The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
ESTABLISHED 1S39
UNIVERSITY
OF MICHIGAN
1951
JUL 20
BUSINESS M*mwm
LIBKAIY
&
Reg. U. S. Pat. Offlqe
Volume 174
Number 5030
New
York, N. Y., Thursday, July 19, 1951
Price 40 Cents
a
Copy
EDITORIAL
The Current Investment
As
We
For
little time
some
See
And Business Outlook
the
now
propaganda mill
in
Washington has been grinding out material
designed to prevent a general "let-down" or re¬
laxation
from
realization) of
a
By HAROLD AUL*
fearful
is
that
it
will
lose
It
rearm.
clearly
sees
The outbreak of
We
not
-are
substance
that* the
or
;
harmful
,
The
has
however,
see certain other dangers ahead
Administration, as much as anyone
well contribute. It is never to be for¬
the
Federal
Government
is
at
the
least
believes
itself
under
now
moral
political, if not legal, obligations to do
is
a
in
matter which is certain to loom rather
the
thinking of
election
acts
near
and
any
A
and
large
pearing when scarcities,
inventory glut
controls
and
195%
to
223%
corporate bonds have gone from
As a matter of fact, the
ap¬
the
1935-39
a
average.
2.61% basis to
Continued
possibly
on
of
Production
2.96%
a
change in the yield of
highest grade corporate bonds has been substantially
greater than this index reflects since recently
top-flight
bonds have been offered around a 3.25
basis, about 60
an
———
page
on
page
Interestingly enough, just as the outbreak of war in
in mid-1950 greatly accelerated a business boom
Korea
months,
the present/developments .1
quickening the feeling
uncertainty that 'has recently f
taken hold in the economy. ' A
year"
ago, all the signs were pointing in one direction. For an indefinite time 4 J
ahead, rearmament - and de'f e n s e
overseas
of
so
are
to
underwrite
economic
tionary
rising rate
a
pressures,
increasing. short¬
ages of civilian goods and the many
other familiar attributes of a defense
and war economy.
;
recently, however, the econ¬
has been displaying a number
More
omy
of inconsistencies.
On the
defense
and
contracts
penditures
indeed
are
21
a talk
by Mr. Aul before
Pittsburgh, Pa., June 27, 1951.
in
our
a
group
by month. The trend of personal income, even
higher taxes, is upward; consumers have never
after
had
more
income
available
production
costs
have
announced
been
are
for
rising,
in
the
•An
address
Association at
by
Dr.
Reierson
&s Boston
64 Wall
STATE
Tel. HAncock 6-8200
on page
MUNICIPAL
Tele. BS 424
Tel. WOrth 2-0115
Tele. NY 1-315
30.
across
Troy
THE NATIONAL CITY BANK
PHILADELPHIA
Albany
Buffalo
Providence
Investors Trust
or
VANCE, SANDERS & CO.
Ill Devonshire Street
BOSTON
Williamsport
Washington, D. C.
Head Office: Toronto
Bond
AUentown
Dept. Teletype: NY i-708
\
Bonds
Y
/«
New
York
Chicago
,
Loo
Angeles
f-
7
r
New York
Bond
Department
THE CHASE
NATIONAL BANK
THE CITY OF NEW YORK
OF
Agency: 20 Exchange PL
Portland, Ore. San Francisco Los Angeles
CANADIAN
CANADIAN
Hawaiian Securities
SECURITIES
Iowa Electric
BONDS & STOCKS
Light & Power Co.
COMMON
Direct Private Wires
Dean Witter
14 Wall
&
Co.
Street, New York, N. Y.
Goodbody
&
Co.
Members of Principal Commodity
Security
San Francisco
•
Boston
•
Honolulu
•
Dommox Securities
Grporactoh
MEMBERS NEW YORK STOCK EXCH.
Exchanges
Los Angeles
Analysis
CANADIAN DEPARTMENT
ESTABLISHED 1891
and
.
24
West
Canada
of Commerce
Scranton
,
Prospectus from authorized dealers
page
State and
The Canadian Bank
OF NEW YORK
Harrisburg
t.
Wilkes-Barre
Pacific Coast &
Massachusetts
on
Monthly Commercial Letter
Seattle
k
the
civilian
some
Virginia Bankers
White Sulphur Springs, W. Va., July 13, 1951.
600 Branches
BONDS
Stock Exchs.
BROADWAY, NEW YORK 5, N. Y.
of
and
cutbacks
Municipal
AND
SECURITIES
Street, New York 5
BOSTON
120
Wages
significant
output
before
upon request
York
spending.
and
Continued
of investment bankers
.
"Securities in Registration" Section, starting
R. H. Johnson & Co.
INVESTMENT
Members New
Roy L. Reierson
month
potential under¬
takings in
B o ught—5 old—Q uoted
31 MILK STREET, BOSTON 9, MASS.
ex¬
increasing
SECURITIES NOW IN REGISTRATION—Underwriters and dealers in corporate securities
afforded a complete picture of issues now registered with the SEC and
Established 1927
duPont, Homsey & Co.
hand,
one
defense
Prior Pfd.
A, B, C, D, Pfds.
,
activity, growing infla-1
22
are
Boston & Maine R. R.
Boston & Maine R. R.
danger our
spending.
up
government
»
•Part of
Continued
Industrial
of
basis.
Administration with
consumer
on
Once again, as a year ago, events in Korea are raising
incisive questions concerning the future of our economy*
seemed
from
Index
Between May, 1950 and June,
1951, U. S. Treasury bills have gone from a 1.18% basis
to a 1.48%
basis; the yield of 1%% Treasury notes of
1954 has risen from a 1.41% to a 1.93%
basis; the Victory
2V2S have declined about five points and
Moody's Aaa
enough ahead to tinge all official
plans.
gone
Reserve
est rates and bond prices.
This
so.
'■
Federal
The gross national product has risen from a
jjrate of
$263 billion in the first quarter of 1950 to $316 billion
in the same period of 1951—over 20%.
A major change has taken
place in the trend of inter¬
charged with the task of preventing depressions,
or
shortages, controls and higher taxes.
period wholesale commodity prices have risen
9.4%.
hazardous.
or
,
15.8%; The index of sensitive raw materials prices has
soared 30.2% * and the cost of living has. advanced about
*
to which the
else, may
gotten that
in Korea and its aftermath have
war
readjustment, it points
is becoming dependent
of ;
\ In this
these
not be
cases
economy
that had been under way for several
-
no
apprehensions, or
developments evidently so much feared
would in all
We do,
:
in
serious business
with its materials
prepared to say that there is
reason
business, such as cur¬
prices, incomes, production, and employment, are
abnormal, and although defense program may defer
rent
changed profoundly the whole pattern of our economy;
and we; are now'.launched oh an all-out rearmament
effort, with all of the paraphernalia of a war economy
;
bring the public around to its
way^of thinking.V>
i
!
affect the ulti¬
consumer
bank economist finds trends in
investment markets.
really hurt. Day in and day out, it is using the
press,, the radio and any and all other instru-
war may
outlays, but not
their upward direction, in next several years, New York
In the course of the past 12 months we have witnessed
significant changes in the circumstances surrounding the
that it will be
persuade Congress in a pre¬
election year to
impose additional taxes which
level of defense and
mate
level of common stock prices not too high,
though, in view of prospects of reduced corporate earn¬
ings, there may be some moderate recessions. Says index
of investors' confidence remains high, and current situa¬
tion is only "a temporary squeeze."
to
mehts7at.vhand to
Asserting settlement of Korean
current
perhaps all, of its extraordinary powers,
to say
nothing of failing to get the additional
authority that it has been seeking. It is uneasy
lest there be a reduction in the
pace at which
we are
rearming, and at which we are assisting
others to
Vice-President, Bankers Trust Co., New York City
Market analyst reviews course of investment markets
during past year, and, predicting improbability of allout war or a major depression in near
future, contends
some,
difficult indeed
By ROY L. REIERSON *
Vice-President, Calvin Bullock
emerging out of the outlook (or
cessation of the fighting in Korea.
The Administration
Economic Implications
01 a Koiean Settlement
Chicago
115
40 Exchange Place,
BROADWAY
NEW YORK
New York 5, N. Y.
105 W. ADAMS ST.
CHICAGO
WHitehall 4-8161
request
IRA HAUPT&CO.
Members New York Stock Exchange
end other Principal Exchangos
111 Broadway, N. Y.
WOrth 4-6000
Teletype NY 1-702-3
upon
Boston
6
Teletype NY 1-270*
Telephone I Enterprise 1820
"I
f
The Commercial and Financial Chronicle
(238)
2
.
.
Thursday, July 19, 1951
,
'•1 U
Leading. Banks and
Trust Companies
?
Quarterly
(The articles contained in this forum
request
Established
New
New
Teletype NY 1-583
The
New
no
called, there have been
were
t
frflC pONNELL & CO.
Members
/
Stock Exchange
Exchange
Pan¬
120 BROADWAY, NEW
Tel.
REctor
YORK 5
2-7815
1961
not
Frederick
O.
bid
basis.
for bonds is around a 1.50%
Bassett Furniture Industries
Camp Manufacturing
Commonwealth Natural Gas
purposes
Federal
a
Life Insurance Co. of Va.
ITRADER,TAYLOR & CO., Inc."
a
Public
the
to
pursuant
Annual
an
between
Contract
Contributions
&
Administra-
Housing
City. (Page 2)
the
on
United
1937,
States
incentive
is
fund
the
to
the
1.05%
basis
to
Again I call your attention to
unusual special situation and
an
neglected opportunity, Blue Ridge
Fund.
Mutual
demption
this
re¬
cer¬
tificates
j?
deferred
The
for
one
2.25%
a
newly
ernments.. 34.14%
—
Sold -— Quoted
in,
a
dustrials'
vestment trust
t
offer
■
an
usual
JAMES J. LEFF & CO.
tunity to pur¬
securi¬
chase
j
Incorporated
\
50 Broad St., New York 4
-
| Telephone BOwling Green 9-5920
Teletype NY 1-3018
ties
utility
Even
cash
with
the recent
break
in
other
bargain
more
than
Aaa and Aa tax-exempt
on
will
offer the
tunity
the
investor
obtain 2%
to
oppor¬
more
on
type
of
tax-exempt. investment.
GREENE
fund
should
for
investors.
In
the
as
Central
poration
scares,
an
now
situation
trust
,
at
asset value
TAPE AND
AUDIODISCS
GROWTH COMPANY
Analysis
on
Request
10%;
of
plus
a
generally
at
9%,
$10.17. This
of
open-end
shares
at the prevailing
discount, offering se¬
temporary
curities
diversification
the
distributing agent not to sell
new
investor
at
1
as
possible.
8%
averages
to
there
shall
exist
for
six
months
in
for
redemption
are
to
for
redemption
from
to much
"•
which
I
have
in the past.
redemption
this
aver¬
time
when
conditions
are
uncertainty and
Gekstex & Fuenkel
Members
150
a
the
one
called
'
-
.
attention
Tel.
demptions will be in effect. How¬
ever, the deferred redemption pe¬
New York 7
r
DIgby 9-1550
Tel. NY 1-1932
„
to
Giant Portland Cement
1
•
Alan Wood Steel Co.
principal
speaker.
Houdry Process
Black, Sivalls & Bryson
Pennsylvania Railroad
'
Central Electric & Gas
Purolator Products
American Marietta
His
outsta
the
of
Henry B. Warner & Co., Inc.
nding
representat i
Members
the
of
v e s
of
issuing
the
purchased
shares, the major items of such
cost
being commissions to
the
breath
salesmen
Phila.-Balto.
Stock
Exchange
Phila. Telephone
Bell System Teletype
prospects.
agent.
the
and
In the
the
«ase
distributing-
of Blue
Ridge,
loading charge is to be 9.2%
of asset value.
Ordinarily, there¬
chase
of
the deferred
redemption
dustry—
in
its
-
KIngsley 5-2700
taking
New
York
Direct
growth
difference between 9V2 and $10.17,
or whatever the asset value
is at
the
time, plus
loading charge.
As
the
to
tributor
is
and
Research
a
saving, of
the
itself,
its
investment
dis¬
adviser
Distributing 'Corp.,
wholly-owned by the firm
of
Rey¬
The fund' will
have
and
Company.
the
benefit
Central
of
that
firm's
Ridge Corporation
States
Electric.
An
wire to
*
.
PH 771
Ames Emerlch,
!
Chicago
man¬
ufactured by
Rohm & Haas
"i
BUY
certain
are
on
ex
-
change rs,"
which
Johnson
H.
Rupert
U.
S.
SAVINGS
are
BONDS
N. Q. B.
in the world.
than 25 years of service,
tioning equipment
In
more
the
experience
of
The
Permutit
Company has extended into prac¬
trust
'
City Tel.: BOwling Green 9-4818
Among the
products
tically
class of industry, to
municipalities and to
every
numerous
tens of thousands of household in¬
stallations
throughout the
OVER-THE-COUNTER
INDUSTRIAL STOCK INDEX
12-Year Performance of
35 Industrial Stocks
world.
,
It
is the stock
of The Permutit
Company that, I have selected
favorite
ment.
For
a
-
field,
Continued
few
on
enter-
page
BOOKLET
ON
REQUEST
'v
"
as
security at the mo¬
specialty situation in
investment
.
123 South Broad St., Phila. 9, Pa.
in¬
chemical
the
re,-
Security Dealers Astn.
coiripany is
of the old Blue
Sub¬
dailv
Y.
top executive of Rohm & Haas
was
my
date,
N.
Broadway,
RUPERT H. JOHNSON
wide experience in securities and
the guidance of certain executives
Feb. 26, 1952.
that
'M '
This is my idea of another one
prevailing
on
5%
of those unusual special situations
nolds &
to
Serial
the Blue Ridge
the fortunes of individual compa¬
nies are so difficult to appraise.
Dec. 29, 1951 through Feb.
26, 1952
will be paid at the asset value
sequent
V-/%s & 4s
Central 4s-1959
/ Missouri Pacific R.R.
sea-
value, is only tem¬ shares is worthwhile is apparent used principally for water-condi¬
porary.
This is caused by the from the fact that shares
While a great deal of
may be tioning.
change in set-up from the two bought now at a discount of about what the speaker had to say was
closed-end
investment
trusts
to 14.42% from the
"off the record," I am revealing
conventional cost
one open-end
operation. In order to investors. The elimination of no secret in reporting that, in this
to make the transition
smoother* the delayed redemption and of the connection, he paid a tribute to
it was provided that instead of the
discount on the shares would re¬ The Permutit Company, the larg¬
usual daily redemption of shares sult in
est manufacturer of water condi¬
a profit, to investors of the
rendered
N. Y. 5
soon
asset
prevailing
days after any redemption re¬
quest.
Thereafter
shares
sur¬
Tele.: NY 1-2078
as
being
from
60
Nassau Street,
values
along these lines may be
early in September of this
after the first 60-day period.
The
loading charge paid on
open-end trust;shares covers the
receive the asset value
31
subject
This
the
of asset
turned
Tel.; Dlgby 9-3430
and
attractive for the
are
market
this is
the
after June 28, 1951, a "freezing pe¬
riod." During this interval shares
PETER MORGAN & CO.
for
directed
fore, at the recent asset value per
share of $10.17, a purchaser of
customary Blue Ridge Mutual would have to
loading charge, pay $11.10 per share'. That pur¬
discount
a
Cor¬
Corporation.
traded
asset value of
instead
which
RECORDING
Greene
Electric
Blue
and
The
have
value,
MAGNETIC
reason
has
cost
States
traded
(
A.
to
investment
Manufacturers of
Irving
reorgan-
uncommon
INC.
The
SEC
at their
so
year
this
of
successor
AUDIO DEVICES
the
to do
directors
Wisconsin
summary,
taken
trust
started in
year
ized
power
discretion.
that
company
^
Geo, & Fla. R.R. 6/46 Series A
J
Action
June
the
having the
considerably
Boston Terminal
expected to show
substantial growth since it offers,
from
many
aspects, a desirable
age
be
Teletype B8 259
be
may
shares
& Co., New York City
:
prob¬
shares put in
pay
-soned management,
~
;
Y. Telephone WOrth 4-5000
N.
w
and Governments will
medium
an
or
highest.*grade
very
148 State St., Boston 9, Mass.
Tel. CA. 7-0425
during the initial
redemption period. Thereafter the
Bonds, for the first time in years,
set
ter.
was
North
of
for redemption
2%
a
discount by com-*
mencing daily redemptions at as¬
coun¬
request
securities.
consisted
.list
ably be used to
municipal bond prices, it has been
eliminate
the
over
This
■i
un¬
oppor¬
on
diversified list of in¬
and
effectively prevents the sale of Senior
Partner, R. H. Johnson & Co.,
newly-issued
shares.
The
dis¬
New York City
tributing
agent
and
the
trust
The Permutit Co.
*
management being naturally de¬
sirous of increasing the. size of the.
Recently I attended a meeting
trust by- selling new
shares, can for brokers and dealers at which
in¬
open-end
Analysis
in utilities, and,
ma¬
year
be bought over the counter.
launched
Bought
26.79%
this,
Of
AEROVOX CORP.
for
shares without advising purchasers
of the discount at which they may
of
j
in the form of cash and Gov¬
was
nation¬
a
$44,146,000.
was
•' *
ceived.
riods
Ridge Mutual Fund;
branch offices
investment
Housing
AmericamCompany shares, which40-year the trust will
pare down consid¬
maturities. '.At this writing,
the
erably both by prudent choice and
bonds appear to be very well re¬
SEC
requirement. Most of the
turities
shortened, the
Eskimo Pie
that
fact
our
the
of
as
general
Blue
Reeves Soundcraft
growth
9.6% ot net assets included in the
ALLEN
Senior Partner, Greene
NY 1-1557
Mobile, Ala.
Direct wires to
when
bonds
St., New York 4, N. Y.
HAnover 2-0700
New Orleans, La. - Birmingham, Ma.
Mutual '.def-erred
IRVING
TWX LY 77
39
25 Broad
York
New
Co.,
York Stock Exchange
York Curb Exchange
New
actually
are
Lynchburg, Va.
LD
Members
Senior Partner, R.
Johnson
bonds.\ These Housing Authority
...
"The bonds of each issue will be
payable
Johnson,
H.
Tuesday, July 17,
The under¬
the yield
first pledge of an¬
nual contributions unconditionally
Dan River Mills
H.
the principal of
pay
difficult to obtain
states:
by
The
describing
circular
secured
j
as
security.
guaranteed
writer's
bonds
practical
considered
be
can
all
for
Bonds
American Furniture
Authority
Housing
new
Steiner, Rouse & Co.
Rupert
39.07%
a
Paul
tively and the
These
—
ing Authority issues and reoffered.
the bonds at prices ranging from
000,000. These
trade very ac¬
Trading Interest In
Company
wide group of dealers purchased
$155,739,1100 of the various Hous¬
of
current
to
interest
On
less than $50,do
Permutit
in
tions Contracts."
but are
outstanding in
empt
bonds
Partner,
Co., New York City.
Members New
to the aforesaid Annual Contribu¬
a x-e x-
amounts
Senior
Greene,
management fees are geared to
amended, solemn¬ the size of the fund and the dis¬
ly pledges the faith of the United tribution
feesdepend on the numr
States to the payment of the an¬
ber of'shares sold.
On June 23,
nual contributions by the Public
1951, when the trust's operations
Housing Administration pursuant commenced, total net asset value
The
in
due
Bought—Sold—Quoted
Fund—Irving
Ridge Mutual
The
the
housing agency which
due.
Bonds
a r e
of
funds
New
together with
local public
which,
amount
other
Act of
United
ama
said local public housing agency
Co..
&
(Page 2)
annual contributions will ,be pay¬
an
Frederick
Greene &
opinions
Louisiana Securities
City. (Page 2)
Allen
issuing said bonds in the
of bond counsel.
Said
agency
and
in
volume.
3%
Blue
—
Frederick, Senior Partner,
York
the local public housing
sufficient
out¬
States
Since 1917
Housing Authority Bonds
Paul
nor
Alabama &
and
Selections
available for such purpose, will be
government
Rights & Scrip
be,
to
able directly to the fiscal agent of
Housing Authority
security I like
the old Liberty
standing
Curb
'
tax exempt
bonds
York
.;
"
the
are
Since
3%s
York
City
Housing Authority Bonds
best.
New
York
intended
not
are
tion and
1920
Specialists in
New
particular security.
a
offer to sell the securities discussed.)
FREDERICK
PAUL
Bonds
New
as an
Senior Partner Paul Frederick & Co.,
Broadway, New York 5
BArclay 7-5660
they to he regarded,
are
Corporation
for favoring
Paul
New York Hanseatic
120
reasons
Week's
Participants
Their
week, a different group of experts
advisory field from all sections of the country
participate and give their
4
on
Forum
A continuous forum in which, each
Comparison
Available
This
Security I Like Best
in the investment and
New York
Consecutive
77th
The
27
National Quotation Bureau
Incoroorated
46 Front Street
New
York4,N.Y.
Volume 174
Number 5030
.
.
.
The Commercial and Financial Chronicle
(239)
3
,
Paper Profits—By the Roll
'
<
Author of
"How
Some
it
Make
to
musings
80%
New York, Boston, Chicago or any
metropolis
you'll
.get
glimpse
some
a
of
The Current Investment and Business Outlook
can
higher
go
of
the
of
.
.
.■
.
Canadian
table
distribution
of
the
look,
needed
third,
word;
dollar
oi
rolls
is
lion
today
Ira
$87 and is just
tiny
U.
Cobleigh
ffacthe
of
6)4
million
to
bring
the
you
dollars,
torts
while
news
ypu
(1)
coffee, * a
bird-cage, a lining
fop your garbage
'
Anf how does it
that
just
costs
$S7 today.
•'
*
i
cent
per
wage
anguish
to
a
more.T
grows
basic
of
a
Paper xomes
raw
new
use
material
from-
material
these
almost
'
uses
Kraft
For
this
brings
paper
more per
ton than
reason
of the Canadian paper mills built
the war has been for news'
j
Lower Ratio of Real' Estate
H.
Discrimination
a
Against
the
Investor—William
12
Jackman
Berkshire Fine Spinning
13
Proposed Changes in Capital Gains Tax—Emil 'Schrami15
Why Overtaz the American People?—Julius Hirsch__
Punta
fact putting further
15
Service Increased___*__
Regular Feature*
As
We
Bank
See
61
'
It (Editorial)
and Insurance
Canadian
*.4
>-s
^_____
Philadelphia and Los Angeles
12
20
—______
pres-
And the United
-
producing
less
today
Coming Events in the Investment Flfeld__._j.__'___^X__-__:__l_
4
_
Dealer-Broker Investment Recommendations
,
.
,
8
Associated
.
Dev. Res.
Einzig—"Re-Enter—Britain's Dollar Gap"____
Indications of Business Activity
16'
.__
From Washington Ahead of the News—Carlisle
Doeskin
Bargeron____ 17
.....
—
Funds
14
News About Banks and Bankers______
Observations—A.
Wilfred
Our
Our
Reporter
May___;
Reporter's Report.
■
1
on
offerings of
1
HA-2-0270
32
1
Securities
Securities Now in
The
______
Registration.
(Walter Whyte Says)
1—__1
Washington and You___
*
this
Mr.
'
;
May is still abroad and ho report
Collins Radio
25
.1
36
Dictograph
received from him
was
Di-Noc
week.
•
The
Twice
Weekly
COMMERCIAL
U.
1 Drapers'
Gardens, London,-E.
land, c/o Edwards & Smith.
•:
and
CHRONICLE
Copyright
WILLIAM
DANA
B.
COMPANY, Publishers <
-
25
Park Place,
New York 7,
;
WILLIAM
York 4
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Hubbard 2*8200
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second-class
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the
post
matter Febru-
office
Subscriptions
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Every
news and ad¬
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corporation news, bank clearings,
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U.
S.
Members
of
Pan-American Union, $45.00
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1951
(general
Thursday
vertising issue)
plete statistical
in
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Business Manager
RIGGS,
Thursday, July
state
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DANA
D.
Editor & Publisher
Dominicn
records,
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25,
Eng¬
**
York. N. Y., under the Act of March
N. Y.
REctor 2-9570 to 95T6
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ary
C.,
*
1951
Patent Office
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Reentered
New
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t
rate of
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exchange, remittances for for-
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t
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Note—On account of the fluctuations in
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40
17
The State of Trade and Industry
">
Spencer Trask & Co.,
■
8
_
Salesman's Corner.:
FINANCIAL
preferred stocks
fc"
&
:
interested in
■
Singer, Bean
mackie, Inc.
22
Securities
Securities
Published
.
;
.
.
page,
'
*
35
_______^
Offerings!
Security
'!"*•••/
Reeves Soundcraft
16
-
Governments.
on
Utility
Railroad
International
Continued
Products
Greater New York
29
i
i
Corp.
Industries
Mutual
Public
dollars in what has historicallyPr*°Y _A°
a rewarding dudus-*^
J;
£
f ? ^ r*? 11 ? ~
growth rising sales price, dynamicv demand and no flooc of new com-"- •*
?
a~kuilding to dilute CUFT^1 P.r0*lts«
,v4
If the
w^h the biggest
Members
Teletype NY 1-3370
Direct Wires
Teletype NY 1-1825 & NY 1-1826
^
newsprint,
are
Broadway, New York 6
—Cover
Stocks.4
Securities
Prospective
paMhe PU^P and the paper* and
J? earning handsomely from ^both.--
than ten years ago, content to buy
We
Reilly & Co.
BO 9-5133
owns the other:
^
States has just about given up on
the press.
Alegre Sugar
18
Incorporated
industry is attractive, we
ought to single out some worthy
dividend earners fn it.' We'll start
on
Argo Oil
Values in Nation's Total
Armstrong__J_______li;i_______
J. F.
_
none
since
print,
II
Life Insurance Companies Increase Purchases of U. S. Bonds 21
^dEIoweyer you .face it, Canada-
daily.
1
sure
7
in^.Pruce Falls Power and Paper
half1
that
pulp—and in most
upwards of $50
newsprint.
,
1
Mr.
our number one
against communism?
^
pulp—a
YORK
WHitehall 4-6551
Policy in Inflation Control
Weston
about
(3) The cost of steel and ma_newspaper. chinery and
difficulty of obtain-'
should be
b;t
Dept.
NEW
REMINGTON ARMS
printing paper, cartons, con-;
? pe,, °d^political. r
tainers, dishes,
wrapping,
wall f*10™' Jf lick em, join*
\ board and now textile fibers ail em, .lets see how well the Amer-^
! strive
with
newsprint
for
the
investor can fare by lodging
'
of Monetary
Fred
cap
.
.I Bags',
V
Railroads—Wglter Hahn_______:
Finds Foreign Dollar Bond
The high price ol suiphur>i
,j,e world's scarcest major chemi—
.Let's unroll this paper problem
wood
;
Role
the
Telephone:
in-
in pulp industry, May, 1951.
DiSalle.t
who'd like to "roll back'Vthe price-
weapon
;
WALL STREET,
6
Tax
continues
paper,
real
; press
i
Inflation and
Wealth—Robert
the price? No doubt our top price
adm*histrators will .try;-How about
building .new mills here, or in,.
df
tftis roll, back to a nice neigh- Alaska, where,pulp: wood trees
borly ceiling of say $100 or $105- outnumber people about lQ .mila ton. Tonnage prices
perhaps lack h°n to one. Wouldn t that cut,
meaning, but when you ponder down Canadian control of this
that this price hike means an an- trade?
Good ridea/vbut "lfeave us
nual $50,000,000 more in costs to; face W newsprint mills are^just)
publishers here, then you scratch about
the most expensive of
your head and wonder how long, our
industrial creatures, costing;
it will be before the daily paper roughly, m a big plant, $650 for
follows the 'phone call and sub- each ton of production. Since we
way fare up to a dime. And if it's, huy over 5 million tons of paper
tough for us, what about our Latin. *T0m Canada every year, you can
amigos who simply can't pay the. hsuro out for yourself .the cost of < price?
If a free press like "La duplicating their capacity. Some*
Prensa" can be 'snuffed out at the
Papars hke the New'
whim
of a Peron, elsewhere it Yprfe
Times' have sought to as—
may be priced out of business by
y
buying into a mill.;
the cos; of newsprint. And the
Times owns a half inter esting
strictly
hunger.
Obsolete Securities
5
The
And this latest price peg is bring-
•;
Where Do We Go From Here?—S.. B. Lurie__
Population Trends and Investment—Joseph J. Spengler____
has just kicked upw
F treignt.
■.
the price of this raw material, in-; \ Well what do we do? Sit around^
dispensable to the literate, to $116l and Pa^ through the nose-glasses?
a ton—up from $35 20 years
ago.. Can we cajole producers to dip,.
'
Sakolski_J___
99
Because Canaaa,.
jng same for plant additions and"
,our northern neignbor, manufacexpansion.
'
;
'
turer of 60% of the world's news-'
(,,
u;
\rtl.
1 print
Go?—A. M.
come
roll, of
one
*
those
you
them,
,(2)
can, or first aid
oroken window.
Eleven
crease
sold
buy
balances
to be a*
cogent cog in Canadian prosperity..
Well
these
gentlemen, ' having.1*
of sifted the evidence, now say that
morning
your
•carpet for your
.
We
American Marietta
by\
get'
up annually in $116 a ton is most reasonable on
presses,5 just
to account of:
v
American
guzzle
„
4
High Should Taxes
—J.
newsprint chewed
*
a
have
may
obsoletes.
^
*
for
guys
Cover
this
these
■,
Korean Settlement
a
____i
3
The
Canada;
that
worth
-
Reierson.
How
into*:
bubblingand fourth, to see,
pulp and paper section. of
Canadian
enterprise, ■ with a.
capital investment of over "a bil¬
into
these,
our
L.
Paper Profits—By the Roll—Ira U. Cobleigh
it, the,
clobber communism
written
time you
'cause each
a
—Roy
newsprint tot
Take
tiou
Economic Implications of
.
seeking
ameter.
see
DISHONORABLE
political and in¬
allied countries which need
to
Cover
—
.
feet wide, and
3 feet in di¬
better
STRICTLY
Aul
'
first, * to? :*
avoid the welter of bankruptcies
of the 30's
(due to overproduc¬
tion); second, to promote an equi¬
huddle
deep
a
paper
good
—Harold
'
•
from
dustrial fathers. They've gone
aboard—great
big rolls 5y2
next
f
This virtual monopoly of supply
great big-has by no means escaped notice
along the
street, ; w i t h
a
*
of its needs north of the St.
Lawrence.
onoxiding
AND COMPANY
Page
'
:
prooably
trucks
open
rolls
Article* and New*
*
•
papered with imported newsprint — and containing a Suggestion or two about leading Canadian paper stocks.
! other
m
-
the theory that "ceilings"
on
LiCHTtnSTfllT
"
:
Killing in Wall Street and Keep It"
a
If you happen to live in or visit
*
INDEX
IRA U. COBLEIGH
?\
5
THEODORE YOUNG & CO.
40
Exchange Place, New York 5, N.Y.
WHitehall 4-2250
Teletype NY 1-3238
The Commercial and Financial Chronicle
4
political repercussions,
nomic and
so
By A. M.
and points out problem cannot be solved by
therefore resort must be had to
"trial and error." Warns against imposing taxes that destroy
and reduce individual incentives or lead, through shifting, to
the
Thus
profits furnish
easy
h for
additional
and
Irish
old
head,
hit
has
been
'
A. M.
Sakolski
J
.
Thursday, July 19, 1951
.
problem is not so sim¬
services affect de¬
and
for
ence
one
tax
another be¬
or
they have different values,
philosophies of life, dif¬
of worlds in which
kinds
ferent
choose to live.
Of course,
are aspects of taxation, such
they
there
in¬
shifting and incidence, that
as
problems entirely divorced
from tastes and preferences. Un¬
volve
fortunately, scholars do not agree
even
on these
matters. The dif¬
not
is
ficulty
of subjective
one
approach that
limit. History is replete from earl¬
iest to
modern times with in¬
revolutionary and
economic upheavals arising from
taxable
even
stances of vast
Taxable Capacity
is
200 years ago
than
more
philosopher David Hume
since the
wrote in his essay on
-'
is
"There
taxes:
that every
tax creates a new ability in
subject to bear it, and that
among some reasoners
new
the
burdens
increases proportionately the in¬
dustry of the people. This maxim
is of such a nature as is most
increase
each
likely
to
much the
be
of
public
abused,
is
and
so
denied;
but it must be owned, when kept
within
certain bounds, to have
some
to
the
Neither is
economists
psychological, social, and
political factors that require the
utmost care in the study of their
It is for these reasons that
British
to
work
in
America, and between the attitude
,
formulas
for
determine
or
limits
the
of
British
Gladstone,
statesman,
pointed this out on various occa¬
his budgets to
The subject of the
sions in presenting
the Parliament.
and
Taxable
that of American workers,
the amount of vigor and
shortcomings
estimating
in
listed- as* essential
limits
na¬
factors
the
the
There
.yy.-,-
are,
moreover,
questions
and equity involved in
every tax
system—questions af¬
fecting not only the present, but
the
may' be in¬
or senti¬
by patriotism
future
One
generations.
great difficulties in
any
of the
tax sys¬
that
think
I
if such
server,
countries, and
independent ob¬
an
could be
a person
found, could hardly fail to com¬
ment upon the deadening effect
British
upon
decades of
is
there
industry
reducing this burden,
actually
attempt at
an
a
further increase by eating
capital
these
well
as
into the
the income of
as
businesses, and thus stulti¬
improvement
that
is
bound
"(4) It depends on the distribu¬
tion of wealth.
and
den of the national or state fiscal
"(5) Its rate of increase is great¬
social disruption.
ciples.
many
tioned
The problem of estimating tax¬
complicated
one
been mathemati¬
more
rapidly than the
diminished."
or
are
undoubtedly
other "variables" not
by Lord
much
seems
reason
and
and
elabo¬
an
analysis of these prin¬
There
The enterprise
policies will fall.
savings of these may be taxed
for the past abstinence and
mistakes of others, represented by
Space does not permit
ration
whom the bur¬
on
Stamp.
certain:
experience,
men¬
But this
Based
any
substantial increase
on
sudden
in taxa¬
Nor is it capable of tion is bound to have serious
public debts and obnoxious levies,
of which they receive no benefit,
and
in
this
can
be
stunted
to
their
ambitions
future
and
prog-
rewards
traffic
return
of
is
greater
are
there is
first-class
no
men
barrier against
a
potential im¬
Shifting
COMING
EVENTS
as
social
in
unrest,
as
Tax
its
ture,
and
To argue, as many
"New
be
no
on
which
result
in
Country Club, Sandwich, Ont.
Association
or
even
which the tax system is based.
Nov. 2,
day
LOCAL STOCKS
ture
few
Sept. 7, 1951
wage
about
for
/
LONG DISTANCE 421
outing at the New York
Sept. 24-26,1951 (Cincinnati, Ohio)
Calif.)
National
Security Traders
ability
(Dallas, Tex.)
Day outing.
Holly¬
wood Beach Hotel.
We Offer
BARUCH OIL
It
CORPORATION
Common Stock
of present-
mass
Price $1
spend, and
enforce higher
to
to
they
bring
can
general rise in commodity
passing
their taxes
on
add them
to prices. The result is a continu¬
ous
wage-price spiral.
This has
been
U.
our
recent
experience in the
S., and there is
high taxes
Copies
be
of
share
per
Circular
the Offering
may
obtained from your investment
dealer
the
or
undersigned.
are
inflation.
or
In
no
can
fact,
proof that
be
a
curb
under
Aigeltinger & Co.
Securities Dealers, Inc.
Member Natl. Assn.
52 Wall
St, New York 5, N. Y.
Tel;
BOwIing Green 9-3530
the
past
<MyL Bfoiel
of our mod¬
meets the
of the
requirements
Established
Members
discriminating
Stock
Exchange
Curb
Exchange
Cotton
Exchange
York
York
•
Spacious Rooms
New
•
Homelike
Commodity
of the many
•
Delicious Food
•
Intimate Cocktail
•
Excellent Service
foundation
as
taxing of the many for the benefit
1856
H. Hentz & Co.
New
economic struc¬
a
(Hollywood
.-Investment Bankers Association
New
rickety
Col¬
;
Annual Convention at the
Central Location
the benefit
annual
Club
Bond
Chronicle,"
"The
demands,
a
As¬
sociation Convention opens at Co¬
ronado Hotel.
;
*
1950) that because of the
prices by
Atmosphere
York
Chicago
Lounge
New
Exchange,
Board
Cotton
Orleans
And
of
other
Inc.
Trade
Exchange
Exchanges
of the few.
Likewise, if taxes are too steep¬
ATLANTA 1, GEORGIA
(New York City)
••
the
the
at
to their employers, who
Deal" economists have
in
Ding"
Security Traders Association of
heavy taxation for the
and
is just as
Robinson-Humphrey Company,Inc.
RHODES-HAVERTY BLDG.
(see
wage-earners
their
limit to taxation, is
Taxes, it is
course of time, become
fixture
a
"Fling
Mauh-Nah-Tee-See Country Club.
levied
are
general
partial increase in prices, they are
inflationary and thus affect ad¬
versely the economic stability on
upper
in
annual
Detroit
be shifted from the tax¬
to others. If taxes
disproven by history.
true,
of
golf party at Essex Golf
summer
umbus
effects
consequent
can
payer
done, that taxes are not a social
CORPORATE BONDS
Club
Bond
experience proves.
eco¬
Field
(Detroit, Mich.)
1951
July 20,
Dallas
Burdens
prices; If should not be forgotten
that most taxes, of whatever na¬
burden and therefore there should
STATE AND MUNICIPAL BONDS
Investment
In
Another
problem involved in
measuring taxable capacity is the Nov. 25-30, 1951
Beach, Fla.)
shifting and incidence of taxation
All this may
result in efforts at repudiation as
well
be
safely borne in the present crisis.
Oct. 12, 1951
migrants."
jeopardized.
gress
are
can
become
to Britain because British taxation
on
ern
EST.1894
way
taxation
One
capacity of the
into the world
na¬
still
Association of Stock Exchange
little-publi¬ Firms Fall Meeting at the Terracecized aspect of this problem is the Plaza Hotel.
quiet emigration of some of the
ablest men in industry to coun¬ Sept. 30, 1951 (Coronado Beach,
marked.
more
at
coming
greater
with
pace
the other side of the At¬
on
lantic
keep
to
on.
individuals
to
Athletic Club
industry
laid
new
extrava¬
technical
If these factors
higher
present,
New York
ish
rate
tinually
leading
tional income.
vation, the relative failure of Brit¬
It may be pointed out,
for example, that there are con¬
is
intensified
production and, hence, higher
already been pointed out by
;
the
more
individual
and
and
fying all progress by capital star¬
writer
increase
is
work,
capita output, less gov¬
per
ernment
in
remedy
situation
several Aug. 23, 1951 (Rockford, III.)
If,
Rockford Securities Dealers
of
the
the
The
pay.
taxation.
excessive
far from
so
has
which
is
tax
a
the difference between the reward
equitably.
This has never been
accomplished, despite continuous
attempts.
there
adopting
of
from-
difference
"(3) It depends partly 'on the
the taxation is raised, both as
to the methods adopted and the
political unrest, and thus become
source of revolutionary unheaval
this
way
'a
WALNUT 0316
to
and
tem is to distribute the tax burden
the bounds as just
economic de¬
The
ity
enthusi¬
work
ment.
wealth
\
which
of effort in the two
and
y
of justice
"(2) It depends upon the spirit
and national psychology
of the
fluenced
nation.
of
stability
and
Questions of Justice and Equity
pf taxable capacity:
people taxed, which
prosperity,
the
in
"(1) It depends upon what
taxation is to be used for.
stated may lead to
4
with
asm
pay-as-you-
burden beyond the nation's capac¬
lies in
a
To go beyond
never
budg¬
goThe great
danger
grave
a
advisable,
is
and
workers
British
of
that
and
industry
where
to pay
cally solved.
in
and
revenue
policy
go
that
in this country;
and
and has
hack with the
come
impression
than
than the increase in wealth and
a
effects.
variable
shrinks
■
to
a
volves
it
able capacity is
matter for
determine.
It in¬
it merely
question of balancing revenues
and expenditures, but it was a
matter which affected the welfare,
,
social
been
stated, the problem is not adapt¬
able to mathematical calculation.
er
as
this needed
already
has
As
revenue.
problem is to discover the means
keeping taxes within bounds.
well
diminishes
that
snare
than procures
rather
running
without
needed
revenue
into
published in England in .1922, the
late Lord Stamp, after outlining
the
statistical
difficulties
and
of
or
productivity team
pres¬
conclusion, it may be stated
though
government
needs
more
gance,
the main
difference between the leadership
clear
budget, he stated, was not merely
perience."
V,
;
The exception noted by Hume is
the utmost importance.
The
as
commonplace logic.
is
Capacity,"
of
terioration
P.
tries
capacity has gone on for
centuries.
In his book,
several
foundation in reason and ex¬
,
search
The
dangerous, as its
more
truth cannot be altogether
In
1951, "Lloyd's Bank Review,"
Chambers, a British econ¬
uary,
inflationary
sures.
present
ernment administration.
tional wealth and national income,
■
prevailing maxim
a
So
problem facing Con¬
gress today is to devise a tax sys¬
tem which will give the additional
This
the pressing
supply and credit, consti¬
powerful
greater
veri¬ eting is of such importance in
experiment or other precise
rules
because of the
incentive,
exposing hypotheses to controlled
"Wealth
taxes..
'
It
But
national advantage.
a
fication."
too much or too many
philosophical stand¬
increased taxation destroys
there are limits to taxable
capacity, and it is exceedingly
dangerous to economic welfare or
stability
for
any
government,
whether national, state or local,
or
than
recently has
if the
plexity of the phenomena ex¬
amined, to the many variables in¬
volved and to the impossibility of
over,
tute
Writing in the Jan¬
generation.
a
more
nations to¬
point,
differences; it is due to the com¬
exceed
effect for
in
taxation
income
graded
been
disassociate
decreasing returns. More¬
to
steeply
from a'broacl
public finance scholars, one
different
consumption side
of the exchange equation. So the
levying of taxes is subject to the
law of
proof of this assertion we
only look at the experience
of Great Britain, where high and
taxes, along with increased
omy,
money
that
For
has
present wartime expanding econ¬
problems of management are
tackled.
It is very difficult to
cause
i.e., the
mand,
to
moves
need
"Almost every
higher taxes is such as
of
in
creates
communism.
or
which has visited the United States
day is the effect of higher taxation
on
individual incentives.
If the
effect
it
easy
facing this
confis¬
is
catory or depressive nature, it de¬
'accepted doctrine.'
"Critics differ in their prefer¬ stroys the very meat it feeds upon.
ple as this. Higher taxes or more
and different kinds of taxes do
not necessarily mean
increased
revenue. Taxes like prices of com¬
modities
transition
in the
national economy and may prove,
conceding that most
controversial. There
little in taxation to hand out as
it."
thing, tax
But the
declining profits lies
socialism
of
menace
democratic
other
and
The
question
of the field is
#
field of
a
collectivism.
of
Incentives
serious
A
replacement of indi¬
enterprise by some form
omist, states:
must begin by
■hi
public finance
as, "When you
see
vidual
its
serious additional burdens on the
among
I?
JI
a
it,"
translated into
the
M
I'lw
"When
see
of Individual
Factor
The
be
conflicting viewpoints
"As to the
Donnebrook
Fair,
human
do,
will
Taxation." Professor Groves writes:
at
you
a
exploited
government;
instruction
not
to create greater incentive to work
and
to
produce, and, therefore,
field of scholarly re¬
results in greater national income,
search is well expressed by Prof.
Harold M. Groves in his recent it, as has been commonly stated by
book entitled, "Trouble Spots in classical economists, results in no
•'
a s e a r c
the
is
ultimate outcome of this situation
S.
com¬
experience, by the
method of "trial and error."
Public finance is not an exact
science.
This aspect of a long-
■
of
capacity
have widely different
degrees of taxable capacity.
least thus
only be tackled, at
in
far
world there is
Its
solution!
taxable
erally
putation involves so many factors
and is subjected to so many un¬
certainties and variables that it
can
Throughout
the
whole
civilized
revenue,
mathematical
systems
quantity. Two nations, hav¬
ing the same wealth, population,
and national income can, and gen¬
road to socialism and communism.
today
slogan
relation to
taxes adopted."
fixed
Says taxes that reduce or elimi¬
is not
"nothing is so sure as death and
taxes," but rather "nothing is so
i,ure as death and higher taxes."
old
The
pointed
As Lord Stamp
extent, modifiable by
mathematical formulae, and
nate
of any proposed
out, "Taxable capacity is, to some
able capacity,
further inflationary pressures.
effect
and
the nature,
advance
in
tax levies.
difficulties in estimating nation s tax¬
Dr. Sakolski discusses
study
kind
SAKOLSKI
is extremely important
that it
to
High Should Taxes Go?
How
\
.
(240)
For reservations
ly graded (such as our present in¬
come tax rate) so as to offer little
or
no
rewards for
success
in
A '
PLaza 3-9100
en¬
terprise, the national economy may
lose far more than it gains. The
N. Y. Cotton
Theodore B. Archibald, Manager
Madison Ave. ol 54th
CHICAGO
DETROIT
PITTSBURGH
St., New York 22
GENEVA,
i
Exchange Bldg.
NEW YORK 4, N. Y.
emwuwewnnwimtwrfinmwwwmni
SWITZERLAND
%
Volume 174
Number 5030
.
.
.
The Commercial and Financial Chronicle
—but
r
Where Do We 60 From Here?
Steel Production
The
Electric Output
State of Trade
Paine, Webber, Jackson and Curtis
Members, New York Stock Exchange
Retail Trade
Commodity Price Index
Food Price Index
Stock market analyst, asserting, on broad view
Auto Production
and
Industry
having
Business Failures
as
whole the pasl week following a seasonal curtailment
a
iii operations in observance of Independence Day. However, over¬
all production advanced moderately above the level for the sim¬
ilar week of last year. Reports on over-all claims for unemploy¬
ment insurance
Last week
indicate
steel
a
decline for the latest recorded week.
operations showed
a
mild upward trend as
Fur¬
did the production of cars and trucks in the United States.
ther, the past week was the 19th in which the country's furnaces
poured more than 2,000,000 tons. In the auto industry, the in¬
crease was due in large measure to the return of a normal work
week following the previous week's fout-day operations.
"Ward's
to be
Twelve
down
General
Motors
hon has ended
like
lamb.
a
the
do
obscure
they
fact that
truck
the
Administration estimates 20,825,000
tons of finish steel will be available in the third quarter. Allot¬
ments
to
claimant
agencies
and
slightly more than 16,000,000 tons,
this trade weekly points out.
Y
divisions total
75% of the estimated supply,
NPA
or
industry
during the remainder of the year will be greater than production.
steel shape requirements for the fourth quarter are
figured at 2,400,000 tons and production will be about 1,300,000
tons, it notes.
controls will provide their first real impact on new
Credit
housing in the next three months, states H. E. Riley, chief of the
division of construction statistics of the Bureau of Labor Statistics,
in
a
of
survey
metropolitan
housebuilding in the New York-New Jersey
new
area.
There'll be
more
high-priced houses around,
fewer for low and middle income families.
houses
New starts by
pared with
he
And there'll be fewer
bought sight-unseen.
large-scale builders in the big eastern market
have dropped off by almost 50%
year ago,
a
during the second quarter,
com¬
Mr. Riley noted, but the biggest factor,
added, was probably shortage of mortgage money rather than
Over 60%
of the houses started during the first half of the
sold under the old easy-credit terms.
Only 15% of the
homes completed in the first six months went for the
payments.
H- ■i.
S. B.
Lurie
higher down
Wp
tne
in
vestor^
of jl«o
w
1949
am
matiiritv
Stock
+10%
Prices—^
Prices
National
+39%
■
...
Income...—...
Credit.—....
Commercial
Loans——
based
cha»,e .inc. Jun. 23,
latent available statistics,
Roirncnooi
p
Fact that we've been
enjoying
unnatural boom points up the
oninion errors 01 mis lumui
opinion errors of this tumul-
tuous period. Certainly, those
y ot
g
the
on
score
which
suffering a
shortage of customers rather than
economy
are
of
burdensome
inventories
lated
incident
nips at
was
but
our
true
such
as
metals
com-
possess
special elements of strength. But,
over all, the present weight of
evidence does not point to another commodity price boom
which will revive inflation fears.
Stockpiling for government puris lessening—while supplies
increasing.
What does all this mean? Three
poses
are
in many
—
part and parcel of this econ-
are
Thus,: tte.^64 omy; (3) It is 1952rather than
Soft g°°4s
question is whether the Adminis- 1951 which carries the big questration is correct in its premise tionmark-^-for by early next year
capital goods backlogs will have
that "the full force of inflationary
pressure
F
!
*7,
,
,
and govern-
been reduced sharply
is still to come.»
u
u
mPnt
i-
mav
Undine
have
be
nassed
made
In our book, today's hesitation jnent spending may nave passea
merely a lull before a de- its peak. In fact, a strong theore-
s.
n
seams
True
the
an-
nual rate of defense spending has
risen about 50% since January
and may rise another 50% by the
our cake and eating it too. If we
year-end. But even then, defense
look back at the summer of 1950 expenditures won't represent
with the benefit of today's knowl- more ton 15% of our gross naedge, these fallacies are exploded: tional product which compares
(l)-That the World War II pattern"'2?
?T ^i°
during World
would be duplicated in degree if W8r II. Moreover, .the military
not extent; (2) That^ we were em- porgram is not being superimbarked on a new inflationary era Posed on top of a civilian boom
of government deficit spending; that is taxing productive capacity
That Korea
snee-
certain
that
likewise
for
the most part were disappointed
On broad view, we've been having
other
„
modities
rrospect
who js not merely a luii oeiore a ae
harsh luge which will strain the nations
^on xne score or iiarsn
goo^™shortages
consumer
.
goods are still things: (1)'In terms of the FRB
bulwarked by Production Index, a well sustained
the prospect of a 30% increase in —and possibly slightly higher—
+17% industry's expenditures for new level of general business activity
+12% plant and equipment. Moreover, for the remainder of the year;
+13% high disposable income and pro- (2) In terms of individual indus+ .°% duction cutbacks should spell an tries, wide divergence from the
„,t
"wolf"
woii
enervating than ex-
,
+26 /o
on
a
+J2% eventual easing of the previously statistical average—for distortions
Inventories
^Estimated
~iT*i""YT 77
r
,+
—.3% materials. Capital
—15% booming and are
Production---.
Consumer
7,~"
^lstion which occurred during the
post-Korean advance. And It's
nf
♦
xr
Commodity
cried
cnea
question about it, inflation
™
®*5S
shown
score
«
mass
No
■
,
becoming
uccuuuug
was
was
1
an
mote.
or
growing
i,?dl^lnt
nr.
v
Industrial
*
can
V
casa
downward
can
pe
business
^citywdl be about 50% great;
Who Killed Cock Robin?
^ new market phase
started
jagj.
—
but
probable
the
pattern has not yet been
ciearjy defined. It remains to be
seen
whether we'll turn into a
price
economic hypochondri-
natjon
Continued
on
page
to
Marketwise, the past year was
highlighted by a curious but un-
Continued
on
page
28
"World's
We maintain markets for dealers in
Largest Manufacturer
of Display
L. A.
Order
We
are
pleased to
announce
that
Darling
well
as
now
associated with
our
$6,000,000.
In
buyers
Defense Orders.
we
Information
Chas, W. Scranton & Co.
.
Members New York Stock Exchange
209 CHURCH
July 16, 1951
'
'
.
STREET, NEW HAVEN 7, CONN.
;
large number of other popular
addition, you may find us helpful in
our
firm.
a
issues.
85% Are
is
as
Backlog
Approximately
Mr. Sidney l. parry
West Point Manufacturing Co.
Equipment"
on
or
locating
sellers for more inactive issues through
100 offices
—
and the thousands of contacts
maintain from coast-to-coast.
Request
Trading Department
Moreland & Co.
,
Members:
Midwest Stock Exchange
Detroit Stock Exchange
1051 Penobscot Builctag
DETROIT 26, MICH.
Bay City
Muskegon
Merrill Lynch, Pierce, Fenner
70 PINE STREET,
a
year—when industry's productive
not an iso¬
a
prelude
flanks.
for
inaae ior a
trend next
But with most of the pre-regulation obstacles out of
The way—and with signs that mortgage money is becoming easier
»
are
juagm
Stock Pnces-^w-j?«®°nd PncesWholesale
.
,i
st,mulus deseems rq-
within
from
seems mor«
attuned
,
Railroad
veloping
sa
Industrial Stock Prices--
(3)
tougher credit curbs.
year were
n
_
j
deferred demand was un-
sun
a
requirements,
Structural
ehanfpQ
always be given to the in-
do
summer
puiuiiici
1950
For many shapes and forms of steel products,
.
wars
suspect. All the box
Rough spots are developing in
the system for channeling steel,
a? guan^ity ot. civilian
a new ,nflaUonary
more
Judged solely by the uneasy
tenor of recent corporate news,
below does prove is that Korea the-business boom is wearing thin'
was the spark which touched off
at the edges. Yet, one fact stands
a nation wide spending spree.
out: A piece-meal readjustment
kas been taking place. It's the
One Year After Korea
consumer goods segments of the
production in the fourth quarter, and no important reduc¬
are planned for that period.
Production
was
year ago, the then up¬
ward trend which had started in
tions in the work force
Defense
ciaent
not reflect the
The company stated that plans are being made on the basis
that there will be no further reduction in allowable car and
a
thatlS
KT citing. Commodity prices, another
ciden^n
lile 7+1,potential "outside" s t im u la ft t,
a well man- f
aged company. The secret that
?
lebruarv True much of
not fought on a defla- fiif
declineseoresent technical
tionary basis is out—but credit In/rpotinn nrfhl lxcessiTC
must
in
realization.
And
plya
nfllhnhiiitv
.fe jual9' j^LrnSfpnf
wit!
1951-52 government deficit will
IE.replace this fiscal year's surplus
nrire
eventual
nortPri
the
a n
Furthermore,
a
osoDhv
anticipa¬
t h
er
avoid mass layoffs.
The
the
tion was great¬
General Motors is scheduling temporary shutdowns for the
third quarter—when commercial production will be reduced by
materials allocations below second quarter totals—in order te
well.
too
present raw material restric¬
tions will permit industry to sup-
peculiar to this decade. Moreover,
the
that
the
worked
even
underlying investment demand A ?'J?
many instances
ancing inventories in the face of critical materials shortages."
.
tell
—
whole
fact
buying policies. As
things now stand, the public's de¬
mand for goods has been well
satisfied—and industry is inven¬
tory conscious; the cry of wolf has
the market demon¬
newly found resiliency
reflected
the
enormous
strated
added which will'
be
revitalize
which
story. If any¬
thing,
they
auto production
weeks starting July 23 because of "the necessity of bal¬
Even
registered, something
has to
partraent store level were accompanied or followed by stock
stampedes.
be
can
new
and
—
not
the
and Ford.
the Controlled Materials Plan
copper and aluminum enters
the third week of its shakedown operation, says "Steel," the
weekly magazine of metalworking, the current week. Steel mills
are being flooded with orders, backed by CMP allocations, from
consumers with whom they have never or rarely done business
before, it adds. Since there's no priority among CMP orders the
'mills must accept these orders cn a first-come, first-served basis.
But the hitch is that many old and valued customers were late
in having their applications processed and when they attempt to
place their orders with their regular suppliers, the mills' books
are filled, states this magazine.
tum
if 1952 is
even
main¬
approximate
means
tenance of the present status quo.
Before a real upward momen¬
significant,
statistics
cannot
Packard Motor Car Co. said it will suspend
as
only
have been
we
derstandable affinity between retail trade trends and speculative
interest. Buying waves at the de-
market
Consequently,
Demand for newr cars promises to exceed supply in the weeks
ahead, the agency said. It said sales equaled or exceeded pro¬
duction for almost every producer in June.
for two
cline in civilian activities. And this
poor year.
of
surprises—
change-of uncertainty-of
confusion, have passed into limbo,
A fiscal year which started like a
Reports" Stated that labor trouble in
plants of Chrysler and Hudson, supplier strikes, vacations and
material shortages combined to hold down output la£t week to
the lowest for any five-day week since Feb. 10, when the switch¬
slowed
months
a
of
Automotive
men's strike
definite floor to both business and
markets,
a
which has
economy
.
piecemeal readjustment has
been taking place, Holds today's hesitation in stock market
cannot merely he construed as a lull before a
deluge which
will strain nation's productive seams as defense
production
will not exceed 15% of total .production.
However, foresees
Some slight easing occurred in total industrial output for the
an
Thus, the first to
quarter increase in gov¬
ernment spending may do little
more than just about offset the de¬
cake and eating it too, contends, judged solely by
our
on
its steam.
fourth
the uneasy tenor of recent corporate
news, the business boom
is wearing thin at the edges and a
J)
nation
lost
ByS. B. LURIE
Carloadings
'
5
(241)
Beanb
NEW. YORK 5, N. Y..
Ollices. in.97. Cities
.
...
...
.
.
......
28
IB
The Commercial and Financial Chronicle
]
(242)
Average
Inflation and the Railroads
35.5
F J
JV
^
(
.
B
a
Group
for
decreased
A
Continued
from
and
1950.
1940,
Nickel
Plate's
$7.38
showed no change and one showed a small decrease.
Transportation ratio shows what part of revenues is used up
of
panies that increased
and 1950 and two other
millions
'
*
ings increase from $2.69 in 1940 to $31.28 in 1950, compared with
rise from $1.75 in 1940 to $2.84
railroads.
of
was
kicked in $129,000,000
out
of
International
<
the ratios of wages to operating revenues
these four companies, changed as follows:
: ;
is
one
same
of the
This
another.
it does
as
WAGES
AS
PER
A
CENT
i *
fore
a
that
me
That
and the Poor Get Poorer."
about
up
well
as
could.,....,
Kansas
subheading on the sheet be¬
reads, "The Rich Get Richer
as
.v..:...
,,,
Consider
some
of the
Atchison, Topeka & Santa Fe
is
|
,
*
Chicago, Burlington & Quincy___„____
Delaware, Lackawanna & Western!
*Erie
3.45
: :
_______
,.
Illinois. Central
____
Kansas City Southern
c!
Southern Pacific
°Pro forma for
1940.
have
taken
'
which
and passenger
10.95 .V
2.47
.■
these
16
:
:
,
not included in the 110% increase.
are
and
•• <
divided
/
1
•
them
'
into
.7-/'^
.
"
.■
' Fuel
,
■
^
'.
•
•
-
companies in Group B increased their average earnings
during this period from $1.43 to $2.13 per common share.
Average Earnings
Share
; ^
118%/-/p'
________
WAGES—STRAIGHT
v'-,V
•"■7:
V
■*'>
",
•)
:>v
;;
•
^
,.
Chicago, Burlington & Quincy
Illinois
1___
City Southern
York, Chicago & St. Louis
York
AVERAGE
.
Central
:
! ;
jnuch
lower
than
average
in
$2.13
common
denominator in either
transportation ratio
35%
or
an
Wage
-Group
a
26%
c&o
With
39
C & NW
38
CB&Q
33
44
DL&W
IC
35
38
E
28
KCS
29
41
LV
40
33
NYC & SL
33
38
NYC
44
37
SAL
34
35
P
42
36
37
R
39
f
5^^res,s
respect to
the 41%
an
increase
33.5%
^r* ^a^n
C:ty, July 10, 1951.
37.3%
before
the
Association
Average
of
44
•
•
1.754
-
;
*
46%
'
Rates
Customers'
Brokers,
'
!>.
V,...
? v
further, I've listed
papers
newsprint tonnage:
Powell
Passenger
Fares
Ontario
and
263,000
46%
in ton-mile revenue, you
For a true picture
One company, yau will
a
jvhat the reasons. There
that has relatively low operating costs or one
on
page
Co
300,000
300,000
Price Brothers
over-all figure.
Continued
River
Lawrence
St.
which railroads are well managed
and which are not. I have spoken about that in other talks and I
am
not going into it here.
But when I say an efficient railroad
one
defi¬
fission,
few} in the order of their annual
Minnesota
have been many disputes as to
mean
are
or
,
41%
have to study the individual company.
here, I
split,
>
nadian
a
.
41.1%
paying
and
Paper
provement in the relationship—-no matter
f
.
If you want to look at the Ca-
better-than-average
management, but merely to a certain; favorable relationship be¬
tween revenues and operating costs; more specifically, to a good
relation of transportation expenses to revenues, or a good im¬
40
tu
j
105%
90
range.
Passenger Mile
.
w
" *
the shares
in- the
nitely
2.560
sarily referring to efficiency produced by
44
37
New York
,
'
about
Sells
future; and
bination
ACL
SP
221
Freight
*
value!
•only $3, carries the hint of a bright
..
.
Only the efficient railroad companies could cope with a com¬
of such inflation increases.
By efficient I'm. not neces¬
1950
40
Average
and Supplies
must remember that this is
32%
36
38
-v
'J
Fuel, Materials
110%
B-
1940
30%
|
35.5%
105
improved
i:
L
.
Rate
will
cut
mon.
100)
side by side, we find the
"
-
talization of only 332,836 of com¬
=
find, had an increase of as much as 50%, while another company
may have had an increase of only 20%.
1950
AT&SF
'
$225
hands paper with a
your
'(Cents)
t
you
A—
1940
f.'
-
INCREASES FROM 1940 TO 1950
Transportation Ratio
j
"
41%
_:
Putting all these increases
following 1940-1950 increases:
transportation ratio.
-—Group
l
v
1.329
Increase
„
transportation ratio. The railroads in Group B either have had a
higher than average transportation ratio, or have experienced an
increase
...
Shares in this,
paying
producers} in. Canada.
It
offset, litho and Kraft
papers,
building board, sulphite
;and ground wood pulp, and has
! launched t a $12,000,000 two-year
expansion program. A cozy capi¬
turns
110%
'
The gain in earnings for the one
group averaged 700%. In
the other group the average gain in
earnings was only 50%.
