Full text of Commercial and Financial Chronicle : July 17, 1947, Vol. 166, No. 4612

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ESTABLISHED 1S39

Reg. U. S. Pat. Office

Volume 166

Number 4612

New

Does the Bear

Stable Money a
To European

Walk Like a Man?
Hano

Partner, Newburger &
Members

honestly administered, economic

Exchange

Stock

Investment broker, in comment¬

subsidies granted.

can

foreign situation which is
a fog of uncertainty in
business outlook, holds fear of
Russian war is unjustified and

ing

in paper money

causing

that Soviet recalcitrance is

mere¬

wrote

June*>

which

supplements a
previous
let¬
April

nents

successful

democratic

Mr.

Sloan

somewhat surprised manner ad¬

mitted
in

their

that

are

health and bid fair to
and last but certainly

good

remain

industries

so,

(p. 2).

15,

lain

the

William Chamberlain

May

analyzed
financial,

economic

political

•

fects

the

and

World

Bank.

following letter, Mr. Cham¬

berlain

the

stresses

need for

fundamental

monetary stabilization in

order

the

highly illogical thesis that the
depression
that
was
predicted

European reconstruction effective;

can't possibly arrive.
So that if one tries to penetrate
the remaining fog of uncertainty

My dear Congressman;

See

25)

on page

PICTORIAL

for

SECTION

pictures taken at recent outings of
Columbus Stock and Bond Club;
Los Angeles Traders and Security
Traders

Association

Los

An¬

geles.

Leland Electric

'An

make

American

interested

reader

aid

the

"Commercial & Financial Chron¬

icle," in which my letter to you
of April 25 was published, has re¬
quested that I indicate such condi¬
tions as I believe ought to be at¬
tached

proposed
Loans and
Grants to foreign states should the

being formu¬
lated in the State Department be
approved by Congress.
In my letter to which reference
has been made, I called attention
new

program

now

(Continued

on page

Aerovox Corp.
Havana Litho. Co.

Two Worlds?

Worlds."
rope are

work

represented at Paris, and

apparently going to

are

with

cluded,

Russia

France

As "The Conference for

ef¬

International Mone¬

tary Fund and the
In the

least Washington has propounded

(Continued

^■7:^:^;;:^};'

a
right good will. Russia has, of course, ex¬
herself, and is how boasting that she was able to

that

join
in
calling
the
conference.

Obviously
this

develop¬
is of

ment

major a r\d
grave postwar
significance.

Harold E. Stassea

keep eight of her neighbors from going to the French capi¬ The conference is being held as a
tal.
Meanwhile this former ally of ours is said to be busily direct result of an address by
engaged in working out a new "orientation" for these satel¬ Secretary of State Marshall on
June 6 at Harvard University. He
lite nations around her, which would
ally them more closely stated that America would con¬
in an economic sense with the Soviet Union than
they have tinue to assist in rebuilding Eu¬
been in past years.
The terms, or at least some of them, rope but that Europe itself must
of an understanding with Czechoslovakia have been an¬ get together and agree on a plan,
nounced to the world, and the favor of all of those lands including their own self-help, and
present a proposal and statement
under Russian dominance is being sedulously cultivated—
of needs to the United States.
at least in the press.

(Continued

Meanwhile, of course, the nations whose represen¬
tatives are gathered in Paris are without the hereto¬
fore

quite ubiquitous handicap imposed by the obstruc¬
tionist tactics of Russia and the regimes in Eastern
Europe which have regularly been doing her bidding
; apparently without asking why.
(Continued

38)

Mr. Stassen
Broadcasting
1947.

National

the

over

on page

address

*An

14,

System, July

Spain, which is not

on page

29)

State and
•-*'/

Municipal

R. H. Johnson & Co.
Established

-Mi

she

28)
•••*'

111

confer¬

ence.

Mr. Chamber¬

expo¬

in¬

the

rejected
the
request
of
England
and

Sixteen of the 27 countries which constitute Eu¬

capitalism
Motors

W'» As We See-It

the first letter

"Chron¬

icle"

General

associations'have

commercial

door¬

turned

down

European Economic Cooperation"
gets under way in business-like fashion, "One World," at
first glance at any rate, appears to have become "Two

the

Such

have 1 issued
statements
casting
grave doubts on the chart-begot¬
ten predictions of>dobm. /Various

step,

EDITORIAL

dated

25, and
published
i n

of the Bankers Trust

and Mr. Colt

<$> Russia's

the

foreboding that have obscured the
business vision of a great number
of our less astute industrialists,

Today in Paris 16 of the nations of Europe are meeting at an
Eight of the nations of Europe, all located on

economic conference.

—

vitation

ter

outstandingly

Outlines 12 steps for clearing out Com¬

Cal.),

existant, rifts have begun to ap¬
in the ebon clouds of fear and

investors.

defying Soviet.

Anderson (R.-

pear

and

risk

not

munist infiltration.

Chamberlain, former President of the United Light &
Co., has furnished the "Chronicle" with a copy of a letter he

duced depression a few weeks ago
that to me seemed to
be non-

merchants

paper money.

Republican Presidential aspirant, asserting Russian political leaders
be convinced they cannot sabotage our economic
system,
urges: (1) prompt action to make Paris program success; (2) no
abandonment of eight nations not participating in conference; and
(3) stern measures to clear out Communist infiltration in U. S.
Says nations bordering Russia desire individual freedom, but can¬

must

William
Power

in¬

self

the

removed and Ameri¬

inflation is senseless because useless and illustrates

gressman J. Z.

ridiculed

By HAROLD E. STASSEN*

Says subsidization of governments engaged

futility of price manipulation of foreign

ly case of rabbit spitting in the
bulldog's eye.
Since

are

Copy

Former Governor of Minnesota

in Europe is impossible,

recovery

though intercontinental trade barriers

even

Price 30 Cents

U. S. vs. Communism in One Woild

Prerequisite
Recovery

William Chamberlain states that without honest monetary systems,

SMITH

By. H. BERTRAM
:

York, N. Y., Thursday, July 17, 1947

Bonds

1927

INVESTMENT SECURITIES

tilRSCH & CO.
Members New

York Stock

Bond Department
64 Wall

Straat, New York 5

THE NATIONAL CITY BANK

Exchange

and other Exchangee

BOSTON

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

Troy

HAnorer 2-0600

Baltimore

Chicago

Teletype NY 1-210

Cleveland

Geneva

London

(Representative)

HART SMITH & CO.

PHILADELPHIA

Albany

Buffalo
Dallas

Pittsburgh

Scranton

Williamsport

OF NEW YORK

Harrisburg
-

New
52

York

Woonsocket

SERVING SOUTHERN CALIFORNIA

Dept. Teletype: NY 1-708

New York

Bond

Emery Air Freight Corp.
Common

Investment Securities

Underwriters and

Distributors of Municipal

Assn.

HAnorer t-WSO
1-395

Montreal

NATIONAL BANK
OF

THE

CITY OF NEW YORK

Toronto

Inc. Com. & "A"

Detroit Harvester Co. Com.

U&gensellerSDurst, Inc.

Dealers

Bell Teletype NY

Bond

Air Products,

SINCE 1927

Security

WILLIAM ST., N. Y.

Wilkes-Barre

Springfield

THE CHASE

Members

Syracuse

Brokerage

Central Vermont
Public Service Co.

Service

^Georgia Hardwood Lumber Co.
,

Common

for Banks, Brokers

Analysis

upon

request

and

626

SPRING

ST.

Corporate Securities

Raytheon Manufacturing Co.
$2.40

TRinity 5761
10$

ANQtlES

Established
•

PASADENA

•

«DIRECT PRIVATE WIRE TO NEW YORK

request

Hardy & Co.

1899

Reynolds & Co.
Members

New

York

REDIANDS

MEMBER LOS ANGELES STOCK EXCHANGE
•

OTIS & CO.
(Incorporated)

ClAREMONT

Preferred

Conv.

*Prospectus
14

CLEVELAND

New York

Cincinnati

Chicago

Columbus

Denver
Toledo Buffalo

120

Stock

Bell

REctor 2-8680

Teletype:

Members

Exchange

Broadway, New York 5, N.
Telephone:

NY 1-635

and Dealers

New

York

Stock

Exchange

Members New York Curb Exchange
30 Broad St.
Tel. Dlgby 4-7800

New York 4
Tele. NY 1 -733

ira haupt&co.
Members
and

111

Broadway,

REctor 2-3100
Boston

York Stock Exchange
Principal Exchanges

New

other

Y. 6

Teletype NY 1-2708

Telephone:

Enterprise 1820

EDMUND W. TABELL*

Shields & Co.

Common

•

at this

time

before

York 5

Savoy Plaza

their
How¬

own.

3/6s, 1956

goes.

told

Class "A"

any

year,

and

opinions ex¬
pressed will

WANTED
*

based

Piedmont & Nor.

Ry.

Vanderhoef & Robinson
York Curb Exchange

31 Nassau Street, New York

mental

sta¬

tistical out¬

Edmund

mentioned, but simply

their

technical market action, as shown

Teletype NY 1-1548

ket

individual

and

averages

of the mar¬
se¬

curities.

this business

When I started in

American

Cyanamid

31/2% Conv. Pfd.

approach%to market in-

by Mr. Tabell before
York Society
of Security
talk

*A
New

pONNELL & Co.
York Stock Exchange

New

York

a; changes
in some of the
higher priced issues. In all, my
library consists of almost 2,500
graphs.
While these point and
tigure charts comprise the major
part of my technical work, I also

In addi¬

speculative bonds.

including the various
New York "Herald
Tribune," New York "Times" and
ket averages

Dow-Jones,

Statistics

averages.

While I have

one-point charts on
all of these individual securities

averages,

addition, there

Market

Analyst, Harris,

2-7815

Actual Tdafkets Qn
Co. WD
Taylor Wharton Iron & Steel
U. S. Finishing com. & pfd.
Electric Bd. & Share Stubs
New Eng. Electric System
Gen'l Aniline & Film "A"
Title Guaranty & Trust

ous

for

averages

shorter

trading, of the 28-day
the

intermediate

trend

term.

19456

Also, there

cators of

buying

iness

year

saw

de¬
24%
in

average

cline

but

value
the

same

in
pe¬

riod the

70%,

volume

along

with

the market studies.

Bell

Security Dealers Assn.

Hanover 2-4850

St,, N. Y. 5

Teletypes—NY

difference-in

1-1126 &

1127

Rotnem

such

But

Year

ended___

war

0.00

the market and business to follow

(1) The dire predictions of the
economist, ;who per¬
haps remembered the way the
Administration
"planned
things
that way" in 1937 and 1938.
If
adjustments had to be made in

Society
9,

address

Mr.

Security Analysts'
of New York City, July

the

same

there

was

pattern

and

perhaps

too much stress put on

the similarities of the two periods
and too little emphasis placed on

Mfg.

^Tennessee Gas & Transmission
banks

and

PINE

ST.,

N. Y.

Teletype NY

WHitehall

1-609

4-4970

York

1923

Curb

Exchange

NEW YORK 8

HAnover 2-9470

Curb and Unlisted

Securities

MICHAEL HEANEY, Mgr.

periods

two

people expected

KANE, Asst.

WALTER

Pow. &

Brown

Co.

Bulolo

Gold

13.77

York Curb Exchange

Chicago Stock Exchange

New York 6

39 Broadway

$10.56

Teletype NY 1-1610 '

Digby 4-3122

13.64

1947—— 16.50 est.

1948

(3)

Most

Dow

theorists

inter¬

preted the setback last fall as the
start of

bear market.

Allen B. Du Mont

Even the

optimists rushed to sell stocks be¬

ple who follow this theory when
a

generally
World

market

many

pated

expected.
War

1939
out

broke

historians

antici¬

sharp decline because that
happened in 1914 when the

first

war

started.

Instead of going

down, however, the market had a

bear

all

that

market

remember

indicated.

the

followed

declines
bear market

sharp

the

signals in 1929, 1937 and 1940.

Members N. Y. Security Dealers Ass'n

(4) The government regulation
of

Troster,Curries Summers
74 Trinity

;

markets

(Continued

on page

Place, N. Y. 6
HA 2-2400
NY 1-376-377

Teletype

resulted in
thin markets and the selling by a
security

Wires to Cleveland
Pittsburgh - St. Louis

Private
Detroit

26)

$1.10

United Kingdom 4% '90

Securities

Department

British

Securities

Department

Members

Stock Exchange

115 BROADWAY
Telephone BArclay 7-0100

and Other Principal

*Twin Coach

Common

$1.25

;V BOUGHT—SOLD—QUOTED

INCORPORATED

NEW YORK 6, N. Y.
Teletype NY 1-672

37 WALL STREET

90c

NEW YORK 5

ESTABLISHED 1890

Tel. HAnover 2-9300

w, •

«f7«

Tele. NY 1-1815

Conv.

Company
Preferred

Conv.

Preferred

*Prospectus on

Comtnon

request

Reynolds & Co.
Members

120

4. '

^Universal Winding Company

J-G-White 8 Company
Exchanges

'•

Conv. Preferred

90c

Scophony, Ltd.

Alloys, Inc.
Preferred

Solar Aircraft Company

Common

...

Paper

Southern Production Company

V' Gaumont-British

Conv.

Federal Water & Gas Corp.

Rhodesian Selection

Ont.

Canadian

Paper

Mgrk

Joseph McManus & Co.
Members New

when

Goodbody & Co.
7«

request

Teletype NY 1-1140 v

Seldom does the market do what

only

Sulphur

Warrants

City Units

New

WALL ST.

G.A.Saxton&Co.,Inc.

Established
Members
64

*Prospectus available to
dealers

Mexican Gulf

Acme Aluminum

Minn. &

Standard Stoker

*Tide Water Power Com.

cause there usually is a wave of
selling from the thousands of peo¬

many

We Maintain Active Markets in U. S. FUNDS for
Abitibi

^Standard Ry. Equipment

(Va.)

Stock

Common

Frank C. Masterson & Co.

significant differences.

the

particularly sharp advance.

1947.

General Portland Cement

^Standard Milling Company

Central States Elec.

•Prospectus

Dictaphone

Grinnell

Teletype NY 1-1227

Bell

Tudor

Second World War

6.74

'JL

the

many

1918—-$16.18

1921—

dilemma,

too

First World War

1920—

Rotnem before

Giddings & Lewis

WOrth 2-4230

After the

Second peace year
Third peace year_._«

government

"Based

American-La France

Exchange

Broadway, N. Y. 5

120

Com.

the Dow Jones industrial average:

After the

had

Trading Markets in

■

the earnings on the stocks used in

are

These include:

(WenecaCompcmn

Members Baltimore Stock

shown in the following figures of

54%, and bus¬
iness
activity

the pessi¬
mists search for other explana¬
tions of the decline in stock prices.

Argo Oil

MitclielU Company

earnings, .dividends,
and
com¬
modity prices after the last war.
The industrial average of stock
prices declined 451//2% from No¬
vember 1919 to August 1921. The

1919

Time, Inc.

Pharmaceutical Organics A

few daily vertical line
issues which I am par¬
a

ticularly interested at the moment.
Also, there are over 900 monthly
range charts going back to 1936.
All of this requires a great deal
of work. Today, it is necessary to
have a staff of two or three help¬
ers, including a capable assistant,
to keep these charts up to date
(Continued on page 30)

increased 17%.

Ralph

Lea Fabrics

May, McEwen & Kaiser

other indi¬

are

power and

trading,

breadth of

First peace year_____

yields

37 Wall

stocks have

Hood Chemical

economy

those

gone

Foundation Co.

Members N.

it would be better
for political reasons to have them
out of the way before an election
year.
The government also re¬
tired
$5 . billion of
marketable
government debt during the first
half of the year.
•
1
(2) The studies of the market
historians that showed we had a
severe decline in business activity,
our

earn¬

ings

Moxie Common

Albert Pick

activity.

the Dow Jones

Warner & Swasey

bus¬

During the last

Punta Alegre Sugar

Kingan & Co. Com. & Pfd.

and

selling
pressure and gauges of the short
interest compared to the average

earnings, div-$>idends

industrial

Haytian Corp.
Int'l Detrola >

Interstate Hosiery

for

range

term

International Elevating

term

Illegitimate because we have had a sharp decline in stock prices without a decline in

ket.

Aetna Standard Eng.

Ala.

branch office*

our

During the last year we have had an illegitimate and premature bear market.
Pre¬
has been the longest anticipatory decline in the history of the stock mar¬

Northern New

Direct wires to

the 200-day range for the longer

mature because it

•

England
United Piece Dye Wrks.
United Artists Theatre
Dumont Laboratories
Boston & Maine R.R. "

MY 1-1557

Henry Hudson Hotel Com.

Analyst points out market's logical action in switching strength from war to peace industries. In view
of prosperity outlook and market's sound technical position, Mr. Rotnem regards as possible a 100point rise in the D-J average.

Virginia Electric Power

HAnover 2-0700

Intl. Educational Publ. Pfd.

Co.

Upham &

Exchange

moving averages and oscillators
of the 21-hour range of the vari¬

By RALPH ROTNEM*

BROADWAY, NEW YORK 5

Stock

York

St., New York 4f N. Y.

New Orleans, La.-Birmingham,

charts in

tion, there are charts of the mar¬

New

25 Broad

have various other indicators such

also, have

Members

point

trading issues. I also have some
200 of the more active New York

Exchange

Curb

REctor

only exceptions being some
extremely inactive 10-share units

Steiner, Rouse & Co.

An Illegitimate Bear Market

Members
New

Tel.

the

and

Analysts, July 9, 1947.

120

issue listed
the New York Stock Exchange,

Standard

Request

15 years ago,

technical

Bought—Sold—Quoted
Prospectus

I had a port¬
folio of 20 or 30 charts of market
leaders.
The whole idea of the
some

I have one-point figure

available.

priced issues and three-and-five-

Curb issues and also some 50 or

charts and graphs

charts of almost every

interpretation

Tabell

the

for

look

market averages

various

the time element.
I believe, at the moment, I have
one of the most complete collec¬
tions of point and figure charts

not

the

regardless

the funda¬

securities

Telephone COrtlandt 7-4070
Bell System

graph. They are quite simple and
depict, instead of the daily price
range,
only the full one-point
changes in individual securities

here
As I
you
last

ever,

Savoy Plaza

30 charts has grown

quite sizeable proportions/ My
original charts were point and
figure charts and I have contin¬
ued to concentrate on this type of

opin¬

and

informed
definite
ions

list of 20

have

whom

300 shares

opinions in writing in a
when you attempt to »make predictions

terpretation became a sort of , are also graphs of every half-point
some
of
the
lower
hobby with me' and my original change in

all

alysts,

Bought—Sold—Quoted

hazardous occupation at

<e>

group

of security an¬

Teletype NY 1-583

Members New

bi-weekly market letter and triply hazardous

Corporation
120 Broadway, New

HID

Louisiana Securities

market's technical pattern

Attempting to forecast the fluctuations of the market is a
best.
It is doubly hazardous when you are forced to put your

New York Hanseatic

7-5660

check

psychological changes. These combined factors lead Mr., Tabell to ad vise buying
dips and holding for ultimate doubling of the current price level.

because of investors'

request

should be used

Market technician holds statistical background

Rights

Alabama &

■

Preferred

Memo

Thursday, July 17, 1947

Market Forecast

A Technical Stock

Arden Farms Co.

BArclay

CHRONICLE

THE COMMERCIAL & FINANCIAL

(210)

New

York Stock Exchange

Broadway, New York 5, N. Y. *
Telephone:
BeU

REctor 2-8600

Teletype:

NY 1-635

Volume

166

Number

4612

THE COMMERCIAL & FINANCIAL CHRONICLE
■

I N D E X
Articles

and

News

Communism in One World—Harold E. StassemiCover

vs.

Does the Bear Walk Like

Market

Man?—H. Bertram Smith..Cover

•
,

An Illegitimate

Outlook for the Stock Market—James F. Hughes...

JAMES

Analyst,

HUGHES*

Auchinloss,

Parker

Mr. Hughes asserts SEC regulation and

A Technical Stock Market Forecast—Edmund W.
TabelL—.

Bear Market—Ralph Rotnem

•

Redpath

Treasury expansion of bank

traditional stock market patterns. Holds Euro¬
pean rehabilitation and other inflationary factors may keep stock
prices high for several years.

member of this

allowing

Society I have developed the bad habit of
humor to creep into my occasional appearances at

some

these lunch-<§>

....

Dahlberg..

it's

;

crease

ceived
and

selling

subject

in selling based largely on
factors resulted in one

technical

Sea-Air Opportunities—Richard H. Wels

for

Economic Observations Abroad—N. S. W. Vanderhoef

Stock Market Lethargy—Roger W. Babson

there

time for

ization,

I am
forced to plead
guilty.
I in¬

Causes and Remedies

sist,

was

business

however,

Telephone:

really

touch

discounting

NEW YORK

WHitehall 4-6551

things de¬

the

humorous

Aeronca Aircraft Com. & Pfd.

came

Gulf States Utilities

economic

Haile Mines

recession that could ap¬

by the spring, summer,
tumn or early winter of 1947.
pear

What do you do about
in which the

U. S.

au¬

Finishing Com. & Pfd.

situation

however,
overwhelming major¬
are
ity of people accept as the true gos¬
extenuating pel an economic
sequence that was

re¬

old cats

WALL STREET,

fairly general discovery
that the
technical bear market of
1946

your

dogs.

with the

comedy. De¬
spite this real¬

Opening of Private Trade With Japan—Thomas R. Wilson.. 16

—Paul G. Hoffman

stock

the

market

tory of the market.

veloped,
crowning

present

cash

—

dealing of the four worst breaks, consider¬
so serious
ing the time involved, in the his¬

the outlook

welcome

seme

from

late

too

never

with

Europe in Climax—A. W. Zelomek

Economic Instability:

that

realize

Flexible Public Debt Policy—Daniel W. Bell
Our Neglected

forums,

eon

Accomplishing Economic Stability—Emerson P. Schmidt....
No Famine Ahead in Building!—Bror

IS PAST"
but

Papa

Export Boom Collapse Threatens Business Outlook

Davidson,

"FATHER'S DAY

credit have upset

.1'' 3

The "Dollar Crisis" and Foreign Trade—Franklin
Prager...

—Clinton

Outlook fox the Stock Maiket

Page

U. S.

(211)

that there
World-Wide Better Living
—William

Standards Is Road to Peace

James F.

Batt

Hughes

Economic Problems of Postwar France—Rene

Mayer

Popular Economic Misconceptions—Frank M. Surface

circumstances.

The most important of these

ex¬

tenuating circumstances is that if
did not cultivate

one

ability to

view with humor the bewildering
Stable

Money

Prerequisite to European Recovery

Chamberlain

—William

Cover

—'

New Distilling Process Eliminates

Aging

Snyder

Secretary

Peru's Latest Offer to American Investors Not Meeting
With

Acceptance

Major Problem

vent

"sudden

Gen. Marshall Sees Turning Point in Foreign Relations.^...

under

Bonds Begin

Analyzed by Wm. R. Boyd, Jr

Financing.

Aubrey G. Lanston Predicts Early Unpegging of Treasury
24

Certificates
NICB Says Unit Labor Costs Still Rising

Henry

Named Man-of-the-Year

Ford

unreasonable

—

all

to ask

realized

V
As

and

(Editorial)

See

Bank

Cover

Stocks

fluctuations

Securities

Our

Reporter

Bookshelf

Man's

Canadian

Our

Reporter's Report

Public

Field

Investment

News—Carlisle

Ahead

of the

Salesman's
Now

State

About

Trade

and

Industry..

one

rities"

that

should

and

...

and

News

Published

Weekly

Twice

You—

39
48

Dominion

and

Canada,

Countries,
Other

CHRONICLE

FINANCIAL

DANA COMPANY,

25 Park

$25.00

Publishers

2-9570

the
HUBERT D. SEIBERT, Editor &
WILLIAM

t'lLLIAM

SEIBERT,

DANA

RIGGS,

Publisher

corporation

and

Other

3,
Drapers'

ad,

c/o

17,

Reentered

25,

Quotation

year.

Record—Monthly,
(Foreign postage extra.)

Earnings
year.

Record

.—

.Monthly,

the

price

news,

135

bank clearings,

Salle

St.,

1947 by William B. Dana
Company
as

1942,
Y.,

made

exchange,
New

remittances for, for¬

York

funds.

Bond & Mtge. Guar. Co.

Dow-Jones

industrial

high of 197 to

represented

the

were

technical
level

the

averages

low of 166

first

important

Punta Alegre Sugar

greatest
depression
in
history,
there was a general stampede in

Lea Fabrics

the autumn of 1946 to get abroad
the
business
depression
band¬

U. S.

wagon because of

I asked, "What clo you do about
situation like this?" My answer

DUNNESCO.

is that you take it
pretty seriously
and use the lessons learned from

Members New York
Security Dealers Assn.

25 Broad St., New York

it when next faced with the prob¬
lem of

trying to appraise the out¬
the stock market. ! :

points between the 200

and

186

the

industrial

For example,
195 was
important for a variety of reasons
including the fact that one group
theorists

Dow

firmly believed
level, rather than 186
signal a reversal in its
major trend if it were violated
this

that

Sugar

Susquehanna Mills

ten-day tech¬
nical collapse in stock
prices.

4, N. Y.

WHitehall 3-0272—Teletype NY 1-958

look for

Lessons

From

Last

Year's

Experience

ThQre

Elk Horn Coal

two significant les¬

are

that may be learned from the

sons

portant

than

before

ever

become

and

Common

BOUGHT

—

SOLD

—

QUOTED

imperative,,

if one
wishes to keep abreast of what is
going on in the market, to know
what the various schools of tech¬
nical

interpretation
saying and advising.

history

number of critical

average.

-'t

had
no
ability
forecasting
the

The

are
,

lesson

second

FIRST COLONY

thinking,
;

that

CORPORATION
for

52 Wall St.

practical market operations what
the

great majority of people think
is going to happen is more impor¬
tant that what actually does hap¬
pen.

New York 5, N. Y.

Tel HA 2-8080

Tele. NY 1 -242!

This statement is supported

by the history of the past decade
during which time three simple
slogans
rather effectively con¬
trolled the major trends of the
stock market.

Established 1850

H. Hentz & Co.
'

Well, it
later

later,

186

was

ticular "sudden and

There

humor

five

and

reached

its

effective

low of 166.64.

sufficient

was
in the

ironic

York

Stock

Exchange

New

York

Curb

Exchange

New

1938 until the

drifting into war and war is

simple

resulted

situation

where

concentrated

in-

are

advance

Board's

duction
*A

talk

by Mr. Hughes before
Society of
Security
Analysts, July 9, 1947.
,v.'v
New f York

spring of 1942 the

major trend of the stock market
was dominated by the slogan, "We

speculation
a

New

time of

the

fessional

but

■

the Czecho-

From

bearish."vSo

moderate

slovakian crisis in the autumn of

realization oF the
fact that the elimination of pro¬

by law had

•

Members
t

par¬

unreasonable

Mass Thinking Deluded

days

September 10, this

violated and four days

was

1938 to
increase
:

;

effective

that

concept
in

the

index

was

an
Reserve

Federal
industrial pro¬

from, 100

Cotton

Commodity

^ ^

Chicago

[

Exchange

Exchange,

Board

Inc.
Trade

New Orleans Cotton Exchange
And other

N. Y. Cotton

Exchanges

Exchange Bldg.

NEW YORK 4,

N. Y.

November,

189 in April, 1942, and an

in .corporate

(Continued

York

this

despite

on page

CHICAGO

earnings

DETROIT

PITTSBURGH

GENEVA, SWITZERLAND

29)

Lawyers Title & Guar. Co.

$35.00

per

year;

are

interested in offerings

Stern & Stern

High Grade Public Utility and Industrial

Textile, Inc.

York

Bell

Teletype

Stock

New

York Stock

Broad Street, New
Tel.:

HAnover

Exchange

York 4

Members

New

York Curb

135 S. La Salle St.,

Exchange

Chicago 3

1-2033

Conv. Preferred
on

request

Boston

Glens Falls

Schenectady

Unterberg & Co.

Merhbers N. Y. Security Dealers Ass'n

Telephone BOwling Green 9-3555

Teletype—NY 1-5
Albany

C. E.

61 Broadway, New York 6, N. Y.

Tel.: Andover 4690

2-4300

Exchange

WHitehall 4-6330
NY

Analyses

Members

'New

& Trust Co.

Spencer Trask & Co.

Prudence Co.

15 Broad St., N.Y. 5

Rome Cable Corp.

PREFERRED STOCKS

;

N. Y. Title & Mtge. Co.

Members

S.
of

Lawyers Mortgage Co.

Newburger, Loeb & Co.

Subscription Rates
Subscriptions in United States,- U.
ssessions,
Territories
and Members

Union,

that

•'

Public National Bank

post office at New
the Act of March

1879.

n-American

proved

whatsoever

secu¬

the fluctutations in

CERTIFICATES

second-class matter Febru-

the
under

during

theory, it was obvious that
these ten days which carried the

(Foreign postage extra.)

account of

Haytian Corporation

TITLE COMPANY

1947

HI.
(Telephone: State 0613);
Gardens, London, E. C., EngEdwards & Smith.

Coypright

>rk,

rate

year.

Publications

city news, etc.).
Offices:

ticago

per

year.

eign subscriptions and advertisements must
be

President

Every Thursday (general news and adrtising issue) and every Monday (comjte
statistical issue — market quotation
ite

per

And yet 17 years after the
market

do about

ket

climax at

$38.00

$42.00

banking system enabled the
run right over the
high of industrial activity in 1929?

has

Broadway

stock market to

body having even a slight bowing
acquaintance with technical mar¬

;from

Security Dealers Assn.

Teletype N. Y. 1-714

Business Manager

Thursday, July

cords,

per

Note—On

9576

and

Monthly
$25.00

York 8, N. Y.

Place, New

-REctor

Eank

Office

U. S. Patent

Reg.
ILLIAM

page

Other

COMMERCIAL

The

article

scientific and

new

Bell System

experience of the past year. First,
market technicians are more im¬

fructuation"
*See

dramatically revealed
a

REctor 2-4500—120

elastic

unreasonable

occurred

(Walter

Says)

Whyte

Washington

Corner

Registration;... 41

Bank and Trust Cos.— 39

NSTA Notes

Markets

Tomorrow's

Mutual Funds

Securities..

Securities

Bargeron

the

there

would

The

of Business Activity

Indications

Securities

Estate

Securities

Einzig—Sterling. Diplomacy—
Washington

—

Securities

Utility

Railroad
Real

Governments..... 40

Recommendations

From

Prospective Security Offerings

Coming Events in the Investment
Dealer-Broker

Page

Observations—A. Wilfred May—.—
cn

than

was

such when

Established 1008
Members

seriousness, I would like

what

"sudden

There

•

Insurance

Business

Page

that

"sudden and

securities"

fluctuation

Regular Features
■■■■

secu¬

might justifiably be
fairly normal conditions,

technical bear market
■i

which

J.K.Rice,Jr.&Co.

ten market sessions between Aug.
27 and Sept. 10 last year. To
any¬

Lehman Plummer Warns of High Price Effects on

Credit

the

were before
regulation, one has to
laugh in order to avoid going mad.

the

Consumer

When

prices

Services

The Petroleum Industry

market

rigid
old-fashioned banking
system, and

what

unreasonable

Sterling Convertibility Problem Discussed by British

Bank

and

there have been

Settlements

Sales of World

stock

knowledge of the
fact that it is regulated by legis¬
lation primarily designed to pre¬

called

Delay Coal Price Increase, Urges Truman

Information

appreciation

the

heightened by

rities."

—

Production and Movements of Gold, Survey by Bank for
International

fluctuations in the price of

J. Cheever Cowdin Sees Leveling Off of Prices, Costs and
Income

Humorous
antics

Convertibility of Sterling Postponed for 14 Countries,
Reports

gyrations of. the stock market, one
could be driven beyond the realm
of sanity by these gyrations.

accidental by-product of

Worcester

Teletype MY 1-1066 "

THE COMMERCIAL & FINANCIAL CHRONICLE

(212)

Thursday, July 17, 1947

BUSINESS BUZZ

The "Dollar Crisis" and

Foreign Trade

rST. 1926

FRANKLIN PRAGER

Supplies Corp.
Trade, College of City of New York

Executive Vice-President, Allied Metal Products and
Lecturer

Foreign

Export executive, while admitting dollar shortage is serious and
may cause decline in U. S. exports, decries fears our export busi¬

foreign countries still have dollar
decline, they will remain above prewar
level. Foresees bartering expedients and high level of exports for
1949 and thereafter, and looks for implementation of Marshall Plan
as leading to healthy world economy.
will

ness

Abitibi Power

reserves

American Hardware

Brockway Motors
Buda Co.

Cinecolor

are

disappear. Says

and

period, many exporters
their doors at the first pinches

parallel to the similar 1921

many

if exports

even

pulling in their .belts or closing
of

Chicago R. I. & Pac.
Crowell-Collier
Fairbanks Co.*
Fleetwood Air Flow*
•

General Machinery
General Tin

com-<S>-

the

Brazilian
Government
de¬
petitive post-, the
war
trading clared that all (importers4 could
world are felt. only pay off in 48 monthly dollar
The situa¬ installments, so many time draft
tion is admit¬ shipments were made that the ac¬
tedly serious. tion had to be duplicated in 1934
The .actual when another "dollar moratorium'!
of

excess

ex¬

ports over im¬

". i'

ports

Gt. Amer. Industries

the
five

for

first,

ments

'year was over

States

$4 billions.
The

Lawrence Port. Cement*

Liberty Aircraft Prod.
Majestic Radio & Tel.
Michigan Chemical
Minn. & Ontario Paper
Northern Engineering

Nu-Enamel
Pathe Industries

Philip Carey

if of stran¬
gulation, and a quick resort to
exchange controls plus an em¬
gasp, a cry as

Sorg Paper
Stand. Fruit & Steamship
Sterling Motors*
Stromberg Carlson

turn

Taylor-Wharton*
Textron-Pfd.
Tokheim Oil Tank
U. S. Air Conditioning
United Artists*
United Drill & Tool "B"

Have

Dollar Reserves

situation

present

where

near

serious.

is no¬
Many for¬

eign countries increased their re¬
serves of dollars-and gold during

upon

practices, real estate offices and
retail counters from whence they

witnessing the reversing

direction

dulum.

economic pen¬

trade

Epcport

can

cer¬

tainly not be maintained at its
present fantastic level.
But at
one-third
still

better

year,

it will

rate

current

than

prewar

any

and provide employment di¬

rectly and indirectly for 15 mil¬
lion persons.
Since not price nor

quality but dollar-shortage is the
limiting factor, a decline from

Taca

Still
This

The ef¬ our wartime topheavy purchases
restricted
commercial
ex¬
the thousands and
of
exporters
who
opportunely ports. Heavy loans for non-pro¬
mushroomed up as the War ended ductive purposes, such as we wit¬
has been a frightened squeal plus nessed during the early twenties,
have not been
duplicated.
The
a
hasty retreat back to the law
in

We are

.;>•••

of bilateralism.

bracing

Purolator Prod.*

four-year

course.

pronounced

are

came.

Polaroid

discounting

was

of this nature. All traders
received all their dollars, in due
paper

"favorable"

overseas

of this decided

balance of trade

fect

Moxie

imme¬

effects

diate
Prager

discounting privi¬
bank in the United

benefit of bank

leges;

Lanova*
Franklin

these large-scale ship^
were
made without
the

that

note

months of this

Higgins Inc.

It is interesting to

declared.

was

ncft
but

price

high

present

levels

would

reduce export dollar volume
will

simply

result

goods going to the foreign buyer
fdr

the

dollars

xperienced

has

exporters

available.

famil-

are

iars^with this situation and are
prepared totTeaT with it.
at the low points of 1932

Even

dollars had become

when

horizon

bright for greatly in¬
imports to pay for a flour¬
ishing export trade: Wartorn Eu¬
rope and Asia are rapidly recov¬
ering their r.industrial potential
and

reaching

orders from
are

ery;

position to fill
importers who

bespeak greater

raw

billion

"import"
just

which

well

dollars—an

invisible

provides

dollars

does crude rubber.

interim

measure

many

American manufacturers have al¬

ready
The

turned

barter

Predicting export boom collapse this year, Mr. Davidson says it
will deepen business depression and cannot be entirely averted
by U. S. foreign loans or aid. Cites dollar balances abroad as not
covering to most countries one year's exports, and concludes a
return to normal export situation will start continuous crushing r
of purchasing power

trading.

Safety Razor Co.
sends blades into Italy and takes
fruits and vegetables in exchange,
which

converts

less of how much we

f 1

t i

o n a

page

27)

countries

QUEENS BOROUGH GAS & ELECTRIC CO.
6% Cumulative Preferred

Corporation

ESTABLISHED 1927

-■

Teletype: NY 1-2948

Virginia Elec. Co.

the

Export Increases

shows how much our
various countries in
quarter of 1947 (on an
annual
basis)
exceeded 1937—a
year
of world-wide prosperity.
War-torn
Europe
accounts
for

exports
the

has
the

in¬

Clinton

Circular

upon

the

largest

GRAHAM-PAIGE

WARD&CO
est.

1926

MOTORS

collapse
by

will

not

watching Europe's

count

120 BROADWAY, N. Y. 5
REctor 2-8700
N. Y.

Memorandum

ENTERPRISE PHONES

Ii«rtrd6in

Bun.wz*

Boe.2Kx>

pro¬

sustain

our

increase

exports to that area
the current 250%

near

over

1937.

It should be

remembered, however, that these
countries have already been using

Di-Noc Co.

gifts

Soya Corp.

request

long-term

and

at the annual

new

loans

from

rate of $7 billion.

program

will be

taper¬

ing off, rather than a stepping up
European aid.

exports could still de¬
billion a year, if our cash
customers reduced their buying to
Yet

Seligman, Luhetkin

1-1286-1287-1288
Direct Wires To

Fhila., Chicago & Los Angeles

lend-grant

proposed

of $5 billion a year to re¬
habilitate war-torn Europe may
gram

The

^embers N.Y. Security Dealers Assn.

nor

three-fifths.

for

The

the increase,
suffering nei¬
destruction ac¬

countries

somewhat

ACTIVE MARKETS

CORPORATION

4% Convertible Debentures due 1956

one-third

only

shaky ther hunger

supporting current business
activity. The first signs of the
prop

discovered

request

first

whereas

impending
*Bulletin

Davidson Jr.

ventory accu¬
mulation

which

over

taken

primary cause of this year's

export boom is revealed by Table

ex¬

imports

Canada.

and

The

of ! ex¬

place

Street, New York 16, N. Y.
•

India

i n g
business
recession, be¬

po r

ex¬

deepen

cess

the

forthcom-

cause

•

titute

en¬

and

Federal Water & Gas

Telephone: LExington 2-7300

Congressional liberality to des¬
nations,
but. rather
by
watching for ebbtides of abnormal
spending in Latin America, Africa,

port
collapse
will " hasten

Cent. States Elec. Com.

Central National

hunger and reconstruction needs,

booms

(Continued

business boom.

now props up our

boom will probably collapse this year regard¬
lend-grant Europe, because it has been pushed up

largely by in-

dollars

into

that

Our bloated export

Gillette

the

•.

bricklayer!"

Economist, Fiscal Counsel, Inc.

eign travel expenditure exceeding

EASTERN CORPORATION

V. •/

By CLINTON DAVIDSON, JR.

goods requirements; the
Brookings Institute predicts a for¬

Amer. Gas & Power

22 East 40th

Threaters Easiness Outlook

material and

Bought—Sold—Quoted at Net Prices

•

B. L., I made almost as

profitable week,

Export Boom Collapse

war.

Standard Gas Elec.

very

much

riched

Southwest Natural Gas

consumer

Warner & Swasey

Tide Water Pwr. Com.

was

increased leisure time in the U. S.

Vacuum Concrete*

New Eng. Elec. System
Puget S'nd P. & L. Com.

"This

complaining "about non-deliv¬
the high national income and

that

scarce

creased

Co.

INCORPORATED

Members New York Security

41 Broad Street

1937

Dealers Association
New York

4, N. Y. "

our

cline $6

SIEGEL & CO.
39 Broadway, N. Y. 6
,

Dl&by 4-2370

Teletype NY 1-1942

level.

over

1937

and

going

Central America.

increased
;

The largest increases
are

her

Canada,

Brazil has

purchases from us

(Continued on page 45)

Volume 166' Number '4612

THE COMMERCIAL & FINANCIAL CHRONICLE

*\?

»•

;

t; «• •<

With Reagan* & Co.

• *•<

(Special

Production

Electric Output

Carloadings

State of Trade

rvations

Trade

Retail

Food

Price

Auto

Industry

...

ta' The Financial

PASADENA,'

Althouse is

Chronicle)

Jack M.
with Reagan &

CAL.

now

—

Co., Inc., 575 East Green Street..*

By A. WILFRED MAY

Index

Production

Business

Commodity Price Index

and

-r" H

•

Steel

The

*4-

*
i/i

■

(213) " 5

SECRETARY MARSHALL SETS OFF HIGH-STAKE GAMBLING

Failures

The world's two Super-Powers, it should be
realized, have be¬
embroiled in a gigantic gamble with bigger and

come
•

;

While

•

the

United

States

initiated

bigger betst
new
diplo¬

matic policy of non-appeasement in then-Secre*

Settlement of the soft coal stoppage by Northern and Southern
operators with the United Mine Workers Union has been
productive
*

insuring

peace

the bituminous

year, but it has at the
future course of prices

benefits that will

accrue

concern

~tary

to the miners under the

new

might
after

one

the

over

contract. "

has

power,

shown

much

the number
the gain

of factory

workers has increased almost

in output.

University states.

Supplementing the above remarks the
productivity increases in the

same

business

will

stimulated.

ratio
does

higher costs will in the long run be
ness
activity. The recent increases
ferred

price reductions

any

have not yet been
It

as the
rise in wage rates,
not, the adverse effects of

factor in slowing down busi¬
major industries have de¬
lines but in most cases they

followed by price increases."

should be

pointed out in the present instance, however,
that with increased wages in both the steel and
coal industry, the

chants following in line.

price

increase

In the

case

of the hard coal

mer¬

producers,

in factories.

rise

the

In some fields the increases
of living.
They are

have

cost

reflected,
purchasing, which is sustaining busi¬

however, in increased consumer
activity at current levels and will do

ness

much to

slow down

any

decline after more nearly normal relations between
production' and
distribution have been established."
V

European

week's

total industrial

output.

,i;-

consideration to usual seasonal changes,
approximated the 'level of a week ago and was
moderately above that of the corresponding week a year ago. Order
volume moved ahead in
many lines and employment levels were at
record heights.
The Census Bureau in its latest report for
June,
1947, notes that there were 60,055,000 Americans in civilian
employ
and 1,400,000 more in the armed
services.
The June, 1947
figure
was 1,730,000
higher than in the previous month and
approximately
3,700,000 above the June, 1946 total. # Thus the;
Uune, 1947 figure
exceeded
America's
postwar
full - employment
goal
by
55,000
overall

proper

production

workers.

With the settlement of contracts in the
of the steel workers resumed work and

coal

industry,

many

production moved ahead
output scheduled at 11% more than in the previous week.
Although many steel consuming plants were closed for Summer
vacations, pressure for steel deliveries increased.

civil

the previous week.

Production
"above

levels

and

order

year

ago.

volume

the

4% below production and

were

for

week

lumber
ended

orders

new

Heavy

are

trade

Surely the amount gambled there
a

status

OUTPUT

1947

the

first

Operations

six

months

such

high

Foremost there

WILLIAM ST.,

IIAnover 2-0980

N. Y. 5

Bell Teletype NY

1-395

Toronto

Montreal

New York

BALANCES

STERLING

Arabian, Ethiopian, Iranian,
Liberian, Siamese

with

AND

SOLD

approval of local controls.

quoted for any kind
foreign exchange, free or
gold, silver, platinum.

Markets
of

blocked:

risk

that

the

United

Congress,

F. BLEIBTREU & CO., Inc.
79 Wall St., New

York 5, N. Y

Telephone HAnover 2-8681-2
Solofret,

Cables:

New

York

have already distributed $16 billion for post-war relief.

United States Government

She,

that atomic-warfare

still safely

beyond

her

grasp.

Public

of risk for Marshall Plan oper¬
of the Ramadier Government,
with the aid of liberal credits and material support/to withstand the
imminent continued onslaughts of the belligerent domestic Reds.
•'
We must also gamble that we can free Germany from Russia's
stranglehold on her productive capacity, so that, instead of "bleeding"

Powers, her

mutual aid.

:V. /V

The

Investment Stocks

R.W. Press
Members New York Stock Exchange

Knowledge

•••:

■->

: •;

Experience '
J or Investors

Facilities

Russians, in walking out of the Paris Conference along with
taking their chance on the converse
additionally on affirmative ones. Chief of

will,

•
.

e I?!

LAMBORN & CO.,Inc.
99

WALL

STREET

NEW YORK 5, N. Y.

nations:

on the failure of attempts at trade, agreements;
that the schism .between1 the* interests' of American businessmen and
Europe's need for tariff reduction will continue.
But Moscow's basic gamble is that America's material contribu¬

relying

absolute

disappointing to the
parties,

Boston 10

New York 5

the latter is that the United States will soon run into a devastating
"capitalist" depression which will both render us incapable of carry¬
ing through our commitments and discredit free enterprise with inde-

tion

201 Devonshire St.

68 William St.

'The Soviet's Risk?

their regimented
satellites, are
of the above
factors, and

tVp^fprn

potential output can be used for

enormous

/'vv"

J/r-:':

Utility

BONDS

France also provides a focal point
ations.
Indispensable is the ability

the Western

Municipal

Railroad, Industrial

our

or/in order to hold in line her satellites, to match American
and

and

State

of double her scheduled

strongest European "ally," must necessarily over¬
come the elevated level
of U. S. prices, the great dollar-burden in
her share of Germany's
support, and the difficulties of maintaining
the free convertibility of sterling from this week on.
y*;
Again, in going ahead affirmatively without Moscow and her
satellites, the Western powers are taking it for granted that Russia
will not in the early future be able'to lift her industrial and agri*
cultural production sufficiently to make of herself a potent military

size

and

manner

"borderline" countries with

SUGAR
Raw—Refined—Liquid

distribution, be so
strong Communist

to shove them all the way into the Soviet column.
•
The stakes are
high, and the "game" is nearing its final round!
as

Exports—Imports—Futures

DIgby 4-2727

slightly
28, shipments

fractionally above

Pennsylvania Sait Mfg. Co.
3

Vz%

SETS

Specialists in

Preferred & Rights
"When

Issued"

Domestic,
-

'■

Philippine Mining Issues
Bulolo Gold Dredging, Ltd.
Kerr

Above

1947

the

Previous
steel

Week

industry produced

The 42,267,320 net tons of steel made in the
first half of 1947
almost 15,000,000 tons larger than the amount
made in the

(Continued

on page

33)

Addison

Big Wedge Mines

16%

Canadian and

Common

Bought—Sold—Quoted

Far

•

East Oil

FREDERIC H. HATCH & CO., INC.

stitute announced.

HART SMITH & CO.

involved, the

gambles which

the

monthly drawing-down of her Loan from
amount.

larger total tonnage of ingots and steel for castings than ever before
in any similar peacetime
period, the American Iron and Steel In¬

was

1957

BOUGHT

elements

PEACETIME RECORD
Current

5ft

scarce.

FIRST HALF

Steep Rock Iron Mines

quo

United Artists Theatre Circuit
STEEL

1944

Internat'l Pr. Secur's 6V2S & 7s

balance, her renewed cutting-down of imports and her current

household

in the past continued

Internat'l Hydro-Elec. 6s,

become

may

number

sharp
tools

Rooseveh

are gambling on Great Britain's ability to survive and
economically. Tnis in the face of her. mounting adverse

recover

appliances sold well in the week, but such
toasters, irons and other small appliances encountered
buying resistance.
The supply of motors and small
power

items

continued
June

were

production.

start

all-out effort to maintain

Company 5s, 1959

;

which

Moscow is

engineering construction by 26%, with a
$78,690,000 in the week ended July 10, against
$105,599,000 in

total of

"Doctrine."

peace.

taking.

nendent

Building construction displayed a noticeable improvement" in
activity with the lifting of government restrictions. The
holiday cut
total volume

actual

United States as well as the Soviet Union is engaging in giant
political gambles through the attitudes thereto which they are whole¬
heartedly embracing.

with

into

the

situation met by Mr.

tion to Greek and Turkish stability.
At any rate, apart from the financial

force

giving

before

one yet knows the amount of
involved in making good the
Secretary's suggestion advanced at Harvard, but there is no doubt
that it will far exceed the Truman Doctrine's
$400 million contribu¬

largesse;

the

his

small for

for

money

Independence Day closing of most plants coupled with the usual
shutdown of many industries for a one or two week
vacation period
After

Brown

non-

Our next major step in European intervention is embodied in the

INDUSTRIAL PRODUCTION DECLINES SLIGHTLY IN
WEEK

reduced

plight of the

Then"we

"Wage rates and weekly earnings have increased in
nearly every
as

desperate

action

shooting—a

possibilities for action at home.
is woefully

which

observations:

well

a real way
since last March.

appropriate the further financial wherewithals to be furnished by u§.
Secretary Marshall is necessarily gambling on the persuasiveness of
the argument that credits operating under, business-like systematic
direction will eliminate the objections to the piecemeal manner in

discussing the effects of increases in wage rates and weekly
earnings on business activity, the "Bulletin" made the
following

aims

conformity with the temper of the American people, will refuse to

offset the

All Issues

—

have

billions

States

scarcely

forth

There

expected to go into effect on Aug. I. The
effects of these increases will in the
natural course of things be
felt throughout our whole economic
structure.
*

other field

Canada

The U. S. Gambles

contrary effect will be found to be true, since higher prices are
being forecast for steel products, and both soft and hard coal
producers have already taken such action.
According to reports
two big Pittsburgh district soft coal
producers on Friday, last,
raised the price of bituminous coal at the
mine with retail

relief—we

Dominion

Internal Bonds

pending so-called Marshall Plan.

Bulletin adds: "If worker

those

other

asking the Congress for only
objective, after the twentyalready made available through the other abovementioned relief media, the President made a
compromise between
emergency political strategy against the aggressor abroad and the

tension

and

decade ago by his epochal proposal to Quaran¬
tine the Fascist Aggressors—President Truman
last March 20 started a mild rolling-of-the-ball

May

setting

three

they have
significant effect on consumer incomes than on making
business operations more difficult
through an advance in production
costs, the June issue of the "Business Bulletin" of the La Salle Ex¬
a

Press

four hundred million dollars for this vital

With employment high,
wage rates also have risen and

had

UNRRA

definitive

take

the
Wilfred

stood that

termed

Recognizing the

working hours in a number of places. The Census
Bureau reports that ill June, 1947,
60,055,000 persons were em¬
ployed in contrast to 56,355,000 in June, 1946. It is also under¬

Overseas

Communist portion of the world and-the tradi¬
tional unwillingness of the American
public to

With regard to purchasing power,

decrease

the

February,

1946; and what
quasi-dollar diplomacy there¬
Export-Import and the Brit¬
property,, Lend-lease and sta¬
World Bank and Fund sub¬

affirmative

toward

encourage workers in other fields to sdek Kiglier scales which will
affect the average consumer and his
ability to buy in a great degree.

however, it is cheering to
important factor in the Nation's buying
steady gains notwithstanding layoffs and a

before

only begun laying down the chips in

adjustments and other benefits in their contract which recently
up for renewal.
All in all, wage scales at the moment are
tending higher and the pattern established in the coal
industry will
came

scriptions,

pay

employment,

end

ish

Taking their cue from demands of fellow members in the soft
coal pits, the anthracite or hard coal
miners have obtained similar

note that

speech
of

—

the

through
loans, surplus
bilization credits,

direct result of higher wages and other

Byrnes'

Club
4

industry for at least

time provoked some

same

coal

Established
MEMBERS N.
63

Wall

SECURITY

Street, New York 5, N. Y.

MAHER & CO.
62 William St., New York, N.

Tel. WHitehall 4-2422

1888

DEALERS ASSOCIATION

Bell Teletype NY 1-897

Branch

Office

113 Hudson St., Jersey City, N. J.

Bennett Heads Sates

Kaitfmann, Atsberg Go.

For J. M. Dain & Co.

To Admit Three

MINNEAPOLIS^ Minn.—Charles
R. Bennett this week was named

Manager of Sales for J. M. Dain
&

He has been

Co., Rand Tower.

Vice-President of the firm since

joining
that

was

1943,

prior to

and

25 years with the Wells-

Dickey Co.

Richard

By EMERSON P. SCHMIDT*,

-V*.

Co., 120 Broadway," New York
City, members of the New York

Dr. Schmidt stresses need of international peace as force
standard of living must shrink if implementation of
Deplores deprecation of thrift and artificially low interest rates as impeding capital formation.
Sees danger of successive wage jumps entailing mass unem- '
ployment, and holds costs, prices and output must be kept in balance. Warns against use of averages
in judging profits and wages.
'

Asserting

Exchange, will admit Her¬
Newman, member of the
Exchange, Edward T. English and
Irwin Guttag to partnership in the
firm on Aug. 1. Mr. Newman for¬
merly was with Ira Haupt & Co.
and prior thereto was a partner

we are

still in

semi-war

economy,

promoting economic stability. Points out U. S.
Marshall Plan requires heavy shipments abroad.

Mr.

Bros, & Worms.

First

Terminal

National

Franklin

the

Bank

York

CALVERT

Bell

York

during

Baltimore

Donald

Gilbert will become

308

in Donald

partner

Gilbert

•/.,>

Preferred

economy

Traded in Round Lots

New

and

Los Angeles Stock Exchanges

Also

Member

New York Curb Exchange

Connolly &

Federal

Inc.

Street, Boston 10.,;

Tel. Hubbard 3790

1420

Tele. BS 128

ally

Walnut Street, Philadelphia 2

New York
Los Angeles
Pittsburgh, Pa.
■>
Hagerstown, Md.
N. Y. Telephone—WHitehall 3-7253
Private Wire System

between
Philadelphia, New York and Los Angeles

DES MOINES

change

economy.

3.30%

Preferred

Warner

Stock

H. M.

DES

BUILDING

MOINES

Phone 4-7159

OFFICE

Stock Exchange Bldg. Phila. 2

IOWA

Bell Tele. DM 184

Telephone
RIttenhouse

LOUISVILLE

Teletype
PH 73

6-3717

SPARTANBURG

Consider

II.

Textile Securities

Willett

Girdler Corporation

AND

Murphy Chair Company
Reliance

Varnish

Properties

Co.

(Established

LOUISVILLE 2,

Long Distance 238-9

Home

Life Bldg.
KENTUCKY
Bell Tele. LS 186

in¬

rapidly

restoration

might
argue

not

ply,

considerable

very

the

This in turn will set

♦

the; unbalance it sold
tickets. It is doubtful

that

learned

have

even

that further wage increases,

pacity. Gur government has just
placed a restriction on the ex¬
port of rolling stock. We have a
shortage of paper, steel, lumber,
many
metal alloy products; we
are
grossly short of commercial,
recreational,
and
many
other

when

and

or
can

types
and

ways,
ways:

the

price

that the existing
be permanent—

relationships

price

and

wage

off

to. drain

excess

mand.

ditions

foreign exchange.
oPinterference can ac¬

picture,

fair

borrowing

out

are

your

look criti¬

foster

productive capi¬

Some take the view

that our

price and wage structure is di¬
verting an unduly large portion
of our productive effort to pro¬
ducing

4—Inflation.

essential

increase

tal.

de¬

money

3—Government

advised to take

vast

taxation

2—Exceedingly heavy

public works

cally into the general problem of
capital formation and what con¬

of savings.

their

this

well

control.

which

neglected;

1—Rationing,

being bid up 15, 30, 50
100%. Our roads have

Committee and its staff would be

combination of these

Hotel

establishments.

are

general have been neglected, yy

in several

effective

be made

over

been

Such shrinkage

ing must shrink.

rentals

recognize that through one means
or. another their standard of liv¬
can

pipe line ca¬

due to a lack of gas

yet

cost

the

our

Winter, as are fuel shortages. We
already have gasoline shortages.
In
Chicago
newly
constructed
houses cannot install gas furnaces

with price increases, like the
company which sold more
tickets than it had seats, and then
opera

correct

our

equivalent of two Canadas and
yet we have had relatively little
net capital formation in this pe¬
riod.
Electric
power
shortages
are
widely predicted
for next

generalized union wage demand
across
the economy, because the
public is so readily disposed to
accept' as ; just, the notion that
wage increases must at least keep

upon

1929 we have
population
the

Since

economy.

added

some

demand

impossible

motion

price inflation,

today with our large mon¬

are

etary national income making an

price

pressure, on many commodities.

after allowing for

10 to 20%

upward

designed

was

annual national in¬
come of about $90
billions.
;Our
income has doubled.
But, even

agricultural products
a

prewar,

produce

estimated

increase in their prices. The Mar¬
shall
plan is likely - to involve

goods

consumer

and

re¬

tarding the expansion cf our capi¬
tal supply. If this viewpoint has
cause
we
appear to
be moving any validity it means that we
toward expanded programs of for¬ must divert more machines and
This

•

eign
not

will

much

If this is correct,

incumbent

be¬

reconstruction,

ominous nature.
it

mentioned

matter

aid and
something

few

years.

This

additional drain

upon

labor power

to produce producer's

goods, other durables and perma¬
installations.

nent

the

at this

moment before your

may

mean

issue

the

prod-

Committee in terms of the prob¬

:!:Statement by'Dr. Schmidt, be-r
the Joint Committee on the

Teletype SPBG 17

increase

for

less

additional
our
price

been

approximately

means

Real

fore
L. D. 51

has

every

demand

have

lem of domestic stability?

1892)

SPARTANBURG, S. C.

pressure

structure.
that

will

here, * with

that

A. M. LAW & COMPANY

Incorporated

that

Normally the free market would
cumulate very rapidly and lead government of the United States
automatically make corrections of
to make clear in advance the cost
to further trouble.
such a distortion by encouraging
If the Marshall Program, sup¬ in real terms, and not simply in re-investment of profits, the issue
the euphonious "foreign credit," of new stocks and bonds, and in
plementing the Truman Doctrine,
what this program will involve in
is put
general encouraging thrift, which
into effect in the next
terms of belt tightening.
is the only way any society can
months, it may cost this country
Is the foregoing not the crucial raise its standard of living.
many billions of dollars over the
next

™I BANKERS BOND ££

some

have

We are exporting nearly $3 of
goods for every dollar of imports.
Dollar exchange is shrinking and
already a number of foreign na¬
tions have placed restrictions on
our
exports to them merely to

1st Floor, Kentucky

beginning

the by-products of war.

are

This type

American Turf Ass'n

extend

"foreign
this means
available
services, goods and raw mate¬
rials to foreign lands.
This will
consume

rate

capital formation,
first due to the depression and
then due to the war experience.
Some war assets are being put to
civilian use, but by and large we
are
grossly short of productive
capital as well as certain special¬
ized labor. Our basic capital sup¬

credits" but in practice
that
we
are
making

the production pattern,

endure,
relationships

conserve

Southern

American Air Filter

pattern,

wage

patterns

secure

times

relations

wages

While

will

Byllesby & Company

PHILADELPHIA

EQUITABLE

some

ideal, few would
pattern

Company

inter¬

:;..' v;

several

others.

present

Cement

Nazareth

that it rests

prewar

Sterling Motor Truck
V

Stock

Meredith Publishing Co.
Common

creased
as

Iowa Power & Light Co.

normal

may

living
is
pressing
against the wage structure, merely
permits the consumers to bid more
fiercely against the scarce supply
of goods.
If the Marshall pro¬
Because of the war-induced con¬
gram calls for several billion dol¬
ditions
we X are
experiencing a lars worth of goods per year, the
kind
of
prosperity, i but
it
is American people
will
have to

Since the war's

Pittsburgh Rys. Co.

pace

establish

grossly distort the economy, ex¬
panding different parts unequally.
Production and price distortions*
including' wage
distortions-,
abound everywhere.
The money
supply is multiplied and seeks to
express
itself in higher prices.

prices and

Empire Southern Gas

Continuing Interest in

ex¬

^.'V"

can

foundation..,

Empire Steel Co.

civilian

national peace, there may be lit¬
tle purpose in talking about do¬
mestic economy
stability.
Wars

Botany Mills

INCORPORATED

normal

doubtful

American Box Board

WHEELOCK & CUMMINS

nor¬

conditions. Actu¬
remain on a quasi-war

Unless

Philadelphia

York,

;| in

anything like

return

BUCKLEY BROTHERS
Members

year period to
mal peacetime

Request

re¬

the

footing which has not permitted

Company

The Gruen Watch Company
Memos

have

converted
Schmidt

E. P.

unconcernedly

the brief two-

Southwestern Public Service Co.

Boston & Maine RR.

doubtful,

PHILADELPHIA

B<m

however, that

BOSTON

Warner

appears

complete.,

man-hours.

our

post-i- upward

reconver¬

In-

—

ucts

mean

sion

Dr.

war

partner in Carter & Co., 14 Wall
Street, New York City, members
of the New York Stock Exchange,
as of Aug. 1.
In the past he was a

Stock

Co. of Syracuse.

Walter J.

in¬

some

people

Telephone BEctor 2-3327

Prior

pros¬
are

Semi-War

Be Partner in Garter

■

en¬

Economy

ST., BALTIMORE

Teletype

and

perity

Donald N. Gilbert to

Exchanges and other leading exchanges

New

the

from

retire

Lumber

STEIN BROS. & BOYCE
New

will

July 31.

world v—:—

e e

divisible.

Common

Goodman

firm

peace

County Coal

Kirby

Members

problem of durable peace, this is the most important problem to every American.

Lasker, a member of
the Stock Exchange, and Bertram

Common

office manager.

Bernard J.

Baltimore

welcomes the opportunity to cooperate
problems of maintaining enduring prosperity. Next to

with the Joint Committee on the

■

The Chamber of Commerce of the United States

Guttag and Mr. English have been
with the firm for some time, the
latter

Bayway

;V/.

Director, Economic Research Department,
Chamber of Commerce of the USA

Kaufmann, Alsberg

Stock

in Newman

BALTIMORE

Accomplishing Economic Stability

bert

Thursday, July 17, 1947

CHRONICLE

THE COMMERCIAL & FINANCIAL

(214)

Economic
D.

C.,

Report,
Washington,
July 9, 1947. v
t

For

half

Capital Supply
than

have

decade and a

experienced a sub-

thrift has been depre¬
rates have been
down
to a point where

For years

Interest

cated.
driven

be insufficient incen¬
shrink current consump¬
tion, which is necessary if we are
to divert a greater part of our

there

tive,

may

other resources to
We have cast
aspersions upon the investor, the
landlord, the enterpriser and risktaker, whose talents and drives

manpower and

SPOKANE, WASH.

LYNCHBURG

capital formation.

CA.

ATLANTA,

Tiiiiiiiiiiiiiiiiif iiiiiiiiiiiiiiiiiiiiimii

NORTHWEST MINING

Trading Markets

STATE AND MUNICIPAL BONDS

Co.

For Immediate Execution
or

Bassett Furniture Ind.
Dan River Mills

of Orders

Quotes call TWX Sp-43

Floor

CORPORATE

BONDS

Deficit

years

Members Standard Stock Exchange
of

Brokers

Lynchburg, Va.
Tele. LY 83

LD 11

ILlllllf llllllllllllllllf llijuiilliiiiijiiiii

Peyton

j!-; J jfi|f§«fi|i if if

Kellogg, Idaho

and

end,

Underwriters

Building,

Established

Spokane

Branches at

Yakima, Wn.

RHODES-HAVERTY

BLDG.

Teletype AT 288

1930's

the

ends

deficit

spending by increasing the share
of the national income going to
the wage worker.
Before war's

Spokane

Dealers

the

the labor movement to

accomplish

STANDARD SECURITIES
CORPORATION

dy¬

the same groups have now

turned to

Scott, Horner &
Mason, Inc.

spending

having failed to solve the employ^
ment
problem, in more recent

LOCAL STOCKS

other hours.

essential in creating

expanding economy.

are

Exchange from 10:45 to 11:30
A.M., Pac. Std. Time: Sp-82 at

namic

SECURITIES
American Furniture

1894

powerful movements, sup¬
by government bureaus,
set in motion to raise wages

ported
ATLANTA

Long

GEORGIA

Distance

108

were

(Continued

on page

30)

.Volume 166

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4612

(215)

No Famine Ahead in

From

Building!

By BROR DAHLBERG*

President, Celotex Corporation

Ahead

of the News

Materials manufacturer asserts millions of housing units

as well as new factories and industrial plants
"terrifying a valance" of construction requirements. Says there is nothing wrong
with building industry and costs are not abnormally high and houses today are a "good
buy."

are

By CARLISLE BARGERON
Your correspondent had dinner a few nights ago with one of the
''slave laborers" we have been hearing so much about, more specif¬

ically

of the $10,000 a year labor editors.

A fellow with a sense
couldn't help laughing about the ruckus the labor
trying to stir up.
They are working mightily to get the workers politically con¬
scious
again.
visions which simply remove the
The labor bill
is
their
best
protection
of the
Wagner
Act
from a union which engages in
hope.
Ever
of

one

humor,

leaders

certain

Roose¬

velt's

death

these

work¬

against

who

there

c a

11
i

share.

they

politically

are

velt-regime, their
tremendous

They

enjoy

leaders
of

sense

got credit for

power.

delivering

which they never delivered.
It was Roosevelt himself who had

vote

the workers' allegiance; the lead¬
ers, as was proven in the case of
John L.

have

Lewis, could not possibly

diverted

them

him.

from

Roosevelt knew this and he looked
upon
men

the leaders as simply hench¬
who did the chores. But they

nevertheless

enjoyed a
promi¬
and a place in the sun
which they would not otherwise
Jiave enjoyed.

nence

.They have felt themselves slip¬
ping.
The good old days, they
have felt, are going, not to re¬
turn for a long, long time.
So
they are struggling frantically to
convince the workers that slaves
have

been made of them; they
trying to do this to the very

are

workers

that

who

the

besought
passed.

was

bill

My editor friend admitted rue¬
fully that the leaders aren't get¬
ting very far, Shout as they may
about

the

been

vicious

done

thing that has

the

getting little

are

These

workers

contentment

they

workers,

are

response.

state

that

bring; they

see

strikes and

less

good
wages
future of fewer

strife.

ticularly at the CIO. Because the
intellectuals,
roost

the

and

like,

college profes¬
who rule the

here have not

with

tion

running a
designed to

ers.

This

content

been

labor

organiza¬

raise the wages
and living standards of the work¬
has

The

them.

their

been

union

vehicle

whole

for

range

the

from

In this

have

things

considered,

secondary to
has been'but
in the
affairs—

power.

human

morals

men

the

controversy has arisen that they

didn't

project

their

voice.

With

their

legions becoming politically
apathetic they loss this.
They
have

will

content

matters

with

themselves

peculiar interest
to labor and they have little or
no
taste for
such commonplace
matters.
If they can't now make
the
workers feel
that they are
slaves, they are lost.
It will be

the

far

unions
do

interesting to

movement

not

with

lations

the

National

Board

matters

Will

have to

the

course,

for

with

comply.

example,

law, NLRB
other

goes.

definite

act,

shop,

have

hand,

see

how

among

the

anything

Labor

Re¬

There

are

law

which
The

our

pro-1

great
of

many

our

needs, we have staring us in the
construction
requirements
disposition face
in Congress, in the meantime, to that
stagger
the
imagination.
rewrite, at its convenience, the Everywhere around you, practi¬
provisions prohibiting union pub¬ cally everything you see is proof
seems

to be

from
criticizing mem¬ that tremendous reconstruction is
Congress or in anyway needed to bring about modern ef¬
engaging
in
political
activity. ficiency. Those who do not prog¬
lications

bers

There

seems

and in¬

will fast fall behind

considerable

ress

eonstitution-

evitably be simply pushed out of

its

about

doubt

repeated

and

over

until

over

out of
,

us.

Let

lot of peoplo

ing that things

are

assum¬

impossi¬

ble dead center—and that there isj

only one thing to do—wait until
prices and conditions come down
to

"normal."

meant

1939—they
disappointment.
Forces

"normal"

doomed to

are

already beginning to
develop that will mean a healthy
are

overall

trend

for

the

building

business:

the process—in¬
running, let us turn

us reverse

stead

There

building

famine

Instead of a
famine, we are on the threshold
of one of the greatest opportun¬
faced.

ever

(b)

the

industry!

ities the world has

(a) A constant and regular flow
of materials.

around and say "BOO!"

happen, pessimism began to
set in.
They did not realize what
a
task it is to reconstruct, from
War to Peace, an industry as basic
as

construc¬

the

tion

industry.
Even now, after
two years, it is becoming evident
that we have traveled only the

scheduling and in¬
productivity of construc¬

(d)

not

tremendous

Better

creased

tion labor.

•

Many people thought that Vic¬
tory Day would signal, an imme¬
diate surge of building to unpre¬
cedented heights. When that did

and

is, I wonder if

have not been misled into

and

Increased

mass

(e)

use

of machines

production.

The

use

and better

new

materials, and

(f) As important as any—tha
modernizing of building codes and
regulations.
The temporary hesitation in the
building business from the first
heedless

and

headlong burst of
war is healthy.
It
Tomorrow—and that tomorrow
provision was intended in
gives us time to get our breath,
the first place to apply the same is galloping toward us with in¬ first few yards in a mile long trip.
take our bearings, coordinate ou?
prohibition against unions con¬ creasing speed—no one will want
Someone
says
that
building efforts, and finally, to let • Old
tributing to political campaigns to operate, live or work in old- costs are too high. It is true that Man Competition once more climb
ill-venti¬ costs are
as
there is against corporations. fashioned,; inefficient,
■<..:
higher than pre-war back onto the driver's seat.
Also, against the CIO type of ed¬ lated, noisy, nerve-racking fac¬ normals
but the cost of every¬
Governments
and
industries
tories,
hotels,
stores,
offices,
itors who
ride high, wide and
thing else has increased—and we may plan and propose—but it is
a
handsome
on
funds taken from apartments, or anything.?
jnay as well understand that this the
spiyit of enterprise that finally
the members who have no voice
; Now, with all this -• terrifying basic condition is indicative of
disposes. '• Peoples, empires, govin the managementaof the paper. avalanche of construction require¬ progress.
A return to pre-war
ernment% rise and tfall, but Old
The CIO "News," which is not ments before us, we are told that wages and costs would be disas¬
Man Competition eventually gets
the slightest bit different in con¬ there is a famine inc the building trous.
'
!
the final grip on the reins. Count¬
tent from the "Daily Worker," is industry; that an immediate reces¬
I Every great war in recent times
less countries throughout the ages
sion and finally a deadly depres¬
a particular case in point.
has been followed by increased have desperately tried controlled
sion,, is going to lay us all by the
A loud cry about freedom of
productivity—increased consumer production and planned economy,
heels. Let me emphasize that this,
the press is being raised, but it is
demands
a higher standard of
but always the competitive spirit
croaking is not about-some wornnot a case here of a man using
living. After World War I, the
out country—but about America—
his own funds to publish a pam¬
general price level finally stabil¬ has survived, and so the world has
powerful,
resourceful,
vibrant, ized at about 50% above 1913. The
phlet, hiring himself a hall, or
njoved forward. Thank Provi¬
young America, an America which
present
cost-of-living index is dence, competition is still with
publishing a newspaper.
These
has the materials, the power, the
about 55% above
1939.
While
fellows have simply moved in on
us in America!
scientific
and
practical' knowl¬ some
the workers and operate freely,
things
will come down,
edge,. the energy, the people who others will probably rise. It is not
I The men brought up on con¬
mostly with a subversive slant,
can do anything—anything—they
unreasonable to assume a postwar
on
money taken from the work¬
struction are in their souls build¬
determine to do.
A Don Quixote
level
stabilizing at a range of
ers.
V
fightingimaginary windmills could somewhere around 50% over pre- ers; builders—strong, courageous,
Certainly no house organ of an
resoruceful.
If left alone, they
not possibly express a greater bit war.
4 ■■
industry would be used to influ¬
of childish buffooonery.
[Even at today's prices housing kpow their way about.
ence a political
campaign.
; ;
Whatever famine there might is a good buy. It is not beyond the
It is only for the moment that
But the provision seems to have
been badly botched up.
For one be in the building industry is a realm of possibility that a year some of them are faltering—hesi¬
business.

ality.
.

