

ill-

An

plan like this is bound

to backfire.

It is false economy of

the worst type.
These
poorly
cuts

an

revenues.

reflect

planned

postal

confusion

the

which

prevails in official circles in Wash¬

Foundation

for

the

Advancement of Financial Knowl¬

edge.

'

at Williams;
Robert
L.

Assistant

and

Professor

Morris

A.

nomics

Department of Massachu¬

Adelman

setts Institute of

Eco¬

Technology; Caii

Assistant

Kaysen,

the

of

Professor
of'
Joe S.

Economics at Harvard; and

Bain, Professor of
University of

Economics at
California at

the

Berkeley.

•

tion

of just how effectively com¬ on goods and services traded in
petition is operating today, and fi¬ national markets.
nally a consideration of what pub¬
"In the past two decades/' Dean
lic and private policy is needed to Mason
says in his letter to the
help markets function competi¬ Merrill Foundation,
-'economists
tively. •
<
have been shown increasing inter¬
The Merrill Foundation, headed est in
studying the divergence in
by Winthrop H. Smith, managing both structure and behavior be¬
partner of the New York firm of tween the competitive models of
Merrill Lynch, Pierce, Fenner and economic
theory and the actual
Beane, gave an "exploratory grant" competition in the markets of the
of $10,000 last fall to a group of business world.

specialists

in

determine

little

such

attention

of the people.

masses

from

this has resulted in loss of

as

liberty in other lands.
lose

too,

the

Indifference
Shall

we,

rights and services,
and
ultimately our liberty, by
neglect and inaction?
our

study of anti-trust decrees, and
volume

final

rec¬

addition

the

ommendations.

the

amount

the

who

men

curtailment

possible

service.

of

these

that

Is

it

in

cuts

engineered to divert
attention from the acute
were

FIRST

Pipe Line Oebs.
Two
of

issues

new

Panhandle

of

AND

doubtless

there

are

instances of inefficiency and

many

Pipe

ones

which cost

more

to

the

run

and maintain than they are worth.

"This

come

Hoover

that

the

Commission

postal vehicles

found

these

age

was

of

15V2

average

years.

The next time you

are

in

compe¬

into vogue.

standard

is

yet

as

imperfectly articulated: it is
jor

aim

tically
gan

the

of

present

consistent

a

very
a ma¬

study

and

COMPANY

Invite

Line

useful content for the slo¬

July

on

Attention
to

Kidder,
Merrill Lynch,

of the

company

three firms head

same

this Condensed

12.

STATEMENT

Peabody & Co.;
Pierce, Fenner & Beane and Halsey,
Stuart & Co. Inc. publicly
offered $15,000,000 of serial de¬
bentures

BANK

PATEPSON

OF

your

a

CONDITION!

OF
OS

JUNE

of

of

1950

30,

and the
group of

Panhandle

2%%

sinking fund debentures due 1975.
The
in

serial

the

Cash and Due from Bonks

debentures, maturing
of $1,500,000 each

U.

amount

June

expansion

lines at estimated
-

180,000.00

20,670,902.20

loons ond Discounts

16,357,687.72

First

12,813,467.80

F.

Mortgages

H.

A.

Mortgages

17,582,348.83

Bonking Houses
Accrued

Other

1,512,030.07

Income Receivable

543,111.18

Assets

TOTAL

407,067.11

ASSETS

$152,107,227.92

$141,605,697.68

Deposits
Reserves, Taxes, etc

1,239,417.30

Capital...;

construction

program

000.

The

3,000,000.00

Surplus
Undivided
TOTAL

_

ject

to

f.

1951

and

post office, glance into where the

creasing

mail

debentures

redemption

redeemed

your

on

or

3,000,000.00
3,262,112.94

Profits

$152,107,227.92

LIABILITIES

cost of $9,900,-

•

2%%

19,294.210.65
62,746,402.36

Municipal and Other Securities

plus accrued interest to yield ap¬
proximately 2.80% to maturity.
Out of the proceeds the com¬

The

$

Bonds

Federal Reserve Bank Stock

priced

1950.

S, Government

at
at

sub¬

101%%

RAYMOND PETERSON

BENJAMIN P

Choirmon of the Board

if

June

RIAL

President

1,

before

thereafter

are

Member Federal Deposit Insurance Corporation

prices de¬

1974. A

is

being handled. You will
find obsolete equipment and lay¬
out unadapted to moving the mail
as quickly and as cheaply as pos¬
sible.

It

is true

that

fice does not control

paid

to

railroads,

the

post of¬

the amounts

steamship

and

airlines for moving the mail. Nor
does it
control the
inexcusably

heavy
mail

volume
which

it

of
must

to

100%

after

June

1,

sinking fund is calculated
to retire 90% of the issue by ma¬
turity. The 2%s, due 1975 will be
callable
for
sinking fund pur¬

AND

ing, the company will have out¬
standing $107,000,000 of deben¬

7

OFFICES

Government

tures, 135,455 shares of preferred
stock and 3.240,000 shares of com¬
mon

a

TRUST

•

handle

at

FIRST NATIONAL BANK

at 100.
Upon completion of this financ¬

poses

stock.

PATERSON

COMPANY

OF

CONVENIENTLY
and

to

prac¬

of workable competition."

.

The

of workable

standard

tition has

were

for 1950 involves ex¬
stupidity which cost us taxpayers penditures of approximately $18,needless heavy expenditures.
For 200,000, a major item being the
example, look carefully at the post construction of approximately 131
office trucks operating in
your miles of main transmission loop
vicinity. Note the large number lines parallel with existing main
of old

as

judging the performance of actual
markets, even in terms of vague,
long-run tendencies. In its place,

NATIONAL

TRUST

debentures

Eastern

streamlining and further

but

true,

abandonment

perfectly com¬
a standard for

The Board of Directors of

pany
will prepay $10,000,000 of
promissory notes due May 1, 1951
mechanizing the postM service?
and $3,000,000 due Aug. 11, 1950.
The balance of proceeds will be
Reorganization Is Urgently Needed
added to general funds to provide
Many
people
claim that
the part of the cost of new facilities
postal service is grossly misman¬ to be added to the company's
aged. I do not know whether that natural gas pipe line system in

is

petitive market

elaborate

Participants in the project will
Dean Mason, Professors David

Office

Post

25

be:

Panhandle Eastern

$20,000,000

Congressional lead¬

strange that the

seems

In

will direct studies of
particular industrial markets.
group

a

concept of

has

concern

an

of the

a

of analysis and

this

"Recently,

tended to lead to

Underwriters Offer

and

This may be true. If it is true,

run

law,
eco¬

the feasibil¬

48 investment firms which offered

money

the

of
and

government

1, 1953 through 1962, were
to yield from 1.85% for
Department those maturing in 1953 to 2.65%
are
making no apparent attempt for the 1962 maturity. The 2%%
to save money in ways other than debentures are
priced at 99.11%
it

field

the

business,
nomics to

ington. More disturbing
still, ity of a full-scale study.
especially in this instance, is the
The unexpended balance of that
apathy of our people.
Although grant plus the new grant will be
the majority of our people are used
by the eight-man study group
gravely affected by these changes, to finance the writing of seven
yet very few have actively ob¬ volumes on different aspects of
jected. These cuts^receive surpris¬ the monopoly problem, a special

cuts

bring the Post Office Depart¬

need for

65

1949

office

backwards.

step

a

are

ordered

were

public

67

As to preservation of

taking
We

Earnings

$6.11

post

a

es¬

nearly 260 years
find our American postal

ago, we

to

of

unemployment

some

occur.

Co., aggregating $35,000,000

you.

continent

service

1944

means

For the first time since the

this

and

higher prices for merchandise.

marketed

% of
Dividends

mail

receives

or

"Why the Cuts Were Ordered

not

Years

to

This

businesses

Another effect will be

be felt by everybody

writes

from cities.

634%, compared with 2.76% from
high-grade bonds. In other words,
the yield on high-grade common
stocks

cuts will

who

order

rapid turnover to keep above
the break-even point will suffer

in

ter

the

Merrill

Bishop

Professor

volume

on

post

investing in equities? 1
29

move¬

by early

those firms which depend chiefly

offices which formerly was such a

help

when

moving the mail
quickly and efficiently. These lat¬

June

mail

worse

the

eliminated

able income" be obtained without
On

in

ments will become

fall

ingly

readers living

many

semi-rural

ies

securities
"reasona-

a

is

second

post

home

your

a

chance that you will not get it un¬

in

assume

us

fice,

of

or town

or

class

common

and the preservation of their cap¬
ital." There have been countless

in

first

of
Roger W. Babson

purchase

men

city

resi¬
area

containing

-

Prudent

live

you

the

a

rea¬

his purchase

serious.

dential

may

of

process

behind

in

harm

no

be

may

If

umbrella

because

Office

more

A prudent

an

him

do

the

It

School; Profes¬

Department

Associate

.'A five-year study of monopoly
problems in the American econ¬

Law

Business School; Associate Profes¬
sor
Kermit Gordon of the Eco¬
nomics

Monopoly

on

Harvard

Lincoln Gordon of the Harvard

The study will deal chiefly with
normally
.The major aims of the study four areas of the
Department increases.
economy^ mining,,
Already, delays of from will be three in number: An at¬ manufacturing, distribution, and
has
started.
24 to 48 hours are
being reported tempt to formulate a standard of construction. Within these areas,
This
in
the
in the delivery of first class let¬
workable competition, an evalua¬ the studies will be concentrated
end

stocks.

common
i.

carry

will

loss.

cuts

which

stocks because

acknowledge this fact.

silly

Post

they
imprudent not to; and
Act
was
passed
to

it

the

man

the

great

men"

overlook

to

to

accurate

more

"prudent

common

believe

Cer¬
tainly, it should not cause readers
Korea, does not worry me.

common

suffering

It would be

say

trustee

a

the
by Russia in

trial balloon sent up

stocks because prud¬

common
men

The present war talk, due to

half truth to say

a

that the Act permits
ent

high Post Office costs to obsolete equipment and
methods.
Says cuts will mean higher prices to consumers.

word¬

trustee

a

Study

ascribes

previous "prud¬

as

laws.

17

F. Cavers and Robert R. Bowie of

Postal Service Cuts

such

in

would be acquired by

as

prudent

The Commercial and Financial Chronicle

.

.

.

CLIFTON,

PATERS0N

LOCATED

•

IN

NEW JERSEY

✓

18

The Commercial and Financial Chronicle

(174)

Continued

from

which

3

page

..

Thursday, July 13, 1950

.

might

of

needed

be

take

to

infinite

variety of fu¬
contingencies which are not
predictable.
But insofar as we
handle the current situation well,
care

an

ture

Canadian Securities

United States Economy Will Expand

By WILLIAM J. McKAY
It

is

perhaps highly significant

that at

time

a

when

it

that the western world

groping

its

appeared

towards

way

a

almost

and

state

a

to place the Dominion
position of unprecedented
unassailable strength.

conspired
in

last

The

was at

inevitably increasing call
Dominion's

of greater economic freedom, the

the

proponents of despotic statism
have
attempted
to
arrest
the

only

movement

of

blatant aggression.
Whereas it had been hoped that
the

by

contributions made

enormous

country to restore the
war-ravaged countries of Europe
would have imposed an intoler¬

by

this

fill

to

natural

military demands

new

can

further expansion
virile economy.
In

result

in

Canada's

circumstances

these

on

resources

should

there

Despite World Events: Keyserling
bring

these two factors together,

have intrepid management and

we

splendid
and it

about

billion

As far

as

already

by

the

should then
a

about

rate

annual

an

the Canadian dol¬

trols.

be, the

cur¬

of

billion should rise to

$270

higher

lar is concerned there are

maintained,

and should

can

If

resources.

is

rent annual rate of total output

no necessity to have recourse
protective restrictions and con¬

be
to

financial

prosperity

steady

end

year

This
easily attain

and

by $9 to $10

the next five

over

ten years.

1950,

of

increase

billion

$8

viously moving towards tne stage

that we
that the present dis¬
a
total annual
count provides an ample cushion
output of $310 to
$320 billion
against any adverse pressure that within five years, and $360 to $370
billion within ten years
(meas¬
might develop in the event of the
abandonment of Foreign Exchange ured at constant prices). Thus, our

at which wartime restrictions and

Control Board restrictions.

able strain
this

economy,

the U. S.

on

expectation

doomed to failure.

Europe and the

Commonwealth

British

controls

could

clearly

was

ob¬

were

be reasonably

safely removed;

on

the other hand

of

unprecedented level

an

In short, tne eco¬
nomic phase of the cold war was
running in favor of the free world.
buoyancy.

v,As a result the roots of Com¬
munism which thrive

economic

on

decay could derive no sustenance
in the healthy soil of economic
recovery. Recent events however
constitute

an

even

chal¬

sterner

lenge. Still greater stresses will
be imposed on the economies of
the western world and the danger

of

the

losing

freedoms

is

Whereas

ent.

hard-won
only too appar¬

recent

now

the

before

Korean

bold

A

and

in place of the anticipated reces¬
sion, the U. S. economy was main¬

tained at

indications

take

can

decision

the

in moving

lead

annual

this time to

at

toward

complete economic freedom could
not

fail to

constructive

have

elsewhere.

percussions

re¬

Eu¬

The

ropean Payments Union is already
in force, but British reservations
and

or

international sit¬
against its full
operation. But wholehearted Ca¬
nadian support of U. S. efforts to
militate

direct

trade

world

finances

and

production

about

previously

'economic

provide

into freer

flowing channels would
European
doubts concerning the wisdom of

vide

pursuit of these objectives at this

type

critical time.

support

However

as
long as Canada is
unreservedly committed to the
principles of economic freedom it

not

would

suffer

verse.

The lines

drawn

the

on

a

between

are

now

despotic

hand and

one

moral

severe

re¬

clearly
statism

freedom

of

economic enterprise on

toe other.

To

long

abandon

now

the

ain

sus¬

decide

of

business
at

Despite

the

added

democracy.
difficulties in

front

ac¬

cepted in the same spirit tnat in¬
spired the decision to ignore the
risks involved

in meeting the is¬
squarely in the military field.
Thei* country that has an out¬
standing opportunity to set a con¬

sue

structive example in bus direction
Economic events have

CANADIAN BONDS

bring
bear

the

of

section

Dominion

eco¬

to

of world

During

desired

is Canada.

strongly

press

regard to

would

tinued

nomic

to

surplus
of

grams

business

on

the

future

politics.

the bond

the

external

market

side

easy

internals

con¬

the

and

were

also

a

The corporate-arbi¬

trage and free funds rates on the

hand were higher at 13%
and 9V8%, respectively. The stock
markets, under the influence of
the international situation,
suf¬
fered
a
further sharp
setback.
Western oils and gold prospects
in particular bore the brunt of
successive selling waves. In the
case of the oils it is possible that
hasty liquidation might prove to
be shortsighted; Canadian oil in
the present circumstances might
assume
greater importance than
other

norjnal conditions. The in¬

dustrials and the base-metals

less affected

Provincial

were

by the selling pres¬

sure

and at the lower

was

well absorbed.

prices stock

Leslie

Morgan With

Television Shares
SAN

CANADIAN STOCKS

FRANCISCO, Calif.—Les¬
lie A. Morgan, formerly with Dean
Witter & Co., has been appointed
representative for Television
Shares Management Company and
Hudson Distributors, Inc., princi¬

A. E. Ames & Co.
incorporated

•

Two Wall Street

budg¬

a

pro¬

development,

resource

stimulation

human

and

essential to this

are

such inter¬

carry

pal underwriters of shares of Tele¬
vision

Fund, Inc., and Hudson
Fund, Inc., in southern California
and the States of Utah, New Mex¬
ico and Arizona.

upon

as may be im¬
by the foreseeable

us

in

evolving

an

Inevitable

Business

WORTH 4-2400

NY

1-1045

Prior to his

why

downturns

with

serious

'^he only thing that could seri¬
ously jeopardize this rate of dy¬

hope

assuming the
which we all must

progress,

world

peace

will

result

from

the

firm

stand

against aggression now be¬
ing taken, would be a prolonged
recession
is

depression. But there
inevitable about the
cycle. And these three
or

nothing

business
main

factors

reinforce

now

against the

economy

vast

the

shocks

of the past:

"First,

enterprise system it¬

self—including businessmen and
workers—has learned much more
about

hQw

whole

our

economy

BoMton 9, Matt.

salesmanship

*




IBA.

as¬

is

the

courses

sponsored

by

cer¬

expand

ports

contract

and

in¬

versely to the trend of private in¬
and

vestment

than
war,

of

it

1947

knew

ever

and

be¬

has translated

and

1948, there
were not the speculative excesses
so
typical of previous 'booms.'
Even during the moderate reces¬

for

recovery instead of cumulat¬
ing the forces of downturn as in

previous
derance

The

eras.

of

vast

prepon¬

economy consists
of operations in the private
sphere,
our

and it is in the progress

that
of

we

here made

look for the main

sources

stability and growth;

in

-the

Economic

Mr.

maintained
and

the

to

concept that action

ulation

and misrepresentation in
security and commodity marts,
the greater flexibility of credit

port

of

the

agricultural

sector

against catastrophic ^decline,
the

establishment

of

and

nationwide

many

on

the

sound

must and

can

effectively be taken to deal with
large-scale and prolonged

unem¬

to

improvements

public

in

private

economic

and

policy

along

business

man¬

these lines:

"(1)

Important
should

their invest¬
ment policies, their
plant capa¬
cities,
and
their
improvement
agers

of

tools

gear

to

the

of

prospects

sights will in itself contribute to

and

overwhelmingly

occasion and

adopt

sive program on a
ful

if

fronts

should

compared with
depressions
evitable

rise

variety of
falter.
one

use¬

system
We

are

stable

a

by

rate

growth in
tant

of

in the past has been

violent

most

their

run

will

areas

any

international

say

tensions

ultimate
which

of forecasting,

no way

degree of accuracy, the
unfolding of the events
in

commenced

The

June.

late

sensible

most

on

that

manifest

the

Korea

of united and

determination

freedom-loving

peo¬

ples will increase rather than di¬
minish

the ultimate

durable
there is

prospects for

the short

In

peace.

that any increase

sover

run,

yet no indication what-

as

of public

outlays occasioned by the current
situation

would

in

be

sufficient

magnitude materially to alter the
create

economic

dangerous

outlook

or

general

or

to

in¬

flationary pressures. An economy,
which in its normal stride

total

crease

output

fiscal

The

the

can

in¬

by

and

credit

tools

disposition of the govern¬
be sufficient to

ment should

con¬

tain

ness

ex¬

to

which

lead

to

con¬

tractions of business and increases

unemployment at other points

in

the

economic

system.

On

the

other hand, if businessmen should

their investment and

gear

ity to projected
ments

over

cycle of
lean

a

require¬

traditional

business

fat years and some

some

years,

capac¬

average

this

in

itself

would

add to the very instability which
is

feared.

-v

as¬

which now to act is

sumption

Ade¬

in

Keyserling had this to

"There is

which

inflationary price
and will help to avert

increases,

the United States economy:

with

of

subject to the

fluctuations.

help to avoid the

contributes

bottlenecks

upon

rate

the economy

cessive tightness of supply which

Current I International

of

stable

of the most impor¬

one

areas

growth,

general

a

in which
as in¬

'natural' course."

Effect

of

furnishing

quate productive capacity in key

regarded

allowed to

an

world,

new

a

the

were

and

the

to

comprehen¬

a

in

literally

No

quickly

business

our

seriously

living

"(2) Increasing production does
no good without expanding mar¬
kets.

Expanding markets are cre¬
by the lowering of costs re¬
sulting from efficiency, by coor¬
dinated adjustments in prices and
wages
so
that
real
purchasing
ated

rises with

increasing out¬
the development of new
and appealing products which the
public wants and which provide
more
variety in the standard of
living, and by good salesmanship.
Constantly more comprehensive
power

put,

by

market
wants

analyses of the needs and
the people as a whole,

of

of the price-income structure
enable these needs to

and

which will

serviced

be

ductive

as

fully

resources

as

our

permit,

pro¬

is

the

paramount challenge to the whole
business system.

While wages should ad¬
rapidly enough to maintain
adequate purchasing power, they
should not advance so rapidly as
"(3)

vance

to

cause

inflation.

Economic sta¬

and consumers which has be¬

bility and growth also require a
narrowing of the vast disparities

increasingly characteristic
postwar period.
If busi¬

in the wage structure. The typical
method of adjusting wages in the

come

the

nessmen

to

seek

question that

party composition, would

in

As
against
this
further

downward.

must

Congress, no matter what its

arise.

it should

informed person can
the

at

it

turn

bulwarks
we

economy growing substantially
from year to year. This lifting of

ployment if

in

which be¬

interdependence of
operate power¬

whole would

fully

and

consumers

the

follow

continue

of buying
which governed their actions in 3l
prosperous

pattern

and

expanding

econ¬

prior to the recent turn of
events, few if any

United States is through the col¬
lective

international

shortages

pipelines

of

should

arise

supply.

But

in
an

bargaining

process,

which

affects wages even in those

areas

where labor is not organized. Fur¬
ther
improvement in the rela¬

a

of

efforts

further

of

strengthening

of

cause

the

to

The

improved

auto¬

require hard

sectors of the economy

view cf the increasing amplitude

the stability of the economy.

expanded

but will

fronts:

found

to

and

matically,

abroad, popular thinking has swung

omy

contribute

Keyserling indicated, how¬
that prosperity will not be

ever,

acute

to

Expansion Is N6t

Automatic

"Second, the Government dur¬
ing a generation has adopted pro¬
measures

of

danger,

employment;

tion.

the

authqr of the IB A sponsored book facilities both for" purposes of
"Security Salesmanship," and ? as¬ stimulation or restraint, the sup¬
on

well,

flation

fore

the

in carrying

as

such as Social Se¬
curity and agricultural price sup¬
programs

this improved thinking into prac¬
tical results. Even during the in¬

functions

banking

sisted

expenditure side

$9 to $10
billion a year, should well be able
to
absorb some changes in the
pressure
of
demand
for
some
products without general
infla¬

over spec¬

He

the

tain

short-run

our

able

be

equally well the prob¬
the future
when they

"In
an
economy
as
vast and
declines, and a correspond¬ flexible and ever-changing as the
ing increase in taxes whenever United States economy, it is still
inflationary pressures appear. On true that dislocations can arise in

economic

unlikely to inter¬

are

the

legitimate

will

ment

regarding the impact of recently

the

Detroit.

taxation,

increased

namic

given

any

Tension

Mr. Keyserling listed these main
reasons

fere

At

as a

the progressive
nature of the tax system results in
a
sharp reduction of taxes upon
business whenever private invest¬

Mr.

structure, the controls

and

of

rate

About

sociation with Dean Witter & Co.,
Mr. Morgan was actively engaged

Angeles
Flfty Congresft Street

force.

stabilizing

world

Cycle

the

we

arise."

of the Government's fiscal

nature

r

Nothing

lems

that

very-

policy operates automatically

situation."

in the investment business in Los

New York 5,N.V.

grand scale. The

a

on

inflationary
pressures
no
sion of 1949, business adopted pol¬
greater
than
those
which
are
icies
of
investment
confidence, likely to arise, particularly if sup¬
discriminating price adjustment, plemented by the kind of intelli¬
and
wage stability which made
gent behavior on the part of busi¬

Municipal

Corporation

to

progressive expan¬
momentous sion of the United States economy:

a
on

week

the

shade lower.

under

Government

major

domestic

the

welfare which

eventu¬

an

favorable outcome. A com¬
pletely united U. S.-British Com¬
monwealth-European
economic

the path of the attainment of the

objectives the new
challenge should be

more

sustainable

level of taxation and with

etary

secure

doubt with

course

western

by

enterprise;

easily

an

desirability growth; and to

ally

erty would play into the hands of
of

living

kets and rewards for every

greater free¬
dom of world trade, there is little
to

attempt

influence

foes

would

lift the gen¬

following the U. S. lead. On the national obligations

tained struggle for economic lib¬

the

the

membersv of

other

and

/for British Commonwealth co¬
'v operation with this country in its

world

in¬
na¬

a decade; to pro¬
correspondingly larger mar¬

elements

free

oper¬

than 25% within

posed

the

of

do much to remove any

should

event

growth

resources to

standard

eral

other hand if the senior Dominion

this

now

"Allowing for population
this entirely feasible

tional

of

In

are

we

handle

to

proved worthy as stabilization

devices

years about $90.
"Third, and most significant of
higher, than the, all, although not so fully appre¬
unequalled peacetime ciated in the United States or

crease,

the tightening rather than the re¬
laxation of governmental restric¬
"

higher,

end

overwhelmingly

tion of greater economic freedom,
there are now growing lears of

<•

billion

be

ating.

Commonwealth of the

•••

and

can

un¬

ten

peak at which

wealth were moving in the direc¬

*

goods

years

cushion against

as a

increase

will

employment have all been tested

billion

$100

will be difficult to convince Brit¬

tions. "

$50

to

within

and
to

$40

developments,
Canada,
Western
Europe an^l the British Common¬

X

of

services within five

the present

uation

means

insurance

it

confidence

tionship between management and
labor

is

therefore

a

central

key

stability and growth, without
larger amount of industrial

con¬

unjustified scramble for excessive
of stocks, to safe¬

flict than is perhaps inevitable if
freedom is to be preserved. There

guard against some hypothetic fu¬
shortage, could bring on the

are

accumulation

ture

very

evil of inflation which pru¬
Every ef¬

dent action can avert.
fort
a

should be made

balanced

succumb

to

attitude,
hurtful

We cannot do

all

to

maintain

and

not

to

excitement.

the things now

recent

agement

signs that both

and

labor

are

man¬

working"

toward the improved understand¬

ing and mutual cooperation which
are-

the

main

safeguards against

excessive public intervention.

"(4) Government policy, despite
years which are al-

gains in recent

.Volume 172

Number 4924

.

.

The Commercial and Financial Chronicle

.

I

most

universally conceded, needs

still

further

cial

emphasis

Spe¬
placed
those public policies which

upon

do

tives

for

should

the

stable

a

self.
room'

industry's gross assets now exceed¬
only by agriculture, railroads, and public utilities. They term
1949 a readjustment year, with net earnings down

growth

'for

and

evaluation

which

to

add

nation

the

investment

industry

the

of

in

petro¬

United

the

billion

the

at

close

of

1949

and,

distinguished

earth must

nations

tween

United

the

and

if

States

they

but

are

1949,

not

upon

resist

aggression. We must also continue
to

draw

upon

Coqueron

to

resources

our

Frederick

themselves

in terms of gross assets
employed,
is exceeded onl.y by

larging

railroads and

the

This estimate

is

help

other

peoples

free

to

help

economically by en¬
capital equipment,
advancing their technology,
by selling goods to us if we

by
and

their

expect to continue to export goods
them.

to

United

with

And

States

this,

all

the

must

cling to the
perception that, while we happen
to

now

world

other

excel

we

mean

maturity or moral judg¬
ments, the higher attributes of

United

civilization.

and

has

States

tribute;
learn.

Isolationism

it

security;

to

con¬

is

not

equally

is

to

only

the viewpoint of

dangerous from
in

much

The

also has much

but it

Pogue and Frederick G. Co¬
queron of the Petroleum Depart¬
ment of the

dangerous

field where mankind has
impulses and aspirations
regardless of national boundaries."
any

common

Chase National Bank

conjunction with their detailed
study of the financial transactions
of

States.
The

.

of

the

annual

raised

through

sales

of

lion.

Of

this

totalled

added

and
bil¬

$0.7

about $0.4

amount,

were

Funds

financing

assets

billion

and

aggregated

sources.

to

of

estimated

an

$23.5

value

gross

billion, current assets at

billion

$6.3

and

other

assets

at

working

capital.
tained

funds

from

lowing

totalling

$641
banks, insurance

panies and

the public in

proportions:

mil¬
com¬

the fol¬

42.6%

from

insurance

companies, 36.7% from
public, and 20.7% from banks.

The

borrowed

this

of
of

for the

petroleum
postwar

started

in

1946.

operating
companies was

Prices

reduction,

some

gross

industry,
expansion

of the 30

revenue

down

and

5.7%

from

Net

1948.

earnings of the

group

amount was in the

long-term

increase

debt,

a

urban

&

Company

low

the day's
George K.

in

turned

grols score'of 77.

Garvin of Garvin. Bantel & Com¬

had

pany

low gross with

second

73.

a

The

low

net

combined

world

wide

-

production of the 30 com¬
panies averaged 3.4 million bar¬
rels per day in 1949, a 10% de¬
crease

crude

oil

1948.

from

mestic

foreign

barrels

day,

per

the

by

for

determined by a blind bogey,
carded by Joseph Lettman of
Merrill Lynch, Pierce, Fenner &
Beane, who scored a 79-8-71. Prize

for the shot nearest the

pin on the
Jay B. Samson

tenth hole went to
of

the

same

guest,

won

Lending-

In

Wall
The

Street

prizes

ner

in

the

attended

so,

companies

coming increasingly important
investors

in

residential,
are

signifi-

a

cant factor

3

Ithe
-"'A

,

as

whole,
ac¬
cording
to
a
Mortgage

Lending

lished

Stock

pub¬
the

by

National

become

York

Saulnier

Exchange
late

Bu¬

of

Eco¬

reau

nomic

Re¬

P.

Maloney.

N. Y. Stock

Exchange
Weekly Firm Changes

The New York

Stock

Exchange

has announced the following firm

changes:

R.

J.

Their urban

Saulnier

and

that

dicate

of

the

late

James

E.

Bennett in James E. Bennett & Co.
ceased June 21.

Interest
Hassold

June 30.

in

of

the

held

14%

they

Bioren

&

Carl

Go.

F.

R.

ceased

\j




held

about 40%

of all urban

16%

and

mortgages

residential

all

of

farm

mortgages.

Since

held

7

from

value ratio and contract

length oct
by one- to fourfamily properties than on loans o»
loans

secured

other structures.

fre¬

About

•

56%

the

residential

and

to

on

and

of

commercial

4.9%.

loan

the

investment).

Between these two extremes, he

investments, that

insurance

an

company

its
loans
exclusively
through its home office staff and

tionship,

through

or

system.

brancli

a

same

range, were more

virtually

among
former type.

of¬

widely
lower

and

,

There

weie-

geographical

differ¬

interest rates

on

ther

of

ad

property types tended to be higher

adopted, Dr. Saulnier

provision.

Urban

Mortgage

on

says.

Lending

Returns Are

and

Interest

loans

rates

loans

on

with

amortization

no

There

was

a

distinct

tendency for interest rates to be-

Costs

lower

Studied

on

than

on

loans

of

those

long

of

short

maturity
contract

reviewing the history of length, and interest rates on loana
urban mortgage lending
by life secured by properties other thai*
oneto
insurance companies and analyz¬ the
four-family
type?
ing the market served by the tended to be lower on the larger
loans.

companies, the economist presents

Continental Illinois National Bank

Company of Chicago
Statement
■y

;

of Condition, June 30, 1950 {
,'i

■"

i

of

all

mort¬

to

properties is done largely
through life insurance companies.
Urban

mortgages

are

found,

exception, among the
all

as¬

insurance

companies
of $100 million and

$

Professor of Economics at Barnard

at all.

a

very

all

few

small

Only

companies, he

have no mortgage investment
In

1945 more than 80%

companies

held

some

of

United States Government

CHAUNCEY B. BORLAND

Other Bonds and

Obligations..

Financial

all

Program,

conducted with grants of

re¬
was

funds to

126,256,402.77

the National Bureau by the Asso¬
of Reserve City Banker^,

of $1

Loans and Discounts.

CHAMP CARRY

.337,939,797.91
I*

Stock in Federal Reserve Bank

4,800,000.00

D. A. CRAWfORD
Chairman, Finance Committee,

Customers'Liability

Pullman Incorporated

on

Acceptances,...

1,063,444.50

Income Accrued but Not Collected

EDWARD A. CUDAHY
Chairman of the Hoard,
Tlx Cudaliy Parting Oompjny

7,479,914.12

Banking House

9,450,000.00

JOHN r. CUNEO

$2,319,697,337.86

Pretident, The Cuneo Prc»», Inc.

LAWRENCE

>

P. FISHER

LIABILITIES
i

CHARLES Y. FREEMAN

Acceptances.

WILLIAM

1,077,674.78

Reserve for

Banker

7,156,487.32

Taxes, Interest, and Expenses

H. MITCHELL

Reserve for

Partner, Mitchell, Hutchins tit Co.
A.

.$2,114,19.6,274.8/ ]

Deposits

Chairman,
Commonwealth Hdison Company

Contingencies

18,109,338.78

W. PEAKE

Income Collected but Not Earned

392,972.19

Standard Oil Company (Indiana)

H.

Capital Stock

A. SCANDRETT

60,000,000.00

Railroad Executive, retired

Surplus

JUDSON F. STONE
McCormick Estates

100,000,000.00

Undivided Profits...

18,764,589.92

FRANK F. TAYLOR

$2,319,697,337.86

Vice President

HERMAN WALDECK

R. L.

WILLIAMS

Unitrd States Government obligations carried at $212,879,891.84

President, Chicago and North Western
Railway System

arc

pledged

to secure

purposes as

CHARLES D. WIMAN
president, Deere & Company

public and

trust

required

permitted by law.

or

Member Ftdrral Detail Inturancr

deposits and for otber

Corporation

_*a

the Life Insurance Association

America,

and

Foundation.

the

6f

Rockefeller

with admitted as¬
million and over were

urban mortgage

The

heaviest

lenders.
urban

Chicago has another great lake-front fair—The Chicago.Fair of!
mortgage

loan investments are found among

the

1950.

It

has

already drawn national interest and attendance,

and should well be worth

companies with assets of less

than $500

j

Pretident, Pullman Incorporated

companies

sets

\

1,277,610,688.87

Securities..............

mortgages, and more than 90% of

The study

■

MiinaxitiK Okiu'i, Borland Propcrtin

urban

Director of the National Bureau's
Research

■

555,097,089.61

Executive Viet President

Dr. Saulnier reports.

says,

'

v

•

Cash and Due from Banks

Director, General Motors Corporation

specialized commercial and in¬

outstanding,
between
1929
and
1947, Dr. Raymond J. Saulnier,
College, Columbia University, and

higher

to an in¬
creasing extent, a combination of
these
arrangements
is
being

of

resources

amount

no

ences

However,

President,

over,

the

in

producing properties.

system of correspondent rela¬

fice

Joans

on

by other types of prop¬
while also concentrated in

mortgage loans at the end of 194$
was 4.5% on one- to
four-family
properties and 4.2% on income-

acquires
its

had

The average rate of interest re¬
ceived
on
portfolios
of
urban

cation.
Often

one,

interest rate classes.

policy of broad diversifi¬

a

Interest rates

distributed

notes, there are other companies,
mainly those with intermediatelarge-sized

by
properties

secured

erty,

and

loans secured

four-family

type (mostly companies with large

JAMES R. LEAVEI.L

with

of

13%

to

one-

on

of

all

of

,(

of the number and

original interest rates between 4.1

mainly of large loans
income-producing
properties

four-family
properties and from 14 to 23% of
the mortgage debt on larger resi¬
dential structures. The financing
gages

sets

16.9%

Large

1938, life companies have

without

or

Are

Holders of Mortgages

farm

16.2%

was

more

loan-to-

to

MARSHALL FIELD

billion,

which

respect

Pretident, Sun and Times Co.

Companies

Insurance

ciation

late

lenders

such mortgages outstanding at
the end of 1945. In contrast, they

mortgage holdings rose from $7.6

ports in the study.

Interest

as

dustrial

search.

the

mem¬

Gregory

with

consist

Real Estate

Estimates in¬

says.

billion,

the

Credit terms tended to be

liberal

J. Q. ADAMS

the insurance

greatest

mortgage debt outstanding, to $8.5

of

amortization basis.

RESOURCES

urban non-residential property,

by

Com¬

panies"

On

bership

tization by maturity, or were con¬
ventional loans written on a fuA

Chairman

of

Insur¬

ance

85%

and

originally made

less

amount of

WALTER J. CUMMINGS

study of "Ur¬

E. H. Stem Co. to Admit

New

a

is

companies
Dr.

of

CARL A. BIRDSALL

The importance of

on

number
were

quently the small portfolio com¬
panies) to those whose portfolios

BOARD OF DIRECTORS

,

Life

acquire

in

mortgage

market
*'<<■

dent of the Association.

will

as

commer¬

cial and industrial properties, and

awarded at a din¬
evening by Blancke

O'Connor

the

1948.

from

be¬

are

Noyes of Hemphill, Noyes, Gra¬
ham, Parsons & Company, Presi¬

Mr.

(most

and

loan£

The

exclusively, or nearly
small residential properties
basis

the

of

than $10,000.
majority were either FHAinsured, thus requiring full amor¬

companies.

Policies

insured

of

amount

amounts

Pretident

Insurance

outing.

July 14 Gerald T. O'Connor
a
partner in Edwin
H.
Stern, Jr. & Co., 25 Broad
Street, New York City, membefs
of the New York Stock Exchange.

in

their

an

number

of

interest rates.

ban

will

the

lend

on

on

slight decline

a

companies' increasing investing participa¬
residential, commercial and industrial properties. Esti¬
mates their mortgages on urban non-residential properties as
about 40% of all such loans outstanding. Notes divergence in

were

the

95%

lending policies, Dr.
Saulnier found, individual
com¬
panies vary all the way from those

million

5.2

Dr. Saulnier notes

in

men

of

the

amount

on one- to
four-family prop¬
erties, and the great majority weieon
single family homes.
About

the

about

of

the

were

to

Vary
Widely
Among Individual Companies

tion in

Lee, a
the kickers' handicap.

100 of the young

About

sizes

is

Mfge, Lending by Life Insurance Companies

William

firm.

all

estate

90%

of

do¬

refineries

averaged

cap

was

about

The volume of

processed

and

group

real

1947.

study of 3,390 loans with
original amount of $37,128,000'

45%

The

assets.

1945 and

a

outstanding in 1946, he finds thai

one re¬

equal

and Trust

with handi¬

score,

In

general, most such property
was acquired
through purchase.

