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UNIVERSIT
OF MICHIGAN
o
JUL 25 1952
ESTABLISHED 1S39
NSMESS
HSWH
KJ
MMMSIHIIMI
MHiSTUnMI
TAe Commercial
Financial
Chronicle
Reg. U. S. Pat. Office
Volume
176
Number 5136
New
York, N. Y., Thursday, July 24, 1952
Price 40 Cents
Copy
a
EDITORIAL
As
Prospeiity Under the
Democratic Party Regime
We See It
Following the example of the
master politician
office, President Truman at in¬
he succeeded in
tervals
since
ever
his
By HON. PAUL A. DEVER*
Governor of
first
inaugural has been
trying (and not infrequently succeeding) to make
capital out of guessing about the future. Pres¬
ident Roosevelt
was
fond of
which the rank and file
spiration—and confidence
fact that these
goals
that
but
they
into the
were
future,
"setting goals" from
were
in
were not
supposed to get in¬
their
leader.
The
always reached,
or
sort of projection of the past
did not appear to detract very
a
New Deal
gloomy doctrines of
a
to the
But
it
Party platform
fossil."
as
recently obtained liberal
prediction that in 1960
a
space
we
in the
"We
"not
do
can
by
press
one
tion,
this
con¬
for
from
the
experience
great consolation—the
that wise parents, an
of
struggle
for
building
a
Commission
of the
en¬
mote
the
last
can best pro¬
harmonize the interests of
the
30
is
investors,
the
and
the
of
Sec¬
obverse
ing
systems
company
systems.,
Section
30,
to
on
integrated
the
great
hand, directs the Commission
20
years
port
Paul A.
our
Dever
how the
on
country
may
accrediting delegates—of picking
one
While the Commission to date has
had occasion to issue a
not
on
page
delivered
by Gov. Dever at the
Party National Convention, Chicago, 111., July 21, 1952.
Association
of
Los
Angeles
at
the
appear
outing
pages
22
the
reorganization
holding companies taken
Continued
STATE
Pacific Coast &
Municipal
AND
the
of
and
Oil
BONDS
Security
Chemical
14 Wall
COMPANY
Co.
THE NATIONAL CITY BANK
j. a. h0gle & co.
OF NEW YORK
Members of all Principal Exchanges
established
tix,..
Los Angeles
•
Boston
STOCK and BOND
•
50 Broadway
Chicago
Bond
Honolulu
NATIONAL BANK
Peace River
Natural Gas Co., Ltd.
BROKERAGE SERVICE
to
Kenya
Head
Branches
Burma,
the
Government
Colony
and
Sherritt Gordon
Uganda
Office:
26, Bishopsgate,
London, E. C. 2
in
India,
Aden,
land
'
"S'l
%
Stock
Exchange
Members New York Curb Exchange
Pakistan, Ceylon,
Tanganyika,
Kenya,
30 Broad St.
New York 4
Paid-up
Reserve
The
Capital
Fund
£4,562,500
£2,281,250
Bank conducts every description of
banking
and
also
Los Angeles
NATIONAL
—
CANADIAN
Sold
—
CANADIAN
El Paso Electric
Power
BONDS & STOCKS
Quoted
&
Co.
ESTABLISHED 1891
Analysis
PoxcaoTi Securities
Grporatio?!
MEMBERS NEW YORK STOCK EXCH.
40 Exchange Place, New
115
BROADWAY
NEW YORK
YORK
Spokane
DEPARTMENT
Goodbody
BANK
OP THE CITY OF NEW
Mines, Ltd.
Bought
exchange business.
undertaken
Denver
'
£3,675,000
Trusteeships and Executorships
Tele. NY 1-733
CHASE
Company
COMMON
Protectorate.
Authorised Capital
New York
Salt Lake City
in
Uganda, Zanzibar, and Somali-
Hardy & Co.
Dept. Teletype: NY 1-708
of INDIA, LIMITED
Bankers
for Banks, Brokers and Dealers
•
THE
1915
Commodity
and Security Exchanges
San Franeisee
30 BROAD ST., N. Y.
Bonds
Mining
Bond Department
a
Street, New York, N. Y.
Members of Principal
bond department
'«
and
Direct Private Wires
Dean Witter
BANK & TRUST
Municipal
Securities
Direct Private Wires
Tel. DIgby 4-7800
28
23.
UTAH
MUNICIPAL
Hawaiian Securities
HAnover 2-3700
York
page
State and
Securities
New
on
address
in
Members
such, it has in con¬
simplification of
and
up many questions which would
U. S. Government,
telephone:
as
by Commissioner Cook before the Public Utility
Executive Program, at the
University of Michigan School of Business
Administration, Ann Arbor, Mich., July 17, 1952.
Democratic
recent
on
with
24
♦An
Address
Donald C. Cook
compre¬
nection
set of shoestring
Continued
re¬
utility facilities of
be more economic¬
ally combined.
next proceeded to the sordid business
PICTURES IN THIS ISSUE—Candid shots taken
State and
other
to
hensive Section 30 study, labeled
Our opponents
Traders
locality served,
and
the
Allies."
28
.
tion 11. Section 11 directed the Com-'
mission to reduce uneconomical hold¬
They opened their proceedings on
note that "the present
global struggle can be ended
victoriously with lower taxes, fewer soldiers, and no
of
.
public,
Section
malice, and dedicated to
all
to
consumer."
a
♦Keynote
DEALERS
today about that part of Section 30 of
Utility Holding Company Act which directs
the
survival,
simultaneously through
page
con¬
should be swept away.
generation.
We have come to
recognize that depressions are
avoidable; that a steadily expanding economy is
attainable; that investment opportunity and con¬
on
Looks for progress in regional utility
integration from SEC studies.
Public
brought forth in
shopworn declaration,
proposition that
achievements of the
wide
concerns.
the
our opponents
conceived in
a
various
make studies and
investigations of
public utility systems for the purpose of
recommending
in public reports the
"type and size
of geographically and
economically
integrated
systems which having
regard for the nature and character
hopeful
a
Reviews
there is
I want to speak
than a week ago, we listened
long and
Republican friends from this very rostrum.
the
"Our free enterprise system has
undergone a
transformation in outlook within a
Continued
pendent
my own choice led me into the
Democratic Party.
•
For in the course of their Conven¬
by conserving what is best in responsible free
enterprise and responsible free government.
grow
art
government."
and
any
can
and
of
waited
we
vironment
but
markets
our
emerged
solation
ventures that would be
strange to our economic or political institutions,
sumer
Act
"untrained in the
improving
.
"can" have "a
this," the President
sense
more
vain
I
output" of some $440 billion (dollars,
that is, of 1952
purchasing power), which is, of
course, about one hundred billion greater than at
present.
little
with
total annual
tinues,
Taft-Hartley
as
for
says
operating systems, either
through acquisitions, exchange of properties, or con¬
tractual arrangements.
Holds utilities are "big busi¬
ness," and can operate at lower costs than small inde¬
for this challenging atomic
age. We heard only the voice of the
fossil.
•
is
undertaking to outdo both himself and his
predecessor in making use of this technique of
"talking big" about the future of this country.
with
of
field
program
now
He has
developments along these lines and
Utility
to make studies
of regional integrations of
operating companies.
achisved
genuine humility that I assume
the task of keynoter to this Democratic
Convention.
A
Truman
repeal
of civil
a
Has praise
was
and scores Republican
"antediluvian" and "the voice of the
Advocates
It is with
SEC Chairman calls attention to section of Public
Holding Company Act which requires SEC
rule,
characterizes Gen. Eisenhower
In
that President
appear
which he claims
Party
carefully to
would
Chairman, Securities and Exchange Commission
New Deal and the Fair Deal
programs.
for current
prosperity,
under Democratic
mature economy
and the like.
By DONALD C. COOK*
Massachusetts
In keynote speech at Democratic
Party National Con¬
vention, Massachusetts Governor urges his party adhere
much from their
political effectiveness, as strange
as that fact
may seem. Perhaps such pseudo op¬
timism was
helpful as an offset to the earlier
SEC Plans Study of
Utilities Integration
York t>,N.Y,
105 W.ADAMS ST,
CHICAGO
WHitehall 4-8161
request
IRAHAUPT & CO.
Members New York Stock Exchange
and other Principal Exchanges
111
Broadway, N. Y. 6
WOrth 4-6000
Teletype NY 1-702-3
upon
Boston
Teletype NY 1-2708
Telephone:
Enterprise
1820
f" *1
»'
-i
i<r\;
,
2
C f* »■-* J.
; i
f
v.
* •
*
f /: n u
'
»4 *
'
i) 1
* ■'
f
.
.«,,,■'»
.
Financial Chronicle
The Commercial and
.
.
Thursday, July 24, 1952
.
(286)
1
>, ^
Ti '
WE POSITION and
The
\
Security I Like Best
\
IN
TRADE
week, a different group of experts
and advisory field from all sections of the country
Polaroid
in the investment
participate and give their reasons for
Corporation
favoring
Pacific Gas & Electric
Garfield,
intended to he, nor
sell the securities discussed.)
volves
Central
Electric &
Illinois
Gas
rub-
on
tired
ber
Out
wheels.
American Tel. & Tel.
retirement
of
3,/2/64 W. I.
&
Rights
legend-
•
and
N. Y. Curb Exchange
Member
120 Broadway,
the
New York 5
Teletype NY 1-583
BArclay 7-5660
came
"floating
power"
P 1 y-
mouth.
From
maintained for Dealers
and Institutions, in
A. T. & T. CO.
seeming¬
ler has within 26 years grown
3V2% Conv. Deb.
cables
ing leverage issue among
is
to a
all the
versus
contrast with General
analysis.
General
almost 87 Vz million shares
Chrysler
8,700,000.
Mo¬
close
Prospectus upon request
three
to
million
an
balance
telephone
'
and
plus
The
The
1950
is
income
premium
Pro¬
on
A
large part of this impressive
was
due to
a
sizable
quate to take care of this greater
volume
of
business
so
that in
capacity and sales capac¬
loan
overlooked
uncover
1951,
the
Reconstruction
Corporation furnished
funds for an addition.
This
May,
Finance
a
mar¬
the
current
further
to
a
that
are
year
new
sales
American Furniture Co.
quality of their product plus the
recently perceptible progressively
quired for
attitude toward eyevalues, is steadily gaining buyer
loyalty and addiction. Such im¬
ponderable public acceptance fac¬
tors do not always show up quick¬
orders
hospitable
Dan River Mills
Moore
Conn.
department ,24
hours per day six days per week.
Net should rise to about $345,000,
the
$3.20
Handley Hardware Co.
ly on balance sheets. I have per¬
sonally, out of sheer curiosity of a
broker interested in the products
Scott, Horner &
:
Mason, Inc.
of the
companies whose securities
hundreds
Plymouths,
Tele. LY 83
LD 33
for example, and discovered an
dlllllllllllllllllllllllllllllllllllllllllllk amazing
unanimity
of positive
opinion. A "plug" of this kind
.would seem hardly cricket in a
we
Lynchburg, Va.
trade, chat-checked
of cab drivers handling
commentary
upon a
security; it is,
however, totally disinterested, and
though perhaps unconventional, to
Over-the-Counter
my
.Quotation Services
mind arises out of the kind of
inquiry I have oft found
impor¬
tant in "understanding" a stock.
for 39 Years
The liberal and inconstant divi¬
dend policy
of the
company,
has,
by that peculiar irony of invest¬
ment
National Quotation Bureau
Incorporated
the
Established 1913
46 Front Street
CHICAGO
New York4,N.Y.
SAN FRANCISCO
rating
philosophy
sanctifies certainty,
fication of the stock. Had
classi¬
Chrys¬
of paying out at one
time $7.50, at
>■
redounded to
somewhat deprecatory
ler, instead
which
another $9.75, at
an-
textile
the
a
per
ac¬
impetus
of
war
abnormally low.
was
itself
found
stock
underwriting
the
to
share. While this
per
the
solved
pany's financial
resolve
sold
were
com¬
problems, it
certain
did
differences of
opinion that had cropped up with¬
its
managerial ranks.
own
is not dependent on such
ures
group
started
withdrew
a
so ever
The stock up to the
has
never
ever,
paid
company
chemicals and manufactures plas¬
tic-covered
cables;
up
and
wires
building
radio,
instrument,
apparatus
wires;
and
hook¬
lamp
dividend.
How¬
condition of the company
has been
so
is
rapid in recent months
believed
that
it
give serious consideration to
a
fore the end of this year and pos¬
as
soon as
Selling below
book value,
early
the
It
covers
dustry
stocks,
bringing you estimates
specifically on a per share basis of (1)
what
the
earnings and dividends
are
likely to be in 1952 and, on average, in
the pest excess profits tax years 1951-56;
(2) the extent to which the prices of
these stocks already discount or* fail to
discount this year's estimated earnings
and
dividends
and
the
longer
term
(1954-56) estimated earnings and divi-
unusual
The
normal
This
be
issue will
important 48-page
at
sent
Petroleum
It
covers
42
»
Paper
stocks,
in-
t
once.
and
eluding:
•
,
Atlantic Refining
Socony-Vacuum
Cities Service
Standard Oil of Calif
Continental Oil
Standard OH (Tnd.)
Gulf Oil
Standard Oil (N. J.)
Philips Petroleum
Richfield Oil
Texts Company
Shell Oil
Tide Water Assoc.
$5.00
Sun Oil
INTRODUCTORY OFFER—
(New subscribers
weekly
only) includes 4
Re¬
editions of Ratings &
ports, a Special Situations Recom¬
mendation,
Supervised
Account
*
Repcrt,
4
and
prospect
of
2
Fortnightly Letters and
Weekly Supplements.
Plus
the
48-Page
Send $5 to
Oil Stock Issue
Dept.
CF-6
prospects
over
the
for
my
VALUE LINE
dividends
to offer
price
near
favorite
Investment Surrey
en¬
term.
«
5
It
low-
priced speculation at this time.
k
Rat¬
Line
Value
objective
reveal that in re ation to the
capitalization of prospec¬
tive earnings and
dividends most
oil stocks are now too high.
ings
,
sets, and wires and cables for spe¬
•
<
dends.
earnings, and with
the capital stock appears
hancement
this timely 48-page edition
Value Line Ratings & Reports.
42 Petroleum and Paper In¬
see
of
approximately only three times
current annual
an
September.
is. .therefore
•
New, when public interest in Petro¬
leum stocks is at a peak, every investor
should
dividend policy be¬
cords; flexible electric cords,
cord
\
•
t
*
ground assets,
with
little regard to
probable dividend realization on these
or
time required for realization.
assets
directors
that
will
at
buys copper and
a
:
-
Amerada Petroleum Sinclair Oil
present time
the improvement of the fi¬
nancial
They
since.
$5,000,000.
of around only
ume
operations sibly
few months later.
have remained
The
fripm the com¬
profitably
and
OIL STOCKS?
market—experts and public alike—
has
taken
to
evaluating
petroleum
stocks
on
the
basis
of their underThe
subject to renegotiation.
are
Finally, in 1949, the dissatisfied formulating
pany
What Price
it would appear probable
ade¬ that the
company could show sub¬
Conse¬ stantial earnings on a civilian vol¬
without
capital.
working
public at $6
in
beyond 1953, the
extend
Now York 1
Tel. NY 1-1932
r
Thus,
quently, in 1947, 49,500 shares of
not
not
perity. As a matter of fact, profit
margins are extremely low on
such contracts and even these fig¬
this work
capital
will
company
immediately,
almost
At the end of the war the com¬
quate
are
government contracts for its pros¬
though the margin of profit
pany
indications
present
that the work for the Signal Corps
good volume of business
developed
even
on
was
reasonable fig¬
very
a
Under
ure.
plant
Security Dealers Assn.
DIgby 9-1550
production
about
or
Y.
N.
150 Broadway
approximately
$9,000,000.
This
can* be accomplished by running
While
idle
An
Members
for
rise still
record high of
will
share on the
currently.
108,667 .shares of capital stock out¬
New York Stock Exchange
tential in its other-than-car lines,
New York Curb Exchange
The
Plastic Wire & Cable Corp. standing
which
represents
the
which are at present not impres¬
appears
to
qualify - as
such
a company's
sole* capitalization.
120 BROA/DWAY, NEW YORK 5
sive, i. e., proportionately.
%
situation.
Management
and underwriters
Tel. REctor 2-7815
Chrysler seems to be a most in¬
As companies
go,
this one is exercised options to purchase 9,teresting admixture of conserva¬
167
shares
of
stock
at $6 per share
tism
in
managemental
policies neither old nor large. As a mat¬
ter of fact it came into existence on July 1, 1952. There are no fur¬
and radicalism in mechanical pol¬
ther options'i outstanding.
iiimiiiiimiiiiiiiiiimiiiiiimiiiiiiiir icies.
They have chalked up a as recently as 1943 at Jewett City,
glamorous list of "firsts." The cu¬
mulative
effect
of
the
rugged
Geksten & Fbenkel
Tel.
subsequently paid off.
was
Indications
per¬
constantly being
are
Southwest Natural Gas
received from the Signal
Plant capacity was inade¬
,
There¬
capital gains.
fore, analysts
Corp.
Foote Mineral
increase
Corp.
placed
Commonwealth Gas
and
year
share increased from $0.68
$2.71.
to
the
has
issued
and
net per
conserva¬
level of
taxes
1964 when
Rights
3l/ts,
$2.9 million in
$6 million last
to
Mass. \
Teletype BS 259,
American Tel. & Tel.
Conv.
from
rose
■<
^
company's fiscal year ends
Sales
:
Telephone WOrth 4-5000
Y.
N.
Sept. 30.
City
present high
sonal
CA 7-0425
Clark.
Landers, Frary &
STEPHEN J. SANFORD
The Plastic Wire & Cable
148 State St., Boston 9,
Tel.
Minneapolis-Honeywell
Regulator, Servel, Bullard Com¬
pany, Ford Motor Company, and
contract
New York
accounts includ¬
Westinghouse Electric, Remington
stockholders
common
request
on
many
Rand,
leverage
a
Circular
met
dividends
»
offices
branch
our
HOFFMAN RADIO
well-known industrial
giants such as General Electric,
a se¬
Manager, Investdrs Research Dept.,
Amott, Baker & Co., Incorporated,
pre-
asked to
Trading Markets
to
J
shortage of this metal
of "Tiffany"
list
ing
ity contrast in the auto field alone
ket
situations with
reasonably
off to a large edge.
Motors has distinctly greater di¬ good prospects of price apprecia¬
tion over the coming months even
versificational
advantage.
How¬
though such stocks are not paying
ever, Chrysler is not without po¬
Members
wires
Direct
with such
excellent reception that its cus¬
tomers
compose
an
impressive
shows Chrysler
bfcpONNELL & Co.
Ala.
Mobile, Ala.
The field of
independent
products have
Corps.
between
and current liabilities.
ductive
1917
even
NY 1-1557
over.
its
tive safety.
Chrysler's $22.46. Motors'
$25 per share current assets versus
Chrysler's $60. Both firms have
cash
company,
contains
that
factor for its
versus
Rights & Scrip
Chrysler
that
opinion
growth
a
curity
against none for Chrysler.
Motors' $6.88 per share in cash
about
the
still
ferreds
Specialists in
coaxial
as
Naturally, this company oper¬
in a competitive field, but
invites
Motors'
tors'
of
which has glamour
The very
Subscription Warrants
such
New Orleans, La.- Birmingham,
ates
you
mon,
automotives.
Motors
for
worst of the
yields have been generous. Capi¬
talized with but one issue, com¬
point where it is, in the writer's
opinion, "the" outstand¬
31, 1964
applications
and broadcast cables.
been quite reasonable and,
examine them, not at all
temperamental,
in
contrast
to
Gen eral Motors.
The dividend
if
and
Since
cial
years
humble
Due December
St., New York 4, N. Y.
HAnover 2-0700
with no long-term debt, with
increasingly strong trade position,
ly inauspicious
George Garfield
with highly
competent manage¬
germ,
in
an
ment, with plenty of brains and
industry which has a distinguished
eyes
that rove the future, with
and
fascinating cemetery of its formidable
capacity for war work,
own, there has grown a small in¬
for peace work, with an estab¬
dustrial
dynasty: "C h r y s 1 e r." lished name that would accrue to
Overshadowed but by no means
the advantage of additional prod¬
overwhelmed by the Gulliver of
uct
were
management policy to
the field, General Motors, Chrys¬
add diversificational items, I am
that
Net Markets
25 Broad
price fluctuations of this
have over a period of
The
his
out
Members New York Stock Exchange
Members New York Curb Exchange
City. (Page 2)
security
wand
magic
1920
Steiner, Rouse & Co!
Amott,
New York
Inc.,
business total of about $75
companies has been left untouched
which as of the first
largely because of copper short¬
quarter of 1952 has burgeoned to
ages.
Now that imports of for¬
over (at the rate of)
$339 billion,
eign copper are permitted by this
we must have a dynamic and not
government, it is believed that the
a static concept of evaluations.
an
waved
Co.,
-
billion, and
Maxwell,
old
Corporation
Associate
took
P."
&
Baker
Quoted
gross
"Walter
ary
New York Hanseatic
al¬
late
the
most
Established
—Stephen J. Sanford, Manager,
Chrysler is the Johnny Come
heavily penalizes all financial quixLately among the Bigs in a world
otries, regardless of what is behind
that revolves around its own axis,
them. In a nation which but little
revolves about the Sun, and re¬
more
than a
decade ago had a
Northern Indiana Public Service
Bought—Sold
Corp.
letish of regularity
whicn makes a
England Electric System
&
Investors Research Dept.,
sensitized mind
the highly money
Chrysler Corporation
Puget Sound Power & Light
Garfield
Partner,
The Plastic Wire and Cable
regularly paid $4.00
or
$5.00, I should be tempted to
hazard the guess that it would now
be selling at a higher price.
But
Partner, Garfield & Co.,
New York City
George
—
Co., New York City. (Page 2)
$6.00,
other
GEORGE GARFIELD
Michigan Gas & Electric
New
they to be regarded, as an offer to
are
Corporation
Chrysler
(The articles contained in this forum are not
Pacific Power & Light
Selections
Louisiana Securities
particular security.
a
Alabama &
Participants and
Their
A continuous forum in which, each
Florida Power Corp.
Week's
This
Forum
East 44th St..
N. Y. 17, N. Y.
ARNOLD BERNHARD &
V
CO., INC.
y
Volume 176
Number 5136
.
.
The Commercial and Financial Chronicle
.
(287)
The Outlook lor Government
INDEX
Bond Market and Interest Rates
Articles and News
By LEROY M. PISER*
In
-
this talk
I want
to
consider
no
of the more important fac¬
tors that have influenced the Gov¬
ernment
security
past
recent
and
that
market
stricted
the
in
supply
may
-influence it in
offered
Farm
Between
the
the
of
end
of
end
companies
and
far
banks
about
$200
bonds.
The
the
ture
is
fu¬
sold
con¬
restricted
cerned, I shall
purchases
not
vided
try
forecast
a
to
precise
cause
erate
forecasts have
the
disconcert¬
a
bonds
turning out to
December.
be
rapid
wrong.
Rather I shall
try to present
M.
Piser
with
much
as
this
I
as
attention
your
and
can,
both
the
natural
and the policies that are
followed by the Treasury Depart¬
the
on
on
security issues that
Business conditions also influence
the market indirectly by their ef¬
fect
the' policies
on
lowed
that
who
us
bond
are
all
to
in
should
Market
like
to
the
dis¬
cussion
by reviewing the recent
history of the market. This is
background with which you are
doubt familiar.
no
the
that
greatest
-include
to
seem
me
to
be
significance.
developments
that
these
should be of interest only to
-mercial
bankers
and
not
.are
matters, however, that
important to the bond market
and to
mortgage rates.
also have
of
an
mortgages
effect
on
They
may
the volume
that becomes avail¬
able to you in the future.
The lowest point in the market,
♦An
address
by Mr. Piser before thi
Michigan
Savings
and
Loan
League,
Charlevoix, Michigan, July 22, 1952.
Paul Douglas Takes Issue
Stocks
that
effort
lesson
It
We
See
It
"»
___;
»
Business Man's
Bookshelf
40
it to
was a
Dealer-Broker
pe¬
Investment
Recommendations
to
Mutual
sustained
NSTA
rally
a
num¬
Sales of restricted
tinued, but the demand from
Our Reporter
sion and retirement funds
pen¬
seemed
to be larger and more aggressive.
In
addition
business
loans
at
weekly reporting member banks
actually declined, after showing a
large increase during the second
1951.
This represented
rather than reduced
to
lend.
It
only
Report
'
*
12
Securities Now in Registration
The
sea¬
however, resulted in
ness
on
the
some
uneasi¬
part of bankers
Continued
on
that
page
38
,
!
The State of Trade and
Industry.
•
Boston
•
CT L K KLU JlUUflJ
New York
Stock Exchange
ST., NEW YORK
Chicago
Private Wire to
.
•
Weekly
1
Park
Place,
•
Schenectady
•
Worcester
CROWELL, WEEDON & CO.
COMPANY, Publishers
New
REctor 2-9570
*TRI-T0R UIL
Drapers'
Gardens,
York
to
7,
N.
Y.
DANA
ary
Thursday, July 24,
Offices:
Chicago 3,
111.
135
South
President
N.
1952
(Telephone: STate
C., Eng¬
second-class matter
as
Ltd.
Dana
Febru¬
1942, at the post office at New
Y., under the Act of March 8,
*
1879.
Subscriptions
Possessions,
Other
Salle
St.,
2-0613);
in
United
Territories
■Pan-American
Dominion
La
E.
•
Prospectus
on
Request
Subscription Rates
Every Thursday (general news and ad¬
vertising issue) and every Monday (com¬
plete statistical issue — market quotation
records, corporation news, bank clearings,
state and city news, etc.).
Other
25,
York,
9576
SEIBERT,
London,
Copyright 1952 by William B.
Company
HERBERT D.
SEIBERT, Editor & Publisher
TELETYPE N. Y. 1-5
•
Glens Falls
DANA
GULF SULPHUR
40
land, c/o Edwards & Smith.
Reg. U. S. Patent Office
¥
8
i
COMMERCIAL and
FINANCIAL CHRONICLE
B.
5
.__
Washington and You
4, N. Y.
LOS ANGELES, CALIFORNIA
2
(Walter Whyte Says)
The
BELLE ISLE
33
Security I Like Best
Tomorrow's Markets
1-1826
KINGWOOD OIL
25
sonal
in nature, in fact, less than
seasonal.
The
decline
in
itself,
Exchange PI., N. Y. 5
30
^
Salesman's Corner
a
40
Teletype NY 1-1825 & NY
39
35
on
HA 2-0270
5
17
*
Singer, Bean
& MACKIE, Inc.
18
Prospective Security Offerings
Securities
willingness of
was
'
•
5
Governments
WILLIAM
Albany
7
32
Railroad Securities
slackening in the demand for loans
Spencer Trask & Co♦
TELEPHONE IIAnover 2-4300
Bargeron
Public Utility Securities.
f
Whiting Corp.
26
Reporter's
National Alfalfa
16
Observations—A. Wilfred May
25
Members
i
Exchange"
Funds
Our
banks
Sterling
Notes_
bonds by life insurance companies
and
mutual
savings banks con¬
of
in
News About Banks and Bankers
peak early in
a
Corp.
8
Reentered
BROAD
8
Coming Events in the Investment Field
market
result of
Development
18
-
Indications of Current Business
Activity
This
Associated
and Research
Canadian Securities
in
/
16
L_
dis¬
a
Angeles
r
til
had
Los
Cover
__
Einzig—"Improvement
and
Philadelphia and
21
Stocks
From Washington Ahead of
the News—Carlisle
the
Teletype NY 1-3370
Direct Wires
seems
of this
close
Broadway, New York 6
BO 9-5133
un¬
were
Incorporated
61
____21
substantially alone unless and
conditions
J.F.Reilly&Co.
19
Independent Federal Reserve 21
an
leave both the money market and
the Government security market
half
17
on
_
WILLIAM
25
Report
(Editorial)
until
DDCCCDDCIl CTflPlfQ
have specialized in
Patman
Ilelm
Bank and Insurance
to
sharply
a vacuum.
the
As
The Federal
dropped
With
Represent "Growth Industry,"
Published Twice
For many years we
17
Regular Features
a
are
Trading Hours
Lag in Construction Contracts
Reported
discount
intervene
not
ber of factors.
com-
group whose principal function is
the
making of mortgage loans.
These
did
had
me
May.
that
to
the
no
rumors.
that carried
of
the
matters
are
Extends
Kingwood Oil
first
made
turned
money market, in short-term se¬
curities, and in Federal Reserve
policy. Perhaps some of you may
.feel
the
High Peak in May
These
in
for
that
rumors
Reserve
Subsequently,
presenting this background to you
is to point out certain
develop¬
ments
12
says Harold II.
orderly.
My purpose in
Empire State Oil
7
12
Bank
riod is that Federal Reserve pol¬
icy, at least at that time, was to
the
History
start
rate
pretty much of
market.
Recent
I
vital
are
interested
Cedar Point
13
Monetary and Debt Management Policy
drawn
were
raised, and the Fed¬
to
Kunhardt
*
CIO Economists See
Danger Ahead in 1953-1954
large volume
eral
prices
and the
System.