The

speed after the

•>

—

members of Congress
light
to stifle criticism against

the

thing,

put themselves in the

have

of trying

provision is straight¬

Until the

there seems little dis¬
here to attempt to en¬
force it.
Therefore, those union
leaders who are defying it are
ened

out,

position

for

going

some unnecessary
And they know it.

theatricals.

made
I

Lynch, Pierce Adds
Lynch,

Fenner

Street, New
of the New
York Stock Exchange, have an¬
nounced the appointment of six
&

Pine

Beane,

City, members

new

account

New

York

lagher,

executives

offices.

John

Jerome

Jr.,

enough

signed
Pine

Kimball

the

Street.

Robert

have

main

Roy

Leverich

account

graduates

executives

the

and

loud

have not

into

Fuehrer—repeat

the

pattern
German

crowded

the

tating.

talked

wages

that

a
are

few

maladjust¬

temporary

and

Gal¬

Gross,

been

office

as¬

at 70

Lange
have

are

and
been

buy a house in 1947

same

average

by working

1940 to buy that

to work in

had

to the ad¬

the

than he would have

house.

lowest possible

2, 1947.

realistic.

simply

half-believing

been
some-*

There is

The little breather

ing industry.
space
us

famine in the build¬

has been long enough.

Let

get back to our regular busi¬
of building

ness

—

not only the

building of houses but the build¬
ing of courage and strength—the

spirit of optimism and determina¬

that construction

costs should not come down

the Building Officials Conference
of America, New York City, July

to the

level, but let us be

Stringent as the situa-

tion.

„

There is no famine in the build¬

ing industry.

OFFERINGS WANTED
Greeley Sq. B!dg. Corp. Stock
A. M. Greenfield & Co. 5s 1954

Lombardy 3s 1961 W.S.
New York Athletic Club 4s 1955

In-

1955

New York Athletic Club 2nd 1 V2s

53/4S 1956 W.S.
Savoy Plaza 3s 1956 W.S.
Sherr.sth Corp.

The

Wall & Beaver St. 4l/2s 1951 W.S.
Windermere-92nd St. 3s 1946
1936 W.S.
51 East 42nd St. 3s 1966 W.S.
61 Broadway Corp. V.T.C.
79 Realty Corp. 5s 1948 W.S.
165 Brcadway 4l/2s 1958
500 Fifth Ave. 4s 1961 W.S.
• '

40 Wall St. 5s

Hotel Drake-5s 1953 W.S.

reports are now available on request:
Broadway-Barclay, Fuller Bldg.,
(NY), Lombardy Hotel

following new statistical
Allerton

Y. Corp.,

Hotel Drake

Amott, Baker

& C o.

Incorporated

recent

MLPF&B

vestment Training School.

"Speech by Mr. Dahlberg before

They, have
into

thing that is not s_\

had not

The average worker can

302 hours less

Outside

D. C./ the

Washington,

advanced in proportion

worker.

that

showed

price of a new 1947 house

enough

and

they may seem low.

survey '

vance

truth.

ments

now

untruth long

it will be taken

soon

from

its

Edward Gordon Hooker and Rich¬
ard

famous

made

Pierce,

York

self-

recent

wondering if

pretty

—

I do not argue

To N. Y. Sales Staff
Merrill

plenty

phony famine.

begun to stumble

Merrill

amidst

famine

them.

730 Fifth Avenue. All of the new

are

yet

but

they finally seem to have the ap¬
pearance of substance.
Inexpe¬
rienced planners, statisticians and
forecasters, peering into the fu¬
ture and repeating ghost stories
to each other, frighten themselves
and in turn try to scare the hell

tion

NLRB.

closed

living,

people are living in want
ciable number of unions will long and squalor.
continue to struggle without the
Measured in terms of modern

assigned to the uptown office at

against

Dahlbcrg

ed¬

they

NLRB.

there

the

and
high

standard
Bror

control of atomic energy. Scarcely
a

progress

elec¬

our

much

American

event

This state of affairs strikes par¬

sors

All

There

het up as they were in the Roose¬

action.

would

talk

not

itor friend doubts that any appre¬

Carlisle Bargeron
gress i o n a 1
campaigns the
Republicans seem to have got

tion under NLRB auspices.

his

contest

did

and

uipment;
bridges
and
highways. We
e

sanction

union

bus

terminals

Presum¬

NLRB

another

provided

1946 Con¬

long

without

union

conscious

employer who fired

and

line

ably ari employer could recognize

were

union

for union activity.

becoming inn g 1 y
apathetic
towards
pol¬
itics; of those

creasi

their

ings, stores;
railroad, air¬

man

the

structed, mod-<e>ernized; ho¬ easy to correct there is nothing
tels, theatres, wrong with the building indus¬
apartment and try. Here and there we hear some
office build¬ frightening words—hollow words,

doesn't have this protection, there
would
be
no
recourse
in
law

have been

polit i

conduct.

It would be an imposition for me to take your time to tell you about current build¬
ing shortages and bottle-necks. Millions of housing units are needed to house our people.
We also must have new factories and industrial plants—old ones to be
replaced, recon¬

are

since

ers

needed, indicating

150 Broadway
Tel. BArclay 7-4880

New York 7, N.
Teletype NY 1-588

REAL ESTATE

SECURITIES
★

★

SHASKAN & CO.
Member! New York Slock Exchange

Members New York Cvrb Exchange

40 EXCHANGE PL.. N .Y.
Bell

Dlgby 4-4950

Teletype NY 1-953

THE COMMERCIAL &

(216)

Thursday, July 17, 1947

FINANCIAL CHRONICLE

New
Dealer-Broker Investment

4 ^

i|, t

i 4

Recommendations and Literature
mentioned will be pleased
interested parties the following literature:

CHICAGO

whiskey

send

July, 1945, acquiring
properties of Public Service Company of Indiana
together with Sheridan ice properties. Segregation of the business
did not-represent any necessary step under the Holding Company
Act but rather the conclusion of the management that greater effi¬
ciency could result if the gas business was separated from the electric.

tian era,

Indiana Gas & Water was incorporated in

the gas and water

order

capital

avoid

gains

have

been

stock

had

payment of a3>

rather

heavy

sold

been

Dividends

offering) the management decided
to

the

distribute

stock

its

dividends.
share

the

(or

rate

inaugurated at the rate
making the cur¬
6%. The price
earnings ratio based on earnings
for the calendar year 1946 would
be
about
13, based on the 12
months ended May 31 about 11,
and
based
on
the
"projected"
earnings for the calendar year

1/20

share per an¬

num) were initiated March 1 and
expected to continue at that

are

rate

lieu

the

cash

former

payments.
With the gas stock
quoted at 15-16 V2, this means an
indicated return of about $3 in

about 9.

The company serves natural

mixed)

market value per annum to hold¬
ers

sumers

of P. S. of Indiana, or a return

of about 7%
both

to about 55,000

gas

(or

con¬

in 36 communities of In¬

31,

(based

1946

had

value
of $15,-

ated.

original cost)
less depreciation of re¬
serve
Of $2,024,663,
Acquisition
adjustments had been completely
on

written off.

1946

and

17%

Sheridan is also

revenues were

water

oper¬

83% gas

(with ice

ligible item).. Natural gas is pur¬
chased principally from Panhan¬
dle
Eastern
Pipeline, Kentucky
Natural Gas and Louisville Gas &

As of Jan. 28,

debt

Since Indiana Gas & Water was
constituent part of the parent

company until two years ago,

of gas

did not show
much change in 1945 and 1944.

the

complete

industrial

use

not

earnings record

available prior to 1945.

months

ended

June

P. S. of Colorado Debs.

In the 12

30,

1945

months

ended

Dec.

For

reported.

31,
the

1946 earnings were $1.14.
However, earnings for 1947 have
shown surprising gains over last
year

fered

for

May 31 gross revenues were up
nearly 40% and net income gained

$6,481,100, leaving $518,900 of de¬

about

bentures

50%.

For

the

months

purchased

the

$1.42.

benture purchasers.

Halsey, Stu¬

art

the

first

through the balance of the year,
earnings would approximate $1.71
a share.
However, in view of cur-

by the several de¬

company

Co.

Inc.,

for

Lehman Corporation

Reorganization

Railroad

Bul¬

—

discussing current situation
Co.,

Beaver

New

Street,

York

account

the

"Fort¬

Letter"

Investment

con¬

discussion of the utility
situation;
and
an
analysis
of

taining

Crown

Seal

Cork

"Stern Facts and Figures"

—

N. Y.

Wayne's Mining Atlas for 1947
36

Features

completely revised
and redrawn maps of the import¬
ant mining areas of Canada and
shows

the location of over 3,000
mines—Wayne Map Co.* 30 Wel¬
lington, W., Toronto, Ont., Can¬
ada—$1.00.
*

Woolen

Company—

William

Street, New York

N. Y.

Farms

dum—New

Co.—Memoran¬

York

poration,
120
5, N. Y.

Hanseatic

Broadway,

Cor¬

New

York

*CroweII-CoIlier Publishing Co.

Manufacturing Co.

-G.

Saxton

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

Co.

—

Vermont

*Prospectus

Established

1879

■*

Bank

Trust

analyses

are

Textile, Inc.,

Stern

Broadway, New York 6,

Southwestern Public Service Co.

3.6s, 1953

Co.,

—

Union

1420 Walnut Street, Philadel¬
phia 2, Pa.
available

Also

Warner

memoranda

are

Company

Watch

and

The

Co.

Gottron-Russell

Commerce

—

Corporation

Transamerica
Memorandum

Co.,

—

A. M. Kidder &

Wall Street, New York 5,
'
// v.-:

Utica
Inc.

Mohawk

Circular

—

Mill*

Cotton

Mohawk Val

ley Investing Co., Inc., 238

Gen

Direct

Wire to

Chicago

various

de¬

the state of

the market at the time it is with¬
sold

and

mature whis¬

key.

In many cases, because of
currently inflated
cost
of
grain, cooperage, and other costs
at the time of processing, an in¬
ordinately low profit or even a
big loss may be sustained. The
distiller is thus at the mercy of
the

the fluctuations in the market for

aging of

practically

whiskey is

new

eliminated

new

developed by Disticraft,
Inc., 209 West Jackson Boulevard,
Chicago
6,
Illinois.
Disticraft
claims that its process, in only
72 hours, accomplishes the same
result as years of costly aging in

processes

the

The

wood.

first

commercial

whiskey, produced by this
process, came out of the Louis¬
ville
Distillers, Inc., Louisville,
Ky., in the latter part of June,
1947.
This liquor will be mar¬
run

the

under

label

Foure

quantities within the
days.

next 30

Street, Utica 2, N. Y.

Tube

Voor-

Co., 15 Broad Street, New
N. Y.

have

been

years,

only

for

one

heralded

distilling

recent

inadequate,

prove

reason

processes

another.

The

industry is inclined to
new
process
seriously.

the

reason

for which is that

sev¬

eral

contracts, with old time whis¬
key makers, with a reputation of
successful operation in the past,
have been negotiated. The second
of

Districraft

equip¬
completed at the
Distilleries at Napa,

should

ment

Hedgeside
Calif., by Sept. 15. It is the inten¬
in

the

production

Mr. Clarence W.

an
engineer, who developed this
quick finishing process, claims it

is the result of 40 years
mentation.

chine
lers

COMING

Kraft,

of experi¬

Districraft does not sell its

leased

are

ma¬

Selected distil¬

process.

the

machine

and

gallon royalty
Disticraft, under the lease

basis.

per

arrangement, controls the ingre¬
dient base, the packaging and la¬
beling and the advertising. Only
distillers making an original qual¬

EVENTS
Investment

has

satisfactory.

equipment

York 5,

process

Many quick maturing

brandies.

Sheet

Youngstown

time, this

been adopted by several other dis¬
tillers and the product is said to

tion of Hedgeside to also use this

Field

Electric Bond & Share Company
Memorandum
Newburger,

ity product will be licensed

and

—

Loeb &

Co., 15 Broad Street, New
York 5, N. Y.

July 22, 1947

qualified by Disticraft.

(Detroit, Mich.)

Security Traders Association oi

Michigan Annual Sum¬
Party, Orchard Lake
Virginia Electric and Power Com¬ Country Club.
Also a cocktail
pany—Discussion in view of dis¬ party and buffet dinner on July
21 at the Savoyard Club, Detroit
tribution of common stocks to the
common
eers

Company and

stockholders

Public

Engin¬

Service
Bear,
Co., 135 South La Salle
—

Golf

mer

Aug. 10-14, 1947
National
ciation

Street, Chicago 3, 111.

Hotel
Fairbanks
&

BROADWAY. NEW YORK 6, N. Y.

pletely dependent
drawn

One

Building,

Co.,

Co.—Circular—Ward

120 Broadway, New York

5, N. Y.

States in

of the old fashioned aging
process.
Its actual value is com¬

process

6s, 1950

Gilbert J. Postley & Co.

United

grees

take

Cleveland 14, Ohio.

Stearns &

Portland Electric Power

the

Broth¬

—Memorandum—Buckley

Company—Analysis—Kalb,

El Paso Electric

3-5s &

1946 showed a total of 327,000,000
gallons of whiskey in storage in

Since that

Detroit &

American Gas & Power

uct at the end of the

and

Rome Cable Corp.

Paine, Webber, Jackson & Curtis

liquor and it
only by sale of the prod¬
aging period.
Inventory figures at the end of

deemed

commercial

available

Also
Stern

—

Request

Mason

Serv¬

Public

Analysis—Ira Haupt

invest¬

separate
can be re¬

run

keted

esee

Central

repre¬

Score, and should be available in

N. Y.

Company—Memorandum

warehouses

N. Y.

Disticraft
Brochure—Bennett,
Spanier & Co., Inc., 105 South La
Salle Street, Chicago
3, 111.

Co.—Analysis—C. E. Unterberg &
Co., 61 Broadway, New York 6,

his

U. S. Potash Co.

National

pe¬

major part of the invest¬

installation
Buda

—Analysis

Rockwell

Parker Pen Co.—Timely back¬
ground story in the July issue of
"Business and Financial Digest"

Gruen

Arden

ice

Liberty Products Corp.
•

analysis — Comstock &
Co., 231 South La Salle Street,
Chicago 4, 111.

Public

Cleveland Cliffs Iron Company

Buckeye Steel Castings

Detailed

Trading Markets in Common Stocks

Bell Lumber Company—

Long

the completed product.

monthly report containing —Loewi & Co., 225 East
discussion of the market—Stern & Street, Milwaukee 2, Wis.
Co., 25 Broad Street, New York 4,
semi

N. Y.

Manufacturing Co.

Railroad Income Bonds.

Company,

Inc.

purchas¬
sold the entire block to one

purchaser at 113.07.

the

eight years.

ment of any distiller. This
ment increases with each

The

available

Also

nightly

Co., Ill

Bates

— Changes
portfolio—Ira Haupt & Co., Ill
Broadway, New York 6, N. Y.
Also available is an analysis of

N. Y.

of the several debenture
ers,

County Land Company—

Street, New York 5, N. Y.

from

ended May 31 share earnings were

If the rate of gain for the
five
months should carry

Kern

Memorandum—Otto Fuerst & Co..

announced

subscription to stock¬
holders, the company accepted
subscriptions for an aggregate of

For the five months ended

year.

was

Iluttig Sash & Door Co.—Report

Analysis and field investigation
Railroad
Developments — Cur¬ conclusions—Maxwell, Marshall &
rent action in the field during the Co., 647 South Spring Street, Los
week—Vilas & Hickey, 49 Wall Angeles 14, Calif.

American

July 14 that
of the $7,000,000 3% convertible
debentures, due 1962, of the Pub¬
lic Service Co. of Colorado, of¬

cents
calendar

convertible

due

ers,

Oversubscribed

Corp.—

1956—Seligman.
Lubetkin & Co., Inc., 41 Broad
Street, New York 4, N. Y.

Street, New York 5, N. Y.

pro

forma
figures
indicated
share
earnings of $1.28, and in the four

debentures

Motors

outlook—Stifel, Nicolaus &
Investment Issues With 50-Year Company, Inc., 314 North Broad¬
Dividend Records—A list of 25 is¬ way, St. Louis 2, Mo.
sues—Bond & Goodwin, Inc., 63
Wall

age it in charred barrels for

riod up to

and

neg¬

1947,
was
approximately Electric.
$7,000,000
and
common
stock
Judging from 1945 figures (1946
equity
about, $6,654,000.
Thus
data is not available), some 94%
common
stock equity was about
of gas requirements are purchased
48%, usually considered a con¬
and 6% produced.
In 1945 resi¬
servative ratio.
The
company's
dential revenues were about 45%
business is growing, and in Janu¬
of total gas revenues, house-heat¬
ary this year the company issued
nearly $1,000,000 1st 3s due 1972, ing ll%, .commercial 12%, indus¬
trial 28% and miscellaneous 4%.
about half the proceeds being used
to pay off a bank loan, and half It appears likely that recent gains
have been largely in the residen¬
for new construction.
tial and house-heating field, as
funded

was

Circular —
Laird, Bissell & Meeds, 120 Broad¬
way, New York 5, N. Y.
—

in several issues—H. Hentz &

ice plant at

plant

308,515,

quarter of 1947 of 19 New York
City Bank Stocks

letin

communities, and the

Ce-

Portland

Liquor

Memorandum

5,000 customers in six commun¬
ities, water service to 29,000 cus¬

Lawrence

Graham-Paige

tomers in 19

Indiana Gas & Water Co.

first

the traditional method of

sents the

N. Y.

Earnings Comparison for second

levels,

Corp.;

ment; Sterling Motors.

Co., Inc., 67 Wall Street, New

York 5,

Manufactured gas is served

diana.

if present prices of
remain at
present

stocks

Dec.

stock

new

of $1 per annum,
rent yield about

Accordingly, quarterly

distributions
of

the

have been

company

gas

stockholders as

own

Stocks—

Insurance

and

Bank

List of circulars available—Geyer

—

public

the

distilled

finishing fine whiskey has been to

might rently rising costs, such a figure
if the is probably on the high side.

(which

tax

Since

—

was

Arabic Tribes of the Middle East,
long before the dawn of the Chris¬

It is understood that the firms

Indiana Gas & Water

Distilling Process

Eliminates Aging

Also
on

(Boston, Mass.)

Security Traders Asso¬

annual

convention

at the

Statler.

available

are

Purolator Products;

Sept. 20, 1947

Upson Corp.;

Fleetwood

Air

Flow;

underwriting

The

First

Shields &
an

issue

Co.
of

Municipal Bond
Outing.

Club

Chi¬

tric

are

(Hollywood,

Fla.)

60,000

Hotel.

$2.50

stock,

par

Power

The

Co.

stock

is of¬

Holly¬

July 1.

Proceeds

will be used to reduce bank loans
and

Annual Convention at the

Beach

and

offering today

fered at $52 per share plus accrued

Investment Bankers Association

Lanova wood

headed

Corp.

preferred

dividends from
Nov. 30-Dec. 5, 1947

group

Boston

$50, of the California Elec¬

value

(Chicago, III.)

memoranda

United Artists; Vacuum Concrete

Calif. Electric

cumulative

cago

Taylor Wharton Iron & Steel;

First Bostcn Offers

for

poses,

general

corporate

pur¬

including development and

expansion of company's properties.

Volume

Number 4612

166

THE COMMERCIAL & FINANCIAL CHRONICLE

Flexible Public Debt

Europe in Climax
A.

j
f

Fairchild

and

with

observer

lower world prices, and severely

business activity.

Publications

curtail United States exports and

Anyone who returns from Europe, no matter how well-informed
before starting his visit, is bound to return with
a deep feeling
of
low.
Output per man-hour is
pessimism
and
a
sense
disappointing.

impending

crisis.

One of the

European

the

low wages.

mind

in
of

this

teri

cient

de-

now

ration

Zelomck

ernments

keep

a
climax.
Conditions
essentially less favorable
than they were a year ago, since
tasks of reconstruction that should

and

are

have

been

very effi¬
Most gov¬

under

pres¬

government

bureaucracy

culture

are

high.

Even in agri¬

elimination

land-owners

has

large
output,

reduced

ment in industrial

this has been very

tion

either

ment has varied

land, Belgium and
are

this respect than

tries.

The

lying
are

most other

real

replacement

and

mass

dustrial

being

•

ex¬

resent

charity,

was

are

al¬

the continen

the Marshall plan

was

an¬

The response was elec¬

ample supplies of dollars.

ma¬

doubt,

migration

im¬

well

that

will

the

actually

will

create

later date.

crisis

In off the record

discussions, leaders in the various
countries quite frankly expressec

era

any really substan¬
would merely introduce

of United States

imperial¬

ing sides between East and West
was
discussed freely.
It is dis¬
couraging to note how many in¬
telligent men and women in al
walks

life

asked

why

burden

production, it will

World

War

began

Great

time,

country could

Sweden.—Editor.

such

Under

the

events

have

circumstances

have

the

present
Government

Federal

should make
every effort not only
to continue to

keep the budget
balanced, but also to keep a sur¬
plus

taxes

over

own

atom bomb.

(Continued

page

These

21)

the
utmost
in the operations of all

government
see

52%

its

the

national

How¬

the real current burden of

ever,

the

gross

debt

production,

the

and

of vital interest to

one

business, is
by the'"total service
charges' paid for out of tax rev¬
represented

The interest alone amounts

enues.

about $5 billion

that

passed

secure

organizations, and to
of these savings are

some

to the

taxpayers
borne

taxpayers.

this

wartime
and

get

relief

some

The

just

as
•

soon
:

that

have

can

every

nothing sacred about

gested that

years

prosperous

debt

There

year.

a year, but it
represents only 2l/z % of the gross
product today. It has been sug¬

times

have during these
a
debt retire¬

12 months
any more

period of

than there is

period of 30 days. Some
we might even have to show
a

an increase in the
debt just as we
$2]/2 bil¬ will during some months. The im¬
lion a year.
This figure would portant
thing
that
we
should
represent another
1V4%
of
the strive for, say over a long
period
gross product, or for both interest —for example ten years—is to see

ment program of at least

and

debt

3%%.

keep
on

retirement

So long as we
a

are

national

gross

our

such

total

that the trend of the total debt is

able to

kept definitely downward and not
upward.
V '
'

product

high level, these charges

will not be too burdensome.
as

declines, the
on

becomes heavier.

some

relief

can

But

the

econ¬

Of course,

one year

obtained

retirement
should
must

by eliminating debt

come.

drastic

But

paid.

decline

the

interest

important,
therefore, to do everything within
♦An address by Mr. Bell before
the
Eleventh Carolinas Bankers

Conference, Chapel
July 7, 1947.
<

Hill,

C.,

form

drawn

out

taxes.

This

is important because

reduction
in

those

must

times

beneficial

the

for investment in special

ury

economy,

might be better to turn it

retire the debt in the hands of
the

public.

They are, therefore, just
deflationary as debt retirement.
In
considering the overall fiscal
policy of the Government, these

operations must receive careful
attention because there is some
danger that we could deflate too
fast.
V
A

Flexible

Debt Retirement
Program

In this connection I should
like
see the Congress establish
some

long-range budgetary policies, ineluding

flexible debt retirement
In my opinion it should

program.

endeavor

range
a

ascertain

times,

fairly
in

normal.

establish

The

Trading Markets in

...

omy

because it is deflationary.

this

connection

governmental
tions

which

along

with

there

;

••

Brochure

must

its

This

cause

expenditure

—both actual and
potential — and
the requirements of our
veterans.

Therefore, I believe, a
expenditures involving
between the high and
say

Salle

the low of

fixing this

range for the expendi¬

ture side of the
>

budget, Congress

(Continued

page

31)

The

Long-Bell

Lumber Company
Common Stock
1946

Earnings

1947

1st

considered

retirement

program, as they have the same
effect on the economy as debt re¬
tirement. These are the net col¬

share__

per

Quarter Earns,

per

r$2.5Q
sh._$1.37

Company's earnings and operations
continue

peak rates

Approximate Price «__$15.00
per share

lections from taxes for account of

trust

funds.

While

Detailed,

mm"

-mm

«•*

analysis

available

request.

—-j[

CHICAGO 4
231 S. La Salle St.

the

Chicago

Stock

our

Dearborn 1501

Teletype CG 955

Exchange)

♦.

pens.

Central Soya Co. Com.
Curtiss

*'Business and Financial Digest"
progres¬

corporation.

Companies, Inc., Com.

Ft. Wayne Corrugated Paper
Co. Com.

Copy Will Be Sent

Request!

Standard Silica Corp. Com.

Whiting Corporation Com.

Request

St., Chicago 3, 111.
Teletype

1004

DAVID A. NOYES & COMPANY

r
Members:

Telephone Central 4274

spread

$3 billion is preferable. After

certain

BENNETT, SPANIER & CO., Inc.
So.

range
a

Lincoln Nat'l Life Insurance Co.

105

estimates.

doubly difficult now be¬
our
foreign commitments

debt

any

timely background story about this

STOCKS

sive Wisconsin

Disticraft A and Disticraft B
'

that

definite

beyond which the Gov¬
ernment should not go in
making

transac¬

are

financial

leader in the writing instrument field

July issue of

contains

these

for

amount

around

other way and say, when it
has the least effect on the econ¬

profited from NOT making hall-point

;

other

any

COMSTOCK & CO.

PARKER

••

the

matter, it would be extremely dif¬

COMMON STOCK

•.

what

expenditures should be
which might be con¬

year

debt

the

government

(Listed

COMMON

is¬

of nonmarketable
securities,
the proceeds of which are used to

sues

most

PARKER PEN CO.

Active

in
are

accomplished

when

Whisky Will Soon Be Available

Maintain

They

are

instance

•

'mm

This Better

first

the economy and
then they are used
by the Treas¬

ficult

non-

the

sidered

But getting back to debt retire¬
ment, I do not believe we should
reduction

the

of
a

These trust funds

for

therefore,

character

marketable to

marketable.
the

great

with

should,

conditions justify it.

about

the
a

collected

have

country

taxes

fortitude

assume

change

debt from

expenditures

huge debt during good times such
these. Also, every effort should
made

continue to reduce this

can

economy

the

perfect its

and

the

Europe, the principal of the public

any

The problem and risk of choos¬

France, Switzerland, Czechoslova¬
kia

ism.

Workers

measure

omy

aid

Britain, the Netherlands, Belgium,

trip

out
a

the fear that

has just returned

six-week

governmen¬

—

must -be serv¬
future
production.
—

the total product
burden of the debt

United States did not attack Rus¬
sia now, before that

from

iced

kind

private

tial

war

shifting

and

human tragedy.

Zelomek

of aid

There

about

made available, and suspicion
that the terms of such aid as is

stability.

political

however,

dol¬

poorly fed and their morale is

Mr.

Nations, like people,

Russian orbit, indicated their de¬
sire to accept it in the hope of

some

production

provide adequate
security for its own

trifying.

populations have hampered in¬

are

and

granted

Heavy mortality during the

any

increase

nounced.

(4) Inadequate labor supply.
of

debt

tal

product it is about 125%.

only country in the

can

The writer

proved machinery.

(5) Lack

considering
the strong
of
the pblic debt.
A

nomenal

than

amount

buy

influence

increase

when

terials.

occurred.

such

product.

increasing.

inclined

(1) A serious lack of coal.

lars

Bell

that

about

All countries, including
Czechoslovakia and Poland in the

supply of

without

1930

debt in this country amounted to

though they will accept it.

four-fold:

(3) Inadequate

Daniel

eco¬

front

United

coun¬

(2) Inadequate foreign
change for use in buying raw

the

This
the first year since the fiscal

year

made

can

This is not

people.

revival

and

applied to debt retirement.
was

national
Today, in spite of the
in prices and the phe¬

food

problems under¬

reconstruction

(

tor,

major decision

is almost the

situated

favorably

major fac¬
and
no

budget, but a surplus
of $754 million which has been

world

Sweden

even

it is

We have just closed

balanced

surprising when the United States

Switzer¬

widely.

that

Resentment against the

and the rate of improve¬

needs,

the fiscal year 1947 with
not only

be of interest to note that in 1939

States

small in rela¬

expectations

vast

public debt

Growing Anti-U. S. Feeling

production, but

times.

Now

when

improve¬

some

accom¬

perous

the production of handicraft items
that they had in the

Improvement Small

There has been

financial
c

in addition to which small
farmers
now
have less time to spend in

past.

Production

brings out the point that

ulations.

c a

has

Debt in Prosperous Times

plished during those periods when
it has the least effect on the econ¬
omy—in other words during pros¬

factors
entering
into

these operations have no effect
the gross amount of the

debt, they

debt retirement should be

just one of

gross prod¬

This

debt

many

our

keep the
high level.

Retire

na-

tional
was

power to

the

war

nomic

topheavy,

are

today is the Public

uct at a

spending

backwardness

the

our

Taxation

levels high.

been exaggerated and transporta¬

activity and exports
very short time.

both

tion costs

not even been started.
This general state of
^deterioration must be expected to have an
adverse effect on United States
within

passed, at least

far.

technological

many cases

business

unani¬

now a

Nationalization of

have

wage

and

have

completed

result of

to protect wage earners and

sure

ap¬

proaching

now

results

low

the period

industry has not shown

hand observer
that

time.

some

the

that

low labor costs has
for

first-

Prewar

There is

opinion

mous

doubt

likely to

seem

disappointed.
prices were partly

some
There

little

exports

hoped for
low-priced

ating for
lime.

revival

European

been deterior¬

early

cated
—to

Before

Businessmen who had

uation,
eco¬
nomically and
politically, has

biggest and most important problems facing all of

Debt of the United States and how best to
manage it. It stands at the present time at about
$253 billion and represents for the most part the cost of wars which has not
yet been allo-

the' nation.

Doubtful

sit¬

taxpayers of

European Export Revival

The

deflation and urges public
improvement expenditures he held back in prosper¬
Federal Reserve credit policy and denies it has come under jurisdiction of
Treasury.

periods. Defends

ous

manage¬

inflation

ment to avoid

he may have been

Asserting National Debt is so vast that it is a major factor in our economy, former
Treasury UnderSecretary advocates a flexible plan of debt retirement. Stresses importance of sound debt

Concludes her further deterioration will

crises ahead.

severe

President, American Security and Trust Co.,
Washington, D. C.
Formerly Under Secretary of the Treasury

Bureau,

Europe embracing fatalistic attitude

reports

Policy

By DANIEL W. BELL*

Statistical

International

Economist

American

ZELOMEK

(217) ;»

Chicago Stock Exchange

225 EAST MASON ST.

PHONES—Daly 5392

Chicago:

Members

MILWAUKEE
State 0933

(2)

Teletype MI 488

New

York

Stock

Exchange

208 SOUTH LA SALLE STREET

CHICAGO
Tele. CG 730

ILLINOIS
Tel.: State 0400

& FINANCIAL

THE COMMERCIAL

Convertibility of

Connecticut Brevities
England Telephone Company reported total
of $3,254,968 for the month of May, 1947, compared
$3,131,869 in May of 1946, or an increase of 3.9%. Income avail¬
Southern New

The

$182,828 against $335,905, while net profit
with $264,990 in May of 1946. The declines
attributed to the recent pay raise adjustment.
Telephones in service at the end<S>—
of May this year totaled 614,318,
1947, compared with 78.673,000 lor
the corresponding month in 1946.
an
increase of 11.7% over May,
This
represents an increase of
1946, while long distance and toll
7.6%.
calls
totaled 5,709,273 this past
May

5,572,052

with

compared

year

$50,000,090

issued

sponding
income

$5,000,000 each year

due serially

annually

the

Ilaven.

New

1947, which compares with

June,

17.4%.
*

(Fire) Insurance Co.
stockholders of record July 11 re¬
ceived rights to subscribe to addi¬
tional stock in accordance with
the
recently authorized
capital
increase.
The ratio is one-forthree at $40 a share and the rights

and

The Aetna

held

$4.48

announced

has

Groton
tion

Electric Boat Company

The

ift

John

the

Hopkins to

of the Board of Directors.

1947, Peck,

31,

compares

$2.13

for the year to June
*

the

cover

the

30, 1946.

pany's

plan

construction is now.
*

■/

which

expansion

July

and

Stock

from

arrangements

which

with

Walter H.

Snyder also pointed
Anglo-American
Agreement does not require

the British Government to remove

all

exchange controls. There still
controls on "blocked

remains the

balances"

and

transfers

NEW

Hartford 7-3191

President—Charles C. King, The

New York:

annual Spring

With

and 22/

Bright, Blyth & Co., Inc.

830

ORLEANS, LA. —Walter

Weil,

Jr.,

has

elected

been

Traders Association of Los

the proper atmosphere, the party was the most
of the club. Fifty-two members and guests
Pictures taken at the outing appear elsewhere in this issue
Chronicle" through the courtesy of Jackson Cherry of

pine forests to create

successful in the history
attended.
of
Automobile Facts and Figures—

Edition—Automobile

"The

Francis V; Nixon & Co.

Union

Walter

IIF 365

Street, to fill the

caused

cancy

Weil,

edition

Exchange
Beaver

—

New

Service

York

„

.•/

Street, New York 4, N. Y.

va¬

the

Grip of Inflation—April

death

1947—A. M. Clifford—A. M. Clif¬

who

died

We are

advised that up to

Investment Counselors, 639
Spring Street, Los Angeles
14, Calif.—paper—copies on re¬
quest while available.

Amount

Int. Rate

Maturity,

$15,000,000

1959

50,000,000

I960

50,000,000

lf"31

difference

The
Our

Sterling

Balances

1—National

—

Handbook

Information

N.
No.

Pub¬

lications,
Ltd.,
National House
Near Regal Cinema, Tulloch Road
off Lansdowne Road, Bombay 1,

Information

India—Paper—*4

rupee.

July 9 inclusive, that only

originally

bonds

between
offered

the

$115,-

outstand¬
ing ($81,850,000)- is, we are ad¬
vised, probably due to sinking

000,000) and bonds now

fore

be¬
repatriation since

operations, retirements

fund

and

1931

that date.

CHAS. W. SCR ANTON
Members New York Stock

Exchange

Co*

Teletype NH 194

Waterbury 3-3166,
Danbury 5600

f Y »"»»>; *.v f *'*?'*

■

the

New Haven 6-0171
New York Canal 6-3662

Railroad Wagek

the

history

study

of labor relations

industry—Bureau
Information
of
the
Eastern
railroad

Central Termi¬
nal, New York 1?, N. Y.

Railways,

Grand

Peru

American
three external

recently offered

investors

fop0ws;
years;

years;
and
new

1V2%

the

for

first

two

for the second two>

2% for the third two years;

2V2% to the maturity of the
bonds in 1997.

It is

interesting to note that the

Foreign Bond Holders
Council,

Protective

unofficial auxiliary of

the Washington State Department

formulated

by ex-President Her¬

bert C. Hoover and organized dur¬

ing the late F. D. Roosevelt's ad¬

and Labor Re¬

lations—1900-1946—revised

$462,000 of

bond issues have accepted the Republic of Peru's offer
out of a total of $81,850,000 bonds outstanding.
The original under¬
writing of these three external issues totaled $115,000,000 as follows:
Peru's external

ford,

South

American Investors Not

Meeting With Acceptance

Cotton

Bureau,

the

Connecticut Securities
Markets—Statistical

Peru's Latest Offer to

Cotton Year Book for 1945-46—

Vakil—Economic

Manu¬

Inc.,

Fifty-sixth Year of Dealing in

2-4301

ANGELES

ASSOCIATION OF LOS

Angeles held their 14tli
outing at the Lake Arrowhead Lodge on June 20,' 21,
the beautiful background of the mile-high lake and

The Security

Weil, Jr.

May 28.

London

Bankers Bond Co.
Urban J. Alexander & Co.

Vice-President—Urban J. Alexander,

SECURITY TRADERS

27th

President of Weil & Company,

BOwling Green 9-2211

Hartford 7-2609

Eugene W. Bright

Russell Ebinger

Urban J. Alexander

Charles C. King

capital.

18th

New

the following new

elected

Secretary—Russell Ebinger, Smart & Wagner.

Elected President of Firm

Primary

has

1, 1947:

facturers Association. New Center

Connecticut Securities

System Teletype:

Louisville

the

that

Loan

transfer

Club

Secretary
out

capital would be increased
$4,000,000

New York

for

400,000

New York 5,

settling sterling balances have not
yet been ma&e to convert freely
jof. the sterlihg they earn between
July 15 and the date the arrange¬
ments are agreed to.

Building, Detroit, Mich.—paper.

Hartford and

Bond

Treasurer—Eugene W.

$2,000,000 from surplus.

Curb

Primary Markets in

Bell

The

officers to take office Sept.

outstanding

80,000

B. SMITIL Chairman,
Advertising Committee

BOND CLUB OF LOUISVILLE

the

committee to advertise our work

our

out¬

Exchange

Siam, Turkey, U.S.S.R.
and Yugoslavia.
Uruguay, it is
reported, has just concluded a
satisfactory arrangement regard¬
Romania,

at their Annual Golf Tour¬

Collin, Norton & Co.
30 Pine Street,

which
be

Traders;

has informed us

cooperation is most helpful and we

NSTA

Exchanges
Associate Members New York

requesting all members of

Security

Boston

advertising contracts.

Among the countries with
arrangements have yet to
made are Paraguay, Poland,

15.

the

year's Convention,

this

HAROLD

the

30,

increase

Boston

plans

President of

for

Sept.

Inc.,

the

host

these

to be effected in the same
manner as the Fafnir split. This

Tifft Brothers
and

are

for

i'-/"iyty-

Co.,
of

half

Wolley,

nament and Dinner. This sort of

one,

would

York

■■

granted to

been

R.
our

that he spoke of our advertising program

similar split.
stockholders
will vote on a proposal to split
the
company's stock five-forCo.,

watt hours for the month of June,

New

'':

Cooley

&
owns

ing

reported sales of 84,645,000 kilo¬

Members

Sumner

standing shares of Fafnir Bear¬

Connecticut Light & Power Co.

■

shares, bringing

4.*

consult the head of your lccal Affiliate.

Association,

extension

has

capitalization to $8,000,000.
Hart

Com¬

under, way.

new

arrangements with the "Commercial & Financial Chronicle," please

'■

Manufacturing

$1,000,000

dollars

million

Four

800,000.

■

Scovill

be increased to

would be transferred from surplus

290

presently outstanding 160,-

000 shares would

This*

share.

$28,970,

with

The

net income of

Wilcox reported

$212,-597,

Stow

stock dividend on the new shares.

ended

months

nine

the

For

March

This would be

splitting the present
$25 par shares on a 2J/2-for-one
basis, thereby reducing the par
value to $10, then ordering a 100%
effected

Spear who was named Chair¬

company's

the

split

proposal

stock five-for-one.

Presidency. He succeeds Lawrence

man

July 30, stockholders of
Fafnir Bearing Co. will vote on a
On

the elec¬

deadline

.Practically all Presidents of Affiliates are now assisting the
Advertising Committee representing their local, and should any of
the members require any further information regarding this year's:

pointed out by Secretary
that
the
extension
to
Sept. 15 does not permit any mod¬
ification in the obligation of the
British
to
permit countries

share.

within

Snyder

complied

It was

the six months
ended May 3, 1947, were $15,for

Earnings

had
gener¬

ing its sterling holdings.

Stevens will be publicly offered.

500,000,

registration with
block of shares
by the estate of Nathaniel

the SEC, a large

stock will add

si:

York

New

Subject

July 21.

$7,500,000 to surplus.
Jfc

the

outstanding) on
Stock Exchange.

capital is being increased
$7,500,000 to $10,000,000. The

issuance ot tne new

& Co., Inc.* will

Stevens

shortly apply to list its 5,000,000
shares
(of which 3,460,000 are

The

from

that

cases

will be published

Many of our advertisers are holding up their contracts as they
they may take larger space, should bus.ness continue to improve
for the next few weeks. This is indeed most encouraging and at the
present time, we are over $10,000 gross advertising.

that in the case of 14 coun¬

ever,

NSTA Post Convention;

hours
for tries, the British have not yet suc¬
increase of ceeded ih making final arrange¬
ments for sterling convertibility,

33,595,000
kilowatt
1946, or an

the window."

expire at 3 p.m. (DST) on

John W. Snyder

reported power sales of 39,359,000
kilowatt hours for the months of

our

Financial Chronicle"

feel

July 15. - Mr.
Snyder, ad¬
mitted,
how¬

Light Co.

The Hartford Electric

all

Wednesday,

"Commercial &

cn-August 28.

set, which
expired

$500,000

the National
City Bank, submitted bids of
100.4399 for the V/Hs and 100.315
for the 14s.
The bonds were
reoffered to the public on a
scale ranging from a .55% basis
to 9914 and the issue went "out
headed

cate,

ally

with

construction of its new
power plant addition in

begun

15, 1948 to 1957,
inclusive. The successful syndi¬
$110,000 July

Advertising will close August 16 and
issue of the

cur¬

actions
been

$2,200,000
University of
Connecticut 1*4% bonds dated

other

Advertising Committee is

territory.

current trans¬

was

year

sterling in¬

rencies

$1,595,004
against $1,464,413, or earnings
per share of $1.21 and $1.18, re¬
spectively.
The company has

and

July 15,1947, maturing

this

15, 1948 to 1957, inclusive,

July

for the corre¬
period in 1946. Net
for the first five months

$6,525,878

with

II
lJ/g%
Bonus
July 15, 1947, and

War

World

Britain

permit the
convertibility

NOTES

very happy to report that Bert
Horn.ng of Stifel, Nicolaus & Company, Inc. cf St. Louis has accepted
the Vice-Chairmar.ship of our
committee, handling the Southwest

operating rev¬
$7,248,062 * compared

enue

Your

i red

requ

Great

ing showed total

24, the State of Con-

NSTA ADVERTISING

Secretary of the Treasury,

Illuminat¬

May 31, 1947, United

Bonds dated

negotiations are pending.'
John
W. Snyder, announced on July 15
that the provision of the AngloAmerican Loan Agreement which
where

ended

months

five

the

For

nectieut

has been

ago.

On June

Secretary says delay
granted until Sept. 15

Treasury

$117,214 compared

in these figures are

NSTA Notes

For 14 Countries

charges was

able for fixed

was

Sterling Postponed

telephone revenue
with

CHRONICLE

in- these

terest

in¬
payments for the past 16

years

and

bond issues a

plan to skip all

ministration by the State Depart¬

ment,

Department and

Treasury

Federal

Commission, have

Trade

recommended bond holders not to

to resume interest as accept the plan.
...

•

^ '

Volume

THE COMMERCIAL &

Number 4612

166

FINANCIAL CHRONICLE

(219)
These

Missouri Brevities

Michigan Brevities
including, among others, First of
Michigan Corporation of Detroit, on June 18 publicly offered $32,000,OCO of first mortgage bonds, 2%% series due 1977 of The Toledo
Edison Co. at 103.1647 and interest.

On the

the

Blyth & Co., Inc. of New York
City, and including, among others,

share and dividends.
The

be used
$30,-

funds, will

other

bonds,

mortgage

first

4)00,000

trucks,

and

the

123,000 of 7%, 6% and

5% pre¬

Midland,

Co.

special meeting to be held on July
22 will act on an agreemant of

shares of convert¬
preferred stock, no par val¬
ue.
The merger agreement pro
vides for the merger of the Mich¬

the

Dow
com¬

into

pany. -

Chemical

Dow

The

Co.

July 2 filed a registration state¬
ment with the
Securities and

covering
"the issuance of the new second
preferred stock. Smith, Barney
&
Co. was named as under¬
Exchange Commission

writer.

July 14.

Detroit, on
June 24 publicly
offered, as
speculation, 60,000 shares of com¬
of

stock

mon

Co.,

Continental

Body

Inc., Bay City, Mich., at par ($1
per
share) to residents in the
State of Michigan only.
Of the

proceeds, about $5,000 will be
used for additional equipment and
the balance of $45,000 for addi¬
tional working capital.
net

Continental

The

truck

commercial truck trail¬
is also a general fab¬

bodies,
and

ers

ricator of steel.

Exchange on
announced admission of
the firm of Davis, Hunter, Scott
The Detroit Stock

Co., who will conduct a

(brokerage business at

genera"

608-10 Pen¬
Genera"

Detroit.

obscot Building,

partners are W. Fred Davis, Fred¬
erick B. Hunter
and Walter
Scott.

these

Corp.

had

products

Trading

produced

passenger cars

continues

Co.

.trucks

and

stock

General

cars

the

7%, 67o and 5% preferred
—

underwriting syndicate,
by Kuhn, Loeb
& Co.,

Detroit

issue

Stock

short

units produced in
against 135,276 in May

were

155,609

June,

175,262
March.

April and 174,602 in

in
-

Louis

•

Gardner,

and

Stix

Co., both

of St. Louis, and Stern Brothers

Banking circles in Detroit .lost
their

with the death

figures
July 11 of Wil¬

Griswold, Executive VicePresident of the United Savings

reports

employees'

announced

was

Detroit

Milton

letter

listed

companies,

the

their

annual

port to be considered
"Oscar" to industry.

will

and

added

corpo¬

National.

June

dends

voted
its

share,

stock

five

payable

record

made

18 and Oct.

18
9.

divi¬

net proceeds will be used to re¬
tire a bank loan and any balance

by the
per

to hold¬
similar

April" 16."
1945; none

17,

Bank

Trust

%% bonds at prices to yield from
to 100.80%, according to

100.55%

maturity.
They mature serially
July 1,1948-1951, inclusive.
Curlee Clothing Co., St. Louis,
tomorrow (July 18) will redeem
all of its remaining
outstanding

from

class

A common stock at $31.50
share at the Mississippi Valley

per

Trust Co.

;

dend

made

July

$1.121/2

mulative

value, which

Stifel, Nicolaus

414%

18, last,

of.

quarterly

this issue

1947,

holders

The

liittaly-QSark Com,
Francisco

following the signing of
Federal District Judge
George H. Moore at St. Louis ter¬
minating his jurisdiction over the
railroad, which he had retained on
approving the plan of reorganiza¬

July

order by

tion in 1945.

v-j.

corporation,

which

group

"--v.

underwriters,

included Mark

of Denver,

permission to

file

record

June

announced

Louis,

Stein¬

that

net

profit of the company after taxes
was

$712,376, or $2.85 per share,
ended March 31, 1947,

for the year

compared with $549,495, or $2.19,

preceding fiscal year. Sur¬

for the

plus was increase
bringing the Tatter

$2,575,089.

distribution

first
since

Jan.

22,

This

for

000

Auto

first

1D46,

will use proceeds'

estimated

financing,

general funds.

Projects

manufacturing facilities at Lakeview

Mill, Neenah, Wis.; construc¬
a
mill at Niagara, Wis.;

tion

acquisition and conversion of a
at
Memphis, Tenn., ?^d
construction of a sulphate pulp
plant
mill

Terrace

by $378,213,
amount to

Bay, Ont.

Co.

Supply

month

the

was

in execution include expansion of

(Mo.) reports combined whole¬
sales of $10,107,-

ST. LOUIS

June,

$52,824,000 for the
months of this year.

and

1947,

was

six

Peltason Jenenbaum Co.

MARKETS

the;

Berkshire Fine

the' stock

company

the

sale and retail

berg & Co., Stix & Co., Edward

other

and

products.
The stock
priced at 24% a share. :;'
paper

-'t

manufacturer

wadding

cellulose

July

stockholders

30.

and from

Dennig, President of Hyde
Park Breweries Association, Inc.,
St.

Corp.,

berly-Clark

stocks, the issuance of notes and
of bonds of a Canadian subsidiary,

15 paid a dividend of five cents1
per

Co., Inc., and other
underwriters placed on the mar¬
ket July 16 an issue of 300,000
shares of common stock of Kim¬

$6,725,000, toward expansion ex¬
pected to cost $45,700,000 by 1949.
By April 30 about $15,810,000 had
been spent and the rest is to be
raised from the current sale of

L. S.

Co., I. M. Simon & Co. and Mc-

1/.

Inc.

V. Hodges,

Blyth & 0®*

Myth &

Colo., counsel for the old Frisco

Western
f

Offered by

The

Judge

the reorganization

_____

Ry., in receivership for 14 years,
was restored to private control on
an

Mr.

announced.

Monitor."

:j:

Louis-San

St.

1943, after serving on the editorial
staffs of the "Wall Street Journal"
and
the
"Christian
Science

record

Sept. 19.
(

been

has

Inc.,

vice-president of the

Oct. 1,

Ritchey

Ritchey joined the firm in June,

payment of $1.1234 Per share is
payable

Law,

company,

Co., Inc.,

Another

Guenther

| elected

$100

offered to

was

cu¬

stock,

public oh May
Louis.

was
,

the

preferred

the

St.

per

par

ing capital.
'

John

An initial quarterly cash divi¬

D. Jones & Co., Scherck, Richter

since.

Electromaster,

purposes

syndicate headed by the Mer¬

remaining will be added to work¬

cents

July
July

was

Co.

resume

common

declaration

ers

organization plan.

60,000 shares of $1 par value com¬
stock at $4.75 per share. .The

Stamping

the plan

Dempsey-Tegeler

mon

The

of the

department and member of
board of Albert Frank-

copy

objections to the completed re¬

$500,000 first mortgage 4%% ser¬
ial convertible bonds, dated May
•15, 1947, at 100 and interest, and

re¬

for

$7,625,000

& Co. and
J. W. Brady & Co., both of St.
Louis, on June 20 offered to the
public the following securities of
the
Bearings
Co.
of
America:

Detroit Trust Company's invita¬
to submit

devoted

general corporate

John C. Ritchey, director

net

nied

loans

balance

Exchange,

acceptance

their

urges

Stock

Ritchey V.-P. of

Albert Frank Agency

per

The

Moore also discharged
managers he
had named at that time, and de¬

ration.

President

Msi

stock

the general funds of the

Co.

Trust

Manley,

Detroit

the

preferred

share. The net proceeds will

the

an¬

June by Selden B. Daume, Presi¬

of the

$101

bank

Awards to industry for the best

dent

100,000 shares

Co., 7 1012 Baltimore Avenue.

be used to reduce existing term

if.

and

offered

City,

Warren Petroleum Corp. at $102
per

nual

public

Kansas

convertible

of Detroit.

stockholders'

the

$100 par value 3%% cumulative

liam C.

Bank

Co.

best-known

are

affiliated

become

13 of¬

Investment
at

has

Herrick, Waddell & Co., Inc.,

preferred

dividends.

Chronicle

Financial

CITY, MO.— George

Co., St. Louis, on June 30, pub¬
licly offered $3,000,000 of City of
St.
Louis
public
improvement

The net

oversubscribed.

oyer
-

proceeds, together with treasury
funds, will be used to finance ex¬

July 9.

was

St.
and

cantile-Commerce

July 9 offered to the public
$20,000,000 - of
Wheeling > Steel
Corp. first mortgage sinking fund
31/4% bonds, series D, due July 1,
1967, at 101% and interest. The

the May figure but was stil
of totals achieved in the
months of March and April. There

other

penditures in connection with the
company's construction and im¬
application of the McAleer
provement program.
•Manufacturing
Co.,
Rochester
;
■
*
#
*
*
'
Mich,, to list its $1 par common
On July 9, a banking group,
stock and $10 par 5% cumulative y
li e a cl e d
by
Merrill
Lynch,
convertible preferred stock on the
Pierce, Fenner & Beane of New
Detroit Stock Exchange has been
York, N. Y., and which includ¬
approved, and trading is expected
ed, aniong others^Keinholdt &
to begin on or before July 26.

Motors

the United States and
Canada rose considerably in June
Corp.

with

together

issues,

The

of the company.

proceeds of the, above

The

July

passenger

net

Stamping

Lansing

Exchange commenced

payment

Production

interest.

and

York, N. Y., and which in¬
cluded, among others, Newhard.
Cook & Co. of St. Louis, and Stern
Brothers & Co. of Kansas City,

June

the

high level.

tion
*

proceeds

headed

and trucks and that demand for

company

sells

and

manufactures

100

President, told

1,255,684 postwar

Co.

stocks.

Keller,

Chrysler

one

4 Moreland

Securities

two

the stockholders that up to date

ible

Delaware

stock

The

issue of 400,000

Co.'s

publicly offered
of first' mortgage

the New York Stock Exchange

designed to provide the
with a more flexible
capital
structure.
A
proposed
capital revision involves, among
other things, a four-for-one split
in the outstanding common shares
and the creation of an authorized

company

convertible

New

merger

igan

mulative

Wood

with

June

bonds, 2%% series due 1977, of
the
Toledo
Edison
Co.
at

meeting held on
the
stockholders
of
Corp. approved a pro¬
to change the authorized

began

Louis,

$32,000,000

1,186,-

of incorporation
was
filed July
11, and trading in the new stock

company

Chemical

among

funds, will be applied to the re¬
com. stock from
6,000,000 shares, demption of $30,000,000 of first
par $5 to
15.000,000 shares,' par mortgage bonds, 3%% series due
$2.50 and authorized the. split-up 1968; $3,000,000 of first mortgage
3V4%
series
due
1970;
of each share of $5 par stock into bonds,
two
shares
of
$2.50 par stock. $4,713,000 of 3 y2 % sinking fund
debentures due 1960; and $16,123,The amendment to the certificate

Dow
at a

the

St.

103.1647

total of

July
8,
Chrysler
posal

Kansas: City,

special

included,

H.
—

Courtney-Breckenridge
all

KANSAS

fered to the public 7,352 shares
of $100
par value
of 5% cu¬

N. Y.,

others, Stern Brothers & Co. of

Special

share and

per

—

Boston

New York,

which

and

corpora:-

1948, the

057 units.

stockholders

First

The

Corporation,

corre¬

year.

tion turned out

ferred stocks.

Chemical

263,294

headed

<$>

another
bankers

in-*

With Herrick, Waddell

.»•' -y

■■

date,

investment

same

group

produced

the full year

3J4% series due 1968; $3,090,000
first
mortgage
bonds,
3*4%
series due 1970; $4,713,003 3^%
debentures due 1969; and $16,-

The

cars

against

redeem the outstanding

921,929

months

sponding period of last

from the
offerings, together

two

with

six

proceeds

net

'above

first

1947, General Motors

Watling, Lerchen &' Co. of De¬
troit, offered to the public 160,
€00 shares of $100 par value 4%'%
cumulative preferred stock of the
Toledo Edison
Co. at $103.62Vz
per

the

■■■"' ;

dividends.

underwriting syndicate headed by

date, another

same

preferred stock of The Toledo Edison Co. at $103.62%

represented

of 12.6% and 10.7%, re¬
spectively, over the correspond¬
ing periods in 1946.
creases

An underwriting syndicate, headed by Blyth & Co., Inc. of New
York, N. Y., and which included, among others, Newhard, Cook &
Co., Smith, Moore & Co. and Stix & Co., all of St. Louis, on June 18
offered an issue of 160,000 shares of $100 par value 41/4% cumulative

of investment bankers, headed by The First Boston Cor¬

A group

poration of New York City, and

figures

11.

when "IV2,'

Spinning

BUILDING

LANDRETH

ST. LOUIS 2,

Chicago & Southern Air Lines

MO.
"

Teletype—SL 486

L. D. 240

Cleveland Cliffs Iron NEW

cents was paid.

Ely & Walker Dry Goods Co.
El Paso Electric

Gulf States Utilities

Charles A. Parcells & Co.

c. ft dm™

Established 1919
r

Members Detroit

Hearst Publications
;

Stock Exchange
Latest

Information

639 Penobscot

Moreland & Co.
Member

Building

DETROIT 26, MICH.
,

Telephone

Teletype

Randolph 5625

Detroit

Stock

Exchange

1051 Penobscot Building
DETROIT 26, MICH.

DE 206

Eay City

—

Lansing:

—

Muskegon

•

Rockwell Mfg.
•j

Michigan Markets

Pfd.

Pub. Serv. Com. & Pfd.
LaPlant-Choate Mfg.

Kansas City

Stix & Co.
INVESTMENT

Southwestern Public Service

SCHERCK, MCHTER COMPANY

509

SECURITIES

olive:

street

St. Louis lt>Io,

Landreth Building
Bell

Teletype

SL 456

Garfield 0225
St.

Louis 2,

Mo.

L. D. 123

Members

St.

Louis Stock

Exchange

*12

THE COMMERCIAL

(220)

& FINANCIAL CHRONICLE

renewed,, qptimism.
There J is
growing assurance of a record
volume of new construction for
the

half of the

second

Our

Neglected Sea-Air
Opportunities

now

year

eased

that rental curbs have been

building restrictions lifted.
All this is creating a background
that could lead to what we regard
as
a
more realistic appraisal
of
the business situation, and could
revive confidence in the invest¬
and

By IIENEY HUNT

"Don't Sell Stocks

Strike News

caption, "Don't Sell Stocks on Strike News." was a
market maxim of the '20s like "Don't Buy Stocks After the Good
News Is Out."
■
'
V
"v
v
"I"'

hv.

•v.<

The above

strikes

Today,

serious

menace

far more$——
business when
with
were in the

than they
Higher labor

ieconorr.v
'20s.

costs

mean

higher prices for consumer goods
add another ring to the in¬

and

flation spiral.

Strikes in such vi¬

tal industries as coal cut down on

steel
as

and

well

automobile production
railroad freight car-

loadings.
•:

However,

frequently

over¬

looked factor about strikes is

that,

though they may bring pro¬

even

duction to

they

standstill temporarily,

the pent-up

not reduce

demand

for

goods.

the

con¬

trary, they merely defer the day

production
unfilled

catch

can

up
of

example, if it hadn't been
for
major strikes in 1946 (and
material
shortages in 1946 and

down

turn

total

The

1946.

January

was

business

profitable

sufficient

freight

cars

tities.

This

situation

directly

caused,

also

indirectly,

and

by strikes.

Maybe there is a prof¬

until

companies

During the second quarter In¬
corporated Investors added two
new
common
stocks to its port¬
folio: Commercial
Solvents and
Commonwealth and Southern.

have

been

par¬

year

and

that

should

make

much

Mutual

better

showing over the next 12 months
include: Steel, Automobile, Build¬

Corporation, added the following
common
stocks to its Portfolio:
Air
Reduction
Co.;
American
Home Products Corp.; American

ing, Railroad, and Railroad Equip¬
ment.

Steel

Foundries; Armstrong Cork

Long's "New York
Letter" (July issue) has the fol¬
lowing comments to make on the

Co.;

;

from your investment

Distributors Group,
63 Wall

request

"The

profits

dealer or

prospect for business and
appears

been

than has

Incorporated

Street, New York 5, N. Y.

Cluett, Peabody & Co.; Columbia
Insurance Co.;

to be much better

last

dividual

ing

generally assumed

Lines,

Fall.

Many of the in¬
maladjustments are be¬

there

able

during

and

corrected

weeks

has

been

In the textile

weaker

regarded

recent

spots,

industry,
one

there is

Eastman Kodak Co.;

Co.;

C.)

United Air

United Aircraft

and

;

•

;;-Ay

Distributors

has

Inc.

the Steel Indus¬

try.

Corporation had
last week with
ature

Research

record mailing

18 pieces

covering its 12

of liter¬

funds.

tion

port Steamship
Line, with the
establishment of American Export

It exists in the conservative Scan¬
dinavian
kingdoms;
in
radical

American Over¬

France;
in dictatorship - ridden
Spain and Portugal. It is settled

(now

Airlines) were the leaders in
this movement.
In recent years,

seas

Board

Prospectus
s

,'S

air

•
* A/»

overseas

re¬

gardless of whether such air lines
have been controlled or owned by

marine.

Those
while

V4S&

Lord, Abbett & Co.

our

New York

Chicago

—

CAB

the

that,

has pursued

and

sea

shall

is sea,

meet,

the

companies, and, apart
representa¬

DDL,
a

the

Air

substantial percentage
held

shipping

Chairman
also

Danish

the

three

companies,
the

general

DDL

manager

steamship

and

board

the
In

company.

addition, all of the Scandinavian
countries

and never the twain

European

held by the Norwegian

principal

assumption that air is air,

its

Danish

fantasy of economic theory based

INCORPORATED

«• WALL STREET, NEW YORK 5, N Y.

own

53%

governmental

Line, has

today.

Europe

demonstrate

facts

sea-air

than

Denmark,

the repre¬

J.:-;'-itsrr>a9A •

Swedish

tives, the entire board is controlled

ascertain the exact facts of
aviation

The

policy,
and
dethe contrary policy of the

are

from

sentative of the Sea-Air Commit¬
tee to

the

represented

several by 'the steamship companies.

spent
as

also

approved

steamship

American foreign

Europe

are

Norway

Because of the impor¬

recently
in

than

shares of DNL, the Norwegian Air

placed at a serious dis¬

months

Swedish

held

American CAB in the same prob¬
lem
as
"domestic
politics."
In

foreign Line,

American

has

steamship companies, all

has

scribed

American

and

are

prlcipal

management.

CAB

while Annerican steam¬

shipping

its

governmental

coordinated sea-

ship companies cannot,

whom

its

if foreign steamship

travelers

air service,

HUGH W. LONG & CO,

the

airline

Swedish

companies are permitted to oper¬
the air and offer shippers
and

Sweden

40%

steamship companies
the efficient competi¬

Concededly,

civil

existing local circumstances.

tors of our own merchant

•

combination
naturally takes
varies with each country because

of the

States and overseas points

are

govern¬

air

transportation between the United

foreign

Churchill

European Technique Varies

foreign

—

policy of the

The form which European sea-

seeking

lines

III

upon request

'
"•

conservative

permits to all foreign
to conduct air

air carrier

Netherlands.:
the

ment, and is today the policy of
the left-wing Labor Government.

companies, and has followed a
policy of denying every applica¬
tion filed with
it by American
time the Board has issued

the
was

England it

wings by American steamship

! I

W-

policy

the Civil Aeronautics
has opposed the sprouting

however,

trade,

This concept exists in all
Europe, regardless of the polit¬
complexion of the country.

ical

tance of this to

Fund B

trade, and meet
challenge we may de¬
make against such dom¬

inance.
Richard H. Wels

agra, and the
American Ex-

advantage.

Union Bond

international

cide

Pan-

trade

new

whatever

ate in

National Securities

the

tone

Group,

revised folder

gen¬

terests

forma¬

which

Notes:

It is the basis of

with which European in¬
hope to attain a dominance

groups

Line,
rticipating

the

notice¬

in sentiment
among
businessmen.
This
is
showing up in greater willingness
to plan ahead. Retail concerns are
commencing to reorder merchan¬
erally

Inc.;

Corp.

improvement

dise.

(J.

Penney
'

since

Corp.; Continental

Gas & Electric

outlook:

business

Throughout Europe this concept
is prevalent.

approach which is today produc¬
ing
the
combinations and
the

Corp.; steamship companies. At the same

Financial

European Practice

The

Air Lines

During the month of June, First
Trust Fund sponsored by
National Securities and Research

half—industries

transport system..

areas

years.

Portfolio Changes:

year.
that

upon

recognized that
foreign trade de¬
integrated sea-air

into

p a

this

late

pends

American

other carriers.

uniformly

their position in

Grace

thought in this for you?"

itable

basis

same

have

which

big

customers.

here again the ultimate
result will probably be merely to
postpone the peak profits of the
railroads and the railroad equip¬
But,

Hugh

prospectus on

the

they
dealers. The dealer not
stepped
up
production have operated
their
surface
sharply by the contest, but was
gratified to find that a high per¬ transportation
or
many
centage of sales were adding new
the

quan¬

aviation

overseas

only

Hugh W. Long Comments

participate in
They have

helped a lot by a successful sales
the
contest which was run by one of

their inability to buy new

due to

Norway,

■

American 'steamship companies have
sought for years the right

American
been
in
the
Shares.
In fact, the dollar value
fore front of
of Selected sold last month ex¬
ceeded that of any month since the extension

The railroads have been forced

past

Denmark, Spain, Britain and Canada.

aviation

Industries

Group Securities, inc.

sales

Selected

ticularly hampered by strikes and
excessive labor costs during the

years)

(best

sured.

year or

BOND

port system, he details technique practised in Sweden,

about its sales in June: "June
1947 was the best June since 1936

be nearly
so
many
people clamoring for
new cars as there are today. Thus,
the motor companies will go into
1948 with capacity operations as¬

following

Asserting European countries uniformly have recognized
foreign trade position depends on integrated sea-air trans¬

say

wouldn't

there

1947),

the

has

Chicago

;

that their

Company

Investments

Selected

orders.

panies.

Looking Up for Selected

Business

—-

—

For

ment

RAILROAD

are a
to our

By RICHARD II. WELS

Mr. Wels notes failure of American
steamship companies to secnre
Government approval to
participate in overseas aviation in face of
CAB s issuance of air carrier
permits to foreign steamship com¬

outlook."

ment

Thursday, July 17, 1947

•

feature

(Continued

countries

air

lines

cargo

on page

45)

Los Angeles

£ 4

national
SEeURmK^ERlES

SHARES OF CAPITAL STOCK OF

iSwmti
wcncma
TWELVE NEW

eystone

NATIONAL SECURITIES SERIES

Custodian

INSTITUTIONAL SERIES

BALANCED SERIES
'«f

AUTOMOBILE SHARES

Funds

AVIATION SHARES

EsSSl

•

OIL SHARES

RAILROAD SHARES

Prospectus
your

The

may

RAILROAD EQUIPMENT SHARES
RETAIL TRADE SHARES

METAL SHARES
from

BUILDING SHARES
CHEMICAL SHARES

STEEL SHARES

be obtained

local investment dealer

Keystone Company
of Boston

£0 Congreii Street, Boaton 9,

Prospectus
your

may

be obtained from

local investment dealer,

Prospectuses

NATIONAL SECURITIES & RESEARCH CORPORATION

the

parker

corporation
„

Mui.

on request

ONE COURT STREET. BOSTON 8. MASS..

120 Broadway.

New York S, N. Y.

■

THE COMMERCIAL & FINANCIAL CHRONICLE

Volume 166 ' Number 4612

industry

Sees Leveling
,,ii

it,*.,!* .I-41

kJi •,'*>*

if ii'ij.1

OH oi Prices, Costs and Income
»B*«1

jft

....

the

and. that price reductions
by higher man-hour, production and resulting, lower unit

be achieved under present level of wages
Foresees further technological, advances

can

costs.

and

goods

facta?

and

taxes

the

tions

averaged 3.6% of sales in
1937, 5.2% in 1941, 4.2% in 1943,

has

and

for

purchasing • goods
services, and discourages in¬

man

'basis

able

will

"we

possibly
fore¬
shadow
a
recession in
general
business activity. *

ex-

perience

for

consid¬

of,

length

time.-.

Ac¬

cording to Mr.
Cowdin:

are now

And foremost among

another, is impeded,

Necessary Readjustments

much

that

favorable
the

business

picture today.

J. Cheever Cowdin

Civilian

em¬

ployment is the largest in our his¬
tory. Payments to individuals are
than

double pre-war levels.

Industrial production is at
time high, although

personal view is that we
in a readjustment period.
the readjust¬

ments *that

the

a peace¬

different

potential

demand

products

For

300%

steel

28%.

American
—

do¬

our

mestic

purchasing power is un¬
precedented; and never before
were
foreign countries so eager
to

obtain

products
from
the
States. Our government's

United

revenues

goods

and

services

above

level;

acute imbalances
the price structure
industries. In textiles, for

within

instance,
above

its prewar

the other hand is up only

Equally

exist

for

cotton

prewar;

goods
rayon

are

200%

only

30%.

Now,

business
prosperity depends upon the continuing exchange of goods and
as

know,

price

be made

porate profits?

in this period generally
lower rate of return per
sales.

reductions
out

come

some

Just

that

most

cases cur¬

small.

Profits

disappointingly

and

Prices

Contrary to general impression,
the

normal

profit

margin

industry is not high.
fact, the economic progress of
this
country
reflects
primarily
production

goods

quire

overall

A recent public opin¬

however, showed that
a majority of people believed that
the peacetime profit of a manu¬

American economy is called upon
to bear. The high rates and mul¬

facturer is 25 to 40%.

These

people

tiplicity of direct and indirect
taxes imposed upon business and

thought

that

build

Yet

the

clouds

are

sky

and

less than realistic if

in the

recognize them. For example,
tail

stores

are

noting

sharply in many cases. In¬
stallment purchase debt has steadily increased.. Securities

are lower
the stock exchange. Here and
there employment has

dropped.

Living
high.

costs'

'■

are

•

on page

foreign

American

abated,
rests

Currently,

demand

we are

the normal pre-war
volume. This

boom,

offer to

only by the Prospectus.

buy

any

of these Bonds.

JULY

;.Y

V. -•\'v

••

•

......

important

present

:t;iyfinternational-bank ; :hyy■
Reconstruction

element

national

■

;

■, ;

;;

Development

and

Dcted

July 15, 1947

^
Due July 15, 1957

/■

'•

prosperity,

$150,006,000

coun¬

•

try is able and willing to make
huge additional loans or grants
abroad; because foreign nations
just do not have adequate dollar
exchange

$100,000,000

Ten Year 2%% Bonds

cannot continue at its
present pace
unless we assume that this

support

it,

nor

there any reasonable
prospect
their selling materials
to us
sufficient
volume
to
even

Sy'yY^
Due

July 15, 1947

Twenty-Five Year 3% Bonds
Dated

i > t;

Interest

July 15, 1972

payable January 15 and July 15.

ap¬

proach

this

volume

of
imports
industrial situation
abroad, furthermore, is not good.

from

The

us.

Feather-bedding
generally

low

there "are

not

deterrent.

worried

sibility of
lapse,

-of

labor

the

100% and accrued interest for t!ie Ten Year 21A% Bonds

re¬

However,

about

would

depression

production
erous

100% and accrued interest for the Twenty-Five Year

3% Bonds

pos¬

general European col¬

which

major

morale

seriously retarding

further

PRICES

practices and the

Intense nationalization is

covery.

bring

here,

because

abroad, despite

num¬

handicaps, is gradually im¬

proving. It is

the uptrend al¬

The offer of these Bonds is made

only by

means

of the Prospectus and is being made by the Bank

only to qualified dealers in securities. Copies of the Prospectus may be obtained from such
qualified dealers in securities

as may

legally offer the Bonds and distribute such

Prospectus in compliance with the securities laws of the respective states.

though slower than it should be.
increased production is the only

.'jsound solution to the economic
dilemma

foreign nations,

these

nifichhf retarding influence

but

the

overall

for

Reconstruction and Development

New York Office—Room 520, 33
unfavorable

business

yet

picture;

income.quarters it is believed I

Liberty Street

de¬

velopments has exerted any sig-

International Bank

is in this country.
None

15, 1947

...

for

continues
un¬
boom in export trade
insecure foundation.

exporting goods
at the annual rate of
approxim¬
ately 20 billion dollars, four times

our

goods

our

solicitation of

NEW ISSUES

for

Here and Abroad

Although

nor a

all-time

y'y....

••

offer to sell

The offer is made

of
re¬

the

indus¬
that

profit

28-year period from 1916 to

(Continued

re¬

are up

new

these

observed

increasing

resistance to prices. Sales in some
lines have dropped. Inventories
.

This announcement is neither

failed to

corporations

all

the

would

new

with
for

operated at

average

rate

long last exceed its

there

Further¬

expenditures.
business

money

for

others.

connection

half of

only

same

profit

the type
corporations

earnings

should

try,

ion survey,

the

amounts

than

more,

consumers.

unit

put

car

upon

some

larger

purposes

in¬

costs

lower

new

Depending

creasingly

business,

American

mass

and I

you

accumulate funds

showed a
dollar of

plant, to repay borrowed money,
to purchase new and better ma¬
chinery and tools for its em¬
ployees, to improve the quality of
its goods and services to the pub¬
lic, to expand its operations and
to have something in reserve for
a rainy day.

reductions possible will
cases

washing machine or
refrigerator, so a corporation must
put aside part of its earnings to

profits is spread out over the
huge volume of goods produced,

house

cor¬

the price

1946,

aside to buy a

that

rent profits will support some re¬
ductions in prices—but even in
such cases, when the total amount

burden

the

should

underlying cause
high
prices
is
the

tax

peacetime

government—na¬

in taxes from its
people.

Can

Another major

today's

that in

for

State and local—to take
than 25% of the national in¬

come

If the consumer has to spend a
disproportionate amount on, say
food,
there
is that much less
money left to buy the remaining
goods and services. This obviously
upsets the balance between the
different parts of our
national
economy. The ultimate result is
that some groups of people will
no
longer be able to buy goods
and services provided
by other
groups.
V ■
_' ;
of

in national,
Economic

year

taxes.

proves

is unsafe

Consumer and Taxes

enormous

local

tional,

our

example, the price of wheat

of many

enormous

that make up our business struc¬
ture have become badly jumbled.

volume.- The

war-time

be made

economy! is to be soundly pros¬
iS the correction of the
current distorted relationships
among prices. The price relation¬
ships among the many thousands

substantially

under

inust

perous

There

history

services among the various groups
of people who make up our popu¬

lation, and also upon exchanges
goods with foreign countries.
When price relationships are dis¬
torted, the free flow of these goods
and services from one group to

tial prosperity
erable

may

billion
and

substan¬

very

they

equit-1 that

$51

State

income <$>-

and
on

For

1945.