If you analyze these two
groups you will find that the rail¬
:
;
;
:___• 0.945
1950
1940-50
$1.43
a
*
(Cents)
k-
"
Group A have had
..'.p,
34
paper
'
REVENUE PER UNIT
1940
•.
1940
$15.49
in
.74
$32
alluring baper firm; for the years ahead, is
Howard Smith.' Through its con¬
trol of Donnaconh, it offers 100,000 tons of annual newsprint-—but
it also is one of the largest fine
<
J
(1935-9
bal¬
a
surplus
Perhaps the most
'"-Index
l-i
-
112%
i
:
Reading
1940-50
roads
? "7.
"
ton Mile
Pennsylvania
And what
common.
lot of book
•
New
Pacific
$1.94
Increase
Lehigh Valley
Seaboard Air Line
1940
.
157
Erie
Central
Kansas
Southern
P p',
1950
Line
RATE
HOURLY
b
Chesapeake & Ohio
Chicago & North Western
Delaware, Lack. & Western
New
place in
.209
.
"pp. 105%
confined
net
around
at
.102
206
100%
7
TIME
; •
1940
group
I
earned
—
and
2,566,058
*
and Supplies
103
98
Cents
Per Common
Atchison, Topeka & Santa Fe
Coast
.
"
,
railroad
Atlantic
for*
-Fuel, Materials.
(Other than Fuel)
.
214
1950
Increase
:
.
j Material and Supplies
(Coal and Oil)
"
.1940
eight railroad companies in Group A which had average
earnings per share of $1.94. in 1940, increased their average earn¬
ings to $15.49 per share in the years 1946-1950. The other eight
group a
English.
working capital
$40 million.'.'25% of net goes to
Tetire the $19,550,000 of first mortgage
3 % s — sole ' debt ahead of
7;/;/.77:'!v '*•i '//-■••
v...
(1935-1939 Equals 100)
below—eight with large increases in earnings in Group A
eight with small earnings increases or decreases in Group B.
*
million
r/
INDICES OF RAILROAD MATERIAL PRICES AND WAGES
two
The
I
sheet
ance
Freight rates
fares have risen also-r-41% for the former, 46%
the latter.
9.29
■
railroads
and
history that is!
10% you are
creases
groups
and
French
1.77 :
.■>'
,
fO.37
■
I
"
share earnings. \
An
650,000.
over.
myself to the English version, but
its earnings last year were quite
definitely OO-La-La—largest in
3.49
3.51
tonnage
thing about this one,
is that its annual report is in both
fDeficit.
.
•
v
common
newsprint
interesting
Costs, other than wages, have also increased materially.
30.69
2.59
the
on
parade is Consolidated Paper with
But increased wages haven't been the only inflationary
;
1.07
_
*•
r,
oji
!
line
in
Next
annual
factor.
Fuel," oil
and coal, and other materials and - supplies have all gone up. in
price. From 1940 to 1950 the cost of fuel increased;118%y and the
cost of materials and supplies other than fuel "increased 100%.
Fuel, materials and supplies increased .105%.We must consider
too that in the past few months, there have been other wage in-'*
4.29
;,*Seaboard Air Line,_l
r
;
■'
that when you change wage ratio
see
really changing
12.31
1.75
____
can
______________
taxes..
acquisition
1950
should create.
11.93
k 4.08
,
the
j
0.83
York, Chicago & St. Louis
Pennsylvania
Reading
Federal income
You
.v1:
15.41
Central
* Be fore
>
2.81
;
1.53
New
A'
15.00
f0.25
-
& Ohio
Chesapeake
,
i.85r;
1.32
Lehigh Valley
New York
!
0.13
__
earnings
British Columbia Pulp and Paper
11.78
—
City Southern-_J_____-'_'———--
1.73
>012
.
on
$21.53
New York Central__L-__-_-__--__-_---_--_--_-_-
with $1 dividend prob¬
1951, give you a nice basis
which to ride to the higher
able in
■**
' •"
;
Atchison, Topeka & Santa Fe_______
'
'
'
Com¬
about $18,
tremendous amount when it comes to common stock earnings.
a
Kansas
9.64
4.31
f 1.94
2,57
substantial earnings increases, Santa
For example:
$20.66
,
48
•
'" ' 41V2
•
ratio in 1940, but
almost ten points apart irf 1,950. Ten points in the wage ratio
were
1946-1950 Aver.
2.21
Chesapeake & Ohio_,-_
♦Chicago & North Western
l
;
*'1
10% OF 1950 OPERATING REVENUES PER COMMON SHARE*
$2.69
Atlantic Coast Line,
r
•
686,225 tons in * 1950.
went places last year, rack¬
ing up its biggest net itt history,
$12,623,833 and this April, split its
common
3- for
1.
New shares,
The two groups had the same average wage
Earned Per Common Share
1940
48
v ! '"
with
City Southern, improved their wage ratios three
Kansas
Can¬
and* Paper
Power
Abitibi
pany
ings, New York Central and Chesapeake & Ohio, had an average
rise in their wage ratio of six and a half points.
following variations:
v.....
381/2
43
53
points. The other two companies/wttfr little or no increase in earn¬
earnings trends of the railroad companies in the United
States.
ada's
41V2
'
V
;'t\ * ]
■
The two companies with
Fe and
before have there been such wide differences in the
;never
'
'-Average
■'"
study the earnings of the rail¬
roads for the last five years, the postwar
years, you will see some tremendous dif¬
ferences in the earnings changes of the
various railroads. It is probably true that
Hahn
F.
35
'
35
,
.
the next largest producer is
Average
•
it
sums
Lm
42%
38
•
'
*
short phrase
any
i,
,
annual total of newsprint,
world
45%
——
'
If you
Walter
City
In rolling out the. 10,000,000-ton
1950
1940
phases of inflation that I
want to talk about this afternoon.
I have
REVENUES
OPERATING
OF
now
status, and
$3 yields, a
'
) /
,
the
road
has
common
investment
at around 49 paying
satisfying 6%.
;
acquired
In the last ten years
rail¬
one
this completely
acres,
774,484 tons, and
of net sales
roughtly $500,000,000 totaL
produced)
a per common
1950, as against the
decrease from $4.31 in
Chesapeake and Ohio which experienced a
1940 to $4.25 per common share in 1950.
of
pulp and paper last year.
Newsprint
alone (all Canadian
share increase from $1.53 in 1940 to.$16.53 in
companies including the
But it doesn't affect
City Southern with
largest
sorted
•New York Central with earnings
Let's also examine Kansas
,
integrated giant chewed the wood
into some 31/2 million tons of as!>
First, let's look at Atchison. Topeka and Santa Fe with earn¬
subject of inflation has been before Wall Street
for some years. It has been before the public at large in
increasing measure in the last couple of years. It affects
/
American-
standard,
paperrmaking outfit of the world.
From timber tracts sprawling over
companies that had little or no success in
<
in 1950.
any
owned Iniernational is the
T
this respect.
share on its 8,900,000 shares
a
common
By
Almost all of the ex¬
consists of wages and,fuel., Lei's examine two of the com¬
their earnings substantially between 1940
pense
The
and all
„
Paper, which racked up a goldgn
$66,647,000 net; earning |igure-4*
increase in transportation ratio,
an
in 1950.
us
3
page
Paper Profits—
By the Roll
ratio, the second lowest in the
was
in the movement of freight and passengers.
particular railroad the operating costs of which
have been carefully surveyed.
4
all of
from
of the eight railroads
Six
1950.
and
companies, six experienced
one
♦
securities of
1940
unchanged in 1950.
The story is quite different for the railroads in Group B—
those that didn't have much of an increase in earnings in th6 19401950 period.
Here we find"1.the average transpor.ation ratio in¬
creasing from 37.3% in 1940 to 41.1% in 1950'. Of the eight Group-
securities, but in
should be made not in railroad
vestments
1940
group in
Members, New York Stock Exchange
'
between
transportation ratios. The one that showed a slight
increase, Kansas City Southern, was the lowest of Group A bo.h
in
Security analyst, in discussing effects of inflation on the rail¬
roads, points out each railroad is affected differently, some
increasing their net earnings while others undergoing decreases,
depending on ratio of transportation costs to total operating
expenses.
Says if we have more inflation, the rails that will
do best are those that have relatively low costs, particularly
a
low wage ratio. Warns, in;analyzing position of railroad
securities, each company must be separately studied, and in¬
4
ratio
transportation
33.5%
Thursday, July 19, 1951
.
decreased their
By WALTER HAHN*
Smith, Barney & Co.
jf
to
.
.
26
455,000
"While today's pitch was
to
you'll observe
newsprint,
all
the
the
that
companies
stuff,
spill
lines—Kraft
slanted
over
that
produce,
into
other
ground wood
paper,
pulp, sulphite pulp, etc., and even
the leaders in grinding out news-:
boy
fodder,
their
are
doing
expanding in
fields.
Which
just
means
tinues
tight supply
for
long
that
a
even
low in
a
whiie,
$116
a
most' of
other related,
a
con¬
of newsprint
and
ton
suggests
may
seem
couple of years—as time
and paper
rolls
on.
Volume 174
Number 5030
.
The Commercial and
Financial Chronicle
.
.
%
(243)
The Role of
Mtmetaiy
By DR. J. FRED WESTON*
real estate credit is
of
L/e
to
Inflation results when the effective means of
payment exceed the
supply of services and goods of¬
fered for sale at a
pre-existing
level of prices.
Thus there are
requirements
reserve
alone
control
Monetary
petitive
of
side
control-
is
fiscal
monetary
a
and
represented
competitive
by the volume
since
com¬
ana
and
effective
sense
fiscal
with
policy
direct
direct
if
effective
controls
On
purchasing
side
fiscal
the
controls
by the supply
upon
of goods. Mon¬
less
are
monetary
achieved.
are
other hand the
direct
represented
are
controls,
controls
necessary
and
supply
of
success
crucial
of
the
greatly
control
policy
decreased.
or
Al-
mnnptnrxr
because
the
be
of
of
means
level.
increases
that
able income of the
;
on
income
on
through tax
or
population
of
.
can
decreased quickly.
through. the
cessation
initiation
spending
or
programs
...
,
...
cthe
income stream is directly influenced, although this device
cannot be used with as
bility
the
as
revenue
great flexiinstrument,
Monetary policy is in
some ways
preferable to fiscal policy in that
monetary policy is more indirect
and general in its operation. For
these
reasons,
traditionally the
monetary
authorities
,
have
been
entrusted
with greater grants of
than fiscal authorities. With
-
power
greater
in
power,
policies
can
Bank
^.Ult5
P°w^r J*> change reserve require-
mentS. 1x16 legal power tO raise reulcliL5- a"c iegai power ito raise re-
s^lve requirements has been virtu-
should
decreases the spend¬
or
of
greater flexibility
be achieved by the
monetary authorities. Thus monetary policy may be more effective*
at turning points than
changes in
been available to the Reserve
not
authorities.
Second,
operations:
From
market
open
1941
through
March, 1951, the price of
ment
securities
was
govern¬
effectively
supported by the Federal Reserve
System. The consequence of this
to
was
handicap the Reserve-authorities in utilizing one of their
most
effective
trolling the
devices
ment
bond
to fall,
Federal
sell
System.
their
higher
are
at
banks
from
the
of
heavy borrowers.
As
the Federal Reserve Sys¬
supported
the
government
are
tem
market, banks could readily
convert
government
into cash.
of
securities
Hence, the third
power
the
was
Federal -Reserve" System
ineffective as long as it
sup-
ported the government bond
ket.
mar-
ket,, the Federal Reserve
*r,
credit controls
•
supply
sessed
Author¬
direct credit controls
adjunct
credit
" the
quantity
which
banks
Hence,
of
ban!k
make
can
effective
con-
trol of member bank reserves
effective
control
of
sig-
mem-
deposits and hence the
supply. With their reserve
money
is
over
not
Data
power.
on
are
useful
a
,
credit
strate
effectiveness
the
controls in this
amply
area.
demon-
Statistics
tnrnpH
turned
the, meaning
withdrawal
support
of
and
of
several
,
is
°f
tion of the Reserve authorities
Reserve
'
V
ic
bond
,
Congress
to
determining
~
limit
the
discre-
policy which
in
the
provisions of
"
and perhaps even
'
Regulation W
Regulation X. Such action
is
re-
grettable and unsound. Either the
pegged market does not .assure Reserve authorities should have
complete and effective control by the power or not have the power,
the
departure
Federal
a
would
Reserve 'Authorities
increase member bank
,
a
member
bank
reserves,
gold inflow, for example,
.over,
First,
from
,
re-
Second, if member banks
•
RQuidated one category of loans
"and increased others, the money
supply might be increased by
-™1"
J u
immoderate
able
tent
that
„
in
amount
directions.
undesir-
Third, to the
production
our
of
our
results
operations
Without
use.
of
source
an
to
offset;-
in the.output of cl-
V
g0°
sacrl£lces must be
•
If an attempt is made to
the
consume
goods when
Quantity
same
smaller
a
of
quantity is
actually available, the results can
only be a rise in price level-iriRation.
This is
method of dis-
a
tributing burdens, but it is
pniiitahle
equitable
It
is
not
an
one
one.
very
clear, therefore, that
powers of the Reserve authorities
over
regulation of consumer credit
and real estate credit are unsound
and will
If they have the power
instrument of government
sible for controlling
the
as
respon-
the
money
supply, they should have the necessary
discretion in using that
1
r
_____
for
Lending
Voluntary Credit1 Control
gram—In recognition
Pro-
of the
still
incomplete control by Reserve au-i
over the money supply,
lending institutions have agreed
to voluntarily restrain credit.
I
must confess that my initial reacthorities
tion to the voluntary
credit
con¬
trol program was one of extreme
skepticism. It
ja voluntary
feeling that
was my
would
program
nec¬
essarily break down, because when
loan°this^end^r^
lencler tor a loan' tms lencler 13
likely to make the loan for fear
that if he does not, his competitor
\
may.
However, there is considerable
evidence accumulating that the
-
current
voluntary credit restraint
is being effectively im¬
plemented. Voluntary credit re¬
program
straint
committees
Whenever any restraints
widely
imposed it is certain that some
groups will k" aggrieved. In fact,
ni be
T~
__
Bank
'.
■.'
Devices
Controlling
power.
_
con¬
supply and infla¬
Alternative
t
have
been
Loan
appli-
established.
are
'
handicap efforts to
trol the money
tion.
Continued
on
page
9 '
_
ex¬
positions
reserve
an
of
_J
only in the
months, since existing commitments and others in
contemplation of Regulation X
next
of
This
importance
government
_
the
TVno
Federal
the
market^
But
rlrwxxn
dowm
real
diversion
goods and diversion of the
on
home building will reflect the effects of Regulation X
„
are
is
direct
of
rationing
]oans
loans
sacrifice
changes in the level of
consumer
of
member
banks are
not
already
tight dt the time the Federal Re¬
serve
System - removed
support
from
* FLASH
ANNOUNCEMENT!!«
the''government bond mar¬
ket^ the ability to control member
INVESTMENT HISTORY MAY BE MADE IN THE NEXT FOUR WEEKS
bank lending- is still
inadequate.
Fourth, while the pegged govern- :
ATTACH $1. TO THIS COUPON AND MAIL
action
of
the
Federal
Re-
ment
bond
market
has
been
de¬
For a whole month you
parted from, the Reserve author¬
serve Authorities in March,
1951,
ities have made it clear that
they be initio to withdraw support from the
.will continue to preserve an or¬
ated only after some
delay/
government'bond market is therederly bond market.
,*
These
This means—
abstract
statements
on
fore of great significance.
It is a
that there is still a partial com¬
the importance of
monetary pol- step
toward
restoring effective
mitment to maintain stable prices
icy are illuminated by data on re- control over the money
supply to in
the government bond market.
cent
movements
in
the
money the Federal Reserve System,
In the process of
doing this, there
supply.
From the end of June,
The meaning of
fiscal
the
pos¬
have stimulated
activity through
credit to pros- eariv 1951
pective
borrowers.
.pective ..borrowers.
AppL'(canxts
AppLicanfs
" '
It appears to be the disposition
wiR fjpd that their requests for
begin
a
the
is
by the Reserve authorities,
ities
of the member banks de¬
by necessity
period such as
thaf general fluantitaUve effort toTestTkt thrdT'sTretionaiy"
tent that effective control
total money -
over
termines
kind
The
military
Sacri¬
grievous error.
present.
and can be used with greater
pre-
mar¬
are
given increased control
the supply of reserves of the
member banks.
The
supply of
a
some
the
they act with greater rapidity
arP
is
of
-
•
The
Tu0Il +wr
that
support
bond
government
ienced
that
The second justifica-
A*
modify the controls simply be—
cause some groups feel inconveh-
/ represent made.
quantities
will be sold.
institutions
withdrawal
thevrenrwent
f Y
miljmark<etplace deThey do not directly set
norration
losses.
bonds
reasons,
intrusfonflnm
permitted
on
al¬
are
sound
♦«'
th*
3f
restraints do not
anyone are complaints reCf? n. beard,
^iS^Mettiese U"r
viL+mm
Tess^agCT To'shift "from"govby
three
are
credit
^nmen1t holdings to private loans.
Hence
con-
Third
as
bond
There
gover
govern-
capital
vields
tending
s0
indirect controls
preferred to direct controls.
ways
less willing to
are
bonds
Furthermore
If
on
Hence, in
general,
Y
must be made in
and general and not
intrude
market place decisions.
Reserve
when
u-
fices
^'^Tat^
supporting
controls
market, controlsare direct
prices
among
economists mat if eontrok
economists that it controls
bond
are
banks
serves.
for
supnlv
monev
changes in rediscount rates1 This
power
is
effective
only 'when
long
There is widp a*rppnW
the
ber bank
\
Central
of
Reserve
nifies
any exftaustea tor several years so
policy thaMhe use °f this technique has
it
fiscal
example,
be increased
Also,
influence
directly
more
For
its
payment,
recognized
operates
System
YSS+iv^ tl
briefly reviewed. One, is the
be
may
though monetary nnlicv i<a imporpolicy is imnnrtant
traditional
significance
™emb
monetary
payment
either increased
thniiffh
Reserve
Market
The
of
...cans
means
fiscal
Government Bond
J. Fred Weston
Dr.
of
be¬
t..rough
cause
monetary and
Federal
and the
in
inflation
the
The
thnt
that
government
available.
im¬
portance
sound
true
reserves
depends
policies.
etary policy is
*
not
policy
policy
power and the
of
policy
controls, but rather
In
funds
ftinds
of
the quanixdii
will ho
be-boron
unable readily
to convert government
bonds into
cash- or reserves with the Fed-
liyethea^d„twefvnri
the
demand
the
inflation.
libcai
other indirect
influence
member banks
banks.
monetary
policy
with
wnu
pcciuvc
dom-
may
support
from
the
government
bond market is more subtle
than
the interest rate
influence. Without the
necessity for
eral
impression
two aspects to
inflation:
for
that
can
simply indicates
relatively weak effect
an
of
of
It
variables
withdrawal
desirable, and voluntary credit restraint
impose special
as
%' The
much
Reserve
other
powered to control credit in connection
with
real
estate
loans
under Regulation X
rowed
is highly commendable and. promises to be
produc-<
good. Advocates standby powers of Federal
program
that
inate the
titv
tity
Finance,
V/est Coast economist describes
workings of our current systern of monetary controls and alternatives proposed for com- "
bating inflation. Says continuation of checks on consumer and
.
undenthe Defense Production
Act,onTv
the Reserve authorities
were em-
borrowing money does not
the
quantity of it that
will be hired.
cost
University of California, Los Angeles
?
not to say that the
is
influence
Policy in Inflation Control
Associate Professor of
This
rowing
cost of
will receive:
may
STANDARD & POOR'S
Buy, Hojd and Switch Recommendations
1950.
to
loans
loosening^ the
and
the end
of
March,
1951,r pegs
corporate and munici¬
pal securities held by all banks
increased
by over
$12
billion.
During this same period of time
has
on government bond pr-ices
been widely misunderstood.
The immediate
and
direct
result,
course, has been higher inter¬
of
est
rates.
Some
have
deduced
the demand
deposits of businesses
and
individuals
increased
over
from this that the purpose of such
withdrawal was to raise interest
approximately $7 billion.
rates.
Although
and
half
a
next
for
few
tinue
of
observe
various
problem
tion,
the
on
not
we
horizon
con¬
is
infla¬
There
is
competent
among
that the
economists
may
softening
in
lines, the real
deflation.
agreement
for the
This
While
month
last
probably
months
to
prices
and
the
.
is
rise
a
billion, and that the inflationary
popular
in
billion,
furtner
paper will
lights of
in the absence
increases.
This
therefore sketch high-
tax
important
monetary field
icant for
program
tion.
♦An
It
sored
which
are
in
the
signif-
contributing to a broad
for the control of infla¬
is
business firm
The
-
(2)
on-
by
Dr.
Weston
Inflation
before
Control,
a
spon¬
by
the California Farm ^Bureau
Federation, The California State Chamber
of
Commerce, and
the
Los
Angeles
-Chamber of Commerce, Los
Angeles, Cal.,
June 13, 1951.
rates
-
are
relatively small.
fluctuations
costs
that
fluctuations
changes-in
Prospective
sales
and
in
are
For example,
rates swamp
wage
interests
large
the
*
costs.,
(3)
increases
prospective
in
high
profits that high sales presage are
likely to dominate shifts in interest
costs.
is
not
in
changes
the level of interest rates that
must
look for the reasons
withdrawal
in
one
why
of
support from the
government bond market is likely
to
be
an
effective
banks
by such
action.
will
reserves
be
of
device
on
increased
Fifth, additional
be required to offset
velocity increases. For these rea¬
power
removal of support
sons
• •
ber bank
supply.
other
the
reserves
We
areas
policy and advice
over
•
mem¬
thev money
therefore look
for
for
re¬
straining increases in business bor-
j
on
recommended cash
reserve.
n
.
I
•/•
authorities
and
must
Without additional cost you will also get data on share earnings,
indicated dividends, current percent yield, Standard & Poor's market
from the
government bond market does not
provide the Reserve
with complete control
to
§ Closely Watched Stocks
may
that
assurance
responsibility of the
•
Included in the closely watched stocks, you will find Low-Priced
high percentage gain issues recommended for advance; 17 for
appre¬
ciation combined with worthwhile income and 20 for good income
•'
Federal
return.
Reserve System for controlling the
Most of which have long, unbroken dividend records.
(Offer open to
money supply is accompanied by
requisite powers.
new
readers of this Survey only)
,
ACT
Direct
We
have
controls
serve*
Monetary
had
since
m
System
direct
the
given*
*1
Re¬
,
power
under Regulations T and U to pre-
cCribe
margin
connection
joans
on
Reserve
requirements
with
nurrhases
securities
In
of
1941
in
or
were
given
regulate consumer credit
Regulation W. This authority lapsed at the end of the war,
was
reimposed briefly and
again lapsed.
On Sept. 18,
then
1950,
under
the
Defense
Production
Act of 1950, this power was once
again restored to the Reserve
Finally,
on
TODAY
Recommendations
month
market
on
56
Buy, Hold and Switch
Closely Watched Stocks for the next
together with earnings, yield, dividend data, and
policy.
your
I
,
1
Name
the
authorities
p0wer to
thorities.
COU PON
I enclose $1. Send me Standard & Poor's
monetary
1934 when
was
NOW- MAI L
Controls
under
.
Hence, it
member
take
likely to
be1 of, much greater magnitude
than the fluctuations in the level
important to avoid the
address
Conference
areas
interest
deter increased borrowing by
firms, it is likely not to
have a strong impact for several
reasons.
(1) Interest costs as a
proportion
of
total
costs
of
a
business
g2P !0r.,?SC/lyear 1?5,2 will run of interest costs.
about $15
of
fallacy.
may
inflationary place in other
gap for calendar 1951 is about $10
a
be periods when
may
au¬
Oct. 12, 1950
Address.
i
.Zone.
City
1
_Date_
State
POOR'S
INVESTMENT ADVISORY
Published by Standard
SURVEY
& Poor's Corporation (Established 1860)
The Largest Statistical and Investment Advisory Organization
345 Hudson Street, New York 14,
N. Y.
in the World
A788-127
I
I
8
scribed
therein)
been
have
follows:
Public
March
1.60
1949—..
Mountain
Green
for
was
Cor¬
Power
a
years
many
subsidiary of New England Elec¬
tric
which
System,
was
result
the
all
held
stock. The
common
company
ovter-capitalized, /and as a
of' continued
defaults
in
of
80%
dividends
preferred
of
payment
about
voting control
the
passed to preferred stockholders
Sept 1, 1948. A plan of recapitali¬
zation was approved by the SEC
in
whereby
1951,
May
old
the
stock would be cancelled
common
and the preferred
stock would be
exchanged for new common on a
3-for-l exchange basis, with an
additional offering of 104,094
textile
cotton
1.03*
1.56
the
•Low
of National
Life Insur¬
Company as well as other
casualty insurance comoanies. The territory has become
ance
and
fire
earnings
were
occasioned largely
increasingly popular as a resort
area,
both summer and winter,
and
in recent years its recrea¬
tional facilities have
been ex¬
dividends has been
At the recent price
future
to
as
established."
14 the yield on a
around
rate
dend
price-earnings
the
and
ratio
is
8.3.
about
presented before the
Estimates
connection with the plan
in
SEC
$1 divi¬
7.1%;
about
be
would
indicate that projected earnings
tensively developed.
plan was
The company in 1950 generated may gradually rise to over $2 per
approved by the District Court only a little over half of its power share by 1953, after adjustment
on June 4, 1951 and is now being
requirements,
the
rest
being for a tax rate of 52%. Assuming
consummated. The 104,094 shares
bought from other utilities (prin¬ that a dividend pay-out of 70%
shares of
The
common.
stock were offered to
cipally the former parent, New would be reasonable this estimate
stockholders on a sub¬ England .Electric System). It is
would indicate the possibility of a
scription basis, the offering being estimated that the cost of power
underwritten by a group headed for 1951
1953 or
(under a new contract $1.40 dividend rate in
by Kidder, Peabody & Company. with New England Electric Power later. Before the recent reorgani¬
The price to the public was $13.
Co.) will be approximately $90,000
zation, a neighboring utility, Cen¬
The
stock was recently quoted
greater than under the old con¬
tral Vermont Public Service Com¬
over-counter at about 133/4-14.
tract; but upon completion of a
The
company's revenues are rew 66,000 KV transmission line, pany, had opened negotiations for
about 90% electric and 10% gas. this increase in power cost should a merger of the two companies. It
be partially offset by reduction in
Of the electric revenues some 43%
is said that such a merger would
are
residential
and
rural, 25% line losses, and by decreased oper¬
effect substantial operating econo¬
commercial, 23% industrial and ation of steam plants. ■
9% wholesale and miscellaneous.
The company's own plants are mies, and hence it seems reason¬
System properties consist of a hydro (total capability about 23,- able to expect that negotiations
"main system" which contributes 000
kw) but it also has a few might be reopened in future to
of
will be pleased
the following literatures
send interested parties
manufacturing
paper
home
the firms mentioned
It is understood that
to
making mills, food
by sub-normal water for hydro plants.
processing plants, metal and ma¬
A dividend On the new common
chine shops, wood products and
working, and the mining and proc¬ stock has been declared payable
essing of talc and lime are also Oct. 1 to stockholders of record
Presumably this indi¬
important. Montpelier, the capital Aug. 31.
of Vermont, houses the activities cates a $1 annual rate although
the prospectus stated, "no policy
of the State government and is
plants,
Thursday, July 19, 1951
Recommendations and Liteiatnre
1.19*
1946—
poration
1.38*
1947—
Corporation
•
$1.70
1951
Calendar year 1950....
31,
1948—..
Green Mountain Power
.
Dealer-Broker Investment
12 months ended
Utility Securities
.
as
v.
By OWEN ELY
old
Chronicle
The Commercial and Financial
(244)
Recommendations on 56 stocks plus data
indicated dividends, current percent yield,
etc.—$1.00—Standard & Poor's Corporation, 345 Hudson
Street, New York 14, N. Y., Dept. A788-127.
share earnings,
on
contains large, clear reproduc¬
Graphic Stocks—January issue
records for the
lows, earning*,
capitalizations, volume on virtually every active stock on the
New York Stock and Curb Exchanges—single copy $10.00;
yearly (6 revised issues) $50.00—special offer of three edi¬
tions of Graphic Stocks, 1924 through 1935; 1936 through 1947
and up-to-date current edition, all for $25.00
F. W. Stephen*,
15 William Street, New York 5, N. Y.
Handbook on Over-the-Counter Trading—Booklet dealing with
the ethics, customs and language of trading in over-the-coun¬
ter
securities—National Association of Sepunties Dealers,
Inc., 1625 K Street, N. W., Washington, D. C.
"Information Please!"—Brochure explaining about put-and-call
options—Thomas, Haab & Botts, 50 Broadway, New York 4,
charts complete with dividend
1950, showing monthly highs,
tions of 1,001
full
of
year
New York.
common
preferred
Switch
Buy Hold &
\
Authority Bonds—Analysis—The
Corporation, 100 Broadway, New York 5, N. Y.
is
a
comparison of New York City Bank
Housing
New
June 30,
1951.
1951—New
of
Earnings—Preliminary figures for first half
Bank
York
New
First Boston
Also available
Stocks as of
Corporation, 120 Broadway,
York Hanseatic
.
82%
about
and
isolated
several
tems."
electric
of
revenues,
"minor
sys¬
The company serves about
31,000 electric and 9,200 gas cus¬
tomers, the total population in its
being
area
142,000.
larger
cities
pelier,
Burlington,
ooski,
the
Among
served
Mont-
are
Win-
Barre,
Vergennes,
River
White
Junction and Bellows Falls.
The
territory served
is largely
farm land and rural country,
dairying
There
and
are
raising.
poultry
numerous
with
mill
towns,
and other small communities
serve
steam
with effect it.
about 11,000 kw capability. With
the exception of 2,000 kw these
latter plants appear to be obsolete.
A new 45,000 kw hydro plant is
scheduled for completion by the
end of 1952, and two other hydro
shopping centers. Granite
rying and stone finishing
quar¬
the
are
chief industries while woolen and
sites
may
be
developed
stock
on
this basis is estimated at
on
$17.58.
an
Property accounts are now
orignal cost basis. It is esti¬
1952
that
be
can
sale
of
expansion
carried
out
without
any
Green Mountain Power
the
■Common,
supply
prospectus
of
stock,
analysis
upon
sale
pro
(after
and
of
in
connection
additional
forma
certain
re¬
with
Falk, Harold M. Smith,
F.
Kuncl, and Melvin
to
4, New York.
G. A.
Puts
&
Common
Calls—Booklet—Filer, Schmidt & Co., 30 Pine Street,
Y.
New York 5, N.
Railroad
and
Ratings and Reports—covering 177 stocks in 14 industries
a special situations recommendation, supervised ac¬
count report, two fortnightly letters and four weekly supplements plus the 52-page rail stock issue—$5.00—Department
of
120
Broadway,
New York
Stewart
has
.
111.
—
Whitney
become
M.
associated
Steel
Salle
Street,
Stocks—Analysis with particular reference to Bethlehem
Steel, Jones & Laughlin Steel, Republic Steel, and U. S.
with Cruttenden & Co., 209 South
Corp.
members of the
York
New York and Midwest Stock Ex¬
New
earnings changes. Mr. Stewart was former¬
adjustments
de¬ ly with Rodger, Kipp & Co.
Corp.—Analysis—Raymond &
Aerovox
*
Steel
.
New
.
&
an
active market in
5
Capital
1-583
,
Inc.—Reappraisal, Inc.—Sutro Bros.
Co., 120 Broadway, New York 5, N. Y. Also available is a
California.
•
;
& Co., 60 Beaver
American
N. Y.
&
Your
inquiries respectfully invited
Natural
Gas
Corp.—Memorandum—H, Hentz
Also in the
Co.—Brief
&
same
Co.,
F.
P.
FOX
Power
Telephone REctor
Corp.
2-7760
Teletypes NY 1-944
& NY 1-945
data
in
current
issue
of
York
5,
New
Broadway,
120
Rubber, National Lead Co.» Niagara Mohawk Power, Syl-
Bros. Pictures.
Brad Foote
Gear Works,
Inc.—Bulletin—O. M. Motter & As-
on
British
Columbia
Power
Corporation,
Ltd.—Analysis—James
Continued
Green Mountain Power Corporation
Request
BOUGHT
—
SOLD
—
on
page
Active Market
stock
20%
Stockholders
Prospectus available
on
Milk
Open End Phone
Teletype BS
to New
G. A. Sax ton
142
Teletype
York
CAnal 6-1613
declared
record
of
August
to
15
Troster, Singer & Co.
Street, Boston 9
Tel. HUbbard 2-5500
dividend
request
1. B. Maguire & Co., Inc.
31
OIL
ARGO
QUOTED
70
PINE
Private
ST.,
Wires
N. Y.
to
5
NY
&
Co., Inc.
1-609
Members:
74
Philadelphia. San Francisco & Los Angeles
N.
Y.
Security
Dealers
Association
Trinity Place, New York 6, N.
Telephone:
WHitehall 4-4970
..
sociates, 500 Fifth Avenue, New York 18, N. Y.
New Common
Prospectus
'
Street, New York 5, N. Y.
Common
Bought—Sold—Quoted
,
circular are data on Firestone Tire
vania Electric, and Warner
120 BROADWAY, NEW YORK 5, N. Y.
,
Street, New York 5, N.Y.
Audio Devices, Inc.—Analysis—Peter Morgan & Co., 31 Nassau
Green Mountain
/,
review of Union Oil Company of
"Survey"—Abraham
Stock
Co., 148 State Street,
Boston 9, Massachusetts.
American-La France-Foamite
York
Street,
Broad
15
Co.,
&
Dillon
Eastman,
5, N.Y.
—
share
green mountain power
Teletype NY
:
/'
Survey, 5 East 44th Street, 'I.
Value Line Investment
17, N. Y.
CF3,
(Special to The Financial Chronicle)
Corporation
BArclay 7-5660
*
and also
With Cruttenden & Go.
'We specialize and maintain
1920
analysis on The
covering 35 rail and rail
52-page
Stocks—New
Tobacco
Value of Line Investment Survey,
Affiliated Gas Equipment,
Established
;
•
Stocks — Comparison and analysis —
Saxton & Co., Inc., 70 Pine Street, New York 5, N. Y.
Utility
equipment stocks and 10 tobacco stocks—special introductory
offer to new subscribers only includes four weekly editions
request
New York Hanseatic
up-to-date com¬
an
yield and market performance over an 11-year periodBureau, Inc., 46 Front Street, New York
Public
Whitney M. Stewart
La
common
showing
National Quotation
Mcintosh.
CHICAGO,
According to the prospectus
Limited
changed to Buffet-Falk & Com¬
pany.
Principals of the firm are
ratio.
issued
as
Buffet-Falk Go.
Stanley
of Nas¬
New York 15, N. Y.
parison between the 30 listed industrial stocks used in th*
Dow-Jones Averages and the 35 over-the-counter industrial
stocks used in the National Quotation Bureau Averages, both
National Bank Building, has been
IN
cently
E. Pogue—The Chase National
City of New York, Pine Street, corner
Over-the-Counter Index—Booklet
A.
N. Y.
City Bank
Bank of The
sau,
OMAHA, Neb.—The firm name
Buffett
&
Company, Omaha
Carl
Stocks—Special Report—Laird, Bissell
Bank
Oil in Brazil—Study by Joseph
through
additional securities,
operation of bond sinking
and
of
City
Stocks—Comparison and analysis of 17
New York City Bank Stocks—Laird, Bissell & Meeds, 120
Broadway, New York 5, N. Y.
New York
later.
Giving effect to the recent fi¬
nancing, pro forma capitalization
would be approximately 68% debt
and
32% common stock equity.
Book value per share of common
York
5, N. Y.
Meeds, 120 Broadway, New York 5,
&
plants
funds, together with retained in¬
come, should increase the equity
TRADING MARKETS
New
Firm Name Now Is
mated
as
Diesel
and
New York
HA
2-2400.
Teletype NY
Private
wires
1-376;
Y.
377;
378
to
Cleveland -Denver-Detroit-Los Angeles-Philadelphia-Pittsburgh-St.
Louis
34
Volume 174
Number 5030
Continued
.
.
.
The Commercial and Financial Chronicle
specified by the Reserve authori¬
ties. This power may be held by
them on a stand-by basis. Even if
from page 7
(245)
before
years
World
War
the
-
II,
outbreak
reserve
of
must
have
the
requisite
powers.
policy in this
greater burden is thrown
ments were much below their le¬
area,
a
necessity for using it,
gal maxima. Also after World War
upon
the use of fiscal devices and
it will stimulate the effectiveness
II, the Reserve authorities volun¬
-there is
no
of
voluntary credit restraint ac¬
tivity.
The Reserve authorities
m
have demonstrated
that
they
tarily
when general economic
conditions made this feasible.
can
have
formally re¬
voluntary credit
restraint committees.
determinations
tions
tion
for
Thus
and
controls
chasing
proliferation
and
erosion
power
of
of
with
vier
direct
the
ORLEANS, La.—John M.
Bobb and Thomas M. Edwards
an exten¬
Beer
&
action of the
Street, members of the New
of money.
changes.
joint
the
-wjjKSW'x-v V m
m
MM
-mmm^pLBAsuRE
-
pm ■
"
lending
district with the
a
committee has been
investment
The
bank¬
ing phase of the voluntary credit
restraint program has also been
successful.
'«- Increased
Stand-by
Powers for
the Federal
Reserve
System—To
the
that
extent
controls
credit
direct
and
voluntary credit re¬
straints need to be supplemented
.by further Federal Reserve action,
additional
alternatives
*
been
have
^proposed.
One often mentioned
lis, to give Federal Reserve Authorities power .to raise reserve
requirements further. While this
proposal;, has
some, merit,
one
weakness
*
*
•
that
is
reserve changes
apply to broad classes of banks on
national basis with little recog¬
a
nition
of
stances.-
differences
in
circum¬
Thus, it would be inequi¬
table and
unnecessary to require
some banks to place an increased
portion of their resources in non-
earning assets because other banks
expanding loans. '
*
have been
•
variant
A
suggested.
has
•
•
•
been !
therefore
This is
the certificate
proposal which would
reserve
re¬
quire the banks to hold increased
but in the form of gov¬
reserves,
securities.
ernment
thus held
serves
ing
assets,
While the
would
be
re¬
earn¬
plan
a
of this type
distinguish be¬
would still fail to
tween banks in different kinds of
situations.
It
hardships
upon
not
would
also
Leading Products of
place
banks which had
P. LORILLARD COMPANY
loans
expanded
unduly but
required under
such programs to liquidate loans
in order to purchase the requisite
quantity of government securities
which
to
be
would
satisfy
the
Cigarettes
OLD GOLD
require¬
reserve
MURAD
HELMAR
Therefore, still another proposal
has been made.
Back when America
It has been called
the ceiling reserve plan.
The ceil¬
plan provides that af¬
reserve
tobacco
herb in
ter
a specified date,
any additional
loans of banks would be required
in the
to be met by a substantial increase
in
Such a
reserves.
proposal would
distinguish between those
banks which were making loans
defense
which
and
made
certificates
fied
in
of
connection
necessity
with
weaknesses
of
alternative
Cigars
MURIEL
America's
are
have
uses
grown
to the
up
with
VAN BIBBER
BETWEEN THE ACTS
present-day
Chewing Tobaccos:
World's
,
an
a
BAGPIPE
how to
us
HAVANA BLOSSOM
why modern smokers turn to
Treat Instead
of a
Treatment."
They know "Old Gold Cures Just One Thing; The
Best Tobacco."
And
they know "We're
Tobacco Men, Not Medicine Men."
-
In the campaign against infla¬
tion, monetary policy has an im¬
portant role to play. The loosen¬
ing of pegs from the government
is
We
of experience have taught
years
Old Golds "For
program—it has
Conclusion
market
merchants.
blend tobacco best. That's
highlights one of the
points of the voluntary
restraint
tobacco
Nearly 200
reserve
*
Today
and
more
more
Americans
are
enjoying the
smoking pleasure of Old Golds. With present business
good, with
encouraging
and
desirable development. Con¬
tinuation of controls by the Fed¬
eral Reserve Authorities over con¬
sumer
in those days. Es¬
even
BEECH-NUT
considerable flexibility.
bond
in business
was
would not be
proposals
,
INDIA HOUSE
popularity of cigarettes.
certi¬
or
subject to the special loan
credit
quiet dusk.
tobacco—right from its earliest
requirement.
strong
UNION LEADER
FRIENDS
HEADLINE
oldest
provision that
under V loans
The
Smoking Tobaccos
BRIGGS
long-stemmed clay pipes, savoring its fragrance
tablished in 1760 the makers of Old Golds
might
purposes
be remedied by the
loans
the Indians called
young,
those
not. This defect
were
was
"uppowoc." They smoked the dried leaves of the
P. Lorillard
not
for
past rich in experience, it's easy to see why
a
P. Lorillard Company—and Lorillard stockholders—view
the future with confidence.
credit and real estate credit
including
credits
in
with the sales of
desirable.
The
connection
t f
existing loans is
voluntary
credit
restraint
program is highly com¬
mendable and promises to be pro¬
ductive
of
Federal
much
good.
Reserve
responsibility
money
for
supply,
Since the
System
has
the
regulating
the
effective
AMERICA'S OLDEST TOBACCO MERCHANTS
should
on
be
insured
by
a
to impose special
grant of
reserves
increases in? loans after
•
ESTABLISHED 1760
control
w
power
'
EMBASSY
ments.
ing
are
Company, 817 Gra-
York and New Orleans Stock Ex¬
pur¬
applica¬
implementa¬
and
acquainting
institutions of
achieved.
inevitably leads to
sion
loan
on
made
are
to the extent that popular
support
cannot be secured for these, the
road
For
(Special to The Financial Chbonicle)
NEW
.
been
these
to
-
a monetary policy to be ef¬
stand-by powers with re¬
sponsibility. For a long period of fective, the monetary authority
Of Inflation
cations
credit
consumer
controls
exercise
ferred
relaxed
Two With Beer & Co.
Without enlightened
require¬
9
a
date
r
ryr
\i,/A
p£
,
Vfr'.VA
,
'
'
'' yi
4 A',"',
V' v/
'
>
^
' -
s'' < ''''
'
•
/
,..
/
,
%
' '
/
,
'
-
'
v.: * -
'
-,
"
-
"V"; * V
-
--- <-•
/
+/i
10
The Commercial and Financial Chronicle
(246)
Dempsey-Tegeler
&
Co.,
St.
Louis, were members of the Lee
Higginson Corp. syndicate which
recently underwrote an offering
Missouri Brevities
half
of
in order to ade¬
quately assess the damage caused
to industry, agriculture and indi¬
viduals as a consequence of the
floods which, even at this writing,
are
still continuing to take their
with
$2,896,852 in 1950.
toll" in the States of Missouri
and
shoes.
of
the
Considerable
'
must
time
neces¬
elapse
sarily
The
Kansas.
seriousness
catastrophe was emphasized with
that
President Truman had
arranged
the announcement on July 16
fl,y over the stricken areas
Missouri and Kansas to obtain
to
of
a
The
fiscal
report
rently
of the
Co.
Moulder.
M.
Both the House and Senate, at
President's
the
quickly
request,
passed an emergency relief meas¬
ure,
and various governmental
agencies joined in setting up facil¬
ities to provide assistance to vic¬
tims of the flooded areas.
In
proclaiming
state of emer¬
a
in the afflicted portions of
on
July
14, Missouri
gency
State
the
will
750,000
land
about
estimated
been
had
been
25,000
isolated by the
and
inundated
their
floods.
been
had
families
from
evacuated
farm
Missouri
of
acres
that about
homes
or
The havoc
wrought in the neighboring State
of Kansas was equally tragic.
late
1951
close
Despite the fact that operations
the third quarter ended June
30
were
adversely affected by
suppliers' strikes, net earnings of
Gleaner
an¬
-
if
of
Western
during
amounted
Auto
Inde¬
June
com¬
ended
Supply
the month of
to
$14,478,000,
Corp.,
period were
82 cents per
share of common, compared with
$294,210, or 74 cents a share a
year
ago.
For the nine months
if
*
Harvester
pendence, for the
$329,578, equal to
pared with $14,025,000 in June of
June
30,
earnings
net
a
iated
covering
The
Pratt
which
build
Fox
$1.89
2,574
*
*
*
Barrett Herrick
figures reveal that shares of
Stix, Baer & Fuller had net earn¬ Victoreen
192
share,
as
against $1,854,-
share in the pre¬
ceding fiscal year. Because of the
company's decision to use the
$2.95
or
per
&
Co., Inc. and
stock
common
Instrument
of
the
Price
Co.
of
The
debentures
sold
privately
the
if
1951
tains
in
branch
St.
Louis
*
with
be
the
used
plans
in
*
*
*
institutional
an
would
be
for
used
the
:
additional
12
NEW
buildings
HAVEN, Conn.—Chas. W.
Scranton & Co., 209 Church
members of the
at
&
Light
Co.
❖
*
.■
Power
City, Mo.
overwhelm¬
Exchange, 60
New
'Net
*
'.
ingly
*
income'of
International
endorsed
which
will
three
permit
the
Stockholders
proposals
company
The Missouri Supreme Court on
July
ford
of
that Sidney
Parry, former¬
ly
executive
Vice President
acqui¬
change Firms,
has
During
the
to!
sales.
taxes
The
were
company's "income
2%%
$4,991,333 for the first
and.
of
maturing
within,
a
Reopens
this
used
to
r
will
Delhi Oil
Exchange, have
reopening of their
Peoples Trust
Building,
under
the
the
ances
row
management
and
;
of
Robert
F.. Gerrie
Covert L. Goodlove.
Tennessee Gas Transmission
Texas
nection
Company
Harshaw Chemical
and
to
finance
up
with
the
Argo Oil
Bought
—
Sold
—
the company will also
up
PRIMARY MARKETS
IN
Bell
Teletype
SL 456
St. Louis
award
Co.
.
T
/■
7,
~Established
York
&-Boston
190T
,-J
STREET
sale
.
'
St. Louis LMo,
2,Mo.
New York Curb
Exchange
(Associate)
!
Tel. 7-3191
Hartford 4
New York:
Bell
—T"
Stock- Exchanges
'
9 Lewis St.
The
group
bonds at
Monday
on
com¬
on
a
-\;
Proceeds from the sale of these
bonds will be added to the
pany's general funds and
pected
to
be
used,
com¬
are
ex¬
other
things, to provide fpr part of the
current
to
among
construction
the company and
of
2%
program
of
subsidiaries, and
treasury for $1,-
reimburse the
000,000
serial
notes
due
July 1, 1951, and paid.
i
Regular redemption prices range
from 103.67% to par, while special
redemptions
may
be
made
at
prices from 100.67% to par.
"
BArclay 7-3542
Teletype HF 365
are
engaged in the
of
purchasing, distribut¬
ing and selling natural gas for
cooking, heating, refrigeration and
other purposes within the metro¬
politan area of Washington, com¬
prising the District of Columbia
and
Members
New
the
Washington Gas Light" Co. and
Connecticut Securities
5O0 OLIVE
interest.
of
its subsidiaries
Tifft Brothers
SCHERCK, RICHTER COMPANY
Vice President
series due 1976 at 100.665%
business
&
rank
Prior
Stock Exchange.
bid of 100.195%.
bor¬
Hartford and
Stix
the
1945.
&
petitive
to
V
Quoted
in
was
Chicago
accrued
won
MIDWEST STOCK EXCHANGE
'N
Landreth Building
and
pending receipt
$1,000,000 on a sevenyear 3%-3V2% note which will be
paid off out of earnings as an op¬
erating expense. :
-
MEMBERS
Southern Union Gas
the
3.%%
to
con¬
Eastern Transmission
Rockwell Mfg.
he
Loeb & Co., and A. C.
Co., on July 18 offered
$9,000,000 Washington Gas Light
Co.
refunding
mortgage
bonds,
of natural gas. To cover the eonversion ' costs of customers' appli¬
Stock
branch office in the
Petroleum Heat & Power
with
Commander
war
Kuhn,
be
$900,000 construction costs in
announced
war
released
was
Allyn
off $200,jD00 of notes
pay
payable
loan
New
Spinning
and
advertising.
he ...served with
Washington Gas Light
3V2% Bonds Offered
,
HACKENSACK, N. J. —Joseph
Walker & Sons, members of the
Berkshire Fine
public
relations
.
Branch in Hackensack
York
the
Lt.
of
•
year.
notes
in
Unite^States Naval Reserve
to the
..
Jos. Walker
be
firm's
Sidney L. Parry
.
•.
d
e
charge of the
•
_
ciat
will
,
_
become
with them. He
June 19
.
of
Ex¬
a s s o
,
.
Asso-
Stock
13
v.-
the
of
ciation
upheld the validity of to approve the merger with Bristol
Shoe Company for the first six
Kansas City's projected $3,500,000
sition of new facilities necessary
Mills, which involved .changes in
months of its fiscal year.f ending
bond issue. program to provide for.
the capital structure.;; Holders of
to meet the company's increasing
May 31 was $4,661,729, or 4.3%;
parking facilities.
The decision common in the old
business, i-The shareholders
(1)
company re¬
of sales, as 'compared with $4,was
rendered
in
a
test
suit
ceived one and one-half shares of
approved an increase in the pre-:
554,943, or 5.4% of sales during
ferred issue from 200,000 shares to brought by a taxpayer which was new common for each old share
the same period last year, it is
limited
to .only
$50,000 bonds. and holders of the 6.% non-call¬
350,000; (2) set the limit on se¬
disclosed in the company's mid¬
The
high court previously had able
curities
preferred received one and
representing
unsecured
year report in the mail to stock¬
sustained the city's right to ac¬
one-half shares of 4*/2% callable
indebtedness from 10 to 20%; of
holders. The net is equivalent to
quire land and operate a parking
the total of secured debt, capital
preferred. Earlier plans to issue
$1.37 per share of common stock
lot.
"
/.v..v.\, -;V v
additional
and surplus, and
preferred- stock
for
(3) authorized
'
"
as compared with $1.34 last year.
cash have been deferred.
a
$12,000,000 increase, in bonded
Net sales of" Edison
brothers
I' The company's sales for the six debt.
;/■/ '
;
*
*
*
'
•'
The
company's financing
months
totaled
$108,112 593, an/ program, according to President Stores in June aggregated $6,On
June; 28 Bridgeport
Gas
increase of $23,190,972, or 27.3%
845,029, a gain of 10.42% from a Light Company's
Harry B. Munsell, calls for the
plans to borrow
over the
same, period
Six months' - sales of
last year sale over a two-year period. of year ago.
$2,100,000 were given a public
when
sales
totaled
$37,655,726 reflected a gain of
$84,921,621. $12,000,000
hearing by the Connecticut Public
bonds, $10,000,000 pre¬
5.49% over the first half of 1950". Utilities
Considerably higher Federal in¬ ferred
stock
and
Commission.
The com¬
$8,000,000 of :..
; /.
'r-V
;•
i'i
come taxes this year than last, the
common stock.
The company, he
pany
proposes to borrow up to
$1,100,000 on 90-day 3% renew¬
report set forth/ were responsible added, has arranged to borrow
able. notes until Dec.
31,
1952.
for the lower ratio of net income from banks up to $11,000,000 ''on
Proceeds from
to finance construction and
ex¬
firm
announces
Bigelow-Sanon
Stock
change
*
Carpet Co. voted
Street,
York
old stock
year
.
*
.
/
Chas. W. Scranton Go.
*
if
'
of Kansas
connection
Sidney Parry Joins
underwriters.
This will increase
the available floor space from 42,-
.
re¬
finance
expected arrival of nat¬
inventory method, earnings
The financial and executive of¬
for the recent year were reduced
The Kansas City Security Trad¬
The
fices
of
Prugh
Petroleum
Co. 000 to 100,000 square feet.
by $192,000. Had the old method
ers Association, an affiliate of the
have
been
space
is
needed
to
mbved
to
Kfansas additional
of inventory valuation been main¬
National Security Traders Asso¬
City and the general offices will speed up production of helicop¬
tained, net earnings would have
remain in Tulsa.
The company, ters for the Navy.
ciation, is endorsing the national amounted
to -$4.09
*
*
*
per
share.
with a paid-in capital of $300,000,
organization's
new
educational Dividend
payments' last year to¬
The Connecticut Public Utili¬
program designed to enlighten the
plans to increase the amount to
taled $1.25 per share, comprising
general public on the necessity for
$1,000,000 in the near future, ac¬ ties Commission has approved is¬
quarterly payments of 25 cents
thrift and savings and the advan¬
cording to President William B. suance by Southern New England
and
a, 25 cent extra. , Payments
Company
of
400,000
tages of becoming owners of stock
Prugh.
The company owns and Telephone
during the current year have been
of American corporations.
Earl
operates oil producing properties shares ;of common stock through
at the rate of 30 cents'.
' v
:
L. Combest, President of the Kan¬
in various States.
Mr, Prugh is rights on a one-for-eight basis at
si:
* /;
S'>... V'
:• •' head of
sas City unit,
The rights expire
is a Vice-President
Prugh, Combest & Land, $25 a share.
of Prugh, Combest & Land, Inc.,
Stockholders
of
Kansas
July 20.
City Inc., of Kansas City.
«
<•'
to
ural gas this fall.
Bradley Field.
LIFO
will
construction
suffi¬
Kaman Aircraft Corporation has
leased
*
*
.
to
*
and
several other cities.
if
•
Series A Bonds of 1961 and the
mainder
construction program.
in
a
if
July 3 The New Britain Gas
Light Co. sold $1,110,000 of 3%%
First Mtge. bonds, due July 1,
1976, in a private placement. Ap¬
proximately $500,000 of the pro¬
ceeds were used to call the 3%%
$300,000.
probably be
will
public through
Proceeds
was $4 per share. The
firm, whose principal of¬
New York City, main¬
the
occupy
On
investor and the common stock to
to investors
is
—
in¬
cient to raise $275,000 to
Herrick
fice
stock
common
the
feet of floor space.
square
largest
department store, specialized in
farm machinery, heavy tools and
shares
A. H. Vogel & Co., Detroit, spon¬
sored
an
offering
of - 324,000
Final audited
ings for fiscal year ended Feb. 3
of $2,330,559, equal to $3.76 per
*
*
*
compared with 268 and 2,518, re¬
spectively, a year earlier.
common
a
house
Phoenix building, which was built
in 1916 and contains about
56,000
of
outlet
Hartford's
Co.,
&
planning to
its home of¬
Company will
surance
has housed
rural
the
Foxmart,
G.
is
on
it
new
number
of
employees.
early 1952 until the new
wing is completed Automobile In¬
past four years.
the
for
that
wing
building to
a
From
foot building in
Windsor which
South
Foxmart
expected to be ready
Aetna Life recently
creased
Division
of United Aircraft Corp. has leased
the 21,000 square
is
announced
fice
Whitney
&
Company
early in 1952.
*
*
Insurance
Phoenix is presently con¬
structing a new office building,
spent for plant and machinery.
*
has purchased
building of the
office
Group.
received
been
Companies,
home
Phoenix
Bureau of Ord¬
$1,450,000 to be
Navy
member of the Aetna Life Affil¬
the
shaae as against
power equipment. Due to the in¬
last year, an
increase of 3.2%. only $1.95 for the full year ended
creasing shortages in these articles^
Sales during the first six months Sept. 30, 1950. Supplies currently
it was decided to close the branch
of 1951 totaled $73,140,000 com¬ are
being received on schedule
store.
pared with $65,440,000 in the cor¬ and production is under way on
*
*
if
responding period of 1950, an in¬ a new type self-propelled com¬
Derby Gas & Electric Corpora¬
crease of 11.7%.
bine.
Foreign demand for the
tion has applied for permission to
In June of this year the com¬ company's farm equipment is re¬
sell
$900,000 of debentures due
pany operated 266 retail units and ported substantial.
July
1, 1957, and about 12,500
had
wholesale
accounts,
equaled
Thursday, July 19, 1951
.
Automobile Insurance Company,
Dan-
a
has
intent
the
in
months
as
of
ter
*
nance
year."
good
Sales
the
*
*
feel confident our
year, we
company
Governor Forrest Smith said that
it had
in
high
bury, is planning
from
cur¬
report
things
"and
Corporation,
Barden
$2,000,000 ex¬
pansion of its plant to provide ad¬
to
ditional space for the manufacture
The St. Louis firm made an of¬
of super-precision bearings.
The
fering for its own account of
new
addition will contain 42,000
$180,000 AVi%
first
mortgage
serial bonds of Mississippi Valley square feet of floor space. A let¬
pointing to the national economy
running
Chief of the Army Engi¬
estimated the damage as ex¬
ceeding $750,000,000, as compared
with the $2,000,000,000 plus esti¬
to Missouri Con¬
business
good," the
with all
quite
concludes,
Pick,
Morgan
of common stock
Carbon Company, priced
investors at $26.25 per share.
of Speer
present
.
Connecticut Brevities
The
of 179,034 shares
Stockyards, Inc., of St. Louis.
neers,
attributed
compared
that
notes
retail shoe
"With
other
gressman
as
selling prices of the great major¬
ity of shoes manufactured b,y In¬
ternational
Shoe
Company
are
lower than OPS ceiling prices of
personal
view
of the damage
wrought by the nation's costliest
flood.
Major General Lewis A.
mate
1951,
.
adjoining
States
of
territories
in
the
Maryland and Virginia.
Population of the territory served
by the
is
-
company
estimated-/ at
1,300,000.
and
subsidiaries
approximately
'
,
Volume 174
Number 5030
-
.
Commercial and Financial Chronicle
The
.
.
(247). 11
logistic theory.
Population Trends and Investment
between
By JOSEPH J. SPENGLER*
Professor of
Economics
the
Business Administration,
and
185
that
means
for
200
and
The
2000.
year
nual
Duke University
This
compound
the
rate
half
next
millions
average
of
increase
century
would
then be between five-twelfths and
seven-twelfths
growth, and its implications in relation to the increase in
national
and
income
of
increase
1%
per
capital
out
an
1%
the whole
for
1920-1950.
allowing for improvement in living standards. Concludes, so
long as population outside of U. S. is growing at rate of 1%
per year, there results a heavy demand abroad for invest¬
ment capital and this can only be
fully satisfied by capital
these figures a little
Let
It
which took
My fundamental objective will
a
result of war,
be
to
population
trends in prospect here at home
various
and
abroad
and
the
indicate
and
the
then
examine
to
influence
elements
in
provision
of
of social security,
replacement of the pes¬
forms
the
the
of
the
in
1930
the
1930's
by
s
the
op¬
To illustrate,
s.
annual
number
of births
approximated only about
In the 1940's, how¬
ever, the annual number averaged
3.25 millions, or 30% more than
economic
our
the
timism of the 1940
those
upon
as
the elimination of
unemployment,
simism
of these trends
place in the 1940's
millions.
2.5
the
of
and
1949,
as
30%
nificance for
between
I
seven-
duced
this
America
Latin
and
birth rate
about
of
where
approximates 40-45
per
who
failed
mand for cap¬
could
population reported for 1950.
I
report similarly of the fore¬
ital
casts made in other countries. But
and
I
upon
the
composi¬
tion
of
de¬
mand for capital.
aggregate
many
forecasts
defective in that they
appreciably to foretell the
American
defective
forecasts
not
as
their recent perform¬
as
suggests them to be? We
say
for
certain
yet.
ance
The movement
population
these
are
Joseph J. Spengler
this
that
indicated
American
prob¬
and
1930's.
have
can¬
We
that the other half
force
labor force of
1150-1200
about
millions, and the population of the
would would
into the present.
billions.
to suppose,
mately the same answer that we
of
some
attitudes
mental
the
these forecasts will stand up
which affect the investment situ¬
ter
ation.
respect
performance
1950 suggests.
It is
questionable whether the annual
Population movements are
of
great
short-run
signif¬
not
their
than
bet¬
with
to
the opinion of most number of births will remain at
Population
move¬ the 3.7 million level to which the
ments
condition
the
longer-run postwar upsurge in natality car¬
prospects of countries, industries, ried it. Now suppose, for exam¬
in
icance,
economists.
and markets.
therefore,
upon,
ments in the
as
shall
of
consider
there.
to 3
millions
and
stays
Then, if the average expec¬
tation of life at birth is extended
to
that
element
the
falls
ber
important ele¬
as
making of the growth
growth-factor
a
ple, that the average annual num¬
And it will be principally
factor.
we
They must be looked
American
the
75,
will attain
movement
the
population.
population
maximum size of in
a
neighborhood of 225 millions;
and much of the increase will be
Experience With Population
*
'
Let
accomplished in the present cen¬
Forecasting
have
now
us
a
our
experience with population fore¬
casting and see how it stacks up
compared with our experience at
forecasting the outcome of elec¬
tions or turns of the security mar¬
ket.
I
shall
make
Should the American popu¬
logistically in the fu¬
ture as in the past it will grow to
185-190 millions by the close of
tury.
look at
for illus¬
use,
lation grow
best
been
forecasting
made
logistic,
lions
by
America's
lation
and
at
population
mil¬
197
maximum
anticipated
were
as
should
we
sell
to
we
we
popu¬
by the
American popu¬
Canada 64 out of each 100 persons
2000, and
lation
of
forecast cannot
if
that of the rest of the
these forecasting fail¬
about?
They came
births
underestimated and second¬
were
arily because mortality
estimated
and
was over¬
immigration
was
incorrectly gauged. In the 1930's
fertility was low and falling, be¬
0.75%;
Forecasts of births
part
upon
fore failed
-investment
long-run
*This
the
is
by
What
what happens elsewhere.
happens elsewhere affects
situation
can
lenders
Ameri¬
American bor¬
one
And
rowers.
of
confronting
and
of these matters
import is population growth in
foreign parts.
World
vs.