New York held at the Westchester

Country Club in Rye. New York,
Andrew F. Peck of Clark, Dodge

tween

an

properties
admitted

analysis of their urban mort¬
lending costs and returns be¬

gage

by
for

reports

19

After

crude

the

in

slight

1948.

over

The

According to the study, the year
was
a
period of readjust¬

1949

and

money

capital

equity

$0-,4 billion.

of all

follow

During the year, the group ob¬

form

such

of

Association

Investment

the

assets

requiring $0.3 billion

outside

*

.

fixed

18%

at

which

golf tournament

during
than was

ried

underwent

At

was

made

billion

investments

from

the

indicated

proportion of total assets invested

that

for

$2.4 billion,

lion

an

In

The in¬

was

less

2.4%

rep¬

employed by the
30 companies at the close of 1949
amounted to $14.4 billion.
Some

ment

Tourney of Irtv. Ass'n

$2.3

16%

ported

earn¬

study, "Financial Aanalysis
of 30
Oil Companies for
1949,"
was
published by the Chase on
July
10.
The
industry's plant,
property and equipment (are car¬

following the

Winners in Golf

to

about

other

in

petroleum industry in the United

litical

freedom

E.

that

others in po¬

better than

are

by Joseph

30 major oil companies which
comprise about two-thirds of the

the

strength

potential, this does not

agriculture,
public utilities.

made

and

of

parts

economic

in

the business.

penditures

Joseph E. Pogue

as¬

purposes,
most. showed
amounts less than 1% of their to¬
tal admitted assets,

same

available

earnings of the group
amounted to $2.7 billion in 1949,
leaving $2.1 billion for other pur¬
poses
after dividends.
The ex¬

that we draw
immense resources to

our

to

Cash

enough,

help other free peoples to

30

which

sum

of

The

million

$564

spent in 1948.

It is important,

now.

1948.

disbursement

amounted

the other
parts of the world remain as wide
as

40%

however, by

up,

over

the decreased outlay
plant, property, and equip¬
ment.
Expenditures of this kind

prosperity

is

though

year.

for

in

shortages

were

19%

decrease of

a

previous

possible by

secure

high in the family
the disparities be¬

This

says.

of their

Of 14 companies reporting hold¬
ings of urban property for invest¬

ings. The balance of earnings

hold its head

of

Dividends

nearly

creased

increasingly

recognise; that it cannot be
or

the

retained in

the wealthiest

all,

from

resented

of

payments

$1,408 million,

27%

companies paid
stockholders, a

of

70%

mortgages, Dr. Saul-

ment

were

States has been estimated at $30.2

another.

or

on

The
leum

and

analysis of available
1931, 1936 and 1945.

h^ut

dividends up.

items

wealth

real

be

can

"(5) '.Above
nation

expenditure
those

transfer

mere

kind

of

that

so

from

classification

improved

programs,!

There is

structure.

need

note

ed

the

the whole tax

one

of

rate

Petroleum economists

incen¬

50

sets in urban

nier

enterprise system' it¬
Toward
this end, there is
for
important reforms in

within

between

Thirty Billions

be

maximize

to

most

the

U. S. Oil Investment Reaches

improvement.

(175)

million, of which 13 had

a

visit this

summer.

20

(176)

The Commercial and Financial Chronicle

Continued

from first

Mandate from UN?

page
The

Securities Salesman's Corner

United

the New York

Korean Lessons

date

from

uprooting

of

Ko¬

favor¬

sia)

rean

economy

are

Figure

able

items

the Bolshevist

it out for. yourself and you will see that you normally have only
the hours between nine a.m. and noon, and from one to five o'clock

ance

sheet.

The most valuable asset any salesman has is his time.

call to see people. This gives you
day for the actual solicitation
of business.
If you work five full days a week this leaves you a
total of 35 hours. However, by adding two luncheon dates a week
-and spending four more hours on evening interviews, you will still
have only 42 hours which can be used to place yourself before
your potential buyers.
daylight hours

seven

every

so many

we
have
combined
at
Moscow's face
with a nice piece of appeasement.
I am referring to the President's

shall

be

determined

in

the

make

which

we

to 32 hours

down

are

again. Unless you can always
(which is impossible even if you have

see people when you call
appointments) there must be additional time spent in waiting and
delay. Three more hours of this and our work week has dwindled

to 29 hours.

There

about two weeks of

are

the investment
of vacations.

holidays which are observed in
during the year and another two weeks

business

Here then

another two hours a day that you can
subtract from your available actual selling time.
This now leaves
27 hours a week that are available to
you, even if you work some
are

nights and take time for two luncheons with clients.

However,

we

haven't spent any time at all in the office. We haven't included
time for making appointments, for doing clerical work and record

keeping. If

spend the hour between nine and ten for this
pose you can take off another five hours each week.
This
leaves

you

pur¬
now

net of 22 hours when you. can see customers and
actually
Less than four hours and a half a day that are
available to you, even if you work nights as we have indicated
a

after business.

go

above.

treaty with Japan or by the
(In either case, we determine

it.)
are

over

to

Communist

it

a

in

success

checkup

who have made

men

on

an

above average

the

selling field you will find that they were keenly
value.of their time. Nearly all of them were planners.
set up the week ahead like a general surveying a
battle. Each day had its appointments and these dates were marked
on a handy diary.
Each morning was planned—luncheon dates ar¬
ranged—evening calls set up—and this was done a whole week in
of the

aware

They would

advance.

Some

men

"have

found

it

better to

spend Friday after¬
noons in the summer, and Saturday
mornings in the fall and win¬
ter, just for telephoning clients and prospects in order to arrange
set appointments for the following week.
Then when

they

to

their

office

morning they knew where they were
going to do and say when they got there,

going, what they were
they eliminated waste motion in

and

Five hours

came

Monday

on

travel time.

be added to your actual
"selling
between eight and nine in the

time" by doing
clerical work
morning, or on free
evenings. When you stop to consider that you actually only have
22 hours, isn't it possible to add almost
20-to-25% to your income
just by consistently using this additional time for the direct solici¬
tation of business?
Possibly there are some metropolitan centers
where it is not advisable to

inorning, but in

see
prospects at nine o'clock
parts of the country this is feasible.

many

in the

You

may say this is a full week.
Two nights of work, two
luncheon dates each week, start on the first call at
nine, work
through till five. Do clerical work at other times. Sure it is. It is
a

full hard week.

Bu.t time is valuable and there is not much of
it.
If you want to work a 40-hour week
it is very easy to get a
job
where all you have to do is to
report in the morning, go through
the motions expected of
you, and at the end of the week collect
your small check.
There is social

security in it,

insurance,

union card in

a

unemployment

unit

(trusteeship).

the

Nationalists

CINCIN NS AX !,
Statement

as

O H t O

of June 30,

1950

RESOURCES
Cash and Due

from

United

Bonds

State

States

Banks

$ 64,115,158.62
98,830,064.85

and

Municipal Bonds_a
and Securities-.
*
Loans and
Discounts______________

Other

6,163,771.47

Bonds

7,031,128.50
66,359,005.55

Federal Reserve Stock

450,000.00

Banking Premises Occupied
[Income Accrued Receivable
Other

Resources

and

3,585,574.83
639,804.31

Prepaid Expense

__

57,766.73
TOTAL

^247,232,274.86
.

,

„

,

Stock
7

_____

' 7 " -"

~ ~

- -

-

-

-

,Undivided Profits

1,765.070.46

Reserve

Reserve

for

Dividends

Reserve

for

Taxes____

$

18,765,070.46
j

1

__I

.

Reserve fpr Interest, etc._
Prepaid Income

|yg 392 11

'l40*000 00
917,Wee

ZZIIIIZ

__

154,343.56

726,073.47

DEPOSITS:

*'Commercial, Bank
rut

t

•

t

iu-

CS

and

219,536,412.89

S' Gover,lment

5,793,064.40
20,365.31

TOTAL

$247,232,274^86
*In

addition

standing
**This

in

to

the

includes

this item
amount

shown

as

of

we

have unused

loan

commitments

out¬

S3,768,553.23.

$2,299 855.68

of

trust

moneys on deposit in the
Banking
Department, which, under the provisions of the
hanking law, Section 710-165
the State of Ohio, is a preferred claim
against the

of




of

In

economic

of those

ress

allies is that

British

learned

in

But that is not the whole

We operate

story.

took
pres¬

the

as

Malaya.

the

on

theory

stability and

areas

prog¬

essential to

are

their

forbidden

are

to

auxiliaries and satellites in all

but

-»'<

name.-

'

moral foundation

of

our

action

is

wedge through which Bolshevism
enters, Burma and Indonesia call
political wisdom. But for economic doctors, too.
With
sign of the times that deep slight
variations
on
the
same

Nationalist guerrillas within China

it

as

little affected
is

a

as are

its military

doomed, aqd the Communist thinkers like Mrs. Roosevelt must theme, Thailand, India, Pakistan
their
regime will be definitely secured. have
political
conscience and the Arab world should
follow;
backed up by a formalized con¬ in
It is plain ignorance to assume
Iran, we have started.
Japan,
that Russia might be easily pro-, sent, the true meaning of which is incidentaly, is .heading for a crisis
voked to war.
If she needs ex¬ nothing but "powers acting in con¬ of first order unless her problem
hand:

number of them

the

conflicts

cert."
are

in

I.

of

on

Berlin,
the Dar¬

Incidentally,

over

Greece, Iran, Austria,
danelles, our propaganda

the

no

Mr.

"mandate"

terpose

our

Truman

whatsoever

had
in¬

to

countries,

Germany into

ern

our

anti-Russian

^n

system of alliances. And it is plain
naivete to

to

notice this nonchalant by-pass¬

ing of the UN.

that in the atom

assume

totalitarian would

start

The

rising population and declining
is met, which means
huge "investments."
production

seventh fleet^between

China and

Formosa, and to impose
policy of
rearming Europe, protecting Tito, rules of conduct upon both. Yet,
the believers in formalized "col¬
etc., etc., etc., to say nothing of
the gradual integration of West¬ lective security" do not even seem
satellite

In

short, military aid under the

Atlantic Pact may have to

plicated
shifted

in
from

doing

are

Plan

the

for

West

now)
Asia

have

ments

and
own

Colonialism

just

as

we

Marshall

a

evolved.

care

be du¬

(not

East

to

their

Russians take

New

Orient

Commit¬

logic—the

of that.

his

age

a

war

in the gentlemanly fashion of

putting

the adversary on guard
advance notice. The fact that

The
over

Korean

in

a

incident

blow
matter of months (but

guerrilla and

even

What Is Russia Up To?

may

The

border warfare

well-prepared Korean

ad¬

venture indicates

that Moscow ex¬
likely to continue much longer).
to
overrun
the
South
implications pected
as
in Korea proves that for the However, there are
in
the
President's statement
of quickly and to confront us with an
time being it lacks the intention
fact.
This sort of
June 26 which reach much farther accomplished
or ability
(which amounts to the
in time and space.
It announced, thing may or may not reoccur, but
same) for a real showdown.
in effect, all-out aid to southeast at any rate, no end of the trouble
Who
is in sight.
doubts
what
the
Soviet Asia. We are "in" there for
The number of fools
good.
rulers would do if they were well Which means a
who still believe, and fellow-trav¬
new departure in
ahead
elers who so pretend, that Russia's
of
us
in
super-weapons? the foreign policy of the United
Short
of
such
friendship might be won by dol¬
overwhelming States.
Moscow resorts to such

thing

that

might

irrevocably: if
and

Japan.

provoke

their "security."

another,

them

Germany

we rearm

That could be fatal to
But Korea does

not affect

appreciably,
the bilateral

is

maneuvers

power, or of actual aggression on
their territory, there is only one

one way or

balance

of

power.

lars or territorial concessions, is
dwindling. There still remain the
problems
hopeful who expect Korea will be
has been influenced by a deepa
lesson
to
her.
It upsets the
seated misgiving toward foreign
"timetable"
of
aggression, they
rule over backward countries,
t ""Srgue, and forces a
change of its
we
did not
actually foster native pattern. Especially so, if we really
rebellions
againstthe
British, turn the table on the Communists
Since

titude

the

1920's, America's at¬

toward

French

and

arrogance

in by¬

fused to

colonial

Dutch,

sympathized

The Cost of Fellow-Traveling

with

we

them.

certainly
We

re¬

appreciate^ (a) that local

Dillingers
ratherthan
colored
George Washingtons lead the in¬
surgents
that the

in

many ^instances;

natives Lo^most

(b)

cases

are

by liberating North Korea
as

the South and

as

well

uniting both. For

thereafter, we should have
of course, but—a se¬
breathing spell, a return to
"cold war," which compared

years

—not
cure

the

peace,

to the current "lukewarm"

one

has

passing Congress and Constitu¬ still incapable of jself-government
become a term of endearment.
tion, let him have what is due to and benefit by Western rule mor¬
Unfortunately, the pattern of
him, or to his military advisers, ally as well a£'ectmomically; (c) the Soviets'
dynamism is not that
for reversing the Hiss-Lattimore that the
colonizing nations' own simple. Expand
they must, facing
line of the State Department. But economic svstems^re
profoundly as they do a far
superior global
what else could he have done? It dependent on their colonial assets.
coalition which they consider their
The extreme case is Holland: 20%
was bad enough,that he hesitated,
deadly enemy. They are too real¬
of thej.
thus enhancing the
Communists' vested Dutch national capital is in¬ istic not to understand that in the
in
tactical
Indonesia, the export modern
advantage
due
to
the
world, two totally opposed
criminal state of unpreparedness surplus of which^cbuld practically
principles cannot live forever side
balance the mother country's dol¬
in which we kept South
Korea,
by side. Russia must expand her
and which was a virtual invitation lar
deficit.
Butgrthe Indonesian political hold so as to offset her
to invasion. Had he left
things to regime is bentf,.on
confiscation domestic weaknesses and her in¬
drift further, the loss of American rather than on "cooperation.
ternational isolation
to restore
—

"face" would have been disastrous.
Who in Asia could trust American

assets

of

the

bank.

Philippines,

the

lingering

Communist spark would have ex¬
ploded sky-high. (And what would

happen in the elections?)

i

Mr. Truman not only turned

a

somersault on

are

will

our China
pol¬
coming home to roost. It

cost

much

more

to

hold

against Hussia, and that
ternal

rebellion

the balance of power. To avoid a
suicidal war, her expansion takes

the

as

covers

in¬

well. We have

gain .economic benefits.

For

bet-

tionalists; bolstering their
morale^ ter^oc^v^r^e, our postwar Inter¬
material

only,

and

was needed.

managerial

The teeming areas of
"naturals" for the revolu¬

Europe's 'remaining tionary process, as Sinkiang (Chi¬
nese
Turkestan) is in process of
as
well as the
being peacefully penetrated by a
highly artificial, semi-totalitarian mixed
Russo-Chinese corporation.
politic,aJU structures which grew
Welfare

out

have been done by the Chinese Na¬

are

empires

of them.
parallel, plus Indo-China and
Formosa, than it might have cost
Imperially 19th Century style,
to
stop Mao Tse-Tung on the consisted
largely in using force to
Yangtze. There, the fighting would
38th

by

countries.

Asia

underwritten

colonial

The'chickens of

icy
Savings

years,

are

the

i_„

;

Pa/able__.

will be expensive enough. To
out
guerrillas
may
take

rea,

clean

promises

$ 7,000,000.00
10,000,000.00

Total Capital Funds
ueneral

Asia

consequences

-Formosa, but aban¬
if we ignore our com¬ doned our pet idea that colonies the
line
of
least
resistance:
mitments
time
and
again
and are a bad thing per se. From here through penetration, peaceful or
desert our friends? From India to ion^'we-are going to defend them
revolutionary,
i n
neighboring

LIABILITIES

_

Capital

7rU rP.,uA

Plan for

financial

top of an inherently unstable Ko¬

that

our

just

outcome and

leaving aside his

UNION HfllXI'ca

ently, the role of

and

in

of
policy will be momentous. To
"pacify" Indo-China, torn by a
bitter three-cornered contest, on

Boxer

action;

in the

in

our

However,
truly indepen¬

another

one

results

Marshall

The

China.
were

shares

equal

therefore

The President is being applauded
for the decision he made.
Indeed,

TfceHFTii IMilJl

of

dent

to

harass the mainland—to fight for
their own country. Thereby, the

some

cases, and small recompense both
in material and personal satisfaction. The
kind of a job you have
is something more than this sort of
routine. The man who makes
a go of it knows this to
be true—he is jealous of
every minute of
his time and he uses every golden one of
them to its fullest.

A

is that

the

we

security, and must be ^bought
by generous hand-outs. The same
principle applies, of course, to
It makes no difference in our Formosa and the chaotic
Philip¬
in, his UN seat. Prestige-wise and Korean procedure whether it is pines. Already, a commission has
politically, that may be worth to justified
by
a
decision
of six been dispatched to study the eco¬
Stalin a setback in Korea.
In the powers sitting in conference or by nomic "needs" of the
latter—over
meantime, it is true, we shall pro¬ a vote of seven powers in the UN and above the $2 billion we have
tect Formosa;
but in exchange, Security Council. The legal and sunk there so far. If chaos is the
neutral

by

can

separate and

or

either event, Chiang Kai-shek will
be out of, and Communist China

cuses, any

When you

China,

in

those powers

That means, in effect, that we
considering either to hand it

subdue

to

"con¬

interests

and

Internationalism

today is wnat
alliances and confer¬

1900

in

exports

to

process,

that, too.

Alliance. The
analogy to the present sit¬
uation is the six-power interven¬

week and

be

can

time

The fact

the

vested

done

function

Rebellion

not free time that

UN

nearest

UN.

are

have

In

ideology, and
run headlong into conflicts. If eco¬
nomic Imperialism was supported
by military expeditions, the new

since the Holy

completely devoted to the production of business. There is
must unavoidably be spent in traveling.
Possibly a
fair estimate would amount to about two hours a day for this pur¬
pose alone.
Here then must be deducted another 10 hours every

well know these 42 hours

you

both

be

used to„perform in the past,

ences
ever

tion

as

West

security?

UN's

peace

But

would

that the

say

the

great power

announcement that Formosa's sta¬
tus

It

mandate from the U. S.

a

could

for

as

the

slap

j

to

on a man¬

objective:

Russia.

acquiring

are

anything but follow us, on whom
they depend lor livelihood as well

Actually,

the

on

How

bal¬

Act of Appeasement

in the afternoon when you can

about

on

UN.

says

acting (in the absence of Rus¬

was

South

the

the

political

our

tain"

acted,

"Times,"

correct

more

the

DUTTON

By JOHN

States

Thursday, July 13, 1950

...

aids nationalism consists of providing
'benefits to others so as to achieve

vs.

Security

The lesson of Korea is this: that

genuine
a

world

peace

of

is

not

genuine

possible

between two great powers

if they

cannot rely on a multilateral
ance

of power; and

in

antagonism

bal¬

that, therefore,

Volume 172

Number 4924

national

our

gered by

security

The Commercial and Financial Chronicle

...

is

faster

than they did last time in
inflationary repercussions. Under

endan¬

tremendous force that

a

not

Preparations

against

bound

are

material sacrifices.

find

shall

we

not used the

both

call

to

for

that

circumstances, the threat of
early break in the current pro¬
duction boom is negligible.

haz¬

added

breathing spell of the

WASHINGTON, D. C.—Arthur
Salmon, III, has become asso¬
set-up. The same holds, and more ciated with Folger, Nolan Incorpo¬
so,
for our Western allies. Re¬ rated. 730 Fifteenth Street, N. W.,
member prewar France and Brit¬ in the
municipal bond department.
ain building up their little New Mr. Salmon was
formerly in the
Deals
while
Hitler
was
getting municipal trading department of
ready to fight them in a big way? Union Securities Corporation in
If the Korea incident has shak¬ New York and
prior thereto was
en
us
out of
a
dangerous com¬ with the New York office of the
placency, it may turn out to be a Commerce Union Bank of Nash¬
sort of blessing in disguise.
The ville.
President may find it worthwhile
to spend more on additional air
fleets
But

and

less

ways:

and

as

for

tax

C.

Fred E. Hawk Co. Formed

public housing.

on

likely,

more

both

"home
But

uneconomic

an

shall

we

more

spend

Welfare

YUKON, Okla.—Fred E. Hawk

at

has

Security abroad.

more

formed

Fred

E.

Hawk

with offices at 440 Main

it is, the American machine

engage in a

&

Co.

Street to

securities business.

strained

accordingly.

demands

on

met

of

out

capacities,

Since

the system
unused

they

reverberate

1,

June

30

Marzano, President

that

he

has

sold

interest in the bank and is

his

sever¬

ing his connection with the insti¬
tution.

This

Newark

learned

"Evening

the

which

founded

was

Vito

by

ago

years

from

News"

that the bank

states
60

is

Marzano,

father of Richard D. Marzano. The

who

latter,
bank

43

father

been with the
and succeeded the

has

years

President

as

in

he plans to continue

1938,

said

in the bank¬

business, according to the
"News,"
from
which
we
also

ing

board

last

directors

of

[June 29]

William

elected

$20

share, in the ratio of

a

share

new

for

each

share

one

held.
on

of

Washington on June 30, 1950 had
deposits of $87,566,340; total as¬
sets of $90,125,195; and undivided
profits of $388,191. Stockholders
recently approved a decrease in
the par value of the shares from
$100

share to $10

a share, con¬
ten-for-one split. <t.The
bank now has capital of $2,10(>;000
and surplus of $2,100,000. Annual

a

stituting

a

dividends of $6 a share were paid
on the old stock.
>'f

past

of

Institute

promoted
President

to

The

of

1943.

of the bank's board of directors at

Fred

a

Hemminger,

a

time

there

the

elder

with

the

of

were

the

called

was

&

Trust

Bank

the July

Vice-President

Virginia,

by

of

action

7 meeting in Richmond,

Mr. Taylor is a former Presi¬

Va.

of

dent

the

Richmond,

chapter, A. I. B.;
man

of

tees

and

former Chair¬

a

national A. I.

member

a

Virginia

B. commit¬

the

of

tute's executive council since 1945.

brother Louis, who

leave only his

As national President he recently

resignation

Cashier.

Assistant

bank's

concluded

his

office

of

term

*

It

Mr. Marzano's father, who

established

1940.

By the end of last week the market had settled down appre¬
ciably. The sharp wave of selling following the surprise attack
on
Korea two weeks earlier had
pretty well worn itself out. On
the whole, market analysts considered that the shock was well
taken, particularly in view of the weak technical position follow¬
ing a full 12 months of advance. The market last week was sensi¬

the

Feb.

institution

private

bank

The

Bank

to

the

1936

the

as

in 1925."

Herbert

retire

V.

July 1

on

banking

National

lent

buying support and rallies were convincing.
It is probable that stock prices will continue to fluctuate
fairly
dynamically for the time being at least.
In the situation that we
are now facing, however, there is one
group that appears to stand
That

out.

is

the

earlier firemen's

strike, should relieve fears of

a

comparative

with

traffic

half is good.

second

up

results should

over

be

cated

that

states

identified

with

Rail traffic

The

outlook

for

the

hardly be disrupted this fall

can

as it was last year by steel and coal
strikes, and further gains in
operating efficiency are expected.
Generally speaking rail stocks are very low in relation to
earnings and dividends. The group should benefit relative to

other groups

from

psychology. Unless completely confisca¬
tory taxes are to be imposed, the railroads are in a relatively
sheltered position if we are again to have an excess profits tax.
Increased defense appropriations will extend the visible period of
a

it makes

One

of

the

difference

no

point whether it

is

used

stocks

to

the

carriers from

for armaments

that

has

or

a

civilian

traffic

view¬

attracting considerable in¬
prices is Southern Pacific. Aside from any
considerations brought about by war developments
the stock has had definite appeal.
The management has done a
very

good job in recent

debt

and

charges.

it has materially improved its

this year

some

other major western

car¬

of

Bank
with

banking interests

1899

California;

the
and

of

Bank

Cashier

the

of

he

Southern Pacific's earnings have been

run¬

well

efficiency was also an important factor. It
is not likely that the recent rate of year-to-year improvement can
be maintained for the full year.
It is expected, however, that
ment

in

operating

further gains
the full year

started

Scotia

First

m

named

was

National

Kalispell, Mont. From the
indicated we also quote:

Bank,
paper

Vice-President

was

Cashier of the Fidelity Trust

Co. of Tacoma, Wash., whicn was
purchased by the Bank of Cali¬
fornia in

1919. From

Mr. Alward

the

of

Bank

and

was

192?

1925 to

joint manager of

was

California, Seattle,
of the bank'*;

manager

Portland office from 1927 to
the end of which year

at

elected

transferred

head

the

to

Francisco. He

San

Mr.

wasc

Alward

is

and

irt

office

elected to

was

1946."

board of directors in

the

1935,

he

Vice-President

a

immediate

past

President of the California Bank¬
ers' Association.

Parker S.

*

*

Francisco

San

the

Maddux, President of

Francisco,

cording

Cal.,

the

to

of

Virginia.

was

in

elected Assist¬
Vice-President in July, 1946.

April, 1936 and
In

He

Cashier

Assistant

an

was

June, 1948, he became Branch

Manager of the bank's new office
in South Richmond and continued
until

there
was

he

when

1949

early

assigned to the Correspondent

of

sistant

of

Bank

San

June

Joseph

branch,

President.

to

Assistant

and

Vicealso

"Chronicle"

V.

Cashier and
the

Presi¬

Assistant

The

H.

slated

pro¬

Butler, As¬

D.

Manager

ac¬

Francisco

22, the

Cashier of the bank's Park
dio

Sain

of

announces,

Assistant
Assistant Manager of
Truitt,

Haight Street branch, has also-

been elected Assistant Vice-Presi¬

dent.

Carl

Buttelman

L.

Ankels and

FIFTH

THE

A**r. 24. '50

$2,750 465

$2,056,707

129,877

_

and

from

due

Govt,

1,119,187

419.667

_

419,693

Cashiers

sistant
ters

Apr. 24,'50

been

Lorenx

the

at

elected

with

bank's

As¬

headquar¬

West

Portal

branch.

225,329,477 225,795,798
due

*

l'rom

banks

64,115,159

56,927,245

holdings——_

98,830,065

110.903,864

discounts-

66.359,006

61,041,455

1,765,070

3,675,367

S.

_____

ity

Govt,

Loans &

profits

247,232,275 347,506,353

resources

Deposits
Cash and

198,699

security

holdings
Undivided

Total

U.

1,275.309

232,964

banks

CO.,

O.

June 30.'50

123,979

resources—

Deposits

TRUST

UNION

THIRD

have

YORK

June 30. '50

U. S.

he

Nova

1908

in

motion

Bank

COMPANY,

TRUST

Undivided

secur¬

profits—

•■f

will be realized in the June-December months.
For
earnings should at least top $10, or twice the present

dividend rate.




ILLINOIS

CONTINENTAL

BANK,

NATIONAL

FHII A DELPHI A

THF.

BANK

TRUST

AND

PA.

PHILADELPHIA,

CHICAGO,

v

June 30.'50

Mar. 31,'50

resources

762.882,245

739.773,478

NATIONAL

COMPANY,

ILL.

June 30,' 50

Apr. 24, '50
$

$

Total

692,136.835

Oa*h

and

313,510.950

149,994.908

Undivided

S.

555,097,090

530,318,503

hldgs._

1.277,610,689

1,210,778,886

discts.

337,939.798

329,303,608

prof.

18,764,590

16,392,846

&

Undivided

11,542,534

11,812.864

Industrial

due

banks—
Govt,

curity
Loans

profits—

2,014,088,758

and

from

284,254.188

150.786 256

2,114,196,275

Deposits

U.

bills dis¬

counted

2,319,697,338 2,220,101.238

resources-

Cash

secur¬

holdings

ity

Loans and

Total

222,264.523

from

due

Govt,

S.

U.

670,810,207

203,501,987

Deposits

se¬

Study

Retirement Plans:

A

including

analyses of re¬
cently negotiated Union agree¬
ments—Bankers Trust Company,
Wall

16

Street,

New

York

15,

N. Y.—paper.
COMPANY,

201,771,011 220.160,578

and

due

from

ity

48,150,547

83,393,865

76.084 184

________

profits—

given

inadvertently

was

Illinois,

as

life

LOUIS.

ST.

National

Second

delphia

effective

that

June 30, George F. Budd

Assistant Cashier

as

Phila¬

of

Bank

announces

IN

bank.

resources-

and

S.

ity

31

of

the

that
The

ington

announced on
recapitalization

National
of

volving

an

offering

of

sistant
Union

in¬

105,000

value, canital stock, has been com¬
pleted. Of 105,000 shares of capi¬

fornia

tal

stock

bank

to

rights,

bank

offered
its

of

initially

stockholders

104,680

hsares

$10

by the
through

were

104,452,581

161,325,827

157,33°,515

sub-

(Special

Barclay Inv. Co.
to The Financial Chronicle)

CHICAGO, 111.—Richard A. Tefo

167,599,278 175,109,163

6,792,531

6,329.277

profits

is

of

Rod

Maclean,

Vice-President
Bank

&

Trust

As¬

now

affiliated with the Barclay

organized

of

Bank

Southern

Los

E. F. Hutton Co. Adds
(Special

Cali¬

Advertisers Associa¬

tion has been

announced.

George

&

Bank of Los

Merchants

Angeles,

National

was

named

to The Financial

BEVERLY
liam

Clark, Advertising Manager of the
Farmers

Salie

the

of

Co.

39 South La

Street.

Angeles, Calif., to President of the
newly

the

discounts.

Election

Wash¬

23, N. Y.—cloth

York

Investment Co.,

par

of

shares

With
112,737,732

secur¬

holdings,—

Undivided

C.,

of

Bank

Washington, D.

of

Broad-

454 221.537

July
plan

Bureau

1819

—$2.50.

from
—

Govt,

Loan* &

underwriter,

due

banks
U.

New

Apr. 24,'50
$

459,225,471

National

Research,

424,373,466 419,116,012

Deposits
Cash

—

Economic

$
Total

resigned

of the

•

mortgage
lending
by
Companies — R. .T.

MO.
wav.

of the

Semisch

G.

Business-

Insurance

Saulnier
FIRST NATIONAL BANK

June 30,'50

President W.

Urban

whereas it is Indiana,

*

u

*

in

Illinois—paper.

5,441,386

secur¬

holdings

count' d

Relations

Wedding—University of
of the Calumet National Bank of Illinois, Office of Publication, 358
Administration Building, Urbana,
Hammond, the name of the State
Nugent

Loans and bills dis¬

Undivided

Public

tion of L. L. Murnhy as President

70.297.291

5,550.531

—

Govt,

S.

51,955,349

56,6'8,871

banks
U„

$

230.214.2*6 248.545.895

resources

Deposits

issue of June

our

in which Hammond is located

Mar. 31,'50

$

Cash

in

item

an

29, page 2692, reporting the elec¬

PA.

PHILADELPHIA,
June 30,'50

Total

In

TRUST

FIDELITY-PHILADELPHIA

Johnston, Lemon & Co, as the

ahead of the like 1949 period. For the five months
through May share earnings of $3.10 were almost double the $1.62
a share earned in the
period through May 1949. Part of this re¬
flected the adverse winter weather of 1949 but overall improve¬
ning

3,291,641

NEW

Ca*0i

was

with other banks until

CINCINNATI,

handling of the heavier load.
far

3,262.113

bond

riers, to adopt diesel power for freight trains. This is now being
corrected at a rapid pace.
The progress already made has been
reflected in a consistent and fairly sharp, downward trend of
transportation costs.
The' full benefits have not as yet been
realized. This diesel program, moreover, has been augmented by
road property improvements. Intensification of military efforts in
the Pacific will almost certainly throw an increasing burden on
Southern Pacific and other transcontinentals.
Property improve¬
ments and the new diesel nower should allow more expeditious
So

profits—

been

40.556.351

CORPORATION

Total

He

1925.

66.996.573

16.357.683

Undivided

in reducing its outstanding funded
Also, through comprehensive refunding

slow, in comparison with

was

02,746.402

ais"ts.__

and

oans

years

maturity sched¬
ule.
It is the dominant railroad in California, and other parts of
the service area are also among the most rapidly expanding in the
country. Thus, the long-term traffic performance has been good
and the future prospects are bright on the same ground!
One thing that retarded the road somewhat was the fact that
it

in

career

Bank Division.

secur¬

holdin8s_____

ity
l

19,203,586

_—

Govt,

S.

150,683,908

from

due

tank.

been

terest at recent lower

fixed

and

140.533,861

19,294,211

Deposits

banks

purposes.

temporary

operations,

152,107,228

141,605,638

Total resources

U.

$

indi¬

has'

war

high traffic volume. Finallv, price controls or material allocations
would not impose a hardship on the carriers.
So long as steel is
made

'i

ef

paper

he

51 years—the last 31 with the

over

1933, when he joined the staff of

ant

J.

Apr. 24.'50
:

THE

better.

N.

"

July 15. May earnings were
the levels of a year ago, June

even

PATERSON,

OF

June 30,'50

Cash

TRUST

AND

nationwide strike

of other railroad unions threatened for
excellent and

COMPANY

railroads, and it is expected

that they will be
given more and more attention bv speculators and investors. End¬
ing of the switchmen's strike last week, following failure of the

BANK

NATIONAL

Cali¬

Association,
The

Francisco.

San

"Chronicle"

tive to

FIRS'*'

Vice-President

at

organization's golden jubilee
convention at Minneapolis, Minn.,
June 11-16. Mr. Taylor began his

named

day-by-day-news from the fighting front and rumors from
Washington of possible industrial mobilization, with the accom¬
panying threat of price controls and materials allocation. Never¬
theless, on recurring declines there was ample evidence of excel¬

would

Alward

as

director of the Bank of

and

fornia

Tftf

j

in the San

Francisco "Chronicle" of June 22,

the

associated

changed

was

name

Commerce,

of

1890.

7,

chartered

was

Marzano State Bank
In

died in
bank as a

*

made known

was

••!<

Southern Pacific

the

in this field

procedures
*

Insti¬

will

Richard's

the

in

Marzano

State Bank

Marzano

Co.

sons

seven

bank, which formerly

At

bank.

present

"By 1916 he

Taylor, immediate
President of the American

with

for the mutual ex¬
change of ideas and discussion of

and
F

advertising,

cooperation

and

press,

*

*

advertisers

to

financial

in

furthering

that

Subscription
rights
expired
July 7.
The National Bank

as

Marzano

He has been

Vice-President

is

at

Bank

Angeles

12 had the right to

director

succeed Mr.

director for two years, was named

the

Under the offer stockholders

Vice-President of the bank

a

one

Co.

Banking, has been
from
Assistant Vice-

since

a

privately by Johnston, Lemon &

Hartwell

President.
and

by stockholders. The
remaining 320 shares were placed

•/

quote:

for

subscribe for the additional stock,

Si!

of Newark, N. J., announced

merce
on

scribed

of record June

1948.

*

D.

on

and director of the Bank of Com¬

Klaile to

Harry M. Stonemetz of Schirmer, Atherton & Co., Boston, died
July 4 at the age of 76.

productive

will

was

Richard

asso¬

July 16,
appointed Chief

*

night

Harry M. Stonemstz

new

cannot be

bank

Dec.

on

"The

at top gear, with pri¬
public credit and taxes

and

and

Teller

is running
vate

with the

1929,

Folger, Nolan

debt, to readjust an un¬
balanced price-wage system and
rationalize

Mr. Fowler became

ciated

inflated

to

methods

elected Assistant Sec¬

was

retary.

last five years to deflate an over-

Los

21

San Diego
comprise the organization formed
for
study
of new
trends
and

News About Banks and Bankers
Fowler

have

w:e

Vice-President,
from

an

The trouble is,

out,

)

Continued from page 15

such

only operates insidiously, but
also prepares to strike suddenly.
ards

(177)

to

G.

the

Haddad
staff

Company, 463

Chronicle)

HILLS, Calif.—Wil¬

of

has been
E.

F.

added

Hutton

&

North Rodeo Drive.

22

The Commercial and Financial Chronicle

(178)

Continued

jrom jirst

natural

page

both

of

excluding

1941,

December,

pre-entry "hon¬

our

to be drawn /from

Market

in

disabuse

us

entry

war

in

first

the

piace,

of the impression that

necessarily

presages

rising prices for appreciable seg¬
ments of the stock market, irre¬
spective of

external

elements

taxation and controls.
well

as

In

as

1917

as

1941 the market action of

nearly all
anticipated
extremely

securities — even the
"war
babies" — was
disappointing.

During the month following our
into World War I in April.

entry

1917, 110 of
on

some

211 stocks listed

the New York Stock

£.xcx

ange

lurned down with

securities

much
in

than

before

even

over

very poor¬

1941

and

1916

they

such "War Baby"
groups as aircraft, air transport,
explosives, machine tools, petro¬
leum,
chemicals,
shipbuilding,

the

even

following

weeks

the

during

declined

steel

and

our

1, 1918.