These
11
Dow Chemical Co. Officials
Accept Payment for Recent Issue
Patman Committee Opposes
period
a
rate would be
Reserve
fol¬
are
virtually
was
Funds
discount
scotch these
Treasury
Reserve
matters
are
of
the
by
Federal
that
*
Baruch Oil
10
Western Europe Economic
Conditions Seen Improved
the money market was ex¬
spread
new
available.
are
Smith
Corporation?—Lewis H. Haney
Management—Kingsley
time, and restricted bonds dropped
another point. There were wide¬
market
savings and
the amount of loans and of
on
the
Aberdeen Petroleum
9
Sponsors Movie: "Opportunity, U. S. A."
NYSE
a combination of factors.
The
Treasury bill rate went through
direct influence that business
have
and
manner
by
by the Federal Reserve
By natural forces I mean
through their effect
This
out of the market in
ment and
conditions
hand.
of
tremely tight.
forces
the
IBA
accom¬
was
WHitehall 4-6551
own.
when
include
market
Dept.
re¬
rather
a
was
Securities
STREET, NEW YORK
6
Ellinwood
>*
Sen.
out
M.
Individual Portfolio
During the last half of Decem¬
ber, however, matters got a little
ing months.
System.
its
on
various
factors that I believe you will find
it helpful to watch over the com¬
These
was
but
orderly
an
The
serve.
range
to
This
WALL
Telephone:
6
The "Old Lot" Securities
Business—Howard C.
by two'points be¬
decline,
Obsolete
Unsatisfactory
Shull
Who Owns What in the
only a negligible scattering
purchases by the Federal Re¬
of
possibilities,
call
offsetting
evenly di¬
Treasury
trust
with
to you a range
to
—David
early September and mid-
plished in
Leroy
G.
,
09
5
Financing School Improvements Through "Special Authorities"
of
price of the longest-term
stricted
tween
narrowed
—Frederick
and
insurance
savings
million
Party Gold Plank
offerings, however, dropped
ing habit of
of
Republican
funds and various pension and re¬
tirement funds. These rather mod¬
pre¬
cise trend, be¬
4
May
the
about
between
Possibilities—Roger W. Babson
.
but
mutual
were
4
Economic Impact of Military
Spending and Foreign Aid
—Max Winkler
in
were
August
December,
the future. As
as
3
Cobleigh
The People's Choice—In the U. S. and
USSR—A. Wilfred
moderate.
were
Lichtenstein wins the high bid!
—Leroy M. Piser
Food Chains Forge Ahead—Ira U.
reserves
Treasury bonds
in the market,
amounts
Cover
The Outlook for Government Bond Market
and Interest Rates
since the unpegging, was reached
around the end of last year.
Re¬
some
OLYMPIC NEWS
—Hon. Paul A. Dever..
on
large increase in government security holdings, nor large-scale
support purchases. Cites probability of seasonally tight money
year, and supplying of bank
through borrowing.
AND COMPANY
Prosperity Under the Democratic Party Regime
Government Bond expert, on premise market will
depend
course of business and
Federal Reserve policy, looks for
during balance of
»llCHTflOT
Page
SEC Plans Study of Utilities
Integration—Donald C. Cook__Cover
Vice-President of Aubrey G. Lanston and Co., Inc.
market
3
of
Union,
Canada,
Countries, $52.00
Other
States,
and
$45.00
$48.00
per
U.
Members
per
year;
per
S.
of
In
year.
year.
Bank and Quotation Record —
Monthly,
$30.00 per year. (Foreign postage extra.)
Note—On account of the fluctuations In
the rate of
exchange, remittances for for¬
eign subscriptions and advertisements must
be
made in
New
PETER MORGAN & CO.
Publications
York
funds.
31
Tel.:
Nassau
Street, N. Y. S
Dlgby 9-3430
Tele.: NY 1-2078
i
4
The Commercial and Financial Chronicle
(288)
of America
rooms,
not
should
it
yields
capita
per
incomes,
espe-
cially in the lower brackets, have
lifted
hardest hit was Safeway with a
48% dip.
steadily in America in the
there
decade,
past
has
been
visible
a
te«-
dency for Joe
Taxpay er to
.
...
_
.
.
__
,OKO
Traditional Profit Margins in 1952
"higher
the
on
hog."
Raises
in
have
almost
pay
always been
immediately
reflected
in
higher
family
food
outlay,
and the selec-
and
tion
con-
sumption
of
the choicer
Cobleigh
U.
»><i
and
meats
viands.
the
since
since
price of food (up 100%
has
1941)
than any
such
But,
far faster
risen
other basic living costs,
clothing, rent or elec-
as
the
American
which operate them are now
doing
centage appears to be on the in-
With this brisk historic background, we are now ready to look
at
In
the
per-
the chains had 41%
1941
market
whether
but
during
because
of
the
which
companies
of
with
indi-
1952 sales of $12.4 billion,
cated
in-
the
operate
supermarkets,
15,200
war,
better
of the leading individual
some
should
not
reason.
It
snubbed
be
that
for
the
with
is,
..
for
thp
Thp
sharps
storps
flnTerin7of
nolicv
Xushfna ott smlll feeble
with bieeer
sSd
A
hprp
nppmpnt
Trapetent
man-
definitelv
ran
havf ungraded
to
Them
profit-laden self-
more
units!
service
replacing
be
this enter-
^
making buyers less price These should give us plenty of
conscious, or the means to afford food for thought!
•
Among the
newer
companies,
deliveries, the extension of credit,
Almost every trade seems to
and undoubtedly the fastest growmore
personalized service, near^-boast a Big Three. Well in food
ness to customers
(remember gas chains it's easy to pick those out: mg company in this industry, is
Food Fair Stores.
For its fiscal
rationing) or because of a more (1) A & P with 1951 sales of about
flexible observance of rationing, $3.4 billion, (2) Safeway with $1.45 year ended April 26, 1952, this
local
independent
grocers
and billion and (3) Kroger selling $997 enterprise advanced from the 20th
comes,
•
a
meat
markets
pushed the chains
back to about 31%
of the grocery
in 1945.
Since 1946, however, the native
gross
advantages of the chains—central
million last year. A & P with its
common selling at 134 and paying
a
$7 dividend is the premier
equity in the business. Kroger
has been a stable earner, while
Safeway appears at the moment
just a little vulnerable, falling
10c short in net earnings, of the
$2.40 dividend paid in 1951.
sunermarkets
mostW
fn
ated
ooer-
are
Pennsylvania (50), Mary-
land
not,
however,
translated
the chains.
war
into
1950
net;
for
every major company,
but
year
nearly
boasting
an
uninterbeen
uniformly rupted
dividend
record
going
net earnings for back
to 1914. At around 39%
was the top postFST paying $2 yields 5%.
growth in volume has
in
per
share
the
imposition of Federal price
controls and complicated regula-
tions in 1951 loused up
holders
about 24%.
industry-wide,
disturbed
Stores
(from
was
1950)
a
net,
Least
a
net
of
1951
only
Grand
Union has
progressive
excellent
growth
management,
fin
recQrd
labor
relation
the
Stock
rest,
is
Exchange
*951 high.
decline
9%;
and
dends
in
week,
selling
well
on
below
the
the
better
future.
additional
than
Only
king
pleased to
announce
the opening of
our new
office in
DENVER, COLORADO /
1717 E. Colfax Ave.
Phone:
Also Private
DExter
(6)
Teletype wire from New York office
52 Broadway, New York 4, N. Y.
after the increase in
land
crop
has
leveled
off.
Continuing research should do
much to help reduce the anticirpated deficit in crop land; and, in
addition,
it
available
crop
should
make
land
even
valuable, especially
World War III.
,
in
our
more
of
case
.
,
.
in
population, and comparatively
floods,
soil
erosion,
soil
and
has been leveling off since 1920. deterioration resulting from the
rpbe jncrease jn cr0p iand from abnormally high crop production
ja^e fgOO's to its peak in the during the past decade. The effect
earjy i930's came primarily from of this "mining" of crop land is a
the reiease 0f grazing
land for very serious factor.
*
horses
mules. This
and
of
source
increase jn farm iand, however,
Farmers Beware!
is
Here are some practical sugtrend towards greater use of live- gestions:
used for
(1> Urg? your children to stay
la ™
1:o
used o
a farmmg community instead
Thfs ^
of settling m some city which will
iSi
available be bombed in World War m
•
considerably
for the Future Crop Land
Moreover
since 1930 lone-ranffe
pfennfng0 'ha! prf-
gowmment
vided
of
sources
new
land.
crop
The
draining of swampiandi together
irrigati0n projec{s
to reclaim desert wastes,
with6new
has
lread
of
land
Lookln*
45
aii
added 3„
t
our
ing other nations self-supporting
to food.
as
(3)
It
25
further
however,
many
I T,, af-' 7?1S more millions of acres will
distributor
of
groceries" needed to feed our nation
having 2,089 home service routes present-day
Its
self
-
the
42 of
over
operations
157
are
48
states,
means
have
marts
&
P
teke
dollars
in
value;
and
many
Robert F. de
Robert
items
marketwise
has been mentioned
1856
Coppet
as
a
New
led
Stock
Exchange
Curb
Exchange
Cotton
Exchange
York
York
43.
Chicago
some
Board
Cotton
Orleans
And
of
other
Refining
and Distributing
Company
Sioux Oil Co.
Inc.
Exchange,
Commodity
New
has
I
de
A Producing,
Members
York
New
New
The current search for so-called
stocks
F.
H. Hentz & Co.
to
split.
a
while
bonds
Coppet, member
of the New York Stock Exchange,
passed away July 20 at the age
of
paid
possible candidate for
fit
should
includ¬
Dividends
faithfully
altitude
Established
a
lanJ
Such
increase
aPd stocks wU1 become less valu-
that certain farm and pas-
around
since
1928
and last year were
$3.50.
At 68 the yield is 5%, and Jewel,
in
t
This
Catalog listing
non-food
been
on
,and
dollars
rounded out by
service
Shopping Service
800
standards.
diet
paper
be paper
u.
buyer
our
yea/s
a(jdecj
growth,
cut
"Johnny-cleanyour-plate" attitude must return
to every household. This is a job
be
for the parents; and it is just as
important as the "Three R's."
im
assignment lation
is important to
waste of food. The
fair investment.
a
"a? OurloTefen Td nrT
tonjrmjL^.foreign mdjpro-
economy.
another
ahead
(2) Temper demands upon the
soil and conserve what crop land
y.ou already have> and at the same
merchandising
COMMON STOCK
Trade
Inquiries Invited
Exchange
Exchanges
analysts to these food companies
on
Stanley Pelz & Co., Inc.
even
available
its
"defensive"
Manager: JOSEPH W. HICKS
to rise
,imber
A
/
ing
such
made
next
1878
Food
dividends.
looks
ing house furnishings.
are
insecticides, improved farmmachinery
and
techniques,
as
crop
rotation. This has
enabled farm output to continue
zers,
ThuSi in 1975 we should have a
total of 500 million acres of crop
of Jewel Tea, which handles land. At the present rate of popu-
some
We
Fortunately,
agricultural
research has brought forth fertili¬
in 1951. Available proved fertilizers and insecticides,
the other hand' has and despite imProved agricultural
increased less than two and one- techniques, the fertility of our
garter times-from 188 million crop land is declining, in some
acres in 1880 to about 408 million sections as much as 1% a year, or
ae-s in 1951. Furthermore, the Pe^PSl5%in2^years.Farmers
net Production of available crop have not been able to completely
land is both lagging the growth neutralize the damage caused by
Chicago; and it also does a lot
this of business
with. its
124-page
size
of Research
..
.
Some mention should surely be
its spread
Paying out less than
an
common
good
leverage in its common, and unlike
Fair
a
40% of net ln cash indicates some
al
prospect 0f further stock divi-
TTW
„rnc,
with
reducing
by
take,
the stock-
common
.
(19), New Jersey (42), New
(18), two in Delaware and
one
in Virginia.
Per store sales
are believed
to be largest in the
industry.
For the eight weeks Outlook
York
stock
this
,
The Role
withraleso«260million°' lsTstores passing out of existence- With the
buying, often rubbing out the
middleman, volume sales, all for
cash, low labor costs, splendid locations with ample parking faciliended June 21, 1952 sales were
ties, palatial supermarkets with
Down the line in point of size,
23% higher than for the same
fabulously wide selections of food First National, fifth in the indusand meat, plus, in some cases, try, ranks in operating and sales period-last year and suggest some
improvement over $1.62 a share
ownership of baking and process- efficiency among the best; and its
net earnings just reported. Coming companies — all these factors stock appears to have attained
mon
was
split 4-for-l in 1946.
have built for the chains new high considerable
investment stature,
levels of gross revenue, and a it is the only major company with Policy has been conservative respecting
cash
dividends but from
more incisive attack than ever on
no
senior security, capitalization
1946, in each year except 1949
the independent grocer.
consisting merely of shares of there were
All
if acreage prices de¬
cline.
crop land' on
of
earn-
an™
outlets
money even
be the safest in¬
to have our
which
million
155
ooerated in the Middle West
iM
may
in
the u- s- has increased threefold vitamin tablets are only supple—-from about 50 million to about ments to human diet. Despite im-
1 54? nnn
824
.
,
$12 million preferred provide subpommon
land
vestment
"starvation ;
Unfortunately many farmers
thatJs' certain diseases even now fail to realize that fertilizers and
are due to a deterioration in our insecticides will not provide a
dl®f;
so
n 0
Pr°blem. They are
4uSl?tce0 1880 .the Population of merely supplements, the same as
growing food chain outfit and at
its present price of 26% yields
5.9%.
$4.6 million of bonds and
WpraPP
signs of
are
Roger W. Babson
probable
exception of Food Fair, the fastest
stnntial
ture
_
^
a
crease.
this
Noting that since 1880 population increase has far outstripped
that of farm land, Mr. Babson warns regarding future food
supply of U. S. Comments on long-range planning to increase
acreage and output, and gives practical suggestions to farmers.
ly quoted at 38 has increased its
400% over 1940.
It runs,
sales
now
Leading Companies
roughly 42% of the retail grocery
volume in the U. S.; and
By ROGER W. BABSON
largest chain, Amer¬
with common current¬
ican Stores,
today, over 1,400 stores, princi¬
With the big chains, meat dipally in New Jersey and Penn¬
visions supply about 27% of gross
sylvania, and is a classic example
revenue; and it was red meat sales
of the profitability of switching
Although the present Realthat dented
1951
earnings the from small outlets to big super- Estate Boom is ending, I don't
most.
Ceiling prices, and high markets. More than half of its want my readers to sell "sustenance"
farms held as insurance.
wholesale meat costs eroded net stores are now self-service.
A
When we gaze
revenues; and created a clamor in
strike
in 1951
hammered down
the trade for fairer OPS treatupon
our
earnings to a meek $3.88 on each
bo u ntif ul
ment, more like the Capehart of the
1,301,000 common shares in
Amendment
for
manufacturers
f/
dinner tables,
existence.
1952 projections sug¬
x
which allowed price increases to
se
hardly
gest perhaps $5 or more in net,
seems possible
offset higher costs. Well, appar- and
give substance to the thought
that
our
ently the protest was heard for that the
present $2 dividend may
price relaxations on a broad list be hiked before snow flies. Selling
grandchildren
of items have now been granted; at below 10 times 1951 earnings,
may
have to
face semiand meanwhile nearly the whole ASC is
scarcely to be described
starvation.
In
range of meat prices has recently as an inflated
equity. It belongs
dipped below the OPS ceilings, on any representative shopping
spite of the
fact that the
Thus, 1952 should be more nor- list of food chain shares.
U. S. is rated
mal; and traditional profit marNational' Tea common, although
the
best-fed
gins seem likely to be restored,
quoted at about its all time high
Not only that, but some chains
nation,
there
housewife have so broadened as to include
has
become acutely price
con- high profit margin items usually
scious, and has become a chronic found on drug store counters,
food bargain hunter. And because They
generally, however, draw
supermarkets
were
born,
and the line at lipsticks, razor blades,
waxed great, by virtue of their small compacts, etc., because of
ability to offer the lowest com- the temptation these wares offer
petitive retail prices, the chains to the light-fingered,
tricity,
—
Farm Possibilities
basis,
3.2%.
a meager
^
live
—
31 and paying $1
be neglected merely
The fourth
As
easing
an
because, on a cash dividend
not amiss.
seems
to
at
currently
Superman, Supersonic speed and super carriers,
discussion of the chain reactions of supermarkets on the
board, and the board
as
ume.
On the record, GUX selling
Korea.
In this age of
a
Thursday, July 24,1952
in and Cadillacs has subsided, peo- facts about the chains I've rattled
pie will still be eating with gusto, on about, above. They're definitely
capped chain growth, shortly after and buying an increasing per- forging ahead.
\
thanks
Jersey,
Income"
Author of "Expanding Your
»
.
they have the sales vol- centage from the food chains. So
When the buying of minks. you may want to get the complete
long
was
New
Paterson,
.
building restrictions which handi-
By IRA U. COBLEIGH
.
for
announced
Food Chains Forge Ahead
supermarket
Union
Grand
.
the
theory
penditures
under
that
will
most
grocery
continue,
ex¬
even
N. Y. Cotton
conditions; and these chains have
their
ability
N. Y.
,
economic
adverse
CHICAGO
proved
Exchange Bldg.
NEW YORK 4,
to
earn
so
DETROIT
GENEVA,
PITTSBURGH
SWITZERLAND
JAMES M.T00LAN& CO.
67
WALL
STREET
NEW YORK 5, N. Y.
HAnover 2-9335
Teletype NY 1-2630
Volume 176
Number 5136
>
The Commercial and Financial Chronicle
.
5
(289)
r
The
Steel Production
State of Trade
Retail Trade
THE PEOPLE'S CHOICE
-In the U. S. and USSR
Electric Output
Carloadings
Commodity Price Index
~
and
liriT17DIJn
Industry
CHICAGO
Business Failures
ances
J
Whatever
feels with
one
vention,
—
whether
mechanics
S^eat
weather
and
machinery and bad
for the delays in the program.
blamed by the agency
Deep gloom settled over the steel market this week as the in¬
dustry found itself in the eighth week of strike without a
were
hope that it could be settled
metal working weekly
reports.
and the United Steelworkers
of each
was
of
national
ray
quickly, "The Iron Age,"
Differences between the companies
paper-thin. But the position
deeply entrenched as to make consumers despair
so
were
of relief from the
stranglehold on their
The strike issue is union
source of
supply.
security or union shop. Stripped to
principle the industry and union ^positions shape
up like
this: The union wants
compulsory union membership. The com¬
panies do not, this trade weekly notes.
barest
For several years steel
wage contracts have provided for union
security with a "maintenance of membership" clause which allows
a 15-day
period when workers can get out of the union if
they
so desire.
The union would like to eliminate
this "escape" period.
The
companies say this would
mean
union
membership forever,
that it would perpetuate the union
monopoly. Union membership
now totals more than
90% of workers in major steel
companies,
"The Iron Age" points out.
Economic matters have been resolved
per
hour
ton.
Still
employee.
per
on
when
a
cost
of
about 250
So have prices, to the tune of
$5.20 per
of union security was based the
long¬
this fine line
est and costliest strike in
noon
at
the
history. It was not until Monday after¬
Wage Policy Committee, despite a dra¬
Union
matic personal appearance
to abolish all negotiated
plea by three industry leaders, voted
understandings with industry and revert
to full WSB recommendations.
Thus, the only visible means of
restoring production continues to be the
Taft-Hartley Law, which
President Truman has made it rather
apparent he doesn't intend
to use, declares this trade
journal.
If the
White House decides to again seize some
steel compa¬
nies under provisions of the Selective Service Act it will
be an
indication that it has failed in its efforts to end
trade authority asserts.
The real motive of another seizure
the
strike, this
attempt is viewed
of
means
one
week
taking the union off the hook.
after the
strike
started
as
union
chief Philip Murray and
industry representatives pledged to reopen selected steel
plants to
produce military and atomic energy orders. This has not
been
done, although steel companies have repeated their
offer, despite
the sure knowledge that cost of such
limited operation would be
sky high, this trade magazine observes.
Consumers
are
getting ready for
manufacturers
some
of the worst steel scram¬
Even while the strike con¬
one
bles in history when the strike ends.
tinues
Continued
on
page
31
comprise 77% of the Supreme:
in the
y
rj<he Election Returns Are
Despite
•
h
ipp
party
'election"
is
purposes
to
the
all
intents
The
didate
whom
Then
month is
it
Even
has
e country, namely, the all-pow-
•
erful Politburo. Technically it is
devoted to a femaking "mer¬
rnP
verish show °f "campaigning" on
cenaries," the
numerous
TV
behalf of the "candidate," with
antics
the the aim °f getting out an enthudunes,
uie
chosen by the Central Committee
°f the Communist Party. This
Central Committee is by law supPosed to be chosen b7 the Party
grotesque
bombast
:
authoritarian is the
more
set-up of the intriguing ruling
body of the Party, and hence of
a
vv.iar.es
torical
Level,
Perpetuation
designated.
horts of noise-
A. Wilfred May
the local
effective
under
PoHtburo_Top
Self
and
fait
a
officials,
Soviets,
Candidate
supervision from Moscow.
se-
lecti<>n of the slate in Moscow, the
o-
of the local
case
system is similar.
selection is directed by
Month
a
With the completion of this
of
the
Ahead
•
~
accompli.
The
Central Office sends out
telegrams
profess i o n a 1
to all the
districts,
apprising them
cheerleaders
of the respective
with their co¬
simon-pure can-
and
other
siastic vote.
ora¬
trappings, the proceedings do
a
basic, if imperfect,
rep-
cog
-
Congress
are
even
candidates in
scarcer
the
Soviet
Our exhibitions of bitter
U.
than
Union.
warfare
lnin°oTdpdntXr%tiC
PT6S"
Incidentally, it must
not be for-
at
at
Congress,
our
Issues
weird
resent
S.
meeting
a
a
Conventions.
akin
^ ^1939 To^thaf ^hite rulfng
b|d'
.
strictiy self-perpetuating
Part^Con^efs
331£6
Deweys, and Arveys, they have the police state say they
always—with their ears attuned
Remarkable
to
to
the
electorate's
wishes—come should be the size of the
popular
indudingWIFDRW°HST
'
Adlai(?).
'
'
Sitting here in Chicago
Convention arena, I
in
the
frequently
wonder what
the Kremlin's
tion would be to
some of
reac-
the par¬
But the
ticularly bizarre incidents.
real
is
answer
this "Gen. Sec." office
are.
Americans
that
our
sistent
with
the
lefders
as
being
traditional
rorfin
nAUIO„
tegic position of
Browder
here
deed
vote (that is> the dr0PPing of the Thorez'in France. In any event,
checked "secret(?)" ballot into an it is impossible to imagine Stalin
urn). In the Soviet Union 99.98% or any other candidate shaking a
of
the
vote
eligible
f0r
"the"
voters
cast
candidate.
their
In
Si-
beria, voting frequently entails
a
defeated
opponent's
hand,
per
Ike's recent post-nomination visit
to Bob. Shooting is so much more
apropos
than hand-shaking!
seemingly
part and parcel of
all
"muddling-through"
ity
over
our
Soon
*
after
arrival
my
in
the
Soviet Union last
April, the Mayor
of
Moscow
quite
proudly
re¬
minded
me
that
he
had
been
elected
unanimously and "with¬
out
any
of the corruption and
other nonsense that
goes on in the
States."
But
this
from
single-candidacy,
being
only
the
ficers,
Russian
the
choice
is
the
far
rule
governing
municipal of¬
of
basic
gospel
in
Here is the way this monolithic
four
1946,
The
years—in
February,
1950, 1954.
single candidate
in
each
district represents the so-called
"Bloc of the Communist
Party and
the non-Partisans," the latter
term,
although
technically
comprising
non-party members, being a fic¬
tion to give the illusion of the ex¬
of
independent
an
,
The annual
spring outing of the Security Traders Association of
Angeles, held June 27-29 at the Hotel Del Coronado, was a
great success, with 66 in attendance including Harry Arnold, Gold¬
Los
Sachs & Co., New York City; Phillip J. Clark, Amos C. Sudler
Co., Denver; and C. Arnold Taylor, Wm. P. Harper & Son & Co.,
man,
&
Seattle.
Members and guests were entertained at a cocktail party
given
by the San Diego Gas & Electric Co., with E. D. Sherwin, President
and Ray Cavell, secretary, hosts.
Pictures taken at the outing appear on pages 22 and 23.
NATIONAL SECURITY TRADERS ASSOCIATION
The
leave
"elections."
'
SECURITY TRADERS ASSOCIATION OF LOS ANGELES
all
technique works out in estab¬
lishing the Supreme Soviet once
every
NSTA Notes
over
superior¬
the monolithic state.
USSR's Single-Candidate
Election
System
A
National
New
Oct. 18.
Security Traders Association Convention will
Chicago on the afternoon or evening of
York
and
The Convention Special trains will meet in Washington on
Oct.
19.
Oct.
19
Members
and
arrive
will
in
Convention itself will
On Oct. 24,
ing to Miami
New York and
leave
Miami
run
Washington
on
the
on
afternoon
the
of
from Oct. 20 to Oct. 23
afternoon
Oct.
20.
Edgar, Ricker
THE
is
now
MILWAUKEE
for
months
the
before
(four days).
on
Oct. 27.
Chicago
on
It will leave for home and be back in
Oct. 29.
Those not desiring to make the
spective offices the following day.
date
Party's
heads in Moscow, via the Central
Committee's Election
Commission,
We take
& Co.,
with
third
choices.
tions
conducted
With
second
its
pleasure in Announcing that
Mr. R. VICTOR REID
and
delibera¬
absolutely in
«se-
is
now
associated with
us
in
our
cret
(far from the land of Conven¬
tion-TV)
the
Moscow
Central
Committee makes up an overall
COMPANY
slate.
the distributor for the above Mutual Fund
It
makes
certain
that
Unlisted
Trading Department
in
addition to, or instead
of, the local
representatives, the slate includes
number of prominent
people, in¬
cluding the 13 Politburo members,
14 MVD and MGB
police officials,
collective-farm presidents, scien¬
tists, artists and writers. Thus a
a
The Milwaukee Comfany
EDGAR. RICKER & CO., Est. 1904
suggested
Investment
207
.
■
CHICAGO
Eadfc"Michigan Street-'
'Ay Milwaukee
•f'l
It
'
*
MADISON
off
\
■
'
political
WAUSAU
the
slate
few
by
a
New York Produce
•
Chicago Board of Trade
Exchange
•
New York Curb Exchange, Associate
veteran
ballerina from
Moscow's Bolshoi Theatre.
A
:'o<:
.'V '
local
seeking to represent the Kirsanov
district might well be "bumped"
**
*
1, Wisconsin
.v
ST. PAULy
Securities
Members of: New York Stock Exchange
non-Communists
("en¬
have in¬
lightened" ones), as we
dicated, are added in for windowdressing. The number of Corn-
ingH ibaire^^tout & Co.
FOUNDED
50 Broadway,
re¬
-
body
the
"election" the
representative,
wholly owned subsidiary of
a
set
few
of
The
the Convention will go to Havana by boat, return¬
Havana trip can leave Miami on Oct. 24 and be back at their
ask the local sectional committees
for suggested nominees to be their
Announcing that
.
and
helter-skelter voting system is in¬
istence
Organized in 1924
con¬
stra¬
tK,_
of the CP
power
of voters.
WISCONSIN INVESTMENT COMPANY
to
the
But
keynote speechifying and other » is likely that a
wj|]
ri/fprrpf, nnfi1
will hp
be deferred
until stfllin'®
Stalin's riede¬
gotten that despite the
politicians' castigations of the party m power,
mise—if not longer.
delegate
deals,
and
the
hard- have no semblance of a counterboiled ward
Incidentally,
Stalin's
title
is
politicking of the Part in a state where the right
General Secretary of the Party;
Hagues,
Kelleys,
Prendergasts, and the effective policy are what
*
k
are
scouting conversion possibilities.
Their anxiety is evidenced
by their willingness to snap up any¬
thing available. Other steel users are displaying equal
ingenuity
in keeping their plants
operating. In order to piece out unbalanced
inventories some companies are
cutting stock to desired sizes. Some
.
drome,
a
It will be recalled that
-rather than freely choose between
holders, however, is step- - issues and candidates, assuredly
ped minutely up from election to presents a sad contrast in scornelection, to prove the Party's ing appreciation of democratic
"growing popularity," and they privileges.
"*-\'";
now
klieff lii?ht<i of
$9.5 billion by June 30, according to the
the eligible voters stay at home
.
.
MAY
munist
appurte-
the
Defense Production Administration. The above
figure amounted to
54% of the dollar value of such government-assisted
projects to
that date, the
foregoing source noted. However, the last official
report by the D. P. A. was for the first
quarter ended March 31,
when about $8 billion of facilities was in
place. This represented
only 45% of the dollar value authorized. Shortages of construc¬
equipment
its
nom-
nances
Industrial expansion which received United States assistance
in the form of fast tax amortization allowances
was completed to
the tune of an estimated
production
-
its
learn this at first hand in
Siberia.)
The United States, where
55% of
e ?s membership (versus but
Ameri5% of the population).,
insmu-
can
year
materials,
con-
with
tion.
before and about 10% under the all-time peak at¬
tained during. World War II.
tion
party
be
a
Assembly lines in automobiles and many electric products
plants were brought to a halt by the dearth of steel. As a conse¬
quence, total manufacturing output remained
moderately less than
a
annoy-
inee, it-is in-
A
that of
-
final choice of
or
slight advance occurred the past week in total industrial
output for the nation, following the vacation closings of the pre¬
ceding week, but this was tempered by the effects of the
growing
shortage of steel which became more deeply felt.