American Population
Growth—For
sion
shall
I
notion
This advertisement is neither
The
1951
at
first
Life
Beloit
of
a
series
of
18
and
19,
three
Spengler delivered
Officers
Investment
College,
1951.
the "Chronicle."
offer to sell
an
nor a
the
of
growth
'
*
•
that the
said
I
between
grow
population would
five-twelfths and
seven-twelfths per cent per year.
Let
call
us
it
which would
the
rate
one-half
per
■
'•
..
in
experienced
/
'
'
t' :
•*«
year.
Then we get an annual rate
of increase in the national income
of in the neighborhood of
Let
us
call
1
V
•
.
•
Common Stock
'
-
v,
'' ■
-'
•
'
'
Corporation
.
(Without Par Value) »
Holders of the Company's outstanding Common Stock are being offered the
right to subscribe at $25.25 per share for the above shares at the rate of one new
share for each ten shares held of record on July 17, 1951. Subscription Warrants
will expire at 3:00 P.M., Eastern Daylight Saving Time, on August 2, 1951.
The several Underwriters have agreed, subject to certain conditions, to pur¬
chase any unsubscribed shares and, both during and following the subscription
period, may offer shares of Common Stock as set forth in the Prospectus.
.
■
:
of discus¬
to give a rough
prospective course
purposes
Copies of the Prospectus may be obtained from any of the several under¬
only in states in which such underwriters are qualified to act as
dealers in securities and in which the Prospectus may legally be distributed.
writers
'
'
i
■
•
■
?
.
lec¬
before
Semi¬
ness
of
carried
i
'
,
i
i
I incline to the view
crease,
'
■
,
'
.
Wertheim & Co.
that
the American population will in¬
crease
■
consider first the United
us
States.
Corporation
'
Lehman Brothers
years.
Let
The First Boston
investing will have to be
during the next 25 or 50
at
a
in
decreasing rate of in¬
accordance
with -the
Merrill Lynch, Pierce,
2-2.5%,
This com¬
it, 2.25%;
with the 2.75% realized in
Continued on page 20
pares
New York State Electric & Gas
•
1930-40.
Suppose, further, that output per
worker
increases
1.5-2.0%
per
solicitation of offers to buy any of these securities.
:'..;;*•
■
cent,
be "a little less than
offering is made only by means of the Prospectus.
'•
na¬
tional income in the United States.
217,904 Shares
.
same
get back to the an-'
of
July 18,1951
framework within which the busi¬
Bcloit, Wis., June
The remaining lectures
will be published in subsequent issues of
nar
me
rate
NEW ISSUE
try
the
of
there¬
to
Prof.
nual
roughly envisage the demographic
anticipate the great
increase in marriages and births
tures
nongov¬
the
with
situation.
in
based
1930 conditions
than do
workers
But let
15-59
figure
aged
and
among
ture.
be
the average, govern¬
degree of training.
that the re¬ these countries have another im¬
population provement factor. Sixty to eighty
will
grow
about 1% per year. per cent of their population re¬
This estimate gives a population mains concentrated in agriculture,
of 3,345 millions by the year 2000, and this is a much larger fraction
and assumes for the population of than is required. Much of this ex¬
the world as a whole, an annual cess may be looked upon as the
growth
rate
of
approximately under-employed fraction of the
three-fourths of 1% per year, a labor force. 'Accordingly, if it can
about
world
other reasons, there of population growth here and*
was
considerable
unemployment abroad in the course of the next
and pessimism concerning the fu¬ 50
years. I do this so that we may
cause,
to
corresponding
on
income
ernment
mainder of the world's
would correctly size up the
we
the
tion.
the
For
however, for Asia,' Africa, and Latin Amer¬
believe that the world's popula¬ ica is in the neighborhood of 55.
tion will not grow quite so rapicL So they have a potential improvely. They suppose that about 450 merit factor of about 16%, the
millions will grow little if at all, equivalent of 7-8 years increase
that another 450 millions will grow in
per capita
output.
Many of
foolhardy were
Gallup's pollster
against
the 1950 population
3-5%;
Other forecasts
also
underestimated the 1950 popula¬
estimated
are
national
demographers,
Some
be
Mr.
by
because
mil¬
years;
For, howsoever we try, we cannot
insulate the American
economy
principally
200
sell the
short just
derestimated
come
from
far
not
than the American.
younger
lions.
somewhat
are
Population Growth for
and
about
an
countries
people, and it is a safe
ly more
bet that,
ment workers add less to the real
example, in the United States and
1949
these
of
II
tion nail right on the
was
replaced-by later forecasts
which, despite their decency, un¬
government will employ relative¬
populations
the
prospect.
spend
system short.
"
head, but this
be counted, for it
For
lation of close to 3.7 billions
year
1920-
by
to
2000. This logistic underesti¬
American Investors
mated the 1950 population by only
It is necessary for us to en¬
about 2%. It is true that a Scripps
Fundation
empirical
forecast, visage both the prospective popu¬
made in 1928, hit the 1950 popula¬ lation grovyth of the United States
ures
population.
in
Consumers
relatively less
for
mass-produced products than in
the past. There is no longer dis¬
guised unemployment in agricul¬
ture to draw on. And, finally, the
the
than
view
in
will
Latin American
faster
increased
somewhat
the Implication of American and World
for
somewhat
grow
the
year
How did
get approxi¬
will be lowered in¬
as it ought to
of the advances in
age
of
medicine
country like the United States
By contrast, the
extrapolating, the
rate.
We get a world
got
We should be
forecasters
popu¬
millions
185
foolhardy
Pearl-Reed
which fixes at
maximum
a
population
has
record
the
to
move
above 200 millions.
purposes, only of Ameri¬
forecasts prepared since 1920.
The
we
tirement
be
will
week
per
There is danger that the re¬
the present century and in the
early part of the next century
trative
can
In short
worked
hours
stead
neighbors and of the countries of
Asia and Africa can be made to
number close to 3.7
must wait until the future unrolls
of
fall.
it
Great Britain.
our
a
operat¬
are
output per capita. As I have
improvements in age com¬
position will no longer add to
output per worker. The number
year
by death, retirement,
disability. Its growth there¬
fore depends principally upon the
rate
at
which
the
population
grows, and this is especially true
a
of conditions
of
each
or
grew
said,
and
have
to
from
removed
are
of
through
There is reason
however, that some of
than
it
ing to reduce the rate of growth
those
of
are
three-fourths of 1 % per year. By
2000
these
880
millions
would
grown
and
year.
per
1948,
choose 1.5 instead of 2.0 is that
seeking employment. The
labor
force
grows
principally
through the addition of more per¬
sons of working age to the labor
increased
of
population, whether in time or
space, is relatively slow
compared to the movements of
employed
are
who
1.75%
and
number
The labor force consists of those
1,000 inhabitants, and the rate of
natural increase
proved
t
the
in
invest-
upon
m e n
two
upon
further.
the
that is,
the ag¬
gregate
de¬
bear
immediately
of
growth
depends
How fast
labor force.
Between
between
1.75 and 1.88% per year. We may
suppose,
therefore, that output
per worker per year will grow
1.5-2.00% per year for some dec¬
ades yet.
If I were making a
wager I would put it closer to
1.5 than to 2.0, but I am willing
to settle for 1.75.
The reason I
1929
3.7
upon
which
annually—the
income
the
about
movements: (1) the growth of the
billions labor force, which depends large¬
by the year 2000.
ly upon the growth of the popula¬
Let
us
look
at
the
prospect tion; and (2) the growth of out¬
somewhat differently.
About 1.5 put per member of the labor force
billion people live in Asia, Africa, per year.
Let us examine these
population
lems,
social life
ber of
volume of goods and services pro¬
eighths of 1 % per year on an aver¬
age.
Should we suppose this rate
to continue we would get a world
the second of the
which the growth
income
will output per worker grow. Be¬
tween
1870
and
1929, it grew
American
vs.
produced income, the net
mean
national
depends, that
is, the growth of output per mem¬
mili¬
and
Income Growth—The growth of a
nation's income—and by income
approximates 1012 per thousand,
that is, better
than 1% per year. If this popula¬
tion were to continue to grow 1%
per year, it would double in 70
years
and it might number 2.5
billions by the year'2000. Suppose
that
one-half of the remaining
880 millions increase very little,
and
economic
of
analysis.
tary
whole.
about
or
shall see, is of some sig¬
we
force.)
But to get to
This change in propor¬
Prospective World
a
agriculture
movements upon
tion,
the popu¬
now
out of
useful
labor
later.
world
transferred
approximated
6.25%
i n
1949,- will have fallen to between
of
use
be
into
•
.
5 and 6%.
period,
make
about
increased
1920
drawn from United States.
consider
us
lation
shall
I
2000.
which
year,
period'.
whole
the
for
recorded
savings equal to from 3% to 5% of national income, without
<
per
This compares with a rate of 42%
population calls for
in country's
year
Points
accumulation.
20-30%
or
of
possibly continue
year
employment
else¬
If the demographic forecasts are
where, the effective labor force of
to be trusted the world's popula¬ the countries
presently overloaded
tion will number between 3.3 and with
agricultural workers will be
3.7 billions by the year 2000. The improved.
(Addition of women
proportion formed by Americans, can still significantly increase the
by
lation
>
long after the
an¬
Professor Spengler reviews forecasts of U. S. and world popu¬
that might
rate
population, which now num¬
bers 154 millions, will increase to
our
Fenner & Beane
12
(248)
The Commercial and Financial Chronicle
.
.
Thursday, July 19, 1951
.
Caesar Borgia cheated?
The Lower Ratio of Real Estate
Bank and Insurance Stocks
By H.
tellects stayed clear.
that follows in the
mercial
This Week—Insurance Stocks
\
may
,
In many cases it is expected
that the results
be disappointing in comparison with those of a year ago.
In the first place there has been a carryover from the wind-
decline.
Says real estate
Normally these losses should have
been charged to the operations of last year. The severe and wide-
i
•
the present time.
In many
/ underwriting operations.
Another
factor
*
which
real estate prices have
advancing and following the
general
inflationary trend over
the past ten-year
that we have
.
contributed
has
to
the
unsatisfactory
;
there
years
.
damages
i
has
cars
,
on
has-been
increased
the
rapidly.
to
the
panies that write large amounts of automobile liability coverages ■■
f
have suffered heavy losses.
-V
In the straight fire lines the underwriting experience has been
more favorable.
Despite an increase in fire losses so fat this year
i of around 8%, a larger volume of earned premiums has enabled "
ious
.
.
Such
one
;
•
most
written for
t
piring
1
companies to offset the larger losses.. Also, fire policies
a three-year period and the policies that are now
last
are
ex-
were
there
of the favorable period of operations from 1949 when the most profitable
underwriting in the
history -of the Industry was established.
In the investment phase of operations the results should be
better. Increased premium volume has meant a larger volume of
t
+
i
-
year
was a
c
funds available for investment.
•
mitted
an
Also, dividend payments
•
V
stock holdings
:
to take advantage of the more favorable tax
which dividend income receives as opposed to interest.
.
>
treatment
/
,
On an overall basis investment income is expected to show a
gain of between 5% and 10%. This will not be sufficient, however,
to offset the lower
underwriting income and overall earnings are
expected to show a decline.
•
/
-
-
Results
parison.
for
Some
the last half could
of
the
being solved., There have been
/
show
problems of
a
the
a
favorable
more
insurance
'
com-
companies
this connection
'the
State
of
was
New
is
•
the amount of the increase is
considered significant. Other states
have also made increases in insurance rates on
the automobile
•
.
a
more
the period
So when real
win!
as
City,
es¬
In the midst, of
a, new
Corpora-1
has
associated
sales
the
become
department of the
firm.
Mr. Bartow was formerly,
with G. C. Haas & Co., Central
Republic Co., and ; prior thereto
with Laurence M. Marks & Co. 'V\
inflation¬
New Hutton Office
"
this?
of
v
,
There
20
was
or
can
'*'/• "
real
r
'/./v.".
eludingreserve
This is not to
could
of
«
■./Now it has been said here that
there
is
\1;
t
Government
'•
i y
12,068,016.18
and
direct
'
-
of
•*
"
debentures
*
eluding $192.2o ovei'draiust
and' fixtures
Furniture
Other
m or A
than v in
.their graves. We used
hear
ago,; but When the phrase,; "A
penny saved is a
10% of an average
penny earned"', "An honest man
15,809,742.99
and
^
/. vaults
/
'
-.
assets
i TOTAL
87.924.49
/
.,
77,958.82
.:
,
ASSETS.
$38,732,425.07 i
'4.
'
/
h
"
i
/./*■ 1
■
«/•
-5
20,584,196.31
^
4,805,521.98
<■
'€
.
\
•j
i
t
..
<
On
+
I
an
overall basis final results
may
shown for last year.
i
<
the earnings
vi-
-
/
"
>v
Joins
(Special to The Financial Chronicle)
:
.'CHICAGO, 111.—Erwin
has
1
(Special
B. Arvey
H. Hentz
joined the staff of
Co., 120 South La Salle Street.
\./-V
v
/ //
.
Ken¬
nedy is with S. A. Sandeen & Co.,
Talcott Building.
to The Financial.
A T L A NT A, Ga.
—
Allison H.
Adams has become associated with
Thomson
&
McKinnon,
Healey
this
PAUL,
Rasmussen
Minn.—Joseph
is
with
Kalman
P.
&
ANALYSIS
17 N. Y.
City
Bank Stocks
July
Head
Exchange
Teletype—NY
YORK 5, N. Y.
1-1248-49
(L. A. Gibbs,
Manager Trading Dept.)
Specialists in Bank Stocks
Bishopsgate,
E.
C.
Branches in India, Burma,
Ceylon, Kenya
Colony, Kericho, Kenya, and Aden
and Zanzibar
Subscribed Capital
£4,000,000
Paid-up
department
pay
Reserve
The Bank
Capital
Fund
£2,500,000
conducts every
banking
and
description of
exchange
business
Trusteeships and Executorships
also undertaken
angle of
4
as
It
15
con¬
well
a
20
or
stores
4J/2%
or
is
years
could
and
possible, and: to speculate./ Then
over
invested in
average
rent.
such
others
of its sales vol¬
&
A
formerly
were
3% of their sales
P,
and
willing
rent.
as
to
To¬
day that figure hovers about the
1V2 % mark.
real
of
down to
are
they
getting
wealth
*An
"The
the
the
the
this
editorial
Appraisal
American
30
years
mean?
It
property
smaller
a
of
hi
to
this
that
portion
rentals
almost half of what
does
means
through the field
percentage
20
were
What
is
All
estate,
and
total
country
ago.
only
owner
smaller
economic
every year.
by Mr. Armstrong
Journal," published
Institute
of
Real
vested.
Of
'!
Estate
'.y '
in
by
Estate
Boards, July,
1951.
officers'
•
checks,
258,414.80'
579,323.61
i
-V
TOTAL
'
/.
DEPOSITS $35,603,270.17
liabilities
i
4
TOTAL
(not'//-
LIABILITIES
including
/
/;; 147,475.64
Other
-subordinated
1
/
~
■-
-
''
CAPITAL
ACCOUNTS
<
course,
have to take
we
our
and
tell them
and
the
that the
TOTAL
get on in life is by way of mak¬
ing a "quick" "dollar.
What is vitally needed today is
a
recognition of the changes in
America's way of life as they are
occurring year by year. Change
does not necessarily have to be for
the better; it can also be for the
worse.
Change need not mean
progress; it may also mean retro¬
than
half
a
cen¬
tury ago John Jay Chapman slated
words that
here:
honesty
quence
is
are
well worth repeat¬
"Mere
of
financial
very
little
dis¬
conse¬
in the history of civiliza^
tThis,
institution's
cares
if Caesar stole
or
$33,732,425.07
capital
with
stock
*,
AND ' :
CAPITAL ACCOUNTS
common
'
$2,981,679.26
total
consists
of
value
of
par
$1,000,000.00.
;
-
MEMORANDA
Assets
to
"(a)
pledged
other
Loans
are
serves
lb).
of
•
I,
$3,889,644.93
shown
deduction
above
of
44,882.39
deduction
of-..
reserves
Kenneth
of
shown
as
after
are
Ireasurer
to
the
the
.
:
173,941.28
—
Landfare,
W.
Assistant
abo\e-namcd
hereby certify that the
true
re¬
of
Securities
above
apd
purposes
as
after
*,
assigned
or
liabilities
secure
for
institution,
statement in
above
Dest of my knowledge and belief.
KENNETH
W.
LANDFARE
Assistant
"
Treasurer
Correct—Attest:
C.
W.
KORELL
SUMNER
J.
Who
1,231,679.26
/
AC-
TOTAL LIABILITIES
.
More
CAPITAL
economics
to
,
"750,000.00
COUNTS
teachings of their
parents and
grandparents were
incorrect, and that the only way
/'/
$1,000,000.09
Surplus fund— ___I——
Undivided profits-.
moral
gression.
t
Capital
chil¬
*
-
.
obligations shown below) $35,750,745.81
,
dren, practically in their infancy,
tion.
.
(and
etc;)
•
M h- *
i
; 9,126,537.69
s
Other deposits- (certified
•
$10,000 building, and
the lvalue increases to $13,000 or
14,000, he will probably get a dol¬
lar or two back for every two in¬
ing
Appraisers of the National Association of
Real
years,
speculation has al¬
ways taken place. But it is not a
-de¬
pleasant thing to contemplate. It
Large grocery chains,
Kroger's,
as
of
a
of their sales
'Th'e
,2^ to 2%%
ume as
term
it is;
possible to take profits out, be¬
cause if a person has only $2,000
rent. But what has hap¬
today?
short
a
means
£2,000,000
Telephone: BArclay 7-3500
Bell
26,
London,
Members New York Stock
Exchange
Members New York Curb
BROADWAY, NEW
the Government in
Office:
9
Laird, Bissell & Meeds
120
to
Kenya Colony and Uganda
Second Quarter
Available
NATIONAL BANK
of INDIA, LIMITED
Bankers
that
did
from
Company, Inc., Endicott Building.
&
'
another
attention.
ago
pay
COMPARISON
is
fact
volume
go-,
partment store pays no more than
(Special to The Financial Chronicle)
ST.
and
-
subject which deserves
known
pened'
With Kalman & Co.
homes
of
+
there
siderable
Chronicle!
./ Building.
(Special to The Financial Chronicle)*
ROCKFORD, 111.—Earl C.
Thomson, McKinnon
"
i4With S. A. Sandeen & Co.
I
value
Now
.
H. Hentz Co. Adds
&
over-all
dwelling units jn this country
ing down.
>
k
approach
-f-,
;
*«
249,275.73
*
i
\
-
■r
.
r
v
"
V"/.
liabilities
,
from last November's storm should'
family's income to translate into
always pays his debts," a«d "Never Demand deposits of lndividbe at an end, although floods and windstorms may
uals, .,p4rtnerships,
prevent any
and
' real estate value, instead of 20%| a borrower hor a lender be." But
substantial improvement.
'
corporation^
.' ;V then as compared to the,100%
pi what has j .happened today. The Time deposits of individuals,
}.
The general fire lines should continue profitable.- If there is
spendable income of that family,
partnerships,, and corpoonly wdy - that one can
keep
come
slackening- in inflationary pressures these lines could show
real estate is worth less and is less
-j -rations
—-/r-.T
abreast or ahead of- the inflation
Depositsv of United States
a gainV •
>
important to them than it. was be¬ is to borrow
Government'
up to .the hilt—a 70%
rInvestment results are expected to show further
fore.
So while prices have been
increases
Deposits of • States and po¬
or 80%
or 90% mortgage,, to have
with a larger volume of funds invested and d continuance of high
litical
subdivisions^.—:
going up we are confronted with as little
money in a property as Deposits of banking instldividend payments contributing to the improvement.' :y-y.
.•>./ a strange anomaly of the relative
tutions
,,
I
;
;
46P, 113.03
/■ )
-
discounts/(in-
and /
Loans
L
v
-
i
'
j
;
process
States, and
i.
:
C
political'-subdivisions-ii-i.'-LI,032,875,2g
Other=;, .bonds,
notes, , and,/. /;
i': Vj
Obligations,
20 years
only
States
obligations,
guaranteed
'■*.
balances.
in
cash- items
collection--—$8,286/784.28
United
•/'
the v. parents
and
grand¬
that real
parents of many of us to^turn over
say
and
.
.
,
-
Hedge Against Inflation
mo/eyears.. cause
estate cannot be Sold for
it
ahead.
from
k
j
EZ
Douglas
that
announces
Bartow
with
hedge
a
Securities
tion, 25 Broad Street, New York
thing, that is, possibly with
exception.
answer—that insofar
one
The extraordinary losses
i
the
win, he
run
cannot
mentioned
American
cerned., there is less of the ayerr there is one
way in which real
age /family's ;annual
income', /, in estate may be a hedge against in¬
proportion to .the whold, to < be flation.
^However; that way of
capitalized into real estate valtie:
ago..
.
ones are expected over the next few
favorable rate structure this line of under-
writing should show improvement in
<
I
long
Douglas E. Barlow
would
ary
of
result
only
than there
-
I liability lines and additional
months. -With
the
the value of real estate is con¬
as
.
-
it
early 1920's to 10%, U%; or Estate
will buy him the goods of
today, What, it may be asked/, the world,
the
be
season
.
the
owner
never
is
In
„
Particularly important in
increase in rates recently made by ;
The upward adjustments; were made
effective-the first of June just in advance of the active summer /
when a large number of policies expire. 4
Because of the importance of New York State in insurance
regulations, the readiness of the Commission to adjust rates and"
v
that
derived
the
12%
lines
the 20%
York.
Indeed,
down.
:
-
.
.
value
American Sees. Adds
up
,
are
number of recent developments
which should aid the underwriting operations.
V
;
' 1
First of all, rate increases in the automobile
liability
"i bave been madfc by a number of states.
pre¬
-
per-
•
j ments
be
can
.
on
are running ahead
Many companies have expanded their stock invest-
of last year.
-
Higher interest rates have
increase in the return.
nation
.
carryover
,
t
this
of
spiral which will only end— J
i j
we cannot" say where—real estate
real
; ESCONDIDO, Calif.—E. F.
estate
Hutr
as a capital asset will buy us less
ton & Company, members of the
amounted to
of the world's goods and services
New York Stock Exchange, have
about
oneevery year.
And as we face this
half
opened an office in Escondido un-»
of
the
Rebt. H. Armstrong
problem, we are confronted by der the management of Herbert
national,
another in the specter of Uncle
L.
Dunn.
This brings the total
wealth of the /'/'//
/ '
Sam's Government/wherein, if a
number
of the firm's offices id
United States., But as the infla- ■:
man buys a piece of property to¬
California to 17."
*
tionary spiral has continued dizzily
j/
day, for $10,000 and sells it .ten
upward, the importance of v real
years hence for $15,000, he will
report op condition of
''v
estate, as measured value-wise to,t have
to give away 30 or 40% (and
our
total
wealth, has declined
maybe
more),' of
his /so-called
Underwriters Trust
relatively; and there indeed is a
profits. Let it be assumed, for in¬
serious
question as to whether
stance, that out of the $15,000
real estate is worth more than 30'
any
sales price a. man must give away
to 35% of America's wealth today.
of 50 Broadway,- New
York 4,
$2,000 in taxes./That leaves him the close of business 011 June N. Y., al
30.
1951;
During the past few years there with
$13,000. If, during the next published in accordance with a call-madd
have been a number of studies
decade, dollar devaluation occurs by the Superintendent of Bank.- pursuant
which
have
tended
to the provisions of the Banking Law of
to; indicate to a level
of. between, 40% and the State
of New York.
:
* * /
that the amount paid as rent,- or
50%, then our mythical man with
real estate costs for living, has de-;
ASSETS
*
a
profit of $3,000 really has no
clined from
about
20%
of ,the
Cash,
balances
with
other
profit at all—he has a loss insofar
banking
institutions,
inaverage family's total incdme in
as
his dollars
written during the period of high rates/ / / :
'//" //'/
Comparisons of the first six months will also suffer because
.
that
total
and
up
we must realize
that there probably just isn't any
studies
/act
situation that is
a
Real estate prices are
against inflation,
var¬
confirmed the
►
v
)
challenge we have
today is to keep our
intellects clear.
It is only -by so
doing that the moral and religious
while values—*
relative values—are going down,
pan
econ¬
the 1930's
going
tate
During
omy.
t
v
that they
when they see
Paradox
have
we
paradox.
property
total
over-all
com-
Here
seem
relevance
*
■
a
down,
real estate
of
Also the cost of repairing damage to
Events during the last year have
fiharply accentuated these trends with the result that the
j
seems
unfortunately
sight of
tendency by the courts to award larger
a
liability actions.
period, it
lost
underwriting experience has been the increase in automobile accidents and the cost of settling these claims. Within the past several
i
befuddled
so
America
fiber
A
been
this year's operations and have adversely affected this phase of the
;
are
served.
While
these losses have been charged to
cases
generates.
mind stealing, but
out at people whose
The greatest
getting lower returns
are
com¬
intel¬
not
cry
not know theft
in
than in past.
spread damage caused by this disaster, however, resulted in a
continuous flow of claims throughout the winter and almost up to
;
owners
of
the
is
it
it."
Though admitting inflationary rise in real estate values, Mr.
Armstrong contends, in relation to nation's total wealth, real
estate value-wise has undergone a continued and incessant
storm losses of last November.
<■
minds
do
next several weeks.
need
must
we
Managing Editor, "The Appraisal Journal"
Operating results of the fire and casualty companies for the
first six months of the current year will be published within the
.
dishonesty
One
By ROBERT H. ARMSTRONG*
\
dishonesty,
lectual
Values in Nation's Total Wealth
E. JOHNSON
Their in-,
The real end
wake
B.
V.
FORD
TAMNEY
Z
[Directors
1
j
,
Number 5030
Volume 174
.
.
.
The Commercial and Financial Chronicle
13'
(249)
well.
as
Tax Discrimination
Against
are
The Investor
buys
who have worked
able
hard, sacrificed
freely and lived frugally to
effect
tax
is
thus
fallacy. It
a
society
our
When labor says that manufac¬
are
sible
high prices
for
the
current
respon¬
and when manufacturers and
chants
the
on
sible
the
of
future
that
say
the
labor
nation
It is the position of
the Investors
people of this
mer¬
is
respon¬
suffers
because
of people
against another.
one
is
group
pitted
League that the
invest in country—all of the
people—should
"Prosperity, face a few basic facts. One of these
When each and every American
stands willing to pay his propor¬
American
facts is
Style."
and
the pressure for higher and still
higher prices will be greatly re¬
save
and
These
loyal
are
in taxes
citizens
who
counted
The
be
can
that
that
of
are
paid for
burden
the
of
tax
burden,
Withholding Tax
division
to push
the
to
on
share
duced.
well as.in human lives.
as
tax
costly
very
be
must
tendency of each
society has been
our
the
upon
wars
they
tionate
The
1951
Revenue
that
In
they
not
are
to
estimation
my
and I
grace
burden
it
in
group
auto¬
an
cigarettes.
hiding of the
one
he
turers and merchants
Nation.
women
or
pack of
a
when
to claim that the other is respon¬
sible for high prices and inflation.
period of capital gains tax.
and
or
the
causes
Advocates national excise tax and favors reduction in holding
men
true
theory that
rendered painless is
Appearing in interest of investors, Mr. Jackman tells Senate
Committee proposed withholding tax on interest and dividends
is not only discrimination against investors, but is insulting
to them.
Says revenue benefit is doubtful, since Government
would be put to heavy expense in carrying out such proposal.
the interest of mil¬
is
same
refrigerator
a
The
on
speak in
the
mobile
President of the Investors League, Inc.
I
him
changing the
ing this
ously.
this
here
am
to
group
be
The
is
a
protest
whether their
the
form
investments
piece
a
are
in
we
must
our
of
wars.
prepared to pay
If
prepared to
.bonds
of
shares
or
few,
the
in
Let
how-
stock,
great
be
tions which have helped to make
The
do
Investors
League
states
that the average in¬
vestor is a splendid and upright
American. He recognizes the ter¬
rific responsibilities of those who
with
elected
been
members
•
are
the
made,
•
income
some
stockholder
use
will
not
of this
until
the low income investors.
on
economic
House
monstrosity.
that
also
the
by
those
is
members
of
their
had
the
measure
be
done
as
and
it
while ordinary
ink
{
the
of "tax
a
in
up
very
naturally
carry.
uary
it
until
ex- :
same
tax
own
•
It says to this group,
fect,
I
revenue
created.
are
dissipation.
may
the
be
of all taxes to
enforce, a fre¬
simplest
and
understand
quent subject of litigation in
tax
You
1
The
Tax"
just
mistakes.
to
make
waste in
burden
are
cannot
people
obliged
afford
The American
see
*
our
another example
nomer, so gross In this case as to
constitute actual fraud, which H.R.
lowering the false "aver¬
earnings" base still further
of reality, would make
more gross. The whole excess pro¬
fits statute
is
an
unintelligible
4473 by
age
75%
to
monstrosity,
taxes
on
in ef¬
sive
war
profits on government
contracts, with a readjustment of
the flat corporate tax rate if more
Our
time
League
Sam
badly
are
I
words
'•
this
at
'
time when
needed.
think
you
In
are
,
a
has
come
when
a
on
be
effectively
are
sive income
.
if the incentives to
weakened by exces¬
taxes.'
Double
•
less
objection to
a
general sales
of a reasonable amount—say
the most unfair to investors, is the
5%—is admittedly purely political.
double
tax
taxation
We
met
of
dividends,
suggest that this objection be
at
its
own
level
merely
Continued
;
by
This advertisement is not, and is under no circumstances to be construed as, an offer of
securities for sale or as a solicitation of an offer to buy any of such securities.
The offering is made only by the Prospectus.
NEW ISSUE
on
'J,
these'
:
''
$9,000,000
i
*'
1
,
*
*
■
,r
of:
pound,
a
•:
,
.
.
'.
,
'
.
,
Washington Gas Light Company
Refunding Mortgage Bonds, 3^2% Series Due 1976
Dated
of
Finance
10,
Mr.
but for its probJackman
Committee,
before
the
Washington,
July 15, 1976
should
expenses, we
pay their
OFFERING PRICE
legitimate share of these taxes. In
100.665%
AND ACCRUED INTEREST
doing
this we should eliminate
many if not ail tax exemptions.
Let every commercial enterprise,:
whether it be owned by private
individuals, .educational institu-j
tions, etc., pay their full share of
Copies of the Prospectus may be obtained in any State only prom sych of the
under signed-and- others as may lawfully offer these securities in such State.
the tax burden. This Nation today
afford
cannot
Let
us
also
tax
taxes.
that
slackers.
make
indirect
direct
realize
1951.
Due
July 15, 1951
all
eliminated
it
clear
very
Kuhn, Loeb & Co.
public that it is
taxes
Let
when
as
the
he
well
as
buys
a
loaf
of bread he is not
only paying for
the bread
is paying taxes
but he
-
A. C. Allyn and Company
Incorporated
workman
July 18, 1951.
*
Taxation
Among the multitude of need¬
complexities, hypocrisies, and
injustices found in the tax law,
revenue.
^The
the
produce
which, it is estimated, would pro¬
duce at least $5 billion annually
in
system
enterprise
theory that fbcentive
provided for special
effort. That system cannot con¬
tinue
to function smoothly and
ure
believes
plied to all commodities, with the
Uncle
'private
has been built in very large meas¬
>
Investors
the
needed.
is
revenue
should
that
the
promptly replaced by provisions
renegotiation of actual exces¬
The cir¬
the income which you re¬
to
you
only
for
national excise tax should be ap¬
trust
hot
serves
public, and which will create end¬
less headaches and liigation unless
National Excise Tax
The
which
the taxpayers and
Confuse
to
time the Depart-;
to it that all groups
paying
economy
'Statement
Profits
of mis¬
"Excess
so-called
is
Service last Jan-;
to the American
D. C., July
the
Federal Courts.
result in its
pay
do
the
when
hurts"
have
we
only because of the direct effect
Senate
'
.
Agriculture sold 5V2 mil-:
United States has become a most
serious matter. It is serious not
t
source
can
bought 5 million pounds
After
respon¬
public is depending on you. " "
The
question of taxes in!.the
our
confusion,: and
which should
cause
make the sales tax,
on
great
attempting
excessive
make
on
at
crook.'
proper;
a
illustration: how
ment of
in and out of business
to
the
at
only discrimination;
is insulting. It is insulting to
least 10 million loyal Ameri¬
other
unneces-,
military
set
oleomargarine at 25V20
so
sense out of this political
hodge-podge. The responsibility is
particularly great because of our
huge national debt and because of
to
.
distinctions
the
cut to
are
even
Quartermaster's
economic
.the
deducted
we;
reconcile the President's statement:
an
and at the
done
so
r
sibility
pencils, pens, and
senseless
-
-•
have
men
tax on me¬
fountain pens,
exempt.
are
These
This is not
on
Tax lion pounds of surplus butter to
V
Italy for 150 a pound. It is almost
; It seems to me that you gentle- too fantastic to believe!
Bills.
excise
wasted.
it
has
for
high
great let us
are
waste
not
us
us
properly should
as
prices
on
As
in
in the. past
times
many
20%
a
pay
chanical pencils and
ceive from dividends and interest- exception of food. It strongly rec¬
5%
payments. I believe you will chisel ommends that this tax be
to check into military ex-i
penditures to see that no funds
are
their
cheeks, believing that the Senate
Finance Committee would rewrite
tongues
to
agency
an
Committee who approved the pro¬
posal
.
revenues
the
Let
penses.
stated
He
attempt
our
ury.
can
paying such' a high
money
sary
the Bulletin, the League's official
publicatioh, the Tax.Bill prepared
passed
given group!
expenses
Let
bone.
House Ways & Means Committee
stated
in an article written for
and
any
in
be
paid directly into the Treas¬ cle is vicious and
cans.
burdens
the
ernment
of the members of the
one
Revenue
one
group
of sports altogether,
portion of his while
increasing the sales tax onj
receipt of such re¬ the rest to
15%; cricket, football,
fund as may be due to him. This
and hockey equipment would bet
is, therefore, a vicious principle
tax-free; baseball, golf and tennis
and, moreover, unduly burden¬ further
penalized. We are now to
have the
Bill
"v. ■
I know and you know that our
bare" necessities. Let us eliminate,
upwards of 10 million investors
hll unnecessary cost of govern-'
in
the
United
States
are
not
inent. It is reliably estimated that
crooks. Why should the govern¬
savings, of $3V2 billion can be
effected if our non-military gov¬
,,
As
are
tot
as
tax
to
not
foolish
so
and
it
dangers so
above all keep pur taxes down to
They realize that Uncle Sam In¬
corporated is the biggest business
.concern in the world,
-1,
V
Because
and
appointed
and
we
be
price.
positions.
Our
dependable citizens.
government
be
our
on
'US
must also
the costs.
lose the very freedoms
so
which
pride
have
to
•
pushed
and let
country so great.
pur
that
willing to I
are
we
pay
not
us
believe
corpora¬
we
them
fight for
ery, and
livestock, - scien¬
learning, the tools of trade,
forj
wish to have our;,
we
freedoms and if
machi
;
should
be
tific
>-ever
Internal
,
land, a
home, savings accounts, insurance
policies,
factories,
stores,
farm
of
the
League is in com¬ Code and which demands a com¬
the principle
plete overhauling.
that taxes due should be paid and
For example, at present a large
collected. Collection, at the source,
number of sports articles are sub¬
of taxes on dividends will, how¬
ject to a so-called manufacturers
ever, include many cases in which excise tax of
10%. Why sporting
no tax
is due. More than 47% of
goods should be taxed while danc-.
stockholders have incomes of less
ing shoes are exempt,, is puzzling
than $5,000 per annum. The with¬
enough, for surely nothing is more
holding of 20% of dividends will, essential to the health of the coun¬
in
these
cases,
work hardships,
try than plenty of outdoor exer¬
severe
in some
instances. Even
cise. But it is now proposed to ac¬
though refunds may, in time, be centuate
this bias by exempting
,
■
of
of
rates,
is
the grossly1
with
accord
4473) would place a
to
keep faith fellow either directly or indirectly. all dividend and interest payments
agent and the government will
with the prinThe laboring man says in effect: at- the source. Jn other words the undoubtedly be put to additional
ciples and "I want higher
payee would be obliged to deduct expense.
wages to cover my
When the withholding
practices increased taxes so
my take-home- 20% of all dividend and interest agent has reduced his tax liability
which have
payments.
pay is
not decreased."
by credit for the additional busi¬
made ours the
As President of the Investors ness expense, when the govern¬
-Industry says: "I want to lift
greatest counLeague, I feel it my duty to call ment has deducted its expense
my prices sufficiently to cover the
to your attention the ill effects
try in the
plus refunds, the net will, it is
increased taxes I am obliged to
world. These
William Jackman
such legislation, if enacted, would
believed, be far below estimates.
pay, so that my net profits will be
men
and
have on the general economy of
Such a provision as this with¬
as high or higher than they have
women stand ready to meet every
the country. I wish also to register holding of dividends is equivalent
been in the past."
national crisis, every threat to our
with you the protests of these in¬ to saying to the stockholder "We
The time has come when this is
civilization.
These citizens stand
vestors
against
such
proposed will collect the tax and then give
no longer possible.
The demands
ready to give of themselves to
you the opportunity to prove you
for higher wages on the part of legislation.
Over the years we have heard do not owe it." That is a police
help meet every plan for social labor and for
higher prices on the
a great deal in certain quarters in - state
£nd material advancement of the
procedure. Furthermore, it
part of industry tend to create
people of this country and of the more
Washington- about the charge of is penalizing the majority for the
dangerous inflation. This in¬
world.
/
:
discrimination. I say to you that few—even more
a
; flation
police state
can
wreck
our
economy
no group of Americans should be
method.
Those who have a stake in and it can do more than anything"
discriminated against.-I want to
The * League
believes such
a
America are determined to defend else, to
push us into Socialism,
i call
your particular attention to withholding procedure will prove
the Seven Rights, the right to live,
j
Economic conditions were re-i
the discrimination against Ameri¬ a
deterrent to
the purchase
or
work, worship, assemble, petition, sponsible for Socialism in England.
can investors, which is so obvious
holding of stock and therefore
Her politics are but a product of
speak and vote.
in. that
provision
of
the
tax will discpprage the flow of .capital
Investors
believe
in4 progress her economic conditions. This can j measure which provides that 20% to business- and
industry from
and will happen here unless every¬
and
prosperity
regardless
of
of
all
interest
and
dividends which more jobs and hence more
one buckles down to the idea that'
,
;
or
example
acterizes
The Investors
plete
,
,
basis
rational
no
unfair discrimination which char¬
•
*
the
coverage
another
vigor¬
(H.R.
Furthermore, its actual benefit
20% levy on is doubtful. Both the withholding
other
on
either
of special
most part
system
for
taxes,
based
dis¬
represent¬
as
present
sales
trusted?
*
'
of the tax from
name
"sales" to "excise."
so
that
By WILLIAM JACKMAN*
lions of American
Let
know that one ment say to these people that they
primary reasons why prices are not to be trusted, anymore
high today is because of than it should be said to any other
these indirect taxes. Let him know
group of our law-abiding citizens
of the
page
26
J4
(250)
1
Wallach Elected
-
Ira
D.
Wallach, Vice-President
and director of Gottesman & Com¬
Mutual Funds
Inc., and Central National
Corporation, has been elected to
pany,
the
of
By ROBERT R. RICH
office
Executive
ONE OF THE MOST UNUSUAL SITUATIONS to
develop in the
industry in some time is the current trading of Blue
Ridge Mutual Fund Shares at a price below net asset value.
Vic e-Presi-
dent
of
mutual funds
East¬
Corpora¬
ern
tion.
He
be chief
utive
The situation aro^e because, under the plan of reorganization
of Blue Ridge Corporation and Central States Electric Corporation,
it was decided that calls for redemption by the shareholders would
will
exec¬
officer
the
of
...
newly
created
be subject to a sixty day waiting period, up to Dec. 30, 1951, in
order that the redemption obligations of the new Blue Ridge
Mutual Fund could be known in advance and provided for in an
com¬
pending
pany
appointment
orderly manner.
of
deemed
successor
a
its
to-
Presi¬
has
selling
been
at
Ira D. Wallach
Presi¬
elected
dent of
Rayonier, Incorporated.
Mr. Wallach has been
a
director
of Eastern Corporation since 1947
and
Atlantic
doilies,
Executive
Corporation
business
fine
paper
its
Eastern
manufactures
other
of
member
a
Committee.
and
Bond
lace
papers,
place
and
mats
shelving,
NATIONAL
your
that date and
on
request
upon
investment dealer,
re¬
call thereafter.
values
price."
Currently the shares of the fund, with the sixty day waiting
period, are being traded in the open market at quotations some¬
what under the asset value per unit, and, of course, at an even
greater discount, if the offering price (asset value plus sales
charge) is taken into consideration. [Editor's Note: This situation
is carefully analyzed in this week's "Chronicle" in an article on
page 2 by Irving Allen Greene, of Greene & Co.]
TOTAL NET ASSETS of 101 mutual funds reached
a new high of
June 30, according to figures compiled by the
National Association of Investment Companies.
Although both gross and net sales for the second quarter of
1951 were materially less than for the first quarter of this year
repurchases took an even sharper drop, placing the industry,
or
from
from
securities
on
statistically, in the most stable position it has enjoyed for the past
18 months.
In
all
three
fund
namely, common stock, balanced,
and bond and specialty, total repurchases, as a percent of assets,
declined materially from the first quarter of 1951. The bond and
specialty group, whose repurchases in the first quarter of this year
were 9.2% of assets, only had repurchases amounting to 5.56% of
assets for the second quarter. Repurchases, as a pereent of assets,
for balanced funds, dropped from 1.93% to 1.59%, and in the com¬
mon
national
research
on
1852 will be
shares when the board of directors "deem it advisable,
plus selling commission of 8V2% of the offering
new
asset
$2,725,311,000
Prospectus
Subsequent calls to Feb. 28,
Research-Distributing Corporation, organized by Reynolds &
Company as distributors for Blue Ridge Mutual Fund, will start
dent, Clyde 3.
Morgan, who
grows, tracing its growth from small beginnings to a giant in the
industry." The best features of this new pamphlet are its conserva¬
tive tone, its simplicity in explaining to the prospect how he, too,
can enjoy the fruits of American enterprise,
and the insight it
gives into the questions that investment managers try to answer
before they buy securities.
•
Copies of "The Growth of American Industy" can be obtained
without obligation from Hugh W. Long & Co., 48 Wall Street,
New York City 5, N. Y,
groups,
the Berger and Snowden "Pru¬
be returned
to the Pennsylvania State Senate for a concurrence on the amend¬
ments.
Both bills, originally slated for readings in the State
House this week, passed the Senate some-weeks ago, the Snowden
Bill with a vote of 46 to 3, 1 absent; the Berger Bill with a vote
TECHNICAL AMENDMENTS to
Man" bills made it necessary for both bills to
dent
of 29 to 9
12 absent
Bill
fund shares.
HO BROADWAY, NEW YORK 5, N. Y.
Pennsylvania legislature convenes again.
Efforts' to effect a compromise between those in opposition
and those in favor of mutual funds shares as an investment device
for trustees have been reported. The Snowden Bill" is slowly gain¬
ing favor as more and more of the legislators recognize that, in
case of small trusts, mutual funds are the logical investment
medium for the prudent trustee who wishes to secure for the lifetenant a good return, while minimizing risk through adequate
the
can't sell investment funds "in the
knocked into a cocked
few years, according to an executive of Lord,
Abbett & Co., managers of Affiliated Fund and American Business
Shares. In 1948, New York City accounted for 2.19% of the firm's
national sales' volume; in 1949, 5.53%; in 1950, 9.11%; and in the
first five months of 1951, 11.39%.
During the three years and five months the firm's national
sales volume averaged approximately $40,000,000 per year. These
OLD THEORY that you
shadow of the Stock Exchange" has been
hat during the past
figures are reported to be a source of wonder to midwest security
dealers who can't understand what happened in the "big town."
The answer lies
number
of
partially in the decline,; percentage-wise, in the
in the stock market and in the increasing
traders
emphasis which the larger New York investment houses are plac¬
ing upon retail distribution of mutual funds.
NOTWITHSTANDING PREVAILING price declines, the American
people would be well advised not to drop their guard in the fight
Continued
No. of
■Sii....—■ ■■■■■—WW———W—WMR
MIHWNMHMmNWNIIilMj
Funds—101
MMUNM
Stock...
Balanced
^WELLINGTON
1st
1951
2.6£%
4lh
3rd
Quarter
1051
Knickerbocker
3.92$,
Bond
&
Fund
2nd
1st
3.27%
1050
2.70%
1950
1950
1949
2.64%
3.71%;
-
4th
Quarter Quarter
Quarter Quarter
1950
(Fund Group Repurchases a3 Percent
Common
>
2.03%
2 77%
2.32%
2.36%
3.54%
2.31%
1.65%
30
1.59%
193%
1.82%
1.44%
2.26%
1.76%
5.56%
9.20%
7.09%
5.30%
5.
4.33%
for the Diversification,
FUND*
1.47%
26
Specialty
BULLOCK
2.03%
of Group Assets)
45
3.49%
„
Supervision
and
Further strength is noticed in observing the "rate of growth"
of the fund groups, measured by the ratios of their sales to repur¬
.4, rum
chases.
shed
to
Safe-keeping of
Investments
The ratios of the balanced fund group increased
from 3.82
3.90; that of the bond and specialty group from 0.83 to 0.93.
common stock fund group held fairly steady in changing from
2.10 to 2.06.
prospectus from
your
-
•
or
PHILADELPHIA 2, PA
(by quarters)
Repurchases*
1st
2nd
4 th
3rd
Quarter
quarter
Quarter
Quarter
in Gr-oup
Stock—
Balanced—
Bond &
Specialty
"THE
4th
Quarter
,
1951
1951
1950
1950
1950
1950
19^
1.90
1.70
1.64
1.88
1.57
2-51
3.10
45
2.06
2.10
2.02
2.12
1.34
2.58
3.71
30
3.90
3.82
3.69
4.32,
3.17
4.54
26
.93
1.10
1.48
CALVIN BULLOCK
5.10
send the attached coupon!
GROWTH
OF
'■
•
AMERICAN
Influence Your Financial
,71.
Future"
*
Send
me,
Place, New York 5.N. Y.
without obligation, Prospectus
for Knickerbocker Fund.
.89
/
INDUSTRY
is
Established 1394
New York
One Wall Street
the
and
latest
How
It
Name.
Address.
.State.
City
Figures less than 1 indicate net
Can
and
perhaps the
best sales literature to be released by Diversified Common Stock
Fund. The pamhlet pictorially shows the reader how a company
Custodian
WISCONSIN
FUNDS, INC.
fatal DisMMltt .1 WIKOMM IHVESTHEHT (WHIT Stem
Funds
;
Fundamental Investors, Inc.
Announces the
Certificates of Participation' in
INVESTMENT FUNDS
investing
I
INC.
1.61
.83
""Figures are sales divided by repurchases.
repurchases for the quarter.
-
20 Exchange
1st
2nd
Quarter Quarter
101
Funds
Common
or
'— — MAIL THE COUPON TODAY!
KNICKERBOCKER SHARES,
investment dealer or
July 1, 1949 to March 31, 19511
Fund Group:
Keystone
<
Dept. C
Funds
—t—
.Office,
Prospectus from your
.■
No. of
All
sod its shares, phone or call at out
-H-
.
Ratios of Mutual Funds' Sales to
investment dealer
For Prospectus, describing the Fund
r
The
ML
35
Percent of Total Assets)
as
Quarter Quarter
in Group
v
All
2nd
Funds
,
\
page
:
(Total Repurchases
'
on
Repurchases as Percent of Assets
(by quarters)
.
V
-
diversification.
THE
July 1, 1949 to March 31, 1951
;
until July 30, when
the
stock group, from 2.77% to 2.03%.
Mutual Funds*
mutual
specifically permits trustees to invest in
No further action will be taken
&
corporation
that the
"Prudent Man" bills are identical, except
The two
Snowden
Manhattan Bond Fund, Inc.
their capital
Appointment of
Two New Distributors:
IN
KING MERRITT & CO., Inc., New York, N. Y.
BONDS
Diversified Investment Fund
Southern States Distributor
(Series B1-B2-B5-B4)
PREFERRED STOCKS
(Serie. K1-K2)
L W.
Diversified Preferred Stock Fund
SIMON
COMPANY, Cleveland, Ohio
Midwestern States Distributor
COMMON STOCKS
(Setie< SU2*iS5tS4)
Diversified Common Stock Fund
WISCONSIN FUNDS Inc.
Prospectus may be obtained from
The Keystone Company
of jBoston
SO
Congress Street
Boston
Massachusetts
PROSPECTUSES AVAILABLE
ON THESE
MUTUAL FUNDS
225 E. Mason
.Milwaukee 2
Other Distributors;
48 Wall Street
and
FIRST CALIFORNIA CO.
Company
Incorporated.
New York
Chicago
'
Los
Angeles
HARTWELL P. MORSE
Distributor Western States
Distributor Bastern States
SAN FRANCISCO 20
Hugh w. Long
New York 5
BINGHAMTON, N. Y.
Volume 174
Number 5030
.
The Commercial and Financial Chronicle
.
.
(251)
transformed into risk capital—but
not if the saver is penalized by
Proposed Changes in
Capital Gains Tax
too
a
Stock Exchange
Schram, arguing against raise in capital gains tax, points
to large extent, capital gains tax is a self-imposed tax,
need not be paid unless taxpayer elects to do so. Denies
on capital
gains tax has relation to income tax rate, and
out
and
,
r>
rate
raising rate capital gains will not produce
says
be
appearing before Con¬
gressional committees
on
matters
the
take
will
the
of raising new
and
show
you were
greater
Be¬
revenues.
of
cause
ten
revenue
service
with
this
make
Ex¬
international
become
guardian
inti¬
today is
gains
commitments
as
is
goods
the
-round
creation,
and
The
Emil
vital
came
1942, the need for
We
nue.
want
to
before you
reve¬
more
carry
fair
our
share of the tax burden. We do not
is
by
Schram before
the Senate Committee in Finance, Wash¬
ington, D. C., July 11, 1951.
•
,k';
statement
is
Mr.
accomplish
plants,
new
substantially
ment's
revenue
the
gains
it.
Gains
Tax
intimate
an
hope
our,
We
of
this
contribute
con¬
that
we can
out
your
in
is
To that
imposed
be
elects
it is
extent
tax,
unless
do
a
which
tax
a
paid
to
We
an
The money to do this job must
.
not
from
come
government's
additional
gains
on
service
has
been
$2,556,164,668,
on
or
65.17% of the total $3,922,491,-
916 .of
publicly
offered
foreign
dollar bonds outstanding on Dec.
come
is taxation.
be
of
source
in¬
Our production
financed
by
a
private
than
1946.
in
1949
due
was
number
to
of bonds
the
self-
thje highest
need
shorter
a.
have
so.
been
•The
that
convinced
are
increase
in
the
that
either
capital
to
assented
the
debt-service
resumption
plans, including the offer of the
1950,
Railways
became
and • to
issuers
and
obligations
effective March
2,
cancellation' of
the
Japanese bonds
acquired
the
by
conversionof
repa¬
triated bonds into yen bonds.
Thus,
owing to the assent of bondholders
either
to
Plan
A
Plan
or
principal
amount
bonds
Mexican
of
of
rate' increase
31,
bulletin
a
"Statistical
36.05
Offered
with
serious
ciated
he
is
to
bonds
to
to
assented
and
unassented
has
bonds
We
decreased
would
tax
to
matter of record
from capital gains
a
revenues
time
the
shorter
period
:
Institute
of
International
as
of
Dec.
the
from
man
which
owns
has
a
appre¬
in rvalue, a capital asset
reluctant to sell because of
his capital asset,
a
think not. What
we
need is
than
their
ually
savings
business.
has
in
Big
easier
an
more
small
.
tax
capital
December 31,1949
>
•.
c-'.
!
face
$44,-
of
all
;
•
1950
T
An
underwriting
aged by A.
-
i
Sink, fund
the
the
of
first
public
The original plant is at
Oglesby, 111. and there are fiveother plants located in four states.
Marketing area is principally in
the
states bordering the f Missis¬
sippi River and in the southeast
The company has
paid dividends'
its
on
common
since
year
1932.
and
Total
:
■
ft
'
J
U
'■
V-V
•"•/'•
>
per share, and payments in
1951, through June, amounted 'to*
$1 per share..
"
■
Edw. E. Mathews Adds I
(Special to The Financial Chronicl*)
BOSTON, Mass..
*
Edward
of
E.
Mathews
40.72
1,294,600,000
Joins
Tucker, Anthony
BOSTON,
Mass.
Anthony,
Jr.
and
the
Downes
is
are
now-
'*
1.74
71,700,000
■
■
■
>
.
.
.
Vr
.
•
-
counted
faulted
Copies of the Prospectus
At the end of 1950 Latin-America
bonds.
can
for
94.4%
Of the total
of
Bolivia
accounted
26.39%,
respectively,
man
total
defaulted
Latin-Ameri¬
bonds in default,
Mexico and
for
32.54
while
and
Ger¬
issues represented 66.17%
European
defaulted
of
bonds.
25.6%
bonds,
on
Dec.
as
of
total
compared
31,
The
the end of
Far
Share
as may
any state from such of the several Underwriters,
lawfully offer the securities in such state.
with
accounted
1950 for 5.6%
.
be obtained in
1949.
East
defaulted bonds.
may
including the undersigned,
de¬
Europe's
percentage increased from 58% at
the end of 1949 to 77% on Dec. 31,
1950.
per
$3,922,500,000 100.00
On Dec. 31,-1950 European and
L a t i n-A m e r i c a n obligors ac¬
17.4%
.
'Alfred
B.
Tuckeiy
at
of total
.
.
..
*.
.
A. G. Becker & Co.
-
Incorporated
<
July 17,1951
'
4
.'
1.83
$19.75
-
P.
with
-
($10 Par Value)
Price
53
Reed
—
Anthony & Co., 74 State Street.
33.00
for
Co.,
State Street.
\
'
•
;
Charles B.
—
Cutter has been added to the staff
100,000 Common Shares
*
accounted
were
$1.40
%
$4,300,400,000 100.00
1931
1950
Dividends in
\ ' ;'v
•
•
'
evejry*
in
(Special to The Financial Chronicle)
who
'
65.17
* 74,700,000
*
stock* in
1910, ' except
December 31, 1950
$2,556,200,000
principal
distribu¬
cement.
following table:
1,751,200,000
or
funds, and
Marquette Cement Manufacturing
Company f:*
•
man¬
Half of the stock is
being
by the company, proceeds to
v
are
57.54
:
Interest
group
G. Becker & Co. Inc.
July 17 offered 100,000 common,
shares of Marquette Cement
Man-]
ufacturing Company at $19.75 per
on
.
••
from
gains.
offer to sell nor a solicitation of an offer to buy any of these securities.
The offering is made only by the Prospectus.
.*
V.
pub¬
%
$2,474,500,000
rather
Stock of Cement Firm
'
'
less
Group Offers :
STATUS OF PUBLICLY OFFERED FOREIGN DOLLAR BONDS
Debt service paid in full
In default in regard to:
in
revenues
an
-i.
"
under
higher
a
us¬
to
businessman
timing
lengthened holding
will .result
Becker
unsea¬
business
access
therefore,
a
more
long-term
.A great deal is heard these days
risk
the
payment is also
control;
period
about
soned
taxpayer, and
tax rate and
taxpayers, not fewer.
in; the
was
<V
2
31, 1949 and
summarized in the
asset
the
of the tax
in Chicago, is one of the
prin¬
cipal American manufacturers of!
to
equity capital markets than does
,V; This advertisement is neither
licly offered foreign dollar bonds
the
Finance of New York University.
The increase in proportion of
question. ,:A
always
are
con¬
open
taxpayer who pays 25%
of his gain to the government—
has this man been favored? We
comes
vestments until the shorter period
became > law. Despite the limited
Colombian
of
status
judgment, is
con¬
company's stock.
Marquette, whose headquarters:
fairness,
This
stand. We must
our
tion
tax
realizes his gain and thereby be¬
was not felt in that year, however,
because the tax-paying public did
not begin to thaw out their in¬
to $10,817,800.
the
in
of
record
appreciate that the realization of
a
capital gain is under control
resents
income
helping the small business¬
In the Tax Bill of 1942, which man. Here is a solid way to help
him. Many a small enterprise will
was
passed in- October -of that
die from financial malnutrition if
year, the holding period was re¬
tax
legislation frightens away
duced from 18 to 6 months. The
full impact of the shortened period people who would be willing to
Plan
358,300
on
on
rate
raised.
tax rate, he sells
in¬
be
dropped from $12,000,000 in 1938
to the point that, in 1940 and 1941,
capital losses offset capital gains,.
on
Rowland Collins, Director, and Dr.
Marcus Nadler, Research Director,
Data
firms
for
revenue
The
the other 50,000 shares by a
group
of stockholders. The
offering rep¬
-
high" tax penalty. He
can
the tax by continuing to
hold the asset. But if, with a lower
right.
were
1941, it is
that
during 1950 from
37.09%;
of
be
our
capital
ing period of 18 months from 1938
;
also
cept, in
longer
When
a
so.
be
more
be added to its general
would
.
firmly convinced that'a
produce
sold
escape
the principal
Japanese bonds has
of
amount
just
1949
A has increased
entitled
Analysis of
Foreign Dollar
issued by Dean~G.
holding period
still higher.
o£
share.
with
record—and
on
theory has been advanced
should
When the law provided a holdr
been reduced from $281,273,200 to
$67,592,000; the percentage of
Publicly
Bonds"
the
was
raised, the
capital gains,
on
the
1950;
Brazilian
according to
that
for 1950
time
deep respon¬
has
$55,463,861
of
end
amount
1950,
believe
revenue
the
(capital"gains
$211,415,429! at
Dec.
31,
1947.
this
defaulted
Railways
the
Nadler
that
in
own
B, the
been reduced from
Marcus
known
if the rate of tax
must
gains
industry, I stated that
holding
period
were
shortened, revenues from the
growing
various
which
Collins
We
capital gains
the taxpayer
holding period will do
bonds serviced in full from 57.54%
Mexican
Rowland
also
exceeded
receipts were only slightly lower
equity capital, the savings of the
I testified before this Committee
people. These savings "can be
in 1942 as a spokesman for the
Mexican Government to holders of
G.
is
It
1946
our
the government.
it is known that capital
in
are
will
The record
revenue.
revenues
1945.
rate
or
a
lengthening of the
holding period will decrease reve¬
nues. We are certain that coupling
government—for
only
University, report 1950 debt service on ><■
foreign bonds issued and outstanding rose to 65.17% r
compared with 57.54% in 1949.
;
debt
loss to understand
a
and
We
his
'
.
1950
at
are
able to us,
new
wealth.
Dean Collins and Dr. Nadler, of Institute of International !"
In
Not Increase
We realize the needs
government
shortening of the holding period
Though comparable figures for
1946 and later years are not avail¬
It
not
Foreign Dollar Bond Service Increased
paid in full
capital
why the Treasury estimates that
increasing the capital gains rate
by 50% and doubling the holding
period would produce $440,000,000
It
one.
requires.
sibilities.
does not bear out their contention.
gain.
new
Finance of New York
-
govern¬
the
Holding Period
summarize
me
crisis
of
live with day by day.
we
creased.
dollar
the
from
in¬
markets
if
^
will
it
of
tax.
securities
Finds
tax
generally recognized that
capital gains are not true income
and that a tax on capital gains is
in
reality a
capital levy. The
Treasury does not seem to realize
that a capital gains tax is a tax
which is paid only if the tax¬
payer elects to realize a capital
production—more
must
*A
task
labor with the tools to create
prise system. We in the securities
industry recognize today, as we
in
The
months
crease
on
reve¬
gains
deliberations.
>
equipment; improve and modern¬
ize
existing equipment. Provide
part of our free enter¬
did when I first
to
production. Build
Each day
the impact of taxation on
see
answer
brains
Schram
.capital into
productive enterprise.
we
the
capital
four
or
Higher Rate Would
structively to
difficult, extraordinarily difficult.
But our people have the power
and
flow of equity
this
services.
is
is
experience
a
of
and
tax
tax
a
It
duction in the output of consumer
sur-
sensitive
*
our
on
and
the net
capital
un¬
our position.
We appreciate the difficult task
three which confronts
you, the judgment
seven-year period 1935 to
"•
*
•
three
to
re¬
particular.
Capital
to
the
which
effect
of
Let
year
Revenue
democracy. At the
same
time, we must avoid crip¬
pling our afforts by excessive re¬
problems
view
a
the
into
More Revenue from Shortening*
1945
-We are convinced that the re¬
tention of the present rate with a
reduction in the holding period
,
Our association with the capital
task
mately ac¬
quainted with
;
1941.
revenue
general
from
under
government with the
in
one-half times
for the
to approach this
higher
a
and
nues
which
taxed
laws.
unfavorable
not less,
raised from a
nation
change, I have
-
highly
in
strong enough
to preserve our liberties against
any
aggressor and to meet our
.the New York
Stock
essential
Our
of
be
tax
the
to
economy,
capital gains tax.
my
years
will
$266,600,000, in
frequently venturing
charted territory.
alone the revenues from the
capi¬
tal gains tax were more than
greater
income
to
$354,000,000 and in
$720,000,000. In the latter
to
productive
the
increased
1944. to
more, *
be
may
real
and
bringing
least
us.
how
you
the
income
turn
obtained from
be
into
question of taxation with
-
that' additional
position
but
everyone
gains tax receipts
expanded to $68,000,000 in 1942. In
1943 returns from the
capital gains
tax
channels,
We have tried
We believe—sin¬
cerely and after long study of. all
pertinent factors — that we can
Then; as now,
faced with the necessity
be
should
more revenue.
should
revenue
of taxation in 1942.
attracted
investment
-
to
I £>egan
effect, capital
long
investment is required to produce
true income. The more capital that
can
Mr.
too
or
There is another important fac¬
tor to be considered, Capital
By EMIL SCHRAM*
Former President, Now Consultant to, N. Y.
high a tax rate
holding period. 1
19
.