Following
war

those

a

short

First

market's

relatively well for a short time,
but, as we shall see below, even

lowing groups
banks, dairy,

soon

is,
War

lectively
that

acted

of

after

Korean

the

the

ginning of hostilities only

a

The fol¬

ful,

fairly stable:
distilleries, drugs,

had

to

perform

the

-WORLD

WAR

(April to May,

-WORLD

WAR

(Deceniber, 1941-January, DM2)
No

No

Total

number of

appre-

number of

appre-

companies

ciablc

companies

ciable

of

6

0

1

5

Agricultural mach'y

0
0

0

0

Aircraft manufacture

8

0

3

5

21

1

9

11
4

3

5

13

Auto

0

0

Auto equipment

Auto

0

0

0

0

Banks

2

0

2

0

Biscuit manufacturers

0

0

0

0

Bread manufacturers

0

0

0

0

0

0

0

0

Building materials
Camera supplies

3

1

2

0

Chemicals

3

2

1

0

Coal

6

0

4

2

Communications

0

0

0

0

Confectionery &

0

0

3

0

0

0

2

1

3

Biscuit manufacturers

0

1

1

3

4

Bread

0

3

35

1

12

22

28

4

14

0

0

2

2

1

1

0

0

5

10

15

Chemicals

1

4

10

0

3

7

9

2

4

3

0

3

2

7

Communications

1

4

2

3

0

3

0

8

Confectionery

0

1

7

12

1

2

9

12

Containers

2

2

3

0

I

2

4

Dairy

0

1

0

0

9

11

0

2

9

9

13

1

5

7

4

6

0

3

3

4

4

1

1

2

3

0

1

2

Fertilizers

7

2

1

Finance (credit)
Food & beverage

5

0

0

1

Distilling & brewing

0

0

1

Drugs

2

0

2

0

0

0

0

0

Electrical equipment
Engines & motors

0

0

0

0

Explosives & firearms

0

0

0

0

Feed

2

1

0

1

0

0

0

0

1

0

0

1

1

0

1

0

4

0

4

1

0

1

0

0

manufacturers

Coal ^

;

■

and

gum

Department stores

0

3

17

Distilling and brewing
Drugs
Electric equipment

4

2

0

2

4

5

1

6

2

Engines and motors

1

1

2

Explosives

0

1

3

2

Feed

0

2

0

5

Fertilizers

3

1

1

4

5

Finance

1

3

3

20

Food

3

7

10

and

beverage

0

9

9

9

Food

chains

0

2

4

8

Gold

mining

0

9

0

7

2

0

Hosiery

5

0

1

4

0

0

Household furnishings

18

0

7

11

1

0

Insurance

0

0

0

2

0

1

1

Investme'nt companies
Leather

0

0

0

0

Machine tools

1

0

0

1

Machinery & parts
Mail order

3

0

3

0

12

0

3

9

4

0

3

1

7

0

3

4

34

4

17

13

4

0

3

1

1

0

1

0

Meat packers

6

0

5

1

0

0

0

0

Metal products

6

1

1

4

0

0

0

0

Motion pictures

8

0

1

7

0

0

0

0

Natural gas

4

0

0

4

0

1

0

3

0

1

5

1

3

0

0

0

0

0

C3

3

Nonferrous metals

43

14

8

21

Office equipment

8

0

5

3

2

Paper

9

0

6

3

1

Petroleum

45

1

12

0

Printing & publishing

10

0

3

7

0

0

Radio & electronics

5

1

1

3

39

21

Railroads

31

2

9

20

16

1

3

12

2

0

0

2

5

0

1

4

11

3

2

3

Railroad

equipment

32

0

0

0

0

Razors

0

0

0

Restaurants

5

0

3

2

Rubber & tires

1

10

0

0

0

0

0

4

0

3

1

2

0

0

2

Shipbuilding
Shipping

3

0

2

1

1

1

0

0

Shoe manufacture

7

4

0

3

0

0

0

0

Soap

2

0

2

0

14

9

2

3

Steel & iron

37

3

12

22

6

3

2

1

0

0

0

0

4

0

3

5

0

2

5

0

5

0

Transit & taxi

Sugar
Sulphur

15

14

1

0

3

0

0

3

1

Textiles

18

0

3

15

3

Tobacco

15

1

10

4

8

0

2

6

1

.0

1

0

Trucks & buses

10

1

2

7

12

0

12

0

Utilities

23

0

12

11

1

0

1

0

Variety chains

16

4

2

1

0

1

0

0

0

0

110

70




3
20
4

10

28

Hosiery

Metal

over

"£

this

0

12

Vegetable oils

4

0

1

5

0

3

2

TOTAL—all groups

753

56

271

426

a

the same in
,2^4%
bond

seven-year

eligible fbr banks should be worth
a
1.65% basis or a dollar price of
nearly
when

purchase this

you

it becomes eligible

advance in

that

it could

price to 104, unless, of

interest

course,

In

If

104.

today at 101%, in two years

bond

rates

go

higher.

I would prefer this
seven-year optional bond to any¬
thing that I know of.
If

case,

a

bank

seven-year

eligible

option is not worth 1 65% in two

2

6

5

8

lar

0

3

against

years'
2.10%,

price

would be about 101
original
cost
of
This
would
result in

your

1

11

8

101 8/32.

2

2

your

2

1

7

7

6

premium appreciation but the re¬
turn from the 2Y4 % coupon, less

companies

tools

15

'

order

1

1

packers

0

0

4

1

2

products
pictures

2

5

0

0

2

3

gas

14

5

17

Office equipment

3

2

3

10

Paper

0

3

51

return

Petroleum

1

28

22

8

Printing and publishing

1

6

1

8

Radio

3

3

2

8

10

17

and

15

Railroad

electronics

Railroads

0

3

12

Razors

1

1

0

Restaurants

1

1

1

8

investor

can

a

on

status.

interest

If

rates

remain

un¬

not impossible to
receive the return mentioned ear¬
lier and
if it does not occur I

it

changed,

is

think investment in U. S. Govern¬

2

0

alert

an

bond, in a short
period of time, as it moves from
an
ineligible status to an eligible

2

0

believe

I

capitalize

7

Non-ferrous metals

two-year investment with no

i/4 point depreciation or roughly a
of 2Vs% per annum.

2

5

Rubber

equipment

and

ence
a

tires

5

Shipbuilding

4

Shipping

0

1

3

7

Shoe

3

0

Soap

0

1

1

5

8

to

still

any

wise

other

in

prefer¬

investment of

conservative nature.

4

2

bonds

ment

17

30

Manufacturers
;

Steel and iron

;

Hamilton Management
Adds

DENVER, Colo.—Hamilton Man¬

0

4

9

2

Sulphur

1

1

0

agement

16

Textiles

3

9

4

Building,

13

Sugar

.

Tobaccos

1

5

6

Transit and taxi

3

2

1

5

Trucks and buses

1

0

4

30

Utilities

4

8

18

16

0

5

1

2

1

6

Wire and

;

0

1

5

Total—all groups

121

263

367

Corporation,
Boston
has added to its staff

L. Blattman, William W.
Burke, Douglas W. Duffey, Herschel
B.
Eatherton,
William T.
Jones and Robert E. Kinney.
George

11

4

Variety chains
Vegetable oils

15

9

i

(Special to The Financial Chronicle)

J. E. Stuler Opens

3

Wire & cables

remains

range

1952

time,
but
worth
only
fully .45%
basis higher
than the present pattern, the dol¬

2

11

six-year optional bond and

a

eligible for bank ownership, yield
1.60%.
If the interest pattern in

7

Motion

4

of

6

Natural

2

Treasury 214s

Sept. 15 1959-56, which is slightly

1

5

8

S.

and

2

7

36

option.
U.

be elig¬

banks,

0

Machinery

5

will

0

Machine

Mail

bond

4

Leather

Meat

this

commercial

for

0

furnishings

Investment

4

wouldn't

1

Insurance

4

a

0

(retail)

-

Household

35

0

.

8
17

on

present time this bond
eligible for
commercial

not

Today,

1

2

(credit)

6

0

8

3
*

18

1

31

Equipment

Food chains (retail)
Gold mining

0

is

ible

10

2

Building materials
Camera supplies

9

0

1

return

the

At

1

11

1

annual

bank

2

0

6

3.62%

year

3
4

20

plus

nearly
2%
points appre¬
ciation, which is the equivalent of

at that time it will carry a seven-

Banks

3

coupon

(2V4%)

Moffat

1

3

10

L.

Donald

re¬

the

2

3

1

Department stores

ceiving

0

0

6

Dairy

0

result

your

however,

0

0

0

1

years

would

in

0

25

0

0

0

in

for

issue

3

10

4

0

1

this
two

13

1

16

0

in¬

an

6

8

5

Cosmetics

If

vestment

16

15

Containers

0

59.

4

manufacture

36

gum

f

investment, hence the cur¬
rent 2.10% yield for a nine-year
optional
bond.
In
June,
1952,

10

0

1

12 Months

3

3

14

More Than

43

.

o

14

transport

4

0

Treas-

2V4s

y

security in the world,
you be interested?

1

0

3

7-12

Months

S.

r

June 15, 1952-

us

Elapsed Since Dec. 1, 1941

Months

the

two-year investment in the safest

12

8

u

about

5

8

U.

the

whole.

a

4

Air transport

6

as

1

Auto manufacture

23

periods

war

se¬

issue I favor is

full

1

0

211

the

one

these

specific,

causes

1

0

turally be
of

spring¬

a

Aircraft manufacturers

0

choice would na<-

my

investiga¬

Agricultural machinery

9

7

0

as

further

i-<;

0

1

useful

Air

18

bonds,

not

succeeding article we will
how security prices
acted

Industry Group

0

8

a

Companies

0

0

be

Time

7

1

do

course,

Total of

0

-

In

Number of

6

ment

pre-

The Number of Months Required for Security Prices to
Exceed Their Pre-Pearl Harbor Levels*

Group

synonymous

November, 1.918.

of the
of past market behavior.

over

in

with
C. F.
whose very name is
with U. S. Govern¬

associated

few

TABLE II

II-

Being

curities. To be

their

to

particularly

tion,

show

Following Our Entry Into Shooting Wars

1917)

Total

a

I

I-

Co.; Chicago, 111.

(Treasury 2 Us ofJune 15,1962-59)

for

following
outbreak,
changing

toward

board

only picking one of the very
few
grouos
that would
benefit

Price Behavior of Securities, by Industry Groups, During the Four
Weeks Immediately

only

guide

will

terial

initially, but also of being nimble
TABLE

&

co d to hot war, nor to im¬
inclusive
explanations
and
concluslo s. They
hope the ma¬

hand¬

feat

Vice-President, C. F. Childs

ply

not

were

DONALD L. MOFFAT

Ass't

from

be¬

pattern,

initial decline.

recovered

for

No break¬

shown

since

I,

II

Table

however,

authors, of

investing

se¬

in its declines,

months

re¬

intend their studies to furnish an

even

had

joined

well

market

six

shock

periods,

which

The

but,

War

declined, while only 31 advanced,
70 remaining approximately un¬
changed.
Sugars and steels did

groups

initial

securities

rest of the
so

the

impact in bath

in

conflict levels b.y

following the ful of stocks were suosuniia.ly
these above their prewar levels. There¬
joined the general fore the investor, to be success¬

time,

World

for

advanced

down

rdiiioja

of "Picking Winners"

Difficulty

Security

Childs & Co.,

shown

World

and

2

page

I Like Best

levels. These

Second World War.

securities

badly

metals

is

This
the

botn periods

equipment.

into

nonferrous

stages of

containers,

were

actual entry

shooting war. Others doing
then were meat packers,
rubbers, variety chains, and chew¬
ing gum companies. During this
early period shoes, sugars and

initial

to

earnings.

high

Groups which exhibited a
considerable degree of stability in

ingly,

stocks

his

in market recovery oc¬
curred despite a
background of
sustained' industrial activity and

Jan.

ing and 426 showing no immedi¬
ate
substantial change.
Surpris¬

for

delays

taken
on

time

to their prewar

turn

period,

were

by the government

The

or

to

erable

better during the
former

jrom

would have had to wait a consid¬

did

the

Continued

lucky enough cor¬
recognize the market
lows
which
occurred
eight and
four
months, respectively, after
the
beginning of hostilities, he

the utilities,
tobaccos.
The rail¬
as

able

was

rectly

this table. Gold

the

and

motors,
latter

only 56 advanc¬

listed

753

of

271

bor

both

periods,

war

roads did

Similarly, following Pearl Har¬

Response

Study of both of these "hot war"

periods must,

de¬

market in its sharp

cline.

eymoon" (cold war) periods.
Bearish

joined the

these two groups soon

general

into

entry

our

short

Again illustrating the investor's
wartime difficulties, even
if he

is shown in Table I.

wars

mining shares behaved
ly

time

Harbor

immedi¬

market

Other significant conclusions are

Stock Market Behavior
and

the

following

ately

Analysis of Wartime

of

profit in

a

Thursday, July 13, 1950

.

.

order.

bearish

above-described

behavior

to take

enough

and sulphur.

gas,

The

.

751
•Excluding

some

cable

intervening

rallies which

is

PHOENIX, Ariz.—J. E. Stuler
engaging in a securities busi¬

ness

were

not

sustained.

from offices at 1406 West Van

Buren

Street.

Volume 172

Number 4924

Continued

from

.

.

from what they believed to be the

long-rkun requirement that, in

cal

that they saw was provided by the

free

scratching.

of

the

with the requirements

pace

additions

annual

the

to

Techniques for Avoiding
Depression
though it

even

discernible

no

may

have

associated

payout

with it.
It is

exert

doubtful, however, whether

instances
for

a

tal

such

these

as

account

large proportion of to¬

very

business investment. Although

data

quantitative
should judge

lacking,

are

I

that net changes in
investment

the volume of private

sufficiently strong to
continuous expansionary

a

Federal outlays,

on

the

the

of

deficit

current

But

perhaps

limitation is

decisions

able,

of

depreciation allowances, net addi¬
tions to existing plant and equip¬

ment,

or

investment in

new

products

and

There¬
non-pecuniary

processes.

despite

fore,

new

the

considerations that frequently im¬

investment decisions,

pinge upon

the outlook is not very encourag¬

ing

for

investment

total

of

adjustment

an

business

the

to

re¬

quirements of contra-cyclical pol¬
icy,

within

except

limits

narrow

very

a

opportunity for

limited

somewhat

to be

at

serious

the result of

an

is the

of

result

main

unpredictable in the dis¬
future, because of the

cernible

and

ness

That

public sentiment.

This

only suggest that the oppor¬
tunities of taking effective con¬
by stabiliz¬
investment, "or by
ex¬
undertaking
a
com¬
fiscal policy are, at this
our
thinking, of only

tra-cyclical
total

pediently
pensatory

of

measures

with

that

there

we

expanding
the budget,

the impact of

Federal

outlays

on

that deficit

and the reverberations

financing

have upon future

may

expectations, upon sentiment,
and in turn upon business invest¬
ment and consumer expenditures.

tax

than

More

national

three-quarters of

expenditures

our

made

are

business and by consumers,
changes in that sector of the

by
and

cannot fail to outweigh

economy

students have worked with

to

finding ways of eliminating ex¬
cyclical fluctuations.
It is
that

held

the

mand,
the

the analysis to

shift

we

compen¬

of the Federal
Government, whether it be in¬
duced by
expanding outlays, or
simply by a stable level of ex¬
penditures for all purposes against
a contracting take by the
tax col¬
satory fiscal policy

that

fiscal

within

policy

limits

can

used

Development

mittee For Economic

that

has recommended

we

"set tax

budget

the

balance

to

be

stabilizing de¬
success. The Com¬
a

as

vice with some

rates

believe

I

Nevertheless,

lector.

and

provide a surplus for debt reduc¬
tion at an agreed high level of

national

and

employment

in¬

Tax rates would presum¬

come."

out¬
activity and

ably remain stable relative to
so
that when
employment
declines,
would decline, and an

lays,

deficit

would

occur

revenues

automatic
An infla¬

automatically increase
revenues and thus the surplus, and
make more debt retirement pos¬
tion would

The principle, you can see,

sible.

deficiencies

periodic

if

or

other

avoid

of

de¬

want to stand on
the shield, the

you

side

pat¬
fruits

of

surpluses of production,
provide the initial
impetus to the depression phase
of the cycle.
periodic

that appear to

That

takes

the

level

the

Put in its extreme

simply

say

wage-

the nation and
of taxation, in

of

pattern
to

the

into

us

policies

contrast

Something of the same rever¬
berations
are
encountered when

the
the

of

of economic activity, we can

into

Fiscal Policy

revising

by

distribution

of

tern

of

taxation.

form, these ideas

that

if

too

of

much

of

nation

the

the

real

goes

to too few people, there will

not

income

be enough

profitable produc¬
opportunities to induce full

tive

investment of the surpluses. These

surpluses are then hoarded and a

deficiency of demand for the na¬
tional product at existing prices
naturally follows.
As a nation approaches matur¬

merit of predict¬

would

It

trolled expansion
of

be

quite dif¬

politically

a

Federal outlays

con¬

and contraction
—

usually

ex¬

Given

a

All of the literature

that I have

has

elaborated

examined,
the

which

Keynesian

expanding

and

plausibilities of
contracting gov¬

as
an
effective
device, has sup¬
plied me, as of today, with more
logic than conviction. In the first
place, there is the matter of in¬
herent
difficulties of timing—of
forecasting with sufficient accu¬
racy to know when to expand or
contract
expenditures.
The in¬
evitable delays of translating pol¬
icy into action, once policy has
been determined, also involve an
unpredictable timing factor.

ernment

outlays

contra-cyclical




this

too great, effort tends

and the

basis of
under¬

very

is

system

of

area

ideas,
the

others in

all

in al¬

as

social

sci¬

there is no positive and
unqualified answer.
It may be
true at times that a higher wage
ences,

relative

to

would

prices

good thing.

nation

the

that

a

as true, at
lower wage

a

It

needs.

at times that

gression

be

It is just

times,

fields

of thought, namely

ment

policy, fiscal policy, distri¬

a

thing that
be true

higher rate of

a

policy, and support policy,
which
students
have
sought

tenance

to

encourage

essential

ventures

is

in the first

matter,

of

a

pros¬

thing

important

The

realize is that this

new

main¬

the

for

enlargement

or

perity.

of

to

functional

instance, and

exercise in the metaphysics

an

equity, which is/the basis that

all too many people use in
proaching these questions.

Structural
There

Supports
another

still

is

ap¬

in

area

which it is believed that measures
are

to

means

fluctuations

treme

prevent

in

the

ex¬

aggre¬

available

velopment

to

business

excessive

of

the de¬

prevent

That is in the imposition

decline.

of structural

supports throughout

the economy,

designed to prevent

more

unit of

per

point

eventually

trying to get

capital

would

ceiling

the

after

a

that

assure

well-

on

being would be reached, and that
ceiling would constitute an iron¬
limit

clad

pansion

of

against which the
population might

ex¬

not

advance.

Today
about

we

this

not

are

static

concerned

so

concept

di¬

of

gate level of business activity, has

minishing return on capital in
this long run sense. We have seen

been

a

cal

purposely presented in criti¬
That

terms.

that

nothing

can

does

not

mean

be done in these

Indeed much has been done

areas.

demonstration

laboratories,

business and of govern¬
their completely effec¬

of

part
ment

tive

for

The

use.

tools

tremely crude.
are
still using
share

to ^cultivate

instead

fields

are

still

ex¬

Figuratively, we
the single plow¬
of

economic

our

the

ten-row

tractor plow.

This
means

of

that might be

ways and
available to

prosperity would be in¬
complete, it seems to me, if it
stopped with a recitation of those
measures
dealing directly with
is

business cycle as such.
another

area

is

that

There
only in¬

associated with business
cycles that might be explored
with profitable results
To ex*
plain it, I want to go back and
pick up an idea that used to preaccupy the thinking of a group of
men
known in
England in the
directly

early

19th

sophical
such

century
Radicals.

intellectual

as

It

the Philo¬
included

stalwarts

state

seems

improvement

that

of

a

our

me

to

great

as

that

promise

minimizing cyclical business
contraction,
and
of
prolonging
periods of high level activity, as
the
possibility of a robust and
enduring growth in the total mar¬
ket.

A strong

not

help

the

but

growth factor can¬
cushion recession

are

prosperity.

discernible

no

limits

expansion from the side of

efficiency

duction, then

of

we

factors

of

pro¬

must look to the

side of demand for the restrictive
and

limiting elements.

Just why is there not today
vision of an almost limitless

ex¬

pansion

the

of

the

market

world's production?
we

have

lost

the

for

Why is it that

vision

a

Philosophical

which

Radicals

the

of

the

early
19th
century held,
even
though they were impressed by
the

limits which

they foresaw

production, while
such

limits

all

in

become

on

foresee

we

no

the early future.

it is

Perhaps
our

impressed with the possibilities of

in¬

of

as

Jeremy Bentham, David Ricardo
and the elder Mill.
- They
were
social

it

and support periods of

examination

the

farm.

present

nothing carries

to this

maintain

the

the

on

the

In

If there

Expansion of Markets

The

from

and

productivity of modern
soil-handling methods and ma¬

knowledge,

that simply await the

magic

creased

chines

adoption of proper attitudes on the

almost

of

results coming from our scientific

But it does us no good
blandly to accept the idea that
here is a ready-made set of eco¬
already.

is desirable. It

in taxes

required

not

and

pro¬

other times, that
slower rate of progression may

be

invest¬

bution

may

is just as true, at

too

we

have

preoccupied

because

with

separate and special interests,

and have lost

good

for

the

our

feel for what is

whole.

Continued

came

That
on

ap-

page

24

development of chaotic mar¬
kets.
Another set of terms for

the

EZIOPINZA, famous singing

structural supports would involve
the

and

insurance,

measures

many

star, says:

of words like guarantees,

use

There

special set of circum¬

stances, the arguments have much

also

they

But

validity.

have

weaknesses. They lean heav¬

ily

on

the

it

unless

people's
fied,

or

bad

dream

available

their

satisfaction.

tion

has

ever

On

country..
we

are

either

means

that

wants have been satis¬
that there are no natural

resources

pansion.

In

10

more

no

given level of production.

a

nomic tools,

are

up,

mined.

is.

would have the

from

been

achieved

effici¬

subsidies.
The
of this kind that
the past

"For

a

enchanted

cool

evening

enjoy Schenley"

all

the production there

of a ma¬
ture economy.
I, for one, do not
know what a mature economy is,

ability.

has

surve^ of four important

the

support

that

any¬

date.

ity, these tendencies become more
^.several decades, and that are now
serious in their impact, since new
current in the nation's economy,
capital ventures of a promising
extend all the way from the in¬
nature appear with less frequency.
surance
of bank deposits to un¬
The ideas then go on to say that
employment compensation, sup¬
higher wages relative to prices,
port of farm markets, and price
and more or less steeply gradu¬
maintenance,
or
so-called
fair
ated income taxes, will serve to
trade practice laws.
We are now
prevent such an accumulation of
hoarded incomes, and by spread¬ thinking of extending this kind
of thing to the international field
ing the fruits of enterprise more
by some sort of an insurance ar¬
widely, will assure the mainte¬
rangement for foreign investment.
nance of a vigorous demand for

some

ferent

some¬

the

productive

most

could

thing

have been developed over

would

apply automatic brakes to
inflation
and
deflation, and
it

If

of

if

than they have
resulting dis¬

less

gets

only

group

or

view

a

treme

price

political agencies.

those of

in which

area

resulting

relative to prices is the

Policy

is another

There

part

associated

But

investment.
into

Distribution

signifi¬
of

only

to

policy

contra-cylical
run

the

the

amounts

productivity

else,

produced.

other

Federal

the

leaves
as

contributor

bodies,

can

be

cant

their

to dry

busi¬

on

the

than

more

parities

rates, and

be

simple one.
individual or a
individuals can obtain

of

land

than

far

ways

group

in

goes

This

complex

a

decrease

market

of the factors of production.

certain

beyond

the

to

The inefficiencies of

in

prospective future

tax

between

limit

that

In either case, an

impact of the resulting deficit on
the effect of this in turn

might

an

It would

economic system and a

someone

I fear it will re¬

weak¬

In this respect, there is

difference

no

of expenditures.

stage

Government

conceivably

marginal
The

out but it is never¬
extremely important

only

require an exercise
of self-discipline by business, la¬
bor, agriculture and by govern¬

though full employ¬

even

The

ment

in¬

greater effort and

expanding productivity is

a

cerned with them.

ency

one.

ened, and we have a declining real

from

limited promise.

ments.

inducement to

ment

most

different

That's

and back
hard assign¬

potentials of markets.
They had cycles in those days, but
they were not particularly con¬

theless

recipients. Unless it does, the

come

manipulation

expansion

ment to carry

must conform

productivity of the

income

of

based on
compulsions, the pat¬

reasonably well with the relative

time

a

a
incentives

tern of distribution

fluctuating revenues, or of pur¬
poseful expansion and contraction

municipal

investment outlays to
adjusted to cyclical require¬

than

Witness

policy is unpredict¬

whether it

society,

achieved.

the

that

erratic fiscal

ing

indeed.

There likewise appears

situation.

high level activity.

primarily influenced by the
prospect of profit.
This is true
in varying degree whether these
reinvestment

re¬

gardless of the stage of the cycle,
and policy is not likely to con¬
form to the theoretical require¬
ments

appropriately held,
that these under¬

to me,

seems

rather

are

influence

are

involve

it

been

consumption theories overlook the

organized pressure

Moreover,
groups

has

It

supports

achieve

labor

force.

holder,

23

be
developed
to
specific functional pur¬
poses,
with full knowledge of
their limitations, and that they be
kept as far removed as is humanly
possible from the realm .pf politi¬

keeb

7

page

(179)

The Commercial and Financial Chronicle

.

to

enlarge

Neither situar

existed

in

this

the other hand, if
the great expan¬

to enjoy

sion of material satisfactions that

to
be
just
ahead,
our
principal
concern
should be to obtain enough capital
formation to make possible the
full utilization of available tech¬
inherently

nology.

appear

Moreover, an average of

$8,000 to $10,000 of capital equip¬
ment
is
required to provide a

single job for an industrial work¬
er, and most people are worried
today whether the inducements to
capital formation are sufficient to

these
first

be

can

measures

line

severe

doubt

no

that

constitute

do

a

against a
Whether they

defense

of

contraction.

be desirable over a

shall prove to

period of time is yet to be
They
cannot
help
but obscure the development and

long

determined.

the

prolong

existence

tions in the economy.

adjustments

would

arise from the

of

distor¬

These mal¬

inevitably

failure of the price

the

structure to reflect adequately

pattern of community desires. We
are
interfering with one of the
functions of free prices which is
to

effort
desired
by

economic

direct

most

channels

into
the

iable

community.

in
the
years ahead
we may have
cause to regret the imposition of
Some

these

place

along

so-called

the

line

structural

i,l enjoy

You,too, wi

smooth,^

sup¬

but the fact of the matter
is that they are with us now, and
for all practical purposes, they are

ports,

likely to be with us for some time
to come.
That puts a strong em¬

phasis

on

the

requirement

that

J ^

%

BLENDED WHISKEY86 PROOF. 65% GRAIN NEUTRAL

SPIRITS. SCHENLEY DIST., INC., N.Y.C*

24

The Commercial and Financial Chronicle

(180)

the Korean situation.

Continued

jrom

page

Continued from page 5

23

modity price index

The State of Trade and fndustiy
Techniques for
States.; (4) to
out the provisions of the Atlantic
Avoiding Depression
within the next three months voluntary methods of
United

carry

to the highest level since December, 1948.

If

Charter.

to be true whether we are
talking about separate group in¬
terests, separate national interests,
pears

just

or

It

considered

be

to

en¬

tirely moral for nations to set up
barriers that isolate their internal
economies from the affairs of the

without realizing that by
so doing they are restricting the
size
of
the
world
market.
It

'world,

entirely
specific groups within

be

to

moral

regarded

to

.seems

seek

for

nation

a

as

obtain

and

for

restriction?

special

controlled

available supplies.

protec¬

and

benefit to the fa¬
But when all such

ing immediate
vored

group.

looked

tions

such

all

and

are

groups

together, these restric¬
help but limit the

at

national market.

a

that needs to be

There is much

freeing the flow of trade,
and across national

done in

within

both

boundaries.

of

lifting

require

would

It

a

sights

respective

our

self-interest
individuals, or of
the self-interest of special groups,
or
even
of
the
self-interest of
immediate

the

from

<of ourselves

producers, booked solid through the third quarter in the
West, are taking orders for October delivery.
The situation is
softer in the East, "The Iron Age" declares, but tightening fast.
Hot-rolled bar producers are theoretically booked up solid
indefinitely, although demand is more flexible in

the larger horizon of
the
greater
good of mankind.
Nothing, to my mind, could more
surely lift the
world from its
morass
of floundering
bewilderment than the vision of

present
a

for
all

great expansion in markets

of

efforts

productive

the

taking orders for October delivery.

week

Electric Output
of

amount

The

It

previous week, 397,751,000 kwh., or 8.0%, above the total output
for the week ended July 9, 1949, and 619,608,000 kwh. in excess
output reported for the corresponding period two years ago.

of the

than our
achievements would be beneficiat.
In

the

a

real sense. I feel that

very

promising

most

way

to mini-

recession

business

raize

to

and

support prosperity is to seek ways

in the com¬

and means, all groups

munity acting together, to expand
within and

total market both

the

It

boundaries.

national

■across

suffi¬
ciently mature in our economic
■flunking to exercise the self-re¬
straint required to place special
that

be

may

783,357

not

are

we

will

We

reach

not

ual

or

long

by

our

group

interests, in the
benefited
prosperity for

be

can

run,

most

expanding

an

1950,

was

a

Association of American

the

to

below the

decrease of 26,795 cars or 3.3%
a

increase of

an

above the corresponding week in

26,079 cars, or 3.4% above the comparable period in 1948.
Loadings in 1949 and 1948 were reduced by the coal miners'
vacation

annual

period,

which

scheduled

is

for

week

later

a

this year.

Auto

Williamson
ated

with

-Street.

the

III

Charles

—

7,178

Pierpp,
Eighth

Lynch,

Beane,

He

J.

125

previously with
Railroad Bank and

was

Georgia

Trust Co.

unit«?

1949

produced in the United States and Canada in the like

week.

Business Failures Cut by
Commercial

industrial

and

failures

Holiday

declined

138

to

the

in

holiday-shortened week ended July 6 from 156 in the preceding
week, Dun & Bradstreet, Inc., reports. At the lowest level yet
reached in 1950, casualties were 10% below last year when 153
occurred, but they remained above the 88 in the comparable
Failures

week.

were

34%

below

the

208

in

reported

the

1948

jetailing had fewer failures than last year; the rise from last year
was

moderate in construction and service.

very

Four

clines

major
The

regions

Middle

sharp weekly de¬
States dropped to 48

reported

Atlantic

28.

The

East

27

to six from 12,

North

the

did

as

mildly to

Central
East

States

South

10, the South
from

noted

Central

a

mild

States

decrease

with

a

The New England States rose sharplv to 18

to

26

dip to two
from nine,

and the West South Central

Atlantic, East North Central, West
Mountain States reported increases over last

year.

Trade

Building,

members

formerly

was

with

George

of

He

K.

Baum & Co.

Financial

DETROIT,
Koch has
of

Charles

pany,

bers

E.

added

Bailev

Penobscot
of

the

to

and

advances in rrpats and foods,
the Dun & Bradstreet wholesale food price index climbed to $6.19

Reflecting

further substantial

July 4, the highest level since Dec. 28, 1949 when it was $6.21
was

the

sharpest for

any

over

previous

$7.36.
year,

The
an

current

figure

compares

the $6.04 of the week
week since July 13,

Detroit

Stock




Ex¬

moderate

were

al¬

a

broadened consider¬

sugar

raw

high ground for the season; spot

new

pound, also

new

a

high for the year.

the tightening

situation in spot

sup¬

prices

steadily during the week in response to good
The rise was also influenced

rose

sharp advance in live hogs and stronger markets for soybeans
oil. Beef steers advanced about $1 per hundred¬

a

cottonseed

weight last week; market receipts were the smallest for any week
far this year. Demand for live hogs in the Chicago market was

so

active with prices soaring to new highs for the past nine

very

prices in domestic

week

last

features

Strengthening
the

Far

The

a

demand
15

reach its all-time Deak of

goods.

announced over the week-end,
that of a month previous.

ended last Thursday, as
Exchange, totaled approxi¬
mately 254,000 bales. This was the highest for any previous week
during the past several seasons, and compared with 139,000 bales
in the preceding week, and 129,000 bales in the corresponding
week

New York Cotton

the

year

a

by

ago.

Trade Volume Closes Above Level of Year Ago
lengthy Fourth of July week-end served as a sales spur

The

period ended on Wednesday of last week, as shoppers re¬
sponded favorably to summer clearances; country-wide retail dol¬
in

the

lar

volume

slightly

was

above

the

level

for the corresponding

period in 1949, according to Dun & Bradstreet, Inc., in its latest
review of trade.
There was no appreciable reflection of interna¬

developments

buying

moderately

rose

spending.

consumer

upon

promotions
last week.

widespread

Following

Sports items

of

paramount in the

were

summer

wear,

apparel

interest of many shop¬

blouses, slacks, and tropical worsted skirts were

pers;

sold in large

high seasonal interest in beachwear
and cotton dresses. Other eagerly-sought items of women's wear
were
hosiery and accessories.
Men's furnishings were in in¬
creased demand in some localities, while they were infrequently
quantities.

There

was

also

a

requested in others.
The

consumer

for

demand

food

rose

somewhat in the week.

bought than during the previous week,
despite rising prices in many cuts. There was brisk buying of
vegetables and fruits; both fresh and canned varieties were plen¬
tifully sought. The buying of eggs, poultry and some dairy prod¬
Slightly

more

Total

meat was

in

declined

ucts

sections.

scattered

retail dollar volume in the period

of the past week was estimated to
a

ago.

year

these

ended

on

Wednesday

be from 3% above to 1% below

Regional estimates varied from last

year's level by

percentages:

New

Midwest

East,

England,

South and Northwest -f-2 to

and

Pacific Coast

-f3 to —1;

—2 and Southwest 0 to -f-4.

the nation was nearly unchanged in
dollar volume holding slightly above the
comnarable week last year. Moderately rising prices

Wholesale

buying

for

the week with aggregate
level for the

sq^ne commodities, partially affected by the Korean conflict,
a slight decline in unit volume during the holi¬
day-shortened week. There was a sharp drop in the number of
in

helped to offset

attending various wholesale centers.

buyers

store

Department

sales on a country-wide basis, as taken
Board's index for the week ended July

from the Federal Reserve

1.

*10% from the like period of last year. An increase
recorded in the previous week from that of a year ago.
the four weeks ended July 1, 1950, sales showed a rise of

1950, rose

of 1%
For

date

was

a

drop of

period a year ago, but for the year to

1%.

Retail trade

in New

York last week was

it compared unfavorably

marked by activity;

with the like week a year ago

stores were open one day less.

Board's index, department
weekly period to July 1,
1950, rose *6% from the like period of-4ast year.
In the pre¬
ceding week a decline of 3% (revised) was registered from the
similar week of 1949. For the four weeks ended July 1, 1950 an
increase of 21% took place.
For the year to date volume de¬
According to the Federal Reserve
store sales in New York City for the

creased

by

4%.

*In using year ago

the

level of wholesale prices continued to move
higher last week, largely under the impetus of developments in
general

price,

Exports of cotton during the week

increase of 9.4%.

Commodity Price Index Stimulated by Korean Crisis
The

cotton

for

parity

rise of 25 points over

a

hostilities in

attributed to the

were

ECA authorizations, ex¬
higher mid-June parity price for cotton, and con¬

June

showed

small.

were

announcement of further

East,

brisk

tinued

moved irregularly higher

markets

fluctuations

although daily

with $5.66 at this time last

Commem-

an¬

prices continued to work higher under good manufac¬

due to the fact that most

Registers Sharpest Rise in Two Years

1948 when the index soared 24 cents to

Z.

the staff

Building,

change.

by

and

however

before,

Chronicle)

Mich.—Richard

been

and

Food Price Index

on

<8pecial to The

Central

The week's gain of 15 cents, or 2.5%,

Charles Bailey Adds

flours

bakery

for refined and

5% from the corresponding

from five.

seven

The New England, Middle
South

of

the

past two weeks.
Lard

and the Pacific States to 20

the Mountain States to six from one,

Inc., Board

the Midwest Stock Exchange.

*

nine

casualties.

in

Atlantic States

of Goffe &

.

the

of

from 59. the West North Central States to five from

KANSAS CITY, Mo.—Joseph M.
Crowe has been added to the staff

Carkener.

included

Green coffee prices were firm at recent high levels as some
coffee roasters pushed their prices higher for the third time in

cor-

In manufacturing, casualties rose from 27 to 36
wholesaling from 16 to 17. Manufacturing, wholesaling and

from five.

<Special to The Financial Chronicle)

East

Far

plies.

"Ward's

to

and 2,561 trucks built in Canada.
with a combined output of 118,611

cars

from

With Goffe & Carkener

wheat

turer and dealer interest and

The week's total compares

become affili¬

has

Merrill

&

Fenner

Ga.

Demand

tional

Ottyput Cut by July 4 Holiday

Automotive Reports" for the week
ended July 1, motor vehicle production in the United States and
Canada dropped to an estimated total of 142,548 units, compared
with the previous week's total of 197,767 (revised) units.
The drop in output was caused by the additional day off on
Monday of last week and the July 4, holiday.
Total output for the current week was made up of 111,739
cars and
21,070 trucks built in the United States and a total of
According

and in

to The Financial Chronicle)

^Special

hard

sold at 5.85 cents

week's decrease.

With Merrill Lyrch

of

Sugar futures went to

Cocoa

139,175 cars, or

1949, and an increase of

Retailing and commercial service accounted principally for the

AUGUSTA,

prices.

ably.

strike of switchmen on five western

resoopdmg week of prewar 1939.

all.

the

Country marketings of corn were lignt with tne cash
advancing to the government support level.

Bookings

,

that

-stage of maturity in our thinking
until we realize that our individ¬

according

cars,

week's total represented

The

21.6%

interest behind the interests of the

whole.

in

though buyers continued to be cautious in the face of rising wheat

railroads.

mistakes in this endeavor

costly

rise of two

estimated

Western Railroads

on

Loadings of revenue freight for the week ended July 1,
This

more

the

735,195,000 kwh higher than the figure reported for

week due to

be

crisis

higher support levels for the 1950 wheat crop and
cents a bushel in the wheat parity price from May

pectations of
was

preceding

our

the

to

same

15 to June 15.

Cotton

by the electric

stitute.

Railroads.

would

distributed

light and power industry for the week ended July 8, was esti¬
mated at 5,379,924,000 kwh., according to the Edison Electric In¬

this discussion—

an

a

article

Shows Sharp Drop for Week

electrical energy

assigned to

be

addition

33,000,000 busjiels the week before,
week last year.
Bullish fea¬

the

months.

r»amely, "Techniques for Avoiding

that

to 1,830,000 tons of

and castings for the entire industry, compared to 1,765,200 tons a week ago. A month ago the rate was 101.1% and
production amounted to 1,927,200 tons; a year ago it stood at
77.8% and 1,434,300 tons.
steel ingots

totaled

expanding will
unsuccessful
effort, and

in

to 258,706,-

43,000,000 busheis.

commission house and trade buying.

week's operating rate is equivalent

This

24,000,000 bushels in

tures

the

operation in some companies.

of you

market that is not

a

corn

nouncement of

the vacation schedule notw in

curtailed output is due to

The

immediate prob¬

present state of our knowledge,
any attempt to prevent depression
within the framework of a total

92.6%

ago.

off of the

Depression."
I
submit
that it
bears very specifically on the is¬
sue
here.
I believe that in the

steel
capacity

operating rate of steel companies having 94% of the

that the

for all

active with-volume of sales up sharply

was

The latter compared with
and

raws

making capacity for the entire industry will be 96.0% of
for the week
beginning July 10, 1950, compared to

Carloadings Cut by Strike

This may seem to some
lem

Trade

000 bushels for the week, or a daily average of

and Steel institute announced this week

American Iron

'i/ne

peoples.
to be

the East. Makers

through the third quarter and are

of silicon steel are booked solid

as

nations, to

%

they

Alloy

cannot

size of

than

more

stop them from trying. Consumers who normally use carbon steel
are
now
trying to get alloy. They are only partly successful.

tions, which may provide a seem¬

favors

climbing all over
the steel they can. Whether they can get
have been getting is unlikely, but that won't

get all

to

high prices for the

new

recorded for deferred deliveries of wheat and

futures.