*
a
it
journeying through the
(As a matter of fact he who
doesn't vote in Moscow, will soon
snow.
.
Food Price Index
Auto Production
full day's
,
1868
New Yor
The Commercial and Financial
6
Chronicle
Thursday, July 24,
.
.
.
1952
(290)
Economic Impact
of Military
Spending and Foreign Aid
Members
of the New
York Stock Exchange
defense
orders
pendent
'The
United States is
geared
to
if
angel
an
war
a
heaven
and
people
that
now
economy
appeared
told
the
they
so
that
from
American
would
desire
prolonged disturb¬
The reduc¬
tion in defense expenditures will
out serious or
fraction of the cut that
made after
World War II.
be only a
was
have
probable cut will
there would be an immediate
range from $15 to $25 billion, re¬
lated to a gross national product
financial panic."Statement by
of about $350 billion.
former U. S. Presidential can¬
This com¬
didate.
pares with a $119 billion curtail¬
ment
in
spending related to a
Opinions and views such as the
gross
national product of about
above
were
effectively contra¬
If it should prove
dicted
by
Henry J. Simonson, $275 billion.
President of National Securities necessary, there are a variety of
everlasting
starting
peace
...
and
available to the govern¬
measures
Research
ment
in
tendencies.
nation¬
a
wide
The
address
the
over
are
Mu¬
Network
One is to lower taxes.
on
May
18,
In
an
1952.
hard
legislators
persuade
spend¬
S.
Assistance
178
62
—_______——
—131
U. S. payment for Am. lire issue
.2
312
European Recovery Program (ERPj
business
this
—
has
What
solution.
the
been
1,390
return
nor
yet by eco¬
nomics, but by ideals
age applied to
the
of our herit¬
future." To
Huge
of
fear
prevailing
views
Similar
held
are
Wilfred May of the
by
A.
its
acnieve
ob¬
thesis
that
considerable
S.
U.
the United States
can
other
votes
tivity and economic well-being in
foreign
pro¬
a
the
allowed
parties to win, usually
the center
by
of
those
to
Christian Democrats that
*
America's
That
added
parties,
seen
that in the case
of
Italy, American billions have
neither accomplished impressive
economic,
cri^cism gains in the realm of economics,
nor
have they effectively elimi¬
or
outright objection,- is not sur¬
.frequent
reminder
that
"Wall
nated the threat of Communism.
Street" desires war in order to prising: When the Economic "Co¬
In other parts of the Western
operation Administration (ECA)
safeguard its profits. Hence Pro¬
World into which American bil¬
time of
the
fessor
thereby depriving
its distressingly
peace,
Kremlin
of
Galbraith's
"the most
complaint that
damaging charge made
against the United States in recent
years
real
that
is
we
afford
cannot
peace."
Stressing the fact that prosperity
is possible after
ducing huge
he
points
alone, there
that
are
to be made
ages
of
eliminating
public
or re¬
jnilitary expenditures,
out
"In
housing
enormous
short¬
In the field
up.
there
enterprise,
are
schools, roads, hospitals and slums
requiring attention. Peace would
not quell
the ambitions of dam
builders
land
reclaimers—
and the Missouri is
still untamed.
.
.
.
for
and
an
whatever
endless
resources
period ahead,
we
can
will be needed and wanted
less
fortunate
Africa,
rope."
South
spare,
by the
of
masses
America
Eu¬
in
a
somewhat
similar vein:
"We have good reason for con¬
fidence in
ability to meet the
readjustment with¬
our
post-defense
inaugurated early in 1948, its
was
principal aim was to rebuild the
of war-torn countries,
An
address
National
by
Dr.
Securities
poration, New York
Winkler
&
before
Research
City, July 21,
Cor¬
1952.
lions have flowed, the
much
economies
not
check
France,
increase produc¬
inflation,
for
extent to which some of American
times
funds' have gone into
non-productive
chan¬
taxpayers'
distinctly
nels, is perhaps best evident from
what has happened in Italy.
Ac¬
Commerce
of
If
United States:
".
.
station,
in
good
a
.
modern
railway
mile long, has been built
in which you could put
a
Rome
Pennsylvania Station, Grand Cen¬
tral
stations
few
the railroad
and have a
Station, and all
of
acres
Chicago
left
over.
another
"In
our
stations in
and
Syracuse,
Isle
of
hotel
Rome
40,COO,
a
that would dwarf
Albany, Rochester,
was
built.
On the
Capri, a new luxurious
erected, while many
was
other older but
"On
of
town
are
perfectly suitable
empty.
the
and
outskirts
Naples
of
are
Milan,
literally
1937
than 26%
more
prices;
in
1950,
were
clined
the
of
1952
paying
value of the French franc has de¬
.286c
Chamber
in
were
almost 221/4 times
higher.
These figures
may
be
somewhat misleading, because-the
from
"Economic
to
more
the
prices
Intelli¬
gence," official publication of the
cording
situation'is
encouraging.
In
Frenchmen
food
tion and contain Communism. The
hotels
*
the
or
should encounter serious
railway station
'
Dr. Lubin argues
political
grams,
Asia,
and
and
America.
States of
TO
LETTER
THE
EDITOR:
Republican Paity Gold
Plank Termed Unsatisfactory
fix
Conn,, holds it fails to
value of $35 per ounce.
Skull, of New Haven,
Frederick G.
price of gold at present
during
3.978c
in
these
the same period
S.) in 1937 to
(U.
1950
and
gave
e n c o
.2857c
in
1952.
den
in
1946
as
are
gold-producing
of the
Republican Resolutions Commit¬
tee being from that state, it could
state,
the
who
be
for
paratively
trying
our
been
U.
of
pursue
the
restoring
currency
"encouragement" was short-lived;
for in the space
of four days, for
to under¬
difficult
reason
some
a
revolt
empire
in
against
the
all
of the com¬
gold-producers
few
considered to be of greater
were
million
the wise move
of the
S. to the honesty and integrity
the Gold Standard.
But that
to
a
Chairman
those of our 160
imoortance than
to get
political
leaders
of
Frederick G. Shull
the
that the interests
people
people as a
whole.
the Democrats over¬
look this opportunity, they will
be unwise in the extreme; for they
have a fine chance to gain many
Anyway, if
Republican votes by
their
including an
sound-money
honest
platform, reading
plank
in
somewhat
6 version of a as follows:
"We advocate
the
monetary
plank had shrunk to prompt return of the United States
the following meaningless mon¬
to the Gold
Standard, with the
strosity: the Party's merely under¬ value of the dollar firmly fixed at
taking to restore "such stability $35 a fine ounce of gold, and made
as
will permit the realization of
redeemable, on demand, at that
that
stand,
our
aim
of
July
a
dollar
on
a
fully
basis"—a far cry
return of this nation to a
fixed value."
convertible gold
a
advance in
Orient.
Launched
by the French as a
"negligent
and
not
carefully
thought-out police operation," it
now rages over a 1,000 mile front
colonial
being
and
have,
from
taken
back to my story,
was responsible for this sud¬
change
in
the
Platform?
get
to
urage-
years,
dollar-assets.
classes of
three
who
it
of
order
But
into
true gold standard.
the cost
This question seems an entirely
of living is not quite so sharp as
the above statistics suggest, but it reasonable one: Who was respon¬
is marked enough to cause alarm. sible for this sudden last-minute
The
French
picture,
on
the change from the earlier forthright
If I were to
whole, is not a pretty one; nor is monetary plank?
it a healthy one.
The princioal hazard a guess, it would be some¬
reason:
expenditure beyond the what as follows: There are strong
nation's capacity, aggravated by gold-producing interests operating
the war in Indo-Cbina
and the in Washington, under the highdefense against Russian aggression sounding
name
"United
States
in Europe. The former began late Gold Committee. Inc.," that have
figures
account, the
peoole now own on the
$500 billion of those
—for the
Colorado
to
of govern¬
deposits, and
life
insurance
benefits already
paid for with current dollars, to
the extent of about $270 billion
bank
bonds,
ment
great
t
m en
a
would rob all holders
interna-
tionally,"
the dollar.
such
cidentally,
further
In¬
devaluation
53.3%
a
of
"devaluation"
domestically
and
to
amounting
thousands of
small margin."
Thus it is
and abroad.
ac¬
In Rome, and most
places in fact, it was the
for the three small allied
everywhere.
transitory nature, and discontinu¬
ance or drastic curtailment of such
"Commercial
high level of business
a
energy
everywhere,
particularly, in the United
then, and,
only
and
Then,
capitalism
prosperity, and the
of peoples
.
expenditure is bound adversely to
and Financial Chronicle," Profes¬
affect the nation's economy, unless
sor
J. K. Galbraith of Harvard,
it is in a position to replace nonand other economists of repute. It
constructive spending with reve¬
is essential to lay emphasis on the
nue-producing programs at home
enjoy
undependable.
industry
.vith definiteness.
207,000.
The Advocates of past,
I feel that as
No one outside the circle of pro-* present and future spending are .; When The New York "Times"
military
expenditures decline, fessional demagogues will regard trying to console themselves, and of July 6 carried a news report
there will be an increase in our
war as constructive or look upon
presumably the U. S. taxpayer, stating that there wouM be a
expenditures for highways, schools continued hostilities as beneficial
by stating that the Communist plank in the Republican platform
and public buildings—also in for¬
in
to the country and the American gain
is "less than most people expressed
these
words:
eign-aid spending and in the ex¬
people. While huge defense orders expected." An American observer
tension of foreign credits in an
"It (the Party)
and
armaments
programs
may on the scene, had this to say: "Had
effort to help friendly foreign na¬
also advocates
stimulate business activity, they the Christian Democrats by them¬
an
tions raise their standard of living
early reopposed
the
left-wing
create nothing and produce noth¬ selves
and become more self-supporting
turn to the
ing of lasting value.
The high groups in the latest Italian elec¬
through the development of Amer¬ economic level is at
best, of a tions, they would have lost almost gold standard
techniques."
by armies,
cally
However,
ican business
dominated
foreign policy are
"not
on
taxpayer? The latest
Moscow, or any election results show that the prohave a depression, Mr. Simonson other aggressor:
To what extent West,
i.e. pro-U. S., Christian
said:
education and constructive propa¬ Democrats
have
lost
1,413,000
"No—I don't think there will be
ganda can bring about a change votes compared with 1948, while
a
depression then,
although a n this direction, cannot be stated the
Communists
have
gained
likely.
anti-Moscow
ican
holocaust is'the only
new
a
could
by
moderate decline in business seems
of
sorts
our
expenditures,
reduction
or
over
expenditure which en¬
sacrifices by
vast
tailed
the
threatened
willingness to incur all
expenditure to further
campaigns. This,
of course, will never stop recip¬
ients
of American dollars from
accepting them, but they would
be
far more impressed,
if they
felt that American aid and Amer¬
sequent
—_.
—assigned
sion, threatened or believed to be
would
States
the United States as
Through a change in our meth¬
gigantic
budgets, currency manipulations, od of dealing with our less for¬
exchange restrictions, export and tunate neighbors, we shall be able
to
restore to a
sorely stricken
import quotas, are not the answer
or the solution.
They afford tem¬ world, peace and security, so vital
to the creation of such economic
porary relief, at best. Elimination
to purchase surplus sup¬
Loan,
vast sums to
Winkler
136
500
121
200
Aid
S.
Id.; to purchase 123 cargo vessels
Export-Import Bank loan to Italian
to
legislators into spending
guard against aggres¬
frighten
Max
Dr.
U.
plies
appropriations for con¬
structive projects
at home, and
especially abroad.
On the other
hand,
it
is relatively
easy
to
program,
United
the
U.
376
Italy—
in
Economic
Administration
Rehabilitation (UNRRAi
Interim
stems
vote huge
ernmental de¬
ing
to
attempted
be
can
could these be resolved?
military
distributed
Relief &
Direct
it is extremely
from the fact that
question
whether, upon
completion of
the
big gov¬
fense
difficulty
chief
this
Whether
or
Committee
Control
Foreign
expressed above. How¬
the
ever,
the
to
answer
the views
Britain,
to drop the whole
lap of the Amer¬
the
icans as did the British in Greece.
(in million dollars): /
follows
as
Allied
considerable merit to
is
con¬
are
like
France,
into
issue
saving the country
The above sums are
great."
There
Greece.
might decide
Those responsible for the
toward
way
UN
tual
and
spending have endeavored to per¬
successfully during a Presidential act otherwise, is to invite the
suade the American people, who
charge that our actions are, while
ca^naipn. fp" be doubts
in the final analysis, supply the
France's problems are also those perhaps
strategically expedient,
funds, that the policy is justified,
unsound,
morally
of many other members of the economically
because
the money goes a long
"Western" community. How should and ethically unwise, and politi¬
possibilities of freeing pur¬
power by tax reductions
very
Free
possibility that
Indo-China might become another
have been given or
"loaned" to Italy and the Italian
chasing
broadcast
most Americans
What
billion
people.
the
to
a
cerned with is the
garded as commensurate.
Since
the
country's liberation,
almost
$3%
be
World.
on
recessionary from Communism.
counteract
to
Corporation,
taxpayers can
the
sure,
would
blow
serious
most
be
To
Indo-China
of
loss
expended by
hardly be re¬
amounts
vast
the
U. S.
return
The
of
theirs?
send
to
Washington
against the threat
Communism.
of
the
time
This
now,
gener¬
the part of
on
create alliances
to our economy.
ance
American
upon
osity which in turn stems from a
desire on the part of Washington,
they create
nothing of lasting value." Reveals waste in foreign aid program
stimulate business activity,
following is
conflagration.
another
hoped
is
It
the send¬ to meet this challenge.
However, in extending aid, it is
ing of draftees and reserve offi¬
fallacious to convey the idea that
cers to any overseas area in time
of peace.
Will the U. S., under our actions are prompted primari¬
these circumstances, dispatch her ly, nay exclusively, by our abhor¬
sons
to where the French, refuse rence of Communism and our con¬
of the country—and this
is true of most of the Western
World—is to a large degree, de¬
forecasts on the effects of heavy
spending" and the future impact on the econ¬
may
the
which the
be able to
should
World
without
place of aid;
This
Free
meet
in place of war.
challenge
a
French statutes prohibit
economy
of its curtailment, Dr. Winkler holds that "while huge
omy
as
and Point IV
is
in
trade
jectives:
expected that
the acknowl¬
future course, edged leader of and spokesman
interest: The for the Free World, may be able
been sent. As to the
mind, it may
examine the
a whole:
The
to
Italy
of
status
After reviewing views and
government "war
interest
of
be
apparently
has
willing to supply financial
and material aid, so far, at least,
no
American
soldiers have
yet
With the above in
Bernard, Winkler & Co.
S.
U.
bunoa dux.ai^.
a
been
populace."
By DR. MAX WINKLER*
the
While
live in these, they
have become the source of con¬
siderable
discontent among the
cannot afford to
to
c.ose
ana
men
Italian
Since the average
shame.
jungle, forest and swamp, and
already cost France 18,000
has
Park Avenue to
put
would
that
of
apartment houses
hundreds of new
recently
distributed
a
Democrats have al¬
Prominent
this helpful sug¬
interests of the
American people; and it remains
to
be
seen
what they will do
ready been given
in
gestion
the
about it.
Very truly yours,
FREDERICK G. SHULL,
Connecticut Gold
Chairman,
Standard League,
July 20, 1952.
'.j,.
.
K'mball & Co. Formed
four-page
'3
Joseph C. Kimball has formed
price of gold to $75 Kimball & Co. with offices at
a fine ounce—meaning
the drop¬ 7 West 96th Street, New York
ping of the "value" of the dollar City, to engage in the securities
printed circular calling for a rise
in the official
to
l/75th
of
an
ounce,
and
business.
Volume 176
Number 5136
The Commercial and
Financial Chronicle
...
(291)
been retarded
From
Washington
Ahead
humdrum existence.
It is
to
the
wife
doing her chores with
heartening to
some
a
been
these
of
the
passel of bare¬
Carlisle
considering what
explanation apparently
with
these
made
such
also
found themselves.
the
to
the
Democrats
they
I
had
American
local
citizens
to go
to hell.
be to retire to
But
it appears
a
one
of
the
is
dra¬
matically
por¬
trayed
in
liberated
ment
at
a
V)V«"
J
o s
in
contribu¬
"Opportunity,
produced
to
to
know
intended
is
for
senior
high school
eral
that
of
the
form
It
sketches
shows
jobs
eph T.
Joseph T. Johnson
The
,
t
x
x
^
n
and
the
modern
tools
sential
to
and
conducted by I. B. A.
schools,
abou{
this'fiVm"project
k
from
Erwin
Educational
Bankers
may
W.
™
Director,
Association
Street,
Chicago 3, Illinois.
Ft P.
Joins Bear, Stearns
ated with Bear, Stearns & Co., 133
South La Salle Street. Mr. Breck-
the
inridge has been President of hli
more
investment
own
of
so
Breckinridge
CHICAGO, 111.—Frank Prevo^
Breckinridge has become associ-
Breckinridge
es¬
advisory
and
firm,
Company, to
years.
many
our
of
John 6. Marshall
share in the future growth of the
Association, presented the film
coimtry; how he may become part
at the meeting which was arranged
0f American enterprise
and reby the New York Group of the cejve
dividends through the purAssociation
through the Group chase of shares of
stock; and how
Chairman, Walter F.Blaine, Goldmay lend his savings and reman, Sachs & Co.
On the same ceive" interest
through the purday, preview screenings for the chase of bonds.
were
obtained
Investment
steadily
rising
living.
The viewer learns how he may
standard
groups,
high
of America. 33 South Clark
in
flow
services
by
adult
information
of
Boehmler,
to
senior
Additional
*
th<-
how
constant
was
you
investment banker
process.
circulation
be
develops
theme, and
savings of the nation provide
A."
a
loan basis through,
exchanges of Modern.
on
film
—££a*se
groups.
picture
saving-investing
narrative
role
ers
press
27
copeges anc^
adult
agree that
'Opportunity, U.
clearly tells the story of
industry and its essential role
motion
S.
Association
will be available through Modern.
Talking Picture Service for gen¬
or
it through their eyes,'
see
U.
the
Talking Picture Service,.Inc., lo¬
cated
in
cities
throughout the
country.
After
Sept.
1,
prints
that
little
for
them
the
A.'
the
~"7
/»
who
our econ¬
Prints may be purchased
by I. B.
A. members and are also available
which the picture is intended and
.in
i^.-
.
out
growing number of
depicting the work of the
Wilding Picture Productions, Inc.
"Keep in mind the audiences for
This
of
President of the Investment Bank-
fact, been problem children in our
society, excluded from play¬
ing with the rest of us, ignored and that
their development has
Association's
the
omy.
in the economy, and should prove
an
effective educational tool."
Company, Milwaukee, Wisconsin,
_
pointed
to
public understanding of
audiences of all types and for col-
lege and
our
Bankers
prtao
T"l"
and
ness
S.
Milw aukee
have,
preview.
financial community—motion
pic¬
nothing about the securities busi-
will
pic¬
Association
Johnson
representatives, "and I think
the
by the Invest¬
prerequisites of great
the
repre¬
by the revolution.
people
try
ture sponsored
walled-in estate and tell the mob
at
initiated by President
was
the
tion
Mr. Johnson suggested to the
press
sound
new
h.uuon
have
that these multi-millionaires
cnan-
are
govern¬
ments
Johnson,
always thought that
A."
sents
comes
"Opportunity; U. S. A." is designed
nelled into productive use by pri¬
vate industry
and by state and
To appreciate just what the
last 20 years have meant to
these
fellows you have only to
contemplate Kerr and Harriman as
they
mill gaily among' the
sweating crowds of paid teen-agers
marching
and chanting in their
behalf; their happy countenances as
they
are jostled
and pushed around and asked
insulting questions by
the press.
wealth would
been
How the savings of the millions
of
fellow
mobocracy of
have
Mr.
America, "Op¬
applies
who
men
"Opportunity, U.S.A."
men
presided
introducing President Johnson,
stated that
"Opportunity, U.
Johnson to round out the
I. B. A.
educational program and
It would
Sponsors Movie:
portunity,
U.
S. A.," shown
sweating
S.
men.
lost.
were
others who
the
shout about how they have lifted the
they should also tell about what the.y have
really hard to describe the glow of happiness that
bleeding hearts, whom we Conservatives have
-considered were
leading us straight down the road to Socialism:
Green, Lehman, Murray of Montana, Bob Kerr et
al. They have
been lonesome, it
seems, ignored in the councils of their
In
In
Democrats
masses
for
His
.have become such
men.
movie,
sing the revolutionary
wealth
Bargeron
explained, his going all the
This
arms
tures which are
serving to reduce
financial illiteracy and to
improve
IBA
tremendous affection for
minorities, it
way on racial issues—'''civil
rights"
—was due to the fact
that he is a member of a
persecuted minor¬
ity himself, that minority of
multi-millionaires.
was
be
can
lock
can
They have always wanted, it seems, to go to the ball game, munch
peanuts and hurl imprecations at the umpire.
the
motivated Harriman.
they
as
films
so
mill-
tick, why men of their wealth had become such
workers
vineyard fashioned by that
conglomeration of Leftists,
Pinkoes, labor leaders and, in some
instances, Communists. A
syndicated columnist friend of Harriman's
explained recently what
in
happy
as
the two multi-millionaire Presidential candidates—Kerr and
Harriman—as they march, the perspiration
see
time I had
are
have been much more fun had they
working out on the car tracks in the blazing
sun, shirtless and greasy and with a bucket of beer.
Certainly
they have been such manual laborers in their quest of the Presi¬
dency here.
My first picture of great wealth was that of the individual
being protected from the herd by bodyguards and barricades. Not
how the 20 .years of the
Deals—New and
Fair—have lifted the spirits of such
men as Averell
Harriman, Bob
Kerr, Senators Lehman of New
York, Green of Rhode Island and
Murray of Montana. It has filled a void within
their beings given
them
companionship and a purpose in life.
For
They
streaming down their
faces, with the hired demonstrators which all the candidates em¬
ploy. You get the impression that they are manual laborers at
heart; that they figure the years they spent in the seclusion of their
impression at this
foot kids hanging onto her
apron strings.
But
it is a little
startling to learn that I should
have bestowed some of
my pity on multi-mil¬
lionaires who, it
develops, have been about as
lonesome and downtrodden as
any other group
of our citizenry.
as
Fenner & Beane, New
Chairman of the I. B. A.
Education
Committee, which is
responsible for distribution of the
them
over
my
out
the
done for these
.they have also done these
things for the
multi-millionaires, certainly a
large group of them. Somehow or
another, as
I have pursued
my studies, I never knew this
was a neglected
group. On many occasions
It is
Pierce,
York,
transformed
men,
he
When
that
gone
extroverts.
these
all these years been
But you can't
escape the
has
liberated
accepted by Phil Murray, when they
are
dignity of the
along day after day in
accomplishment with which
they
The
they
has
*
prepared to go down in
history and which
their acts of
corruption can't erase, they claim,
is that they have made
the masses feel
good
inside.
worker
never
songs. '
CHICAGO—For years the Democrats have
been talking about
how they have given
expression and articulation to the
underdog,
the great mass of
people who just went
heart
youngster who could
same as a
with the drivers of beer trucks and
together
of the News
are
revolution
from introverts to
By CARLISLE BARGERON
Convention
result, the
...
The
when
their
as a
go to school.
>
7
Norman
groups and member firms in lead¬
Office in
Open
'A
d>
Chicago
CHICAGO, 111. — John C. Ma:/shall has opened offices at 23J.
South
in
La
the
Salle
Street
securities
to
engago
business.
Miv
Marshall in the past was a partner
Smith, Merrill Lynch, in Kebbon, McCormick & Co.
ing cities throughout the country.
ft >1
Gairdner
.
Member:
%
Gompany Limited
The Investment Dealers' Association
of Canada'•
]
'
^ '
f
v
'
*
'•
-Then and Now
m
Government, Municipal
and
>:
.
CANADA has
\
ment
Corporation Securities
since
the border
come
a
long
& Co.
Baclie
way
first
in its economic develop¬
opened
Then
320
Bay Street,
EMpire 6-8011
Mineral
-
**
Population
Toronto,. Canada
Montreal
r'
4
.
;
'
"
:
•
i.I
■
Quebec City
■
i
Hamilton
...
Kitchener
•'
-
i
,
>
i
11
■
'
i>
office north cfl
Now (1950)
(1913)
13,8415,000
7,206,643
Production
$145,635,000 $1,040,888,000
i
...J
-
14,313,000
270,698,000
Agricultural Field Crops
552,771,000
1,637,458,000
Manufacturing Production
589,604,000
5,330,566,000
Pulpwood Production
■■■■•■"
an
than four decades ago.
more
Kingston
11
Calgary
New York
•
i
We had faith in Canada's future then just as we
have
now.
.
Our
Gairdner, Son
&
evidences
Company.
is
Members:
The Toronto Stock
Montreal Stock
-
our
belief in
in
Stock Exchange
Canada's continued growth and
our
policy to improve and expand
service to investors.-
'
Exchange
Montreal Curb Market
membership in the Toronto
further step
a
our
Exchange
new
BACIIE & CO.
,
MEMBERS
NEW YORK STOCK
EXCHANGE
'
NEW YORK CURB EXCHANGE
r
•
■
-
-
•
~
Private wire system
OTHER
-
LEADING
MAIN OFFICE: 36 Wall
320.Bay Street, Toronto, Canada
*
EMpire 6-8011
Montreal
Quebec City
Hamilton
Kitchener
Tel:
'
Kingston
Street, New York 5, N. Y.
Dlgby 4-3600
J
Toronto Office: 36 Melinda Street
Calgary
New York
•
.
TORONTO9TOCKEXCHANGE
STOCK AND COMMODITY EXCHANGES
.
.
?
Founded
1879
Branches &
correspondents in principal cities
n
The Commercial and Financial Chronicle
8
(292)
Cement
10 Post Office Square, Boston 9,
Co.,
Industry—Lerner &
COMING
Mass.
Dealer-Broker Investment
Company—Analysis—Lober Brothers & Co., 30 Broad
Simmons
EVENTS
Street, New York 4, N. Y.
Stone
Wells—Analysis—Hayden,
Struthers
Recommendations & Literature
It is
and review of the
Co.—Analysis
Cement
Riverside
&
Co.,
25
Teleprompter Corporation
understood that the firms mentioned will he pleased
to send interested parties the following literature:
Wall
52
—
Analysis
York 5, N.
New
Street,
L. H. Rothchild & Co.,
Also available is an
—
Y.
Pipeline Co.—Detailed report—Lan-
Mountain
Group of IBA Summer
Frolic
the
gill & Co., 134 South La Salle Street, Chicago 3, 111.
of
York 5, N. Y.
special reference to
International Nickel
of Canada, Ltd., Noranda, Mines, Ltd., and Golden ManiMines, Limited—Ross, Knowles & Co., 330 Bay Street,
Companies — Analysis with
Consolidated Mining: & Smelting Co.,
Metal
Toronto 1,
Splits—-Bulletin—Ira llaupt & Co.,
Stock
Walter
Ill
=
Broadway, New York 5, N. Y.
Leading Banks & Trust Companies of Northern New Jersey—
Semi-annual study—Parker & Weissenborn, Incorporated, 24
Newark
Street,
N. J.
2,
Walston, Hoffman & Goodwin, 265
Montgomery Street, San Francisco 4, Calif. Also available
is an analysis of the Cement Industry and of Allis-Chalmers
Gas
Analysis
—
—
Manufacturing Co.
1952—New York
New York Bank Earnings—For first half of
120 Broadway, New York 5, N. Y.
Hanseatic Corp.,
New York
York 5,
of Value Line Ratings & Reports
covering 42 Petroleum and Paper Industry stocks showing
prospective earnings and dividends in relation to normal
capitalization—Oil Stock Issue and four weekly editions of
Ratings and Reports, Special Situations Recommendations,
Supervised Account Renort, two Fortnightly letters and four
weekly supplements—$5.00 to new subscribers only—Dept.
CF-6, Value Line Investment Survey, 5 East 44th Street, New
York 17, N. Y.
Stocks—48-page
issue
ties at
liam
Co.—Memorandum—DePasquale
Street, New York 5, N. Y.*
randum
Co.,
Also available is
57
Anderson-Prichard Oil
Corp.—Memorandum—White,
Co., 40 Wall Street, New York 5, N. Y.
Chicago, Milwaukee,
cere
&
St.
Paul
&
Pacific—Memorandum—Sin¬
&
South
Incorporated—Analysis—Hill
Richards &
Co.,
Spring Street, Los Angeles 14, Calif.
EI Paso Electric Power
Ill
Company—Analysis—Ira Haupt & Co.,
Broadway, New York 6, N. Y.
Equitable
Credit
Corporation
Credit Corporation,
Good
Humor
453
South
Co.
—
Detailed
circular
—
Equitable
112 State Street, Albany 7, N. Y.
of
California—Memorandum—Fewel &
Co.,
Spring Street, Los Angeles 13, Calif.
Gulf, Mobile & Ohio Railroad Co.—Brief analysis—E. F. Hutton
& Company, 61 Broadway, New York 6, N. Y.
Also available
is
a
brief analysis of Western Pacific Railroad
Hoffman
Co.—Memorandum—Smith,
Co.
Barney
&
14
Wall Street, New York 5, N. Y.