The Commercial and Financial Chronicle
(252)
16
.
.
Thursday, July 19, 1951
.
'
=
,
ive
Re-Enter—Britain's Dollar Gap
•
in
News About Banks
By PAUL EINZIG
Dr.
*'
tion
again become
Eng.—It
about the
had
1
of payments. It
is not as if the figures had been
unfavorable. On the contrary, the gold and
dollar reserve continued to increase during the
three months ended June 30, even though the
r
<
reserve
Einzig
accompanying the announcement of the gold
figures Chancellor Gaitskell explained that the decline in
reserve
the
surplus
mainly due to three causes—an increase in the
and value of dollar imports, a decline in dollar exports,
volume
was
that
New
York,
it
was
announced on
July 11
by
Winthrop; W; Aldrich, Chairman
the
Board.
board
death
Vacancies
resulted
ficer, and
P.
rectors
Trust Co. in 1926
requirements,
Craig is
Central
the
and
fi¬
trustee
a
of
Savings Bank and
Petrucelli
Assistant
Mr.
of
who
imports, in addition to the increase in their
most member countries "can ill afford to lose much
the
of
cause
distinct from
whole.
change in the
deterioration
Britain's
of
balance of
the
terms
of
D.
balance
of
as
Britain has to depend
to
these countries
of
adverse
offset
change in her terms of trade
Mr.
Gaitskell
admitted
that
on
the contribu¬
the unfavorable
on
the
effect
the
of
her balance of payments.
task
of
balancing
Britain's
during the period of rearmament has proved to be
difficult than the government had anticipated.
At prices
prevailing in May Britain had to export 20% more in volume in
more
order to pay for the same volume of
average
imports, compared with the
Apart altogether froru price increases,
howevep,
volunie of'trade'was'also untavbrable to Britain.
for 1950.
the change in the
During the first five months of 1951 the volume of imports was 9%
above the corresponding figure for 1950, while the increase in the
volume of exports was only 4%. In addition, the prices of exports
have not risen to
The worst
whether they
prices
nearly the
is
that
most
should hope and
whether,
or
it
of
would be more
extent
same
people
pray
for
a
as
are
1940.
not
sure
Assistant
Trust
the
is very
considerable, it is by
no
means
He is
awarded
in 1932.
a
graduate
of
the
rearmament
requirements the
steel exports do not appear to be
very
Notwithstanding this there
revert
once
more
would be reluctant
to
cuts
even
are no
in
of
prospects
of
Banking
University.
western
associated with Argus
the
City National Bank
Chicago, Goodbody & Co., and
various other
research positions
*
Horace
of
statistical
dollar imports.
the
in the mid-west.
*
4
The government
petrol rationing, in spite
temporary cessation of oil imports from Persia. Yet, should
rearmament gather momentum a return to the
regime of austerity
&
to the
Mr.
—
Theodore
associated
E.
with
Company, Vance,. Sanders & Company, Ill-
Minnesota Federal Building.
Devonshire Streets
Co.
in
Co.
California
bank
in
the
conducts
in
San
Francisco and
in
Portland, Ore¬
Seattle
and
Tacoma,
and
The total
have
in
of
resources
increased
the
from
$188,to $412,901,162 at
1941
1950.
,
Harry C.
W. W.
Chairman
Board
.
Crocker, Chairman of the
of
Directors
of
Crocker
First National Bank of San Fran¬
have records of 27 years
ice.
Aberdeen, Miss., Mr.
from
the
entire busi¬
a
appointed
was
in
director in
July 11 Crocker First Na¬
tional Bank announced the retire¬
served
World
War
was
II.
as
Trust
was
*
and
an¬
June 26 that the Man¬
Pittsburgh
National
has
office
Manchester
in
bank
the
in
been
hemian
a
1909
and
had
He has been active
Banker's
Foreign Trade,
has
Estate
started
Foreign Department
years.
the
Real
Angell
Association
for 30
and
member
Club.
Mr.
of
the
Roth
for
years
Bo¬
came
become
of
&
Bank
the
the
to
Mellon
Trust.
The
later
join the
Savings Bank, which was
merged with The Crocker
Bank.
He entered the Real Estate
Pittsburgh "Post-Gazette" reports Department in 1928.
that William F. Minnick, formerlySecretary, Treasurer and Trust
As a result of the sale of
$500,Officer of the Manchester Bank,
000 of new stock, the
capital of
has been appointed Assistant Vicethe
President of
and
Mellon National
the
of its Manchester
office.
R. M. Bunting, formerly
Assistant Secretary and Assistant
Treasurer, and James C. Lowry,
formerly Auditor, of the Northside
Manager
bank,
have been
sistant Managers.
appointed
As¬
tin
National
Bank
of
Oakmont,
June
Bank
<
&
Trust.
*
•
The
20
was
from
raised
as
$1,000,000
of
to-
$1,500,000.
Two With
Conrad, Bruce
(Special to The Financial Chronicle)
Swails
have
and
Frank
-
Derele
Zimmerman
joined the staff of Conrad,
Co., 813 S. W. Alder St.
Bruce &
With Jos. Faroll
Murray E. Wagner and Socrates
*
increased
*
capital of The
spectively of the Manufacturers National City Bank of Cleveland,
Trust. Mr. Allen came to the bank Ohio, raised from $10,000,000 to
in the Brooklyn Trust Co. mesr $12,000,000 by the, sale, of $2,000,ger in 1950 having been with that 000 of new stock, became effect¬
.
June
Pa.
(capital $75,000) was absorbed on
15 by the Mellon National
same
Puget Sound National Bank of
Tacoma, Wash,
PORTLAND, Oreg.
According to the weekly Bulle¬
of the Office of the Comp¬
troller of the Currency the First
upon
re¬
in
for 41
,
of Pittsburgh
the
been
the
Mr.
Mutual
from
Officer
with
elected
*
in
of
announced that James
Assistant
He
Cashier
the west coast in 1915 to
a
the
on
ant
Department.
Vice-
a
chester Savings Bank & Trust Co.
He be¬
At
dent in
Assistant
National Bank
Trust Company
merger
career
R. Angell, Vice-Presi¬
charge of the Foreign De¬
partment; and Paul Roth, Assist¬
Graduate
and
serv¬
ment of A.
January of 1948."
Mellon
nounced
an
of
On
Assistant Vice-
1941
*
The
came
the
Harvard
President in 1943.
National
1932.
banking
Lake
and
"
now
Trust
Phenix
H. Allen and William H, Padgett,
Jr. were appointed Trust Officer
With Vance, Sanders
BOSTON, Mass.
become
has spent his
President
major in
the United States Army Air Force
(Special to The Financial Chronicle)
Andrews is
He
graduation from Harvard in 1928.
in
Minn.—James
Trust
his
time it
MINNEAPOLIS,
has
Cashier in 1934, an
Z.
City, Mr. Lake
Chatham
gan
inevitable.
E Billings has been added
staff of B. C. Ziegler &
Chairman
Manufacturers
which took place in
to reintroduce
Joins B. C. Ziegler
of
Manufacturers
Bank
of the
(Special to The Financial Chronicle)
Flanigan,
that Henri
of New York
to
intention
San
The
branches
the end of
the
tion
Lake, for¬
merly Trust Officer, has been ap¬
pointed a Vice-President. A native
the
any
C.
Board
nounces
and
in
office
877,801
on
School of Business Administration.
and
Trust Company of New York, an¬
satisfactory.
indications of
succeed
to
"A native of
and
Corp., and prior to that
with
was
in
North¬
Before com¬
Trust
Co. Mr.
Bankers
was
suffi¬
coal
year,
in
1850's.
its
gon
Board, the first, according
Chapter of the American In¬
cago
stitute
reassure
needed for
who
Walker
He also attended the Chi¬
Research
is incapable of keeping pace with the
growing demand, and acute
shortages are freely predicted. Since the limited supplies will be
seems
bank's Personal Trust
degree of
Master of Business Administration
British opinion about the prospects.
Official quarters in London are less
perturbed about the posi¬
tion as far as imported raw materials are concerned. On the other
hand they view with growing concern the
prospects of the two
home-produced raw materials—coal and steel. The output of these
to
New
been
held
reserve
of
University of Michigan, hav¬
exist.
dollar
of
Treasurer
Company
Investment Research Divi¬
ing to
Cooper
and
Carr
of the
Vice-
ing
British papers are full of gloomy ref¬
Even though the amount of the gold
at»the
Philadelphia "Inquirer" to
President of Rockefeller Brothers
cisco, announced on July 12 the
hold that post since
1924.
Mr.
Inc., a director of the Home Life
promotions
of
A.
L.
Hay and
Walker, who is 47 years of age
Insurance
Co., a trustee of the
Henry Pult to Assistant Trust Of¬
and who had previously been a
Atlantic
Mutual
Insurance
Co.,
ficers, and A. N. Veltman to As¬
Vice-President, is the youngest
and
a
trustee of
the
Seamen's
sistant Cashier, foreign
exchange
and eighth President in the his¬
Bank for,Savings.
.v,\
department.
Mr. Hay: has' been
tory of the bank, which has just
with the bank for 33 years and
"i
b';77*
observed
its
88th
anniversary.
Messrs. Pult and Veltman each
Lawrence C. Cooper has been The "Inquirer" also states:
thing is certain. The British public has become once more
acutely conscious of the dollar problem. Twelve months ago it
was the general opinion that the
problem of the dollar gap was
incapable of solution. Six months ago the view gained widespread
acceptance that the dollar gap problem had virtually ceased to
cient to
President
er
to
Department.
One
the dollar gap.
Executive
the
ings of the other Sterling Area countries. Conversely, a rise in
these prices would further aggravate the adverse
change in the:;
terms of tracteTrom Britain's point of
view, but it would cause an
increase of the dollar earnings of the Commonwealth.
to
is
sion of the
and would therefore tend to benefit her balance of
payments. On
the other hand it would mean a further decline in the dollar earn¬
erences
trans¬
was
shares
July 12 elected William B. Walk¬
ferred to the head office in charge
of New York City branches.
Mr.
in
British gold and dollar reserve.
It is true, a further fall in the
prices of wool, rubber, etc., would improve Britain's terms of trade
more
he
at
Na¬
Philadelphia
of
Bank
First
at
general banking business at' its
head
York and will be
in charge of
ness career with the bank, joining
public utility investment research it in
1929, a year after his gradua¬
sharp fall in commodity
a
once
1947
elected
recovery of these prices after their recent fall
in accordance with the interests of maintaining the
And now
In
tional
the
88th
established
early
4
of
directors
The
Vice-President
a
its
in
bank
when
bank
having been
Francisco,
July 5, 1864, to take over the
business of private banking firms
alterations.
and
4
the
share for each
Of the $3,400,received by the bank
be
Wash.
sjc
established in 1933
Bankers
those of imports.
in Britain
Branch
was
construction
new
of
new
held
incorporated
ing and Maintenance Department
and has been engaged in archi¬
tectural work in connection with
was
of
the
a
Chase's
Center
named
was
of
been associated with the Purchas¬
Na¬
to
is
was
Manager
July 1933, in its Real Estate De¬
partment. In recent years he has
He
1922.
Assistant
Bank
sale of the < new capital
stock, $1,700,000 will be added to
its capital increasing it to
$10,200,000, and $1,700,000 to surplus,
raising it to $13,200,000. The bank
Office.
promotions, he
five
Metals
of
Mansfield
trade
overseas
in
in
Street
18th
Chase
Manager
that office
and
&
000
1947.
Mr. Petrucelli was
first employed by the company, in
John
his
with
been
Princeton
appointed
Rockefeller
payments of the Sterling Area as a
a large extent the gain of other
Sterling Area countries.
had
its
The
unsubscribed
from
uary
1948
with
and
of
♦-
*
stock
one
shares
all
the Fourth Avenue Office in Jan¬
Bank, a predecessor bank,
shortly
after
graduation
since
from
payments
Jr.
Mechanics
the
tional
What is Britain's loss is to
tions
He
and
the main
is
Rockefeller,
sons.
gold.
trade
become
in
Bank
associated
to
ing a long view, this rise is expected to continue. The decline in
dollar exports of the Sterling Area may conceivably become re¬
versed if and when the United States resumes its stockpiling
purchases of wool, tin, and rubber. As for gold receipts from the
European Payments Union, they are likely to remain low because
Vice-President
Chase National
the
volume, has been due to the rise in prices in the Dollar Area. Tak¬
a
*
of
subscription price.
company.
first
appointed
as
the
was
was
at
Je¬
of record July
purchase the new
shares at a subscription price of
$40 per share expires on Aug. 3.
A
group
of
19
underwriters,
headed by Blyth & Co., Inc. has
agreed to purchase from the bank
born in Troy,
employed by
Manufacturers Trust Co. in July
a
aj
$£50,4
The offer to
10.
I.
H.
appointed
been
Cluett,
N.
Y.,
Mr. Mansfield resigned from his
position
Richard
capital
five
(July
that
Arthur
and
rearmament and
stockpiling, and these factors are likely to con¬
tinue to operate so long as rearmament continues. The increase
of
the rate of
1947.
states
Secretaries
Dakot?«
California, National Association of
17) by Mr. Flanigan of the Manu¬
have
of
of Black
San Francisco, are being offered
rights to subscribe to 85,000 shares
since
announcement
further
A
1936
unfavorable
*
Gen¬
the
Board
its formation in
as a
Bank
City, So.
Stockholders
the
Vice-Presi¬
on
Administrative
eral
.Since his ap¬
Vice-Presi¬
as a
has served
dent and
Cluett
Mr.
Rapid
capital
000 became effective June 20.:'-%'
of
charge of the company's long
lines department, personnel rela¬
tions, operations and engineering,
nance.
at
ill1
'
the
from $500,000 to $750,000 as
suit of a stock dividend of
Loaning Of¬
Committee „of
After several
The
Hills,
stock
a
*
in
the First National
announces
Christenson, Vice-
Loan
wood, N'. J., etc.
in the value of dollar
Manufac¬
4
increase
by
Chairman of the Di¬
been named
from-the
facturers
revenue
$330,000
4
member of the bank's
a
director of the Citizens First Na¬
fall in gold receipts from the European Payments Union.
in the volume of dollar imports was the result of
a
National
$165,000.
General Administrative Board has
the
on
Louis
tional Bank & Trust Co. of Ridge-
and
also
President and Senior
of
Bank
The increase
v
i
Co.
Trust
dent he has at various times been
In his statement
.
4
to
An
of the
Flanigan
turers
in
Paul
Dr.
4
dividend of
Pad¬
Mr.
1947.
the board of directors of the Chase
pointment in 1940
deficit.
a
Mr.
since
National
with the company.
responsible for the sharp fall in the surplus is
expected to continue, and that it is likely to
convert the surplus into
1925.
gett has been with Manufacturers
Trust Co.
ley, Chairman of the International
Nickel Co.: of Canada, Ltd.
Mr.
Craig was elected President of
A. T. & T. on July 2 after 38 years
$109 million, and the total reached was
$3,867 million. As far as the present position is
concerned it cannot be said to be unsatisfactory.
;What is disquieting is that the trend which was
7
since
Leroy A. Wilson, trust company.
Mr. Christenson
Telephone began his banking career in 1913
and Telegraph Co., and the death with the National Bank of Com¬
last February of Robert C. Stan¬ merce.
He joined Manufacturers
was
,i
institution
Craig, President of the
American Telephone & Telegraph
Co., and Richard H. Mansfield,
Vice-President, Rockefeller Cen¬
ter, Inc., have been elected to
recent
Allowing for Marshall Aid receipts, the
gold and dollar
4
President of American
$180 million for the corresponding quarter of
actual increase of the
surplus
Bank of Lebanon, Ohio, increased
F.
bank's
with $360 million for the previous quarter and
1950.
Cleo
of
surplus amounted to $54 million only, compared
■'
the
to $18,000,000
Lebanon-Citizens
$165,000
very
:.
that
increased
its capital, effective June 22, from
been
position and prospects of the balance
be
The
CAPITALIZATIONS
generally expected that the
second quarter of 1951 would show a less satisfactory gold and
dollar position for Britain and the sterling area than any previous
quarter since the devaluation of sterling in September, 1949.
Nevertheless, the publication of the actual fig¬
ures created a widespread feeling of pessimism "
LONDON,
Bankers
and
OFFICERS, ETC.
serious problem.
a
indicated
was
would
from $15,000,000.
REVISED
because of unfavorable changes in terms of trade,
Britain's balance of payments with world has deteriorated, and
may
In giving details of
plans to enlarge the capital,
our
May 24 issue, page 2154,
NEW BRANCHES
NEW
Says,
gap"
it
CONSOLIDATIONS
Einzig discusses current British balance of payments situaas
induced by recent international trade developments.
"dollar
June 20.
the
T. Karadish have recently become
associated with Joseph Faroll &
Co., 29 Broadway, New York City,
members
of the
Exchange,
sentatives.
as
New York Stock
Registered
Repre¬
Number 5030
Volume 174
From
;.
The Commercial and Financial Chronicle
(253)" 17
Washington
Ahead
of the News
Chicago, Rock Island & Pacific
By CARLISLE BARGERON
proving disappointing to its many
been
dend
be
we
over
:-Jf
Yet
the
a
of
demagoguery,
of attack;
he
understandable desire! However, this GOP member
a position to go about it in a hammer and tongs
to "save the country from ruin," "from socialism," or anything
honey
It is
life,
or
one
to
believe that everything should be
sunshine and light'in the great game of American politics.
conflicting forces that make up our
of the contending and
counter and off-setting greed to other greeds.
a
But
'
.V'
as
too many
.
so
of the Republicans have been in the minority
long that they have become too cynical and inclined to
be the opposition.
Joe
Guffey of Pennsylvania
was
for
years
quite affluent and content as the Democratic or minority leader
of Pennsylvania. But in 1936, with the Roosevelt tide, it was too
much of a set-up for him to resist running for the Senate and be¬
coming the majority leader in Pennsylvania.
And I have
a
friend who sat in the late Andrew Mellon's home
high moguls had decided the State should have a Senator in Wash¬
ington who was close to Roosevelt and that he, Dave, was through.
after, of course, that Roosevelt was trying to
put Andy in jail for alleged income tax evasion. A jury saved
him from jail, not Joe Guffey, who stood close to Roosevelt. But
Andy thought he was being smart.
'
was
one
The
in the industry.
not long
Section
under
Duff, come back to the Senate because he is "close" to the
Strangely enough, the CIO, the "Liberals" and
too., I sometimes wonder that
'
these
"selfish"
and
"reactionary"
interests
with the CIO and the other Leftists and
a
don't
get
this
from
sale
ST. LOUIS,
and to
pay
off
bank loan con¬
a
couple of months earlier
to redeem the old 1st mortgage 4s.
tracted
lop
has
with
Robert
become
Reinholdt &
affiliated
Gardner, 400 Locust
Street, members of the New York
and Midwest Stock Exchanges.
L.
Pray
us
Calif.—
James
Burkholder and
are
Rock Island
roads
have
whose
been
year
of the
one
this
above
the
level
Hicks &
of
Street, members of the New York
Stock Exchange, as a registered
representative.
now
with
Paul
C.
Rudolph & Company, 127 Mont¬
gomery Street.
a
May in itself witnessed
year ago.
a
is
earnings
year-to-year decline in net in¬
the
like
interim.
1950
has
management
Miss
many years
Price, 231 South La Salle
Osgood is one of the first
Chicago women to become a fully
registered
The
representative
New York Stock
estimated' first
=
for
Exchange firm.
last
of
THE=M==
-LINE
The Value Line Investment Survey
¥
$53,994,000 by the end
This represented a
of some $50,000,000 in
New 52-Page Analysis of
RAILROAD AND
year.
reduction
below the
provided in the
reorganization. Moreover, further
systematic debt reduction is as¬
sured through operation of a sink¬
non-equipment
debt
TOBACCO STOCKS
conservative level
ing fund of $1,000,000 a year on
the 27/gs, 1980, the only non-equip¬
ment debt now outstanding. Aside
from the reduction in face amount
of
it
debt,
also
is obvious that the
company's stock has
benefited
from
the
bonds
2%s
the
from
and
a
the
mortgage
modest
relatively
serial
of
1st
of $5.00 preferred
(dividend
cumulative only
earned) and $1,408,895 shares
Fixed
charges are
if
of
$2,600,000 annually and pre¬
ferred dividend requirements
under
$3,524,24 5.
to
charges
ahead
Thirty-five Railway and Railroad Equipment
Tobacco stocks
and 10
Two Railway and six Rail¬
analyzed.
ommendation,
stocks carry the strongest Value Line rec¬
"Especially Recommended" and offer tha
wide appreciation potential and gen¬
dual attractions of
erous
income.
of
the
SPECIAL:
you
issue will be sent to
charge with this special offer. It
and Rail Equipment Stocks and 10 Tobacco
This important 52-page
at once at no extra
covers
35 Rail
Stocks, including:
Total
Common
B.
A
Specialists in
N.
Coast
Canadian
Ches. &
Co.
Reading
Co.
Central
Southern
Pacific
Chi. & St. L.
Southern
Ry.
Hudson
Pacific
Northern
Ohio
Penna.
Union
& West.'
Norfolk
R.
Pacific
Westing'se Air Brake
Pacific
R.
$5.00 INTRODUCTORY OFFER
subscribers only) includes 4 weekly editions of
Ratings and Reports—covering 177 stocks in 14 industries.
It includes also a Special Situations Recommendation, Su¬
pervised Account Report, 2 Fortnightly Letter* and 4
Weekly Supplements. (Annual subscription $95.)
(New
Plus
RAILROAD
Y.
N. Y.
0.
100,000. This amounts to only 3.4%
at the 1950 level.
Great
Atchison
Atlantic
Pullman
Northern
Del. t
Loco.
Amcr.
stock, then, come to roundly $6,-
of gross revenues
are
now
running at the rate of somewhat
amount
vafue in relation
in sight
equipment debt
company's capitalization con¬
sists of 704,849
impersonal Value Line Ratings to offer
to earnings and dividends
over the next 12 to 18 months.
The effect of
excess profits taxation on this year's earnings is analyzed
specifically, and on a per share basis, for each company.
revealed by the
relatively good
road Equipment
sold to retire 4s and 4X/2S.
Aside
ports on Railway, Railroad Equipment and Tobacco stocks.
At current market prices, most stocks in these groups are
low
very
rate of interest on the new
Now it the52-page edition investor toLine Ratings week's
time for every of Value review this dc Re¬
timely
the
52-page Rail Stock Issue
Send $5
SECURITIES
to Dept. CF-3
VALUE LIVE
investment Survey
I nine Line Survey nuilding.
>
ARNOLD
FRANCISCO,
S.
rail?
111.—Agnes Osgood,
to W. B.
Simpson of the A. M. Castle Com¬
pany, has become associated with
earnings
a
(Special to The Financial Chronicle)
SAN
r's
4X/2S
Two With Paul Rudolph
Mo.—John R. Hes-
y e a
amounted to $10.20
were
used to redeem the old income
Selected Situations at all Times
(Special to The Financial Chronicle)
Last
CHICAGO,
secretary for
major
any
.
With Reinholdt & Gardner
For Hicks & Price
during that period totaled
$30.33, or an average of $10.11
together
really give the rest of
going over.
earn¬
77
Administration.
the Leftists would like to see this,
Agnes Osgood Rep. '
share has been
the most drastic im¬
Indeed, I know of influential Pennsylvania industrial forces
who want to see Francis Myers, Democrat, defeated last year by
Joe
a
Common share
-VALUE
common.
the night Andy told the Republican Senator, Dave Reed, one of
the ablest men ever to serve in the Senate, that the Pennsylvania
It
the reorganization
early last year with the sale
$55,000,000 of new 1st 27/ss,
amount
Senator
Former
indefinitely. For
status of the
seek
the profitability of the minority role. It is not generally understood
that there is this profitability for the more influential in the
minority, if they are reasonably acquiescent while professing to
for
of
On
reduced to
perfectly
naive
that
expect
Through sinking fund operations
this new 1st mortgage had been
obviously is not in
so
to
by the ICC on
Proceeds
on the ground that one . of the steel companies favoring the
project has always been good to the Republicans. This company,'
along with several others, wants the waterway to bring in the
iron ore in which they have invested in Labrador and Quebec—a
not
directors
share.
1980.
way
am
freight rates.
For the full year,
then, the company could well earn
in the neighborhood of
$12.00 a
nated
of
Only recently a prominent and influential House Republican
visited with the Republicans on the House Public Works Commit¬
tee and urged them to vote for the proposed St. Lawrence water¬
I
new
ings
year.
possible
three years since con¬
distributed.
a
is
months may not
last year.
Fall
top of this the man¬
agement started on a program
of
aggressive debt retirement
through open market purchases
immediately upon consummation
of the plan. This program culmi¬
Buchanan Lobby Investigat¬
./.v-
of
one
carrier.
they were not free enough of criticism themselves to
r
for
to
up
it
and
prospects, however, are good and
should
be
bolstered
by higher
years
for
be found
posed
perhaps the Republicans' ablest
persecution was two Communist fellow travel¬
the committee's staff. These Republicans knew this to be
else.
oc¬
far, it does ap¬
reasonable
reorganization
beyond the mere routine denunciation.
way
and
out
summer
measure
come.
For the full five months,
however, common share earnings
reached $3.65 compared with $3.00
to
of this committee's
go
that the
most conservative debt structures
ington gang, circulating literature against them or subscribing to
an organization that was distributing such literature.
Reluctantly
and under pressure, two Republican big shots "denounced" the
committee's action. But they never would disclose that the core
on
flattening
thing, Rock Island has one of the
ing Committee set out high-handedly to persecute individuals and
industries in the country that were working against the Wash¬
ers
the
of
action
be continued
fun, without being really effective.
the case, but
in recent
property
(1948-1950) $3.00
nor
disappointing so
pear
entangled that he can't go the full route
Several months ago, the so-called
the
on
the
summation
.this extreme conservatism cannot
only go to the point of what is considered clean
can
half earnings of $4.43 against
$3.45
a year
ago, indicating further im¬
provement
in June.
Traffic is
background, and
large sums that
spent
and
power
with respect to dividends has been
with
Republican who usually jumps up to answer him
sort
same
been
line
nearly in
earning
Neither of these events
While
was
debater in the House, is so
have
of the full
has the regular rate
been increased so far in 1951.
Yes, look.
are.
With the above
would
common
more
current
curred,
the streets, now look where
in
brought
uted.
John McCormack, whose patron¬
selling apples
were
we
the
on
year-end extra would be distrib¬
employes are. Instead of
letting the public know what their investigators had dug up, these
Republicans preferred to use it for trading purposes with John.
This man is a great contribution to this country and a stalwart
in the preservation of its freedom for which we are spending so
much money and giving atomic raid drills to children to preserve.
His invariable presentation in House debate is to say that under
Hoover
sen¬
net
working
capital as of March 31, 1951 stood
at $31 million, with cash
items of
$40 million.
widespread considering
the
prospects.
Barring this, it had
been hoped that a fairly liberal
most of the Boston Internal Revenue
age
rate
with
They were quite disillusioned when
Republican employers didn't go to town
it. Instead, these employers, these Repub¬
information
capitalization,
policy. Once the debt equipment, Rock Island should
picture was so thoroughly cleaned obviously be in a position to pay
out a fairly, large proportion of
up early in 1950, it had been ex¬
pected that the regular $3.00 divi¬ ..its earnings in dividends. In each
their
licans, preferred to keep the
comparison with the small
ior
dividend
more.
the head of Democratic Leader
reflecting
In
time it had
some
disappointment over failure of di¬
rectors to
adopt a more liberal
gators employed by the House Republicans in
the 80th Congress dug up all this dirt and
on
For
adherents.
point where the Leftists say say, o.k. old fel¬
low, you have made the proper showing of
indignation but don't go any further.
We have been reading in the newspapers
of a scandal in the Internal Revenue office in
Boston.
The fact is that some young investi¬
Bargeron
Korean-induced
its
the common stock of Chicago,
Rock Island & Pacific had been
prominent figures were more
intellectually honest and less cynical them¬
selves. Too many of them are too vulnerable
to make the all-out fight.
They go up to the
Carlisle
rail
general
pep,
of their
some
lost
market
.
if
the
before
Even
Capitol Hill a study of
ethics in government, brought on by the Fulbright committee's
disclosures about the RFC, it is the plain if unpalatable truth that
the Republicans would get much further in saving the country
,,v*
from "ruin," "socialism," "Trumanism," "Pendergastism" and the other things which they
say they are trying to save the country from,
Now that there is being conducted on
J m co
25 Broad Street
New York 4, N. Y.
Telephone BOwling Green 9-6400
Members Nat'l Assn. Securities Dealers, Inc.
feW 44th St.. A'. Y. 17, A'. Y.
BERNHARD i
CO.,
INC.
I
a
18
(254)
The Commercial and Financial Chronicle
.
.
Thursday, July 19, 1951
.
(
Did
Why O vertax the American People?
Mr.
reduce
claim
last
at
now
for
$10
billion
taxation for fiscal 1952?
new
he
By JULIUS HIRSCH
Snyder
his
allow
for
the
better
Did
Securities Salesman's Corner
forecast
of
the
Committee " of
Internal
forecast for 1952, ' however, was Revenue adding $2.5 billion to tax
in
Washington
has consistently based on a "total personal income" income; for the fat tax surplus
underestimated the Federal rev- estimate of $231.1 billion a year from social
security taxes? Even
renue. and done so to a startling• which
was the figure when the'omitting
this
last
element
hi^
degree.
Now -forecast
was
made in
October "deficit" would have been reduced
it claims a $10
1950.
*
■
- .
*
v „ «■.
to less than $4 billion. * *
billion
boost
,In view .of the obvious rise in y Far from it!
I» For
five
government
our
years
'income,, the Treasury itself raised
<
its
needed to bal-
estimate of tax receipts. As
personal income at the beginning
t h e
of April had reached $245.2 billion
a
n
c
e
budget in the
fiscal
begun.
•
new
taxes.
i
t
s
t i
r a
o
cast of
by $3.4 billion.
Accordingly the Administration
reduced its claim for $16.5 billion
in new taxation to $10 billion.
,i
n's
present claim
for fiscal 1952
ought
to
suspect
ply
on
Julius Hirsch
v
basis
.
of
revenue
(1)
tional
the
its
risen
again,
sional
the
Joint
for
Internal
record
for
erroneous
forecasts.;Revenue upped the government
addition, analysis of available -forecast of total personal income
figures suggests
that
the
cash for 1951 to $255'billion and arbudget in the new fiscal year will rived at a tax income .for fiscal
In
be
without
balanced
at
taxes
all.
If
-
the' Executive's
to
simply produce
Let
and
will
they
surplus. ';
a
at
look
us
yields
pressure
increases,
tax
papses
new
any
Congress
a
few
*
examples
,of -past underestimates:
v
1
Sins
The
•
of
the
Past
will
be
the
very
by
the
Joint
Committee
items
of
about
$265-270
during
have
I
originating
the
seen
from
past
reliable
securities
in
this
ment
bonds, and savings bank
counts. .Possibly the figures
con-
the
total
are
not
1952
on/InApril,
million
number
of
broken?
why
.pe0pie
ac-
on
two
more
,
.
.
,
" ment
supervision of
others
govern-
the securities
1952, on the basis of the present the average for fiscal 1952.
markets by the SEC
after around
rate, of'$60.9 billion. T
(2) The Snyder forecast antici- thirteen years of domination of
'
On June 28, 1951 Secretary Of
"pates that not the slightest cut inthe. Treasury,-Snyder announced the
by
expenditures as proposed by
that the government had revised "the Administration will be made L 4
uf
an
„its expenditure figure for fiscal —while Senator
Byrd claimed a by both of these agencies oi govof
1952 downwards
by $3.2! billion. $7 billion cut and Senator Douglas ;• prnimpnt
Contemplated outlay is now re- at least a $3 billion cut.
-•
i.
duced from $71.6 billion to
i
$68.4
(3) Even under the assumption ties commissions in the individual
billion.
v-'t,'-"1•
that no reduction of expenditures
,
fiscal
For
1947-^year
June
to
Forecast
Miscalculation
though
even
v*
sur-
a
$5.3 billion,
was
expenditures
of
a-forecastdeficit, as proposed
te "has the second highest surplus vtion would
-
some
are
firms.
A11
of, them
are
sssTto k°°w"
department that
'•th*
tne -way.
pays
^ °f
*!'.« theSe
Th^ k"°W th3t
1
profRs
come
pri«
marily from the creation of new
activities
history for fiscal
namely. $3.52. billion.
'•"■■v
*
the
by
Administra¬
,1Si t?
L1!
solely
are
dependent
upon
®:
do not have, confidence in
equity
0 7
th
servirinfJ of olH
the Cash .' investments?
If
these
agencies
from
1951,-Budget for 1952 would look .as have done- so much
These
_to promote ' theYneri whc)
.-:1 ' follows based on present tax rates:
produce^the income
public confidence in the purchase
^-jiich supports the NASD
and
q±
Snyder
Jt. Com.
"Author's
securities^why ;is it that so few produces the tax: money which
Proposal
Proposal • Estimate
*
people ,own then)
■i
;
(in billions)
a^compared to ^eepS
alive. ;
•
' j
all
rn
The fiscal year yielded
■plus of $0.8 billion.—
There
prjmariiy interested in the selling
^ncj . 0£- the -securities business.
•
-Instead
deficit of $4.5 billion.
a
accounts?
.
3
3SS&S& SS'
S£SS
^
1947—the President: t'y
30,
savings
,
sman
of
wfolie~c°unter business
5
co^t uued
iy si £ .yii?
74,000,r
bonds, life
are
office
managers
for
New York Stock Exchange
firms^
some are dealers in
general mar7
ke^. secxirities and'sole proprietors
.
of
while
T,...
,
6,000,00d
only
been mn f securities business
*Jearly aU 9^ their working lives,
spme of these men are -salesmen,
,
-
many .years
being
som£
serious matters which are today
disturbing practical men who have
those who have invested in fixed
After
and
.
mofe questions.
a very wide disbetween the relatively
small number of stockholders and
-
is
Next week I d like to ask
crepancy
income investments.
that
stocks
government
own
,T
less either
or
is 'it
own
insurance,
stockholders
still leaves
way
•
as
000
"law
a
J•'>
\
absolutely correct, but a
or
when
pearance
,
country,
compared to around 80,000,000
who own life insurance, govern-
..
£>
'
when he; can help a
law-abiding
citizen, and only make his afr-
aS
na-
billion
'
j
,
of duty to .help an old lady across
the street? Does he turn his back
news
.
statistical sources, indicating there
are about 6,000,000 owners of cor-
ternal Revenue Taxation in
but
1:
..
,
,
probability
income
months
porate
casts
Congres-
Committee
all
times
Several
Foreby non-government experts *
point to "total personal income"
not of $245 billion as last anticipated by Secretary Snyder, not of
$255 billion as last anticipated'
Some weeks later, when it was
sim- 'clear that national income had
..
(Article I)
.
;siderably higher in fiscal
than its'rate in April, 1951.
be
'
In
DUTTON
Answer, Please!
-
*
theless still claims that he "needs*,
,
The Admin-
.
;
Sticking to his antiquated infew
come forecast, Mr. Snyder never$10 billion in
By JOHN
,
on^an annual basis, the Treasury
I think that it is easy to show
forecast that this would also be that all expenditures for fiscal
the average of calendar year 1951, 1952 can
be met without new
and-consequently upped its fore- taxes because:
/
' : :
year
which has just
,
v
.
in taxes is goi n g
to
be
t
be' made,
coun"fand
S
Ire
•
were
■■
greater than forecast by $6.5 bil
gase(j
*
For
estimated
^Presideiof,
budget
balanced
a
($0.2 billion surplus).
.
In August
of 1947 the President
surplus would be
$4.6
billion—and
we
'had
an
actual surplus of $8.4 billion (misthe
$8.2
fiscal
billion).7,
President
1951
income
V
at
1951
least
of
2
carried
—
$245
Tru-
man
estimated in the budget mes-
sage
of Jan. 1950
.
$255
62.1-63.1
forward
'•/;
3.5 T
3X)
3.5
$3.5
now^ have a surplus of
Miscalculation. $6.6
billion.
billion.
Why ; Higher
;
,
Fiscal
>
,,
Incohte
,
..."7-1 'A' - •* " f
-v
in
..hurdensome fqr an economy-ex.-,,
i/fh' 'perienclng a "lull", qorhpletely un- -
*
Thus, the inflationary pressure
we experienced in the first
9 months of fiscal
tainly not due to
1951,
was
cer-
budget deficit.
will also have, as the figures
now
stand, no cash deficit in
a
fn
®
stocks
"
$
TFpssibjy.at
wn
heard
out about it?
t
ti!
April,
and
fr^rn
-this
of: the
ofheld. in
held
'llu.
the
New
of
our
stock
are
are
of
change
oftenB.
firnls. ..xhcy
b
NASD,
^me
e c 0 m e
in
1952
even
without
a
penny
taxes.
new
No Cash Deficit in Fiscal 1952
Even Without New Taxes
T
..
„
.,
_
^nVTnaiid:'out
help
rise.
Looking forward, the 1951 surplus amount of $3.5 billion can be
carried
will
into fiscal 1952. This
over
immediately
improve
the
cash situation—which will be
even
favorable
more
since
the
trust
tor Taft
thinks
.consider
assumption
and
wage
1952
-
at
(Social Security, etc.) have
.
..
.
,
.
.
yielded a surplus in 1M1
1951,
as we had
during that fiscal year
very small payments, e.g. for unemployment.
,
National
Income
Again
Underestimated
,,
..
busfne
1hat
-
,
talk
ber!S theSfme^
for
tional
budget
was
too
some
_
time
income,
revenue
based,
low
a
that the
on
which
estimate for
be
put
salary
rate
$178
the
bill
of
between
$183-190
end of the period
and
$75
cer-
both
it will lie i
Hereuoon
to'Te
at
these Questions
seem
evi-
that they know
As salaries and
the
1952
an
^increased personal income and
^
j
bfllion from bfli
j^ril 1951 i^iusive
I fl
by $25
that
an
annual'
rate
of
7
to $245 2 billion ThP fW
^45.2 billion. The first
tmvf1
^
budget
h
these
-
organizations
o
.
ConkeaueLtlv
with
tion
wp
as a
business
as
well
your
and
block
carries
catches the
as
to
night
a
intruder
our
•
Under
the
they just
assumption
of
the
boast
want
a
big surplus
Under
an
assumption
of
$270
on
stick
your
to
<3» »-me budget savings were
$7.2 bK-' b£ Sector By/d,' let XnfS
cash surplus of
up
fully to the $7 billion
proposed
$2o
billion cut proposed by Senator
But the House of Representa-, Taft, but only the modest $3 biltives, as a result of the erroneous lion of Senator Paul Douglasassumptlons of the Administration, why does Congress prematurely
?3S new no less than ^7'2 billion hand out $10~n billion more than
VOted
in
taxes, partly extremely needed?
'
•
'
affiliated
nQW
—
Sydney
Robert
E.
205
M.
Simpson
with
Pierce, Fenner &
West Congress Street.
M*rrin
Beane,
Joins Waddell & Reed
(Special to The Financial Chronicle)
KANSAS
jjuss
has
Waddell &
more
CITY, Mo.—Duane E.
become
affiliated, with
Reed, Inc., 1012 Baiti-
Avenue.
Prompt Wire Service
LOS ANGELES
•
SPOKANE
•
Markets in
DENVER
SALT
•
LAKE
CITY
^Tfhe/wo^
eit-to
a
are
Mich.
and
FOR BROKERS AND DEALERS
To Western
no
lion.
Lynch
na-
about?
billion personal income:
defi~;
veSs
an idea
more about solvmS
1S g
Lynch,
safe¬
in his line
also
Political WPA in favor
expenditure of
expendlture of $68 4 bll-s of suPer-omployment during the
4 bU
election campaign of 1952? Or do
an
DETROIT,
Qrauer
to
guard the public against unethical
practices?
If the policeman
on
the defense production of
average.
the
(Special to The Financial Chronicle)
NASD
purpose
-t
over
Two With Merrill
securities
the
the
...
now own
promote the welfare of the securi¬
^ °r are some parts of the premises, isn't it
Administration thinking of using
na-
fnee Korea — probably
annual ratej™
and
not
an
t
innnm„
of
Acts
Is
today.
realized,
a y
b r o k e r, occasionally
the lme, as drawn by the
Securities
ties
justified
jusuiiea.
or
over
billion, or rather modestly figured between $265-270 on
again forecast at
level. Inflation and
nprcnnai
dealer,
isolated
some
up needs of fiscal 1953.
^
3
Total
case
by-laws.
(D Should the end of the
wages amount to 65% of
personal blTd^ flght.ln«,in K°rea btri"g,n0
income, coorespondingly total'reductlon at aI1 in the scheduled
personal income should
be'about expenses-
was
about 11-12% at
in
tax program less by the needs
of fiscal 1952 than by the blown-
Professor
exists
kuLThat"tL^I
^
just to have them always around
steps
new
fiscal
somewhere
billion
billion
tainly not $90 billion. Thus, when
Snyder testified, he "justified" his
average
for
billion.
Slichter estimates that
10%),
modest
a
$80
^
a"d ™
thinking' In fact- 1 have
.
.
dent
to
billion—not
$269-275
_
Furthermore, it has been
to
than
more
it
a
around
funds
also
get then might perhaps read
o£ •
ahd get the limited amount of
holders that it is claimed
SEVCStamnednttheUNASD bav°f
one^ function—which^
we
o£ficers
Exvery
They do know the 6,000,000 stock-,
,
somewhat; as, moreover, wages
bound to increase some (Sena-
don't
NASD/ba^'"e this nation'3
p
have
are
,
York
In
,
.
fiscal
are
they
ih the private
im the
partners when
„
they
H!linrs;me-n- buSf"„VAm0r^bS'
thi^ Bne°mo^bettera
Lhv
-
triple
nieetings
meetings
might
Still
t0 make Congress adopt---this
huge budget, which evidently will hasn't the SEC and the •
continued
and
will
-yield a near record surplus
if awakened to this serious problem
further do so after many huntaxes are increased
the Admin- and offered some assistance to the
dred
wage
raising
agreements istration announced that in fiscal
waiting on the Wage Stabilization, 1953
exnenditures would run to
onlv
Board s desk will be agreed upon, r
$80-90 billion. At the same time,
is to act as
let alone the relaxation in the
however, it was announced that a policeman? Do you pay your
wage ceilings.
7
the military budget for fiscal 1953 tax
money
which provides the
As during the next
year
the might run up to $55 billion. Based salaries of the SEC employees,
labor force will
certainly not de- on present standards, this would and your dues to; the National
crease
but
probably ■> increase actually mean that the total bud- Association of Securities Dealers,
to
or
£act;:they don't have
;much, tjj say„ ab0ut anything exWhy doesntsome-,
cept that th£y do know how to go
Since-r the April: forecast was billion surplus.
^
;
made, labor income has already 0
Under an assumption of $270 rtf6? cpfwfi t°
he. SEC that they
increased somewhat. It rose fby'.billion
personal iincome: $7.4-8.4
$1.9
billion - from
February ; to • billion surplus.,;
^
1;
March, and from $2 billion
is needed-if
But these men are
Washington to testify
too -often
too/ often
savings,offi'ce
•
iti
before committees,nor
before committees,i nor
lack ,of eppfir
gi) /investment,
Total personal" income is com- • f(oreseen by government experts. as. compared with
government
posed of labor, income,r dividends,,
the $7.2 billion in new,.-faxesbonds, life -insurance and
and
proprietors' income.
These would be enacted, we would have,
accounts.
If this :is partially so,
were $165 billion, $19.7 billion and without one penny cut-in the Ad$48.3 billion respectively, when ministration spending proposes:; why doesn't this offer an opportnnity for the responsible eaders
the Snyder forecast was made in • Under the assumption of the
of the securities
business/o find
April. • '
,' <
,i
Internal Revenue Committee: $6,0
IVIarch
number.
n0^. as^e(j
"uTm--
i
a
wh^at
you
are
These-men
.
hope to double
ever
! this
n
industry.
telv
ld
^
as
is
dence.'irt stocks
Amerjcan
insurance,
tS
-a
.
own
why; don t t hey q
*
,
1952?
life
3.5 :
68.6-69J6
,
must
■which
.accounts
savings
3.0 «»:
67.4
.
billion.-We
80,000,000
.
>
3.0.
-
64.9
S^rfn nn°nrms of 1mvestment? 11
These men know -why there
6£00,000; people fWmon^ii1y; 6)000,000 stockholders
stocks, and about
$265-270
-
60.9
deficit of $54-33W
a
billion, and. changed, this in Jannary
1951, based on new taxes
passed in 1950, to a deficit of $3.1
>
58.4
.U—
Cash supply available for fiscal 1952-1
-
.
For
tax
gU(jget surpius 0f
as early as TTanUary; 1947,'a sur-^ ;.
plus of $7.8 billion.
calculation
a
V/;Cash surplus of Federal funds-.
Togethei: with Raymond Moley
the writer was able to estimate
estimated
on personal income in fiscal 1952 of
Would yield
the
1948
fiscal
J. A. HOGLE & CO.
ESTABLISHED
1915
»
Membeis
and
other
50 BROADWAY
Tel.: WHitehail 3-6700
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York
Stock
.Principal
Exchange
Exchanges
NEW YORK
4, N. Y.
Teletype NY 1-1856
Volume 174
Number 5030
.
.
.
The Commercial and Financial Chronicle
(255)
In
this
designs
rubber
ATOMS
The
men
in the
picture
active automobile
are
handling "hot"
parts. That's the
reason
or
FROM
radio-
for their
long-handled tools, the radiation exposure meter held
by the man at the nght-and then caution. It s all
part of a new kind of research at Chrysler Corporation.
Our
engineers send engine (distributor,.points to
the U. S. Atomic Plant at Oak
they
are
Ridge, lenn., where
made radioactive in the famous Atomic Pile.
Returned to Detroit, a "hot"
-
in
a
standard
though in
pbint is mounted
distributor, and given
your car.
Practical
a
test
run
as
Ordinarily it takes hundreds of
IMAGINATION
OAK
"Radioactive Materials Room"
.
radioactive atoms
a
are
•
wear
TO
enough
lasting parts for
ways
In this way, our engineers find out where wear
first starts, and how and why, and thus J earn how
develop improved points that will
run
much longer
without replacement.
Similar tests, using "hot" piston rings, gears,
bearings and the like, are helping us to develop longer-
guides research
at
Chrysler Marine & Industrial Engines
•
metals
.
.
.
better
CHRYSLER
Dodge Job-Rated Trucks
DODGE,
•
DE
SOTO
,
cars
and other vehicles, and improved
of lubricating them.
transferred from the "hot".
Chrysler Corporation was
po.nt-enougn to be measured accurately by sensitive
Geiger Counters.
to
many stronger
DETROIT
few minutes of this test,
PLYMOUTH,
Airtemp Cooling, Heating. Refrigeration
COME
hours of engine operation for points to
some
Chrysler Laboratories,
.
RIDGE
to be measured. But in
at
smoother-running, longer-lasting parts have their beginning. Note the protective lead-and>
gloves and aprons, and the thick lead box in the foreground where "hot" parts are
safely stored.
.
jn ftis
(
ful
use
an auto
of atomic
industry pioneer'
It-S
one more
examp]fi of the practica]
that leads
directly to the fine performance and long life of the
products we make. And another reason why our
experience and skills
are always ready for a wide
variety of challenging jobs—from cars and trucks and
military vehicles to industrial engines, heating and
cooling systems—and
even
railroad freight
car
trucks.
CORPORATION
and
CHRYSLER
Oilite Powdered Metal Products
•
CARS
and
DODGE
Mopar Parts & Accessories
•
TRUCKS
Cycleweltl
,
I9t
The Commercial and Financial Chronicle
20
Continued
Canadian Securities
capital, when it does not orig¬
can
Population Trends and Investment
By WILLIAM J. McKAY
At
of going
time
the
to press
week, the official figures of
last
stock
Canada's
S.
U.
and
published,
of
monetary
dollars
yet
the mid-year situa¬
so
ing the second quarter of the cur¬
rent year.
gold
not
were
tion with reference to the
in
Domin¬
Canada
into
lars
at
tourist trade. The fa¬
vorable balance of payments on
tourist account in 1950 was $53
the
heavy
foreign
announced that on June 30, Can¬
ada's official reserves of gold and
climbed
dollars
S.
million,
a
gain
of
$1,683
to
$400
million
from last year.
These reserves,
held by the For¬
eign Exchange Control Board, are
only about $100,000,000 below the
record quarterly high of $1,789,-
however, sharply lower than
of $94 million in 1949. The
reduction was due, in part, to a
was,
that
in
decrease
expenditures
the
of
foreign tourists in Canada, but
mainly to an increase in the
abroad,
Canadians
of
spending
American visitors in Canada spent
i.75% per year. 'Inis means
capita real in¬
come
will
approximate
1,239—
1930 dollars; and by the year 2000,
2,086—1930 dollars.
The corre¬
sponding national income figures
would be $202 billion in 1970 and
$393 billion in the year 2000. If
we
put the base total figure for
that
1970
by
3950
1950 dol¬
billion late
250
at
per
lars, we may assume that the na¬
tional income will rise to $390 bil¬
$760 billion by
terms of late
1950
dollars
per
capita income,
about 1,647 in 1950, would then
rise to about 2,330 by 1970 and
to 3,932 by 2000.
lion by 1970 and to
the
In
2000.
year
million less in 1950 than in
National
income
should
rise
000,000 on Sept. 30, 1950, and were 1949, whereas Canadians visiting
accumulated in spite of a five- the United States spent $26 million faster in the rest of the world,
more. Tourists from overseas spent
at least outside Western Europe,
month deficit in foreign trade.
than in the United States. As we
The trade deficit for the five $3 million less in Canada than in
have indicated population in the
the previous year, but Canadians
months of this year, as pointed
overseas spent $4 million more in
under-developed countries, where
out last week, totaled about $300,the same period. During 1950 ex¬ live about 1.5 of the world's 2.4
000,000. An offsetting factor of this
deficit is undoubtedly due to a penditures of Canadian travelers billions, will increase about 1%
in
other countries reached $222 per year. Let us suppose this rate
new net inflow of capital to Can¬
ada from the United States. The million, an unprecedented 81% of will hold on the average outside
Canadian Government freed the expenditures of non-resident trav¬ the United States for several or
elers in Canada. The correspond¬ more decades.
dollar to halt that speculation, and
Per capita income should rise
since then U. S. capital has re¬ ing ratio from 1925 to 1939 aver¬
turned to its normal pattern of aged 54%.
appreciably faster outside than in¬
$8
mainly seeking long-term invest¬
The removal of some restrictiorts
ment in Canada instead of specu¬
imports by travelers to Canada
in January 1949, according to the
lation in exchange.
It
is
reported
that the move¬
on
Canadian Bank of Commerce, was
side the United States, at least in
the
under-developed pans of the
world.
For
the
in
under-devel¬
economic
activities
agriculture are not
parts
oped
responsible for the un¬ other than
precedented increase of 66% in well developed, whilst the meth¬
Canada came
Canadian expenditures over those
ods of production often are ar¬
trial companies in the U. S. that
of the previous year. The freeing
were
chaic. So there is room for very
enlarging their Dominion
of the Canadian dollar on Oct. 1,
great improvement. Accordingly,
facilities. This was supplemented
1950, along with the relaxing of it may be safe for us to assume
to some degree by Canadian bor¬ restrictions on United States dol¬
that there per capita income will
rowing
in the
United
States, lars for Canadian travelers, re¬ rise 2-2.5% per year for some
which was reported as heavy dur- sulted in increases in Canadian decades to come.
In fact, if an
tourist expenditures in the United
increase of this magnitude cannot
States amounting to 26, 32 and
be achieved, there is little likeli¬
of
ment
American
capital
to
chiefly from indus¬
largely
in
68%
1950
last three
the
the
over
same
months
of
period in 1949.
Canadians took advantage
of the exchange situation to spend
lengthy winter vacations in Flori¬
da. Shopping trips to the United
Many
CANADIAN BONDS
Government
■
V
Provincial
Municipal
Corporation
;
CANADIAN STOCKS
which
States
of
because
had
resumed
were
on
great gap now found
level of per capita
the
between
output in the advanced industrial
countries and that in the under¬
will
countries
be
re¬
Suppose we combine a 1%
per
developed
scale.■
year
increase in
with
larger
a
in
2-2.5%
the
per
labor force
increase
year
capita income.
Then we
get an annual growth rate of about
3-3.5%. This rate means that to¬
per
with the tourist trade,
enjoying a fairly pros¬
perous mining industry. Dividends
tal output will increase at least
by mining companies in Canada
one-third faster outside the United
this year are running considerably
States
than
within
the
United
ahead of last year and it is con¬
Along
Canada is
that
ceivable
the
for
total
1951
will
eclipse by a comfortable mar¬
gin the all-time record of $119,200,000 reached in 1950.
While the
industry is experienc¬
higher operating costs and
ing
In
And this should raise for¬
States.
United
into
aggregate
now
to
consider
the
turn
us
sav¬
this:
PopulaCountries
Income
tion
richest.
8
10
50
Savings
5.5
55
poorest
v 10
33
25
Others
40
under t
units.
They
United
Nations
market for its production at more
the
New York 5. N. Y.
NY 1-1045
WORTH 4-2400
for
one
Boston
Mass.
nickel.
for
Quemont is likely to initiate divi¬
ill
the fourth
quarter. The
$2.14 per share
in 1950 and 53 cents per share in
the first quarter this year.
company
earned
Consolidated Mining and Smelt¬
ing
Co.
is
the
outstanding
con¬
tributor to the increase in mining
dividends. Its total of $10.50 per
share to be
CANADIAN
INDUSTRIAL
WESTERN OILS
MINING
paid in 1951
compares
with $8.50 per share in 1950, an in¬
crease of $6,500,000. East, Sullivan,
New
Calumet, Normetal, Mining
Corporation and Centures are
among the companies paying more
this year. The latter two are hold¬
SECURITIES
ing companies.
Dividends
Inquiries Invited
Established 1922
Kippen & Company, Inc.
not
so
as
:
the
gold
mines
are
favorable and may be lower
mining
is
subject
that
runs
estimates;
since
the, outbreak
Korea.
Telephone Lancaster 5101
Direct Private Wire to Toronto
been
Their
occurred
of
indicated
war
total
in
for
the first nine months of
$14,600,-
000 would compare with
$15,200,-
000
for
the
States
of
the
1950
period.
the
world,
much
the
of
was
create
the
on
investment
of
wage
countries
uted
where
nels:
and
face
value
under¬
to
in
deal
of
good
a
does
through
not
distrib¬
g£t
commercial
chan¬
tendency to accept at
a
States
the
worth
put
upon
to
to
require
begin
and
establishing
by
jobs which
less capital
wage
considerably
is
than
comparable figure
since, on the whole, it is
better
income
needed
in
be used in the United
industries
national
job
industry,
commerce, or the services in the
borrowing country. It is hard to
know
just what figure to use,
however.
This
figure
will
be
a
upon
tendency
a
production
needed,
the
on
the United States.
in
average,
A figure of
$2,500 is often used for this pur¬
now.
I cannot say whether
pose
this
figure is too high
too low.
or
It does give us something to esti¬
mate
with, however.
Now how much capital is needed
government outlays for labor. De¬
in those parts of the world where
spite, these errors, however, the capital is in very short supply
figures do give us a notion of and the population is growing?
the world situation.
Let
me
use
a
tional income
Earlier I said that in, these
somewhat differ¬
illustration.
ent
In
1949
our
na¬
about $217 bil¬
tries
live
there
people.
Let
fraction
about
at
put
us
these
of
1.5
coun¬
billion
the
35%
that is
lion,
and
this was distributed in the labor force. In a country
among about 150 million people. like United States, of course, this
Business and personal net saving fraction is higher, being in the
ran
about $18 billion, or about neighborhood of 40%. Thirty-five
9%. In that same year the popu¬ per cent of 1.5 billion is 525 mil¬
lation
of
ran
Asia
(exclusive
of
Ja¬
lion
workers.-
people
If numbers
should
Africa, and Latin America grow 1% per year, we should be
numbered
1,527
millions;
and adding 5.25 million workers to the
these people produced about $97 labor force each year, to say noth¬
pan).
billion
saved
other
of income, of which they
only about $5 billion.
In
countries ten times
as
peo¬
in the U. S.; and they
as
many
pro¬
duced less than half
product;
much
the
income
that
they
one-fourth
as
head
per
did
as
mates
Clark
lion
this.
mid-1950's
The
I.
U.,
I.
an
little
a
which
income
U.
of
the
582 bil¬
today being
Of this
$1.50.
over
Russia
esti¬
some
will approximate
amount
and
East
Europe
Latin America, about 35; Asia and
Africa
(incl. So. Africa), 142. The
United
States
will
produce about
about 28% of the estimated
or
total.
by
and,
would
savings will approximate
billion, with the United States
supplying 24,
Europe,
or
Canada,
New Zealand will
one-third.
West
Australia,
and
supply 21; Rus¬
East Europe,
and
the
1970,
have
billion.
cost
annual
risen
to
$16
about
According to the
United
10%
of
their income, they
would still fall short by about $3
billion of the amount of savings
needed
to
equip
the
workers
being added each year to the labor
force; and this figure ignores all
their
other
13%
of
at
If
needs.
they saved
they could,
least in theory, equip this 1%
their
income
increase in the labor force.
they
do
to
what
namely
the
to
Japanese
enough,
save
endeavor
tion
Since
not likely for some time
are
borrow
did,
will
they
and
this
ac¬
is bound to increase the de¬
mand either for American
capital
for support from the American
Government. In either event the
level
of
demand
for
American
or
World
sia
of
at
only
made
the
for
like
of workers out
This
number,
$2,500 per wage job', would cost
just over $13 billion per year now
saved
Colin
73
transfer
agriculture.
It is not surpris¬
saved
gate.
162,
ditions which would be created by
Nations estimate, these 1.5 billion
about workers produced about $100 bil¬
If they
much in the aggre¬ lion of income in 1949.
Americans.
ing
much nei
as
which means that they
only about one-twentieth
average
as
ing of what would amount to ad¬
words, there lived in these J;he
trast.
10.
By con¬
rica),
Africa
Asia,
(incl.
So.
Af¬
capital will be raised, and by
than
the
cate.
mentioned
For
we
did
more
figures indi¬
allow
not
for
better
equipment, for the existing
population.
are
A
bit
a
where
the
saving
lower.
live
world's
rate
number
lish-speaking world, with the
S.
of The
World
which
are
many
offer
of around 3%, which is far
low, considering the produc¬
tivity of capital. There is too much
consumption
emphasis
on
the
well-to-do.
more
poor,
among
Among the
Capital
to Absorb
will
re.mainder
have
to
this
of
do with
increase in population
permit the improvement of
output per head. We may, there¬
fore,
tive
leqture
the impact
the
amount
of
the amount of produc¬
compare
or
capital, with the national in¬
and
come
wealth,
or
of world
increased to
In
see
this
liow
much
capital,
must
this
be
come.
population growth upon
the demand for American capital.
my
next lecture I shall finish
this topic
tion
to
and devote some atten¬
the
effect
of
American
and into this class fall most population growth upon the
mand for American capitaL
of the people, incomes are so low
the
wealth,
American Capital
The
of
interest
for
Demand
Its Capacity
and
date
and to
has
responsible for
and
U.
playing the dominant role.
Savings institutions are not
well-developed,
too
rate
three-fifths
circumstances
rates
has
Members Investment Dealers Ass'n of Canada
610 St. Janies St., W., Montreal, P. Q.
tries
about
rise
that
to
foreign
the pas¬
power
loan and sometimes, after
They
to
the
estimate
the
In
of its
some
producing
interest
based
the double error
through national income
are
of
one-fifth
furnish
and
Latin America
will
There is another way of
looking
supply only 17. These figures, for
above
one-tenth, Kuznet's esti¬ what they are worth, indicate that at the effect of foreign population
growth
upon
the
demand' for
mate of about 12% representing most of the world's capital for
our
disposition to form capital. foreign investment will have to American capital. The national
income must grow to accommo¬
In most of the backward coun¬ come from Europe and the Eng¬
United
those
costs
and
incomes.
national
their
feeling the effects of 'the further
in
capital.
on
one-tenth
tween
this.
industry
form
two factors, (1)
country's national
income and (2) the disposition of
the people to devote their pro¬
ductive power to the formation
of capital goods instead of con¬
sumption goods and services. In
the nineteenth
century and the
early twentieth century the West¬
ern
peoples, together with the
variously
saved
be¬
Japanese,
population,
by
gold
to
capacity turns
At the size of a
dividend payer may
be added to the list this year,
dends
Fifty Congress Street
and
copper
new
world
time, to utilize
a
increased
estimates.
are
of will produce about 72; West Eu¬
rope, about 151; Australia, New
This Zealand and Canada, about 20;
incorporated
least
arrange¬
borrowing country becomes able,
after
that would
These figures are in percentage
the United States and the rest of
larly
quasi-military,
usually
lower than the
say 3.5
capacity
taxes, it is also enjoying a ready
favorable average prices, particu¬
is
ments,
amount
of
amounts
We then get something like
ings.
pacity of the United States and the worth
World—Let
wealthier
the
and
States
world
A. E. Antes & Co.
Two Wall Street
military,
anti-communist
progressive countries is at least sage of a sufficiently long period
of time, to furnish means where¬
10%, whilst that in the under-de¬
with the loan can be repaid. •
veloped countries is about 5%.
There are two ways we can get
These comparative figures give us
at the foreign demand for capital
a
rough notion of the contrasts
for productive purposes.^ One is
which prevail at present.
simply to estimate the average
Now let us put these figures
supply.