Recognizing this, steel users this week are
themselves

week earlier,

a

the corresponding date last year.

Chicago Board of Trade continued the

the

on

July 3, from 266.57

on

on

upward trend of the previous week with
season

this do

doing

personal interests.

our own

seems

not prove effective we may see a return of the
materials plan—CMP—requirements matched against

compared with 237.45
Grain markets

Thursday, July 13, 1950

.

.

The Dun & Bradstreet daily wholesale com¬

rose

The index climbed to 270.43
and

.

fact

that

stores

in

comparisons allowance should be made for
some cities remained open on Saturday,

July 1 this year and, therefore, the week had one more trading
day than the corresnonding week last year when stores were closed
T111

xr

9

Volume 172

Number 4924

.

.

.

The Commercial and Financial Chronicle

(181)

Le very unwise in any

from first page

also

to

Continued

allowance would have
effect when after

military sense to permit ourselves
become committed to the defense of Southern Korea

since it

was

the Russians

Kremlin,

charmed ourselves into thinking that with

we

the fall of Hitler and Mussolini and the

crushing of the
Japanese Empire, the world at long length was indeed
"safe for democracy."
Imperialism was gone with the
winds of the mid-century. The lion and the lamb, if in¬
deed there were any realism in a division of the nations
of the world in any such fashion, would lie down in peace
together. It was the "great design" of the most influential
man of his time, then but
recently passed to his reward.
We could safely disarm, and did so at a speed comparable
to the record we had established in arming when our life
seemed at stake early in 1942.

It was,

of

course,

at once obvious that Russia had no

notion of

observing her solemn agreements, or of disarm¬
ing. What is more, it became evident in a very short time,
indeed it was implicit in her actions preceding the end of
the fighting, that she was on the make. We looked for,
and, of course, found all manner of excuses and explana¬
tions for this conduct. But it was not long before the fact
could not be ignored that we had a problem on our hands
much greater than the Hitlers and Mussolinis and the
Japanese ever were. It smote the man in the street in
the face every day at every turn. It was not possible to
go on with the hollow pretense that the word democracy
meant the same thing to the Kremlin that it means to us,
or that
internal struggles were responsible for much of
Russia's international vulgarity and insolence. Stalin had
to be taken down from his pedestal. We had a determined

"aggressor" to contend with.
/What is as important is the fact that repeated reports
maie it clear that this aggressor was devoting much of its
substance to

building military potential. It was likewise
fishing in all the troubled waters it could find anywhere
in the world, and all around its almost limitless periphery
it

setting up puppet States made possible by ex¬
tremely untoward conditions and political infiltrations
in advance. On all fronts and in'all ways it was marching
on.
It remains, of course, to be seen how permanent all
this is.
The Chinese, the Koreans, the Czechs, and the
may

not in the long run care more for Russian

There
may presently be more than one Tito and it may well be
questioned whether many of these satellites will show a
great deal of enthusiasm for conquering their neighbors.
But the potentialities of the situation are incontestably
disturbing.. One can scarcely fail to wonder what is com¬
ing next.
tyranny than for any other kind of exploitation.

Our

Own

send

to

were

things to

from

pation

seems

to have been to try to out-shout and out-

abuse the Kremlin.

Certainly it could scarcely have been
said to have spoken softly.
Perhaps it should not have
done so, but its shouting and its "big talk" should certainly
not have been accompanied by a little stick, a rotten stick,
or
no
stick at all.
Yet this latter appears to be about
what it has been doing.
It has talked much about air

strength and what it could do in the next war. It may
have much on paper to support these arguments, but ap¬
parently nothing or nearly nothing in actual reality. We
have been steadily reducing our military strength at pre¬
cisely the time when we were inviting trouble with our
talk and our general international policies.
Korea Is

The situation

a

we are confronted in Korea
pleasant one, however measured—
is a direct result of such policies as these, plus continual
vacillation which has left no one, including the oppressed
of the East, with any feeling of certainty as to where we
stand or of any feeling of trust in us or any desire to
follow our leadership.
Indeed, it might almost be said
that Korea has been a miniature of our world policies

by which

today—and it is not

and

our

very

world blunders.

It

was

evident almost from the

first that Russia had not the slightest notion of leav¬

arming the population of that country within her juris¬
diction from the very first, and that the ostentatious
"withdrawal" of the Russian army was a farce. What did
of

do?

Well,

building

we appear

up a

taxes

re¬

borrowing

the

ratio

of

large part of the oil

a

owned

lands.

As

pri-^

stated
drilled

are

tion and

in this

reserves

country.
been done, and
privately owned

Most drilling has
is being done, on

lands under conditions

similar in

many respects to those

prevailing

during the early growth of the
industry. The problem of leasing
and exploring lands owned
by the
Federal Government has
long been
to the producers in the

Bocky Mountain States. Recent
decisions of the Supreme Court of
the United States have placed the

IndustryEgg or Chicken Itself?

ilar exploration elsewhere.

These

rights of free choice of free
to

make

such

largely
within

men

arrangements

decade,

all

need

as

dependent
a

the

which

between

known

reserves,

curity,

itself,

tries

those

with

"have-not"

their
and

resources

great

sibly

coun¬

petroleum

our

Taxes in

in

particularly note¬
worthy in the oil producing busi¬
for

the

petroleum

the

United

moment

a

industry

States.

nearly

of

every one

in

Clearly

of

fundamental
Clouds

clouds

of

our

effect for
is

clear

more

present tax advantages to provide
the incentives for continuing his
efforts

through

ahead.

It

the

not

is

is

the

leaner

than

more

a

material in¬

crease

visible

on

in depletion allowances be¬

cause

he

from

our

will

reserves

cost, and

then

be

producing
at higher

obtained

cannot hope

his

ducers in

our

to recover

present depletion basis.

First, oil pro¬
country are believed

capital

investment

discover

To

and produce these resources,
out

which

would

we

SUMMARY

with¬

become
OF

OIL

taxes,

PRODUCTION,

the

oil

doubtless

large

a

undiscovered

oil

of the United States.

portion

resources

For that

rea¬

the future well-being of the
oil-producing
industry
in
this
country will depend on the extent;
son,

to

which

and

laws

governing

operation

leasing

of these lands ap¬

proximate, the terms and freedom
of action
owners.

obtainable from private;
Imposition of greater re¬

strictions and
drive

countries

attempts

ducing
the

in

red

more

in the

us

which

to

minimum

the

regulations

the

of

be

can

for

course

would

royalties,,
bright.

appear

doubt

no

con¬

conservation
the Govern¬

commensurate

future

There

and

by-Government

sistent with proper
and with payment to
ment

oil-pro¬
fails. With

and

of

of those

Government

operate

industry,

restrictions

tape will

direction

which

as

all

we

the

to

should

work, for greater freedom of
tion will

benefit all of us,

ac¬

includ¬

ing Government, itself.
Given

the

services

of

a

proper

weather-maker,

in the shape of
informed public opinion, to dispel
these two clouds the American oil

we

producer in his

aged if profits from risk of his
capital are materially reduced by
onerous

the

will

contain

the

exploring for the last two- are justified in taking a stand
our oil sources, which on
against reduction in depletion al¬
the
in
average
will be
found
in lowance and
informing our
smaller pools, at greater depths, Congress of the probability that it
and probably in areas of greater should be increased in the future.
In
addition to being discour¬
operating difficulty than the re¬
known.

combined,
to

prove

on

be

now

same

Thus,

fifths of

serves

States

years

probable

that in another decade he will be

justified in urging

horizon.

to

It

exploration in our country the oil
producer should have at least his

at low

if

than 20 years.

that in the remaining oil

wages.

it.

are

seen

tion allowance which has been in

Business Horizon

on

have

by reducing the statutory deple¬

prosperity,

our

to

Recently

private business.

daily

industry,

our

cornerstone

present government's

us and

of

terms

se¬

to

$15,000 per worker.
The products of
the industry
are
used daily by
cost

national

be imperilled.

in¬

total

invested

our

may

burden of the petroleum producer

about two million workers, or an

capital

to

revenue-hungry
Treasury Department attempting
to increase the already large tax

vestment
is' approximately
$30
billion, providing employment for

average

our

progressive
resources

what

means

The

all

we

ness.

Consider

these

the

The tidelands and the,
Government lands in the Western,

of
pos¬

deficit economy are an important
and sometimes determining factor

is

and

Lacking
of

incentives

and

impor¬

very

under

resources,

ownership.

oil producers

have,

now

more.

conversion

country with
its
great
petroleum
production
and
prosperity.
The failure of
governments in business is uni¬
versal,

they

tant

foreign oil

on

our

financial

they might desire with respect to
their own property are undoubt¬
edly the fundamental difference

tidelands, with their

producer

look

his

forward

to

industry.

not

creating

will aid
serves

country

own

fair

can

weather

in

This climate, while
oil

new

resources,

in their conversion to

and will

keep

our

re¬

chicken

producing the golden eggs of pros-

perity for all of

PROVED RESERVES AND

us.

RESOURCES

(Data after L. G. Weeks, published 1948, modified by G. F. Moulton)
Cum. Prodi»c*!on to

Proved Reserves

—January 1,1950—

—January 1,1950—

Bill. Bbls.

Percent

Bill. Bbls.

Percent

Bill. Bbls.

38.9

63.0

24.7

31.6

110.0

18.0

35.0

57.0

2.6

4.2

3.0

3.8

40.0

6.6

6.5

14.0

41.5

67.2

27.7

35.4

150.0

24.6

28.0

46.0

5.0

8.0

9.5

12.11

pn n
ou.u

1 Q 1
10.1

1.7

2.6

1.0

1.3)

6.7

10.0

10.5

13.4

80.0

13.1

8.0

21.0

48.2

77.8

38.2

48.8

230.0

37.7

21.0

37.0

Russia—

1.7

2.6

0.8

1.0

13.0

2.1

13.0

19.0

Middle East, inch Egypt—

3.5

5.5

33.0

42.0

155.0

25.4

2.0

24.0

3.9

3.1

G.4

0.5

24.0

4.0

8.0

10.0

0.6

1.0

1.1

1.3

30.0

4.9

2.0

5.0

8.0

1.3

Country

United

Region

or

States

America

North

Total

America

North

.

Pe«ourcec

or

Estim.

Ultimate Production
Percent

Percent of
Resources

Produced

Discovered

a

ing Korea and the Koreans to attend to their own business.
It has been known that the Kremlin was organizing and

we

increased

increase

service.*

annually to maintain the produc¬

Petroleum

Balance

Result

which

debt

familiar

Two
occu¬

vately

a disgraceful per¬
evidence of better

business

Its chief

income

for

earlier numerous wells

9

page

probable impact

producer's

and

Second,

/

come.

Continued

It is

he

with

to be discovered is not under

some morning and put an end to
(Remember the talk before Pearl Harbor?)

some

adverse

equity to borrowed capital Which
must be provided by him.

planes before breakfast

But it is a very
sorry story.
formance. We wish we could see

the

power

few

a

used

Accordingly,

determined

we

depletion,

an

capital

the

on

be

duce

to

When the North Koreans struck

of

borrow

taxes

might

policy during this period

to stick to our
original determination
try to defend Southern Korea. At any rate, it is
now evident that
we took
no
steps whatever to imple¬
ment any other
program if. one had been decided upon.
not

Ineptness

But what did the Administration do?

of

complacent as we did before Pearl:Harbor, and if our
policy toward Formosa is to be taken as any criterion,
were

to

must consider the

use was

to be rather too inane to be credible. We remained

appears

was

others

surprised when

loss

whicn to exploit his new
property.
Banks and other potential lenders

building up strength north of the 38th
parallel. Apparently, we supposed that it was some sort of

the affair.

Promises Meant Nothing

\

seeks

were

game since we were very much
made of these preparations. Our

that

discovery

quite "untenable," as the military jargon goes.
For months past, so it is now
said, we have known that

As We See

finds

25

to have gone through the motions

"constabulary" lightly armed, if armed it
day and time, and then withdrew.

Venezuela

-

-

-

_

South

Balance

America.

South America

Total

Total Western Hemisphere

excluding

Eurone,
Balance

Asia, excl. Russia-

Indonesia

—

Africa, excluding Egypt—
Total

Eastern

--

--

—

--

--

—

Hemisphere,
7.7

12.2

35.3

44.8

230.0

37.7

3.0

18.0

6.3

10.0

5.0

6.4

150.0

24.6

4.0

7.0

Hemisphere

14.0

22.2

40.3

51.2

380.0

62.3

4.0

14.0

1-

62.2

100.0

78.4

100.0

610.0

100.0

10.0

23.0

_

23.3

37.0

53.7

68.4

500.0

82.0

4.6

14.4

excluding Russia

/

•

£ 3 in Li r. H3

i

i

i

i

i

i

i

i

Total

Eastern

Total

i

i

i

i

i

i

World

i

i

i

i

could be called in this
A

It

was

Disgraceful Performance

said at the time, and with reason, that it




would

Total Foreign

—

._

'

26

The Commercial and Financial Chronicle

(182)

I'm

War

Tomorrow's

the

Walter

I
a

By WALTER WHYTE=

other

no

this
that

past few weeks I've

Taking

stopped out at a loss.
isn't

losses

it

experi¬

new

any

the same I find

but just

ence

*

*

affected by
have

Commodities,
of

kinds

all

started

tain

fears,

climbing. This is cer¬
reflected

be

to

the

in

living. Because

involved

disturbing.

litical

Far

the

in

we are

Eastern

agitation to check this
A

rise.

ance,

to, the

almost

similar

rise

come

will

less there will be

Instead of

Warnings to
already been

spending.

that effect have

sounded

Securities

deficit of

revenue

for example,
1918-1923 and 1930-

Treasury,

as

deductions from income,

or

great fluctuations in capital
gams tax receipts upset the budget
and proved
that the capital

by responsible
All this adds up to

tax is unproductive, decepdeters investment and

gains

and

tive

when
most
needed,
the unequal treatment

expansion

Even under

affect

certainly

heavy industries. The drive
to check government spend¬

more

net

a

bal-

on

sell, it freezes funds which thus
prevents the movement of risk

enterprises and

new

property and

little

period was shortened

the holding

™,1X
and

short term

and

meaningless.

„

between

distinction

The

y

received untl

was

revenue

relative

l°sses

and

&alns

is

gams

<>"£

arbitrary

By waiting

House

evi-

As

Means, last February, urges that
in

fjgurjng the estate tax of a dea tax be levied on the cap-

cecjent,

on

Pacific Coast Exchanges

Schwabacher & Co.

the

capital
,

exposed.
In several countries in
Europe, the government permitted
rewriting the income account and
the balance sheet in terms of gold
instead of depreciated paper cur¬
rency and based its taxes on real
values.

There is

ital-gains. in addition to the tax
^.jle orjginal yglue of the propThe capital.,gains tax is a
form of capital levy or an advance

Canada

erdyv

th&-*ieath .duties.

Qn

a

it is

Indeed

duplicate inheritance tax. There-

f0re

investors tend to hold securi-

tiertfmil death instead of risking
:

„

]d

fi

±lelds'

m°Aney m

.

.

^

is

Again, the country

cut his

in

the

Jbidst of an inflation. All prices
sources.
The capital
gains tax does not/havei risen because the value of
inflation
the sort of infla¬ reach the rich. Selling securities the dollar has declined. As real
to take capital gains is discretion- estate and shares rise in value, the
tion we had hoped to escape.
ary, not mandatory. The taxpayer Hlcr®ase represents a paper profit.
*
*
*
in the high income brackets takes ^
r^ ^+e. ar? flctltlous-TaxHow the stock market will practically no short term gains, ing this fictitious increase at 25%
taxable at high income rates.
He as a capital gam-is economically
take all this should be easy
is like a farmer with a bountiful unsound and legally unjust. First
enough to foresee, but the crop rotting away because it is
g°vernment . depreciates the
market seldom does the obvi¬ uneconomic to harvest it
dolIar and then...when property

capital gains tax in

no

in

even

or

regimented Britain

Laborite

Therefore, as I found
trip to Europe,
foreign
investors
in
American
shares trading in Geneva^ Zurich
or

on

recent

a

can sell their shares
being liable for a capital
And they did so in the

elsewhere,

without

gains tax.

Spring of 1950.

Thus the Ameri¬

investor

can

is

discriminated

against, and holds the bag for for¬
eigners to dump for the capital
gains tax deters him from selling,
particularly for the short term.
On
the capital gains tax, the
shows

record
rate

of

tax,

that

the

the

lower

greater

York

Stock

San Francitco Stock

Exchanar

Chicago Board of Trad'
New York 5, N

Y

OOrtlandt 7-4150

Teletype NY

1 -928

It is

up.

cult to

any

ized
I

the less

and

the receipts.

are

this

proved

conclusively from
abundant Treasury data available
in 1942.
Capital gains were prac¬
tically nil at high short-term rates
and

substantial at low long(See my brief in the
Hearings before the House Ways
very

term

rates.

and

Means Committee,

Second Session,

gress,

77th Con¬

on

the Rev¬

Revision of 1942.)

enue

The

Treasury for the first time

long-term

short-term gains from
gains in
the
report,

"Statistics

of

segregated

Incomes

for

1938."

Rosa

chances

the

Per

100

Shares

@89%
Schenley Ind. @34%
Montg.-Ward @54%
Chrysler Corp.@63%
Shell Oil
@42
.

....

U. S. Steel..

@33%
Stand.Oil(NJ) @72%
Ohio Oil
@16
Republic Steel @ 38
Mission Corp.

Socony Vac.

.

mos.

6

Put

&

Dealers

at least not

—

away.

When

not

412.50

ulatives.

459.00

for

or

this

I

give reasons

can

there

but

2

won't

Brokers

believe

it

matter

no

utes

*

The

sum

is that

*

total of

no

of

discussion
of
trends today and

time

c

i f i

and

11% income in
stability securities.
Send $1
portant
next

4

not

today

They

are

presented

as

issues

BONDEX

on

(Special to The Financial Chronicle)

Ohio—Lewis

CLEVELAND,

F.

Cook

has

become

affiliated

with

to

merce

Building, members

of the

New York and Midwest Stock Ex¬

With Saunders Stiver
CLEVELAND,

INCORPORATED

Merkelbach

654 Madison Ave., New York 21

Stiver

Publishers of

BANKERS INVESTMENT SERV'CE

-

llllliBll"

&

is

Co.,

Ohio —John
with

J.

Saunders,

Terminal

Tower

Building, members of the Midwest
Stock

Exchange.

present
•

...

trend

to_

revenue.

long-term gains.
est

income

maximum

gains

In¬

Returns with

subject to the
short-term
disappear.
They

income tax,
than

3/10tlis

1%

of

Following is the Treasury table
1938 showing the relation of
gains taxed at high
rates to long-term gains taxed at

im-

low rates.

$5

capital

30,000,000

$30,000,000
23,000,000

31,000,000

33,000,000

91.0

14,000,000

68.0

33.0

$10

-

10

Long-Term
Capital Gain

$46,000,000

$5
25

,,

50

25

_

rn&L.

-

of

short-term

Capital Gain

Net.Inc<jme

Under

of

group

virtually

less

gains

150%

But in the high¬

for

.,

-

Ratio %
Short to

Long

150.0%
130.0

50

100

_____

7.000,000

150

______

2,000,000

12,000,000

17.0

has created the seasonal
pattern of a downward

150

300

1,000,000

20,000,000

5.7

500

*

16,000,000
22,000,000

1.5
1.1

61,000,000

0.3

three

last

months

300

last quarter. * Before

holding

500

A low rate

period

______

*

-1,0007":
1,00(FA

Over
*Less

profit taking, ^produce
check a wild rise, en-

S.S' """*
receipts.

"""

_

.

The price of shares on the New

The

than

table

confirms

the

"» «**««■*» e.ta

and

jesg

Can

Treasury receipts.
ignore these facts

in

lower than in the principal Euro-

foreign

investment

reported. $60,000,000, or 200% as
trip much. "However,
in
short-term
Gov- gains> subject to the graduated
ernment bonds as the yardstick, income
tax, incomes under $5,000
yields on stocks are much higher reported $45,000,0(30 whereas in(or stock prices are,.much lower) comes over $1,000,000 reported,
on

recent

a

Taking the yield"

York

than

on

in

Paris, Amsterdam

or

these

market

centers

reflects

the

capital

London.

not 200%

Zurich. * In
is

values

free

0f

much

$90,000,000,
only $175,000. or four-tenths
1% as much. K&d all taxpayers
as

or

more

realized short-tertn gains as freely
enough in the as the low-rate gfoup, the Treassame
company,
of
which^.fhe ury WOuld have found $250,000,parent company's
dollar shares 000 more gains subject to tax. The
are listed in New York and sterpresent capital ,gains tax is not a
ling shares of a subsidiary listed revenue-producing measure but
in London, the yield is lower (or
a
revenue-preventing
measure,
the price is higher)
in London
chart II of my 1942 brief corneven though the product and the
pares yields of high taxes during
management are identical.
the war period 1917-21 and the

Strangely

Because

the

>'

$28^,090.

above

Congress
framing the present tax bill?
Again, incomes under $5,000 repean markets, in countries which
pprted $30,000,000 in long-term
have no capital gains tax, as I
gaiij&JbSit incomes over $1,000,000

York Stock Exchange is relatively

from

■

would

nrrs, r.&.'as z

and

a

lowest

100

encourage

New

the

were

of

brief

and

1938

in

Short-Term

pro-

1917 this trend was up.

truly.

and

trial.

no

it

selling to establish losses

trend in the

in

Ball, Burge & Kraus, Union Com¬

(Special to The Financial Chronicle)




market

abroad.

changes.
Bulletin

year

In

short-term

group,

reported

23,000,000
21,000.000

the

learned

and r»c'ie Im¬

current

weekly

coincide

expressed in this
necessarily at any
with those of the

The
..

assets, makes it particularly
'

do the

you

on

6%

Violently

or

institutions

selected

buy

more

With Ball, Burge Firm

trading op¬
help
you

portunities to
profit or maintain

see

those of the author only.]

spe-

recommendations

c

views
do

Chronicle.

these

to

lently than it did before
gains were taxable.

1

[The
article

mean

our

getting

same.

penetrat¬

ing

this col¬

intention of

signs.' I suggest

economic

could

.

deed, the market moves more vio¬

revenue,

1950-51

and

little

during

having gotten out

.

investment

real increase

a

Therefore, though the mar-

In fact

*

disturbing position, I

one

have

corpor¬

fellows rush

hysteria and sell in mob

fluctuates

duces

arguments I present.

4

Inc.

of

value „

,

what

BO

rise

the little

in group

ket

point. The seasoned observer
will know the answer; others

425,00
359.00

price change

record

copy

the An
also

on

decline. It contrib- ward inflation, with the accomto the instability of markets panying rise, in .the value of all

little panic

is

5*M).00

6

behind

your

therefore,

for

much lower prices for stocks
in the near future.

Get

exaggerate

faster than the so-called spec-

Calls

which

to

325.00

production and earn¬
are three important

trends

officials

and,

259.00

■IIIIHilHlPj

international

expensive fea-

law to administer,

tends

9

Vulnerable
.

it

ers,

market's

of rates.

are

Oct.

down

go

at

different

long-term gains.

It is the

profits by big hold-

deters taking

Oct. 2
0;t. 16
Dec. 7
Oct.
2

into another until I

.

a

an

the subsequent

they

income

dollar instead of

and

Government
Because

ductivity

ing from, the depreciation of the

difficult

ture of the tax
as

taxes

two

methods of taxing furnish a good
experiment on comparative pro¬

concede.

income,

administrative nuisance.
most

of intestable funds,

full

tax rates. But

are

These

rate.

high capital gains tax

from

producer but

revenue

a

359.00

Stocks Still

ings

A fair

gains

The jalse character of the capi¬
*al £ain® tax is indicated in the
government s o w n report. "In
instances the capital gains
^ax ls imposed on the mere mcrease ln monetary value result-

Sep. 15

umn

ate

mSSeto

revenue

losses

of

naive.

Assn.,

for

take

gafn^"ax, permitting

they all go down. And the
blue chips probably go down

■I1HI

outlook

to

stable

and

ree

and also nrodlice

3?0.00

Broadway, N. Y. 4. Tel

Lurking

flat

create

the

50

to exPr°Pdate Part of the unreal
increase ^suiting from currency
depreciation, thus drying up

659.00

THOMAS, HAAB & BOTTS
Members

eainsA low flat tax would

ferm

ta

values rise to reflect that depre- * at graduated income
long-term

2

0;t.

@56
Sep.
@21% Jan.

Subject to prior sale

•

mos..

it

The argument
that buying blue chip stocks
can't hurt you is one I find
right

$1225.00

6

obvious

are

won't happen

SPECIAL PUT OFtERIHb
•

simple

so

inrnmp

low

Short-term capital gains are taxed

ciation,' the government proceeds

deduction

But because it4s

in

afford

can

the

tax rate, the less is the gain real¬

short

brackets

capital

*

*

Barbara

Monterey—Oakland—Sacramento
Fresno—Santa

apparent

simple it is diffi¬
other answer.

so

see

Offices
*

San Francisco—Santa

all

on

factors, the market should go

14 Wall Street

Private Wirei to Principal

Based

ous.

New York Curb Exchange (Associate >

Gen'l Motors

r^Ur Svnivprt

Exchany«

the

are

gains realized and the greater the
tax receipts.
But the higher the

,

Members

New

and

other

most

or

countries.

out

Qn

capital gains tax from
80% to 25. That is fiscal nonsense.
can

estates.

on

the CIO statement to the
Committee on Ways and

,

one

day, a taxpayer in the high bracket

new

—

Orders Executed

reconsider

fell very greatly, the real evil was

capital fro® mature situations to

industhe periods
tries and new sources of employ1935.
ment. As Senator Connally stated
The capital gains tax is unde- in. the 1942 hearings, "As to capipendable and unpredictable as a.tal gains and losses, we should
source
of
revenue.
During the make it more attractive to sell, inyears
1917-1933
when
capital stead of offering a premium to
gains
and
capital
losses were hojd."
treated alike, as additions to in£
x on cap0a| gajn js a tax on

ing is certain to be stopped.

Pacific Coast

also

and

show,

to the taxpayer

loss

net

a

the

cost of

stocks were fracas there will be little po¬

three

the

know

me.

❖

a

mixed
my caution with buying sug¬
gestions. By this time you
the

that interests

which

1917-1941,

rea¬

when

except

can

than that

reason

place to think about
market and the forces
make it work.
During

I want

such,

be applied to future
action, and it is the future
they

spending this week in
small Connecticut town, if

isn't

It

reasons.

concerned with

am
as

sons

am

for

Shorten Capital Gains Holding
Period and thus Increase Revenue

much to do

as

as

other

for

that I

portant to
gains tax.

5

page

Thursday, July 13, 1950

.

.

In countries where the currency

generally believed.
Believing that I must look

Whyte

from

responsible for

break but I don't

recent

with it

Says—
=

held

believe it had

Markets

Continued

that the Korean

aware

is

.

capital gains tax recovery

period

1932-36

makes investors KoTd rather than.-yields.-of...low- taxes

in. the

with
boom

period 1925-29 and the depression
period 1930-31.
der

low

rates

It shows that
of

tax

on

un¬

capital

gains,
the
taxpayer
realized
heavily on gains and lightly on
losses, thus furnishing abundant
revenue to the
Treasury. But un¬
der high rates of tax the results
are
reversed; heavy losses and
light gains were taken thus fur¬
nishing
little
revenue
to
the

Treasury.
The

Treasury

shows

that

small

short-term
tax rate

gains

report

for

1934

taxpayers took
because
their

low. However, as the

was

rates

rose

in the higher brackets,

there

was

a

skarp decline both in

short-term gains realized by

tax¬
and in taxes thereon paid

payers

into

the

hand,

capital
over

Treasury. On the other
tax rate was low on

the

gains
10

on

securities

held

Therefore,

the
high-income
group
realized
heavily on such capital gains and
provided large tax receipts for the
Treasury.
Obviously, low rates
years.

stimulated

realization

of

gains

and tax payments to the Treasury.

Exactly

the

same

evidence

is

•

I

Number 4924

Volume 172

.

.

(183)

The Commercial and Financial Chronicle

.

27

1
'

'

Chart III-B of my 1942

shown in

in

has resulted

capital

net

of

crease

Money Market and
Factors in Securities Analysis

phenomenal in¬

a

gains.

For

six

1945-47, under the
months holding period, total

net
net

eaniiai
capital

the three years

a^^aged

dividuals
as

trains reported by ingains reported bv in-

$2,578 million

compared with $458 million for

the

1935-37,

years

mucn
much

or

560%
r'~

1 n

nv~»

as

tne
the long holding

under

as

nnrinrli'

"~

periods up to 10 years. The increase
was
undoubtedly due to
shortening
of
the
holding

the

period. This three-year average

of

$2,578 million is the highest in the
history of capital gains excepting

fantastic period 1927-29
$3,339 million. Even the bpom years 1925-27
averaged only $2,354 million under the long holding periods up
to
24
months. Incidentally, the
net gains for 1946 of $3,322 million was exceeded only once by
thfe 1928 figure of $4,505 million
only the

when the average was

!

shortening the holdincreased
Treasury
receipts. Under the long holding
periods the average capital gains
receipts
for
the
active years
1935-37 was $94 million. But under the six months holding period
enacted in 1942 the receipts from
the tax on capital gains averaged
Of course,

period
P

ins
mg

a.

w

.

*•

lU

.,

.

.

.

,

,

,

^'for'two reasons'"3

.

rf a

as

.

,

,

P3ri"?.,the,

peak of 1936 under the long
holding periods with the peak of

figures available)
under the six months period, the
receipts increased by over 420%,
nr
from S171 to S721 million
(the latest

1945

.1 t0House m l 0 .
$721 Ways

'

f
Before

R

the

and

Committee in 1942 I predieted
a
rise
in
receipts to a
range
of $200 to $600 million
from the $30 million average for
Means

1931-40, if the holding
period, then 18 months, were entirely eliminated. Mr. Randolph

the decade

Paul, then Treasury

opposed

suggestion, thought

my

1940 the Treas-

the year

in

cause

be-

"extravagant"

estimate

my

Counsel, who

collected apparently only $12
But subsequent statistics,

ury

million.

i.

~

a.u

but

ixwv

it

vircia

Si*
period

six months?
If so a
further reduction from six months
to

to

months should

three

increase

made a point, and-l will make itr ?Jzirt/+^ap52P
2r y°U *
again, of drawing",ihe . distinction .•
W
7
VtiOWll^HUli
i 1 tne -figures of tne country
, ,
v"w VVM1*"A j
ween price and value.
Value is ln connectlon Wlth the outlook for
between price and value. Value is ln coni}ection
'

in

transfer tax

in

income taxes

an

increase in

and

issues

a

receipts, increas!
paid by brokers,

the number of new

re-opening of the

t?ew stocks! tlierefore!

market for

internal financing through
undistributed profits, therefore, a

less

greater
tributed
sanly

yiv?e,
What

is

e,lSUry' ,1
the next step?

Congress
experimenting since

been

has

l.917 with

the capital gains pertax.
it has moved

sistently in

shortening the

1938

Smce

duced

five

the

holding

Revision of 1938, re-

period. The

holding periods
year to

ranging from under one
over
10 years to three

holding

under 18 months to
months. In 1942 Congress
shortened
the holding

periods from
over

24

further

period to six months. The subsequent great increase in revenue

this

vindicated

Congressional

policy. Your Committee should
now
recommend shortening the
holding Period to three months,
The result should again be a great
'

increase

gently
„nj
and

in

revenue—an

desired by the

maae

imnprativp
imperative

—

end ur-

Committee
hv
Dy

the ag
tne

gression in Korea.




is

not

a

a very

definite

you can

depend

confidence. However, that
extra 114% is yours for knowledge
in any event. The profit that you
mignt make out of the process of
witn

very

It gets pulling that bond up to the point
viv v

j

^jlvy\jm cx

There are securities which are
Perpetually and perennially out
of line. Remember in the days
when the United States Steel
Corp. had the Sinking Fund 5s?
Those bonds which were junior to
the Illinois Steel bonds and the
Indiana Steel bonds always sold
to yield less than the bonds which
preceded them. They were more
Popular. Liggett and Myers had
tw0 issues of debentures outstanding, one 5% and one 7%
obsolutely identical, but the fives
always sold to yield a little less
turities at all because the bond than the sevens because the
tables will give you the answer. sevens would have had to sell at
—tIlcf
T"rv , Q
u-'Z
:—
va?viri<*^if£Tw9ls^Effect of Interest Rates
decided
pua yfgx
vfG +
as

your

as

?n ^

risk,

take

them

If

your

you

around for

A1—

a

"

up
■ecuAtte. homelf adv^ itTSti?ef,CP vZV
nePhlPi b httle
vuLr Zt J Sta"d Up'•
whole ehiy moving up andchart
e'eS Is constantl of your securi

AdiTmTa• 1 TP y

When'we

on

that

it.
mi
to circumvent

peai

-7

ties

is

do

law

world

.

value of Banking Figures

is

as

movement

the

of

down expressed

chart

through

up

and

multi-

either

supplier 0£ a demander.
if you have read the Bible you
know the storv of Josenh and the
a

aUP 1?°
mab?Htv ?f. you..have read the Bible'you
White. ^nU^'an"'whose'acti^
You mTht te
"Si.
^ ^en Iean-years and the S6Ven
itie7\adS,taken 'TiT^rf^ inking * figures. You mightTin* Actors it wouldtionship
be inoW The rela be a wnnxwfi.i "^a^ years- The trouble is that the
ne nad
^ w.ipw mai in
of this h^ one there were drawn considerably Nowfj^H tetw,
friends in every country. At. had jITjL-1?!9 thing if vou could sav that tni Present politicians don't work
time
presented with an more than a trillion dollars'worth length of the cord from whinWnf that way'
opportunity to do
deal in Bra- of checks. Does anyone know what chart is suspended is a constant
7hat 1S why we
few
zil. It looked all right, but we a trllllon dollars amounts to? but that isn't so k,,
extra P°tatoes and ahave a into
weren't too
'
Even with inflation that is a fig- douhle check
eggs- The government few extra
came
and
Again y°u can't accurately in- d7wn Pressed"thrn^h
get that or plicity of
formation any more accurately or pUcity CP emmons and
ion any more

coupons

a

maturity

a result or mis

we were

a

muu

Even with
ure

t+

It
a

to

is

inflation that is a fig-

conjure with,
-

a

definite

i:+4i~

little

too

opinion

the impact of the

isn't it?

—1--

A

'—

early to form
as

ion

w

au.

xuu

neea

a

double check on the interval be-

tween your pure interest
'
""
your very '
best credit,

rate and

to whether

Korean incident

Two Yardsticks

eggs.