Kuhlman
pany,
Electric
Memorandum
Charles
Morris Plan Corporation of
America—Analysis—Eastman, Dil¬
lon & Co., 15 Broad Street, New York
5, N. Y.
is
Oil
an
Also available
analysis of Radio Corporation of America.
Finance
Corp.
—
Memorandum
—
West
&
Co., 26 Journal
Square, Jersey City, N. J.
Phillips
Petroleum
hoff &
Company
Analysis — Freehling,
Co., 120 South La Salle Street, Chicago 3, 111.
Plastic Wire and Cable
—
comments
on
two
newcomers:
Colorado Interstate Gas
Westpan Hydrocarbon
74
N.
Y
Security. Dealers Association
Trinifv P'ac*.
N*»w York 6,
N
Y
Board
body hopes it'll turn out that
way.
Buying, what is some¬
times characterized
as "good"
accomplished on
the dullness and usually on
the way down. Such buying
requires perception, independ¬
ent action and guts, or if you
is
buying,
like, intestinal fortitude.
*
Prof. Robt. C.
fill vacancy caused by
Turner to
of Dr. Roy Rlough.
resignation
President
Truman
22
July
on
appointed Robert C. Turner, Pro¬
fessor of Business Administration
University, and
a
I
economic
comes
Traders Asso¬
the Roney
Convention at
(Havana, Cuba)
Security Traders
sociation Convention tour.
National
As¬
Nov. 30-Dec. 5, 1952
(Hollywood, Fla.)
Investment Bankers Association
Holly¬
Annual Convention at the
.
wood Beach Hotel.
director
for
Prof.
Turner,
is
who
44
Eisele, King, Libaire
years
addition to teaching at
Indiana University, has been serv¬
ing
as an
Steelman
economic adviser to Mr.
in the latter's capacity
the Office
Acting Director of
of Defense Mobilization.
Branch in Denver
King,
Stout
Libaire,
Co., 50 Broadway, New
City, members of the New
Stock
Exchange, announce
&
Victor
R.
York
York
that
associated
Reid is now
with them
Stanley Pelz Opens
i'fi
&
Eisele
in
old,
the way up.
R. Victor Reid With
the
Nations.
United
might point out that the
qualities are required to
*
(Miami, Fla.)
National Security
Oct. 24-27, 1952
HoteL
nomic Advisers. Prof. Turner fills
same
on
Governors
of
Oct. 20-23, 1952
long¬
the vacancy caused by the resigna¬
tion of Dr. Roy Blough, who be¬
as
*
Exchange
Fall
of Stock
meeting at the Ambassador
prices before you see higher
time associate of Presidential As¬
ones.
However, nobody buys
sistant, John R. Steelman, as a
at the bottom, though every¬ member of the Council of Eco¬
trad¬
in their unlisted
ing department. Mr. Reid was for¬
merly manager of the trading de¬
partment for the New York office
of York Affiliates, Inc.
'
It
doesn't
take
any
great
tape's active; or sell them be¬
cause
they're breaking and
imagination to buy them be¬
cause they're
going up and the
the
of
rumors
cepted
as
&
are
ac¬
the
of
opening
under
the Democratic
Once
Con¬
Presidential
candidate
all
directions.
That
new
Joseph
formerly
the management of
Two with Hooker
(Special to The Financial
SAN
FRANCISCO, Calif.—S. G.
Lippitt, Jr. and Hubert J.
Quinn
was
officer
an
&
of
Robert D.
Co.
a
private
teletype wire between New York
and
become
have
Exchanges.
previously with
Harris, Upham & Co.
San
Francisco
Mr.
Quinn
Stock
was
Denver.
and
J. M. Robinson Opens
is
fly from
& Fay
Chronicle)
connected
with
Hooker & Fay, 340 Pine Street,
partner in Shelley-Hicks & Co.
members of the New York and
W. Hicks. Mr. Hicks was
Bowers
vention is out of the way
a
office at 1717 East Colfax Avenue
and
basic truths.
Pelz
Co., Inc., of New York City, an¬
nounced
a
doom
Colo.—Stanley
DENVER,
The firm will maintain
Edgar, Richer fo
there'll
(Special to The Financial
LOS
Chronicle)
ANGELES, Calif.
—
John
opened of¬
fices at *650 South Spring Street
be market repercussions is a
MILWAUKEE, Wis.—Announce¬ to engage in the investment busi¬
foregone conclusion. Bas¬
ment is made that Edgar, Ricker ness.
Russell W. Brazelton and
ically, however, the party still & Co., a wholly owned subsidiary Jack W. Speer are associated with
in power
will do everything it
keep the economic train
the tracks. Pump priming
can
on
to
one
sort
or
another will be
Distribute Fund
of
The
East
Milwaukee
Company, 207
Moore
Robinson
has
him.
Michigan Street, is now the
distributor
for
the
Joins Eaton &
Wisconsin In¬
vestment Company, a
mutual fund
Howard
(Special to The Financial
SAN
Chronicle)
FRANCISCO, Calif.—Louis
The chief danger
strangulation „ of
businesses dependent on steel
production.
How this will
the staff of
Incorporated,
SAN DIEGO, Calif.—E. M. Ernst 333 Montgomery Street. Mr. Ni¬
has joined the staff of R. E. Evans coud was previously with J. Barth
work out is still in the realm
Rr
stepped
Members:
Association
Plaza Hotel.
of
Troster, Singer & Co.
Calif.)
Firms
at least gives,
chosen the mud will
HIGHLIGHTS (on request)
author only.]
(Los Angeles,
Oct. 8-10, 1952
presented as
are
Hopkins
Mark
Hotel.
President appoints
a
new
They
those of the
Meyer-
Corp.—Analysis—Amott, Baker & Co.,
Incorporated, 150 Broadway, New York 38, N. Y.
Our
coincide
expressed in this
necessarily at any
with those of the
Fall
Governors
the
at
meeting
ciation
King & Co., 61
Broadway, New York 6, N. Y.
.
not
of
Of Economic Advisers
sell
—
views
do
of
Board
Firms
Exchange
Stock
Association
j ust such markets that new
long positions are acquired
which may later turn to be
profitable. This is not an in¬
vitation to jump in and hock
the family jewels. I might add
that I think you'll see lower
Noble & Com¬
Michigan Trust Building, Grand Rapids 2, Mich.
—
market's
Better try
five points of
Hew Member of Council
Co.—Memorandum—White,
Massey-Harris Co.
[The
time
*
stock
or
*
Co.,
Country Club.
appearance, the
fact remains that it is during
Boston 9, Mass.
Oil
Municipal Bond Club of Chicago
the Knollwood
annual field day at
figure and then hold on.
article
such
every
Radio—Circular—Raymond & Co., 148 State Street,
Kewanee
that
at Indiana
Co., 231 South La Salle Street, Chicago 4, 111.
Drayer-IIanson
621
Wil¬
Weld
for them within
market activi¬
*
the
asleep,
~
memo¬
a
if
But
fast
Ilaskelite Manufacturing Corp.
on
Sept. 19, 1952 (Chicago, III.)
impossibility.
an
Chronicle.
Stocks—Discussion—Francis I. du Pont & Co.,
Wall Street, New York 5, N. Y.
Control
'
weeks ago
few
A
low ebb.
a
*
Grade
Allied
mar¬
a
poses a
=
making out of the
are
with interest in
Field—Analysis in current issue of Trusts & Es¬
tates, 50 East 42nd Street, New York 17, N. Y.
1
wo?ry about®
What to do in such
present heat wave. All in all
it adds up to a so-what week
Retail Food
Second
keeps
number of prob¬
lems, of which patience is one.
By WALTER WHYTE
outfits
New
'
N. Y.
specific
Security Traders Association of
saying New York Outing at Richmond
any
Calif.)
Stocks—Comparative figures as of June
City Bank
30, 1952—The First. Boston Corporation, 100 Broadway,
Country
I wrote in
this space that averages would Sept. 26, 1952 (Philadelphia, Pa.)
Bond Club of Philadelphia an¬
The
televised
Convention react to about 270 (they were
nual field day at the Huntingdon
proceedings of the Democratic then about 285), followed by Valley Country Club, Abington,
Party out at Chicago are un¬ dullness. The next move gave Pennsylvania.
doubtedly more interesting indications of going to about
or
better. Nothing has Sept 28-Oct. 1, 1952 (Atlantic
than the draggy performance 300
City, N. J.)
of the Translux tape. Second happened since that was writ¬
American Bankers Association
in conversational importance ten
to change the
opinion. Annual Convention.
is the weather and the guesses Getting aboard at the 270 fig¬
Oct. 5-7, 1952 (San Francisco.
of what the air conditioning ure in all stocks is obviously
Tokyo, Japan.
Guide—Monthly bulletin—Sutro Bros. & Co., 120
Commerce
Whyte
ket
Kabutocho, Nihonbashi, Chuo-ku,
Natural
it
or
there's little to
Says—
Foreign Investments in Japanese Securities—Detailed discus¬
sion of the law—Nomura Securities Co., Ltd., 1, 1-chome,
Investment
clues;
Markets
G, N. Y.
Broadway, New York
Hill
Park
The market Sept. 5, 1952 (New York City)
guess work.
refuses to give
Tomorrow's
Ont., Canada.
for
Candidates
at
Club.
Meeds, 120 Broadway, New
Co.
Denver-Rocky
of
Club
Bond
Stocks—Comparison and analysis of 17 New York City
Bank Stocks for second quartea^aof 1952—Laird, Bissell &
tou
(Denver, Colo.)
Aug. 22, 1952
analysis of West End Chemical Company.
Bank
Base
Field
Investment
In
Broad
Street, New York 4, N. Y.
Texas Illinois Natural Gas
Oil
Thursday, July 24, 1952
..
.
I
is
the
up.
slow
R. E. Evans Adds
(Special to The Financial Chronicle)
f!o
202
Rroadwav.
Nicoud, Jr. has joined
Eaton
Rt
P.O.
&
Howard,
Volume 176
Number 5136
.
.
The Commercial and Financial Chronicle
.
(293)
Financing School Improvements
Through "Special Authorities"
By DAVID M. ELLIN WOOD *
Manager, Municipal Department, Moody's Investors
Service
voters
School
here
local
,
authorities
something
ng fairly
tairiy
school finance
MvViim-
nown
Liuwn.
generally well known.
iviv
My assitm
assign
ment
is
to
you
can
jure
con-
up
an
"authority"
through which
you
may
ob¬
all
the
tain
class
you
need.
hope
to
I
show
done,
part¬
my
do it.
Devices for Exceeding Debt Limits
David
M.
of
better ways.
are
.
creating
poration
was
w««>
a
or
etmotiirp
and built the
Thi«
IpdcpH
wac
P the Board of Education
whSrnumbe^lfTocafgo^
and
well
had interests.
used
in
the
as
The
this
idea
Crown
country
interest
common
when
which
New
could
do not
areas
always
The authority has been
coincide.
found to be
efficient
an
conducting
for the school system.
m0st
states,
debt
limit,
incurred
was
used
provements
in connection with the acquisition,
to
but
the
debt
finance
im-
not
to
operate
them.
of
means
relatively lew munici- ground, municipal
Pennsylvania
owned
be authorized to construct
public school buildings and
may
their utilities
To enable its municipalities to to lease these structures to school
fmance for utility purposes with- systems. The school districts en-
Lelfslat^e
the creation °£ municipal
running^''leas!
authori-
as
long
limited
the life of the authority
as
But the
J^ase
such
the
current
a
1S "ot significant to
city borough, township,
'
6
'
tucky
coun-
where,
you
will
from
the
and
premise
other
rental
This
announcement
is
not an
offer
The
to
sell
solicitation of
nor a
an
offer
levied for the pavment of debt
payment oi aeot.
_
Pennsylvania has
not been
addition
to
regular
state
aid
allowances for teachers'
salaries,
transportation, etc., an extra state
subsidy may be granted to assist
school district
a
in
rental payments to
To qualify for this
of course, the
meeting lease
an
authority,
subsidy,
building must meet
extra
state requirements and the whole
plan of financing requires State
Board of Education approval. The
amount of the
subsidy is determinprl Kv fnrmulq
mined
by formula, turhlnTi
which IoItdo
takes a
number of factors into acount. In
o
my
experience,
ranged from
high
as
the
low
as
50%
of
subsidy
rental
g
The stated
Kentucky
reason
for
is the belief
of
financing
school may "aYe
buildings
-
By
it
-
of
way
a
..
,
-
further preamble,
is
necessary to recall
most of our states, the
that, in
borrowing
of
powers
local
government
an
adequate
us
ieeaiiv
school
number
of
wealthy
Continued
to
buy
any
as
In
New
York,
a
tnay borrow up to
school
district
10% of valua-
tions_:as equalized by the
1930
gome
question
to whether
holding corntax-exempt. Also,
Tax
Commission;
izedvahies
in
fuU market: values.
are
Until recent changes in
provisions,
schools
in
quired
to
streets
and
Connecticut
share
are
-
were
with
sewers
qualify#
which authorized cities and
tjeg to
revenue
chargeable
limit
that
o{
of
coun-
the
the
bonds.
against
civil
These
the
jurisdiction
school
district.
Itaance
read
Officers
United States and
^fune
17,
before
are
used to build
Association
Municipal
of
the
Canada, Boston, Mass*
1952.
agreed, subject to certain conditions, to pur¬
unsubscribed shares and, both during and after the subscription
period, may offer shares of Capital Stock as set forth in the Prospectus.
Subscription Price
a
year-to-year
to the school district
from
tion
in
nanced
The
hoiding
company
are not secured
Kentucky
has
been
Copies of the Prospectus
writers named in the
may
be obtained in
Prospectus and others
as
any
State only from such of the several Under'
may
lawfully offer these securities in such
State.
fi-
by holding company bonds,
COUntleS.
the
to Warrant Holders
$7,625 per Share
school facilit
a
on
bonds in that they
the
The several Underwriters have
chase any
or
so
paper
Rights, evidenced by Subscription Warrants, to subscribe for these Shares
by the Company to holders of its Capital Stock of record
July 22, 1952, which rights expire at 3 P.M., Eastern Daylight Saving
Time, on August 8, 1952, as more fully set forth in the
Prospectus.
have been issued
Like
or by the rental
revenue bonds of
were deemed neccities and counties.
The actual
that abuses, which had
payment reeord of these bonds in
occurred, could never happen
Kentucky has been just about as
again. It is now commonly possigood as that o{ the uniimited tax
We for the
governing body of a
direct obligation bonds of
cities
municipality to incur debt of the
and schoo]!
districts> and greatly
municipality to a very small exsuperior
to
the
payment record of
tent. Debt
commonly may be in- the
iimited tax debts of
Kentucky
•A
Share
are
ago, debt limits
essary
Par Value 500 per
debt
Letus not forget that debt
by mortgage on the premises,
limits came into being to protect
During the past 25 years, the
taxpayers from themselves, during
largest part of a]1 school construc.
those
^moments when enthusiasm
•
CAPITAL STOCK
holding company bonds, they
5% hmit. In Indiana, schoois
differ
outstrips caution, and from ambiturns officials
A century or so
•
issUe> without referendum,
other municipal
which is leased
over-all, all mclu- basis
limited to 2%.
Kentucky
got around both of these obstacles
by a special Act of the Legislature
re-
all
purposes m an
mve
did not clearl
State school
theory, equal- not
However, the
holding
...
revenue
districts
on
of these securities.
security factor,
In the mid
arose
borrowing
*urn to the authority despite
*
coerced school boards
limited by law. Thus in Califor- pany bonds were
the pWA was reiuctant to
ente^
ma
a school
system may borrow into
loan and grant
arrangements
up to 5% of the assessed valuation
except with a bona fide political
(legally one-half of full market
values) for elementary schools subdivision; the holding company
5% for high schoo purposes, and
5% for junior college purposes
'
company
..
obhgation
nature Of
or
Tental
.
is
such that the
Reynolds & Co.
Bache & Co.
Crowell, Weedon & Co.
July 23, 1952
in--
low,
Tbe abbeal °f the extra
subsidy, however has impelled a
*
t
are
plant within
available
1
on occasion> but as a general rule,
investors placed little reliance on
are
that'in
district may be unable to build
Decca Records Inc.
principles involved in the authorby mortgage on the school
ity have come to be distorted to building. * Threat of foreclosure
point
turning to
Snces whlre vafLalSns
a
258,883 Shares
Boards of Education to renew the
lease from year to year on terms
government. A little later, we will adequate to maintain, the bonds
see how the
original governmental ln £°od standing. The bonds were
as
obli-
gation.
gov-
well, which cannot be performed
within the existing framework of
has
10% to
as
the
offering is made only by the Prospectus.
NEW ISSUE
con-
merely to allow school financinS outside the debt limit. Actually, it is fostering school construction by authorities. In
our pres-
of the
tax
for current
expenses
from
lease rentals are
payable
somehow different from tnvna
are
V
distinc-
that
funds avail-
which
recall,
'
•
expense,
fnt study. The purchasers
to
able
ernmental
the
districts
long-term leases
was only one year,
considered
as
Jhe explanation for this
tlon
any
*on£ term bonds of the holding
functions, and occa- company were required to rely on
sionally proprietary activities as the
n\oraJ ^ligation of succeeding
certain
authorities
Kentucky ties, so-called. These may be ere- bonds. On the
surface, Pennsylcourts would not allow the Board ated
by resolution or ordinance of vania is more advanced
than Ken-
be performed by either state the courts
acting alone. Political boundaries obligation
not
and economic
jn
a
Amortize the debtTthe" holdl
company.
first
was
at
of Education to enter into a long
Jersey and New York, by joint term lease; to do so would create
action, created the Port of New a debt in violation of the debt
York Authority to act in matters hmit.
On the other hand, if the
of
other 7%
.
school building corholding company
which sold its bonds
rived
revenues
and
in
a
cylladminlterthl port facilities
as
municipalities
districts
inKeatuilkv develmed"the riev?ce eent years'
Palities in
.inwood
-»»
The
ine governmental
governmental auuiumy
authority
mments
limited
are
Thus there came into
being
construction, development, exten- in Pennsylvania the
unapter one m tne History oi
lease
back
sjon or improvement. of a water
device. For
example, the City of
r
-+K s*ructures outsiae
SUpply and distribution system is
Bethlehem, then owning its watern',aCC^r +ngJ0 excduded from the debt limit of a works system, but unable to bormi9
01-n+
UC
municipality. Not so in Pennsyl- row for its
enlargement, trans.
.Y.
1 1Q9n!vania> except as the debt is proven, ferred title outright
to
the
+,ir.w limita
to the satisfaction of the District authority which
promptly
sold
ueui
OI
Z /O
Court' £o have been actually self- authority bonds for extensive imOI
valuations lilu
wnicn
wprp
sustaining within the vears
im- nrnwmpnts
thpmQPivPQ
i™
+Vip
years imonlarcfprl
provements, lMeincf the
enlarged
nS ranit? orI Ir ni nH Wi<? mediately Prior to the judicial re- utility back toleasing
the city to operate,
Mnrmvpr
a
rpWnri^m i. rt 7'T' Thus' a city may be able Rentals paid by the city,.out of
miirid and the Smner nf tho tav
to have existing water debt placed earnings of the water department,
vis such that an" 0Utside its debt limit> but " can take care of Principal and interest
,li the
the t„L S:
proval of. bonds and
taxes to lncur new debt £or water purposes requirements on the bonds issued
oniy within its debt limit This is
retire them is difficult to
by the authority.
obtain.
one of the reasons
why, until reUnder
the
same
legal
backa
Don't
There
authority
back- only by its
ability to find buyers
for its bonds.
nav?m Common
ing advice
will be:
.
to a
greater,, but still limited extent, subject to referendum,
referendum.
vprv
how this is
but
legal
o
you
being
the
nco
room
space
but
-
show you how,
as if by
magic,
year-to-year basis
school
create
Frequently, municipal authoriPennsylvania ties are created as actual
operat(except the City of Philadelphia ing
entities, engaging in the conand its school
district) may incur duct of a water
utility operation,
indebtedness without referendum for
example, virtually indepenin an amount not
exceeding 2% dent of the municipal
government
of the tax base,
plus an additional which created it. It
was not
long
5% if the electorate approves. This before
the
legal
ability of an
produces a total debt limit of 7%
authority to sell bonds, without
for the civil jurisdiction and
an- referendum and
outside
school
currea
in
in
new
a
of
into
'has been upheld
sequence
that interest costs are No referendum is
by the Pennsylnecessary. Au- vania State
believed unnecessarily high.
Supreme Court which
thority bonds are payable solely found
that such an
For Chapter Two in the
arrangement
history from the earnings of the
authority; does not
Incorporated
as
and (4) deny
government;
are on
right
enter
-
an
privilege of reviewing proposed capital expenditures.
building
is
of
structure
own
Kentucky,
(1) higher interest charges; and (2) higher
financing costs. Opposes creation of tax-supported authorities
on
grounds: (1) they conceal true status of
public debt; (2)
they lead to excessive creation of debt;
(3) they weaken
general credit
The
ground has been roughly similar
disadvantages:
\
leases
confined
9
a
debt of the
building authorities, we
they are not charged against the school district The
legal reasonPennsylvania. Here gov- debt limit of the
sponsoring gov- ing involved defies
ernmental needs have not been as
comprehenernment. The
debt-incurring pow- sion by the
acute
as
has
been
lay mind but is dethe case
in ers of
structures, Mr. Ellinwood
advantages from financial viewpoint in creating school
improvement authorities having debt creating
Lists
ty, or combination, and may be
generally.
Their market authorized by their
incorporators
pretty much to their to engage in a wide
variety of
immediate area with the con- revenue
producing
enterprises;
vestors
is
of school
sees no
powers.
in-
turn to
After reviewing
history of devices by municipalities to exceed
legal debt limits in financing school
\
bonds hold little attraction to
Laurence M. Marks & Co.
Bear, Stearns & Co.
Carl M. Loeb, Rhoades & Co.
page
r
to;
room
37
■
The Commercial and
10
Business
The "Odd Lot" Securities
SMITH*
By HOWARD C.
after reviewing history
in mind
I shall ask you to
thing. We are
riot brokers
one
the word is gener-
as
We are principals, or in
the common phraseology, we are
ally used.
dealers.
lot
odd
buy 50 shares of
•
Steel at the marorder over
wire room,
ket. He will turn this
to his order room or
old
Business
holding orders in the
many
as
There
line.
the
down
on
so
unit of trading as we have
\/as no
there was no odd lot
Orders for any number
o£ shares were executed.
today and
cystem.
After
that
auction
the
time,
some
market
adopted;
trading in all
procedure
was
is, there was
the
however, still no separation of
gradually
There
orders.
lot
odd
system corresponding
present-day overthe-counter market by which odd
Tots were executed in the offices
of member firms. Prices for odd
lots were the result of negotiation
developed
a
somewhat
and
they
to
were
Vs on
was
that
changed so
share,
is
all stocks,
the differential
At this point, let me say a word their judgment.
about the reporting system on the point that our
floor. The Exchange has employ- various stocks are always the re¬
sult of the action of the odd lot
ees stationed at all posts who are
called reporters. It is the obliga- orders. In other words, we do not
tion of the seller of a round lot attempt to guess the market and
to see that the reporter is notified buy or sell round lots arbitrarily.
of each sale. The reporter writes
this on a slip of paper which is
sent up to the fifth floor where
the ticker tape itself is made. As
Offer Deere & Go. Debs.
you saw from your visit to the
Harriman Ripley & Co. Inc. and
Exchange, this main or master
,
Harriman, Ripley Group
the line the tape is made from three compo-
not directly tied to
:the round lot sales.
died
effectively
on
of the Exchange and
so
more
floor
floor of the Exchange and the
appearance of that sale on the
ticker tape.
Each of our odd lot brokers has
and
evolved.
this
the floor
a few of
system
lot
The important feature of
system is that odd lot prices
tied
directly
are
round
to
lot
«rices
think that it should have
been executed on a previous sale
0f 4034. You will ask your brokerage firm to check the price of
this. He will go over the wire to
bjs New York office or his correspondent who in turn will call the
odd i0£ fjrm giving all the details
you may
presently
are
carrier and
odd lot firms who do the bulk of
the odd lot business and they are
dealings
deal
with
I
P_nl_
stationed
.
think it will help if we
lot order from
its
trace
incep-
there takes this
Chicago and
want to
you
buy 50 shares of Steel at the market. You visit your brokerage office, Jones &
that
person
account and
*An
address
Second Annual
Co., and talk with
who handles your
give him
by
Mr.
Forum'on
order to
an
Smith
before the
the "Economics
Exchange Firms, investment Bankers Asof
America.
National
Associa-
tion of Securities Dealers, the n. Y. stock
of
for
aggregating about
Proceeds
the sale of the
from
debentures and from
the sale last
shares of $10 par
stock will be used
week of 691,276
value
Let
request
return tQ
ug
the
after this
post.
Let us assume that the Pla<* at approximately that
Steel from the above mentioned
SLASZ f'f;
"reoort"
your
the
and
addresS ft
brokerage firm's
floor
rPDOrt
that
Dp
common
This
or
corporated and Shearson, Hammill
Jones
whon h io riiffimiit ^
&
Co
sold
share? of
Steel at 41 %; this
50
being
the price of the round lot sale plus
the odd lot differential of V4.
Had
•
.
Patrick J. Sheedy Joins
Conrad, Bruce & Co.
(Special to The Financial Chronicle)
of Steel at the market, your report
WOUld have Said that De Coppet &
Doremus
bought from Jones & Co.
gone
,
on
.,
the 40 3A
,.
sale,
,
we
ANGELES, Calif.—Patrick
LOS
H.
procedures.
5 V0"1
^
Jt'
S
™« «
with a net
We must
or selling round lots. Each broker
is allowed a long or short position
Conrad, Bruce & Co. of Los
Angeles, 530 West Sixth Street.
formerly head of
Mr. Sheedy was
department for Edger-
the trading
thereto
&
Co.
&
Wykoff
ton,
'
.
.
the
and
Dean
with
was
prior
Witter
Co.
Franklin, Stettner Co.
Stettner & Co. has
offices at 1440
Franklin,
formed with
engage
in
York
securities
a
Partners are Donald R.
City, to
business.
L. Frank¬
lin, Max H. Stettner, and William
M. Landau.
Gardner & Co. in N. Y. C.
Gardner
and
Company is now
doing business from offices at 50
Broad
Street, New York City.
Partners are Lawrence F. Gardner
Gardner.
and H. A.
Markell & Co. Formed
;
C.
Morton
V
Markell is engaging
;in the securities business from of¬
fices at 150 Broadway, New York
City under the firm name of Mar¬
kell & Co.
With Waddell & Reed, Inc.
(Special to The Financial Chronicle)
will We have several partners of the
make the correction and send you .firm who are on the floor of
associated
Sheedy has become
with
exactitude just which of a fixed amount in each stock.
the^roper
sale, beting in mind, As soon as his position reaches
the chances for delay. If it ap- the limit, he must either buy or
mine wlth
Co.
&
Broadway,' New
"d" — »«
He was previ¬
Exchanges.
Stock
ously with Jackson-Anderson, In¬
been
!£? w
Drive, members
Angeles
the New York and Los
order to sPeed and simplify the
time
To be sure, there are
executed.
Daniel Reeves & Co.,
398 South Beverly
changes. To be sure, we are constantly making refinements in
sales
" 'I
Kosterman has been added to
the staff of
actions da ly, t is is a °ne
a rat er simp e way. At the e
of the day, your br ke age f
submits a list of tiansac 1
which is compared with our ow
1st. Any necessary corrections or
djustments are made. Usually
ne settlement check is exchanged.
this, representing the net amoun
of money due.
. Present-day odd lot system has
been in existence for a number
of years without any m a j 01
t0 determme on what round lot we are always left
saIe y°ur order should have been P??1'10" Jong or short.
Connet
Doremus
to
to
booth on
of the Exchange.
savs
W.
0ur responsibility begins.
next round lot transaction of
I
Completing the Transaction
So much for the handling and
executing of your order. There
remains, of course, the completion
of the transaction. If you have
bought 50 shares of Steel we must
deliver this to your broker and
pick up his check in payment. If
you have sold it, we must pick up
the stock from your broker and
deliver our check. As a matter
of fact, wit thousands 0 tians-
New^York ^^i^ersity.^Ne^^Yorkf^uly 50 shares of Steel at 40%; this be- a new report. If the execution at Exchange at all times. It is their
is, 1952.
'
ing obviously the price of the 41
appears to be correct, we will responsibility to supervise these
required
equipment
operations.
$69,700,000
^on^ore^mbyriCthne As^Sfon^f irstock your order been to sel1 50 shares pears that y°ur order should'have- sell 100's to stay within his limit.
sociation
the
in
distribution
and
dental
e, is the point where does about his positions. As emWe will phasized before, we are principals
orierha^reached then check the sales which took in every transaction so that in
2AS SiJTTou %££ gj£
lives in
principally
engaged
farm
d be
,A™ °
V?"
Sface
odd
are
manufacture
It takes a sizable
J ® checked. We will look at the back clerical force to handle even presorder of y6ur order and see e*actlY ent"day modest volume.
n„r
+
public.
They
stock exchange
firms.
aii
ceding prices from 102% to par.