Prospective Capital-Forming Ca¬
the
Let us suppose
saving rate in the
that the current
run
of
present dis¬
be contrasted, I shall
may
it this way.
put
eign demand relative to American
Rest
the
that
order
parity
ple
moved.
restrictions
much
a
hood that the
deferred
been
exchange
and
premised upon
the assumption that this capital
1929-1948.
when
the nooulation as to make very little saving pos¬ will be used to augment the prosible even under the best of cir¬ ductivity of the borrowing country.
was growing more rapidly.
For when
this is the case, the
Suppose per capita income in¬ cumstances.
creases
dol¬
this time is
Another source of inflow of
exchange situation
could not be adequately told. On million, an interesting contrast to
July 6, however, the Dominion's the over-all unfavorable balance
Finance
Department at Ottawa of $316 million. This credit balance
ion's
}
Thursday, July 19, 1951
.
The foreign demand for Ameri¬
jrom page 11
inate
U.
.
.
(256)-
de¬
rate,
of
accomplish
increase
in
a
certain
national
in¬
The ratio of all wealth to
na¬
tional income appears to be in
the
neighborhood of 4 or 5 to 1. That
is,
a
nation's stock of wealth is
Volume 174
Number 5030
.
.
.
The Commercial and Financial Chronicle
21
(257)
equal to 4 or 5 times the national
income. Let us call this ratio 4.
Now
that
suppose
Continued
population increases 1% per year,
and that it is desired also that per
capital
of
about
in
•
income
This
yeaii;
the
ratio
increase
that
means
3%
per
wealth
3, then
2%
If
Inflation
national income of 3% would call
for an annual saving equal to 4
times this 3%, or 12% of the na¬
fore,
that
increase
an
income
of
in
3%
will
call
for
saving of 12% per year. This
figure becomes 15, if the wealtha
income ratio is 5; and it becomes
only 9 if the ratio is 3.
in
argument
I put the
terms.
average
It
must be put
in marginal terms, if
average differs greatly from
the
the marginal level.
If
instead
of taking all wealth
only certain kinds of cap¬
ital, those kinds which contribute
take
we
most
directly
may
but
to
production,
in the
reason
same
is 3
we
figures.
product to
capital stock
Then again we may
4 to 1.
or
that
reason
increase of 3%
an
itive
in
saving of 9-12% of the national
bring
may
now
to
ment
head.
a
1% per year in
lation calls for
3-5%
this
An
our
saving
of
popu¬
equal
to
permits
no
improvement
in
money
is only about 5% if
that much of their income.
Any
such improvement calls for addi-
'
tional
!
saving.
We may conclude,
therefore, that so long as the popillation
c£
the
ouside
world
the
United States is growing at a rate
of
be
1%
"Point
there is going to
heavy demand for capital for
a
per
year
This
is
demand
bound
capital.
demand
to
for American
out the world.
This impact will be felt
mit reasonably safe investment in
the countries with growing popu¬
about
lations. While this type of i'livest-
year
that is pres¬
-
insurance
to
open
com¬
clined
to
invest.
can
believe,
I
am
the
therefore,
States
will
give
not
strong
support to the demand for Amer¬
condition
But there remains a
I'll discuss first thing
'>>'
.
.;VW
:
{Editor's Note:
Foregoing
is
■first of three lectures by Profes¬
sor Spengler. Others will be
given
subsequent
issues
the
of
"jChronicle"\
Paine, Webber Adds
j
(Special to The Financial Chronicle)
CHICAGO,
111.
—
Richard
E.
Webber,
Jackson
.
^
j'; •
,
•/.
^ *•
;
Joins P. W.
y.
;
.
Brooks
SPRINGFIELD,
P, W.
Brooks
&
Mass.—Donald
Co.,
1570
Main
Street.
Joins
v' (Special to The Financial Chronicle)
LOS ANGELES, Calif.—Earl S.
Toner has joined the staff of King
Merritt & Co., Inc., Chamber of
Commerce Building.
H. L
Ritter Opens
OLNEY, 111.—H. L. Ritter has
opened offices at 302%. East Main
engage in the securities busi¬
to
ness.
1950
$716
$46
$4,937
33
2
96
State, County, Munic. bonds (U.S.)
23
7
80
81
Railroad
1,143
1,078
24
23
128
133
3,126
552
10,417
3,008
9,69?
S.
Government
Public
Stocks
as
(U.S.)— _i
misc.
bonds
565
9,930
8,632
68
123
227
2,020
1,814
17
4
83
77
711
18
1
71
~1
2
2
30
2,8
38
31
221
169
1,406
90
122
492
624
1,198
3,989
Admin.
:
FHA__
securities
and
.
'
4,906
57
673
151
2,628
1,078
680
8,782
1,330
7,332
mortgages $1,693
$55,064
$789
$9,423
$3,664
$58,759
17
23
77
79
1,462
1,262
51
42
246
211
2,496
2,293
1,001
1,750
1,433
$65,496
$60,976
real
estate....—'
real
estate
Policy loans
————
28
—
36
-
__
Other. assets'
■
v
'■
__
i
assets
888
Opens Brokerage @1
Anchorage, Alaska
Francis I
Unpopular
51
166
Other
Total
581
125
■
__
Farm
Cash
'
235
1
.
Total
1,147
39
Administration
Other
1,424
345
1
mortgages:
Veterans'
$14,907
1,480
143
__
...
Nonfarm
$12,109
34
119
bonds
Others
1950
$368
59
securities
Veterans'
May 31,
1951
293
(U.S.)__
—
corporate
Bank
mortgages:
-A'
In
CHICAGO, 111. —A. Elmer An¬
ANCHORAGE,
Alaska — The
Anchorage Corporation has
derson has become associated with
First
Francis
been
I.
du
Pont
&
South La Salle Street.
son,
the
Federal
Reserve
own
authorities
devices.
have
a
veteran of 25
Salle
Street,
was
Co.,
208
Mr. Ander¬
years on
La
formed
Fourth
and
with Paul
formerly
Faroll & Co.
new
with
offices
Avenue, to act
brokers in stocks
R.
at
715
dealers
as
and
bonds.
Flynn is President of the
company.
3
never
were
central
supposed to act.
much
more
Coal
INVITED
as
'
,
of July
15, 1945, under which
of C. E. Beachley,
Company,
1915
Secretary-Treasurer, Pittsburgh Consolidation
Koppers Building, Pittsburgh 19, Pa., before 3:CO
15, 1951, and must state the serial numbers of the
o'clock P.M., EDST, August
Debentures offered, the
All
tenders
whole
active role would
on or
have to be undertaken
by the Reserve authorities to enable
Treasury to borrow large additional funds at presently
prevailing rates. A period in which fear of depression
was
governing might very well bring a return to the old
pegged market—the only difference being that the peg
would be lower than in the past. That would not be
good
for anyone except possibly the
politicians.
There are also the good standbys, the farmer and the
veteran, to whom funds can be handed out in large
amounts allegedly for the prevention of
depression. These
handouts are much more attractive to the
politician when
TENDERS
permitted by the Indenture dated
the office
in
derstanding between the Reserve and the Treasury really
is, but obviously it is not what it once was. It is highly
a
Twenty Year 3!/2% Debentures, Due July 15, 1965
were issued,
Pittsburgh Consolidation Coal
Company invites tenders of said Debentures for sale and delivery to it
on
August 29, 1951. Sealed proposals must be addressed to and received at.
banking system
accepted classical theory
It is not known precisely what the un¬
are
Coal Company
the above-described Debentures
a
the so-called central
banks
Pittsburgh Consolidation!
As
The market in which
Treasury must find its borrowed funds would be
act
and
May 31,
a
different affair
to
(U.S.)
(U.S.)
Foreign
World
Farm
securities—.
Utility bonds
good many of the pseudo economists of the
day take on instead a sort of halo of glory. Any remote
possibility which may have existed of major reduction
in indefensible Federal outlays would in such circum¬
stances of course vanish
wholly and very quickly.
One could scarcely imagine a situation more
perfectly
made to order to support a full renewal of
pegged gov¬
ernment bond prices. Of course, the matriculate are
fully
that
bonds
Industrial
Continued slack in business would
onerous.
probable, however, that
King Merritt
5 Mos.
1951
Foreign Government securities
a great deal of influence in the direc¬
reducing the net increase in armament and other
expenditures, but it certainly would reduce the fear of a
Federal deficit, which in such circumstances
might in
the
/
5 Mos.
during the next year to
already rumors about plans of
\
Holdings-
May
1950.
U.
already that, politically speaking, the
matching outlays with tax collections has grown
[■/( (Special to The Financial Chronicle)
F. Whiston has joined the staff of
—Acquired—
would present
The Administration
0
several years ago,
prices.
the Institute of Life Insurance (000,000 omitted):,
May
1951'
programs
1
left Treasuries to their
&
Curtis, 209 South La Salle Street.
follows by
as
evident
more
investments, which began
Investments made by the life insurance
companies of the
country during May and holdings at the end of
May are reported
naturally have
aware
Tobias has been added to the staff
of; Paine,
are
Despite the increase
of pegged government bond
for business
half. There
the minds of
'
in
during the period
tion of
ican capital,
this afternoon.
is
task of
much
growth of population outside the
United
a
Taxes More
It
in¬
dation of this class of
It would be much easier for the author¬
outlook
the
and
the sort.
panies, it does serve to draw capi¬
tal out of lines in which insurance
companies
related
billion, compared with
purchases, however, the total holdings of U. S. Government
securities by life companies at the end
of the period, show a
decline of $1,718
billion, thus revealing a continuation of the liqui-"'
Washington to find excuses for giving billions away
either in Europe or throughout the so-called underdevel¬
oped lands of the earth should there arise a definite fear
strongly, of course, if con¬
ditions are established which per¬
ently
and
issued by the Institute of Life
U. S. Government securities in first five
of
in
ities at
most
-ment is not the sort
Four"
i
„
statement
a
year.
the
to
as
to
months of the current
year totaled $4,937
but $368 million in same
period of last
danger point of importance.
has long been itching to get into this business of
pouring
funds abroad, at times as a means of
preventing depres¬
sion here at home and at times as a measure supposed to
have great merit as a peacemaker or peacesaver
through¬
ifnpinge in one way or another
upon the American capital mar¬
ket and should therefore serve to
sustain the
way
another
investment capital in these coun¬
tries.
either
According
Insurance, purchases
might be expected to have
upon public policy during the next few months. Rearma¬
ment expenditures, which for the most
part have so far
been regarded as an unpleasant and expensive
necessity,
might suffer a change into an anti-depression influence
of great value. In such an event,
outlays as such, rather
than rearmament, might become the
overriding virtue of
the process, with results not wholesome on
any account.
parts saving
:
Acquired in first 5 months of current year
approximately $5
billions, compared with $368 millions in same period of 1950.
Holdings of U. S. securities, however, show net decrease.
of the effect such uneasiness
of the national income, and
living standards, and yet in
Life Cos. Increase Purchases of U. S. Bonds
general economic philosophy (if such it can
be termed) which prevails in
Washington and the habits
and practices of the New Deal and the Pair
Deal, it is
not particularly difficult to arrive at an idea of the nature
argu¬
increase
country's
a
The general nature of the hazards
of a
depression threat, real or fancied, in a pre-election
year
are clear.
The public must be
prepared for them.
Given the
income.
We
discussion further.
will
assurances
'
talking bravely about
stabilization during the past year
although not a
great deal has actually been done about it. A
depression
psychology would quickly restore higher
wages as eco¬
nomically desirable as a means of increasing and
spread¬
ing purchasing power. But there is no need to extend the
general business
outlook during the next, say 12 or 15 months—the
period
which will elapse before the
voting starts.
the net national product calls for
a
idea
an
s
wage
presently dominate official or Con¬
gressional thinking. Naturally, the course of events dur¬
ing the next few weeks or months will have a definite,
possibly controlling, influence upon official thought, al¬
though this rather limited period will hardly afford pos¬
Suppose that the ratio of the net
national
imagined.
The Administration has been
Deflation?
the
been
such
manner,
must use different
w«-
or
.
son of
booming markets. We should not be able to do much :
with this shameful situation in
the presence of a
depres- i
sino threat, real or
Washington "line" has to
danger of "inflation." It is still having
much to say on the subject. There are reports, however,
that influential elements among the President's advisers
are now
beginning to wonder whether or not they ought
really to be worrying not about inflation but about what
they term "deflation." It may well be that this view of
the outlook—in a pre-election
year—may presently pre¬
vail. It is no secret that
European observers are beginning
to ask about such a prospect. The
point being made here
has little or
nothing to do with the validity of such a
diagnosis or prognosis. What concerns us here is whether
tional income. We may say, there¬
the (national
It
The dominant note in the
date
file
fighting in 1945,1
come
only by rea- j
in Korea.
to
annual increase in the
an
and
substantial exception since the end of tKe
reduction in largesse to the farmer has
rationing had been promised has taken on added signif¬
icance in some minds by reason of recent
developments
the
is 4
income
rank
'are
worried about depression.
Even
during the booming times which have prevailed without
per
is desired
income.
to
the
page
We See
As
increase
an
year
national
of
from first
country's
a
or
shall
principal amount thereof and the selling price.
be
subject to acceptance, rejection or allotment, in
in part. Notice of acceptance or rejection is expected to be mailed
about
August 17, 1951.
Payments of principal and accrued interest
the
posals accepted will be made
office of
after
on
to August 29, 1951 for pro¬
August 29, 1951 against delivery at said
Debentures, together with all interest
coupons
January 15, 1952 attached. Coupons maturing
on
maturing
on
and
and prior to July 15,
1951 should be detached and
presented for payment in the usual manner.
The Debentures so acquired will
initially be held in the treasury and not
currently extinguished. Accordingly, federal transfer taxes (5tf
i
of face value
or
fraction thereof)
on
each $100
will be deducted from the purchase price.
PITTSBURGH CONSOLIDATION COAL COMPANY
.
Dated:
J9y: Charles E. Beachley, Secret ary-Treasut et
Pittsburgh, Pa., July 16, 1951.
:•
.
..
®
22
The Commercial and Financial Chronicle
(258)
Continued jrom first page
is
.
.
the
large
current
Our
Reporter
Governments
on
The Current Investment
eleven-month
1%%
offered
note
for
note
new
notes due in
the
August
is
1956.
a
the
by
Treasury
And Business Outlooh
in
basis
This is evidently a control measure, to
enable
position to meet conditions
Mixed Opinion
The
action
of
the
on
dustrials
;
has
have
Will Liquidation Resume?
:i
from
to
estimated
an
level
of
$7.42 per share in the first quarter
Common stock
prices,
as meas¬
by the Dow-Jones indus¬
trials,
have risen
12 xk%
from
217.78
the
245.27
to
light
(June
these
of
25th).
In
changes in the political and
eco¬
environment,
it
seems
quite fitting to take another audit
of the principal factors of the se¬
curities
markets
as
they affect
investment policy — particularly
strike
to
and
pros
taking
We
bearish
of
strike
It is
busi¬
our
de¬
and
the debit side
on
balance sheet is the
our
and
major
or
the
war
be
can
ascertained
threat
of
in
war
another
growing out of this in¬
the
from
strains in other
stresses
of the
areas
and
world,
particularly the Middle East.
i_
panies will continue to hit the market with bonds as time goes
along. However, the opinion is expressed in some quarters that
these bursts against the market are likely to be less severe and
there
to
seems
place,
will the
lows?
Some
believe
the
market
advance
could
part of the recent gains would be given
back,
believe prices will go
altogether over again to
fensive. The selling, it is
expected, is not
be
halted
to
the
part, and there should be
absorb the issues that will be
help
As
for
up
sale.
other
*
be
able
to
be
found
for
the
cloud
and
up
of
dust
like
down and test the lows for the
year.
put down your coin and take your
pick.
go
behind
house
a
of
sector of
.
cards
There you have it,
the
between
;
,
the
2s
rise
in
due
12/15/52/54 and the 2%s
price of the latter obligation
due
3/15/56/58,
being mainly re¬
sponsible for this. This again
brings into the forefront the desire
of many commercial
banks to get what is termed an "assured
Coupon income," because they still believe
many of the callable
obligations may be retired before
maturity with lower coupon
obligations. The passing of the call on the
2s not so long ago
by the Treasury has not altered
very much the ideas of these
institutions about what
might take place in the future.
According to reports, the 2%s due 12/15/63/68, have come
in
for some good
buying recently because the
buyers believe
the price and
yield is attractive and the
eligible feature which
becomes operative Dec.
1, 1952 is an added attraction. It is
Hidicated that all, of the
tap bonds, which can be
bought by the
deposit banks in 1952, are
getting more than passing attention
at this
time.
g
partials have
not
been
very much, and not very
tnany of them have found their
way into the market.
Nonetheless,
keep their
Joins Lincoln McRae
'TtnrKT awn
u
Ingraham has
Lincoln E.
reported,
2%s and the 1960-65s.
'
Fm1J!!CIAL Chronicle)
•
•
1 "TL
J01n^d the
continue
to
V. T. Curran
Opens
PROVIDENCE,
R. I. —Vincent
°les
and
infiltration
of
not
through
challenge of
the
St.
di¬
The recent
war.
fire suggested that
cease
a
sub¬
the
Communists, having made
Westminster Street.
than
April
'/\;
on
44%.
A
from
rose
rise
of
by
the
supply
money
of
the
ve¬
at the
are
is whether
we
beginning of the famil¬
a major deflation.
-
iar spiral of
mem-,
the
$13.3
billion
I
do
think
not
peak of $19.3 us to the first
11, 1951, more .balance sheet
:
This
so.
credit
a
billion in
$8
either
locity of the monetary turn-over.
record-breaking
commercial
debt.
of
of
acceleration
an
The question then
as
brings
item of
contra
a
our
to
the
foregoing, namely, the prospect of
a
high level of industrial pro¬
manu¬
hardly duction and full employment for
regarded as excessive or dis¬ the duration of the defense effort
turbing if viewed in the light of and the prospect of a concurrent
unfilled orders, which rose about expansion of the money supply,
facturers'
inventories
can
$30
billion
in
the
income and
;iperiod.
same
Manufacturers' inventories in this
period declined from 133 % of
filled
orders
about
to
savings, granting the
of some disemploy-
probability
ment
un¬
as
shift from civilian to
we
armament production. Our urgent
defense needs virtually insure a
70%.-
heavy inventory position
full utilization of our material and
retailers, however, is another
matter, as they appear to be manpower resources for at least
two years ahead and provide in¬
caught in a squeeze between flag¬
surance
against a major depresT
ging consumer demand and the
of
reduce
to
pressure
loans.
sion
Con¬
in
that
period,
subject,
of
having discovered that course, to the extremely improb¬
able contingency of an abandon^
widely
heralded
shortages
sumers,
the
ment of our
to pass and having
come
heavily,
good deal
up
are
ing
dis¬
now
arms
program follow¬
apparent accord
an
Communists.
now
with
the
This I believe could
area.
we
I
believe,
are
moreover,
get by the critical
of
the
next
several
pursue
with
pe¬
unflagging
termination
in
war
an
1952
likely than
This
is
months
de¬
all-out program of
defense, the outbreak
1953
or
of
is
major
a
less
even
now.
not
to
deny,
however,
that the market will be subject to
the impact of recurring war scares
the
Communists
pressure
on
other
turn
areas.
their
That
altogether likely; and it is
several
ing
ft
-
.tenance
and
major dealers.
from shortages.
The
banks
erting
of
meantime
pursuant
of
program
ex¬
their
voluntary
a
policy
goal
the
a
good
cautious
vestment
for
reasons
and
of
follow¬
balanced
this
at
program
one
is
in¬
time.
need
of
ment
and
to
in
is
rugged
a
non-defense
needs
Top-heavy
are
at
Rise
in
second
item
in
our
business
tion
of
recession
how
far
and
this
the
may
ques¬
carry.
and
product
-
of
rate
a
the
above
year
national
from
of
$300
$335 billion in the
as
in
after
assumed
inr
higher
In view of the prospective
taxes.
restraints
also
substantial
disposable
consumer
even
This should
a
1 on
for
sonal
consumer
durable
expendi¬
goods,
we
can
that the rate of per¬
assume
savings
will
rise-substan¬
low last year. Our experience in
the last World War, when a
interest
have
rates
flationary
prices.
exerted
a
high
de¬
pressure on commodity
Wholesale commodity
level
income
of
of
area
duced
savings,
ing
the
support
the
index
terials
past
three
of
prices,
vanced
months
sensitive
38%
after
from
raw
having
June
and
ma¬
ad¬
1951,
has
11%
from
since
its
declined
February
peak.
we
have
characteristics
of
all
present
a
the
deflationary
phase—high debt level, tight
spending pro¬
abnormally high rate of
appear
to
lend
would
to
this forecast.
>
served that the stocks of the
ufacturers
goods,
some
the
to
and
which
pressure
present
merit
on
Thus
restricted
a
Parenthetically,' it might be ob¬
De¬
to
and
consumer
an
prices have moved sidewise dur¬
about
Inventories
debit
level
tially, though currently this is be¬
ruary
The
The
end
a
end of this
gross
rise
;
the
at
index
which
the
at
December 1950 to the end of Feb¬
immediately
r
v
retail level and tighter credit con¬
ditions reflected in a sharp rise in
there
stake.
"
Board
accompanied by
tures
cember 1950 and another 6% from
more
/
Production,
reach
much
as
come
concerned.
Iran, for instance, is a greater
danger spot than Korea because
is
the
rise
connec¬
inventories
'
•
Reserve
217
by the
be
tion with the defense
effort, this
program
so
far as
and
essentially infla¬
final quarter of 1951.
credit;,to fi¬
of plant, equip¬
inventories
will
might
bank
expansion
nance
program
controls
billion in the last quarter of 1950
of
level
able
at
that
up
rollback
be
Industrial
230
re¬
of: New York has recently, set
of
•
year,,
adopted
credit
defense
probable, for instance, that
stood
straint. The Federal Reserve Bank
.as
It is
of
speculative
or
.
to
would
the Federal
are
for the reduction
pressure
nonessential
loans
the
of
our
Main-p
program.
tionary.
*
some
abandon
and
relaxation
taxes
by
This is
of the
far cry
guard
our
rearmamament
of $5 million of television sets
in
and taxes,
shall be
drop
"•>
Recently the New York "Times"
a story of an auction sale
one
in controls
altogether unlikely that
so fatuous as to again
seems
we
carried
a
result
may
.slow-down
area, department store sales for
the country as a whole are below
last year on a physical volume
basis.
fire
cease
Despite the
an
play for Korea;
in that
as
brief and local flurry.
increase in sales in the New York
outstanding' bank credit ; to the
prevailing at the beginning
prepared to cut their losses of this
year. ► In view of the prob¬
unsuccessful
the
have
as
It should
soft
under
reflection
a
favorable
of
man¬
of
been
slump, would
basis
consumers'
.
retailers
of
appear
consideration
the
outlook
for
disposable income.
be
borne in
mind
too
that
the Treasury for some time
currently in a deflationary
phase—a pause in the mesh be¬ ey conditions, heavy inventories, past has been taking more money
tween declining civilian produc¬ and declining commodity prices. out of the
banking stream than
tion and rising military output. Tighter
money conditions are re¬ it has been
putting in; that is, we
Following the outbreak of war in flected at all
levels—consumers, have had a substantial surplus Nin
We
are
Korea
there
was
a
feverish
mon¬
rush
Curran is engaging in the secu- by consumers,
merchants
staff of rities business from offices at 170 manufacturers to stock up in
McRae, 449 Main
methods
familiar
balance sheet is the current mild
doing
fv,n- the
teeth inc®Pime^cial banks, it is
will
and
longer
the
Communists
riod
the
,.
with
the
that if
market, that is the intermediates
ones, have been doing all
right, with offerings
rather limited and
buying orders not too sizable, but enough
%}Xe them a good tone. One of the noticeable features of the
eligible obligations has been the
narrowing of the yield spread
and
the
on
imperial¬
rect
Eligibles Acting Well
The eligible
that
me
bid for
.
>
strike
to
hanging
were
version .but
them.
expansion
a
loans
1, 1950, to
billion
commit¬
failure
continue to pursue their
ends
through the
view of the situation is taken
by
and this is,- when the
won't
we
the
make
his
istic
district
/Then they expect the market to fold
to
buildup of strength in West¬
Europe and at home, suggests
ern
around
The
so
at Pusan and in the face of
ropes
our
to
has
stated, I believe that
will begin when Sta¬
and
when
war.
MacArthur
war
elects
ment;
and
certain people in the financial
large institutions come back in
to sell Treasuries in order to
get funds for other investments,
the professionals, the
traders, and the not-too-rugged investors
world
lin
sizable
as
investors
more
General
eloquently
a
but they do not
the extreme de¬
likely to be
in
as
all-out world
an
rather general agreement that this will take
market fold up and do a spin down to the old
banks
June
no
policy at this time the
improbability of the outbreak of
be
ber
on
stocked
vestment
they may well be less frequent. This phase of the situation is
being watched very closely, with the belief being expressed
here and there that the. high point of the institutional
selling
may have beep reached during the month of June.
When selling again
appears from the large institutions, and
of
remedied
playing a
more caution.
disposition to assume
precipitate a deflationary spiral;
the role of political prophet in Retail trade declined more than
but it is too remote to enter seT
this dangerous
and bewildering seasonally in March and,, April,
.riously into* our present calcula¬
and, recently
the widely adver¬
world, but I am prepared to ac¬
Current negotiations for a
tised price wars caused .only a tions.
cept as a major premise of in¬
T have
checking as to when the
likely to be drawing to a close.
the large life insurance com¬
by
business
have not
Improbability of Ail-Out War
from
companied
expansion
The
be
can
and
The
policy.
a
Korea
'
time we
for being
balance
a
trial
our
reasons
The first item
of
numerous
in
given
bullish.
or
to
pur¬
tion
drastic liquidation or by a further
ac¬
was
the
funds to finance rising inventories
and expanding plant.
The situa¬
a
fee to automobiles and houses.
inventories
in. turp. reflects
liquid position of the latter,
arising from the need, iof added
volume of frantic buying,
from nylons and cof¬
The rise in
the .part of corpora¬
on
This
be
usual
any
plenty
the
was
huge
less
about 33%.
or
all know that there
we
large
dynamic risk-
a
credits
At
the
of
stocks.
as
and
balance.
rive
of
cons
common
find
debits
ness
balance
policy—namely,
chase of
find
trial
a
tions.
all the way
pronounced
nomic
for credit
retailers' inven¬
$14.5 billion to
and
'from
rose
the
selling bonds steadily to take care
of the huge increase in demand
more
There
is no Way of measuring what hap¬
pened to consumers' inventories
but
ured
$64 question, in the opinion of some money market
is how long will the big liquidators of Treasury
obligations stay on the sidelines. There appears to be considerable
selling that must still be "done by these institutions, although
the comparative calm at the moment
may have greater significance
what
25%,
$19.4 billion,
1950
of this year, or more than 36%.
The
much talked about liquidation is
To be sure it is expected that
than
from
instalment and mort¬
personal savings available for in¬
vestment.
The banks have been
In the 12 months
wholesalers increased stocks
money position of the
gage debt over the past five years,
which results in a curtailment of
the Sec¬
ending April 1951, manufacturers'
inventories rose more than 29%;
about
followers,
than
ond World War.
of
many
)
risen
the experience 'of
tories
cident
,
mind
year
a
$5.44 per share in the first quarter
followers
of these securities asking themselves,
is this the real McCoy
or
is it a cream-puff development that could be deflated very
readily. Reactions as to what has been taking place in Treasury
obligations is still rather varied. Some hold the betterment,
which has been witnessed so far in quotations, is not of the
lasting variety. They point out that the rise does not rest on
solid footing because there is too much professionalism in it,
and not enough of the important and necessary investment buying.
The market for many issues, particularly the higher yielding
obligations, is said to be very thin and it takes only a handful
of orders to move prices rather easily in either direction. At
the present instance, the trend has been on the constructive side,
because of not too sizable buying by dealers and traders who
are trying to scalp a few
32nds, some short covering and a modest
between the 2s due 12/15/52-54 and the 2V2S due 3/15/56-58,
According to reports, the 2V2s due 12/15/63-68, have come
market
than
Earnings of the Dow-Jones in¬
Market Outlook
government
higher
ago.
Radical
and
mystifying
changes have occurred in the price
of tax-exempts.
monetary authorities to be in a
as
they develop in the money markets.
Although the government market has had periods of greater
volume and activity, the past week was a good one as far as
the Federal Reserve Banks were concerned, because the Central
Banks did not have to purchase Treasury bonds for support
purposes. A combination of decreased liquidation by the large
sellers
and
a
certain
amount
of
professional and investment
buying made support purchases by Federal unnecessary.
The near eligible restricted obligations, the 1956-58 eligible
and the longest bank bond, have been the market leaders. The
short-term issues continue to be well bought because the desire
for liquidity is still strong.
]
points
surplus of the
budget. •
stems
increase in
IVis
desirable
the
tight
consumer
was
in line with expectations.
obligation for banks and others,
and the exchange is being well received. The Federal Reserve
System also announced the exchange of one billion dollars of
the non-marketable 2%s for a like amount of Treasury 1%%
exchange
This
cash
Federal
No Major Deflation
The
By JOHN T. CHIPPENDALE, JR.
The
Thursday, July 19, 1951
.
and
an¬
corporations and financial institu¬
the
tions.
Spending is stepped
ticipation of shortages, having in tion
Contributing to
a
contrac¬
in the effective money
supply
cash
budget.
As
our
up
defensd
this situa¬
tion will be
reversed, as we
shali
.Volume 174
Number 5030
.
.
.
The Commercial and Financial Chronicle
in all probability return to deficit
are
financing.
any
to conclude that a recession of
significant
for
come
Current
Situation—A
Temporary
Squeeze
In
short,
situation
as
the
current
temporary
a
bear in mind that
we
squeeze
to
serve
floor under
a
degree to put
a
as
may
we
ceiling
a
feel
jus¬
rather
than the beginning of a tified in
paying a higher multiple
major deflationary spiral; and ad¬ of earnings and dividends than we
mitting the expanding needs of in¬ have for some time past. Indeed,
dustry for capital and credit to that is just what we are doing
finance rising defense production, now.
I
should
expect to see an easing
of the statisiical position of mon¬
in the
ey
course
of this year and
firming of bond prices
some
reflection
the
of
as
a
im¬
restraints
posed on credit demand on the
hand and a rising volume of
one
investable funds
While
the
on
other.
money
is up sharply from $140 billion at
the end of 1945 to $229 billion at
the end of 1950, or 64%, I do not
believe that the volume of private
be
can
regarded
of trou¬
as
blesome dimensions when
the
to
of
source
be
related
its support. Pri¬
this
sure,
will not
boom
fact,
it
will
long
as
of
should be able
a period
unless a truce in
arsenal within
our
two
years
results
in
slow-down
a
the pace of our arms output;
in
and
thereafter major defense expendi¬
tures
should
the
for
military establishment
standby productive capacity
and
well
and
the development of new
as
improved
one
of
the
interest
stocks
common
few
elements
which
economy
do
in
the
sound
ing is the low
investment pansion of the economy for a con¬
ratio
The
siderable period of time ahead.
In the analysis of the stock mar¬
prices to
price of ket there is one factor that must
of
earnings.
our
the Dow-Jones industrials in 1948
reflect
1949
and
average
about 8 times
was
ings
the dollar.
about 7 times.
and
the
ratio
As
in
earn¬
1950
was
result of the
a
expanding
sharp advance in prices in the
past six months and the prospec¬
money supply, and a contracting
supply of goods available for ci¬
the next six months this situation
Under
the
conditions
namely
economy,
an
of
a
war
decline
in
the
value
the
of
dollar,
is a long-run probability
despite the current evidence of a
tive
decline
longer
no
nounced
stocks
gain
a
are
basement.
ship
drastic
tracks
not feasible
are
litically
inflation
in
economically.
or
How far
shall proceed with
we
effective inflation controls is
jectural;
accept
but the
as
its
either po¬
con¬
investor should
major premise of his
a
This could
mean a sharp cutback in the mass
production industries and it raises
the fact that a
large element of inflation is frozen
the question of the rate at which
of
On
the
of
Dow-Jones
halt
to
as
the
earnings
over
in so pro¬
degree, that is, common
no
longer in the bar¬
deflationary setback. It is simply
question of degree. Measures so
a
net
prevails
studies
our
in
stock
market
the
basis
of
past relation¬
prices
to
earnings
measured
as
23
been provid¬
are
in
not
dence
values which it has
fully the decline in the value of
mainte¬
of
nance
as
be
absolute levels
of
emphasizing that
historically high
ther
of all-out war, we
to fill
level
am
current
as
Short
suppose.
now
at
In
forever.
last
prevailing
even
vilian consumption, a further rise
in commodity prices, that is a fur¬
rearmament
last
not
people
some
Korea
is
undeniably
tight at this time and private debt
debt
To
the
not rates, but I
prof¬
excess
well
as
earnings,
over
will
time ahead and if
some
its taxes
I regard
degree
(259)
by
the
be
not
overlooked, namely, the
and steadily growing
tremendous
volume of institutional funds that
provide the market
dation
of
believe
largely
times
demand.
this factor has
responsible
for
price
solid foun¬
a
investment
that
the
in
orderly
declines and
quick
bound from such declines.
probably
know,
I
recent
nature
the
1
been
of
re¬
As you
report
can
cheerfully that the open-end in¬
vestment companies are currently
selling new shares at an annual
rate of about half
a
billion dollars:
industrials
currently and the trend continues upward.
might be said to be about 20 This results in a current net conpoints above normal. At its pres¬ tribu.ion of about a quarter of a
level
ent
the
times
indus¬
Dow-Jones
trial average is
selling at
over
10
estimate of ihe earnings
our
those companies this year and
yielding about 5% based on our
dividend projections.
While this
is not extravagantly cheap, nei¬
of
is
billion
annually, largely to the
equity markets. Beyond this there
is a large and growing demand
for equities from the insurance
companies particularly
substantiial
weapons.
investment policy
into
as a result
legislative authori¬
zation for the purchase of com¬
the
of
recent
economy and a further
ther can it be said to be unreason¬ mon stocks by the life fcompanies
degree
of inflation
in 1953, to should be experienced in 1952. I ably high if we consider the in New York. A growing number
nature of current earnings.
compared with 172% at the end efnploy a steel capacity of 120 have
of states are permitting purchase
put inflation on the credit
of
1939.
Moreover, prospective million tons and a productive ca¬ side of
common
stocks
by trustees;
This brings us to the offsetting of
my ledger in the audit of
conditions
suggest a
decline in pacity of aluminum more than common stock investment
and the rapidly growing pension
policy. credit item in our trial balance,
the volume of private debt and double that of
1943, at the peak of This is not to suggest that I re¬ namely, the nature and durability funds are a potential source of a
an increase in the rate of savings.. World War II demand.
gard inflation as good. I do not, of current corporate earnings. In huge flow of money into equities.
We
recently estimated that the
Anything in the nature of a
However, it is unduly sophisti¬ of course. It is an unmitigated the first place, these earnings as
major business depression is sim¬ cated as a matter of present in¬ evil for almost everyone, but it is related to the value of the dollar amount of funds available to the
ply not admissible for the fore¬ vestment policy to worry about to suggest that in our present so¬ in which they are expressed, or equity markets from these sources
should be running at close to one
seeable future in view of the huge
possible excess capacities several cial framework common stocks more important, as related to the
debt at the
vate
97%
of
national
the
demands
end of
1950
income
growing out of
fense effort and
was
as
de¬
our
the great expan¬
sion of expenditures for plant and
equipment by industry largely for
kinds
billion,
projected
are
at
$46.4
than twice the $21.4
more
be
able,
say
.
hence, bearing in mind the
growth in our needs
years
based upon a
dynamic increase in
population.
Our
scrutiny
of
the
balance
sheet of investment policy reveals
third debit, namely the absolute
a
Historically
of
stock
common
prices.
is very
by the year-end
defense spending should reach a
rate of $50 billion per annum as
high.
It has never been higher
except for one brief period from
against $30 billion currently. Ex¬
1928
industry for plant
by
and
equipment are estimated at
$24 billion in 1951, about 30%
higher than the 1950 volume.
This
opinion
is
held
in
full
recognition of the probability of a
sharp decline in residential build¬
ing
activity
and
automobile
and
to
1930; and since the 1929
we
have regarded
the
price level of that lamented new
era
,
industrial
Would
months
as
be
not
housing
year.
surprising
starts
in
the
of this year are
50%
below the
last year.
if
last
It
new
six
much
as
period of
Building starts in April
were
down
Were
34%
same
It
within
now
of
1929.
From
the 1932 low
1929
The
level
high
to
the market declined
than 80%. This is
more
side
the
that
sobering
a
should
serve
to
speculative expectations.
contra
of
the
relative
item
on
balance
level
of
the
sheet
credit
the
is
common
stock
prices in terms of the purchasing
power of the dollar, as contrasted
contra-seasonally and
with the admittedly high absolute
below
level.
April
of
last
year; and in May starts were 35%
below the same
month
of
last
year.
Dow-Jones
less than 20% of the average
dampen
this
is
average
reflection
of
The
fantastic.
as
the
half
market
debacle
other durable goods production in
second
the
seems
probable too that
passenger car production may de¬
cline by as much as 30% to 40%
term
and
We
have
been
in
the
to
only means
investor
protect himself at least in part
against the ravages of this evil.
a
long-
inflationary trend since 1933
further significant decline
a
fourth
final
and
capital from which they
derive, cannot be said to be ab¬
normally high. Moreover, as we
have seen,
under the economic
conditions
which
appear
to lie
ahead
the next several years
over
billion
dollars
per
This
institu¬
annum.
of
concentration
great
tional investmerit funds which
ordinarily committed
term
income
sult
in
basis
lower
on
may
yields
a
are
long-
well re¬
for good
item
on
trial balance
our
corporate
than those of
resulting from the current slump, The degree of the decline in earn¬ of a 10 to 20% correction of the
the maladjustments of conversion ings which I have suggested in market, I do not believe that this
of defense production, price and the second half of this year may consideration should deter the in¬
other controls and higher taxes.
seem
drastic but I call attention vestor from committing available
So far as price controls are con¬
cerned, all is confusion, and indus¬
try, if not Washington, is baffled.
I know of several companies that
have
sent
representatives
to
Washington in aq effort to find
out
just how the recent compli¬
cated pricing formula will apply
them.
to
attempt
Hence
scarcely
can
predict its impact
earnings except to
that for
some
mean
rollback
a
I
to
corporate
on
say
industries it should
prices and la
of
considerable contraction of
profit
margins, unless the Senate Bank¬
ing Committee's present proposal
to eliminate
To date
a
this
rollbacks prevails.
factor which has
tained
to lie ahead
extraordinarily
the product of our
invested
earnings, though lower quality common stocks than we
have
been
accustomed
to
for
1950, should never¬
is the almost certain prospect of a theless be maintained at satisfac¬ some years past.
Even granting that present cir¬
material
decline
in
corporate tory rates as related to current
earnings in the last half of 1951v levels of common stock prices. cumstances suggest the possibility
The
the debit side of
in the value of the dollar appears
as
average
Prospects of Corporate Earnings
Are Stocks Too High
fiscal
penditures
the
to
level
and
almost
available
billion of expenditures in the 1951
year;
provide
tremendous
the purpose qf taking care of our
defense needs. In the coming fis¬
cal year military expenditures of
all
snail
we
our
market
has
sus¬
been
favorable
the
corpo¬
tfi% fact that
to
this year's
earn¬
funds
now
to the shares of invest¬
ings even then will be the highest
ment
in
standing if he is willing to accept
history
for, the
except
year
ticipate
An Index of Confidence
a
We
maintain
index
so-called
a
established
of
basic premise that
my
1950.
companies
an
we can an¬
expanding rather than
contracting
economy
for a con¬
ahead. I
siderable period of time
of confidence which expresses the
make
ratio of, the yield of
these reasons:
stocks
common
to
the
At
bonds.
corporate
Moody's 200
Moody's
end
1950 this index stood at 2.48 to
that
almost
stocks
common
2Vz
times
was
yield
the
for
(1) It is seldom profitable for
of the individual to attempt to catch
1, relatively short swings* In the
is, the yield afforded by rep¬
resentative
recommendation
this
Aaa
of
first
place, if
decline
the
we
do have
investor
a
minor,
who sells
or
refrains from
buying is not likely
buy at the bottom. In the sec¬
bonds.
There have to
brief periods in the ond place, he will be without in¬
history of the market when this come while he stands on the side
ratio has been higher, namely, in lines and income is of the essence
1940 following Dunkirk and 1942
of investment.
high-grade
been only two
after Pearl Harbor.
In 1929
com¬
(2) The purchase of shares in
effort, despite the rate earnings statements and divi¬ mon stock yields were only 62% an investment company should be
dend declarations. That factor will of high-grade bond yields; and the
anti-inflationary
meas¬
regarded not as a purchase of
of 1950.
ures that
may accompany it and not be present to the same degree average relationship of the past 22 common
stock, but rather as the
Confirmation of the prospect of
in the latter part of this year.
granting that we are now in the
years has been about 1.6 to 1.
employment of investment coun¬
a high over-all rate of industrial
midst of a deflationary phase. The Net earnings of a large group of
In the course of this year this
sel.
In purchasing the shares of
production for a considerable pe¬ supply of money has about trebled typical corporations in the fourth ratio has declined from 2.48 to
a
good investment company the
riod ahead is to be found in our since
quarter of 1950 were almost 30% 2.19 at the end of May as a result investor is
1939, far exceeding the in¬
achieving the three
index of incoming orders. In the crease in the
production of goods. above the same quarter of 1949 of lower common stock yields and cardinal prerequisites of satisfac¬
fall of last year this index reached
Consequently a significant rise and in the first quarter of this a sharp rise in high-grade bond tory investment experience, ad¬
a
level above
the peak
of the has taken place in commodity year the net income of 550 com¬ yields.
On the basis of present vantages which accrue ordinarily
World War period. It has, to be
prices. The U. S. B. L. S. Index panies as compiled by the Na¬ common stock prices and highonly to the institutional investor
sure, suffered a decline of about of
Wholesale Commodity Prices tional City Bank of New York was grade bond yields and our pro¬
or
the very wealthy individual
18% in the past two months, but rose 131% from August 1939 to likewise 30% above the first quar¬
jection of 1951 dividend rates, a through the employment of com¬
it is still well above any level
ter of 1950.
ratio of about 1.7 might be ex¬
February 1.951; and the more vola¬
petent investment advisers.
reached
in
the
postwar period tile index of sensitive raw ma¬
We are of the opinion that a pected by the end of this year.
prior to 1950.
terials- prices
rose
291%.
The sharp decline in net earnings is Again, on this basis stock prices
The
virtual
assurance
of
the
sluggish and somewhat unrealistic in prospect in the second half of are no longer extravagantly cheap.
Barclay Inv. Adds.
absence of a major depression for index of the cost of
living rose this year. For the year as a whole Neither are they abnormally high
(Special to The Financial Chronicle)
several years ahead and the con¬ 85%
we are projecting a decline in the
between August
1939 and
particularly in the light of the
CHICAGO, 111.—Lyle E. Ware has
sequent probable maintenance of April 1951.
net
earnings of the Dow-Jones general economic prospects of the been added to the staff of Barclay
In terms of the cost of living industrial
relatively high and relatively sta¬
companies
at
about next two years.
Investment Co., 39 South La Salle
ble earnings despite the impact of index the dollar
may be said to 20%, which could mean a decline
Street.
Probability of Market Decline
higher taxes and the contraction be worth about 54c currently as of almost 40% in the second half
as
with
compared
the
half
last
all-out defense
various
\
of profit
margins incident to price
controls
and
negotiation,
significance
common
ber
of
prices
power.
to
its
1939
purchasing
Expressed in terms of 1939
of the year as compared with the
re¬
extraordinarily
high
factors of primary
in
the appraisal of
dollars
derived
last six
of
defense contract
are
stock values.
past
years
have
normally
For
a
num¬
common
stock
represented
low
rate
of
an
ab¬
capitaliza¬
tion of earnings because we have
looked upon those earnings with
related
from
the
cost
of
1950.
living
index, the Dow-Jones in¬
are selling at the
equivalent of 134. The average or
mensurate decline
dustrials at 248
in dividends largely as a
so-called
year-end extras;
"normal"
index in the prewar
1939,
I
was
about
not
level
of
this
period, 1935-
150.
suggesting that there
jaundiced eye, regarding them is an exact mathematical relation¬
as
a. manifestation of
temporary ship oi stock prices to commodity
boom conditions. We have had our prices.
Stock prices in the long
sights fixed steadily
upon
the run represent a capitalization of
"coming recession."
Now if we Earnings at a rate determined by
a
months
rate
am
the
elimination
thinking
of $13
can
or
of
A
com¬
be expected
result of
reduction
and
the
our
of
Dow-Jones
in the neighborhood
share this year for the
companies
industrial
as
against
the
out
decline
average
$16.13
last
that
over
of
order
the
recent
rection
we
probability
the
would
analysis I derive the
this
present convinced
is
per
From
conclusion
be
the
that
to
but I
a
term
20%
am
decline
(Special to The Financial
of
from
firmly
here
than the
a
initiation
OMAHA, Neb.—Warren E. Buf¬
fet has joined
&
the staff of Buffett
Company, Omaha
Building.
National
Bank
J. C. Eversole Opens
(Special to The Financial
Chronicle)
CHICAGO, 111.—Joseph C. Evertoday the ele¬
A characteristic of this market ments of a major depression over sole is engaging in a securities
firm
offices
at
4340
for several years past that has the foreseebale future.
On the business
consistently sustained my confi¬ contrary. I look for continued ex¬
year.
in
our
economy
i
Chronicle)
in the nature of a cor¬
rather
major bear market, as I do
not believe that we have present
of
With Buffett & Co.
rule
market
a
nearer
10%
top;
cannot
of
24
The Commercial and Financial Chronicle
(260)
reduce the urgency to
stockpiles and would lead
industry and government to reap¬
praise future needs for raw ma¬
terials.
Of course, not all forces
will be operating in the direction
011 lower prices:
labor costs are
likely to continue, to rise and the
farm price support program
is
still on the statute books. Never¬
it
Economic Implications
Of a Korean Settlement
would
build
The real economic im¬ garding business prospects would
pact of rearmament is still ahead in all likelihood be enhanced.
Without
of us.
attempting to call the
turn on international affairs, it is
Yet at the same time, the econ¬
omy
has begun to show many obviously more useful and perti¬ theless, for the time being at least,
nent to discuss the economic out¬ the prospect is for stable or some¬
signs of hesitation and readjust¬
look on the assumption that the what lower prices rather than for
ment.
A number of commodity
prices have retraced part of the peace negotiations in Korea will continued strong inflationary
This change in the
sharp upsurge that occurred after proceed and will be interpreted pressures.
the outbreak of war in Korea. as indicating some relaxation of price outlook v/ill have its effects
international tensions, rather than On consumers and businessmen.
Civilian goods are more abundant
to assume a renewal of military
than at any time in the past ten
Consumer Spending—Since the
conflict.
years. Retail price cutting has re¬
beginning of the Korean war the
appeared an*d "price wars," un¬
country has experienced two great
Increased Prospects of Business
heard
of
since
the
consumer buying waves. The first
depression
Readjustments
years, have been undertaken to
appeared almost immediately
Even before the steps toward a
stimulate the flagging buying in¬
after the outbreak of war; the
Korean settlement became a fac¬
terest of consumers.
second emerged at the close of last
tor in the economic outlook, it
Clearly, business sentiment has was evident that the boom engen¬ year, when the Chinese Commu¬
changed, and consumers as well as dered by the outbreak of war was nists entered the war and the
President declared a national
businessmen are displaying a de¬
beginning to lose some of its vigor,
gree of skepticism and hesitancy and that excesses had developed emergency. In these buying waves,
consumers anticipated
future re¬
regarded as most unlikely a few which
might entail readjustments.
quirements
for
durable
goods,
brief months ago. Now, the im¬
Recent happenings in Korea have
such as automobiles and household
pending settlement in Korea is increased the possibility of a tem¬
providing a further strong incen¬ porary downturn in the levels of appliances, and probably for some
soft goods as well.
It has been
tive for a careful scrutiny and
business activity and prices. The
estimated, for example, that as
critical reappraisal of the eco¬
general effect of a truce there
many as
one million
additional
nomic outlook,
v;i,
would be to strengthen, at least
passenger cars were sold last year
for a time, the forces operating in
International Developments and
as the result of scare buying.
goods.
this direction.
Business Activity
record
past
12
months clearly indicates the po¬
tent influence of the international
situation in shaping the course of
economic1 events;
outbreak
should
sioned
the
-
of
Although
the
the
Korean
war
perhaps not have occa¬
great surprise in view of
unsettled
state
of
our
inter¬
national relations during the postWar
years,
it nevertheless had
immediate economic repercussions.
It set off a series of
interrelated
booms in consumer goods, in
busi¬
spending for plant and equip¬
ment, in business inventories, i!i
construction, in government stock¬
piling and later in spending for
defense. All these were promptly
reflected in a sharp upsurge in
commodity prices and in a sub¬
ness
stantial rise in the rate of indus¬
trial
pr^uction.
This
general
environment
of sapid spending,
rising prices and mounting pro¬
duction persisted into the early
months of this
year!
A brief considera¬
forward.buying naturally
had its effects upon retail sales in
porting this point of view is in
recent
months, especially since
order..
v.
the expected shortages of con¬
Commodity Prices—One of the
sumer
goods did not materialize
most
eloquent indications of a and the war news
improved. Also,
change in economic prospects was
the regulation of consumer credit
the halt in
the sharp upward
has had some effect. Even though
trend of commodity prices in the
personal income has continued to
early part of 1951, shortly after
rise in recent months, retail sales
the imposition of widespread price
have not followed suit; they have
controls. Without doubt, the price
sagged from the record levels that
ceilings directly prevented some
prevailed during the two con¬
price increases; in addition, they
sumer spending booms.
Although
have reduced the
tion
the
ot
of
some
of
the factors
may
of ..consumers to
eagerness
rush Out and-buy
goods in an effort to beat the price
rise. However, it appears that by
the time broad price controls were
put into
effect, the initial infla¬
tionary forces resulting from the
outbreak
of
war
had
already
largely spent themselves and that
the controls had relatively little
influence on the subsequent course
Of commodity prices.
In recent
months, some of the sensitive
price indexes have reversed part
of
their rise
and
the
more
This
sup¬
com¬
The
£
program was not
of
fear
war
going to be pressed with the vigor
with foreign
of an all-out effort
and that
omy
would be
less
on
the
con¬
econ¬
extreme
and
and
of
interference
of raw ma¬
terials,
The imminence of price
controls and of limitations on the
use
of
logger delayed than
sources
materials for civilian pro¬
was generally duction was
widely publicized;
In recent
this encouraged businessmen to
weeks, this feeling of caution has
mark up their prices as a defen¬
been reinforced by the initiation
sive measure. The consumer buy¬
of steps
apparently designed to
ing wave, which resulted in great¬
liquidate the war in Korea.
supposed
a
year
ago.
ly increased orders, further stimu¬
In appraising the economic out¬
lated higher prices.
Rising pro¬
look, international events again duction brought
many materials
appear decisive.
Should the ef¬ into short
supply. At the same
forts to arrive at a settlement in
Korea end in failure the
time, the government sharply in¬
disap¬ creased its stockpiling activities,
pointment in this country would and the
inflationary environment
be great, and would
probably be convinced the businessmen that
followed by a determination to
inventories were better than cash.
step up the pace of rearmament
even
above current schedules. The
uncertainties concerning
trend- of
business
present
the
activity
would be largely dissipated
by the
prospect of a rapid rise in defense
spending to twice current levels,
or higher.
This would revive the
general economic environment and
With the passage of time, how¬
these factors gradually lost
their power to keep prices under
ever,
continuous
upward
pressure.
In
the
inventory
father
,
such sales for the purpose of ex¬
rapidly.
The price outlook is also an
important factor. As long as busi¬
nessmen expect continuing short¬
ages and rising prices, they strive
to build up their stocks of raw
materials. When the price outlook
changes, their natural desire is to
Shorten commitments and to allow
inventories to
run
down.
Inventory policy is one
of the
panding their loans or other in-v
Doubtless this has
vestments.
ercised
ex¬
restraining influence on
a
the extension of credit.
Yields
on corporate bonds have
sharply since governments
were unpegged and the differen¬
tial in yield between corporate,
and
government
bonds
has
widened substantially.
However,,
corporations have considerable
flexibility in their financing oper¬
risen
factors underlying shortterm swings in business activity.
But it is also one of the most vola¬ ations and have been able to con-,
tile factors in the economy and tinue to raise funds by offering
a more attractive yield on their
one of the most difficult to fore¬
cast. If the Korean situation de¬ new issues.
major
.
The
velops satisfactorily and
influ¬
ences prices and consumer spend¬
onstrated
ing along thp lines here discussed,
the
case
For
a
it
difficult
is
visualize
to
inven¬
credit
new
policy has dem¬
its
strongest impact in
estate financings
variety of reasons, including;
of real
tory accumulation continuing any¬ the hesitation of borrowers to in¬
where near the same rapid rate crease their fixed charges signifi¬
as in recent months.
While pro¬ cantly, it has not been feasible td
duction and inventories of defense increaise mortgage lending rates to.
them
competitive
under
goods will be rising, business may make
endeavor to reduce inven¬ present circumstances. As a
con-;
tories of consumer goods, which sequence, long-term financing for
Would entail some declines in new new ventures has been difficult'
well
orders
output
and
items.
For
civilian
of
consumer
some
dur¬
ables, shortages of. materials as
the result of the defense program
to
arrange, and this in turn
restricted the availability of
terim
or
construction
had
in¬
financing.
*
The cumulative effect has been
expected to lead to forced cut¬ to dampen the ardor of builders;
backs in production and this will New residential starts so far
this
are
further
reduce
the
inventories.
In
to
tend
size
year are running at the annual
any rate
of about
1
million, which
event, inventory accumulation is is a sizable decline from the 1.4
not likely to be the stimulant to million attained in
the record year
economic
activity which it has 1950. Recent starts will hold up
of
1
civilian
been
over
the
months
past nine months.
Policies
Credit
restrictive
become
credit
recent
policies
in
some
the
of
areas
In
restraint
exercised
have
—
economy and have
factor to be considered
Business
Inventories—The
12 months have witnessed
the
level
of
building
for
some
months to come, but the consensus
is
that new starts will decline
substantially later in the
less
credit
year un¬
restrictions
are
re¬
laxed
.
there
mulation
months
during
has
been
is
evidence
inventory
the
of
an
accu¬
past %few
involun¬
trends must
they
run
for
a
time before
be discerned in the sta-?
The program of voluntary credit tistics, and the momentum thus
established
cannot
be
changed
restraint
a
new venture in the
Thus, as far as the ef-i
field of credit policy—Will like- overnight
fects upon the economy are con¬
Wise tend to restrict in growing
cerned, there are lags when credit
measure the amount of financing
may
become more pronounced.
can
—
available
less: essential
for
pur¬
outstanding commitments,
of
biggest, inventory booms in
history; during this period
business inventories rose by more
than $15 billion, or by about 30%.
Retail
inventories,
despite
the
two big consumer buying waves,
increased by one-third or more
over the past year.
Most of this
inventory building occurred in the
past nine months.
Much of this growth reflects
higher prices and the larger in¬
ventory
requirements
resulting
from higher levels of industrial
production and sales; also, invenr
tories of defense goods are on the
But
real estate credit control
sults of
past affect
one
our
that some of the
.
Since the program does not
the
increase.
a
poses.
tary character and represents the
the ease of consumer goods, large backing up of merchandise where
inventories have
checked, price production has been running in
increases; in fact, efforts to reduce excess of sales. As long as retail
some
excessive inventories have sales were holding at very high
led to conspicuous demonstrations levels, businessmen felt comfort¬
Outlook of a year ago.
of price cutting. For farm
prices, able with large: stocks; in fact,
However, should progress be lower levels are reasonably cer¬ they frequently regarded their in¬
made toward ending the Korean tain if the
present good crop pros¬ ventories as inadequate and placed
war, the feeling of uncertainty re¬ pects materialize.
orders accordingly. But when re¬
off and deliv¬ commercial banks and other lend¬
received on or¬ ers how face capital losses on the
months earlier, sale of government obligations/
situation
shifted and are less eager to undertake
fairly promptly. Residential
in appraising the outlook. Selec¬ building is an important basic in¬
tive controls over consumer credit dustry, and should this pattern
and real estate credit were im¬ materialize, it will have signifi¬
posed last year. The former have cant .effects on a number of in¬
retail trade still continues to show; not caused any significant
dustries that provide the furnish¬
^con¬
increases over the corresponding traction in the volume
of out¬ ings
and
equipment
for
new
months of 1950,
; ft
consumer
credit
but homes.
v^e are now en¬ standing
The
tering a period in which sales have prevented the increase that
purpose
of these credit
will be measured against the very otherwise would
probably have policies is not to foster lower
high records established last year. occurred. The regulation covering production, idle plants and unem¬
Consequently, Retail trade com¬ real estate credit has not yet been ployment, but to restrain compet¬
parisons are likely to be less fa¬ very effective. / Many
builders itive bidding when materials and
vorable in the months ahead.
are
scarce.
hastened to begin operations, in labor
Presumably^
Progress in settling the Korean prder to protect themselves therefore, these policies will be
war
would act as a restraining against the shortages of building relaxed if slackness should de-r
force on consumer spending. Vlt materials expected to develop this velop in the economy. However/
would remove the last vestiges, of year, arid entered into commit¬ experience seems to indicate that
scare-buyjng, if any still remain. ments covering the financing of restrictive policies are generally
Also, it might induce consumers their projects before the antici¬ started too late and continued too
became iong. This is not said in criticism
to hold out for lower prices. Re¬ pated credit regulations
This backlog
of pre- of the monetary authorities.
It
cent developments in retail trade effective.
suggest that consumer resistance controL commitments has not yet simply reflects the difficulties of
is directed at least to some extent been fully utilized; later, the re¬ sensing the course of the economy;
change in business senti¬ prehensive
indexes
have
been
ment, which first became evident
substantially on a plateau.
a
few months ago, likewise re¬
It seems reasonably clear that
flected developments on the inter¬
the price boom in the last half of
national scene. The military prog¬
1950 pushed some prices to levels
ress
in Korea, coupled with the
not likely to hold in the absence against high prices; when prices
failure of Russia to take overt ac¬
of a continuing war psychology. were reduced, consumers demon¬
tion, contributed to a calmer ap¬
strated both their willingness and
The
increase
in
prices in this
praisal of the international out¬
their
ability to
increase
their
period was one of the most rapid
look, and the fear of imminent
buying. As a result of the huge
on
record, being exceeded in the
worldwide war, which had been
postwar output, consumers have
twentieth century only
in the
held by many people last
fall, be¬ postwar inflations of 1919-20 and probably never been in a better
gan to subside. Also, with the
osition than today to postpone
1946-47. Many factors contributed
passage of time, it became evident
heir purchases of durable goods.
to this sharp rise.
There was a
that the defense
sequently its effects
Thursday, July 19,1951
*.
Genuine peace in/Korea would tail sales tapered
further weaken the underpinning eries began to be
of commodity prices. Specifically, ders placed a few
Continued from first page
The
.
its
effectiveness
presumably will
increase with the
passage of time.
Also, the large increase over the
past year in the volume of loans
makes the commercial banks less
The
credit
,
Conversion
relaxed
as
well as
tightened.
Problems
—
Last
it was fairly generally antic¬
ipated that sometime in the first
year,
t
half
of
1951
industry would be
problems of con¬
verting from civilian to military
production. So far, these prob¬
with
faced
the
policy
.
that bad
the most
immediate effect omeconomic af¬
fairs, however,
reached
last
wast the "accord"
March
between
the
Federal Reserve and the Treasury.
This
are
theif; lending poli¬ lems have not
assumed noticeable
*"•' il:;
proportions, partly because the
development jri the field of defense
aggressive in
cies.
restrictions
When they are
the Federal Reserve
flexibility of action in the
use
of its powers of credit re¬
straint, and enabled it to display
considerably greater reluctance in
the acquisition of government se¬
curities. As a consequence, yields
on
government obligations have
risen, and for the first time in
much more than a decade, longterm government bonds are below
gave
more
in the
In
program has been largely
"tooling-up" phase.
weeks, however, real
recent
cutbacks have been ordered irii
the materials available for civilian
goods, and there have been some
signs that the cutbacks in civilian
production might hot be whollyOffset by increased defense pro^
duction.
this
It is difficult to
become
see
hoW
major problem;
since presumably ho less laborwill be required to work on thh
can
a
materials used for defense orders
than is employed when these ma¬
terials go into civilian output. In
fact, the general expectation is
growing labor shortages later
in
the
year.
Nevertheless, we
had it not been for the substantial
should not ignore the possibility
shortening of maturities by many
that for a while at least, the task
financial institutions in the months
par.
The recent action would
probably have been more effective
,
preceding the unpegging of gov¬
ernment bonds; nevertheless, some
for
of
shifting into
tion may
involve
defense
some
produc¬
unemploy-
■
Volume 174
Number 5030
.
The Commercial and Financial Chronicle
.
.
(261)
and with it
ment
in income and
Summary
in
our
Current
bear
economy
earmarks
decreases
At
spending,
able
some
consumer
commonly
the opening
of the
phase of
eye—
a
seems
that
assume
lical downturn in business activ-
and without incurring
ity.
*
Treasury deficit.
A
In some respects, the Korean
boom
war
resembled
the
level
final
decline.
heels
the
of
Coming
rparhpri
upon
tremendous
a
enact-
would
ahd
^
hv
be
the
thp
$5
So
J
nf
Unlike
billion
contLolatS
un-
time, the deferred
same
At
con-
demands that sustained
sumer
prosperity
have
of
tightness
creasing
the
by
the
in
postwar
been
now
met,
our
years
the
gest
imminence
of
an
r*5ispmi*»ntiv
-
fh^
rate
nf
spending would increase
by $15 to $20 bill|orl, which is
not far different from the rise
the
over
months.
past
construction, and
nomic
,
.