1,100 leading- manufacturing *
corporations indicates a net prof¬
it of approximately 6% on sales.
These years have been selected
because they are generally con¬
sidered as the high profit years of
the past decade. The other years

economy can stand, without
serious effect, the current drain

Company, Inc., reviews current general business
___T_ 0
solving the major problem of leveling off prices, costs

of the Board of Universal Pictures

conditions and concludes that after

by the National City Bank

can

Writing-in his Company's house organ, "Progress," Mr. J. Cheever.', Cowdin, ChairT««

3.8%

survey

itiative
and
enterprise.
It is a
question of how long the Ameri¬

in U. S. productivity.

after income taxes for all corpora¬

the

individual

the

are

According to Department
Commerce figures, net profit

extremely high rate

income

that

available

10% would -be-fair.-What

.cost

time reduces the amount of

money

long period of prosperity ahead when this adjustment ;.

Says normal profit margin of American industry is not high,

completed.

The

personal

same

but. .add

consumer

services.

J. Cheeyer Cowdin, of Universal Pictures, sees

cannot,,help

substantial^;to the .ultimate
to

(221)

v!,: r

40)

THE COMMERCIAL & FINANCIAL CHRONICLE

(222)

Thursday, July 17, 1947

Economic Observations Abroad
By N. S. VV. VANDERHOEF

President, Textile Export Association of the U. S.
Resident, Turner Halsey Export Corp.

"*;^:-"5,

Textile exporter reports on economic conditions in

Europe, noting particularly food shortages and
currency difficulties.
Says mill operations are hampered by lack of coal. Sees continued depression
of textile industry in England and
France, and reports wholehearted approval of Marshall Plan.

The stocks of Denver & Rio Grande Western have been attract¬

ing considerable speculative interest in the recent generally more
favorable market atmosphere. The common has rebounded approxi¬
mately 80% from the low of 6% established a relatively short time
ago, while the preferred is up 10 points from its low of 25%. Many
analysts look for continuation of this upward trend on the theory
that

even

the stocks

now

not<$>-

fully reflect

the earnings poten¬
reorganized prop¬
erties. In particular, the preferred
is viewed as having interesting in¬
termediate term prospects on the

section of Utah.

tialities of

plants

basis of the dividend outlook.

Western

The

the

preferred stock is cumula¬

tive to the extent earned and has

$10

1944

due

earnings.

from

1943

and

expected

quarters close to the company that
these

will

arrears

time late this

paid some
or early in

summer

the fall. Moreover, it appears safe
to

predict that the dividend of $5

share will be earned by at least

fair

margin in the current

year.

taken

this

Steel.

Denver

entire

have

Rio

expected

coal

movement

over

represent,

the

westbound

the

finished

move¬

1945

and

other

extraordinary non-recurring
charges last year the dividend was

not earned either in

One of the

1945

1946.

highly favorable

as¬

Denver

cluded,

the

month

Western

months

motives.

During the past 10 years
$50 million has been
spent for new equipment and for
than

additions

and

betterments

than that.

Heavy rail
has been laid on the major por¬
tion of the main line. That part of
the

main

tracked

line

not

double

largely operated with

centralized

traffic 'control. Wood¬

bridges

with

that is

steel

have
or

been

concrete

replaced
structures

much of the system.

over

Impor¬
tant grade and curvature
projects
have been undertaken.
These
are

property improvements
highly favorable from two an¬

gles. For

one

thing they contrib¬

ute

importantly to increased oper¬
ating
efficiency.
Movement
of

heavier trains at faster
speeds is
made
possible by the property

improvements

and

motive

new

power.
The new equipment re¬
quires less maintenance work than

the

older
is

same

rolling

true

stock
lines

and
laid

the

ing the rehabilitation period. As a
second factor, the improved
phys¬
ical condition of the
property en¬
the
road
to
compete for

ables

profitable

through freight which
formerly it was not equipped to

and

impor¬

sources.

This

partly to be found in its improved
competitive status as mentioned
above.
even

It is also to be
more

found, and
dramatically, in the

industrialization
service area.

parts

This

38.3%

for

This

284.

C. V.

Quayle Elected

C.
a

Quayle has been elected

governor of the New York Curb

Exchange

fill

caused

the

recent resignation
*

of Thomas W.

Bartsch

member

the

vacancy

g o v e rnor

the Exchange.
Mr. Q u a y le

has

been

regular
ber

what

the

meals,

service

countries

sential

the

steward

and

excellent.

In all the

visited,
I
stayed
at
and, despite the

of war, they were clean
well
supplied
with
linen.

ravages

and

industries
and

his

Davis

Foil

haunted

by the
natural
restaurants pat¬

that

hotels

ronized

and

visiting

was

businessmen

should reflect these conditions. As
the

was

case
i/i the United States
OPA.r days, patrons of

during
hotels

gnd restaurants

are

better

fed

labor, especially
craft

electrical

and

reasonable.

ample,
were

visited,

well

all

meals

cooked

but

extremely high.

for four persons.
In Sweden and
Denmark travelers are supplied

owing

with food ration coupons and must
still turn them over to hotels and

Quayle

his election 'to

restaurants.

(2) Exchange: Next to food, the

board, Mr. Quayle has been named
serve

the

interim

member ad

committees

Exchange

clude

appointments
resulting
Bartsch's .resignation in¬

the

naming of Edwin Posner, a partner of Andrews, Posner
& Rothschild, as a member ad in¬
terim of the committee

finance.

Andrew Baird of Josephthal & Co.

has

been

chairman

made

committee

the

that harsh

ployed

every

currency.

country I
stringent

scarcity of dollars
being em¬

measures are

black

curb

market

dealing

business

level, this concern over
is reflected in stricter

currency
curbs * on

currencies.

business.

the

Every

appli¬

cation for import permit or license
for textiles is scrutinized care¬

fully and the

admissions.

concern

visited

has become the

arbitration and admissions.
Other

main

currency to pay for
such essentials as cotton tex¬

even

tiles is being doled out sparingly.
The visitor encounters
currency
restrictions at every turn. Before

■f

entering each country,

cne must
detailed report as to the
amount and kind of currencies he

fill out

Stern, Jr. & Co. will
,b.e formed as, of Aug. 1 with of¬
fices
at
25 Broad
Street, New
York

City, to

engage

curities business.

the

se¬

Partners in the

Stern, Jr.,

Stanley Schiff, Bernard J. Lasker,
members

the

Stern
an

York

Lasker

was

Schiff

floor

partner

Young,

dissolved, and Mr.
partner in

Richard

Kaufman, Alsberg & Co.

taking in and when he is leav¬

ing he must fill out
port

the

out.

This,

currency

similar

course,

cheques

banks,
since

may

another
most

causes

source
are

end¬

Travelers'

cashed

banks

re¬

he is taking

less delays in customs.

only* in
of delay

overloaded

with this kind of work.

formerly did

individual

Mr. Schiff
firm

which is being

New

Exchange, and Joseph SilMr.

the

(3)

Although

reports continue to tell of
transportation facilities,
I
agreeably surprised by the
improvement that I was able to
press
poor

position

the

of recreational facilities and
plant comforts.
It is highly un¬

long

time

French

bedeviled

mills

the

textile

also

are

lack

coal.

designers,

have lost

ever,

how¬
of their old-

none

and

fabrics

the

turning out
and
attractive.
To
France
will
continue

there

now

are

the high styletextile business, but
in

own

the

end

likelihood

little

countries

visited, roads have been mended

and

are

excellent

for

automobile

gent control and must be sold at
prices that often show a loss to
mills
and
manufacturers.
In

England, of course, textiles are
strictly rationed.
In all other
countries so-called luxury
reach

sumer.

basic

the

Dutch

and

cotton

which

items

you

not

are

merely the observations of
exporter.
I must say, how¬
ever.
that the announcement of

one

the Marshall Plan
all of

interest
approval.

economic conditions

and

to point out
Europe can
help but be saddened by the lack
closing,

that

I wish

traveler

have

pointed

come

toward

out,

Belgium

way

long

observers

most

normalcy.

the

has

road

Aside from the

country in which the Battle of
the Bulge was fought, damage to
industrial

lands

operating

centers

light.

was

and

farm¬

mills

Her

satisfactory

and her industrialists

are

land and Luxembourg.

Bridges and roadways

along

have

with

repaired

been

dikes

flooded

and

farmland

is
being drained
brought back aga;n into use.

industrial'district
level

but

the

and
The

Rotterdam
residential

neighborhoods
are
intact.
The
Hague still shows the result of
Allied

constant

bombing

the period when it
the

launching

bombs."
border

Mills
were

was

site

near

during

being used
for

the

Association,
customs

buzz-:

German

badly damaged and

are'being repaired slowly.
The' Hague,

duties

Wh:ie

behalf of the

protested
which

who

lack

the

and

Britain
are

asso¬

and

suffering

such ordinary
butter, sweets,
Surely, it would be no>
of

coffee,

and fats.

hardship to send packages con¬
taining these items every now and
then.
Such personal gestures will
do more to build lasting friend¬
ships for
any

our

export division than

amount of correspondence. 1..

rate

the customs union with Hol¬

Holland

friends

Continent

items

normal. All of us

Great

ciates

shrewd¬

are

ly planning for the future, as wit¬

Holland:

of small comforts which we Amer¬

from

Belgium:

wholehearted

and

great

greeted in
visited with

was

the countries I

the

yarns

doubt have noticed,
economic analysis

political
persist.

these

business

are

yarns,

much higher.

are

regard

was

con¬

cheaper than comparable Ameri¬
can
counts, but retail prices on

have

average

Strangely enough, some
textiles, such as Swedish

icans

ness

textiles

sky-high in price and beyond

her

the
will

rise
be

Paisl D. Spe@r and
E. J. Evans Join

First California
(Special

LOS

The

Financial

Chronicle!

ANGELES,

CAL.—Elbert
J. Evans and Paul D. Speer have
become associated with First Cal¬
ifornia

Co.,

510

Street.

Mr.

Evans

South

Spring
formerly*
partner in Eastman, Dillon & Co.
with headquarters in Los Angeles
ar.d prior thereto was an officer
of Nelson
Douglass & Co.
Mr.
Speer was a partner in Marache,
Sims & Speer and Paul D. Speer
& Co. of Los Angeles. In the past
he was an officer of H. C. Speer &
Sons Co. in Chicago.
was

applied when the union with Bel¬
gium

Luxembourg goes into
protest, however, was
rejected on the ground that we
have never been among the prin¬
cipal suppliers of textiles to that
and

most
of

H. Hentz & Co. to Admit

The

note.

the

garments, which are under strin¬

volume basis in
world markets as long as current

competing

her

textile items are

but

France:

Norway: Damage in Norway is
confined to the west coast.
Like

higher than in the United
with the exception of work

this

for

come.

country.

most

much
States

1938

levels

the countries I visited,

prices

used

was

General Observations

likely that cotton textile produc¬
tion
in
England will approach

effect.

Transportation:

are

way

bright
mind,
hold her

countries

com¬

inducements in

ingenuity

the governing
to

factories and

ern

goods

housed in mod¬

are

not

supply in England and would like
to buy more American textiles but
finds it hard to obtain dollars.

the

and

women,

still

tion of working hours.
Domestic
output, as a result, is far short of
the
country's
requirementsSweden finds it difficult to obtain
textiles from her old sources of

are

course, the selec¬
and consisting most¬
but prices were con¬

industry in
running at
capacity owing to the lack of
skilled operatives and the reduc¬

are

they

as one

Sweden: The textile

Sweden

against the competition of air¬

time

poor

cotton

Lancashire mills are
finding it hard to- obtain

still

French

was

such

ter months.

than those compelled to buy
food in stores for home consump¬
tion.
In Great Britain meals were

In
one
restaurant in Paris I paid
20,000 francs for an ordinary meal

office at Mor¬

gan,
co.

prices

since

makes

Europe

the

goods
will
have their supplies of fuel
rigidly
allocated during the coming win¬

to offer,

problem, and it

still

rayon

panies which

available.

needs.

retail

One

Except in Denmark, all hotels
provided hot water.
In no hotel,
soap

Coal

is not generating enough foreign
exchange to pay for the essential

In all of

Countries

Britain:

textiles

hotels

some

im¬

grave

problem, and there
is every indication that even es¬

the

On both liners,

cabins

were

Great
Number

S/S America and returned

Queen Elizabeth.

constitutes

Individual

Here

for

abroad

went

this

Associa¬

(1) Meals and Hotel Accommo¬
dations:

were

April 14, 1937.

broker.

for conditions
in specific coun¬
tries, here is what I observed:

other

business

1-1063

impressions
they're worth:
V

trolled

the
E

change

Stock

Teletype NY

group

States).

ly of fish,

mem¬

verstein.

New York 4, N. Y.
Telephone BOwllng Green 9-6400

the United

are

tion

Curb

all

25 Broad Street

and

pediment to industrial revival. As

counting

firm will be Edwin H.

GUARANTEED RAILROAD STOCKS-BONDS

restricted to three courses, bread

and

Edwin

Special Securities

would
use

(Textile Ex¬
port

tion

All

Gov. of New York Garb

Geneva-Provo

Bonds

it
of

our

N. S. W. Vanderhoef

food

the

Guaranteed Stocks

hope

Passenger train

however, was

in the last half of the year.

come

efficiency.

especially in Great Britain. Most
railroads, I was told, are suffer¬
ing from a lack of rolling stock,

the

was

this line has
been the establishment of a
steel
the

$898,-

equivalent to $2.61
preferred stock out¬
standing.
Normally by far the
largest part of the road's earnings
share

The most important

five

is conducted with
great

character

com¬

the

development along

industry

ratio

through

from Mr.

Another favorable aspect of the
&
Rio Grande Western
picture is development of
Denver

traffic

36.3%.

total for the year to date to

handle.

new

transportation

in¬

were

May, 1947. Net
income
for
May alone reached
$307,506 bringing the cumulative

with

heavier track and treated ties dur¬

tant

Lake

the

property. The total fixed interest
bearing debt of the system is not
much

results

with 43.2% for the like 1946

pares

pects of the Denver & Rio Grande

picture is the compre¬
hensive physical rehabilitation
program accomplished during .the
trusteeship period, and the instal¬
lation of a large amount of new
equipment including diesel loco¬

Salt

down

was

which

major cities is excellent and

trains are no longer in
operation,

that

In May, the

year.

the

gen¬

eral

The road has progressively been
a better control over oper¬
months

3,000

over

service is not up
to prewar levels and many crack

members

ating costs this

motored

Bridges have been re-:
stored, chiefly through use of the
Bailey Bridge so well known to
GIs.
Airplane service between

tion of

base.

revenue

did try to ob¬
tain informa¬

product.

Augmented
by
other
smaller
plants constructed and being con¬
structed in the territory served,
the Rio Grande has apparently
emerged from the war period with
a permanently
higher traffic and

first

the

plants and will share with Union
ment

tization

charges

the

Pacific

getting

basis

paid
throughout
1948. Because of the heavy amor¬

quarterly

given

affairs

these

into

travel.

miles.)

was

the

get

abroad

spent

Grande

lmnftbg.

time

the

company

It is expected that it will be
on

y■'■■■;' While

been

and are being oper¬
subsidiary of U. S.

over,

ated,

The government's
section

Having just returned from a two months' tour of Western Europe which included
France, Belgium, Holland, Norway, Sweden and Denmark, I have set down
impressions in the belief that they may prove to be of some value.

Great Britain,

Campbell
partner in

Gibson will
H. Hentz &

Co., 60 Beaver Street, New York
City, members of the New York
Stock

countries,

dollars

Walter
become

Norway's supply
dwindling and she

Exchange and other leading
Exchanges, as of July 24.
Mr.
Gibson has been with the firm for
some

time

manager

Rockefeller Center office.

the

Volume 166

Number 4612

THE COMMERCIAL & FINANCIAL CHRONICLE

Sterling Diplomacy

Stock Market

By PAUL EINZIG

furthering political aims. Cites

Babson, pointing out conditions justify higher prices, lays stock market
lethargy to fact that real
worthwhile industrialists, merchants,
bankers, and professional men are tired and discouraged. Says

terms of Anglo-Egyptian

generous

Financial Agreement and concludes Britain

ill afford these

can

Most of the stock market barometers forecast

LONDON, ENG.—So much has been heard lately about "Dollar
Diplomacy" that it is quite a refreshing change to talk for once about
"Sterling Di¬
plomacy." In¬

the

credible

Marshall

may

even

Russia

Einzig

corpo¬

the

Soviet

Foreign Office

that

Treasury

in¬

are

forces

which

re¬

into

enter
the

country
afford, for the sake of fur¬
thering political aims.

and

Egyptian
Foreign Office
than mine

everybody was astonished by the
amazing generosity of Britain to¬
wards a country whose sole con¬
tribution towards the Allied war
the

ruthless exploita¬
troops engaged in
defending its territory. As a re¬
sult

Allied

this

succeeded

profiteering,!! Egypt
amassing
sterling

balances to the amount of

£440,-

€00,000. Of that amount she has
already collected since the begin¬

ning of this year more than £40,€00,000, mostly through forced
purchases of goods in Britain and
the

Sterling Area.

resources have been sac¬

In addition to

convertible,

released

£8,-

£ 12,000,000
of a

for the

purpose

"working balance" which
be converted

for

purchases

also

can

into dollars

used

British

and

Sterling Area goods. A further
£12,000,000 will be released to
cover
existing confirmed credits
an

Britain.

mated

Private

between

£ 12,000

000,

There

balances, esti¬

£8,000.000

the

Sterling

other minor

are

Area.

items

magnitude of which cannot
be

estimated.

will

and

also released for

are

within

use

the

yet
result, Egypt

be able

than

1947.

This

total

to collect altogether
£100,000,000 during
is nearly 25% of its

claim.

Coming

circles.

Had

assist
amidst

been

granted

would

have

been

grounds,

the

that time Mr. Dalton will have

dollars left.

The

basis

the

terms

that

the

of settlement

granted to Egypt, the other hold¬
of

ers

mand

sterling balances will de¬
equally generous treatment.

Britain

can

release
which

two

their

and

inven¬
in general.
people be¬

new

make

fact

peo¬

have

the

brains,

inventive genius,
ability and "drive"
makes industry tick.

vetoed the Labor Bill, even
although Congress passed it over
his veto.
Why?
Because when
they went to their offices next
man

morning, with new plans to spend
money for improvements and ex¬
tensions,
more
serious
strikes
threatened.

were
men

it; but it nevertheless is true.
Kill off even 1% of the popula¬

left

even

retaliation

all

vital

leaders

once

Free

tion

would

the

country—the

na¬

into the greatest
slump in history,
i, Duririg the debate on the Tax
Bill, President Truman and his
friends

go.

Tried

show

that

the

make

right.

President Truman should, how¬
ever, honestly explain and recog¬
nize that there is a difference in

people

that the few

and

idea

that

ability,

is equal in
emphasized by

everyone

first

the leaders of the French Revolu¬
tion

and

as now preached by the
Dealers, Socialists and Com¬
munists,
is
fundamentally
un¬
sound and every reader knows it.
It may require a great depression
to get people once more to think
honestly and correctly; unless be¬
fore then the importance of the
2% is frankly recognized.

New

What About

Vacation?

It is the view of the above that

stalemate. It goes up a few points

As coal
business

asked

them¬

small
These

business

leaders

abused their power

few points,

volume

besides.

transactions

correspond
to

the

Egypt, allow¬

Nor

can

Britain

could

afford

new

senti¬

offices

brokers.

one

have

many ways.

good

Perhaps

Summer

may

hope
come
once

that they will
back

for

at the same time to benefit in full

victory is viewed

with

universal contempt in Brit¬
recently a Socialist nolatician, writing in the "Daily Her¬
ald," recalled how during the dark
days of 1942 Egypt made prepara¬
tions to welcome with enthusiasm
ain. Quite

,V. V

Company

-lb.
"j

of Colorado

3% Convertible Debentures due 1962

even

for continued financial
but by political and
strategical considerations.
Judg¬
ing by its record for political op¬
portunism during the last war,
Egypi could safely be expected to
greed

Dated June l,

payments,

come

down

the

any

efforts

1947

Due

Of the $7,000,000

June 1, 1962

principal amount offered to holders of Common Stock of the

the exercise
Ihe
$518,900 principal amount which was not subscribed for through the exer¬
cise of Subscription Warrants has been sold by the several Underwriters,
Company, $6,481,100 principal amount was subscribed for upon

Subscription Warrants issued to such holders of Common Stock.

winning side,
of

secure

Howard R. Tayior Willi
HALSEY, STUART &, CO. Inc.

BALTIMORE, MD.—Howard R
Taylor has become associated with

States

Egypt, the official policv of cash¬
ing in on the neutrality of the
country during the war and trying
from the Allied

to Egypt at the
it would not secure

past financial payments, nor

§7,000,000

Egypt's goodwill in another war.
Major decisions about siding with
one of the belligerent
parties are
not determined by gratitude for

BLAIR & CO.,

Redwood

EQUITABLE SECURITIES CORPORATION

INC.

New

York

and

Baltimore

GLORE, FORGAN & CO.

Stock

HIGGINSON

Mr. Taylor has re¬
cently been associated with Horn-

LEE

blower & Weeks.

E. H. ROLLINS

Exchanges.

was

business

Prior thereto he
for

himself

Baltimore for many years.

John A. Kaye and Nathaniel R
Real have formed
Kaye, Real &

Co., with offices at 72 Wall Street,
New
York City.
Mr. Real was
formerly proprietor of N. R. Rea
Co.

Mr. Kaye was connected with

Ward

Co.

OTIS &, CO.
OTIS & CO.

CORPORATION

PHELPS, FENN &, CO.

(INCORPORATED)

& SONS

L. F. ROTHSCHILD

A. C. ALLYN

& CO.

A. G. BECKER

CENTRAL

& CO.
:

INCORPORATED

MERLE-SMITH

REPUBLIC COMPANY
(INCORPORATED)

& CO.

GRAHAM, PARSONS &, CO.

July 14, 1947

—

HAYDEN, STONE &, CO.

COMPANY

COFFIN & BURR
INCORPORATED

HEMPHILL, NOYES & CO.

PAINE, WEBBER, JACKSON &, CURTIS

HORNBLOWER &, WEEKS
R. W. PRESSPRICH

AND

INCORPORATED

DICK

Kaye, Real & Co. Formed

W. C. LANGLEY & CO.

LADENBURG, THALMANN & CO.

TUCKER, ANTHONY &, CO.
GREGORY

&. SON

INCORPORATED

this
us

it and

renewed in spirit and

payments

present rate

Streets, members of the

difficulties.

present.

take

Let

again willing' to buy stocks.

Public Service

real

vacation

them.

Robert Garrett & Sons, South and

that Britain could ill afford to be
at

The

industrialists,
mer¬
chants, bankers and professional
men
are
tired and discouraged.

having been sold this announcement appears as a matter of record only and is neither 6H
offer to sell nor a solicitation of an offer to buy any of these Debentures,

continue

gesture

Indian

initial

with

mostly by
professional speculators sitting in
are

All of these Debentures

Britain afford to

transactions.

certainly not afford to
for " India

The whole policy of financial
appeasement
practiced
by
Mr.
Bevin is extremely futile. Even if

reached

worthwhile

that

unfair

has

market

stock

and then down

the

Enterprise

dollars, while another boy equally
worthy should inherit only debts.
Monopolies
of
any
kind
are

continue to "appease" Egypt at the
cost of £50,000,000 per six months.

the

natural

leaders should be encouraged and
not persecuted as at present. The

£ 150,000,000

would

not

do, two

nor

—

sins

the

boy should be born with a million

wrong;'

make

wrongs

for the

blacks

Congress.
industry,

seems

"Two

white,"

wrong

same

mines

Capitalism, so-called, has many
faults.

capital.

organizations

the

excuse

coal

scorn

tion—if this 1% were the business

labor

Thousands

the

selves—"why bother?"

leaders

labor

bracket
who

ones

They furthermore were again dis¬
appointed when President Tru¬

wel¬

Even then the overwhelming ma¬
jority of British peoole would feel

sentimental

hard

this

drivers

worst

higher

the

re¬

that

copied

such

terms

comed in many quarters, on

mental

lieve

irrespective

financial
it

to be negotiated in Decem¬
Egypt will doubtless expect
another
big release of freezed
sterling balances. But possibly by

ing, new businesses,
tions, and enterprise

ber,

Sterling
Diplomacy
Egyptian goodwill.

bewilderment in British political

India

months.

Let

the

Industrial leaders were there¬
fore much disappointed when the
President
vetoed
the
Tax
Bill.

why.
.Statistics show that 2% of the
population of the U. S. is respon¬
sible for 90% of the new build¬

comes

it did after Mr. Dal-

requited" British exports, the gen¬
erosity of these terms has caused

generous

six

financial agreement

new

ton's statement in favor of scaling
down war debts, and against "un¬

and

the

backfire.

that

fact

methods is

is three times that of Egypt's. And
there are many other claimants

€00,000 which will become imme¬

you

serious

ing for the fact that India's claim

this year.

diately

tell

rificed for the sake of securing the
acquiescence
of
Egypt in the
continued occupation of the Canal
When

hold
positions
because
they

"enjoyed the game."
Now
unfortunately reaching
a time when
they wonder if their
work and worry is; worthwhile.
As these men are an important
factor in the development qf busi¬
ness,
this
discouraged
attitude
a

for

11 ,y

are

has

new

something
£ 60,000,000
during the second half

are

now

Egypt is to receive
like
£50,000,000
or

agreement,

can

fact

of taxpayers would

Yet,

are

which

They

their

Babson

the

organization

want to be of service and thus far

foreign

amount released

Now under the terms of the

light

clearly understood. Between
£50,000,000 and
£60,000,000 of

badly-needed

have

Britain's

needed

r e a

Roger

they

me." In the

meaning of this remark

Zone

published

were

serves

and do

need

mass

ple

not

better

you

great

ceive..

work.

"Your

of the terms of the agreement the

"When

terms

delegate:
serves

with

enough

money

reduction

people would get
only 15% compared
tax cut of 30% which the

cut

ration officials

Mr.

cameramen,

chief

exchange

was

corre¬

tax

have

signed

heard to observe to the

was

By far the most outstanding ex¬
ample of Sterling Diplomacy has
been
provided
by
the
AngloEgyptian
Financial
Agreement.

was

press

spondents

ill

tion

agreement

presence

and

g e d

the

The
have

bracket

upper

Most of

these

Dalton

stances of Sterling Diplomacy,
in
these and other instances it is the

effort

discour-

tired.

in
Paul

withstanding

When

credits

its

dollars which would
go to the rest
of the
population.
This is not¬

many

are

under

proportion

that

businessm

troops from the Suez Canal Zone.

Dr.

can

followers.

of the sacrifices is to induce
Egypt to soft-pedal the efforts
aiming at the removal of British

and the negot i a tio n
of

transactions

only

was

too

pose

The

luctant

fact

pur¬

granting of
credits to Italy
and Poland,

reduction in dollars which would
to this 2% would be out of

The simple

that Mr. Dalton consented to sign
such a costly agreement. The

di¬

plomacy.

Dalton's

Egypt
is,
but popular

own

makes<§>-

large
investors hesitant.

strong
pressure from the Foreign Office

pursuing

financial

which

Field

There is every reason to believe

disposal

for

higher prices. This is due to the large
in circulation, abounding credit, good dividends,
high farm income, no
unemployment and general prosperity. Yet, there is an underlying lack of confidence
amount of money

anything
his

Mr.

towards

among

that

at Brit¬

ain's

armies

Rommel.

therefore,

tiling, not¬
withstanding
the highly inadequate
means

victorious

generosity

sound,

there is such

and labor situation hinder investment.

taxes

concessions.

Mr.

she has been endeavoring to extend credits for sake of

resources,

Lethargy

By ROGER W. BABSON

Correspondent points out, despite Britain's inadequate financial
,

(223)

BURR & COMPANY, INC.
STROUD &

COMPANY

INCORPORATED

THE COMMERCIAL & FINANCIAL CHRONICLE

(224)

Thursday, July 17, 1947

.Opening of Private Trade With Japan

Canadian Securities

By THOMAS R. WILSON*

Chief, Areas Branch, Office

of International Trade,
U. S. Department of Commerce

McKAY

By WILLIAM J.

religious oppression an era of dynamic develop¬
in those countries which have offered asylum
foreign immigrants. Earlier British commercial supremacy was
largely based on the skills of foreign artisans who were driven from
the European continent by religious persecution. The commencement
of the industrial growth of this *
country likewise followed eco¬ in excess of the demands of her
nomic depression in overcrowded present population, but accessibil¬
ity has always been the principal
Europe.
sion

political

Commerce Department spokesman reviews and
analyzes economic conditions in Japan to be taken into
consideration the resumption of private trade with that
country on Aug. 15. Points out difficulties due
lo collapse of
Japan s economy and the need for reconstruction. Gives data

following periods of economic depres¬

It is an historical fact that
or

ment has taken place

regarding

present time the Euro¬

the

pean
than

urge to migrate is greater
ever before but the available

outlets were never more restrict¬
In this

picture, however, the
vast empty spaces of Canada with
ed.

incalculable

their

extent

un-

exploited natural resources take
on a new significance.
The tre¬
mendous opportunity thus afford¬

her

from

surface

On the

insular

immigration matters.

the modified im¬

broad

laws

recently

deposits in Alberta and Brit¬
ish Columbia, Canada neverthe¬
less still imports the bulk of her
requirements.
Likewise
in the
case of iron,
the greatest known
reserves
in
the world
of
high
quality ore still remain untouched

informal fashion.

line

alone

recent

«every effort will be made to pre¬
vent any undesirable influx.

new

departure is certainly

long step in the right direction

but
are

The labor

further

constructive

still necessary.

abundance of

efforts

Canada has

natural

requirements for such

program would give added point
to the necessity of an active immi¬
a

gration policy and if thereby the
hidden

treasures

Laurentian
within

ada will enter

fabulous

are

Shield

reach of

the

brought

civilization

Can¬

of prosper¬

era

ity that will rival the boom de¬

velopment
days
of
neighbor.

her

great

southern

small

wealth far

mar¬

into

were

stocks,

Wilson

the world's

history. There
is

to elaborate at great

this

which

group,

with

connected

need for

length to
closely

international

the importance of Japan
prewar commercial and eco¬

trade,

however,

demand

with

con¬

the

in¬

the

world

trade

tion

assistance

change
gold

PROVINCIAL

the

other

than

official

authorization

price

of
sell

abroad at premium prices.

Japan and necessitate outright
purchases from foreign countries,
in addition,
Japan must obtain
from foreign
sources large
sup¬

plies of cotton, jute, wool, ferti¬
lizers, salt, industrial chemicals
such

by Japan prior to the
last war, one must remember that
the

only real advantage held by
Nearly one-third

resources.

of the industrial requirements of
Japan had to be imported, notably
cotton, wool, jute, fertilizers, min¬
erals

and

chemicals, as well as
approximately 20% of all food re¬
quirements. Japan was not only
an
important supplier of exports
but was a very important market
for many raw materials and food¬
stuffs.

Hibbard Broadfoot Is

Japanese
With

CORPORATION

With

Hayden, Stone

Hibbard
come

CANADIAN STOCKS

Broadfoot

associated

with

was

formerly

NEW YORK 5, N. Y.

ERECTOR 2-7231

man¬

department

for E. W. Clucas & Co.

Joins

The

Financial

' Chronicle) *
■

WINNIPEG, MAN., CANADARoy Beale is now with Wood,
Gundy & Co., Ltd., Victory Bldg.

exchange with which
such

Another

the

war

Japan

dustrial

H. Hentz &

New

WHltehall 3-1874

direct

well
and

York

Stock

York

Cotton

Exchange, the
Exchange and

other leading stock and commod

conversion

war

purposes.

The occupation forces were faced
with the stupendous task of re¬

coal

is not

coal

poses

that

assistance

extremely

econ¬

limited

industrial

The magnitude of this

task is realized by very few peo

outside

the

occupying

lems

facing

the

Supreme

mander

and

ernment

is the lack of

the

Com¬

Japanese

Gov¬

resources.

have

Hotel,

from its former loca¬

tion at 610 Fifth Ave.

Alstyne,

Noel

offices
are

Municipal

Van

Corporate

ard C.

separated

Formosa

from

was

Japanese Empire
6%

rice

the

that

important
as it fur¬
require¬

ments, 90% of the sugar require¬

ments,

the bulk of

the

camphor

the

specific pur¬
the
greatest

render

the

country's

David

Alstyne, Jr., President; Rich¬

*An address by Mr. Wilson at
meeting under auspices of Foreign

'Trade

econ¬

Bureau

the

Commerce

and Industry Association of New
Noel, and Edward L. Elliott,
wYork, Inc., New York City, June
Vice-Presidents.
('25, 1947.

This

textiles.

that has

very

only furnished

not

with clothing, which
was
in great shortage,
but also
supplied exports with which to
obtain exchange not only to pay
for
the cotton
but to purchase
the

people

other

needed

materials

raw

industry. This cotton
far beyond the ca¬
pacity of private industry to un¬
dertake, certain in the first in¬
stance. Many private businessmen,
not only of the United States but
of other countries interested in
throughout
program

the

was

of Japan,

development

have

approached the authorities plead¬
ing for an opportunity to go to
Japan and discuss these problems
with
private Japanese interests.
They have assured our govern¬
ment officials that they could help
restore the economy of Japan. In

this pressure the trade
to Japan early in

the light of

mission

went

May.
Mission

Trade

Another problem

into

cotton for conversion

raw

omy.

Japan

that all of you present

sure

the

releases is¬

serious ramifications is the growth
in
the population.
Prior to the

have

war

the Japanese population was
increasing at nearly 1,000,000 per
year.
Once
again that upward

the

trend has been reached

with

cerning the resumption of private
trade with Japan. It was the de¬
sire of the mission to see that

industrial

trade relations were opened on a

based

economy

and

occuDations and lack of resources,
an
increase of 1,000.000 in the

population each

year

economic

Problem

has very se¬

consequences.

tary forces that

were

maintained

also

serious

facilities

basis,

one

can

the Jap¬
anese economy on a dollar basis.
A large portion of the Japanese
conceive

developing

fore must

be sold

in other coun¬

tries, particularly the Far Eastern
areas.
This is also necessary in
of

view

the

materials

need

from

There

those

import raw
same

coun¬

number

man¬

problems which had to be ironed
out by the occupying officials and
th<£ trade mission. First, we were
faced with a lack of living facil¬
ities for commercial representa¬
tives.
After considerable discus¬
sion it was determined by the

housing

problem due to the destruction in
areas

world-wide

tries.

problem becomes acute.

There is

press

the War Department and
Commerce Department con¬

com¬

prior to the war have been
pletely eliminated and the
power

seen

sued by

products are not of interest to the
United States market and there¬

of Unemployment

industrial

With

than

are

very

housing the

were

Army engineers that thev could
of make available in four of the prin¬
cipal industrial areas facilities to
Japan are now working at greater
than prewar capacity to supply take care of 400 commercial rep¬
resentatives and that these facili¬
very poor quality lumber to build
ties could be available by August
low
cost
housing for Japanes1
additional

from

workers

services.

families.

The

demobilized

sawmills

Over-all there is

mendous lack of

tre¬

stability in prices

and wages.

Inflation has been ap
time and prices
have risen rapidly. With the rise
in prices and the cost of living,
wages have shown an increase of
from 500 to 2,500% and even at
that they have been unable
to
keep up with the cost of living

parent

for

some

advance.
A

deterrant

trial development is the

Until

policy

indus¬

lack of a

reparations.

Japanese industrialists and

financial

15.

This in turn created a second

problem for SCAP, namely, the
shortage of staff to handle the dif¬
ficulties created by the re-entry
of this, large number of commer¬
cial

representatives. However, by
on
Boeki-cho, the Japa¬

reiving
nese

Board

Trade,

they

feel

they can adeaua*ely service
that number of arrivals.
that

major problem was one
spoken of, namely, the
inability of the Japanese to pur¬
chase raw materials. Thus, provis'on has been made
that selfA third

serious

definite

Corp.

52 Wall Street.

Officers

been

control.
to the

has been formed with

Provincial

for

resources.

par¬

herefore becomes necessary to al¬
locate

limited

This

insufficient food

781

Van

sufficient

ticularly coking coal within the
country to run the economy and it

literally from scratch.
omy was based on
and

oil-

processes.

There

Sherry-Netherland

The

from

converted

were

Durning to coal-burning
There

2,000,000 homes.

the

Fifth Ave.,

of the industries of

large industrial

Prior to the war Japan controlled
Formosa, Korea, Manchukuo and
the Kurile Islands, all of which

Government

destruction as
government seizures

ity exchanges, announces the
moval of its uptown office to

Van Alstyne, Noel Corp.

SECURITIES

terrific toll both

enemy

nished

CANADIAN

Japan

One of the most important prob¬

Co., member of the

New

■84 Wall Street, New York 5

economy

had taken

war

many

discovered that the in¬

literally collapsed. Devastation of
by

important problem
occupying authorities
shortage of fuel. During

faced by the

production at
approximately 35% of the 1930-34
level, there is a serious problem
had
of unemployment. The large mili¬

beginning of the occupation,

authorities.

Hentz Branch Moves

& COMPANY

Collapsed

to purchase

imports.

necessary

the end of hostilities and

was soon

pie
NY-t-1045

TAYLOR, DEALE

Industry

building the economy of a country
of approximately 80,000,000 people

Wood, Gundy Staff

(Special

TWO WALL STREET

be¬

Street, New
of the New
York Stock Exchange and other
leading, exchanges, as retail sales
ager of the investment

INCORPORATED

has

Stone & Co., 25 Broad
York City, members

manager.

A. E. AMES & CO.

the

Hayden,

ash,

serious problem when
considers the lack of foreign

rious

MUNICIPAL

soda

held

phor

ment

GOVERNMENT

requirements such

one

ranking exporter,
only by
the
United
Kingdom, the United States and
Germany. Here we had a country
supplying
three-fourths
of the
world's requirements of raw silk,
the world's largest exporter of
rayon and cotton fabrics and yarn;
a country with a considerable in¬
surpassed

ever present in the minds
occupying officials. Their

copper,

is indeed

the
being

Problem

background picture

great problem is to develop a pro- ""
as zinc,
auction program that would put
fldurspar, fertilizers
and general chemicals.
From the the large mass of industrial work¬
ers on the job.
To do so it will be
Kurile
Islands
Japan
obtained
coal, timber and fish; and from necessary to rebuild many of the
Manchukuo, soy beans, coal, iron important industries. That was the
of the considerations for
ore, steel and chemicals.
These basis
resources are no longer available
sending to Japan large quantities
metal

'ead,.

fourth

cipally

CANADIAN BONDS

other

nomic affairs—a country that was

that country was in silk and cam¬

the golds, papers, and
western oils.
The golds in par¬
ticular were buoyant as a result
of
a
persistent belief that the
gold-mining
industry
will
be
given some measure of govern¬

often rated in prewar years as

vestor interest concentrated prin¬
on

quantities

caustic soda,
acetone, etc., in order to keep the
wheels of industry turning. This

toys, glass and other items.
In
thinking of this important posi¬

dull

changes

tinued

dominant role
Thomas

inactivity and price
negligible in both

state of

Canadian

recently
played such a

wearing apparel, canned fish, ma¬
chinery, chinaware, vegetable oils,

once

the internal and external sections.
an

empire

relapsed

This is the

of the

Pacific that

fluence

During the week the bond
ket

Reconstruction

needs

which is

p a n e s e

pan,

affords

investment

requiring

capital.

substantial

economy—Ja¬

conse¬

ample
bold policy of
With the re¬

requirements, 40% of their

plans

riously of the

quently vitally necessary.
The
precedent of the construction of
the
Temiskiming and Northern
Ontario

also had a-substantial
pro¬
duction of aluminum.
Korea fur¬
nished 12% of the Japanese rice

tungsten, large quantities of
iron ore and pig iron, as well as

in the western

areas

and

of the railroad fa¬

such

Ac¬

conform to suitable standards and

This

se¬

island

an¬

reports
the
sponsorship of prospective immi¬
grants by Canadian citizens en¬
tails a minimum of responsibility
and
the financial
requirements
appear to be a nominal formality.
This new facility of entry to the
Dominion, however, is open only
to
prospective immigrants who

cording

think

in northern Quebec and Labrador.

by Prime Minister Mae-

and

disposal
today it is
necessary that
our

coal

justification for a
railroad-building.
sultant discovery of the fabulous
Kenzie King afforded cold com¬
Cobalt
silver
deposits and the
fort to would-be immigrants.
In
gold fields of Northern Ontario,
practice, however, it appears that the
mining industry joined wheat
the new regulations will be in¬
and lumbering as a major source
terpreted
in
an
exceptionally of Canadian wealth.

migration

nounced

For the few''*

moments

tremendous undeveloped

are

cilities

Happily there are now indica¬
tions that Canada is ready to de¬
outlook

Representatives of commercial firms will be admitted to Japan on
Aug. 15 and com¬
mercial contracts may be consummated on and after
Sept. 1 according to the agreements
entered into between the special trade mission and
General MacArthur's staff in Tokyo.

obstacle in the path of its exploi¬
tation.
For this reason although
there

of effect¬

means

all who would trade with Japan to first consult with and receive
permission from Commerce Department.
urges

The extension

ed could mark a momentous turn¬

ing-point in Canadian history.

part

ing exchange operations and

interests

are

sure

already

liquidating

contracts

would

which pldnts and assets are con¬

is, foreign purchasers may

signed to the reparations program

advantageous

they will delay

any

development

(Continued

supply
on page

that
find it
certain

given favorable consideration,

35)

Volume

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4612

166

difficulties with which

manpower

Production and Movements of Gold*
Bank for International Settlements analyzes production and movements

of gold in

war

the

and postwar

1946.

Sees higher

compared

estimates

ations in

production in the rest of

world.

the

for

For

information

published

1946,

Africa,

South

from

the United States and a
number of other countries makes
Canada,

net

drawn

from

these

gold

"disappeared,"

accounted

$200,conclusion can

one

newly-produced
all

for

than

the

over

to have been an

seem

Only

000,000.

change

facts:

has

some of

the

almost
it being

increase

in
of gold (in the

possible to state that in that the industrial use
year there were the first signs of jewelry trade, etc.), but the larg¬
est part having found its way into
a change
in the trend, gold pro¬
hoards in Europe
duction rising by probably half a private
and
27%

ounces

million

to $960

total of about

Asia.

(equivalent

ounces

Output of Gold

For the largest

million).

While the

war

lasted, gold

pro¬

producing country, South Africa, duction was
deliberately curtailed
there was as yet no upturn, but in in a
number of countries, man¬
the United States production went
power and otiier resources (e. g.,
up by as much as 75%, though,
machinery) being needed for the
even so, it was still hardly more
war effort.
In some
than

quarter

revealed

dency;

had

other respects

1946

what

been in 1940.

after

also the

decline

year

ten¬
four
monetary

change

for

areas,

ing

the

Philippine

includ¬

Islands,

New

Guinea and, later on,

Korea,

and

even

warfare would
come

still

Manchukuo,
Japan, actual
to

seem

be¬

have

restrictive

fac¬

fited by
tent of

tax reductions to the
£3

reduction

million.

further

announced

being that the mining companies
would
profit to the extent of

tained in

£2.3

Finance

The

the proposed re¬
duction, particular
relief being
given with a view to encouraging
new
capital
outlay.
The
im¬
portance of gold production from
a fiscal point of view is shown by
the fact that, of the ordinary rev¬
enue in the South African budget,
over
one-quarter has
regularly
come from the gold-mining indus¬

million

2.36

ounces

countries

years,

which

Colombia,

Uru¬

and

the

sub¬

and

gold

increased burden of taxation.

reserves:

general

which

due

world

debt

interesting

the

retirement).

result is

whole

that for
the

pub¬

lished

gold
reserves
were
no
greater at the end of 1946 than at
the

beginning and,

even

when

ac¬

count is taken of unpublished re¬
WORLD

(Weight

1929

Africa.

the

fine

by those mines which
worked.

While

sated

higher

selling

idle

Fine

6,003

1,022

929

only one-quarter
The

the

rehabilitation

and smelters

lines

sustained

rising

had

As to the future of gold

produc¬
represent, of
course,
an
important considera¬
tion, but it is not out of the ques¬

tion,

rising

tion

that

costs

reduction

taxation

be employed as a stimulus
production.
Mention
should

may

further be made of the discoveries

rich
new
gold-fields in the
Orange Free State, the examina¬
tion of which was began in 1930,

though modern prospecting meth¬
ods

were

onwards.
are

The

tion stage

will,
on

applied only from 1937
mines

question

expected to reach the produc¬

by 1950 and the result?

of course,

depend not only

technical but also

factors, such

economic

taxation and costs

of labor.

during the

war.

reopening

their

The

Higher

prices, also

and

wages

Movements of Gold

been 'best

restrained many prewar operators
from

This advertisement is neither

658

648

accompanying table shows

the reported gold reserves of cen¬
tral banks and governments at
end of years 1938 and 1944 to

properties.

(Continued

on page

34)

nor a

solicitation oj ojjers to buy

any

oj these securities.

Corporation

75,COO Shares
5%% Cumulative Convertible Preferred Stock
(Par Value $20 Per Share)
Price $20 Per

1946

939

566

565

562

833

593

563

509

499

554

507

437

173

584

555

356

343

155

225

200

175

130

Price $6 Per

*180

2-04

(Par Value $1 Per Share)

182

281

310

343

107

264

178

195

151

120

186

142

*140

364

Class A Common Stock

*500

632

112,500 Shares

545

883

137

289

187

170

131

179

241

209

125

8.435

7,306

6,389

6,796

19,2-00

41,000

28,000

27,000

.27,500

672

1,435

930

945

Copies oj the Prospectus may be obtained within any State
jrom the undersigned only by persons to whom the under'
signed may regularly distribute the Prospectus in such State.

1,709

963

estimated

ojjer to sell

ojjering is made only by the Prospectus.

Seaboard Container

*840

Estimated world production

The

world

production in j millions of
dollars

•Provisional,
tFor
tion.

Herrick, Waddell & Co., Inc.

tlncluding Philippine Islands production received in the United States
1945 and 1946 gold exports, representing about 90% of total produc¬

1944,

1940,

§Estimated.

11 At the

present

rate of

$35

per

ounce

fine

NEW

practice the price paid by the
S. Treasury since Feb. 1, 1934;

.e., $35 per fine ounce.
In terms
>f sterling, there has been an inrease,

48s.
irent
vas

While in July,

however.

ounce of gold fetched
6% d. in London, the price

939,

fixed

161s.

August and

l-38s.

in September,

production in the Union of South
Africa

output probably twice

large

June,

1945,

the

xtra 3d. in question

price

that of the U.S.S.R. and over four
times as large as that of Canada.
of

respect of certain minor transtort costs from South Africa to
a

production, ore
output, working costs and profits
are
supplied by the Transvaal
Chamber of Mines, which repre¬

Between

Seven-

Report
International

of
the
Settle-

formula for ordinary taxation.
It
is estimated that in the
year 1946

Abstracted

enth
ank

1946

and

from

Annual
for

the

1940

ents, Basle, Switzerland.

gold

the

LOS ANGELES

Stirling, Morris & Bousman

Bioren & Co.

CLEVELAND

BALTIMORE

PHILADELPHIA

Frederick S. Robinson & Co., Inc.

Amott, Baker & Co.

NEW YORK

Incorporated
NEW

gold-mining

industry

bene¬

Martin-Holloway-Purcell
KANSAS

Co.

G. H. Crawford Co., Inc.

DETROIT

EMPORIA

CITY, MO.

YORK

A. H. Vogel &

Kenneth Van Sickle, Inc.

COLUMBIA

The State Investment Co.

George R. Cooley & Co., Inc.

Clayton Securities Corp.

PORTLAND, ME.

ALBANY

BOSTON

L. H.

Alester G. Furman Co.

from then onwards the
direction taken was not uniform.

matters of taxation, a special
levy, absorbing 22y2% of the total
profits, was imposed just after the
beginning of the war; but this
levy was abolished in 1946, when
its place was taken by a, new

Ireat Britain).

Maxwell, Marshall & Co.

NEW YORK

LOUIS

The First Cleveland Corporation

gold

rrepresenting dends; but

concession to the gold producers

ST.

gold
vas
again raised to 172s. 3d., a sents approximately 95%, of the
urther slight increase to 172s. 6d. total South African production.
>eing allowed from the beginning'
Up to 1940-41, the production of
f 1946 as regards gold produced
gold rose and with it working
a the Union of South Africa (the
costs, revenue, profits and divi¬
n

A. M. Kidder & Co.

Wibbing & Co.

fell

by 15% only and the
country remains the world's most
important gold producer, with an

Figures

YORK

gold.

0. H.
[old has a "ceiling" price which is

Ingraham & Co.
NEW

GREENVILLE

Wyatt, Neal & Waggoner

COLUMBUS

ATLANTA

Bond & Goodwin

Bushinger Co.
UTICA

Incorporated
BOSTON

July 15, 1947.

R. H. Johnson & Co.

YORK

Vercoe & Company

H. L.

million

and

curtailed production

where

costs, resulting from the pressure
of

pro¬

seem

ounces.

try during the year. On the other
hand, strikes at base-metal mines

the

between

vary

gold

U.S.S.R.

1,625

1,644

countries

2,828

India

JlValue

years

dredges,
major feature of the indus¬

11.918

Sweden

§ Other

war

the output

connected-bucket

was

the

Ounces)

1940

British

greater,

still

PRODUCTION

1945

result

prices,

2,697

Chile
_

been

that ex¬
pansion of output, particularly as

com¬

121

at¬

Bureau of Mines reports

are compen¬

12,214

Zealand

has

of what it had been in 1940.

ponding quarter of the previous
year.
The considerable decline in

being

other

for

modities higher costs

1944

________

Brazil

was

gold

are

203
_

Congo

rent estimates of annual

duction

produced

ore

652

tNicaragua

New

from

2,92-3

Colombia

Peru

proportion

12,277

Belgian

the

extracted

5,311

Australia
West

they have remained
unchanged for several years. Cur¬

decrease

1,923

tUnited States

Rhodesia

been

in 1946

about 480,-

operating
a

14.038

British

themselves

10,412

Africa

Canada

Mexico

GOLD

find

loss and to lead to

2.203

South

the fact that

The

426

The figures for recent years are
probably little more than guess¬
work, as may be gathered from

rise in prices, wages
together with the

mounting production costs tend to
eliminate
the
marginal
mines

Thousands

Gold-producing Countries—
Union

un¬

Japan and Korea.

salaries,

France, the Argentine";
Mexico and Sweden (the decrease
in the case of the Argentine being
An

opening

estimates

added

Venezuela

foreign

and

world gold pro¬
for "other

figures

include

increase

contraction of the

000 ounces less than in the corre-

were

guay.
Four countries show
stantial
decreases in
their

rate

to their during the war, has grown in im¬
Switzerland, portance; namely, the rise in pro¬
Africa,
Belgium, duction costs as the outcome of

gold reserves
Cuba,
South

in the

re¬

1946

1940.

having

The gold output in South Africa

quarter of 1947,

quicker in the United States, but
the

try.

first

en¬

months of 1947, but it is still
der 55%
of the high mark

million by

was

already

gold production

somewhat

continued to do

With the continuing need of

tor.

Canada

covered

Minister of

of those

gaged.

ex¬

production
thus
revealed
was
the
largely the result of
a
strike
gold stock of the United States in¬ manpower for reconstruction and
among
the
European
workers,
creased
by $623,000,000 in 1946, reconversion purposes, the labor
this being only one aspect of the
that
country alone
taking the problem has not yet been elimi¬
equivalent of about two-thirds of nated; but another element, which
the current output of gold.
Other had already made its appearance
consecutive

services

output in the U.S.SR. and also in

fact, it is finding it hard to retain

by the
February,
1947, when he introduced the new
budget for 1947-48, his estimate
was

The

employing another 25,000 na¬
tive workers but, as a matter of
the

million

all-time maximum

the

countries"

U.S.S.R.

pro-f*
duction, the data on this subject serves, the
being still fragmentary; but the year would
increase of
changes are primarily due to vari¬
tain

296,095, as
310,446 a
year

with
an

number

industry is reported to be desirous

having reached, in 1940, a peak of 41 million fine ounces (equivalent to $1,435
$35 an ounce), the world output of gold fell by one-third in the following five

and amounted to about 27 million fine ounces in 1945. These figures include cer¬

years,

the
was

of 375,923 in February, 1942,

After

million at

1947,

workers

earlier and

hoarding and inflation.

duction,

March,

native

In the table

The

European wbrkers is
about 40,000, which is said to be
about 5,000 less than the industry
at present requires.
At the end

periods.

industry is contending.

number

Estimates world annual output declined from 41 million ounces in 1940 to 27% million in
production costs limiting output, and reports U. S. increased gold holdings in 1946,
while most other nations lost supply. Points out reduced central bank reserves have been offset by
private gold hoardings, and discountenances return to gold coin standard as giving more impetus to

(225)

NEW YORK

S. R.

Livingstone & Co.
DETROIT

C. T. Williams & Co.
Incorporated
BALTIMORE

the

1946,

THE

(226)

COMMERCIAL' & FINANCIAL CHRONICLE

Thursday, July 17, 1947

and Remedies

Economic Instability: Causes

how

Development

they

tem

has

that

Studebaker Corp.

The

consider

affect

individuals.

Committee for Economic

President,

must

PAUL G. HOFFMAN*

By
Chairman,

increasing the effective func¬
tioning of our economic system,

our

Our

for

"citizens

economic

promoting

that

will

stability

ways

competition,
extinguish it. The
growth ahd vitality of our system
depends on wide open opportunity
encourage

not restrain

particularly
as

sys¬

a
responsibility beyond for entry of new business and ex¬
efficiently carrying on pansion of existing business when¬
It must add ever production and employment

trade and commerce.

of economic instability and lays down a program for a stabilized economy
which will not end in stabilized poverty. Says responsibility of Government is to es a is con
ditions under which private enterprise can operate most effectively, and responsibility o
usinessmen
is to operate profitably through increased efficiency and with as much regularized employmen as pos¬
sible. Says depressions can be kept within limits, and by wise action real income of most people can

]

CED head lists

{

be doubled in 25

make

in the

development

extent

put off even though
worked hard and thought hard
because there have been rich re¬ ample cash reserves are on hand.
The availability
of cash and
wards for so doing, and mild pen¬
credit, and the confidence in the
alties for inaction.

the

ties ' for

future

advancement
of

all

Next, let us consider

member

still

are

too

unstable is
not simple.
It is very complex
indeed. Market demand for good^
why market demand is

are

whose
opportunities

low,
are

should

also

services

and

limited.

answer

But the answer to

ket demand.

whose

incomes

has been
is simple.

Instability in our economy results
from instability in effective mar¬

many

people

The

unstable.

that

there

the ques¬

tion of why our economy

We should re¬

Paul

Hoffman

made

of course,

is,

of the combined demands of in¬
business firms,

dividual customers,

remem¬

ultimate test of any a»d the government. At any given
market
demand
depends
economic system is what it pro¬ time
duces for the average man. There¬ upon (1) how much cash or credit
is
available to customers, busi¬
fore, our answer to the critics of
nessmen and the government, and
capitalism should not emphasize
(2) how much of that cash or the
past accomplishments, but rather
should take the form of a plan of proceeds of that credit they are
the

ber that

action for

improving the effec¬
system that it will

tiveness of

our

ever-increasing

yield

ties for more and more

Before

ple.

determine
should take a

can

that plan, we

upon

opportuni¬
of our peo¬

long, hard look at our system to
find out what makes it tick, what
made

strong, what its weak¬
are, and how they can be

nesses

corrected.

•

characteristic
its dynamic
productiveness. Since the turn of
the century one great invention
first

The

our

major

economy

another—the.automobile, the

after

radio, the airplane, and numerous

others, has given a start to new
industries which have grown into
giants.
We have perfected the
techniques
streamlined
ernized

of mass production,
distribution, and mod¬
merchandising.

our

have

seen

age

American

the income of the

We
aver¬

doubled,

family

and for the second time in a gen¬

eration

the

dynamism and high
productivity of American industry
have proved a decisive factor in
winning a World War.
The second major characteristic
of

our

been

this

economy—and

has

its greatest weakness—is its

instability.

During the past 100
there have been no less

years

than 26 business depressions,
ful¬
minating in the boom of the 1920's
and the bust of the 1930's.

I propose to give you
my ideas
as to why our economy has been'
,

dynamic and why it has been

un¬

stable, then to outline briefly how
we

should go about developing a

aimed at protecting and
enhancing its dynamic produc¬

program

tiveness and moderating;its tend¬
ency toward booms and busts.

Assuming adequate natural

re¬

sources, the
omy

dynamism of an econ¬
will depend substantially on

the extent to which the
potential¬
of its citizens are realized,

ities

how much

upon

use

made

their
natural inventiveness
and
resourcefulness,
and
upon
how
well they work together.
We in

the United States have outstripped
the world in productiveness be¬
cause

our

jects
made

us
-

hard,

economic

us,

pressures

that

sub¬
have

»individuals,x work
hard, and work to¬

think

gether

system

quite

well.

have

willing to spend for goods or in¬
vest in business assets.
That is clear enough, but in¬

determination of
how
much' cash
and credit is
available to customers and busi¬
ness firms are such matters as tax
the

volved

the

credit policies, and

policies,

trade.
In¬
determination of

status of international

volved

the

much

how

available to
ment

credit
is
the Federal Govern¬
and

cash

of the

decisions

are

exec¬

utive branch and of the Congress.

Complex
in

the

are

matter

problems

availability

they are nothing
compared with those which
determine the willingness of cus¬
tomers and businessmen to spend
and invest.
Here we run directly

which produces

The

Stability Program

Factors

the background of

It is against

factors that we must

these vanous

moderate

develop a program to.
economic fluctuations.

The pro¬

must recognize, of course,
necessity of maintaining ade¬

gram

the

power, but it
must also take into full account
the importance of giving individ¬
uals confidence in the continuity
of their incomes, of giving busi¬
nessmen confidence in the pros¬

purchasing

quate

when

what

buy

correct

its

chance
we

must

have

choose

what

ber

purchases which we can
often do,- though
we have money in the bank.
What is true of the individual
of-

postpone—and

buyer is

even

Business

ness.

purchases

individuals.
makes

true .of busi¬

postpone its
easily than
Modern competition

even

can

business

and
more
of its money into
capital
goods—buildings and machinery,
office and store equipment and
inventories
to
make
possible
low-cost production and to pro¬
put

—

statement

the

Committee

by. Mr.

Joint
on

Hoffman

Congressional

the Economic

port, June 25, 1947.

Re¬
;

Government

question.

program

can we

by one cure-all.
It will take the collective wisdom

simple formula,

tions

the

volume

business

stem from activities of men;

there¬

fluctuations

act more sensibly, the
can
be
moderated.

There is

excuse

fore, if

men

lent booms

that

they

avoidable

with

refrains

expenditures

ernment

State

busts.

are

Government in

our

that businessmen

should

direct

quate

should

plan

profit are dreary,

every

achieve

intensify
dynamic

should

not

wait

nor

one.

and

Public

is neither an, ade¬
desirable method of

this country great.

Nor is it the

function of government in
peaoe-time to intervene in com¬

proper

ernment is to establish

private enterprise
can
operate most effectively.
It
must foster competitive produc¬
tion and trade, and check monop¬
oly power; it must conduct its own
operations, including taxation, in
a
pattern conducive to dynamic
stability; it must maintain Vthe
integrity of the dollar and stabil¬
ity in the supply of money and
credit.

Vitalizing

Competition—It

primary responsibility of govern¬
ment to stamp out practices that
restrict competition; to provide in¬
formation and assistance that will

improve

the quality of decisions

by
business, particularly small
business; to establish conditions
that stimulate inventiveness and
the

assumption of business risks.
labor, agriculture and

Business,

government have too often direct¬
ed their planning against compe¬
tition for the protection of special

efforts to
stability;
we
for

conditions

which

under

our

either

that

interests.

much advertised recession, or for
that big depression

As we examine measures

Government

economize

operations,
to
as
busi¬

carefully

and individuals do in their

affairs, and to avoid unwar-

own

aimed

better

far

money

The

leave

with the taxpayers.
timing

penditures

econo¬

of the individual which have made

The notion

time" when

Ob¬

possible effort must

be made to increase the efficiency

In the last fifteen years

which is being especially, we have learned by ex¬
perience that monopoly power in
so freely predicted for the early
vide
the
values
and
services
1950's.
We should, in the first in¬ private hands of either business
which buyers demand.
If busi¬
or
labor is dangerous, and that
nesses
do not make such pur¬ stance, put into operation those
even
under
government super¬
measures, the soundness of which
chases, the savings of both indi¬
vision it is not safe. .We need to
is not subject to
question-and
viduals and businesses cannot find
We need
second, we should intensify - our plan for competition.
they way into the stream of ac¬ study of those proposals which are thorough study of how competi¬
tion actually functions and fails to
tive, creative capital.' But busi¬ appealing but which have not
been
adequately tested.:
There function; what it can and cannot
nessmen will make investments in
are a surprising number of meas¬
do to mitigate depression.
Out of
such capital goods only if there
ures which practically all think¬
such investigation could come re¬
is promise of a reasonable profit.
ing men approve and which only
alistic policies for extending the
These purchases are oostponable. need to be put into actio;n.
J 1
7
When chances of

expenditures, including
local, are more than

of postponable

for

needed

ex¬

public

works and for other essential pur¬
poses does, however, offer some
opportunity for moderating booms

Such

busts.

and

should

expenditures

held

up, in so far as
achieving stability.
A Govern¬ possible, in boom times and, on
ment guarantee of "jobs for all" the basis of carefully worked-out
might
lead
to
state
socialism plans, executed promptly in de¬
which would wither the independ¬ pression.
ence, the initiative and enterprise
But public works cannot be re¬

inevitable or un¬
be utterly re¬

•

All Gov¬

and

viously

econ¬

can

employer is

minor

employment

the

Federal

—

amount to 20%

25% of the national income.

What the Gov¬

Government's role in the

should

Works

now

of the national income.

from

reasonable certainty

for either vio¬

jected.
Now

Expenditures—In¬

Public

cluding

the risks to be encountered.

before

taking, for
reducing the heavy tax drain on
earnings needed to plow back for
expansion, and finally for foster¬
ing the development of a better
supply of risk capital.

The most vital function of gov¬

$64

the

comes

buy it.

buy and the larger the num¬

the

omy so

Our money will of all of
us—government, business,
go for food, clothing and shelter
labor, agriculture and the educa¬
that we have to have regularly,
tors—to help us work our way to¬
On
the
other
hand, the more ward our
goal. Nevertheless, com¬
money we have beyond what we
plex though the problem is, this
must use for basic needs, the more
much is clear: That the fluctua¬
we

ness,

We
repudiate government
doing is
almost equally important.
There spending for its own sake under
is urgent need to clarify the role any circumstances.
In depression

motion that will provide
dynamic stability? The complexi¬
ties of the problem are such that
it cannot be solved by magic, by a
get

and growth of small busi¬
for removing the bias in the

entry

tax system against risk

ranted hand-outs.

important.

ernment

world economies.
Now

Government

down monopolistic barriers to the

constantly keep in mind that its
petitive pricing, wage negotiations,
strength lies in its natural lusty or
production.
Such interference
vitality.
That we must not lose.
is too liable to domination by spe¬
Otherwise, we may end up with cial
interests, and is likely to im¬
a stabilized poverty so character¬
pede the efficient use of resources
istic of the tired, regimented, oldfor maximum production.

What kind

new

developing the full tal¬

individuals.

does is

the instability of
system and thus

weaknesses,

ideas and

responsibility for breaking

nesses

seeking for meas¬

are

economic

has

dynamic economy with high em¬
ployment.
What the Government

than higher prices.
we

ents

production rather

mand into more

While

for

means

importance, I shall deal first with

arid of creating the
conditions of competitive oppor¬
tunity which channel market de

our

choice

•

and by every one of us jointly
through our local, State and Fed¬
eral Governments.
Because of its

profitable

continued

for
operations

pects

new

ment, have crucial responsibilities
for promoting and
maintaining a

employment.

opportu¬

products; they promote iiexioiiity
and competition in the
economy;
they are among the most effective

ers,

willingness

Full

nesses

laboratories for

—

and small business is

new

especially important. Small busi¬
provide
a
multitude
of

intellec¬

-job-holders, job-seekers,
em¬
ployers, labor leaders, farm lead¬

to minimize

tle

growth and

Policies for Dynamic

maintenance

Business

nity for

ures

psychological 'factors. Indi¬
quite often have
enough cash or credit to keep
market demand stable, but are not
willing to spend this cash
or
credit.
Paradoxically, this ques¬
tion of willingness of customers to
spend becomes a more significant
factor with every increase in our
standard of living.
If most of us
are
just barely able to earn a
minimum living, we will have lit¬

Small

capabilities

socially,

be increased.

can

cash and credit,

vidual customers

the

dynamic
stability is a responsibility shared
by all participants in our economy

into

from

invest, esseniiai as the role of
government, especially
these are,
are
not all that is
the
Federal
Government,
and
needed.
We need also effective
then with the part that business¬
competition to assure than an in¬ men can
play in achiev'ig eco¬
crease in demand will bring about
nomic progress and stability. The
increased production rather than
responsibilities of labor groups,
higher prices. Unless businessmen farm
groups and others I shall not
are in a
position freely to start
develop in detail.
new
enterprises or expand the
output of existing business and
Responsibilities of Government
unless workers are able to shift
The
whole
people
acting
freely to new jobs, increased mar¬
through their Government, and
ket demand for goods may give
particularly their Federal Govern¬
us inflation, rather than increased
spend

our

people.

our

of Instability

Causes

—

Stability

gratification we take in the

they are often

potentiali¬

his

tually and spiritually.

can

by
capitalizing to the full¬

use

and for his maximum

accomplishments of our Afri¬
brand'of capitalism and in our determination to help preserve and streng
en. 11 .
believe that the best way to fortify our system against either frontal or flank attacks
est

full

Basic

no one

than subtract

opportunities for the individual to

years.

CED defers to

its

rather

causes

area

lied

solely,

mainly
The volume
proj¬
ects that, are postponable and the
scope for prompt expansion and
prompt contraction is too meager
to compensate for mass changes in
employment in the whole econ¬
omy.
A proper timing of public
works expenditures if participated
in by State and local governments
upon

to maintain

even

stability.

of useful and well conceived

well

the

could

ment

tially to

Federal

Govern¬

contribute

substan¬

stabilization of the

struction industry.

con¬

v:;y:

Taxes—Federal taxes alone nov?
take 25%

our

national income.

The power to tax is the power

to
Our present tax systerc*
exerts a devastating influence on
the dynamism of our economy.
It
is cutting deep—often more than
half way—into the incentives for
risk taking and creative effort. It
is draining off the earnings needed
for expansion of small business.
[
As a first step toward correct¬
ing the weaknesses in our present
system, tax rates should be stabil¬
ized, set so as to balance the con¬
solidated cash budget in a period
of normal prosperity and then- let
destroy.

alone.

Stabilized

tax

rates

current collection bring

and

high
volume of tax dollars in periods
when

inflation

threatens

and

low volume of tax dollars in peri¬

ods

depression.
Thus, stabil¬
tax rates are automatically
counted-cyclical in their influence

ized

the economy.

dramatic
in

the last twelve

revenues

We have had

illustration of

this fact

months

tax

have jumped beyond all

expectations as prices and incomes
rose,- thereby generating a'huge
anti-inflationary cash surplus.
v

j.»

The principle of balancing ) the

consolidated cash budget at high

employment calls for substantial
reduction in tax Tates from pres¬
ent

levels.

Further cuts will be

of effective competition and ji:(Continued on page 32)

Volume

Number 4612

166

THE COMMERCIAL & FINANCIAL CHRONICLE

1(nc?62S6e Truman

wai

(227)

.■

President

pleads for time to test effect of wage increase.
Says
higher coal prices threaten to renew inflationary spiral and points
out extent of wage increase has been exaggerated.

By WILLIAM L. BATT*

President, SKF Industries, Inc.,
Philadelphia
Former Vice-Chairman, War Production Board

......

statement issued from the White House

July 14, President

Asserting

Harry S. Truman called for delay in advancing coal and steel prices
until

the

feet
and

ef-

part of the
increase in money wage rates. It
is quite impossible for them, they
say, to make any estimate of the
savings in costs which will accrue

profits of

the

recent

settle¬

wage

with

ments

the

fort

since

from

price

the

coal
may

mean

tries,

and

President Truman

inflationary spiral

Text of Statement

fol¬

statement

of the

text

The
lows:

gation

blow to our economy.

view

It
coal

widely feared that this set¬

lead to a substantial
the
price of
coal,
important factor on

dustry,

would

increase

in¬

American

this

that

and

induce

turn

sheets

cost

until
of

com¬

serious blow to

economy and to
of the present

the continu¬

high level of
production and employment. But
blow need not fall upon us.
effect of the wage settle.-

The
ment

the

bare

badly. misrepresented by

amounts
45

statement

cents

per

that

increase of

hour

in the

ment upon
coal.
The

ask

been

made

have

our

know

happened

steel

manager

risk

if the coal and
had been willing
':V V'.'

to wait.
The

economy,
we
what ■ would

involved

continu¬

present

the

prices of coal and
long enough to learn what

increased

will

costs

of production

actually be under the pew

agreement is not serious,
especially in view of -the fact that
such

action

will

greatly

reduce

The producers of coal and steel
have
been
enjoying
their full

the

high profits which
flowing to industry today in

present prosperous economy.

that they, as respon¬
leaders
of
industry, will

sible

invest

profits

portion of those

in ' the

business
for all

are

these:

by management since 1938 and of relating
management's con tributions toward a better standard of
living
everywhere has been assigned to me. You will be the first to
recognize and appreciata
m y
difficulties.

The sub¬

ject is

appealing
But

You

its

maintenance

stability and
people.

prosperity

our

■:

hours, of which seven hours have
been at straight-time rates and

one.

very,

servation of

and

Presidents,

sweeping
erality

gen¬

such
warn

old

man

Sunday

all

about.

how¬

raising stand¬
of

living

hours have been at overtime

clination of

some

greatest hope of making
consolidating the economic
that will give substance to

peace

political
and

peace.

prayer

do here
ward

point

can

life to
the

much

the

measqr^bly
So

the overtime Saturday and to

dimmish

When

firm
&

come

considering
of

means

the

most

important coal

and steel producers in
made this settlement,
they asserted that it would be of
jgreat benefit to the country by
making it possible to continue
full production and employment
for a long period.
We can all
agree that a
coal strike would
have
seriously endangered our
prosperity. But whether this set¬
tlement does permit that
pros¬
operators

perity to continue depends in very
large degree upon the decisions
•of these business managers them¬
selves as to how they will deal
with their costs and prices in the

practical

working

and

raise

the

replied

the

considered

"He

against

it."

generalization is

same

un¬

arriving at

was

agreement

common

indicate acceptable

and

realizable

have

these

come

long

tances to seek means of

better

world.

All

ob¬

that

management's

in the use of labor and

Definition

Let

function

capital has

cept

better production and distribution
of the goods

and services deemed

necessary or desirable by society.
As

second

wonder

constitutes

qualification,
can

we
a

define

been unable to do

for a standard of
living; of considering what con¬
stitutes its components.
Perhaps
of

a measure

shall find that there

agreement

sive to

are

sufficiently

promise

some

areas

only

I have

seen,

.ones

come

Sweden,

meetings

are

the

I should

to such a conclusion.
a

assume

directions

the

national

may

mobiles,

better

shall all agree that

houses,

they

may
area—better

facilities

for

leisure time, and
A

name

Co.

has

Swede

may

In their explanation to the pub¬
and

reason

their

stockholders

which

led

them

contract, these busi¬
leaders have emphasized the

desirability of certain provisions
conditions which they assert

LOS

Raymond
added

wholly

different

quite different items.

attempt
shall

only

spell

point

and

terms

Co.

changed to Mc¬
Partners

out,

that, in character and

(Continued

on page

offer to buy, or
of the Prospectus.

or as an

means

36)

as a

July 17, 1947

#22,000,000

Iowa-Illinois Gas and

staff

King Mer¬

First

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Special

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Due March 1,

Dated March 1, 1947

1977

Chronicle

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Price 101.40% and accrued interest

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Copies of the Pmpccttcs may 'be .obtained from any 'of the several under-

—

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and

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staff

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Francisco

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Stock

may

legally Redistributed.