Deere & Co. and its subsidiaries
immediately available all sales information regard-
that the price of your order be
the
with
only
buy 50 shares of Steel at the mar-
large
two
maturity.'
to
Sinking fund redemptions may be
made at par, while optional re¬
demptions may be made at re¬
so that he has
puller which maintains a uniform
fpeed- Thls ticker tape passes
dling of odd lot orders and certain through an automatic elec tric
offsetting transactions in round clock which stamps every minute,
lots. They are not permitted to The girls job is to write down on
engage in any other activity. They printed forms every sale of each
are paid a fixed commission and °f k<rr.flocks and ^ _e_ minate at
have no interest in the profits or which ittook place.• You will see
losses
of
the firm. Generally from Ibis that at the end of the
speaking, there are two brokers day, we have a complete record of
at each post on the floor and each every round lot sale in every stock
broker handles roughly one-half and the minute the sale occurs,
of the stocks traded at that post. Incidentally, these are the only
such records made. The Stock ExNow, to return to our order to cbange does not list such things.
Present-Day "Odd Lot" System
There
prior
debentures
You may have watched several be executed in the near future and
sajes 0f steel take place after you send them in to his clerk for filing,
en£ered your order. When your This clerk is connected by direct
rep0ld arrives saying that you telephone wire to one of the
bought 50 shares of Steel at 41%; aforementioned range table girls
men
Prices were
negotiation,
activity grew, the
present-day odd
sufficient
so
sponsibility whatsoever. It also is place. We have in this order room
apparent that in any one of these a series of tables at -which are
steps a delay may occur.
seated girls who are known as
Now then I will explain briefly range table operators. Each girl
0ur
organization on the floor of *s assigned two books; that is, she
the Exchange. We have approxi- bas lists of all stocks handled by
mately 42 odd lot brokers. These two of our odd lot brokers on the
are all members of the New
fl°or- Right beside her is a ticker
York Stock Exchange.
They are and the tape passes across her
not, however, partners in the firm table by means of an electric
speak in odd lots.
still
determined
by
As volume
sinking fund has been set up
to retire 75% of the I
A
time
between the actual sale on the
broker. Up to this point, we, cept those at post 30) and the
the odd lot firm, have had no re- minute at which the sale took
people moved down to the
and began specializing so
these
'to
3Vs% debentures, due July
at 99% and accrued in¬
;
few members
a
&
Deere
terest.
report n0w re-traces its course as a booth adjacent to the post where
described ifin you
the entering
of the he is stationed. He also has a
have stayed in telephone clerk to assist him. This
order
1977,
1,
23)
Co.
(July
yesterday
$50,000,000
offered
25 year
can be no uniform elapse of
de- of De Coppet & Doremus. Their
cided that odd lots could be han- entire time is devoted to the hanGradually
associates
an commission firms have nent parts which operate in rotaexperienced. There have been tion. Here again, I believe you
same as
tial in about 19 years.
Your order as we have seen has
now been executed and a report
gent from the odd
firm to
Jones & Co >s telephone clerk on
the £loor of the Exchange. This
*
depends upon
I may say at this
positions in the
the whole operation
by means of an
ing his stocks. It is quite easy to repay short-term bank loans,
electric clock stamps the time of
for the broker to miss a round lot to build, equip and provide initial
arrival at the post. This is an exsale in an inactive stock. There working capital for a new chemi¬
tremely important item. This
may well be an extended period of cal plant for. the production of
same attendant puts this order on
time between sales in some dull nitrogen fertilizer materials, and
a metal hook at the front of the
stocks. As a protection against more than $15,000 000 will be
post which is reserved for De 0f the order.
missing such a sale, the clerk will added to the general funds of the
'
Coppet & Doremus, odd lot broker
Let me digress for a moment to tell his range table girl to notify company.
at that position.
J
explain our order room. One of him of the next sale in a particuYou can see through how many the principal activities of this or- lar stock or perhaps he will reWith Daniel Reeves Co.
hands this order has already der room is the recording of every quest all sales,
(Special to The Financial Chronicle)
passed before it reaches the odd round lot sale in every stock (exTran^nfinn
BEVERLY HILLS, Cal.—Mark
the
There was,
stocks simultaneously.
/
Thursday, July 24, 1952
.
your brokerage office in Chicago, clerk keeps what we call a bible agricultural implements and farm
tractors. The agricultural imple¬
yQU may have tbe report back in in which are filed all buy and sell
a matter of minutes.
orders in his stocks which are ments consist of -tillage tools,
machinery,
harvesting
Now you have seen how many away from tbe current market, seeding
possibilities there are for delays The broker at the post as he pulls machinery, soil improvement tools,
jn £be handling of your order be- the various orders from his hook portable elevators,
grinding and
the nearest pneumatic tube sta- £0re ^ becomes our responsibility, will sort out those not likely to roughage mills, and other inci¬
gather around to exorders as possible,
When they were finished, the pretiding officer called the next stock
'
.
.
positions and they have power to
act as their judgment dictates. To
a
marked degree, the success of
and give you proper
The order is transmitted to that severai increases in commissions would see possibility of delay in
firm's New York office, or in case
recent years but there had been the reporting of tne round lot
they do not have such an office, n0 change in the odd lot differen- sale. You will also see that there
ctock would
ecute
been
all stocks selling at 40 or
of 0peration all along
don where an employee of the
Exchange puts it in the carrier,
days, all transactions on the Ex- inserts it in the proper tube 'vvhmh
change were affected in what was delivers it to the post where Steel
known as the "call market."
The is traded.
presiding officer of the Exchange
Here another employee of the
called one stock and all members Exchange takes the order from
or
a
this had
selling below 40. This change was
brought about by increased costs
a
interested
commission,
1/4.; It remains at Vs on
word about the history
of the odd lot system. In the early
Now,
on
more
your
History of "Odd Lot"
differential
As of Aug. 1, 1951, the
differential
now
brokerage
order to buy
into
go
you
years
all stocks.
to their correspondent in New
office
give them an
York- Fr°m the wire room in the
100 shares of any stock, that order New
York offlc.e> this order is
eventually finds its way to the telephoned by direct wire to the
floor of the Stock Exchange where firm's telephone clerk on the floor
the partner or representative of of the stock Exchange.
Let us
your brokerage firm receives it.' assume that your brokerage firm
He goes to the post where that is doing its odd lot business with
stock is traded and executes your my ^rPC1' ,De Coppet & Doremus.
order for which you are charged The telephone clerk has in front
a
fixed commission.
This is not of him Panted order pads for both
at all the manner in which an odd blW
and sel1, ?n tbls example
lot order is handled as you will which we are using, he writes on
see later.
his
buy pad 50 shares Steel at the
market. This order is dropped at
If
the
primary
many
on
At the outset,
about
pointed out earlier, the odd
I
so
The Reporting System
source of profit is
this odd lot d i f f e r e n t i a 1. For
of executing "odd lot"
transactions in securities, describes present-day system under
which odd lot orders to buy or sell stocks are carried out
floor of the New York Stock Exchange. Points out Stock Ex¬
change members specializing in "odd lots" are dealers and
not brokers, and must operate in a special way, as well as
maintaining personnel and equipment for the business.
bear
lot tell you
odd
sales information.
lot dealer charges no
His
Mr. Smith,
word
A
the
Differential
Price
The
—as
less
%.
differential of
'
Coppet & Doremus
Members, New York Stock Exchange
Partner, De
sale
lot
round
.
Financial Chronicle
(294)
BEVERLY
A.
Cleveland
with
Waddell
Wilshire
.
HILLS, Cal.—Frank
is
&
now
affiliated
Reed, Inc., 8943
Boulevard.
Volume 176
Number 5136
.
.
.
The Commercial and Financial Chronicle
(295)
for funded retirement class of
directors, which would be
disability benefits, (c) Labor the main one, would represent the
would be given incentive by en- pure
enterprise
function
and
provision
Who Owns What in
and
couragement to
the
Corporation?
voting stock at
Professor of Economics,
New York
tion of powers
discusses
and
and separa¬
the status
stockowners.
and functions
sible the
bonus
capital and venture capital should be made effective
in business organization and advocates
separation as far as
possible of functions, costs and rewards of labor, management,
p r o
business organizations to¬
day,
and
powers
responsibilities
dent
all mixed up and there is a very
are
real and present need of clarifica-
ownership.
The enterpriser is not
necessarily
an
organizes
priser
business in
The enter-
owner.
directs
and
responsible
a
order to make it productive.
is
in
tion
.
order
.
,
to
be
able
assign
to
power
where
will
it
"function,"
a
the
in
way,
tion and separation of func-
.
,
,
-
,
com¬
two
levels
of
able business hazards. (Mere own-
then
be
appointed
between
and
made
effective
fuller
Note
a
accounting
practical way.
for
cash
sary
well
to
distinguish "fixed"
"working" capital.
On all
tangible capital investment
for
provision
interest
as
should
payment
of
owners
be
to
and
made
the
in¬
the tangible
capital assets.
well
that
the
executive
In
figuring interest, the growth
factor
the position of running the busi-
figuring the effective life and
enterprisers.
as
be
this
and
group would not, as now, be put in
ness
a
all
It would
reserves.
They would
ership does not require any such neither make major business
pol-
would
taintv
of
the
allowed
be
for
investment and
in
cer-
the
^vestment
yieM
functioning, and is not even nec- icy decisions, nor assume powers
(6) All capital charges or total
essarily associated with produc- without responsibilities.
They interest, should be the gross fig¬
locate respon¬ tivity.)
would not be self-appointing or ure
including maintenance, re¬
sibility ac¬
Again, the ownership of capital self-renewing.
pairs, replacements, additions and
cordingly.!
goods (plant, equipment, working
Management should be made betterments, carrying charges, and
Our "man¬
capital) is not the same as owning dependent upon, and subordinate necessary reserves. Interest is to
do best and to
act
agements"
if
as
they
owned our invested
capital,
They don't.
nothing. But we do
vested capital.
the
own
corporation problem today
in
confusion
the
between
"owners" and "management": Who
are the owners?
What are the re¬
sponsibilities of the management?
(Echo answers.)
The ownership title may be "le¬
gal"; that is, the ultimate claim to
tangible assets.
Or it
uitable; that is,
claim
to
If the
be eq¬
may
a mere
share
a
secure,
secure
and
in
the
SoinS concern.
a
may be a
be an inves¬
He may
so-called
"equity," his property
varies with net earnings, and rises
He
not
value
over
wide
a
between zero and infinity.
may
stock.
not
in
be
He
a
holder of common
be a speculator,
an
investor.
Certainly he is
a provider of investment capi¬
may
tal, but of "venture capital."
This
difference
appears
investor, as a
usually has no voice in
directing the company.
But the
speculative stockholder, or
corporation business policies.
least he receives proxies!)
(At
One
manager
policies.
He
compensation that
Board
would
management
advise the management, audit the
results,
and
report
to
the
share
as
by
(3)
the
already suggested, the
as
of
would
earn
anything
above
(1)
venture
wages
(including
capital
share
is in
and
over
salaries
and
management
compen¬
sation), (2) interest paid as oper¬
ating expenses, and (3) interest
charges on all invested capital
used.
be
"Interest"
separated
and
can
much
more
should
clearly
and
fully from "profits" than
now
the
case.
is
Then the share of
enterprise will be made clear, and
the enterpriser will not have to
apologize for his profits.
This
in the
would, for the first time
long evolution of business
ital
in
vestors
its
thought, put
place
to
be
cap¬
show
and
what
in¬
they
really
are, owners of capital goods used
in business.
It would explain and
justify -profits as the reward of
enterprise.
of
19th
century capitalism and the estab¬
20th century
of
This
credit and the
reality borrowed by
the enterprise.
Investors should,
is
the
private
age
of
enterpriser.
Capitalism is dead.
the
capitalist—the
Long live
individual in-
vestor.
therefore, see to it that the enter¬
prise and management set up an
item
owners.
Thus,
contributors
lishment
ahead of profits.
"invested"
of
capital invested.
enterprise.
Money
and
owners
It would mark the end
interest charges
Conclusion
owners
business,
as
that
their total
which may be
called
"capital
contributed
by
share owners."
On this item, inrepresents
investment,
B. G.
and
Phillips Partners
Andrew
Kanischak
and
Feur-
nand Geyer have been admitted
,,
.
to limited partnership in B. G.
goods, to thd' Merest on invested capital would
ownership is ke charged, and be paid or accrue Phillips and Company, 44 Wall
tion
or may give, a value mixed with the holding of shares
investors.
Street, New York City. Other
greater than the sum of the parts, or stocks that are partly equities
Only after direct operating ex'
TUmiamin
This going-concern value is the in the profits,
(Their functions penses, and this charge for gross partners in the iirm are Benjamin
enterpriser's.
The
might be limited.)
other, interest, would there be any bal- G. Phillips and Arthur Root.
"
capital
such
.
-
,
The Confused Situation Today
Many corporations today issue
nothing but common stock. There¬
fore,
can't
you
in
this
his
case
combines
know
really
and
what
is,
"common
an offer to sell nor a solicitation of an offer to buf
of these Warrants. The offer is made only by the Prospectus.
This announcement is neither
a
any
because
stock"
conceals three
dif¬
SUBSCRIPTION
things:
(1) Almost complete safety of a
part of the principal and income,
a
low regular interest, that
might be represented by mortgage
bonds based
fixed tangible as¬
on
sets.
tive
convertible
and
a
on
preferred
stock
uncertain
more
assets
right to share in growth.
(3)
Speculative
chances,
jjpsht be represented by
that
a very
junior" common stock, based
mere
on
"equity" in profits and a
for
PUBCO DEVELOPMENT, INC.
(2) Reasonable long-run safety
principal and
income, at a moderate but pos-
of another part of the
based
WARRANTS
605,978 Shares
at
Suggested
may
may
get a
depends on
My proposals
Common
Stock
(#1 Par Value)
holders and owners of
New Mexico for all or
presently issued and outstanding Common Stock, non-transferable Rights to subscribe tor
transferable Subscription Warrants for additional shares of Pubco Common Stock in the ratio of a
Pubco Development, Inc., a New Mexico corporation, is issuing to the
Stock Purchase Warrants previously issued by Public Service Company of
Pubco's
Subscription Warrant for one (1) additional share for each share of Pubco's Common Stock which
such holders and owners of record at the close of business on July 18, 1952 are entitled to pur¬
chase from Public Service
Remedies
are as
Company, all on the terms more fully set forth in the Prospectus.
Subscription Price $3.00 for each share a
follows:
Subscription Warrant represents.
(1) Recognize three basic inter¬
ests
in
each
business
concern:
Another manager may (1) Labor, (a) ordinary and (b)
only delegated authority managerial;
(2) Enterprise, in¬
carry out those policies, and eluding such share owners as supmay get only a stipulated salary ply speculative "venture capital";
^
retirement benefit.
may be a
The other
The one
responsible enterpriser.
may be a managerial
worker.
The Enterprise
terprise
as
a
factor in production.
First, I would emphasize that
"enterprise" is not the same as
article
♦This
Haney
is
based
entitled
on
view
address
set-up,
(2)
labor:
1952.
York
of
these
City,
as
follows:
and after expiration
prices and pursuant to the
of the Rights, the underwriter may offer Subscription
Development, Inc. to be acquired, at such
terms
and conditions set forth in the Prospectus.
Recognize
two
classes
Copies of the Prospectus may he obtained from the undersigned only in
States where the undersigned may legally offer these Securities
in
of
such
compliance with the securities laws thereof.
be
freed from the noninsurable haz¬
ards of business.
labor WOUld
To this
end, (a)
be supplied with
data to
Serve
as
a
for collective bargaining with
individual
employer
oAllen & Company
all
\
<.
basis
each
concerning
L?HFHa„"rV.rCK^ri«°n"yoTr }Yages> h°"rs. and working condiLiving," N. Y„ 1952.
tions. (b) Labor would receive fair
to
Warrants for Common Stock of Pubco
functionally
"Ordinary labor" should
//^he Investor s available
vestors" Le^ue," in^New
17,
an
In
cial
to en¬
Prior
(3) Investors who supply capital
goods.
>
different interests, rearrange cor¬
poration organization and finan¬
Factor
And so, finally, we come
June
top
of
to
Mr.
The
appoint
and deter¬
mine its compensation.
It would
the
that
that their combina-
exercise
by
ment.
extent
so
profits.
and
Board
come
the
of
investors
chance of appreciation.
make the ultimate decisions as to
broad
the
gross
Directors, which would be over
independent of the manage-
owners
them,
gives,
"management," again, we find
difference.
in
Such
and
would represent the investors
a
Management
In
of
rects
share owner, is expected to act on
a
enterprise function
should
Probably there should be two
The enterpriser classes of directors.
One class
sibly irregular rate o,f yield, that
bondbe represented by cumula-
holder,
more
be charged op inventories.
in the
that the
fact
The enter-
to, enterprise.
(4) Combine and concentrate the
puts together land, labor, and capital goods.
He organizes and di-
If, however, the "owner" has a
falls
the
uses
But the only capital the enter¬
priser (as such) owns is "venture
capital," which has value accord¬
ing to the value of the business as
ferent
and
enterpriser
business, and
"stockholder"
He
tor.
range
The
investor's capital in it.
immediate
limited return
shape of interest.
bondholder.
f}-.e
owns
in net earnings.
former, the owner is rela¬
and he expects a
tively
capital.
investor may
m-
Who Are the Real Owners?
centers
the
own
The
priser is to be thought of as havWe inves¬
ing a claim on net earnings, after
tors act as if
wages
and
interest, which are
we
owneda^is profits" on that business.
Lewis H. Haney
The
"the business."
the
and of economic
"
~
owners
care-
capital
goods: plant, buildings, equipment,
materials and supplies, goods in
process, finished goods, and neces¬
vestors
rangements.
in
should be
Investment capital should be
and
ar¬
speculation)
fully figured at cost, requiring
cash,
contributory retirement
capital
(between invest¬
capital
of
system, we
keep as separate as pos¬
functions, costs, and rewards of (1) the
management as
and
executives, (2) the enterprisers as
investment
venture
ment
by top
management, and would generally
be compensated by straight salary
This
requiring
initia¬
tive, skill, and bearing noninsur,i
salary
participation of
sort,
(b) The vice-presi¬
and general manager level
would
our
as
f i t-sharing
some
enterprisers and investors.
In
receive
"Top manageappointed directly by
the Board, representing share
owners.
The top echelons would
be required to become share owners.
They would usually have
vestment
f
and
arrangements
ment" to be
number of remedies. Holds important distinction between in¬
a
of the
owners
indirectly, by the Board
or
Directors
Recognize
management: (a)
Says situation is confused, and suggests
In order to preserve the
benefits
the free enterprise
should
(3)
of enterprisers,
managers
the profits of true enterprise
profits of enterprise.
pensation.
and responsibilities in business organizations,
They
fer in that it would be appointed,
of
Haney, asserting there is need of clarification
'by the
business and their equities in the
and
Dr.
experts
owners.
as
share
common
would represent the
directly
Administration,
University
would be hired
earnings available for
dividends on venture capital,
These would be "profits"
proper—
price.
"Managerial labor" should dif-
average
By DR. LEWIS H. IIANEY*
Graduate School of Business
buy special nonreasonably low
a
of net
ance
11
July 21, 1952
=L1
12
The Commercial and Financial Chronicle
(296)
Dow Chemical Officials
CIO Economists See
Accept Payment for Recent Issue
In June issue of
Thursday, July 24, 1952
..
.
Danger Ahead in '53-'54
publication, prepared by its department of
*
education and research, weak spots in the
economy are pointed
out and prediction made business
spending is destined to drop.
.
Under
the
>.
caption
{
"Danger facturing workers with three dependents rose from $62.22 in the
pre-Korean period to $63.63 in the
Ahead in '53 and '54," the June issue of "Economic Outlook," pub-
lished by the Department of Education
and
Research
of
the
last
months
three
CIO, tinued
attention is called to "weak spots
in the economy," and a warning is
of
1950.
Con-
price rises, the decline in
the work-week and increased tax
rates, effective Nov. 1, kept down
spending may the buying power
of workers"
not be great enough to buy the
weekly
earnings
during
1951.
increasing output of civilian goods Average weekly earnings—after
given that
consumer
next year and
in 1954, after gov- taxes—of manufacturing workers
pending levels with three dependents were $62.86
defenses
ernment
off.
in the
According to the text of the
that
tide:
"The
national economy has ex-
panded sharply since the outbreak
of the Korean War. Our capacity
to
produce has grown—with the
new plant and equipment. Productivity — output per
man-hour
has
shot
upward,
addition of
—
There
has been
an
outpouring of
goods and services—for both defense and civilian needs.
first three months of 1952.
"These average figures indicate
ar-
workers
some
—
organized
workers for the most part-had
been able to keep ahead of rising
prices while many workers had
seen 'he buying power of their
^ waSesi after ta*es, decline
ln the period since the Korean
outbreak. The buying power of
workers1 earnings after taxes, had
falled to Srow wlth the expansion
of the
civilian economy.
showing
of Consumer
Spending Below Peak
strength, there are also signs of
"The buying power of total per¬
weakness. Soft spots in the con¬
sonal
income, after taxes, rose
sumer goods industries — textiles,
from
the pre-Korean quarter of
clothing and many electrical ap¬
1950 through the last three months
pliances — persisted for many
of that year.
But it has been at
months after the spring of 1951.
lower levels since then.
Consumer buying power and con¬
"Rises in cash personal incomes
sumer
spending have not grown
have been eaten away by infla¬
as
rapidly as our ability to pro¬
tionary price rises.
The buying
duce civilian goods.
"Despite
"The
total output of goods
of $275
to,
made to the public was
completed on July 22 when Earl W. Bennett, (seated, right) Chairman of the Board of The Dow
Chemical Company received from Charles W. Keanard, (seated, left) partner in the investment
banking firm of Smith, Barney & Co., a check for $100,425,000. The check represented the net pro¬
ceeds from the sale last week of $100,000,000 principal amount of Dow Chemical 3% Convertible
Subordinate Debentures due 1982, the biggest financing on record to be effected by means of this
particular type of security. The check was handed to Mr. Bennett at the New York City offices of
Smith, Barney & Co., head of a nationwide group of securities dealers which underwrote the offer¬
ing of the issue to the public.
Observing completion of the transaction are (above, left to right)
Calvin A. Campbell, Vice-President and General Counsel, Dow Chemical; Carl A. Gerstacker, Treas¬
urer, Dow Chemical; and Leland I. Doan, Presidint, Dow Chemical.
largest offerings of securities of a chemical company ever
nounces
Use
By JOHN DUTTON
toat
Jraes
"Getting to the Prospect"
i
..
...
Likes and Dislikes of
of the material
presented in this week's column
source
The receptionist does not
has been obtained from a bulle¬
(1)
tin
prepared by the Sales Insti¬
of America, Norwalk, Conn.
Those
interested
in
obtaining
To
be
leaned
the
The
through
the
first
three
from, an annual rate of $257.9 bil"Consumers began to readjust
bon i"
9 ,sac°
quarter of 1950 their expenditures in the spring
? a $291'4tllbiU'°"
in theBr„st ""951. Many of them had stocked
{hree months of 1952. Our expand- Up 0n goods—if they could afford
,
i<? that
vou
by
immediately
desk
available for civilian needs.
dated their savings. There have
"Defense expenditures will rise been debts and financial obliga-
after you make your request.
their desks.
1950
duce enough for defense—and yet the Korean outbreak. A large
all°w
a ris®. m the, output number of consumers had liqui-
(2) To have brief cases planted
on
complete material may write
year,
in^ economy had been able to pro- to do so—fn the nine months after
fl"s<nimntion
and receptionist's
breathed at.
last three months of that
are
„here„
tute
the
^)f
Mr
Mr.
s
like:
over
and—
your
of
appointment—particularly if you move away from the
ln^iral
,
.
Reception!
"hello"
please tell
Thompson
Company
is
here."
XYZ
ivouvvi
_
The
you
effect
months of 1951. It declined during
the rest of 1951. And in the first
quarter of this year, was no greater than it had been in the period:
just before Korea.
doubt when she an-
sincere
a
the
$47 billion.
"The amount of goods and services left for the civilian economy
—after deducting defense expenditures from total output — rose
you
"Would
.
"It is not surprising then, to find
that total consumer expenditures
—in constant first quarter 195(1
dollars—have not held up. The annual rate of total consumer spending — in constant dollars — rose
from the pre-Korean quarter of
young
will express
.
three months of 1952 was
somewhat greater than_in the see°nd quarter of 1950. But it was
level achieved m the
an
Government defense
lady will catch the
doubt and may be reluctant to do
all she can to help. Her own voice
Securities Salesman's Corner
of the annual rate of total
billion in the pre-Korean
from
price changes.
expenditures
—for military goods, payrolls and
upkeep of the armed forces, foreign military and economic aid,
and atomic energy — increased in
that same period from an annual
rate of $17.1 billion to a rate of
nate
"
power
personal income, after taxes, m
rose
quarter of 1950 to an annual rate
of $339.7 billion in the first three
months of this year—a real increase of about 11%
if we elimi-
7
the
and
annual rate
services
One of the
this
By standing at her elbow while
she puts the message through, you
o
^
^
^
t0 a peak level> according to pres- tions to pay. High prices had
It is
en}. p1?™',ln abuout a.,y<Lar' B
18 forced many families out of the
Kn^naf
markets
(3) To be treated as an inconse- signal her that you are waiting to
+w
quential human being, or as the see "if" he'U see you. You also ?.ual rate of $55-$60 bilhon at that
Weaknes<! .
Cmmm„
rrivp her the onnortunitv to ask if time- From that point on, defense
weakness in consumer Goods
Many salesmen work almost ex- salesman's enemy.
von
have an aooointment if vou expenditures are expected to level
"The index of total industrial
clusively in larger cities where
(4) They do not like long and
production indicates the weak
they often wish to make "cold difficult messages given for trans¬ remain by her side. Moving away off and> the^» to decline.
calls."
At times it is convenient mission to
helps create the idea you are ex"The continued expansion of spots in the national economy. Th©
the prospect.
to do this when appointments are
pected.
total output will further increase mdex rose from the pre-Korean
(5) Or deceitful tricks used by
spaced so that time can be used
A
ereat
manv
salesmen
ac- the volume of goods and services quarter up to the spring of 1951.
some salesmen to get past them.
that otherwise would be wasted.
knowledge
thev
don't
have
an left for the civilian economy.
By Since then, it declined and, then,
(6) Or the kind of compliment
There is a method and a set of
"ext year, a greater volume of
creep
rules that can be helpful in ob¬ they know the salesman decided
They ask a favor-the old rule of S??ds, and. services will be avail"The durable goods production
to play them while he was still
taining interviews under such cir¬
human relations that gets people atde for civilian use than at pres- index moved up after Korea and
"three blocks away from here."
cumstances.
on your side!
enthas remained at high levels. This
The receptionist likes:
"Miss
I wonder
if you
vou could do
"There have
been
weak spots in
reflects,
to a large degree, goveriiwuao,
miss, *
i
wonaer
wuuuci ix.
it
ywu uuuiu
couia uu
ao
—----—
mnn+
The Receptionist
defense expenditures.
For
(1) A smile and a cheerful hello, me a real favor?
My name is the economy despite rising defense
The
this area that most deyoung
ladies who
hold
(2)
To have difficult names
down receptionist jobs have cer¬
out
and
clearly
pro* —
~
----—
tain
responsibilities.
They are spelled
Mr
Jones
I don't
eet bv here the increasing output of civilian ,tanks> guns and similar military
usually smart. That's why they nounced.
often, so l wonder if you could g°°ds next year and 1954 after
goods. High level durable
are there. They are also there to
(3) To have visitor books signed
goods production also reflects the
get me in? I'd certainly appreci- S°vernment defense spending
be helpful whenever they can
rise
in defense-related outputlegibly and with all information.
levels off?
ate it. My boss made a particular
and more so, whenever they want
such as machine tools and machin¬
(4) A pleasant word or two
point of asking me to see Mr.
to be.
Buying Power of Wages Fails
ery for the production of military
when they are not busy with other
Jones."
to Grow
How long would the reception- callers,
equipment. And it reflects, too,
The foregoing is taken almost
ist last, who lets vvjuui.
everyone "get
1 n 1
navp
T.hfTr
,
, •
.
,
,High prices have cut into the Ihe increase in business expendl—
(5) '.to
To have
their natrip tp—
for
a
copy.—J. D.
appottment bTfore bL/alkead
...
started to
upward.
-
,
j_.__.x_
^—anJrd wlth^ ^
Production lies
planes.
heavy
.
.
.
,
»«»
tain
»"v
facts
A„
xv-wj
about
,,
^nding„Sut.c,erthe
call?
how long would she last if she re¬
fused admittance to the salesman
whose call really meant profit to
her employer?
membered by
men
who call fre-
Also, quently(6)
To
of
have
salesman
..
,.
LLsI™trtT."There1raweSh
additional
material
contained
buying power of consumer IncomeThe buying
power
of average
weekly earnings—after taxes—of
manufacturing workers with three
dependents was only 1% greater
How to handle the difficult "What *n jh® first quarter of 1952 than it
in it. How to get to your man by
"Good-bye and thank you" after using the inter-office telephone,
he has seen his prospect.
How to avoid the "Wasted Wait."
either call
She can
prospect on the inter-office
telephpne and ppnounce you with
your
a
The Reception
„
Room
say
>s
pr®ductive
.
capacity
•
.