.
,
[eJ and ar+e. already c°™m^ted for |?me ,tlme ahead. De-
?n
sectorf of
other
Las
Vegas,
advice
.
11
Economy
V
,
-'j
Congressional
V nrocrastination
~
the
on
~
Sighificantly,
than
rising
daterrate
come., -InatiT, ,wiU
As df today,, it next 12 months. Jn contrast
to
seems
they, will. be .powerful
enough to prevent any widespread
or
rpuU
with
hv
surplus of over $7^ billion in the fiscal year just ended,
S.kJu1S ®ntlrely
lart,p
spending
abroad and
size,
our
particularly
defense program is
but it will add to
pressures
of
will
and
difficulty
if,
increase
^
.
w
rJ^nfhJ
fniT
^
i
f
the
*head- °ne of the most important
of these is business spending bn
*
plant
betweeixJEast
Zi
sive, both
equipment,; which
and
other
[The
remains
that
favorable^developments in Korea
reductlon
m
P
However,
irl
i
i.1
be
j
should
peace
^1+l?f°rea'^fee+^1S
*11
made in the^efenTe nrLrem
which may
mpnts
involve
at
nr
TOe hrmed
Ipuc*
curtail-
some
if
pquco
Lo
foneer ne?iod
servfces
not fikelv
stretched out
oreS
that 1951 will set
comPre^-.peak, for industrial
The backlog
orders
ine,Slf The PresirpPre^?red"
urgent.
over a
are
for
the
S
nrodnrtion
mammoth auantiUes of pouinmpnt
much of which is
obsole?e:
already
They will be reluctant
to
freeze
designs and nrobablv will be more
very
in
-while
article do
Construction,
some
is
hew
a
of- unfilled
equipment is
time to
other
than
come,
private
residential building, is likewise at
record
levels and
is
expected
to
continue very strong for the rest
of
the
here, also, 1951 will
year;
final
structure
of
are
very
authorities
Fays
thus achieved be
other
defense
whether
well
may very
in nut
d°ver?ed
Congress
will
to
but
purposes
agree
of
•
•
'
'
■
'
•
at
work that will tend to relieve the
vvuia uictt wm icnu mj relieve me
fullv
cognizant
build
our
same
time
of
Congress
of
the
defenses.
they
nooH
But
at
are
to
the
displaying in-
are
creasing aversion to the extremely
high taxes required to avoid a
deficit
It
adopting
a
mav
well
he
that
after
tax bill this year
the
Congress will seek to hold defense
outlays
to
a
rate
which
can
be
met without further levies in 1952.
leave
own
of
,
of
it.
Wall
*
*
*
inflationarv
^nected
to
defer
once
business
near
read-
future
it
i^^thegrowTngd^nger
that
to be necessary during the balance
prosper-
soon
is
deficit
financing, with all its
demonstrated inflationary consequences
for
the
future.
On
the prospect of
a
eling off or a decline
spending at some future date
the
evoke
the
levin defense
may
real economic,
social and political problems associated with a painful business readjustment.
very
the shelves.
you
difficult
but
to markets such
^ j
as
this.
Hav¬
come
into
play.
superimposed
A
econ¬
on a
con¬
Pacific Coast
social and
Furthermore
we
Securities
Orders Executed
shall have
iroi£'- r uruiermore, we snau nave
which
an
political
^10^110
wmcn Puunc
it
environment
pressure
in
suppon o'f the reui me,re
Schwabacher & Co.
supper
to
attention
auenuon
give
to
Members
New
New
York
Stock
York
Curb
Exchange (Associate)
Stock Exchange
San
Exchange
Francisco
10
ine
carefully and frequently
have been
moves
and
to
reappraise
on.
Chicago Board of Trade
particularly
the
sumer goods, will tend to disappear. In recent months consumers
abnormal-
to
of
the
Association
Security
of
con¬
a
di¬
Traders
York.
New
N. Y. Stale El. t Gas
'
-Offer MmM
The New York State Electric
,
Gas Corp.
&
is offering to its com¬
(without
share
par
in
value) at $25.25 pef
ratio
the
of
new
one
Wertheim- &
Co.;
Merrill
and
its
construction
calls for
000
a
which
program
total outlay of $68,000,-
for the
years
1951, 1952 and
1953.
SPECIAL
•
CALL
Per 100 Shares
OPTIONS
Plus Tax
•
Mo.Kan.Tex.pf.@48% Sep. 14 $412.50
U. S. Steel...@41
Dec. 14 275.00
Pure Oil
@52
Sep. 6 275.00
Int'l Paper
.@48% Aug. 27 225.00
Bait. & Ohio. .@17% Oct. 16 137.50
Std. Oil N. J...@63
6 mos.
575.00
TWA
@20% 6 mos.
287.50
Radio Corp... @21% 6 mos.
287.50
Revere Copp..@27% 5 mos.
400.00
Penn RR
@19% 5 mos.
175.00
United Aircraft@29% 5 mos.
275.00
Pepsi Cola
.@9% 5 mos.
100.00
Dist. Seagrams@27% 4 mos.
112.50
Boeing
.@49% 4 mos. -..,87.50
..
on
Pacific Coast Exchanges
groups
various
various
of the earlier overbuying of con- forces and trends in our economy,
an
date
gratulate Mr. McLaughlin,
...
.....
necessary
E°
lnc°.me ar0Und P?uk Ipvelf- close
Als0' as time passes, the effects CAObe
spending
that
■.
proceed? to finance in part
tionary^ ^«bum ftat wcjjld de-
c
per-
in mind
'
•
July 25.
ing exhausted its first up¬ Lynch, Pierce, Fenner & Beane.
swing a reaction is also to be
The utility company will use
expected. But here some other the net
challenging "boloxed up" national
and cont.inued increases in wage armament program may flag and
rates wil^ minimize conversion wane. These conditions will make
proble.ms -and wil1 maintain
'
saw
.
,°n tha d?mand side, rising emPayment in defense industries
'
.
didn't take any share for each ten shares held. 1
genius to foresee. It is a nor-,
The financing is underwritten
mal sequence, a kind of pen¬
by The First Boston Corp., to¬
dulum swing that is common
gether with Lehman Brothers;
as
tasks. We must ensure and safeguard our uai.unci ^v.uuv ui « omy
national security in a
temPer any excessive problems in
on
McLaughlin
.'
.
celebrate his birthday on
ous business conditions should not reaction has set in and the
mon stockholders of record July
obscure the fact that rearmament same rumors that flood mar¬
17, 1951, the right to subscribe oh
places a very real burden upon
kets whenever a turn comes or
before Aug. 2, 1951 for 217,904
the economy. Large defense outlays entail a - level of taxation are again seeping but. There. additional shares of common stock
ofMt,his yearat least'and that tkis t0 °°pe Wlth theS6 perpieX^g
e"deav°rs to reduce the volume
F.
..
,
a
our economy may be relying
upon the injection of increasing
written under the hot desert
doses of government spending.
sun at El Rancho
Surface indications of
Vegas, the
pending if achieved, is not likely stroy .out^ ec°nomic
aur£er durable goods will continue
.
rector
a piece in which I said
rally would start, fol¬
lowed by another reaction, to
be followed in turn by a long
period of dullness. You saw
the rally.
As this is being
that
■,
Keep
troubled world. The defense pro- fused
foreign policy is bound
parently some basic materials are gram promises to be a long, ardugoing to be in short supply during ous and costly effort. . We must
the balance of the year; a reduc- avoid as best we can the infla-
tion j? lhe Peak le^el of df™f
John
••.
'
Ap-
-
The-members
leave
Just before I left New York
Consequently this nation faces factors
forces
Pressure toward liquidation.
of such goods
doubtful.
seems
took
sum-"
keep me in touch with
things that make markets go
up or down.
;"
to ease thls sltuatl0n significantly political fibre, and at the same
increasiug indus?rial over tdf next few months Con- time we must not impair our incapacity to produce arms, and in seQuently we may. expect that dustnal efficiency through a maze
experimentation and research. The cutbacks in the production of con- 0j detailed regulations and conorooose that anv reduction
and
taking
interested in
mi] itary
o£
McLaughlin, Reuss & Co., 1 Wall
Street, New York City, will
the facilities—or most of them
analvsis
defense-nroeram
iiri0,,c
ove? the
Even in the case of business many
there
July 25th 1$ Date
I wrote
anv
exceed all previous records.
inventories
not
John F. McLaughlin, partner
—to
however
the
huee
a
,hp
mAv
bigh and this will support other hand,
production for
views
expressed in tliiq
necessarily at any
time coincide with those of th$
Chronicle. They are presented as
those of the author only.\
one's
clear that business will which is already at or beyond the is no change in the immediate
spend some $25 billion on plant borderline of the taxpayers' will- market outlook. A
rally such
and equipment during the present ingness to bear. The alternative
jrear and
only
repeat myself. I still feel that
devices
awaken
to
seems
ideologically and politi-
dont has already announced
hJ
and
currently running about 40%
Settlement of the ?
Korean, above
the rate of a year ago.
lt
v6n
f ac£ieve<*
r^asonably^-. expeditiously, is not
JSfil
? 3S
cleavage
be
the months
over
Qo+fi
today.
n^ss
economy
break.
*
defense
of
ahnnrmai
,
re-:,
0
to
nf
the
d
the trend
t&e4°iLar"^
held Mown,
maintaining
not
present
„inn,
inflationafyM
-OtheftSupporting Factorsf—
^ ^ ^7"
There are additional factors that
fm -i¥orea' win Provide substantial support
r
*
doesn't:; mean;; getting \
from it all. There are
brokerage offices all over the
country and Las Vegas has all
si
prices,
incomes, production and employmenj bas grown around a succes-
an economy
se^uscycUcaT down- strictivocreditpoUcy.
Tnii ffplmumimi
'
of
proportiorfs for
that
nroeram
is
comforting
•urref rlSC,al year- Thls
ls "?• J. ,e y to assume
S?me large
? 'c
3
liquidation, some further price
corrections, and lower
production in certain lines, but
,t|(e supporting factors in the econoAiyfc>are likely to prevent such
^ corrections
from: developing into
TpfiPrtiftn
A
Our
f^orltlfru
inventory
wide open
a
expedient, feasaway
at the present
wise,
probable
time
cash
a
seems
ibie
to levy new taxes, the buget situ-
are
reac¬
unon-the defense urogram
™aae upon lJ?e deiense program Street
aistatetui
provide stfong forcfes to
and will
But
mAdp
distateful
lask °.ftimposl?gaction were toes,
addltional taken
Even if prompt
spending
months
'
j
a
a fabulous
expect any real fireworks un¬
full of slot til the end of
August, if then.
town,
the economy. market to do much this
mer,
I followed
my
improyement m the foreigm situ- In order to assume a protracted
-d?wn". atl.on
likely
the business bf price decline in the
f"±
ward readjustment.
•;. rate of defense spending impor- near futur6i one would have to
Supporting factors lil. the '
Factors'iri^he
ovfr.d e near term, it may visualize far greater inroads being
■\
ouPPPrving;
vWell contribute-to
^
*
technical
a
on
pfeafe
.
J
as
But
From this point on I'll
market
contraction involving, siz- smaller
proportion into pay, subinventory liquidation, fairly sistence and "soft" goods than was
nse sPend^§ is certain to inwidespread price corrections, re- the case during the past year, crease; a settlement in Korea may
ductions in output, rising linem-.Thus
the'drain on metals 'and affect the ultimate level ol the
what all this has to do with
ployment and a general decline in other materials m short supply °- Jays but nowneir upward dithe stock market. The answer
the rate of business activity.
will be substantially greater, as ^ection over the next year or so.
However, we must take Into ac- will the support provided to heavy The rising rearmament program, is it has nothing to do with
count 'that our economy; is not industry which is the bellwether
s r?m}r.ied econ°mlc lm~ it
except that when I wrote
operating in $ normal environ- of the economy.
;
here that I didn't expect the
■Sfat h^Idathicr^U1t™Cdt0tro ■■■Bud^t OUtth,00fk-Whiletan
'.
stock
upswing this
gains momentum until it
*
stupidity. This business is so
large that practically every
place with these one-armed
bandits, and every place ha£
them, is open 24 hours a day.
You're
probably wondering
ln °uLecon°my are very real and
able
>
from
indefinitely and without pause.
However, the sustaining forces
much
a
starts out
tion
becomes
the
one-street
overextended themselves on the machines
a much larger proporof the anticipated rise will
into procurement of material
and into
left
Premlse tt|ait. h'gh|y inflationary
boom conditions would continue calculated
hnnm rnnditinnc wnnlH mntiniw
12
-
However,
eco-
Whyte
By WALTER WHYTE=
I've
f?rm<f
fnr
tion
g0
=
an
isn't felt too much.
Says—
are
On
tendencies toward inventory for the past few weeks and after the
current reactionary
am
touring the West Coast. phase is over we will
declines
m p^adjustments^id
production in some
go into
,
T,
® .
f
hl
now. this
is written a
lmesmay have troublesome Right
period of dullness. I don't
defense
experienced
except
possibly for certain types of housing. In the absence of supporting
factors, this situation would sug-
tinns,
there
ago,
year
"JS
Under these assump-
ago.
a
he expected to strengthen the
than$$15
year
in-
downswing the accumulated
fears gather force.
So what
Walter
divergent and conflicting forces'at
Work in the Economy. An im-
less
Pnd
and
credit.
money,
Markets
Conclusion
-
£
borrowed
Tomorrow's
0
midrilp
to
rate
„
adverse effect oii
an
markets.
future.
spending
brought such typical symptoms as. der the Administration's present
schedule.
This compares with a
a rapid speculative runup m many
nrp<,„„t rat_
_f _hmft ^ hillinn
commodity prices, large inventory
a leyel
f less
nnn,,m,.ioi,on,
biui0n
ht
Part a
with
to have
expected to
support to
economic activity within the near
sizable
a
defense
of
K.„.
flare-up. of a business boom just
before the
ly small percentage of their available
income, but eventually a
more normal relationship is likely
to be restored. All these factors
reason-
after
$55 billion a year might be sup- may reasonably be
ported without additional taxes provide considerable
associated
-
it
moment
to
ment of the tax increase in 1951
a defense program of about $50
conditions
many
the
25
the
outlook
as
time
14 Wall Street
COrtlandt 7-4150
Private Wires to
San
New York 5, N. Y.
Teletype NY 1-928
Principal Offices
Francisco—Santa
Barbara
Monterey—Oakland—^Sacramento
Fresno—Santa Rosa
Subject
to prior sale or price
Explanatory
change
pamphlet on request
THOMAS, HAAB & BOTTS
Members Put A Calls Brokers &
Association, Inc.
50 Broadway, N.
Dealers
.
Y. 4, Tel. BO 9-8470
26
The Commercial and Financial Chronicle
(262)
Continued
from
increase in
13
page
the
Against
very
now
in force and also
the
The Investor
nation's
the
to
particularly in view of
rigid credit restrictions
economy,
Tax Discrimination
speculation would not
detrimental
be
careful
because of
the
which
scrutiny
Securities and Exchange Commis¬
sion
exercises
The
markets.
security
reasoning ap¬
over
our
same
which alone has taken from them
signed to hamper the employment
plies
billions of dollars in the last
which the House now
proposes to add the
20% with¬
of
the proposed increase
tal gains tax return
many
17 years, to
holding
is
There
tax.
the
that
doubt
no
should
government
grossly biased tax provisions
which it has imposed. These pro¬
visions, some of them, such as the
dividend tax, agreed by
parties and
also
by the
Treasury Department to be un¬
fair, were bad enough when rates
double
both
of
tax
They
comparatively
intolerable under
were
are
low.
believe,
the tax received.
to not more than three months.
The
Investors
strongly against
more
in the capi¬
which cer¬
tainly has the effect of reducing
therefore, that the
holding period should be reduced
re¬
move
capital.
*
We
even
In conclusion,
League is aware
of the
gentlemen, I ask
with all the sincerity at my
command: Please, for God's Sake
and for the sake of God's children,
possibility that such a re¬
duction
in
the
holding period
might encourage greater specula¬
tion in corporation securities. We
believe, however, that any such
you
humanity, do not dry up the wells
Prosperity, American Style!
The
from
One
the
of
admitted
laws
tax
all sides.
on
has
the
Most of the railroad
Three years
a
the House, after lengthy study
by the Ways and Means Commit¬
tee,
passed
a-Bill,
late
too
The
for
excuse
so
and
because
revenues.
load
of
taxes
economy is
staggering,
believe
there is no more time for delay
in removing complex confusion,
iniquitous
discrimination
and
gross unfairness from .the Internal
Revenue
Code.
Accordingly,
earnestly recommend that
Committee
with
be
from
the
Committee
&
Means
the
Committee,
staffed,
to rewrite
Revenue Code from
other,
in
form
the
provisions
passed1
immediately
would
produce
of
at
Investors
a
period
League
reduction- in
which
also
are
ing period
ernment
was
tax revenues and
.the
...
the
receive
time would benefit.
same
As the taxes stand
now
resell them and still
that
securities
205
year
profits
and
if
purchaser
a
It
were
to
come
a
person
within the scope of
the capital gains tax provisions
by holding for a three-month pe¬
riod rather than
a
six-month
riod, it is probable that his
the
final
gains tax
capital.
to
is
in
analysis
effect
a
a
capital
levy on
In fact it has been held
be such a levy by our Courts.
Many countries have no capital
gains tax whatsoever for that
son.
this
most of the lack of growth
a
a
on
In
rea¬
companies, 1 want
were
a
increase in wages
50%
over
a
accounts
an
economy short of all-out war.
broke out in Korea and it looked as if there
and
balance
were
the
fo*
average
'
'*
.
'
Chicago &
-
Kansas City
\
Not th Western
1950
Operating Revenues
$188.9
Rate Increases of 25%
-.'Loss
51.9
Per Share of
4.5
Common
$5.70
$8.80
That could happen. It has been happening and it could con¬
tinue, If it does continue, the rich will get richer and the poor
will get poorer—unless
you get a complete change in Federal Gov¬
regulation that changes, through the Interstate Commerce
Commission, the methods of rate making, or some other basic
changes occur fundamentally to affect and alter the over-all rail¬
road economy.
There
small
j
of
are,
railroad
end operations.
large terminal
I've
a
no
billion
dollars from passenger and head¬
doubt that
use
equipment.
expenses of some of the short haul carriers.
of labor saving devices in maintenance of
These
are
all
minimize their importance.
most
3.60%,
1
best years of the 1930's, the
was
one
important factors andl don't
1938.
with
-
\
reduction would have had to be 52%.
stock and bond prices dropped so
.
This ratio of fixed charges to maintenance
v
a
very
useful indication of the
.
to
inflation, Kansas City Southern had
share
mon
Santa Fe's
As
in
1950.
Between
1929
revenues per common
I've
and
„
revenues
1950
way
and
want
to
a
low
cost
of $119
per com¬
Atchison, Topeka &
|
share increased from $110 to $215.
said, earnings fluctuations should be wider,
important stabilizing factor is present in the high Federal
but
an
mcome
tax rate.
tools
of many
ployee in 1950
has
also
kinds.
were
the purchase of labor-saving
result, equivalent ton-miles per em-
stimulated
As
a
30% higher than in 1940 and 82% higher than
in 1930.
-Class 1 Railroads-
I know
I do want to emphasize the fact that
important development that has made for
For 1950
compared
railroad
reason
you've heard of the relatively
you've heard plenty about Diesel-electric locomotives and the in¬
creasing
was
Most other ratios show corresponding improvement. For ex¬
ample, in 1929 these 47 companies on average needed a 32% re¬
duction in maintenance charges to save an amount equal to fixed
charges.. Last-year a reduction of 12% would have saved an
amount equal to fixed charges.
Incidentally, in 1936, one of the
Inflation
other factors that make for large or
You've probably all been reading about
course,
earnings.
companies
,
—
-
•
47
a large increase in
the slocks, which presumably means wider earn-j
ings fluctuations in the future than in the past. On the common
share now outstanding, Seaboard Air Line had operating revenues
of $68 a share in 1929, $36 a share at the low point in 1932. But
last year revenues per common share were $159.
Kansas City
Southern had 1929 operating revenues of $74 per common share,
$33 in 1932. Due to the acquisition of Louisiana and Arkansas and
10.7
"
the
the leverage for
21.4
'.v.
4.7
1—
Gain
,
'
revenues.
Another development of inflation has been
15.2
103.8
—
of operating
only four of which this could be said.
safety of fixed charges.
$60.8
47.2
—
1950 Wages
Wage Increases of 50%———
v.
Southern
(Millions)
,
J
except debt and charges and stock.
charges is not much used but it is
'
'■
i
10.24% in 1929.
low in 1937 and
.*
sheets
charges less than 5%
In 1929 there
This
share before income taxes.
v»ar
a
that 42 had fixed
conditions, Chicago & North Western would experience a wage increase of $51.9 millions and an increase in rev¬
enues of $47.2 millions.
The difference of $4.7 millions would reduce pre-tax earnings by $5.70 per share of common stock.
•
Kansas City Southern, on the other hand, would gain $15.2
millions from the rate increase and lose only $10.7 millions from
the wage increase. Its net gain would be $4.5 millions or
$8.80 per
July
Last year's statistics for 47 of our largest railroad companies show
Under these
operation is better than average growth, and the absence thereof
de¬
require the promise of traffic much
to sell, for speculative stocks of this kind have come down
substantially in recent months. If you are going to stay with a
railroad equity and treat it like an investment, you have got to
go
into the stocks of the relatively low cost operations, especially if
j
you think we are going to have further inflation.
In addition to widening the differences between the
earnings
of growth companies and the earnings of companies with not so <
much growth, inflation has had other effects on the railroads. For ;
all but the highest operating cost railroads, inflation, has played an
important part in improving the position of debt. Inflation has j
helped to increase practically all items in the railroads' income
period and
country
be
to
seem
visualize in
had
Kansas City
high cost operation.
low cost operation.
the
not
now
big increase in traffic which would probably result in
earnings improvement for the high cost operations. You
afford to buy such companies on a temporary speculative
basis. You could buy North Western at 11 and get 29. You could
buy Central at 12 and get 26, but the point is that you would have
closer to this
specifically how
Certainly the taxes levied in
should
.
a
could
1950
aggregate loss of half
would increase.
In
To show you somewhat more
the other hand, is
pe¬
taxes
.
times recent earnings than New
Pennsylvania selling over five and a half times
To be sure, the latter might advance more per-
would
and
Last
to compare Chicago North Western and Kansas City Southern.
former is for many reasons, including lack of pronounced
ernment
follows, too, that if
matter
get back to something that is a little
sell
he would pay a smaller amount of
taxes or perhaps no taxes at all.
4.82.
large
a
the
period
—
strong stock market just as they did late last
and early this year. But lasting price improvement is another
lower than Class I Railroad 1950 revenues index.
even
to
were
at the end of the six-month
earnings.
would be
come
on
or
centage-wise in
246
per¬
may
—
_
.
selling around three
Central
in Group A had a 1950 revenues
higher than Class I Railroads; all companies in Group B
disappear before that six-month
period has elapsed. This means
that
—
_
■
were
Line
railroad companies
—
the
decline
$3.98
Average
within the provisions of the capi¬
tal gains tax.
It frequently hap¬
pens
5.63
19
297
who has purchased securities
must wait for six months before
can
5.76
41.1%
recent
son
he
•3.66
2.95
.
5.63
Pennsylvania
Reading
common
a
2.73
4.62
Central-
10
4.44
26
296
Suppose there
i
.that investors at
4.09
39
340
25% increases in freight and passenger rates.
:
3.16
4.65
3.20
York
Chicago & North Western had an operating ratio of
Kansas City Southern's operating ratio was 58%.
Transportation ratios for the two were 44% and 29% respectively.
Last year Chicago & North Western's wages were 55% of its oper¬
ating revenues. For Kansas City Southern, the ratio was 35%.
in
3.80
19
6.16
putting money into railroad equities on any but a
speculative trading basis, I'd much prefer to have Kansas City
Southern selling less than four times recent earnings or Seaboard
Last year
gov¬
more
5.18
12
18
Air
84%.
holding
to capital
reduced
would
2—
$4.71
23
V
42
159
Railroads——
29
32%
44
17
227
227
216
I
—
4.20
$22.86
;
"•' C
40
New York Central
————
'
44
Lehigh Valley
Southern,
the
applied
...
Lehigh Valley
274
growth of traffic and revenues,
a
We believe—in fact
certain—that if this hold¬
96
312
The
gains taxes.
we
33.5%
If I
For the sake of sim¬
plicity let us skip the probability that costs other than wages
would go up also.
They have in the past, but assume now that
!l
they did not. For Class I Railroads, a 25% increase in rates would
r
about offset a 50% increase in wages, as wages in 1950 were just
fa¬ 1 about half operating revenues for the railroads as a whole.
Capital Gains Tax
4.85
City Southern—
now
effective
for the current fiscal
year.
12.98
Average
211
Now to
enough, with proper executive
economies, to balance the budget
vors
-V
172
Erie
inflation has hurt
year—an amount which should be
The
Del., Lack. & West—j.
255
matter of inflation.
the
billion
63
had
additional
least five
3.04
36
index
on
liquor, tobacco and
high-priced luxuries. Such a tax
and
17.13
heavier than I
except
revenue
260
-V—
All the
sales, to take the place of existing
special sales taxes of all kinds
be
52
"
217
Class
1948; and that a general
tax of 5% be imposed on
would
3.96
34
211
Chic. & North West—
Average
House in
excise
3.88
Group B
more
by
15.46
48.19
Southern Pacific
equitable in substance; that H.R.
4473 be limited by amendment to
2.80
60
Average
'*
Chesapeake & Ohio..—
Internal
and
5.64
20.36
191
Seaboard Air Lines—.
speedily as possible, to
make it more simple and under¬
22.15
33
New York Cent. & St. L._
as
standable
V;
Group B
>
335
Kansas
Ways
4.83
125
\
'29
—
Pennsylvania
Reading
Chicago, Burl. & Quincy—
we
4.61
13.47
New York
301
end to the
one
;
Illinois Central
adequately
the
•
Atch., Top. & Santa Fe_—
forth¬
House
;
Group A
Ratio
81, J951
$33.18
Southern Pacific
REVENUES INDEX FOR 1950
Atlantic Coast Line—
Senate^ Finance
and
City Southern.
N. Y. C. & St. L._,
(1935-1939 equals 100)
vV*'-.
To May
Seaboard Air Lines—
.■■■,;
.
I
153
35
the following:
Joint
a
appointed
Price
40
our
we
Central
Kansas
companies that maintained or developed
.
,
Earnings
57
33
Illinois
Generally speaking, such railroads are
;V;.v
j
Price
12 Months
65
Chic., Burl. & Quincy..
Erie
'
stands
me
Earned per Sh.
44
>.';v
to
RATIOS
38
Chesapeake & Ohio—
Chicago & North West.
Del., Lack. & West
present
which
under
market that
Recent
Ratio
Group previously discussed, we find that revenues growth was
producer of efficiency, i.e.,- an ability to cope with the
inflation of costs only partially offset by increased rates. Examine
non-ac¬
the
EARNINGS
Atlantic Coast Line
B
■
with
stock
30%
merely higher degree of efficiency, gs just defined,
they had a greater than average increase in traffic
If we examine the companies in the A Group and
or even
tion has been lack of time.
Gentlemen,
railroad
the
PRICE
the chief
a
large number of obvious minor in¬
justices.
high
did
for
action, which corrected
of
of
with better-than-average growth.
ones
been
ago
Senate
feature
Group A
that shows improvement.
•
prominently but that has not been much discussed, so far as I
know, is that the stocks of the low or improved transportation ratio ;
companies sell at as low price earnings ratios as do the stocks of
high cost companies. Consider the following:
Inflation and the
a
•
tremendous
out
Atch., Top. & S. Fe—_
simplifi¬
the
of
,
6
page
•
cation
cognizance
taken
Transportation
Continued
widen
you
,
has
market
stock
changes in earnings between these two groups I have discussed.
Santa Fe was selling at 13 in 1940 and Pennsylvania was selling at
15. Today one is 155 and the other 18.
I gave them those figures in Philadelphia recently. But in
the end I made the Pennsylvania officials feel better. At the end
of my talk I took the Santa Fe and Pennsylvania 1950 income
accounts and gave Pennsylvania Santa Fe's growth and Penn¬
sylvania's growth to Santa Fe. On that basis, the 1950 per share
earnings for Pennsylvania would be higher than the earnings for
Santa Fe. This raises some interesting questions as to whether low
net income necessarily indicates poor management.
pres¬
the need for
Thursday, July 19, 1951
Add inflation and
has made for high cost operation.
Code
rewriting and
.
1950
Revision of Internal Revenue
Year after year
.
the differences even more.
ent conditions.
complete
.
1950
Ton Miles
(millions)
Passenger Miles (millions)
*Equivalent Ton Miles (millions)
Average Employees (thousands)—_
Equivalent Ton Miles (millions)
*Ton
miles plus twice passenger
miles.
-
1940
J9:io
588,522
373,253
383,450
31,771
23,762
26,815
652,064
420,778
437,079
1,221
534,040
1,027
1.488
409,716
293,736
,
Volume 174
Number 5030
.
The Commercial and Financial Chronicle
.
.
(263)' 27
One other
important result of inflation is the large increase
improvements. Even in the case «f a com¬
pany which has not grown much, the cost of replacing worn-out
equipment is much greater than the depreciation charged against
by January and February last. But the price
gains were not well
Only a relatively short-term commitment was
justified.
For the longer term the best
results will probably continue
being obtained from investment in the low cost
in the cost of' capital
the
bought in years past at lower prices. In many
cases, too, the high cost of replacing facilities worn out or obso¬
lete is very large in terms of net earnings and depreciation. This
in part explains the highly conservative dividend
policies of many
railroad companies including those excellently situated
financially.
Consider the Atchison, Topeka & Santa Fe:
Large
RAILWAY
1946__
$10.0
Road
$13.2
$23.1
$5.6
$13.9
$19.5
13.5
22.5
36.0
6.5
14.4
21.0
39.1
55.2
6.7
13.6
20.3
-1949__
16.1
1950
54.7
14.6
70.9
42.1
6.9
14.8
21.7
Chicago
Texas
&
56.7
7.1
16.7
23.8
Burlington &
$70.3
$171.6
$241.9
$32.8
$73.4
$106.3
share
per
sheet.
In
cases
do
the
Let's
now
sum
bit.
up a
•prices and wages
different.
over 100% #nd freight and passenger rates less
Jhe effects on the individual carriers have been quite
Only the most efficient railroads have been able to cope
with this combination of
inflationary developments.
operations have been severely harmed.
gains in the past ten years" generally speaking are today's
efficient railroads.
-j
;
revenue
If
to
are
we
have
*
a
*
m
inflation, and you and I certainly
hope not but still fear the established trend, then the railroads that
will do best are the ones that have the
relatively low costs, the
struggle.
This
sort
of railroad
nature
regulation is considerably changed, i.e., until the high cost opera¬
tion is aided in ways that so far have been considered
or at least impractical.
•
In
impossible
conclusion I'd
is
Class I
a
wrong
rpilroad results.
past but is
longer
This
have had certain merit in the
may
Some railroads
late
1930's.
35
35
1930's
have
not.
have
Some
made
great
don't think generally of the rails. Think in terms of a
company.
There probably never was a time in railroad
history when the differences between road A and road B were as
So
In. other words don't invest in railroad
vest in the bonds and stocks of
under
32.7
9.0
36
38
4.32
18
71.3
33.0
34
2.90
9
78.0
46.6
40
35
255
5.50
16
75.7
16.9
35
40
254
7.07
22
52.3
present
day
In¬
It still
is.
Proper selection
will pay off handsomely.
stock
was
common
from
13
to
subsequent years to pick the right one,
in the future.
.
as
so
it paid in
will it pay
33
washers, bottles,
63.5
25.2
35
35
water heaters.
12
55.8
27.2
41
36
247
6.34
19
19.0
5.7
34
36
246
4.35
15
2,413.9
682.0
37
35
Group
I
_____:
cost
operations
outbreak of
war
produces liberal
gains.
in Korea indicated
a
Last July,
for example,
large traffic increase, large
enough to produce good earnings for high cost roads until wages
Were raised.
25.9
37
Boiler
238
10.04
17
29.0
11.3
40
39
12.29
16
48.9
18.3
37
37
230
9.63
19
23.3
4.4
30
32
proper
229
4.71
9
12.7
7.8
38
36
sodium
1.77
Hudson
&
York
Central
227
44
38
145.6
139.1
42
3.75
13
25.4
19.7
39
6.74
22
97.7
58.6
32
15
44.6
24.9
40
38
damage
23
5.87
Stocks of high cost roads doubled and trebled in price
Feed—(Stationary
228
19.6
44
39
and
to
boilers; to establish
ratio of sodium sulfate to:
carbonate
35
29.6
211
Group—__
91.9
6
7
211
200-250
126.8
1.93
5.62
216
___•
4
227
217
—
cans, boilers and
Locomotive) To produce non-scale
forming water thereby to reduce
232
tion
of
for
caustic
37
the
inhibi¬
embrittlement;;
non-foaming.
non-corrosive and
Hospitals and Hotels—To eliminate
hard
water
•
deposits in boil-1,
heaters and sterilizers; waste
ers,
6.42
15
54.9
35.7
38
36
195
3.63
10
35.7
23.4
42
38
of soap and other
192
30.02
32
51.6
47.6
30
21
in
191
1.49
5
12.5
8.5
42
40
188
and
20.0
13.3
of
&
New
Jersey,
Maine
3.38
9
41
39
172
2.31
8
18.3
12.5
44
44
159
2.69
9
16.5
14.3
40
41
Average
Group—
183
7.25
12
25.8
19.9
40
37
Avg. (excl. Norfolk & West.)
181
2.70
8
20.6
14.4
42
40
♦1935-39
150-200
—
100.
<
detergents, usdd
scrubbing floors, in the laundry
kitchen, etc.; to prevent rust'
spots and contamination of
equip¬
ment; to prevent contagion and
prevent iron pick-up in the
pipe-'
lines and destruction of the
pipe-*
lines.
.
.
Bottling*
ages—To
prises enjoy wider public acquain¬
and
mutit
Company.
acclaim
Dividends
than The Per-
the
In addition if the
per
dividend of $1.75 paid in 1950 is
duplicated in 1951 the yield at a
ment
products enjoy with the
public has been achieved at mini¬
mum
advertising expense, for, of
the total annual sales of the com¬
only
1Q%,
represents
A
the
on
domestic
spokesman
average,
installations.
for
the
that this year, household sales
likely to be less than 10%;
but the sharp increase in indus¬
says
continued
high
level
of
sales
the
present
price for the stock, the yield
ten-year average is close
to 41/2.%.
The average for the
past five years has been $1.01,
which is
present
ex¬
industry.
On
the
at
trial expansion already under
way
to cope with the present national
a
share.
per
offer
are
to
last
of
96 lk c
company
emergency production needs is
currently paid at
rate of $1.00
year paid
a year-end
75c, raising the total re¬
turned
to stockholders to $1.75
per share. Since 1945, annual dis¬
bursements have steadily in¬
creased:
1950, $1.75; 1949, $1.55;
1948, $1.30; 1947, 90c; 1946, 75c.
The average annual distribution
during the past decade has been
com¬
stock.
approximately 5% on the
offering
price
of
the
The
for
average
two years is
than 7% on
the
the
past
$1.65, which is better
the
present price of
to
moderate
to
promote
cake
and
1950
to
ally
r
10,363,523
1,330,409
9,218,897
6,403,081.
15,507,955
7,077,585
1945
1944
V
1943
1942
—_
The
results
contracts
for
to
no
shares
1949.
—
28,000
1948.
.___
30,000
♦This includes U.
reserves.
The
S.
large
Canadian
sales
finishing off of the company's
The
bonds
uation
ties
genera
is
of
simple,
common
to
seems
for
only
stoc'y
preferred stock.
offer
further
Fi¬
This sit
Maurice
sound
growth.
'•
'
'
..
in
has
M.
—
Advancemen
Hatcher
to
Vice
Dallas
been
an¬
nounced
by
Ben
H.
Woo-
Since
210,579
Mr.
1.16
has been
341,072
1.55
of First
National'smu-
after' renegotiation
were as
1946
1,
man¬
war
nicipal bond
division.
Previous
$466,000
to
joining the
bank, he had
314,000
50,000
excess
Feb.
Hatcher
ager
Federal Taxes
25,000
1945_
income and
of
ten, President.
follows:
*1,700,000
for
profits taxes and renegotia¬
six
years
operated
M.
M.
Hatcher
and
,
reported
war
for
the
year
represents
culmination
and
to
JPermutit service unique. A
need
served
as
President
of
his
own
firm, Hatcher & Company, Dallas
for this service is
impressively dealing in municipal bonds. Before
varied and long:
that he was associated with other
Municipal—Household—Sterile Texas and Ohio firms specializing
to prevent
individual
the
effort.
contagion; clear, color¬
less and free of organic matter—
the
make
supply
Soft
and
possible
the
eye;
make
the
pleasing
Iron-free,
use
of
to
to
water
q
and
manager
of
the
bond department of the
First Na*
tional Bank
2.78
2.18
-
opportuni¬
1st Nat'l of Dallas
254,743
combined with the judgment of a
large staff of technical experts,
the
sterilize
Hatcher V.-P. of
3.34
<3.02
1947_—$25,000
problems encountered and
catalogue of
or
■
solved
cover
every < conceivable
phase of water treatment, and the
knowledge and data accumulated,
make
$2.88
■
1.92
Contingencies
528,000
and
Tq
nancial position is
good.
0.96
are
$535,000
441,500
is
pleasing .and
a
Capitalization
220,000
0.96
Federal Taxes
1950. —$27,000
tion
1943
—
contagion;
provide
480,042
210,692
Taxes and charges in other years
Contingencies
'
and
Pools
prevent
*
876,771
1942
Net Per Share
422,027
2,285,161
1,031,712
1,270,102
961,753
powder
healthful water for
bathing.
of
$633,009
610,702
734,527
664,616
•
for
where
President
834,952
6,615,926
5,757,372
4,773,352
____
1941
$1,232,740
•1,149,533
and
yeast;
baking
baking
DALLAS, Tex.
Net Income
1,211,018
1946
<*
$9,896,474
9,316,928
1948
1947
<
sulfate
of
•
; Swimming
and
EARNINGS
1949
—
biscuit
bicarbonate
used.
/
Operating Income
calcium
growth
t
(Years ended Dec. 31)
.
arid
carbonization.
,
for the past decade:.
Net Sales
product
Baking—To pre¬
vent iron discolorations
and de¬
posits; for better control of yeast
.
following table sets forth the consolidated net sales, oper¬
ating income and net income together with net earnings per share
CONSOLIDATED
to'
drinks;
suspensions
the
good
prevent '
and
stock.
The
•
promote
Bever-'
to
unsightly
deposits in
Brewing
annual
and
bottled
in the
making of a light beer; to
share; but pursuant to a lib¬
dividend policy, the manage¬ prevent growth of parasite
spores;
extra
The acceptance which the
are
regular
eral
price of 21V2 is 8.14%.
pany
to
Security I Like Best
Carbonated
in
eliminate
and
The
of
sterlize
growth
Continued from page 2
.
Occasionally, usually only temporarily, speculation in the high
stock; to
discolora¬
from
Dairies—To promote
sanitation; •
prevent deposits in bottle,,
to
19
150, while Pennsylvania
going from 15 to 18, is still effective. Just
•1940 and in
:
tions, spots and stains; to improve
6.19
Bear in mind that the force that made
advance
j
deter¬
save
quality, lower sizing costs and
prevent scale formation in boilers.
8.32
a
years.
To
in,bleached
freedom
249
250-301)
k
Fe
shades
insure
34
Delaware, Lack., & Western
Lehigh Valley
*
to,
Pulp Mills—To prevent streaks
or
2G5
.
bonds and stocks.
—
& Pac.
particular railroad that has what
conditions. Selection has been tre¬
mendously important in recent
Santa
38
32
257
»
.
takes
35
33
258
Unless recent trends change, these differences will
•widen further.
;it
6.5
7.7
36
certain
great as today.
22.4
22.0
30
»
,
16
20
-
33
revenues
have
un¬
and
gents, effect even dyeing, and to
improve quality of the finished
a
strides financially and
"others are still burdened with debt and fixed
charges and haven't
had the money to make the improvements so vital in a
period of
rising labor costs.
;
5.84
34
Others have
revenues.
others
6.19
263
25.8
Boston
3'/2 times what they had in the
revenues only IV2
to 2 times their late
Some companies have been hurt by inflation and
now
causes
products.
38
35
35.8
good method of approach for the simple
reason
that the differences in the earnings and finances of the
various railroads have been
widening at extremely rapid rates.
no
36
33
pected to be directly reflected in
like to say a few words regarding what I
approach to railroad analysis. I have in mind
the all too prevalent practice of arguing from the
general to the
specific. People are always asking me, "What about the rails?"—
meaning the rails as a group. Too many of us think in terms of
think
62.7
34
83.3
more
low wage impact. The others will have a hard
of situation will
presumabjy prevail until the
32
17.1
pany's
.
.
20.2
65.4
The high cost
In most instances railroad
efficiency today seems linked with
better-than-average growth. This at least is what the figures show.
The companies that experienced
beiterrthan-averagei -traffici .and
.
161.0
18
tance
The inflation of the last six postwar
years has raised material
than 50%.
15
common
stockholder in the sense that he is likely to
get cash dividends
.anything nearly equal to the net income. This is all to the good in
the long run, but it makes for low price
earnings ratios.
i U'
70.8
5.34
'
Mills
Central
"belong" to the bal¬
earnings belong to the railroad
40
24
Average
'
few
which
Y., N. H. & Hartford
Norfolk & Western
up a very
pal¬
.
Textile
34
38
15.3
N.
is necessary to reduce debt. Or they
may "belong," so to speak,
to the equipment manufacturers or the manufacturers
of signals.
If working capital position is
ance
33
10.5
20
Erie
important point that is not given enough
attention in railroad stock analysis. Not
enough attention is paid
to the question, "To Whom Do the
Earnings Belong?" They may
"belong" to the bondholders in a sense, i.e., if credit is poor and it
v
47.2
26.6
52.7
Pennsylvania
Chicago & North Western—
Reading
"Chesapeake & Ohio
per common
high cost.
Many other railroads, however, have had a serious financial prob¬
lem—a considerably greater problem than casual
inspection of
earnings per share alone would indicate.
may
138.3
15
24
7.20
New
weak, they
26
5.21
14.01
45.4
Central
it
laundry immaculately
white.
Delaware
about
Santa Fe with its large earnings has been in
good position to
finance replacement of equipment and other facilities at
brings
20.95
,
20
—
This
29
iron
discolorations
the
Chicago, Rock Is. & Pacific
Gulf, Mobile & Ohio—
stantially.
'
29
6.67
Wabash
share in the last five years, working capital did not increase
sub¬
.
8.3
10.20
•Class
per year.
Thus, although retained earnings totaled about $57
25.3
26
v
of
Denver & Rio Grande West.
addition, Santa
$12
30
4.23
Ohio
make
35
30
258
Chic., Milw., St. Paul
paid off equipment obligations of $18.3 million. To finance
these operations Santa Fe used about $154 million of its
earnings
less whatever came in from sale of serap, etc. One hundred and
or
30
5.7
Average
Fe
share,
40.3
26.2
8.79
Quincy
Southern
five years. Depreciation amounted
difference of $135.6 million was largely met out of
earnings. (Santa
Fe has not borrowed on equipment since
1946.) In
per common
171.9
277
Francisco..—
water
render
37%
260
Illinois
$241.9 million in the
to $106.3 million.
The
fifty-four million dollars is about $60
28
31
27
*
Louisville & Nashville
$135.6
betterments totaled
past
34%
260
Louis-San
Baltimore &
Gross additions and
$9.2
6.48
264
Northern
St.
Total-
$36.7
1940
274
...
Chic.,
32.9
19%
1950
____
Pacific..:
Odor-free—to
sightly
Louis
St.
&
Great
i
—Ratio
1940
15.18
296
Missouri-Kansas-Texas
49.2
Transportation
1950
11.83
320
Pacific.
Y.,
1950
23.41
301
Pacific
N.
Revenues
—(Millions)—
305
Group
Northern
34.9
Safety
Margin
1950
325
Line
300-350
Southern
15.0
16.1
Charges— Net Operating
Times
Earned
312
Pacific
in 1
purposes
industry; Taste
Laundry—To eliminate waste of
and detergents by convert¬
ing hard water to soft; to free
335
Southern
all
in
soap
340
Southwestern
City
Average
$3.6
1947
Line
Atlantic Coast
of A
Over B
1948__
*
Louis
Union
Excess
B—Total
Air
Atchison, Topeka & Santa Fe
for
and
atable.
Inflationary Factors
Index
Kansas
Equipment
—Fixed
f
home
and
Years
Revs.
St.
Amortization—
A—Total
Equipment
Offsets
Postwar
Oper.
COMPANY
Depreciation and
-and Betterments
Road
Growth
*1950
(In millions of dollars)
Gross Additions
Revenue
in
Seaboard
FE
the
operations.
equipment
ATCHISON, TOPEKA & SANTA
conditioned
maintained.
in municipal
financing.
,
-
of Austin,
Texas, Mr.
Hatcher is a graduate
of the Uni¬
A
native
versity of Texas School of Busi¬
Administration.
ness
The Commercial and Financial Chronicle
23/(264)
Continued from page
Continued
5
Where Do We
get—cuts in the last half can be pinned down more
to credit curbs, the division chief continued.
Economic
will begin to dis¬
count 1952 prospects. It also re¬
mains to be seen how far
the
market can advance in the face
of
advance.
There's
certain:
The Controlled Materials Plan is
fairly
ceiling that
thing
seems
a
postpones the hope 1952 will mark
end of the statistical under-
both
pricing of common stocks so per¬
sistent in recent years. Fact that
is
is
in
1—We're
that:
in
a
a
.able/, than they've , been- at any
yLime in the past 25 years., But
*
Withal, however, there's a defi¬
nite floor to both business and the
is to be a
1952
if
even
"poor" year. Why?
(1) Ours is a growing
a
lion
increase in
spells
;
'
-
from
we're
in
technological
which is creating
kets.
.V
amount
The
/
announced this week
A year
There
industry, compared
and compared
Rebounds Sharply in Post-Holiday Week
electric
of
distributed
energy
electric
the
by
and
661.796,000 kwh. above that of the pre¬
732,528,000 kwh., or 12.2% above the total output for
1950, and 1,396,766,000 kwh. in excess of
Railroads, representing
the
1946-49 trading
As
matter
a
of fact,
this
earlier
period
—
,
.'/■'.
/
.
represented
an
,/
.
Auto
'-/V v;:.'
■
which
men's strike slowed down General Motors and Ford.
enjoy
a
itself in three
It will
re¬
private bull market—but
an
rallies
will
framework
tablished
of
within
occur
the
1951-52
still
to
trading
the
be
range.
inject something radi¬
into the equation. This
cally new
because, (a)
if
It would be naive—
not
stupid—for us to change
long-term policy of becom¬
our
ing
an
Even
later
arsenal of democracy; (b)
if
political considerations
dictate, our defense pro¬
gram has gained too much mo¬
mentum to be stopped over night.
Thus, all the latest news really
does
lowest
the
United
weekly
total
of
States
alone, total output
was
units
total since December, 1949, against last week's
91,849 units, and in the like week of last year
a
is
introduce
an
element
heightens
of
the
of
a
ceiling
in the market place. Now, the
political
as
well
considerations
as
have
the
week ago and 9,282 units in the corresponding
1950 week.
the current week
was
made
up
of 87,133
pect.
sus¬
There
23,800 trucks built in the United States and a total of 5,185
and 1,820 trucks built in. Canada.
In the previous week,
Canadian output totaled 4,480 cars and 1,758 trucks against 6,553
cars and 2,724 trucks in the like 1950 week.
was
July
12
from
Bradstreet, Inc., reports.
which occurred in
tinuing
well
129
failures
in
increased
to
in
173
the preceding week,
the
the
Dun
&
Casualties were off slightly from the 187
1950, but exceeded the 1949 total of 167.
below
prewar
level, failures
nation's
Wednes¬
Regional estimates varied from
ago.
£>elow the
a
year
ago
Northwest +1 to —3; East +3 to —1; South,
almost
no?
change
in
the
amount
of
wholesale
slightly below that for the corresponding week in 1950.
attending various wholesale markets
from the prior week, it was considerably below
level for the similar period a year ago.
•
. ..
Department store sales on a country-wide basis, as taken from
was very
While the number of buyers
rose
somewhat
Federal Reserve Board's index for the week ended July 7,
1951, increased 1%* from the like period of last year. This com¬
pared with a decrease of 2% in the previous week, and an in¬
the
crease
of 1% for the four weeks ended July 7, 1951.
Retail
trade
in
New
sales registered
an
For the year
advance of 9%.
York last week, it
is reported by trade
observers, almost equaled that of the similar period in 1950 when
buying, stimulated by the Korean outbreak, was approaching its
peak.
According to the Federal Reserve Board's index, department
sales in New York City for the weekly period of July 7,
1951, advanced
industrial
and
on
store
Business Failures Rise
ended
the
,
cars
cars
Commercial
week,
ordering during the past week; the total dollar; volume ordered
and
week
shopping
in the period ended
estimated to be from 2% above to 2%
was
year
to date department store
Total output for
were
down
preceding week
ilar
week
of
1950.
increase of 12%
Con¬
year
36%
16%* from the like period of last year. In the
an increase of 8% was registered above the sim¬
was
For
the
four
weeks
ended
recorded above that of
a
July 7,
1951,
an
year ago, and for the
year.
to date, volume advanced 11 %
from the like period of last
from 1939 when 272 concerns succumbed in the comparable week.
The week's rise centered in casualties
business
become
a
New England and
the
184,791. Canadian output in the week totaled 7,005 units compared
with 6,238
more
week
Midwest, and Pacific Coast +2 to —2 and Southwest 0 to —4.
110,933 units,
so
uncertainty which
previous prospect
area
For
revised
The prospect of peace in Korea
not
"
es¬
Post Script
does
Canada the past week,
be possible to
selectivity is the key; (2) Hence,
any time—is a good time—to buy
bought slightly
Trifle in Post-Holiday Week
six-day
$5,000
ous
involving liabilities of
they increased to 136- from 93 but were less numer¬
year ago when 154 occurred.
Small failures, those
or more;
than
a
/
wear, and men's slacks.
The demand for coats and suits, "
although at a seasonal low, increased slightly from a week ago,
following scattered promotions.
; '
Total retail dollar volume in the period ended on Wednesday
Combined motor vehicle
ate
(1)
a
by these estimates:
outstandingly attractive com-,
mon
stock; (3) Sharp intermedi¬
repeat
spects:
of
return
dren's
level of
production in the United States and
according to "Ward's Automotive Reports,"
totaled 117,938 units, compared with the previous week's total of
98,087 (revised) units, and 194,073 units in the like week of 1950.
However, labor trouble, supplier strikes, vacations and ma¬
terial shortages combined to hold down output this week to the
lowest for any five-day week since Feb. 10, when the switch¬
should
attributed to an unexpected advance of 13 points in *
parity price for cotton. Spot market activity de¬
was light with most mills closed down for
slightly below the level of a year earlier. Much of the interest
centered upon cotton dresses, sportswear, accessories, chil¬
:
Output Curtailed hy Labor Troubles, Vacations,
and Material Shortages
with 18,613,000 acres planted to the staple last year,
average of 22,163,000 acres.
Strength in early
demand
the
of last week
can
also depressed by the issuance of the official
was
was
July 4 holiday and the coal miners' annual vacation
period.
be drawn from the market history
of
total
range.
moral
a
' v;;-: '
.
f
liquidation and stop-loss selling, in¬
Shopping patterns from the pending cease-fire negotiations.
Shoppers for apparel spent moderately more money last week
than in the week before, although over-all dollar sales were
decrease of 233,369 cars, or 28.4% below
the corresponding week in
duced by the
broad price swings which rests on
top of the
a
preceding week.
increase of 34,336 cars, or
1950, and a decrease of
7,075 cars, or 1.2% below the comparable period of 1949. Loadings
in the week ended July 7, and the like period in 1950 were re¬
of
Livestock markets at Chicago
than during the preceding period. The total
dollar volume spent was virtually unchanged from the level for
the comparable week in 1950, states Dun & Bradstreet, Inc., in
its latest survey of trade. There was little noticeable effect upon
Carloadings Fall Sharply in Holiday Week
are
pattern
ago.
holiday period.
last
day of
post-war
coming
was
Mill
consumers
for the corresponding period two years ago.
output reported
in
a
year
ten-year
With
the week ended July 15,
week's
a
Trade Volume Perks Up a
Loadings of revenue freight for the week ended July 7, 1951
totaled 588,246 cars, according tc the Association of American
visualize
a
dealings
industry for the week ended July 14, 1951, was
6,738,873,000 kwh., according to tne Edison Electric
above
-
estimate of 29,510,00u, which exceeded earlier expectations
acreage
the July
The
//
;
-
The market
the mid-June
6.2%
;
tapering off from,
in textile business.
ness
1,894,800 tons.
The current total was
years that most
statistically better
value
today than at the lower
dollar prices of past years.
Making allowance for the back¬
ground sketched above, we can
.
some
fluenced by favorable crop and weather news and continued slow¬
week ago, and 103.2%, or 2,063,000
ago it stood at 98.2% of the old capac¬
a
into the price level—and industry
has re-invested such huge sums
the
buying.
has shown
weeks. Lard developed a steadier tone, in¬
in deliveries of cash lard and a much tighter
considerable
was
clined.
(5) A certain amount of infla¬
;
.
Steers andj hogs scored small advances while
lambs were off slightly.
Following a firm opening, both spot and futures cotton prices
irregular.
were
at
the
some new
supply position that
Institute.
1920's.
./'/
the activity of recent
power
tion has been permanently frozen
stocks
the result of
as
light and
vious week,
;v:-
.
market was relatively quiet this w.eek
sugar
Demand for refined sugar
estimated
permanent buyers—not the emo¬
tional margin buyer who domi¬
the
month ago.
Electric Output
redistribution in the
of our national income
favors the buying groups who pro¬
portionately spend the most.
(4) The demand for securities
today is primarily from a new
multi-billion dollar group of semi¬
nated
sions
V
operating rate is equivalent to 2,037,000
2,029,000 tons
ity and amounted to
pattern
>'
raw
with prices making a good recovery from the recent sharp reces¬
■/
The
(3)
a
or
•'
ago.
year
turned sharply downward in the latter part of the week.
current week's
101.5%,
tons
new mar¬
:
,
.
to
a
The domestic
fluenced by a drop
tons of steel ingots and castings for the entire
tre¬
improve¬
mendous
ment
of
era
an
'
:
pared with 44,000,000 the previous week, and 63,000,000 in the like
week
week ago.
a
The
*
materially.
Trade volume in all grain futures on the Chicago Board of Tradelast week declined to a daily average of 41,000,000 bushels, com-,
• •
Steel Institute
and
crop
copious rains.in the Midwest caused
strong, aided by brisk demand coupled with dwindling receip s. Oats finished higher than a week-^go although continued
arrivals of Canadian oats have had a retarding influence on prices;
other plans that failed miser-
■—*-
as
also
companies having 93% of the steelmaking capacity for the entire industry will be 101.9% of capacity
for the week beginning July 16, 1951, or an increase of 0.4 point
Ours is a vigorous country
(2)
—and
Age."
were
apprehension about this year's crdp/^The cash market wax
some
that the operating rate of steel
huge
a
market.
Iron
American Iron
The
rather
mil¬
population and a
birth-rate
rising
new
cludes ."The
-
mature economy—a 20
than
Corn futures advanced
better
plan would be to drop the entire CMP program and return to a
straight DO system limited strictly co military needs. The mills
feel that they could do a better job of distributing the remaining
steel among defense supporting and other essential users than is
being done—and still have some free tonnage for non-essential
Consumers.; At present so-called "free" tonnage is infinitesimal
and CMP is practically closed-end without being so labeled, con-
view, the catalyst of a really stim¬
ulating environment seems likely
to be lacking.
/';■>
••
the Chicago Board of Trade
on
aided that
and in Canada have
limiting controls. "Sentiment is growing that perhaps a
on
futures markets
Favorable moisture conditions in the Spring wheat Northwest
.
..
factors.
They are the
reason
why the market can do
the unexpected—if the environ¬
ment
is
favorable.
On present
July 1C, from
Trends were mixed as corn, oats and
rye scored moderate gains while wheat moved lower under pres¬
sure of expected large new crop marketings, and the outlook for
a cease-fire arrangement in Korea.
(
Steel people have repeatealy warned that if the government
large-scale allocations of steel they must be matched
advantage, becoming no better than
the lowest level
on
week previous,
a
Grain
'ably, continues "The Iron Age."
:; /
r
v
r'.
/ ;
Present confusion has revived talk within the steel industry
ag¬
gressive
markets
.
the
less active the past week.
to
their total mounts beyond the
as
recent weeks,
movement of
downwara
narrowing the advance over the year-ago
figure of 275.57 to 1.20%.
311.70
engulfed
being returned
are
the
street, Inc., dropped sharply last week to reach
in about seven months. The index fell to 308.72
/against actual production* Past experience has shown CMP to
be far superior to other methods of priority distribution because
; this
basic rule was followed. When it is violated CMP loses all
equities today are more respect-
rather than
they
Feb. 20. The current
although tne rise
ago,
daily wholesale commodity price index, compiled by Dun & Brad¬
is to make
*
latent
ana
hunting license, states this trade authority.
y;'v
.Buoyant 50's;„ 2 — There's a New
Look ; to the stock/- market—for
are
orders
hundreds,
the
by
consumers
CMP
of
op
year
In Almost Seven Months
required acceptance percentages. Instead of assuring steel needs to
an essential user, a CMP order, in some cases, is nothing more than
/New Era—one which later may be
called
the
Fabulous
50's,
the
these
tide
flood
a
a
Commodity Price Index Falls to Lowest Level
Continuing
* ,:
.
of
total of the price per pound of 31
and its chief function is to show the general
of food prices at the wholesale level.
^
Wholesale
delivery.
quarter
above'^the $6.28
still'
The index represents the sum
heading into serious trouble,
10 days .steel producers have been
During the past
to minimize the
probability
are
accept under the plan.
guesstimate is not meant
importance of the
This
;
they
average
interest..
academic
fourth
and
reached
year's high of $7.31
is
foods in general use
Some steel com¬
both periods, since
already booked to the limit of the tonnages they must
September
last
,has been narrowed to 10.2%.
panies, it adds, are returning allocations for
level
relatively low, even though it
historically high, is primarily of
industrial
250
the
number
according to "The Iron Age," national metal working weekly. More
tickets have been issued for the production performance than
there are seats in the house. This applies to steel allocations for
the
the
from
trend
sparked the 1950-51
One
Sharply to New Low for Year
10 figure fell 1.1% to $3.92, from $7.00 a week
This marked a new low for the year, and a drop of 5.3%
earlier.
low
Current Week
Steel Output Rises 0.4 of a Point in
;
1 to 37 and exceeded last
up
The July
week.
trend—
inflationary enthu¬
the
of
which
siasm
Thursday, July 19, 1951
.
Bradstreet wholesale food price index
decline in the Dun &
definitely
having the effect of squeezing
are
-
Continued weakness in food prices resulted in a further sharp
anjl middle-income families out of the housing market. Conven¬
tionally-financed upper-income housing has been little affected,
he noted, since such homes always required ctown payments as
high or higher than Regulation X calls for.
owner
dull nearby business
a
loss
a
conditions
Food Price Index Drops
Industry
to
the
in 1946-49—and when
security
having liabilities under $5,000, were
year's total of 33 in this size group.
5
page
The State of Trade and
Co From Here?
acs—as
from
.
♦
In
using year ago comparisons allowance should be made for the fact that
stores
in some cities were closed on Monday, July 3, last
year,
and,
therefore, the week this year had one more trading day than the corre¬
sponding week last year in those cities. '
Volume 174
Number 5030
.
The Commercial and Financial Chronicle
.
.
29
(265)
The following statistical tabulations
Indications of Current
Business
AMERICAN
IRON
Indicated
steel
AND
STEEL
operations
Activity
week
or
July 22
Month
Week
capacity)
ingots
AMERICAN
Crude
Week
Ago
101.9
101.5
and
and
castings
'net
tons)_
July 22
Crude
condensate
stills
output
output
—
daily
daily
—
(bbls.
average
of
Residual
fuei
oil
Stocks
at
Gas,
1
and
AMERICAN
6,168,800
6,180,550
6,168,350
5,475,500
7
116,601,000
6,595,000
7
21,837,000
21,828,000
6,478,000
21,227,000
STEEL
steel
stainless
Revenue
2,080,000
2,320,000
1,752,000
2,276,000
9,014,000
8,732,000
8,678,000
7
9,308,000
9,036,000
8,921,000
126,758,000
25,446,000
127,006,000
7
129,353,000
21,890,000
114,278,000
22,035,000
July
7
69,608,000
65,700,000
57,372,000
56,568,000
July
7
42,S57,000
41,097,000
38,839,000
41,374,000
*
at
24,142,000
zine
2,000
7,916,000
7
Slab
7,353,000
July
Revenue
CIVIL
AMERICAN
freight
loaded
of
tons)—Month
of
CONSTRUCTION
—
lbs.)
Stocks
U.
Private
construction
July
of
7
588,246
821,615
813,326
Unfilled
Public
7
589,241
688,042
655,639
orders
(tons of
80,430
74,149
73,093
68,214
(tons)
15,791
17,411
26,665
73,304
73,942
65,361
$37,700
$36,400
$29,400
2,000
period
at
end
of
period
INVENTORIES,
NEW
(million
of
(tons)____.
DEBT.