Corporation

—

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Prospectus

Chronicle

FRANCISCO,-CALIF.

Reginald
the

only 4n "States in 'which such underwriters are qualified to act

dealers in securities and in which such

The First Boston

Walston, Hoffman

Special

writers

Wiley are with Merrill Lynch,
Pierce,
Fenner
&
Beane,
301
Montgomery Street.

Joins

William W.

Will

offering oj these securities for sale,

of such securities. The offer is made only by

CALIF. —
Mcintosh has been

the

York

and

Exchanges.

American Securities Corporation

but

general

the

volume, the aspirations of any one

NEW ISSUE

the

Company, Inc., Chamber of
Commerce Building.

San

and

as an

for

I shall not

those

ritt &

members

productivity

any

his

measure

hoped-for economic objectives

ANGELES,

and

increase

offer to buy,

use

on.

firm, which is located in the Frost

this

re¬

in the

education,
the

McRoberts, Graham

been

circumstances to be construed

lie.

auto¬

radios,

cultural

in- which

aspirations

be purely material in

frigerators;

conclusion

first broad qualification, I
we

and
own

exten¬

worthwhile

so.

American may succeed in setting
certain goals for his own country¬

nature—more

which

what

standard of living in

broad and comparable term.

any

They

Living

take the problem of de¬

fining

Standard

papers,

solicitation

justification for existence ex¬
as
it serves to aid in the

has

;

From an analysis of the

TEXAS—The

will,

I
accept the basic conclu¬

suppose,

sion

dis¬

improving

contributions

management's

his

present.

1947.

not

With¬

major premise, we should

men, but they are likely to be on
terms relative to what he already

as to

American

contribution to that end.

problem

conclusions

jectives.

of and will to wage war.

Stockholm,

out that

I have

standards of living of nations and

Congress,

improvement in man's
standard of living is desirable, and
that better management will make

principle, but very
great difficulty in so adequately
defining the specific areas of the

from

*An address by Mr. Batt before
Eighth International Management

constant

large

many

the broad

ways

talked

answers

July

light of the settlement.

ness

cause
'

the problem of

This is under

ANTONIO,

Roberts

the country

the

and

re¬

asked

difficulty

jealousies

world,

will, to wage war.

fund.

make

the

heal

envies

the next question.
before

was

fortunately true, with

history of
doing, we can

she
had

people at lower cost
Bv

at¬

questions of wide public concern.
There may be
very little

before in the

planet.

and

to¬

living that will pro¬
the good things in

ever

and

course

than

our

the establishment of higher

standards of

vide

My fervent hope
that the work we

When

sin,"

President

The

had

"And what did he say

answering:

Batt

our

and

(II
SAN

miners to work

lay off on some other day. The
employers also pay an additional
5 cents per ton into the welfare

everywhere

his

alone

home,

"About

about sin?"

The

preacher

President.

ever,
that in
the problem of

ards

the

for

Because of his

service

his

what

can

noted

morning.

turned

b e1ieve

agree,

divine

American

our

man

indisposition,

tended

I am.

one

brevity of speech.
wife's

are

National
Bank
Building,
are
premium rates. Overtime is paid Tames J. McRoberts
and Weldon
for Saturday work only if it has
Carter.
been preceded
by five days of
work in that week, and the em¬
With King Merritt Co.
ployers will no longer find their
Special to The Financial Chronicle
schedules disorganized by the in¬

lic

not

I illustrate my

$1.20

will

object, I hope, if
difficulty by quot¬
ing somewhat humorously an ob¬

most

stead

on'

progress made

The miners

daily wage of $13.05 in¬
$11.85, this being the
increase recently awarded
in
other
major industries.
The
working day becomes eight hours
at straight rates instead of nine
receive

discussing the

sure

want to

industrialist stresses need of

those advances in terms of

wage

the hazards of renewed inflation.

background of social and human

Introduction
The task of

lies
and

once

major features of the wage

settlement

two

price

of the wage
conditions
of

increases

upsets

our

'■):

shall

that

the cost of producing

has

under

prices

are

public does not yet fully un¬
derstand, through the complicated
details of the agreement, what is
the actual impact of this settle¬

the

producers to wait

test

never

wages

It is unfortunate

miners.

about

reasonable

steel

fair

wave

the

only

steel

such

increases

maximum production.
If prices are raised at

ing

This would be

the

the actual effects

halted.

ance

managers

and in the price of steel.

and

modity prices and renew the in¬
flationary spiral which we had
much reason to hope had
been

our

advances

operators.

the

these

immediate

quarters over possible
results of the recent settlement
between the miners and the coal

which

viewed against wider

now

achievements, prominent U. S.

breadth

many

It is

situation

emphatically the obli¬

of coal

;

tlement may
increase
in

present

uncertainty as
to whether, or how much, mine
costs of coal may be raised, the
people of the country have the
right to demand that their pros¬
perity shall not be imperiled by

Deep concern is being expressed
in

the

secure.

of the

renewal

even

indus¬
higher
prices

many

greater

the

and

cost

sheets

and

Security and
improvement in plant
efficiency which is always the
duty of management to create

portant. factor
cn

of workers who enjoy better

wages

im¬

are

achieving higher world-wide living standards. Says there can be no
political peace without economic
peace and calls for improvement in management of international
relations.
Urges industrialists con¬
centrate on "making more goods for more
people at lower cost.

regularized workday and
workweek, trom the increased ef¬

ascertained,
adding that
coal is

responsibilities

from the

mine

workers

considerable

management

contributions rather than merely scientific

offset

costs

Hayden, Miller & Co.

THE COMMERCIAL & FINANCIAL CHRONICLE

(228)

Point in Foreign Relations Economic Problems of

Maishall Sees Tuning
Tells Conference of Governors
ments will

be finished or their govern¬
Lauds Paris Conference

task of assisting European countries must

with

in directions inconsistent

move

Thursday,, July 17, 1947

Postwar France

and their own traditions.

ours

affairs.

and asks for national unity in foreign

Gen. Marshall?

was

that

much

like to

would

discuss

"in

age,

new

itself to

which

rections

are

neither with their own
nor

necessities

States would be faced

and

time

occasion

the

permitted, but
stressed

he
the

"urgent

alteration of its

a radi¬
position

I ask you to

world.

the

sider

con¬

carefully the implica¬
such a development for

most

tion

prosperity and security

the future

necessity" of

making im-

who are in
doubt as to the course which this
nation should now pursue.
They
feel that the aid granted thus far
to
the countries of Europe has

pressively
George C. Marshall

clear the mat¬
ter under dis¬

cussion.

v/ill

right

say

now,"

the

"that

remarked,

Marshall

Gen.

greatest problem I feel we have
to deal with is in
bringing the

"There

are

many

piecemeal, and certainly not
fully effective. And they wonder
whether we are pursuing the right
course.

reactions

"These

under¬

are

ef¬

It is true that the

standable.

derstanding of the conditions in¬
volved at home and abroad which

forts

negotiations
and
to reestab¬

back

been

largely to meet a series of

all

influence

lish

the

efforts

all

therefore

and prosperity

peace

crises

what

the world."

Continuing, the Secretary

stated:

a degree of prejudice under
provocation, and particularly

the scene

is remote from

one

Also it is very dif¬
ficult to reduce the problems to a

of difficulties.

far

thus

some¬

far

realized.

post-hostilities period were
that

one

Foreign Min¬
isters of France and Great Britain
constitutes an auspicious begin¬

could have pre¬

the course of de¬
velopments or devised adequate,
coordinated
approaches to Eu¬

dicted accurately

and
way

think,
own dif¬

rather accurately by my

cerned

preparation

greatest of care the im¬
plications of the various possible
solutions from the standpoint of
the interests of the United States.
But whatever course is adopted

with the

affect the lives and fortunes

will
of

for

"That

experience,

"It is imperative that the atti¬

taken by our Government
this problem, as in all

tude

extent

been

problem while the smoke of bat¬
still hung over

"It is

the scene.

possible to calculate

now

results of the

meeting being held

Paris

and

the

studies

now

made by the Government
will be to bring out all the facts.
facts before them I

the

confident

the

of the

response

find

sistent with
terests and
erate

Government to
of action fully con¬

our

this

national In¬

own

consid¬

equally

yet

the

which

will be

our

course

»'

-<•

"With your help 1 feel it

for

incalculable

stake

has in the
preservation of European civiliza¬
country

tion."

diplomatic, at least dignifed,
phraseology, and unless one is a
such

the

master

Mr.

language,

English

Weighs Strain of Sterling Convertibility

Churchill, for exam¬

ple, it is very difficult to combine
these requirements with the urgent
necessity of making impressively
clear to the ordinary citizen the
matters under discussion.

"These gatherings of the execu¬
tive heads of the states on which
founded

Government

are

function

That

has

of ster¬

problems.

) "Thinking back
of

ments

our

the develop¬

Federal

Union,

the doubts and difficulties which

preceded the final union of the
Colonies, on the remarkable pro¬

keep sterling free depends

payments.

ductive effort which followed on

balancing of her international

the solution of the early

ties,

and

which
to

the

high

states

have

continued

own

individual

the

difficul¬
degree to

their

maintain

personality and institutions, Amer¬
icans

should

have

keen

and

sympathetic understanding for the
efforts now underway in Europe
to

overcome

the

limitations

national barriers in the
to a solution for common

approach
economic

problems.

j. "And their understanding will
strongly

influence,

determine,
this
to

come
;

fact will
decisions which

the

country

take with

will

be called

upon

relation to the out¬

of these discussions.

"There is

blinking the fact

that this country now stands at a
turning point in its

relations to its

dollars

does

cerning the ability of Britain to
keep sterling free, the document

trade. The

states:

from

"As July
15 approaches,. the
question of whether Britain's re¬

less

will stand

between

credit

Even

sterity import
June

ference.

only

plies

has

The gap

imports and exports has
and the drafts on
S.

deeper.
on

the strain

acute form.

larger,

grown

the

have

grown

increased

au¬

program announced

will

make

little

dif¬

It has become clear that

rapid improvement in
which

will

both

sup¬

relieve

shortages and make
increased
productivity

will

save

the

situation.

Faced with this position, the Brit¬
ish Government has emphasized
over and over

the

solution

again its belief that
lies

world-wide

expansion of trade instead

short-sighted
trade
cuts.
Only
through trade expansion can the
means

and

be found to

agriculture

world

keep industry
throughout the

her
she

rectly.

not

add

dwindling

world

more Britain

"releases"

supply

the

has to spend herself di¬
World trade is stimulated

only insofar as the dollars
spent by other countries to
crease

their

are

in¬

productivity and
thus to add to their real purchas¬
ing power. But it is certainly a
helpful
factor
if
Britain,
the
world's
store

own

greatest

sterling

trader,
a

can

re¬

free medium of

exchange, able to play a part in
getting the economic resources of
the world fully at work.

short-term

greatly
possible

"Ultimately Britain's ability to
.sterling

keep

whether she

free

can

depends

balance her

international payments,
depends in turn

and

for

cult

home

the

consumption.
present

Britain there

signs

that

are,

British

own

this

her ability to

produce more for export
as

well

„

count.

does not have the objective of
the better organization of poverty,
it aims at increasing prosperity."

accepted

truism.

this

But, as far

formula

as we are con¬

truth
of it, because, we are absolutely
fixed to an organization of pov¬
erty.
cerned,

understand the

under¬

its

ac¬

own

reports, miners
little and

eat

zone

the rest of the population eat less.

of occupation, the coal pro¬
duction of the Ruhr has not onlyzone

declined, but is not likely to main¬
tain its present level. This is most

German

the

production,

and

that this proportion would increase
total production

increased.

The result of the present situa¬
tion is that
American

dependent

coal—a

far

from

are

expensive,

coal

brought

and

accordingly
what is more,

away

and,

of good

quality, yet it is in¬
dispensable to us—and without it,
not

would not have industry, elec¬
tricity or transportation. We shall
be obliged to continue to make

Production Must Be Increased

Now, in order to increase pros¬
perity, it is essential—and this is
also
a
truism—to' promote
in
every way an increase of produc¬
tion.

sacrifices

disagreements and con¬

tradictions.
Before

discussing the conflicting
France, her

factors amidst which

Government

Now,
steel,
that

and

her

Parliament

order

obtain

this

Iron and Steel

But, it is on this point,, that
us, we have the greatest

amount of

American coal.

among

let's

You

consider

are

iron

aware,

and

doubt,

production of these products
by economists as

considered
index

activity

actual

nation.

industrial

far

have to

fight their way, I wish to that is concerned, France, if she
attempt to review rapidly
the had the coal at her disposal, would
progress of our country and the be able to produce a satisfactory
point at which we have arrived by quantity of steel. But at present,
reference to certain categories of we have a production of 94% of

7>v7J-;/.: "
should be re¬

important advance in our produc¬
which now is greater than
that of 1938.
In March, the last
month of which we have figures,
production amounted to 4,630,000
tons

compared

with

3,963,000

tons in 1938.

that of

1938, and in certain cate¬

gories, such in electric steel, we
have now
146%, in sheet steel
110%, but for foundry iron, only
81%.

The number of furnaces in

operation
last
against 29 the
in

1938.

reached

the

Monnet
tons

March
we

level

steel.

be sure,

has

not

to efforts for greater
production, according to the plan
for 1947 the present figure marks

Yet,

due

achievement.

But, as you know, France has
always been an importer of coal
today, lacks the principal
sources of supply which she had
before the war. Bear in mind that

and,

before

the

war,

depended

Britain for importation
importations un¬
fortunately, have
stopped alto¬
gether.
Then, there is Belgian

largely

coal.

These

coal, of which little is spoken now,
but which used to amount to 392,imports, but have
been reduced to about 30,000

000 tons of our
now

have

*Excerpts from an address by
Mayer before the Republican
Committee of Commerce and In¬
M.

dustry, Paris, May 19,1947. Trans¬
lated
from
text
published
in
"Agence Economique &' Finan¬
cier," May 20, 1947, > > v -

Construction

not

by the
million

Production

coke,
coke, and always

of steel

It is urgent to

and
more

still

coke!

Materials and

Electricity
As

construction

materials,

the increase in production is de¬

pendant upon the solution of the
coal problem.
We have. already
passed the average output of 1938
in the production of cement and
lime. We still

are

behind in

bricks,

tiles and refractory materials.
In electric energy, we have ex¬

perienced a great increase in con¬
sumption since the war ended in
France, but the increase in the
supply of current in 1947 will be
limited

have

average

steam

800

million kwh.

already

Yet,

exceeded

the

monthly output of both
hydro-electric power

and

1938

which

was

1.550

million

kwh., since in March 1947, the
output was 2,312 million of kwh.,
which

Germany, our importa-

have

fixed

Plan, which is

was

previous and

year

But

is still insufficient.

the production per
yet attained the
prewar figure, and this is a serious
handicap, due to the loss of man¬
power caused by the forthcoming
departure of German war pris¬
oners now employed in the mines.
To

worker

As for

From latest

the British

Morrison, Member of regrettable, because at the Moscow
the
British
Labor
Government, Conference, although we did not
who had the responsibility of pre¬ obtain formal assurances of a defi¬
paring an economic plan—which nite amount of coal, France was
England still does not have—said: given to believe that she was to
"The plan which we have before be permitted to receive a portion

fortunately,

industry

Germany

coal crisis

Mr. Herbert

tons.

situation

But,
a

Because of troubles in the British,

It is from this viewpoint that I
wish to speak to you.
On May 1, last, in
speaking be¬
fore his constituents in London,

Diffi¬

on
a
permanently
high
firmly based and will allow much
level, ruling out slumps, raising
higher output once the uncer¬
tions of the old world.
Either it living standards and
bringing eco¬
must finished the task of assisting nomic development to undevel¬ tainties! and shortages of the pres¬
these countries to adjust them- oped areas,
ent interim period are overcome.
y
.
„

traditional friends among the na¬

for¬
dur¬

tion

the

arisen in

and

ing recent months.

As regards coal, it

An "unofficial" paper issued by the British Information Services
in New York City, an agency of the British Government, discusses

sources

slogans

have appeared

mulas which

marked that there has been a very

significance of the July 15<?—
"Britain's complicated prepara¬
sterling convertibility, the efforts
made by Great Britain to meet tions for convertibility are there¬
very
obligations imposed by it, and its fore part of this long-term effort.
when relationship to world trade. Con¬ By itself Britain's "release" of

special significance today
bne considers 'the present world

the

Coal

emphatic reminders of the func¬
tion of the states in our political
life.

going

intelligent convictions rather than

production.

ling, British Information Services conclude Britain's ultimate ability
-

;

bur

In ^unofficial" discussion of effects of free convertibility
to

Ruhr.

questions of foreign affairs,
intimate accord with the
feelings of the nation at large.
"To make up its mind this coun¬
try will need facts. One of the
in

possible

problem of post-war adjust¬
ment in Europe still awaits solu¬
tion. No one clearly foresaw, and
no
one
could have foreseen, the
outlines and the magnitude of the
tle

ents

of the

various

the

Perhaps Mr. Morrison's constitu¬

American people.

public statements I have had to
make. State papers and state pro¬
nouncements must be couched in

such

implant firmly

toward

help Europe overcome the effects
However, a great part

incidentally,

components

Union.

of this war.

has guided my language to a con¬

siderable

of the

in every state

people

the

meetings in Moscow.
-

Washington we are studying

"In

the

ficulties when I first took up

burdens

intimately con¬
with the solution.

their

depend

For we are

will.

With

•

representatives of Euro¬
pean
countries there assembled
deserve to feel that their work
will be followed in this country
with genuine sympathy and good

accomplished by what this country
and others have already done to

this,

i
FRANCE—We are, as far as our economic and finan¬
cial problems are
concerned, in a confused situation. In this situa¬
tion, it is advisable, as a first step,<?
—
to try to understand as much as
tion of its coal is the crux of the
possible the elements in the prob¬ question of
reparations, particu¬
lem, the various plans involved larly coal from the Saar and the

being

"An immense amount has

and

private enterprise.

this task..

erally.

judge

accomplishment

the

ning

rope's problems.

can

in Paris called at

"The meeting

the initiative of the

simplicity of statement that is un¬
derstandable to our citizens gen¬
"I

stabilization must await basic choice between
planned economy

for

great

"The uncertainties of the imme¬

such

price policy is

completed;

carefully coordinated European
effort is now widely recognized.

character.

beneficial than is generally

diate

when

have

therefore

disjointed

real

feet

true that they have been

also

"Prejudiced points of view are
of course objectionable in all such
matters, but it is very hard to
avoid

their

and

countries

European

put

adjustment

"The

been

public to a general un¬

American

country.

our

production, and the indispensability of coal therefor, states wagean adverse factor blocking improved
manpower and
foreign trade situations. Concludes real economic * and political

exactly the needs which
met, and the sources from
which they must be met, if this
more

with

own

French Government
official, stressing his country's need for full

must be

Furthermore, the urgent need

MAYER*

United

this latter case, the

"In

cal
in

consistent
traditions

with those of this country.

great conf iuence," if the
the

changed demands of
it must reconcile
seeing them move in di¬

that I selves to the

there

RENE

Former Member of the Cabinet

Europe and the problems of
of his introductory remarks,

Utah, on the difficulties of reestablishing peace in
United States policy of economic assistance.
In the course

Lake City,

admitted

Salt

Marshall addressed the Conference of Governors at

July 14, Secretary of State

Member of French Chamber of Deputies

the

greatest

part

was

from water power.

Manpower
The manpower problem is par¬

ticularly
our

grave

and agonizing.

mines, in agriculture,

used German prisoners of

have

war and

this has helped our production.

Volume 166

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4612

coal production exceeds pre¬
level, under a reduced manhour output for the
miners, it, is

choice of

policy is made.

fact,

Europeans blame

our

after

war

That choice will be between ac¬

Artierican statements and the At¬

socialization or,a yolbecause, in our mines, we had untary return" to private enterprise
more
people than formerly at in many sectors of our economy.

lantic, Charj;er |or;the present c^is-;

work.

centuated

planned
German prisoners had rendered economy as an end in itself, which
services, of which we are now de¬ ought to lead to a better world,
prived because of their repatria¬ and another policy which holds,
tion. There is probably not more as we do, that it is impossible to
than 10% to 15% of these pris¬ build a better world without get¬
oners
working on a voluntary ting rid of the ruins of wartime
basis, that are left on the farms. controls, which were introduced
"As for those who still remain in only as necessary evils imposed
the mines, I suggest we give them on democracies by the war.
The choice has an international
the Montyon awards.1
It is evident, that an immigra¬ bent. It may follow the advice of
tion of manpower is essential. It M. Varga (the Russian economist)
has already begun with immigra¬ who says, "If you wish a planned
tion of Italians and North Africans. economy, it is essential that you
It ought to come also from a se¬ adopt our social philosophy and
lected recruitment of displaced our ideas of property," or it will
persons in Germany, but it was follow the idea coming from the
impossible to obtain, the permis¬ other side of the Atlantic, which
sion for this from the trade unions, holds a planned economy neces¬
who will not allow them to pene¬
sarily leads to autarchy.
They
trate
beyond the
Saar.
Now, (the Americans) are now engaged
however, an agreement has been in combating against this regimen¬
concluded, and this ought to prove tation at the Geneva Economic
Conference.
a source of manpower—sometimes
even
of qualified workers. But
this, I fear, will not be enough to
solve
the
manpower
problem,
either in industry or in agricul¬
(Continued from page 9)

Similarly,

agriculture,

ture, when all PWs will have been
repatriated.
,

It is a'choice between

people

did

would

doubt that

not

another

there

few

war;

be¬

lieved that it could be avoided for

Foreign Trade

than 10 years.

It is, as you know,

through our
Communism Balked
procure the ex¬
change without which we could
Communism in western Europe
not re-equip
our
industries, or seems to have gained no further
pay for American coal, and, un¬ footholds.
Its influence in France
fortunately, for American grain. is less than indicated by the press.
We are thus forced to export to Its nuisance value in France is
the maximum and to deprive our
very great, however.
The fear of
domestic
consumers
of
many Communism is real, particularly
goods which they would like to in
the
Scandinavian
countries.
have.
This necessary process is Very few in Sweden will deny

exports that

becoming daily more difficult. Al¬ that the bilateral agreement with
ready, retail prices have risen, Russia, providing a credit of one
on certain
products, exporting billion krona, was made as a re¬
is becoming a hard job. Yet, com¬ sult of Russian threats to
occupy
pared with 1946, our exports in Finland and with the hope that it
March, 1947 were 42% greater by would insure Swedish neutrality
quantity, and 300 % greater in vol¬ during World War III. The aver

and

The

ume.

•

impression to be given

age
Swedish
businessman
demns the agreement.
The

con¬

by these figures is that France is
working and will continue
to

credit, coupled with weakening of

work.

the

Wages and Prices
But

there

adverse

are

factors

working against these efforts. The
first

these

handicaps is the
wage-price policy. I shall not re¬
vert to the way this difficult mat¬

huge

financial

position, means an
early devaluation of the krona.
Russia's agricultural outlook has
improved
considerably.
How¬
ever, it is under pressure to give
its population some reward for

victory in World War II.
Wellinformed Europeans believe that
the
Hungarian coup d'etat was
the conference which took place
largely due to Russia's desirb to
at the Palais-Royal.
I believe it
get some consumer goods as soon
was an error to hold that confer¬
as
possible.
Hungary was the
ence under a
new-born govern¬
in the area in a
ment which did not take the nec¬ only country
position
to
make these
goods
essary three weeks to measure the
ter

handled

was

consequences
be adopted.

June

the

1946

decisions

Today,

know, it
is not a question of
wages, but
rather the purchasing power of
we

wages.

The

policy of reducing prices
put into effect, had as
its object a considerable reduc¬

which

was

tion of

profits, which profits the

Communists wish to destroy alto¬

gether. And this leads me to an
assertion: Profits are necessary not
only for the satisfaction of luxury
goods but for all industry. It is
essential that this be recognized in
the difficult situation

in.

are

now

interest of stable

In the

cur¬

rency, we should have a balanced

budget and this can be accom¬
plished only by doing away with
the huge
government subsidies
given in lieu of profits.

(Mr. Mayer next in his address
criticized

the

French

ment's liberal social

icy,

under

which

Govern¬

security pol¬

the

taxes

wages for this purpose have risen
from 15% to 18% in 1938 to be¬

tween 37% and 40% in 1947. He
also criticized the French Govern¬
ment's

financial policy, insisting
that deficit financing should cease
and

the

national budget be

bal¬

anced.)
More

Socialization

Stabilization

ha£ replaced

Return

French

eco-.

very

renowned in France,

for disinterested

and

actions.

union-loving

content

whole, including
to have adopted
fatalistic attitude. There is lit¬

Europe
England,
a

Sales of World Bank Bonds
v

seems

Begin

network set up.
*
Public distribution of the bonds of the International Bank for
Reconstruction and Development was
finally begun this week. Reg¬
istration was cleared
by the SEC«»Monday afternoon, nationwide that the first order for the bonds
selling and Stock Exchange trad¬ through the Stock Exchange had
ing therein began Tuesday morn¬ been executed. The price, was 102.
ing, and by noontime on that day A short time later the first quota¬
.

tle hope that something may hap¬

to better conditions, and gen¬

pen

eral

opinion in

the

worse

two

is that

England
Winters

will

than last Winter.

These impressions of European

deterioration

confirm

the

belief

that foreign developments in the
near future will have an adverse
effect

United
ness

States

prices and on
exports and busi¬

activity.

announced

was

the

world

that the

issue

Abbott, Proctor to Admit
RICHMOND, VA. — George S.
Kemp, Jr., will be admitted to
partnership in Abbott, Proctor &
Paine, members of the New York
Stock Exchange, on Aug. 1.
He
will make his headquarters at the
firm's Richmond office, 911 East

tion

the 3% 25-year bonds ap¬

heavily oversubscribed and peared at 103. At 3 p.m., 1,184 of
subscription books closed.
the 2V4% bonds had been traded

Under final amendments to the

registration,

the amount appor¬
as 10-year 2Y4S was
$100,000,000 and as 25-year 3s was
$150,000,000; both issues being
priced at par.

tioned

Distribution is being made by
the Bank through securities deal¬

with

range of 102 high and
low, and 2,722 of the 3%
bonds with a range of 103.4 high
a

101.11

and 102.8 low.

Schram, President of thd
New York Stock Exchange, acted
Emil

host for top International

Officials

ers

With John B. Dunbar & Co.

ficers

the 25-year bonds.

Stock Exchange Trading Is
Initiated

Special to The Financial Chronicle

At the same time a secondary
ANGELES, CAU—Ralph
Dofflemyre has been added to market is being fostered on the
New York Stock Exchange land in
the staff of John B. Dunbar & Co.,
634 South Spring Street. Mr. Dof¬ the dealers' over-the-counter mar¬
flemyre was formerly with Buck¬ ket. A ceremony to mark the ap¬
ley Brothers and Nelson Douglass pearance of the first quotaticn of
LOS

& Co.

the

newly

bond
held

With Edgerton, Wykoff
(Special

LOS

The

Financial

Chronicle)

ANGELES, CAL.—John A.

Lundigan is with Edgerton, Wy¬
koff
&
Co., 618 South Spring

Street, .niembers of the Los Ange¬
les

Sf)fc!k Exchange. iH.*.,

;

tape
at

the

bonds

the

the Exchange

opening

was

trading

Tuesday morning on the floor of
the

Exchange

10:05

a.m.

the

New York.
symbol

the

trading

the

Bank

business

Bank in connection with the prep¬

arations for

and

accomplishment

of the flotation.
Mr.

McCloy,

behalf of the

International Bank,
source

have the

said it was a

France.

That

ation

has

modern

never

history.

been

securities listed

screen,J Wowing

ure

over

the

reception

ration of tf adirig

in this market.

of record only and is under no circumstances to be construed

offer
/*

300,000 Shares
i

•

coun¬

Common Stock

needs

Without Par Value

more
•

than hundreds of millions of dol¬
lars in

loans; it needs

of ethics and
tablishment

a new

better

;

code

morals and the

es¬

relation¬

Price 2478 per

ship between agrarian and indus¬
trial interests, with a recognition
by one of the human rights of the

other.
The French position is not
untenable

ation

only
internally, but the situ¬

its

proaching

colonies

final crisis.

also

Copies of the Prospectus may be obtained from the
undersigned may legally offer these Shares

whom the

ap¬

It is

undersigned only by persons to
under applicable securities laws.

ex¬

pected that France with lose most
of her colonies, with explosions

Blyth & Co., Inc.

occurring in Tangiers, Madagascar
and Morocco in the not-far-distant

future.
The

colonial

control

are

not

are

for

Merrill Lynch, Pierci
nch, Pierce,

partly blaming this country
their precarious position; in

July 16,1947

& Co.

Kidder, Peabody & Co.

Incorporated

Fenner & Beane

Union Securities

very

hopeful of retaining their position
in the. Dutch East Indies.
They

Ilarriman Ripley

Glore, Forgan & Co.

Corporation

accorded

the new securities on the inaugu¬

and

worse

to
on.thid

satisfaction

great

human morality is stressed on all
sides.
It has became most pro¬
nounced

effi¬

change and of the financial com¬
munity had been available to the

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

try's economic and political situ¬

the

At Exchange and expressed his pleas¬
the

for

Bank's 3V4 % 10-year bonds flashed

This advertisement appears as a matter
as an

issued
of

ciency with which the financing
was arranged.
He said that it was
a matter of pride that the invest¬
ment banking talent of the Ex¬

decline

These included

turn will offer the bonds
mercial banks, savings

French Position Untenable
A

Bank

theucerjemony< and

later at luncheon.

throughout the country who in
tp com¬ John J. McCloy, President of th$
banks, in¬ Bank; Robert L. Garner, Vice*
surance
A.
McLain;
companies, trusts, estates President; Chester
and other institutions, as well as General
Counsel; E. Fleetwood
Main Street,
individual investors.
A
unique Dunstan, Director of Marketing;
feature of the offering is the un¬ and the following executive di¬
usually large number of securities rectors or alternates: Eugene R»
Cohu & Torrey to Admit
dealers participating in the na¬ Black,
United
States;
Maurice
Cohu & Torrey 1 Wall Street,
tionwide distribution. It is esti¬ Henry Parsons, United Kingdom;
New York City, members of the
mated that upward of 1,600 deal¬ Yueh-Lien Chang, China; Guy de
New York Stock Exchange, will
Carmoy, France; Leon Baranski,
ers, the largest number ever co¬
admit Andre V. Smolianinoff to
operating in a marketing opera¬ Czechoslovakia, Poland and Yugo¬
partnership on Aug. 1. In the past tion of this
slavia; Joaquin E. Meyer, Cuba,
kind, are included,
he
was
with
Eastman,
Dillon
Dominican Republic, Ecuador, El
A large portion of each issue is
& Co.
Salvador, Honduras, Mexico, Nic¬
being allocated firm to dealers,
who, by the terms of the offering, aragua, Peru and Uruguay; J. F.
With A. M. Kidder & Co. agree to reoffer the bonds to in¬ Parkinson, Canada; Kyriakos Varvaresos, Egypt, Ethiopia, Greece,
vestors
at
the
public offering
Special to The Financial Chronicle
Iran and Iraq.
price. The remainder of each is¬
MIAMI, FLA. —George H.
Mr. Schram expressed the Ex¬
sue is
being reserved for subscrip¬
Thorpe
has become
associated
tion by dealers generally.
change's appreciation of the In¬
with A. M. Kidder & Co., Alfred
ternational Bank's cooperation in
I. du Pont Building. He was pre¬
Participating dealers will be al¬
introducing the new securities to
viously with Thomson & Mc- lowed a concession of *4 of 1% on
the 10-year bonds and V2 of 1% trading and complimented the of¬
Kinnon.

nationals with her own
people, as in her section of Aus¬
tria, output has declined.
The
shifting of populations is one of
the tragedies of Europe.

•

2y^ and 3% issues offend* at par are quickly oversubscribed, and ^
Stock Exchange sales begin at substantial
premiums. Wide dealer

colonial "subjects.

among

foreign

colonial position of Euro¬
countries in general is de¬
to teriorating.
The Dutch, who were
supposed to have reinstated their

nomics and. politics, can come
only

,lAn award,

Russia

Wherever

pean

More Private Enterprise

given

available.

many

(229)

Stone & Webster Securities Corporation
White, Weld & Co.

Thursday, July 17, 1947

THE COMMERCIAL & FINANCIAL CHRONICLE

The Petroleum Industry
Securities Salesman's Corner

than $4 billions in

demand

By JOHN DUTTON
It

opportunity

Another

again!

happening

ing of optimism. Last September when stock prices were tumbling
and prophets of disaster held the stage, many amateur investors and

What started

professionals as well joined in the chorus of despair.
out

of con¬

normal correction of prices, after almost five years

tinuously advancing markets, turned into a national cataclysm
in the

of many securities over-discounted the

case

in the business situation as well as the

at work

for

limited time the

that

corrective forces

stock market.

that
psychological factors surrounding the declining

v/ith

heads

Saner

experience

behind

them

were

Record

profits

make

yourself and your clients is now at hand as public psychology
turns once again from pessimism about the business future to a feel¬

for

aware

President of American Petroleum Institute, says second largest industry will expend
1947 and 1948 for new and improved facilities. Points out wartime peak of
for petroleum products are exceeded and will continue to grow.
*

Wm. R. Boyd, Jr.,
more

oil

President

prices in

fundamentals win

But

effect for

abnormal manner.

out in the

limited time only.

end.

Mob

psychology has its

During the past three months (since

evidence that securities have been going out
of weak hands into those that are strong. Those who were faint of
heart have been leaving the market—of course they will come back
when prices are substantially higher.
:;V.«
about April 1) there is

excellent 'guide posts which indicate
that the bear market has ended. PUBLIC THINKING HAS BEGUN
TO CHANGE FROM BEING FRETFUL OVER THE FUTURE TO
There

are

also

two

very

building, re¬
modeling, planning, solving problems instead of retrenching.
The
demand for goods is not subsiding and it looks like it is increasing.
The prophets of gloom, even those in government circles, have almost
quit howling. Inflation is once again on the front pages instead
of deflation.
Too many people have tried to buy a new car and
have discovered they couldn't do it without paying an excessive
CONFIDENCE.

Public

men

are

again stressing

once

penalty. People are working and they have money to spend. Cor¬
porate earnings are not only holding up but they are increasing,
especially in the HARD GOODS AND SEMI-HARD GOODS lines,
heavy industries and the railroads. Beneficial legislation regarding
labor has been passed which, for the first time in 15 years, shows a

than twice

mile, and

mar¬

cost more
in prewar:

now

much

Largest Expenditures for New Oil

Petroleum In¬

Reserves

stitute,
nounced

uoiiars

ment

survey

division

alone

the

period, and the total
the entire indus¬
try in this category probably will

William R. Boyd, Jr.

for

account

around

45%

the

overall capital

is based

will

investments
four

division of the

industry, all of which with the ex¬

ception of crude oil production,
at practical, or close to, maxii
mum operating capacity.
On the
basis of reporting company fig¬

are

approximately

will

duction
oil

new

reserves

the

pro¬

for

through explor¬

atory operations, where costs have
shown

threefold

compared with 10
cause
of:
(1) the

increase

be¬

ago

years

necessity for
deeper drilling and (2) the need
drill

But

spite

remote

of higher

places.
the

costs

industry has continued its outlays
for
such
exploratory operations

and, in fact, these will be at rec¬
ord levels in the current year.

the first five months of this year

billion they

two

outlays.
primary importance in

in the oil industry,

in the period totaling'more
than three billion dollars.

ures

spend

will

dollars in the

two-year

lays

the

billion

amount spent by

of a number of companies
out¬

example,

one

production

1947-1948

Capital

for

close to

which have actually budgeted

made

15% ahead of the previ¬
a total of
exploratory
wells
was

ran

peak in 1946 when

dollars will be used in production

ous

(including exploration and the ac¬

4,518

quisition of prospective

drilled.

ing lands); slightly more
billion

lars

one

of 407,000 barrels-a-day of
capacity. Of this total, 100,represent replace¬

years

fineries, while the remaining 307,000 barrels-a-day will represent
new
and additional refining ca¬

panies,

second largest.
j
projected capital invest^

states, has

000 barrels will

finding and developing of new
oil reserves.
One group of com¬

the country's
The

the

eighteen

oiiiion

nounced

The largest expenditures in 1947
and
1948 will be in production,

0 n

June 23.

about

throughout 36
already an¬
plans to initiate con¬
struction
within the
next two
scattered

fineries

new

an¬

hundred

oil-bear¬
than one

million

Total well drillings of all

kinds

dol¬

by the industry this year will ap¬
refining; about four hun¬ proximate 35,000, including those
dred and forty million dollars in for,
exploratory purposes. This is
chology of the market place. Although all is not perfect (it never
transportation; approximately four a new all-time peak, which would
is), there are many reasons for believing that with all the ills which hundred and eighty million dolr
be
exceeded
if more
materials
abound in this world the next few years at least will usher in a lars in
marketing, and about sev-. were available.
Total wells, on
very high degree of business prosperity for American business and
enty-five million dollars fc^r mis¬ the basis of figures for the year
for the investor^ who have confidence in good securities.
THE cellaneous purposes. *
to May 31, were
running 5.2%
LEADERSHIP
OF
THE
MARKET DURING
THE PAST TWO
A sizable portion will be used ahead of the same
period in 1946.
MONTHS GIVES EVERY INDICATION THAT THE FAMILIAR
also for progressive research with
In producing oil, conservation
PATTERN OF PAST TURNING POINTS FROM BEAR TO BULL
an eye to the development of new
measures,
sponsored
and
sup¬
MARKETS IS BEING REPEATED.
The blue chips are leading the
and improved products, including
ported by the petroleum industry
market upward—this type of leadership has never failed to indicate
v^ork on processes for the conver¬ also play an important role in the
recovery is on in earnest.
sion of natural gas and coal into
higher capital investment which
This has not been written as a market letter. The writer lays
liquid petroleum products.
:
j are contemplated.
Such conser¬
no claim to
professional analytical soothsaying. It is just the way
Funds for the major part of this
vation, which is designed to pre¬
we see things as an ordinary security dealer after reading as much
expansion
program
will
comd vent waste and increase recov¬
as we could digest concerning what the so-called experts had to say.
from
earnings
to
be
"plowed eries
from
given
fields,
has
It is also a fact that after you watch the parade for a number of
back" into the business and a part,
approximately doubled the
re¬
years you get a certain feel about things which in the last analysis
probably, will come from new covery of oil from wells as com¬
is based upon past experience.
If we're wrong in our timing now,
financing.
pared v/ith wide-open productioh
there is one thing which seems to even bolster the foregoing opinions
Several factors account for the in the early 20's, but has required
to a greater degree than would otherwise be the case and that is
industry's current record expendi¬ greater capital expenditures.
that sooner or later, before the end of this year, the bear market
tures.
One is the unprecedented
WILL be over if it hasn't ended already.
growth in demand for products 30% of New Capital for Refining
The markets are full of buying opportunities on the exchanges,
which
has
reached
levels
far
and over the counter. The securities of good sound companies that
In the refining division of the
higher than had been anticipated,
have suffered abnormal declines have not begun to move upward
industry, close to 30%
of the
and another is inability to proceed
YET.
NOW IS THE TIME TQ CALL THE ATTENTION OF YOUR
total capital outlays during 1947
with normal expansion programs
CUSTOMERS TO THESE SITUATIONS. In some cases only a few
and 1948 will be made. The costs
because of the war.
Postwar re¬
hundred shares are hanging over the. market and: when some hardy
of new construction in this di¬
strictions on essential
materials
stock buyer with red blood in his veins, instead of water, goes out
vision are about three times those
still continue and will remain for
and cleans them up at bargain prices, others will gradually climb
of 1936 and seven times those of
some time to come.
Today there 1916.
on the
Modern
bandwagon and before you know what has happened one of
equipment
in¬
are
shortages of steel, drill and
the best money making opportunities in years will have passed into
cludes
highly
complicated
and
line pipe, and most of the other
history.
■;
■
;i
specialized units such as catalytic
materials needed by the industry,
If this isn't a sales talk that you can pass along to your cus¬
cracking plants which have made
From the standpoint of demand,
tomers that has some common sense behind it, then the sparks fly
important contributions to
the
wartime peaks, which were not
downward from a fire and the sun rises in the west instead of the
yield
and
quality of gasoline;
expected tp be approached for
east.
Some people need a push (most of us need it); how about
polymerization plants which make
several
years,
actually
were
possible many thousands of bar¬
doing some pushing that has some sense behind it. The way to keep
topped in the latter part of 1946
rels daily of high quality gasoline
customers who own securities at much higher prices is to MAKE
and the upward spiral has contin¬
from refinery gases which, in the
THEM BUY MORE WHEN THEY ARE CHEAP.
But before you do,
ued into 1947.
Such demand-cre¬
make sure they are worth keeping.
*
*
past, were wasted or burned as
ating factors as high employment
July may be vacation time but two weeks of solid work now and income levels, rapid installa¬ fuel; and alkylation units, a rel¬
atively recent development, which
may be worth a month of effort later on.
tions of oil burners and
swing of the pendulum away from labor extremism. The bold facts
of economic reality have at last overcome the pseudo bearish psy¬

$30,000
facilities

keting

American

Spring of 1946 were more important
An outlay of
market factors than the underlying state of business itself.
The this
magni¬
power of the written and spoken word that motivated the broad tude
in
the
public interest in security speculation was one of the most distin¬ two-year pe¬
guished characteristics of the past bull market. Whenever a Broad¬ riod will rep¬
way
columnist becomes standard listening on Sunday nights for resent more
professional securities men, just because they did not dare to miss than *22% of
what he had to say due to the potential effect of his words on the
the total in¬
stock market the following day, a peculiar market psychosis exists
vestment
0 f
which effects security

cost

now

Jr.,

Boyd,

the

<y-

prod¬

William

ucts,

ensued since

market which has

the

capital investments of more than four billion dollars will be made by

petroleum industry in the United States in the two years of 1947 and 1948 for new and
improved facilities needed to serve the soari ng public and industrial demands for all kinds

worn-out re¬

ments of obsolete or

pacity.
Announcement of other
new
plants is expected in the
not-distant future.
While the industry made sub¬

in facilities for the

the war
manufacture
ing

needed to
as

dur~

capital investments

stantial

special products
prosecute the war, such
of

gasoline,

high octane aviation
and others, this

wartime

toluene

capacity has not added appreci¬
ably to civilian production capa¬

although it has made pos¬
in product quality.
In the field of transportation,
where the industry has been re¬
sponsible for developing its own
unique facilities in pipelines and
tank ships, as well as barges, tank
cars and tank trucks, roughly 11%
of thfe industry's outlays will be
used. Marketing, which takes m
service stations and bulk termin¬
als of the oil companies, will con¬
sume approximately
12% of ex¬
penditures, with the remaining
2% to be used for miscellaneous
city,

sible increases

purposes.

Club Hold

Outing

COLUMBUS, OHIO—About 60
members of the Columbus Stock
and Bond Club frolicked in the
outdoors
at
the group's annual
<-

picnic at the City Club country
grounds. The fun started at 3 p.m.
and lasted until

midnight.
and

William

Pryor of Vercoe and Co.,

and John

Walters

Leland

Albin of the Ohio Company, were

arrangements for the
games took up

in charge of

Various

festival.

with

most of the afternoon

softball

scrub

the highlight.

game

outing ap*

Pictures taken at the

elsewhere in this issue of the

pear

"Chronicle."

•

Regent Securities Formed
CANADA

SASK.,

REGINA,

George D. Raymond is engaging
in the securities business from of¬
fices

1747 Scarth Street,

firm

the

name

under

of Regent Securi¬

ties.

diesel

Russell Bath With Loewi
Snecial

The

Financial

MILWAUKEE, WIS.—Russell J.
Bath

has become

Loewi

Co.,

Street.

was

Newburger, Loeb Adds

Chronicle

associated

with

225 East Mason
formerly with The

Newburger, Loeb & Co.,
bers of the New York

becomd

Milwaukee

the

Company and prior
Piper, Jaffray, &
Hopwood of Minneapolis.

Stock

Ex¬

change and other Exchanges, an¬
nounce
that Bromley Krein has

thereto

with

mem¬

associated

with

the

firm

registered representative in
main

office

Broad

Street, New York City.

Special

The

Fin»ncial

Chronicle

CHARLOTTE, N. C.—Samuel E.
Fort

Thomson

now

connected

with

McKinnon, Johnston

Building.

Louis Rogers Adds
(Special

The

Financial

Chronicle)

ASHEVILLE, N. C.
Chester
Brown, Sr.,
is
with
Louis
G.
Rogers & Co., Johnson Building,
Charlotte, N. C.

convert
ents into

demand for travel by automobile,
together with heavy industrial and
foreign demands all combined to
lift the total far in

other

fining

excess

of that

labor-and material costs all along
the line as compared with prewar

the

Developmental
producing oil are far-in
costs

cost

one

com¬

the
re¬

the

dollars

are

quired to put their ideas into op¬
eration."
But in most instances

higher costs have been offset
quality and more im¬

excess

portant products, and prices have
been
maintained
at
reasonable

$12,000

mile

with

Waldron

Co.,

previous¬
ly with Capital Securities Co.
Young Building. He was

With Flynn
SAN

& Levitt

FRANCISCO,

CAL.—Jus¬

tice B. Detwiler is now connected

Levitt, whose main
located
at
411
West

with Flynn &
office

Seventh

Street, Los Angeles.

re¬

prewar-'years;

which

costs

refinery
equipment which cost $400 a bar¬
rel of capacity prewar now costs
more
than $1,000 a borVel: pir>o„
lines

President

techniques;
"The
more
wonders
our
technologists per¬

form,

nected

Special to The Financial Chronicle

recently stated anent
progressive developments in

expected.
Accounting in part for the high¬
er expenditures, too, are increased

Chronicle)

The Financial

FRANCISCO, CAL.—Ar¬
Atwood has become con¬

SAN

gasoline.

the

thur F.

constitu-

gaseous

pany

years.

With Thomson, McKinnon

en¬

gines, widespread farm mechani¬
zation, an almost insatiable public

Joins Waldron Staff
(Special

better

Joins Ted Weiner Co.
(Special to

SAN
ron

Weiner

The Financial

FRANCISCO,
Summers
&

!■

Chronicle)

CAL.—By¬
with Ted

Co., 41 Sutter Street.

levels.
A
the

recent

survey

discloses

that

industry,
which comprises close to 500 recountry's

refining

Edgar R. McGregor Dead
Edgar R. McGregor, partner in
Parrish & Co., died on

July 3.

Volume 166

Number 4612

THE COMMERCIAL & FINANCIAL CHRONICLE

(231)

Popular Economic Misconceptions Warns

President, Standard Oil Co. <N. J.)

Deploring economic illiteracy, Dr. Surface points

out popular misconceptions regarding competitive pri¬
enterprise and nature of profits. Points out higher living standards can be accomplished only by
increasing individual output and efficiency, and this can be obtained largely by better management

Lehman Plummer, Vice-President of Central National Bank and
Trust Co. of Des
Moines, tells furniture dealers twice as much
money is needed by them in instalment financing as in past.

vate

skill.

Cites

relatively small part of national income that

into profits.

goes

At the moment many

people are dissatisfied and they are tending to look back on
the days when the
government did the planning and gave the orders as the golden era.
Many of our people are beginning to question whether it would not be better for the gov¬
.,

ernment
run

our

than

omy

"(2) The

econ¬

continue

with

private

com¬

increase

for

their

them

workers

standard

the

money

for

way

get

living

company

the

already

petitive enter¬
prise. The evi¬

making."

dence and

ex¬

tent

this

showed 31% saying produce
more;
38% saying get more of the com¬

The

leaning to¬

pany's money;

wards

social¬

and 8%

ism

shown

clearly
certain

very

made

surveys

the

Psy-

chological
Corporation,

Or. Frank M. Surface

mAn

May, 1947
they asked the following question
in
.

were

completely managed by the Gov¬
ernment
instead
of
by private
management as at present, would
you

get

Igss,

for your dollar, or

showed

that

this

answers

question
thought they

20%

would

get

tinder

government

for

was

their

dollar

management;

their understanding of our economic system. The further fact
that another 23% thought this was

one

of the ways of

improving their
living is still, more

disturbing.
with

Research

white collar and manual workers,

"Just

rough

peacetime?"

Eleven

regard this result as
representative sample of our

can

population,

then

one-fifth of

approximately
people would be

our

willing to substitute
socialism

for

form of

some

private capi¬
talistic democracy which has made
this country the envy i of all the
World-—a system which even in
the depth of the depression
gave
our
people a higher standard of
living than the peoples of other
countries

our

knew

ever

even

pe¬

riods of their greatest prosperity.
It is perhaps too much to
expect
that any great number of

ple

can

be
t

our

peo¬

made to understand

the implications and repercussions
of

increased money supply, of
enormous public debt and an

onerous

tax

system

Here 40%

eighth grade education.
The
ramifications of banking and fi¬
nance
are
difficult
enough for
of

some

cofnprehend

v/ho

the United States

Important
too

worried

this

the

over

not

outcome.

prevent any serious consequences
from such lack of economic
under¬

standing.

income

from 3 to 41/2%.
In only two years in the last 20
up to 1946 have profits averaged
much

But there

are

certain other

stood and with respect to

eco-

these I

very much
more
concerned
for the future. These
can best be

illustrated I believe by the results
of a recent
survey by the Opinion
Research Corporation of Prince¬
ton, N. J. The following question
asked

1,118

manual

section

cross

workers

manu¬

facturing industries:
"Which

the

wer?

you

two
improve the
standard

think

nearly correct?
•

all workers

improve the

living is for

to produce

sales

the

profits

more.

by Dr. Surface be¬

National

Association

Personnel

Directors,
City, July 2, 1947.

New

York

just

isn't

while.

someone

took it all there

enough

This

was

Hitler's

worth
method

-enriching the German nation.
He was
going to take it from
Even if he had

someone

else.

the

he would

war

not

have

won

suc¬

How much better off the

German

people would have been

if their energy

had been directed
production of

increased

toward

consumable commodities!

cern

con¬

evidence that

I just finished saying, if
don't think that money is one
of your added problems; .let mo
review a few things that might

the

fact

not

b e

"and
make

stores

for

satisfactory

rangements
tal to carry

please

the

don't

the

financing

ar¬

happened?

yourselves,
this problem

background

and

say

lem is

buying and merchandising,
that financing is a secondary
eas¬

only

nanced you may

way

to increase the standard

living of the workman, or of
else, is to increase the out¬
man.
One can write the

time,

want

are

trying to eke.out

(Continued

on page

This is under

solicitation

exis-

35)

•

that many

know
back

and

say

that

you

this

will

now
more

are

offer to buy}

any

too numer¬

The chances are

quently, you are going to carry
inventory consisting of a great
many more articles than you ever
carried before, and with the in¬
creased cost of this inventory you
are going to find that your dollars
and .cents
investment 5is
much

sit

larger than you ever experienced
days."

in prewar

situation

circumstances to be construed

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

as a

NEW ISSUE

July 17,1947

each

1945

60,000 Shares

3.2

figures

for

while

but

5.0

larger, dollar
greater and it h
were

cents

much, i!

out

$2.50 Cumulative Preferred Stock

each

sales dollar.

Profits related

Par Value

invest¬

total

what

$50

higher percentage, running

net worth show

some¬

in recent years from 6% to 8%.
Let

also

picture from
The

look

still

this

Price $52 per share

profit

another

angle.
reports for

plus accrued dividends from July 1, 1947

Treasury
preliminary figures

-f

1844 and 1945

for

all

net

profits

active

after

corporations

$8,965,000,000 and $7,440,000,000

respectively. While I have

seen

Copies of the Prospectus may be obtained from any of the several

lot of money, but like

only in States in which such underwriters are qualified to act as
dealers in securities and in which such Prospectus may legally be distributed.

everything

else it should be considered in

re¬

The First Boston Corporation

lation to other figures.

The U. S.
Department of Commerce reports
that the total income payments to
individuals in 1946 were $164 bil¬
lion.
tion

Thus

$10 billion corpora¬
profit would represent only
of

come to

all

the

total

amount

individuals. And of

Blair & Co., Inc.

Dick & Merle-Smith

Incorporated

Graham, Parsons & Co.

Paine, Webber, Jackson & Curtis

Reynolds & Co.

course

Pacific

William R. Staats Co.

Company of California

the

and

the business

modernize

the

average

equipment

dividend

corporations

over

recent

payments by
have amounted

about $4,500,000,000.

Boettcher and

Company

Julien Collins &

Peters, Writer & Christensen, Inc.

Company

ex¬

which in turn provides more and
better jobs for more workers.

years

A. C. Allyn and Company

Shields & Company

in¬

corporation net profit
does not go to individuals. A
very
large part of such profit has to be
pand

under-

writers

corresponding figures for 1946, it
is probable that they will exceed
$10 billion. That, of course, is «-

all
to

Compare this

figure with total annual wage and

Bosworth, Sullivan & Company
First California

Company

Incorporated

Hill & Co.

Stroud &

Company

store

are

if profits

above

an'\

they

great

not going to elimi¬
any
of these departments
that furniture is becoming
readily available.
Conse¬

you

nate'

mention.

that

statement that most of you, large

put per

furniture

Your

departments that
ous

be at the present
to make the flat

anyone

today probably includes a jew¬
elry department, a sporting goods
department, perhaps ladies' readyto-wear, perhaps a shoe depart¬
ment, perhaps a larger houseware
department including the sale of
power lawn mowers, motor scoot¬
ers, etc.,
perhaps a dozen other

ily you may have handled this
phase of the business in the past,
and regardless
of how well fi¬

drug

drugs.

yourself that your first big prob¬

problem. Regardless of how

sell

factories to war work, you
found yourselves with a dwin¬
dling supply of merchandise. What

paper

push

conversion

the

and

have had the capi¬

same

only

many

have been able to

you

used

However, with the advent of war

Lehman Plummer

you," Mr. Plummer stated,

that

war

furniture, just the

has

e n

problem
most of

ran

that

think otherwise. Prior
a
great many of you
furniture stores that only sold

the

spite of

few people seem to understand
the very basic concept that the

your

"As

sales

financing

into

have

make you

"In

the

you

worries

you

past.

and

things that must

most is the

capital

when

worry

other

many

merchandising problems.

finance

In 1944 average
and

also

were

On
*An address

fore

sales

reinvested in

-"(1) The way to
workers' standard of

living

try to take it from
Even if

3.6 cents out of each

Comparable

doubtful

out

1946 are not available,

6.1%

following

ideas about how to
American workers'

living

cents

dollar of income.

concepts much simpler to
grasp which are also not under¬

was

profits

taxes

-fiomic

need

than

to increase the

standard

else.

will

available

hand—or

this

with

consumers

instalment

cash

average

indicating total

Ignorance Regarding Profits
v.-

Treasury, shows

that profits v.*:en related to total

ment

have faith that our economic
sys¬
tem will adjust itself in time to

not to

ing

credit—and therefore why bother

seli-

concerns

apply to you because you
amply financed, have plenty

are

business

such

Standard

way

warned

that

earn¬

ings of all active corporations in
the
United
States, ?'numbering
around 443,000 and published by

lhave had greater educational ad¬

vantages.

people

are.

dollar

than

or more.

these

The official record of the

cate that some 45%
population have had

adult

Clearly the
workman's

Iowa,

—

does not

Moines,

dollar

our

Living

of Des

Man-Hour Output. Determines

<£

Trust Co.

and

cents.

labor

National Bank

small, are going to be scratch¬
thought profits exceeded 50 %. whole
history
of,
civilization ing for money within the very
When workers have such
ideas
near future, .and
around the increase in production
you better start
about profits it is only natural
looking around to make arrange¬
that they think they ought to be per man. Today we liave millions
ments for either additional capi¬
receiving a larger share.
? >
r of workers in Japan, India, China
tal, new or increased borrowing
.It is hardly necessary, before and other countries
living in pov¬ limits, or arrange for the discount¬
this audience, to point out what
erty dhd squalor! The reason is ing of your time sales paper. I
profits actually

their

no more

25 %

were

which

asking.

Speaking before the National Retail Furniture Association in
Chicago on July 9, Lehman
Plummer, Vice-President of the Central

even

daily lives. After all, reports indi¬

upon

of those interviewed

percent

increase

wage

One of the

what

guess

percent profit would you say the
average manufacturer makes
in

;

unions are

•

thought profits

quite in line

are

earlier survey by Opinion
in which they asked of

ceeded.

These results

did not know.
,

from

away

else is a sad commentary

someone

36% thought they would get less;
14% thought the same and 30%

•

take

viz:

the same?"

The

thought that the

to improve their standard of

living

would only be increased by
about 4%. This is hardly the kind
pay

23%

manual workers
way

it went to the wage earners their

fact

standard

nationwide survey:
"If all these companies
a

question

salary payments of $106,600,000,000 and you can see that if all of

saying both,
opinion. »
that 38%
of
these

had

The

this

answers

High Price Effects
On Consumer Credit Financing

By FRANK M. SURFACE*
Executive Assistant to the

Newhard, Cook & Co.

Incorporated

Mackall & Coe

THE COMMERCIAL & FINANCIAL CHRONICLE

(232)

low average gain in liquidating
value (per share), nevertheless,

Insurance Stocks

—

Price

Change

128
-

Continental

47%

19%

+39.3

40%

+27.2

170

American Insurance

491/2

171

160

Aetna Insurance

comparative study of the increases in liquidating values ot
different fire insurance stocks over a period of years is of special
A

59%-

+48.8

—16.7

4.0%

—

significance to the long-term investor. Mathematically; the liquidating
value (stockholder's equity) of a fire insurance stock is the sum

Fidelity-Phenix
Fire Association

128

f60

capital, surplus, special reserves (if any) and 40% of unearned
premium reserves, divided by the number of shares outstanding.
Theoretically, tne vaiue tnus de-^-r—ttt
uvTTuZlZ'
rived represents the amount a should be compared with the experience of the insurance industry
stockholaer
would
receive
per
as a whole, and with that of other
share in the event a company
should liquidate, re-insure its out¬ companies.
With regard to the third and fi¬
standing policies and retire from
nal factor, obviously management
business. Actually, this is a very

Fireman's Fund

171

993/4

Firemen's Insurance

150

10%
323/4

133/s

+28.9

119

—32.0

146

47%

146

29%

293/4

+13.1
+ 1.7

145

29%

149

—

131

35%

Insurance Co. of No. America.

137

70%

97%

+38.8

National Fire

109

61%

—21.6

116
129

83/4
.28%

122

.79%

137

conservative

valuation

most

has

control over the stock mar-

feet. However, selection of secur¬
for experience over many
ities, diversification of investment
years indicates tnat the 40%-of
unearned premium reset-Ves used risks, the proportioning of a port¬
folio and its modifications to meet
in the formula is too low, and fur¬
tasks
thermore, the older companies changing conditions, are
whicn
require managerial skill
have widespread and well estab¬
and judgment. A wisely planned
lished agency systems worth sev¬
pro¬
eral tens of thousand of dollars, portfolio of securities will
duce
better
investment results
yet this asset is not included in
than will one less competently de¬
the "admitted assets" of the com¬
signed and managed.
pany and thus in its

cases,

The

It may be of iterest to present

liquidating value of

stock

of any specific date is not of
Itself necessarily significant.
But

the

change

in liquidating

from year to year tells

value
revealing

story, for tnis annual change is

compartive table which shows
liquidating values of 22
leading fire insurance stocks have
increased since 1939. The figures

how the

used

Glens Falls

Great American
*Hanover

Insurance

Survey,

beyond
such

management's

the

action

stock

market, the volume of fire losses,
the economic trend, etc. But even
here, superior management can
ameliorate the effects of such
controllable items.

Ihere

un¬

dating value changes, viz: surplus,
unearned premium reserves, and
of securities.

The

annual movement of surplus re¬
flects underwriting results (profit
or

loss), investment income, profit
loss on sale of securities, in¬

crease

decrease

aggregate

market value of investment port¬
folio, dividend nnlicy and taxes.

Practically all of these items man¬
ifest, to a more or less degree, the
skill

and

judgment

index

liquidating

average

^National

40%

between

Dec.

Phoenix
Prov.

manager-

ment.

1939 and

30,

Dec.

30, 1939 to current levels has
been very irregular. The average
appreciation of the 22 stocks is
6.2%
and
the
appreciation of
Standard & Poor's Index, 13.5%.
Only 11 of the 22 stocks, however,
have appreciated in price; 10 have
declined, and 1, Providence Wash¬
ington, shows no change.
is

interesting to note that,
with few exceptions, the stocks
which show market appreciation
are those whose liquidating value
increases have exceeded the 40%

while those which show

average,
market

depreciation

have

liqui¬

With regard to unearned pre¬
mium reserves, a

dating value increases of less than
change here in¬ .40%.

dicates roughly whether the
pany

is gaining

The exceptions are as follows:

com¬

Hanover
or

losing premium

Fire, with

45% gain in
liquidating
value,
depreciated
7.7% in market value; Insurance
a

volume.

The significance

of this

change,, however, is relative, and

Co. of North

EARNINGS COMPARISON

Mentor*

V«m»

Bankers to the Government

Head

Request

York

fttoek

Exrhuurr

Telephone: BArclay 7-3600
T'.Urtvpe—NY

(L. A. Gibbs,

Kenya Colony and Uganda

1-1243-49

Manager Trading

Dept.)

Insurance

Washington

—

156

26, Bishopsgate,
London, E. C.

Capital
Paid-Up Capital—
Reserve

-£2,300,000

The

*U.

Fire

Average of 22—

Bank

conducts
every
description
banking and exchange business

also undertaken.

Predicts

BUTLiff HUff S CO.
SHIM*JT2EET

TELEPHONE TRINITY 7171

Sales Service

»3)iuct tuJl
ROSTON

•

Cenmct'inj

NSW YORK
CHICAGO

DALLAS

•

24%

—12.4,

receive only a Certificate issue or
its

•

PHILADELPHIA * OETROIT
•

ST. LOUIS

SAN FRANCISCO

•

SEATTLE

equivalent/All

indications

continue to point in that direction.
"Sometime during the coming
week

expect to send to our of¬
supplemental
information

relative attractiveness
term

1.9

issues

marketable

longera

versus

non-marketable issue of the type

Treasury might design
buyers." ..

the

for institutional

n. c.

+47.9

113%

Special to The Financlal Chronicle

0.5

—

121.3

With A. Lepper Co.

7.0

—

106.9

tnat

+13.5%

dated
11, fur¬
ther
analyz¬
ing the effects
ment,

terval

July

cates issue closest to 90

the

OHIO — Justin
CINCINNATI,
Meyer has become associated with
A. Lepper & Company, First Na¬
tional Bank Building, members of
the
Cincinnati Stock Exchange.
Mr.
Meyer was formerly with
Weiss, Work & Co. and Merrill
Lynch, Pierce, Fenner & Beane.

(the

order

the

Federal

Com¬

mittee
n a

t i

pegged
buying
and

has

bid,
The

have

2%s

taxable

frequently do not reflect, in their
A. G. Lanston
chase
privi¬
price movements, the size of the
lege on Treas- V
demand.
During the past week
ury Bills.
The following is the this demand has been unusually
text of Mr. Lanston's statement:— large.
letter of July 3 we an¬
alyzed certain phases of the* un¬

writing of this letter

market has had

Abraham

chance

indicate its reaction to the unpeg-

longer

the

issues,

investor

the

opinion.

of the

rest

the

have been

closed

the

"This

causes

Incorporated by Royal Charter 1727

OFFICE—Edinburgh
throughout Scotland

Bishopsgate, E. C. 2
Smithficld, E. C. /

Charing Cross, S. W. I

Burlington Gardens, W, /
64 New Bond Street, W, I

TOTAL ASSETS

£115,681,681
Associated, Banks:
Williams

Deacon's

Bank, Ltd.

Glyn Mills & Ce.

State

the

our

July 3

await the com¬
plete-unpegging of Treasury Bill
maturities (October+947) before
acceding to any unpegging of Cer¬
tificates.
The most cautious or
reserved observer should not need
cautious,

additional

New

and

cash items in

collection

United

•

our

Government

overdrafts)
Banking
premises
owned,
none;
furniture
and fix¬
ing

$51.04

and

tures

5,456,491.72.

15,452,305.43

—
LOO
—127,622.26

vaults

assets

ASSETS

TOTAL

8,566,975.97

———

$36,086,931.56

LIABILITIES

deposits of individ¬
uals,
partnerships,
and
$20,064,589.01
corporations
Time deposits of individuals,
partnerships, and corpora¬
5,908,718.19'
tions .———:
-——Demand

Deposits

States

United

558,877.98

Government

Deposits

and

States

po¬

5,720,442.18

subdivisions

litical

Deposits

insti¬

banking

tutions

395,527.57

———--—

Treasury

636,057.22

TOTAL
DEPOSITS $33,284,212.15
180.453.74,

Other

liabilities

TOTAL

$33,464,665.82

LIABILITIES
CAPITAL

ACCOUNTS

$1,000,000.00

Capital t
Surplus fund
Undivided profits

—

AC¬

CAPITAL

TOTAL

COUNTS

750,000.00
872,265.67

———

$2,622,265.67

TOTAL LIABILITIES AND

ACCOUNTS— $36,086,93L56

CAPITAL

institution's

tThis
common

stock

with

of
of

capital consists
total par value

$1,000,000.00.
MEMORANDA
Assets

pledged

for

other

assigned

liabilities

secure

and

purposes-

—

$4,319,247.03

WILLIAM D. PIKE, Secretary of the
institution,
hereby
certify
that the above statement is true to the
best of my knowledge and belief.
L

above-named

WILLIAM D. FIKB

recommendation

longer-term

$6,483,535.18

——

States

strength of the market has

validated
that

process

obligations,
direct
and
guaranteed ———
Obligations
of States
and
political subdivisions—_—
Loans and discounts (includ¬

other

words, the reason and logic which
last week argued against any im¬
minent unpegging of Certificates
has been weakened by the mar¬
ket's unusual strength during the
week.
The Treasury, particularly
if further strength appeared in its
securities, might feel under addi¬
tional pressure to consider
the
unpegging of Certificates at some
earlier date than we had sug¬
"The

York.

balances with other
banking institutions,
inreserve
balances,

proof of the Treasury

gested.,

1947,

eluding

might

resilience.

New York,

June 30,

ASSETS

to temper one

made in

Other deposits (certified and
officers' checks, etc.)——

letter: that the Treasury, notably

Royal Bank of Scotland

of business

accordance with a call made
by the Superintendent of Banks pursuant
to the provisions of the Banking Law of

un¬

pegging of Treasury Bills.
of the guesses

published in

market is

concerned the history book seems
to

Company
50

general

yields of shorter Certificates con¬
stitute an impressive performance.
It' appears that the first offering
of an unpegged Treasury Bill is¬
sue was all that
was needed
to
far

CONDITION

Broadway, New York 4,

breadth of the demand for nearly
all of them, and the decreased

crystallize

for many

Co.

Underwriters Trust

"The relative price advances in
some

REPORT

Other

our

pegging of Treasury Bills; drew
some implications with respect to
the unpegging of Treasury Certi¬
ficates; discussed possibilities of
the September Treasury refund¬
ings, and recommended the pur¬
chase of longer-term eligible and
ineligible Treasury securities at
the then prevailing markets.
the

He was formerly associated

advanced

While the

repur¬

"In

Street, New York

City.

1960-65 Cash,

%
of
1 point.
longest bank ineligible
issue has advanced only 1/16 the
markets for such ineligible issues

the
%%
rate

day term

in yield/

5 West 73rd

have advanced % of 1 point.
The
bank eligible 2%s of 1967-72 also

termi-

Oct.

due

one

partially

Open

Market

(since July 2) the Certifi¬

decrease of .10%

is engaging in

A. Stern

the securities business from offices

with

next)

Alfred A. Stern Opens
Alfred

years.

moved from .80% bid to .70%

recent

TELETYPE: IA-JTT. LA :»

Analytical and

—30.0

Early Unpegging
Of Treasury Certificates

CALlfOlt Nix'

LOS AH6EIES 14, CUIFORItli

Markets-

As a supplement to his letter dated July
3, (published in the
"Chronicle" of July 10, page 20), Aubrey G. Lanston, Vice-President
of
the
First
<s>
—r-^~—-————
—
Boston Corpo¬
ging of Treasury Bills, and to ar¬
rive at its estimate for the uripegration, has issued a state¬
ging of Certificates.
In this in¬

WEST

guess

this and related subjects. This
will contain a comparison of the

Aubrey G. Lanston of First Boston Corporation reiterates views
expressed July 3.
Sees larger demand for Treasury bank and nonbank eligible long-term issues.

8 West

BANK STOCKS

our

—22.3

•

210

"We have not revised

that in the September refundings
commercial banks are likely to

273/8

^Parent company basis; all others, consolidated, fPrice adjusted
to reflect 20% stock dividend. $Price adjusted to reflect 5 for 1 stock

Split.

however, that
purchases
or
portfolio- adjustments calling for
the purchase of longer-term se¬
curities give some greater weight
to your estimate of this possibil¬
ity.
investment

fices

+ 6.2%

Standard & Poor's Fire Stock Index.

HEAD

COMPLETE COVERAGE

+39.9

55%

market's

••

7.7

—

140

LONDON OFFICES:

Primary Trading

139

Trusteeships and Executorships

122

£4,000,000
-£2,000,000

Fund—

securities

at the levels

suggest,

new

■

Subscribed

ineligible

#110%

$48

121

Branches

INSURANCE STOCKS

Springfield F. & M

"Since the

Office:

In India, Burma, Ceylon, Kenya
Colony and Aden ana Zanzibar

BROADWAY, NEW YORK 5, N Y.
B*H

be¬

Branches

laird, Bissell & Meeds
1MB

of INDIA, LIMITED

19 NEW YORK CITY
BANK STOCKS
Circular

America, with

NATIONAL BANE

2nd Quarter 1947

—

St. Paul F. & M

value

31, 1946.

Liberty

River

*North

value for the 22 stocks has been
Dec.

Home Insurance

liquidating

increase

average

Fire

Hartford Fire

indicating that the

140,

Market action of the stocks from

three main variable
factors which contribute to liqui¬
are

market-value

The

control,
the

and

purchased

dated

July 11, 1947, and are index fig¬
ures, related to the base of 100 as
a company's entire
operations. It
of Dec. 31, 1939.
The table also
is a composite index of the degree
of success achieved by manage¬ shows the current asked price of
each stock compared with its 1939
ment during the period under re¬
view. Some of its components are year-end price.
of the net end result of

measure

—

+ 3.9

Standard &

taken from

are

Poor's

*Franklin

liquidating

value.

ible

ury,

Liquidating Value
r—Market Price—
(1939—100)
(Asked)
Dec. 31/46
Dec. 30/39 July 9/47

DEUSEN

By E. A. VAN

This Week

ket gain of 1.9%. With regard to
Insurance Co. of North America,

existing.
had
a
.market
appreciation of its gain in liquidating value per Since this strength has appeared
38.8%; Phoenix, with a low liqui¬ share is modified by a 25% capital so quickly, and since it may in¬
crease the pressure on the Treas¬
dating value increase, had £ mar¬ infcTease in 1945.

Bank and Insurance Stocks
t

Thursday, July 17,1947

elig

Correct—^Attest.*■
C. W. KORELL
SUMNER

FORD

JOSEPH B. V.

" 'r

•

^Director*
TAMNEY j

The

doubt

still

mind

the

obsesses

the average thinking American of

1947,

the

come

hard

core

fear, which we have learned to
define by the all-embracing term
of "foreign conditions." We ordi¬

real

nary men, without access to

information,

of course delud¬

are

ing ourselves by the
abstract term.

of such

use

So lets come out

with it, and face the fact that we

afraid

only one thing in
the world, the Union of Soviet
Socialist Republics.
I
realize
that
being a stock
broker, and therefore according
to most "liberals" automatically
are

duce

Russia's
racy

approximation

own

dire straits.

must be thwarted

that

leak

can

people of its
honeycombed

police
it is, by concen¬

covite

seen

of their master's lies,

wretched

Europe

ruins

they

saw

the evidence
even

the

less

Dr.

the

against

the

factors

the

feed

gratitude to the USSR.
ing
us
an
opportunity
sound

University of

securities

they

doing

are

lick the world.
If
Jingoism, make the most
;—

nimw

Hill Richards Adds
Special

to The

Financial

LOS

views or opinions
anything Russian
are immediately
suspect. But in
spite of that eight-ball looming in
front of me, I will make a try
at
expressing the viewpoint of

Fascist,

any

have

may

"man

one

street."

the

All my life I

a vio¬
lent, and
partisan
admirer
of
everything
American,
and
one
quality historically shown by the
Americans has always been their

have been

traditional

"guts."
That
any
lick any two other
guys has been our slogan, and by
American

God,

can

bluff

our

called.