But i^m the 1
w
^
^Par-el shoes—that; w<eakness is.
m the pre-Korean sec- revealed . These are the goods that
ond quarter of 1950. But it was
t ihoistly by consumers*.
below the level reached in the And this index reflects the decline
last three months of 1950. '
cnri<^Sr^lQSiPe^n^* since
e
of
you'll be seen by the pros- some excellent sales helps write
"In constant first quarter 1952
pect* Your voice and actions must "The Sales Institute" for a copy of dollars (adjusted for price I-rc+ +urrux ^.££5
iS?i
i
Presentation
do
you
And
wish
to
see
me
about?"
had been
excellent
suggestions
always best to give the im- for setting up appointments by
out here," tone in her voice,
or, pression that there is no question letter.
If you are interested in
a
bored "There's another salesman
she can, by the tone of her voice,
almost recommend that
vonr nmc
peci see you.
some
It is
demonstrate confidence.
If your this
bulletin,
voice seems to express some doubt Prospect,"
"Getting
to
the changes),
_
the
weekly
furst three months of 1951. Sinca
of manu-
Continuedon page 3 X
average
earnings—after taxes1
/
Volume 176
Number 5136
.
.
The Commercial and Financial Chronicle
.
(297)
continuous
Individual Portfolio
Management
'
By KINGSLEY KUNHARDT*
Mr. Kunhardt describes methods, procedures
counts.
of
more
Directors, known
the Trust Investment Com-
as
Stresses value of investment research and
sential statistical data. Notes need for careful
of
use
of security prices in
:
The
<
subject of this afternoon's
discussion
vesting
is.- the
method
individual
in-
of
It
accounts.
does not make much difference if
ttiey
accounts
are
•
and
Directors known
Board of
our
the Trust In-
as
vestment Committee.
in
..
to
invest
know
himself
or
accounts.
of
One
fellow
I
invested his—and made
million
a
dollars
—
by taking
sticking it through
way
by
the
pencil
a
a
and
news
paper,
and then
opening the paper to see
what stock he marked. He started
around
1932,
to
came
the
and
about
bank
dollars,
so
1940
wanted
and
execul°r*
us
million
He
we
had
one
trouble
all
unadulterated
diligence
when
for
all
be
can
successful
period
a
of
well.
goes
decide
a
few shares of stock in one account
or
another, but
responsibility
be
required
have
we
than
investor in that
the
some
to
a
greater
ordinary
day
we may
in
appear
a
any
it is
and
years
Another
trouble is that 90% of the people
who have made some
the
reason
have
we
why
our
done
methods
little more buttoned
up than
would find them to be at an
investment counselor, a life in-
are
a
you
sunjnce
company,
or
some
or-
ganization of that kind.
The
twice
directors'
a
week
committee meets
with senior
invest-
ment and executive officers of the
Trust
Department and takes a
very
active part in the conduct
of our investment work.
Together
decisions
wjth
careful
to
the
country, and quite v
mines, and a lot commodity prices, industrial
pro¬
mills, and I think duction, and government
finance,
light reading for him is "Iron which exert so
great an influence
Age" and other trade papers. All upon the course of
security mar¬
the statisticians get
In his studies he
wrapped up kets.
tries to
in their industries, and know an evaluate
the factors that are
likely
immense amount about them.
to influence the
future trends over
........
■
•
by officers.
of
course
the
senior
the
Board
and
ex¬
investment
quently
mines
-
plants,: has disclosed some relatively unproperties.
To emphasized longer term influences
the
statisticians
tistical
and
in
their
services
and
financial
maintain
library
where
edge
of
point
the
more
tical
in
No amount of research
well-rounded
a
less
sources
can
do
picture
other
changes
in
its
impact
ences
'
Its
of
financial
relative
other
or
future
Its
ket
gross
o
potential;
r
action^of
times
,
(6)
of
the
only
our
(4)
whole
three
The
four
or
Trust
meeting
a
Investment
committee
member?
(5)
ment formulates its
was
very much of
than a science.
It
is
Ben
out
able,
are
with
old
clubs, to play extremely
good
golf, while the Kingsley
Kunhardts cannot play good golf,
with any kind of clubs. But we
both
I
,
are
not
going to try to tell
how to judge whether stocks
you
are
better with good ones.
are
am
high
high
or
good
This announcement is neither
low, or whether bonds
low, but I can tell you
Investment Department are based
on certain fundamental ideas de-
a
over
a
period
years.
of
They
more
provide
practical working basis on which
the
own
or
responsibility for
our
invest-
-
i
headed
by
two
The
our
other is 49 years of age, has been
placed, jointly
investment organization
address by Mr. Kunhardt before
the Second Annual Forum of the "Economics of the American
Securities Busi-
sponsored
"
Association
by
investment
account
offer to sell
nor a
solicitation of
an
a
Joint
Fir'me.,
of
Committee
with
who include six officers
and twelve correspondents, are for
the
most
part men who, after
training in the Statistical Division,
were considered especially quali¬
fied to advise with
garding
their
customers
investment
dealers
as
us
the
26
organization.
years.
Prior
may
are
Each account is assigned to two
who continually review the
men,
accounts
to
under their supervision
that, if any, investment ac¬
see
tion
should
order to
be
considered
offer to
•
Continued
on
buy these securities.
obtainable from only such of the undersigned and such other
to
Harriman
his
Ripley & Co.
Incorporated
Kuhn. Lceb & Co.
!•
9
Blyth & Co., Inc.
.
The First Boston Corporation
nft
..f
he
W3S
vision.
Lazard Freres & Co.
head Of the Statistical Di-
.
v
^
/Smith, Barney & Co.
The Other 16 officers with
exceptions,
have
had
20
years or more of service.
Under the
close
this experienced official staff, the
department carries
Merrill Lynch, Pierce, Fenner & Beane
supervision of
on
its work of
July 23, 1952.
_
/
:
in
apply the policies decided
lawfully offer these securities in the respective States.
The
re¬
pro¬
grams.
Company
assignment to supervisory duties,
°Bankers three
America, National AssoAmerica, National Association
of Securities
Dealers, the New York Stock
Exchange, and the New York Curb Exchange, New York City, July 17, 1952.
of
Copies of the Prospectus
super¬
visors,
vice-
upon
ness"
investment agency account in¬
Price 99% and accrued interest
presidents. The one in charge is
54 years of age, has been in the
division 29 years, and has played
a
major part in developing and
training
ciation
*
is
operations is
I
-
zation
we
ac¬
volved.
Twenty-five Year 3Vg% Debentures, due July 1,1977
investment department itself is made up of 103
people, ineluding 18 officers. This organi-
m e
views aJ
be taken.
ment
•An
r
an
Deere &
Committee,
however,
they are thoroughly thrashed out
S o
economist,
investment
The
The operating principles of our
thirty
of
$50,000,000
vestment
to
Operating Principles
than
our
New Issue
rectors make up the Investment
Committee. Most of the things
considered just fly thropgh the
meetings — you know, the way
they d<> m y<>ur universities or
your fraternities—but important
things really get discussed. Before these problems go to our In-
—
veloped
and
group
The offer is made only by the Prospectus.
among ourselves so that it isn't
something about the tools that you Just each member of the departneed. So, as I know most about ment going off on his own hook
my own set, I am going to tell and
doing as he thinks best. I
you about these
the Guaranty or one
the other officers will
Trust Company has for
investing see
every suggestion and
will
consider the changes or the action
other people's money.
or
a
Six members of the board of di-
something like golf. The
Hogans
worn
an
there
few pf
important, and others
meaningless, at least to me.
referred to it by the officers in
conection with investments or any
questions which the committee
art, rather members themselves may raise,
a
are
any questions
good. The interpretation of public
is
them
statisticians,
j^g
despite the fact that business
of
counts. It is their duty to see that
the policies decided upon are ap¬
the
plied with careful regard for the
senior investment correspondents
and the executive officers so that circumstances of each estate, trust
meetings of the
mar-
and
reaction to economic developments
that,
willing to
count supervisors who are respon¬
sible for following individual ac¬
an
of
ficers and considers
cabinet
division
really.%or exampl?
down,
be
have
o
and the stock market went
would
receive copies well in advance o
the meeting so that they may ha v.
part;
Tn
and dif¬
In order to supply the knowl¬
edge developed by our statistical
Com¬
opportunity to study them
During this period, the depart¬
its securities
cross
against the wall. Quite
them
are
fascinating.
are
of
great
see
re¬
in¬
The
he
rate
our
a
ties of charts, seven of which you
on these
walls, and there is a
securities
attractive for
are
real
admit, is much more difficult than
the original study. For that pur¬
pose, he draws immense quanti¬
to
the
in
a
none
work
think
of them
mittee.
influ
earnings;
showing
dustry of which it is
of
broad
people like Joe Katrausky
summarized and submitted at the
to
(3) The probable
taxes
its
on
latter
after being pre¬
in considerable detail, are
pared
things
condition; (2) Its earnings record
the years;
I
might ad¬
That
a
oi
complement to the
detailed work of the Statis¬
Division.
make
These reports,
the
(1)
we
invest.
been
and myself understand what it is
that he has figured out, and
quirements.
present
determine, among
following:
think
lot
a
that
studied
thorough. We make
intensive study of the past and
record of a company to
an
quite
find
un-
authoritative and
are
we
has
a
ficulty under which he acts, be¬
cause
he not only has to
study
these things, but then he has to
the difficult ones, as we may
are
pre-
is
coverage
which
vantageously
view
as
Fred has
assignee
to
affairs
of
value
'
industries
commodity
a-
their intimate knowl¬
the
and
the economic outlook from
of data is readily avail¬
under
the' supervision
of
on
stock
prices. The continual appraisal of
a
mass
Based
both
on
subscribe to various sta¬
them, the heads of the groups
groups have
assigned to them
prepare
statistical
reports
on
specific industries, and it is their
these
industries and the com¬
duty to be intimately acquainted
panies
in
whose
securities
wt
with and follow developments in have
invested and on companies
these industries
and
short and longer
term,
interpret these influences
their
other
we
large
interest
through
go
and
three librarians.
of individual companies assigned
to them. '
~
the
to
in their relation to stock
and bond
prices.
Some longer
range
re¬
fre¬ search work has been done
which
bad; and (7) Most imDirectors, who re- portant of all, in the
light of any specific recommendations may be
The surprising
thing about it is view the action of the Investment
significant changes in its finan- made to the committee.
a
good many of them are at least
Committee, it determines all gen- cial condition, earnings and com¬
$
as
long as the market advances, eral
investment
policies,
after petitive position, we appraise the
Studying Security Price Trends
There
is
a
greater
difficulty, giving consideration to informaresourcefulness and ability of its
That is the way we study indus¬
though, in handling investments tion and suggestions submitted
by management,
tries and companies, but if we
over a long period of
time, during the officers. In advance of each
f?n
lot fnrthor than that
knew that the stock market was
various cycles.
meeting it receives from the Inour auto- going up, or that the bond mar¬
How successful a person or an vestment
Department
statistical
mobile man spends quite a few ket was
going down, we could do
organization is in investing de- reports dealing with some of the
weekends driving new cars test- a lot better than is
possible mere¬
pends on their ability to judge more
important industries and
out new kinds oftiresknd if ly by studying the individual com¬
public ..reaction to economic de- companies in whose security issues
you were to ask him about' aimost
panies. Fred Simmons, the bank's
velopments. We can have some we have invested or may wish to
any
cai* or accessory you would
economist, who is going to talk
very excellent business, and the invest. After reviewing these refind he knows about its advan- to
you for a few minutes later,
public may react unfavorably to ports at its meetings, the commit—
tages and disadvantages,
spends his time wondering about
it. That occurred in 1946. This was tee passes upon the
purchase, rejoe Katrausky, who will talk the broader question of the
gen¬
just after the war, when business tention or sales of the investments
to y0u later, has been through a eral trends of the security
prices.
was
booming, but the public de- under review. It also reviews ing0od
proportion
of
the
He concerns himself with
such
copper
cided it was not going to boom, dividual trust accounts with the ofcompetent to handle investments,
both
investiga¬
travel
upon the officials
companies in which we- have
able
These
our
men
tensively to call
of
an
great
Investment research is handled
headed
tions
work,
by the Statistical Division which
is divided into groups, most of
them
In the
•
are car-
regard for
steel
.
assist
Investment Research-
-
the
that
see
the circumstances of eaeh account,
over
in
business, consider themselves quite with the Executive Committee of
money
out
court i sent
why. That perhaps is not of
great interest to you, but
much
care
to
going to buy
explain what
invest-
so
than
are
and
ment advisers face. Luck
pure and
more
Directors
we
and
to act. But in the next
year he lost
is
of
whether
to
glad
were
Board
he
all his money, and we never heard
much more about him.
That
ried
owned
such,
as
and
investment divisions and
the policies decided upon
someone
by in- eventually must decide the imby corpora- portant
policy questions. Those
tions, or by pension funds, or by decisions are made in
our case by
trust funds; as far as we are cona committee of the
Board of D1cerned, the system is the same.
rectors.
That
probably
sounds
Of course, there are lots of ways
pretty dressy to you, to go to the
dividuals
also' interpret the commit¬
views
i
organization
every
the views
tee's
„
committee of
a
Investment Committee
They
•
handling investment portfolios.
'
the Trust
and data developed by the
organi¬
zation as a result of its research.
"
es-
study of trends
division to transmit to
the
of
few of the coal
of
.
It is the
responsibility of the
vice-presidents in charge of the
ac¬
Says these principles have been developed over period
than 30 years, and decisions are made
by committee
of the Board of
mines
a
the wills, trusts or
agency agree¬
ments under which we act.i—
and principles
mittee.
research
administration of accounts
keeping with the policies and
decisions of the Trust Investment
Committee and the provisions of
Vice-President, Guaranty Trust Company of New York
followed in his bank's handling of individual investment
investment
-
and the
in
13
Union Securities Corporation
page
27
The Commercial and Financial Chronicle
14
.
.
.
Thursday, July 24, 1952
(298)
AND^FOUNDRY
CAR
AMERICAN
and
FIFTY-THIRD
ANNUAL
REPORT
COMPANY
Subsidiaries
YEAR ENDED APRIL 30, 1952
SHPX FIRST CORPORATION
30, 1952
Sheet as at April
Balance
Consolidated
Consolidated,<
and Subsidiaries
~
ASSETS
Consolidated
current
Cash
Banks and
Marketable
U. S.
at
as
1952
April 30,
less
Cost
at
less
Notes and Accounts Receivable,
Accrued
Escalation
Unbilled
Inventories
(Market Value $1,521,441.50)
reserve
Securities
.
.
.
Charges
less, and not in
at cost or
(See Note 2)
reserve
ASSETS
$19,601,707.00
1,349,856.00
500,000.00
22,130,259.37
1,250,976.50
Hand
on
Securities,
Government
of present market prices
excess
45,005,227.88
Cash
U.
and
items
deferred
securities,
miscellaneous
reserve
less
'
'
subsequent to one year
notes receivable—maturing
.
.
car purchase options—unconsolidated
investment
Land and
(See Note 1)
unconsolidated subsidiary
in
.
•
.
.
..
.
559,000.00
.
Improvements
Patents, Trademarks, etc.
.
.
.
.
Payable
51,267,703.13
19,958.81
■
,
;
57,261,729.04
AND
Payable
and
788,594.36
22,967.15
Expenses
Accrued
31,557.50
Federal, State end Local Taxes-.
DELIVERIES
UNDER
559,000.00
COMPANY
—AFFILIATED
Common:
See
this statement.
SURPLUS, See
of
1
Note
Gross
of
Mileage
including
$8,259,989.62
Financial Statements.
to
CONSOLIDATED
OF
and
Operations,
15,000.00
56,542.25
accompanying Notes
Rentals
Car
Cost
share
share
Statement
STATEMENT
CAPITAL
AND
LIABILITIES
150 shares par value $100.00 per
Issued
INCOME
$514,497.20
-
General
and
Administrative
Expense,
liabilities:
current
Notes
Payable to Banks .
.
...
Accounts Payable and Accrued Expenses
Accrued Federal, State and Local Taxes
Advance
.
.
.
.
.
.
.
.
.
...
.
.
.
.
•
.
•
Sales Contracts .
.
.
.
.
.
Sinking Fund requirements due within one year under indentures
securing debenture issues of Shippers' Car Line Corporation .
Payments received
debentures of
fund
on
shippers'
Earnings
Other
subsidiary:
$3,175,000.00
3%
due july
1, 1962
2,500,000.00
1,700,000.00
april
1, 1963
in
(.net)
employees'
for
capital
stock :
'
.
.
.
Net
Earnings
Net
Earnings
1,055,000.00
28,945,000.00
for
EARNED SURPLUS
$ 56,542.25
$ 56,542.25
year--
1952
to
Financial Statements
statements of American Car and Foundry Company
Subsidiaries include all subsidiaries except SHPX First Corporation and its
1—The consolidated financial
and Con¬
subsidiary
companies.
During the fiscal year, certain subsidiary
companies were organized for the purpose of financing
rental and sales transactions. Any obligations incurred by such financial
leases thereon, and are without recourse to American Car and
its operating subsidiaries—Carter Carburetor Corporation and Shippers' Car
specific car purchase,
subsidiaries are secured by cars and
Common:
Authorized and issued 600,000 shares—no par
Less: 600 shares of Treasury
Foundry Company or
$30,000,000.00
value
30,000.00
Stock
29,970,000.00
Line Corporation.
subsidiaries relate to financing, and their balance
from those of the operating companies, these .companies.:
consolidation and a separate consolidation under the head¬
ing SHPX First Corporation is provided herein.
This consolidation also includes a subsidiary
which had been organized in the prior
fiscal year for the purpose of acquiring the interest
of the parent company in certain car lease rental payments on cars sold by it to an insurance
company to be leased to a railroad company.
The parent company's investment in SHPX First
Corporation is carried at $15,000, bei&g the amount of the said corporation's outstanding capital
stock.
' .V;.':
A;
The obligations of these unconsolidated subsidiaries are payable on a monthly or quarterly
basis, and the maturities due within one year are shown as notes payable under current liabilities.
The balance is shown as secured long term notes payable and is due at various maturities to
Inasmuch
consolidated
J,397,790.63
subsidiary
of Treasury Stock
value
(or staled)
par
of
cost
over
551,600.25
acquisition
2,949,390.88
materially
differ
excluded from the parent company
are
Excess of acquired equities over cost of investment in
the function and purpose of such
as
characteristics
sheet
surplus:
of
35,890.00
$ 56.542.25
STATEMENT OF CONSOLIDATED
Balance—April 30,
solidated
$30,000,000.00
shares—par value $100.00 per share
Less: 10,550 shares of Treasury Stock .........
Excess
Profits
Surplus
Carried to
Notes
<
Authorized and issued 300,000
capital
Excess
7,375,000.00
NOTE
Preferred:
$3,000.00
for
4,129,377.63
(See Note 4)
welfare plan
$ 92,432.25
Provision for Federal Income Taxes
Federal
Income Taxes
(including
earnings before
Taxes)
11,361.67
414,621.95
subsidiary
consolidated
unconsolidated subsidiaries
reserve
98,194,53
Deduct—Provision
1, 1961
interest
:
Charges:
Interest
due april
3due
35,978.62
$190,626.78
$37,073,446.66
Other
3%
minority
$154,648.16
Operations.
from
Income:
Interest
685,000.00
Net
solidated
145,763.31
214,085.73
Depreciation
a con¬
car line corporation,
before
$368,733.89
10,125,892.93
9,957,366.71
1,305,187.02
...
.
.
but
$15,000,000.00
.
843,119.01
6,786,328.36
OPTIONS
PURCHASE
CAR
Authorized 250 shares par value $100.00 per
Statements are an integral part of
$
PAYABLE
NOTES
CAPITAL STOCK:
EARNED
The accompanying Notes to Financial
CAPITAL
;
LONG TERM
SECURED
FUTURE
56,978.414.21
5,778.034.30
214,085.73
Depreciation
for
LIABILITIES
$149,486,459.17
sinking
Amortization and Reserve
Accounts
$108,246,117.34
.
Reserve for Depreciation
.
$5,992,170.03
:
LIABILITIES:
Notes
.
.
Less: Amortization and
208.32
Cars
Accrued
Buildings, Machinery and Equipment
240,339.67
PROPERTY:
Less:
CURRENT
15,000.00
$5,974,067.10
414,621.95
$8.259,'.>89.62
(See Note 3):
property
and
.
.
.
(See Note 1)
subsidiary
946,625.98
880,109.40
___
SECURITIES
267,158.45
'
securities
and
$
YEAR
-
ITEMS
AND
-
561,384.98
70,036.23
315.204.77
ONE
(NET)
COMPANIES
AND
CASH
AFTER
DUE
PAYMENTS
LEASE
$
,
19,646.90
.
cash
of
deposits
OF
_
cost
at
Receivable
AFFILIATED
Railroad
511,607.09
'
CAR
Hand
on
Securities
Accounts
IN
DEPOSITS
PREPAID
1,014,290.94
prepaid
and
FROM
PLANT
and
Government
INTEREST
$ 89,838,026.75
Banks
in
S.
Notes
"
~
ASSETS:
CURRENT
DUE
(See Note 2)
due to
Sheet
assets:
in
plant
Balance
■
earned
reserve
surplus,
for
See Statement
:
.
contingencies
31,319,891.43
7,298,368.90
.
.
.
$149,486,459.17
STATEMENT
Gross Sales and Car Rentals, less discounts and allowances
.....
.
$173,964,755.48
152,399,530.27
.
.
3,929,204.91
$ 17,636,020.30
Dividends
Royalties
....
.
.
.
...
.
.
Cash Discounts
....
.
.
Miscellaneous
......
Other Charges:
Interest and Discount
.
in
are
1913,
1,
included at
740,651.84
...
\
(Including Depre731,532.94
3,579,497.56
218,285.34
.
.
14,797,174.58
Net
Earnings before Provision for Federal Income Taxes
Deduct—Provision for Federal Income Taxes—Including
$175,943.84 Excess Profits Taxes
Net Earnings Carried to
result
a
(See Note 5)
.
to
of
OF
EARNED
7,202,164.74
$ 26,606.932.00
7,202,164.74
.
•
Dividends
paid during the
V.
$ 33,809,096.74
«
year
on
Gapita) Stock
ended
$7.00
share
per
April 30, 1951
.
from
.
earnings
.
.
On Common, $2.00 per
Less:
Reserve
made
share
provided for
this
.
for
.
year
.
.
$1,198,800.00
735,744.74
purpose
to
the
Reserve
Welfare Plan.
for Employees'
to be adequate
$112,601.84 as
This saving has been
Represented bv Collective Bargaining Agents:
union contracts
BELU AND
COMPANY
ERNEST
YV.
Certified
Public Accountants,
the Shareholders of
25 Beaver Street, New
American Car
the Consolidated Balance
Subsidiaries
and
the
York
and Foundry Company:
Sheet of American Car
Consolidated Balance Sheet
and Foundry Company and
of SHPX First Corporation and its
companies not included in the consolidation with American Car and Foundry
Company) both as of April 30, 1952, and the respective related Consolidated Statements of Income
and Surplus for the fiscal year then ended. Our examination was made in accordance with generally
accepted auditing standards, and accordingly included such tests of the accounting records and such
other auditing procedures as we considered necessary in the circumstances.
However, it was not
subsidiaries (subsidiary
practicable to obtain confirmation of certain accounts with United States Government Departments
and Agencies, as to which accounts we satisfied ourselves by other auditing procedures.
In our opinion, the accompanying Balance Sheets and related Statements of Income and Surplus
publicly held, viz:
Preferred,
charges
We have examined
SURPLUS
.
Add: Net Earnings for Year
actuarial computation, the balance necessary to
plan amounted to approximately $6,914,-
service cost of the
the past
,
$
CONSOLIDATED
for
approved at the annual meeting of
Consolidated
On
provide
('salaried employees) has, during the year, been
of $103,940.16 on account of employees' retire¬
April 30, 1952.
7,595,009.84
.
Surplus
STATEMENT
Plan
amount (after tax benefits)
services. Based upon
contain certain provisions with respect to pension benefits
shareholders held August 31, 1950. The Company has not
yet finalized these pension agreements as to funding arrangements, etc.
As at April 30, 1952, the Company has a liability of approximately $2,723,000 representing the
present lump sum valuation of pensions payable to those employees who had been retired up to
that date or who may retire during the ierm of the present labor agreements.
The cost of provid¬
ing for the foregoing liability over future years will be less than the amount shown by reason of
income tax credits. Pending the formation of a definitive plan, the Ccmpariy has charged all cost
to operations on a cash basis. For the period ended April 30, 1952, such costs aggregated $102,657.75,
NOTE 7—Certain of the Company's business is subject to possible price adjustment under provisions
of the Renegotiation Act of 1951.
In the opinion of the Management, any such price adjustments
as, might become necessary should not be material.
To
Balance, May 1, 1951
for Employees' Welfare
applied as a reduction in the charge to said reserve.
NOTE 6—Pensions and Disability Benefits for Employees.
as
1,483,179.73
.
i
,
905,077.06
241,422.49
.
.
.
.
at
valued
cost.
The Company's labor
Property Retirements
Miscellaneous
funded
valuations were inventoried and
Consulting Engineers, as of April 30, 1939, on the basis of values at
additions at cost.
Plant and Property of subsidiary companies
subsequent
The amount now reserved for this purpose is considered
by reason of income tax credits which will be realized over future years,
NOTE 5—Federal Taxes deducted from net earnings are shown before tax benefit of
79,174.94
Non-Operating Property Expense- -Net
ciation of $382,407.98)
Deduct:
with
cost applicable to past
000.00
458,017.51
....
receivable
of parent company included in
by Coverdale and Colpitts,
be
49,300.39
$ 18,376,672,14
on
included
NOTE 3—Plant and property
ment
41,796.91
.
,
.
Loss
•
accounts
and
charged with the net
112,362.09
.
Royalties
consolidation as "Future deliveries under Car
"V .which relate to U. S. Government contracts are
this balance sheet after deducting partial payments received in accordance with the
liability in the unconsolidated subsidiaries'
NOTE 4—The Reserve
Other Income:
Interest
a
2—Inventories
March
.
.
as
Purchase Options."
regular provisions of such contracts.
Properties
Earnings from Operations
and
NOTE
$ 21,565,225.21
Depreciation—Operating
;
subsidiaries, Shippers' Car Line Cor¬
certain cars owned by the unconsolidated
their net
thereof.
Cost of Operations,
including Administrative, Selling and General Expense,
but before Depreciation
.
.
respect to
poration has paid a total of $559,000 for options to purchase these cars at any time at
depreciated book value, with the privilege of applying this amount to the purchase price
This item is shown as an asset in the parent company consolidation as "Car Purchase Options"
INCOME
CONSOLIDATED
OF
With
'
1964.
1,
May
$2,026,150.00
present fairly the financial position of American Car and Foundry Company and. Consolidated Sub¬
at April 30, 1952 and the consolidated results of their operations for the fiscal year then
ended, and the financial position of SHPX First Corporation and its subsidiaries at April 30, 1952
and the consolidated results of operations for their first fiscal year then ended.
Generally accepted
sidiaries
2,489,205.26
463,055.26
consistent with that of the preceding year, recogniz¬
explained in Note 1 to the financial statements.
accounting principles have been used on a basis
Balance, April 30, 1952
The accompanying Notes to Financial Statements are
$ 31,319,891.48
.
an
integral part of this
statement?
ing the change in the extent of consolidation
New
York,
June 25,
1952
ERNEST W. BELL AND COMPANY
Volume 176
Number 5136
.
.
The Commercial and Financial Chronicle
.
Continued from preceding
15
(299)
I
page
AMERICAN CAR AND FOUNDRY COMPANY
30 CHURCH
STREET
NEW YORK 8, N. Y.
*s
ac£
To Our Shareholders:
the
Company's
past
of
the
of
sorts
—there
etc.
its
of these, in former
one
have
been
considered
another obstacle
Throughout
second
of
years,
dip into
as
come
In addition
requirements,
more,
suffered
we
that
year
and
It
shut
strikes in
the plants of our suppliers
natural result of labor
having be¬
on
ume
of
This strike
provided
I
!
was
all
grievances
settled
submitted
strike
by
the
in
has
(as
it
ought
been
great
prog¬
to
materially to our total
ings during the past year.
ficiency of
of
shown
vain
is
sales
increased in
.
the
round
of
continual
a
of material
costs
the
colossal
impossible
paid by
our
taxes
rise
of
in
our
than
in
Company
in
difficult
or
total
to trace
over
It
stock
dividend
(worth
It
is
will
(upon which he does
burden
to
to
do
has this
bear, consequently
that much more
are
share
as
holdings.
additional
stock
dividend
one
market
current
in
as
the
case
of
favor
of
herewith.
%
a
and
citizens
it
is
of
They would have been
writing
not
off
even
been for the necessity
obsolete
facilities
authorize
60,000 shares
Common
Stock
time
also
to
an
and
obtain
shareholders'
approval
authorization
of
tional
shares
which
could
of
oppor¬
other hand, it
in
must
calculating
be borne in mind
depreciation
their
cast
which
precise
more
the
urges
votes
in
are
manner
material which is sent you
proposal requires
of each class of shareholders,
that all
must
due
use
near
addition
Sheet,
Statement of Consolidated Income, and
Statement
of
Consolidated rEarned
Surplus
shown herein. The figures
speak for themselves and require no
explanation here. The Company's Con¬
are
solidated
Capital and Surplus and Re¬
April 30, 1952 amounted to
$100,482,651 while the net working
capital amounted to over 52 million
serves
on
dollars.