The government came into

the picture as

a

demander of those

things, but they have not come as

supplier except to the point
where they burn them up, destroy
a

J

1

rrti

■

-

m

InteresUngly"^"this ten them- Tba sama thing happens" to

^ ?7the*pocket

hcfhwZ thnt th« n { ■tl°f • °ne de?Cy expresses itself aPP™*imate banks arp 2T'Zl: commercial
iTSX thingTd!?
n°
ably. I then askpd him ^ h
nut
valu.e °fof price- toin through the ftions fnr th lman-i y credltJh:elnbank"would advise us to dn thP hd f tn hnard
.peop Jf are. inJPedea
and h* S
? u ^ deaI'
d th?lr cash against some medlum bond is tradedthe market, • ! the PurP°se of faci.sitt1tu
and0St a imP«^hle for daily itget mg tradeif activity Tt to is
l ate
the country'f0^7 ZZ" ZZ Z M
eVildayout almy far away from its intrinsic Purpose of Commercial Banking
in ve!'
0f the things I learned is that with it to h!?v thl °er ru(s
f.
most ofTiem LreTTl'ped a ne^,s ^t'gTn^ole^lubrio"!" sTkf0"' So y0" have two yardThe primary is to diof the
constitutional disinclination to We will have to reserve judgment
u
*
commercicouldbankpurposedetaicount
al go into s ls at
debts." That is fiscal irre- but fortunately th? !ictu?? u!folds nHere . 18
. Pure interest, bil s. I
sponsibilit.y.
.... rapidly, and we won't have7o re
u'
ere .f,lndlcating 'op of great lengths regarding the fitaisc a thi"g One duolicate whi 7
tT
h
h aJ y°n- u"1constitute £ dozen tions, butdustry in its alramificaall corporations which applies to serve judgment very long
g'.
bonds which £ind- a haithe top nance ir the commerci bankers
the statistical background of-a fieW
I Wa? engaged ln the level credit and .the best and most who have the privilege of creatbond issue as compared to the acUvelv I Ti f ??? yS?S *pretty a^lve bondsThey will be selling ir.ess money are primarily tn ■ busistatistical background of another ?? ??' '
.-e ?es,£ way s!flcallon- in that general clas- ng for facilitating tradei Thev
corporation. If the' first one has !.„ ?
' partlcular,y f«r almost invariably at what they have an indefinite reservoir of
gone through I relrean zatton o?
^1"°'T°Ugh
They are your cross- creditancommercisal banker does
Z atJvsl" di posal
receivership, invariablv the credit
* i ?L e pnce of secu' check>
Thenvesttheir People's money,
0f that particular corporation has are intlreli fn f * —
°j CaP^tal N®W' 1 Said that the return on not i
other
suffered slightly by virtue of th^t rnL 2 m u
dividends. Tne an investment was traceable to He monetizes his own credit plus
particular piece of their history r?2
^ regu ated by the three things. The pure inierest, your statement. He makes a few
So there is something extreme^
lhmgS be+^g e9uaL u which ^ the nail in the wall; pay- figures in a passbook and there
important in the anafysis of the if lou can
n
^
+ment. fowhich you can de" ^°Ur money' You can start drawborrowing credit of the corpora- h/?nPrP^2rAf Pme interest' terinine by the analysis of your mg against that at once. That
tion itself
W d tne increment ol yield necessary balance sheets, plus a supplemen- isn't too far removed from printcompensate for that degree of tary analysis of the banking fig- ing press money but so far the
Statistics vs. Judgment
risK,monevTSJsay, for exam- tin"ity indicate the probable con- morning aren't talking with This
Uien you can /v??U,rity n'V,a ures to of £hose balance sheets; People I was frightened one
I
trying to demonstrate the 4%
impossibility of dealing with se? vi»M «i
tekrapayment for of the boys in the tne reaerai
should seI1 lo and what about thiseitner one ol ^ me /aavisers to government
mv
curity analysis on the basis purely ' Z what has eah,of bond firm, and he said that one
.
'
-y
confused, so many knowledge? that in either one tthe advisers to the Federal
You get
of i'
of statistics as a background. In young security analysts about the two ways. If you find a bond is Reserve bank, whose name i
security analysis good enough so that it should be won t mention, recently suggested
-..?
^
wuuic uuj ui security analysis gooa enougn m *— x it should be won i mention, recently suggested
am so tnat
economy. You "have conditions is the very thing thatinstarted me tigation find that the bond is thatexcellent way to have a war,
yielding 4y2%, but upon inves- an if we were to finance the
the

percentage of .profits dis
as dividends and necespay
income tax receipts

more

It

trend,
which

fFT?

gen?-'

w!^s™etTeeaygrSe'incTrhe?s!

evidence.

upon

with the outlook for
.sPeciHc corporation. I tell my
p y blgb Premium,
friends, that there should be two
of factors with which they
Twu y te^duallfyin8 As I said earlier the return on
sho^ld .b<: conSerned in order to distinct imOTessioiTto^ven0^^^ an investment depends on two
dftern}^aH°ns* mind. These are what
use/ 1 fi °n? is the risk which can
set 1S the internal factors, pYPPiion+
5 used- be determined as withanv given
of
investments
much
'bout wbich they know more than fair f { ' ra+her nonr 12 Very period of time- You should treat
do
teeth—
respect
watefhas
else, but about which they n0o; ve^ hal
i ' VGry your investments with as
checkup
?> "eek its
„uP« IfTuPemotions rnTT tfas
thaT^rice"Tn'P- P'etely objective^ .,become ??«- "That ,bas to do with
taae tnem arnnnH tn i
always tendins to
^
become entangled with your iuda- illustrating on blackboard] If every three mnnth
vale "
® ° m°V6 t0War<r
for any reason whatever ^ erlUate various
How do von determine
1
your judgment is not to be and Put them
chart, they to
n
"ePTriee
^ mP,6 trusted.
se occupyother. Those relation^in<3 *.hHThe whole (
certain »relationshipswill • •
+uPI lce considerations I Well,
each
this cost before I hours of last, The other to the outlook for the fortunes very entle inrinirv
night oil me^many found themid- set relating set of factors is that won't changeof an often excent a d0Wn as your '"terest rate will
characteristic for the determina- business as a whole. This is so or an entire svstem rh»nee S move- Now your interest rate
tion of value. Simply stated value. yast ln the aggregate that it is the Rock Island oe the gui
- moves UP and clown in response
constitutes the equity in the prop-. 'mP°ssible to take a subjective Central Railroad or some e
ert.y for the protection of princi, view- These factors are bound to the bfs utflitv eomLnT
6 °ft t0 anotheibeen tinkering economic
law- has -which simple for some
with very the
pal',' - the equity in the demon- have, an influence on the outlook
The whole chSt however is tiQn
strated earnings for the protection f°r your own-business. Your busi- hung from a nail in the?,^n , hi u time- That is the law of supply
of interest, and the borrowing "ess may constitute the exception is tL pure i^i^t^tT
a"d demand.
credit of the corporation; which-is !» the rule for a short time, but nail moves up and fwn 1?
Wel1' gentlemen, you*can cir-!
the resultant of the first two fac- 11 ls a safe bet that sooner or later whole chart will mn?,? ?U y I cumvent those laws, but you can't
tors plus history and is a mathei. !£ won't do as well as you had down! and whTapTars tobf » them.
learned to
matical expression of
reputa- ,h°Ped If business generally is completely illogical crosscurrent fly'w? lea™ed togovernment can
circumvent the
tne
chart
nothing in the law®' gravity' butthe didn't reby
tion for fiscal responsibility, -.^ deteriorating and disintegrating 0f price trends wftiiin the m
we
There is such a thing as fiscal ali around you.
ties on except the reaction to that Peal >'• A» the into the ratio
that ehmt"
?? injecting itself government

substantially further.
Ultimately we should try the
sure.
experiment of reducing the capiI discovered that one of the
tal gams lax to 10% and eliminate salesmen had a relative who had
the holding period and record the lived in Brazil for a long time
results
in
revenue.
Revenue and j asked him to bring the
yield

the

you nave a

trend,

^ ^ Plenty of trouble with your where the bond yields 4*% is
something that may develop time
over
a
3 snort °r l0ng period °£ tuneSh°rt or long Pen0d of
or may never develop.

nf

rate?from
25%ror*^ni'y by"" 160%:
cnuidxxcxu.

15%"7o

judgment of the
Unfortunately, I am

of those people

ing

„

months period, irresponsibility too. I am remindgreatly exceeded my conservative ed of a situation that occurred
forecast.
What was the cause? back in 1923 when I was manager
The increase by over 400% cannot of the bond department for J. G.

bf!da® to-fh® rise in

instinctive

desirable characteristic.

t me

go back and make sure you have
not made an error. If you haven't,

what I

at

reasonsYour earn/nes statement fs a rec- ?uperl°rs' -A" ?wf
lot o£ men
***** xx6xit tu uc wrung.
,ls the d;SP?v?ry by .the ort of how welfthe^omoanv was 3Ve ^ "ght t0 bC wr0ngP"bhc ™ general that Jherexsa ord^of how weU the company was
..
inf S®n®rai
there is a ° .
forWaWLrtir?,i2r2w? ndW nf However, I am a "why" fellow,
thffreu„^ n^ts^por saifty e?"I
time
If vou take three or four and 1 made UP my mind to disJbathad ]ncd
anticipated by
"
y hilancp sheets of a cover the reason for the intuitive
Jhe other is the — and vou find them Judgment of the bond traders
b 1,,e
r?s2w^^i+' progressive^ worse vou are which aPParently was acquired by
®
» o^
ii-? bound to be influenced in vour association and absorption through
interest, asTthey call in it . ,
J the rie^irJhU the Pores. In the security field
economic terminology
tv ^TnVesW
n that coroora
you are Wonted with such a
The return of ar^fciven invest-"
an/^ v°r„ 11 corPora- multiplicity of coupons and mament invariably consists of three
' ' dllu vlce ve.bd;
turities that two bonds of equal
things: the pure interest wnieh-isWell, there isn t any better merit are more than likely to be
the rental value of riskless credit, Place in which to get your in- sening ffve to ten points apart.
the appropriate payment for risk- formation regarding the outlook If you can determine the proper
and payment for knowledge. , - -lor that particular corporation yield to compensate for the deWhen I was dealing with men f/1
* Prosperity than right in gree 0f risitj
n0^ necessary
about your age 20 .years ago, ""IT
hiking , figures. And it is
consider the coupons or ma-

pl3ce for

under the six

even

the

be

who are never
willing to accept anybody's opinion on anything without support-

one

,

^enZoTent°of

amazed

to

bond traders.

an inherent charfcteristic. Price a
is an acquired characteristic
Whenever vou find nriee ™-^sets
terially at variance with value
you may depend upon the~dp®srtion of an economic law whicH*
;-°ne
$446 million for the active years fs as inexorable^as is the'law of
1942-45, or 480% as much. Com- physics that
a tendencv apy°ne
the

be

intuitive

and

The

the holding period

to

considered

1930-33.

and the period

Shortening

began

Continued from page 4

the period 1926-29

brief covering

.

am

ar

xww

w.iai

iids

cuiuuscu so many

IOU get mat in

.

have a dynamic whole field of
conditions ?c mo xro^r
which are constantly in a state of going. I hadn't been
secuflux. The balance..gheet is a record rity business very long before I
the first place you
economy.

- *
You

"have

actually yielding 6%, you better

Continued on page 28

28

(184)

The Commercial and Financial Chronicle

Continued

from

should have lengthened
average as far as

you

27

page

could.

would

difficult

to

checked

by the issuance of

be

with

di¬
Federal Reserve.
Well, that isn't going to miss being
printing
press
money
by very

candidiy,

much.

choice

obligations- sold

government

rectly

they said

the

to

1

tain reservoir of credit at its dis¬

posal. and if that is not used by
its banking customers in the oper¬
ation of their businesses, in the

obligations,

short-term paper
which are primarily

but

the

for

the

tence,

have

tney

reservoir

a

used

—the

can

the

to

government

has

government

extensive

buying

support

quite

an

left, but

power

there isn't any human agency big

enough

"control"

to

market

a

as

the government bond marThe only reason

big

as

feet

has become.

they have been successful is be¬
cause of the fact that people be¬
lieve that they can be successful.
The

of

powers

Open

government

Reserve

value,

and

of

set
you

rate,

to

and

have a
whenever

principles to use
into a jam.

run

I

tell you very

can

frankly that

if you ever have occasion ih busi¬
to

ness

try to

reach

policy by
the analysis of a series of episodes
you will never get to the policy
episodes.

policy

If

you

out of

run

enunciate

you

the basis of

on

principles,

a

your

few simple

bound

are

to

be

button

me

little

the

that fluctuations in

more

definitely.

that

up

I told

a

you

securities

are

takes

of

little beside the

a

when

what

I

have

illustrate,

but

been

trying to
impact of the

the

Federal

Reserve

ernment

bond market to

rates

the

upon

comparatively

definite

a

point

effect

keep the
has had

low
the

on

gov¬

yield

place
the

shifts.
that
you

ity

basic

all

securities

for

rate

money

That is why I said

to you

security analysis should tell
how to buy the right secur¬
at the right time and at the

right price.

the

But

discrepancy

between

You figure
interest

it

prices

fit

that

the

basis

will

their

be

values.

top

line

the

chart

on

differences

in

you

which

likely to

are

into

of

and

risk,

active

so

your

as

others

the

securi¬

industrials

are

with

yield

category,

or

which

coincidental
Take

rails

be

their

you

particular

utilities,

that

the

then

the

will

have

and

chart

a

exercise
little

and

have

it

but

time,

it

while.

worth

folio.

takes

is

The

explained

detail is that I

only reason I
in such great

it

am

quite a
very
well

firm believer

a

in

You

owe

into

to

and

a

picture, and
bank's

a

it

depositors

your

port¬

helped

to

bring

mined gold was more even than in

decline

in

the

the

gold

the

of

kets—reflecting in the
growing confidence in
currencies,

istics

of

year

The

lished

in

1948

1949

or

by 3—4%.

has

regard
U.

S.

to

$100,000

worth

of

bonds

and six months later

ing at

they

at

106

are

sell¬

par.

That is exactly what
you are up

against

in

market.

the

the

No

the

government

bond

one

of

course

dollars

questions that in
time you will get

that

they

in

"The
still
in

peak

trend

cerned; in
ment

if

positors'

output

of

1940.

year
at

can

in

is

was

com¬

present be dis¬

gold

"(2)

a

production elsewhere.
is

influence

in

held

been

up

until

devaluations

took
sum¬

funds

had

moved, clandes¬
tinely and otherwise, in search of
mer,

safety.

In a large measure, the
last three months of 1949 saw the

tially

these

short-term

the

cannot

basis

of

be

the

you

have

dollars

—

invested
if

you

are

a

and the

termination
securities

of

relative
be

can

values

reached,

in

and

I

the

predicted

experience

country

chifely

for

gold production in 1948 and

United

first

time

States

since

has

not

1945

the

absorbed

the

for

it

world

whole current output.
True,
added $164 million to its gold

reserves—which

was

more

than

other country; but this was
only one-fifth of the reported out¬
put and other countries were able
any

to

add

ported
tant

million

$250

loser

net

of

the United
loss

their

re¬

gold

in

1949

Kingdom, and the
regained

was

of

quarter

to

The only impor¬

reserves.

1950.

A

consid¬

erable number of countries added
to

their gold

reserves

in 194.9 in¬

by

Africa,

on

than

"If

might

be

to

substantial

unreported

gold

unknown

"(3)

The

ported

changes

to

official

increase

in

the

an

risen:

have

re¬

ounce

in

fluctuation.

that

Here

is

instance, whole¬
1940

by the government to

help

gold

producers,

has fallen

one-third,

unreported official

nothing had been

done

reached

say,

or

been

perhaps $100 million

one-third,

less

the level of

In 1949,
United

the

only

Australia

re¬

heavily.

in

production

than

1940.

pro¬

States

and

one-half,

In

Price of gold
in

bars in

some

markets.

55

U.S. dollars per fine ounce.

;

55

4s
me

best.

and

it

and

bond

It

worked

is

the

was

still

out

in

I

experts.

by

say

for

well,

very

use

do

best

many

to

you

The

That is

a

that you should make your anal¬

subject that the

easy escape

it

the basis of principles and

on
on

the basis of details.

Someone

ficulty

in

countant

learned
and

once

dealing

what

not

the

was

by

he

with
fact

an

ac¬

that

knew

reason.

by

he

rote

Anything

which upsets the very fine proc¬
esses by which he has been
taught
to reach his conclusions is anath¬
ema

to

tim.

I

found

that




involves

Look

said that the dif¬

very

is

up

is the
a

the

in your Latin
mean

A

50

APorlugal

ation, the gold-mining industry's
working costs had risen since 1940
by more than 35%; the reduction
in

taxes

million

in

of

1940-41

£ SA 27

£SA

to

6-7

ations

did

little

than

more

com¬

pensate for simultaneous increases
in

working

and

one-third

(and,

if

that

profits

remained

about

costs,

dividends
below

so

the

allowance

1940

is

level

made

for

the higher cost of living, the real
value of dividends per ounce of

fell

by

two-thirds

between

1940
and
1948).
Devaluation,
however, caused
an
immediate
rise in profits and dividends, the
average dividend for the year be¬
ing increased by one-third.
"Had the whole output for 1949

been

sold

the

at

post-devaluation

prices, the receipts of the

larger
risen by £SA
working profits
would have Been nearly doubled;
mines would
27

million

but costs

have

and

rising, the wages of
having • been
raised by 15% and some increase
are

European

workers

also

given to native workers —
and, in addition, it is found that
the

of

cost

dollar

claims

for

imports

from

both

and

sterling countries is
going up, thus raising the price
of
equipment
and
leading
to
"The

higher

direct

small.

the

from

sales

prices

premium

wages.

benefits

much-advertised

of

appear

gold at
to have

According
March

to

a

1950 by

the Finance Minister of the Union

Government,

the

industry

had

sold

1.271,285 ounces at premium
prices between February 1949 and

February

1950—an

resenting
The

abotit

Africa's

South

sales

amount

one

-

had

been

rep¬

tenth

in

output

.

of

1949,

made

at

an

premium of only about
10%, providing an extra
profit
of
£SA 1,692,000.
Early in 1950
the sales were suspended, the fall
in the price of gold having made

the

profit obtainable too small.
the United

continued
a

an

as

than

States, the gold
to fall during

result of low profits and

indirect effect of the fall in

copper

production,

one-quarter

since
of

less

no

the

U.

as

S.

by¬

a

differential

sjjatement that

Can.

to

1948
to

and

Can.

$4.23

devaluation

word "speculation"
dictionary. It doesn't

40

$3.27

was

Can.

of

cost

type dr speculation.

to the gold

per

ounce

expected
in

1949

$10

of the

to

at

in

come

total

a

million.

After

Canadian

dol¬

lar had increased the price of

gold

by 10%, the subsidy

"to gamble" at all.

subsidy
producers in

Canada corresponded, on an aver¬
age,

very

sibility to operate in accordance
with that simple
policy. In 1934

payments to

million in each of the years 194748 and 1948-49.
But these allevi¬

"The
45

bands with respect to
interest rate, you have every
right and you have every respon¬

that

product of copper.

aver¬

your

meant

the government fell from

gold output is obtained

reduced:

was

from the

Unless you are
reasonably con¬
fident that you have a constant
on

produc¬

on

middle of the year).

a

your

effect

slightly lower
in the last quarter than during the

granted

bank likes to avoid.

ysis
not

arc

immediate

an

tion: the output was

1949

age portfolio manager in the aver¬
age

and, since Sep¬
1949, by the devaluation
(though this last step did not have

as

And the

in

tember,

the

longer the radius the
arc.

gained,

have

reduction

a

increase in amortiza¬

output

matter of dollars.

the

arc.

They

from
an

allowances

"In

of interest rate
expresses itself in

greater the

subsidy

a

average

[Illustrated by
chart on the
board] The angle of
incidence representing the change
an

in

Canada, on

works:

have no patent or copyright on
the idea. Nor do I believe my idea

tion

the

hourly earnings rose
In those countries in

little

Africa

South

by

statement made in

Probably

and

After all,

price of gold has

112%.

duction

serves,

sales.

however,

been

This leaves nearly
$400 million to be accounted for.
into

as

changes

prices doubled between

which

re¬

output in 1949.

went

mium

and 1949 and

the

corresponded to
just over one-half of the new gold

part,

that

mained unaltered at $35
costs

in

neither

by

in

reserves

a

examined

found,

changes in profits.

sale

/. holdings).

S.

expected,

United States, for

re¬

(without allowing for the

wholly
U. S*

1948.

country is
it wili be

in production bear a close relation

while

some

in

each

separately,

There

also

net

years, its
16V2% in 1949.

United States, Australia and Brit¬
ish West Africa produced less in

the

were

the

of

portant gold-mining countries, the

1949

on

to any large extent, by pre¬

nor,

both

the other hand,
increased its output only at the
rate of 1%, and. among other im¬

cluding Italy, Switzerland, Can¬
Belgium,
Venezuela,
the
Netherlands, Uruguay and Cuba.
ada,

in

1949

responsible

half

in

rising

South

the

in

increase

increase

alone

—

than

more

output

the

to

Canada

was

allowed to sell

were

"Producers

gold

which

longer the bond the great¬

the

way

of

contributed

a

de¬

lers

er

The

to the present.

up

"The

essen¬

effects.

consequences

devaluations

gained

tenden¬

however,

are,

permanent
on

of

reversal

These

significant
change in the distribution of gold:
the

is

Belgian

"Up to the time of the devalu¬

savings-fund banker—you are at
the mercy of the
money market,

To state that another way, I am
primarily interested in expressing
the principles by which the de¬

many

decline

a

Free market price given at the dollar rate for
bank-notes,

the theory that any problem
properly analyzed is three-quaranswered.

decline

The

the

markets.

benefited

currency.

expected

cies.

devaluations have

There

the

ac¬

currency

logical

kinds

temporary stim¬
ulus, while wartime and postwar
increases in costs continue to de¬
press

from the

seen

graph,

transactions

of

(recently)

mar¬

place but, in the spring and

gold

various

black

changes of Sep¬
tember,
1949,
had
cast
their
shadow before them; not only had

countries govern¬

some

subsidies

be

may

"The

the

in

taxes and

domestic

with

No

and

a

taken
to
signify
an
intrinsic
strengthening of the value of the

No informa¬

available

30% below what it

some

the

mon

million

prices

1947,

Philippines in¬
production
by 16%
to
1949; in both countries

creased

have
which

sharp
quoted for

countries, since such

that country.

known

promised

you.

But

$820

become

accumulated

serves

in loans and $6,000 of
them go sour, or whether
you buy

in

to gold production in the
S. R. or the gold reserves

additions

$100,000

gold

gold

factors

about

free

psychological

of

of

the

continued in the first four months
of
1950, exerting an important

which
regularly
pub¬
figures of production rose
the equivalent of $790 mil¬

lion

sales

of

companying

a

national

were:

output

in

"As

countries

from

to

invest

main

These
one

1940.

and

premium

kets.

^he chief character¬

the

"(1)

or

you

was

striking fall in the prices paid
for gold on free and black mar¬

yourself,

difference whether

and there

year

markets.

"(4)

a

directors

trustees to shorten your
maturity
average.
It doesn't make one bit

be

relatively perma¬
nent
in the relationship of one
f^curity to another. That is quite

handling

are

to

reason

running

are

somewhat higher rate

half dozen

a

on

this

in

whether
or

is,

have

.you

you

your pure

first what

rate

available

ties

suppose

believe

the^ two.

of

first

Perhaps
you
don't
think
timing is awfully important.

tions because, after all, there isn't
a

been

was

Timing Is Important

of

too

great

themselves

previous

in

Congo
17%

the

newly-

has

since

a
subsidy was introduced
(amounting to 10%, on an aver¬
age, and to considerably more in
the case of high-cost mines) and,
after a heavy fall during the war,

producers

has 'disappeared'— having
likely been sold on free or

tendencies

made

production

one-third

which

felt:

distribution

hand,

by

very

the

New

whole

high-graae corporate obliga¬

your

with

by the arts. But there
is still some $150 million or more

black

given at least

Now, let

other

the
Canadian
output has risen
again to within 77% of the level

taken

30, 1950, the
year 1949 will remain a memor¬
able year in the history of gold.

sodes

they provide their own an¬
swer, when referred to the prin¬
ciples.

covering

Thursday, July 13, 1950

.

when

was

March

and

biggest syndicate manager in the due to two things. One is the shiff
history of the securities business in the risk factor, and the corol¬
with all of the syndicate
man¬ lary shift in price as it approxi¬
ager's
headaches
including
the mates value determined b.y risk,
The other is the basic shift that
.secondary market problem.

That is

Settlements

ended

astonished by the number of epi¬

the

Impact of Federal Reserve

tional
year

a

because you will never

.

reached

tion

least you

at

become

has

enough

the distinction be¬

as

price

of

Committee

Market

Federal

are

the

interest

when least used. The

most useful

long

necessity of appraising risk,
desirability of taking systems
as
a
whole and considering that
the whole thing is going to be
subject to major fluctuations in¬
duced by the fluctuations in the

of
feel the impact
of the necessity for earnings (on
the
part
of bankers)
on
your
Jbigh-grade bond markets.
It is
just as simple as that. Your sup¬
ply and demand factor will oper¬
ate very definitely.
As

live

thing completely licked,

the

the demands

by

up

of

the

money which impinges oh
high-grade bond market.
As that credit is used up or is

ply of

business you

very

from
security

you

tween

the

wot

field

the

sound, such

of

That is the sup¬

credit available.

if

buy the right securities at

According to the 20th Annual
Report of the Bank for Interna¬

engage

you

start on the basis oi
principles that seem to you to be

exis¬

bank's

in

won't

you

aelf-Lquidating

the

gentlemen

you

if

the
risen

Production, Prices and Gold Movements

I

accountants,
absolutely true.

right

some

was

to

say

nave

reasons

it

the

at

as

You

when

but

and

ing, I doubt if you can determine
that anywhere else as accurately
you can by the analysis of the
banking figures.

could.

analysis and try to decrease your
area of ignorance by the analysis
of
specific securities one at a
time, working as hard as you can,

banking system has a cer¬

The

believe,

right price

time, and with respect to the tim-

you

1947 you should have
it
as
much
as
you

shortened

The Money Maikel and
Factors in Securities Analysis
war

In

the

your

maturity

.

with
i

35

i

1

i

i

i

i

1

i

i

1948

IT925.

1

1949

i

i

h

i

I

I

I

I

1

$3.50
35

1950

Note

:

Weekly

average

prices

on

the various markets, except for Switzerland,

beginning of 1950, mines
subsidy of less than Can.

per

nothing
be

where the price is given for gold in transit.

a

ounce

and

made

in

were

to

reductions
subsidies

mines,- the saving

thus

ing to Can. $4.5 million

receive
were

to

to

other

amount¬
a

year."

Volume 172

Number 4924

The Commercial and Financial Chronicle

...

(185)

The

Indications of Current

following statistical tabulations

latest week

Business Activity

week

or

month available.

or

month ended

on

Latest

IRON

AMERICAN
Indicated

steel

STEEL

AND

operations

Previous

Month

Week

Ago

July 16

.

96.0

July 16

capacity)

1,830,000

92.6

101.1

ingots

castings

and

tons)

(net

of quotations,

cases

1,927,200

INVENTORIES,

1,434,300

of

of

oil

Crude

condensate

and

output

stills —daily

to

runs

oil,

and

(bbls.)
distillate fuel oil output

Residual

fuel

oil

Kerosene
Gas,

Stocks

5,435,350

l
1

115,834,000

5,636,000

5,688,000

19,626,000

19,055,000

18,498,000

1
1

2,169,000

2,001,000

7,582,000

6,868,000

2,221,000
7,187,000

5,440,000

l

7,841,000

7,461,000

7,517,000

7,733,000

1

114,139,000

115,036,000

121,087,000

114,000.000

l

21,229,000

20,165,000

17,369,000

23,617,000

July

i

53,335,000

50,580,000

42,449,000

64,587,000

l

40,543,000

41,291,000

38,991,000

unfinished

and

(bbls.)

Kerosene

(bbls.)

gasoline

:

oil, and distil.ate luel oil (bbls.)
oil

fuel

Residual

at

at
(bbls.)

at

at

5,204,500

4,873,750

freight

Revenue

1,574,000

*

freight received from connections

loaded

GINEERING

NEWS-RECORD

CONSTRUCTION

construction

S.

U.

810,152

709,587

644,182

Bituminous

667,761

614,700

557,670

construction

Public

and

State

municipal—

:

Federal
'

.

'■

$138,526,000

128,391,000

42,884,000

107,128,000

110,288,000
88,994,000

98,338,000
71,760,000

95,642,000

77,886,000

29,322,000

21,294,000

26,578,000

30,803,000

'

64,839,000

(U. S. BUREAU OF MINES):
and lignite (ton§).
anthracite (tons)——
Beehive coke (tons)
:—
1.—
Bituminous

July

•10,622,000

9,291,000

COMMERCE)

of

April

950,000

695,000

63,000

130,200

•133,600

156,100

18,100

1

July

262

1

238

261

250

ELECTRIC INSTITUTE:

EDISON

output, (in

Electric

kwh.)

000

METAL

OUTPUT

Month

6,115,119

5,920,827
.

INDUSTRIAL)

AND

(COMMERCIAL

FAILURES

of

Copper

(BUREAU

138

July 6

73,609

•76,083

**61,783

184,486

•189,233

t* 162,417

35,211

•38,678

**33,66*

ounces)

3,525,€54

•3,795,883

**2,840,835

48,267

•51.212

* *48,65.

refinery

21.995c

19.609c

16.342r

refinery--

22.117c

15.876c

16.543b

11.808c

11.721c

12.000c

fine
short

in

Zince

(in

fine

tons)

ounces)

short

tons)—.

.

164

156

•

153

PRICES

(E.

Average for

Month

pound)

(per

M.

&

iron

Pig

(per

Scrap steel

1

gross ton)

.—

3.837c

3.705c

$46.38

$46.33

$45.91

$37.67

^uly
July

3.837c

$46.38

Ju|y

tor)

gross

(per

3.837c

$37.67

$40.92

$19.33

of June:

pound) —

rper

Common,

Lead

York)

-r

at

Common,

Louis

St.

and

at

15.70C

22.425

20.425

15.925

78.500

78.000

103.000
12.00C

10.800

11-000,
10.800"

12.000
11.800

11.85(

15.000

15.000

14.500

9.000

11.000
-

New

London

York,

(per

IIAntimony

U.

Bonds

Government

S.

Aaa

—-

;
,

—

S.

U.

119.41

118.40

118.80

119.20

117.80

tCadmium

114.66

114.85

115.24

112.37

tCadmium

iper

§Cadmium

iper

Cobalt,

116.41

116.80

115.04

Aluminum,

119.61

119.82

117.80

Magnesium,

2.32

2.91

2.90

2.87

2.99

2.64

2.62

2.68

2.73

2.71

2.69

2.76

2.92

2.91

2.89

3.04

3.32

3.33

3.27

3.47

July 11
—July 11
July 11

•

—

Group

Industrials Group

3.21

3.20

3.13

2.84

2.83

2.81

2.90

2.68

2.67

2.66

2.76

427.8

411.2

401.1

337.1

97%

2.34

2.34

V

Percentage

of activity
at

(tons)

208,738

254,251

161.576

211,058

211,027

1.93,563

153,817

94

94

83

ingot

PLANTS

DRUG REPORTER PRICE

AND

PAINT

AVERAGE—100

24.500c

38.500c

25.000c

39.000c

Nominal

41.730c

Nominal

$66,000

$70,154

$2.00000

$2.0000*

$2.15577

$2.07500

$2.0750*

$2.1500*

—

SALES

20.500c
40.000c

4u.bU0o

Not avail.

17.000c
'

20.500e

FROM

(AUTOMOBILE

17.192c

696,893

—

$2.15000
$1.80000

48.000c

—

17.500c
21.500c

i
pound)

$2.23077
$1.80000

—

iper

pound)..

(per

MANU¬

FACTORY

390,379

395,483

243,297

INDEX—1926-36

July 7

ASSOC.)—Month

121.0

120.7

121.1

of May:

Number

of

Number

of

motor

Number

of

motor

coaches

STOCKS—Month

COMMON

rn>

YIELD

AVERAGE

WEIGHTED

MOODY'S

cars

7.23t

6.25

5.97

6.92

6.45

9.28

5.60

5.19

6.18

4.54

4.26

4.7*

3.41

3.29

3.53!

6.17

5.79

7.0*

2,044

1,716

1,384

216.9

222.8

210.5

136.7

110)

yield

(200)

13i.9

133.*

137.7

136.*

ESTATE FORECLOSURES-

REAL

NON-FARM

56*

___

(1.5)

Insurance

86,20*

268

June:

of

(25)

(24)

Average

394,703

103,850

OF

(125)

Railroads

481,46V

455,193

412

trucks

passenger

559,311

575,518

120,963

of vehicles

number

AND

SAVINGS

FEDERAL

Month
'

—

S.

U.

IN

FACTURERS'
Total

ANCE

OIL,

27.780c

Nominal

——

ingot

plus,

$35.00*
$80.26*

27.780c

"

$66,000

pound)..
pound)—

75

394,110

Ju y 1
July 1
July 1

(tons)

Unfihed orders

22C,204

JuJy *

(tons)

Production

1.02000c

$35,000
$70,346

$35,000

$2.08077

___.

(inutilities

ASSOCIATION:

PAPERBOARD

received

76.495c

76.688c

25.00CC

—

ounce)-

(per

VEHICLE

Banks

Orders

1.03000c

24.500c

M. J.)__;

&

——

99%

Industrials

NATIONAL

9.548c

77.495C

3.30

COMMODITY INDEX

MOODY'S

iE.

••Nickel

July 11

Group

Utilities

107.61

119.41

Ju y 11
July 11
July 11

_

Public

104.61

110.70

116.22

July 11
July 11

A

Railroad

108.16

2.66

43.500*
$4.0255V

11.973c

$70,000

pound)

iper

109.42

MOTOR

—

-

Platinum, refined

107.09

2.26

——

Aa

Antimony

3 07.27

July 11

corporate———————

——

Antimony

109.24

AVERAGES:

YIELD DAILY
Government Bonds

Average
Aaa

113,31

120.63

—

-.

BOND

MOODY'S

103.35

115,63

July 11
JuJy J1

—

Group

Utilities

Public

102.47

115,04

July 11
Juiy 11

——

—

—

__

Group

Industrials Group

102.15

120.22

Ju]y n

ZIIIIIIIZIIII-

—"

a

Baa

Railroad

,

—

pound), bulk. Laredo—
iper pound), in cases, Laredo
(per pound), Chinese Spot

114,85

-

1

pricei_

S.

iper

119.82

102.10

min.

U.

pound),

(per

*i"fy

«j"jy

—.

63.409d

$2.79750

14.647c

flask of 76 pounds)

iper

Antimony

——r_—

■:

corporate

Average

63.500d

77.688c

997»

ounce

Quicksilver

AVERAGES:

BOND PRICES DAILY

MOODY'S

11.690c

71.500c

$2.80000

ounce)

per

York Straits

New

Gold

11.521c

72.614c

pound)—

iper

New

ounce)

iper

1 pence

Exchange

iper

Tin

York

(Check)
pound)—East St. Louis

Sterling
Zinc

11.608c

72.7500

,

Sterling Exchange—

Silver,

■"

21.700

79.750

Ju y
J"iy
Jmy

-----

Louis)

St.

at

at

Louis)

(St.

(East

Zinc

York)

(New

tin

(New

Lead

at

refinery

Export
Straits

■

22.200

22.425

JTu.y
*lujy
J"{y

at

reiinery

Domestic

,

22.200

York

New

Silver,

4

*

Electrolytic copper—

QUOTATIONS)—

—

export

Lead

Silver

QUOTATIONS):

& M. J.

(E.

PRICES

METAL

J.

domestic

Electrolytic

COMPOSITE PRICES:
Finished steel (per lb.)

17,00*

tons)

short

(in

1 in

Copper

AGE

19,100

MINES)—

April:

Electrolytic
IRON

OF

States:

(in

METAL

DUN & BRAD-

—

INC.

STREET

4,982,173

$34,00*

production of recoverable metals in the

Silver

5,379,924

July 8

17,60*

$31,100

dollars):

—

Gold

-•>;'

.

—

$16,50*

17,200

SERIES—

of

Durable

Lead

•

$13,900

SALES

&

NEW

(millions

Nondurabe

United

RESERVE SYS¬

STORE SALES INDEX—FEDERAL
AVERAGE=100

TEM—11)35-39

3,403,00*
265;20*

Inventories:

Mine

DEPARTMENT

INVENTORIES

OF

Month

1,300,000

1,125,000

•448,300

17,300

tons)

Sales

10,160,000

July 1
July 1

coal

Pennsylvania

•35,476,00*

•4,258,000

570,000

(net

tons)

(net

Total

COAL OUTPUT

45,158,000

4,113,000

lignite (net tons)

and

anthracite

(DEPT.

.•

•.

coal

coke

MANUFACTURERS'

$226,729,000

177,294,000

121,150,00*

(BUREAU OF MINES)—Month

Pennsylvania

$287,582,000

338,238,00*

138,972,000

June:

783,357

107.171,000

299,228,000

46,067,000

Federal

436,740,00*
459,388,000

420,392,000

municipal

438,200,000

$31,200

and

$896,128,000

492,953,000

$14,OCO

State

$931,153,000

728,064,000
526,325,000

constiuction
construction

646,256

$214,379,000

of

Month

—

construction

l

July 6
July 6
July 6
July 6
July 6

__

construction

Private

$57,80*

EN¬

105,933,000

S.

i

ENGINEERING NEWS-

—

—

18,300

U.

Public

of

July
July

(number of cars)

RECORD:
Total

$54,500

$1,254,389,000

CONSTRUCTION

June:

Total

Beehive

CIVIL ENGINEERING

9,30*
14,50*

$54,800

ENGINEERING

Private

of cars)

(number

Revenue

$34,00*

9,300
14,300

Total

CIVIL

COAL OUTPUT

ASSOCIATION OF AMERICAN RAILROADS:

$31,100

9,400
14,200

_

65,741,000

•5,356,750

refineries, at bulk terminals, in transit and in pipe lines—

Finished

Ago

$31,200
■_

5,241,000

19,491,000

July
July

(bbls.)

(bbls.)

output

1

July
July
July
July
July

output

at

Gas,

July

1
(bbls.)

average

(bbls.)

output

Yea*

Month

42

July

gallons each)
Crude

Gasoline

(bbls. of

average

Previous

dollars):

Retail

daily

—

of that date:

April:

Manufacturing

INSTITUTE:

PETROLEUM

are as

COM¬

OF

SERIES —Month

NEW

(millions

DEPT.

Wholesale
AMERICAN

either for the

Latest

BUSINESS
MERCE

1,765,200

are

MoDth

77.8

Equivalent to—
Eteel

in

or,

Ago

INSTITUTE:

(percent of

that date,

Year

Week

production and other figures for the

cover

Dates shown in first column

INSUR¬

LOAN

CORPORATION—

March

of

—

—

127.9

STATES
COMMERCE)—Month

PERSONAL INCOME IN THE UNITED

(DEPARTMENT

6TOCK TRANSACTIONS FOR THE ODD-LOT
LOT
DEALERS AND
SPECIALISTS ON

EXCHANGE—SECURITIES
Odd-lot

sales by dealers

•

*

_

——June 24
total sales——_______—_ ______ June 24

24,425

27,376

28,213

14,062

766,220

833,176

871.861

388,337

$33,621,684

$38,337,323

$37,572,0o4

June 24

dealers (customers' sales)—
orders—Customers' total sales

of

June
—June
June
————June
——June

——

short

sales

Customers'

other

sales——

——

——

•

28,444

24

24
24
Number of shares—Customers' total sales
24
Customers' short sales
_:———
24
Customers' other sales—.——June 24
Dollar value
l
June 24
Customers'

shares—Total sales

of

sales

Short

June 24
June 24

sales

Other

purchases by dealers—

Round-lot

168

153

32,303

13,576

Less

NEW

SERIES

—

798,010

891,602

866,107

363,141

5,804

.5,960

5.738

5,577

792,206

860,147

885,864

357,564

$30,903,578

$35,526,685

268.280

$35,608,473

306,310

$11,678,126

301.690

268,280

246,220

Proprietors'

Total

commodities

Farm

L

301,690

109,400

260,980

160,410

Month

_.

Livestock

—

commodities

Metals

other than farm and foods

and

Chemicals

and

figure,

allied

4
4

171.3

165.0

166.4

—

169.3

171.1

—

—

.