What

the

see

has

been

never

and

wonderful

most

humiliation

powerful nation on earth allow¬
the propaganda of a small
group of traitors and their fellow
traveling stooges to bemuse its
thoughts, and dull its courage.

ing

And

Even

what

curtains

are

Russia

afraid?

twin iron

the

behind

from

and

own

our

State

Department, certain facts
leak through, historical facts are
at

our
disposal, and the mighty
panoply of our own transcendent
greatness is spread all about us,

blind to

for the

even

Again

see.

ask, from these facts and reali¬

ties what have

Cer¬

to fear?

not the hollow Russian
monolith, that 30 years ago was
a prostrate nonentity in world af¬
fairs, and has since been ripped
by revolution, two wars, famine
and mortal internal schisms?
Do

tainly

Directors

really think that the serfs and
Mujiks of 1917, under their 1947
tyrants are the equal of our world
shakingly powerful people?
we

The

Statement of Condition

JAMES M. BARKER
Chairman, Allstate Insurance Company

June 30, 1947

MARK A. BROWN

iron curtain is not to keep

Executive Vice-President

from

espying the strength of
Russia, but is a desperate device

THOMAS DREVER

Resources

President, American Steel

by the USSR to keep its weakness
from

Cash

leaking out, and removing
gale of international laugh¬

bogey of Russian terror,
so carefully fostered in each coun¬
try by its own native Communists,
who of course hope to profit capi-

State and Municipal

Mr.

leave

President, Atchison,

Customers' Liability
Letters of Credit

600,000.00

Hall & Ellis

ALBERT W. HARRIS

Acceptances and

Chicago

1,877,472.02

Accrued Interest and Other Resources

The ap¬

STANLEY G. HARRIS

2,219,343.83

Chairman of Executive Committee
*

palling conditions inside the
viet

mausoleum,
two
of

one

So¬

years

bulldog's

eye,

unenviable
and
we

JOHN

spits

the rabbit,

possibility of doubt,
bulldog.

course

obstructionist every

chance,

has

been

time it got

course

vetoes

everything constructive, of

One

achieving serenity

prosperity, because if

group of

the

' - "

i' >■

■

peace

nation

nations such

Western

$ 25,692,337.21

5,692,337.21

USSR's,
ridden

H. MELLINGER

Director, Illinois Bell

General

6,755,700.43

Contingency Reserve

Reserve for Taxes, Interest, Etc.

Telephone Co.

CHARLES H. MORSE
Director, Fairbanks,

3,629,691.07

Demand

Deposits

1,877,472.02

Morse & Co.

Vice-President

PAUL S. RUSSELL

$416,278,490.95
42,575,817.63

President

Time Deposits

458,854,308.58

Total

WILLIAM P. S1DLEY

Sidley, Austin, Burgess & Harper

$496,809,509,31

HAROLD H. SWIFT

as we

Hemisphere,,

Vice-Chairman of Board, Swift & Co.

United States Government Obligations and
at

$31,672,777-68

are

pledged

and for other purposes as

secure

required

the

own

contrast

chaotic,

condition

Other Securities

Public and Trust

carried

STUART J. TEMPLETON
Wilson & Mcllvaine

Deposits

FRANK H. WOODS

permitted by law.

Chairman,
Member of

Addressograph-Multigraph Corp.-

Federal Deposit Insurance Corporation

are
•

prosperous,

FRANK McNAIR
Chicago

12,000,000.00

•

any

cooperate

is to prevent the rest of the world
from

course

It has two objectives.

way.

Undivided Profits

Acceptances and Letters of Credit

USSR

the

refuses

Chicago

8,000,000.00
rr.

Surplus

Co.

McKINLAY

GUY E. REED

the

Capital
:

Co.

B. McCONNELL

President, Sears, Roebuck &

Liabilities

but with inevitably

results

beyond
are

rabbit

John 'l. McCaffrey

President, Internationa! Harvester

in¬

known, I admit that once-inthe

*" *

symptom

the most monumental

a-while

$496,809,509.31

the

feriority complexes the world has
ever

Total

•••<'.

course.

Soviet recalcitrance of

The

past

Topeka &

Santa Fe Railway Company

ARTHUR B. HALL

too

Talk about what?

much.

13,639,073.69

Federal Reserve Bank Stock

the

talk

might

they

Chicago

166,934,082.60

Loans and Discounts

Vishinsky admits he

Tommies

British

USSR

HOWARD W. FENTON

26,720,588.07

Other Bonds and Securities

doesn't dare allow Russian wives
of

Chicago

165,587,504.21

Securities

Foundries

FRANK R. ELLIOTT

$119,231,444.89

FRED G. CURLEY

talistically from the confusion en¬
gendered bv their efforts.
Even

Hand and Due from Banks

U. S. Government Securities

the

ter

the

'"-1,

•,"

'.'•Vv
/%-A.

<5k rX.

■>"

a
,,

»'

poverty-

becomes

Chronicle

ANGELES, CAL.—Clinton
V. Scarich has joined the staff of
Hill, Richards & Co., 621 South
Spring Street, members of the Los
Angeles Stock Exchange.

the

support the

it.

By giv¬
to buy

American

discount,

Push-but¬

world,

necessary

this

holding

fight

world, and lead the world, it can,

the
^tock market to its unjustifiably
low level, we really owe a debt

hundred

gallant

double-crossers
love feast

If the United States of America
can

gestures and fulminations of the
Red colossus are among
major

still

Nazi

Russo-German

of 1939.

Einstein
that, at

the

since their American-

but

hollow

ourselves,

Chicago bears this out.

G. I. Ivans.

those

Should it be true that the empty

authority than

Dr. Hutchins of the

war-torn

than

law.

recent state¬

The

it!

can

ment of

in the

for

menace

Don't let's'kid

years.

minds

et al seem
least for a
great number of years, possession
is
more
than nine points of the

her, we will do so by atom bombcarrying B 36's, and by the re¬
sultant holocaust remove the Mus¬

tration camps filled with malcon¬

tents, who have

unanimous

financed,

Cooler

the
state,

own

jittery

favor

stage, but we have the bombs,
and
planes to carry them, and

in the world wants to
conquer Russia, nobody would try
to invade her. If we have to stop

among

first

is still in the experimen¬

war

tal

Nobody

hint of the desirability of western
civilization

ton

an¬

ders, betrays the Soviet's fear of
external attack.
What nonsense!

Democ¬

and

ioned cordon sanitaire at her bor¬

emphatic. Objective number two is to bleed Europe white
so as to
bleed us white, and re¬

that without more

worry

on,

nexation of neighboring

(Continued from first page)
nagging

encroachment

countries
is another glaring sign of weak¬
ness, this creating of an old-fash¬

Does the Bear .Walk Like a Man?
and

(233)

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4612

Volume 166

even

[THE COMMERCIAL & FINANCIAL CHRONICLE

(234)

Thursday, July 17, 1947

lic is attracted to the

Illegitimate Bear Market
have had only a

(Continued from page 2)
small

of stockholders

percentage

after

Dow

the

caused

theory sell-signal
days of sharply

several

that

excesses

correction of the
in
trading

came

after the war was over. In the de¬

160s' and at

around

present is

180.
,

cline

fall

last

this

Index

re¬

turned to the

the

that

true

that

leve

160

which has held for

tion

had been established

active produc¬

have had

some

Haven't

dustries.

leading in¬

our

had

rather

depression for five years if
look at the production of auto¬

severe
we

mobiles,

homes,

sumers'

durable

and most con¬
goods?
It will
before the pent up de¬

take years

in those industries is satis¬

mand

fied.

The
realization
that
the
"One World" had been
by Russia's uncooperative

(6)

hope

dashed

attitude.

For the first time in his¬

the two strongest countries

tory

acted much like it

it would have

did

1929

1937.

and

June

and

July became rather critical months
in the market's decisions and for¬

tunately
which

have

had

carried

has

the

rally

Index

substantially from its critical level.

covery.

stocks,

would

the peaks

wait until the market

ran

into a

cold

in 1929, 1937 and 1946
these issues topped ahead
of the general market. It was true

market.

sion

This leads to the conclu¬

what

that

has

happened

in
intelli¬

different eco¬ the market may be more
political philosophies. gent action than appears on the
One country seems to be trying to surface. Haven't people been real¬
keep the world in chaos and tur¬ izing that there is a radical dif¬
moil while the United States is ference in the way war-time and
trying to get the world back on peace-time economies affect dif¬
ferent

(7) The

growing

labor unions.

creasing

Their

strength

costs

costs of
have

forced

wages

had much

the

has
with the higher

and

living. However,

we now

labor law which

new

in in¬

success

has
of production

re¬

stricts union activities.
Have We Had

Real Bear

Market?

strange situation makes
people doubt that we have

been in

that

bear market.

had

hull

few

It is true

before

never

favored with

types

there

stocks?
Surely
many
smaller com¬

were

panies that benefited handsomely
during the war. They didn't have
have

good

management,
a
strong financial condition, or a
sales or advertising department.
About all they had to have was a
plant and some equipment and
the government gave them urgent
orders. They had no credit prob¬
lems because the government

This
some

been
that

market

interruptions of

the major uptrend. Never before
had the market advanced for such

paid

them

promptly.
When the war
ended, the outlook for these com¬
panies changed and investors who
had made large profits in those
war-time favorites decided it
a

was

time to weed these issues out of

their

portfolios

funds

into

benefit

and

securities

most

from

to put their
that would

peace-time
What these indices have
it did between
been saying is that people are still
November of 1943 and
February
of 1946. Even in
strong bull mar¬ willing to take a risk in their com¬

long time between corrections

economy.

of 10% or more, as

market

our

there has been a longuptrend in the market that

averages
term

evident from

354

Standard

the

used

the

Poor's

and

chart

stocks

industrial

average.

eliminate

the

unusual

bull

the

market lower

have gone,

than

between

through
the last

47 years.

During May this Standard and
the

bear market uptrend

while

100

came

the

line

upper

parallel line is around 200 where
we might expect the market to go

during the enthusiatic bull
In

ket.

other

the

words

mar¬

market

in May reached a level that was
only 17 points from what should
be a pretty solid level of support
during a depression year and we

83 points from a level

were

where

low

point

and

the

would

upper

around

be around 290.

It is

that a
working under

to forget too

easy

year ago we were

difficulties in

some

our

economic

setup which have been corrected.
No doubt the

lowed

the

pessimism that fol¬
in the market

decline

tic

realize

by looking at the trend of various averted the excesses that might
groups of stocks during the past have come if the stock market had
year.
It is difficult to call this a advanced.

substantial

corrections
created

excesses

during

The

same

conclusion is reached

these

caused

bear market in the

oils, chemicals
in general, the higher priced
stocks.
It is equally difficult not

tnan

higher

was

Thp

for

the

November

holdine

t'ff.s

establishment

long-term

capital gains
throughout market

can
be
history.
Back in the 1920'sy the holding pe¬
seen

riod

was two years. „This created
two year cycles in the market, as
seen
by the rallies from 1921 to

1923, from/1924 to 1926, and from
1927 to 1929.
In-between those
rallies

the

market

consolidated

hesitated

corrections of

wave

Back

and

its

the

1930's the holding
establishing
lower
capital gains were 1 year,

periods

for

some

abuses.^ It also
caution

that

A good

example of this is the
most retail organizations im¬

2 years and 5 years.

By 1937 when

that bull market ended there

three

were

investors

groups

who

able to sell and not pay rates
short-term profits. They were

were
on

the people who had bought at the

bottom in
935 low

1932, af-the important
point and after the sharp

break

their

lows

able

were

followed

long-teroai^gains.

the law

turned around and

they

pressed
started

short

(in relation
market

the

As a

stock short.

sell

sold more stock
to total sales)

approaching

was

the bottom, than they had at any
time in the last nine years, or

figures
were
first
Interestingly
enough

these

since

available.

during that nine year period there
have been five periods when the
amateurs sold a great deal of stock
Each

short.

time

happened

this

the market was near an important
level

which

from

worthwhile

rally developed.
The importance of these figures
is due to the fact that wealthy
.

traders who accumulate large po¬

must watch for

sitions

time to

buy when most people are willing
to sell.
They must then wait for

opportunity to liquidate their

large positions when most people
gre
bullish and willing to buy
them.

Action of

been

also

has

•

American Tel. and Tel.

This

reassuring.

unusually weak not far
from the bottom. Of course this is
stock

was

grade issue but we must
is also widely

high

remember that it
held by

the women of the country.
than the

When it is much weaker

market, it suggests that
holders are
getting bearish and it is generally
a good
sign that the market can
general

these more emotional

bought.

....

objective for the market
in 1947 I would pick the 195/-205
area.
Often when the averages
have moved in a trading range,
As

for the last ten
will tend to move
about the same number of points
in the direction they move
froJ"
have

they

months,

trading range.
This would
out to be rougnly 207 in

measure

irT;1940

shortly after th#purchasers at the
1938

1947

April and May of

come

when the amateurs became so de¬

the

break in 1936.

The

period as represented by ex¬
pessimism of the amateur
traders. Such a cold spell did not
come in the fall of 1946 but it did

treme

re¬

they bougnt.

wuen

influence

period

purchasing

■

advance.

They are demanding
intelligent risks, however.

selling

Using this method as a guide for

not

This suggests that the
good buyers who checked the de¬
cline in May expect the market to

axes on

preceding
Even the most optimis¬

the

advantage.

145

trend line would

the

that

positions as the
might expect trouble in a good
wealthier holders, adjusted their
bull market. Translated into terms
portfolios.
2^'t
of the Dow Jones averages this

evident

erase

important cycle in

matter of fact they

sharply.

market

stock

since

and

lated to the cycles we have heard
so
much
about
recently.
It is

Poor's average reached 117 where¬

hastened

have

rallied

There is
the

there

has

October

take advantage of the lowest tax
all bull rates. At
present they have to hold
market over six months
to gain this tax

mitments.

that

then

last

it should

find that
market peaks and bear
low points are confined
two parallel lines going
peaks and low points of
we

kets of the past we have had de¬
clines that have cancelled out one
third to one half of the

bulls

market

caused by
the capital gains tax
if such an Index is
holding period. This is particu¬
usual low point of 1932, when the
made up of the lower priced, more
larly important in periods when
market went to
extremes
both the
speculative issues of companies
market has been dominated by
that benefited so much from the ways; and if we also eliminate the investment
buying because the
war-time economy we would find 1942 low point when uncertainty larger and wealthier
buyers like
as
to war-time tax rates forced to
hold long enough so they can
that they have been in a real bear

However,

and

its feet.

included in

are

market peak of 1929 and the un¬

in the world have
nomic

stocks

they had during the
earlier weeks of that post war re¬
much

the stock marked because of the
dominant position of this industry
in our economy. ^This \vas true at

over two years
long trend line that
through the is not low historically. Only three
(5) Sophisticated market ana¬
bull market. After rallying from out of the twelve bull markets at the 1942 bottom when these
lysts realize that the best time to
October to February it again de¬ since 1896 that have gone above shares acted much better than
the
sell stocks is when business activ¬
clined to May but did not break that level.
However, because of general average /during the last
ity is high and that the best time
the low point of September and the growth in strength and earn¬ few months of decline. This
to buy is when business activity
group
October. Had it broken that low ings of
the corporations whose sold lowest in ratio to the general
is low. However, one cannot say

lower prices.

six times

balance or about five to
as

when

the market sold

Instead

area.

the lower

buying side.

Action of the automobile stocks
is of barometric significance in

establish

And since

was

the

Jones industrials.

Dow

Also

industrial average moves up
as much in percentage as the rails
would have to in a test of their
if the

changed in 1942 and
important peak of
established a six
vmpnths holding industrial average Febr^y»
proved their inventory situations.
would go to
long-term, gains we around 205. Since the rails gen¬
arities in the setback since last to call it a bear market in the Because of the expectation of a period for
bave seen the rallies extend for
summer.
lower-price,
war
Never in at least the
beneficiaries, decline in business they reduced
erally move up sharper percent¬
six months
last 25 years, have we had a real many of which are down 50% or inventories and also their forward
befp£|:^correction of agewise in a rising market, I oave
any
more in value.
bear market start when the
importane^i&This type of made the range roughly 195-205
orders. Nov; that retail sales have
capi¬
reasoning .sugglsf^that most of
tal good shares have
sold as low
Perhaps the investing world is held up they find that they must
as the test level where the market
he
certain phases of bull markets.
There have been other peculi¬

ratio

shares
1946.

the

consumer

good

they did at the peak in
that time the capital good

stocks sold at 85% of their
prewar
(1935-1939)
ratio
to
consumer
good shares. In other bull markets

or,

benefiting

from

the

excellent

work of the New York

Society of
Security Analysts. In the past the
public has been handicapped be¬
cause

there wasn't such

organization turning out so much
usually have had their intelligent information on the out¬
greatest period of strength in the look for various companies and
1 non

1929

sli?ges of.
the

bull market.

capital

consumer

109%

was

ratio

good

good
shares

while

at the peak in
1937 it was 118%.
The decline has
also been unusual in
that it is the
first.time in at least 25 years that

have had

the

bear market when

volatile

capital good
shares have declined
less than the
steadier
type
consumer
good
shares.
•
There

be some value in
judging whether we have been in
a
bear market or in a correction
m

crimination
should

bull

market

and

that

bull market

condition

that

exists

when people are confident of the
future and are
willing to assume
a greater risk in
the type of secu¬
rities they buy and hold. We ex¬
our

faith

holding the
But

when

the

future

the

future

volatile

lose

outlook

issues.

confidence in
we

put

our

ing out of

extreme

some

fluctuations

During the past

year

elected the first Republican

have
Con¬

15 years, the New
Deal has become a dead Issue, the

gress

over

OPA has been
a

killed, the rails got
10% rate increase, a new labor

bill has passed over a presidential

the

general

iron¬
mar¬

also

and

Also

Corrected

Many Abuses in Our

Economy

hadn't had the sharp cor¬

rection

during the past

and
the market had progressed at the
same rate that it had
during the
1942-46

year

advance, the Dow Jones

portant cycle in the stock market
which is

helpful in judging stock
It might be called
temperature cycle, with thetemoerature being measured by the exmarket trends.

Since the middle of
May when
thorough test of the lows of last

October

was

made, the action of

the market has been
encouraging.
On this recovery, an average made

of high grade stocks has re¬
covered 53% of the losses since
the 1946 highs, the Dow Jones in¬
up

today be fluctuat¬ dustrial average has regained 40%,
ing in the 220-250 area. If the pace and the low priced shares have
peace-time

August,

1945

continued

would be up
we

advance

from

February,

1946

the

same

would

and

area.

enthusiastic in

capitalizing earnings
1929

average

in the 250-280

had been

1937

the

selling in the

regained only 17% of their losses
in the

same

mand

for

started

that

the

setback.

better

Similar de¬

quality

recovery

issues

movements

ent of amateur

buying and selling

in the market.

;

tant decision

As usual there should,
be some corrections in the market.
on the
way to test that goal.
It
would be unusual to see the pace
term trend.

the

last

seven

tained.

Sometimes I feel that

could

something in our business
from the manufacturers of straw
earn

They

accumulate

their

in¬

buying. When the hot weather
and the

siastically

public buys enthu¬
jnanufacutrers

these

main¬

Longer term

of the

objectives are more

risky to determine because one
doesn't know how future influ¬

develop.
However,
to expect that

will

ences

bats.

ventories when the weather tem¬

weeks

/;/■■''i; .';

Longer- Term Objective
Market

there

are

reasons

market

the

eventually

will

260-290 area. If
the industrial average gets around
290 it would be up in the range
of
the
trend lines
established
able

test the

their' inventories de¬
through most of the important,
these manufac¬
bull markets of the last 50 years.
turers have an easier guide for
Often a market that has had a cor¬
heir dealings than we do. All they
rection will tend to move up tiie bave to do is to look at the ther¬
same number of points that it had
mometer or the calendar.
in the corrective movement, once
quietly

let

'Of

But

course,

now

have

some

workable tools to determine stock

They are the
odd lot transactions
good guide as to what

market temperature.

figures
which

the

are

amateur

traders

are

Using this as
would find that the

thinking and doing.
guide

hottest period in the market came
in

February

market

was

1946

when

the

not many points from

were

in 1936, 1942 and 1945.
Persistent and quiet demand for

its top

average

high grade issues often continues

one

320-350

for several weeks before the pub¬

bought 738,000 sb&pps of stock on

next impor¬
regarding its longer

will have to make its

cline.

average would

the

early

There is another extremely im¬

comes

Levels

1947

not

Reassuring

had

1948.

until Jate

perature is low'and the public is

At More Interesting Long-Term

sellers

Plan.

Market Action During Latter Part
of May and in June Was

people who' have been buying

recently will not become willing

intelligence in the
way foreign loans are being han¬
dled, as is evident in the Marshall
more

The Market Decline Places Stocks

had in 1920.

ket?

This Index has not indicated

different picture than

And shouldn't the effect of

good market analysis be

It suggests that we

them.

funds into the steadier type secu¬
rities of cash.
bear market.

quite

Surely it isn't necessary to have
just one major trend for all of

in the "Analysts
August, 1946. This ar¬
a

veto, a tax cut is a near term pos¬
sibility, and the .Communists are
being forced out of government
positions and labor unions. There

market from the Index

ticle interpreted

press

reward

to which securities

writer described

being

the

which should be in a bear market?

Speculative Confidence that the

Journal"

Shouldn't

analysis be greater dis¬

may

bull

industries.
for good

go into the market and buy more
than they had expected, to.
This

active

the former

way

came

of the bull market.

week

the

Odd-, lot

goes

new

high.

Such a

out
Interestingly enough
275 in the Dow Jones would rep¬
would

measurement

around

resent

come

263.

the

high

1929 for the
Jones

stocks now used in the Dow

industrial

(versus

average

actual high for 1929 of 381 for
stocks

then

used

the

same

average). This comparison of his¬
torical levels was made recently

During

traders

Harry Comer.

study by one of our members,

Naturally,

there are clouds in.

Volume 166

Number 4612

THE COMMERCIAL & FINANCIAL

the stock market skies.' There ai¬
rways

plenty of uncertainties,

are

especially when a bull market is
starting. About the only time that
the
.to

outlook
be

market

have
the

seems

the surface

cloudless,

is when a bull
making its peak. We
long-term worries in

some

high

break-even

points for
leading industries.

many of our
.Those break-even points
er

high¬

are

result of using labor costs

get foolish
could

ment

did in 1920 we
readjust¬

another

into

run

period sometime in 1948.

But with what this
to

country has
work with today in the way of

deferred

demand

and

large

pur¬

chasing power,Ave should have a
long period of prosperity ahead of
us

unless

with

omy

Unless

our

can

ahead

move

period

econ¬

blunders.

man-made

further

mishandle

prosperity

CHRONICLE:
for

bring that nation into active
participation much valuable time
will have elapsed. But 1949 should
see
implementation by Congress
of an extended $10 billion pro¬

look

which will not only strike at
paralyzing bottlenecks, but
which will serve to link the econ¬

(235)
trade.

The

mula:

can

making

exporters wealthy,
foreseen for

The

make

can

His for¬

nation,

omies of much of Western Europe.

Plus

unified planning

stuff

the

higher taxes.

We have

been

would

deserve

the

comment

LOS

The

Lynch Firm
Chronicle)

Financial

ANGELES, CAL.—John P.
has

Masterson

affiliated

become

Street.

was

Pierce, FenWest Sixth
formerly with

stuff

measure

import,

export,

A. de

standard

our

Jong Admits

crete

of living.
will do much to' increase their
If the politicians and laymen
.worrying about the high levels of the Communists that this country exports and thereby our imports.
and economists of this
.inventories too. And there are is becoming soft and degenerate.
country
During the first months of the
the doctrines of import
disturbing elements in the foreign
Plan's operation a high level of accept
Conclusion
surpluses now being advocated,
set-up.
.
'
exports is assured by the sheer
While this has been an illegiti¬ weight of European rehabilita¬ and cease worrying about huge
However, one has to time carefully the period for his most se- mate bear market' that has not tion needs. Thereafter the Plan is exports without an eye to getting
rious worrying about the stock been backed
up by declining earn¬
self-perpetuating, providing Eu¬ something in return, in short if
and

(Special

Buckley Brothers.

the

Less

by the European states, plus con¬
blueprints, for trade recov¬

With Merrill

with Merrill Lynch,
ner
&
Beane, 523

produce

of
trade

but the

the future

stuff

present

group

entire country rich.

the

gram
these

The pre-requisite

our

unbalance

ery

Adolf L.

Schrijver has been ad¬
mitted to partnership with Albert
de Jong in the firm of Albert de
Jong & Co., 37 Wall Street, New
York City. Mr. Schrijver has been
associated with Mr. de Jong for
some

time.

■

.market.

from

Otherwise it gets away
for /substantial
moves.

Sometime in the future, after we
have had several years of automo¬
bile and

after

for

the

our

have

many jnore homes
some

durable goods

consumer

.production,

built, and after

world-wide

has

goods

had

demand

been

filled,

would

ings
and
dividends, the action
during the past year has had some
elements of

This

sense.

shown

by the

the
speculative war-beneficiary

stocks

have

portfolios
held

been

while

way

weeded

out

the demand

has

well for the better grade

issues that benefit from

peace¬

be a better time to worry
about the unfavorable elements of

time economy. Action of the mar¬
ket since the May low has been

our
economy. When an important
;peak is reached in the market
there will be few easily visible,

reassuring since the type of lead¬
ership has been good and the pub¬
lic is still skeptical of the rise.

black clouds in the economic

skies,

probably
will
have
many
opinions from-economists that we
in- another

are

"new

era," there

probably will have been
period of
.public

active

financing, and the

new

will

heavily.

be; buying
,/;/ ;,.y ■

seldom sit back and

can

lax in the stock market.
,

•

too

optimistic

going. straight
bull

market

stocks

peak.

re¬

It would

say

are

We will have

to watch the effect of what looks
like another
inflationary spree.

There may

elements

some

•danger if people become too
timistic in feeling that all
troubles

behind

are

us.

action

area

move

equipment, replacement parts, and nomically
complicated
machines +o
make
machines
and
parts.
In

mature.

tion of Robert C. Caswell.

Howard W. Sams & Co. Inc.

short, the spiral of trade leading
to an ordered and healthy world
economy

is in sight.

Special

tury Fund, Stuart Chase put into

proverbial

The Financial

Charles Matson

Chronicle

INDIANAPOLIS, IND. — How¬
ard W. Sams & Co., Inc., is en¬
gaging in the securities business

Writing for the Twentieth Cen¬
the

MOLINE, ILL.—Caswell & Co.,
investment
house, has
a branch office in the Fifth
Avenue Building, under the direc¬
Chicago

opened

offices

from

2924

East

Wash¬

Opens

SHELBY, MONT.

Charles E.

Matson is

—

engaging in

securities

business from offices at 14 Marias
Avenue.

nutshell the out¬ ington Street.

for the Dow

capital gains tax holding period
suggests that most large holders
will

want

chases

retain

until

late

recent

the

pur¬

year

NATIONAL BANK

An eventual test of the 260-

290 level is possible. The course of
the market in attaining that ob¬

jective depends
proceed in the

how wisely we
of filling
demand for goods here

the large
and

abroad.

OF DETROIT

process

Only

unintelligent
handling of economic, labor, fi¬
nancial and political factors should

DETROIT, MICHIGAN

Complete Banking and Trust Service

us from attaining a period
prosperity which would justify
higher stock market.

op¬

prevent

our

still i'a

suggests

New Branch for Caswell

Jones industrial average, while the

least.

to the eventual

This

test the 195-205

with the tools and machinery we learn to act as a creditor na¬
ship us material which can tion, the headlines of decreasing
make life richer for all Ameri¬ exports and rising imports will
cause
good appetites, not indi¬
cans, and at the same time earn¬
ing her the dollars to buy more gestion. Then we shall be eco¬

rope

STATEMENT OF CONDITION, JUNE 30, 1947

RESOURCES

...

293,188,533.56

United States Government Securities

•

597,683,969.49

Stock of the Federal Reserve Bank

1,455,000.00
51,239,284.57

Cash

(Continued from page 4)

•

here.

tered

for

Austria

blades

bar-

are

obligations.

government

timber, in Czechoslo¬
vakia for glassware. The Westing-

Probably $5 -billion will become

house Co.

from

was among the first to
import silk from Italy! U. S. Mili¬
tary authorities are frankly en¬
couraging those who would make

barter

her

sales

with

the

Japan,

re¬

quired for the imports they wish
to

take

out.

Three

The

problem
its

and

export trade

the

effect

this

lack

upon

the

country

can

be categorized into three stages:

(1) The

present

high

of
exports, draining surplus dollar
balances from war-rich nations,
and due to end shortly because of
the

alarming

flow

from

(2) A

rate

rate of dollar out¬

these

countries.

period of rapid decline
gaining momentum as

of exports,

marginal

many

departments
trend

Summer

(3)

export firms or
operations. This

cease

should

crest

during

the

resumption of a high
level of exports for a long period.
This "high" is relative to prewar
export activities, and should be
supported about the $8 billion
level.
There

three

are

considerations

justify the high level predicted

for

1949

and

thereafter:

(a) The directing heads of the
International

Bank

for

Recon¬

struction and Development should

by then have selected
;

of nations which can
structive
out

use

number

make con¬

of dollar loans with¬

jeopardizing the Bank's

repu¬

tation and able to meet the real¬
istic

requirement of repayment
via the operations for which the
funds
can

are

advanced.

sold

which

Debentures

will

not

meet

with the legal and self-im¬
posed inhibitions besetting indiup

exports

the

one

reconstruction

proceeding rapidly, and
nations

foreign

Loans and Discounts

Real Estate

Mortgages

169,775,298.87
46,185,518.35

....

Branch

215,960,817.22
1,397,207.11

Buildings and Leasehold Improvements

2,826,823.75

Accrued Income Receivable

Customers'

Liability

2,629,719.52

Acceptances and Letters of Credit

$1,166,381,J55.22

United States will be able to

ties

greatly increased quanti¬
goods needed here. That

the

administration

trend

stimulate imports is clearly shown
in
the changed attitude
of the

Commerce

Department,

to aid

potential import sales much

they formerly serviced

export

exclusively.
Should
the administration change in 1948,
it is believed that the importance
of a high level of imports to our
national well-being would con¬
tinue

recognized.

stricted trade modeled
ism

that

don't

against

United States Government

vive free

Accrued

Reserves

areas

and

their constitu¬

International

ganization

♦

5,067,452.23
***&.
4

•

Undivided Profits
1

975,000.00

2,629,719.52

♦

Common Stock

now

Trade

forming

■

15,000,000.00
33,500,000.00

5,140,647.71

53,640,647.71

' "N

$1,166,381,355.22

united States Government
ment are

pledged to

Securities carried at $64,623,994.73 in the foregoing state'

public deposits, including deposits of $22,74*,269.26 of the
of Michigan, and for other purposes required by law.

secure

Treasurer-State

Or¬

are

increased imports through reduc¬
ing trade barriers and the threats
of unfair carter .competition.

Shortly

after

presidential

elections have been held, a modi¬
fied version of the Marshall Plan

directors

HENRY E. BODMAN

JAMES S. HOLDEN

NATE S. SHAPERO

ROBERT J. BOWMAN

JAMES INGLIS

R. PERRY SHORTS

CHARLES T. FISHER

WILLIAM S. KNUDSEN

GEORGE A. STAPLES

CHARLES T. FISHER, JR.

ALVAN MACAULEY

R. R. WILLIAMS

JOHN B. FORD, JR.

WALTER S. McLUCAS

C.E.WILSON

W. DEAN ROBINSON

striking directly against Europe's
bottlenecks of coal and steel pro¬

duction, transportation and farm¬
ing equipment, and power pro¬
duction

effect.

813,843.31

•

Payable August 1, 1947

im¬
portant actions in the direction of

(c)

•

competition beautifully,

The reciprocal trade agree¬

the

Capital Funds:

ments which proved so successful
in enlarging our trade in the past
and

1,033,524.82
.

Surplus

sur¬

$1,102,221,167.63

Expenses and Taxes Payable

Acceptances arid Letters of Credit
Common

10,052,688.69
47,150,008.52

Deposits

Common Stock Dividend No. 26,

New

the Midwest

$1,045,018,470.42

Income Collected—Unearned

re¬

skillfully and wisely sold

lawmakers

ents.

Other Public

the tru¬

protect

country and both

has been

Less

„

Commercial, Bank and Savings

which

transactions

this

LIABILITIES

Deposits:

instructs commercial attaches

now

able to produce more,

are

import

stimulating notes in foreign trade.
World

Loans:

and because of
the loans this is

(b)

Other Securities

source,

nature

England

1948.

The

industrial

for

this

certain

the

Stages in Future Trend

dollars

the

supplying

materials

raw

available

Hand and Due from Other Banks

should

certainly

into

Unfortunately, until Rus¬

sian satellites arid world pressure

trust

This bank acts

department

Trustee, Executor and Corporate Agent

Member Federal

Deposit Insurance Corporation

THE COMMERCIAL & FINANCIAL CHRONICLE

(236)

and

Stable Money a

Prerequisite to European Recovery

(Continued from first page)
to the

ing

impossibility of reestablish¬
balanced

reciprocal trade
between this country and certain
of those of Europe under the sys¬
tem of pegged exchange rates re¬
cently announced by the Stabili¬
a

zation

a system which, by
of its gross over-valuation

Fund,

reason

Conditions

economic

stability.

stability

objective

unsupported

economic

Since political
by

conditions

and

subsidies

lar
I

also

pointed out the error in
the curious supposition, now so
commonly held, that profitable
employment of our population is
to be secured through production
and manufacture of more than

that

This
when

served

error

is without

tries,

ment

accepted

that

for

which

and

po¬

fiscal prac¬

They

tangible
things
of
value,
wrought from our natural re¬

countries

are

self-supporting nei¬

ther in respect to

less

ap¬

that

form

usable

American
to

not

provided

government.

both

democracy
will perish.

enterprise

free

barter

commerce

reduced

circumscribed

with

and
accumulation,
other than in tangible things, ren¬
dered

than

hopeless
gamble. Under such circumstances
more

and

there

our

be neither

progress.

from

absence

its

restrictions,

by the

men

move

can

stability

nor

sound and depend¬
medium
of
exchange,
in

soil, of climate, of natural
of

sources;

the.people of Europe,
distinguished from their gov¬

ernments,

live

can

plenty.

those

intrinsically valueless,

foundation stone of economic sta¬

own

recovery

returned

bility and hence of political sta¬
bility since without the former

hope

urally to the conclusion that
less

un¬

are

whatever*

debtors

have

acceptable

offer

American

wrong

back

I say,

citizens take them

and

industry,

and consequently
certain geographical
areas, are to

Asiatic

tection

ture

and

production and manufac¬

order

that

others

greatly expand to supply

may

ex¬

port market.

well

rests

obligations.

that

Much

dollars

seems

of Previous Letter

adequate

appraisal of the
prospects of a nation of
necessity must start with the in¬
future

nity

houseless

into

trailer

families

citizens

and

es¬

excess

economy

adhere

common

all

who

payable.

honesty.
their

through their

the rules

They spend in

revenues

because

they find it politically inexpedient
either

reduce

increase

taxes.

expenditures or
Nothing
could

better suit the book of these very

practical

crowded

minded

ticians than

and makeshift

camps

own

refusal

many highly
placed officials in .Washington has
not escaped the notice of the peo¬
ple back home; in every commu¬

None

oc¬

Eu¬

will

those things essential

policy
more

aid

to their

f&r

are

assistance.

Americans

beyond

Taxation
of

amidst

commerce

near

universal rejoicing because

standing

notwith¬

Yet

famine.

but

dance

experience at home,

our

through this Fund we are now
spending billions in an effort to
sustain Bowlesism in international
trade and with even less hope of
success.

the

dispatches of the
that

press

past fortnight it is reported
French Government put

out
francs

the

ten billion additional paper

during the month of April as a
cover for its deficits, the efficient
French money printing presses
doing the job in one week. A
similar

for

slated

issue

June.

light upon the
the management of the

This throws
attitude of

some

who

Stabilization Fund which has just

reported

those

themselves

calculated to do nothing
than bring all peoples both

European and American to

the French
Ameri¬

of 25,000,000

dollars

can

sale

the

Government

plus

119

for

level

francs

paper

per

Stabilization

European

poli¬

the taxation in

their

Fund

with American citizens.

There should also be immediate

despoiling

day by day destroying

are

their

have

willfully

indebtedness

They

pro¬

with

But countries unwilling to

easy.

These govern¬

basement of the medium in which

dollar

own

such

the

obligations. They are
openly
engaged
in ^repudiating
their national indebtedness by det

caped the notice of

discussion Kept Within Limits
An

small

the

great, all of whose savings or

subsi¬

from

their

hold

practice

nor

made

are

their

highly prejudicial to the Ameri¬
can
economy.
It is a cynically
practice, singling out as its
victims

European

should

ments

cruel

be selected to suffer the
competi¬
of
low-cost

tion

This

reduced.

therefore, without hesita¬

budgetary deficits.

into

ties which must be surmounted if
certain types of our
production

problems.

the

unsuspecting Ameri¬ things or
supposing that they will upon the national balance sheet
the ration of tangible purchasable
be.
I therefore pointed this
out,
describing the political difficul¬ assets to the paper money supply

cans

Congress

trade.

Bowlesism, as applied to

exchange for tangible
services. In this manner

formed and

crushed

dollar. It would be
of common misery.
superfluous to support with ar¬
Treasury of the United States to
gument the statement that such
governments notoriously engaged
The Barriers to Commerce
purchases neither discourage the
in the printing and emission of
Interposed by the Operations of
printing of francs nor deal fairly
paper moneys in
satisfaction of
dies

credits, sends them

our

rope's

decline

exist.

cannot

tion that neither loans

means

creates their equivalent

abroad and

unin¬

lattter

the

Government prints paper

our

in convertible

repaid,

lead

granting of dollars

dollars,

price

consum¬

ers, our loans can never be
and

ing
that

proposed

our

Americans

augment our already greatly in¬
flated circulation,
in short, the
process which is called the loan¬

prepared to open our
ports to the free or near free en¬

try

are

repose

time

land of

familiar

selves

rightfully

Other conditions will

cur

tion

men

and

restore that continent to

that of Bowlesism upon

domestic

our

under which

confidence, is therefore the very

all

re¬

water

and

tion to helpful aid a comprehen¬
sive
scheme
must
be
adopted

which

able

land

easy

supply, already seriously dimin¬
ished by war, into European own¬
ership.
The dollars,
of
them¬

Consideration of this leads nat¬

national trade will not be differ¬

commerce

produce, most of which
are
already being received in
ample supply, must displace an
equivalent of American produc¬

services, and consequently
displace American labor.

sound

transportation; of population and
capacity of population in produc¬
tion. As an indispensable condi¬

can

are

practices

absence

monetary system it does

scarcely be over-estimated.

monetary

truth

possible where
an
honest
and
dependable medium of exchange

Congressman, that Ameri¬

Fund.

impos¬

it de¬
commerce
and
created
ma,y
flow stroyed
unhindered in obedience to those
parent.
scarcity in a land of plenty. As
A democratic system of free en¬ natural laws, incapable of repeal proven
many
times
before in
terprise in civilized society is im^ or frustration by man, the laws many lands, it brought not abun¬

send

labor

economic

are

domestic

and

women,

that

ture

Without

not

true

experience, makes it

effort toward making these

the

such

into

it down

prevailing

trading or

persons

trary and false rates of exchange
established by the
Stabilization

An adequate
recovery requires an
economic integration of such na¬

every

sources

Continental

political stability

sible

well in the absence of them.

subsidies effective, if granted, can

neces¬

the

are

experience
of
mankind
throughout
all
civilized
time
proves it, and reason, unaided by

sity, the things we must accept,
with the exception of articles we

them

ent from

the importance of exerting

mean,

set

Systems

The

pay¬

While

ill economy can never be¬

come

Yet

coun¬

That, of

now

countries.

abroad, and-something in excess of
the cost of our exports, if a profit
is to be secured.

conditions

tices

mind

services of other

must

justification under

litical

that an equivalent in value, con¬
sisting of the produce and manu¬

factures

American

ditions may more promptly be re¬
stored.
In my opinion this hope

can

readily ob¬

it is called to

the

from

area

nations

the

Treasury in the hope that through
such grants sound economic con¬

be consumed at home and its sale

abroad.

Trade Barriers

some

not.- Those who pay

that they do

production, nor
raw materials.
They are economi¬
cally dependent upon each other.

impossible, it proposes large dol¬

it.

sound

from

sound

deemed

abor¬

The fixing of the rates of ex¬
change of foreign moneys in this
not fol¬ manner, under pretense of price
that
from which escape is impossible low
the
establishment
of stabilization, is Bowlesism applied
that a well economy must always such systems in the several coun¬ to international
trade, Congress¬
be rendered
an
ill one by per¬ tries now in financial distress will man.
Nothing else can be made
sistent departure of government of itself
bring recovery.
These of it and its - effect upon inter¬

First:

Administration's

efforts

prove

traveling in France who must pur¬
chase francs at the wholly arbi¬

Breaking Down

reasonably

are

all

must

tive.

and

Governments

own,

tions

future

taken

rehabilitation

sent

are

Sound Monetary

Upon Aided

Imposed

Western Europe is the prompt
re-establishment of political and

foreign

our

abroad

any,

accomplish
permanent good.

Suggested

The

sums,

calculated

mankind.

currencies in relation
imposes heavy restric¬
against the two-way flow of
commerce
and does not promote

such

port not only in objective reason¬
ing but in the entire experience

unless

1947

Thursday, July 17,

Congressional

relief

unconscionable

barriers

terposed

the free

now

flow of in¬
by
the
I
speak

have

that

contradiction

that it is unlikely that
voting ir
the Bretton Woods

body

would at

of
one

constitute

gage

business

and

abundance

contentment

and

personal
institutions liberty and free enterprise. Many
and the same time Americans, and I include myself

Pacts understood that the govern¬

are

be found only in

those

itself

International

Fixing Tariff Erecting body

presume1 to function as such.

Under the
Prices of

Yet that has happened.
term

discussed only matters purely fis¬
cal., But when governments en¬

single
approval
a

and

preceded

business, fiscal policies
policies become in¬
distinguishable. As a people, with
few exceptions Americans believe

fear

when I say

Price

has

congressman

without

ing

what

in¬

ternational
commerce
"Stabilization
Fund."

of Industry

Nationalization

the

from

"Stabilizing

the

the number, believe that state

ownership

the slave state,

choice

state, at

production means
since one who has

but * to

a wage

work

for

the

fixed by the state,

and no
choice but to purchase
shacks; high
and
ever
higher behalf of Americans whose votes Foreign Exchange" this body of
from the state at its own price
men is in reality attempting price
prices; cherished plans for home they do not fear and whose voices
those necessities or luxuries which
mass of individuals.
It must take building blasted and
abandoned; they need not heed. But for the fixing upon an international scale.
the state deigns to offer him, is no
account of the
As pointed out in my letter of
industry and am¬ lowered standards of living; up¬ Congress of the United States tc
longer free.
Rendered helpless
bition of the people; of their in¬ ward
spiraling wage scales, dis¬ seize a portion of the earnings of April 25, using the French franc
telligence and capacity both for covered almost immediately to its citizens by force of law for as example, this body decrees that through denial of the right to en¬
gage
in production for himself
production
and
accumulation; have been ineffectual; and the transfer to governments engaged despite a far different open mar¬
and
others he must submit or
their honesty and demonstrated
steady relentless4 wiping out of in such practices would constitute ket price Americans purchasing
perish.
attitude toward meeting their ob¬ the
savings and income of the a monstrous denial both of com¬ French merchandise or traveling
In many
ligations. It must also take ac¬ people represented by dollars or mon justice and common sense. in
of the countries of
France
must
purchase
the
count of the national
leadership dollar obligations. It is being dis¬ While causing misery and suffer¬ francs they expend at 119 plus Europe listed as prospective re¬
and
the manner in which
the covered
that
the
vast
national ing at home it would accomplish per U. S. dollar. The francs pur¬ cipients of our bounty, such states
people are governed. As
being
established.
Having
chased at
a
national
this fixed
price the are
example, debt is mot
asset, nothing of value abroad.
are the
failed in the art of political ad¬
people permitted freedom though carried on the balance
There are persons who say that American must use in his pur¬
of enterprise, or are
ministration and in the manage¬
chases of things or services. What¬
they shackled sheets of, corporations and indi¬ we must refrain from
meddling
ment of their fiscal affairs, bank¬
by a government which presumes viduals as a private one. That on in
the domestic affairs of foreign ever he pays for his francs ir
through political bureaus to di¬ the contrary it may better be
states and therefore cannot right¬ excess of their true value, as es¬ rupt European governments are
rect their activities?
An investi¬ described as the nation's acknowl¬
tablished by their internal pur¬ now entering the field of business.
fully define the form of money
gation into each of these fields edgement; • of thepartial- cost of they shall use or the manner of chasing power, he pays in excess Proposing for themselves a mo¬
would be pertinent to an
of the true value ,of. that which nopoly of all production and trans¬
appraisal the war .in wealth which once its issuance. With this
position I
of the economic future of a
but has
state. existed
now
been
de¬ do not
he receives.
portation and the right to tax the
disagree. But I say that
Every fact throwing light upon stroyed. Manufacturers and mer¬
people in support of their opera¬
if Congress possesses the consti¬
Do you believe, Congressman
the character and conduct
of the chants,
tions, these governments are mov¬
large
and
small,
are tutional
right to tax Americans that Frenchmen pay the equiva¬
people as well as upon the char¬
discovering with increasing ap¬ on behalf of foreign governments, lent in real value of $2.50 for a ing swiftly to bring their propos¬
acter and conduct of their
als into reality.
gov¬ prehension that
"profits" which a
continental breakfast consisting o:'
dividual

since

nation

but

ernment

would

clear

that

relevant.
I

not

have
pre¬

pared to make such

a study. Nor
I pretend to possess the
quali¬
fications essential to

satisfactory

conclusions
field.
of

covering

original

letter, I

outline

pertaining

affairs

persons
an

the

essential

propose

the

ernment.,

These

confidence

since

con¬

fiscal

which

by all informed
to

ill economy,

character

scope

certain

governments,

be deemed

the recovery

irrespective

people
I

submit

they find

gov¬

with
sup¬

are

question which merits discus¬
sion, it has the right to say what

be¬

ing reported and taxed under a
system of cost accounting and
profit calculation which, however
acceptable under a sound mone¬

sort

governments

and what sort it deems
of

aid.. And

tary system,.is wholly unaccept¬
able today.
In short, Congress¬

indeed

ries

with

aid

unworthy

I say that the

such

will

right exists,

right,
car¬

rolls

and

coffee

medium

grade hotel or of $8.00 for dinner
at ordinary first-class restaurants?
That is what Americans repori

they

are

required to pay in France
are purchased at the

when francs

duty to see that
such aid as it grants goes only
where good is to be accomplished

America, portions

of Washington

alcne

through its expenditure. The first

have

essential

alet in true value of these

ing

and Frenchmen

out

man,

ditions

broad

Keeping within the

therefore

must

existence in fact

this

seem

all

the

not

triumph of fact
relentless

against
•I

world

fiction;

truth

their

things not be¬

present unsound, monetary
practices and the establishment

On the

contrary I know and maintenance of sound and
to be keenly cognizant *, of,
them. I call them to your atten¬ dependable mediums of exchange
tion

only to
of
■.

emphasize

the

in their stead.

im¬

This step must be

making certain that taken by the countries themselves
i

:■>

:$i.

*•

J-

95%

restaurants,

you

portance

by the Stabilization

If Frenchmen do pav

to the States of Western
Europe is the abandonment of

I believe you to be unaware

of them.

step therefore in bring¬
economic and political sta¬

bility

make-believe.

lished

C»

estab¬

exchange

rate

pegged
''

observed

over

pressure

mention these

cause

people

the

Fund

the equivprices

constitute at leasl

patronage

then the

of French
French are

be surprising only to
Washington who havd
lest touch with their own people,.
that Americans view with some
It

will

those' in

consternation the prospect of be¬

ing taxed to support foreign sys¬
tems in which they do not believe;
and
to
sustain governments
in
which

they

have

voice;

the

principles and practices of which
are abhorrent to
them. The pro*
oosal

presents

taxation

people and

its

require

aid from no one. I do not
contend that Frenchmen pay such

its

prices when the true value of the
franc as established in the domes¬

new

land

doctrine of
fought

which

independence

because

tolerable.

rich

tic

and

not

markets

ered.

On the

poor

France

consid¬

war

people deemed taxation in sup¬

port

overseas

government

they had no voice in¬
It may well prove un¬
acceptable to the American peo¬
in

which

contrary it is plain ple,

however

much

favored

Volume

those

166

their

and

4612

THE COMMERCIAL & FINANCIAL CHRONICLE

and it is not in¬
that it could
result

power,

conceivable
in

Number

seeking

discarding the old.

(Continued from first page)

•

„

You will, perhaps, think I have
been* over-solicitous
upon
this

subject.

at work in the Paris

My justification is that
are
small
and
struggling

there

and

men

women

America

well

as
in other portions of the
globe.
These men and women
have been near overwhelmed by

the

force

events

which

over

they exercise

no control. Already
burdened to the limit by taxation

which

bears

every activity
of their lives and but a week ago
upon

the nations

now

conference, is absent, and, far more
important? so is Germany, which at present is divided
into at least two water-tight
compartments, and is with¬
out a government to represent her in
any event. If Spain
is left out of consideration

portance, this

in the Paris sessions act in

sane and sensible manner.
If,
however, Europe is to be
permanently split more or less
down the middle with an
impassible gulf fixed between the
two
segments, the results will be
far-reaching and severe
indeed upon all concerned.
They could, indeed, be very
nearly economically fatal to a good
many peoples—and we

being not of first rate im¬

to leave Europe divided into two

seems

with

a sort of "no man's land" constituting the
Germany and possibly the Russian-occupied
part of Austria in between.

camps,

whole

denied by the Executive a small
relief voted them by Congress,

face demands that they
additional burdens by way

good standing either with Russia

hurt,

segments of that Continent.

But all this leaves Germany wholly

out of consid¬
yet altogether clear what the Paris
conference have in mind about
this vital clement in
the situation.
They must realize that something has
to be done without much
further delay.
It would be
^

other parts

hesitate to do
any guessing as to who would be worst
the Eastern or Western

some

limits, or even if Russia (if she must) lays out
"five-year
plans" and the like based upon such
exchange of goods with
the lands to the
west, the return to normalcy in Europe
should not be made
unduly difficult by what is now appar¬
ently in progress—assuming, of course, that the
participants

As We See It

leadership

new

(237)

of the world the conditions which

eration.

have led to this division of

It is not

Europe are present in important
degree.
Indeed, it could be said perhaps without too great
exaggeration that they exist potentially throughout most,
proposals
are
not
confined
to
if not all, of the civilized world.
In parts of Asia they are
those in power. One public figure
an
almost
unspeakable,,tragedy if Germany must re¬
in quest of power has demanded
quite troublesome.
In saying that these conditions exist,
main
indefinitely divided into segments without full '
that 10% annually of the national we are not
referring merely to the fact that communist cells
and free
interchange of goods and services. Yet if such
production be sent abroad and
are at work
throughout the world, or that they have made
is to be, it is time the fact
nothing required in return unless
is determined and faced.
convenient to the recipients' de¬ sufficient headway in some countries and some areas to be
Revolutionary changes in the flow of trade and the
scendants at some distant future
definitely troublesome, particularly if they have consider¬
economic interrelations not
date. This man would take from able
only within European coun¬
backing from Russia.
Indeed, it has all along been our
a
tries, but elsewhere, will be
family income of $3,000 per
necessary if such a catas¬
view that this ideological
aspect of the world situation was
ann/um,
already cruelly dimin¬
trophe is upon us to stay.
ished by direct and indirect taxa¬
definitely secondary to other phases—chief among which,
tion, $300 per annum more and in and around Europe, is the
Finally — for our space is limited
it is to be hoped
imperialistic ambitions of
that the conference in Paris will
proportionately
from
all
other Russia which have
long ago taken the definite pattern of
not, wittingly or other¬
American
incomes,
apparently
wise, copy Russia's technique of
those so long exhibited
by the Czars.
trying to set up a managed
quite indifferent to the suffering
economy to cover all the European continent left to them.
and sacrifice so great an exaction
they

now

bear

of world-wide beneficences. These

—

would entail.

Now Come to

That his suggestion

was

well received by a consider¬

able

portion of the American

gives
real

clear

evidence

consideration

press

little

that

it.

given

was

It has occurred to me therefore,
Congressman, that the American
people at home, your neighbors
and mine, those upon whose pa¬

tient backs

to be saddled the

are

burden of

attempting to make a
world
well,
though
they

sick

bear

responsibility for its ill¬

and whose cause seems to
been forgotten in Adminis¬
trative Washington intoxicated by

ness,
have
the

behalf.

That

politics:

that

these

their

word

burdening

world

occurred

entitled

are

for

whirl

mad

it has

justification
with my letters.

you

Very

truly

yours,

WILLIAM CHAMBERLAIN

Saratoga, Calif.
June 28,

1947.

But it is
to

come

to think of what is

Before

that what has

recognition
before the

Exchange,

seem

to have

Outlook for the Stock Market

Precisely, what is

taking place

now

can

occurred is

condition

war

what

that Continent?

from

came

done

hardly

which

has

for

1941,

industrials

her

Dow
from

Jones

high
of 158 in
November, 1938 to a low
of 93 in April, 1942.

since

attempt to

and

Russia

the

declined

After the

close—and

without

billion

than formal

existed

(Continued from page 3)
$7.3 ments of the past month

$1.5 billion in 1938 to

see

for

ress

puppets,

about

creasing

counted on,

a
year and there
indications of in¬

common

some

settlement

of many

of these questions, there
could be neither hope of making much permanent eco¬
nomic headway or ground for expecting indefinitely
continuing American assistance.
It now, of course,
some

even

seen

precisely what

can

revolutionized

and gave birth to the
slogan that "A depression is

coming and

isb"

be done, and per¬

mutually suspicious nations

can

agree

depression is bear,

;■<

■

Bullishness Increases

sight is that

large

a very

Prices

the

past year to
stock

reimposition of that tyranny, but viewed from the
familiar—and certainly not
very attractive—conception of
world politics the recent expansions of Russia in
Europe do
take

somewhat different
aspect.

on a

The Real
But

the

Significance

real

significance, certainly the real eco¬
significance, of what is now taking place is to be

nomic
C. Korn

found in the future policies of these two

Korn, who has been Acting Secre¬
tary since Sept. 25, 1940, was first

employed by the Exchange in 1918.

ticularly their attitude toward

one

the outlook for
market, we find that

various technical cults have been

Beginning Oct. 4
!

Emil

New

for

Stock

Exchange,

following

the

an¬

regular

that the Board had decided
Exchange will

the

business

schedule,
change

Oct.

mencing

under

closed

open

Saturdays

The

which
on

com¬

summer

the

Ex¬

Saturdays,

will continue [through September,
as

previously announced.

and exporters

Russia

raw

traditionally is.

With

goods,

turies, been
some

Relatively speaking, they will

one

of the chief
raw

many

decades, if not

sources

that

it had

However, it never became
to admit that war was

necessary

Instead it

bullish.
that

then

was

discovered

bullish

was

peace

was

and
to

able

the

reflect

was

from
any

stir

market
of

1947

the

see

possibility
producing
in the

factors

recovery

during
and

the

this

second

additional

producing a new and
plausible inflationary slogan that
might well sustain the market in

high, wide and handsqme trad¬
ing range for several years, or at
least until the balance5 between

inflationary and deflationary
forces

becomes

clearly

de¬

fined.

Finally,

of the important
justified by experi¬

one

conclusions
ence

under stock

tion

and

market

regula¬
expansion of

Treasury

bank credit is that the market for

relatively

periods

long

time

needs not follow the old fashioned

pattern

major

bull

and

bear

trends.

Joins Dean Witter Staff
(Special

to The

SANTA

Financial

Chronicle)

BARBARA,

CAL.—

John E. Freeman has become

as¬

sociated with Dean Witter & Co.,
4 East Carillo Street.

With Bourbeau Douglass
Special to The Financial Chronicle

LOS

ANGELES, CALIF.—Rob¬

ert J. Henderson has

been added

to the staff of Bourbeau & Doug¬

lass, 510 South Spring Street.
iilitii

bearish

Prone

Switch

opinionor

ments have
One

bullish

People who

economic-

Special

the

base

then-

fundamental

political

develop¬

difficult time.

interesting

to The

SOUTH

Financial

Chronicle

BEND, IND—William

Martin has

been

added

to the

Wolff Securi¬

staff of

Herbert

ties Co.,

J. M. S. Building.

without

support from economic funda¬

market

of mutually advantageous

With Wolff Securities

mentals.

cen¬

ters west of them.

Now if in the future this
type

tended

recovery

exploiting the tragedy of

Technicians can, of course, switch

cen¬

trade is permitted to continue without undue restrictions

can

additional

stock

„

of 1938.

war.

of foodstuffs and,

materials of the industrial

technical

half

without any feeling of guilt that

they have for

instances,

bearish

materials and foodstuffs just as

industrial machinery and the like.

flation.

proclaimed from the autumn

Technicians

the other hand

producers

are

has

interest in the question of in¬

the high level of

have little to furnish Russia in the form of manufac¬
tured

not

was

market
some ex¬

en¬

opinion, how¬
roblem of European

that of late

1942 when it became obvious

are,

rehabilitation

in the

war

annexed

the

ever,

industrial activ¬
ity and rornorate earning power

ceptions here and there, these countries

of the Board of Gover¬

meeting
nors,

Schram, President of the

York

nounced,

that

but with Central and Western
Europe.

Open Sat.

believe

similar to

somewhat

been

purposes

market still

stock

myth of its forecasting ability, it
is impossible to disregard every¬
thing that has happened in the
past year, acknowledge it was all
a mistake and start all over again.
We
are
faced, with
a 'problem

fact

known to all that the countries of Eastern
Europe which
Russia has for most practical

effort

depression

However, in view of the fact
that most people interested in the

par¬

economically speaking, complementary not with Russia
NYSE

averages

It is

this

business

to bullish as

worlds,

another.

the

thusiasm.

various levels in the stock market

em¬

think

not

Applying the lessons learned in

part of the Russian gains from the Baltic to the northern turning from bearish

boundary of Greece, including both those territories

Rise

to i

;■

■

the

economic

thinking
new

important what these habitually dis¬

A second fact not to be lost to

justifies

appointed Secretary. Mr.

for

have been penetrated on
are now found
the recovery from the May lows.
in the satellite states, is in essence a
Accompanying this technical turn¬
retaking of what was
for many years a part of the Russian
Empire prior to World ing movement there has been evi¬
dence of increasing dissatisfaction
War I.
Naturally, the mere fact that the Russians at some with
the 1946 slogan proclaiming
time in the past ruled over
unwilling peoples in no way that a depression is bearish.

has been

amend

that

demand

bearish attitude

thesis has met with too much

stocks, it was discovered
that "Peace (not war, but peace)
is bullish." This slogan controlled
the market right up to the ten
market days in the summer of 1946

bodied in the Soviet Union and those which

John

sibly modifying

toward the market.

long been evident that they were not to be
but were intent upon building up their own
political and economic structure.
Secretary Marshall
was
quite correct in pointing out some time ago that a
stage had been reached in Europe where, in the absence

speculative

has

or so

been the effort to use the so-called
Marshall plan as a new factor pos¬

had been in prog¬

war

definite

were

since it has

Exchange

of the New York Stock

now

trustful and

John C. Korn, Acting Secretary

head.

undertaking to arrive at any definite conclusion
subject the thoughtful man will remind himself

this

do.

the
world, and in particular what is the American citizen,

haps

Of NY Stock

sort

some

remains to be

John C. Korn Sec.

Head

only in Europe that matters

develop¬

With Denton & Co.
Special to The Financial Chronicle

ATLANTIC

CITY,

J.-^-

Charles E. Seldman is with Den¬
ton &

Co., Inc., of 805 Main Street,

Hartford, Conn.

'■

THE COMMERCIAL & FINANCIAL CHRONICLE

(238)

A Technical Stock Market Forecast
the

(Continued from page 2)

economists

publicity

and

interpret them.
The job of
analyzing the formations alone is
an
eight to 10-hour a week job.
Is all of this work worthwhile?
I think so. Are the technical in¬

agents used by some of the larger

We, also, have various "inside"
interpretations from Washington

and

There is no magic, or

not.

course

correct?

100%

terpretations

crystal gazing or star reading or
necromancy connected
with the
technical interpretation. The find¬

the sup¬
ply and demand patterns of the
ings are based solely on

Is the selling
more important than the buying?
Are
previous
resistance points
being violated? Are stocks being
distributed or accumulated?
The
answer to these questions should
be contained in the various tech¬
various

graphs.

A great deal de¬

nical indicators.

pends on the individual interpre¬
tation of the pattern. I am satis¬
fied if the findings are 70% to
75% correct. There are thousands

business

Everybody Has

"Inside"

Opinion

contained

the

numerous

weekly letters. Then we can turn
to the financial pages of the Sun¬
day

and get the latest ad¬

papers

vertisement

Major Angus and
In addi¬

other financial services.

tion,
ous

have opinions from vari¬
semi-pros and amateurs. One
we

Pearson, Mrs. Roosevelt,

Frank

dressed

Mr. Stalin and Mr. Molo-

pressed

tov have also expressed

consider¬

able

economic

about

concern

situation.

Most

our

these

opinions

patterns on chart paper. It is
not as simple as that.
It is an

For example, let us suppose that
all of us were gathered together

eight hour
have

day job unless you

else to do the man¬

someone

Even

for the first
five or six years you will just be
fumbling
at
the
outskirts
of
knowledge. Even after 15 years,
ual

labor.

so,

will make plenty of mistakes.
for the background.
I
wouldn't have mentioned it at all,

you

much

chairman

except that your
gested it.

sug¬

effect

the

the technical interpretation or the

I think

statistical interpretation?

both important. How¬
ever, I prefer to consider the tech¬
nical pattern of primary impor¬

they

are

statistical

the

back¬

tance

and

ground

of secondary importance.
the statistical background

use

Let

Dow-Jones in¬
their* high of 213.

hit

further

suppose

gifted with second sight and
knew the earnings of all com¬
panies for the last half of 1946
and the first half of 1947.' Would
have bought

you

The

have

would

the

been

The

This, I admit,

contrary to the usual approach.
My main reason for using this ap¬
proach is based on changes in the
psychology or frame of mind of
investor.

the

that
some

times

is the element

This

varies.

Why

that

issue will be valued

times earnings and

at 15

at other

times the same issue will be val¬

reason

52
was

not

something

have

been

could

which

predicted

by the
statistical approach. Perhaps when
the much postponed depression or
recession or adjustment occurs,
the

market

will

moving

sharply higher in anticipation of
a

boom

hence. Let

year

that the boom will not be
the

depression.

pression which

now

But then I haven't

ticker items.

elu¬

The de¬

predicted

was

ahead to late 1947

hope

been shifted
early 1948.
the latest

seen

The date may have

been changed while we have been

meeting here. Possibly,

analy¬

sis of the technical pattern of the
market may be helpful.
Here is
the

picture

the

way

appears

term technical pattern it is neces¬

decline.

share on the same
earnings, depending on the state
of mind of the investor.
This is
$25

particularly important today when
the investing public is subject to
so much, shall we say, propaganda
of various

had

few expressions of opinion

from

the '20s we

forms.

bankers,- busi¬

economists,

executives, high government

ness

minute number of

officials, and

government

economists.

there

radical

Today,

change in the

picture. No matter where

turn

you

somebody is predicting something.
The

the

still

are

doing business at
stand

old

same

the

mentioned

individuals

same

above

that

except

economists

government

far

outnumber the rest. Some of these

government economists

heads

others

are

capable

men,

gentlemen with political

bureau
are

axes

thoroughly analyze the longto go back to the 1937-1938

sary

That

low

decline

culminated

of approximately

98 in

the Dow-Jones Industrial average
in

early 1938. The decline

lowed by

was

fol¬

double tops of approxi¬

and

France, Pearl Harbor
unfavorable early war

the

news, the market declined to a
low of approximately 94 in April
of 1942. It is my opinion that the

base
on,

for

was

period

April,

the advance, from 1942
formed in the four-year

between
1942

1937

94-157

Dow-Jones

the

late

the

and
range

industrials.

During this period, the

averages

and industrial stocks built up tre¬

mendous

patterns.

base

accumulation

The ultimate objectives

of these base

patterns in the aver¬
ages have not yet been reached.
My work tells me that the ulti¬
mate objective is above 350 in
the

Dow-Jones

Industrial

Aver¬

When this objective will be
reached, I do not know. If the
age.

They have former back¬

grind.

grounds

being

advertising
journal

editors

workers.

the

opinions,

while

publicized

are

general

public

ions.

are

expressing

(Incidentally,

the

and

who

main,

although

obviously
lot more

are

these

econo¬

opin¬
boys,

above average,

their

colored,

listens.

We, also, have labor union
mists

farm

service

social

Their

unimportant,
that

high-powered

executives

opinions

they

the ball than

are

have

some of

market follows the pattern of pre¬
vious postwar markets, it will be

reached

the

1952 and 1955.
same

indicated

period

between

An advance of the

greater

proportions

by other

averages, but
rather than confuse the issue
by

introducing
confining
Dow-Jones

other

figures,

predicting

the

industrials.

tional

that

and

favored

the

breaking
on ulti¬

to indicate a decline to

area

area," depending

170-175

the

This

support

Advance

Started

The

advance

that

April, 1942, met

1942

started

temporary in¬

terruption in mid-1943 when the

gave

which

area

such
apparently

zone

in checking the nrice objec¬

tives

the

1937-1942

individual

covered that

base

area

issues, it was dis¬
great many issues

had, at their 1946 highs, reached
their long-term price objectives,
thus

indicating an end of the
and the necessity of form¬

another
the

base

new

indicated.

great majority of

issues

were

before

pattern

was

move

the

This

heavy

list

clusive.
in

these

cases,

consumer

soft goods group, such as depart¬

distilling issues, mov¬
ing pictures, luxury items, etc.
It was al$p discovered that the
,

patterns

issues

other

objectives
their

above
issues

Such

most

instances, in the
heavy industry group. This would
indicate

the

that

leaders

market

of the next

stage of the bull mar¬
ket will be in entirely differenct
groups and that the previous mar¬
ket leaders will be relegated to
the background.
The broad dis¬
early

built up during the

area

part

indicated

1946

sizable

reaction, both in the aver¬
and in the individual issues.

ages

The down

eral

swing occurred in

160-170

lower

area

occasions

ent

sev¬

with the averages ex¬

waves

tending the

September,

Individual

1947.
not

did

the

six differ¬

from

May,

also

range

five

their

reach

downside

objectives at the same
time, but were spread out during
the
September to May period.

There

issues.
all-in¬

means

are

issues

many

substantially higher levels.
196-201

the

Intermediate

While I expect the intermediate
term objective for the advance to
be the 196-201 area, I would be in¬
clined to be cautious at this stage

the

advance.

The

has

been

183

rally from
rapid and

would

expect
a
correctionary
phase or, at least, a consolidation
period

the ultimate inter¬

before

area.

favorable
I said before,

indicated

ally made
mate

Chrys¬

dip from

and

level

low of 7514.

the later issues

actu¬

One of
its ulti¬

reach

downside

objective
was
American Telephone, whose dis¬
tribution
from

200

over

jective

this

the

built

that

area

range.

the

this

196-201

major

was

The

base

area

but believe they

area,

Electric Autolite in the higherpriced group and Houdaille Her-;
shey and Mullins Mfg. in the
lower-priced group. My selections
the farm

emplement field

levels
For

their

indicate

and

higher
the intermediate term.

over

example,

Barnsdall

indicates

Bliss

is outstanding with a
objective of over 50.
National

Supply

also

have

appears

pattern and indicates
objective of around 30, Worth-

ington Pump is still in a trad¬
ing
range,
but
has
dynamic
possibilities.
-Other
fa¬

upside

vored issues

in other groups in¬
Chrysler with an ultimate
price objective of 160, Pepsi-Cola,
clude

believe

sell

will

around

55, and United Fruit, which indi¬

75, and Westinghouse

Electric with

have

indication of 38-

issues

that

but

favorable

pat¬
Howe

potentially

terns,

Colorado

are

Fuel,

rock

Sham-'

have been recommend¬

ing in the 26-29 area. It may have
reached temporary resistance at
the

market

its

quick

purchase

the

low

run

but it appears to

39,

over

objective

tion

the

recent

advance

has

buy

at least

these

from

dips.

term

198-201,

been rapid and I would
correction

while

about

the

pace

The

30s.

Oil and Gas.

Let me again repeat that
believe the intermediate

is Cities Service

not

have

resistance

41-45, Gulf Oil 88-89, Standard Oil

which

favorable
an

of N. J. 92-100.

One of my favor¬

W.
price

Sound, Phelps Dodge and

ites in this group

are

Deere & Co. and Oliver Corp.
the heavy machinery group, E.

penetrated

expect

levels.

consolida¬

would

l ';;

Accomplishing Economic Stability
(Continued from page 6)
take-home pay," "to

"to maintain

range
area

indicates
the

ob¬

After that, I would ex¬

corrective phase that

may

duced

rising prices, have

increase

prospect

turn.

etc.
our

purchasing power," "to
deflationary gap," etc.,
Thus despite the fact that
problems today are so utterly
the

different from those of the
we

what

ing" has

then

was

priming."

Today's

the total of

prim¬

"pump

miscalled

of organized labor,

purchasing power

our

increased.

somehow

ample,

Our total

somehow

giving consumers less

coal—and

less

successive

not

jumps

wage

translated

themselves

unemployment only be-:

mass

of individuals and business.

by taking toll of consumers in
general, for-, the benefit of se¬

into

their

cause

"pump

"purchasing power theory of

groups

These
have

getting

ever

called

wages."
V-;; <
In
plain language, ,Jt is the
simple essence of this theory that,

lected

recrudescence

what

1930's

elaborate ration¬

alization

the

have

seem

the

all

things

of the war-created

leave

and

lagging

incomes

many
of

liquidity

wage

economy " and may
in
make it difficult to clear all
kets.

The

They
rates

sectors

some

the

time
mar¬

;

uncertainty

fiscal

and

monetary policy and of wage and
tax policy has placed a consider¬
able cloud

over

iness.

year

the future of .bus¬

or
two of good
promptly sets the labor
on
fire, causes high

profits

movement

administration

and

that coal helps to make—for their

dollars, in order to give the John

officials

further

courage

ganize
prices.

wage

en¬

increases

denounce

profits and or¬
campaign to "talk down"
In spite of good profits

L. Lewis constituency some
a

$13.00

$13.00-a

day

too

What is at is¬

sue

is the straightness of

think

the way

it.

about

uncertainty and the stock

ket follows
When

mar¬

cautious course, not
to- equity-financing.
outlook is uncertain,
a

conducive
the

the chances

recovering invest¬

ments become dim, to say

purchasing
power
cannot be sustained or increased
total

Our

a
whole, investors hesitate, en¬
terprisers and risk-takers hesitate

day for digging it.
Whether

the

turn

chances

nothing
earning a re-,

the outlays.

If this is

valid, though unduly
analy-:
sis, what can your Committee do
tional group. In fact, even these to set straight the thinking of our
organized
special', occupational people so that proper balance may

by taking it away from consum¬
ers
in general for the benefit of
this, that, or some other occupa¬

reduce each other's differ¬
gains—because these groups

groups

ential
are

themselves

sumers.
,

jective of this intermediate term

pect

base

shortly. My favorites include
Borg Warner, Doehler Jarvis and

yet

the point at issue.

drawn

170-160

They have not yet broken out of
their

area

out

recently.

nine-month

through the
May, 1946 and February, 1947,
highs, the trend was definitely
indicated as up and bore out my
contention,
reported
over
and
over again
from September that

buying

attractive.

will

base

broken

This ob¬

152.

lines

American

looks

have

decline

period
between September and May, the
averages have built up a substan¬
tial
base
pattern.
When
the
averages
penetrated the down¬
trend

objec¬

300.

also

They

high, too low, or just right is not

reached just

was

During

indicated

area

Cyanamid

Other

power

84-74

ultimate

around

40.

be increased, for ex¬

the

cates above

supposed to

which

indicates

and

groups, the oils, as
have the most advanced patterns.

purchasing

price

objective of 154-157. du Pont has
also broken out of its price range

which

analyzing the

its downside objective was
140

large

indicates

and

area

at¬

Union

Carbide has broken out of

Objective

One of the earlier issues to reach

ler,

have

patterns.

rnahy
ultimate

considerably

Attractive

also

great

indicated

highs.