,
earnings
can
only be made
on
large
a
In
capacity of
existing facilities and an addi¬
plant may be necessary in the
their
tional
of
lesser amounts will be bor¬
and
inventories
as
the volume
for the
addi¬
340,000
stock
common
be
used
eral
occasions
have
found
for
in
in
the
the
past
ourselves
we
handi¬
for
negotiating
in
could
we
The
vital
the
have
receivables
and others and then
from
insurance
the
These
in
loans
loan
a
and the
cars
made by sep¬
are
subsidiary corporations and
the parent.
to
recourse
Company is
required
not
of its capital
any
obtaining
companies and banks
the pledge of the
upon
are
Thus
tie
to
Because of the
of the transactions and the
es¬
sentially different balance sheet char¬
of
acteristics
these
financing subsidi¬
aries, they have been
the
consolidated
and its operating
excluded from
herein.
The
of
statements
the
diversification
Due
the
in
to
is
classes
program
of
of
business
our
being of the "feast and
nature, the preferred share¬
past
famine"
found
that
on
a
number of occasions
dividend
(or
only a
could be paid them and
non-cumulative, once
no
partial one)
since the stock is
passed without earnings, that
year's dividend was lost forever. Con¬
a
-year
these
a
similar effect. Therefore
steps
are
beneficial
to
the
they
are
affected
not
by
a
shareholders
—
while
directly and vitally
fluctuating "feast and
so
are
be
had
expansion
absolutely fair and considerate in
dealings with employees and in
turn, on the whole, they are inclined
reciprocate. Nevertheless, there oc¬
casionally arise situations from which,
to
due
the
to
of their leaders
acts
and
cost
both sides
benefited
keep
that strikes
time
or
We
one.
kind
this
but
minimum
at any
no
of
cases
lot of money
a
have
we
hope
a
assurance
other stoppages may not
cause
serious^losses.
and Shippers' Car Line Corpora¬
tion, continued to maintain their
rec¬
ord of excellent progress.
addition
Carburetor
to
main
a
Corporation, in
satisfactory volume of
line
—
carburetors—made
headway in the new line of
fuel pumps introduced in recent years
of
Com¬
the
success
can
now
of this
be
new
taken
as
Company maintains
research
department.
an
Pennsylvania,
be modernized and
also
expanded.
the
happy to report that during
are
year
sold for cash
we
factory figure
back
present
used by
are
at
of sale
contract
re¬
year—was not necessary to
business.
sales
a
Wilmington plant which—as
ported last
our
is
Valve Division.
our
We have also made
of the
satis¬
a
which
portion
a
at
entire Detroit plant;
our
leasing
The
proceeds of these
welcome
a
addition
to
our
working capital.
uptown.
ent
quarters
are
and
do
not
luxurious
source
of
of the
dicated
Company continues
by
various
remarks
as
in¬
this
in
We have several lines in
report.
pect
us
by voting for
the increase of the Common Stock
into
mote
buildings
new
While
our prec-
rather old-fashioned
with the modern
of the new
compare
decided that our present
adequate for our needs and
we
are
substantially lower rental is
preferred to
the luxuries
of
buildings.
as
A dollar saved is
dollar
a
bo
to
new
good
as
earned.
on
the
of
our
of
our
business, and the shareholder
feel
can
that
sure
their
We
ress
in the
shall
near
continue
conservatism,
future.
our
more
prog¬
However,
we
in
our
last
year's report: "always being mindful
explore carefully not only the
pos¬
sibility of profits but also the hazards
of the
to
new
any
profits
holders
know them better and the!?
to
pictures
backlog
present
approximately
which
alluring
depth.
usually
the
but
difficult
to
When entering
prudent
the share¬
want
included in the report.
are
Our
of.
be roughly
may
ED
amounts
million
383
dollar
divided into
125 millions of cars,
carburetors, valvuy
and
products
miscellaneous
millions of defense work.
regulations
prohibit
2!!3
and
Government
giving
our
any
detailed description of the latter iteia,
If
we
had
will
be
only
the
assurance
strikes and
steel
and
the
other
that thero
during
—there has
would
bo
tainties
been any
not
the
as
situation
cussions
as
steel
in
policy
the
of
and
questions loom
do
on
or
the
ro-
deferring- de¬
manyo'Jior
the horizon and
than
more
as
ma¬
reper¬
What will bo
fense work? All these and
cavnot
other
Government v/ith
speeding
to
uncer¬
What will be the
sult of the steel strike?
respect
period sicco
many
labor relations
in
year
What will bo
present.
terial supply?
fiscal
coming
satisfactory. However
containing
war
the
ct
thai
the limited manner
the
would be indeed
the
and
last year, the outlook for earn¬
current
ings
difficulties
in
even
amount
materials
other
available
normal
say--we
oi?o
hr
;o
successfully met all sort; of difficult
situations
the past—we
in
future
depend
that
can
Your
ability, experieuca
our
upon
and hard work
accomplish the beat
t(
be dot
shall meat
courageously, and
e.
Ma» ..gement
records
its
ap¬
preciation of the loyalty and devotion
each
of
and
every
member
Executives,
of
our
and Section Heads ait3
Department
and
salaried
the
ployees,
as
it
was
hourly
the past year
and
it
is
for the
upon
success
wage
em¬
by their combined
efforts and cooperation
of
Division,
that the
re snip
have been obtained,
them that
we
depend
of the future.
line before getting into it
great
is
aip
care
we
policy of careful
stated
as
interests
well taken
organization;
excellent
velopment, the so-called "four-barrelled
follow
the
pros¬
and when the shareholders furnish
the necessary means
assured.
Their latest de¬
year
whether
appointments
buildings,
offices
this
tp
moving
being erected
those of the
Our policy of diversifying the busi¬
ness
more
The
of
modern quarters in the
the
to
Carter
tendency
as
we are or
sep¬
provided
are
hope to be able to report
During the year our two main sub¬
sidiaries, Carter Carburetor Corpora¬
tion
the
to
down to
no
expired
the
or
standings and strikes result. Our Ber¬
wick strike was a glaring example of
this—it
Milton,
at
to
our
Drofit
common
the whole
Company would be a unique excep¬
tion. It has always been our policy to
and the
preferred shareholders.
The
shops
,
both
the bulk of
to
on
present quarters at
arose
Foundry Company
subsidiaries, and
financial statements
arate
We
Our labor relations
the question
should stay where
we
up
burden its credit
or
expanding its fleet.
nature
down.
relatively quite satisfactory. Of course,
wheji in every corner the whole nation
is continually being torn by strikes, it
would be fatuous to expect that our
and
our
Street
we have dwelt at some
lengtai
development and improvement
plants and business, we ought
1,157 cars to their fleets at a cost of to mention that perhaps an even greatapproximately $8,394,000. The fleets er development and improvement haa
now
total 11,692 cars and expanding been in
progress for some years in opr
business requires that further additions Management personnel. We are quil>
be made during the current year. In
proud of the group of men who heed
order to conserve the working capital the various
departments of Manage¬
and credit of the Company, a new
ment.
They are an exceptionally cap¬
method of financing was devised known
able, enthusiastic, hardworking group
as] the "S.H.P.X. Plan." Under this —all
young men in their forties and
plan the total cost of new cars is fi¬
fifties who know that their future 5U
nanced by leasing the cars in advance
to
highly responsible manufacturers dependent upon the success and growth
up
go
on
Church
While
Shippers' Car Line Corporation (and
car-leasing subsidiaries) added
other
trend of outside influences, misunder¬
payment.
importance
and
The lease
30
future.
near
American Car and
Large as these figures seem, our in
creasing volume of business (and large
quite
its
to
without
Balance
superiority
created
continued expansion in the volume of
their work now taxes the
arate
Consolidated
has
regular lines the Com¬
pany produces a large volume of fuses
of various designs for the Government
—a
line in which they made an en¬
viable record during the last war. The
proxies.
The
future. Its great
performance
sensation in the automobile world.
lease.
the
at
Madison, Chicago, and Detroit. On the
that
to
in
diligence in promptly sending in their
all
within
consolidated
larger had it
his
propositions
a
apparent
last year.
taxes
reasonable bounds.
Our
his
Since the
vote
further
bring
in
in the proxy
their
to
sell
convert
can
thus
therefore, strongly
the
described
business has
effort
income
and
all shareholders
earnings for the
year, after income taxes, amounted to
$7,202,164.74 compared to $2,675,913.69
an
to pay
and adds it
stock into cash.
sequently, diversification, which tends
to make earnings more
steady is par¬
ticularly desirable from the preferred
shareholders' viewDoint. Likewise, re¬
taining part of the earnings in the
voters in
in
The shareholder who
needs
rowed from time to time
issued
but the
hoped that shareholders
their
of
a
of them
attain than in former years.
be
his
to
need
not
until he sells it)
tax
money
stock dividend
holders
holders have
to
the
greater or
in mind that management
tax
takes
dend necessitates that the share¬
stock.
earnings today
and
1/10
of
at
reasons
equal to 143% of our net earnings.
In comparing the Company's earnings
with former years we must always bear
difficult
$3.00
totalling
share
di¬
was
parts—four cash
two
available which
is
sum
net
into
purchase of desirable businesses
by not having any of our stock
taxes
$10,300,000—a
now
dividend
common
capped
wages,
taxes.
as many
completely secured.
purchase of properties or com¬
panies in the course of our di¬
versification program.
On sev¬
last /and great¬
rise
so
the share¬
to
the Board deems this
well-known
determine the total
to
indirect
direct
and
prefers to leave his
the business
in the
cars
-
ef¬
not
more
now
who
son
number of other better-class
a
be
to
preferred. The stock divi¬ business volume) requires at times an
involving no cash out- even greater amount of money than pany's business necessitated the erec¬
lay by the company was made our own working capital and for this tion of a new service and repair shop
payable as soon as possible after reason we have arranged with our at North Kansas City, Missouri, in
the shareholders' approval has banks a revolving credit expiring in
addition to its existing shops at Milton,
1957 amounting to forty million dol¬
been obtained.'
lars. Of this credit, fifteen million was Pennsylvania; East St. Louis, Illinois;
III. The payment of the stock divi¬ being
used on statement date and and Smackover, Arkansas. Its main
discussing profits
to
come
encounter
vast
prefer to
receive immediately a larger cash in¬
come.
The stock dividend plan solves
this problem for both classes. The per¬
may
on
expected
dend part
mately $174,000,000<
we
another, being in
income,
adopted this year as
Cadillac, Buick
was
the
improve¬
fact that
volume
while
current
carburetor,"
standard equipment by
and Oldsmobile and is
•
over the previous year, reaching
satisfactory
figure of approxi¬
When
at
irrevo¬
payment
tune
were
by the
business
utmost
curtailment
efforts
our
been
aside and earmarked
same
earn¬
obtain
to
production—the
methods—the
That
waste.
made
has
set
additional
To offset these difficulties the
ment
replaced.,
approximately $4.00). The cash
was made payable in four
quarterly installments for the
the
add
be
busi¬
part
part of-our contribution
the defense effort. Defense work did
to
the
its
dividends
as
had
in
that
vided
down our shop production but, after
all, this is for the best interest of our
country and we must bear it with
effort
time
cably
II. The
improvement of the im¬
and our Government
at
dividend
holders is
place the very
disposal of its
armed forces. This necessitates changes
in specifications which at times slow
fortitude
more
share¬
same
be
can
a
our
the
at
money
until it
total
war,
best
and
to
partially, by new earnings.
However, in compliance with
our
charter, the amount of the
six
beginning) and is
commendably desires
latest and
holders
ness
delays of
production of
plements of
provides
income
a
to some extent to
There
This
the
pay¬
quarterly install-
regular
leaves
our
suppliers in the
tools, but mainly to changes in specifi¬
cations.
again made
was
four
in
to
After
situations, may much pre¬
leave a part of the earnings in
The Board,
ments.
of adjustment.
pated, due
are
construe--
preferred dividend of $7.00
able
Our output of defense products was
much smaller than had been antici¬
est)
our
we
tax
need of
any
we must
very
the
earn¬
of capital in
several
share
per
be¬
employees
our
arbitrators
to
in process
we
to
are
least
cost
have been in the
40%
we
lines
our
amount
took
I. The
which
negotiation
arbitration.
to
which
submitted
the
if
stabilize
to
more
tive steps:
weeks' wages and cost your
Company
a
substantial sum the grievance was
not
and
efforts
the
directors
which
labor and management were
tween
to
business
our
to
we are
larger and larger vol¬
a
business. With this object in mind, the
plant,
in flagrant
written agreement
a
that
not
were
ress
doing
increase
almost impregnable monop¬
to these we had a
weeks' strike at our largest
-violation of
to
re¬
an
Berwick.
be
naturally follows that if
keep
In addition
six
are
inflation
way
ings by diversifying
We, like all industry, suffered indi¬
rectly from the continual outburst of
oly.
to
increasing the amount of
which we need to do business.
continue
-
—a
to
fer)
in
money
even
were
due
cost
business—the
the
in
diversify by acquiring other lines, the
greater the possibility of steady earn¬
ings.
The Board, however, realized
that there are great differences in the
personal situations of shareholdersone
may be perfectly willing (in fact,
inventories
receivable
every
retain
foregoing capital
accounts
our
sults
had
we
occasionally
down for brief periods.
come
our
the
production
car
three
to
in
acute
so
resources.
the
to
larger and in
the
tracks
three
capital
our
simply
overcome.
year
freight
our
five
these
be
to
the
became
half
reduce
from
eventually replace
we shall have to
we
equipment
nevertheless
are
greater certainty of earnings. Money
makes money and the more capital we
major
a
have
we
troubles
worn-out
shortage of materials—mainly
a
steel—which
to
make and when
business,
equal to
inflation) re¬
sum
a
famine"
equally interested in the increase and
increasing (due to
placement cost of worn-out equipment.
We are thus compelled to pay taxes on
earnings in excess of what we really
There
era.
earnings
Revenue
deduct from
to
us
the
manufacturing difficulties
rising costs of business,
look upon such
from
the
stoppages due to
calamity, but these days
to
of
permit
not
current
were
Any
would
do
our
shortages of
were
were
during
share
present
strikes—there
"were
materials—there
all
business
had
year
troubles
unrealistic Internal
present
laws
Your
man
The outlook for
quite
visible
hazards
are
and
much
detect and appraise.
For the Board of
Directors:
}
Respectfully submitted,
JOHN E. ROVENSKT
unknown territory, the
proceeds with caution." June 26, 1952.
Chairman
of the BociH
16
The Commercial and Financial Chronicle
(300)
of months instead
ter
Improvement in Sterling Exchange
By PAUL EINZIG
holdings of
sterling were
mained
they
improvement in recent sterling
on
not
been
So long
competitive.
lead
of the sterling
to
delivery dates
as
are
distant
as
of orders
increase
an
in countries
which
of
a certain amount of strength.
This
partly due to the relatively favorable gold
figures for the end of the second quar¬
of
coal
For
Nevertheless, the posit'on remained
satisfactory, and the optimism that
accompanied the slight improvement, war as
continues
pressing
unabated.
excessive
The
wages
Trades
Unions
are
claims and there is
likelihood
of an epidemic of strikes
holiday season.
However, the fact that even though the gold
every
Dr. Paul Einzif
after the
drain has not
brought under control, is in itself grati¬
complete exhaustion of the gold reserve is no
Britain has succeeded in achieving a respite
been stopped it has been
fying.
Danger of
longer imminent.
a
until the autumn.
of
come
What will happen then will depend on the out¬
the
wages disputes.
Should the employers concede the
claims, there is bound to be a considerable increase in
the cost of production and in the volume of consumers'
purchasing
excessive
and the inflationary vicious spiral would
power;
ward
course.
handicap
on
resume
its up¬
The
higher costs would then impose an additional
British exports, and the increase of purchasing power
would both stimulate imports and reduce the volume of
exportable
underwriting group headed
as
a
any unsubscribed
shares.
Net
proceeds
to be received
from
of
the sale
will
shares
additional
these
added
be
general
to
corporate funds. The corporation's
working capital has been reduced
as a result of its
purchases of se¬
bank shares in other parts
While
there
were
of the country, these were
curities of Universal Pictures Co.,
character.
the
past 20
there have
years
the economic
cluding the banking system.
arising
from
Britain's
commitments
under the European Payments Union scheme
New York
itself, resulted in the
only nation-wide market in bank stocks.
permanent changes in
serve
Aug. 8,
an
the
Within
had been the pessimism that
had preceded it.
The fundamental situation
remains difficult.
The drain on the gold re¬
dominance of
the nature of banking
and
largely local in
as
the size and
years
(EDT)
p.m.
shares of the large institutions located there providing practically
markets for
from
exaggerated
many
three
each
by Reynolds & Co. and Laurence
M.
Marks &
Co. will purchase
Bank Stocks
—
the basis
on
1952.
JOHNSON
E.
widening interest developing in bank stocks out¬
a
financial center
helped.
far
share to 258,-
share for
extra
one
An
There is
also
output
per
shares held. These rights will ex¬
side of New York City.
ter, announced by Mr. Butler at the beginning
of July.
The moderate decline of unemployincrease
II.
This Week
developed
the
$7.62%
pire at 3
By
of
stock
July 22, 1952 rights to sub¬
record
Bank and Insurance Stocks
stopped.
offering
is
capital
883 additional shares
reserve
and
its
of
scribe at
LONDON, Eng.—Since the beginning of July there has been
the tendency of sterling.
Instead of having to be kept precariously in the vicinity of its
declared lower Emit of $2.78 with the aid of official support, it has
.ment
Inc.
Records
holders
position to deliver the goods earlier.
distinct, if moderate, improvement in
was
Decca
a
•
a
Offering Underwritten
as
in
are
Thursday, July 24, 1952
.
Decca Records Stock
is inevitable that the convertibility of sterling
it
now,
are
would
exchange, Dr.
:Einzig holds it was partly due to relatively favorable gold re¬
serve figures at end of half year.
Says, despite this, position
of sterling is still unsatisfactory and drain of gold reserve has
^Commenting
of years, a very large part
countries would be spent in Britain, even if
made convertible, provided that British prices re¬
overseas
.
.
been
fundamental and
structure of the
country in¬
Deposits have expanded rapidly with
Its working capital and cash
positions will be restored to pro¬
Inc.
levels
per
the West and Southwest sections of the country showing the great¬
est gains. This is, in part, a reflection of the industrial and pop¬
them
ulation
gains made by these different areas. Similarly, some of the
rural and agricultural areas have been aided by the prosperity of
The
the farmer.
cash
As
result, the growth of the banks in the regional centers of
these different sections has been phenominal.
Of course there has
been a similar gain in operating results which in many cases was
a
much better than that of the New York
These
facts
have
attention to banks in
for
lets
investment
different
than would
have
while
York
institutions
shares.
some
in
been
of the
more
attract
from New York
This
has
resulted
in
possible 10
still
are
areas
trusts
and
five
even
or
dominate
the
the
be
to
to
re¬
present offering.
corporation
has
present
no
plans for devoting this increase in
and
particular
working capital to any
purpose other than for
financing inventories and receiv¬
ables
for
and
current
operations.
Decca Records Inc. and its sub¬
increasing amount of
as possible out¬
an
proceeds
ceived from
City banks.
bank
stocks
in
greater amount of investor acceptance
a
banks
other
Investment
to
away
funds.
receiving
areas
New
served
areas
application
the
by
the
of
years
Thus,
market,
ago.
investment
gaining a wider market for their
pension funds have been adding
popular bank stocks to their portfolios.
sidiaries
engaged
are
principally
in the
recording, manufacture and
distribution
of
phonograph rec¬
ords.
Through
aries,
Decca
the
one of its subsidi¬
Distributing Corp.,
corporation also engages in the
distribution of
phonograpns, radiophonographs, needles and other
accessories, all of which are man¬
The period
ufactured by others. The corpora¬
tion is one of the three largest
would
covered is the first six months of 1952 compared with that of 1951.
phonograph record manufacturers
the
Unless otherwise
in
surplus.
scale
Alternatively, should the
and
prolonged
strikes,
wages
claims
lead
the resulting decline
to
large-
in the
output
inevitably widen the adverse balance of payments. Unless
can be persuaded
to moderate their claims, a deteri¬
oration of Britain's gold position during the
autumn, will become
inevitable.
In any case the
seasonal factor is against sterling
during the autumn. For these reasons it would be premature to
Unions
rejoice
Earnings of
Bank of California
Continental
Cleveland
rise to
revival of convertibility rumors, based on
a
such
speculation.
First
Nevertheless,
it gave
garbled Press
reports about alleged negotiations for a large dollar loan with the
of enabling Britain to make sterling convertible.
In
reality there is
no question of a dollar loan but
merely of
revolving dollar credit facilities, to be granted by
the International Monetary Fund and
by the Federal Reserve
System with Canadian participation. The idea is
that, with the aid
of such facilities, the British authorities would be in a
position to
form
face
the
initial
drain on their gold reserve that would follow a
convertibility. The amount involved is suggested to be in
the neighborhood of between $2,000 and
$3,000 million. Exchanges
views
have
undoubtedly been taking place
they have not reached
a
on
such lines, but
advanced stage.
very
Apparently the main difficulty is that the United States au¬
thorities insist on full convertibility of
sterling as a condition of
the granting of such facilities.
Following on the disastrous failure
cellor
of
the
Exchequer is likely to agree to this condition for
The danger is that, with
sterling made con¬
vertible, Britain would become a happy dumping ground for the
time to
come.
goods of all countries anxious to
deavor to
secure
dollars.
They would
achieve large export surpluses to Britain
en¬
and the Ster¬
ling
Area by fair means or by foul, through increasing their
exports and cutting down their imports from the Sterling Area.
They would take the earliest opportunity for converting their
sterling balances into dollars, being fully conscious that the ar¬
rangement could not possibly last. This would mean that the dol¬
lar facilities granted to Britain would have to serve not
only for
meeting Britain's dollar
gap but for meeting the grand total of the
immense dollar gap of practically all non-dollar countries.
Even
if 33.000 million were enough for
covering Britain's own require¬
ments, it would be a mere drop in the
requirements of the five continents.
ocean
policy
seems to
point into the opposite
impossible to block this
colonial
susbtantial
money.,
governments
would
imports from the
practically exhaust the
under
whole
improve
to
one
be
Should
feel
dollar
of
the
it
be
made
impelled to authorize
area,
and
dollar
this
1
(Pittsburgh)
$1.35*
(Special to The Financial Chronicle)
ATLANTA, Ga.
1.72*
1.53*
Lindsey
3.41
3.20
Clement
22.08
17.38
1.79
2.04
was
9.19
7.87
&
alone
facilities
materially.
Edward H.
—
associated
now
Evans
A.
&
with
Inc.,
Co.,
First National Bank Building. He
formerly with J. H. Hilsman
Co., Inc.
9.92
2.01
2.02
Pennsylvania Co. for Banking & Trusts
Peoples First National (Pittsburgh)
1.60*
1.76*
2.15*
Philadelphia National
Republic National (Dallas)
3.86
3.61
1.78*
2.14*
Robinson
Security First (Los Angeles)
4.53
4.43
with
With Courts & Co.
1.74*
(Special to The Financial Chronicle)
ATLANTA,
Ga.
has
Courts
English
H.
—
associated
become
&
Co., 11 Marietta
members of the
New York Stock Exchange.
there has been a trend among banks to publish
operating earnings at six-month intervals, there are still a large
number that only publish condition statements, making it neces¬
sary to- figure the indicated earnings.
In
reviewing the above list it is interesting to see the number
either paid stock dividends or issued stock through
the offering of rights. The First National Bank of Chicago paid a
which
have
20%
stock dividend last year, Continental Illinois paid 25% and
Cleveland Trust 16%%. All of the above earnings have been ad¬
N.
W.,
Geyer & Co. Adds
(Special to The Financial Chronicle)
CHICAGO,
Speiser
is
'111.
Geyer & Co.
Salle
Inc., 231
Miss
Street.
formerly
M.
with
South La
Evelyn
—
associated
now
with
Speiser
Glore,
was
Forgan
&
Co.
justed for these distributions.
Pennsylvania Company for Banking and Trusts, sold 200,000
Joins
shares to stockholders and issued 60,000 in a merger. Peoples First
of Pittsburgh sold 200,000 shares through rights and
Republic
shares.
National
First
increased
National
of
jts
Boston
outstanding stock by 150,000
issued rights to stockholders
In each of the above instances per
shown
tion
a
favorable comparison had it not been for the dilu¬
more
affected
share earnings would have
by
the
new
stock.
become
Co.,
Street.
forces
with respect
to earnings of these banks
with the New York banks.
Regional
in general, the same as
factors, of course, are important in determining the impact of the
various influences.
Operating results
are benefiting from the larger volume of
outstanding and firmer interest rates have enabled
the banks to show
a
better rate of return
Expenses including taxes
income continues to show
As
results
the
and
on
loans
as
well
continue
to show favorable
becomes
available
continue
La
formerly
Salle
with
& Co.
as
(Special to The Financial Chronicle)
CHICAGO, 111.—Robert A. Mur¬
phy has been added to the staff
of Blair, Rollins & Co., Incorpo¬
rated, 135 South La Salle Street.
in¬
COMPARISON
more
&
ANALYSIS
higher but net operating
stock
more
South
was
Kidder, Peabody
gains.
ship, interest in the shares of the
should
are
different banks
as
135
Tubbs
with BIyth
Blair, Rollins Adds
at work
are,
vestments.
He
affiliated
Actually, total earnings showed
gains for the period.
The
Inc.,
R.
111.—Dan
CHICAGO,
has
&
covering 375,000 shares.
BIyth Staff
(Special to The Financial Chronicle)
National
for
17 N.Y. City
operating
public owner¬
Bank Stocks
progressive regional banks
Second Quarter
to broaden.
Bulletin
on
1952
Request
very
With Barrett, Fitch
might
which
are
position will have to
Should British industries be able to
locomotives, tractors, hydro-electric plants, etc., in
is
11.14
(Special
to The
Financial
Uhlmann & Latshaw Add
Chronicle)
KANSAS CITY, Mo.—Walter W.
that Britain's
Joins Clement Evans
convertible
considerably before convertibility could be envisaged.
thing, her capacity to export heavy equipment would have
increased
deliver
_1_
$1.29*
♦Reported operating earnings.
direction, judging by the
negotiation.
The fact of the matter is
For
.
Chicago__
1951
National Bank of Detroit
loans currently
fact that the sterling balance of Iraq,
amounting to £23 million,
has just been unblocked. There are also the
sterling balances of
the Crown colonies, totaling about £1.000 million.
It would be
the
Boston
National
1952
Although
against the dollar
Another difficulty is that the amount of unblocked
sterling
balances is abnormally large. The first
step toward convertibility
would be to fund them or to block them. In fact the
government's
the country.
Street,
'foTDr. Dalton's convertibility experience in
1947, to British Chan¬
some
earn¬
of
return to
of
—
National
Trust
National
Mellon
purpose
some
Illinois
First National
that many people should begin to think in terms of
early convert¬
ibility. The present improvement is, however, too slender and
anv
the indicated
are
Bank of America
At That time there appeared to be reason for hoping
that it represented a turn in the tide and it was understandable
justify
share results
per
prominent banks in
-—Six Months to June 30—
April.
to
shown,
more
shown below.
are
ings compiled by changes in book value and dividends paid.
over
unstable
selected group of the
different cities ouside of New York
the present recovery of sterling.
It is even more premature to speculate on an
early return to
convertibility. The improvement which is taking place at the time
of writing is not nearly as distinct as that
experienced in March
and
a
a
mat¬
(Special to The Financial Chronicle)
KANSAS
Walton, Jr. has become connected
Barnes
with
Barret, Fitch, North & Co.,
Inc., 1006 Baltimore Avenue, mem¬
Uhlmann
bers
York
of (the
change.
Midwest
Stock
Ex¬
has
&
CITY,
Mo.
Anne
joined the staff of
Latshaw, 111 West
10th Street, members of
Stock
—
the New
Exchange and other
leading exchanges.
Laird, Bissell & Meeds
Members New York Stock
Members New
120
Exchange
York Curb Exchange
BROADWAY, NEW YORK
Telephone: BArclay
Bell
5, N. Y.
7-3500
Teletype—NY 1-1248-49
(L. A. Glbbs,
Manager Trading Dept.)
Specialists in Bank Stocks
Volume 176
Number 5136
.
.
.
The Commercial and Financial Chronicle
(301)
N. Y. S.E. Extends
Beginning
Sept.
3:30
G.
29,
floor
i;
Trading Honrs
trading
will
Bache & Go. Admits
be
lengthened
P. M., with Saturday closing throughout
year.
*
:
Our
to
3:30
t
o
which
from 3 o'clock
ations.
(EST)onMony
that
the
change
be
Ex¬
on
Keith
Board
the
Funston
current
monthly
Trading hours of
for
new
tion,
we
.he
facilities
of
for
the
and
currency
months
the
on
Ex¬
initiated
was
"The
building expected
North
Board's
compensate
While
is
decision
Central
and
•according to
be
decision
to
for
the
the
general
close
The money
due
additional
among
that the feeling in the
money markets as to the immediate
interest rates is mixed to
say the least.
seen
future trend of
markets appear to be
mainly to the tight
money
a
bit
conditions that
tained by the monetary authorities.
Such
a
-
Treasury,
be are going to
keep the
There
,
sidered
em¬
been
are
pressure on for
factors
many
a
loriger period
in the situation
standard
Europe, gained in his
annual
trip
abroad, Homer D.