.—

.-—

___

217.5

225.7

206.7

165.2

162.7

163.2

160.3

246.6

241.5

243.9

2.8

2.1

2.4

2.1

42.8

43.5

45*

18.1

17.9

17 1

16.9

24.1

12.4

207.1

191 8

$745,406,421

$713,820,097
562,625.236

$741,088,924

ROADS
RRS.)—

expenses

Operating
—

ratio—per

—

580,566,624

4
4
4

149.0

•143.7

148.2

144.8

137.4

•136.7

135.7

137.9

333.4

•133.1

152.8

129.3

173.1

172.9

168.1

4

4

202.1

•201.4

199.8

189.5

July

4

314.9

*114.3

114.9

118.0

after charges

STATES

GROSS

78.82%

of June

$69,277,231

67.031.547

62.216,877

57.505,223

45,000,000

38,000,000

32,000,00*

$257,376,855
5,517,087

$256 370,179
4,463,670

$252,797,635

—.———

—

$251,859,768

$251,906,509 $249,327,232

before charges

(est.)— a

——

DIRECT AND

DEBT

30_

—

General fund balance———

Net

debt

Computed

1—

annua!

81.08%

$74,145,684

GUARANTEED—(000's omitted):
As

600,864,076

$80,746,674

—

ra'hva.v operating income

UNITED

77.89%

cent—-——,,—

.—

income

224.0

July

lilncludes 439,COO barrels of foreign crude runs.




237.1

373.0

July

!

I

CLASS

revenues

operating

153.2

4
5
4

2.7

———

AMERICAN

operating

163.4

173.8

r—__

—.—

products—

153.1

4

—

—

products.^-

metal

materials

Building

•Revised

———

materials

lighting

157.4

July
July
July
July
July
July
July

—____.—

products

and

——

_______

1.

Meats

Fuel

———,

1

20.6

May:

Net

•157.1

359.0

—1

-—

—-—

Foods

Textile

of

Total

.

July
_____—July

—

products

Grains

All

OF

Income—

Total

—June 24

1926—100:
All

EARNINGS

17.3

21.6

201.7

payments————————

nonagricultural

40.7

17.8

2.4

and rental income——_—
Income and dividends—_

transfer

RAILROAD

;

——-—

inteiest

Personal
Total

40.1

social

for

contributions

income.—______—

(ASSOCIATION

306,310

237.980

109,400

employee
labor

57.4

40.5

21.7

—————

58.2

"

"

~

S. DEPT. OF LABOR—

U.

59.4

—

Net

PRICES

139.4

17.8

industries

insurance

Other

Taxes

WHOLESALE

—_

industries

Service

141

30,609

,

—I

shares

Number of

Distributive

13,717

32,456

30,777

131

28,313

June 24

—•
—

,-___

—

total

Commodity producing industries.-

$13,834,903

Round-lot sales, by dealers*—
Number

———-—

receipts

employer disbursements-.—

Government

Odd-lot purchases by
Number

income—

salary

and

OF

billions):

(in

personal

Total

—

value

Dollar

April

Wage

(customers' purchases)—

shares—Customers'

of

Number

of
Total

COMMISSION:

EXCHANGE

of orders—

Number

ACCOUNT OF ODDTHE N. Y. STOCK

rate

—

——

—

;—

2.199%

3,470.403

2.236%

the producers' quotation.
tBased on ihc average of
the producers' and platers' quotations.
SBased on platers' quotations. 11 Domes tic, five
tons or more but less than carload lot packed in cases, f.o.b. New York.
••F.O.B. Port
Co'hurne, N. S., U. S. duty included.
§§Tin contained.
**Monthly average 1945.
tiliNot including stocks of American Tel & Tel.
•Revised

figure.

+Based

on

SO

The Commercial and Financial Chronicle

(186)

•

Securities Now in Registration]
Aeroquip
June

of which

Jackson,

Corp.,

filed

21

Berven

Mich.

16,455 shares

June

27

offered by the company and

are

stock

(par $100).

Underwriter

None.

•—Watling, Lerchen & Co., Detroit. Price—To be filed
by amendment. Proceeds—To pay for construction of a
new
plant for production and storage use. Business —

repay

the

remainder

45 selling stockholders.

by

Flexible hose lines.

Alabama

June

Gas

stockholders

to

19.

Southern

Price—$137.50

share.

per

ferred

Office—301

Golden

Gate

Underwriter

capital and to
San Fran¬

Ave.,

•

Blue

Grass

Creosoting Service, Inc., Louisville,

common

Products, Inc.

stock, $15

per

share.

Underwriter—None.

organizational expenses.
Home Life Bldg., Louisville 2, Ky.
Cameron

(7/17-21)

May 24 filed

June

vertible

stock

$1), to be offered in units of one
preferred share and one-half share of common at $7.50
per share; remaining 20,000 common shares at $4.50 per
share.
Underwriter—Hill, Thompson & Co., New York
common

able, for machinery, equipment and other corporate

(Wm.)

stock

Proceeds—For

working capital to

Office—1107 American

ations.

American

Motorists

Bldg., Seattle, Wash.

Insurance

Co., Chicago
June 28 filed 100,000 shares of capital stock (par $5) to
be offered to stockholders of record July 25 at rate of
share for each three held.

new

one

ceeds—For

general

corporate

Price—At par.

Pro¬

Business—

purposes.

American

Radio

&

Television, Inc., North Little

Rock, Ark.
(letter of notification) 301,686 shares of com¬
stock (par 10 cents).
Price—75 cents per share.

June

16

mon

Underwriters—Gearhart,

Kinnard & Otis, New York
Proceeds—For additional working capital. Office

City.

—Fifth and Cornish

American Textile Co., Inc., Pawtucket, R. I.
April 26 (letter of notification) 10,000 shares of common
capital stock (par $10). Price—$15 per share.
Under¬

writer—None.
Office—P. O.

Proceeds—To
Box

&

Read

provide

additional funds.

Co.

Inc.

Palestine

April 10 filed $3,000,000 of 10-year 3% sinking fund de¬
bentures.
Underwriter
Israel Securities Corp., New
York. Proceeds—To increase working capital to be used
for enterprises in Israel. Business—Devplooine the eco¬

Statement effective

resources

Arkansas

of

Israel.

Power

Statement effective June 30.

tion

program.

(EDT)

on

Bids—Received

by company up to noon

Arkansas

Western

Gas

stock

of warrants at the rate
No underwriter.

Castle

June

30

E.

of

share for each nine

one

Center Street,

now

Office

Fayetteville, Ark.

Associated

Natural Gas Co.,
Tulsa, Okla.
March 14 (letter of notification)
2,500 shares of common
stock at $100 per share.
No underwriter.
Proceeds to
build a natural gas transmission line.
Office—105 N.

J

Automatic
30

(letter of notification) $150,000 of participation
ir the Employees' Savings & Profit
Sharing Trust Fund.
:ne

P. oceeds

irent.
©

to be

30

stock.

None.

capL

invested under terms of the trust
agree-

Office—1430

3adger

Jui-n

Citizens
June

Merchandise

Exploration

Co.,

Mart, Chicago 54, 111.

Inc.,

(letter of notification)

Price—At

par

($100

Denver,

1,000 shares of

per

2

share).

Colo.
common

Underwriter—

Proceeds—To acquire properties and for
working
1. Office—1835 Champa St., Denver, Colo.

•

shares of

one

of

Price—At

par

at

operations.

at

1%

•

1

3

be

in

the

second

and

year,

of

Inc.,

natural gas properties in

Rockford,

notification)

III.

3,000

shares

of

Proceeds—For

par

($100

share).

per

class

A

Underwriter—

machinery and general
Office—700 20th St., Rockford, 111.

corporate

7

filed
to

Steel Corp.
100,000 shares of capital stock

stockholders at

the

of

rate

(par $5)

one

new

to

share

Business

—

Stainless steel plates

and

Offering postponed.

•
Ecor, Inc., New York City
July 5 (letter of notification) z/0 shares of common stock.
Price—$1,000 per share.
Underwriter—None.
Proceeds
—For working capital, etc.
Office—Room 4329, 30 Rock¬
efeller Plaza, New York 20, N. Y.
_

Even-Air Corp.,

New York City
(letter of notification) 85,000 shares of common
(par 10 cents). Price—$3 per share. Underwriter

June 16
stock

—None.

until

Proceeds—To promote

for

working capital.
York 18, N. Y.

sales, pay expenses and
Office—464 11th Avenue, New

"

Fedders-Quigan Corp.

(7/19)

Ju'ne;,21 filed 103,402 shares of series A cumulative

con-

*™?ible »"*erred stock of record July 19 onto be offered
(par $50) expected
-to Common stockholders
basis of one

smelting and

,;preferred share for each 12 shares held; rights expected

.

-to-expire

^

Consolidated Tin Co., Salt Lake
City, Utah
June 30 (letter of
notification) 400.000

shares^pf

common

400,000 shares of preferred stock.
^Price—25<J
Underwriter—None. Proceeds—To equip and
Office—16 V2 So. Main St., Salt

Utah.

Power

Co.,

Aug.

4.

Price—To

be

filed

by

amendment,

^along with dividend rate. Underwriter—Smith, Barney
Co., New York. Proceeds—To pay promissory note,

»?-to, complete purchase of

a new plant at El Monte, Calif.,
" arid for additional working capital.

Lake City,

First

June

Consumers

2%

each
three
held, with oversubscription privilege.
Underwriter—Allen & Co., New York. Price—To be filed
by amendment. Proceeds — To pay bank loans and for

•

operate mine.

Ltd.,

working

Rn«inr««

and

Underwriter—Hardy & Co.,

for

Bids—Tentatively planned

heating treat
g treating oi metals.

share.

Drive,

Price—At

be offered

Combustioneering Inc., Cincinnati, Ohio

per

Proceeds—To go to selling

Eastern Stainless

June 5 filed 30,000 shares of class A
capital stock. Under¬
writer—None named as yet. Price—$100 a share. Proceeds—For offices and equipment, expenses and

stock

Denver,

selling stockholder.

year,

None.

Office—

postponed
the Fall, depending on market conditions.

ranitM

first

working capital.

may

Inc.,

$10,000,b00 of notes, due 1960, with Interest

(letter

purposes.

1, 1973; $20,000,000 of 3%

but

share).

per

stock.

($12,000,-

Aug.

Co.,

Corp.

Proceeds—To

the

Dualoc

July

debentures due March 1, 1974; and
$13,000,000 of 3% de¬
bentures due Aug. 1, 1974; and the remainder
on

$7.75

in

sheets.

received

Stores

York.

Gas

for expansion program.

Trucking

Business—To develop oil and
Western Canada.,

System, Inc. (8/1)
July 7 filed $90,000,000 of debentures, series Bydue 1975.
Underwriters—To be determined by competitive
bidding.
Probable bidders:
Halsey. Stuart & Co. Inc.; Morgan
Stanley & Co. Proceeds—To retire on Seot. 9 $45,000,000

be

operating

thereafter, and 249,993 shares of capital stock (par
$1). To be sold to 17 subscribers (including certain part¬
ners of Carl M.
Loeb, Rhoades & Co., State Street Invest¬
ment Corp. and State Street Research &
Management
Co.) Underwriter—None. Proceeds—For general funds.

St., Decatur, Ind.

debentures due April

and

3%

($100

of 31/4%

Chicago

Jan. 30 filed

plant

Columbia

common

Underwriter—

capital

Exploration
(Western)
Toronto, Canada

4y2%

Proceeds—For

•

working

Dome

June

per

dial

share.

per

Christensen, Inc., Denver.

New

stock.

preferred

to

Price—$10

(letter of notification) 10,000 shares of common
Price—$10 per share. Underwriter—Peters, Writer

mated

Lak& City,

Decatur, Ind.
of notification) 3,000 shares

conversion

$1).

1950, at an average price of $8.37% per share and the
remaining 5,500 shares will be offered at market (esti¬

Citizens Telephone Co.,

and

*

Colorado

.

share of class B

stock, non-convertible.
share). Underwriter—None.

amount.

Proceeds—For

(letter of notification) 12.200 shares of common
stock, of which an offer of rescission will be made of
6,700 shares heretofore sold during February and March,

Price—$44.50 per unit. Underwriter—Emory S. Warren
Co., Washington, D. C. Proceeds—For general funds.
Office—1707 Eye St., N.
W., Washington, D. C.
(letter

subordi¬

Price—At principal

Associates, Inc. (Pa.)
(letter of notification) 12,000 shares of

Diana

&

April 27

a

June 28

Security Bank Bldg., Salt Lake City,

and

stock (par 50
director of com¬

common

Research

Denver

&

notification)

stock

1981.

Proceeds—For

stock.

resources

Credit Corp.,

class A

of

June 30

Washington, D. C.
notification) 3,000 shares of class A
stock (par $12.50) and 1,000 shares of class B
stock (par 25 cents), to be sold in units of three

common

shares

Capital Corp., Wilmington, Del.
of notification) $20,000 of 5%

(par

.'l

(letter of

common

selling

stockholders.

Salt
...

400,000

(letter

None.

existing long-term
used as working capital.

.

a

expenses.

Utah.

to

Canteen Co. of America

stock

pay

Co.,

3

June 27

Proceeds—For mine development and production.

Office—1108 First

000)

Boulder, Tulsa, Okla.
€

Mining

To

Price—$1 per share. Proceeds—For development
mining and shipment of ore.

Dental

200,000 shares of com¬
Price—50 cents per share.
Underwriter-:!—

stock.

mon

None.

of

—

general funds.

(7/13)
(par $1).

Underwriter—Dillon,
and drilling

>'•'

(letter

Proceeds

Underwriter—Hodson & Co., New York.

Indefinite

will be used to

Mountain

240 W. Monroe

Proceeds for construction.

9.

Chicago, 111.

nated debentures due

Bolger & Co. Proceeds—Proceeds to
together with term loan of $1,000,000 from

common

(par $6) to be offered at $10 per share to holders

held.
—28

28,948 shares of

Dec.

Co., Chicago, III.
notification) 2,000 shares of common
and 160 shares of preferred stock (par

Mines, Inc., N. Y. City

filed

Crown

July

cor¬

Shillinglaw,

additions

Co.

May 2 (letter of notification)

stock

develop mineral

obligations and the balance to be
Temporarily postponed.

June 19, but rejected.

Only one bid was made
of $100,003 per share, with a $4.95 dividend from Lehman
Brothers, Equitable Securities Corp. and White, Weld &
Co. (jointly). Statement effective June 12.

general

Caspers Tin Plate Co., Chicago, III.
16 filed 150,000 shares of common stock
(par $1),
of which 50,000 shares are to be sold
by company and
100,000 shares by three stockholders. Price—To be filed
by amendment. Underwriters—F. Eberstadt & Co. Inc.

&

Light Co.
May 23 filed 155,000 shares of cumulative preferred stock
(par $100). Proceeds—To be applitd to (a) redemption
on
Aug. 1, 1950, at $110 per share plus dividend ac¬
cruals, of all the 47,609 shares of outstanding $7 pre¬
ferred and 45,891 shares of outstanding $6
preferred;
and (b) the carrying forward of the company's construc¬

for

June

—

nomic

by amendment.

Utah

Trading Corp.

and

Proceeds—For geological

Proceeds—To

insurance firm,

working

Sexton

Underwriter—Max Wolberg,

pany.

Mining Corp., Ltd., Vancouver, B. C.
Aug. 29 filed 1,000,000 shares of no par value common
stock.
Price—800,000 shares to be offered publicly at
80 cents per share; the remainder are registered as "bonus
shares."
Underwriter—Reported* negotiating with new

company,

for

of tonnage and

Canam

•

637, Pawtucket, R. I.,

Ampal-American

May 24

operations in Canada.

and

Streets. No. Little Rock, Ark.

loan

Superior Oil of California, Ltd.

Price—To be filed

underwriter.

Casualty insurance.

a

June 27 filed 2,150,000 shares of common

finance oper¬

indebtedness,

of

Swift-Henke Co.,
stockholder.

Business—Distributor of building ma¬
Temporarily postponed.

Canadian

Alliance Aluminum Smelting Corp.
(letter of notification) 30,000 shares of common
(par $1).
Price—$10 per share.
Underwriter—

retire

per share for common and $13 tor
Underwriters—David A. Noyes & Co. and

preferred.

Office—Kentucky

purposes.

terials.

(to satisfy
Underwriters—

(par $5)
Price — $4.50

Cristina

Proceeds—To reduce

American

None.

&

3* (letter

$25).

Pro¬

14 filed

porate

June 20
stock

Cribben

July

Co.

share.

Statement effective June 23.

poses.

Proceeds—To

•

pur¬

at par

Co., Inc., Cayuga, N. Y.
10 (letter of notification) 2,644 shares of capital
stock (par $5).
Price—$20 per share.
Underwriter—

holders. Underwriter—Reynolds & Co., New York. Price
—To public, $19.50 per share; to employees, $16.95 per

pay¬

issued

be

&

Cowles

cents).

.

to

amounting to $75,000).
Co., Inc., New York.

Brooks

179,833 shares of capital stock (par $7), of
120,833 will be sold to the public and 59,000 of¬
fered to employees. Of the total offering, 91,333 shares
will be sold by the company and 29,500 by three stock¬

(par

Proceeds—To repay bank loans and accounts

City.

•

•

which

160,000 shares of 45 cent cumulative con¬
preferred stock (par $6) and 100,000 shares of

ADDITIONS

July

2,000 shares of preferred

ceeds—For

Proceeds to

INDICATES

(par $25),

claims

W.

None.

(par $100); 8,000 shares of class A common stock
(no par); and 4,500 shares of class B common stock (no
par). Price—For preferred, $100 per share; lor ciass B

27; rights expiring July

No underwriter.

118,759 additional shares.
construct improvements.

stock

stock

parent will subscribe for

Thursday, July 13, 1950

.

capital, etc.

June 27 (letter of notification)

record June

P.

.

SINCE PREVIOUS ISSUE

ceitain

Kentucky

Natural Gas Co.,

Allied Electr.c

San Francisco, Calif.
1,000 shares of capital

notification

of

Proceeds—For additional working

notes.

i

Corp.

of

(letter

cisco, Calif.

(letter of notification) 1,479 shares of ($2 par)
stock, at $8.30 per share, being offered pro rata

12

common

Carpets Corp.,

(par $1),

162,010 shares of common stock

.

Security Corp. of Nevada, Reno, Nev.

14

(letter of notification) 50,000 shares of common
capital stock (par 10 cents). Price—$5 per share. Under¬

Jackson, Mich.

June 23 filed 499,903 shares of common'
stotfc^Xffb par)
to be offered present holders at the rate of
on# new
share for each 10 held, with an

writer—None.
tracts and
uauis aim

for
iur

Proceeds—To

investment in
investment in

buy

instalment sales

selected
seiecteci

common
coiinnori

con¬

stocks
slocks

of
oi

oversubscriptionjprivi- " other corporations. Office—511 W. 3rd St., Reno, Nev.
amendment, ^
frirst Springfield Corp., Springfield, Mass.

lege.
Underwriter—To be named in an"
along with offering price. Five months ago
of

454,457 shares of

ers

was

underwritten

Stanley & Co.
New York

Boston

Philadelphia

Pittsburgh

San Francisco

Private IVires




to

all

offices

Chicago

per

common

share.

by

a

an

offering

stock to common stoc.kholdgroup

headed'^ Morgan,

Price—Expected to be not less than $33
Proceeds—For construction.. Offering—Post-

Continental Copper & Steel
Industries, Inc.
June 30 (letter of notification) 18.750"'shares of common
stock

.stack*/ Price—$15
Mortgage

"** working

Corp.,

(par $2)

and

common

share. Underwriter — Springfield
Springfield 3, Mass. Proceeds — For
per

capital.

^^ijJfleetwood

poned.
1"

Cleveland

May,^9 (letter of notification) 5,471 shares of
r

„

.

......

„

_

Airflow, Inc., Wilkes-Barre, Pa.
ApriB20 (letter of notification) 79,050 shares of common
stock (par 50 cents) to be offered first to common stockholders.
Price—$1 per share to stockholders and $1.25

1,500 shares of 5% cumulative pre--~:fbr^iii*blic.

Underwriter—None.

Proceeds—For

working

Volume 172

Number 4924

.

.

The Commercial and Financial Chronicle

.

(187)

capital, remaining $28,000 being offered to six creditors
Office—421 No. Pennsylvania Ave.,
Wilkes-Barre, Pa.

York.

in payment of debt.

Fleming-Hall Tobacco Co., Inc., N. Y.
June 30 (letter of notification) 180,000 shares of com¬
mon stock (par $1).
Price—$1.25 per share. Underwriter
—Carstairs & Co., 1421 Chestnut Street, Philadelphia 2,
Pa., will act as financial adviser.
Proceeds—To be

Tele-Tone Radio Corp

added to general funds.

Allied Electric

July

(Ala.)

Telephone Co.

Underwriter—None.

Proceeds—To

extend

and

July

Range Mines,

Inc.

(letter of notification;

capital stock

(par $1).

Price—$1.25

per

common

share.

Texas

Under¬

writer—Blair F.

capital.

operating

Publicly

Radiant Heater

General

May 3 filed 170,000 shares of

offered

July

Illinois

July

filed

of

32,885

shares

of

on

Pacific

Telephone Corp.
June 12 filed 199,350 shares of common stock (par $20)
being offered to common stockholders of record July 6
ratio

the

of

one

new

six shares

share for each

August 1,

Statement effective

struction.

Hill

Globe

Mining Co., Colorado Springs, Colo.

(letter of notification) 5,885,000
mon stock.
Price—At par (one cent per
writers—George C. Carroll Co., Denver;
Shares, Inc., Denver; and M. A. Cleek,
Proceeds—For mining equipment.

shares of com¬
share). Under¬
Inter-Mountain
Spokane, Wash.

Granville

working

Mines

Corp.,

Ltd.,

British

Columbia,

Feb.

16

stock

filed

shares of common non-assessable
Price—35c per share. Underwriter—
Proceeds—To
buy mining machinery and for

(par

None.

100,000

50c).

Statement effective May 10.

working capital.
Gulf

Atlantic

Transportation

Co.,

Florida

May 27, 1949, filed 620,000 shares of class A partic. ($1
par) stock and 270,000 shares (25c par) common stock.
Offering—135,000 shares of common will be offered for
subscription by holders on the basis of one-for-two at
25 cents per share. Underwriters—Names by amendment
and may include Blair, Rollins & Co., Inc.; John J. Ber¬
gen & Co. and A. M. Kidder & Co. on a "best efforts
basis." Price—Par for common $5 for class A. Proceeds

capital.

Office—6251

W.

Century

Blvd.,

Los

purposes.

Ki-Gravity Oil Co., Inc., Salt Lake City, Utah
July 3 (letter of notification) 700,000 shares of common
stock
(par 10 cents), of which 500,000 shares are for
of

company

and

selling stockholders.

200,000 shares
Price—At

for

account

None. Proceeds—For oil and gas leases and

now

offered

to

common

of

Underwriter—

par.

development.

stockholders

record

May 12, with rights expiring July 20.
Price—At par
($1 per share). Underwriter—None. Proceeds—For gen¬
eral corporate purposes.
New Orleans, La.
•

Office—Industrial Canal Plant,

Charles Street, San Antonio, Texas.

Industrial

Stamping & Mfg. Co., Detroit
$500,000 of first mortgage
(with warrants to purchase 60,000
shares of common stock) and 400,000 shares of common
stock
(par $1). Of the latter, 272,000 shares will be
publicly offered and 28,000 shares will be offered to cer¬
bonds

(by amendment)

due

1967

tain officers and directors of the company;
to

be

be

reserved

optioned

for

60,000 shares
options; and 40,000 shares to
underwriter of the bonds. Price—

stock

to the

bonds, 100; and of stock to public and employees, $1
per share.
Underwriters—For bonds, P. W. Brooks &

Co., Inc.; for stock, Baker, Simonds & Co. Proceeds—
To pay mortgage and certain debts, and balance added
to working capital, part of which will be used to reduce
bank loans.
Offering—Expected early in August.
Interstate

Finance

—To complete an ocean ferry,

inal facilities, to pay current

•

to finance dock and term¬
obligations, and to provide
working capital. Statement effective May 10.
Gulf

Stream

Frozen

Foods, Inc., Miami, Fla.
June 30 (letter of notification) 100,000 shares of 6% pre¬
ferred stock (par $1), each share convertible into two
shares of common stock one year after date of issuance,
price—$3
To

buy

share.
Underwriter—None.
Proceeds—
food for distribution. Office—26 N. E. 27th

per

sea

St., Miami, Fla.
Haloid
June

Co., Rochester, N. Y.
47,183 shares of common stock

filed

16

offered

common

of

share

stockholders of record

for

each

three

July 6

held.

shares

(par $5)
on

Jaco Realty,

July

will

6

fund

debentures.

Price—At

100.

—14

of

3%

sinking

shoe factory.

Office

Spring Street, Portland, Me.

Kauai

Engineering Works, Ltd., Lihue, Hawaii
June 23 (letter of notification) 98,000 shares of com¬
mon
stock
(par $1).
Price—$1.10 per share.
Under¬
writer—Ross & Co., Box 2665, Honolulu, T. H. Proceeds
—For working capital.
Co.'s Address—Box 1589, Lihue,
T. H.

Kentucky Utilities Co., Lexington, Ky.

derwriters—Issue

pers

Business—Sensitizing photographic and photo¬
papers and manufacturing photocopy cameras, pa¬
and other photographic supplies. Statement effec¬

tive July 7.
•

Harvesters

into

Casualty Co., Denver, Colo.

common

stock

at

rate

of

21

July

shares

per

11

stock

to

cates.

be

offered

Price—10

None.

Office—1229

Harvill
June
stock
26

on

Calif.
16 (letter of notification) 150,000 shares of common
(par $1) to common stockholders of record June
of

one

share

for

each

four

held,

with

an

oversubscription privilege; rights expire July 31. Price—
70

cents

per

share.

Underwriter—None.




sale

holders of

to

cents

per

complete
Old

ore

share.

production

certifi¬

Underwriter—None.

development of

National

mining claims.
Building, Spokane 8,

Bank

Proceeds—For

29

mon

Marine

due

Jan.

stock (par 20

of debentures and
per

unit.

units

of

of

the

Mich.

e'

—2761

ch).

Price

Underwriter—None.

common

subsequent resale
•

$200

working capital and

cumu¬

At

—

of

Proceeds—To pro¬

funds for the "ultimate

stock

7%

principal
pur¬

of

retiring executives and
credit'to junior executives." Office

on

E.j Jefferson Ave.. Detroit, Mich.

Mercantile Credit Corp.,

Wichita, Kansas

June 30 (letter of notification)
200,000 shares of common
stock (par $1).
Price—$1.50 per share. Underwriter—

None.

Proceeds—For

fice—609

general

Scott St., Wichita.

corporate

Of¬

purposes.

Kan.

Merry Brothers Brie"' & Tile Co., Augusta, Ga.
June 15 (letter of notification) 1,250 shares of 5% cumu¬
lative preferred stock.
Price—At par ($100

per share).
Underwriter—Johnson, Lane. Space & Co., Inc. Proceeds
Ernest B. Merry, Jr., Vice-President and General
Manager, the selling stockholder.

—To

Mid-States
June

2

(letter

of

Equipment Co., Detroit,
notification) 3,148 shares

Mich.
of

common

stock.

Price—$1 per share. Underwriter—Greenfield, Lax
Co., Inc,, New York, N. Y. Proceeds—To Greenfield,

&

Lax &

Co., Inc.

Middle South Utilities, Inc.
June 1 filed 400.000 shares of common stock
(no par) to
be offered to preferred stockholders of three subsidiaries
—Arkansas Power & Light Co., Louisiana Power &
Co.

Light
Mississippi Power & Light Co. Underwriter—
Securities Corp will serve as "dealer-man¬

and

Equitable
ager."

Deposits — May
be
accepted
between
June
July 14. (See also listings of Arkansas, Louisiana
and Mississippi companies elsewhere in these
columns.)
Middlesex

Feb. 9
at

$50

Water Co.,

(letter of

per

Newark, N. J.
notification) 5,200 shares of

common

share

common

stockholders of record March 17

one-for-five basis.

on a

Clark, Dodge & Co.

Underwriter—

Proceeds—To

pay notes and
Expected this month.

additional working capital

for

Miles

Laboratories, Inc., Elkhart, Ind.
(letter of notification) 2,500 shares of common
stock (no par).
Price—$16 50 per share. Underwriter—

June 23

Co., New York City.

Proceeds—To two selling

stockholders.
Miller

March

6

(Walter

(letter

R.)

Co., Inc.
notification) 1,000

of

cumulative preferred stock

shares

of

at par ($100 per share).

6%

Un¬

derwriter—George D. B. Bonbright & Co., Binghamton,
N. Y.

Proceeds—To assist

in acquisition of

1216 shares

Mississippi Power & Light Co.
May 23 filed 85,000 shares of cumulative preferred stock
(par 100). Proceeds—To be used to redeem at $110 per
share plus dividends, the outstanding 44,476 shares of $6

preferred

Base,

1,

1960, and

2,500

as

of 10-year 6%
shares of com¬

cents), to be offered in units of $1,000
100 shares of common stock at $1,000

Underwriter—Pulis,

Dowling

&

Co.,

New

on

June

follows:

with
a

stock

purposes.

(EDT)

Inc.
(letter of notification) $25,000

debentures

(in

amount of each.

rate

Lakeland
June

Detroit,

Pro¬

St., Los

$200,000

bonds

on

Wash.

Office—810—14th St., Denver, Colo.

Corp., Los Angeles,

basis

competitive

Mines, Inc., Spokane, Wash.
(letter of notification) 375,000 shares of capital

Proceeds—To

Commissioner.

at

Kimball

July 3

Inc.,

6th

of company's common stock

debenture.

Price—At principal amount.
Underwriter—
Proceeds—For deposit with Colorado Insurance

awarded

was

to

Kidder, Peabody & Co. and White Weld &
Co. on their bid of 100.531 naming a 2%% interest rate.
Reoffering expected this week at 101.108, to yield ap¬
proximately 2.82% to maturity.
•

July 6 (letter of notification) $75,000 of 6% debentures,
in denominations of $500 each; callable at 105 and con¬
vertible

Maxon,

No underwriter.

Office—1600 E.

June 22 (letter of notification) 1,000 shares of 6%
lative preferred stock
(par $50) and

Cohu &

The First
purposes.
copy

working capital.
Angeles, Calif.

stock offered to

expire July 24.

Price—$28.50 per share. Underwriter—
Boston Corp. Proceeds—For general corporate

stock at $60 per unit.

common

ceeds for

26 and

Underwriter—None.

Proceeds—To buy land and build a

basis

Rights

Inc., Portland, Me.
(letter of notification) $100,000

June 2 filed $3,500,000 of first mortgage bonds, series C,
due July 1, 1980. Proceeds—For property additions. Un¬

one

of

chase

Inc., San Antonio, Tex.

July 8 (letter of notification ^67,000 shares of common
stock. Price—At par ($1 per share). Underwriter—None.
Proceeds—For development of oil
business.
Office—

July 6 filed

(Calif.)
(letter of notification) 5,000 shares of preferred
(par $50) stock and 5,000 shares of common stock (par
$10) in units of one share of preferred and one share

vide

Holdeman Petroleum,

115 St.

Market Wholesale Grocery Co.

June 19

common

of

Corp., Dubuque, Iowa
June 14 (letter of notification) 4,000 shares of common
stock (par $5) and 2,000 shares of B common stock (par
$5). Price—$25 per share. Underwriter—None. Proceeds
—To increase working capital.
Office — 1157 Central
Ave., Dubuque, la.

•

Maltine

of

Jacksonville,

19

•

5

Canada

Newhall, Calif.

282,250 shares of capital
Price—At par ($1 per share).
Underwriter—Floyd
Allen & Co., Inc., Los Angeles, Calif. Proceeds—To

•

Angeles 45, Calif.

stock

May 26

California,

(letter of notification)

Co., Morris Plains, N. J.
(letter of notification) 3,000 shares of common
$1), to be offered to employees about July 18.
Price—$5 per share less than bid price on day pre¬
ceding offering date. Proceeds—For general corporate

ment.

vately.

of

stock (par

The Ohio

Georgia Pacific Plywood & Lumber Co.
June 27 (letter of notification) 4,000 shares of common
stock (par $1).
Price—$14.50 per share. UnderwriterReynolds & Co., New York. Proceeds—To selling stock¬
holder.
Offering subsequently withdrawn. Placed pri¬

Statement effective June 12.

Chemical

Debentures

Higgins, Inc., New Orleans, La.
May 23 (letter of notification) 30p,000 shares of

Co., Columbus. Proceeds—To purchase equip¬
Price—Expected at 101.75.

$4.65

a

July 6

two

Telephone Co., Geneva, Ohio
June 13 (letter of notification) $25,000 of 15-year 3%%
series A first mortgage bonds, due 1964. Underwriter—

follows:

as

share with

ard A. O'Conner, President of the
company. Underwriter
—Francis I. DuPont & Co., Chicago. Office—2131 Bueter
Road, Fort Wayne. Ind.

1950

Columbia Gas System, Inc

account

July 6.

Geneva

per

Co., Fort Wayne, Ind.
(letter of notification) 5,500 shares of common
stock (par $1). Price—$18 per share. Proceeds—To Rich¬

The

companies pending the permanent financing of new con¬

made

were

Common

Petroleums, Ltd.__
.

bids

Magnavox

1950

held.

offering will include an oversubscription privilege.
Rights will expire on July 19.
Price—$25 per share.
Underwriters—Paine, Webber, Jackson & Curtis; Stone
& Webster Securities Corp. and Mitchum, Tully & Co.
Proceeds—To purchase additional common stock of op¬
erating subsidiaries, and to make advances to these

$4.80 dividend.

a

June

July 27,

Three

Corp., $100.40

buy land, build a plant and equip it to produce so-called
"impact" plastics. Office—244 S. Pine St., Newhall, Calif.

Pfd.

&

a

General

in

1950
Bonds

oi preferred stock (par $100).
redeem, at $110 per shart plus
59,422 shares of outstanding $6

stock.

Preferred

Telephone Co

the

rejected.
Securities

May 31

Public Service Co. of Colorado__Debentures & Pfd.

common

share-for-share basis
in exchange for outstanding preferred stock of W. L.
Douglas Shoe Co. No underwriter.
to be offered

1940

A.

Mutual

Light Co.

dividend; Blyth & Co., Inc., and Equitable Securities
Corp. (jointly), $100.10 with a $4.65 dividend; and W. C.
Langley & Co. and First Boston Corp. (jointly), $100.30

1950

United States Plywood Corp

Corp., Nashville, Tenn.

maximum

a

(par $1)

accruals,

but

Union

with

July 25,

30

stock

19,

Common

Preferred

July 20,

&

to

preferred*stock, and for construction and other purposes.
by company up to noon (EDT) on June

Gas

19,

Power

Bids—Received

Loven

poned.

June

Com.

(par 250)

Underwriter—Mercer Hicks Corp.,
New York. Proceeds—For plant and warehouse, adver¬
tising research, working capital, etc. Temporarily post¬
Shoe

dividend

Notes & Com.

Price—$3 per share.

General

1950

Fedders-Quigan Corp.
stock

Louisiana

May 23 filed 90,000 shares
Proceeds—To be used

Corp

Natural

12.

Co., Inc.
common

Common

Equip. Trust Ctfs.

Telephone

Office—630 Fifih Avenue, New York 20,

New York.

Preferred

Pipeline Co.

Claybaugh & Co., New York. Proceeds

—For

Pfd. & Com.

(CDT)

Rochester

100,000 shares of

placed

Proceeds—For working capital and general cor¬

porate purposes.

California, Ltd
Chicago, Rock Island & Pacific RR.
noon

Front

be

stock

1950

Canadian Superior Oil of

modern¬

ize plant, lines and other telephone facilities.

June 2

18,

To

June 30

Class A & Com.

17,

Hopatcong, N. J.

^

Leigh Foods, Inc. (N. Y.)
(letter of notification) 300,000 shares of capital
(par 10 cents). Price—$1 per share. Underwriter

1950

Products, Inc
Sightmirror Television Corp
Southern Electrical Corp., Inc

June 29 (letter of notification) 1,200 shares of 4% cumu¬
lative preferred stock.
Price—At par ($25 per share).

Office—Lake

privately.

—None.

July

Office—595 Fifth Avenue, New

York, N. Y.
Fiorala

15,

Proceeds—To purchase property and for
working

capital.

NEW ISSUE CALENDAR

31

a

$4.80

and

for construction

and

other

Bids—Received by company
19 but reiected.

Four

bids

up

corpo¬

to

were

noon

made

Union

Securities Corp., $100.10 per share
dividend; Lehman Brothers, $100,551 with

$4.85 div.; W. C. Langley & Co. and First Boston Corp.
a $4.90 dividend; and Blyth & Co.,

(jointly), $100.30 with

Continued

on

page

32

32

The Commercial and Financial Chronicle

(188)

Continued

from

ferred

31

page

Mohawk Business Machines

•

.stock

$1.12%-$1.25

Fifth

Hicks".- Office—743

Mercer

Proceeds

Underwriter—None.

share).

per

three

and

Price—$100.30

shares.

common

Underwriter—Burke & MacDonald, Kansas
Proceeds—For working capital. Office—3543
Broadway, Kansas City, Mo.

Avenue,

New

York, N. Y.

Inc., Cincinnati, O.

Service

Public

June

10,148 shares of common
Price—At the market (about

ceiits).

10

(par

—To

Corp.

(letter of notification)

July 5

share

unit.
City, Mo.
per

Inc., Equitable Securities Corp., Shields & Co., White,
Weld & Co. and Kidder, Peabody & Co. (jointly), $100.19
with a $4.90 dividend. Statement effective June 12.

filed

26

of Colorado

Co.

due

100,000 shares of cumulative preferred stock
(par $100). Underwriters—To be determined by com¬
petitive bidding, along with prices, interest rate on de¬
bentures and dividend rate on preferred stock. Probable
bidders for bonds: Halsey, Stuart & Co. Inc.; Blyth &

$100). Price—$25 per
preferred. Underwriter—None.
Proceeds—To increase
available capital for loan business.
Office—123 E. 6th

St., Cincinnati, O.

Harris,

Honolulu, Hawaii (7/25)
June 27 filed $1,000,000 first mortgage bonds, series G,
due 1980, and 100,000 shares of preferred stock, series C
(par $10), the new preferred stock to be offered initi¬
ally to common stockholders and employees of the com¬
pany at rate to be filed by amendment. Price—Of bonds
to be filed by amendment; of preferred, at par.
Under¬
writer—Kidder, Peabody & Co. Proceeds—For construc¬

struction.