1946

were,

machinery

other groups that also indicate

ment stores,

base

appre¬

possibilities are the oils,
chemicals, automotive equipments,
agricultural implements and some

How¬

ever,

for

Technically

chemicals

tractive technical

base

The automobile accessories also
have favorable technical patterns.

indicate sizable

and

ciation

meet strong support in the 178-175

buying

indication

terns

been

have

technical

tive

mediate term objective is reached.
I
would expect, any
decline to

as a
for the last 10 months.

The

issues,

some

170-157

the

consistently advising

upswing.
Basic

quite diverse

ultimate

The groups which
appear to have
the most advanced technical pat¬

162

194*3,

show

oils,' having
completed their accumulation

issues

fall

issues

the

to 205 and broadened the distribu¬

mately 157 in both 1938 and 1939.
the

Chemicals

quently, the averages rallied back

From

there, during the period of

vidual

patterns, with

and ex¬
that
the

February low and

tribution

me.

above 60. >

I ad¬

mate reaction to about 174. Subse¬

public,

only five times earnings?
If a stock is earning $5 a share
this can mean a pricing of $75 a
or

group

down

probabilities

ing

ued

stage,

opionion

was

move

early as 1945 has

taken.

be¬

wrong

declined

averages

25%.

sold stocks?

is obvious and yet we

answer

should

were

all

sive

fractionally

this

same

the

pre¬

support

used.

May 29th, 1946,

check ,on the technical pat¬
tern. If both seem to agree, action
as

trend

this

had

strong

195.

of the

which
a

reacted

and

below

the state of mind of the investing

important,

level,

been

the day when the

room

points

Interpretation
is

199

viously

dustrials

cause

Which

public.

general

whether the half point, one point
or
three point chart count was

this

all

Technical Versus Statistical

the

industrial average penetrated

the

level

reach

May 29. However,
average penetrated the

rail

the

February high of approximately
38 only fractionally and failed to
confirm the uptrend of the indus¬
trials.
In the early part of July,

of the

may seem unimportant to the in¬
formed person, but they do have

ous

high of 213

latest opinions on the state
nation by Walter Winchell,
Sinatra.

rallied

industrials

the

Drew

advance

the

1946,

sively penetrate the 1946 highs. I
expect the advance to be ex¬
tremely selective. Charts of indi¬

area
continued, without any important
and in an
advancing phase. Other
nterruption, to a high of 207.
groups still apparently have fur¬
Then, another 10% correction oc¬
before
curred that brought the averages ther consolidating moves
back to 185.
From that point on, their base pattern is completed.

has only to open the daily paper
or listen to the radio to hear the

who endeavor to inter¬
pret market action by spending a
few minutes a day drawing vari¬
of people

February,

10%

about

From early 1944

145 to 130.

rrom

organizations.)

declined

averages

Thursday, July 17, 1947

•

made

of con¬

of robbing
Paul cannot make

The essential process

Peter
both

pay

them

and

over-simplified

be restored? The Nation's

better

off—even

concern

with industrial potential in terms;
of both national defense and a

rising standard

brief

indicate
of
-

the

living, should

supreme

importance

this matter.
The

substantial

profits

earned

eventually
gets by American business today (be¬
around to taking a turn at robbing tween 4 and 5 cents per foliar of
Paul, with„ the protest that his sales, or 3.5 cents per dollar of
purchasing
power
has recently assets) are not earned by an om¬

though

Peter

„

carry

the

This

back to 185-180 level before

advance

.is

again

upswing

resumed

been reduced.

should deci¬ whose

many

nibus

corporation,

consumers,

dreds

And far too

—in fact most of our

purchasing

power

re¬

but

thousands

enterprises.

hun¬

separate

Meantime, railroads,

Volume 166

Number 4612

THE COMMERCIAL & FINANCIAL CHRONICLE

aircraft manufacturers of incentives. It must always be1
conscious that there is great dan¬
are operating close to
the break-even point or at a loss. ger in dealing in generalities and
We
must
permit those adjust¬ aggregates. Profits are not earned
ments which will keep the indi¬ by "business" but by innumerable
vidual enterprise producing those separate concerns.
Perhaps no¬
things which the consumer wants body earns the average wage rate.
and is willing to pay for. For this
It has been said that no progress
reason average wage rates, aver¬ was made in
determining whether
age
profits and average prices, or not civilization had progressed

airlines,

and others

cannot

tell

whether

danger

points

are beginning to emerge.
There is always danger in the use
of these aggregates, because in¬

centives

individual.

are

Because

must

correctives

individual, selective and designed
to

fit

the

specific

malady,

very difficult for government to
do anything positive about these

problems.

Government

the

until

concept

"progress"

broken down into its constit¬

was

uent

elements:

Freedom

from

pain, from suffering, from oppres¬
sion, freedom from tyranny of

government and tyranny of pri¬
vate groups, central house heat¬
ing, reduction of cares, adequate
and balanced diet, etc. The Com¬
mittee, to be most useful, should

usually

similarly tackle these basic over¬
all problems by breaking them
capacity to cure the par¬ down into the forms in which they
ticular sore parts which need cor¬ are in reality, and then examine
rections. It is only as the govern¬ their interdependencies. We know
ment and special interests help now
that
Government-inspired,
to open the "way for natural ad¬ 18-cent-per-hour wage increases,
justments
to
make
themselves for example, were too much of
instrument"
"blunt
operative, that permanent reme¬ a
type
of
dies can be developed.
therapy. They had an enormous
Because of lags in prices and differential, impact and solved no
costs, current profits may be mis¬ problems.
leading. It may take from a few
Basic Methodology

uses

generalized remedy, which

has little

days (an automobile manufac¬
turer)
to many years
(a job
printer) for the full effects of a
general across-the-board wage in¬

The Committee members should

themselves

ask

from

time

(239)

standard of living for the masses
is absolutely assured under this

of the labor supply.) No one busi¬
ness establishment can have much

system if

enduring power

can

the world add

can

bring peace to
create domestic

Government

oyer you .or ipe.
foster
an

should

coordination between anti-trust policy which, while not
investors, management and hostile to so-called big business,
labor, between government and will forever keep open the oppor¬
its citizens and groups.
tunity to launch new enterprise.
The
Chamber
of
Commerce This is the source of liberty, free¬
would like to assure you that it dom
and
economic
progress.
will do everything in its power "Freedom of entry" should be¬
to help make this voluntary so¬ come the foundation of anti-trust
ciety function effectively.
This policy for both economic and po¬
does not mean complete freedom litical reasons.
Before war's end our
from1 government.
Government
Committee,
has a role to play, primarily in on Economic Policy prepared "A
establishing the rules of the game, Program for Sustaining Employ¬
in creating a. sound currency and ment," a brief pamphlet setting
banking system, providing statis¬ forth practical policies for busir
tical information not otherwise ness, for labor and for govern¬
available, and in administering ment, designed to bring high level
the now very large budget in a stability to our economy.
If in
way which will release incentives your judgment, Mr. Chairman, a
where they need releasing most. useful purpose would be served
Of importance at least equal thereby, we shall be glad to have
to the future potential economic you include this pamphlet in the
progress under our system is the record of these Hearings.
fact that we retain personal and
But again we want to empha¬
political freedom under it. "All size the enormous difficulty of
power
corrupts
and
absolute achieving economic stability, un¬
power corrupts absolutely," said less we can achieve international
Lord Acton. Under a competitive
peace and bring about a genuine
economic system we have a great
diffusion of power and authority. peaceful state of mind throughout
and

peace

savers,

(An asset

have lost in parts the world.

all

sectors

Flexible Public Debt Policy

borrow, and

others will issue stock if the

ket is favorable.

mar¬

In other words,

the

directions in tying

many

loose

ends

this

sector

that aspect of the economy

but

also

posed policies
through?

will

not

face a very considerable prob¬
lem of not only capital expansion,

capital
be

replacement.

easy.

Basic
We

The Committee's Tasks
:

Your

Committee, Mr. Chairman,

must be concerned

primarily with

legislation.

It must also be con¬
scious of the problems of admin¬

to be

are

if pro¬
carried

resources.

the

saves

low

government

charges; but it

may

some

-debt

less

thus

and

revenue

have

surplus with which to retire

that it borrowed

our

V-

Reduction

form

desirable

further

You will recall

debt.

long-term

needed

Drive

debt.
A Plan of Automatic Tax

Victory Loan
1945, largely
huge amount of

the

this talk I referred to the fact that

the debt is

now

vast that it is

major factor in our economy and
that no important decision on our

economic iront

be made with¬

can

out

considering i'.s influence. You
just cannot discuss credit and
monetary
policy
now
without
bringing into the picture debt
management in all of its phases.
This only means that the Treasury
and the Federal Reserve System
have to work together on all of
these interrelated problems with
due

regard

each

for

sponsibilities, There
be
not

others' re¬
bound to

are

differences, but they

some

and

have

never

mountable,

been

are
insur¬

believe that
whatever there were they are be¬
ing gradually overcome to' the
and

benefit of all.

In closing I should like to say
that while the debt is large, I see*
reason

to worry unduly about
can be managed, but it

it. I think it

does have to be watched. In its debt

management work the' Treasury
should, of course, keep its policies
extremely
flexible, keep con¬
stantly alert to changing condi¬

and it should continually
the position of the vari¬
investor classes in the light of

the

2lh%

long-term

government and our voluntary this program, it would
system for granted for tremely helpful if the Congress
a
long time. Except in the case could adopt some method whereby

I Fortunately,
the
Act of 1946 throws
in favor of

Employment
its authority
voluntary individu¬

reduced

automat¬

ically when it definitely appears fact that further refunding of the
we are heading for a depression.
short debt into long-term will re¬
A sharp tax reduction first under sult in a higher cost of carrying
such conditions would, it seems the debt, we must use great care
to me, be the best and the most in any such program to see that it
effective stimulant that could be meet those tests, but they should
offered. To be most effective it credit and debt management pol¬
would have to work quickly, and icies. No doubt there will be occa¬
it would lose much of its effec¬ sions when such refundings will

tests, but they should

tiveness if it had to wait months

meet those

while

Congress debated the
subject, and while the country
was sinking lower and lower into
a depression.

arranged so as not to deprive
any funds available in the market
from going into private invest¬

and

the

atmosphere

full

at the

right time. I know the of¬
ficials in charge of this important
task are as anxious to do a good
job of managing the public debt
as you are to have them do it.
But
will

is inevitable that there

it
be

some

disagreement

debt management policies among

bankers, businessmen, economists,
etc. There are always many sides
to a given issue—particularly One
this. Even in the field
this is a con¬
thing because it empha¬
sizes the alternative courses of ac¬

large

of debt management

structive

tion Open to the fisfcal authorities.
I am sure that the

Secretary of the

Treasury and the Federal Reserve
officials

are

sides

the

consideration to them before mak¬

borrowings were* used
period of a year beginning

part certificates of indebtedness
held by the banks. In view of the

taxes could

in the

awareness, the Treasury will be
in a position to do the right thing

sold

March 1946 to retire for the most

revolutions, the loss of liberty

Thus,

The proceeds

bonds

these

over a

ous

the current economic environment.

anxious to get all
important questions
involved in public debt manage¬
ment, so that they can give proper

December

non-bank investors.

step in
be ex¬

funds than

economic

rate

cause exces¬

get
less

Philosophy

new

interest

scribed level, the Treasury would

because

taken

have

has occurred largely on a con¬
legisla¬
cealed step-by-step basis.
Gov¬
tion—that is, legislation in action.
ernments
were
pressured
into
But in economic affairs things
bringing about cures, and, having
usually are not what they seem.
failed
to
heed
the ' foregoing
Social security may bring some
standards, these cures frequently
security to the individual, but it
set in motion so many adverse
has many repercussions on fiscal
effects that the economy bogged
policy, on work incentives, on the
down and malfunctioned to the
mobility of labor, on the applica¬
tion of labor and the allocation of point where more cures seemed
called for. ':

istering existing and

a magnificent job
maintaining a stable market
and in helping .in, other ways to
manage the debt.
But earlier in

resurvey

in steel, to make itself

felt

that it has done

tions,

time:

(1) What is there that we don't
like about the present economic
the
picture?
economy. Only when the printer
(Continued from page 9)
(2) Can the Government really
replaces his presses and other
should then enact a tax program have been directed at the fiscal
equipment will he be confronted do something about this picture?
(3) If
the
Government
does based upon a level of national in¬ authorities. One, for not refinanc¬
with higher steel prices. For this
what is proposed, what secondary come, one which could be assumed ing the bank-held debt with a
reason, it is probable that many
businesses have not yet felt fully and tertiary effects, which are to employ substantially everyone; longer term bond at a higher cou¬
the rise in the wartime wage in¬ not wanted, will flow from the that would produce total revenue pon rate, which would be avail¬
sufficient to meet not only the able to only permanent non-bank
action taken?
creases, to say nothing of the sev
(4) Is it possible to determine range of expenditures fixed, but investors. The other is criticism
eral postwar increases.
in
advance
the
short-run, the would provide, say $2 or $3 bib- of the Federal Reserve System for
Depreciation rates are generally
not being more independent in
calculated on the historical cost long-run and the intermediate- lion in addition for debt retire¬
run
implications of this or that ment. If the national income ex¬ taking control of the credit situa¬
of equipment.
When the day of
ceeds the level used as a basis for tion. I wonder sometimes if the
replacement
comes,
businesses projected policy?
(5) If the Government did all the tax program, the Treasury critics looked closely at the rec¬
generally will be confronted with
As for the first criticism, I
that needs doing, would it do a would receive more revenue, in ord.
much higher replacement
costs.
The large aggregate net cash and really good job, and what kind of which case it could consequently think they have overlooked the
retire more debt.
On the other fact that the Treasury has during
other liquid assets may not help economy would we have?
if**the
national
income the past year refunded a substan¬
(6) How far would the Govern¬ hand,
the individual enterprise.
Many
decline below the pre¬ tial amount of the short debt into
ment have to go in many details should
of them will have to

crease, say

fully

ing their decisions.

It is the duty

of the Secretary of the

whom

Treasury

the

Congress has
placed the responsibility for prop¬
erly handling the public finances,
to weigh all points of view in
reaching decisions on public debt
management. I am sure that these
decisions will always be made in
the best interests of the country
as
a whole and not just in the
upon

interests of

few.

Donald S. White Forms

Own Investment Firm
Special to The Financial Chronicle

opportunities, and so that
alistic society.
CINCINNATI, OHIO —Donald
As a.part of this overall policy, we do not bring back into use the
courage thrift, under certain cir¬
S. White is forming D. S. White
We have not been fully con¬ as much as possible of our whole practice used during the War Loan
cumstances.
It may help create
drives whereby non-bank institu¬ & Company with offices in the
an old-age problem for the
gov¬ scious of the perfectly enormous public works program should be
Union Central Building to engage
ernment by driving down earn¬ virtues and potentialities of this held up during prosperous times, tions sold shorter term obligations
sive demand for capital and dis¬

and it forces type of society. The 3.6 million
separate business enterprises plus
a revaluation
of all earning assets—farms, real 6 million agricultural enterprises
estate, etc. A new minimum wage provide our economy with nearly
law may say to the worker, "You 10 million foci of energy, of drive

ings from savings,
upward (inflation)

shall

not

work

for

less

than

cents

* an
hour."
Does the law,
however, assure the worker of a
Job? Does it stimulate inflation?

Would

other

times

retard

.recovery?
In

considering legislation,

and

ambition.

Most

these

enterprises are engines for fos¬
tering capital formation.
Most
of

them

* are

ever

alert

use

mechanical horsepower per

worker. Many of them are look¬
the ing for innovations and improve¬

Committee should always exam¬
ine the full implications as to its
effect on costs, on prices and on

output.
There is always great
danger of fixing one's eye on one
of these land ignoring the com¬

ments.

We have 10 million

places

where experiments may be tried,
where no outside authorization is
needed

launch

the

new—all

driving the standard of living of
people upward.

our

pensatory and other reactions set
Our
economy operates under
in motion by a law or ruling, about 10 million
separate, private
which may be adverse "'with re¬ business budgets. No
regimented
spect to the one or both of the or " overall planned economy can
other factors."
hope to compete in the dynamic
The Committee must always be drive that an
economy has which
conscious of the inter-relation of possesses
nearly 10 million indi¬
Waees, prices and profits,-the cost vidual centers of initiative.I Eco¬
of borrowed capital; the problem nomic
with a rising
progress

State and local governments

should be encouraged also to hold
back on their programs;
although

plans

for

should

programs
and

proceeding with these
be

formulated

ment

the banks to raise funds with

which
bank

issues

put

out

the

drives. That operation only
more

money

non-

those
added

the

automatic

tax

provide

the

not

stimulant,
with

the

necessary

could

delayed

go forward
public works

program of both the Federal Gov¬
ernment

and

governments.

the State
From

and

the

favorable

time

for

stand¬

proceeding

with these public works programs
because they would be carried on

during

gram which will bring
tice back into use.

this prac¬

ager

securities

business.

Mr.

formerly local man¬

was

for L. J. Schultz & Co. for

many years.

Charles Graham Opens
Firm in San Antonio
SAN

Federal Reserve Independence

local

point of the taxpayer depression
periods would seem to be the most

the

Schultz

to the already over-

supply and further monetized the
reduction debt. I have no fear that the fiscal
authorities will adopt any pro¬

constantly kept current. Then

does

Criticism of the Federal Reserve

System to the effect that it is not
doing its duty as defined by the
Congress and that it has come un¬

TEXAS

ANTONIO,
Graham

Charles

Graham

and

has

Company

—

formed

with of¬

fices in the Frost National Build¬

ing.

Mr. Graham was previously-

a partner in McRoberts, Graham
jurisdiction of the Treas¬
& CO. !
seems to be to be not founded

der the
ury,
on

fact. I have

never

felt that the

period of lower prices,
With Vercoe & Co.
and at a time when they could Federal Reserve System has lost
Special to The Financial Chronicle
stimulate employment; and for any of its independence or pres¬
It certainly has developed
this reason they would be most tige.
COLUMBUS, OHIO — William
beneficial to the country, as a its own independent views about F.
Pryor has joined the staff of
credit
policies,
has advocated
whole from the standpoint of eco¬
them strongly, and it has carried Vercoe & Company, Huntington
nomic conditions.
Bank Building, members of the
Now I would like to say a few some of them through on its own
words about some criticisms that independent motion. I must insist Ntew York Stock Exchange. :,
a

THE COMMERCIAL &

(240)

Thursday, July 17, 1947

FINANCIAL CHRONICLE
public. Only

and Remedies

Economic Instability: Causes
18)

(Continued from page

possible as Government
tures are reduced.
We
a

On the

mism

the

economy.

need

for

tax

reduction there is

widespread agreement. The issue
is how much and when.
Part of

cash surplus
arises from abnormally inflated
prices and incomes in some parts
of the economy which will come
back into line as competition re¬
the

and

present Federal

even,

perhaps,

Once

have

accurate picture

of the needs and sound programs

we should, in my opinion, within
to a counter-cyclical the limits of our resources, extend
pattern.
But in this area, it is
easier to state objectives than to help to get these countries back
on their feet.
If we do nothing
show how to achieve them.
and wait for the world to fall to
Some few points are clear, how¬
ever.
In prosperous times, loans pieces, Russia will be there to pick
should not be made which will up the pieces.
The greatest single contribution
turn sour in a depression.
In a
which the United States can make
peridd of depression, loans should
to high levels of trade and em¬
not be called if they are still good
risks.
Bank
examiners should ployment throughout .the world is

expendi¬ [change it
in CED

deep conviction that tax
reduction is essential to the dyna¬
have

contraction of money and

sion and

credit,

bear

down more

heavily in good

maintain a

high level of em¬

Federal Re¬ ployment, production, and con¬
asserts itself.
There are, more¬ serve
discount, reserve and open sumption within its own borders.
In serving ourselves by maintain¬
over, uncertainties as to the de¬
market policies should be directed
mand for exports.
In the present to
restraining, the expansion of ing our own prosperity, we serve
all other countries as well. •
circumstances with less than two
credit in periods of prosperity and
million
unemployed,
numerous
Agriculture—On this subject, I
easing credit in periods of de¬
shortages and inflated prices, a
should like to refer you to the
pression.
substantial cash surplus is needed.
testimony of Chester C. Davis,
In

of the

view

face, we

uncertainties we

should be

high

Money and

credit are areas in
billion dollar ques¬

Vice-Chairman of the Research
W e and Policy Committee of CED,
need
out which he presented before the
budget what happens to money balances, Agriculture Committee ot the
We should cash flows and credit in business House of Representatives June 7,

conservative in
balanc¬

applying the principle of
ing the consolidated cash
at

than in bad.

times

employment.

which
tions

many

a profitable business
security and opportunity
to its employees.
Operating
profitably
requires

offer

can

remain unanswered.
more research to
find

constant

and

ciency

through
and

efforts

Only

costs.

of better equipment

use

better methods

can workers
continuously raise their output.
Only through such increased pro¬
ductivity can workers obtain high¬
er and higher real wages.
.

Businessmen must push forward
search

the

services.

are

unaware

product.

debt

the

and

products

New products can enrich

most recent

the
a

new

lives and fill needs of which

our

for

research if

commercial

owe

stop to realize that

than 50%

today. Radio is
example of such
get some idea

can

our

people to¬

Federal expenditures.

great need, of course, is for
recast of our tax system aimed

The postwar

world.

prosperity of

All of our interests are interwoven

in a tight, complicated, fast-mov¬
all nations and prospects for con¬
tinued peace would be advanced ing economy. In the long run, con¬
producing the needed revenues
ditions under which farmers raise
with a minimum of interference by the re-establishment and in¬
development of world and market their crops will be
with the attainment of dynamic creasing
if not con¬
trade.
The interchange of goods, greatly influenced
stability.
In 1944, CED issued a
international
travel, and
com¬ trolled by developments entirely
policy statement under the title of
outside of agriculture. Decisions
"A Federal Tax System for High munications between peoples can
make for better world understand¬ in foreign capitals, in the houses
Employment." We are now en¬
of Congress, in board rooms of
If the barriers to trade in¬
gaged in a restudy of Federal tax¬ ing.
great corporations, or in labor
crease after the war as they did
ation and expect to issue a report
union halls will help determine
on
the
subject early this fall. before the war, each nation will
have to look inward, primarily to whether farmers suffer or prosper
Copies of the 1944 statement are
in the years ahead.
available to any one of you who its own resources, and the higher
"If I coqld be graced the ful¬
wants it.
..y
^
./•. and richer ways of life made pos¬
of
one
wish
for
the
sible through world trade will be fillment
Unemployment Compensation— lost. The pressures to restrict are growth and prosperity of agricul¬
So far we have made only limited strong; vigorous effort to expand ture, it would be this: let the nonuse of
unemployment compensa¬ world trade is necessary to over¬ agricultural industries and labor
find the way to keep working at
tion as a social tool, but its effec¬ come them.
The United States has a major full efficiency and capacity turn¬
tiveness
has been dramatically
demonstrated. It gives people the interest in the expansion of world ing out goods and services that
can
be absorbed by this country
confidence in continuity of income commerce. We are a powerful in¬
We need vast in a high standard of living—in
which
is
so
essential to the dustrial nation.
better homes, equipment, electri¬
achievement of greater stability in quantities of goods and services of
our
economy.
It also makes a many kinds. Normally we have a fication, refrigeration, sanitation,
ad
infinitum.
With
tangible contribution through large margin of efficient, produc¬ clothing,
maintenance of purchasing power. tive capacity which can be put to steady work and efficient produc¬
We should not allow the circum¬ work making things for interna¬ tion, prices could go down with¬
We can exchange out cutting profits or wages. Real
stance that there has been consid¬ tional trade.
increase, for the
erable maladministration of un¬ these things with the people of wages would
laborer is like the farmer—it isn't
employment compensation insur¬ other countries who, themselves,
ance blind us to its benefits.
Our make other things available for the number of dollars, but what
other
things
better
or he can buy with his product or
aim should be to extend it as far trade
cheaper'or different than we can his labor, that counts.
as practicable to all workers, and
"Under
such
conditions,
the
to increase benefit standards in or want to make.
A restrictive course by America farmer could produce abundantly
those states where standards are
and still trade on good terms for
now
low.
Payments, of course, toward foreign trade is contrary
a

It will be
large enough to to American interest.
followed
by restriction
abroad.
make unemployment attractive
Monetary and Credit Policies— Inevitably pressures will be built
If it were possible to do business up which will limit private trad¬
ing and foster trading on the part
by barter, we should have little,
of
governments.
Governments
it anything, in the way of booms
which have a monopoly on inter¬
or busts.
Booms occur when peo¬
national trade find it quite natu¬
should

not

ple, businesses, and governments
in total try to increase their ex¬

penditures by drawing down their
cash
balance; or by borrowing

(especially

from

banks).

Busts

expand their controls over

ral to

domestic trade.
In

opinion, we should give

full

support to the State Depart¬
ment in the battle in which it is

when they try to decrease
now
engaged to bring about a
expenditures to accumulate
great reduction in the artificial
more cash or pay off debt (espe¬
barriers to trade between nations,
cially bank debt).
I say "espe¬
whether they take the form of
cially bank debt"
because the
tariffs, import quotas, restrictive
money supply rises as banks in¬
exchange practices, subsidies, or
crease their loans and investments
occur

their

and falls as they decrease

them.

and credit provide the
medium through which booms and
busts
cumulate and feed upon
themselves.
The severity of the

restrictive business agreements.
In

Money

the

however,
reduce

world
a

situation

today,

vigorous program to

tariffs

and

remove

barriers is not enough.

trade

There is

great depression from 1929-32 was overwhelming need for world re¬
large scale liquidation construction and rehabilitation.
of debt and a sharp contraction of
The first step should be a real¬
induced by
the money

supply.

The war and

postwar inflation we have been
going through was induced by
enormous
expansion of
public
debt including heavy bank bor¬

istic

appraisal of world needs, as
suggested by ex-

has already been

President Hoover.

The next step

what

the

other

could prosper
els.

man

makes;

at lower price lev¬

I think that

really is the way

propose,

by' adopting these basic
and
policies can we

Only

measures

need to improvise in
emergencies. Such improvising is
dangerous.
Emergency remedies
avoid

are

the

likely to be half-baked
fail

which

ures

work

meas¬
as

ex¬

pected and which hamper rather
than help full recovery and future

Only by achieving the

progress.

maximum

and built-in

imize

the

built-in

stability

need

dynamism

can we min¬

for

reliance

fallible human forecasts.
.

recognize, however,
coping with booms and
sions there

that in
depres¬
usually special cir¬

are

cumstances

t°

deliver
the total

each

case

which

of consumers,

milk,

have, added

you

ness

good,

that

reserves

will

be available when

needed.

extra pressure
know of no single

business

way
m0r

managers

can

^elp stabilize market de¬

mand than
ization

through greater stabil¬
of sales and advertising

expenditures.

employment

ize

extent possible.
been

out

nesses

and

seasonal

greatest
more
curve

individual

to
of

busi¬

industries.
avoid

un¬

expansion of inventories

launching of capital expendi¬

limited

by operating needs and
costs, but when opportunity exists
such policies should be pursued in
interests

the

stabilizing the
operation of other businesses and
thus of all business.
Businessmen should look to the

long run in their pricing policies.
This

means

foregoing

additional

profits now in order to expand
markets, improve competitive po¬
sition, or encourage greater in¬
ternal
efficiency.
Lower prices

will not be
possible, however, if in the future
and

greater volume

continue to have each year a

tidal

wave

of wage

demands un¬
productiv¬

related to increases in

ity.
sult

some

and while

prices

there

are

declining,

signs

the

nevertheless

ease,

we must recog¬
the present situation is

nize'that

potentially, even though it is not
currently, strongly inflationary.
Consequently, I believe that many
of the recommendations

made
are

CED to

still in order.

previously
fight inflation

These include;

(a) Continuing efforts by man¬
agement, labor and government to
bottlenecks, increase pro¬
ductivity, and void interruptions
to production.

(b) Restraint by all in raising
prices, wages and salaries, in rec¬
ognition of the common interest in

avoiding a further wage-cost-price
spiral.r'
*
(c) Restraint by individuals and
businesses in making deferrable
expenditures at the present time.
(d)

Such action

tures in boom times.
is

while

horizon that the demands for cap¬
ital formation are beginning to

should

Businessmen
necessary

the

we can

the

employment

Much already has

done, but

flatten

businesses, govern¬
foreign countries. While
shortages are now being made
good in one area after another,

ment and'

break

Every employer should regular¬

reduce

and

not

pro¬

maintain

ex¬

needed

sufficient

prevent further expansion of

ex¬

pendable funds in the hands of the
public.
the

This includes restraint

part of the

Federal Reserve

System and the commercial banks
expansion of loans

in the further

and investment's.

;;.t

(f) A vigorous campaign to in¬
crease
the
sale
of
government
bonds, especially E and F bonds,
to the public.
(g) Limitation of exports to es¬
<

sential

requirements of foreign
countries, except for goods in
fully adequate supply.
Measures

sound

continued

government

urgently

yield a substantial ex¬
cess of receipts over expenditures.
(e) A monetary policy to help

revenues

put, less employment.
Participation

penditures
now,

A vigorous and

effort

Such demands, if granted, re¬
in higher prices, lower out¬

Counter

Deflation

—We should not get the

jitters at
the first signs of any slackening
sponsibility of employers. They in
demand.
We have become so
the Research and Policy Commit¬
share this responsibility with labor
used to a sellers' market, that de¬
tee of CED on some of the prob¬
leaders and in special cases with
sirable adjustments in prices in
lems in attaining industrial peace
government. In this connection I
response to
normal competition
were presented in a policy state¬
refer
again to the CED policy are sometimes
interpreted as evi¬
ment entitled "Collective Bargain¬
statement on Collective Bargain¬
dence that depression is here.
ing, How to Make It More Effec¬
ing.
We should be careful also not
tive,
issued in February, 1947.
It is the responsibility of every
to over-correct.
In particular at
Instead of attempting to sum¬
business leader to provide condi¬
marize that report, I should like
large-scale, made-work program
tions which will encourage the could
prevent needed cost-price
to leave a copy of it with you.
growth and development of those readjustments and create addi¬
We are continuing our study of
associated with him.
Far above tional
inflationary pressures in the
the
subject and hope to issue
the responsibility of management
ensuing recovery.
policy statement as our
for its products are its responsi¬
staff research progresses and as
Above all, we should beware of
bilities for its people.
Business
we clarify our own views on the
restrictive
policies designed to>
managers are in a very real sense
remaining issues.
protect special groups from the
the trustees of the potentialities
.This discussion of the respon¬ of those who work for them. It rigors of competition at the ex¬
sibilities of government in main¬
pense of the public. Such restric¬
is people who make a business.
tions fence in
taining high productive employ¬
segments of the
Show me a business where people
economy and limit the opportuni¬
ee™, is not exhaustive but it does are
growing and I will show you ties for
production and trade. We
I
the major areas' we have a business that is making a true
studied in CED.
cannot achieve abundance by pro¬
contribution toward
a
dynamic
ducing less, by artificially jacking
Responsibilities of Businessmen
America.
up prices or wages, or raising bar¬
-To help make our economy dy¬
Short-Run Measures to Cope With riers to trade. Higher tariffs, NRA
namic and stable there are certain
out."

Industrial Peace—The views of

gram

for industrial peace is a re¬

Boom or Depression

Secretary Mar¬ things that businessmen can do.
In coping with booms and de¬
The primary responsibility of a
shall already has in the case of
rowings and concomitant creation Europe, to the country or coun¬ businessman is to operate his busi¬ pressions our main reliance should
and
of additional money.
He owes this to be on build-in dynamism
tries which need help, that they ness profitably.
his stockholders, his workers, his built-in stability. These should be
In so far as possible, it is desir¬ themselves develop a plan of ac¬
suppliers, and customers, and .the supplemented by. definite perma-r
able to reduce the cyclical expan¬ tion for their own reconstruction
is

and credit.

opportunities for special
ing and servicing products that temporary measures to supplement
our basic
were unknown 50 years ago. The
policies.
automobile
industry alone pro¬
Measures to Restrain Further
vides jobs for over a million peo¬
Inflation—Today our productive
ple. Whether you design a new resources are being used almost
airplane or work out a better way to the limit to meet the demands

—

ex¬

provide

The

deferrable

other

and

day are employed in manufactur¬

dynamics of our econ¬
proceed by steps, putting into ef¬ fluctuations. We need also a care¬ 1947.
omy.
fect a partial but substantial cut
In passing, I quote from the
ful
realistic
appraisal
of
our
Businessmen
should
exercise
in the near future and further cuts
of his testi¬
money and credit institutions to concluding section
scientific control of sales expen¬
later as we can see more clearly
see whether they could serve us
mony:
ditures.
If we are to have stabil¬
the level of national income to,
"We have to try to see farming
better, contributing less to insta¬
ized market demand, selling pres¬
be attained under a stable price
bility and more to the stability of in the right perspective in our sures must
be maintained—per¬
level at high employment.
But our economic system. - ,
complex modern life. It is impos¬
we
must get taxes down from
haps increased—at the first sign
sible to consider agriculture by
Foreign Trade^-Our objective
ot a decline in business. We must
their
wartime levels—and that
should be the increase of peaceful itself, the way you can fence off avoid
means continued, vigorous efforts
spending sprees when busi¬
and cultivate an eight-acre field.
trade among the peoples of the
to reduce

policies in regard to public

penditures and in regard to money

effi¬

increase

lower

nent

works

type restrictions and

tidal wage

of wage increases do not cure de¬
pression and they weaken the dy¬
namic powers for expanding out¬

put and increasing productivity.
When a recession, comes, busw
_

Volume 166
nesses

Number 4612

THE COMMERCIAL & FINANCIAL CHRONICLE

should take
advantage of it

moving

rapidly

The State of Trade and

planned
improve
their competitive
position at low
cost in
anticipation of recovery.
capital

This
did
war

expansion

makes

now

—

volume

and

take

the

steps I have already indicated in
policies
required for high employment. In

The

my discussion of the basic

execution

previously

addition,

there

measures

counter

deflation if it

future.

near

These include:

(1) Reduce tax rates immedi¬
ately so that the cash consolidated
budget would be in balance at a
high level of employment, if this
has

not

already

been

remaining restrictive controls
production, trade or credit.

(3) Accelerate
of

strategic
These

stockpiling

materials.

war

lists

the

special

measures

short. They

are

short.

economy

cannot

repeated

measures.

offset the

ton

above

the

viewing its operating

costs, is the fact
major consuming

signed earlier this

year.

early this week just what practical effect the

all

times

the

demand

lack

demand

for

are

some

in the steel

American

Iron

Steel

and

Institute

78.9%

week

one

ago.

This represents

ago.

95.8%

one

month

ago

announced

and 87.9% one year

bave

the.J

there

which

operating rate is equivalent to 1,601.200 tons of steel
ingots and castings compared to 1,380,700 tons one week ago, 1,676,-

need

answers

still obscure.

are

shockingly small
been

spent

for

nomic research

grace.

eco¬

national

nation

The

amount that has

fundamental

ELECTRIC

Intensive research by
government,
■educational institutions and pri¬
vate groups on problems for which
the

involved

failing

liabilities

this

size

$5,000
turned

group

but exceeded by a wide margin the
of the previous year.

$6.41

11 re¬

on July 8, as compared with $6.39 on July 1.
of 2.7% over the $6.24 recorded two
31.3% above the comparative 1946 index of

advance

earlier, and

was

$4.88.

RISES

COMMODITY PRICE INDEX

SLIGHTLY

During most of the past week, the daily wholesale commodity
price index, compiled by Dun & Bradstreet, Inc., remained at a
slightly higher level than in the preceding week, although it declined
rather abriiptly on the

closing day. This was due largely to an ap¬
parently sharp drop in wheat prices resulting from the adjustment
from an old to a new crop basis. The index finished
at 259.80 on July
8, as compared with 259.27 a week previous, and with 221.60 a
year

ago.

Grain markets

again

the

were

generally stronger last week with

dominant feature

seasonal peaks, with the

new

high of $2.1714

per

bushel.

current

for

treme

outlok

lack

trading.

All

deliveries

July option reaching

smaller

than last

crop

corn

touched
all-time

a new

Chief influences in the rise

much

the

were

year,

the

ex¬

country offerings and continued large premiums
corn.

Other grains strengthened in
sympathy with corn.
Moder¬
ate quantities of cash wheat for
export were secured by the Gov¬
ernment.
Buying of flour for export and domestic use was in¬
active

firm

but

the

price

tures

rose

stronger.

was

Rice

prices

remained

were

following decontrol of that cereal.
irregular and slightly lower, but lard fu¬

than 2 cents per pound over recent lows

active

result

tone

recent advance

Cash lard prices

speculative

the

trading.

After a firm start, cotton values turned downward the
past week.
Early strength reflected the rise of 12 points in the mid-June parity
prices of the staple and the report that the Army would purchase
300,000 bales of American cotton to meet Japanese requirements
before the end of October.

The reaction in late dealings was attrib¬
liquidation influenced by uncertainty as to what the forth¬
coming Government report will disclose as to this year's cotton plant¬
ings. The general belief is that acreage for the new crop will be
larger than the estimates of private authorities.
Spot market sales

month ago,

and 1,549,100 tons

one

year ago.

relatively small in volume and inquiries were very limited.
Mill buying was largely for forward delivery with more interest dis¬

The

Edison

Electric

Institute

that the output of elec¬
4,530,533,000 kwh. in' the week
ended July 12, 1947, from 4,189,624,000 (revised kwh.) in the preced¬
ing week. Output for the week ended July 12, 1947, was 9.0% above
that for the corresponding weekly period one
year ago.
reports

tricity decreased to approximately

played in

new crop cotton.
Reflecting the holiday and the seasonal
mill shut-downs due to vacations, the carded
gray cotton goods mar¬

ket

slowed down

The

Car loadings cf revenue

dis¬

1947, totaled 629,204

cars,

perceptibly last week.

Demand

for

cloths

remained strong and inquiries for broadcloth and
sheetings increased.
Prices were firm with occasional advances noted.

RAILROAD FREIGHT LOADINGS 7.4% BELOW 1946

have been

PRODUCTION 9.0% ABOVE A YEAR AGO

market

freight for the week ended July 5,

the Association of American Railroads

improvement in wool buying noted in the Boston wool
during the month of June continued into the first week

July.

Trading

domestic

wools

was

active

very

cluded large quantities of both government-owned and

This was a decrease of 216,937 cars, or 25.6% below
preceding week, and 50,571 cars or 7.4% below the corre¬
sponding week for 1946.
Compared with the similar period of
1945, a decrease of 97,459 cars, or 13.4% is shown.

willing to spend hundreds of mil¬

announced.

held wools.

Substantial buying

lions

the

and

in¬

privately

growing

dollars

for

research

technology, but pathetic

amounts

bave

research

•

been

devoted

that will help build
,

were

measures

discussed

when only

ago

year

uted to

toward boom and bust.

Beyond

failures

concerns

week

DAILY WHOLESALE

increase of 12.6 points, or 16.0% from the

week's

42,

same

represented

weeks

were

The week's

one

the

2 cents to stand at

This

the

preceding week.

400 tons

last week

demanded for cash

industry who early this week

Continuing the upward movement of the previous week, the
wholesale food price
index, compiled by Dun & Bradstreet, Inc., rose

steel

Monday of this week the operating rate of steel companies hav¬
ing 94% of the steel capacity of the industry will be 91.5% of
capacity for the week beginning July 14, 1947, as compared with

concentrate

recurring tendencies

corresponding week

FOOD PRICE INDEX EDGES
HIGHER IN LATEST WEEK

significant, and causing the steel industry

when

not known

The

54c

the

Totaling

ported in the

is still expected to take the lead in
posting new steel quotations.

our

building more dynamism and
stability into the system and de¬
veloping a body of continuing
policy on which we regularly rely

more.

down from 62

privately voicing the opinion that the scrap price rise made necessary
increase in steel prices of more than an average
$5 a ton. It is
unlikely, "The Iron Age" notes, that any steel company would be
willing to face public opinion and governmental censure by naming
unusually high steel prices in the near future. The U. S. Steel Corp.

emergency

must

week

should

save

capacity.

Steel firms are also confronted by increased costs
operating rate recedes from record levels.

steel

to combat inflation and to counter

depression

of capacity.

products.

accom¬

eliminate any

anxiety

was

There
or

this

scrap

average price of scrap today in the three

was

subject

plished.

(2) Liberalize

97%

93.4%

1947,

White House plea on prices would have. If
upward adjustments are
not made, earnings will fall off and some
companies claim investors
will not supply the
money needed to further modernize and expand
steel capacity, the paper
points out. Labor rates both in steel and
coal are fixed for the life of the
contracts, but steel prices are

comes

and

start of

centers, Pittsburgh, Chicago and Philadelphia, is already $8.25 above
the low for 1947 reached around the
middle of May, the magazine
Practically all of this increase has accumulated since the steel

certain

are

appropriate

ton.

gross

contract

special

was

the

states.

plans for public works.

the

that the

made

price of

average

considerable

credit, and the prompt
of

beginning

between

previous record made in June 1917 when the average price reached
$37.21

particular, I refer to the fiscal and
monetary policies appropriate in
depression, including easing of re¬
strictions

weeks

maintained

Age," national metalworking weekly. "The Iron Age" scrap
composite price this week for No. 1 heavy melting steel was only
$1.92 a ton below the all-time high reached in the week of March
18 of this year.
The composite price this week went from $35.58 a
gross ton to $37.75 a gross ton, a
jump of $2.17 a ton.

come.

should

1939. '

consecutive
were

failed.

concerns

Almost all

Iron

exploit the

opportunities of better times

Government

March, reports Dun & Bradstreet, Inc.
Forty-nine concerns failed,
representing a sharp decline from the previous week's 82.
Compared
with 1946, failures in the week
just ended were over three times as
numerous

almost double the production

was

Hope that President Truman's plea for a stay in the rise of steel
prices would be effective received a severe jolt this week when the
price of steel scrap zoomed at all major markets, according to "The

products

new

1S46, and

The average for the full six months

introduced in order to

maintain
lull

And

first

For

panded markets. As I have
already
suggested, sales and advertising
should be maintained and
be

half

the

operations

effort

should

part of

good sense as
bold expansion in the
post¬
transition to realize on ex¬

intensified.

Industry

(Continued from page 5)
comparable

(241)

society that
will use that technology for the
public welfare; that will admina

aster that research
wisely. The re¬
search going on in the

principles

administration, in the under¬

standing of
cial

our

economic and

so¬

environment, and in the field

of human relations is

today tragi¬

Output of

week

by Ward's Automotive Reports at 91,670, com¬
74,015 units a year ago and 114,318 units in the corre¬
sponding week of 1941.
pared with
The

revised figure for the four working days of the previous
63,460.
Last week's daily volume, accordingly, is up nearly
2,500 units over the previous week.
week is

cally small.
In

;

The above trade authority predicts that output for the

shift from

discuss¬

ing problems to discussing pros¬
pects; in the first instance the
prospects
In

for

free

achieving

economy

stability.
can

bave absolute stability.

never

However,

by adopting appropriate measures
of the type I have discussed we
can, I believe, hold the swing be¬
tween the peaks and valleys to

perhaps 15 to 20%.
We

•that.

can
live and prosper with
We cannot live with fluctu¬

ations

such

!place

between

when

business

that

which

took

and

1929

1932.

free economy.

Now
ther

to the prospects for fur¬

progress.

action

.operate

can

through

make

our

.income of most of

our

largely

wise

economy

realize

people
years.

can

the

age-old
abolishing poverty. Most
important of all, on this material
dream of

foundation

we
can
build condi¬
tions which will provide not
only

equality of opportunity but cer¬
tainty of opportunity for every
man,

woman

and

child

country.

this

may

reach the 104,000

cur¬

mark, unless difficulties arise.

The volume of consumer
at

purchas.es for the past week continued
high level of the previous week and was moderately above

the

two

periods

of free

pricing; there

controls after June 30, 1946.
numerous

RETAIL

temporary lapse in
Clearance sales in the past week
was

and consumer response to seasonal merchandise

consumer

interest in

Food volume

week.

Stock

prices advanced to new high peaks since
Feb. 13, but by the middle of the week
profit-taking induced sharp
selling which turned out to be of short duration.
On Thursday the
market

perked up and recovery of
complete.

was

Both the steel and rail shares
a

all of the previous day's losses

the forecast

the

came

Association

in for much attention

one

case, and

American

in the other

Railroads

At the close

Friday prices

were

higher, in keeping with their

last

and

minute

Fourth

was

sales

Mark-down

lines of clothing.

stimulated

buying

consumer

seasonal

Beachwear, casual Summer dresses and men's

lightweight suits sold well. Demand was brisk for sportswear,
Sheer hosiery in dark shades continued to

blouses and lingerie.
,

Demand for accessories was confined principally to
and white gloves. Sales of fabrics and dress trim¬
increased. Men's and women's shoes sold well.
Con¬

popular.

white

purses

mings

evidenced

sumers

interest

Fall

merchandise.

Some

orders

placed for Fall tailor-made clothing.

were

mill vacation shutdowns resulted

a slight de¬
previous week,
but order volume remained above that of the corresponding week
of

wholesale volume

from

the

level

the

Buying policies continued to be conservative with quality

1946.

stressed.

Department store sales on a country-wide basis, as taken from
Federal Reserve Board's index for the
week ended July 5,

the

1947, increased 8%* above the same period of last year.
the

For

This com¬
increase of 3% (revised figure) in the preceding week.
1947, sales increased by 5% and
to date by 10%.

four

for the year

weeks ended July 5,

According

that

earnings of the carriers will amount to about §200,000,000 in the
first five months of 1947, compared with a deficit of
$37,000,000
in the like period of 1946.'

Clearance sales increased

merchandise

seasonal

steady at high levels with stocks of most foods
purchased considerable supplies of picnie
foods, cold cuts, dairy products and soft drinks. Sales of fresh fruits
and
vegetables declined. Frozen foods were in plentiful supply.
Demand was good for meats, fish and poultry.

pared with

result of the labor settlement in the

WELL

Consumers

Holiday and

last

July shopping lifted sales volume. The buying public continued
descriminatory and response to low-quality goods was poor.

crease

Termination of the coal stoppage and predictions of
good busi¬
in the months to come had a
strengthening effect upon the stock

BEARS

to be

were

COURSE OF THE STOCK MARKET

TRADE

street, Inc. in its current survey of trade.
of

improved.

the week declined slightly from the level
week but continued to exceed moderately that of the
corresponding week of last year.
Wholesale operations were some¬
what curtailed by the Independence
Day holiday and resulting fourday week.

market

growers

during the holiday shortened week reached the
high level of the previous week and continued to exceed moderately
that of the corresponding week last year, according to Dun & Brad¬

of the previous

ness

also reported from

Retail volume

OPA

Wholesale volume in

WHOLESALE

AND

abundant.

OF TRADE

that of the corresponding week of last
year.
Weekly comparisons of
retail sales in the current year with those of 1946 measure at
present

effectively the real

!be doubled within
can

SUMMARY

volume

dropped
.more than 50%.
Another collapse
of that magnitude
might cost us
.our

rent week

concluding this testimony I

would

estimated

was

wool

Prices in foreign primary markets remained firm.

and trucks in the United States and Canada last

cars

was

States with fine staple wools commandinggood prices.
There was very little activity noted in foreign
wools and offerings
of fine foreign wools continued scarce.

AUTO PRODUCTION UP ABOUT 2,500 UNITS IN WEEK
•

the

store sales in

the

Federal

Reserve

Board's

increased 13%* above the same period last year.
no

increase

(revised)

ended July 5,

index,

department

New York City for the weekly period to July 5,

in the preceding week.

1947,
This compared with
For the four weeks

1947, sales rose 6% and for the year to date 9%.

advance for the seventh week out of the last
eight.
*

BUSINESS FAILURES DIP IN HOLIDAY WEEK

using

year ago

comparisons for this week allowance should

be made for the fact that last year many stores were closed for

Commercial and industrial failures fell off in the
holiday-short¬
ened week ending July 10 to the lowest number for
any

week since

tw«

observance of the Independence Day holiday whereas
were closed for only one day.

this

days in
vear

thev

THE COMMERCIAL & FINANCIAL CHRONICLE

(242)

Production and Movements of Gold
change .Stabilization
Fund
not
being included in the table of
United States gold stocks given
herewith).

(Continued from page 17)
and also gives an aggregate esti¬
mate

of the amount

of gold held
in unreported reserves at the end
of the years 1944, 1945 and 1946.

considerable; it should
particular, that

be remembered, in
at the end of

the

United

1938 the

Kingdom,

that time to

$2,690

million,

among the reported reserves,
while it has not been possible to

give

ing
„

figure for the correspond¬

reserves as at the end

of 1946.

Attention may be drawn
fact that the subscription
United

tional

Kingdom to

Monetary

nounced

million
it

paid

the

British gold reserves

1946,

add

total

£52

included

ures

an¬

was

stock

having

approximately £512
million net, a figure to be com¬
a

total of

gross

1946.

£512

The

million

equivalent

about

production
importance as a

gold).

new

the figures from

and

the

the trade

earmarking do

always tally with those show¬
ing changes in the monetary gold

stock.

According

the

table

above net imports of gold in 1946

amounted to $312 million, with a
decrease of $465 million in ear¬

$2,060

million.
The

same

not

£642

in gold and dollar bal¬
held at the end of Decem¬

ber,

the

domestic

lost

statistics

million
ances

about

But

were

pared with

use

the reduction in the gold

(the

source

Sept. 12,

gold once
that dol¬

marked

most

conspicuous

Transactions

ternational

United

States

the

1946,"

mentions that total net pur¬

also

gold, and domestic gold
production was at the rate of $57

increase

norts

from abroad

gold

Detailed U.

United States; the two latter fig¬

in gold, from which
calculated that the

may

the

the
Interna¬

Fund

have

begun, in

(in¬
gold for payments abroad. In the
period 1941-45 the U. S. gold stock cluding foreign gold going into
industrial uses) amounted to $705
was reduced by $2,673 million in
Deliveries of gold for
all, this reduction corresponding million.
to
net
exports of $566 million industrial purposes would seem to
during the four years in question have risen, the high level of pros¬
and an increase of $2,079 million perity increasing the demand for
in
the
gold earmarked in the gold ornaments, etc.

included

were

which

chases

amounting

countervalue

transfer

had

war

ligerent, the country began to

reserves

Fund,

the net
lars were needed for current pay¬ increase in the gold stock (includ¬
ments
(purchases of raw mate¬ ing the holdings of the Exchange
rials,
etc.).
After
the
United Stabilization Fund) is given as
States had itself become a bel¬ $623 million for 1946.
The review
the

doubt

for

reason

If account

could be taken also of the change
in unreported reserves, the per¬

centage increase would

before 1941 the in¬

the U. S. Treasury.

$30.2 milliard at the end

1946, i.e., by 18%.

gold was only $464 million.
This figure does not include, how¬
ever, changes in the gold holdings
of
the
Exchange
Stabilization

administered by
According to
crease in the U. S. gold stock was
the review published by the De¬
largely due to a flight of capital
from Europe, with an additional partment of Commerce on
"In¬
In the years

Total
reported
reserves
rose
from $25.7 milliard at the end of
1938

statistics of im-

exports of gold to and

and

countries being now
published once more, it is inter¬
esting to note that in 1946, apart
from
minor
movements,
the

from

other

million

$134

countries

American

but

to Latin
(excluding

the list

recipient

gold in 1946 comes Switzerland,
a net amount of $88

which added
million

monetary

its

reserves,

monetary reserves during 194-3 million, the three items together notwithstanding the efforts made
to stave off conversions of gold
is the
gain by $623 million in the giving an amount of $834
million, into Swiss francs.
In order to
monetary gold stock of the United while in the same year the in¬
sterilize gold, so that its purchase
in

States

($159

million

the

Ex¬

in the U. S. monetary stock

crease

RESERVES

(In

CENTRAL

Millions

BANKS

AND

GOVERNMENTS

Dollars)
Loss (—)-

-End of

Reporting Countries—
^United

1946

20,619

20,065

20,529

1,159

1,342

1,430

111

191

226

for

220

814

914

939

728

732

716

735

rived from the

_~
—I™

Africa

^Belgium
Colombia

127

130

202

215

195

200

Spain

105

110

111

329

354
7

Czechoslovakia
Denmark
Iceland

ZZI

I
ZZI

Salvador

Hungary

274
23

tt263

128

131

127

221

241

237

500

270

265

Portugal

—,—ZZI'

Norway
Iran
Peru

__Z__ZZ
;
_Z,

Turkey
Holland-

9S8

Chile

II s

)

*~™~ 1

flflReserves—Reported

482
234

181

—113

431

1,111

1,351

1,185

—166

1,777

1,030

796

—294

25,700

Unreported
Total

holdings, Canada

—

463

■

§§France

30,700

„

7,600

36,900

end

1946.

December

million, while the official reserves
of gold and U. S. dollars were re¬

1944-

$80
$18

inn

VdndotofApsrss- Ky7

i;7
/

and

go.d

include

rnm

end of 1944,

British

Exchange

ile* A«°rdl?f coins,
t0^ the
bars and gold

gold

$331

h'm

S":M then-

G°ld holdings of the Bank
to

transfers

belonging
z.

1946

Ko"r"-

the Exchange Equalization Account, viz;
figures have been published for the

atVfTp0tJHClnUfdS.nt80lK helIby
1945

?„f

tah"MtaLufo7eFtoanM!'F''re'Bn E*Chme C°ntr°1

Argentine

million

of England

Equalization

reduced

Account

ttlncluding gold

Stabilization
end of

during

$759

nominal
1939,

million
amount

ttFisure

new method of presentation, gold
Fund,

Central

s Wot

reserves for 1946
Bank held abroad and

including

? Funii «»< to the Caisse Centrale

the

deif

1938, $220 million at the end
given ior tiwenti 01 is4s-

'gold

hew

France

1944

As mentioned in the report

Foreign Exchange Board in
Ottawa, exports of non-monetary
gold, i.e., of gold from current

°f ?e,cembZr'
™d •US million at the end of September 1946
end of 1945 and°?2R» muni
/!iS G°vernment, amounting to $240 million at the
Treasure
$44
! f at ?e ®nd of *946- *Not including gold held by the
by

and

d"utre-mer

$468

duced

STATES

MONETARY

(In

GOLD

Millions

STOCK:
of

ANALYSIS

States.
deficit

was

Dollars)

Net

Increase (+)

Decrease (—)

Year

Stock

Imports (+)

Exports (—)

U. S.

at the

Earmarked

Gold

Other

Gold

Production

Factors

End of the

met-

the

from

other

mil¬
the
United
Kingdom in connection
with the Anglo-Canadian Finan¬
cial Agreement.
For the whole
year

1946 Canada had in its bal¬

ance

payments with all coun¬
surplus of Can.$458 mil-

plus

current account

being

lation
Gold

remainder

sources, including Can.$150
lion in gold purchased from

mutual aid

-Changes in Monetary Gold Stock-

million—an

S.$263

The

million

CHANGES

Can.$96

payments in relation to the United

tries

amount which covered part of the
deficit of Can.$*303 million on the
current account of the balance of

loan
UNITED

of the

tinrhidinp

Eo?d L"ld

had

+ 200

28,000

the

likewise

production, amounted

Exchange Stabilization Fund:

unreported

+ 200

7,800;

was

Can.$351,

sur¬

excluding

and relief), but in re¬

to the United

the

(the

States

above-mentioned

there
deficit

of Can.$603 million.

The

U.S.S.R.

has

resumed

the

Year

1937

+1,503

1,586

—200

export of gold, the United States

+ 144

—

1938

12,760

+1,752

1,974

—334

+ 149

—

14,512

having, according to its statistics,
received $34 million during 1946;

+ 162

—

17,644

but

21,995

tent

these

and

22,737

gold

from

the

22,726

fected

1939
1940

1S41
1942

1943
1944

1945
1946,

+3,132
-

+4,351
+

742

3,574

—534

4,745

—645

+ 170

982

—408

+ 169

—

316

—458

+ 125

—

789

*—804

—1,319

—

+
.

554

464

—

845

—460

106

—357

312

+ 465

+
—

—102

21,938

20,619

—

—123

—370

since

20,065

20,529

the

requisitioning

balances.

its

addition,
France has

liberation,

oorrowed abroad the equivalent of

$2,600

million,

mainly

the

United States.
Mexico
of

the

reduction

-a

Added to the value

country's

(equal

gold production
about $17.5
million),

this gives a total of
$130 million,
which is compatible with the
esti¬
mate that, over: certain

periods
during 1946, sales of Mexican gold
averaged half a million a day.
Sweden's
gold
reserves
rose
from

$160 million

the end of
1940 to $482 million at the
end of

At the end of October
the reserves
still stood at $469 million.
But a

period of great losses then set in:
end

1946

the

gold

re¬

serves

were down to $381 million
and in the middle of
May, 1947, to

$199
to

million.

the

These

extent

some

losses

were

consequence of

revaluation-of

crown

the

Swedish

by 16.6%<in July, 1946.

gold

Jan. 28, 1947, the sale of gold was
suspended, the reported reason

being the heavy fall in Mexican
but sales were resumed
at the end of March, when the
reserves;

price was increased to $42.9 per
ounce.
This
was,
however,
a
higher quotation than the market
bear and a reduction was
to the former level in the

made

first

part of April, and to $39.76
in May, 1947.
Arbitrage
in
Mexican
gold

reserves of central banks,

ounce

per

would
on

place

have taken

seem

scale,

considerable

some

the coins finding their way into
Mediterranean countries and even

The result of these

farther east.

and other gold
ern
countries

shipments to east¬
free

the

that

was

price of gold usually fell—for in¬
stance, by over 20% in Egypt be¬
tween
August,
1945,
and
the

Spring of 1947. In Bombay, how¬
ever, where steps had been taken
to check the sales of gold, the
price for the metal rose by about
60% in the same interval.

(iv) The monetary authorities in
have sold gold at a
rate which in 1946 averaged about
Sw.fcs. 1 million per working day.
<

Switzerland

As may be seen from the table
on

was $40.-31 per ounce, this
being 16% higher than the official
U. S. price of $35 per ounce.
On

price

could

shows

$113 million.

gold holdings cancelled
themselves out in 1946, but for the
unreported
holdings- there
has

probably been ar+increase equiva¬
lent

$200

with

pares

these sales

respects

some

regarded

since

measure,

can

sterilization
that way the

not

the

known

what

other

exports of
U.S.S.R. have af¬

total

accumulated

the

country's

gold reserves.
1946, France shows a reduc¬
the gold reserves by the
equivalent of about $300 million,
In

tion

million.

This

com¬

funds from

clusion

and

can

into

gold

other

reason

has

some

"disap¬

hands

monetary

One

that

drawn

i'n

million

than

authorities.
for^thTs^isappearance

doubt

beenZan

increased

siderable amount of the metal has
gone into hoards,; the distinction
the

announced

that

coins

bars

and to
Sw.fcs.

market

the

Swiss industries exceeded

1,000" million, of which Sw.fcs. 307
million

were

sold in 1946.

industrial use-®£ gold, but a con¬

between

its

1941

from

sales of gold

Bank

National

the market and,

consequently, to convert further
amounts of gold into Swiss francs
for foreign customers.
In its an¬
nual report
for 1946 the Swiss

gold output of about
$960 million, from which the con¬

(v) Much
Switzerland

its

found

gold

the

where

to France,

way

had

amounts

considerable

from

from other sales

and

been

purchased by the public in recent

two" destinations be¬

years.
It is estimated that at the
ing no longer as sharp as pre¬ beginning of 1947 private gold
viously, since ornaments may, like holdings in France reached the
gold coins, appeal to purchasers high figure of 3,000 tons, equiva¬
as
a
form of wealth which can lent
to about U. S. $3,4GO million,
easily be cpjocpaled and, if need or nearly five times as much as
be,
transported Zfrom
place
to the gold reserves of the Bank of
place.
'
}■
France.
' ■
■.

Sweden.

and

decline in its gold reserves during

—101

30,200

37,800

milling«,?Vtl!fbinA of December, 1933; $12 million
incl"d5n? 6°ld hpld in the
million at the end Vn

—

381

30,200

6,200

ex-

France, the

are

Mexico

If account is taken of

—

2,430

ttArgentina

only

Among the countries which re¬
a
reduction in
their gold

Argentine,

222

increase

the

higher at the end of 1946
than they had been at the end of
the previous year. •

holdings for 1946

—

Mexico

port
"I

—

321

Sweden

were

274

2,G90

Zealand -ZIIZZ
**United Kingdom

Belgium

belligerent
country
in
Europe
whose
reported
gold
reserves

274

New

slight

from

Italy,

274

India

foreign

those
benefited

Apart

from

liquidation-of French-owned

peared"

by the sale of
able to increase its
monetary reserves by $35 million.

354

and

Nationa} Bank but $750

sugar and was

192

^
ZZ

„

during the year 1946), paying
the gold not with money de¬

Cuba

Congo

Brazil

t!Canada

(

§525

Egypt

made with the

was

ket.

145

193

___

reduced

were

equivalent of $2;614 million at the
liberation to about $1,000 at the
end of 1946.
In'1946, a beginning

with funds borrowed in the mar¬

157

Venezuela

Uruguay
Italy

lion

52
69

—

holdings

requiring payment in U. S. dol¬
lars.
From
June
14, 1946, the

sorb

7C1

Cuba

granting

France, the official
French gold and "hard"
currency

Swiss authorities were able to ab¬

1945

+ 464

Reconstruction

Development when

its first loan to

quently sold on the market.
(iii) The Bank of Mexico has
sold
gold from
time to
time,

reported

14,512

States

Belgian

Gain (+)

for

the increases and decreases in the

1944

During 1946

and

Bank

the
Swiss monetary authorities sold
gold coins, but the Federal Gov¬
ernment had actually acquired as
much as Sw.fcs, 1,239 million by
the end of 1946 (Sw. fcs. 210 mil¬
have

only

not

1938

tSwitzerland
South

issued

also in Greece, which re¬
part of its foreign credits
the form of gold coins, subse¬

seem,

ceived

should not increase the monetary

circulation,

GOLD

statement

May 9, 1947, by the Interna¬

tional

by the

Mexico).
Next

According to
on

1945, moving around the latter
$119 figure until the/ Autumn of 1946.

lion in gold from Canada and
million from
South Africa,

exported

which is, however, less than onehalf of the decrease
(of about
$700
million)
shown
for
1945.

received $344 mil¬

States

United

Thursday, July 17, 1947

Hoarding of Gold

The

From about 1924 to 1941 the

cumulated

ac¬

increase in the world's
the

total gold stock resulting from
annual

sponded

output i of
gold
corre¬
roughly to increases in

the

reported

the

industrial

monetary
of

reserves

internal

movements
is

gold

in France have shown that gold

apt to pass into and out of hoards
a number of reasons, many of

for

them purely psychological.
One
interesting development has been
the adoption of a somewhat re¬

being strictive credit policy early in
probably metfby and large, out of 1947, which would seem to have
scrap gold and such additions as
forced some holders of gold to sell
from time to time, were obtained in order to procure French francs
from hoards in the East, especially1 for current wage payments, etc.
use

gold

India, China and Egypt (this hay¬
ing been the case, in particular, in
the years 1932-34).
A remarkable decline which be¬
gan

1942 in the reported

gold

It is indeed likely that this credit
policy has been one factor in
bringing the price of gold down

market.

French

the

may

stock

gathered from the graph, this
decline has also had an effect on

into

notes

cially those of the British Equali¬
zation Account, whose gold hold¬

which

was partly due to the hoard¬
ing of gold, but partly to a shift
unreported- reserves, espe¬

ings

were

the

years

been

largely reconstituted^ in
1942-45, after having

completefj^exhausted in the

Spring of 1941.
The

into

During

quotations for French
the

value

showed

franc

Swiss

the

hoards

may

briefly

the§

several

the

French

improvement at

other

ging.
the

world

latter

war

peared

half

(including

the

first

the

first

gold

d:sap-

from the reported

postwar

war,

bank¬

market,,

when the quotations for
currencies were sag¬

time

most

be described as fdllows:

(i)

the

in^Vhich gold went

ways

private

mone¬

year

1919)

governments, including the United
States Government, sold gold in

tary reserves very much as it has
done in the corresponding period

India, China and -elsewhere for
the primary purpose of obtaining
local
currencies
at a
relatively

during and since the second world
war.
Obviously, the great in¬

favorable price and the

money,

secondary
purpose of checking inflationary
tendencies by the absorption of
the most volatile money in circu¬
lation.

(ii)

After
method
of

ployed

the

z
war,

financing

Chi^a^and,

similar

was

em¬

it would

in the circulation of naper

crease

which forms part of war
financing, has the effect of mak¬

refuge in other
which they re¬
gard as less dependent upon ad¬
ministrative manipulations.

ing

people

seek

kinds of property

have

suf¬

changes in their

cur-

countries

fered great

which

Volume 166

Number 4612

THE COMMERCIAL &
FINANCIAL CHRONICLE

rency

values, the link with gold is not the whole story: when there
an
indisputable guarantee is a great demand for hoarding
stability.
Where prices have purposes, the price
paid for gold
risen by five or six times or even will
normally rise and, since that

gold

seems

mean

more,
even

minor

price variations or
the wartime
doubling of the

price

price is often regarded

parison.
But
have
escaped

countries

the

measure

level
in
other
countries
rather unimportant in com¬

seem

cur¬

increase the
of

which

inflation.

This

danger, more¬
major
monetary over, may more than offset the
disasters may not make little of advantage connected with an ab¬
the
changes which occur in prices sorption of funds.
There is, in
even on a
gold basis.
The great fact, a fine balance in the argu¬
fall in the price level
by 30-50% j ment: in some cases official gold
between 1930 and 1932 has not sales may both lower the
price
-

been forgotten and at the moment
of

paid for gold and absorb volatile
funds, and then the sales may

writing (in the Spring of 1947)
is clearly a great fear in

there

have

many countries that, although the
link with
gold is not in

useful

market,

influence

though the tendency
sign of distrust in
currency pr another.
But
even

hoard

jeopardy,
commodity prices will continue to
rise.
It is not only that
people

with fixed money claims,

able—one

ing

salary

many

lose

part

earners,

their

real

some

disadvantage that the flow of sav¬
ings into gold will deprive a
country's credit institutions of a

income

"bust."

fresh additions to

reconstitution

depos¬
its.
Typical of the general attiture was a speech made by the

"boom" is likely to

followed

possible

Since

President

country's gold
an infla¬

stock may- tend to have

the

Swiss

National

Bank at the annual general meet¬

tionary effect, it may be thought ing of that bank on March 8, 1947.
that, from a purely monetary Referring to a demand that the
point of view, there is at present
no great objection to the flow of
gold into private hoards. But that

Swiss

authorities
issue

should

once

newly-minted

observed

that

coins,

reintroduce

speech

dition for

well-conducted

tary policy and that
ward

for private traders is the
to establish an

exchange

mone¬

fact

that

uniform

the

Fund

International

has

rise

step would be advisable at

prices and production costs which

with

has

settle

the

sellers'

1939.

market

As long
lasts

would be

would

that

decline

relatively moderate and

not

interrupt the advance
in general business activity for

In French francs.

long while.

Such

expedient

uniform alteration in the price
paid for gold should be used, if at
a

all,

only,

really

tween

depression
balance be¬

severe

which

the

and

costs

prices has been
fundamentally upset by, for in¬
stance, a sharp fall in the genera
level of prices.
It must also be
remembered that the Act provid¬

ing

the

for

participation

the

United States in the International

Monetary Fund and the Interna
tional

Bank

for

Reconstruction

and

Development expressly pre¬
scribed that, unless Congress by
law authprized
^ueh action
neither the1 President'nor any per¬
son

United

States,

propose

1947

change

any

in the

by hand

labor unaided
modern tools and
machinery.
Take
1

our

own

going
by

it required some 8,600,000 farmers
produce food for a population

million

people. In 1940 it
only 10,400,000 farmers
produce food for 133 million

required
to

people with large amounts for
port.

•

■

of labor to produce a ton of

steel,

while in 1942 it required only 24
In 1900 the steel work-

manhours.
er

forked

some

68 hours

week

for an annual wage of some $750.
In 1942 he average about 39 hours
a week and received
$2,300 a year.

Because

the

manhours

unit

per

in two the workingman's
were decreased more than

were cut
■

hours

this

workman

the

labor

been

has

His

sened.

hours

pf the

greatly

work

les¬
have

declined by at least one-third and
with modern machinery the phys¬
ical

effort

greatly
is

has

necessary

decreased.
that

the

All

been

that

workman

give

honest day's.work for an hon¬

est

day's

There
that

the

pay.

tripled.
Such figures could be duplicated
for hundreds for other industries
all showing that the lion's share

very laudable effort to raise the
level of pay for
a

workers, customs
have grown up which
equal pay for everyone
on a given job.
This means that
the person who loafs on the
job
gets as much money as the one
rules
on

who

gives

This

removes

incentive

of benefits from

tion.

per man

increased output
goes to the workingman.

was

Skill of Management

large part

per

worker

to the skill of manage¬
ment backed up by the risk
capi¬
tal of investors.
It is they who
have
devised
the
methods and
go

provided the tools that have made
these

accomplishments

possible.

Labor through its cooperation has

greatly assisted and the
such increases in
output
no

means

been

index of. this
trial
more

power

than

end

has

reached.

note that

indus¬

requirements
doubled

since

large part of the

individual

only

this

work

of the credit for

increasing the output
must

The

honest day's work.

way

room

competi¬

that

ever

of
ahead

any

got
better job, probably

harder,

than
similar

engaged in
take away

you

the

allotted

because

number

has

laid

the

bricks which

carpenter to drive a nail or the
painter who has to refuse to use
a sprayer or a brush wider than
a

The

fact

that

someone

work.

else

When

incentive to

When you remove

pride in craftmanship you destroy
Without self respect
life becomes an empty shell.
self respect.
not

at all

portion of

sure

the

but that

discontent

find in mapy quarters
today
arises from this cause. No one can

really happy unless he takes a
pride in Whatever it is he is doing

different

takes

crafts

workmen

build

bungalow is one of the reasons
why the building industry today
is pricing itself out of a market
and out of jobs.
•
'
.

The

these things can be

reason

and

are being done is largely the
failure to understand a few rela¬

At the

price

will

pay, the
will
discuss
the yen price he
will receive for the
goods.
The
two price discussions will
proceed
with Boeki-cho

will not

nec¬

essarily have

any bearing on one
Many businessmen have

another.

lished by the Department of Com¬
merce

through all facilities at its
Particularly I want to

command.

advise
touch

businessmen
with

keep
and

district

the

in
re¬

gional offices of the Department
where

Commerce

available

information

quickly

Representatives
of
insurance
shipping companies are also
being authorized to proceed to
Japan at once to make necessary
and

supplier

simultaneously and

reasonable time

branch, it will be au¬
thorized and the date will be pub¬
open

possible.

time while he is dis¬
cussing the dollar or other foreign

Japanese

will

same

currency

banks have had

available to commercial

facilities

interests by August 15. In view of
the fact that some commercial in¬
terests

have

neutral

going out with the intention of
buying certain commodities.
He
knows what he
wants
and
he
knows what he can afford to pay.
Therefore a contract can be com¬

pleted without any reference to
the actual amount of
yen received

Japan

namely, those

war,

and

tountries,

some

have been dis¬
cussed unofficially by occupying
contracts

felt that it would be
impossible to
do business on this basis. I feel
that that is not true in view of
the fact that a
businessman is

been

throughout the
may

officials, it

felt necessary to

was

include in

agreement a
pro¬
contract could be

our

vision that

consummated

prior to September

This allows for other commer¬

cial representatives to get

into the

country and try to obtain the bus¬
iness they desire.

As in the

case

of Germany,

make special ar¬
is rangements with the United States

necessary to

was

the Japanese producer. It
sincere hope that this situation Bureau of Customs so that the dol¬
not have to prevail for too lar price. shown on the invoice
long a period.
After sufficient will be taken as the dutiable value
transactions
have
been carried for the imports.

our

will

pattern

varies

from

com¬

vate trade.

modity to commodity.
Also
inmany instances the Japanese pro¬

desiring

Businessmen

to go

Japan should make application
ducer is not able to ascertain the
through the District and Regional
yen cost of his production since offices of the
Department of Com¬
the government frequently allo¬
merce. The Office of International
cates

materials

raw

without

in¬
in

in rebuilding homes, etc.
The occupying authorities have

ance

agreed to open transactional com¬
munications and were striving to
accomplish this by July 1. How¬
ever, that target date seems to be
a little beyond their reach at the
present time but they have ' as¬
sured
at

that they will

the

earliest

open

possible date and

well in advance of the August 15
date.