OF
COM¬
of
April:
SERIES—Month
dollars):
;
11,700
11,400
18,900
*18,600
14,100
$68,300
*$66,500
$52,900
Total
CIVIL
July 12
July 12
295,493,000
July 12
municipal
$404,655,000
July 12
__
$361,028,000
65,535,000
145,532,000
July 12
and
149,961,000
Federal
ENGINEERING
$364,963,000
316,562,000
165,609,000
150,953,000
42,794,000
42,525,000
88,093,000
OUTPUT
Bituminous
(U.
S.
BUREAU
and
coal
Total
254,053,000
U.
S.
Private
110,910,000
CONSTRUCTION—EN¬
NEWS-RECORD
—
Month
of
construction
$1,027,087,000$!,267,995,000$!,254,389,000
construction—
Public
68,385,000
MINES):
443,701,000
583,386,000
July
___
7
*10,517,000
9,890,000
1,597,000
July
(tons)
(tons)
(tons)
7
99,000
986,000
789,000
48,000
7
48,700
*145,600
141,300
74,200
1,410,000
OUTPUT
of
STORE
TEM— 1935-39
SALES
INDEX—FEDERAL
RESERVE
output
coal
and
FAILURES
July
anthracite
(net
coke
219
7
♦258
218
311
COKE
(BUREAU
Oven
OOo kwh.)
(COMMERCIAL
STREET
INC.
___
6,738,873
July 14
AND
INDUSTRIAL)
—
DUN
_
!
____
Finished
steel
Pig
(per
iron
6,077,077
6,746,691
6,006,345
Scrap steel (per
173
129
187
130
SERVE
PRICES
(E.
July 10
4.131c
4.131c
$52.69
$52.69
$52.69
$43.00
$43.00
$37.08
J.
M.
OF
All
Export
Straits
tin
(New
(New York)
Lead
(St. Louis)
Zinc
(East
St.
__
1
at
22.200c
AND
27.425c
27.425c
27.250c
106.000c
106.000c
129.000c
81.375c
All
17.000c
17.000c
17.000c
11.000c
Payroll
16.800c
16.800c
16.800c
10.800c
All
17.500c
17.500c
17.500c
15.000c
PRICES DAILY
Government
Average
Bonds
corporate
97.62
97.55
97.55
July 17
109.97
103.42
110.34
Railroad
Public
Group
114.46
114.08
114.27
;
112.93
113.50
118.40
FREIGHT
108.34
109.42
114.46
ICAN
July 17
103.80
103.13
104.31
106.92
of
S.
BOND
CAR
OUTPUT—DOMESTIC
■
106.56
109.06
Deliveries
108.70
110.15
116.22
Backlog of orders at end
113.89
113.50
113.89
119.20
2.66
2.66
2.68
2.34
3.17
July 17
106.39
♦
106.92
of
(number
3.20
TION)
SIZE
Month
—
2.93
2.95
2.94
2.66
Factory
sales
3.01
2.98
2.73
Factory
sales
3.26
3.20
2.93
Factory
sales
of
3.49
3.52
3.56
3.37
3,22
3.34
3.36
3.17
3.24
3.16
2.84
2.96
2.98
2.96
2.69
COMMODITY
July 17
471.6
481.6
INDEX
493.6
1RONERS
—
Orders
PAPERBOARD
received
Production
439.5
(units)
washers
ironers
—
(millions
of
221,045
283,122
226,087
157,089
244,242
244,690
103
102
.
55
7
657,277
547,963
696,726
491,744
Sales
MOODY'S
WEIGHTED
COMMON
200
PAINT
AND
DRUG
REPORTER
INDEX—1926-36
PRICE
149.4
.July 13
150.0
151.7
121.6
tUtilties
DEALERS
FOR
AND
THE
THE
ON
EXCHANGE
Odd-lot sales by dealers (customers'
Number
ACCOUNT
ODD-LOT
SPECIALISTS
OF
ODD-
COMMISSION:
Dollar
Odd-lot
of
June 30
989,523
750,440
600,390
short
$34,973,167
$28,163,536
$67,599,778
June 30
26,332
22,709
16,655
176
285
293
sales
-June 30
shares—Total
Customers'
short
other
22,533
16,370
606,741
455,974
sales
11,359
Total
June 30
740,903
600,087
444,741
1,423,513
Total
$30,934,737
$26,320,496
$19,409,644
$59,792,806
June 30
201,880
176,020
113,630
422,380
22,307
June 30
Other sales
6,654
11,233
Round-lot purchases
Net
201,880
176,020
113~630
PRICES
NEW
June 30
417,780
291,140
272,640
470,700
U.
SERIES
8.
DEPT.
OF
'
S.
:
___:—,
July 10
179.7
*180.2
181.7
163.0
July 10
July 10
196.3
179.5
*197.6
198.0
178.2
176.5
181.4
173.1
July 10
July 10
265.6
265.0
263.5
*187.2
186.9
172.6
July 10
275.6
275.6
275.4
265.1
July 10
168.2
*168.5
170.6
151.0
July 10
177.1
*177.4
182.4
141.2
,—July 10
138.2
138.6
138.7
Textile
i
Fuel
!
Metals
>
other
than
farm
and
products
and
lighting
and
Building
metal
188.2
188.2
189.0
172.3
206.7
foods
—
materialsproducts
r.
materials
♦Revised.
186.3
224.2
*225.4
226.8
July 10
and
tNot
allied
349.8
*349.8
357.3
-July 10
137.5
*137.7
140.1
products
available,
$888,715,928
693,802,498
78.07%
—
—
$745,406,420
580,566,624
77.89%
$102,888,968
$92,801,386
$80,705,674
74,936,575
50,000,000
70,594,568
45,000,000
67,072,547
40,000,000
$275,000,000
$275,000,000
255,221,976
255,083,096
29,227
29,335
19,503
$255,251,203
$255,122,431
$257,376,853
684,574
,
,
$851,444,701
668,850,295
78.55%
$275,000,000
.
.___
,'L.
—
GOVT.
of
STATUTORY .DEBT
June
face
30
amount
(000's
that
686,955
724, (21
$254,566,629
$254,435,475
$256,652,133
LIMITATION
omitted):
may
be
outstanding
time—
any
lilncludes
521,000
barrels
of
debt
obligations not
gross
foreign
crude runs.
Guaranteed
public
.
t
owned
by
Treasury
*
__July 10
Lumber
Chemicals
»
t
257,357,352
133.2
July 10
_____
commodities
*
RRS.)—
243.7
products
Meats
All
91%
96%
ROADS
I
revenues
ratio
Total
Livestock
♦
20,050,000
90%
—
CLASS
AMERICAN
OF
22,834,000
*22,363,000
Outstanding—
Poods
1
—
—
20,953,000
19,394,000
1—
May:
operating
—As
at
LABOR—
Grains
1
■!
operating expenses
1
All commodities
Farm
of
*
1926=100:
:
U.
19,941,000
20,184,000
24,894,000
—
4~2~2~380
by dealers—
—
6.17
6.35
21,925,000
:
(barrels)
month—barrels)
.—
Total
WHOLESALE
of
railway operating income before charges
income after charges (est.)
Net
June 30
,___
Number of shares
6.35
6.55
(BUREAU OF MINES)—
EARNINGS
Operating
-June 30
*
___
end
Taxes
dealers—
Number of shares—Total sales
Short sales
3.41
June:
(ASSOCIATION
June 30
.___
3.49
6.92
6.55
(barrels)
from mills
(at
Month
Round-lot sales by
>
of
RAILROAD
1,434,872
Dollar value
4.54
6.79
(10)
Shipment
Stocks
45,550
763,210
sales
Customers'
25,761
June 30
sales
5.60
4.77
45,843
571
6.44
5.85
3.48
Capacity used
sales
sales
other
Customers'
total
7.03
4.86
(200)
Production
1,543,106
$41,495,139
June 30
orders—Customers'
Number of
;
51,541
June 30
'
—
Customers'
,
20,988
purchases by dealers (customers' sales)—
Number
;
27,026
June:
of
(15)
"Month
34,654
June 30
value
17,200
5.90
PORTLAND CEMENT
purchases)—
of orders
Number of shares
;
STOCKS—Month
(24)
Average
STOCK
Y.
N.
23,400
OF
(25)'
Insurance
LOT
EXCHANGE—SECURITIES
$29,232
'
Banks
STOCK TRANSACTIONS
YIELD
AVERAGE
(125)
Railroad
AVERAGE=100
j;
_______
Industrial
OIL,
15,528
*$36,675
,
.
129,356
7
62
-July
-July
,
____.
267,786
7
-July
Percentage of activity__
Unfilled orders (tons) at
7
-July
—
$13,704
*19,562
SERIES—
dollars):
—
Total
(tons)
♦$17,113
SALES
&
NEW
16,122
$37,693
INVENTORIES
COMMERCE)
April
27,400
32,960
20,061
;
(units)
23,700
32,292
(units)
dryers
24,200
$17,832
OF
of
Durable
ASSOCIATION:
(tons)
304,640
;
HOME
ASSOCIA¬
Nondurable
NATIONAL
292,193
i
22,300
(DEPT.
'.Month
V
of
MANUFACTURERS
Inventories:
MOODY'S
253,942
•'
3.34
July 17
_
3,874
40,505
of May:
of
3.23
9,774
150,628
(number
(AMERICAN
—
MANUFACTURERS'
2.98
—July 17
—July 17
Group
9,644
of month
AND
WASHERS
LAUNDRY
2.92
3.15
of cars)
147,725
July 17
-
—July 17
Utilities Group
Industrials Group
6,614,000
(AMER¬
cars)
July 17
Public
7,548,000
*7,056,000
:
—July 17
Railroad
14,162,000
*8,975,000
RAILWAY CAR INSTITUTE)—Month
June:
STANDARD
Average- corporate
\
*16,031,000
6,957,000
_____
July 17
l.
____
337.2
8,985,000
—
goods
109.97
DAILY AVERAGES:
Bonds
.
141.6
*433.5
in manufac¬
____
goods__.
July 17
:
*'
Aaa
*161.2
15,942,000
of employees
industries—
July 17
YIELD
Government
160.0
433.3
number
HOUSEHOLD
U.
11,597,000
6,185,000
5,402,000
i;
'
July 17
-
Utilities
MOODY'S
:
119.82
113.50
108.88
.
Group
Industrials Group
*5,765,000
—
indexes—
Nondurable
July 17
__
*7,440,000
of
manufacturing
——July 17
Baa
*13,205,000
5,666,000
DEPT.
workers)
■
Indexes—
Durable
114.66
'
13,104,000
7,438,000
S.
"
102.10
___
i
(production
A1H manufacturing
July 17
___
281
manufacturing—
Estimated
AVERAGES:
——July 17
S.
298
*297
.
SERIES—Month
goods
'
Employment
'
U.
*301
RE¬
Average=100)
PAYROLLS—U.
goods—
turing
MOODY'S BOND
718,111
303
(FEDERAL
'
Nondurable
22.425c
July 11
;
—
.
24.200c
July 11
_
.
at—i
24.200c
July 11
,
;__
1,410,223
adjustment
manufacturing
July 11
-
;
,____
528,652
1,444,663
(net tons)
variation-—
LABOR—REVISED
July 11
l
—
at
at—.,,
Louis)
24.200c
July 11
York)
Lead
5,868,380
*573,483
j.
seasonal
Durable
Electrolytic copper-
refinery at
refinery at
6,397,032
5,910,775
286
SALES
seasonal
EMPLOYMENT
QUOTATIONS):
Domestic
*6,484,258
622,509
$46.38
$43.00
6,744,734
6,122,225
end of month
June:
for
Without
3.837c
July 10
ton;
4.131c
July 10
ton)
&
580,600
,
STORE
April:
»!ETAL
4,196,000
*622,500
tons)______
SYSTEM—(1985-39
of
Adjusted
PRICES:
gross
*45,823,000
*3,622,000
tons)
(net
Oven coke stocks at
DEPARTMENT
July 12
(per lb.)
gross
43,390,000
3,543,000
tons)_____
tons)
MINES)—Month of May:
tons)
(net
coke
Month
IRON AGE COMPOSITE
(net
(net
tons)-
OF
(net
coke
Beehive
BRAD-
&
105,933,000
632,000
lignite
Pennsylvania
INSTITUTE:
(in
209,973,000
SYS¬
AVERAGE=100
ELECTRIC
Electric
420,392,000
June:
Bituminous
Production
EDISON
728,064,000
526,325,000
(BUREAU OF MINES)—Month
Beehive
DEPARTMENT
698,456,000
44,014,000
municipal
359,566,000
180,864,000
and
569,539,000
402,522,000
construction
State
COAL
July
lignite
Pennsylvania anthracite
Beehive coke
OF
9,400
June:
$206,897,000
86,320,000
120,577,000
77,783,000
Federal
COAL
75,766
Retail
541,081
NEWS-
ENGINEERING
construction
State
6,252,672
77,679
of
of
end
MERCE
553,910
July
cars)
.
construction
8,143,230
6,634,510
lbs.)
_____
GINEERING
S.
*9,094,499
6,938,708
INC.—Month of
output, all grades
(tons
at
BUSINESS
RECORD:
Total
8,658,000
May
Wholesale
cars)
freight received from connections (number
ENGINEERING
Ago
for
(net
smelter
Shipments
RAILROADS.
(number
Year
Month
INSTITUTE:
Manufacturing
ASSOCIATION OF
date;4j
Previous
June:
5,912,000
7
gasoline
(bbls.)
AND
and
AMERICAN ZINC INSTITUTE,
20,059,000
7
at
oil
7
terminals, in transit and in pipe lines—
(bbls.) at
July
at bulk
IRON
ingots
castings produced
(net tons)—Month of June
Shipments of steel products, including alloy
1,894,800
July
(bbls.)
oil, and distillate fuSI oil (bbls.) at
Residual fuel
98.2
July
.
oil
output
(bbls.)_
unfinished
(bbls.)
2,063,000
of that
Latest
July
fuel
output
refineries
Finished
Kerosene
103.2
are as
Month
July
distillate
of quotations,
cases
Ago
July
;
(bbls.)
output
and
2,029,000
in
or,
the^
either for the
are
42
(bbls.)
average
(bbls.)
oil,
Gas,
that date,
and
July
to
runs
Kerosene
2,037,000
production and other figures for
Dates shown in first column
Year
INSTITUTE:
gallons each)
Gasoline
on
Steel
PETROLEUM
oil
month available.
month ended
Previous
Equivalent to—
Steel
or
Latest
INSTITUTE:
(percent of
latest week
cover
Total
the
-
public
gross
debt
and
guaranteed
obligations
Deduct—Other
-
outstanding
gations not subject to
Grand
total
Balance
able
face
under
public debt
obli-
debt limitation
outstanding
amount
above
'
—
of
—
obligations,
authority
issu-
*
20,433,370
^
20,564,626
,00,.™
18,347,86©
117.3
♦Revised.
$Not including stocks of American
Tel. & Tel.
.1
30
New Registrations and
Alabama
fice—58
Flake
Graphite Co., Birmingham, Ala.
$100,000 of 7% 20-year
sinking fund bonds dated Jan. 15, 1949 and due Jan. 15,
July 9
Proceeds—For working
be
working capital.
$250,000
—
$1,020
Consolidated
Idaho
N. Y. (8/15)
1,000,000 shares of class
A stock.
Price—At par (15 cents per share).
Under¬
writer—To be supplied by amendment.
Proceeds—For
operating expenses. Office—27 West 72nd Street, New
York 23, N. Y.
;
Inc.,
Inc.,
Mines,
Seattle,
Wash.
Seattle
—None.
<
Office—4109 Arcade Bldg.,
1, Wash.
—
Audio &
Corp.,
Evansville,
Ind.
Corp., N. Y. (7/24)
July 16 (letter of notification) $150,000 of 6% 10-year
convertible sinking fund debentures and 90,000 shares
of common stock (par one cent) to be offered in units
of $100 of debentures and 60 shares of stock.
Price—
Mid Texas
Underwriter—Gearhart, Kinnard &
Proceeds—For working capital
to recondition and equip studios of subsidiary.
$100.60
and
per
unit.
Inc., New York.
Otis,
Bonanza
Mining Co., Wenden, Ariz.
June 27 (letter of notification) 168,525 shares of
mon
capital stock. Price—At Par ($1 per share).
Proceeds—For
derwriter—None.
working capital.
&
Brass
1
Central
new
Un¬
equipment and
Address—Box 103, Wenden, Ariz.
$50 per share; and of preferred, at par ($20 per
share).
Underwriter — None.
Proceeds — For work¬
to
to be
ing capital.
Office—2817 Laclede Avenue, St. Louis 3,
«"•
-
.
California Tungsten Corp., Grand Junction, Colo.
July 13 (letter of notification) 1,999,000 shares of com¬
mon
stock (par one cent).
Price—15 cents per share.
Underwriter—Tellier & Co., New York.
Proceeds—To
purchase mining equipment and for working capital.
Office—801 4th Avenue, Grand Junction, Colo.
Carolina
North
Mountain
Telephone
Co.,
Weaverville,
Carolina
July 13 (letter of notification) 100,000 shares of capital
stock (par $1) to be offered to stockholders on basis of
one
share for each two shares held.
Price—$2.15 per
Underwriter—Interstate
share.
lotte, N .C.
Securities
Proceeds—To retire loans.
Commercial Mortgage
Illinois
Corp., Char¬
'
& Finance Co.,
Rockford,
July 13 (letter of notification) 1,800 shares of 6% cumu¬
lative preferred stock.
Price—At par ($100 per share)~
Underwriter—None.
Office—115 Seventh
Proceeds—To retire
indebtedness.
Street, Rockford, 111.
Consolidated
Equipment Corp.
July 10 (letter of notification) 300,000 shares of 6%
cumulative preferred stock.
Price — At par ($1 per
share). Underwriter—None. Proceeds—For purchase of
soft drink dispensing machines. Office—105 Vz East Pike
Peak Avenue, Colorado Springs, Colo.
Delaware
July
9
stock.
Research
& Development Corp.
notification) 5,691 shares of capital
(letter of
Price—$10
per
share.
Underwriter—None.
Pro¬
ceeds—To
purchase production and processing equip¬
ment and for working capital. Address—P. O. Box 110,
New
Castle, Del.
Dole
(John)
Engineering Co.
June 27 (letter of notification) $24,798 of convertible 5%
income notes due Jan. 1, 1957, second series, issuable
upon exercise of assignable warrants. Price—At market
(not in excess of $1.25 per $1 of notes).' Underwriters—
J. Barth & Co. and The Broy Co., both of San Fran¬
cisco, Calif. Proceeds—To James D. Dole & Associates
$100
Wax
Co., a wholly-owned subsidiary,
and the balance used for general
•
/
Paper
share
per
corporate purposes.
Missouri Research
Laboratories, Inc.
29
(letter of notification)
St.
share). Underwriter—Morfeld, Moss & Hartnett,
Louis, Mo. Proceeds—To redeem outstanding $20
par
preferred stock and for general corporate purposes.
($5
per
Montgomery Elevator Co., Moline, III.
July 10 (letter of notification) $300,000 of first (closed)
mortgage 5% sinking fund bonds dated July 1, 1951,
and due July 1, 1963. Price—100% and accrued interest.
Underwriter—Illinois Securities Co., Joliet, 111.
Pro¬
*
ceeds—To pay
bank loan and to retire outstanding first
Office—30 20th Street, Moline, 111.
mortgage 4V2% note.
Olds
Oil
Corp., Casper, Wyo.
July 13 (letter of notification) 50,000 shares of common
stock.
Price—At par ($1 per share).
Underwriter—
None.
Proceeds — For working capital.
Office —101
North Kenwood Street, Casper, Wyo.
,■
,
of
for the
Plan
Potomac
Common
Stock
Systematic Accumulation
of
Potomac
The
Electric
Power
Co., Washington, D. C.
July 16 filed $1,200,000 aggregate amount of Potomac
Plans for the Systematic Accumulation of PEPCO Com¬
mon Stock to be sold and paid for over a five-year pe¬
riod.
Sponsor—Capital Reserve Corp., Washington, D. C.
Reorganized Silver King Divide Mining Co.
(letter of notification) 383,500 shares of capital
stock (par 10 cents). Price—16 cents per share. Under¬
writer—None.
Proceeds—To develop mining properties.
Address—c/o Nevada Agency & Trust Co., 139 No. Vir¬
ginia Street, Reno, Nev.
June 27
Riverside
July 12
Stadium, Inc., Riverside, Mo.
(letter of notification) $250,000 of 15-year 5%
debenture
notes
and
25,000
shares
of
common
Wahler, White & Co., Kansas City, Mo.
obligations.
;
Rochester
Gas
.
&
Electric
Corp.
Proceeds—To
'
!
(7/31)
27
(letter of notification) $142,000 of convertible
5% income notes due Jan. 1, 1957, second series, issuable
upon exercise of warrants.
Price—At principal amount.
<
July
13 (amendment) filed 175,000 shares of common'
stock (no par), to be offered for subscription by com¬
stockholders of record July 31 on basis of one
share for each six shares held up to and including Aug.
15.
Price—To be supplied by amendment. Underwriter
—The
First
Boston
Corp.,
New
York.
Proceeds—For
construction program.
Russell
June 27
(F. C.)
Co., Cleveland, Ohio
Proceeds—To Frank C. Russell and
stockholders. Office
Ohio.
Schweser's (Geo.) Sons, Inc., Fremont, Neb.
r
July 10 (letter of notification) 1,650 shares of 6% cumu¬
lative preferred stock. Price—At par ($100 per share.);
Underwriter—Ellis, Holyoke & Co., Lincoln, Neb.
Pro¬
ceeds—For expansion and improvement.
Searle
New York.
Boston
Philadelphia
•
Private Wires
Pittsburgh
San Francisco
to
all
offices
Chicago
Cleveland
(G. D.)
& Co., Chicago,
III.
July 11 (letter of notification) 5,000 shares of common
stock (par $5) to be offered to full time employees who
are
stockholders of company.
Price—At market price
(approximately $61.50 per share). Underwriter—None.
Proceeds—For general corporate purposes.
Address—
P. O. Box 5110, Chicago 80, 111.
Oil
&
Gas
Corp.,
Baltimore, Md.
(letter of notification) 300,000 shares of com¬
mon
stock.
Price
$1 per share.
Underwriter — For
25,000 shares: Mitchell Hoffman & Co., Inc., Baltimore,
—
drill
Proceeds—To
Bank
wells.
Old Town
Office—404
Bldg., Fallsway and Gay Streets, Baltimore, Md.
Transgulf Corp., Houston, Texas
(letter of notification) 160,000 shares of capital
June 29
stock
(par 10 cents) to be first offered to stockholders.
and to public at 15 cents.
Underwriters—Herbert WySchaefer & Co., Baltimore,
Price—To stockholders at par,
Gearhart, Kinnard & Otis, Inc., New York.
working capital. Office—1 Main Street,
Houston, Texas.
'
r , V V. ■
Md.,
and
Proceeds—For
Trusteed
Inc., Boston, Mass.
units of Commonwealth Fund in¬
denture of trust. Plan A, aggregating $3,600,000 princi¬
pal amount, and 1,300 units of Commonwealth Fund
indenture
of
trust, -Plan
B,
aggregating $1,560,000.
Dealer—Herbert B. Schwa be, Hartford, Conn. Proceeds
July
Funds,
filed
11
3,000
investment.
—For
•
Grocers
United
(Inc.)
Co.
'■-to
N. Y.
Brooklyn,
v-
(letter of notification) $300,000 of 5%- deben¬
ture bonds due Aug. 1, 1961 (in-denominations of $500
and $1,000 each).
Price—At par.
Underwriter—None.
Proceeds—For frozen food locker equipment.
Office—
July 11
1630 Cody
Street, Brooklyn, N. Y.
Western Carolina Telephone
Co., Franklin, N. C.
of notification) 2,109 shares of capital
stock (par $50) to be first offered to stockholders at rate
of one new share for each two shares held; unsubscribed
July
6
shares
(letter
be publicly offered. Price—$60 per share.
Proceeds—For working capital.
may
Underwriter-^None.
States
Western
Price—50
stock.
Metals Corp.
notification) 200,000 shares of capital
cents per share.
Underwriter—None.
July 10 (letter of
)
Proceeds—For expansion.
Registrations and Filings
Previous
It American Bosch Corp., Springfield, Mass. /
May 17 filed 98,000 shares of common stock (par $2).
Price-«-At the market (approximately $15 per share).
Underwriter—None. Proceeds—To Allen & Co. (owner
of 198,000
shares, or 15.1% of outstanding
shares). State¬
ment effective July 3.
American
Brake
Shoe
Co.
shares of common stock (no par) to
be offered to certain officers and key employees through
June 29 filed 50,000
a
stock
purchase plan.
—To
Price—To be not greater than
the date of the offering, or no less
85% of such price. Underwriter—None. Proceeds
be added, to general funds.
the market
(letter of notification) 8,500 shares of common
Price—At market (about $13 per share).
Burton W. Bartless, the two selling
—1100 Chester Avenue, Cleveland,
Office;—
Minneapolis, Minn.
Western
Trans
than
stock (par $1).
Underwriter—None.
Scarlet Gulch."
Street, Reno, Nev.
July 11
stock
(par $1) to be offered in units of one $100 note and 10
shares of stock.
Price—$100 per unit.
Underwriter—
retire outstanding
costumes,
produce a play
Tiger Tractor Corp., Keyser, W. Va.
July 12 (letter of notification) 200,000 shares of common
stock (par 10 cents).
Price—$1 per share. Underwriter
—M. J. Sabbath Co., Washington, D. C.
Proceeds—For
working capital/ Office — East and Moselle Streets,
Keyser, W. Va.
*
K
Md.
40,000 shares of cumu¬
lative convertible preferred
stock (160,000. shares of.
common stock reserved for conversion).
Price—At par
June
Sixth Street,
mon
and three stockholders.
June
.
Proceeds—$50,000 of proceeds from sale of warrants
will be used to purchase 500 additional shares of The
at
of
Romance
Proceeds— For
.
salaries to
exceeding $10 per share, which is at, or below cost of
shares.
Underwriter—None. Office—1015 So.
Mo.
Midwest
North Sierra
and
treasury
Price—To be supplied by amend¬
Louis,
Ncne.
Strutwear, Inc., Minneapolis, Minn..
,
(letter of notification) 3,000 shares of common
stock (par $5) to be offered to employees at prices not
purchase stock at $5 per share, and then
Underwriter—Edward D. Jones & Co., St.
"The
as
—
property
and
July 9
10,880
filed
publicly offered.
ment.
mon,
Missouri.
43
Materials Co., St. Louis, Mo.r
shares of common stock (par $1)
be issued to Edward D. Jones & Co. upon exercise
17
Reno, Nevada
2,000 shares of preferred
200 shares of common stock.
Price—$5 per
Underwriter
known
Midwest Packaging
July
,-S
,
r
Inc.,
Players,
and
scenery
Telephone Co., San Antonio, Tex.
of warrants to
St. Louis, Mo.
July 9 (letter of notification) 2,807 shares of common
stock (par $10) to be offered to common stockholders of
record July 9 at rate of one share for each five shares
held, and 1,500 shares of 5% cumulative preferred stock
to be offered to residents of Missouri only first to com¬
mon
stockholders and then to public.
Price—Of com¬
Copper Sales Co.,
stock
share.
July 10 (letter of notification) $90,000 of first mortgage
4^% bonds (in denominations of $1,000 each) and sold
to Wachob-Bender Corp. at 102% per unit.
Underwriter
—Wachob-Bender Corp., Omaha, Neb.
Proceeds—To re¬
tire loans.
Office—South Texas Bldg., San Antonio, Tex.
com¬
of these shares v/ill be pur¬
(letter of notification)
July 5
Longines Wittnauer Watch Co., Inc.
July 9 filed voting trust certificates for 400,000 shares
of common stock
(par $1).
Agent — The City Bank
Farmers
Trust
Co., New York.
Statement effective
July 13.
Products
(no par) to be purchased by the Fund for mem¬
Storey
—
Video
general corporate purposes. / < "
Proceeds—For
Boston, Mass.
July 12 (letter of notification) 200 shares of common
stock (no par).
Price—$16.50 per share.
Underwriter
—Paine, Webber, Jackson & Curtis, Boston, Mass. Pro¬
ceeds—To Walter S. Bucklin, the selling stockholder. 1
Street, Evansville 8, Ind.
more
the
on
Shawmut Association,
Finance
Interstate
Employees
an
Price—To be equal to 85% of
bers during the years. None
chased from the company.
July 10 (letter of notification) 15,557 shares of common
stock (par $1).
Price — $10 per share. Underwriter —
None. Proceeds—For working capital. Office—405 Syca¬
Corp., Naumee, O.
July 13 (letter of notification) 3,000 shares of 4% cumu¬
lative preferred stock.
Price—At par ($100 per share).
Underwriter
None.
Proceeds
For working capital.
Office—Illinois Avenue, Naumee, Ohio.
employees under terms of
July 16 filed 25,000 new memberships in the Savings and
Profit Sharing Pension Fund of Sears, Roebuck & Co.
Employees and not more than 750,000 shares of capital
stock
.
Anderson-Farmer
ADDITIONS
INDICATES
the New York Stock Exchange on
the date the contract for the sale is issued. Underwriter
July 13 (letter of notification) 100,000 shares of capital
stock.
Price—50 cents per share.
Underwriter—None.
Proceeds—Working capital.
to
price first quoted
per
Wilmington, Del.
July 17 (letter of notification)
offered
Stock Purchase Plan.
of 12-year 5%
$1,000 unit.
Co., Wilmington, Del. Proceeds—
Office—111 West Fourth Street,
Price
debentures.
Underwriter—Laird &
For
Thursday, July 19, 1951
.
Sears, Roebuck & Co., Chicago, III.
July 16 filed 500,000 shares of capital stock (no par) to
capital. Of¬
Street, San Francisco 4, Calif.
of notification)
(letter
convertible
1969 (in denominations of $1,000 each).
Underwriter—
Odess, Martin & Herzberg, inc., Birmingham, Ala.
Pro¬
ceeds—For plant expansion.
Office—420 Comer Bldg.,
Birmingham, Ala.
Mucinum,
Sutter
•
Garrett, Miller & Co., Wilmington, Del.
(letter of notification)
American
Registration
Underwriter—None.
Filings
.
.
* REVISIONS THIS WEEK
Securities Now in
July 12
Financial Chronicle
The Commercial and
(266)
price
on
-jf Arden Farms Co., Los Angeles* Calif, v
55,000 shares of $3 cumulative and partici¬
June 11 filed
pating preferred stock (no par) of which 54.444 shares
are first being offered to preferred stockholders at ratfe
of one share for each 4% shares held with rights^to
expire
on
publicly.
Proceeds
Sept. 24; unsubscrbied shares to be offered
Price — $45 per share. Underwriter — None.
To repay bank loans.
Statement effective
—:
July 6.
-
■
,
.
,
;
Scotia, Toronto, Canada
June 12 filed 300,000 shares of capital stock (par $10)
Bank of Nova
being offered to stockholders of record June 30, 1951,
with unsubscribed shares to be publicly offered after
Oct. 5.
Price—$30
per
ceeds—To be added to
June
28.
share. Underwriter—None. Pro¬
general funds. Statement effective
Volume 174
Number 5030
.
The Commercial rand Financial Chronicle
.
.
31
(267)
Bigelow-Sanford Carpet Co., Inc.
May 16, filed 100,000 shares of 4y2% cumulative pre¬
ferred stock, series of 1951
(par $100), of which 39,604V2
shares
issuable
are
to
holders
of
shares
26,403
of
NEW ISSUE CALENDAR
6%
y
preferred stock on the basis of IV2 shares for each pre- '
ferred share held. Public
offering of the additional 60,000 shares of new preferred stock has been deferred due
to present market conditions. Underwriters—Harriman
'
10
a.m.
(EDT)
Dome Exploration
•
1
Checker Cab-Manufacturing Co.
.
United
Chevron
*
Bonds
•,
offered
900,000 shares of
Vas
>
speculation." Price — 50 cents per
Underwriter—Willis E. Burnside & Co., Inc., New
Proceeds-^To take up option and develop prop¬
gfetire,
.York.
erties. ^Offering—Indefinitely postponed.
V
./
stock (par $1)?
common
J
*
t
Ing—Postponed
March
Bonds
—
Car-Nar-Var Corp., Brazil; Ind.
"
(letter of notification) 150,000 abates of com^
(voting) stock (par $1). Price—$2 per share. Under*
writers—Sills, v Fair man & Harris, Inc., Chicago, and
Cearhart, Kinnard & Otis, Inc., New York. Proceeds— t
For working capital and
general corporate purposes.
Temporarily deferred.
4
;
-
,
;
Continental Electric Co., Geneva, III.
/l,
(letter -of. notification), $300,000 of 6% sinking
fund debentures due Dec. 1; 1975
(to be issued in units
of $100, $500 and $1,000 each). Price—91% of
principal,
March 2
•amount.
..Underwriter—Boettcher
&
Proceeds—To retire indebtedness and
tal.
Co.,
Chicago, IlL.
for working capi¬
Offering—Postponed indefinitely.
Continental
June 27
,
•/-/
;
Sulphur & Phosphate Corp.
(letter of notification) 23,967 shares of
<
t.
T
Office—2010
expenses."
Tower Petroleum
Bldg.,/Dallas,
Tex.
/,
Cornucopia Gold Mines
May 14 (letter of notification) 229,800 shares of
.
stock
(par five cents)
stockholders of record June 30,
basis, with
on
not
1951,
on
one-for-five
a
oversubscription privilege; rights to expire
Oct. 1.
Price—To be determined by directors, but
exceeding $1 per share. Underwriter—None. Pro¬
an
ceeds—For
working capital.
Bank Bldg.,
Spokane, Wash.
v
reduce bank loans by $9,000,000, and the balance added
working capital.
July 3.
Withdrawal
—
Statement withdrawn
Culver Corp., Chicago, III.
Oct. 23 filed 127,364 shares of common stock (par $5).
Price—To be equivalent to approximately 95% of the
net asset
diately
value of all shares of stock outstanding imme¬
prior to the public offering plus a commission
of 50 cents per share to
security dealers.
Dealers may
ments in
be underwriters.
Proceeds
railroad and kindred securities.
Underwriters—
—
For
invest¬
Offering—Ex¬
act date not yet determined.
stock (par 10 cents).
writer—None.
Price—70 cents per share.
Proceeds—To
pay
obligations.
Under¬
Office—
Fidelity Bldg., Oklahoma City, Okla. Offering—Tem¬
porarily postponed "because of market conditions."
(B. F.)
& Co., Inc.
2,000 shares of capital
than $40 per share.
Under¬
Hornblower & Weeks, New York,
as
not
but
broker.
Proceeds—To
a
selling stockholder.
«
Drayson-Hanson, Inc., Los Angeles, Calif.
(letter of notification) 50,000 shares of common
stock (par 40 cents);
Price—$1.20 per share. Under¬
writer—Edgerton, Wykoff & Co., Los Angeles, Calif.
Proceeds—To purchase real property and plant.
El
June
Paso Natural Gas Co.
29
filed
Falls Creek
second
pre¬
Mining Co., Seattle, Wash.
27
(amendment to letter of notification) 400,000
shares of common stock (par 10 cents). Price—20 cents
per share. Underwriter—None. Proceeds—To S. A. Lein-
ing and Philip Seymour Heath, two selling stockholders.
Office—418 Second & Cherry Bldg., Seattle 4, Wash.
Food
Machinery & Chemical Corp.
June 13 filed 100,000 shares of common stock
(par $10)
Price—To be based on mar¬
New York Stock Exchange
(about $34.50 per
Underwriter—None. Proceeds—For general cor¬
to be offered to
ket
on
share).
employees.
porate purposes.
Statement effective June 29.
Fosgate Citrus Concentrate Cooperative
29 filed 453
shares of class A
common
(Fla.)
stock
(par
$100); 5,706 shares of 5% class B preferred stock (par
$100), cumulative beginning three years from July 10,
1950; 8,000 shares of 4% revolving fund class C stock
(par $100); 2,000 shares of 4% revolving fund class C
stock (par $50); and 4,000 shares of 4% revolving fund
class C stock (par $25). Price—At par. Underwriters
—None. Proceeds—To construct and equip frozen con¬
centrate
plant at Forest City, Fla.
Fruehauf Trailer Co., Detroit, Mich.
June 15 filed 115,000 shares of common stock (par $1), to
be "offered to certain employees pursuant to stock op¬
tion plans." Price—At 85% or 95% of the highest sale
price of the stock on the New York Stock Exchange on
the day on which the option is delivered to the employee.
Underwrtier—None. Proceeds—For working capital.
;
Finance Corp., Chicago, III.
(letter of notification) 46,153 shares of common
stock (par $1), to be offered to employees, officers and
directors of company.
Price—$6.50 per share. Under¬
July 3
writer—None.
Chicago
as
Proceeds—To The First National Bank of
Trustee for the Estate of Owen L. Coon. Of¬
fice—184 West Lake
Salomon Bros. & Hutzler (jointly), was received March
27, which
was
returned unopened." Statement effective
"March 14. ^Amendment—On May 8 SEC granted an ex¬
emption from competitive bidding. Preferred may be
privately
placed,
but reported,
temporarily
aban¬
;
doned.
'
"
St., Chicago 1, 111.
,
if Lehman Corp.
,?
July 2 filed 129,785 shares of capital stock
be offered
;
(7/23)
(par $1), to
to stockholders of record
July 20 at rate of
with an over¬
subscription privilege; rights to expire on Aug. 3. PriceTo be approximately the net asset value per share.
one
new
share for
each
15
shares held,
Underwriter—None. Proceeds—For investment.
Lily-Tulip Cup Corp., New York
(7/25)
70,000 shares of convertible
ferred stock (no par). Price—To be supplied by amend¬
ment-Underwriter— White, Weld & Co., New York.
Proceeds—For expansion program.
June
Corp., the parent, will be used for new construction.
Bids—Only one bid, from Union Securities Corp. and
.
less
General
Deardorf Oil Corp., Oklahoma City, Okla.
May 18 (letter of notification) 200,000 shares of common
'
219
will act
operations.
(letter of notification)
Price—At
writer—None,
June
,
15
stock
Office—824 Old National
if Cudahy Packing Co.
;
*
March 23 filed $10,000,000 sinking fund debentures due
April 1, 1966. Price — To be supplied by amendment.
Underwriter—Halsey, Stuart & Co. Inc. Proceeds—To
to
Drakenfeld
June
with proceeds to be received from the sale of 350,000
additional common shares to General Public Utilities
Ltd.
(7/24)
July 2 filed 500,000 shares of common stock fpaf $2:50).
Price—To be supplied by amendment. Underwriters—
Carl M. Loeb, Rhoades & Co., New York, and Wood,
Gundy & Co., Ltd., Toronto, Canada. Proceeds—To retire
common
to be offered for subscription by,
effective
(par $100). Proceeds—From sale of preferred, together
if Dome Exploration (Western)
common
stock (par 10 cents). Price—$4 per share.
Underwriter—;
'None. Proceeds — To finance drilling and exploration
Statement
Jersey Central Power & Light Co.
June 4
-
indefinitely.
14.
Feb. 21 filed 40,000 shares of cumulative preferred stock
Continental
March 5
(par 10 cents). Price—25 cents
Underwriter—H. M. Herrin & Co., Seattle,
received by company on March 27, from Halsey,
Stuart & Co. Inc., which was returned unopened. Offer*
1951
and to acquire property for drilling
Office—Toronto, Canada.
morr
non¬
common stock
was
Bonds
notes
;
Inc., Wallace, Idaho
notification) 800,000 shares of
(letter of
Jersey Central Power & Light Co.
Feb. 21 filed $1,500,000 first mortgage bonds due in 1981.
Proceeds—For expansion program. Bids—Only one bid
;
a
Loeb, Rhoades &
Stein Bros. & Boyce,
Phila., Pa.
Proceeds—To Harry
A. Ehle, Vice-President, who is the selling stockholder.
>■
-
—.Class A
Co
M.
International Resistance Co., Phila, Pa.
(letter of notification) 1,500 shares of common
stock (par 10 cents).
Price—At the market (approxi¬
mately $6.37Vfe to $6.62y2 per share).
Underwriter—
,
..•>"•
Mucinum, Inc.—
Power
Carl
June 26
1951
September 11,
Alabama
—
Proceeds—For general corporate purposes.
^.Preferred
^
<
in exchange for their holdings of
share-for-share basis; offer expires on
& Telegraph Co. (Fla.)"
notification) 6,000 shares of 5% cumu¬
stock, series B. Price—At par ($25 per
share). Underwriters—Florida Securities Co., St. Peters¬
burg, Fla.; and H. W. Freeman & Co., Fort Myers, Fla.
August 31, 1951
<
a
June 27 (letter of
lative preferred
1951
.
Chicago, III.
Wash., and others. Proceeds—For development of Liv¬
ingston mine. Office—Scott Bldg., Wallace, Idaho.
>
....Common
Corp.___
■'
,
—
Inter County Telephone
I Southern Counties Gas Co
.
(7/24)
.Petroleums, Ltd., Toronto, Canada
March 14 filed
,
•••;
,
Office
Corp.
on
share.
per
record
to be
;
;
American
"
.
-
Equip. Trust Ctfs.
-August 15, 1951
July 24 at rate of one new share for each
sbare held; rights to' expire:on Aug. 9. Price—To be
' r
August 6,
Plywood
8
assessable
Michigan Consolidated Gas Co.
10:30 a.m. (EST)-.
,
supplied by amendment. Underwriters—None. Proceeds'
,*tTo repay loans and for additional working capital.
;
,
1951
July 31, 1951
.
States
rolling mill.
Idaho Custer Mines,
Preferred
August 7,
;
.
June 28 filed .433,444 shares of common stock
(par $1.25)
to be offered for subscription by common stockholders
of
__Bonds.
Rochester Gas & Electric Corp
r
and
Offering—Temporarily postponed.
July 27. Dealer-Manager
Co., New York.
Central Vermont Public Service Corp.—_^__Bonds
Tulsa, Okla.
1
(letter of notification) 104,000 shares of com¬
mon stock
(par $1). Price — $2.87 Vz per share. Underwriters^-First Southwest Co. and Rauscher, Pierce &
Co.; Inc:, both of Dallas, Tex. Proceeds — For working
capital. Office—1333 North Utica- Tulsa, Okla/
r
(EDT)
a.m.
July 25,
29
h
11:30
El Paso Natural Gas Co
short-term borrowings and
fdr additional. tonstructiort
requirements^. Bids—Invita¬
tions for bids are expected, to be published about July;
21 with bids probably opened on
July 31.
^
Light Co
Central RR. of Pennsylvania
ly); Carl'M. Loeb. Rhoades & Co. and Blair, Rollins &
Co. Inc. (jointly); Kidder, Peabody &
Co.; Smith, Barney
& Co. Proceeds—To reduce
#r".'
such stock
June
Parsons & Coi (jointly); Lehman Brothers;
Coffin & Burr, Inc. and The First Boston
Corp. (joint¬
f
dorf-Astoria
..Common
Common
&
^
Halsey, Stuart &
Hemphill, Noyes,
,
(Western) Ltd
United Gas Corp.
Graham,
June
Common
Common
~
_
if Century Geophysical Corp.,
steel plant
Hilton Hotels Corp.,
Pacific Power
Central Vermont Public Service Corp. (7/31) ■
June 29 filed $2,000,000 of first mortgage
bonds, series
Cx, due 1981. * Underwriters—To be determined by com¬
and
—
March 30 filed 153,252 shares of common stock
(par $5)
now offered to holders of common
stock of Hotel Wal¬
__Debs. & Com.
Montana-Dakota Utilities Co
-
Co., Denver, Colo. Pro¬
selling stockholders. Office—901 S. Front
St., Quincy, 111.
••
'•
•
■.
' •• ? •
j",;
bidders:
1951
Checker Cab Mfg. Co
ceeds—To tv">
Probable
Business
electric furnace
poses.
Preferred
Audio & Video Products Corp
Fibre Products Co., Quincy, III.
bidding.
Corp.____
July 24,
acquisition, construction and
and for other corporate pur¬
Organized to construct and operate
installation^ of facilities
Owensboro, Ky.
June 11 (letter of notification) 3,000 shares of
non-voting
stock (par $5). Price—At the market. Under¬
writer— Bosworth, Sullivan &
Tnc.; W. C. Langley & Co.
Bonds
Equip. Trust Ctfs.
Texas Gas Transmission
.common
petitive
(EDT)____
(EDT)
noon
,
,
V-Canam Copper Co., Ltd., Vancouver, Canada
April 20 filed 200,000 shares of capital siocit. fnce—At.,
par ($1 per share). Underwriter—Harry M. Forst. Pro¬
ceeds—For Exploration and development work.
Co.
a.m.
St. Louis-San Francisco Ry.
Underwriter—Kidder, Peabody
&
Co.,
New
York.
Proceeds—For additions and improvements to plant and
equipment. Offering date postponed.!
^Central
...Common
Mississippi Power Co. 11
filed
due 1961 and
320,000 shares of common stock (par 25 cents) to be
offered in units of
$1,000 of debentures and 80 shares of
stock. Price—To be
supplied by amendment. Underwriter
—Equitable Securities Corp., Nashville, Tenn. Proceeds
—To be applied to cost of
1951
Lehman Corp.
300,000 shares of convertible preference
(par $100). Price—To be supplied by amendment.
stock
if Green River Steel Corp.
June 5 filed
$4,000,000 of 3V2% debentures
Bonds & Common
July 23,
;
Proceeds—For drilling expenses, repayment
working capital. Offering—Date not set.
of advances and
1951
Meridian & Bigbee River Ry.
Burlington Mills Corp.
March 5
New York.
'
4
.
July 20,
Rjpley & Co., Inc.; Kidder, Peabody & Co., and F. S.
Moseley & Co, Proceeds—For general corporate pur¬
poses..
Golconda Mines Ltd., Montreal, Canada
April 9 filed 750,000 shares of common stock.
Price—
At par ($1 per
share). Underwriter—George F. Breen,
June 15, filed
75,000 shares of common stock (no par)
being offered for subscription by common stockholders
of record July 5 on basis of one share for each five
shares held; rights to expire July 19.
Price — $50 per
share. Underwriter—Blyth & Co., Inc. Proceeds—To be
applied toward construction of new buildings. Statement
effective July 5.
Lindberg Instrument Co., Berkeley, Calif.
(letter of notification) $100,000 of 6% promis¬
sory notes
(in denominations of $1,000 or fractions
thereof); 20 shares of common stock (par $10) and 40%
of fractional royalty interests to be issued by licensors
under certain patents for which no consideration will
June 25
be received. Underwriter—None.
development
of
an
electrical
Proceeds—For further
sound
apparatus
called
"Fluid Sound."
Loven Chemical of California
June
15
(letter of notification) 86,250 shares of capital
par
($1 per share).
Underwriter—
Floyd A. Allen & Co., Los Angeles, Calif. Proceeds—For
working capital. Office—244 So. Pine St., Newhall, Calif.
stock.
Price—At
Mayfair Markets, Los Angeles, Calif.
May 24 (letter of notification) 5,000 shares of preferred
stock (par $50) and 5,000 shares of common stock (no
par) to be offered in units of one share of preferred
and one share of common stock.
Price—$60 per unit.
Underwriter
None.
Proceeds — For working capital.
—
Office—4383
McGraw
Bandini
(F.
Boulevard, Los Angeles 23, Calif.
H.)
& Co., Hartford, Conn.
May 17 (letter of notification) 4,650 shares of common
stock
(par $2).
Price—$9 per share.
Underwriter—
Granbery, Marache & Co., New York. Proceeds—For
working capital.
Mercantile Acceptance Corp. of California
May 18 (letter of notification) 4,881 shares of first pre¬
ferred stock.
Price—At par ($20 per share).
Under¬
writer—Guardian Securities Corp.
Proceeds—For gen¬
eral corporate purposes.
Continued
on
page
32
32
The Commercial and Financial Chronicle
(268)
Continued'from
(8/7)
July 6 filed $15,000,000 of first mortgage bonds due Aug.
1, 1976. Underwriters—To be determined by competitive
bidding. Probable bidders: Halsey, Stuart & Co. Inc.;
Smith, Barney & Co. and Blyth & Co., Inc. (jointly);
White, Weld & Co. and Lehman Brothers (jointly); Harriman Ripley & Co. Inc. and Union Securities Corp.
(jointly); Glore, Forgan & Co. and W. C. Langley & Co.
(jointly). Proceeds—From sale of bonds plus $5,012,000
from sale of 358,000 shares of common stock to American
Natural Gas Co., parent, will be used to repay bank loans
expansion program. Bids—To be opened
(EST) on Aug. 7 at company's office, 415
and to finance
10:30
at
a.m.
Clifford
Inc., Kansas City, Mo.
June 26 (letter of notification) 892 shares of capital
stock (par $1). Price—Not to succeed $9.50 per share.
Underwriter—Morgan & Co., Los Angeles, Calif. Pro¬
ceeds—To Thomas F. Ryan, III, the selling stockholder.
Mississippi Power Co., Gulf port, Miss. (7/23)
22 filed $4,000,000 of first mortgage bonds due
Aug. 1, 1981. Underwriters—To be determined by com¬
petitive Mailing. Probable bidders:
Halsey, Stuart &
Co. Inc.; Union Securities Corp. and Equitable Securities
Corp. (jointly); Salomon Bros. & Hutzler; First Boston
Corp.; Otis & Co.; Kidder, Peabody & Co.; Merrill
Lynch, Pierce, Fenner & Beane; Blair, Rollins & Co.,
Inc. and Carl M. Loeb, Rhoades & Co. (jointly); Lehman
Brothers.
Proceeds—For construction program.
Bids—
-
June
11 a.m. (EDT) on July 23. at office
of Southern Services, Inc., 20 Pine St., New York 5, N. Y.
Statement effective July 11.
To be received up to
Mitchum Pharmacal Co.,
Paris, Tenn.
May 18 (letter of notification) 290,000 shares of common
stock.
Price—At par ($1 per share).
Underwriter—
None. Proceeds—For working capital. Offering—Not to
be made to public.
.
(7/24)
A Montana-Dakota Utilities Co.
June 27 filed 162,838 shares of common
(par $5)
stock
to be offered to common stockholders of record
July 24
held, rights
to expire Aug. 7.
Price—From $14.50 to $15 per share.
Underwriter
Blyth & Co., Inc. and Merrill Lynch,
Pierce, Fenner & Beane, New York. Proceeds—For con¬
basis of
one
share for each eight shares
—
struction program.
Multnomah
June
/
.
Plywood
v
Corp.,
not
stockholders, and 16 shares
to be offered to
are
present stockholders on basis of one share for each two
shares owned. Price—Per unit, $12,500;" and per share,
$2,500 to present stockholders. Underwriter—None. Pro¬
ceeds—To acquire timber and a peeler plant operation.
Office—1500 S. W. Harbor Drive, Portland 1, Ore.
National Aviation Corp.
July 5 (letter of notification) 700 shares of common stock
(par $5).
Price—At market (approximately $16 per
share).
Underwriter — Thomson & McKinnon, New
York.
Proceeds—To Elmer Wellin, the selling stock¬
holder.
....
...
A New York State Electric & Gas Corp.
June
26 filed 217,904 shares of
common
stock
(no par) ^
being offered for subscription by common stockholders
of record July 17 at rate of one new share for each 10
shares held; rights to expire Aug. 2. Price—$25.25 per
share.
Underwriters—The
First
Boston
Corp., Lehman
Brothers, Wertheim & Co., and Merrill Lynch, Pierce,
Fenner & Beane, all of New York. Proceeds—For con¬
struction program.
Acceptance Corp.
March 20 (letter of notification) 15,000 shares of 60-cent
cumulative convertible preferred stock (par $5). Price
—$10 per share. Underwriter—Michael Investment Co.,
Inc., Providence, R. I. Proceeds—For working capital.
(Offering—Postponed temporarily.
Northrop Aircraft, Inc.
6 filed 125,000 shares of
common
stock
(par $1).
Price—To be supplied by amendment.
Underwriters—
William R. Staats Co., Inc., Los
Angeles, Calif. Proceeds
working capital. Offering—Postponed indefinitely.
Ohio
Pan American
Edison Co.
150,000 shares of pfd. stock (par $100),
Underwriters—To be determined by competitive bidding.
IProbable bidders: Morgan
Stanley & Co.; Lehman Bro¬
thers and Bear, Stearns & Co.
stock
postponed.
on
Were
May 2.
Colony Finance Corp., Mt. Rainier, Md.
(letter of notification) $250,000 of 6% sub¬
debentures
with
stock
purchase
warrants
The latter will entitle holders thereof to
pur¬
share of common stock at $4
per share for
each $100 of debentures owned.
Price—At par (in de¬
nominations of $100, $500 and
attached.
chase
one
—None.
$1,000 each). Underwriter
working capital. Office—3219
Avenue, Mt. Rainier, Md.
Proceeds—For
Rhode Island
Pacific Power & Light Co.
(7/24)
June 29 filed 554,464 shares of common
stock
of which 250,000 shares are to be offered
for
(no par)
subscription
by
common
one new
expire
are
to
stockholders
share for each
of
seven
record
July 24 at rate of
shares
held, with rights to
about Aug. 20; and the remaining 304,464 shares
be
sold
for
the
account
of
certain stockholders.
JPnce—To be supplied by amendment. UnderwritersLehman Brothers; Union Securities
Corp.; Bear, Stearns
&
Offering—Indefinitely
1
Philadelphia Life Insurance Co.
(letter of notification) 15,000 shares of common
stock, of which 7,000 will be offered shareholders and
then to public, and 8,000 to officers and employees. Price
—$11 per share. Underwriters—John C. West, Philadel¬
phia, Pa. Proceeds—For working capital and reserves.
June 28
Office—111 No. Broad
St., Philadelphia 7, Pa.
Pitney-Bowes, Inc., Stamford, Conn.
July 2 (letter of notification) 9,370 shares of common
stock to be offered to employees under stock purchase
plan. Price—$14 per share (at rate of 36 cents per share
per month).
Underwriter—None. Proceeds—For work¬
ing capital.
A Pittsburgh Coke & Chemical Co.
July 5 filed 140,243 shares of common stock (no par)
to be offered for subscription by common stockholders
at
rate
of
share for each four shares held
one
July
on
23, 1951, with an oversubscription privilege; rights to
expire Aug. 9. Price — To be supplied by amendment
(proposed maximum offering price is $30 per share).
Underwriter
—
None.
Proceeds
From the sale of this
—
stock and the proceeds from certain borrowings together
with company funds will be applied to construction pro¬
85% of the market price on the New York Stock Ex¬
change at time options are granted. Underwriter—None.
Proceeds—For working capital.
Pittsburgh Steel Co.
June 26 filed 12,569 shares of first series 5%% prior pre¬
ferred stock (par $100) and 27,495 shares of common
stock
(no par) to be offered in exchange for Thomas
Steel Co. 4Y4% cumulative preferred stock (par $100)
at rate of 8/10ths of a share of 5V2% preferred and 1%
of
common
ferred share
stock
for
each
Thomas
Steel
pre¬
(unexchanged Thomas preferred stock will
$105 per share). Underwriter
be called for redemption at
—None.
Potlatch Yards, Inc., Spokane, Wash.
May 22 (letter of notification) 20,000 shares of common
stock (par $5).
Price — $15 per share. Underwriter —
None.
Proceeds—For general corporate purposes.
Of¬
fice—909 W. Sprague Avenue, Spokane, Wash.
Reading Tube Corp., Long Island City
$1,859,256 of 20-year 6% sinking fund de¬
bentures due July 1, 1971, and 66,402 shares of class B
stock (par 10 cents) being offered in exchange for 265,608
shares of outstanding class A cumulative and participat¬
ing stock (par $6.25) on the basis of $7 principal amount
of debentures and one-fourth of
for each
Co.; and: Dean Witter & Co.
Proceeds—From sale of
stock to stockholders to be used to
finance, in part, con¬
a
share of class B stock
class A share
—
held; offer to expire on Aug. 4.
Aetna Securities Corp., New York.
Statement effective June 29.
Realty Co., Denver, Colo.
7 (letter of notification)
2,000 shares of capital
(par 25 cents). Price—$6 per share. Underwriters
—Ralph S. Young, Colorado Springs, Colo; J. A. Hogle
& Co., Salt Lake City, Utah; and Garrett-Bromfield &
Co., Denver, Colo. Proceeds—For working capital. Office
—937 U. S. National Bank Bldg., Denver, Colo.
(par $25),
Telephone & Telegraph
Co., and for new construction. Statement
effective June
26.
Associated Telephone Co.
filed 17,500 shares of $5.50 cumulative pre¬
ferred stock (no par). Price—To be supplied by amend¬
ment.
Underwriters—Paine, Webber, Jackson & Curti3
and Stone & Webster Securities Corp., both of New
15,
York, and Rauscher, Pierce & Co., Inc., Dallas, Texas.
Proceeds—To retire $1,500,000 of bank loans and the
Postponed.
Spiegel, Inc., Chicago,
June 21 filed 78,250 shares
to be issuable upon exercise
officers and key executives
adopted by stockholders on
III.
capital.
(7/23-26)
Transmission Corp.
100,000
filed
28
June
price—$11.70 per
April 18.
Proceeds—To reduce bank
borrowings and for working
Gas
—
of common stock (par $2),
of stock options granted to
of the company under plan
Underwriter—None.
A Texas
Offering
general corporate funds.
added to
balance
(par
stock
preferred
of
shares
$100). Price—To be "supplied by amendment. Under¬
writer—Dillon, Read & Co. Inc., New York. Proceeds—.
expansion program.
Southeastern
Texas
Gas Co.,
Bellville, Tex.
May 16 (letter of notification) 19,434 shares of common
stock to be offered to common stockholders through
Price —At par ($5 per share).
Proceeds—For working capital.
warrants.
transferable
Underwriter—None.
,
United Gas Corp.
stock (par $10)
record June 27,
share for each ten shares held,
May 25 filed 1.065,330 shares of common
being offered to common stockholders of
1951,
on
with
basis of
an
one new
oversubscription privilege; rights to expire on
Price—$17.50 per share. Underwriter—None.
Proceeds
To purchase securities of United Gas Pipe
Line Co., a subsidiary, which, in turn, will use the pro¬
ceeds to pay costs of new construction. Statement effec¬
19.
July
—
tive June 21.
;
United Gas Corp.
(7/24)
May 25 filed $50,000,000 of first mortgage and collateral
Underwriters—To be determined
1971.
trust bonds due
Pittsburgh Plate Glass Co.
June 27 filed 450,000 shares of common stock (par $10)
to be offered to certain employees of the company and
its subsidiaries under a stock option plan.
Price—At
shares
parent company, American
from
For
Pennsylvania.
Thursday, July 19, 1951
being offered for subscription to stockholders of record
June 27, 1951, in the ratio of one share for each eight
shares held; rights to expire July 20.
Price—At par.
Underwriters — None.
Proceeds — To repay advances
share.
Philadelphia Suburban Transportation Co.
June 11 (letter of notification) $300,000 of 4Vz% con¬
vertible debentures of 1967 (each $100 principal amount
convertible into three shares of common stock).
Price
—At par.
Underwriter—None.
Proceeds—For working
capital.
Office—69th Street Terminal, Upper Darby,
by competitive bidding. Probable bidders: Halsey, Stuare
& Co. Inc.; Morgan Stanley & Co., White, Weld &
Co. and Equitable Securities Corp. (jointly); First Bos¬
ton Corp.; Harriman Ripley & Co., Inc., and Goldman,
Sachs & Co. (jointly). Proceeds—To purchase securities
of United Gas Pipe Line Co., its subsidiary, which, in
turn, will use the funds to pay $7,000,000 of 3% promis¬
sory notes owned by United Gas Corp., and the re*
Bids—To be re*
(EDT) on July 24 at Two Rector
Y. Statement effective June 21.
its construction program.
mainder for
ceived up to 11:30 a.m.
New York, N.
Street
United States Steel Corp.,
Hoboken, N. J.
May 21 filed 1,300,000 shares of common stock (no par)
"to be offered from time to time to certain key em¬
ployees" under an incentive plan. Price—At market (to
net company about $54,275,000.
Proceeds—For general
corporate purposse. Statement effective June 11.
,
Uranium Mining Co.,
Lake
Van
June
7
filed
100,000
shares
of
Van Dyke, Mich*
common
stock.
Price
($1 per share). Underwriter—Titus Miller &
Co., Detroit, Mich.
Proceeds — For exploration and
drilling of mining claims.
Office—23660 Van Dyke
Avenue, Van Dyke, Mich. Offering—Expected soon.
—At
par
Inc., Seattle, Wash.
Weisfield's,
May 21 (letter of notification) 5,244 shares of capital
stock. Price—$53 per share. Underwriter—None. Pro¬
ceeds—For working capital. Office—Ranke Bldg., 1511
Fifth Avenue,
Seattle 1, Wash.
Virginia Water Service Co.
June 27 (letter of notification) 1,000 shares of $5 cu¬
mulative convertible preferred stock (no par).
Price—
West
Underwriter—Allen & Co., New York.
$105.50 per share.
June
Proceeds—For new construction.
stock
A Western Osage Oil Co., Inc., Las Vegas, Nev.
May 28 filed 1,000,000 shares of common stock (par 20
cents). Price—To be supplied by amendment. Under¬
writer—None.
Proceeds—For drilling of exploratory
shares
ordinated
160,000 shares of 5%%
26 filed
(par $25).
.
400,000 shares
Southwestern
prior preferred
Price—To be supplied by amendment.
Underwriter—A. C. Allyn & Co., Inc. Chicago, 111. Pro¬
March
.
England Telephone Co.
of capital stock
New
filed
8
June
Peabody Coal Co.
New
(EDT)
1
Southern
June
ment necessary.
struction program.
Bids—Indefinitely postponed.
to have been submitted up to 11:30 a.m.
Old
stock. Price—At
($1 per share). Underwriter—None. Proceeds—To
purchase machinery and equipment, to construct a mill
in Mexico and for general corporate purposes.