1,200 shares of common
preferred stock (par
share for common and $100 for

(letter of notification)

June

7

stock

(no par) and 1,000 shares of

Mutual Telephone Co.,

tion

and

expansion program.

Inc.

National Automotive Fibres,
June

(par $1).

140,000 shares of capital stock

filed

19

Price—To be related to the current market

price at the

Underwriter—Reynolds & Co., New York.

time of sale.

purchase assets of Federal Leather Co. (An
additional 10,000 shares were to be sold to Louis M.
Plansoen, President of Federal, at the same price.) Pro¬
Proceeds—To

posed offering cancelled on June 29. Deal off.

raise $1,000,000 at $5,000

offer only sufficient shares to

Co.,

Inc.,

and

Hall

&

Co.,

(jointly.)

Inc.

Rainbow Onyx Co.,

Proceeds—For

share. No underwriter. Proceeds to be used to ex¬
plore and develop oil and mineral leases. Statement ef¬
fective May 22.
per

Norris Oil Co., Ventura,

Phoenix, Ariz.

ating

capital.
Address—P.
Phoenix, Ariz.

O.

Box

3210

6112,

South

19th Ave.,

Raytheon Manufacturing Co., Waltham, Mass.
July 12 filed 289,459 shares of common stock (par $5)*
to be offered to present holders of common stock at rate
of one share for each five shares held. Price—To be filed
amendment.
Underwriters—Hornblower & Weeks
Paine, Webber, Jackson & Curtis. Proceeds—For
working capital. Business—Electronic tubes and equip¬
by

and

Re-No Chemical

•

radio sets.

Fairmount

Ave., Baltimore, Md.

stock.

Price

&

None.

Proceeds—To

Co., Los Angeles; and James Ebert Co., Bakersfield,
Proceeds go to Eva M. Halliburton, Fresno, Calif.,

the

Office—182

stockholder.

selling

W.

Ramona

St.,

Ventura, Calif.
North
June 26

American

dividend

series
per

increase

receivable

Office—765 W. Lancaster

Northern

"May 10
common

Illinois

and

for

items

working capLal.

Corp., Chicago

$2(band $22 per share) by T. Howard Green,
Vice-Presisgnt\)f the company. Underwriter—Faroll

Sc Co., Rogers & Tracy and Shields & Co., Chicago.
Northwestern

Public

toe offered

Service

Co., Huron, S. D.
stock (par $3) to
present stockholders at rate of one share

to

each 10 held.

or

Resort

common

Oil

Co., Los Angeles, Calif.
June 19 (letter of notification) 197,672 shares of capital
stock (par $1). Price—$1.50 per share.
Underwriter—
None.

Proceeds—To pay

bank loans and increase work¬
Office—811 W. 7th St., Los Angeles, Calif.

ing capital.

May 5

(letter of notification)

now

held in treasury.

Underwriter—None.
Watt

and

Schoyer.

1,100 shares of

common

Price—50 cents per share.

To be offered
through Preston,
Proceeds—Toward repayment of

Co., Orchards, Wash.
March 16 (letter of notification) 500 shares of common
stock.
Price—At par ($100 per share). Underwriter—
Proceeds—To modernize plant.

Orient

(Wash.) Eureka Gold Mines Co.
June 29* (letter of notification)
332,324 shares of common
stock (par 10 cents). Price—50 cents
per

writer—None.

(7/27)

June

30 filed
900,000 shares of common stock (par
$l-Canadian). Price—To be filed by amendment. Under¬

writer—Eastman, Dillon & Co.
loan and for corporate
of oil and gas lands.

Pan

American

purposes,

Proceeds—To pay

bank
including development

Gold

Ltd., Toronto, Canada
July 20, 1948 filed 1,983,295 shares of common stock (par
$1). Underwriters may be brokers. Price—45 cents per
«

share.

Proceeds

—

Mainly for development. Statement

effective April 10, 1950.
Power

Petroleum

Ltd., Toronto Canada

April 25, 1949, filed 1,150,000 shares ($1 par) common
of which 1,000,000 on behalf of
company and 150,000 by
New York Co., Ltd.
Price—50 cents per share.
Under¬
writers—S. G. Cranwell & Co., New York.
For administration expensed and

drilling.

Proceeds—

Statement

effective June 27, 1949.

?

,

Prestressed Concrete Corp., Kansas

City, Mo.

July 5 (letter of notification) 2,500 shares of 5% cumula¬
and 7,500 shares of com.
(par 10 cents), to be offered in units of one pre¬

te preferred stock (par $100)
stock




—Ill Cedar

of

July

rentals

11

So. La Salle St., Chicago,

and

obligations. Office—1609 Roanoke Bldg.,

Rochester

June 29
to

111.

Telephone Corp. (7/13)
filed 125,000 shares of common stock (par $10)
(N,

Proceeds—For

Street, New Rochelle, N. Y.

Office

Expected week

17.

Simmel-Meservey Television Productions, Inc.
June 29 (letter of notification) 150,000 shares of common
stock

(par

$1).

Price—$2

Koellmer & Gunther,

share.

per

Newark, N. J.

Underwriter—

Proceeds—To com¬

plete films in -progress and for general corporate pur¬
poses.
Office—321 So. Beverly Drive, Beverly Hills,
Skiatron Corp.,
June

New York City
(letter of notification) 500 shares

27

of

common

Price—At approximate market ($1.50 per share).
Underwriter—Hirsch & Co., New York City. Proceeds—

stock.

selling stockholder.
Skiatron Corp.,

New York City
(letter of notification) 2,500 shares of capital
(par 10 cents) of which there will be presently
sold 1,500 shares at $1 per share, the remaining 1,000
shares, to be offered later at $1.50 per share. Under¬
June

22

stock

writer—d'Avigdor & Co., 63 Wall Street, New York City.
selling stockholder.
Office—381 Fourth
Avenue, New York City.
Proceeds—To

June 26
stock

Shore Oil

&

Development Co.

(letter of notification) 50,000 shares of common

(par

mately

10

Price—At the

cents).

$4.871/2

$5.12Vz

market

(approxi¬

share). Underwriter—
None.
Proceeds—For working capital and general cor¬
porate purposes. Office—401 Carondelet Building, New
Orleans, La.
Southern

to

per

Co., Atlanta, Ga.

June 23 filed 1,000,000 shares of common stock (par $5).
Underwriters—To be determined by competitive bidding.

bidders

Morgan Stanley & Co., Kidder,
Merrill Lynch, Pierce, Fenner &
(jointly); Blyth & Co., Inc. and Bear, Stearns &

Peabody
Beane

&

Co.

are:

and

Co.

(jointly); Lehman Brothers; Union Securities Corp.
(jointly); Harriman Rip¬
ley & Co., Inc. Proceeds—To purchase shares of subsid¬
iaries in order to assist them in financing new construc¬
tion.

Bids—Had

Y.)

be offered to present

been scheduled to be received at office

of the company,
11:30

20 Pine Street, New York, N. Y., up to
(EDT) on July 25, but offering has been de¬

a.m.

ferred

until market conditions improve.

June

21

filed

Electrical

Corp.,

Inc.

(7/17-18)

cumulative preferred
stock (par $50) with 64,000 stock purchase warrants tb
buy 64,000 shares of common stock (par $3), and 15,000
shares of

May 19 (letter of notification) 300,000 shares of common
stock (par 50 cents) to be sold at $1 per share. No
underwriter. Proceeds for drilling activities and payment
of

Co., New York.

•

an

Development Co., Chicago, 111.

16,000 shares of 6%

stock with 15,000 warrants to purchase

common

additional

15,000

stock is offered

shares

by the

offered

warrants

of

The preferred
with four stock purchase
share. The com¬

common.

company

wtih

each

preferred

stock is offered

mon

by three stockholders, with an op¬
accompanying each share. UnderwritersCourts & Co.; The Robinson-Humphrey Co. and Clement
A. Evans & Co., Inc., Atlanta, Ga. Price—$50 per share,
plus accrued dividend from July 1 for the preferred
with purchase warrants at 5 cents each; $8.25 per share
tion warrant

stockholders at rate of one new
July 18, with rights to expire
Aug. 3. Price—To be filed by amendment. Underwriter
—The First Boston
Corp., New York.
Froceeds—For
general corporate purposes, including construction and

for the common, plus 5 cents for each warrant. Proceeds
—From the sale of the preferred, together with a $750,000
loan ,will be used to expand the company's operations.

repayment of a

cable.

share for each four

held

loan.

Business

Drawing aluminum and copper wire from
stranding aluminum, copper and steel wire into
—

rods and

Southwest

Works, Inc., Newark, N. J.

Natural

1,300 shares of common
stock (par $1) to be sold lor the benefit of the estate of
Louis V. Aronson at the going price on the New York

June 26

Stock

Gas

Co., Shreveport, La.
13,500 shares of common

Co., New York City.

(letter of notification)

May 29

Exchange, which

was

$18.25 per share on May 25.
City.

stock

(letter of notification)

to

&

record

share for each 10
held. Of the preferred, 205,661 shares will be offered in
exchange for 186,965 shares of outstanding 5% preferred
stock, along with an unspecified cash payment. Under¬
writer—Merrill Lynch, Pierce, Fenner & Beane will offer
July 18 at the rate of

the unsubscribed
of

preferred

not

common

needed

one new

shares

for

as

the

well

as

85,114 shares

exchange

and

30,225

shares which will be created by converting

sold

Standard

stock

by

Television

($1

par

for capital to
ture films.

of

9

of

per

share).

offered

June

5,

shall not

$15

per

amendment,

1.

Price—To

be

filed

along with the dividend rate on the

by
new

Proceeds—To redeem the unexchanged 5%
stock, make cash payrrfents on exchange, and toward the
prepayment of $20,000,000 in bank loans.
Offering—

preferred.

Temporarily postponed.
Seneca Oil Co., Oklahoma City, Okla.
April 27 (letter of notification) 225,782 shares of class A
stock (par 500).
Price—$1.25 per share. Underwriter—
Genesee Valley Securities Co., Rochester, N. Y.
Proceeds
—To acquire properties and for working capital.

exceed

share.

number

of

offering price

$100,000.

Price—At

Underwriters—Antici¬

Dillon & Co., New York, will sell
shares in over-the-counter market.
Proceeds—To SBN
West Orange, N. J.

Sudore

Gold

Placed privately.

Mines Ltd.,

Toronto, Canada

June 6, 1949, filed 375,000 shares of common stock.

—$1 per share (U. S. funds).

Underwriter—None.

Price
Pro¬

ceeds—Funds will be

ment,

road

applied to the purchase of equip¬
construction, exoloration and development.

Tele-Tone

Radio Corp., N. Y. City
(7/15)
135,000 shares of common stock (par $1).
share. Underwriters — Sills, Fairman &

Harris; Straus & Blosser.

Oct.

common

Proceeds

pated that Eastman,
Gas Co.,

will

on

No underwriter.

shares (par $1), so that aggregate

June 22

redeemed

Mesa, Ariz.

Propane Gas Corp.
of notification) a sufficient

that many of
the old 5% shares brought in under the exchange into
new preferred stock.
Any old preferred not exchanged
be

Co.,

begin producing television and motion pic¬

(letter

shares

close

Film

Address—P. O. Box 915, Mesa, Ariz.

Suburban
June

M„ Craigmyle, at market
through Craigmyle, Pinney &

Ronald

(letter of notification) 300,000 shares of

at

common

Safeway Stores, Inc.
June 8 filed 321,000 shares of cumulative preferred stock
(par $100) and 257,064 shares of common stock (par $5).
The common will be offered to common stockholders of

be

(about S7.37V2 per share)

June 12

Electronics, inc.,
Washington, D. C.
June 22 (letter of notification) 600,000 shares of common
stock (par 10 cents). Price—50 cents per share. Under¬
writer—None. Proceeds—To buy television set compo¬
nents. Office—714 Fifth St., N. W., Washington, D. C.
Royal Television

share. Under¬

Proceeds—To equip and develop mine.

Pacific Petroleums Ltd.

Underwriter

Proceeds—For working capital.
Oil

&

payment of patents, etc., and for working capital.

Underwriter—Ross Blanchard & Co., New York

Orchards Telephone

«>

Underwriter—Tellier

and Equitable Securities Corp.

Inc., Pinehurst, N, C.
13,547 shares of common

Airlines,

Ronson Art Metal

bank loans.

None.

capital.

(letter of notification)

Richland

Ohio Oil & Gas Co.
stock

working

capital stock. Price—At par ($1 per share).

Underwriter—A. C. Allyn and Co., Inc.,

Price—To be filed by amendment. Proceeds
-—For construction expenditures. Postponed temporarily.

19

—None.

New York.

Oceanic

additional

Television Corp. (7/17-21)
(letter of notification) 749,000 shares of com¬
(par 1 cent).
Price—40 cents per share.

Southern
June

^tter of notification) up to 2,000 shares oi
sthfik (no par) to be sold at the market price

June 9 filed 49,200 shares of

At par ($10 per share.)
Underwriter—
restore depleted stocks, buy new

Reorganized Silver King Divide Mining Co.
(letter of notification) 55,000 shares of capital
(par 10 cents). Price—16 cents per share. Under¬
writer—None. Proceeds—To pay property purchase obli¬
gations and replace working capital. Office—139 N. Vir¬
ginia Street, Reno, Nevada.

(between
za

for

and

Office—111

stock

Probable

•

Avenue, Bryn Mawr, Pa.

Coal

Brothers, Ltd., San Francisco, Cal.

April 3 (letter of notification) 10,000 shares of preferred

stock

cumulative preferred
stock (par $5).
share.; Underwritei^None.
Proceeds—

notes

installations,

July 6

Acceptance Corp.

(letter of notification) 20,000 shares of 61-cent

Price—$10
To

B.

—

'selling stockholder.
Rochelle, N. Y.

Sightmirror
mon

South

Refrigeration, Inc., Reno, Nev.
June 19 (letter of notification) 200,000 shares of common
stock to be offered at par ($1 per share), through Gerald

Reid

Proceeds—To

June 21

Corp., Baltimore, Md.

(letter of notification) 2,500 shares of common
stock
(no par).
Price—$10 per share.
Underwriter—
None. Proceeds—For working capital. Office—1314 West

Ilolton, Hull & Co., Dempsey-Tegeler & Co. and Morgan
Calif.

Y.

Cedar Street, New

To

•

ment for television and

(par 5 cents).

Calif.

(letter of notification) 80,000 shares of common
stock (par $1).
Price—$1.50 per share. Underwriter—
None.
Proceeds—For machinery, equipment and oper¬

James, Reno. Proceeds for equipment,
manufacturing and reserve.

9

(letter of notification) 18,500 shares of common
Price—20 cents per share. Under¬
writer—Butler, Moser & Co., 44 Wall Street, New York,

June 8

Calif.
(letter of notification) 5,000 shares of common
.stock (par $1), to be sold at the market price (of from
$5 to $5.50 per share) through First California Co.,
June

A*

con¬

July 3

Norlina Oil Development Co., Washington, D. C.
March 28 filed 600 shares of capital stock (no par.) To

Sightmaster Corp., New Rochelle, N. Y.
stock

1960, and

Smith, Barney & Co. (jointly); Lehman
Brothers; First Boston 'Corp.; Harris, Hall & Co., Jnc.;
Kidder, Peabody & Co. Probable bidders for preferred:
Glore, Forgan & Co. and W. C. Langley & Co. (jointly);
Lehman Brothers; First Boston Corp., Boettcher & Co.
and Bosworth, Sullivan & Co.; Kuhn, Loeb & Co. and

Mutual Credit of Cincinnati,

Thursday, July 13, 1950

.

.

June 20

N.

(7/25)

of convertible debentures,

$7,000,000

.

filed

Price—$6

per

Proceeds—To 15 selling stock¬

holders.
Tele-Tone
June

22

class

A

filed
stock.

Radio
100.000

Corp., N. Y. City
shares

Price—At

of

par

(7/15)

cumulative

($10

per

convertible

share).

Under¬

writers—Sills, Fairman & Harris; Straus & Blosser. Pro¬
ceeds
For additional plant facilities and for
working
capital.
—

Television Associates,
June 26
stock.1

ifcic., Michigan City,

(letter of notification)
Price—At

par

($5

per

15.623 shares of

share).

Ind.

common

Underwriter—

.Volume 172

None.
for

Number 4924

cancel

Proceeds—To

The Commercial and Financial Chronicle

....

existing

indebtedness and

a

Prospective Offerings

Office—East Michigan Street, Michi¬

working funds.

City, lnd.

gan

Texas

June

Aetna

Natural Gas Pipeline Co. (7/18)
$12,000,000 of interim notes, due Jan. 1,

Illinois

filed

26

June 3 it

stock will be offered to holders of
one new

remainder

to

outstanding common
Co. and

notes.

Price—Of

stock,

common

$10

construction

of

pipeline facilities.

Busi¬

ment.

stock

—To

stockholders at

United

States

<

Associated

vertible preferred stock

Dillon

(par $100).

Univis

Jun

26

per

Associated

con¬

Underwriter—East¬

$8,000,000

common

held.

Underwriter—None.

Price—At

par

Proceeds—To pay

first

end

this

of

of Michigan,

Inc.
plans early registra¬
capital stock, with offering toward the

month.

stock.

Underwriter—J.

Proceeds—To

cents

per

share.

develop mine.

June

27

tion.

000 loan

Underwriter—None.

Office—15 So. First Ave.,

it

was

reported

if

Mines, Ltd.,

mill

for

small

mine

bentures for

July 11

(letter of notification)

of

$100 each.; Underwriter—None.

loans and.for working capital.

tion

Price—In units

mon

make

son

in

*

20

years.

Price—In

units

each* Upderwriter-^-None. Proceeds—To make
loans^and for working, capital. Offiee—7700 Bergenline
Avenue, No. T3ergeny N.
of: $100




Corp.

package price of $18.

a

The

common

stock,

&

July 1, 1952. Re¬
funding of the first and refunding mortgage 4^4% bonda^
series A, due Sept. 1, 1962, is also said to be a
possibility.

Probable bidders: Halsey, Stuart & Co.
Inc.; Morgan
Stanley & Co.; Lee Higginson Corp.; Harris, Hall & Cow
(Inc.); Drexel & Co.; Kuhn, Loeb & Co. and Salomon
Bros. & Hutzler (jointly); Harriman, Ripley &
Co., Inc.;
First Boston Corp.; Lehman
Brothers; Paine, Webber,
Jackson & Curtis; Kidder,
Peabody & Co.

Commercial

Credit

Co.

March 30
stockholders
approved creation of 500,000
shares of cumulative preferred stock (par
$100) of which

plans to sell 250,000 shares. A group of under¬
writers, headed by Kidder, Peabody & Co. and The First
Boston Corp., are expected to offer the stock.

company

Edison Co. of New
York, Inc.
May 15, Ralph H. Tapscott, Chairman, said the company
will require approximately
$90,000,000 of "new money"
through the sale of securities. No permanent financing is
contemplated before this fall, however, and current ex¬
penditures are being financed by short-term loans, of
that

$16,000,000 are now outstanding. It is anticipated
$257,000,000 will be needed for the construction pro¬

gram
sey,

the next four years. Probable bidders: Hal¬
& Co. Inc.; Morgan Stanley & Co.; First

over

Stuart

Boston

Corp.

Duquesne Light Co.
June 22 it

100,000

was

shares

reported that company may issue about
preferred stock.
Probable bidders:

of

Kuhn, Loeb & Co. and Smith, Barney & Co. (jointly);
First Boston Corp.; Lehman
Brothers; Kidder, Peabody
&
Co., Merrill Lynch, Pierce, Fenner & Beane and
White, Weld & Co. (jointly); Glore, Forgan & Co. Pro¬
ceeds

are

gram.

to repay bank loans and for construction
pro¬

Expected in the fall.

Eastern

May 23 it

\

Utilities Associates

was

•

announced that under

a plan filed with
will be formed to acquire the
assets of Eastern, and of the Brockton Edison
Co., Fall
River Electric Light Co. and
Montaup Electric Co. and

the SEC

will

a

issue

new

company

and

sell

$22,000,000

collateral trust bonds and

of

first

mortgage

and

$8,500,000 of preferred stock.

Elliott Co.
was reported that between 47,000 and 48,000
shares of this company's common stock may be offered
some time in the near futuer
through F. Eberstadt 8c

Co.

Emerson

Radio & Phonograph Corp.
Benjamin Abrams, President, announced that
company may use unissued 1,240,390 shares of capital
stock (par $5) to acquire additional
plant facilities if

May 29,

needed.

proximately $25,000,000
•

Granite

in

July

basis.

Curtis

Dealer

and

Managers—Paine,

Stone

&

retire

on

a

1-

Webber,

Jack¬
Webster Securities Corp.
$850,000 short-term loans.

Central

Vermont Public Service Corp.
May 4, it was announced that if offer to acquire Green
Mountain Power Corp. becomes effective, it plans to re¬
fund outstanding $7,715,000 first and refunding 3%%
bonds due 1963 of Green Mountain by the issue and sale

for cash of-first mortgage bonds of a new

series and of

capital through 1952.

new

City Steel Co.

July 11, company announced stockholders will vote Aug.
17 on increasing authorized common stock from
400,000
shares to 1,000,000 shares, and directors
approved tenta¬
tive plans for a proposed
offering to stockholders of
rights to subscribe t«i> additional common stock.
The
proceeds will be used to reimburse company for capital

expenditures
further
tion
an

already made and to provide funds for
capital expenditures contemplated. A registra¬

statement

is expected

to be filed with the SEC at

appropriate time.
Holeproof Hosiery Co.

June 22 it

was announced that
registration statement is
expected to be filed shortly covering not less than 25%
and not exceeding 33J/3% of the stock held
by principal

stockholders following proposed 7V2-for-l stock split up.
Underwriter—A. G. Becker & Co. Inc.
Houston Lighting & Power Co.
April 14, S. R. Bertron, President, estimated construction
expenditures for 1950 between $19,000,000 and $20,000,000.

This estimate may be raised to accommodate

demands

financing

it plans to file a registra¬
covering 90,000 shares of
stock (par $10), which are to be issued to com¬
late

Traditional underwriter: F. Eberstadt & Co.

Power & Light Co.
June 9 stockholders approved creation of 50,000 shares
of $4.50 cumulative preferred stock
(par $100). These
shares are soon expected to be offered to finance
part of
construction program which is expected to
require ap¬

power

Telephone Co.

Proceeds—Mainly to
t

July 11 (letter of notification) $150,000 of 6% cumulative
debentures due

Electric

stockholders of Central Electric & Gas Co.

for-13

Office—76 Tuscan Road,

Workers Finance Co.-of No. Bergen, N. J.

deferred

States

statement

common

Maplewood, N. J. V
••■

Probable underwriters:

June 22 company announced

N. J.

Proceeds—To

of

banking group headed by Hemphill Noyes, Graham,
Parsons & Co., Shields & Co., Blair, Rollins & Co., Drexel
& Co. and Sterling Grace Co.

$225,000 of 6% cumula¬

tive deferred .debentures, due in 20 years.

satisfactory,

a

operators.

Chicago & Western Indiana RR.
Jan. 31 reported company will
probably issue in the near
future some bonds to refund the 4% non-callable con¬
solidated first mortgage bonds due

new

debentures would be underwritten by Darien Corp. and

Central

Workers Finance Co., Maplewood,

considered

are

to buy a unit of one new common share and $1.75 of new
income debentures for a package price of $2.25 for each
five common shares held.
The issue of new stock and

Address—Box 455,,: Hailey,, Idaho.
•

conditions

initial series of this

except for approximately 4,600,000 shares held by Harri¬
son Williams and associates, would be offered the
right

1,000,000 shares of com¬
10 cents per share and 125,000

Stuart & Co. Inc.; Salomon Bros. & Hutzler; HarriRipley & Co., Inc. and Lehman Brothers (jointly):
Harris, Hall & Co. (Inc.).
sey,

Florida

was announced that under an amended
plan
reorganization it is proposed to issue to holders of all
classes of 6% preferred stock for each old share the right
to buy a unit consisting of eight shares of new common
stock and $14 principal amount of new 4V2% income de¬

shares to be issued to directors of the company for their
services.
Underwriter—Lackman & Co., Hailey, Idaho.
a

time this month.

March 1 it

Concentrating Co.

build

some

of

(letter of notification)

Proceeds—To

market

Central

May 23.

be sold at

a

Dillon, Read & Co. Inc.; Morgan Stanley & Co.

28 filed 800,000 shares of common
capital stock
(par $1). Price—35 cents per share. Underwriter—None
Proceeds—Exploration and development work. State¬

stock to

Issued in 1930 with

Morgan Stanley & Co.

additional production facilities.

Feb.

mon

is

preferred stock which may
be convertible into common stock.
Net proceeds would
be used in part for expansion of the business, including

an

Vancouver, B. C., Canada

Wood River

Government

Corp. of America
April 12 the stockholders voted to authorize the creation
of 1,000,000 shares of a new preferred stock (par $100),
505,000 shares of which can be issued at any time.
Plans are being formulated for the issuance this
year,

Western Oil Fields, Inc., Denver, Colo.
May 5 (letter of notification) 600,000 shares of common
stock and a $50,000 note carrying interest at 4%
payable
from percentage of oil sold.
This note will carry with
it as a bonus 500,000 shares of stock.
Price—Of stock,
250 per share.
Underwriter—John G. Perry & Co., Den¬
ver.
Proceeds—To drill for oil in Wyoming and for
working capital.

June 26

Canadian

extensive refinancing opera¬
plan refunding of a $100,000,-

Celanese

_

ment effective

the

payable in U. S. dollars.

Probable underwriter:

ceeds—For equipment, real estate, working capital and
general corporate purposes. Office—Virginia and Truckee
Building, Carson City, Nev.

received

be

man

Co.,

an

ilege is expected to be exercised

Corp., Carson City, Nev.
May 29 (letter of notification) 300,000 shares of capital
stock. Price—At par ($1 per share). Underwriter—Phil
Morsfe, Trustee, P. O. Box 1283, Kingman, Ariz. Pro¬

Cobalt

&

4% coupon, these bonds are due Oct. 1, 1960 and subject
to call Oct. 1, next, on 60 days' notice. The latter priv¬

Western Gypsum

Uranium

White

(Dominion of)

is understood to

It

RR. (7/18)
by the company, at Room 1136,
Station, Chicago 5, 111., at or before noon
(CDT) on July 18 for the purchase from it of $2,352,000
equipment trust certificates, series H, dated Aug. 1, 1950,
to mature in 24 equal semi-annual instalments from
Feb.
1, 1951 to Aug. 1, 1962, inclusive. Probable bidders; Hal¬
will

May 26 it

Canada

Phoenix, Ariz.

Western

G.

New York.

Copper Co., Inc., Phoenix, Ariz.
(letter of notification) 100,000 shares of common

Price—50

company

share

($50 per share).
bank loans.

Chicago, Rock Island & Pacific

Bids

stock (par $20) and

mortgage

announced

was

tion of additional

Western

June 29

common

preferred

making preparations for

•

•

of

Big Bear Markets
June 9 it

value. Prob-

preferred:

which

Ltd.
the

construction program.

Western Carolina Telephone Co., Franklin, N. C.
June 22 (letter of notification) 1,406 shares of capital
for each two shares

that

Bros. & Hutzler (jointly); Lehman
Brothers; Paine,
Webber, Jackson & Curtis and Stone & Webster Secur¬
ities Corp. (jointly); White, Weld & Co. and
Kidder,
Peabody
& Co. (jointly); Equitable Securities Corp.
and Harris, Hall & Co. (Inc.) (jointly).
Proceeds—For

Co., Columbus, Ohio
May 8 (letter of notification) 19,500 shares of common
stock at $10 per share. Underwriter—The Ohio Co. Pro¬
ceeds—To buy the assets of Brodhead-Garrett Co. and
for working capital.

one

Telephone Co.,
announced

mon

Vieh

for

Consolidated

company

bonds, series G.
Under¬
stock, probably Paine, Webber,
Jackson & Curtis, Stone & Webster Securities Corp. and
Mitchum, Tully & Co. For the bonds, to be determined
by competitive bidding.
Probable bidders for bonds:
Halsey, Stuart & Co. Inc.; Kuhn, Loeb & Co. and Salo¬

Office—401 Leo Street, Dayton, Ohio.

to stockholders at rate of

was

writers—For

sold to 33 employees. Price—
Underwriter—None.
Proceeds—For

stock to be offered

it

15

(par $20), a like amount of

Lens

general funds.

announced

.

.

Co.

company's present
intention is to raise approximately
$10,000,000 of addi¬
tional funds by selling, in the fall of the current
year,
50,000 additional shares of cumulative preferred stock

&

share.

was

Gas

a new
pipe line project in south¬
Missouri, authorized b.y FPC, to cost $934,000.

eastern

stock (par 50 cents), to be

$7.75

it

Natural

finance construction of

(7/20)

Co., Dayton, Ohio
(letter of notification) 19,750 shares of

eight shares

plans issuance of
$234,000 common stock and $450,000 of 18-year 4V2% first
mortgage bonds, plus a 5-year bank loan of $250,000, to

Co., New York. Price—To be filed by
amendment along with dividend rate. Proceeds—To in¬
crease working capital and for other corporate purposes,
including the erection of a new plant at Anderson, Calif.
man,

14

June

Plywood Corp.

each

(jointly); Blyth & Co., Inc.; Lehman Brothers; The First
Corp. Proceeds—To increase investments in stock
Michigan Consolidated Gas Co. and Milwaukee Gas
Light Co.
V
'
IV.. '

Proceeds

60,000 shares of series B cumulative

share for

one

of

common

Boston

selling stockholder.

June 19 filed

of

to

of

1,400 shares of common
Price—At market (about 75 cents

Exchange.

rate

issuance

Price—To be filed by amendment. Underwriters—
To be determined by competitive
bidding. Probable bid¬
ders: Glore, Forgan & Co. and W. C.
Langley & Co.

June

the New York Curb

on

Pro¬

held.

.

Underwriter—Tucker, Anthony & Co. will

handle sale

Underwriters—Glore, Forgan & Co.; Kidder, Pea-

May 18 it was announced company plans
380,607 shares of common stock (no par)

Profit-Sharing Corp.

share).

per

company

American Natural Gas Co.

(letter of notification)

(par 25 cents).

Investment Co. of Illinois

body & Co., and Alex. Brown & Sons, and others.
working capital.

Vance Bldg., Seattle, Wash.
United

Proceeds will be used

ceeds—For additional

Triplex Corp. of America, Pueblo, Colo.
May 18 (letter of notification) 28,571 common shares
to be sold at $7 per share. T. E. Nelson, Assistant Secre¬
tary of the company, will handle the sales on a commis¬
sion basis. Proceeds for working capital and payment
of obligations. Offices—Pueblo, Colo., or 1415 Joseph

June 28

Goldman,

is planning to file shortly
a registration statement
covering 160,000 shares of prior
preferred stock (par $50). Price—To be filed by amend¬

Transvision, Inc.
June 13 filed 300,000 shares of common stock (par $1).
Price—2.75
per
share.
Underwriter—Blair F. Claybaugh & Co., New York. Proceeds—To increase work¬
ing capital and repay loans from RFC and Croydon
Syndicate, Inc..
'
.

Corp.; Drexel & Co.

American

ness—Natural Gas pipeline transmission.

.,

underwriter:

bidders

La Salle Street

May 24 announced

notes, to be filed by amendment along with interest rate.
Proceeds—For

financing

for construction expenditures.

share; of

per

Traditional

year.

par

Halsey, Stuart & Co. Inc.; prob¬
W. C. Langley & Co. and
Hemphill, Noyes, Graham, Parsons & Co. (jointly).

Co.

First Boston

other

Weld
the

&

preferred stock, $100

33

bidders for bonds:

able

-

reported company may do some

series of

new

aoie

Alabama Power Co.
'
'
'
! !• H
May 12 company reported to be considering issue in late
summer of about $10,000,000
preferred stock. Probable
bidders: Morgan Stanley & Co.; Blyth & Co.,
Inc.; Union
Securities Corp. and Equitable Securities Corp.
(jointly);

stockholders, with Peoples taking
all shares not subscribed for. Underwriters—White,
& Co. nad Glore, Forgan & Co., will underwrite

up

this

Sachs

share for each 3V2 shares held and

will be sold 50% to Peoples Gas Light & Coke

Finance Co.

was

later

1952, payable upon maturity by delivery of cumulative
stock at the rate of one share for each $100
principal amount; 120,000 shares of cumulative preferred
stock ($100 par) to be used in paying off the notes, and
1,750,000 shares of common stock (par $1). The common
preferred

at the rate of

(189)

will

done through
financing.
•

on

the system.

increased

If this is the case, more
he added.
This may be

be necessary,
additional common

or

preferred

stock

Indiana Gas & Water Co.

July 5 it

was reported that the company may issue $9,500,000 of refunding mortgage bonds. Probable bidders:
Halsey, Stuart & Co. Inc.; First Boston Corp.; Harriman
Ripley 8c Co., Inc. and Blyth & Co., Inc. (jointly); Kid¬
der, Peabody & Co. Expected in August.

Iowa Southern Utilities Co.

April 26

company

said to

plan sale of first mortgage

bonds to finance part of its $3,200,000 construction
pro-

Continued

on

page 34

.

34

The Commercial and Financial Chronicle

(190)

Continued

jrom

page

New

York, New Haven & Hartford RR.
(EDT) on July 11 for
purchase from the company of $3,000,000 eqquipment trust certificates to be dated Aug. 1, 1950, and to
mature in 15 equal annual instalments of $200,000 each.

33

Probable underwriter:

1950.

gram for

Kaye-Halbert Corp., Culver City, Calif.
June 8, Harry Kaye, Bres.uent, announced that "it is
possible from time to time that additional financing
might be undertaken to facilitate the further growth and
development of the business." Office—3555 Hayden Ave.,
Culver City, Calif.

Underwriters—Salomon

$1,300,000

bank loans, due in September, 1951, and the remaining
$300,000 will go to Central Telephone Co., parent, to re¬
pay temporary advances lor construction.
Probable un¬
derwriter: Paine, Webber Jackson & Curtis.

Long Island Lighting Co.
May 18 it was reported coi.. any's construction program
in 1950 will cost $20,000,000 which is currently being
financed
manent

by

up

loans pending

to $12,000,000 bank

financing

which

may

per¬

competitive sale

(P.)

Co.

April 4, Herbert A. Kent, President, said: "It may be
necessary to do some financing" before Aug. 1, 1951 to
redeem $6,195,450 of 5% bonds due on that date and
for additional working capital to meet expanded sales
volume.
He added that company plans to pay, off its
bank loans in full by July, 1950. These loans now amount
to $12,000,000.
Traditional «nderwriters: Lehman Bros,
and Smith, Barney & Co.

Macy

(R. H.) & Co.
reported that company is considering issu¬
ance of $10,000,000 of new securities, either debentures
or preferred stock.
Traditional underwriters — Lehman
Brothers; Goldman, Sachs & Co,
May 8 it

was

Market

Los Angeles, Calif.
May 25 company announced it plans sale of 4,452 shares
of authorized but unissued
preferred stock, series C,
(par $15) and an additional 30,000 shares of preferred

stock,

Basket,

(par $15)

be authorized.

to

issue

•

Mich.

29

FPC

construction

granted

of

Gas

temporary

additional

•

FPC

gran led

jabilities

temp^ary

for bonds

Probable

debt

Niagara

June 21 it

was

Gas

a group
of 16 purchasers who acquired company's 500,000 shares
of common stock from American Power &

outstanding

common

senior securities and

common

over

stock

owns

plans to create

a

new

ized

preferred

shares.

There

stock
are

(par

$50)

presently

from

75,000

Plantation

•

outstanding
Lynch, Pierce, Fenner &

/

$37,000,000

early fall $10,000,000
50,000 shares of nreferred stock.
Probable
bidders:
(1) For bonds—Stuart & Co., Inc.;
(2) for bonds and preferred: Harriman Ripley & Co.
Inc.; Lehman Brothers; Kidder. Peabody & Co.; First
Boston Corp.; Merrill Lynch.
Pierce, Fenner & Beane;
(3) for preferred:—W. C. Langley & Co.
bonds

and

New England Public

April 7 SEC authorized

Service Co.

company to

file

an

application to

sell 200,000 shares of Public Service Co. of New
Hamp¬
common stock or a sufficient number of
shares of
Central Maine Power Co. common stock

shire

(about 225,000
approximately the same amount of
money. Probable bidders: B^+h & Co., Inc. and Kidder,
Peabody & Co. (joints; Coffin & Burr, Inc.; First Bos¬
ton Corp.; Harriman Ripley & Co. Inc. and
Goldman,

shares)

to

Sachs & Co.

raise

(jointly). The proceeds will be

bank loans.




used

to pay

would

be

either

Co.

refund

$30,-

Gas

Co.

1950-1951.

Permanent

issuance and

the

financing is expected to

sale

of

least

at

$10,000,000 of

a declaration
expected to be filed prior to Nov. 1, 1950, to be fol¬
by additional financing early in 1951, involving
the sale of at least $5,000,000 additional common stock

is

lowed

'

which will be offered to stockholders under preemptive

rights. Probable bidders for bonds: Halsey, Stuart & Co.
Inc.; Blyth & Co. and Kidder, Peabody & Co. (jointly);

Southern
June

8

SEC

Utah

Power

authorized

Electric Co. to undertake

Co.

trustee

of Washington Gas &
negotiations with "all interested

parties" for the sale of its common stock interest (62,910
shares) in Southern Utah Power Co. for not less than a
$550,000 base price, plus adjustments.

Tampa Electric Co.
was
announced

April 25 it
$4,700,000 in

securities,

new

Jan.

the proceeds
expenditures.

Gardiner

25

plans to raise
sale of additional
in part 1950 con¬

company

through
to finance

money

Symonds,

Co.

President,

to

be

used

to

begin early

17

company,

build

next

an

affiliate

new

pipe line, with
and completion

year

approved

the

issuance

of

The increase is being sought

early
of bonds.

Bros.