Thus it will be possible for

contracts

entered

mto

latter or cable and " obviate fhe
necessity of sending a representa¬
tive to Japan when the volume of

business does not warrant the high

applications
Appropriate approval

Trade will screen the
and issue the
on

the

basis

information fur¬

SCAP on commodities
available, raw materials required,
etc
The past history of firms in
the trade of Japan may also be
a factor.
New traders will not be
nished

barred

proof can be presented
to aid in the develop¬
Japanese economy.
SCAP will keep the Office of In¬
of ability
ment

the

Trade

ternational

informed

changes in availabilities, etc. This
information will be passed on

the trading community as
as

rapidly

possible.
In all

this

mind that

must bear

the Japanese economy

It must be rebuilt

had collapsed.

first and most important of these

philosophy of government must be

workman, to restore pride in craft¬
manship and the feeling of selfthat
comes
from
the
average, man is to
increase the respect
production per man. To do this knowledge of a job well done.
all that is required of the work¬ Even Russia has found it neces¬
man
is an honest day's work not sary to inject an incentive sys¬
is that the

living

only

can

way the standard
be increased for the

tem

limited by some arbitrary rule.
The

second

fact

understood
are

not

that

they

are

capital to furnish

necessary

tools

for

industrial

exorbitant,

better

needs

that

bring
more

and

better

jobs.

Also that if all profits could
be given to labor they would fur¬

nish

only

insignificant increase

in wages.

the

third

socialized

its

There
better

job

raised

Unless

his

gets

find

can

in our economy we

standard
If

country.
lessons
be

gotten

you

across

have conferred

the

face

living

declin¬

this

economics

can

an enormous

bless¬

task and

an easy

combined

coopera¬

tive efforts of all.

Aubrey Kash With
Win. L Men & So.
William

to labor you will

ing upon mankind.

It is not

take

some means

know how these

simple

rebuilt.
will

ration

these simple principles

to restore

ing

does

food

better place to live.

from scratch, just as the Japanese

economy.

workman who

the

in
and

place we need to
| find some method of restoring an
1939, j and has the feeling that his work I incentive system to the individual

have

short time it will

be necessary to cable such banks
to deposit the funds with the ap¬

expense. At present there are no
tively,simple economic facts. The foreign banks able to furnish com-

■

a day's
work, really takes pride in his
accomplishment?
Do you think
the plumber who has to wait for

profits

goodly

he
of

his union says constitutes

job well done.

banks and for

concerned, after which he will
discuss with SCAP the
price to be
paid for the goods in his
currency.

afteroon

greater effort you remove a large
part of the element of pride in a

contract

addition to which his wages may
consist of money, rice or assist¬

40% and his dollar pay more than

of his

forming him of the final cost,

4 inches really feels
that he is
certain other things
happening today in the doing his part of the world's work?

field of labor that give us reason
to pause and to~ be concerned. In

insist

details

stops work in the middle of the

are

and

important cog in the general
things.
you think the bricklayer who

all

asked

•'

In 1900 it required 54 manhours

scheme of

in 1945.

In 189C

country.

from 79 billion kilowatt
in that year to 162 billion

hours

foreign purchasers

par

Popular Economic Misconceptions
(Continued from poge 23)

Japan may get in contact
the Japanese
supplier anc

price

tence

meantime

Because
of
through, it is possible that an ex¬
previous commit¬
change pattern may develop. There ments raw silk, cotton textiles and
value of the U. S. dollar under
is no exchange pattern at the the 1947 tea crop have not been
any of the provisions of the Fund.
present time simply because the made available at this time to pri¬
agree

1946

agency could, on behalf of

the

authorized

are

prices, it is
the

unnecessary stimulus to the
boom.
But, even if there were a

possible

that

far as the
quantity of goods.'
quality, design and delivery dates

and

commodity prices still show a
tendency to rise, an increase in
the price of gold would add an

setback in commodity

foreign

purchaser

once,

enter

since

exchange rate.

considering the rise in commodity
occurred

future,

The latter plan
overwhelmingly decided upon
by the conferees.
Under this procedure a

such

should arrange their line of credit
with
their
regular
commercial

have

-near

date which will be announced. In

the

rate. We

was

Monetary

whether

the

being processed for
foreign banks to open branches
in Tokyo for this purpose at a
are

Inability

rate out of the air, which

Appli¬

banking facilities.

cations

trying to develop a process where¬
propriate depository designated by
by commercial transactions
may
SCAP. As soon as all commercial
be completed without the
use of

changes

given

already

discussion

undoubtedly

changed

in the price of gold may be made
under the Articles of Agreement
of

would

ment.

The

the problem vof

pulling

back¬

faced with

were

develop¬

currency

■*

Problem of Exchange
Perhaps the greatest headache

its reintro-

would constitute

step

they will take finished products.

the

President of the
Reserve
Bank
of
New

Federal

a-'-

(Continued from page 16)
materials in return for
which mercial

raw

York, who
had
expressed
the
opinion that a gold coin circula¬
tion was not an indispensable con¬

quite

Quotations of Gold Coins in Paris and in Switzerland.

in—

in the international price of
gold.
He
also
quoted from a recent

another state of Affairs is conceiv¬
characterized
by the

includ¬
would

through the rise in prices, but,
also, the lesson taught by expe¬
rience. that

Trade with Japan

and the economy from
modifications of any consequence
currency

duction

the

Opening of Private

with all the inconveni¬
which would result for the

ences

the hoarding habit tends to
psychological danger

rency,

coins into circulation would
that the franc would once
be tied to gold in a fixed

relation,

"true"

as a

value

Burton

nounce

now

that

manager of

Mr.

Nash

curities
was

associated

Co.,

Bread Street, New York

an¬

Nash

Aubrey
with

City,

the

firm

the retail department.
has

business

been
since

the

1923

se¬

and

formerly with Kalb, Voorhis

& Co. and Richard J. Buck & Co.

THE COMMERCIAL 4 FINANCIAL CHRONICLE

(244)

general, looking back at
life. This improved environ¬
incorporates mental health
and safety no less than
physical
security. Much more remains to
are,

World-Wi

their

ment

(Continued from page 19)
country may bear little compa¬
rable relations to the aspirations
of

improved

for

but

However, these economic ob¬
jectives will all have one common
characteristic, I believe; and if
can
accept that, we are well-

the

haps,

find

and

courses,

vored,

different form,

they reflect the desires of
the people—that the economic re¬

study committees,
lectures being fa¬

In Belgium,
research and in¬
way to a major agreement of
some significance.
centered
upon
materials,
It it the qual¬ quiry
products, equipment, labor, and
ity of constant betterment.
People
of
all
countries
will working methods, because of the
want something which will seem Extreme economic scarcity.
to

them

what they

ample

improvement over
have. As an ex¬

now

this

longing, they are
likely to want something bet¬

all

for their

ter

children

than

what

lasting peace based on an
increasingly better
standard
of

The lower the scale of

present

more ma¬

report

living for the individual citizen of
the

One

fairly point to the
production of the Amer¬
ican people during and since the

re¬

war

result of the long depression

before the war,
and

one's

be.. The

ambitions

apt to
who has had diffi¬

man

are

increasingly insist that turned

they will

decent

from
for

of the

part

day's

items

work be

return

available

this

living
place,

will
the

ment will

Congress,

place

that manage¬
will not show such

The challenge to this

see

it, is to picture

those tools and their

form

standard

tools

use

differences.

variable

differ from

use

such

and

of the art and

England,

bombing
which

the

and
the

worked

during

tionably

the

placed

inspiration that I think

find
L
•

the

you

papers presented

will
by

universal

the

provement deserves
of

its

lessen¬

This

im¬

subdivision

particularly in
industry where

own,

agricultural

the

in¬
machine usage has
unquestionably raised productive
power

standards of living tremendously.
think it can safely be said that

male

labor, requiring that

take

the

power

place

growth

power

muscle.

Prior

States.

acceptance, and there are
few American corporations
today which are not studying the
very

in
and

successful application of this phi¬

problem

means

the

there

war

was

the

steady

availability

worker in the United

per

During the war years, for
reasons not quite clear to
me, that
growth lagged; but under condi¬
tions of peace it re-emerges as a
every

will

show

constant

in¬

the

that

played

world

for

the

part
by the

trade

repercussions
prosperity.

ternational

availability

power

important

world

farreaching

this

worker.

per

Good

in¬

management in the edu¬

cation and

training areas has un¬
questionably been responsible for
marked contributions to the work¬

Effect of Management Upon

the

Living Standards of People
at

ciples.
quite obviously r anxious to speed
the improvement of new ideas for

The

er's standard
has

Work

of living. Not only
potential capacity thus

his

been released so that he has been

enabled

train

himself

for

the

of management procedure

which I have had access; I assume
that the papers from other coun¬

Management,

funds

its

papers

United

States speak effect¬
the relation of man¬
agement and living standards. If

ively

„

seem

base' my -comments

largely on the American papers
you will understand that it is be¬
they

cause

with

disposal,

are

the

only

ones

will provide a mechanism through
which these aspirations of British

tries make similar contribution to

papers are read

management may be given a note¬

jective.

of eager men
where who have not been able to

ment.

culture

and

the home.

these

by the thousands
and. women every¬

attend

this

Congress,

worthy

better understanding of this ob¬
-

opportunity for develop¬
Production Standards and Social

Standards

they will
provide courage and knowledge
for an attack, with new
vigor,

The reports from neutral coun¬
tries have been so brief as to give

the problems of reconstruc¬

readily understands the hazardous

position

papers concerned with production
I have come to the conclusion that

upon

tion.

•

After

the

reached

made

decision

hold

this

had

been

meeting,

first

point to ask the
Committees
of
each

National

country to give me a brief ap¬
praisal of what had happened to
the

management

their

respective

movement

countries

since

last

our

meeting. I find every¬
where in these reports convincing
evidence that good management
is at least

day

Seventh

well appreciated to¬

was

the time of the

Congress.

In the

management

activities

have

anoarently been a powerful
spiritual
force
in
maintaining

courage

and confidence.

In Greece,
one

might

basis

any

environment

was

the

severest, public meetings were not
permitted. Their place was taken
by circulars and pamphlets, and
underground gatherings were held
4he

With
tun ed

'"^rpSt

tion,

rehabilitation.

special educa¬

organization

and research,
attempt to apply manage¬
principles, in national re¬

ment

time

convenience; better mate¬
handling techniques lessen
physical effcrt; more precise plan¬

not to be misunderstood if I

length.

some

speak
Citizens of the
that the sudden

recognize
development of natural
the

and

cumulative

century and
prise have
At
so

ning and control eliminate
ductive idleness and loss

impetus of

tinuity.

top

Working

still

misery and actual hunger
many parts of the world, I

anyone

marks

not

for

moment

consider

about

the

that

United

the

few

countries

tions has had much attention.
is obvious that the

want

objective

workplace is regarded as increas¬
ingly important.
The
wartime

un¬

need for the greatest possible vol¬
of output, coupled with the

was

war

ume

shortage of labor, unquestionably
made

•

war

and

management

relatively free to perfect'its"

methods.

Her? obviously we
In the light of these
psources,
management fighting, -ndt for •I'think I am
justified iri pointing

:y,... *.

r vi

have, the

for items having to do

goes

with

food, shelter and clothing. These
are the bases of normal existence*

important to note that

and

essentially industrial

they are also

Food management in pro¬
duction and in distribution of con¬

goods.

effect of in¬
improving serv¬
and enlarging the
oppor¬
ice,
tunity of use.
It strikes clearly
in the direction of enhanced liv¬
ing standards.
The platform, so
widely emphasized in the Seventh
Congress, of more goods for more
people at lower prices is accepted
by the authors of the papers for
this Congress with even greater
sumer

goods has the

creasing quality,

uanimity.

Purchasing Power
While

apt

are

think of

policies

worthwhile

tion that people live the most im¬

v.-

producer income as

The current great growth in the
of personnel
management

field
has

salutary effect upon work¬
living standards, ■ inas¬

ing

and

much

its

concern

with the

purchasing power
public, the higher its liv¬

larger the

the

ing
standards;
the better the
management, the higher the in¬
dividual return as a result of eco¬
nomic and efficient operation. It

accepted,
I
wants are wellnight
insatiable and,
speaking
broadly, depend only upon pur¬
chasing power for their satisfac¬
tion.
There/apparently ? is J no,"
doubt in the minds of the Ameri¬
can
authors
that the
United
States, at least, has the production
capacity to make all that: it, needs
and
in
ample
surplus.
Better
worldwide management will in-'
creasingly find the means of mak¬
ing that surplus available to other
parts of the world whose mechan¬
is

/ generally

now

think, that human

adequate.

ization is less

Distribution
Good

management in the field
create a pow¬

of distribution will

towards

thrust

direct

and

erful

Personnel Activities

higher standards of living. Grant¬
ing the premise in the earlier
paragraph that human wants are
insatiable, they must necessarily
be

directed

and

guided

those

areas

where

toward

satisfaction

practicable and
possible.
"total working situation."
I can Here, the
marketing functions
foresee no dissent from the con¬
having to do with publicity and
clusion that personnel adminis¬ sales promotion, exert/a direct
tration, in its broadest sense, is and vital influence upon living
essentially devoted to the rise of standards.
Good management is
living standards of the industrial of the essence of progress, for it
both

worker.

tends
wants

Agriculture
The

with
on

above

can

terms of

consumer

practically
satisfied
in

-commercially

and

apply

stimulate

which

purchasing power.

equal emphasis to production

the

and

farm

the

Research

home.

living takes place in
around the home and the farm,

Much of
or

the Home,

and

statements

our

the

research

and Development

papers

and

•

which deal with

development,

the

significance of management1 in its
bearing upon the cohsurner may
be seen. Through organized; inno¬

ard of

vation,

and it follows that

any

contribu¬

these areas
the stand¬
living. Here the objective
toward the living of free, rich and
satisfying lives, will manifest it¬
self most obviously as a possibil¬
ity of better management. In the
United

States

there

the

new

value

and improved I ratios
can be: con¬

process

ceived, and it is these iwhich will
make for the heightened indus¬
trial flow which lies at the base of
national

chal¬

The

lenge today to assist in maintain¬

prosperity.'.rod

new

"i"

managerial * develops

ing standards of living in the mid¬
dle-class families where domestic

ments in-"planned'■■research*<will
unquestionably have morelbearing

paid help has always been a prob¬

the

acceleration

extensive

particularly acute improvement, and its correspond¬
one now when postwar conditions
ing enlarged employment, than
have
almost
eliminated ,reliable anv other immediate influence. It
domestic help from the market- will be*"this developments Which i,
Great' strides have been made will tend to. compensate for the

lem,

but

istence

■'

■/

portant part of their waking ex¬
at their work, and when in
improving the
they look back at their work, they work' mf-the office.

construction.
see

such

from the standpoint of production.
One gain to come out of the war
has been the widespread realiza¬

Civilians had few of the
physical
was

bettering the surroundings at the

whose physical plant was undam¬

hazards

re¬

made boastfully. I am not
mindful of the fact that this

.which

tion of management in
will directly enhance

Conditions

Improvement of working condi¬

States

are

one

Work

world affairs.
time when there is

of unemployment as
technological improve¬
ment, is to a considerable extent
a matter of facility in readjusting
skills and capacities to the everchanging requirements of process
and
operation.
In
the
United
States
the
period of the war
showed extraordinary progress in
result of

con¬

simplification,
widespread, is in
reality no more than fitting the
process and the equipment to the
man, rather than reverse.

half of free enter¬

brought her to

The noticeable reduction in

the hazards
a

unpro¬

which has been

resources

much
so

rise in social stand¬

rials

As to the United

man

superfluous.
States, I hope

this

are

working standards
also living standards)

For example, better build¬
design conserves the nonworking time of employees; im¬
proved plant layout increases hu¬

liberation, such
a
spirit aged, but rather found itself larger
nueiestingly to a few basic at the end of the war than before.
as

a**.

from

ards.

evaluating the
progress
of
Swedish management and further
be

rise

(which

comment

sible.

noticeable emphasis

ing

management activities
have
been
impossible,

found

really mark

would

brought. about by research- and
development has been made pos¬

this field.

raising the living standards
people at work. In reading the

ment was carried on.
Our visit
here will give us the
opportunity

position

that

they

long, the sharp

po¬

importantly, his continued
adjustment to the rapid changes

upon

of tension in which their manage¬

would

'»-*

which

(

for

One

the

for example, where
assume

comment.

There is

limitation of marly of their critical
materials, and the constant state

concerted

the

themselve^

would
where

for

world

occupied countries, par¬

ticularly,

little

consumer

Training

United States will inevitably have

management prin¬
British
management
is

substantial

the

greatest effect-upon living stand¬
ards. While industrial goods will
be those first thought of, the larg¬
est share of the individual income

The

of the

rest

crease

the proving ground to widest na¬
of the European tional application in the least pos¬
papers, but from the standing of sible time, find so tp make maxi¬
the men who-* prepared
them, I mum impact, on the standards of
am sure that the/will be
equally living of that country.
impressive in the contributions
The recent
formation
of
the
they make to raising the standard new central body of the British

where, in business and industry,
in labor, jn,
government, in agri¬

place/-will be obvious.

the

reason

disseminating

the

is, after all, the prod¬
markets available to

ucts

the necessity for maximum
production amidst the difficulties

Institute

Consumers

The results, in terms
of living standards at the work¬

Here

we see

see any

every¬

Standards of People

related only
to production, it is in reality an
aspect of consumption as far as
living standards are concerned.

sitions of larger compensation but,

tunity to

Management Upon the

ment that it

objective, and there is
indication that the years to

come

Again and again I find reiter¬
ated in various papers the state¬

desirable

presented by the
representatives of this group from

the. authors from the United States
and Canada. I have had'no
oppor¬

Effect of

losophy is not without consequence

obstacles' before

the management movement.

made

America

unques¬

war

reference is

the

of finding ways
and
welding the components
of
the
economy
together
to
achieve better understanding and
closer community of interest. The

lived

should

paragraph

ing of physical effort.

wider

prolonged

standards..^

with
the
subject
"mechanized materials handling,"

continued to meet with wider and

management
developing an extraor¬
every¬
may be able usefully to dinary growth of interest in as¬
employ them in raising all stand¬ sociations,
institutions and the
ards of living.
like for the express purpose of
earlier reference to the

preceding

creasing

America's economic

people are thus more af¬
office than by domestic
'
...
;•

many

fected by

Effort

connection

public and last, but not least, to
This concept has

where

I made

people

the stockholder.

of survival

that

can

Physical

segments of the economy, to the
customer, to the employee, to the

became

difficulties

British

re¬

particularly
growing
con¬ heavy physical effort is now ir¬
of 'the revocably obsolete in American
problem of maintaining employ¬ industry. This advance is perhaps
ment.- In the meeting at Wash¬ one of the greatest outgrowths of
ington you will remember the the war for its natural develop¬
emphasis which many American ment was hastened because of
authors placed on the responsibil¬ wartime exigencies,
particularly
ity of management to the various through the increased use of fe¬

science.

the

light

over

emphasize

art

what

democratic

sciousness

sabotage in
production—a curious and under
the circumstances, proper inver¬

living that are not
sion
merely bare essentials.
In
So
while
the objectives
that
constitute

itself

skilled in the

the

management.

stability,

out the

culty maintaining a thatched roof
over
his
from
so-called
scientific
poor
cottage will not away
in
its
narrower
aspire to aluminum shingles. But management,
technical sense, to that type of
he will despair of a
society and
its
management which
do
not management which concerns it¬
promise
him
some
betterment. self with administrative, economic
Many men will not venture to and social problems. The whole
French report is truly an extraor¬
wish for
an
automobile
or
an
electric
refrigerator,
but
most dinary statement.
In many of the occupied coun¬
.men will have a vital interest in
earning enough by their labor to tries, an inverted development
Good
management
buy shoes or shirts or bread, and took place.
some

good

concern

guidance.
The report from France brought
significant point that dur¬
ing the war the thinking swung

evidence

done

widely looked to for

•

terial

may

with

fully regained its
during those dark days

now

world.

record of

lates how scientific management,
brought under a cloud of criticism

prestige

■they themselves have had.

living, the smaller and

The Czechoslovakian

equity of wage

tions,
conventions and customs
are definitely in advance of those
at
home.
Living
standards of

Living

Lessening

tion for

the

improve conditions in
as

condi¬

infrequently, :wc>rkin£

not

wish of the American na¬

seated

"•

be done to
such fields

lationships, closer- adjustment of
human abilities to job
sources of the United States shall
require¬
be used-to implement the deep- ments, and the like.

per¬

the Netherlands.

as in

part of the" responsible lead¬
life

in all walks of American

—and

the pressure of the en¬

took

emy

determination

growing

ers

standard of living,
bare
existence of

the

living.
Where

another.

fact that

discover the interesting

standards
.

| hazard

Here "we .may. .«

of /-that - unemployment

' im?..
PA

Volume

166

Number 4612

The use-of this

provement.

THE COMMERCIAL & FINANCIAL'
either

com-

futher

parativety new management tool
•—product planning arid develop¬
ment—is still in its elementary
stages, but it offers definite prom¬
ise

constructive

and

the

these, activities

burden

fected.

I think

tistical

one

control

what the

and

regional

sources,

I shall

that

assume

au¬

"quality

lines
and

earlier

under

manufactured

extraordinary
be obtained at rela¬ change for the better.
cost where the
It would be a mistake to in¬
quantity is sufficient to justify
terpret the meaning of this under¬
high precision, mass production
taking merely in terms of cheap
techniques.
As these principles
power.
That has been rather a
can be utilized, they should have
by-product even though an essen¬
a direct and revolutionary impact
can

unit

low

tial

upon

standards

living

consumer

the

could

I have heard this line of devel¬

•the

succinctly

expressed

"The

carried out by
other means, will agree that
of living for most of

people

in these

States

seven

health,

that employment opportunities are

strengthened, that recreation

fa¬

economics, i.e.,

technological

lower

wider

markets—from

wider

cilities
exist where
they were
improvement barren before and that the whole
costs—from lower costs region has been reborn with this

chain reactions in
from

the

have been
given new direction
and purpose, that the inhabitants
have
greatly improved

of
the ac¬
companying improvement in our
standard of living is the result
of
one
of
the
most
powerful
growth

and

industry

that

assume

been

standards
the

phenomenal

have

some

following words:

American

Even the critics

one.

project, who will

future.

opment

markets to mass

experiment
the

production—from
to still lower

public

management

for

good.

Cost Accounting

Progress

the

fields

;

accounting

cost

general

same

the

control

effective

that

relationships

industrial flow
flow

can

The

assured.

this

administration,
conclusions

municipality.

the

obtain

most

and
be

influences his standard of living.
The gains resulting from advanced
techniques in public administra¬

cost-

resulting

pre-planned

heightening of tion lie mainly in the achievement
raising of of operating efficiency without

the

means

loss
of
democratic
living standards.
guarantees,
Postwar requirements call for even in times of national emer¬
individual analyses in individual gency.
establishments

cost

factors

whose balanced inter-relationships

•

this

the

effective tool of

national

administration.

the

Effect of

Management Upon the
Living Standards of People
as

load of the citizen which will add
to his spendable income and so
relate

Citizens

the

environment

larger portion of
other

are

vidual and these I

now

propose

itself

standards.

which propose to

relate the man¬

Leisure

dear, to the

The

first

has

with

the

larger

life

questionably make by increasing
the amount of leisure time avail¬
able.

the

generation

usual

two

'or

ago

hours

of factory work
week, and a man had
little free time remaining. Weekly
working hours are steadily de¬
clining and the worker in in¬
dustry now finds himself with a
60 per

were

substantial

sector

time

his

available for recreational and

vitally

to
living
improvement
in

ment in the management
and ad¬

ministration of these activities is

cational

pursuits.

management, the use of
scientific principles coupled with
the

increasing
availability
of
power machinery, have likewise
greatly
shortened the farmer's
working day. Whatever the use
of

his

free

time,

constitutes
to the

its

availability

major

contribution

possibility of

improved

the

tion

educational

.activity

throughout industry.
As
before, employees no-less

executives, have

been

form

the

habit

themselves

with

never

than

urged

acquainting
changing

the

conditions, procedures and oppor¬
about them; and this is

people.
'

Municipal Administration

clothing

sources

from

the

barest

mini¬

desperately impelling

to speak for

food,

(f-

above

itself;
and

men

whose

housing

re¬

but barely removed
starvation and freezing

are

the

lift

their

crushing

load at the
health and sanitation standards,
the protection from fire hazards, earliest possible moment. The op¬
for
management to
and the maintenance of law and portunities
demonstrate its value, in a rela¬
order are but a few of the many
tively rich and unhurt economy,
areas in which science in munic¬

fluence

standards.

;

community's..

in¬

living

Conversely, economies

municipal ^pper^tions. -may

gent

planning are likely to be far
favorable than those where
the future has not been

such

managerial

new

working
•An
this

will

who

creative-

inquiry throughout the
group.

characteristic

tendency is its all-embracing

quality.

tific

management, is nothing

than

the

able

seems

worth

education

for

youth

those countries where one of the
results of better management has
been to
provide larger worker

incomes, is
tion

a compelling satisfac¬
the parent. For the indi¬

vidual

himself

hanced

have

en¬

opportunity

pression

for self-ex¬
the result of his own

to the dimensions of his existence.
fr'

him.

only when
security is present that long-term
advances

personal

reasonably assured. Good
agement, as it continually
tributes

economic

the

tragically

con¬

stability

net

mated at

proceeds

the

re¬

corporation, esti¬

approximately $1,490,173,

about $270,000 will be
used to
redeem, at 105, the $250,000 five-

year

debentures

due

1950;

approximately

$452,500 will be
used to
repay a loan with interest
and premium in the
amount of

$450,000, and
gether

the

with

remainder, to¬

funds

raised

later, will be applied toward the
construction of
Bucks County,

new

plant

Pa.,
where the
company intends to move all of its
operations.
The new plant will
house all of the
company's activ¬

The

human

attain¬

creature

set

the

standard, whether
"quota"

production,
—-■l:—■
accounting, or

in golf.

More than this,
of human effort is

elasticity

so
large that, once the goal is
fairly set/ its attainment results

from will

less than from work.
As long as there have been ani¬
no

mate creatures

earth, there has

doubtless been

some

form

or¬

ganization,

and good management
employs the principles of

good

organization
environment more

only

renders

satisfying

the human creature. With millions
years of gregarious existence
man

tends naturally

to cooperate and live with
others.
It is only

wheji

poor organization

faulty custom

terfere

with

will

continue

Reading, Pa.

become
available by
making fuller use of
its present

manufacturing equips

ment.

tendency

action

again,good

aims but to release

results.

management
human ten¬

dency.

MINNEAPOLIS, MINN.—E.

of the Board

Crabb, Chairman

Investors Syndicate and
Investors
Syndicate of
America, Inc., was
elected to serve .also as
President

both

companies at the annual
meetings of the boards of direc¬
tors.

has been
Chairman since
1945, and has been with the or¬

ganization since 1925.
Investors Syndicate
rent of six
of

which

the

stated, much if

study

not all

methods

early ^advent

machinery

versed this trend for

but

more,

the

now

century

evidence

pa¬

one.

elected

was

Vice-Cha'irrrian

vestors Syndicate.
nent

financial

He is

of In*-

promi¬

adviser 'and

sultant, and has been
Reynolds

and

con¬

associated

Co.

for

the

past several years.

Clyde J. Moore, Vice-President
and

Director of Sales

for

Inves¬

tors

Syndicate, and Grady Clark,
General
Sales
Manager,
were

elected Vice-Presidents of Inves¬
Syndicate of America, Inc.

ebbing tors

once

tide is in full flow and
there

re¬

the

Galen Van Meter of New
York

di¬

rected toward a more favorable
adjustment of work demand. The

investment companies,
Investors Syndicate of

America, Inc. is

with

As before

hand

Investors Syndicate
Announces Elections

convention in¬

natural

ineffective

Once

which

The company
manufactures and
sells corrugated fiber
board and
cartons
made
therefrom,
and
through its subsidiary produces
for its own use
chip board and
interior
packing materials. The
new plant will
be so designed that
the
company will be able to dou¬
ble its production
when additional
supplies of paperboard

its goal

the "hiiHfJpt" as in
budget" ao m

Co.,

conducted

every

that

the

work

of the world is rendering
machinery subservient to the con¬

Mr. Clark

also

was

named

Vice-

President of Investors
Syndicate.
were also elected Vice-Pres¬
idents of Investors
Both

venience of the individual rather

another member

than

Mutual, Inc.,

Syndicate

the

of the Investors

contrary.
group
of
investment
Finally, human effort may be companies.
R.
W.
Peterson
generally to be the compo¬
was,.elected
nent of four influences, namely: Secretary of Investors
Syndicate
the hope of reward; the fear of of
America, Inc. and James B.
penalty; the assurance of promise;
Racey was voted Secretary and
and the inspiration of an ideal.
Norman Waag Comptroller of In¬
Good management serves to im¬
'

said

plement all
that
a

of these
of

creature

the

fulfills his

man

end

function

action—a

dynamic

entity.
In the

and to¬
management
is

good

well-nigh

synonymous

New directors of Investors
Syn¬
dicate of

Roach,

world of today

morrow,

vestors Syndicate.

with ever-

America, Inc.

President

are

Hal

Hal E.

Roach

Studios, Inc.; Don Loftus, Presi¬
dent

Permanesque

Homes

higher

its

good management is guidance and

Realty Corp.;

good guidance brings advance.

Chairman of the Boards of Gam-

products
its

power

which

its
of

and

the

purchasing
is thereby
security and

markets

its

own

employees.
good

incorporate

put and
serve

management

general

pol¬

thereby of employment,

directly to promote higher

industry

living of the indi¬
here, perhaps,

makes

its

greatest

standards

living.

For

that
con¬

tribution-to 'the enhancement; of

America,

Inc.

ble-Skogmo,

Other

icies favoring stabilization of out¬

vidual.

from

people of wartorn re¬
gions rlhere will • be little. likeli-

can

man¬

the

through effecting favorable rela¬
tionships between the prices of

inition;

but

status

remaining 75,000 by

always risen to the
challenge

definition of

ideal.

has

emphasizing that the possibility of
better

standards

burdened

the

setting of • goals,
which lies at the heart
of scien¬

that

unusual

class

renaissance

and

that of the United States,
may be open to more precise def¬
as

studiously

Again,

behind him,

ipal management may directly

may be assessed and directed be¬
fore it become
reality. The stand¬
ards of
living under such intelli¬

but the beginning of a movement
will ineyitably provide a

which

particularly,
building
limits of existence, will be
there ^are
grate¬
many
things which
ful beyond words to those skills that - of
municipal government alone can
of management which
promise to aspects
do.
The ; insurance - of
public
In the home area,

plan the fu¬

management
uses
in order that the future

tunities

.....

level.

Good

foresight

extraordinary accelera¬

•

intimately ~ asso¬ dividual
mum
is
ciated with the standards of living
of the

only

ture."

the

One of the outstanding charac¬
teristics of the last decade has
been

should prevail."

the

Planning is after all man's way
of
controlling his environment. As ities,
except those of its
wholly
someone has
said, "We control the owned
subsidiary, Seaboard Paperpresent

assessed.

In farm

vita1-

In
the
Through for good management.
war-worn
countries, for example,
all of:'them runs the thread of
the need for early and substantial
conclusion that improvement in
the
quality of government ad¬ lifting of the existence of the in¬

ministration

concern

more
avo-

international

the

disciples of Taylor, but the def¬
initely human character of its

which good management will un¬

the living stand¬
Security
The more acute the need for
citizens.' These
The development of man as an
papers deal with administration bettering the living standards in
individual is
closely related to the
any country or group of countries,
on the local level, on the regional
degree of security which life of¬
level, on the national level and on obviously the greater premium fers to
government to
ards of people

nounced so that within the
organ¬
ization it is now felt that
not the
scientific matter so

discuss.

contribution

ceived

technical and scientific
achieve¬
ments. In this connection I can
quote with agreement from
the
French report which states:
"This
widening of the organization's
horizons, from the technical to the
social (have) become
more
pro-,

which
on

individual thought is to make a
Up to now I have been discus¬
communication and transportation
direct contribution to better liv¬
sing contributions of the Ameri¬
inevitably
continue
to
develop
can papers to the living standards
ing, for man is at best a thought¬
more intimate international deal¬
ful creature, and to
of people at their work. There is
give outlet to
ings, a corresponding improve¬ his
an
mental potentialities is to add
interesting group of papers

agement behavior in the field of

contribu¬
tions instead of
merely measured,
in the
past, by their purely

considerations of large importance
to the better living of the indi¬

of conflict
between
management and this function has possibility
countries
is
definitely lessened
acquired a new relation to broad
and the atmosphere for worldwide
company objectives, policies and
peace
and prosperity improved,
procedures.
Vthere is a lightening of the tax

conditions
workplace

that

grounds

constitutes

ness

recognized

tne
his

his waking hours.' There

bring

International Relations

; In: the management of inter¬
high manufacturing
national relations, it almost goes
turnover.
This, the cost division
without saying that
living stand¬
alone can do.
It is significant to
ards are
immediately related to
note
that
the
cost
accounting
advances in the
quality of inter¬
function
has
been
increasingly
contribute

by
at

and

squarely and constructively countries national taxation is a
into areas of living standards, in¬ measurable burden on the income
asmuch as it is chiefly through of *the individual and so vitally

and

enced

exist

tion and

certain stockholders.

influ¬

by the corpora¬

viewed

now

against the wider background of
their social and human

with

itself

standards

Education

national

drives

price

living

are

offered at $20 per share and
the
common
atv $6.
Of the class A
common shares
being offered, 37,500 are being sold

now

management

Vhf

Corp. and 112,500 shares of the
company's class A common stock,
par value $1.
The preferred was

I come to
my conclu¬
It is that the
responsibilities

sion.
of

preceding discus¬

concerned

National Planning
In

markets."

international

cost

man's

the

has

and

Conclusion
And

par'"

costs and from lower costs to still

wider

Much

sion

standard of living.

production

mass

family

the worker's
dependents no less
'

than of the worker
himself.

Individual

boundaries where the standard of

Progressive living was
undeniably low by any
management in quality control is measure and
steadily worsening,
^demonstrating that high product underwent
an
tively

presented

practices.

poorer

quality

Effect of Management Upon the
Standards of Living of the

TVA may properly be cited as an
plateaus" is example < of how
planning and
contributing to the ability to pro¬ freedom can be
compatible and
duce high commercial quality at
creative within the framework of
costs materially less than those
democratic tradition. An area of
characteristic
of
lower
quality acute
distress,
crossing
many
term

papers

the»Jtexi$tence*' df

by our European - authors will
clearly and forcibly develop this
comparison.

Planning

discussion

planning which centers upon the
Tennessee Valley
Authority, is a
challenging one. Without propos¬
ing to express any opinion as /to
the desirability of the production
of power through public or
pri¬

Control

esting facts to

thors

the

doubt

The

of the most inter¬
come to light has
been the effect of management in
quality control upon standards of
living. The development of sta¬ vate

living
af¬
i',>:

that

(245)
k

hood of challenge. I have

the

upon

immediately

Regional

living standards.
Quality

are

to lessen

In either event,

standards

ful influence in the enhancement

funds

taxation

individual.

power¬

release

serve

CHRONICLE

and

Market

Waddell

Herrick,

associates

July
shares

15
of

vertible

value;

new

5V^%

publicly
issue

tin,

Co.,

75,000

cumulative

'Seaboard

Inc.,

offered

preferred stock, $20

Inc.

Gamble,
Western

and

•

B. C.
E. E.

and

Beverly

Auto Supply Co.

Seaboard Container
Stocks

and

con¬

par

Gamble, Carl C. Raugust,
Crabb, and Charles R. Mar¬

were

Investors
Carl C.

re-elected
Syndicate.

directors of
Mr.

Raugust, George M.

Crabb,
Stew¬

art, David West, and Guy H. Ram¬
sey
of

were

re-elected

directors

Investors Syndicate of Amer¬

Container ica, Inc.

■

---•••"*-

i—

THE COMMERCIAL &

(246)

FINANCIAL CHRONICLE

sia

U.S.

vs.

Communism in One World
leadership in

(Continued from first page)

that

Thursday, July 17, 1947

this

infiltration

car.not

workers

succeed.

If we permit the Polit¬
buro to miscalculate the extent of
the

peaceful, progress¬ Clearly the peoples of these eight

effectiveness

union

and proven

Communist

who

remove

exposed

are

to be Communists.

Twelve—Take all

infiltration in
be
almost as

nations did not

themselves

can

officers

these actions

cause the decision
America, this could with complete
respect for civil
because of ing world.
serious to
future
by Russia. If our original proposal
liberties and for legal rights. ■
such a
Policy Fundamentals
took this particular form to cause world developments as an actual
By this approach I am confi¬
proposal. As a result it is more
On the basis of this analysis Russia to show her hand, that has dangerous infiltration. With their
dent that not only the influence
clear than ever today that there
there are three fundamental de¬ been.accomplished, and we should very limited numbers Communists
of Communists in America would
will be a continuing major com¬
velopments of our American pol¬ now continue our economic pro¬ have already caused a dispropor¬ be
sharply decreased but it will
petition and clash of economic
tionate disruption in labor rela¬
icy I urge tonight. First: that we gram with due humanitarian re¬
also soon become evident to the
systems and of ideologies between move
tions
and
in
false
promptly and effectively to gard for all the peoples of the
propaganda
members of the PoLtburo in Rus¬
Russia and the United States. It
within our
world.

The

there

split

Russia's refusal to join in

the

assure

greatest competition of sys¬
It is of basic

is the

success

of the European

country.

The

We should also keep in mind
developed at Paris. Sec¬
ond, that we do not abandon the that the economies of these eight
importance that we recognize this
countries are not entirely social¬
eight nations of Europe who did
fact and that we seek to under¬
not accept
the Paris conference ized and collectivized, the land is
stand just what it means.
The invitations.
Third, that we pro¬ still peasant-owned, the merchants
hope of mankind is that a deci¬
ceed promptly with an intelligent, are nearly all individual operators
sion may be reached on a basis of
coordinated program, to clear up and not state-possessed, and the
a competition of economic systems
Communist
infiltration
in
the people do not wish to move to¬
and of ideas and not through a
ward a complete, socialized, regi¬
United States.
resort to force.
mented
economy,
and if
these
Clearly our first priority now
I
have
ab:ding faith in the
must be the success of the eco¬ peoples do not move further in
the regimented direction, the ul¬
tightness and the strength of
nomic group that is being formed
the fundamental concepts of our
in Paris.
It is good news for us timate working out of our world
American system with individual
economic
and
ideological
rela¬
and for the world that the Ad¬
freedom of men and women, eco¬
ministration is moving in the di¬ tionships will be easier to attain.
nomic freedom as well as social
rection
of
a
continued helping
Conditions of Assistance to
and civil and religious freedom,
hand
in the rebuilding of this
Russian Zone
and with respect for the individ¬
of all history.

tems

ual dignity of a

program

war-torn

human being.

deep confidence in our
modern American capitalism and

early

representative form of gov¬
ernment
of free citizens -as to¬

news

have

in our

May that no more was to
this year. It was bright

consider

made

were

done

also

can

understand

from the history of
her Czars and her

Russia

and

the

from

and

revolutions

nature

present form of govern¬
ment and economic system, why
the rulers of Russia do: not now
share that faith and that confi¬
her

dence.

believe that there will

I do not

major change in Russian pol¬

icy for the better until the mem¬
bers of the all-powerful Politburo,
convinced

things:

two

the

notwithstanding

that

First,
strains

Stalin,

Generalissimo

including
become

and

war

postwar con¬

confer

should

istration

such

the

with

the

Worker."

that

activities

is New

the

show

that

Eisler,

12-point

and

worked

of the

approach

1933

Minnesota.*

Minnesota

centers

had

Communist

activity

in
the
United
States.
Minnesota then had more than its

dispropor¬
tionately high percentage of the
known paid
membership of the
Communist Party is in New York.
In fact according to official
gov¬

part

labor

their

violence

due

influence.

third-

political party captured State

con¬

trol and Communist "fellow trav¬

ernment
reports
40%
of
the
known enrolled Communist mem¬

elers"
Our

moved into key positions.
Republican Party took a di¬

bers

rect

position in the first campaign*

the

are

entire

New

United

York.

States

Most

serious inroads in organized labor
by the Communist Party stems
from
New York.
It
should
be

recognized of course that the fact
that New York is a news and
communication
and

gateway from
has

rope

trade

and

made

and

center

Eu¬

especially

at¬

tractive for concentrated effort by
the Communists.

aid

freedom

the

State

New

York, the
production of these items, such as or
to
clamp
down
additional Mayor and the Prosecutor of the
coal-mining machinery and equip¬ socialization
upon them, and that City
of New York, to clear up
ment, farm implements, hydro¬ the
people should be given the this center of Communist
activity.
electric installations, and trans¬
facts of the aid program.
'
•"'••• •
'
' -i.
portation facilities. Authorization
As
one' specific
Steps to Clear Out Communism
example, the
to place a half-billion dollar or¬
des¬
I suggest these 12 specific steps
der for this type of equipment, peasant farmers of Poland
perately need farm machinery. as the most effective way of clear¬
extended before this session of
..

•

of November 1938 that

the

both

individual

system.

this
it

1937

one

Commu¬

clearly must
include that
the
Needed, and needed badly, is
parties in Con¬
press and radio be able to report a vigorous,
coordinated, and com¬
gress to see whether preliminary
to the outside world without cen¬ prehensive
bi-partisan program
authorization cannot be given to
sorship what is happening within developed
and
put
into
effect
an appropriate agency of the gov¬
the country, that the assistance
through the cooperation of the
ernment to place advance orders
should reach the people for the President and
the Attorney Gen¬
for the articles that will be criti¬
purposes for which it is intended, eral of the United
States, the Gov¬
cally needed. Our American man¬ that it should not be used to de¬
ernor
and the Attorney General
ufacturers can then expand their
crease
their
leaders

Known facts that have been

reported

the

because

suc¬

confident of the effective¬

re¬

scene

Gerhart

key

cannot

subvert or
American political -

economic

ness

been

Communists

sabotage

their

that

cessfully' infiltrate

Commu¬

has

convicted

ac¬

location

"The

nist.

change of policy came forth in
constituting an excellent June. Action is urgently needed eight countries, that we do not
system to give expression to these for their future and for ours be¬ foreclose the probability, under
basic concepts.
fore another grim winter sets in proper conditions, of extending to
them desperately needed economic
over Europe.
assistance.
What Russia Must Understand
Speed is essential. The Admin¬
The
conditions
But

was

the

gether

least partially

Daily

recently

backs to these

our

This

vealed

immediately make it clear that
do not turn

sia

Communist

headquarters.

in this world-wide competition of
ideas and economic systems that
we

publication,

nist

imperative

indication of the

the

when

York.

their

It was dark news

area.

statements

when

center

tivity in the United States

•

would;

clear them

them

out, would not permit
public payrolls, and con-,

structrvely would seek the coop¬
eration of the working people to,
their

decrease

influence

ation

Federal

ernments

or¬

cooper¬

local

and

gov¬

able to make

were

With the

ganized labor.

sharp change in their whole dis-'
ruptive practices in labor and in

political and social events.
The
third political party was defeated
eliminated.

and

Within

few

with the active assistance,
of the loyal organized labor men

years,

the

State

and

cit¬

alert

izenry, the situation was greatly
improved
and
now. for
years;
Minnesota
share

had

has

difficulties.
I

less

than

her

national Communist

of the

;-///;■'

...

emphatically that,
this program should not be ap¬
proached on a basis of any hys-.
emphasize

teria

should

and

with

full

carried

on/

recognition and respect

for civil rights and liberties. But /
it is important, not simply
be¬
thoroughly the cause of the dangers of their ac¬
swept their
production and high standards of economic program being devel¬
identity of all known Communists tivities, but because of the even
homelands
over
and
over
and
living and without a major eco¬ oped in Paris, and can also ease
and "fellow travelers."
Give the
greater dangers in the world sit¬
These peasant farm¬ exact
nomic crash and devastating de¬ the ultimate strain on the Ameri¬ over again.
evidence of their connection.
uation if we do not make it clear /
ers are on their own farms.
They Some
pression; and second, that the can economy, which is home base
of the press have made an
to the Politburo
in Russia
are not collectivized.
that.
Europe des¬
Communist Party cannot success¬ for the success of our entire fu¬
excellent start.' " V :
Communists
cannot
successfully

economic system can Congress ends,

ditions, our
continue
to

infiltrate

fully

with

function

and

high

dominate

sabotage this country or any other
of

one

the

of the

major powers

world.
If

they

convinced

become

these two things, both of

which I

difference

ture.

can

the

make

orders

these

success

major

Their

almost

was

own

entirely

the

destroyed or taken
grim tides of war

not

ing Communist infiltration:

perately needs the food they could
raise.
If their government will
agree that the farm equipment we
would send them would go to the
peasants themselves and would

are

placed
early,
later
when
the
plans are finally complete, sudden

orders will place a sharp
burden on already crowded manu¬
facturing facilities in America,
without proper time for expan¬
sion, will increase our shortages

heavy

away

the

One

Two
and

cies;

and

Russian poli¬

friendly,

her

vigorous

badly

people, who want

peace

will then take

any

do,

portance.

that

their place in sharing constructive

System

REGULARLY

must

ever

the

direction

individual

dignity,
nities
do

freedom

and

system

and

human

for opportu¬
and methods to

yearn

means

The

so.

peoples

Clear
it

make

not narrow or

are

bigoted, that

Finland

people
made

;

basic

faith

the

working

Meet

—

the

squarely, through
on

the merits, the

Communists

raise.

Six—Move

continually to .cor-,
rect deficiencies, maladjustments,
or evils
which they point out in
our American social, economic, or
political rights.
/
A \
\
\

share
own

emphasize these major devel¬

world

of our. policyf
economic field and

cause

the
be¬

prompt action is-

believe

needed'and

the',

front

subversive

have

confidence in

ability to move upon them.*
We must constantly keep in mind,
our

that

physically and geographically
scientifically
this
is
one
world, and that While there is
and there will be sharp competi¬

and,

tions and

conflicts -and clashes of

ideas, and of economic and social
systems,
the world cannot
be.
successfully divided. If we con-,
sistently and fairly present and
advocate our dynamic ideas of in¬
dividual freedom and human dig-*^
nity on which our America is
based, i then 'I have a - sober .-op-,
timisrri that we can win peace and

plenty and freedom -for ourselves and for others in the years ahead.;

countries to work and to trade, to
and invest, to speak and
to assemble, to vote and to wor¬

Seven—Expose the unsound and

disruptive
make.

the nature

martyrs.

Five
issues

the plenty that we
that we believe that

that they are not

frank discussion

and

cooperation

understand

opments

domestic

facts.

manage

•

fronts,

people
and
keep them fully informed of the

selfish

false

false issues.

effective

the violations

clear

is to be set free within their

ship.

behind

Federal, State and local govern¬
ments, making certain that the

sincerely de¬

the majority
of the peoples of every other na¬ enjoy, and
tion of the world prefer to move the best way for them to
in

the

American

freedom

It is my view that

Buy UlS. Savings Bonds

with

sire the advancement of mankind,
that we want others to share the

Prefers Our Economic

hide

Four—Have

Must Make Our Policy

World

speak out in
genuine capacity, that they

not

infiltrate in America.

and

Three—Prosecute
them
vigor¬
ously for their violations of law

to Poland.

the Fall,

Insist that they stand up

—

false names, or

not be held by the government as
a
lever for
collectivizing their

after the Euro¬
pean plan is presented. But a be¬
ginning now on our production
for peace program is of major im¬

sion

Expose

be counted

their

agriculture, if they would agree
that our press couid report with¬
am confident are true; and if at
of these same items and will de¬
out censorship the developments,
the time they reach that decision lay the reconstruction of Europe.
and that they would announce to
The actual delivery of these sup¬
America is strong and resolute in
the people the amount of aid de¬
plies should properly await the
its military position; then there
deliberated major Congressional livered, then I would be in favor
of granting aid in farm machinery
is grounds for hope of a major
decision, probably at a special ses¬
favorable change in

—

proposals"; that

they

./.Ly.'-.'y

Iowa-Illinois Bonds

:« Eight—Urge our fellow' citizens
We should
constantly make it
to refuse to associate with them in
equally clear that-to attain these
A banking syndicate headed by
objectives they do not need now organizations, - insisting that they
Hungary and
either be exoelled to form organi¬ The First Boston Corp. is offering'
bania, do not want to turn away or ever to subjugate themselves
zations of their own, or else-the ;today an issue of $22,000,000 first'
from us, do not want to turn fur¬ to us, that we believe basically
mortgage bonds, "2%% series due
ther and further away from indi¬ that men should be free, that they citizens who do not wish to follow
their line withdraw and label the 1977,- of the Iowa-Illinois. Gas &
vidual
freedom.
But
is it not should not

and

Poland

and

Czechoslovakia

and Yugoslavia and

Rumania and
Bulgaria and Al¬

be slaves to other

equally clear that these small
C" W

tions
/

- -

"K<y ■

located

defy Russia?

r : • -rid!

%. m.

they are cannot
It would be a major

tragedy, If because of our
request for a joint European pro¬
gram, and the declining of invita¬

WORK

Ask where you BANK
;

TVJSS-VIT'.*

doned

them.

division

was

The

reply that the
actually caused by

Russia's refusal to join and by her
insistence that these countries de¬

cline,

within

men

organization

without, their

Nine—Do

borders.

Action

'■

■.

Against

;

•;

Communist

Infiltration.
As

the

third

phase

our

by these countries, it would prompt, action, I consider it to be

be interpreted now that we aban¬

Ask where you

own

world

tions

either

na¬

not

sufficient

excuse.

imperative
and
place

that
into

effect

develop
a

well

thought out, effective program, to
not only decrease the infiltration
of Communism in America,
but
also to make it very clear to Rus¬

definite ~ front.

not

lightly .use the
charge of "Communist" .against
anyone unless we are certain. of
the
evidence, then present the
evidence with the charge. ;
Ten—None of them should be

permitted on public payrolls, Fed¬
eral, State or local.
■ ■
Eleven—See to it that the mem¬
bers
a

labor

chance

their

organizations have

to vote
own

by secret ballot
officers so that the

Electric Co.
at

101.40

was

The bonds

awarded July

100.779.

are

priced-

and interests The issue

on a

bid of;

■

Iowa-Illinois Gas & Electric Co..
is

subsidiary of the United Light*

and Railways Co.

The

new

funds'

will be used to redeem presently

outstanding
struct

and

property.

bonds

and

con¬

acquire'' additional
,*_j

Volume 166

Number 4612

were

announced:

Harold

wisle, Assistant Cashier

News About Banks

sistant

CONSOLIDATIONS

Ent-

clearer.

to be'As¬

Assistant

Geuder,

Bankers

and

OFFICERS, ETC.

REVISED

CAPITALIZATIONS

Assistant

Cashier

Tomorrow's

Vice-President; Joseph
McDonald, Manager, credit de¬
partment, to be Assistant Cashier;
Fred A. Stocker, Assistant Cash¬

NEW BRANCHES
NEW

Vice-President; George W.

ier to be Assistant

Richard

West,

The People's National Bank of
Brooklyn, New York, has declared
a regular dividend of 50
cents per

Vice-Presi-

dent and Director of Irving Trust

•

Company

New

York

was

June 26 elected to the newly cre¬

ated

office

Executive

share and

Vice-

cents

President of the Company, it was
•

announced

at the

1947.

New

Yorker, Mr. West remained
Europe for a number of years

after

service

War.

The
of

With

the

First

headquarters in Paris
engaged in industrial re-

was

period.

Later

conducted

organized

wholesale and retail trade.

•

Join¬

■

•

;

Bankers

can

entered

United

the

•'

•

*
FIRST

THE

amount

Total resources

by
President

167,500,731

TJ. S. Govt,
Loans &

bills

462,522,606

dis-

123,515,072

80,802,431

Undivided profits.

'"/

■

26,089,371

25,818,016

■

THE

COMMERCIAL
AND

TRUST

NATIONALL

CO.

June
Total resources

NEW

30,'47

BANK

YORK

Mar. 31,'47

194,744,808

194,034,661

48,164,216

46,608,542

Cash and due from
banks

U. S. Govt,

secur¬

ity holdings
Loans &

121,039,172

125,965,824
dis

bills

V counted

46,492,962
2,112,024

42,137,795

Undivided profits.

2,265,038

THE CONTINENTAL BANK

reported

TRUST

CO.

June 30,

'47

Total resources—$195,100,750

Deposits'
Cash and due from

Andrew
of

Mar. 31, '47
$193,483,875

179,620,409

banks

49,059,495

ity holdings.—_
Loans

& bills

June

26,

50,024,032
J

75,799,313

70,140,386

dis-

...

Undivided

i'i

■

,•

••

__'2

profits.
* r

■

Election

55,118,397

52,107,538

2,040,100
*

of Gayer G.

■< '

1,938,721
'■/
.
.

been

director

Reserve

1942,

had

was

also

Bank

the

Board

York

Trustees

at their

meeting on July 11
announced by President Earl

Harkness.
limited

Dominick

Mr.

partner

Dominick and is

Shell Union

delity
New

Oil

Dominick

Director of the

Corporation, Fi-

Casualty

Company

Share. Corporation,. also

ces

000

...

Robert

The bank

Company of Philadelphia

Company, effective Sept.
was

also elected

meeting
a

Company.

President.

.than 235,r

serves

000 depositors.

' " "

-_L

Jft

Karl

Mitchell
Director of the

Govt,

Federal

Reserve

delphia, it
He

will

Bank

ap¬

announced

the

Phila¬

July

charge of

re¬

search.
X •*.-

James

Executive

632,488,213
163,350,622

get

5,140,648.

>Large was elected
Vice-President of the

LOUIS,

MO.

320,275,756

Cash' and due from

329,899,860

83,516,709

S. Govt,

and

149,715,962
92,419,148

Mr.

Large, ~ previously

President,
with

the

has
bank

Philadelphia

bank

been
since

leave
for

war,
of

four

July

Vice-

associated
1928.

"Inquirer"

during the
on

1947

Bank

reported

The

reports

Mr.

cash

hand

and

from

distin¬

"Also promoted at the
meeting
of

Tradesmen's

was

directors

Hauck, who

vanced from

July

was

'ad¬

Assistant Vice-Pres¬

identy tQ; Vice-President;
"The:

following

are

now

discounts

the

$32,009,-

latest

date compare
with
$28,027,611, on Dec. 31, 1946.
The bank's capital account is un¬

Large changed at $1,000,000 and its

absence
years,

853

appointments

$605,654
-

the
oa

The

July

Atlanta

end

the

year

June 30.
*

years, was

and

profit

from

July 3

(through

tional

some
a

him

nothing

kind

but

still

loss.

its

State

News

Wilson,

who has been associated with the
Bank

xx*

Bank

the

and

Liberty

Trust

at Savannah at the

and

Thursday.
—Walter

article

time

view*
do

not

coincide

Whyte

expressed

necessarily at
with

those

this
any

Chronicle.

the

They are presented
those of the author
only.]

Na¬

Company

meeting of the

Board of Directors July 3, Charles
S.

Sanford, President, announced.

is further stated that

Bell,

who

has

been

Orell

with

Pacific Coast

B.
the

Securities

Liberty National in various posi¬
tions since

1938,

was promoted to

the position of Assistant
*

the

announce

Pacifio Coast Exchanges

The Board of Directors of The

Texas,

Orders Executed

Cashier.

First National Bank of

Galveston,
election

'.: '

;

-■

Schwabacher & Co.
'

Members

Winterbotham,

Jr.,

New York Stock

Directors of the

Bank,

have declared
a

Trust
,

Exchange
Chicago Board of Trade

San

14 Wall Street

Francisco

New York 5, N. Y.

COrtlandt 7-4150

San

Francisco,
a

Calif.

dividend of $330

the capital stock, said

(Continued

on page

40)

Exchange

New York Curb
Exchange (Associate) ■*
8an Francisco Stock

Vice-President, effective July 15.

Savannah

that Edward J.

National

More next

elected Vice-President

Cashier

John

"Constitution"

reported

First

-Y '

can

with

assure

know of, can do
that,

Service)

today

little

eighth;

just re-read the fore¬

•

These can't

top

[The

sur¬

remains at $3,000,000. Un¬
divided profits have risen from

$438,162

stops.

Company in Macon for the past 11

plus

himself

the

will

know, however, that

guard

(June 30)
shown as
$26,517,428, compared
with $32,459,725 on Dec.
31, 1946.
and

I do

know if I made
my point any

deposits

total

banks

bonds

Loans

tell.

flirtation

a romance I can't

the holder of stocks

going paragraph and I don't

National

held

I've

I believe that

6,509,705

Tenn.

from

ment

;.A

On paper

get around

you

this

develop into

in¬

re¬

motor

majority of stocks are
flirting with the highs.

better than

$86,354,738 and total assets of
$91,682,280 compared respectively
with $90,494,782 and
$95,569,281
on
Dec. 31, 1946.
The bank on
June

so-called

90,066,419

4,743,340

Third

Nashville,

due

the

149,341,532

loans

30,

Un¬

public that capitalizes
not

loss, when

now

seldom

ythe

Whether

time

Undivided profits-

June

it,

and

cashing in, is something I

the

And when

news.

siders.

89,618,312

being written the

can't foresee.

motivating power
They get it in an¬

secur-

ity holdingsDemand

it is the

•

banks

that becomes
public property

Dec. 31,'46

$360,121,707

—

news.

markets

ticipation of

AND

June 30,'47

Deposits

and

about 91 and 76

are

come

nice profit. Wheth¬
it will be a still better
one,

or a

process

higher prices."

their

from

$27,457,155
Tradesmen's National Bank and compared with $28,867,674 on Dec.
31, 194-3; holdings of U. S. Govern¬
Trust Company of
Philadelphia
by its Board of Directors

favor of

3,961,195

BANK

steels

si*

stock is about 118.

sis

"which is all in

fortunately

Total resources—$350,093,304

The

been

Vice-President
was

597,683,969

ST.

As this is

spectively

something that is

news

was

83,

explanations.

fattening

because of

Loans and bills

CO.,

so-called

Dec. 31, '46

MERCANTILE-COMMERCE

do. Bethlehem

woe¬

dullness at this time would be

se¬

long. They fatten or wither.
might be argued that any

DETROIT

169,775,299

Bethlehem, U. S. Steel
Chrysler would probably
the ones to
buy; so I said

and

ex¬

called

that

mar¬

sounds

though I'm

❖

(though
Applying this figure

Markets can't stand still for you have

ST<

has

mean

263,760,708

prof—

have to reach it

Big Steel at 66
been weakened. Chrysler was left open.

this

293,188,534

hldgs.

curity

Obviously

hard and fast

individual stocks I decided

fully weak

due

banks

to about 185 in the

move

what I

under

and

has).

I..-'know

the

from

tossing

you

neither has it

x..

June 30, '47

Cash

anyway

give

this 185 isn't

few

Delphos double-talk. I'll try to explain

Bopp

#•

Don't try to
It's too

equal re¬
Anyway all this pointed

sults.

cept that I have to add that

resources_$l,166,381,355 $1,168,892,277
Deposits
1,102,221,168
1,095,361,796

Mr.

•

coin will

some

half-and-

out.

one

and

warm

and

strength¬

Tot.

July

V '

pointed

-•

NATIONAL BANK

TRUST

*
guishing himself with the
Navy.
in the. four offi¬ The same paper said:

was-reported

discounted—

10, W. Logan MacCo.y was elected
\ Chairman of the
Board of Di¬
rectors and William R.
K. Mit¬
chell was elected
President

the

Catharine,

;

collar

what

call

even

capital stock of $200,000, divided

special meeting of the Di¬
rectors
of
the
Provident Trust

of the Dollar Savings Bank of

300,000,000,

12196)'-' and

vv..'.:y.'

based

figure that

win¬

ened. This sounds ominous

Peoples National
Delphos," with common

Bank

same

loosen

structure of the
general
ket has not been

into 2,000 shares of the par value
of $100 each,
and a surplus of

dividend, while $100,through the sale of new

came

I look out of
the

going on;
conversely the weak buy¬
ing is also going on.
During
this
exchange the underlying

consum¬

charter

Bank

(Charter !No.

Undiv.

was

exceed

that the consolidation is
the

cerned about is still

$50,000). The office of the Comp¬
troller of the Currency
reports
under

turn

and

Delphos,
at
Delphos,
Ohio
(Capital $75,000) and the
Peoples Bank of Delphos (Capital

$200,000.
*

...

in the market of
the past

National

I figured some
based on

days to change the general objective. It can be bettered
picture. The selling I was con¬ a couple of points; it doesn't

June 28, of the Old National

mated

up).

versation
is
to
ask, "Hot
enough for you?", I see little familiar averages.

age.

stock of that amount.

President

the City of New York now

and

President

years

served

*>.

Total deposits

per

couple of

three-four weeks

involved formula which in

inquirers
starting a con¬

The consolidation is announced,
as of
the close of busi¬

Bank

look it

grunt at solicitous
share. whose idea of

effective
ness

buying

some

stocks would
go up

reaching for the top. In
stocks I thought this

dow,

months

■

stocks

half formation.

the

Thompson said.
x

ommended

many

paid

transfers

six

the

Sussex and Merchants Na¬
tional Bank of Newton, N.
J., has
increased
its
capital,
effective
June 23, from
$200,000 to $400,000;
$100,000 of the increase represent¬
ed a stock

that

of the Roosevelt Hospital.

Mr.

ures,

The

and

Bond

National

York,

was

Union Properties earnings are in¬
cluded in the bank's earnings fig¬

ciation.

the

that

after

the

figure

will

you

you read here last week.
Last week I said the
market

value, continues to be carried

nominal

column

remind

thing

the bank's balance sheet at the

of the Connecticut Bankers
Asso¬

Dominick

Savings Bank of New

for

just talk about
I think I know
something about. When I rec¬

Thompson

profit

reserves

tial

Boston

Greenwich

July

and

top had already been reached. technicians

$360,540, equal to $1.02

3380.

page

•

counted

John

forget the explana¬

can

An in

was

usu¬

ago the averages were down
give you a single in the region of 170
(figure is
thought that will change any¬ approximate —it's too hot
to

was

the title oL"The

also

x>\y *

U. S, Gdvti secur-

share.

par

net

week's

ended June 30, 1947, amounted to

Wilson, Jr.,
County Trust

The

the

181,086,898

stock

explanation

merry-go-round. I don't think

bank's

an announce¬

of the

OF NEW YORK

$100

President

and Mount Kisco

$220,580,558 $220,102,393

Deposits

old

had

131,014,053

bank's

Old

secur¬

counted

since

the

Middletown,
Conn,
since
1932,
died on July 7.
Mr. Holmes, who

619,464,487
•;

Jan. 25 of this year.

Allen W. Holmes, President of
the Middletown National Bank of

Mar. 31, '47

ity holdings—^ 467,312,087

each

Reserve

issue

tial dividend of 75 cents

becomes
effective
when
the
stockholders
of
The
County Trust Company, the Wash¬

703,820,719

banks

value

Company. Approval by the Fed¬
eral

$347,187,900 $762,406,987.

Deposits
Cash and due from

the

stock¬

The capital stock of Union Prop¬

-June 30, '47

erties, Inc., although of substan¬

Federal

BANK

NATIONAL

VV.

record

This

probably

changed from $100 to $10, ten new
common
shares being issued for

Chester, Tarrytown, Yon-

ment

NEW YORK
"

July

Governors of the Federal Reserve

in 1945 with the rank of Captain
he joined Irving Trust Company.
.

•

its

States

the

value

par

353,000
capital

System, according to

Until

Association.

■

increased

the

business July 15. It may be noted
that on May 27 1946, the par

July 11 by The
County Trust Company of White
Plains, N. Y., from the Board of

Army in 1942 he had some years
experience
in
Wall
Street and
after his discharge from service

;

holders

Company's business.
W.
Nelson
Young
has
been
elected Assistant Secretary of the ington Irving Trust
Company of
Irving Trust Company, according Tarrytown,
and
the
Bank
of
to an announcement made by the Westchester of Yonkers
approve
bank on July I.
the proposed merger of the
Mr. Young is a
three
graduate of Johns Hopkins Uni- banks at a meeting to be held
versity
and
of
the
Graduate later this month. The
proposed
School of Banking of the Ameri- merger was referred to
in our

the

Bank

received

was

positions, and as a member of important committees, Mr. West has
participated in all phases of the

kers, Larchmont

cently he has been the Company's
senior loaning officer.
In these

;

•

stock

new

in Port

Estate, personal .and Corporate Trust Divisions. More re-

■

has

$10

stock, payable

Tentative approval to establish
and operate
eight new branches

head of the Mortgage &

National

dividend

Top signs increasing despite
something
continued strength.

•

Real

;

Y.,

ing the Irving staff in 1930, Mr.
was
first engaged in handling reorganizations.
Later he
served

Comptroller

$183,600.

West

the

capital, effective June 24 from
$229,500 to $413,1000 by the sale

and

agent for
American
Canadian firms engaged in

and

Bank

ex¬

hands slapped.

So I'll

tions

Union

declared

cents

Company of Port Wash¬

purchasing

■

Currency reports that

ington,

merchandising busi¬
acted
as
Europeon

which

ness

Washington

and Trust

organization, in the reconversion

the

Port

World

Office

July

•

ally get

By WALTER WHYTE=

Commerce of Cleveland, Ohio

share, payable Aug. 1,

per

A native

bank.

I go in for

Actually I'm

and whenever I do that I

Says—
=

Directors

Whyte

Vice-President,

Assistant Cashier."

extra dividend of 25

planations.

reaching for

Walter

Joseph R, Roberts, Assistant
Manager credit department, to be

probably confused
frequently

happens when

Markets

and

more.' That

you

Teletype NY 1-928

Private Wires to
Principal Offices
Saa Fraoeieeo — Santa
Barbara

Monterey
......

—

Oakland
Fresno

—

Sacramento
.

•-

THE COMMERCIAL & FINANCIAL CHRONICLE

(248)

Thursday, July 17, 1947

Sees

News About

Our

Reporter

Banks and

Leveling OH of Prices,
Costs and Income Major Problem

Governments

CHIPPENDALE, JR.

By JOHN T.

(Continued from page 13)

Bankers

demand, as well as 1943, according to Treasury De- has been made in tools that enthe belief that the bark may be worse than the bite, the government partment figures.
able one man to do the work of
securities markets turned up especially in those issues of which
(Continued from page 39)
Admittedly, the profits of some many and to do it with less effort
the powers that be do not have large enough, holdings to make an
the San Francisco "Chronicle" of
industries currently are high but and in less time.
As more and
impression on prices even if they were sellers of these obliga¬ these often are the result of in¬ better tools have been provided
July 3. which noted:
tions..
.This resulted in the intermediate- and longer-term eligibles
ventory paper profits and other American workers, arduous phys¬
"This is an increase of $30 a
being moved ahead to levels which indicate that, at least a part purely
temporary factors. These ical labor and long hours of work
share over the previous semi-an¬
of the funds that were waiting for a buying opportunity were being will
disappear as supplies- catch have diminished on the one hand,
nual rate.
The dividend is pay¬
put to work.
Interest in the World Bank bonds and fear of a up with scarcities and the law of and on the other the standard of
able Aug. 1 to stockholders of rec¬
certificate
rate
change, cancelled part of these gains, on light supply and demand
ord July 26."
brings back living of our population has con¬
Aided

by the usual heavy July investment

volume.

semi-annual dividend of $270

paid by the bank from 1935
to 1945. On Aug. 1, 1945, the rate
was

the

district that buyers would
uncertainty over short-term rates

in the financial

known

the

when

market

cleared up.

was

increased to $300.

was

well

was

into

come

...

cisco, Cal. reports
of

hitched

President, of
Bank of America of San Fran¬

the

Giannini,

that deposits as
June 30 totaled $5,113,290,000,

$238,524,000

represents

deposits,

normal

exclusive of the war loan account.

783,000

compared with $5,554,-

310,000

Earnings for
were
$32,737,000.

ago.

year

half

the

$5,469,-

now

are

resources

year

this

$5,902,000 was
reserved for depreciation of bank
From

total,

premises and other real estate and
amortization of bond premuims,
set up in re¬
serves and applied to the revalua¬
tion of assets and absorption of
losses other than loans. President

and

$1,700,000

pointed out that loan
charged to "Reserve for

Giannini
losses
Bad

was

are

insurance
against any possible future loan
losses. At June 30, 1947, this re¬
serve
stood at $30,344,000. After
payment of $8,531,710 in dividends
for the semi-annual period at the
regular annual rate of $2 per
share, and after a profit-sharing
bonus to employees, capital funds
months

six

$16,187,000,

by'

compared to $10,590,000 in the
corresponding period last year.

funds

Capital

$257,-

total

now

lost

Assistant Vice-President,

will re¬
Hills

main in the bank's Beverly

Office where he is associated with
F.

Brandt, Vice-President.

Ben R.

Unicn

Bank

ment

announces

Herman

Co.

Trust

Los

Hahn

from

Vice-President to Executive Vice-

upon

While the

and

yield

Treasury bills is approaching the certificate

think twice before they unpeg the certificate

will probably

that be

rate, a'hd allow it to seek higher levels, because
increase the cost of

servicing the debt.

somewhat since investors have had an

ant

Vice-Presidents

the

Peo¬

National Bank of Seattle,
Wash., to the office of Vice-Presi¬

ple's

dents, and the promotion of three
other members of the staff
sistant

Vice-Presidents

nounced
P. A.

June 28

Strack, it

was

As¬
an¬

by President

rate. ... The 1949 and 1950 ma¬
little better tone, with not so much selling now

turities have

in these securities.

RESERVE BOARD

REPORTS

*«£

If the powers that be

investment policies of the

purposes.'.

than

take

chance

this

happening,

was

re¬

ported that some institutions are doing what is being classified

long-range scale buying.... A part of the funds are being in¬

vested

now

in longer-term issues

if prices should decline.

later

with

the issues held

price

average

and

with more to be put to work
These new purchases along

at lower prices will give them a favorable

satisfactory income.

seeking greater controls, seems to guarantee low
interest rates, because the only way in which credit expansion could
be discouraged would be through higher interest rates.
.

The

obligations are still
of selling by the authorities.
ineligible

because

DEPRESSED

being kept
.

under pressure
There is no doubt about

the demand that is around for these securities and

unless the mon¬

etary authorities were supplying the market, prices of these issues
would be substantially higher.
.
.

The

2V&s due 1962/67 and 1963/68 have been taken in rather
sizable amounts by non-bank investors, along with the 2*4s due
1959/62 not only for maturity and income purposes but with a
weather

The

to the year 1952,

eye

eligible.

when these issues become bank

appreciation that is possible to be obtained from these bonds
considerably the total income from these pur¬

ELIGIBLES ATTRACTIVE

BANK

bank

year

his

upon

re¬

turn from service in the
T. R.
the

Navy, and
Faragher, who is serving at

bank's

First

Avenue

Branch.

eligible

vance.

...

It is indicated that the 2%s were

the

2V£s
.

John

went

Assistant Viceto

John

King,
C. Laughlin, Jr., and Frank

Ward.

only part of the day;

goodly part of the day he is

that still exists.

our unique creative ability and
ingenuity?
We
might
like
to

but

appreciable effect

upon

the large

...

reported that the smaller commercial banks, which have

large amounts of savings deposits, are putting real pressure on their

should remember

that inventive

fined

genius is not con¬
country—history
other nations have

this

that

proves

their

proportion
imagination and
ventive

ideas

have

they

these

each

week,

dollars

how

will

buy in
terms of goods and services pro¬
vided by others.
For example,

the average
receives in

factory worker today
exchange for his dol¬
only 39% as much farm prod¬

lar

ucts

put

shoes

he did prior to the war.

another

pair of
was equiv¬

way,

prior to the war
18 pounds of butter. To¬
pair of shoes will buy only

day

ten

pounds

butter.