State¬
ment effective June 26 through lapse of time; amend¬
Par
(jointly); W. C. Langley
& Co.; Glore, Forgan & Co. and
White, Weld & Co.
Gfointly); The First Boston Corp. Proceeds — For con¬
June
Milling Co., Las Vegas, Nev.
Jan. 24 filed 200,000 shares of common
Dealer-Manager
June
March 30 filed
Washington,
cost $26,450,000.
June 5 filed
North American
—For
Southwest
gram.
Portland, Ore.
14
(letter of notification) 76 shares of common
stock (par $2,500), of which 60 shares will be offered
in 20 units of three shares each to 20 individuals who
are
in
ceeds—For construction program.
St., Detroit, Mich.
Mid-Continent Airlines,
on
Yale hydro-electric project
which, it is estimated, will
struction of 100,000 kilowatt
31
page
Michigan Consolidated Gas Co.
.
Ronson
July
6
(about
Art
(letter
of
Metal
of
common
$17.75
York.
per
Works
notification)
stock
share).
Proceeds—To
not
in
excess
of
(par $1). Price — At market
Underwriter — Laird & Co.,
Alexander Harris,
President,
28 filed interests in corporation's employees' sav¬
ings plan which will permit an employee to allot from
1% to 5% of his base pay, with the employer contribut¬
ing an additional amount equal to 50% of his allotment;
also 1,000,000 shares of capital stock (par $15) which
may be purchased in open market or from company at
market; aggregate contributions are not to exceed $35,000,000. Proceeds—Employees may direct that funds in
or
more
Mines
Ltd.
(Canada)
April 9 filed by amendment 384,000 shares of capital
Price—At par ($1 per share).- Underwriter-
stock.
Optionee—Robert Irwin Martin of Toronto.
and
,
Insurance Co.
(letter of notification) 10,000
shares of common
per share.
Underwriter—None. Proceeds—
financing expansion program.
Office—1108 Lavaca
Street, Austin, Tex.
Winston
July
Proceeds—
commissions, exploration and development expenses,
working capital.
&
Newell Co.,
Minneapolis, Minn.
filed 50,000 shares of common stock (par $5).
be supplied by amendment.
Underwriter—.
Dain & Co., Minneapolis, Minn. Proceeds—To re¬
5
Price—To
J. M.
duce bank loans.
.
i
■
<
■
;
Prospective Offerings
of the following:
(a) Series E U. S. Government bonds; (b) capital stock of
or
(c) common stock of any investment
company eligible for investment.
For
Registration
$10) to be offered for subscription by present
stockholders at rate of one share for each two shares held.
corporation;
UraniuM
—
withdrawn on July 12.
stock (par
For
June
South State
was
Price—$20
Socony-Vacuum Oil Co., Inc.
one
June 12
Withdrawal
Elko County, Nev.
Western Reserve Life
1,600
who is the selling stockholder.
his account be invested in
well in
statement
Inc.
Alabama
June
20
it
Power Co.
was
(9/11)
stated that
company
contemplates sale
$15,000,000 first mortgage bonds due 1981. Under¬
writers—To be determined by competitive bidding. Prob¬
of
able bidders: Halsey, Stuart & Co.
Inc.; Morgan Stanley
Blyth & Co., Inc.; Harriman Ripley & Co., Inc.;
Shields & Co. and-Salomon Bros. & Hutzler (jointly);
& Co.;
Drexel &
Co.; Union Securities Corp. and Equitable Se-
Number 5030
Volume 174
.
The Commercial and Finhncial Chronicle
.
.
(269)
(jointly); Kidder, Peabody & Co.; The
Corp.; Lehman Brothers. Proceeds—For ex¬
pansion program.
Bids—Tentatively expected to be
opened on Sept. 11. Registration—About Aug. 10.
curities
Corp.
First Boston
American
President Lines,
Ltd.
May 27, Charles Sawyer, Secretary of Commerce, pro¬
posed the public sale to the highest bidder of the stock
of this company now held by the Department of Com¬
merce.
The proceeds would be placed in escrow until
the Courts decide whether the stock rightfully belongs
to the Government
Alaska
to the Dollar interests.
or
Commonwealth Edison Co.
company
may
letter of notification with the SEC covering
convertible bonds. Price—At
file a
soon
$300,000 of
(in units of $100
par
equipment and for expansion.
new
Associated Telephone
Co., Ltd.
(Calif.)
July 3 it was announced that tentative plans call for the
sale later this year of $8,000,000 additional first mort¬
Underwriter — To be determined by com¬
bidding. Probable bidders for bonds: Halsey,
Stuart & Co. Inc.; Paine, Webber, Jackson & Curtis and
Stone & Webster Securities Corp. (jointly); Kuhn, Loeb
& Co. and Salomon Bros. & Hutzler (jointly); White,
Weld & Co., Kidder, Peabody & Co. and Shuman, Agnew
& Co. (jointly); Harris, Hall & Co., Inc. and Equitable
Securities Corp. (jointly). Proceeds — For construction
gage bonds.
petitive
program.
•
Baltimore
July 16
&
Ohio
RR.
on
proposed issue of
a
$7,755,000 of equipment trust certificates, series CC, to
be dated Sept. 1, 1951 and to mature in 15 annual in¬
stalments of $517,000 each on Sept. 1, 1952 to 1966, in¬
clusive.
Probable bidders: Halsey, Stuart & Co. Inc.;
Salomon
Bros.
Beaunit
Hutzler.
&
Mills, Inc.
June 26 stockholders approved issuance and sale of 100,000 shares of $5 cumulative preferred stock (no par).
Underwriters—Probably White, Weld & Co. and Kidder,
Peabody & Co. Proceeds—From sale of stock, together
with $15,000,000 from bank loans and $3,000,000 from
other
be used
to
sources,
to
construction
finance
of
comnanv
Telenhonp
Bell Aircraft
Corp.
May 28 stockholders approved a proposal to borrow
$2,500,000 on bonds to mature serially. The proceeds will
construction of
a
$3,000,000 helicop¬
ter plant near Fort Worth, Texas.
British
Columbia
(Province
of),
Canada
reported that early registration is ex¬
pected of an issue of $35,000,000 bonds to mature serially
tip to and including 1976.
Probable Underwriters—The
First Boston Corp. and A. E. Ames & Co., Ltd. Proceeds
^-For" refunding and for new construction.
June
it
23
was
^Canadian National
>Iay 28 it
orr
Ry.
stated
was
company
about
guaranteed
under the auspices of the Canadian Government.
1
Carolina Natural Gas Corp., Charlotte, N. C.
Feb. 20 a fourth amended application was filed with the
SEC for authority to build a natural gas pipeline system
*to
serve
certain
areas
in North and South Carolina. Esti¬
mated cost of the proposed facilities is $3,595,295, to be
financed by the sale of first mortgage bonds and the
issuance of junior securities. Underwriters may
R. S. Dickson & Co., Charlotte, N. C.
Central
June
29
market
RR.
it
was
late
Co.
of
Pennsylvania
(7/25)
an
Co.
Inc.;
Salomon Bros.
&
the
issue of $2,475,000 equip¬
ment trust certificates. Probable bidders:
&
include
reported company expects to be in
in July with
Hutzler.
Halsey, Stuart
Bids—Expected
about July 25.
Chicago District Pipeline Co.
May 22 it was announced that this company (a sub¬
sidiary of Peoples Gas Light & Coke Co.) may find it
necessary to construct a 30-inch pipeline from Volo,
111., to near Mt. Prospect, 111., at a cost estimated at
approximately $1,650,000. . The amount and character
of the financing are not now known.
Bond financing in
March, 1950, was placed privately.
Chicago & Western Indiana RR.
June
2
it
reported
was
company
expects to be
in
Price—Not less
than
par.
Underwriter—To
be
determined
by competitive bidding.
Probable bidders:
Halsey, Stuart & Co. Inc.; Morgan Stanley & Co.; Lee
Higginson Corp.; Harris, Hall & Co. (Inc.); Drexel &
Co.; Kuhn, Loeb & Co. and Salomon Bros. & Hutzler
(jointly); Harriman Ripley & Co., Inc.; First Boston
Corp.; Lehman Brothers; Paine, Webber, Jackson &
Curtis; Kidder, Peabody & Co.
Proceeds—To refund
$49,988,000 of 4% non-callable consolidated first mort¬
gage bonds due July 1, 1952, and to redeem $13,747,000
first and refunding mortgage 4Y4% bonds, series D, due
Sept. 1, 1962.
The remainder will go towards property
Consolidated
and
Securities
reported that the holdings of the Union
Corp. group of stock of Colorado Interstate
was
(531,250 shares) will probably be sold publicly in August
or September.
.
Columbus & Southern Ohio Electric? Co.
-
bonds.
Underwriters—Last
issue
of
bonds
were
placed privately on July 1, 1948 through Dillon, Read &
Edison Co. of New York,
Hal¬
Glore,
Inc.
on March 30).
Underwriters—To be determined
by competitive bidding. Probable bidders: Halsey, Stu¬
art & Co. Inc.; Morgan Stanley &
Co.; The First Boston
Corp.; Merrill Lynch, Pierce, Fenner & Beane and White,
Weld
&
Co.
(jointly).
Proceeds
—
To
redeem
gage bonds due 1967.
like
a
amount of Westchester
Lighting Co. 3V2 % general
Offering—Postponed.
working capital.
Delaware
June
20
River
FPC
Development Corp.
decided
to
issue
a
(N. J.)
one-year
preliminary
permit to the corporation for investigation of the pro¬
posed development of a hydroelectric project on the
Delaware River in New Jersey, Pennsylvania and New
York, estimated to cost $47,000,000. Early last year, it was
announced that the proposed project would be financed
through the issuance of $28,200,000 of bonds, $14,100,000
of preferred
stock, $4,700,000 of convertible common
stock and 100,000 shares of no par value common stock.
Denver
&
Rio
Grande
Western
sometime
new
Underwriter—Allen
Dow
Chemical
&
Co., New York.
Pro¬
1951 construction program.
Co.
h™i19 it:
*7™nnnn
Co.
bonds
any
possible financing in this connection. Traditional
Smith, Barney & Co., New York.
underwriter:
Fort Worth & Denver City Ry.
May 17 stockholders of Colorado & Southern Ry. ap¬
proved a program providing for simplification of that
company's corporate structure and for the refunding of
the indebtedness of the company and its subsidiaries.
This program calls for a new issue of $20,000,000 first
mortgage bonds due 1981 of Fort Worth & Denver City
Ry. and the transfer to the latter of stock and other obli¬
gations of seven Texas companies. Probable bidders:
Halsey, Stuart & Co. Inc.; Morgan Stanley & Co.; Salo¬
mon Bros. & Hutzler; The First Boston Corp.
Fuller
(D. B.)
Underwriter—F. Ebertsadt & Co. Inc.
Proceeds—To
re¬
indebtedness of subsidiary, and for working capital.
Meeting — Stockholders will vote on financing program
pay
Aug. 10.
April 23 it
was announced company expects shortly to
registration statement covering 60,000 shares of
$50 par convertible preferred stock and to withdraw
statement covering 159,142 shares of class B common
stock (par $1); see a preceding column.
Proceeds—For
working capital and general corporate purposes.
a
Products, Inc., Phila, Pa.
June 7, it was announced company (in addition to sale
of 5,000 shares of common stock filed with SEC) proposes
to
issue and sell another issue of approximately 29.651
shares of
common
stock (par
—2636 North Hutchinson
June
$1) later this year.
Office
Street, Philadelphia 33, Pa.
..
reported
considering issuance of
$15,000,000 of additional first mortgage bonds. Will prob¬
6
company
ably be placed privately. If competitive, probable bidders
for
50,000
preferred stock.
I-T-E Circuit Breaker
Co.
was
announced
stockholders have approved
the authorized indebtedness
of the
company to $3,500,000 from
$1,500,000, and the author-
proposals to
increase
umssued preferred stock
from
30,000 shares,
par
15,000 shares to
$100.
* Kansas City Power & Light Co.
June 12, Harry B.
Munsell, President, announced
opes
and seH within the next
two
*ssue
com-
years
$12,00^,000 of bonds, $10,000,000 of additional
preferred
stock and $8,COO,000 of
additional common stock to fi¬
its
nance
construction
holders
for
program
1951-1952.
Stock-
voted
July 11 to increase the authorized
preferred stock from 200,000 to
350,000 shares and the
authorized indebtedness by
$12,000,000. Probable bid¬
ders for
preferred stock: Glore, Forgan & Co. and W.
Langley & Co. (jointly); Smith, Barney &
Co.; The
Corp.; White Weld & Co., Shields & Co.
and Central Republic Co.
(jointly); Harriman Ripley &
Co., Inc.; Salomon Bros. & Hutzler and Merrill
Lynch
Pierce, Fenner & Beane (jointly); Union Securities
C.
Corp. and Stern Bros. & Co. (jointly). Probable bidders
common stock; Lehman
Brothers; Glore, Forgan &
Co.; Harriman Ripley
Co., Inc.
Probable bidders for
for
bonds:
Halsey, Stuart & Co. Inc.; Blyth & Co., -Inc.;
White, Weld & Co.; Shields & Co. and Central Republic
Co. (jointly);
Glore, Forgan & Co.; Smith, Barney & Co.;
Kuhn, Loeb & Co.; Union Securities Corp. and Salomon
Bros. & Hutzler (jointly); Lehman
Brothers and Bear,
Stearns & Co.
(jointly); The First Boston Corp.; Equit¬
able Securities Corp.; Harriman
Ripley & Co.,- Inc.
Gas
May 24 Murray
nounced
that
&
Electric Co.
F.
the
Gill, Chairman of the board,
company's present construction
gram
calls for expenditures
1951.
To
of
than
more
an¬
pro¬
$8,000,000 in
finance
part of the expansion program, com¬
sell $5,000,000 of first mortgage bonds. Under¬
writers—To
be
determined
by competitive bidding.
pany may
Probable
bidders:
Halsey,
-
Stuart
Securities Corp.; Merrill Lynch,
Kidder, Peabody & Co.
Co.
&
Inc.;
Union
Pierce, Fenner & Beane
(jointly).
There is
a
pos¬
sibility that company may also decide to refund its
outstanding $16,000,000 first mortgage 3%% bonds due
1970 (held by a group of insurance
companies)
$5,000,000 first mortgage 3%% bonds due 1978.
and
Long Island Lighting Co.
June
it was reported that the company's next
step
financing program may include the sale of ap¬
proximately $15,000,000 of preferred stock.
Probable
bidders may include Blyth & Co., Inc..
in
25
its
McKesson &
May 24 it
on
Robbins, Inc.
was announced
stockholders will vote Oct. 23
proposal to increase authorized
a
common stock by
500,000 shares to 2,500,000 shares in order to provide for
a probable
offering of additional stock to common stock¬
holders.
Probable
New York.
underwriter:
Goldman, Sachs & Co.,
Proceeds will be added to working capital.
Mead Corp.
8
it
announced
was
that
construction
$21,000,000 kraft container board mill
is scheduled to
be
under way
tional underwriters:
&
at
an
of
a
new
Rome, Ga.,
early date. Tradi¬
near
Drexel & Co. and Harriman
Ripley
Co., Inc.
Meridian & Bigbee River Ry.
(7/20)
A
Bids will be received up to 10 a.m. (EDT) on July 20 by
Leo Nielson, Secretary of Reconstruction Finance
Corpo¬
ration, 811 Vermont Ave., N. W., Washington 25, D. C.,
$50,000 first mortgage
4% bonds due Jan. 1, 1968; $500,000 of income mortgage
4% bonds due Jan. 1, 1998; and 7,846.55 shares of com¬
stock
mon
of
no
value
par
Blyth & Co., Inc.,
(having
a
stated value of
$784,655).
Michigan-Wisconsin Pipe Line Co.
May 29, SEC authorized extension for one year, or
until July 1, 1952, of maturity of $20,000,000 bank loans
and
the issuance
stock
to
the
and
sale
American
of 30,000
Natural
shares of
Gas
common
parent, for
$3,000,000, to provide an equity base for contemplated
future permanent financing which may include issuance
and sale of $12,000,000 of first mortgage bonds.
Pre¬
vious debt financing was placed privately.
If competi¬
tive, bidders may include: Halsey, Stuart & Co. Inc.;
Co.,
The First
Boston Corp.; Harriman Ripley & Co., Inc.;
Glore, Forgan & Co.
•
may include Halsey, Stuart & Co. Inc.;
(jointly),
for the purchase from the RFC of
Glenmore Distilleries Co.
file
company expects to issue addi-
The stockholders
July 17 were sched¬
issuance of the
remaining
approve the
of authorized
shares
addi-
bidders: Halsey, Stuart
UnioA Secu¬
to
June
& Co., Inc.
July 9, Daniel B. Fuller, President, announced that com¬
pany will soon file a registration statement with the SEC
covering 120,000 shares of 6% cumulative convertible
preferred stock (par $15). Price — To be named later.
on
at
stock.
or
682 454
Light Co.
(for bonds); W. C.
Langley & Co.,
Corp. and Glore, Forgan & Co.
rities
uled
of
year,
m 19* V°+ finance its construction proexpfcJ?d to. cost between $6,500,000 to
the timeflnanculnS will depend on market
Probable
v
Sitfnnc
conditions
6
&
reported
whirh
firam
and
April 5, Leland I. Doan, President, stated that the com¬
pany plans to spend $65,000,000 on plant expansion in
the current fiscal year ending May 31, 1951, and expects
to spend somewhat more in the following fiscal year.
He added, however, that no decision has been reached
on
the
t0
stockholders. UnderrePay short-term loans
construction
Kansas
July 16 corporation received SEC authority to issue and
sell $900,000 of debentures to mature July 1, 1957 (to
be placed privately with an institution) but reserved
jurisdiction over the proposed issuance of approximate¬
ly 12,500 additional shares of common stock (latter to be
offered to public pursuant to a negotiated transaction).
ceeds—To be applied toward
of
SiSP°pfai si%k
for
announced that this
;31<^ owned by American
htfJTetegrap]h
before the end Co.) plans issuance and ; sale,
uyr^
First Boston
RR.
April 12, Wilson McCarthy, President, stated that due
to prevailing market conditions, the
company has post¬
poned to an undetermined date the taking of bids for
the purchase of $40,000,000 first mortgage bonds to be
dated May 1, 1951, and to mature on May 1, 1981. Un¬
derwriters—To be determined by competitive bidding,
Probable bidders: Halsey, Stuart & Co. Inc.; Morgan
Stanley & Co.; Kuhn, Loeb & Co. and Bear, Stearns
&
Co.
(jointly).
Proceeds — Together with treasury
funds, to redeem on June 1, 1951, $35,062,200 oustanding
first mortgage 3%-4% bonds, series A, and $8,666,900 oi
Denver & Salt Lake income mortgage 3%-4%
bonds,
both due Jan. 1, 1993.
Probable
& Co.;
Securities Corp!
& Co., Inc. Proceeds will be
company's
Kahle/' President,
T0?1111
May 28 it
to issue and sell 1,500 shares of 5% preferred stock
(par $50). Proceeds—To repay $66,232 of notes and for
(jointly);
Peabody
Union
Illinois Bell
Telephone Co.
mort¬
Consumers Public Service Co. of
Brookfield, Mo.
June 8, the Missouri P. S. Commission authorized com¬
Kidder,
improvements to the
★ Iowa Power
the SEC
Idaho Power Co.
May 16 J. B. Poston, President, announced that com¬
pany plans an early offering of $10,000,000 first mort¬
gage
debentures:
refunding mortgage bonds, series H, due May 1,
(in addition to $40,000,000 series G bonds filed with
1981
Hahn Aviation
Colorado Interstate Gas Co.
June 18 it
or
March 23 company applied to New York P. S. Commis¬
sion for authority to issue and sell $25,000,000 of first
improvements, etc.
_
Probable bidders for bonds
Stuart & Co. Inc.; The First Boston- Corp.;
Forgan & Co.; Morgan Stanley & Co.
the
market late this year or early in 1952 with a new issue
.of approximately $70,000,000 of first mortgage bonds,
due 1981, of which about $65,000,000 will be sold ini¬
tially.
$250,000,000
be required through 1954.
Neither the timing nor
nature of this new financing have yet been deter¬
Corp.;
Hutzler and
properties
it Derby Gas & Electric Corp.
has
$48,000,000
mortgage gold bonds coming due
Sept. 1, 1951, in U. S. funds. Refunding likely to be
4V2%
of
that additional capital of about
sey,
rayon
be used to finance
means
mined.
a
tire yarn plant at Coosa Pines, Ala., and for work¬
ing capital. Offering—May be made privately.
&
5 ; "arnman RiPIey
pany
requested bids
company
Securities
Bros.
This
each). Underwriter—Tellier & Co., New York. Proceeds
—For
a'ld T^e Flrst Boston Corp.
c
Equitable
May 22 Charles Y. Freeman, Chairman, announced that
the company's scheduled construction
program for the
1951-54 period calls for the expenditure of about
$450,000,000, of which it is estimated that $200,000,000 will
be provided out of cash resources at the end of 1950.
the
April 25 it was announced
6%
Inc., New York. If competitive, probable bidders
may include Halsey, Stuart & Co.
Proceeds—For ex¬
pansion program.
will
Telephone Co.
33
Co.
Continued
on
page
34
34
The Commercial and Financial Chronicle
(270)
Continued
from
33
page
Products
Distillers
National
Corp.
June 6 stockholders voted to create a new issue of
500,-
preferred stock (par $100) and to increase
the authorized common stock from 10,000,000 shares, no
000 shares of
value, to 15,000,000 shares, par $5. It was also voted
authorized 150,000 shares of pre¬
par
to
eliminate the then
issued.
Management contemplates new financing in 1951 to pro¬
vide for $20,000,000 of plant improvements, repayment
of $17,000,000 of short-term bank loans, and for addi¬
tional working capital.
Underwriters—Glore, Forgan
ferred stock
(par $100), none of which had been
Nekoosa-Edwards
outstanding bonds and the balance used for expansion
company
common
stock to finance part of its
$150,000,000
scheduled for 1951, 1952 and 1953.
Merrill Lynch, Pierce,
Fenner &
construction program
bidders:
Probable
Beane; Kidder, Peabody &
Co. and White, Weld & Co.
(jointly); Morgan Stanley & Co.
Instrument &
Nuclear
-
Proceeds—To be
Service Co. of
Public
Indiana, Inc.
Southern
was reported that company may do some per¬
financing "when market.. conditions permit."
system.
Union
pany
year arrangements were made with eight
borrowing up to $40,000,000 on promissory
notes bearing interest at V>k%. Of this total, it is planned
expansion of gas transmission
Offering—Expected Aug. 31;
Gas
May 23 C. H. Zachry,
this
Earlier
banks
used for
distribution
and
Co.
-v
President, announced that
plans the issuance of $5,000,000
bonds within the next 60 to 90 days.
for
writer—Blair,
r
Rollins
&
Co.,
Inc.
com¬
first mortgage
Traditional Under¬
new
Proceeds—For
new
construction.
.
.
,
pm
.
,
July 74,500 shares of common stock (par $1). PriceTo be determined later.
Underwriter—Loewi & Co.,
Proceeds—For working capital.
Milwaukee, Wis.
-
,
•
Public
Service Co.
July 12 it
was
sell
several
the
Fall.
July
May 15 it was stated that this company, a subsidiary of
American Gas & Electric Co., will need $36,000,000, per¬
which it expects to raise some months hence
last
placed privately with
of
Public
Carolina, Inc.
company
dollars
million
In
of North
announced
St. Louis-San
Ohio Power Co.
more,
$13,000,000 in 1951, $14,000,000 in 1952 and $13,Superior Water, Light & Power Co.
;
000,000 in 1953. Underwriters—May be determined by
July 7 it was reported that company expects to sell $f,competitive bidding. Probable bidders for bonds: Hal¬
000,000 additional bonds this month or next and another
sey, Stuart & Co. Inc.; Kuhn, Loeb & Co.; Union Securi¬
bond issue for a like amount in January.
May be placed
ties Corp. and Salomon Bros. & Hutzler (jointly); Blyth
privately.
& Co., Inc.; The First Boston Corp.; Glore, Forgan &
United Gas Improvement Co.
Co.; Merrill Lynch, Pierce, Fenner & Beane; Kidder,
June 18, the §EC directed the company to dispose of jta
Peabody & Co. and White, Weld & Co. (jointly); Harri¬
interest in six non-subsidiary companies,'viz:
man Ripley & Co. Inc.
Probable Bidders for preferred
Central
stock: Blyth & Co., Inc.; Glore, Forgan & Co.; Harriman /Illinois Light Co., 35,340 shares; Consumers Power Co.,
52,586 shares; Delaware Power & Light Co., 37,355
Ripley & Co. Inc. Proceeds—To retire bank loans in¬
curred in connection with construction program.
shares; Niagara Mohawk Power Corp., 145,000 shares;
,
Chemical Corp.,
III.
June 18, it was announced company expects to offer in
Chicago,
haps
were
a
'
applied to FPC for a license for a pro¬
posed new project estimated to cost $22,611,000. On Jan.
26, company had announced that k probably would sell
late this year or early 1952 about $15,000,000 of addi¬
tional
stock
was
file
to
to use
Niagara Mohawk Power Corp.
o,
preferred
(8/31)
announced company expects about July
registration statement with the SEC cover¬
ing approximately $12,000,000 of first mortgage bonds,
due 1981 (probably as 3V4S).
Underwriters — The hist
bond financing was handled
by Blyth & Co., Harriman
Ripley & Co. Inc. and Dean Witter & Co. in April, 1948.
25
subscribed for by common stockholders in 1933.
manent
program.
June
cumulative
$5
Thursday, July 19, 1951
.
Southern Counties Gas Co. of California
July 2 it
June 25 it
Paper Co.
July 18 stockholders were to approve an issue of $5,100,000 of new bonds.
Proceeds are to retire $2,100,000 of
'
of
shares
21,493
.
Inc.; White, Weld & Co.; Lehman Brothers; Merrill
Lynch, Pierce, Fenner & Beane and Harris, Hall & Co.
(Inc.) (jointly).
Offering—Expected in the Fall.
$100. These shares are now without par value. Com¬
pany now has a $25,000,000 expansion program, the fi¬
nancing of which will be accomplished through a later
sale of securities to the public. The present outstanding
Ripley & Co. Inc.
& Co. and Harriman,
•
Pennsylvania Water & Power Co.
May 28 John A. Walls, President, announced stock¬
holders will vote July 25 on approving changes in the
company's charter provisions which would permit the
issuance of the remaining 78,507 preferred shares as
cumulative series preferred stock with a par value of
.
first
Francisco
Ry.
-
in
mortgage bonds
$1,200,000 of bonds
two institutional investors.
year,
Service
common
plans to issue and
Electric
&
shares and 4,861
Coach Co., a
Gas
Co., 36,801 preference
shares; and Delaware
common
$1,000,000 note.
!
-
\ • United States Plywood Corp.
were
<
j
(7/23)
Bids will
(8/6-13)
July 11 it was reported registration was expected this
week of 60,000 shares of convertible
preferred stock
(par $100).Underwriter—Dillon, Read & Co. Inc., New
York.
Offering—Expected in first half of next month.
be received by the company at its office, 120
Broadway, New York, N. Y., up to noon (EDT) on July
23 for the purchase from it of $5,085,000 equipment trust V
Utah Power & Light Co.
\
March 8 it was announced company during 1951 pro¬
certificates, series I, to mature in 15 equal annual in¬
stalments. Probable bidders: Halsey, Stuart & Co. Inc.;
poses to issue and sell 200,000 shares of common stock
Salomon Bros. & Hutzler.
about $12,000,000 of first mortgage bonds. Underwriters—
: •
K.
•
.
.
,
through the sale of new securities. Probable bidders for
bonds: Halsey, Stuart & Co. Inc.; Morgan Stanley & Co.;
.
The
First
Boston
Corp.;
Forgan & Co., White,
Corp. (jointly). Pro¬
Glore,
ceeds will be used for construction program.
Pacific Power &
June
it
29
was
Light Co.
announced
company
plans issuance and
sale of $15,000,000 of mortgage bonds in the early part
of 1952. Underwriters — To be determined by competi¬
tive
bidding.
Probable
bidders:
Halsey,
Stuart &
Co. Inc.; Blair, Rollins & Co. Inc. and Carl M. Loeb,
Rhoades & Co. (jointly); Lehman Brothers; W. C. Langley & Co. and The First Boston Corp. (jointly); Union
Securities Corp.; Kidder, Peabody & Co.; Blyth and Co.,
Inc., White, Weld & Co. and Harris, Hall & Co., Inc.
(jointly). (For registration of 554,464 shares of common
stock, see a preceding column).
by the Missouri
issue and sell to the public $20,isinking fund debentures, due 1971,
and to issue 60,000 additional shares of common stock
to key employees under a stock option plan.
Uuderwriters^r-For debentures, to be determined by competi¬
tive bidding.
Probable bidders may include Kidder,
Peabody & Co.; Merrill Lynch, Pierce, Fenner & Beane
and Halsey, Stuart & Co. Inc. (jointly).
Proceeds—For
P.
S.
Commission to
000,000
of
3Vi%
constiuction program.
Continued
from
page
,
Co., Atlanta, Ga.
South
April
24
plans
this
a
Jersey Gas Co.
Earl Smith, President,
bond
issue of
more
announced
than
Underwriters—May be determined by com¬
bidding. Probable bidders: Halsey, Stuart &
Co. Inc.; Lehman Brothers; Blyth & Co., Inc. Proceeds—
To refund the,presently outstanding $4,000,000 of 4%%
first mortgage bonds and repay outstanding short-term
bank notes which
are
due before the end of the year.
Pabst Brewing
Company
Ronson
Seismograph
General Precision Equipment Corporation—Brief
Analysis—in
Co., 1 Wall Street, New
"Gleanings"—Francis I. du Pont &
N. Y.
Also available in the same issue are a sug¬
gested portfolio of stocks yielding 6% and a list of interesting
York 5,
Canadian issues.
Company—Study and appraisal—Weinress
&
Co., 231 South La Salle Street, Chicago 4, 111.
Hoving Corp.—Circular—J. F. Reilly & Co., Inc., 61
Broadway,
New York 6, N. Y.
Also available are circulars on Maryland
Sulphur.
non,
.
.
\
Also available is
Abbott, Proctor Admit:
Grumman Aircraft Engineering
Corp.
Company—Analysis—American Securities
Archbold
a
Service
Corporation—Bulletin—Barclay
Steel Strapping
Co.—Memorandum—Dayton
105 South La Salle Street, Chicago 3, 111.
i;
Cor¬
New
York
Ger-
v
R. Bell and Richard W. Denner
have become associated with Wil¬
liam
R.
Staats
Co., 640 South
William J. Holm Joins
<
154th
CHICAGO, 111.—Remer, Mitchell
Reitzel, Inc., 209 South La Salle
Street, announce "the association
with
Denner
was
With
Cantor, Fitzgerald
BEVERLY
ing Hofstem
is
now
Drive.
was
formerly
Barclay Inv. Co.
-
is
:
now
with Barclay. Invest¬
Co., 39 South La Salle St.
With Lee
(Special to The Financial Chronicle)
Higginson Corp.
(Special to The Financial Chronicle)
LOUISVILLE, Ky.—Herman F.
Monroe has rejoined the staff of
Fitzgerald & Co., Inc., 224 North Wilson-Trinkle
Canon
He
CHICAGO, 111—Paul H. Dunament
"
Street.
(Special to The Financial Chronicle)
Calif.—Irv¬
with Cantor,
>
Goodbody & Co.
With
kin
" ;
Rejoins Wilson-Trinkle
^
HILLS,
Goumois Opens
'
formerly Vice-President and
Treasurer of the Steel Warehous¬
(Special to The Financial Chronicle)
'
ities business from offices at 7-03
&
ing Corporation.
on
Goumois is engaging in the secur¬
Remer, Mitchell Co.
with their investment department
of William J.
Holm.
Mr. Holm,
previously associated
-
.
WHITESTONE, N. Y.—Marc de
Spring Street, members of the Los
Angeles
Stock
Exchange.
Mr.
was
of the
Exchange,
Macauley will retire
from
partnership, in Davies
&
Mejia,. San Francisco, on Aug. 1.
de
ANGELES, Calif.—Arthur
be¬
Palmer C.
Hull & Co., 210
West Seventh Street, Los
Angeles 14, Calif.
Walt
Disney Productions
Analysis —- Republic Investment
Company, Inc., 231 South La Salle Street, Chicago 4, 111.
LOS
members
Stock
To Retire from Firm
Corporation—Bulletin—Holton,
Wm. R. Staats Adds
City,
York
Aug. 1.
—
•
will
a.
New
Invest¬
&
Buren
van
limited partner in Abbott,
Proctor & Paine, 14 Wall Street,
come
-
Co., 39 South La Salle Street, Chicago 3, 111.
Towmotor
—
Mission Corp.—Memorandum—Smith, Barney & Co., 14 Wall
Street, New York 5, N. Y,
Van Buren Street under the direc¬
tion of Warren D. Griffin.".
Inc.—Analysis-J-Stanley Heller &
with F. H, Breen & Co.
Co.—Analysis—Ira Haupt & Co.,
6, N. Y.
Corporation
Analysis of changes in portfolio — Ira
Haupt & Co., Ill Broadway, New York 6, N. Y. Also avail¬
able is a brief review of New York
Susquehanna and of
Works,
(Special to The Financial Chronicle)
Cor¬
.
Card memorandum^ Lerner &
Signode
General Manifold
American Viscose.
-
.
.
poration, 25 Broad Street, New York 4, N. Y.
Hegarty & Associ¬
ates, Inc., 52 Broadway, New York 4, N. Y.
r ;
Lehman
Metal
St. Regis Paper
Foremost Dairies, Inc.—Brochure—D. M. S.
,
Art
ment
& Printing
Company—Circular—Englander
Co., 115 Broadway, New York 6, N. Y.
—
Co., 30 Pine Street, New York 5,:N. Y.
Corporation—Analysis—Vilas & Hickey, 49 Wall Street,
New York 5, N. Y.
Power—Analysis—New York Hanseatic
poration, 120 Broadway, New York 5, N. Y.
Merrill Lynch Branch
Falls Machine Co.
'
brief discussion of
Mexican Gulf
bank loans and to
.HARLINGEN,
Tex. — Merrill
Lynch, Pierce, Fenner & Beane
have opened an office at 202 Ealst
Co., 10 Post Office Square, Boston 9, Mass. Also available If
memorandum on Gear Grinding Machine Co. and on Seneca
Ferro
and
October. Proceeds—To repay
a
Cooper-Bessemer Corporation—Circular—Joseph Faroll & Co.,
29 Broadway, New York 6, N. Y.
Drydock
& Co. (jointly);
(jointly); Kidder,
Peabody & Co., and Merrill Lynch, Pierce Fenner ;&
Beane.(jointly). However, common stock offering may
be made directly by
company, without underwriting.
Offering—Of stock expected about Sept. 18 and bonds
late in
.,
Company—Progress—Walston, Hoffman
Goodwin, 265 Montgomery Street, San Francisco 4, Calif.
Iowa Electric Light & Power
Ill Broadway, New York
Smith,, Barney
— Analysis — Cruttenden
& Co., 209
Chicago 4, 111.
Riverside Cement Company
Cliffs Iron
&
and
W. C.
Union
Lehman Bros, and Bear, Stearns & Co.
Photon, Inc.—Analysis—May & Gannon, Inc., 161 Devonshire
Street, Boston 10, Mass.
:
\ "...
&
Walter E. Heller
•
1
Corp.,
& Go.
-
8
Green Mountain
•
(joint¬
provide additional construction funds. May 18 company
June 15, SEC announced approval of a plan filed
by The / sought SEC approval to borrow from banks not in excels
United Corp., which, in part, provides for the sale by t
of $12,000,000. Registration—Expected
early in
the latter of its entire interest, amounting to 28.3%,
August.
Virginia Electric & Power Co.
or
...
154,231.8 shares of South Jersey common stock (par
May 1 the company announced that it is contemplated
$5). These holdings will probably be disposed of to ,a
that there will be additional financing to an amount
apsmall group of investors.
* ;
"
l proximating $20,000,000, incident to the 1951 construction
Southern California Gas Co.
J ;
program, and that further financing will be required fn
April 4, the company indicated.it would this year be in
1952.
Probablle bidders-for bonds: Halsey, Stuart & Co.
the market with $18,000,000 of senior securities. Prob¬
Inc.; Salomon Bros. & Hutzler; Stone & Webster Securi¬
able bidders:, Halsey, Stuart & Co.
ties Corp.; Union Securities
Inc.; Blyth & Co.,
Corp.; White, Weld & Co.
•.
&
Securities
Jersey Gas Co.
Sons, 367 Main Street, Winnipeg, Man., and
Royal Bank Building, Toronto, Ont., Canada.
.
company
year.
Recommendations and Literatnie
&
Hutzler; First Boston Corp., and Blyth & Co., Inc.
ly); Union Securities Corp., and Smith, Barney
(jointly); and (2) for stock: Blyth & Co., Inc.;
Langley & Co., and Glore, Forgan & Co. (jointly);
petitive
Dealer-Broker Investment
Cleveland
bidding. Probable bid¬
(1) For bonds: Halsey, Stuart & Co. Inc.; Kidder,
Peabody & Co.; Lehman Brothers, and Bear, Stearns &
Co.
(jointly); White, Weld & Co.; Salomon Bros. &
ders
$8,000,000 by fall of
South La Salle Street,
Richardson
To be determined by competitive
,
May 24 the FPC dismissed the application of company
to construct 527 miles of natural gas pipe line to
supply
markets in Georgia and Florida, the estimated cost of
which was between $10,500,000 and $12,080,000.
'
South
Panhandle Eastern Pipe Line Co.
June 8, the company was authorized
-
South Georgia Natural Gas
Weld & Co. and Union Securities
ville
Company,
Trust Building.—*
Louis¬
CHICAGO, 111.—Walter G. Mann
is
now
with Lee
Higginson Cor¬
poration, 231 South La Salle St.
Volume 174
Number 5030
.
The Commercial and Financial Chronicle
.
.
(271)
Continued
from
page
interested in the right kind of op¬
portunities and, as those close to
14
the
Mutual Funds
situation
tential
source
ample
recently
"Assuming that
_
we
are
not to be lulled
to
into
false
a
sense
1951'," the review says. Regardless of the immedi¬
it emphasized, "There are still present in
many inflationary forces."
direction of prices,
our
economy
In the year
circle
since fighting began in Korea "we have come full
the problem of inflation," the study notes.
on
"With supply
in many areas running ahead of demand, with retail trade lagging
after two mountainous waves of scare buying in July 1950 and
1951, and with
January
(
a
cards for Korea there
in the
truce
is
again the smell of deflation in the air. The situation has reached
the stage
sional
;
,
;
i
where there is a substantial amount of talk in Congres¬
circles about junking price and wage controls entirely.
inclined to believe, however, that it would be very
hazardous to assume that we are going to see a repetion of our
1948 price experience" when the first wave of postwar deflation,
setting in in September of that "year, marked the beginning of a
steady 16 month price decline which by December 1949 resulted
in a drop of about 11% from the August 1948 top.
"We
-
are
The corporate new issue market
to
came
week
EATON & HOWARD Balanced Fund Semi-Annual report to share¬
holders dated June 30, 1951, shows assets at a new high of $69,-
252,939,
increase of $6,329,147 since the beginning of the year.
outstanding increased from 2,149,102 to 2,340,620 and
.Asset value per share increased from $29.28 to $29.59.
Nineteen
.percent of the Fund is invested in U. S. Government and Cor¬
an
; Shares
,
porate Bonds, 18% in Preferred Stocks and 62% in Common
Stocks; 1% is uninvested. Largest common stock holdings are in
the Power & Light
(12.5%), Oil (12.0%), Insurance (5.1%),
Natural Gas (4.5%) and Chemical (3.9%) industries.
virtual
a
standstill
this
underwriters
both
as
and
Dec.
31, 1950, to $9,101,956 oh June 30, 1951. Shares out¬
increased from 335,206 to 432,186 and asset value per
share increased from $20.37 to $21.06. Eighty-eight percent of the
Fund
is
•
are
in
common
6%
stocks,
in U.
S.
Government
6% is uninvested. "Largest common stock holdings
in the oil (13.9%), power and light (10.2%), rayon and textile
and
.bonds,
C
invested
WISCONSIN FUNDS, general distributors of Wisconsin Investment
Company Shares announced the appointment of King Merritt &
New York City, as Southern States Distributor, and L. W.
Simon Company, Cleveland, Ohio, as Midwestern States Distribu¬
tor. Presently, First California Co. is Western States Distributor
Tuesday. Underwriters
high bidders for more than
were
on
$155,000,000
of
the
total.
Meanwhile the corporate end of
the business was in the doldrums
with
only one issue, a small un¬
dertaking of $9,000,000 of 25-year
first mortgage bonds of the Wash¬
ington Gas Light Co., reaching
market.
Of six bids received all but
The
rate of 3%%.
winning bid fixed
coupon
a
other and
price of 100.195 for
a
The group reoffered at a price
100.665
for
latest reports had this issue,
like
bit
recent
the
on
slow
predecessors,
a
side.
Next week will bring to market
for
bids, United Gas Corp.'s $50,000,000 of first mortgage and re¬
funding bonds. With four groups
the
basis
running
this
established
cessful flotation
Electric's
undertaking,
since
the
-KNICKERBOCKER FUND,
.
in its semi-annual report for the six
31, 1951, reports that per share asset value
$6.24 at the end of the period, as compared with $5.60 on
months
was
.
1 Nov.-30,
the end
■
vember
ended
May
Buyers at
While
like to
the
see
issue
new
that
is
it
bit
a
Price
a
would
observers
market
activity in
more
C
'>:
y
;
•
*:
&
Reed,
Financial
Darby, Henry L.
M.
Chronicle)
CITY, Mo.—Marion F.
Schlesinger,
Lewis, Richard
Ewell
S.
Shipp
ments
considerable
other
in
securities
the
(Special to The Financial Chronicle)
DETROIT, Mich.—John C.
ber
the
is
with
Ford
Andrew
C.
&
&
members
Building,
of
Joins Baron G.
Helbig
Helbig & Co., 60 Broad
Street, New York City announce
that Tristan G. Dupre has
joined
their firm, specializing in mutual
funds.
Brinkman is William Brick.
DIVIDEND
With
Halsey, Stuart Co.
(Special to The Financial Chronicle)
COMPANY
Dividend Notice
The
Board
Office Square.
of
Directors
declared
a
quarterly
of
a
share
33 %c
and a
the
on
has
dividend
Preferred
$1.35
Stock
quarterly dividend of 15c
share
a
of
BOSTON,
Mass. — John
H.
Evans, Jr., is now associated with
Halsey, Stuart & Co., Inc., 10 Pest
NOTICES
TIDE WATER POWER
Cumulative
on
the
Common
Stock
the Company, both payable
August 15,
1951, to holders of
record July 31,
1951.
'
WARREN W.
July
16,
BELL,
President.
195L-
With White, Weld & Co.
(Special to The Financial Chronicle)
BOSTON, Mass.—Thomas Lamb,
Jr.,
has become associated with
White, Weld & Co., Ill Devon¬
shire Street.
He was previously
with First of Michigan Corp.
through the medium of the
mortgage market.
are
Rfl VOniER
DIVIDEND NOTICES
DIVIDEND NOTICES
•
Hu-
Reid
Detroit Stock Exchange.
which
SHEBOYGAN, Wis. —Fred O.
Cloyes has become associated with
Heronymus and Brinkman, Inc.,
809
North
Eighth
Street.
Mr.
Cloyes was formerly associated
with Cruttenden & Co. and prior
thereto was with the Chicago of¬
fice of Geyer & Co., Inc.
Also associated with Heronymus
less aloof
But smaller insurance firms
Andrew C. Reid Adds
(Special to The Financial Chronicle)
investors
more or
of
Reed, Inc., 1012 Baltimore Ave.
Co.,
Cloyes Joins
Heronymus & Brinkman
field, they point out
institutional
has
the list.
Fred 0.
possible to move good
the price is right.
big
topping
and Samuel O. Zetcher have been
added to the staff of Waddell &
Baron G.
of May from the
last year.
(Special to The
those
interested
in
municipals
might be inclined to bid for.
merchandise if
The
it
way
back.
The fund's total net assets rose to $15,333,748 at
$13,767,130 reported at the end of No-
1950.
But
weeks
some
issue
suc¬
being satisfied to go after private
deals and to fill out their require¬
-C •*
Waddell
years.
Waddell & Reed Adds
agency's
curities, with Baltimore & Ohio's
big
Cleveland
of
offering
loan
emergency
corporate portfolio is not large,
and leans sharply to railroad se¬
but
several
its holdings, there has
tendency to look for some
a
The
-
of
yield,
its
3.46%
a
tributor.
v .■;/
Syming¬
RFC chief, expressed
of
some
3^4% rate.
a
continue to hold
'/-
Stuart
one
;and Hartwell P. Morse, Bingharfiton, N., Y., is Eastern States dis¬
.•
new
with
many
possible action in that direction.
(8.7%), chemical (6.2%) and electrical products (5.0%) industries.
'
ton, the
for
KANSAS
W.
for sale
vie,
in
on
these days.
Ever since
L.
with
Evans
&
Company,
Baltimore Avenue.
He was
in
been
to
because of its size, should provide
a
real test of
the
new
market
standing
interest
banks for $171,000,000 of various
tax-exempt housing bonds put up
turned
holders dated June 30, 1951, shows assets increased from $6,826,■865
of
Mo.—Alan
associated
now
McDonald,
Inc.
buzz
CITY,
is
formerly
C.'s Portfolio
a
and
successfully, with commercial
dealers
.EATON & HOWARD Stock Fund Semi-Annual Report to share¬
.
F.
is
the belief recently that the agency
should have long since marketed
their
specified
1
conditions
KANSAS
Weston
the possibilities for business in¬
herent in the portfolio of the Re¬
construction Finance Corporation
by
in 1952 than in
ate
R.
of
blueprints, it seems
this firm two months ago still stands—namely,
'that inflationary pressures will exist and will be somewhat greater
made
suc¬
McDonald, Evans
(Special to The Financial Chronicle)
1009
There
we
rearmament
our
ment
for
prevail.
will continue to adhere
clear to us that a state¬
security by the truce in Korea and that
to make
where the proper
cess
against inflation, according to a review of "Commodity Prices"
monthly publication of the Investment
Management Department of Calvin Bullock.
contained in "Perspective,"
With
point
out, this po¬
of buying has been
35
PRODUCER
OF HIGHLY
.CUSTODIAN FUNDS reports that its Low-Priced
Fund, B3, registered a gain in capital value per share of 10%
.'during the year ending July 1, 1951 and a decline of only 1%
for the first six months of this year compared to 3.3% for longterm government bonds. The 10% increase from $16.42 to $17.58,
which included 59c per share paid shareholders from realized
security profits, substantially exceeded the 7% gain for the class
of low-priced bonds as a whole.
In the period from the market
KEYSTONE
>
ALuminum
*
Tennessee
Corporation
hidustries, inc.
Bond
cmcinnflTi 25, ohio
1LHHMU
CORPORATION,
1
low of
a
.
June, 1949, to July 1, 1951, the Keystone Fund registered
capital gain, including realized security profits, of 25% com-
Dividend
of
(15c)
Sept.
5,
close
of
16,
10,
Aug.
F.
63
from
net
investment
income
for
B3's
12c-per share.
was
pf record
at
the
of record
1951.
Secretary
ECKERLE,
fiscal
year
»IN CHEMICAL FUND'S June
dent of the Fund, states
quarterly report F. Eberstadt, Presi¬
that the continued growth in demand for
'
DIVIDEND
At
The
Colorado
July
close
reported net assets
on
18,
of
amount
the industry.
;
meeting
a
share
Chemical Fund, Inc.
Broadway
dividend
j. b. McGEE
cents
Treasurer.
■
was
of
the
Beard
and
Fuel
1951,
the
declared on
business
on
D.
June 30, 1951 of
its
common
share
per
on
the
Stock, payable
of
record
at
the
July 27,
1951.
the
per
R. L. LINGELBACH
stock, payable
September 6.
C.
in
cents
one-half
quarterly
close of business
Directors of
held
dividend
Secretary
record at
to stockholders of
1951
(75$f)
a
seventy-five
August 15, 1951 to stock¬
STOCK
of
of
Common
Corporation,
Iron
regular
thirty-seven and
September 28,
of
COMMON
ON
of Directors
declared
holders
July 16,1951
1951.
McGREW,
PACIFIC
Secretary
•
m
FINANCE CORPORATION
$45,784,998 represented by 2,091,666 outstanding shares compared
with
has
The Colorado Fuel & Iron
substantial plant expansions now under way in several fields of
,.-..v
The Board
the close of business
New York 6, N. Y.
on
:J;
at
Corporation
organic and inorganic chemicals has rendered essential the
; both
COMMON DIVIDEND
September 6, 1951.
61
■;'v.;:
.• ?
fifty (50^) cents
share has been declared, payable
September 20,1951, to stockholders
per
payable on
declared
pared to 20% for the low-priced bond class.
Dividends
A dividend of
the Board
dividend of fifteen
a
to shareholders
1951
business
No.
meeting of
share was
per
E.
ending July 31, 1951 totaled 90c per share which approximated
| that for fiscal 1950. Payment from realized gains for fiscal 1950
i
a
held July
Directors
cents
At
WOOD
CELLULOSE
7. July 10, 1951.
v
PERMITE
PURIFIED
>
of California
$41,253,208 on March 31, 1951 represented by 2,058,716 out¬
:
:
standing shares.
:
DIVIDEND NOTICE
„
SITUATIONS WANTED
J. A.
t
1
ANGELES,
DIVIDEND NOTICE
Calif. —Ray¬
On
TRADERS
Two
SALE
,
NASSAU, BAHAMAS ESTATES
palm
declared
a
grove
beach
plots near Nassau.
200 tp 300 foot
several with high elevation, ail of
entrancing
beauty.
Price
$100.00
to
$150.00
a
foot front.
Box H 718.
The
Commercial &
Financial Chronicle.
front
Experienced
house
ity
out
25
Small
Traders
of
Natural
business.
and
now
Over-the-counter
specializing
and
mercial
widths,
Pre¬
on
-
GAS
•
payable to stockholders
July 16, 1951, as
■
Birmingham, Alabama'
J
record
i
:
follows:
Date
share
Per
able
!
Rate
Pay¬
of
25
cents
per
Share
in
Gas
Box
Public
issues
Util¬
going
B719, Com¬
Financial
September
common
stockholders of record
Park Place, New York 7, n. y.
1951
to
Common Stock Dividend No. 50
stockholders of record
close
of
business
at
the
of
■
Southern Natural Gas Com-
!
Common
j
I
$25 par value
$1.25 Sinking
8-1-51
Fund Series
pany, payable September 12,
1951 to stockholders of rec-
s
ord
the close of business
S
■
$1.25
on
$0.3P/4
at
August 31, 1951.
H. D. McHENRy,
;
August
24,
B.C. REYNOLDS
S
Secretary
1951.
D. H. Millett, Treasurer
S
■
-
X '
wmmmtmm
/
"
/'/
Stock
■
8-1-51
Fund Series
m
on
•
$1.25
share has been declared
Sinking
Preferred Stock,
the
■
per
S
8-1-51
5% Series
m
■
5
■
$100 par value
5%
;
A dividend of 62H cents
Preferred Stock,
the close of business
August
15, 1951. In addition, the Direc¬
tors declared a special dividend
of 5 per cent payable in com¬
mon
stock September 10, 1951
at
to
Chronicle,
1,
j
COMPANY
of this corpora¬
divi¬
cash
payable
REAL ESTATE FOR
landscaped
dend
AVAILABLE
available.
Natural
July 17, 1951, the Board of
NATURAL
SOUTHERN
■
staff of J. A. Hogle & Co.,
507 West Sixth Street.
,
tion,
of
Directors
mond J. Carpenter has been added
to the
dividends
ferred Stock
Chronicle)
regular
Directors declared
quarterly
"
I
1951, the Board
On June 27,
of
BANGOR, MAINE
Hogle Adds
(Special to The Financial
LOS
Eastern Corporation
:
-
*
'
,
,
,
•
Dated: July 19, 1951.
■
:
5
Secretary.
f
9
i
36
The Commercial and Financial Chronicle
(272)
Washington...
from the
agency of government,
Administration as a whole is
opposed to it,
reasons.
modified
dibit
M "MM/
a
on
thwarted
the
drives for new and vaster powers to
the
nation's
one-half
and
economy,
be like
War
Smaller
of
and
medi-
town
was
did not prevail during World
flabber-
just,
at
the
Administration's
presented last week as to
just what should be done in the
way
of war damage insurance.
The issue in committee has been
fore
for
long
ago,
ment
would
give NO consideration to com¬
to
plant
That
cost the taxpayer anything.
castle
is
needs
amendment
to
little
a
allow
the
Thus,
of
use
restore
these funds for payment of health
Insurance
for
the
aged
you
are
supposed to think.
With
all
but
not
the
only
their
old-timers
children
who
feel
government
the
and
rehabilitate
would
essential
indus¬
tries.- '
'
Government would provide in¬
services
community
and
-
come
for individuals injured, de¬
of
pendents
killed,
whose
their
destroyed.
those
injured
source
or
for persons
of income had been
income
or
they might be relieved of the need
of paying for the medical care of
.
—then
after
over
that
to
see
'Gentlemen
Sardi's
to
for
a
tells
he
me
doesn't
more—He
do
his
fired
was
have
set
vast bureaucwhich would "establish val¬
racy
a
up
ues"
for every piece of property
in the U. S., and set up as it saw
fit a vast system of indemnities
for
loss.
It
would
set
up
a
sys¬
tem of
personal cash benefits that
would rival the social system.
All this, of course, adds up to
incidentally, the
injection
Administration
idea
twist of the legislative
the
to
more
limited
rective
to
on
insurance
The Congress is
on
this front.
for
program
"small
make loans to
committee
bill. On the principle you can't op¬
imaginable
ness
purpose.
This
to
"small business,"
same
of
ness,
and
help
Smaller
would
★
It
could
technical
for its
Defense
in¬
engage
and
man¬
clients.
Plants
contracts
The
to
could
ment
be
officials
with
the
fall—it
change
Board
serve
McCabe
no
let
did
to
want
not
supply
con¬
procure¬
cleared
sure
to
the
agency
undertake
the
other
could
as
things, the Cor¬
certify arty small
competent to perform
a war contract,
and that cer¬
tification would bind the procure¬
on
officials.
business
terials
projections of
months
some
hence.
(This column is intended to
to
re¬
flect the "behind the scene" interpretation from the nation's Capital
and may or may not coincide with
the "Chronicle's"
views.)
own
For
Large
Appreciation Potential
WE SUGGEST
RIVERSIDE CEMENT CO.
CLASS B
leading
in
STOCK
(common)
producer of
fast-growing
California.
cement
Southern
'
«.
Analysis of
Among
probably
upon
might happen
Plants
business.
ment
to William McC. Martin.
always to act
The
Defense
make
Re¬
The Eccles-McCabe approach was
A
Corp.
in
supreme
first
had
Smaller
leadership
thinking from Eceles-
gov¬
subcon¬
so
until
probably will reflect
in
as
serve
them to its clients.
practically
materializes—
prospect
Finally, the Cor¬
would
take
over
the
of allocating short ma¬
this Company wad
review of
the Cement Indus¬
a
try
available
on
Selling about
request.
$14.00
LERNER & CO.
Investment
Securities
10 Post Office Square, Boston
9, Mass,
Tel. HUbbard 2-1990
small business.
!
CURRENT MARKET
'
•
27c
Bid
34c
Allied Electric Products
Asked
FIRM TRADING MARKETS
INQUIRIES INVITED
:
on
Corp.,
and
corporation would be
that the final DPA will
■>
use
factories,
be empowered
indicate
seem
could
"prime contractor" taking
to
would
it
build
course.
provide
agerial
a
busi¬
equipment and lease or sell
to
businesses, small busi¬
poration
This
commit¬
report
boost in requested reserves be¬
what
land,
buy
legitimate
million
$50
it carried.
pose
small business for
a
any
business
House
Wilson
the
and
this
If
fore
legislative phase of their crusade
on
the floor of the Senate, and
the
left
the
The original plan was sweep¬
ing. A special government agency
with (at first, only, of course) $50
million could compel the RFC to
poration
in
with
no
business" pushed over a modified
another
.
identified
often
tract
defense
«
apparent
credit,-the Federal
Reserve Board, it is now antici¬
pated, will not request higher
standby reserve requirements be¬
fore fall, when it: will be known
whether the inflation predicted by
all government officials, actually
wing.
that
-
Although at present the Smaller
Defense Plants Corp. idea is not
an
Administration
proposal,
it
bears watching.
Advocates of a special set-up in
the
STOCK
\
*
the
-
tracting
please"
you
lan¬
set-up,
text
"to
all
the
The
final
features,
of
arrives on schedule.
If inflation
will not be as sweeping as
unlikely
of legislation sponsored does not arrive, it is
that higher reserve requirements
by the advocates of "small busi¬
ness" aid—advocates incidentally will be sought.
>
;
the
Administration
ahead and do
obscure
on
course,
ernment
a
in
money
ness."
di¬
go
COMMON
any¬
special features for the
feeding, and diaper chang¬
ing of what is called "small busi¬
statutory
write
the
to
a
dial,
action
postpone
of property loss.
unlikely
of
of everything with
care
serve
even
WESTERN OIL FIELDS, INC.
ment
some
stall
debt.
this
mere
have Dollar Ideas.
ago!"
some
*
Despite
care,
should
may
may
Just put over
and the trick is done.
and
purchasing
month
a
it
taking
Penny oil stock which
so
the
limitations
Blondes'—
supper
firm's
should be entirely abandoned, that
of
A
Prefer
late
drinks,
then to the Copa for nightcaps and then the- "
4
Just
t
with
remove
guage,
"First I take him to the Astor for cocktails and dinner
ernment
^
just
capital of the
Smaller Defense Plants Corp. and
by Mr. Staats, that the
impression is given that there is
no
damage or no problem which
cannot
be solved
by an act of
Congress and the creation of gov¬
"PENNIES MAKE SENSE"
expanded
is
it comes to putting
grandiose scheme like
addition to
an
outlined
II,
This
of inflation which
scheme whole.
new
partially-dependent
old
Finally, government would pro¬ a lot more
folks expected to support this lit¬
power, although it is
vide
the
broadest
compensation
tle amendment, Oscar figures he
proposed that this vast scheme
for property damage.
can put this across.
be enacted on a "standby" basis.
It is the administration's idea
Then once you've got a few
So all-embracing are the pro¬
millions receiving the blessings of that
any
notion
of
insurance posals of the Administration, as
...
of
legislation than to persuade the
Congress to swallow an entirely
workmen in case of a serious en¬
minor
two
the Spence bill, it is much easier
to work over an existing piece of
Then Elmer B. Staats,
Director of the Budget, came
i
of 3% of employer- emy attack.
What
the
government should
withholding taxes for
the old age insurance is building do, said Mr. Staats, is merely to
up such a large reserve fund that take care of everything.
it
of
govern¬
when
And
across some
aggregate
employee
all
plugging
as
has been abuilding these 20 years
shall never tumble.
Assistant
for¬
ward with one of those grandiose
ideas which simply defy descrip¬
The new try
is just a little tion, complete with the draft of
a
proposed bill. Mr. Staats says
amendment to the Old Age and
that
it
is
not
a
question of
Survivors' security set-up which
whether ;the
government's
re¬
would provide for health insur¬
sponsibility should be limited to
ance for 6,000,000 persons on those
rolls. Mind you, it wouldn't really paying for property or injuries to
health
insurance
this
Oscar Ewing, the Social Se¬
curity Administrator, has cooked
op a brand new try at this thing.
pulsory
year,
in
just
government-
o r
capacity.
that the
former.
the
favor
start
bill"
construction
'
to
should
to provide for
owned
-
forced
first, with a
sion of the
limited form of
Act.
So the perpetual grab for comparatively
additional powers moves to new property insurance, or whether to
add provision for reinsurance of
fronts.
"
*
*.>
*
workmen's
compensation liabil¬
ities. The committee was disposed
Although Congress is disposed
and if there is
as,
peace
"Spence
a
years
whether to start out,
if
then the Administration be¬
come,
gased
proposed exten¬
Defense Production
When,
real danger of set-back
a
business,
ideas
the
lot of
a
War II.
*
*
World War
Plants
There is one broad background
factor, however, whichprevailsnow
and by the
then have a
ever
This
which bureaucracy was
rushing to thrust upon itself in
draft
a year,
decade you
*
powers
its
a
disposed to take a
on
the theory
Corp.,
noise, noise show¬
ing that everybody is friendly to
small
business, but would and
could accomplish next to nothing.
cine.
additional
dozen
of
full-fledged state control of
of
the spider's advice that if at first
you don't succeed, try, try again.
Right now it looks like Con¬
gress is going to refuse some two
control
program
end
their
in
temporarily
was
version
II's
compulsory insurance, you can
plan on adding a couple or three
million
more
"beneficiaries" to
D.
C. — Bu¬
currently are putting
swell demonstration, when
/ WASHINGTON,
for other
as
that it would
make
reaucracies
well
as
•
Congress
f)/y
jLM.lt/lM/
Nation'*Capital
Thursday, July 19, 1951
special
a
the
^
..
Because this beautiful program
would subordinate procurement to
BUSINESS BUZZ
BeVmd-the-Scene Interpretation*
.
Stanley Pelz & Co.
FOREIGN
Beneficial
SECURITIES
Corporation
W. L'. Maxson
Susquehanna Mills
QARL MARKS & P-O. IMG
FOREIGN SECURITIES SPECIALISTS
INCORPORATED
40 EXCHANGE
4
50 BROAD STREET...NEW YORK 4, N. Y.
PLACE, NEW YORK 5, N. Y,
BOwling Green 9-5580
Hill, Thompson & Co., Inc.
4
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Trading
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Department
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Tel. WHitehaU 4-4540
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