&

announced

to pay

company

October

may

issue

Hutzler.

that

was

Co.

reported that company in August is ex¬
pected to register with the SEC additional shares of its

May be offered through dealer-manager
probably headed by First Boston Corp.
Pacific

an

increase

in

the

It

W.

Langley & Co.

C.

Utah

Natural

June 5 it

mile

underwriters:

Union Securities

Corp.;

Gas Co.

announced company plans to build a 325-

was

22-inch

pipe line in Utah to cost approximately
Hearings will be held before the Utah
P. S. Commission in August or
September, after a study
of the project.
$25,000,000.

June 27 company
a

sought FPC authorization to construct
$144,500,000 pipeline project to carry natural gas from

the

Gulf

and

Coast

off-shore

fields

in

Louisiana

Texas to markets in Indiana, Ohio and Michigan.

is

and

Com¬

in process of completing negotiations for

now

Virginia Electric & Power Co.
June

it

20

through

was

announced

expects

company

to

offer

bidding not exceeding $20,000,000
refunding mortgage bonds. Probable bid¬
ders: Halsey, Stuart & Co. Inc.; Union Securities
Corp.;
Kuhn, Loeb & Co.; White, Weld & Co.; Stone & Web¬
ster Securities Corp.; Salomon Bros. & Hutzler.
Pro¬
of

first

competitive

and

Ex¬

Warner

(William R.)

June 12 Elmer H. Bobst,

poration

proposes

& Co.,

Inc.

President, announced that

cor¬

recapitalization and

change in name
registration state¬

to Warner-Hudnut,

Inc.; also to file a
covering the sale of approximately
325,000 shares of new common stock (par $1) to the pub¬
lic through a nation-wide group of underwriters headed
by F. Eberstadt & Co., Inc.
ment

with

the

Western
June 14 it
about

was

SEC

Pacific

RR.

Co.

reported company plans issuance and sale

$20,000,000

bonds. Probable bidders: Halsey,
Inc.; Lehman Brothers and Bear, Stearns &
(jointly); Merrill Lynch, Pierce, Fenner & Beane.

Stuart & Co.

was

stock.

Sierra

approved

stock to 1,000,000 shares from 500,000
understood that 125,000 shares may be

Traditional

of

Finance

have

common

pected this Fall.

registered with the SEC in the i^ar future and offered
sale to the highest bidder b^ the Office of Alien
Property. Probable bidders: A. G. Becker & Co. (Inc.),
Union Securities Corp. and Ladenburg. Thalmann & Co.
(jointly); Merrill Lynch, Pierce, Fenner & Beane; Kid¬
der, Peabody & Co.; F. Eberstadt & Co.: Allen & Co.;
new
company to be formed by United States & Inter¬
national Securities Corp.; Dillon, Read &
Co.; F. S. Moseley & Co.; Riter & Co.

it

competi¬

ceeds will be used to finance construction
program.

for

3

stockholders

4

authorized

late in

between

was announced that the company's entire com¬
stock issue (440,000 shares) was expected to be

Seaboard

at

Tide Water Power Co.

May

May 4, it

June

summer

its major financing requirements.

Sobering Corp.
mon

this

(jointly); Kuhn, Loeb & Co. and A. C. Allyn
(jointly). The proceeds would be used in part
for construction.

Co.

&

pany

Reynolds & Co.

reported that

or

late

Valley Gas Pipe Line Co., Inc., Houston, Tex.

Diego Gas & Electric Co.
was

sold

sold.

Gas Co.

Corp.

San

be

shares.

Service Electric &

stockholders

bonds will

bidding, but the amount has not yet been decided."
Banking circles speculated that a $40,000,000 bond sale
would be forthcoming. Probable bidders:
Halsey, Stuart
& Co. Inc.; Stone & Webster Securities
Corp. and White,
Weld & Co.

this

(New

$8,000,000 and
$10,000,000
Probable bidders: Halsey, Stuart
& Co. Inc.; Blyth & Co.,
Inc.; White, Weld & Co. and
Shields & Co. (jointly): First Boston Corp.; Union Se¬
curities Corp.; Merrill Lynch, Pierce, Fenner &
Beane;
Lehman Brothers and Bear, Stearns & Co.
(jointly);

new

oay
construction costs
estimated at $40,000,000 for 1950 to 1952. Present
plans
are
to issue in late summer or

Oil

Proceeds to

Salomon

about

financing would

stock

Pipe Line Co.
reported that

was

Standard

July 3 it

150,000
72,993 shares.

New England Power Co.

Bond

preferred

and

Probable underwriter:

Probable underwriter: Merrill

April 24 it was estimated that
financing will be required to

6, it

Co.

to make additional shares available for
any future need.

to

to

approved

Tennessee Gas Transmission

competitive.

or

shares to 2,500,000 shares.

author¬

Beane.

by Drexel &

competitive,

September

the

Natural

SEC

for

Co.

said that there will be additional financing

June 7 company announced stockholders will vote
Aug. 9
on
increasing authorized common stock from 1,500,000

firm

be used

first mortgage bonds, with respect to which

Reynolds Metals Co.

Mountain States Power Co.
increase

Electric

would

temporary bank borrowings of
up to $20,000,000 to mature July 1, 1951, the proceeds to
be used for construction
program, estimated at $32,520,-

"some

Boston

oil

to

21

struction

Probable bidders: Halsey, Stuart & Co.
Inc.; Morgan, Stanley & Co. and Drexel & Co. (jointly);
Kuhn, Loeb & Co. and Lehman Brothers (jointly); First

its exploration

May 17 the stockholders voted

similar

a

bonds due 1972.

and development of natural
operations. It will be financed, in part,
through public sale by the new unit of 1.000,000 shares of
capital stock (par $8). Financing plan submitted by First
Boston Corp. Expected this Fall.

and

gas

raise

$90,000,000 new bonds for the purpose of refunding $50,000,000 3V8% bonds due 1965;
$10,000,000 3V4% bonds due
1968; $15,000,000 3% bonds due 1970 and $15,000,000

Supply Co. of Utah

June 6 company announced
to take

to

1951.

was

Proceeds

tive

April

Halsey, Stuart & Co. Inc.; Glore, Forgan & Co., and Leh¬
man Brothers
(jointly); Kidder, Peabody & Co.; Harriman Ripley &
Co.; Smith, Barney & Co., Kuhn, Loeb &
Co. and Blyth & Co., Inc. (jointly).
Mountain Fuel

on

last, have informed him of their intention to
public distribution of these shares at earliest

Public

97.7% of presently
Probable bidders for bonds:

stock).

a

issue

First Boston Corp.

scheduled for early 1952.

preferred stock and bank loans (about $8,500,000) through
now

Power &

Light Co.
April 13, Paul McKee, President, disclosed that

6,

Co.

Southern
June

Pipeline

Corp.
June 30 company sought FPC authority to build a 2,175
mile pipeline system—from southern Texas to Washing¬
ton—at a cost of $174,186,602.
Negotiations for major
financing requirements are now in process of being
completed.
Pacific

Co.

Boston

&

involve

construction

financing program, expected to be consummated prior
October, 1950, will involve refinancing of $13,334,000
of first mortgage 4V2% bonds due 1967, $2,000,000 of 7%
new

Shields

000

Northwest

Edison

tnat company expects to

000,000 3 V4% bonds and for construction costs.

bidders for bonds:

Pacific

reported

$55,000,000 of bonds.
Probable bidders:
Corp. and Harris, Hall & Co. (Inc.)
(jointly); Halsey, Stuart & Co. Inc.; Blyth & Co., Inc.;

Corp.

Jersey), is contemplating
financing of about $50,000,000, probably privately.
If
publicly offered underwriter may be Morgan Stanley &

tl at the company's permanent

(American Natural Gas Co.

First

Loeb & Co.
•

California

was

summer

The

only: Halsey, Stuart & Co

Power

it

3

this

financing, including short-term bank loans
Halsey, Stuart & Co. Inc.:
Morgan Stanley & Co.; The First Boston Corp.; Kuhn,
Probable

to

the issuance of

Southern

equity

or

of

Light Co.

announced

Mohawk

15 United

March

Jan. 19 announced that construction program will neces¬
sitate in 1950 not more than $25,000,000 of additional debt

Co.

Milwaukee

It is estimated that $6,000,000 of new

Jersey Gas Co.
Corp. proposed, under its amended plan
filed with SEC, to sell its holdings of 154,231.8 shares of
South Jersey Gas Co. common stock as to which an
exemption from competitive bidding is requested.

and

bidders for bonds
I

Inc.

July

"ilities costing an estimated

in

South

June

preferred: Blyth & Co., Inc., and Smith,
Barney & Co. (jointly); First Boston Corp. and Glore,
Forgan & Co. (jointly); Harriman Ripley & Co. Inc

be

debentures

or

Corp.

1952, the proceeds to be used to
in part, cost of new construction estimated to total
in the next three years.
Probable bidder*

pay,

negotiated

may be issued later
financing placed privately.

Bonds

Gas

underwritten

for the

$22,732,200.

Previous

Electric &

$55,800,000

•

authorization

f

year.

there

later this year, with probably some common stock to be

costing

spend

will be required in this year, to be raised by
the sale of $3,000,000 of bonds and 60,000 shares of pre¬
ferred stock (par $50). Probable bidders include Lehman

securities to be sold in

May 5 it
for the

construction of additional

this

State

Philadelphia

Co.
authorization

1950.

plans to

company

$34,000,000, of which $11,600,000 will

money

May 24 it was reported company expects to sell $14.000,000 of bonds and $6,000,000 of new preferred stock
in June,
1951, with an additional $10,000,000 of new

amount in

Michigan-Wisconsin Pips Line Co.
29

that

publicly offered. Company also expects
$3,000,000 in new money later this year and

$15,346,500.
Probable bidders for new ceot financing: Halsey, Stuart
& Co. Inc* White, Weld & Co. and Lehman Brothers
(jointly); Smith, Barney &
o. Expected later this year.
June

understood

be

common

Michigan Consolidated

is

spent in

Corp.

Electric & Gas Co.

announced

was

the next four years
be

Thursday, July 13, 1950

Brothers.

make

stock (par $1) from
250,000 shares to 500,000 si ares, with holders of present
outstanding stock to have no preemptive rights.
June

It

practical date, which may be shortly after Aug. 6. A. C
Allyn & Co., Inc. and Bear, Stearns & Co. headed this
group. The 500,000 shares of common stock are being
split-up on a 3V2-for-l basis, all or part of which will

announced stockholders will vote July 20

increasing authorized

on

no

New York

Feb.

Further details not

Michigan Bumper Corp.. Grand Rapids,
was

expected today.
public offering.

was

will be

it

11

Securities

Carolina

.

prior to Oct. 31, 1950.
Halsey, Stuart & Co. Inc.;

bonds:

for

.

stock

common

Webster

&

May

associates

and

Light Co.

available.

July 5 it

Hutzler

be done following effec¬

Probable bidders for any
securities include Smith, Barney & Co.

Lorillard

&

11 bid 99.4633 for the certi¬

coupon, while Halsey, Stuart &
bid 98.3389 with a 2%'% coupon. Award of the

Co. Inc.

tiveness of consolidation plan.
new

Bros.

July

on

and

bidders

South

ficates naming a 2V2%

Co.
announced that it has advised the Wis¬

additional

Stone

at

La Crosse Telephone

of long-term bonds and not less than $600,000
common stock.
Proceeds wnl be used to repay

Probable

the

Corp.

June 6, company
consin P. S. Commission that it expects to sell $1,000,000

debentures

Bids will be received up to noon

The First Boston

.

Co.

Worcester

County Electric Co.

group

Power Co.

June 2 company announced it plans to finance and
per¬
manently refund $2,200,000 of bank loans by the sale of

April

25

reported planning issuance of $10,000,000 first mortgage bonds. Probable bidders: Halsey,
Stuart & Co. Inc.; Harriman Ripley & Co.,
Inc.; Lehman
Brothers: Kidder. Peabody & Co.; First Boston
Corp.;
company

Merrill, Lynch, Pierce, Fenner & Beane.

Volume 172

Number 4924

Continued

from

page

.

.

.

The Commercial and:Financial Chronicle

(191)-

ble

4

taxation

of

dividends.

poration profits,
taxed

are

The New York Stock

Cor¬

first

the

at

bonds

corporate

stake in the ownership,
which is provided by stocks of
American industry.
The problem
public

is

of reaching

one

individuals, I am sorry to
say, are unfamiliar with

many

have

that field. Too

to

the attractions and features of se¬

curities;

they

familiar

with

volved

the

in

are

often

what

risks

too

un¬

are

ownership

of

in¬

who

include

must

Put up

his ^dividend

-

We

seek

to

convey

the

those, who will allow us tnat
opportunity, factual information

is
the
only
capitalistic
country that taxes capital gains.
A gradual elimination
pL our cap¬
ital

effect, the backbone of
is also

Exchange

sion of its capacity to produce and
to go

doing what it can construc¬
tively to encourage an improved
structure.

tax

We

Public

vital.

tive studies

The Southern

on

Company

the big southern

noicunif

company

which

breakup of

This year rainfall has been less

abundant and in the first five
months hydro output was about 600 million KWH under last year.
However, the situation has shown improvement in recent weeks.
Assuming normal rainfall in the balance of the year it is possible
that, after allowance for tax savings, the loss of hydro power might
reduce
earnings about 70 this calendar year, making a total
of 140.

>

,

.

However, this isn't the whole story. Total sales have been
increasing more rapidly than anticipated, and for the five months
ended May 31 net income was slightly ahead of last year (although
it

would

have

been

slightly lower if adjusted for non-recurring
taxes).
Moreover, the big Yates plant with two units of 100,000
KW each will come into operation this fall, using dump natural gas
as fuel.
Alabama Power, which mines its own coal, has installed
some of the big Joy machines which
are reducing mining costs
sharply. These factors should help to offset part, at least, of the
estimated 140 dip in earnings.
Last year about 8% of Southern's revenues were from transit
operations, but Georgia Power has been attempting to sell its bus
companies, and recently disposed of the Atlanta property, leaving
Rome as the only remaining property—which will also be disposed
of eventually.
Alabama

for

an

area

domain.

Power

serves

the

greater part of that State except

along the northern boundary which Is. part of the TVA

disposed of as soon as possible, perhaps this year. This purchase
is not expected to dilute Southern's share earnings.
Southern Co. system

The

is still in

a

period of rapid growth.

Revenues for the first five months of 1950 were about 7% over last

but for the month of May the gain exceeded 10%. Recently
KWH output is said to have been as high as
22% over last year, and the management of Southern Company has
been wondering whether it may prove necessary to revise upward
the system construction program. Present plans call for the instal¬
lation of 575,000 KW in 1950-52, bring capacity to 2,289,000... Of
this 1952 capacity nearly two-thirds will be steam, and 85%- of
this steam capacity will be in high-efficiency units installed since
1940. While most of the hydro plants were built before 1940 <at
year,

the weekly system

the

holding

from

period

dends

paid to their stockholders.

It is held that that is

ing.

As

be

of

Southern

own

construction program, the management

with the Federal Govern¬
facilities. .-Georgia Power Is
either buying or proposes to buy the output from government
hydro projects at Buford, Altoona, Clark's Hill and Jim Woodruff
Dam—a total of over 500,000 KW. This will help to offset the loss
of

should be allowed

ers

tax credit

a

for

dividends, rather than to have
10% of i:their due income from

of

the

S.

U.

in

there

indications

are

within

stage
will

set

be

fortnight

next

the
hack

pending

more

propitious conditions marketwise

sharp decline in utility stock prices this been deferred.

closed today (July 11) at lOYs, making the
The 1950 high was 13%.

Southern Company
current

yield 7.4%.




bid

was

3% rate.

a

The issuer withheld award until

if

the

market

regains

its

equilibrium, is just short of 500,000

shares of

new

stock

common

for Consumers Power Co.

Bankers

job

will

this

on

do

"standby"

a

which will involve

one

Current

afford for

of diver¬

some measure

Your

caused

before

more

of

these

observations

time

your

I have tried to

A

you.

to
is

minute

conclude
all

explain to

I

ask.

why

you

stockholders

to

Panhandle's

financing involved

the

Exchange is essential to

talism, why

seek to

we

continuance

of

or

JOHNS HOPKINS, Treasurer

1950

Philadelphia, Pa.

The term debentures were offered

at 99.11 to afford

Dealers

for both

a

yield of around

COLUMBIA PICTURES
CORPORATION

these

on

assure

the

system

that

by

Municipals Take
little

With

in

the

dividend
share

Over

the

balance

the

Preferred

A.

current

is

what
You

it

and

down

comes

have

tionalized

England,

communications.

templated

week's

Next

ployment,

with

Oil Co. of California.
na¬

railroads,
Even

restriction

was

alert

to.

business

seen

in

more

of

individuals

con¬

em¬

pro¬

per

'

Stock of the,

payable

August

SCHNEIDER,

Vice-Pres. and Trees.

month,

major corporate
prospect takes the form of a large
to policies leading to socialism or
equity operation by the Canadian
nationalization of industry, to a Superior Oil Corp., Canadian Ex¬
restriction of our freedom.
That ploration subsidiary of Superoir

enterprise, they will be

quarterly

a

$1.06J4

record August 1, 1950.

the bulk of interest will
center in the municipal field. And
of American industry.
It is our even here the July aggregate may
belief that,
if more individuals do well to equal June's $214,000,000 figure.
are co-owners of our
competitive
broadening the base of ownership

of

at

11,

15, 1950, to stockholders of

way

of

July

the $4.25 Cumula¬

on

company,

of new
issues likely in the corporate field
for

declared

1950,

secur¬

Directors

held

meeting

a

ities wouldhe closed quickly.

of

Board

The

reported brisk demand
offerings and it was in¬

dicated that books

our

capi¬

record

THE UNITED GAS IMPROVEMENT (0.
June 27,

tive

system of free-enterprise

of

August 31, 1950.

2.80% while the serials were of¬
fered at prices to yield from 1.85 %,
encouraging attention has
for the shortest maturity to 2.65 %
m£ to overstay
my
ap¬ for the last series.

pearance

payable September 30; 1950,

sification.

A

IOWA SOUTHERN
UTILITIES COMPANY
of Delaware

Dividend
The

negotiated undertaking this is

designed to embrace public offer¬

41

its

has

de¬

dividends:

% cents per share on

Stock

Preferred

($30 par)

of

stock

following

5%%'

2,000,000 shares of capital
the new company for

of

ing

the

Notice

Directors

of

Board

clared

30 cents per

working capital.

on

share

its Common Stock

States Plywood

United

Co. has
($15 par)
financing slated for both dividends payable September
terest and work from one indus¬ around July 20, but it is possible
1, 1950, to stockholders of record
that market
conditions between
August 15, 1950.
try to another. The recent elec¬
now and that time may influence
EDWARD L. SHUTTS,
tion, when.the Conservatives were
hibited from transferring their in¬

new

some

the final decision here.

practically

returned

to

With all but

opinion,

our

July 10, 1950.

Columbia Gas System

upset those plans.
In

President.

power,

a

nominal amount

we
think the
of the $110,000,000 total reported
have, though it
taken bankers sponsoring Colum¬
has flaws, has demonstrated the
bia Gas System's huge debenture
fact that it provides the greatest offering terminated
their agree¬

economy

that

we

opportunity and incentive to the
individual.

The

more

the

Amer¬

ment

care
a

more

going to be done to take

of those flaws. All of

us

have

job to do in assuring more op¬

portunities for
out of

you

fellows coming

college. You will be free to

that

turn

issue

little

a

more,

the amount

which remained unplaced. Brought
out at

102.448 to

yield 2.86% the
quote reported in the "free mar¬
ket"

was

here

101% bid-101% asked.

what

But
a

made

bit curious

the

was

situation

the fact that

choose where you

efforts.

000

additional debentures

funding
investor

everyone,

would not

be

a

the

happy

outlook

one.

for

of Directors

today the fol¬

lowing dividends:
$1.25 per share for the third
quarter

of 1950

upon

,

the $5

Preferred Stock, payable Sep¬
tember 15, 1950 to
ers

of record

at

stockhold¬

the close of

business August 15, 1950.

$1.00

per

share

upon

the

Common Stock, payable Sep¬
tember 15, 1950 to
ers

of record

at

stockhold¬

the close of

business August 15, 1950.
1 he

Goodyear Tire & Rubber Co.

re¬

By W. D. Shilts, Secretary

new

to

has declared

con¬

dampen

interest.

Akron,

Ohio, July 10,

1950

The

Greatest

tunities, if the government takes
of

financing

struction costs tended

If you do not have those
oppor¬

care

and

DIVIDEND NOTICE

The Board

Estimates put at around $5,000,or

good/^ear

loose

early this week.

000
work is

and

selves in the future by your own

Southern Company sold 1,500,000 shares of common stock
December, making the common stock equity 30% (or 25%
intangibles, including plant acquisition adjustments). The
Company has recently proposed to sell an additional - 1,000,000
shares at competitive bidding on July 25, but because of .the recent
after all

interest

same

lowest

yesterday thus delaying actual of¬

ahead,

least

At

gram

equity portion of its construction pro¬

the

a

bid

fighting is tending to put the fering for the equivalent time.
quietus on new financing plans of
Another
prospective
offering
corporations.

last

*

In order to finance the

for

the

"freeing" of the issue did hot seem
are going, and to
generate any real buyer inter¬
you will have an opportunity to est. Unquestionably the action of
the company in filing for $90,000,build up a competence for
your¬

of TVA power.

100.531

Runners-up

the

101.5049 for

the

Korea

dividends withheld.

Company has cooperated

ment's program for developing river

involvement

and

in

$20,000,000 of 25-year term deben¬

vantages of that system, the

addition to its

hostilities

of

tures, due 1975, and $15,000,000 of
serial debentures, due 1953 to 1962.

today.
In

outbreak

double

of

low cost)

plants averages only about $110 per KW.

circles indicates that the

writing

dividends, stockhold-

characteristics

natory

re¬

ican public is educated to the ad¬

they are about as efficient as hydro plants constructed
Due to installing big units, the system cost of building new

Conjecture in investment under¬

for

while

lilesday

on

total of three tend¬

a

coupon.

happen¬

offset to the discrimi¬

an

taxation
-

just the

of what should

verse

However, the City of Birmingham has been serviced by

Birmingham Electric, which has been buying its entire power
requirements (at wholesale) from Alabama Power. The Company
has been having difficulties with its transit property and no divi¬
dends have been paid since March 31, 1948.
Southern Company
has recently proposed to acquire the block of-Birmingham stock
held by Electric Bond & Share on the basis of an exchange of IV2
shares of Southern for 1 share of Birmingham Elctric, and this
offer will be open to other stockholders. The bus company will be

public offer¬

uneasiness,
however, offering first to
six to three months. The tax out¬
present share¬
was
not sufficient to deter Pan¬
look, unfortunately, is complicated
holders in the ratio of one new
handle Eastern Pipe Line Co. and
at this juncture by
the Korean
share for each ten held at a price
sponsoring bankers from going
situation and all of its mobilizing
through with the $35,000,000 of to be disclosed later.
implications.
new
financing for that company
An aspect of the tax bill re¬
yesterday. Pipeline securities, it
ported by the House Committee
DIVIDEND NOTICES
must be remembered, have struck
contains, on the other hand, a
the fancy of institutional investors
feature that, particularly among
for the moment, not alone for the
corporations, is undesirable. This
relatively, favorable yields which
A quarterly dividend of 35e
is the mandatory
withholding by
per
share on the Capital
they afford, but quite as much, it
corporations of 10% of the divi¬
Stock, par value $13.50 per
appears, for the opportunity they
share,
has
been declared,

described in this column about

decrease

prog¬

The House Ways and Means
in its tax bill would

reduce

the effects of dou-

Commonwealth & Southern, was
a year ago.
The Company made an
excellent showing in the calendar year 1949, with share earnings
of $1.27 a share compared with 910 a share on a
jailer number of
shares in the previous year; net income increased 57% on a gain
in revenues of about 8%. This improvement reflected a non-recur¬
ring tax saving of about 70 a share, and fuel ecohibmies of perhaps
15-200 a share due to abnormally heavy rainfall and resulting big
hydro output, plus other factors.
from the

some

Committee

By OWEN ELY

emerged

We have made

ress.

have

presented to the Congress exhaus¬

Utility Securities

Southern Company,

A reduction of the

fotf1 bids

100.06999
rate

ing period, it is today generally that several issues which had been
acknowledged,
are
comparably expected to reach the marketing

engaged

in

Federal

forward.

rate, and the lowering of the hold¬

The

Exchange is endeavoring to
fill that gap of economic illiteracy.
Our Public Relations program is

capital,

which, in turn, is essential to ex¬
pansion of industry and the exten¬

the American economic system.
The

gains tax is essential to the

increased flow of venture

of securities of long
companies, companies

that are, in

£%%

States

pertaining to the purpose of the
Exchange in our system of enter¬
prise as well as the rewards and
risks
that
accompany
informed

ownership

reach

the best being

ers,

are familiar, I
know, with
confiscatory characteristics of
capital gains tax. The United

the

to

established

to

bonds drew

receipts in his income tax returns.

that direction, as is our

advertising.

any

form of property.
Speaking gen¬
erally, they are, in many instances,
supicious of stocks.

in

mortgage

ing today.

You
aimed

first

Kentucky Utilities Co.,

.

Its Economic and Social Functions
point of the contrast is, of course,
to give you an indication of the
room that there is for an enlarged

du-year

of

slated

was

rate, and then again when the
profits, in the form of dividends
are
received by the stockholder,

Exchange-

new

01

as you are aware,

35

Due

The
up

on

Market Today

•

only other corporate issue
for sale this week, $3,500,000

Name
in Rubber

hi

36

The Commercial and Financial Chronicle

(192)

.

Thursday, July 13, 1950

.

.

--dLrfaeforerjere^dhougitUt

BUSINESS BUZZ

become law.

originally.,, disapproved
'

Washington.
from the Nation's

-l/r

'

'< *> r<;::

if'* ^
;s Minify/

■'

And You

Capital

not

bill,

the

presumably because

was

of.a^fight between the marketing

•

•

"

Behind-the-Scene Interpretation*

but that

did

The Budget Bureau

"'

production factions within
t^^pepartment of Agriculture
bi^eaycracy;...

«...

tjhis colurHri is intended to re&£t&e.scene" inter-

*pr^ta$£^frbm tlie nation's Capital
WASHINGTON,

C.

D.

The

—

casualty" of
likely to be
'the tax bill, always barring some
^harp change in the military situ¬
first

Korean

is

war

of

-Senate,

be

bill

tax

a

had to

"George, the Chairman of the Fi¬
nance
Committee, promised that
tie will present a tax bill upon
the Senate

which

,

bad

for

for

news

hold

real

the U.

Grants credit of $16,400,000 for

under
if

circumstances

development and grain stor¬
age facilities.

port

it

South Korean
until such time as it

estate

Turkey

COMPANY

S.

to any

on

Mr JetsamT Flotsam

sizable forces to bear.

bring

can

The Sen¬

Loan to

some

indeed

well

very

adverse

such

SHIPBUILDING

expectation

normal

be

doing

The

vote.

can

be kept.

firomise will

the

considerable time, with

can

World Bank Granls

improvised in haste.

be

should

Senator

since

course,

in the

of

one

tized examples of how the war has

So

will

just

thousands but otherwise unadver-

ation.
There

is

aircraft,

and may or may not coincide with
the "Chronicle's" own views.)

obsolescent

the

handle

to

Russian

"civilian

big

ihe

fast

;

it.

<:

The International Bank for Re¬

Then, after the bill goes to con¬
ference between the House and

be tied up for a
long time.

.Senate, it will
very

very,

This

cided

strategy has been de¬

new

it

informally,

upon

is

re¬

between the Administra¬

ported,

Best guess now

is that the drive
to get Congress away, Aug. 1 will
fall short of its mark by about 10

of not burying the tax bill fits in
with the Administration strategy
off with moves to

of not leading

trumpet the change in the econ¬

from

omy

civilian to

a

wartime

a

until the

fcasis

military situation
imperative and impresses

makes it

people generally with the -need
for controls, rationing, huge war
appropriations, and higher taxes.
With

dered

how

House

can

kill

To

of

men

however, it is
leisurely

to

White

fail of enactment.

ports is for

a

carries

interest

One
bill

bill

tax

tend

how¬

now,

alert

to

people

them

of

Kefauver

the

is

chase

company

one

that this
until the
Congress, for lack of time.

have

next

The

bill to triple

is the

second

damages under the antitrust laws.
does

Congress

when

ad¬

journ, it is expected to be subject
to the call of the Congressional

the

legally call the Congress back into

J-tecretary

listened

opening

to

Finance

hearings

tax bill, are

and

Treasury

*

Committee,
the

on

House

betting that the Ad¬

ministration does not want the tax
fill.

Should

pretty well fits in with the

views of the Senate conservatives.

able

taxes.

Everybody will be
trappy if the Senate casts record
for

votes

has

to

time

same

Then

creases.

excise

some

if it

even

Ihe

tax

record

for

the

cuts,

votes

thing

at

in¬

tax

some

will

be

quietly buried.

Of course if the military situa-

#

chunk

completely
rice

Japanese

it

eliminated,

be

This

would

grain

here.

shipments

S

U.

•J*

There

*}*

Victory

in

there

and

are

was

six

o

view of

In

tne

behind

months

fresh

tailment

early optimism

a

quick

reticence that

disappear when and if it be¬

comes

necessary

to

alibi

a

campaign.
Any military operation
magnitude
«mall
a

a

of

defending

equipped,

long

of

the

even

as

against

and

deter¬

mined enemy, with its own opera¬
tions long planned, is something
which

ordinarily takes months of
quick and suc¬

preparation.
A
cessful
detense

cannot

be

im¬

provised off the cuff. Troops canquickly be assembled, schedfiled, and transported, together
cot

with

the

hundreds

of

scarcely has
from

which

had
to

a

Korean

operate.

cessity of abandoning

gate
the
of

vehicles

The

cars,

of

last

rate

the

are

usually

motor

1,600,000

passenger

only

1949.

Trucks,

which

relatively
are

runs

the

car

with

system,

for

wore

bushel and
It

$1.50.

way

"made

a

first

minimum

that
enough U. S. dol¬
it

magic lamp is the govern¬

guarantee of loans
instant

Committee
about

to

thorize
ture

to

House

Agriculture

on

approve

the

the

case,

bill

a

is

pos¬

and

to

loans

vegetables.

retail

cidentally,
so

long

also

can

they

as

is
au¬

for

Just

markets

is

be

under

Department
showed

the

report

U.

S.

Agriculture

of

first

that for the

U. S.

The

for

run

benefits

though

even

which

is

the Agreement to July 4, exports

groups

U.

ing

S.

wheat,

given

though

even

be¬

short

80,-

were

away,

000,000 bushels of the guaranteed

imports made by importing

the

in

Corp.

Cinema Television B

Scophony-Baird Ltd.

juicy

it

is

footing

taxpayers,

their

bill.

the

40

Exchange PI., N. Y. 5

1919

HA. 2-8780

Teletype N. Y. 1-1397

money

Only

out

the

of

these

1

For

enterprise,

would be eligible for loans to con¬

Large Appreciation Potential
WE

markets.

SUGGEST

coun¬

while

ESTABLISHED

would be denied to

municipalities, or private
which agree to take no

profits
struct

M. S. WlEN & Co.

Canadian

26,000,000

exports

were

nearly

With

bushels shy.

less

It

is

the

and

Elmer

of

the

in

go,

this strongly indicates that the

operation

to

agreement will fail to achieve the

though
subsidizing them.

export
U.

S.

quotas,

Finally,1 the

even

report

FAO

the

said

that despite the subsidy, the lower

prices
not

on

Agreement wheat were

being passed
*

on
*

to consumers.
*

Congress

is

going

Chairman

of

the

Senate

RIVERSIDE CEMENT CO.
CLASS B (common) STOCK

Agriculture

than three weeks of the first year

Agreement's

doubtful, time being short

Committee, Senator
Thomas (D., Okla.)
back

Oklahoma

political

life,

Committee

can

fighting
that

the

for
his
Senate

get around to con¬

this bill this year. With
adjournment final in 1950, when¬
ever that may be, and no Senate
sidering

A leading

producer of cement

fast-

grTo_w i rrj; Southern

in

California.

Analysis of this. Company and
review of the Cement Indus¬

a

try available on request.

Selling about

action, the bill would die.

Nevertheless,

the House

Com¬

mittee is going ahead, because the
best

preparation for enactment in
years is to show one
House of Congress has approved

Investment .Securities

10 Post Office Square, Boston 8

subsequent
to

make

a

$8.75

LERNER & CO.

Tel.

HAnover 2-0050

Teletype—NY 1-971

HUbbard

Mass.

2-1990

Firm Trading Markets

l

Commonw'lth Natural Gas
Foundation

last

the

reoort

Company

Jack & Heintz

FOREIGN SECURITIES

W. L. Maxson

All Issues

Minute Maid

PAUL MABKS 4 P.O. »g

*

FOREIGN

high-flown lan¬

economist, the Food
Agricultural Organization in

layman is

Finishing

Video Corp. of America

maxi¬

a

this

of

profit-making

co-ops,

of

foreign

Government Employees Corp.

period of 40 years and cost

of

year

the

Television Equipment
Trad Television

constructed

not the prin¬

are

would

Loans
mum

credit subsidy

separate

a

the equivalent of $38,600,-

cover

cipal part of the enterprise.

any

In

1954.

cost

for

at the

the Agreement.

its

years;

$12,500,000
exchange
required for the importation
of equipment and materials.
will

in¬

minimum of $45,000.

even

price

lower

18

the

that is U. S. and Canadian wheat,

or

of

The total cost of the port de¬
velopment and construction proj¬
ects

only 4% interest.
The borrowers
must put up 15% of the cost or a

minimum

a

Secretary of Agricul¬

guarantee

farmers

for

C00. The Bank's loan of

sible that exports of dollar wheat,

indicates what to

the conclusion that

SECURITIES

SPECIALISTS

guage of the

were too

tl>e

above the volume
H=

*

recent

reserve

will be used to finance

term

cars.

in

Agreement, is

special

amortization will start in

marketing facilities for perishable

the

a

brought into existence.

are

the

In

suggested

was

out

at the time of Pearl Harbor.

and

ment

wanted

Agree¬

maximum of

a

Motor vehicle production today,

Buried

things

The old

and

scrap-

1,200,000

during

more

however, is

of

its

and is

believed to be going to

than

to

machines.

the junk heap at a higher ratio to

output

Articles

of

construction of wholesale terminal

25%

on

beautiful

which

fruits

pre-War

if normal

or

totaled

a




Of

in

time

3y4%,

year's production at

of

However,

of the

some

Jet fighters because they

ne¬

the

at

pings

war,

600,000

and

62%

some

Scrapping
new

the

S.

base

versus

registered, totaling some

million,

II.

of

aggre¬

cars,

400,000

Harbor...

hands

to

hands of dealers
Pearl

43

the

in

500,000

supplies:

car

believed

about

between

on

cars

are

thousands

of items of equipment. The U.

a

the situation

dealers

of

produc¬
thumbnail sketch

at rubbing the govern¬
special magic lamp, by

pass

has

tries under the Agreement,

H:

automobile

tion,- here is

basis

of

country as Korea

trained,

of

Stocks of

a

Hi

1950.

year

Against the day when military
might bring about the cur¬

*

Of the Administration for

will

fiscal

the

for

needs

outcome to the Korean war, mili¬
tary people have to be a little
reticent
toward
explaining the

4great difficulties,

about

that

The Agreement provides a two-

per

buying. Part
of this was occasioned by the fact
that Congress did not complete
appropriations until after mid-

appraise.
o

wheat

under the

exported

ment.

of

significance

"financed,"
about three-

away,

the

of

wheat.

has

might not fill quotas

quick

«&gns of Russian armed aggression,
Ihen there is another situation to

given

fourths
been

in

trade

sales within

the familiar
pattern of the government's buy¬
ing before the fiscal year-end, so
that
its
unused
appropriations
will not lapse. Actually the Army
jeeps. This

J|:

no

world

and

over.

relatively

a

is

available"

On the other hand, if the Korean
ends

about half

even

of opera¬
fof only

year

accounted

price

just

October

war

has

it

down,

lars

purchase

til

after the election is

break

may

though in the first
tion

Agreement

before the
end of June by the military of
more
than $72 million in trucks

the

to

was

until

program

Wheat

year,

schedule in its truck

or

free, the whole In¬

away

ternational

are

might be forced to
^sk for a tax increase, although
probably not soon. The intention
probably will be to avoid this un¬
least,

giving it

to

'i'

war

no

lion deteriorates rapidly, the Ad¬

at

ment's

unless there

was

ministration

year,

long

large volume of U. S. and
perhaps also Canadian wheat and
a

mean

"*

next

without continuing ECA purchases
of

is

Japan.

of

rate

grain storage fa¬
cilities, carries an interest rate of
27/8% (plus the 1% commission)

$1.80

greater

the

major

term of 25 years and

construction

So far the U. S

go

the

of

will

supply

They want excise tax cuts but not
load enough to raise corporation
tncome

Korea

for

Turkey's

Amortization payments will

which

that

Hi

«

into the hands of the Reds, a siz¬

noted

This

can

an

$12,500,000
of

begin in 1956. A loan.of $3,900,000,

session at any time.

presentation

Snyder's

the

•xefore

Senators

economy.

who

also

President

The

fund.

word

the

passed

bill will have to go over

of

allocated

sets of another,

leaders.

war

Bank's

of the as¬
thus bringing the
purchase of assets under the same
ban as the purchase of stock con¬
trol of competing companies. Sen¬
ate Leader Lucas is reported to
by

loan

plus commission at the rate of 1%
which, in accordance with the

subject to Federal Trade
Commission
approval, the pur¬

«£ the danger of the move toward

ethers

A

to

And

the

grain

storage facilities.

development

won¬

the

totaling $16,400,-

loans

Congress does quit be¬
fore mid-August, there is a chance
that two anti-business bills will

be.

would

ever

call

initial

an

the services,

Development has

two

000 to the Government of Turkey
for port development and

If

days.

tion and Senate leaders. The idea
-r7

President

*

*

construction and
made

ate will pass

Hill, Thompson & Co., Inc.
"

Trading Department

50 Broad Street

New York 4, N. Y.

70 WALL

STREET, N. Y. 5

Tel. WHitehall 4-4540