The

pur¬

chasing

power of the farmers has
thus risen at the expense of other

with
in¬

are

the

world

inherent

native

worker

much

designing tools as
Aimerica has provided
climate

nomic

individuals

not

genius for
the fact that

that

eco¬

enabled

has

business

and

organi¬

zations to accumulate capital with

ideas for new and

receives

But

practical
perfected
and placed
in production.
The
major reason that the American
worker
is
the
best
equipped
unless

value

much

men

ideas.

which

consumer.

quality of the

think

More important
than the actual number of dollars

also

and

finance

production

is vital to all

for higher

have
will

the

perfection
innumerable

better tools.

future hopes

our

standards of living

economic atmosphere that

ever-increasing capita^

assure

investments

per

Summing

up,

earner.

wage

main eco¬
nomic problem today is the dis¬
torted relationship among prices,,
our

costs and income. Unless they aro

then stabilized

leveled off and
some-

level,

new

recession

activity
sooner

looms

hesitancy
general business
some

probability

later.

workers.
The incomes of
workers

great deal;

Outlook

groups of

some

have risen

About

for

Prosperity

■;

when most

ago

year

the wages of other groups have
lagged. Wage increases, however,
generally mean higher production
costs
and
consequently
higher
prices to the consumer, who also

people

turns out to be

justments have started to get un¬
der way. For example many lux¬
ury
lines
were
marked
down
sharply months ago; today some
food, textile and lumber prices

is formed with

A circle

worker.

higher prices being

followed with demands for higher
wages
In

which,

if granted will be
again by higher prices.
to leading to further

addition

rise

prices, higher wage rates
also set up rigidities which make
eventual price readjustments ex¬
tremely difficult.
If

the

wages

then

high level of
be maintained, how

present

can

ductions

achieve the price re¬
be made in

that should

order to

bring about

ance

among
come?
The

better bal¬

prices, costs and in¬
only basic solution

lies in higher production per manhour
and
resulting lower unit

must meet its responsi¬

agement
bilities

bring this about, man¬

by improving methods and
and by so planning op¬
as

eliminate

waste.

optimistic

highly

were

about the business outlook, I was
much more pessimistic than I am.

today,

encouraged

fact that

the

of the needed

some

ad¬

having corrective reductions..

are

The United States emerged from
World War II with unprecedented
resources

for

which

American

the

prosperity

standard

of'

living could rise to new heights..
History shows that the American;
way has
always been a rising:
standard of
and

that

world

living for the people,
other

has

proximate such
One

wartime

nation in

been

ever

the

able to

ap¬

standard.

this

nation's

greatest

was the ability
beyond levels thought
by American and for¬

resources

to produce

possible

eigners alike before the

This

war.

ability to produce fully must be
carried

if the United States is

to realize its

ties by making full and produc¬

ities.

tive

of the tools management

use

provides.
America's High

Actually, the major reason for
high productivity of our na¬

the

equipped
In America,

best

worker in the world.

the average worker today
vided

firmly believe that

adjustment

Productivity

the

trained,

prosperity potential¬

nation has passed

tion is the fact that the American

GENERAL MARKET

wage

worker, in addition to being better

because

of these securities to have any

demand

of the more favorable tax-free

1956/58

part to the fact that the powers that be do not have enough

think¬

The better showing of the eligible issues is attributed

due
.

being bought in place of

with

than

is pro¬

$6,000

perience
time.

period

perity for

very

use

the

nological
curred

substantial

the

several times as much as workers

expanded

make

many

will

pros¬

full

oppor¬

bring into full
important tech¬

developments
war

use

productive

nation.

re¬
ex¬

readjustments

there

during the

equipment and tools to do his job,

will

considerable length of

With

completed,
tunity for

this

once

through the

that

oc¬

period and
the

greatly

capacity of

Congressional delegations for participations in any new issues of re¬
bonds that may be issued in the future to non-bank in¬
vestors.
It is indicated that the June 2s of 1952/54 have been

in the most advanced foreign na¬

our

tions.

lower unit cost of goods and

high

getting better buying than the December 2s. ... A good-sized order
was reported in the 2V2S due Sept. 15, 1967/72.

wages; these in turn

pos¬

ress

stricted

...

"Promotions
Presidents

often

Is the amount and

Labor must meet its responsibili¬

obligations have been in demand, with the
last four maturities of the partially exempts the leaders along with
the 2V2S due Sept. 15, 1967/72.
.
The largest buying orders were
reported to have been in the 22As due 1960/65 and the 27/ss due
1955/60, with the 23/4S at one time showing quite a sizable ad¬
The

M. Clare

last

What

economic

our

processes

...

yield.

later; J. Franklin
Eddy, who became Assistant VicePresident

for

erations

,29, which

year

for

costs.

....

enhance

chases.

Geddes, who
joined the bank's staff in 1927; B.
Morrison, who started as a mes¬
a

followed

The Board, in

senger

Wages and Prices

Cqn

alent to

should win their case for greater controls
member banks, then these institutions
might not be able to take on some of the issues they need for income

over

"Those advanced to Vice-Presi¬
were

nim»

kets, particularly the trend from shorts to longs, has been respon¬
sible in some measure for the better tone in the government market.

in part also said:

dents

■

Undoubtedly the admission by the Federal Reserve Board in
its annual report to the Congress that an unpegging of short-term
rates is not a cure-all for what has been going on in the money mar¬

stated in the

Seattle "Times" of June

have subsided
opportunity to study the

effects of unpegging of the bill

would

The advancement of four Assist¬

from the longer into the

shorter certificates, but this initial rush seems to

this action will really

...

To be sure, there has been switching

MacLennan to the post of Assist¬
ant Cashier.
*

heading for- a period of
extraordinarily keen competition.

earner

rate, most of the large banks appear to be holding on to practically
all of their certificates.
The opinion seems to be that the powers

Neary from Cashier to Vice-Presi¬

Cashier,

ness

overlook

CERTIFICATES STILL RETAINED

President; election of Edward H.
LeBreton to the position of VicePresident; promotion of W. C.
and

oper¬

large corpora¬
tions, already has done. It is my
firm opinion that American busi¬

the price depreciation that

dent

small

than

increases?

INELIGIBLES

advance¬

composed

rather

ing, is that the worker is

Meyer, President of the

Angeles, Cal.,

part
ators

wage

and elected J. H. Steensen a Vice-

President. Mr. Steensen, formerly

margins
makes itself extremely
vulnerable,
and runs the risk of
pricing itself
out of its market, as the build¬
ing industry, which for the most

the decision to pickup desired

years, had had a bearing
maturities of the bank bonds.

the

declared

against

now

few

Rather

have

the

important to investors, especially the
to be considering the income that would

investing

not

defrosting

seeks

profit

price

regular quarterly dividend of 50
cents per share payable Aug. 1 to
shareholders of record July
18,

that

believe

that

high

the problem of distorted
relationships be solved by

Directors of California Bank of

Angeles

before such action takes

time

be some

however,

income

quarters

notice, the impression in some

will

industry

maintain

might take place, and evidently have concluded that it was to their
advantage to put some funds to work at prevailing levels. . . . Also
the scarcity factor, which will be much more evident in the next

483,000.
Los

member banks, they appear

increased from earnings for

were

the

that

Others,

Because

Debts," to which reserve an
allocation is customarily
end

has

certificate rate is imminent.

annual

made at the year

hut

moment's

place.

including

increase,

$138,766,000
Total

seems

account of $277,000,000.

loan

war

This

a year ago,

conditions,

including $13,000,000 in the war
loan account, compared with $5,-

tools and equipment provided the
American worker primarily due

business.

Any

did not, however, remove
nevertheless resulted in many in-«
vestors feeling more confident that the real effects of an unpeg¬
ging of short-term rates will come only with the unfreezing
of the certificate rate.
While the certificate could be un¬
these

tinually increased.

ican

defrosting of Treasury bills

The

❖

the keenly competitive conditions
that normally characterize Amer¬

from the Pacific Coast
.

bonds, went over with a bang, as both issues
premium.

The World Bank

went

sizable

The

flects

our

creasing

should

result

and

social prog¬

country,

in fact, re¬

sible further increases in the liv¬

the ever-in¬

ing standards of all the American

economic

This

large part

capital

investment

that people.

making

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4612

Volume 166

Securities
•

N. Y. (8/11)
June 26 filed 123,246 shares ($1 par) common stock.
Underwriters—Herrick, Waddell & Co., Inc., and First
Colony Corp.
Offering—To be offered publicly at $5
a share.
Proceeds—Company will receive proceeds from
the sale of 58,880 shares and four selling stockholders
the proceeds from the sale of 64,366 shares.
Company
also will receive proceeds from the sale of 20,000 war¬
rants for common stock to underwriters at an aggregate
price of $2,000. Net proceeds will be used to pay current
bank loans and for working capital.
Corp., Cuba,

Acme Electric

Hartford, Conn. (7/22)
June 20 filed 250,000 shares ($10 par)
capital stock.
Underwriters—Dillon, Read & Co. Inc. and W. C. Langley & Co., New York.
Offering — The shares are of¬
fered for subscription to stockholders of record June 18
on the basis of one share for each three shares held at
$40 per share.
Rights expire July 21. Unsubscribed
shares will be sold publicly.
Proceeds—To be added to
Co.,

Insurance

Aetna

;

capital funds.

filed 25,000 shares ($20 par) 5% cumulative
convertible preferred. Underwriting—None. OfferingOffered to stockholders of record May 10 in the ratio of
one share for each two shares of common held.
Rights
expire July 15. Any shares not taken up to and including
18,750 shares will be purchased by Republic Insurance
Co.; balance will be sold to or through the Dallas Texas
National Association of Security Dealers.
Price—$20 a
share.
Proceeds—To retire present indebtedness.
26

May

Grain

Allied

•

Co.,

Phoenix, Ariz.

1,500 shares ($100 ^ar)
with option to purchase
$10 par common at $10 a share.
No un¬
To build grain elevator at Phoenix.

one

share of

derwriting.

Inc., N. Y.

Broadcasting Co.,

American

June 23, 1947)
UnderwriterDillon, Read & Co. Inc., New York.
Offering—A maxi¬
mum of 30,000 shares may be sold by company to per¬
sons, firms, or corporations with whom the corporation
Jiad network affiliation agreements on March 31, 1946.
The remainder (3,333 shares) will be offered publicly.

27, 1946, filed (by amendment
33,333 shares ($1 par) common stock.

June

Price by

amendment.

par) common, of which
10,000 will be offered to officers and key employees.
Underwriter—Townsend, Graff & Co.
Price—$3.50 per

includ¬
outstanding notes.

Proceeds—For general corporate purposes

ing reduction of bank loans and

Vending Machine

American

Corp., New York

($1 par) common. Under¬
writer—Reynolds & Co., New York.
Price by amend¬
ment.
Proceeds—Of the total, 120,000 shares are being
sold by stockholders and the balance by the company.
The company will use proceeds for organizational pur¬
poses, which includes the merger of Berlo Vending Co.,
Philadelphia, and Sanitary Automatic Candy Corp., New
■

Inc., N. Y.

1946 filed 2,343,105 shs. of common (par $5)
additional number determinable only after the
results of competitive bidding are known. Underwriters
—To be filed by amendment. Probable bidders include
an

Dillon, Read & Co. Inc., White, Weld & Co., and Shields
& Co.
(jointly), and W. C. Langley & Co. and The
First Boston Cor£>. (jointly).
Offering-—Price to public

by amendment..
•

purposes

stockholders
a

(par $5).

will

common

subscription

for

offered

Central Soya Co.,

Aug.

common

in the ratio of one-third
each common share held.
Unsub¬

for

purchased by the
underwriters.
Price—Public offering prices by amend¬
ment.
Proceeds—Net proceeds will be used to retire all
unexchanged shares of $6 prior stock and to redeem its
outstanding 7% preferred stock.
George Eastwood, President, in letter to stockholders,
Dec. 22 said "we have come to the conclusion it will
shares

not be necessary

stock"

mon

will

common

part of company's refinancing plan.

Proceeds—Offering is part of Ameri¬
dispose of its holdings of 1,150,000 out¬
standing shares of Atlantic City.
The shares remaining
after the public offering will be distributed as dividends
on
American's common stock.
Bids—Expect that call
Co.

can's

(jointly).

plan to

submitted on or be¬
(EDT) July 22 at 30 Church St., New York.

for bids will be issued July 18, to be

fore 11

a.m.

Atlas

Under¬
Price—
By amendment. Proceeds—For additional working capi¬
27 filed

June

72,882 shares

($1 par)

common.

writing—Van Alstyne, Noel Corp., New York.
/-,*

Barium

M-.

■'■<$?<,

' "...

Steel Corp.,

New York

June 17 filed $3,000,000 15-year

Inc. (7/18)
par) common.
Under¬
being sold by stockholders, in¬

Black, Sivalls & Bryson,

($1

27,000 shares

writers—The shares are

the
M. Byllesby & Co., Cruttenden Co. and

William R. Staats Co. also were named as

selling stock¬

Proceeds—Go to the

Price—By amendment.

holders.

preparation,
Blue

Makers

printing, distribution, etc., of "The Home
Book," the corporation's product.

Bonanza

June

Inc., New York

(letter of notification) 7,000 shares of common
Price—$10 per share.
Underwriters—None. For

stock.

Mines,

San

Inc.,

Francisco

(leter of notification) 65,000 shares (100 par)
Price—$1.25 a share.
Underwriting—A. L.

Albee

For exploration of mining

Co., Inc., Boston.

claims.

10 (letter of notification)
approximately 7,000
($5 par) common on behalf of Gus B. Walton,
Vice-President of the company who will act as own
underwriter.
Shares to be sold at market.
shares

Arkansas

1977.

Power & Light Co.

(7/21)

$11,000,000 of first mortgage bonds, due
Underwriters—To be determined by competitive

bidding.

filed

Probable bidders: Halsey,

Stuart & Co. Inc.;
First Boston Corp.; Glore,
Harriman Ripley & Co. (joint);

Dillon, Read & Co. Inc.; The
Forgan

Co.

and

Lehman Brothers and Stone &

Webster Securities Corp.

•

Bowman

July

of notification) 5,000 shares ($1 par)
Being offered on behalf of Jacque C. Morrell,

Vice-President
Price

and

not stated.

General Manager of the

company.

Flying Service,

Inc.,

Robertson,

Mo.

(letter of notification) 50,000 shares ($1 par)
27 V2 cent cumulative, convertible preferred and 50,008

March 24

shares (10c par) common.
of

one

share of each.

Brooklyn

Corporate and Public Financing

The
-

New York

Price—$5

per

(N. Y.)

4.40% dividend.

California

Chicago and other cities

(7/21)

Los Angeles

$750,000 15-year 5% sinking fund deben¬
Underwriter—Maxwell, Marshall & Co., Los An¬

June 16 filed
tures.

Proceeds—Estimated proceeds of $681,000 will be
$250,000 of bank loans. The balance will
be added to working capital.
.

geles.

Claude

New York

Inc*,

Neon,

shares ($1 par) common. Under¬
Offering—Shares will be offered for

March 28 filed 226,454

writing—None.

subscription to

stockholders on basis of one

common

Price by amendment.
additional interests in oil

shares held.

each

for

Proceeds—Towards

cost

leases.

Coast Counties

Gas & Electric Co.

May 22 filed 75,000 shares series A

(7/18)

4% preferred (par

Underwriter—Dean Witter & Co., San

$25).

Francisco.

exchange for com¬
pany's ($25 par) 5% first preferred stock on a share for
share basis, plus accrued dividends on the old stock.
Exchange privilege expires July 16. Unexchanged shares
will be offered publicly.
Price—$26 a share. Proceeds
—To retire all unexchanged shares of 5% preferred.
Counties

Coast

Gas

Electric

Co.,

San

(7/18)

Francisco

Issue—65,000 shares of $25 par, series A

4% cumulative

Underwriter—Dean Witter & Co., San Fran¬
cisco.
Offering—To the public.
Price—$26 a share.
The underwriting commission will amount to 50 cents
a share.
Proceeds—To retire its 5% first preferred stock
and to reimburse its treasury for capital expenditures.
preferred.

Business—Public utility.
Cohart Refractories Co.,

Louisville, Ky.

182,520 shares ($5 par) common.
Under¬
writers—Harriman Ripley & Co., and Lazard Freres &

Mar. 28 filed

Price by amendment. Proceeds
sold by Corning Glass Works,
New York, and represent 88.8% of the total outstanding
common of the
company.
Offering indefinitely post¬
poned.
•

Oil

Colorado

Producing Co.,

Denver, Colo.

July 11 (letter of notification) 1,240,000 shares of com¬
mon on behalf of the company and 1,260,000 shares of
common on behalf of G. D. Fleetwood, President of the

and Wm. McCullough

company,

Fleetwood, Vice-Presi¬

Price—10 cents a share. To be
sold through the president and vice-president. For devel¬
opment of oil, gas and mineral properties.

dent

Treasurer.

and

•

Denver,

Inc.,

Placers,

Colorado

Colo.

July 11 (letter of notification) 40,000 shares (25c par)
capital stock, being offered by Roy Godfrey Olson, Presi¬
of

the

concurrent
notification
1946.
Olson will offer two shares for each
purchased from the issuer. No underwrit¬
company,

filed Aug.

three shares

ing.

bonus offering

of the issuer under letter of

unit, consisting

(Continued

page

42)

for

Union Gas Co.

stock
($100 par). Underwriters—To be filed by amendment.
Bids Rejected—Company July 23, 1946, rejected two
bids received for the stock. Blyth & Co., Inc., and F. S.
Moseley & Co. and associates submitted a bid of 100.06
for a 4.30% dividend. Harriman Ripley & Co. bid 100.779

Underwriters and Distributors

Corporate and Municipal
Securities

Indefinitely postponed.

Oregon Power Co.
($100 par) cumulative pre¬

competitive
bidding. Probable bidders include: First Boston Corp.
and Blyth & Co. Inc. (jointly); Merrill Lynch, Pierce,
Fenner & Beane and Harriman, Ripley & Co. (jointly).
Bids—Bids for the purchase of the securities scheduled

ferred.

Pittsburgh

funds.

Clary Multiplier Corp.,

Underwriter—White and Co., St.

March 26 filed 60,000 shares

CORPORATION
;

added to general

May 3, 1946 filed 70,000 shares of cumu. preferred

for

FIRST BOSTON

2,080 shares ($20 par)
No underwriting. To be

(letter of notification)
Price—$144 a share.

common.

with the offering

Brayton

Price by amend¬

Chicago Bridge & Iron Co., Chicago

dent

No underwriting.

Louis, Mo. For expansion of operating facilities and
working capital.

Boston

•

July

Philadelphia

Gum, Inc.,

(letter

common.

held.

Co., both of New York.
—The shares are being

Bluebook Associates,

July 8

stockholders at
Unsubscribed

common

Proceeds—Working capital, etc. Offering indeili*itely postponed.

cluding F. S. Yantis & Co., Inc., who will manage

offering;

to underwriters.

sold

ment.

•

with non-detachable subscription warrants for
purchase of common stock.
Underwriter — Name by
amendment.
Price by amendment.
Proceeds—For pay¬
ment of loans and for other corporate purposes.
■>-'

9 filed

subscription

shares will be

sinking fund debentures,

due 1962,

July

for

rate of one share for each 7V3 shares

Offering—Shares are being offered in

(7/21-25)

Plywood Corp., Boston

July

June

Underwriter—None.
offered

Inc., Fort Wayne, Ind.

90,000 shares (no par) common.
Offering—Shares initially will be

shares ($10 par) common, being
offered by American Gas & Electric Co. Underwriters—
To be determined by competitive bidding.
Probable
bidders include: The First Boston Corp., and Drexel &
&

filed

1946,

used to retire

(7/22)

Electric Co.

(N. J.)

21,

to issue any additional shares of com¬

Atlantic City

Proceeds—For a variety
in connection with exploration, sinking of

share in Canadian funds.

shafts, diamond drilling and working capital.

the company

new

common.

Arkansas-Missouri Power Co., Blytheville, Ark.

Mlnas, Ltd., «f Toronto*

Ontario

1,355,240 shares
Underwriting—Kuhn, Loeb &
Co., New York.
Offering—The 350,000 shares of first
preference stock will be offered in exchange to holders
of its 532,996 shares of $6 cumulative convertible prior
preferred stock at the rate of 1.4 shares of first prefer¬
ence stock for each share of $6 prior preferred.
Shares
of first preference not issued in exchange will be sold
to underwriters. The 300,000 shares of second preference
stock will be offered publicly.
The 1,355,240 shares of
stock

common

March 30,

plus

Carscor Porcupine Gold

selling stockholders.

American Water Works Co.,

amounts

to $9,000,000.

preference stock, Series A, and

second

June 30 filed 145,000 shares

York.

of preferred

loan of

term

and

June 24, 1946, filed 400,000 shares of common. Under¬
writer—No underwriters.
Offering —To the public at

Mar. 31 filed 133,000 shares (50c

share.

•

July 12, 1946, filed 350,000 shares (no par) cumul. first
preference stock, Series A; 300,000 shares of convertible

tal.

Machinery Corp.

American

construction credit

Co., Chicago

and

Armour

May 20 and postponed to June 18 further delayed.

for

received at 2 Rector
(EDT) July 21.

St., New York, up to noon

It is reported company has abandoned sale

March 19 filed 522,416

(letter of notification)
preferred.
Price—$100 a share,

July 7

for

purchase of the bonds will be

for

ISSUE

(jointly); Central Republic Co. and Equitable Securities
Corp. (jointly).
Proceeds — To repay short-term bank
loan and to finance construction program.
Bids—Bids

scribed

Co., Dallas, Texas

Registration

ADDITIONS SINCE PREVIOUS

INDICATES

Allied Finance

Now

(249)

Underwriters—To be determined by

Kidder, Peabody ^ Co.
Founded 1865

Members
New York

of the New York and Boston
Boston

Stock Exchanges

Philadelphia

Chicago

THE COMMERCIAL

(250)

offering)

July 17, 1947

Chicago & St. Louis

be received.

amendment.

(Showing probable date of

July,,11

Common

Black, Sivalls & Bryson, Inc

common

Preferred

Coast Counties Gas & El. Co
Oil Forum, Inc
..-Preferred
Staten Island Bowling Centre, Inc

proximately $3.25

Common

Light Co.

Atlas Plywood Corp

East Coast

Common

Clary Multiplier Corp

writers—To be

Aetna Insurance Co

Edelbrew Brewery,

Power Corp

July 28, 1947
Bonds and Preferred

CI. A & CI. B Stocks

—Capital Stock

•

August 5, 1947
Rochester Telephone Co

—.Preferred

August 11, 1947

Acme Electric Corp..
Manhattan Coil Corp

Common

•

Materials

Fairport

New

Pictures

Corp.,

stock dividends or through stock split-ups on common
stock.
Price—$16 a share (estimated).' Proceeds—Pro¬
as

ceeds go to the

selling stockholders.

Crawford Clothes, Inc., L. I.
City, N. Y.

Aug.

1946,

filed

300,000 shares ($5 par) common.
Aug. 9 filed 300,000 shares ($5 par) common ttocfc.
Underwriters—First Boston Corp., New York. Price by
amendment.

selling

Proceeds—Go to Joseph Levy, President,

stockholders.

Offering, date indefinite.

Cyprus Mines, Ltd., Montreal, Canada
May 31, 1946, filed 500,000 shares of common
(par $1).
Underwriter*—Sabiston-Hughes, Ltd., Toronto. Offer¬
ing—Shares will be offered to the public at 75 cents a
share.
Proceeds—Net proceeds, estimated at
$300,000^
will be used for mining operations.
Detroit Edison Co.,

Detroit

;

June 27 filed $60,000,000 of general
refunding mortgage
bonds, series "I," due 1982. Underwriting—To be deter¬
mined by competitive
bidding. Probable bidders: The
First Boston Corp.;
Halsey, Stuart & Co. Inc.; Coffin &
Burr; Spencer Trask &' Co.; Dillon, Read & Co, Inc.
Proceeds—To redeem outstanding

mortgage bonds, series
"F," due 1965, to repay bank loans, and for
property

additions.

Disticraft, Inc., Chicago

West Memphis,

underwriting.

business.
•

New York

(letter of notification) 37,500 shares ($1 par)
Price—$1 a share.
Underwriter—Hoit, Rose
& Co., New York.
Proceeds have not been earmarked
common.

Douglas Oil Co. of California,
Clearwater, Calif.

ing.

Electrochemical

Hooker

June 26 filed 110,000
-

Dow

stock.

Underwriter—Smith, Barney & Co., New

Price—Estimated to be $110
expansion.

eral

York.

share. Proceeds—For gen¬

Co.

;

shares (no par)

cumulative pre¬

Underwriting—Smith, Barney & Co.,

ferred, series A.

Price—By amendment.
Proceeds—To re-?
delhl outstanding shares of $4.25 cumulative no par pre¬
NeWe York.

ferred at

$104

share and for construction expenditures.

Decatur, III.

Power Co.,

Illinois

1946 filed 200,000 shares ($50 par) cumu. pre¬
shares (no par) common stock.
Underwriters—By competitive bidding.
Probable bid¬

June 17,

ferred stock and 966,870

Blyth & Co., Inc.; The First Boston Corp.;,
Co.
Proceeds—Net proceeds from the

E. Hutton &

preferred will be used to reimburse the com¬
pany's treasury for construction expenditures. Net pro¬
ceeds from the sale of common will be applied for re¬

demption of 5% cumulative convertible preferred stock
into common prior to the redemption
date.
The balance will be added to treasury funds.

ti&V converted

Company has asked the SEC to defer action on its fi¬
nancing program because of present

market conditions.

•

Inglewood

Gasoline

Co., Beverly Hills

($1 par)
to stock¬

publicly
To purchase equip¬
ment, liquidate indebtedness, and for working capital.

through Bennett & Co., Hollywood.

Power

Interstate

for any particular purpose.

Co.,

Dubuque,

Iowa

June 4 filed 100,000 shares ($7.50 par) common.

May 13 filed $19,400,000 of first mortgage bonds, due
1977, and 3,000,000 shares ($3.50 par)
capital stock.
Underwriters—To be determined by competitive bid¬

writers

ding.

Florida

Power

Corp.

(7/24)

Under¬
Kidder, Peabody & Co. and Merrill Lynch,
Pierce, Fenner & Beane.
Offering—The shares will be
offered for subscription to common stockholders of rec¬
ord July 9 in the ratio of one share for each 10 shares
being held. Rights will expire July 23.
Price—$14 per
share.
Proceeds—To be used in $9,450,000 construction
—

Probable bidders: Lehman Brothers; Goldman,
Co., and The First Boston Corp. (jointly);
Halsey, Stuart & Co. Inc. (bond only); Harriman Ripley
& Co., and Dillon, Read & Co. Inc. (stock only).
Pro¬
ceeds—For debt retirement, finance new construction
and for working capital.
Sachs

program.

Investors

Florida Power & Light

June

Co., Miami, Fla.

(7/29)

filed

$10,000,000 of first mortgage bonds, due
1977; $10,000,000 of sinking fund debentures, due 1972,
and 150,000 shares
of $100 par cumulative preferred.

June 26

Mutual, Inc., Minneapolis, Minn.

shares of capital stock. Under¬
Syndicate of Minneapolis. Price—
market price.
Proceeds — For investment.

filed 4,000,000

writing—Investors
Based

Business—Investment business.

Underwriters—Names to be filed by amendment.

Chemical Co.,
Midland, Mich. (7/24)'
July 2 filed 400,000 shares (no par) second
preferred

heli¬

copters and equipment and for working capital.

July 7 (letter of notification) 100,414.8 shares
capital stock.
Price—?$1 a share. To be offered
holders;
Unsubscribed shares to be offered

Flamingo Air Service, Inc.,

Inc., New York. Underwriters may
Price—$3.50 a share. Proceeds—Net

such.

proceeds will be used to pay obligations, purchase

Ark.

For operation of

Under¬

filed 270,000 shares of capital stock.

Offering indefinitely postponed.

R. Kennedy, President of company, and his as¬
sociates, who are promoters of the sales, will be given
an option
to purchase 60,500 shares of common at par

July

March 13 (letter of
notification) 11,500 shares ($25 par)
5y4% cumulative convertible first
preferred. To be of¬
fered at a maximum of
$26 a share. Underwriters —
Pacific Co. of
California, Cruttenden & Co., Pacific
Capital Corp., all of Los Angeles; Brush Slocumb
& Co.,
San Francisco; and Adele W.
Parker, Clearwater. To
purchase 493 shares of capital stock of G. H.
Cherry,
Inc. out of a total of 625 such shares
presently outstand¬

Helicopter Air Transport, Inc., Camden, N. J.

withdraw

Wm.

each.

share. Proceeds—

writer—Strauss Bros.,

July 3 (letter of notification) 29,500 shares ($10 par)
preferred and 29,500 shares (1 cent par) common, to be
offered in units of one share of each for $10.01 per unit.

officers of the company.

Corp., Detroit

March .14

sale

cent

120,000

porarily postponed.

do., Newark, N. J.

purposes.

one

Inc., Los Angolos

be offered to the public at $5

ders include

Corp.,

New York

Inc.,

Con$>any is selling 50,000 shares and stockholders are
selling 75,000 shares. The company will use its proceeds
to pay the costs of opening additional stores and to ex¬
pand merchandise in its existing stores.
Offering tem¬

Discount

filed

1946

provided in the warrants. Un¬
derwriters—Any underwriters will be supplied by
amendment.
Working capital and general corporate

Divco

(letter of notification) 30,000 shares of class A
common
(par $1). Price—$4 per share. Offering is to
enable holders of 30,000 warrants to subscribe to 30,000

May 8 (letter of notification) 15,000 shares Class B com¬
mon.
Price—At market.
All or part of the securities
may be sold through Bennett, Spanier &
Co., Chicago,
as agent.
The shares are being sold on behalf of three

April 30 filed 34,963 shares ($1 par) common. Under¬
writers—Reynolds & Co. and Laurence M. Marks &
Co.,
both of New York.
Price—By amendment. Proceeds—
Shares are being sold by a stockholder.
Twin Coach
Co.,
Kent, O., which will receive all proceeds.

Society,

shares ($1 par) common.
& Co., New York, and
Jotihiton, Lemon & Co., Washington, D. C. Offering—

June 25

Finance

Aug. 1,

Underwriters—Van Alstyne, Noel

Fidelity Electric Co., Lancaster, Pa.

•

Phoenix, Ariz.

r/';

Juni 27,

York

par) common class A.
Co., Inc., New York.
Price—$7.25 a share.
The registration states princi¬
pal stockholder has granted the underwriters an option
to purchase 45,000 shares of class B ($1 par) common
at $7.25 a share, exercisable for a period of three years.
Proceeds—Proceeds of approximately $870,000, together
with $755,000 of other bonds, will be used to repay the
balance of $34,000 of a property mortgage, to pay off
loans in the amount of $1,295,000 to Bankers Commer¬
cial Corp., New York, and for additional working capital

stock

Inc.,

Hartfield Stores,

Feb. 26, filed 150,000 shares ($1
Underwriter—E. F. Gillespie &

shares class A

common,

share entitling them to purchase up to

loans.

(letter of notification) 2,250 shares (no par)
22,500 shares (1c par) com¬
Price—$100.50 per unit, consisting of one share of
preferred and 10 shares of common.
Underwriter—
Eastman, Dillon & Co., New York.
To purchase ma¬
chinery and equipment and for other working capital
requirements.
J
Federal Electric Products

Goldwaters

equipment for

$5 cumulative preferred and

June 26 filed 24,832 shares (no par) common. The shares
are being sold by stockholders and
represent stock divi¬
dends on common stock held by the sellers. The regis¬
tration also covered an additional indeterminate number
of shares which may be issued to the
selling stockholders

par)

Noyes & Co. Offering—Underwriters will purchase from
the Company 70,000 shares and from Fred P. Murphy
and J. C. Graham, Jr., 100,000 shares of issued and out¬
standing common.
Proceeds—For reduction of bank

mon.

New York

($1

reserved

are

common

Grolier

April 29

(Continued from page 41)
Columbia

Corp., New York

April 2, 1947 (by amendment) 170,000 shares of $1 par
common stock. Underwriters—Riter & Co. and Hemphill,

Inc., Wilmington, Del.

Corp.,

war¬

Refsnes,,Ely, Beck & Co., Phoenix.
To acquire real estate^jretire indebtedness and for working capital.

July 14 (letter of notification) 3,500 shares ($50 par)
preferred and 15,000 shares ($5 par) common. Price—
$50 a preferred share and $5 a common share. No under¬

Debs., Pfd. and Common

The

July 8 (letter of notification) 3,000 shares of 5% cumu¬
lative preferred.
Price—$100 a share.
Underwriter—

capital.

writing. To purchase land, machinery and
manufacture of textile bobbins.

Chicago

stock of the company at $11 a share. Price
by amendment. Offering temporarily postponed.

eauioment.

Engineered Plastics,

shs.

55,000

10 cents

1949,

Projector Corp.,

For working

ard.

August 4, 1947
(J. P.) & Co.

July 1 (letter of notification) 20,000
4i/2% cumulative convertible preferred

August 1, 1947

Co.,

for issuance upon the
exercise of stock purchase warrants. Underwriter—Van
Alstyne, Noel & Co. Offering—The 300,000 shares are
Issued and outstanding and being sold for the account
of certain stockholders.
Company has also issued 55,006
stock purchase warrants to the selling stockholders at

New York
shares ($10 par)
and 20,000 shares
($1 par) common. Price — $10 a preferred share and
$1,315 a common share.
Underwriter—Philip L. PritchEmpire

Light Co.
(EDT)__»_Bonds, Debs. & Preferred

Inc., Brooklyn, N. Y.

plant and machinery and

July 29, 1947
Florida Power &

Stevens

which

31,1946, filed 5,000 shares ($100 par) 5% non-cumul.
preferred. Underwriters—None. Offering—To be offered
at par to customers, officers and employees of the com¬
pany. Proceeds — For corporated purposes including
modernization and improvement of the manufacturing

Common

(Pa.) Housing Co

Harris, Hall & Co. (Inc.); Otis &

Dec.

2nd Preferred

Cement

Aug; 28, 1946, filed 355,000 shs.

poned indefinitely.

July 24, 1947
Dow Chemical Co.

* Qlensder Textile

shares of $10 par common. Under¬
determined by competitive biding. Prob¬

Co.; Kidder, Peabody & Co. The stock is being offered
by East Coast Public Service Co., parent. Bids for pur¬
chase of the stock scheduled for May 19 has been post¬

Capital Stock

Atlantic Electric Co., 11:30 a.m. (EDT)
Common
Pacific Power & Light Co., 11:30 a.m. (EDT) Bonds
Thermoid Co.
Common

Franklin

Electric Co.

bidders include

able

July 22, 1947

Portland

ranty entitling holdings to purchase stock at $12 a share,
were/issued to stockholders of Florida Portland Cement
Co, and Signal Mountain Cement Co., January, 1947.
Proceeds—For general corporate purposes.

Mar, 28 filed 60,000

Debentures

For general pur¬

holders of Portland's consolidation warrants.

Johson,

Bonds

(EDT)

share. No underwriting.

of company.

General

Underwriter—Johnson

share).

per

(8/1)

Housing Co.

(Pa.)

June,.20 filed 42,480 shares ($1 par) common.
Under¬
writing — No underwriting.
Offering — To be sold to

Pittsburgh, Pa., and The First Cleveland
Corp., Cleveland. The company will use its proceeds
for working capital.
&

July 21, 1947

1:00 p.m.

Pricq—$100
poses

12,500 shares ($1 par) common for the account of
Mrs. Thomas R. Hayward, Jr.
Price—At market (ap¬

Common

Virginia Dare Stores Corp

Mississippi Power Co

Scottdale, Pa.

and

and Common

Franklin

(letter of notification) 900 shares ($100 par)
class A stock and 600 shares ($100 par) class B stock.

(letter of notification) 25,000 shares ($1 par)
on behalf of the issuer, 12,500 shares ($1 par)
for the account of Thomas R. Heyward, Jr.,

common

Florida

•

March 12

July 18, 1947

Noon

Separate bids for the bonds, debentures and stocks will

Duraloy Co.,

Loan

(EST)

Arkansas Power &

for expansion of facilities.
Bids—Bidding tentatively set
for July 29 at 1 p.m. (EDT) at 2 Rector St., New York.

($1 par) common shares. Under¬
Noel & Co. Proceeds—Stock is
being sold by Harry R. Drackett, President (6,929 shares)
and Charles M. Drackett, 7,371 shares). Price — By

April 28 filed 14,300
writer—Van Alstyne,

NEW ISSUE CALENDAR

Noon

Thursday, July 17, 1947

CHRONICLE

Cincinnati

Drackett Co.,

New York

& FINANCIAL

able

bidders:

Prob¬
(bonds); The

Halsey, Stuart & Co. Inc.
First Boston Corp.; Glore, Forgan & Co. and W. C. Lang-

ley & Co. (jointly); Lehman Brothers (preferred);
White, Weld & Co. (bonds); Central Republic Co. and
Drexel & Co. (jointly).
Proceeds—To redeem outstand¬
ing debentures, serial notes, and promissory notes, and

•

Irene,

Inc.,

Beverly

Kills, Calif.

•

July 10 (letter of notification 40,000 shares ($1 par) com¬
mon
and 150,000 shares
($1 par) 5% cumulative pre¬
ferred.
Price—$1.25 a common share and $1 a preferred

share.._No underwriting.
and

working ranital.

For lease deposit, equipment

Volume 166

•

Number

Jacksonville

4612

(Texas)

THE COMMERCIAL &
FINANCIAL CHRONICLE

Agricultural

Foundation,

Inc.

Loew's

ville.

($1 par)

common.

writer—Sills, Minton &

Co., Inc., Chicago. Price—By
amendment. Proceeds—The shares, which constitute
ap¬
proximately 48.5% of company's outstanding common
■tock, are being sold to stockholders.
•

Jardine

(Mont.)

Mining Co.

To be sold at market.

Orange,
capital.

Jefferson

Underwriter

(iowa)

repay

Telephone

and

Manontqueb
writer—F.

Kentucky Utilities Co., Lexington,

claims.

pre-

preferred will be used to redeem unexchanged
shares of old preferred. Bids—Bids for
purchase of stock
advertised for July 14 has been
postponed.

3,000

and

$10

plant,

issue

of
a

common-

common

underwriting. For financing construction
near
Morristown, Ariz. ' /V ■<"
-*4
La
>

Plant-Choate Manufacturing
Cedar Rapids, Iowa

r.'

filed

& Co.,

16,000

convertible preferred
mon.

Inc., Atlanta

and

($50 par) 5% cumulative
15,000 shares ($1 par) com¬

Underwriter—Clement

Evans

Co;,) Inc.,

Offering—All but 3,000 shares of the
common
will be sold
publicly at $6.50 a share. The preferred will

be offered to the public at
$50 a share.

of common not sold

The 3,000 shares
will be offered to conipany

publicly

officers and employees at
$5 each.
Proceeds—For con¬
struction of new plants at Atlanta
and Memphis, Tenn.

Offering indefinitely postponed.
Legend Gold Mines,

June 27 filed
stock.

Price—50 cents

properties.
Lerner

—

share.

($1 par)

Canada

common

To be supplied by

treasury

Proceeds—To develop mining

Business—Mining.

by amendment.

Corp.,

Baltimore, Md.

May 2 filed 100,000 shares ($100
par) cumulative pre¬
Underwriter—Merrill Lynch, Pierce, Fenner &
Beane, N. Y. Price by amendment. Proceeds—To retire
'31,870 shares of 4%% preferred at
$105 a share and to
repay $4,500,000 bank loan.
Reported plan to offer
pre¬

ferred abandoned, with
possibility of new issue of deben¬
tures being offered.
*

struction.
20 Pine

new

—

•

Mining Co., Hot Springs, N. M. 2
July 7 (letter of notification) 300 shares
($100 par) com¬

mon.

Price—$100 a share.
No
underwriting.
ploitation of mineral properties.
Nut

For
*

ex¬

(letter of notification) 92,500 shares ($1 par)
Price—$1 a share.
To be sold through offi¬
directors of the
company.
To purchase ma¬
chinery and to exercise aq option to purchase certain
mining property.

Chicago

common

the basis of

shares of

common

Rights expire Aug. 4.

stockhold¬

share of pre¬
held at $100 per

one

Proceeds—For expansion

•

Pitney-Bowes, Inc., Stamford, Conn.

July 9 (letter of notification) 7,500 shares of common.
Being offered to employees under stock purchase plan
at $9.28 a share.
No underwriting.,
'

Popular Home Products Corp., N. Y.
May 9 (letter of notification) 75,000 shares of common
stock (par 25c.) and 5,000 shares on behalf of
Raymond
Spector, President. Price—$3.75 per share. Underwriter
Hill, Thompson & Co.,-Inc., New

Proceeds will be advanced to Staze Inc., a wholly
subsidiary, and used to eliminate factoring, to

owned

purchase packaging materials more advantageously, for
working capital, etc.
*"• "
v
'
*
V " "
■

•

Potomac Electric Power Co., Washington,

D. C.

July 10 filed 140,000 shares ($50 par) preferred, entitled
to

cumulative

mined

dividends.

competitive

Underwriting—To

bidding.

Probable

deter¬

bidders

in¬

clude Alex. Brown & Son; Kidder, Peabody & Co.; The
First Boston Corp.
Offering—Stock will be offered in

""exchange for outstanding 5V2% preferred, series of 1927,
in the ratio of two shares of new
preferred for each old
preferred share, plus cash adjustments.
Shares of new

for

the

lower

not

issued

the

exchange

Proceeds—The

purpose

dividend

will

stock

new

sold

will be

issued

of refinancing
rate.

the old preferred at a
proceeds will be used to

Cash

adjustments and to

loans made for the purpose of
shares.

repay temporary bank
redeeming old preferred

common.

Public Service Co. of Indiana Inc.

and

March 26 filed $11,077,800 15-year 2%% convertible de¬
bentures.
Underwriters — None.
Offering •— Common
stockholders of record

Morris Plan Corp. of

Mar. 31 filed $3,000,000 debentures. Underwriter—East¬
Dillon & Co., New York. Price by amendment.
Proceeds—To retire outstanding bank loans.
*

•

Mosher

(L. A.) Co., Inc., Atlanta, Ga.
July 8 (letter of notification) $35,000 of no par common
and $35,000 of $100
par preferred.
Price—$70 a com¬
mon share and
$100 a preferred share.
No underwrit¬
ing.
For working capital.
Cadmium

June

Battery

Corp.,

(letter of notification)

cumulative

convertible

Easthampton,

30,000 shares

preferred.

share.

($10 par)
Price—$10 a

Underwriter—Harrison White, Inc., New York.
Proceeds—To be added to general funds for
general cor¬
porate purposes.
•

Oil

(letter of
share of $100

par common.

notification)
par

500 units, consisting of
preferred and one-half share of

Price—$100

per

Poindexter

unit.

Distillery,

filed

50,000

cumulative preferred and

par)

with

publishing

Inc.,

will

convertible

into

common

Public

Service

Co.

New

Mexico

May 29 filed 20,000 shares

($100 par) cumulative pre¬
be sold through competitive
Probable bidders include Blyth & Co. Inc.; The
First Boston Corp. and White, Weld & Co. (jointly); Otis
& Co.; Glore, Forgan & Co..
Proceeds—Will be added
to general funds to be used for expansion program.
Bids
ferred.

Underwriters—To

bidding.

Invited—No bids received July 9 for the preferred

stock.

Quebec Gold Rocks Exploration Ltd., Montreal
Nov. 13,

1946, filed 100,000 shs. (500 par) capital stock.
B. Soden, Montreal, director of
Price—500 a share.
Proceeds—For explora¬
tion and development of mining property.

Ky,

($20

par) 5% convertible
unspecified number of ($1

preferred is conver¬
Underwriters—F. S. Yantis & Co., and H. M.
Byllesby & Co., both of Chicago. Price—At par. Proceeds

working capital.

Public

Service

Co.

July 3 filed 160,000 shares
ferred.

Louisville,

common shares into which the

postponed.

debentures

May 1, 1947 to April 30, 1959;

Price—Par.
Pro¬
ceeds—For repayment of $11,500,000 of bank loan notes.
It is expected that registration statement will become
effective July 25.

No underwriting.

tible.

—To be added to

The

18.
from

common

company.

For
working capital in connection
monthly trade publication.

Mar.

for each share of

Underwriter—Robert

Forum, Inc., New York (7/18)

July 11

July 16 will be given right to sub¬
principal amount of debentures
held.
Rights will expire Aug.

scribe in the ratio of $10

America, N. Y.

June 17 filed 50,000 shares
($12.50 par) 5% cumulative
preferred and 250,000 shares
($1 par) common.
Under¬
writing—No underwriting.
Price—$17.50 per unit con¬
sisting of one share of preferred and five shares of
com¬
mon.
Proceeds—For payment of
outstanding botes and
for purchase of
machinery and equipment.
^

of production facilities and other
corporate purposes.

preferred

Old

Corp. of America,

share.

July 15

each

underwriters.

Morgan & Bush, Inc., Las Vegas, Nev.

July

one

Little Girl

record

con¬

Bids—Bidding tentatively set for July 28 at

Mass.

(no par) preferred stock.
Underwriter
Glore, Forgan & Co. Offering — Stock¬
holders will be given the
right to subscribe to the new
stock at the rate of one
share of preferred for,,each 36
shares of common owned.
Proceeds—The money will be
used to complete a
plant at Sunnyvale, Calif.; and for
other corporate
purposes.
Offering temporarily post¬
poned.

make the cash

Libby, McNeill & Libby

Lock

finance

St., New York.

Nickel

April 30 filed 100,000 shares

Offering—Shares will be offered

—Eric & Drevers and

man,

Stores

Pennsylvania Salt Manufacturing Co.

York.

Proceeds—To

obligations to the sinking fund

June 18 filed 50,000 shares
($100 par) 3V2% con v. pre¬
ferred series A stock.
Underwriter—No underwriting.

sup¬

plied

$4,000,000 bank loan.

changes in the indenture

services.

present holdings on a share
for share basis, plus cash. Shares of new
preferred not
issued in exchange will be offered
publicly through
underwriters. Price—Price of bonds will be determined
by competitive bidding. Price of preferred will be

amendment.

ferred.

•

for,

will be offered to the
company's $6 preferred stockhold¬
ers in
exchange for their

cers

Ltd., Toronto,

300,000 shares

Underwriting

compensation

competitive
Stuart & Co. Inc.

bidders:

Atlanta.

bidding. Probable
Halsey,
(bonds only); The
First Boston
Corp.; Blyth & Co., Inc.; Kidder, Peabody
Co., and White, Weld & Co. (jointly); Glore, Forgan
& Co., and W. C.
Langley & Co. (jointly). Offering—
The bonds will be offered
publicly while the preferred

Inc.,/

loans.

(H. W.)

President,

New York

to eliminate present restrictions
against creation of debt

Price—Per unit:

Ward,

received at 2 Rector St.,

(EDT) July 22.

and give relief from
any
until 1950.

Leeward

June 27 filed $2,500,000 of first
mortgage bonds, due 1977,
and 20,099 shares (net
par) preferred. Underwriting—
Bonds will be sold at

Lay

Antigua,

indenture to permit extension of

Indies

Mississippi Power (7/28)

($25 par) 5% cumuL con¬
Underwriter—Paul H. Davis & Co.,
-Chicago. Price—$25 per share. Proceeds—To be added
-to working capital and will
be used in part to "reduce

April

son

April 30 filed 60,000 shares

bank

Ltd.,

a.m.

and for pay¬
purchase of

White, Weld & Co. will act as dealer-manager to engage
in proxy solicitation.
Holders of the outstanding deben¬
tures will be asked to
approve

ferred for

Properties,

will

the

for

debentures, due 1960.
The registration was filed as a
step in obtaining consent of two-thirds of the holders
of the
outstanding income debentures to changes in the

$6,000 B. W. I. ($5,100 U. S.)
and 60 capital shares.
The company will
additional 700 shares of capital stock to Robert¬

to 11.30

Bids—Bids

Pennsylvania-Central Airlines Corp.
May 29 filed $9,850,000 15-year 3V2% convertible income

corporate purposes.

Islands, British West

For construction
program

indebtedness.

bonds

Inc., Brooklyn, N. Y.

Proceeds—To acquire property and construction of club

vertible preferred.

:current

Reef

the

150,000 shares

Price—

share-

bonds due 1955.
ment

share.

facilities.

of guest ranch

Co.,

debentures

Knight (Harry)
Hacienda, Chandler, Ariz.
v
July 9 (letter of notification) 2,700 shares of 5% cumu¬
preferred

cents

ers

company.

•

preferred and

Price—40

Can.

Under¬

June 26 filed
$780,000 (B. W. I.) of unsecured debentures,
due 1977, 3% interest after Jan.
1, 1950; and 8,500 shares
of $1 (B.W.I.)
par capital stock.
Underwriting—The
shares may be sold
through officers and directors of the

PocatellOf Ida.

1,000 shares ($100 par) preferred.
Price—
$1 a common share and $100 a preferred share.
;To be
sold through Patrick J.
Healy, director of finance and
sales, and officers of the company.
To purchase

Toronto,

common.

Business—Mining.

Mill
>

common and

$100

Ltd.,

and W. C.
Offering—

Corp.

Midland Cooperative
Wholesale, Minneapolis
May 29 filed $1,000,000 4% non-cumulative preferred
Stock "D."
Underwriting—None. Price—$103 a share.
Proceeds—For operating capital and other
corporate

-July 26 (letter of notification) 200,000 shares ($1
par)

lative

Co.

Underwriting—To

Colorado,

Denver,

Colo.

cumulative pre¬
determined by competi¬

($100 par)
be

tive

bidding. Probable bidders include: The First
Corp.; Glore, Forgan & Co., and W. C. Langley
(jointly); Blyth & Co., and Smith, Barney & Co.
ly).
Offering — Successful bidders will offer
shares of the total issue to present holders of

Boston

& Co.
(joint¬

62,199
company's

5, 6 and 7% preferred stocks for exchange on a share for
share basis plus an undetermined amount of cash. Shares

Offering indefinitely
(Continued

(7/22)

$2,100,000 of the bonds will be issued to Pacific's parent,
American Power & Light
Co., in exchange for the same
principal amount of 4V2% debentures due 1959. Price—
To be determined
by competitive bidding.
Proceeds—
For redemption of 5% first
mortgage and prior lien gold

purposes.

new

machinery, and for working capital.

Light Co.

Langley & Co. (jointly), Blyth & Co., Inc.

Mid-Continent Airlines, Inc., Kansas
City, Mo.
May 14 (letter of notification) 30,601.4 shares of com¬
mon.
Price—$7.50 a share. No underwriting. To be added
to working capital.

preferred not issued in exchange will be
•sold at competitive bidding.
Price to be determined by
competitive bidding.
Proceeds—Proceeds from the sale

Inc.,

Winter

ceeds for general

new

Harvester Co.,

($1 par) common. Under¬
writer—Burr & Co., Inc., New York. Price
by amend¬
ment.
Proceeds—Of the total, 100,000 shares are
being
sold by seven stockholders. The
remaining 50,000 shares
are
being sold by the company, which will use its pro¬

Underwriters—To be determined by
competitive

Kiest Beet

Explorations,

Mays (J. W.)

Ky.

cumulative

Feb. 28 filed

ferred.
The basis of exchange will be one share of
new
'preferred for each share of 6% preferred and one share
-of new preferred for each two shares of
junior preferred.

.•

common

Proceeds—For exploration and
development of mining

^bidding.
Probable bidders include The First Boston
-Corp.; Union Securities Corp. and Merrill Lynch, Pierce,
Fenner & Beane (jointly) and Lehman Brothers
and
hazard Freres & Co. (jointly).
Offering — Preferred
stock initially will be offered in
exchange for outstand¬
ing ($100 par) 6% preferred and ($50 par) junior pre¬

the

April 10 filed 300,000 shares ($1
par)

Co.

-May 9 filed 130,000 shares ($100 par)

-Shares of

Aug. 13.
underwriting. For additional working capital.
Pacific Power &

ment.

Nugent & Igoe,
for working

—

loans

—Wachob-Bender Corp., Omaha. To provide funds for
plant extensions and for additional working capital.

ferred.

and

par

shares ($12.50 par)

June 18 filed
$29,000,000 30-year first mortgage bonds.
Underwriting—Of the total, $26,900,000 will be offered at
competitive bidding.
Probable bidders include Halsey,
Stuart & Co.
Inc.; The First Boston

Proceeds—To retire bank indebtedness and to
finance purchase of
machinery and other plant equip¬

common.

'July 2 (letter of notification) $20,000 first mortgage
•3ft% bonds, series B. Price—$102 per unit. Underwriter

'■r

each.

July 7 (letter of notification) 80,000 shares of
-East

offered

Price—$12.50 , a share..
Offered at par to
stockholders of record June 13 at rate of one
share for each 10 shares
held. Rights expire

new

($1 par) common.
Un¬
derwriter—Kirchofer & Arnold, Inc.,
Raleigh, N. C. Price
—The debentures at
102.507, while the preferred shares
be

common

ble preferred and
85,000 shares

will

Oneida,

common.

Corp., Atlanta, Ga. (8/11-15)
May 20 filed $500,000 5% serial
debentures, due 19491957; 12,000 shares ($25 par) 5Y2% cumulative converti¬

Under¬

Ltd.,

^May 27 (letter of notification) 20,500

Manhattan Coil

Jahn & Oilier Engraving Co.
Feb. 26, filed 102,000 shares

Oneida,

June 20 filed 59,676 shares (no
par) common.
Under¬
writing—To be sold at market through
regular brokers.
Offering—To the Public.
Proceeds—The shares are be¬
ing sold by Nicholas M. Schenck,
President, who will re¬
ceive proceeds.

July 10 (letter of notification) $25,000 of preorganization
.certificates to be surrendered for 1,000 shares of
$25 par
common.
Price—$25 a share.
No underwriting.
To
promote agricultural development in area of Jackson¬

(251)

Inc., New York

page

44)

4
44

(252)

THE COMMERCIAL & FINANCIAL CHRONICLE

Thursday, July 17, 1947
-•

(Continued from page 43)

-Underwriters—Van

new

preferred not issued in exchange will
be.sold to
public.
Proceeds
To finance new
construction.

the

•

Strauss

issue
to

Sept.
held.

Swain

(8/5)

shares ($2 par)
capital
Dillon & Co., New York.

by amendment.
Proceeds—Shares
stockholders who will receive

are

Feb.

Inc.;

convertible

Underwriter—Jackson
not be

underwritten.

Price

total, 111,626 shares
holders of Asbestos

par)

Price—$50 a share.
Co., Boston, will be under¬
The
remaining 120 shares will
For.
working capital and organiza¬

For

to purchase

operating capital.

•

one

•

Vapo-Bath Co., Inc., Dayton, Ohio
July 10 (letter of notification) 250 shares
(no par) Class
A stock to be
exchanged for 250 common shares of VapoBath, Inc., the old company, the assets of which are
be¬
ing acquired; and 600 shares ($100
par) Class B shares.

The Class B shares will be
sold at $100 a share.

derwriting.
company.

preference stock

the

purchase

production

Mountain

Gold

Colorado
Price—50

cents

share.

facilities

Mining

Tucker

and

for

lense

new

Co.,

Denver,
common.

For

ex¬

mining property.

Corp., Chicago

May 6 filed 4,000,000 shares
($1 par) Class A common.
Underwriter—Floyd D. Cerf Co., Chicago. Price—$5 a

share.

The

underwriting

share.

discount

will

cents

Proceeds—To lease and
equip manufacturing
plant at Chicago, and for other
operating expenses. The
offering of the stock is expected some
time after the
middle of July. It
is understood that over 500 retail in¬
vestment firms have
indicated interest in this issue and

(by amendment) filed
110,000 shares of 75c
cumulative convertible
preferred stock, series B
(par $5)

Dufault Mines,

Ltd., Toronto, Canada

operating

•

Victor

Chemical

July 15 filed

40 000

Works,

expenses.

Chicago

($100 par) 3V2% cumulative

preferred, second series.
Underwriter
Co., New York. Price by amendment.

F. Eberstadt &
Proceeds
To
increase production facilities at Mt.
Pleasant, Tenn., plant
and for construction of new
plant.
Business^—Chemical
.business.
-V;/ •' :v;/;// '
\
•

Virginia

—

Dare

Stores Corp., New York
(7/18)]
(letter of notification) 15,000 shares of common
on behalf of
Sidney M. Netzorg, President.
To be sold
at market
through brokers and dealers whose names will
be supplied by
amendment.

July 11

Weber Showcase & Fixture
Co.,

Inc.
108,763 shares ($5 par) common.
Under¬
writers—Blair & Co., Inc. and Wm. R.
Staats Co. Offer¬
ing—Shares will be offered for
subscription to Weber's
common stockholders. Certain
shareholders have waived
subscription rights.
Proceeds—To retire preferred stock
Mar. 31 filed

and

reduce

bank

loans.

Reported July 16 that the

present plans will be entirely changed.

;

•

...

Wisconsin Power & Light
Co., Madison, Wis. >
May 21 filed 550,000 shares ($10 par) common stock
to
be

sold

competitive

amendment.

No underwriting.

ploration and development

un¬

($1 par) common.
Under¬
writer—Name to be filed by amendment.
Price—50 cents
share.
Proceeds—For general

basis of

for four shares of Amco
common.

will

To provide purchase price of assets of old

' '■■■

share of Amco
and one share

July 11 (letter of notification)
100,000 shares of

Under¬

Price—Debentures 98/common $3.75
share.
Proceeds—For plant construction, purchase
equipment and for working capital.
Registration

statement became effective June 28.
;? /

Offering—Of the
exchange to stock¬

90,000 shares of Amco common for
$225,000
it voting control of
Amco. The bal¬

Treasure

underwriting.

Manufacturing Corp.

Co., Inc., Boston.
per

assure

proceeds

Proceeds—To

writer—Smith, Burris & Co.,
Chicago. Price—$25 a pre¬
ferred share and
$10 a common
share.
Proceeds—Pro¬
ceeds, together with funds
to be provided
by a term bank
loan, will be used to
discharge indebtedness to
Credit Corp.
Domestic
March

Dec. 20 filed
$700,000 5% 15-year convertible debentures
1962, and 225,000 shares ($1
par) common. The state¬
ment also covers
112,000 shares of common reserved for
conversion of the debentures.
Underwriter—Carver &
due

Under¬

common.

working capital.
Business—Manufacture of
for
screening colored motion pictures.

Service Caster &
Truck
Corp., Albion, Mich.
April 10 filed 32,000 shares
($25 par) $1.40
convertible
preferred and 53,962
shares ($1
common.

common

date

added to working
capital.
Thomascolor Inc., Los
Angeles
:
July 9 filed 1,000,000 shares ($5
par) class A common.
/Underwriter—No underwriting.
Price—$10 a share.

Utah

purchasers an opportunity to
by July 14.
No

par)

ance

to afford past

Solar

Thermoid

for

common

Offering

remaining 50,000 shares will be offered
publicly.
Proceeds—Proceeds from the public sale will
be used

uAv

merchandise business.

common

(7/21-22)

Manufacturing Co.

The

which will

purchase

will be offered in

two shares of Thermoid
cumulative convertible

common,
1,026 shares pf.
cumulative, preferred, and
5% debenture bonds.
$73,000 of
The-company has stated a selling
price of $100 a unit.
The
offering includes $93,200 of
common, $73,000 of bonds and
$14,600 of preferred sold
in 1946 in the
belief they were
exempt from registra¬
tion, in order

their

N. J.

Waddell

The under¬

Mar. 31 filed 500,000 shares

capital.

June 27 filed
161,626 shares ($1 par)
writing—Blyth & Co., Inc., New York.

Save

rescind

working

Price—$10 a'share.

Utah Chemical & Carbon
Co.

filed

Thermoid Co.,
Trenton,

stock.

and

Rite, Drug Stores, Salt Lake
City,
July 7 /letter of
notification) 1,152 shares of

York

Tobacco

for

Underwriter—Herrick,

commission of $1.50 per share.
In
addition, they will be granted warrants to
purchase 50,000 shares of the
issuer's common at $5 a share.
Pro¬
ceeds—For additional
working capital. Business—Retail1
door to door household

Providence, R. I.

and

preferred.

Inc., New York.

Vauze

000,000 each,
indefinite.

1,300 shares.

tion expenses.
•

preferred.

Utilities & Specialty
Corp., Boston
75,000 shares ($10 par) 5% cumulative

filed

writers will receive

Proceeds—For payment of
$3,950,000 of
bank loan
notes; purchase of two notes issued
by a sub¬
sidiary, Textron Southern Inc. in the amount
of $1-

proceeds.

writer for

& Co.,

300,000 shares ($25 par) 5% convertible
preferred. Underwriters—Blair &
Co., Inc., New York,
and Maxwell, Marshall &
Co., Los Angeles. Price by
amendment. '

June 25

cumulative

(R. L.)

convertible

Proceeds—For additional

Textron Inc.,

being sold by 13

Sanitary Products Corp.,
Taneytown, Md.
(letter of
notification) 1,420 shares ($50

New

United

holders.

Inc., New York

240,000

Stevens,
Wool
manufacturing

Sylvan Seal Milk, Inc.,
Philadelphia
July 1 (letter of notification) 4,000 shares of

pay off -de¬
property expansion and conversion
system from manual to automatic
dial oper¬
ation in Rochester.
Bids—Bidding for securities tenta¬
tively set for Aug. 5.

Underwriter—Eastman,

•

July

underwriting. For

redeem

Salant &
Salant,
March 28 filed

Inc.,

convertible preferred
E. Burnside &

Underwriters—William

Mercer Hicks & Co.

Offering—To be of¬
Proceeds—For general corporate
purposes
additional working
capital.
Registration statement is
expected to become effective next
week, v

payment of indebtedness and for
working capital.

preferred,

mand notes, and for
of telephone

Fasteners

Mfg. Corp., N. Y.

common, of which 196,983 shares will be offered to
pres¬
common stockholders at
$1 a share and 3,000 shares
in exchange for $3,000 of
outstanding notes.
The bal¬
ance 37,417 shares and
any unsubscribed shares will be
offered publicly at $1.25 a share. No

cumulative pre¬
competitive bidding. Probable
Pierce, Fenner & Beane and

cumulative

—

and

fered at par.

stock (no par). Price—$8.
Underwriter—Penington, Colket & Co., Philadelphia. Proceeds
to go to
selling stock¬

bidders—Merrill Lynch,
Kidder, Peabody & Co.
(jointly); Blyth & Co.,
Glore, Forgan & Co.; Shields & Co.
Proceeds—To
first

Business

States Television

(par $4).

Co., Inc.

(8/4-5)

ent

unsecured notes.

Inc., N. Y.

stock

„

Co., Inc., Danville, Va.
(letter of notification) 237,400 shares
($1 par)

June 24

ceeds—To redeem all of its
outstanding $7,675,000 bonds
and to
repay $3,500,000 bank loan and to
finance new
construction.
Corporation has
temporarily abandoned
the proposed
financing, it was announced June 17, due
to
"unacceptable" conditions of New York P. S.
Commis¬
sion. Instead
company June 18 asked SEC
permission
to issue

series

& Co.,

working capital.

stock.

be determined

by competitive bidding.
Probable bidders:
Halsey, Stpart & Co. Inc.; Blyth &
Co.,
lInc.; Glore, Forgan & Co.;'Merrill
Lynch, Pierce, Fenner
& Beane;
Harriman Ripley; Lehman
Brothers; The First
Boston Corp. and
Smith, Barney & Co. (jointly). Pro¬

4Vz%

March 25 filed 25,000 shares of 60 cents
cumulative con¬
vertible preferred.
Underwriter—Floyd D. Cerf Co. Inc.,
Chicago. Offering—The shares initially will be offered
for subscription to common stockholders of
Segal Lock
& Hardware Co. Inc.,
parent, at $9 a share in the ratio
of one share of preferred for each 30
shares of Segal
common held.
Unsubscribed shares of preferred will
be
offered publicly at $10 a share.

underwritten.

Underwriting—By

P»)

shares.

of the

owner

Rochester (N. Y.) Gas &
Electric Corp.
May 26 filed $16,677,000 first
mortgage bonds, Series L,
due 1977, and
50,000 shares ($100 par)
preferred

ferred.

(J.

firm.

Company decided to
454,465 shares of common stock
only, which were
offered for
subscription to stockholders of record
5, 1946, to the extent of one
share for each five
Issue not to be

Rochester (N. Y.)
Telephone Corp.
4 filed
67,500 shares ($100 par)

Stevens

184,823

underwriters.

June

United

June 18 filed
75,000 shares of 5%

July 14 filed 200,000 shares ($15 par) capital stock. Un¬
derwriters—Morgan Stanley & Co. and Harriman Ripley
& Co., New York.
Price by amendment. Proceeds—All
of the proceeds go to the estate of Nathaniel

Underwriters—To

Bowling Centre, Inc., St. George,

(7/18)

cumulative convertible
preferred ($10 par;
and 277.231 shares
(50c par) common
stock, with Sterling.
Grace

York

Republic Pictures Corp., New
York
Registration originally filed
July 31,1946, covered

New

heavy oversubscription of the

stock is expected by the
underwriters.
Statement became effective
July 7. Pend¬
ing action on "blue sky"
applications in a few remain¬
ing important states,
including Michigan, it is expected
the
offering will be made in next few
days.-

275,000 shares ($1 par)
common.
Price—$1 a share. No underwriting. For purchase of land, construction of building, installation
of
'bowling alleys and for working capital.

business.

& Co.

July 11 (letter of notification)

Refrigerated Cargoes, Inc., New York

•hares ot

Staten Island
.

Feb. 3 filed 25,000 shares
($100 par) 6% cumulative
pre¬
ferred and 25,000 shares
(no par) common.
Underwriter
-—John Martin
Rolph, Vice-President and director of
company.
Price—The stocks will be sold
at $105
per
unit consisting of one share
of preferred and
one share
of common.
Proceeds—To be used in
organization of
^

per share

$12.50 Proceeds—Net proceeds will be applied to re¬
demption of bank loans and to cover part of cost of
expansion program.

—

Raleigh Red Lake Mines, Ltd.,
Toronto, Can.
June 9 filed 460,000 shares of stock.
Underwriter—Mark
Daniels & Co., Toronto.
Price—25 cents a share.
Pro¬
ceeds—To finance diamond
drilling and land surveys.

•

Alstyne, Noel & Co. Price

Co.,

and

consin
of

C04

the

bidding.

Underwriters—By
Glore, Forgan &
(jointly); The Wis¬

Probable bidders include

Harriman

Ripley

Dillon,

are

Read
to

Co.

Co., Inc.
Proceeds—Part
by Middle West Corp.,
of the System, and part
by prefbe

sold

top holding company
erence stockholders of North West
Utilities Co., parent
of Wisconsin, who elect to sell such shares of
Wisconsin
common
which will be distributed to them
upon the
dissolution of North West Utilities Co.
e

Wembley, Inc., New Orleans, La.

July 14

(letter of notification) 12,000 shares ($25
par)
preferred. Price—$25 a share. Underwriting—D'Antoni
& Co.; Howard Labouisse Friedrichs &
Co.; Weil
Ar¬
nold; Woolfolk, Huggins & Shober; Kohlmeyer, Newburger & Co., all of New Orleans. For operating
capital.

Prospective Security Offerings
(NOT

YET IN
REGISTRATION)
INDICATES ADDITIONS SINCE
PREVIOUS ISSUE

•

United States

Government,

State, Municipal

American Telephone &
Telegraph Co.

July 16 directors voted

2,800,000 shares

and
pany

Corporate Securities

Plan
is

Blair
BOSTON

•

BUFFALO

PHILADELPHIA

•

YORK

•

PITTSBURGH

preparing

ST. LOUIS

the

•

8AN

CLEVELAND

FRANCISCO

Central

f'-> I

capital stock to employees of

com¬

subsidiaries

registration

statement

filed

with

Hooker Electrochemical Co.

July

16 reported that with the postponement of the
offering of the preferred stock issue company is con¬
sidering the public sale of some additional common
stock.

will

RR.

Pennsylvania

received

July

the

purchase

July 14 reported syndicates

elude
of

$3,750,000 1-15-year equipment trust
certificates, series B.
Probable
&

bidders:

Co.

(Inc.).

Halsey

Stuart

Co.

Inc.;

Harris,

may

be underwriter.'

Monongahela Power Co.

J i

are

being formed to bid

$11,000,000 bonds and preferred stock to be sold,

later this year or early in

(7/22)

for

Smith, Barney & Co.

"...

•

some

Hall
<r1

•

offering of

SEC.

Bids

CHICAGO
•

its

under the
Employees' Stock
previously authorized by stockholders.
Company

•

Co.

INC.

NEW

and

to proceed with

Langley

1948.

Co.

Probable bidders in-*

and

First Boston
Corp.'
(jointly); Lehman Brothers (bonds and preferred);'Har-,

riman Ripley & Co.

and Lazard Freres & Co.

(bonds only); Glore, Forgan & Co.
sey

(jointly)-?

(bonds only); Hal-?

Stuart & Co. Inc. (bonds only).

1
1
-

Volume 166- Number 4612

THE

(253)

New York Chicago & St. Louts RR.

(7/17)

rate

will

loan

will

loan

used

for

purchase

Natural

; -« 4<.,.w

of common
'

115,369
Wheeling & Lake Erie 4% prior lien stock and 1,658
shares of preferred owned by Chesapeake & Ohio and 54
shares of 4% prior lien stock owned
by Alleghany Corp.

'■

stock to

number-of

»-■

The

stock

chief

authorized

down

share, and

heavily

decline

billion

booms

purpose

exports

lend-grant

Character of Exports

foreign

II.

by
by

table

shows

the

pave

the

will

level

program

Distribution

TABLE I

■

of Export

and

Equipment
Inventory Change
Net Exports

War-Torn
T,

■

: i*

«;

•

1947

"1947

—4.3

—3.4

—7.0

10,231

3.6

3,174

31.0

536

1,388

852

8.3

War-Torn

1,826

Sweden

•

5,852

3.0

20.8

20.0

9.7

5.6

9.0

India

312

384

340

580

256

157

1,383

321

1,720

1,399

13.7

318

(especially

2,280

1,962

19.2

1,513

luxuries)

7,680

6,167

60.3

terials for 22%. In other
words,
most of the increase went
for more

living

and

($ Million)

-Exports-

All

3,299

Commodities

Foods

——

Fertilizer
Farm

14,140

235

—

——

Industrial
Electrical

Machinery.-

1,200

959

.39

1,160

Net

Exports
Dollar

III

Net

ties

Dollar

Balances

8,748

5,989

312

173

India

have

When

been
will

total

each

omitted.
our

foreign

cash

customers pare down their spend¬
ing to normal? Either when they
run

out

dollars

when their

business booms bust.
Sweden, Ar¬
gentina and Brazil have already
begun restricting imports in order
to conserve rapidly
dwindling dol¬
lar reserves. Canada has

Brazil

Exports and Dollar Balances
'
Table III indicates how
long
dollar balances can finance our
-

excess of
exports over imports to
certain war-enriched
nations. Net
exports are for the first quarter
©f 1947 adjusted to an annual
ba¬
sis. Dollar balances are estimated
as

Mexico,
Sweden

Argentina,
must

soon,

packing

their

either
use

year,

Africa,

Brazil

and

restrict

im¬

monetary

the

gold

systems,

interests. John Booth of the
Booth
Line
principal British

932

ship company operating to Latin

83
54

exports

It will

from under

Purchasing

our

war-

enriched foreigners recede to

nor¬

knocking

leaning wall

power and the result¬

ant

demand for goods has been
propped up to a difficult-to-mainheight

economic

several

factors,

unstable

shown

Table IV.

The largest
prop—plant
equipment—has
ceased
to

grow and there are

beginning of the year.
ginning
Although Canada can live off

ports

when

economy

and

crack.

signs it is be¬
The

second

largest last year—inventory accu¬

mulation—has

already shortened

substantially. The sudden jacking
up

and BSAA

666

the

her dollar fat for

174

England's steamship and
railway

What will be the effect

of net exports alone has saved

purchasing

power

from

toppling

which

tralian

National

turn

—

America
of

man

steam¬

has been made chair¬
British South American
—

Airways, through which England

hopes

penetrate

the

France.
the

is owned

Steamship
purchase

Corporation)
of

American

TACA,

airline.

for

the

key Central

Had

the

CAB

been

successful
in
carrying its
policy to a logical conclusion, this
vital Caribbean route
would today
be

British

and

not

American

hands.
British

the British

control and

that

railways
own

connect

the

—

which also

shipping lines

England

with

the

fact

For years before the

war

French

Maritime.
French
formed

BOAC

—

the

airline

the

like-,

days the
Air; France

and

joint subsidiary

Transatlantique

Air

—

fly

the North Atlantic routes.
Today
aviation has been national¬

ized in

France, under the aegis of

Communist Minister of Aviation
But air and water
transport have
been integrated at the
govern¬
ment level. Joint offices are main¬
a

tained in all parts of the
world

including Radio City, New
Full

York

Full text of Commercial and Financial Chronicle : July 17, 1947, Vol. 166, No. 4612

FRASER