Wheaton, partner of the invest¬
ment advisory firm of
Clayton &
Wheaton, New York City, empha¬
Federal
tax
sized
Allen & So. Underwrite
Western
that
fact
great
progress
has been made in the past twelve
months.
Mr. Wheaton stated that
in
France the
is
making
avoid
another
devaluation
of
the
stable
in
currency
France
a
would
be of great economic and psycho¬
logical value in the next several
act
as
The
an
that there
Co.
owned
to
of New
Mexico
issued
1951
to
its
which
late
in
stockhold¬
own
-
warrants
ers
additional
a
but,
omy,
profoundly beneficial
Western European econ¬
in full
once
operation,
will notably reduce the likelihood
of
future
tween
political
France
friendly
and
friction
be¬
Germany.
If
between those
relations
shares
of
Pubco
subscription warrant for
ditional
share,for
Pubco's
each
stock
common
2%
"The
share
are
problems
war
-
complicated
unabated
growth
This,
of
the
of
by
of
an
should
of
the
new
devoted
it.
to
However,
March
31,
in almost all other respects West¬
earlier dates
Europe by obtaining, from its
own
and
from
foreign sources,
designate.
ern
advice
and
assistance
in
mounting its troubles has
sur¬
1955,
Allen & Co. is
subscription
or
The
was
the
accom¬
case
few
a
ago."
years
in
"The striking recovery in West¬
Europe
ern
would
undoubtedly
have been accompanied by greater
investment
the
Pubco
of
private
capital
part of Americans,"
on
said Mr.
New
of which
owns
and
gas
Wheaton,
"if
vestments
in
garded
are
the
laws
tax
our
progressive.
to
under
fitable
upon
other
money
a
raising
do
of
re¬
exercise of the
At the time of the
new
warrants
the
side
pro¬
the
proceeds therefrom will be added
to
the
pany.
general funds of the
com¬
some
rates.
would
as
quarters
It
18
It
a n
years.
also
was
nNo u need
that
K.
E.
Douglas
Huycke
Francis
M.
Hunter, limited partner of
Bache & Co., has been admitted to
general
will
and
partnership of the firm
specialize in the devel¬
of the firm's department
dealing in oil ventures.
opment
Pruett and
Company
Is Formed in Atlanta
(Special to The Financial Chronicle)
ATLANTA, Ga. — Pruett and
Company, Inc. has been formed
with
offices
Street,
N.
Carl
at
710
to
engage
E.
securities
business.
A.
Peachtree
in
the
Officers
are
Pruett,
President; Ger¬
Pruett, executive Viceand secretary; William
Brumbach; Vice-President; and
trude
M.
President
H.
Sosebee
Mote, treasurer.
F.
the
new
Carter
and
Roper. Mr. and
Roper
and
Mr.
Mrs.
Also
firm
are
Charles
Pruett,
Brumbach.
Mr.
were
previously associated with French
&
Crawford,
Inc.
Joins Waddell & Reed
(Special to The Financial Chronicle)
ORTONVILLE,
is
be
much
K.
Evans
dell
&
is
Minn.—Arthur
connected
with Wad¬
Reed, Inc. of Kansas City.
With King Merritt Co.
(Special to The Financial Chronicle)
ROLLA,
Mo.—Dewey C. Hick¬
is with
man
Inc.
price-wise
they would
seem
be
some
the
go
King Merritt & Co.,
of New York.
y
all
maturities
or
the
in
(Special to The Financial Chronicle)
to
believe
higher
might
Core
a
of
has
been
Courts
&
added
Co.,
to
R.
the staff
Liberty
Life
Building.
they
coupon
take
place,
While it is
initial liquidation
in the
hold
to
U. S. TREASURY
new
the
STATE
quo¬
far from currently existing levels.
and
Divergent View
of
the
ledger
are
a
those
refunding of the
an
recently
MUNICIPAL
that, while they
time, do not
a
will
take
one-year
SECURITIES
place.
obligation
The opinion is also expressed
part of the August and
might be paid off by
the
CHARLOTTE, N. C —Vivan
there
event
2%% obligation
a
September
the Treasury.
certifi¬
This group
attractive obligation for investors
believe that times of price weakness should
holding in
Joins Courts Co. Staff
a
down close to, if not to
Whether
certificate rate,
somewhat longer-term issue.
that
less
six-year 2% % obligation, with
market will be kept tight for
they look for
this
pressure,
higher levels
market
offered security.
be used to build
is
It
felt
that
the
the 2%%
that
have
obligation
been
will
predicted
eventually
for
it
by
go
many
to
the
money
Aubrey G. Lanston
followers.
8c Co.
,
of
expenses.
Street, for the
past
period of tight money will not last too long, and with the passing
payment of loans of $500,000 from
the parent company, Public Serv¬
ating
there
might >go
still consider the 2%% bond
up
office,
Melinda
which would tend
increase in the certificate rate to 2%
an
some
and
from the sale of the
ice Co. of New Mexico; acquisition
additional oil and gas leases,
and their development; and oper¬
ronto
36
purchase by these institutions.
some
•-
Market Briefs
INCORPORATED
•
\
Pension
funds, both private, state
and
those
of
the
*
Federal
Government, according to reports, have been taking the restricted
issues out
of
the
market.
to
.purpose
capitalism and to seek
thus
as
There¬
money
fundamental
cutlets,
re¬
States
risky than domestic.
prevail
in¬
undeniably
United
fore,
its
were
Overseas
more
fulfill
the
cates
.
more
as
The
the
by
leases
warrants will be used for
in
obligation, is anyone's guess, but not
upping of
an
On
with
Mexico, the development
was begun late last
year,.
Net proceeds
new
oil
2%s
that there would
believe
an
the futu.e than
answer
long before there
adversely affected marketwise, with
certificates,
Neither
firm
will
purchase
all
subscription
amazing restoration as warrants which are not subscribed
compared with the situation in for
by the holders of currently1945.
There are, therefore, more
outstanding Public Service of New
reasons for being optimistic about
Mexico warrants.
plished
Federal has the
believed
for
2%
one-year
with
expect
underwriting the
warrants.
the
6
such
upon
is
tations from going down very
the company may
as
market
money
they have been-or will they be
opinion that, purchases by the commercial banks would keep
warrants
stock will be exercisable at $1 per
share between Jan. 1,
1955 and
be
a
as
indicated
bond,
world today, is still
receiving the attention which
it
available
where
be
for
has
Andrew
whether
is not shared by many other
money market followers.
war¬
lor the additional shares of Pubco
must
as
original offering price of 100.
rate
The offer expires
subscription
to
would be
Aug. 1, 1952.
The
issue,
new
few of the guessers believe
rec¬
important
one
factors in the
not
rant represents.
on
population.
most
subscription
a
Huycke
manager
of Bache's To¬
principal buy¬
the
As
that stock
purchase warrant holders of
for each share
post
Europe
continue tight
is
a
certificate
ad¬
one
and
incalculable."
moment-
desire upon their part to
acquire a
The rights are being
by Pubco in the ratio of a
issued
of
in
Mr.
associated with
the
at
somewhat longer-term
security,
further firming effect upon interest
a
firm,
been
What would a higher certificate rate do to the rest of the
governrpent market especially the recently offered 2%% due 6/15/58?
is believed in certain quarters that a
2%, one-year obligation
would bring about
selling of the recently offered
ers
com¬
stock.
mon
have
partner
Toronto.
H.
2% Issue Forecast
ticularly among the not too permanent owners
It is reported there are still
quite a large amount of the 2%s held
by this group. Since the commercial banks are the
countries
distrust
again.
obligation, par¬
of this security.
ord July 18, 1952 are entitled to
could replace the
purchase from Public Service Co.
enmity
of
recent of New Mexico. The
subscription
decades, Europe's gain would be
price for the new warrants is $3
two
be started
an¬
1
gen-
the
It
shares, is issuing to holders
of such outstanding stock purchase
"It is not realized
sufficiently
warrants, rights to subscribe for
in
America," said Mr. Wheaton,
"that the Schuman Plan will not subscription warrants for 605,978.
on
fire should
being
pointed out that Treasury bills are currently
giving a yield that
makes a higher rate for certificates a distinct
possibility.
by Public Service
mon
only exert
A defensive money
answer to the new infla¬
the
on
'
has
a
resident
are
funded with
Development, Inc. all of
605,978 shares of common
is
stock
of
possibilities the Aug. 15 or the Sept. 1 certificates
will be refunded with a
one-year 2% obligation.
Others hold the
opinion that the next maturity of certificates could 'also be re¬
Pubco
this
effect
full
tightened slightly from present levels.
years, and
can
a
big question
conditions will
Pnbco Stock Warrants
whose
action which
the tight side.
or
1
e r a
con¬
influence upon
an
taken
to what will take
place, and it should not be too
is evidence of what-will
happen. It is believed
granting them the
option to purchase its Pubco com¬
hope is spreading that
be accomplished.
if
the
ent, an obstacle to investors."
Pinay Government
franc; that the maintenance of
living,
must
on
complete
One-Year
inducement instead of, as at pres¬
tremendous effort to
a
laws
be
tionary forces that might develop but it will certainly not
help to
fan the flames
world's
qf
of time.
that could
inflationary implications that could have
conditions, the money managers have
market may not be the
Wheaton, of Clayton & Wheaton, Investment
advisors, reports on recent trip abroad. in
become
as
has kept the money markets
Europe Econcmic Conditions Improved
conditions
being main¬
condition has not been
responsible for the hardening which has taken
place in
interest rates. Probably foremost
among them is the steel strike,
which could have
inflationary effects upon the economy. Higher
wages and higher prices are not unfamiliar
inflationary forces
which have plagued the
economy in the past. When there have
to
on
are
side,
past following a major financing operation
by the
However, this time it looks as though the powers that
economic
D.
the confused
on
unusual in the
five-day work week
practice
Huycke
'
1,
part or in full,
of these money market followers.
Thus it can
some
recently
Exchange has
that
as
The small amount of
one-year obligations due
the next two months
might even be retired in
in
alter the Ex¬ ployees of member firms and the
business," Mr. Exchange, it has been achieved
Funston commented, "was based by a program of
staggered days
on the
recently completed national off.
the
Oct.
around
Stock
nounced
the certificate rate.
change's hours of
Reporting
well
as
which
E.Douglas
factors,
On the other
hand, there, are those that do not look for any
important changes in money rates and in
particular no upping of
Exchange on Saturdays
throughout the year was made to
in
1944.
Homer
loans
*
Partner
as
Co.
membership
Toronto
money conditions will not only continue
tight but there
possibilities that interest rates will be
upped slightly by the ;
monetary authorities. This group believes that somewhat
tighter
money rates would be brought about
by an increase in the certifi¬
cate rate.to 2%? :
:
•
:
•
•
Exchange
period to
longer
a
people in the
policy
10 to 3 o'clock
first established
West
seasonal
are
light of such informa¬
believe we should make
change in 1873. In 1887 Saturday half-hour work each day and to
trading hours were changed to 10 make employment in the Stock
o'clock to noon.
A program for Exchange community more attrac-:
closing on Saturdays during the tive to new personnel."
"The
demands
and
that
•means
the
summer
increased
as
changes in the financing of
States
Far Western time belts.
meeting.
were
Western
the
available
Governors
at
Far
implications of the steel strike,
.
Funston
the
f
the
.
said, was made
by
such
the, largest number of
share-owning
families
in
the
country.
decision,
r:
flationary
jontain
"In
The
instance,-
and that the North Central States
year.
o
for
est.
Saturdays
throughout the
M
for
families to population is larg¬
.ng
will
closed
know,
:hat the proportion of share-own-
through
Friday and
a
We
&
acquired
government market is again
operating with ..considerable
caution because of the
tight money conditions and the added un\ certainty as to whether or
not interest rates
might not be hardened
-still further by
the.monetary authorities. There appears to be no
general-agreement over the idea of higher interest rates
being in
store for the money markets. Borne
hold to the belief that the in¬
need for the
we
Huycke
Bache
The
long-ran go
planning of the Exchange's oper¬
-o'clock
Governments
on
By JOHN T. CHIPPENDALE, JR.
Funston, President of. survey of share ownership made
the New York Stock Exchange, on by The
Brookings Institution at
July 17 announced that starting our request.
>
Monday, Sept. 29, 1952 trading
"The
survey
has provided us
hours will be
with facts, never before
available,
d
Reporter
Keith
extended
17
and
pension
funds
have
Savings banks, private trust accounts,
been
cently offered corporate bonds.
of
the
funds
these
institutions
rather
sizable
buyers of the
This has sopped
have
had
up a
around
for
re¬
fair amount
investment.
15 BROAD
ST., NEW YORK 5
WHitehall 3-1200
231 So. La Salle St.
45 Milk St.
CHICAGO 4
BOSTON 9
ST 2-9490
KA 6-6463
18
The Commercial and Financial Chronicle
(302)
over-all
its
of
Canadian Securities
creased
new
of
the
vastly
capital investment in
Canada and its effects
future
tion's
be
in
a
the
on
economy
na¬
appears
to
topic of serious consideration
S.
U.
Canadian
and
economic
and
in¬
political
The
circles.
Ca¬
predicated
approximately
on
in
its
monthly
Commercial
The
of
"The
publication,
Letter."
issue of
May
dealt in
this subject
some
the "Letter"
detail with the role
capital investment
the
in
ad¬
justments to the Canadian econ¬
omy necessitated by the successive
demands of
war,
reconstruction
currently,
and,
It
defense.
was
pointed out that past experience
was an imperfect guide in assess¬
ing the desirable level of saving
or investment at any given
time.
Moreover, an investment
level
which may be desirable from one
(increased produc¬
tion)
may be
undesirable from
another (its inflationary effects).
In the early postwar years, for in¬
point of view
when great efforts were
being put forth to increase output
new
capital investment was en¬
couraged by official action in sev¬
eral directions, chief of which was
the provision for special depre¬
stance,
already
own
economy
modernization,
and
ex¬
By the end
found advisable, in
pansion of industry.
of 1947 it was
News About Banks
shows
CONSOLIDATIONS
capital investment
serious signs of drying
for
no
NEW
BRANCHES
NEW
OFFICERS, ETC.
CAPITALIZATIONS
forecast
seemed to preclude any in¬
(5%)
in
crease
(including government cor¬
ment
problems in allocation.
main calls upon capital
poses
"The
invest¬
Public
volume.
first, repair and maintenance.
been estimated that in the
are,
It has
two-thirds of
United States about
S.
Sloan
Bankers
Colt, President of the
Trust
Company
York, announced that at
of the board
of
a
New
meeting
of directors
Cyprian
Norland, formerly
Managers, were elected
%
at
254
28
33
31
with 1V2 %
251
182
35
Manufacturing
Government
Depts.
Agriculture
7
17
services
Institutional
21
___
17
3
9
11
Construction
$
%
Million
Housing
82
10
Commercial services
25
Trade
24
23
11
22
28
12
18
insurance
Finance,
estate
-
real
and
office
a
of
Bankers
Trust
Company in 1926. In 1929 he be¬
came
Assistant Manager and has
demand
been Deputy Manager since 1938.
duction and housing keep pace.
At the same time, Richard Boyd
In the agricultural field, the de¬
was appointed Assistant Trust Of¬
cline in available labor can only
ficer, and will be assigned to the
be offset by an increase in laborin the last two decades,
that the means of pro¬
Division
Pension
765
DECREASES
the rise
issue formal notice
prices, to
—
_________
Forestry
be
of
the
*
perienced, and there is little in
Marvin
L.
Gosney, Executive
the present
outlook to indicate
Vice-President
and
director
of
any recession in this direction.
the Sine lair
"Fourthly,
by
capital
respect of
£2 shares shall
capable of being called up
in the event and for the
the company being
Ordinary Resolution:
of
purpose
wound
up.
That the authorized capital of the
company
be increased to
£15,000,000 by the creation of 5,000,000
shares
of
£ 1
each, each
ranking for dividend and in all
other respects (save only in so far
new
there is a contingent liability
attaching to the existing shares in
the event of a deficiency on wind¬
ing up) pari passu with the exist¬
ing shares of the company. Such
as
shares shall be issued
new
terms
and
such
at
time
on
or
such
times
the Board may deem expedient
as
in
the
interest
of
the
company."
The latter resolution will have the
effect
of
authorized
ent
£
increasing this bank's
capital from the pres¬
of
£10,000,000
to
It is intended that, as
new capital is is¬
figure
15,000,000.
and when such
it
sued,
£ 1
be in
shall
the form
of
shares, fully paid.
Pension
saving capital equipment.
and Personal Trust Department, at
"Thirdly, resource development the
bank's Wall Street office.
is on a scale not previously ex¬
*
*
in
£1
each oLthe issued
except
rate of 2%% a year compared
Million
Mining
to the extent of
not
Resolution:
capital of the company
gross
London
Special
up.
the
Deputy
capital formation over the Joint
Managers of the London of¬
long term is employed in main¬
fice, to succeed the late Roland H.
industries, with the exception of taining existing capital invest¬
Oxley, a Vice-President of the
mining and oil wells, seemed dis¬ ment and in offsetting deprecia¬
company and Manager of the Lon¬
the balance don office since 1943. Mr.
posed to reduce the rate of their tion and depletion,
Bridge,
new
investment, as did trade, fi¬ being used to increase the stock born in
London, was educated at
nance
and commercial
services. of capital goods. While it would Eton and New
College, Oxford. He
The
rise in manufacturing and be unwise to apply this estimate
served with the British Army dur¬
utilities, however, continued un¬ too strictly to Canada, it would
ing the last war, and was demobil¬
broken. The prospects were that nevertheless seem to be the case
ized
in
1944
with
the
rank
of
housing would decline again this that the heavy investment of re¬ Lieutenant
Colonel.
He
joined
year, following a sharp drop in cent years itself tends to gener¬ Bankers Trust
Company in 1951.
ate
further
investment,
and to
new starts in 1951.
Mr. Norland, born in London, was
"The second estimate indicates become one of the most dynamic
educated
at
University College
increases over 1951 of $765 mil¬ elements in an already strongly
School and Lausanne University.
lion, offset by decreases of $165 dynamic economy.
He served, with the rank of Cap¬
"Secondly, the heavier domes¬
million, made up as follows:
tain, in the British Army in World
tic needs arising out of the in¬
War I and joined the staff of the
INCREASES
crease
in population, now rising
$
Utilities
paid
as
That
J. Bridge and F.
expenditure Oil
Corpora¬
which, as was tion and the
that the reconversion period was
pointed out in our previous issue, Sinclair
Re¬
would normally be held in abey¬
over and to cease authorization of
"The increase in the mid-year
fining C o mance in view of the high level of
this special depreciation privilege,
estimate appears to be based on
pany, has been
though the estimated accumulated
private investment, is, by force elected a trus¬
developments expected in the last
of circumstance, likely to be high.
demand for investment projects
tee of the Emihalf of the year rather than on
Certain types of public works can
at the end of the war had by no
grant Industhose that have already occurred,
be postponed, but others such as
means been satisfied.
t r i a I Savings
some of which tended to cast some
public utilities and highways must Bank of New
In the current (July) issue of
order to put some curb on
in
Bankers
and
REVISED
up, the calls upon it have never
small increase then been so demanding or so diversi¬
for
and their very diversity
private investment fied,
ciation in the interest of the con¬
version,
to
way
The
price.
of porations) was, however, expected
the
Dominion's
leading
private to rise about 21% in value, which
banks,
during
the
last
three would also indicate a substantial
months has been junning a series increase in volume. The primary
articles relating to
are
the
equal increases in volume and in
nadian Bank of Commerce, one
of
we
in
under-emphasis which
over- or
are
available
impact
if
errors
showing up in our
and which are now
evident in that of Australia and
of New Zealand. While the fund
By WILLIAM J. McKAY
The
volume
certain
avoid
Thursday, July 24, 1952
..
.
*
*
*
The First National Bank of Buf¬
falo, N. Y., increased its capital as
of June 26 from $750,000 to
$900,$100,000 of the increase re¬
000.
sulted from the sale of
new stock,
$50,000 rep¬
the additional
while
resented
stock dividend.
a
governments,
*
*
*
165
doubt
"TKe Commercial
nadian
Bank
of
Letter," the Ca¬
the estimates of
cusses
dis¬
Commerce
new
capi¬
tal investment in Canada in
1952,
and its immediate impact and the
outlook
"The
Letter"
mid-year estimate of
investment in
lion
is
states:
1952 at
Chief of these
the first estimate.
decline
the
were
1951
from
to
in the value of construction
12%
the five
months ending May, and a stable
index
of construction costs, de¬
contracts awarded during
beyond the present year.
Concerning these matters, "The
spite
Commercial
fulfillment of even
the
on
increase
4V2%
a
in
wage
The
further increases indicated in the
rates since the first of the year.
new
$5,181 mil¬
estimate are for the
part in the categories in
mid-year
million higher than most
increases
were
forecast
estimate, issued early this which
year, and $600 million above the early
in the year; that is, the
previous high of $4,581 million emphasis continues to be on the
invested in 1951. The earlier esti¬ expansion of basic industrial ca¬
mate forecasting an
increase of pacity as represented by non-fer¬
about
9% in dollar value was rous
metals,
chemical products
and public utilities, chiefly cen¬
tral electric stations, steam rail¬
$178
the first
and pipelines.
ways
The reasons
given for the present upward re¬
CANADIAN BONDS
vision
possible
were
CANADIAN STOCKS
in
ment
1952
tablish
months
WORTH 4-2400
ny
1-1045
times
three
times
and
a
that
and
"We
our
participation
in
in
are
a
basically expan¬
value
about
volume
of
the
over
prewar
new
is
year
of
hostilities, and the extent
to
our
export
centre
on
trade
the
con¬
United
tion.
Mad¬
T.
from
Marvin
Gosney
more
the bank.
of
with
des
who has been asso¬
Gosney,
ciated
suggest that the apportionment of
capital be made in the light
new
the
all
of
than
the
of
known
factors
temporary
any
rather
sectional
oil
for
industry
advantage."
Vietor, Common, Dann
Nathaniel
S.
Howe, member of
the New York Stock Exchange, on
Aug.
W. W* Culver Opens
SOUTH
WEYMOUTH, Mass.—
Wesley W. Culver has formed W.
W.
Culver
Elinor
was
&
Co.
Road
with
to
engage
business.
formerly
offices
with
Mr.
in
To Be
and
cies,
customers'
Bank
New
of
credit
and
during
sufficient
a
new
drafts,
foreign
and
of
letters
regular
day
week
Saturdays, Sundays
on
whenever there is
Holidays,
This
This
Idlewild.
checks
hours and
traffic
air
to
warrant.
will not conduct
agency
general banking business at any
inasmuch
time
as
this
service
is
City
of
Bank
New
York
during regular banking hours. Ar¬
thur
W.
Johnson
has
been
ap¬
pointed agent of The International
Exchange Member
st.
The
New
"the
same
and, said the
his law
year
named
a
of
director
the
Second
National Bank of
In
1928
he
named President of the bank
in
was
and
1948
resigned, assuming Chair¬
manship of the board." The "Sun"
likewise stated in part: "He was
also, at the time of his death, a
director of the Chesapeake Poto¬
mac
Telephone Company of Balti¬
more,
Vice-President of the Lown¬
des Savings Bank and Trust Com¬
pany,
of Clarksburg, W. Va.; Vice-
President of the Commercial Coal
Company
of
West
Virginia
and
President of the Cumberland Fair
Association."
«j!
Five
were
#
!}!
Portsmouth
i
(Va.)
»
citizens
elected members of the Ad¬
visor/ Board of The Bank of Vir¬
ginia in Portsmouth, Va., by action
of the bank's General Board of
*
St-
York
agency,
of South Africa Ltd.
at
67
announces re¬
ceipt of advices from the Secre¬
tary of the bank of the annual
meeting
general
in
London
on
30 at which the following
special resolutions will be laid be¬
July
fore the stockholders:
Charles H.
Sulzberger, partner
States.
In view of these uncer¬ in Hallowell, Sulzberger & Co.,
tainties the direction into which New York City, will acquire the
new capital is channeNed becomes
exchange membership of the late
as
important a consideration as C. R. Coster Steers on July 31.
"Sun,"
Banking Corp. to conduct the new Directors
meeting in Richmond on
I. B. C. agency.
National City's
July 11. Abner B. Hill, Chairman
Branch at the Airport has been
of the new group, was elected a
functioning since Sept. 10, 1948.
member
of
the
General Board.
the Wall Street of the Standard Bank
J.
the
practice opened, Mr. Lowndes was
already provided by the Interna¬
Branch of The Na¬
tional
Mr.
practiced law in his home city
from 1909 until 1915,
tional Airport
at
Culver
Richard
Airport,
chase
travelers
To Admit N. s. Howe
City
will provide for the pur¬
sale of foreign curren¬
agency
of
Cumberland, be¬
43-year association with
York, opened on July 21 at Inter¬
national
death
President
the International ginning a
Corporation, affiliate of that institution.
National
The
his
of
was
According to special advices
Cumberland, to the Balti¬
"Sun" of July 11, Mr. Lown¬
An Agency of
Banking
in
Maryland State Board of Educa¬
den, President
circumstances of the times would
two all-important Buck & Co. and Boardman, Free¬
considerations, namely, the over¬ man & Co., Inc.
hanging
threat
of
a
widening
which
John
time
the
Lowndes
by
21
Cumberland
the son of former Gov¬
Lloyd Lowndes of Maryland.
was
on
the economy is vig¬ many years, is also a director of
orous
and opportunities for de¬ the Richfield Oil Corp.
*
*
*
velopment are plentiful, but the
obscured by
area
July
At
in
born
was
1883,
era,
capital in¬ securities
beyond the present
who
an¬
nouncement
July 10 of Tasker
land, Md., is announced by the di¬
rectors of the bank. Mr. Lowndes,
ernor
ing to the
on
G. Lowndes, Chairman of the Sec¬
ond
National Bank
of Cumber¬
accord¬
York,
Mr.
sionist
24
"The outlook for
tinues
Boston 0, Mass.
ments
capital
are
require¬
on
defense
by
dates
average.
to
Fifty Congress Street
made
all the fore¬
NATO.
likely to es¬
again this
dollar
a
seven
vestment
Two Wall Street
those
records
INCORPORATED
New York 5, N.Y.
ago,
delivery
seems
new
with
year
A. E. Ames & Co.
demands
going
on
1 will become a partner in
Vietor, Common, Dann & Co. of
Buffalo, members of the Exchange.
for some types of equipment, and
Mr. Howe is a partner in Hallothe probability of an increase in
well, Sulzberger & Co.
costs, chiefly of industrial ma¬
Joseph Hemmerle, member of
chinery and equipment, as a re¬
the Exchange, will retire from
sult of higher wage rates and a
partnership in Vietor, Common,
possible rise in the price of steel.
Dann & Co. on July 31.
"All told, new capital invest¬
earlier
materials,
Municipal
than
estimates
six
superimposed
new
availability of labor and
greater
Corporation
of
which information
previously
available,
accurate
more
Provincial
initiation
the
And
on
not
was
Government
are
projects
the growing needs of ex¬
service
panded business if their lack is
not actually to hamper its growth.
The death
"Ordinary Resolution: That each
of the existing
company
of
the
£2
sum
£20 shares of the
of
Portsmouth.
The
five
men
have
record of
outstanding service in
religious, business, civic and com¬
a
munity affairs in Virginia, it is
each of which stated, and the combined board
£1 shall be credited holds ranking offices and mem-
be divided into 10 shares
each
Advisory Board members are Ab¬
ner
B. Hill, President, Standard
Hardware Corp.; Robert B. Beaton,
attorney-at-law; T. Deale Blanchard, President, Blanchard's Inc.;
George T. Ewell, Secretary-Treas¬
urer, Planters Mfg. Co., Inc.; O. B.
Wooldridge, Vice-President and in
charge of The Bank of Virginia in
upon
Volume 176
Number 5136
.
.
The Commercial and Financial Chronicle
.
(303)
berships in practically
civic
group in the City of Portsmouth.
pointed Assistant Vice-President.
every
elected
Bank
Vice-President
a
of
Virginia
duties
new
and
with
Portsmouth, Va.,
The
of
began
that
his voted
bank
in
the
July 16. Ed¬
win E. Mathews, Assistant Cashier
ing
JVijr.
career
as
a
for
runner
posts,
he
were
when
purchased
in
the
1930
Mr.
Mathews
The
Portsmouth,
come
the
Bank
in
became
Morris
the
In
Bank
later
to
joined
on
of
bank's
In
separate
a
share
one
of
stock
common
by the shareholders of
rec¬
monetary policy.
practice
inflationary oscillation
ally occurred.
in
bank reserves, which further encouraged the flight from money to
to
Sen.
tention
is
merely to indicate the
magnitude
of
the
argument
to involve
not
magnitude
the
It
a
United
States,
Eco¬
the
at
University
of
issue with the
of
the Committee
two
tudes of mind with
*
placed
that
our
on
of
means
~
,
is
an
inverse
strained
policy
that
unre¬
actually
we
pursued.
as
would
If
prices.
this
be
led
tracting the
prices are
into
such
were
ings,
we
prices
order to prevent an
rising,
in the
pendent and effective policy of the
of
is
doubtless
truth
some
allegation that the outbreak
the
Korean
created
war
necessarily
world-wide
excitements
are
discon-
was
produced
As
serious
a
was
direct
a
in-
the inflation
perti-
de
this
public
^he
0^
remains, then, only one
assumption.
This is the
assumption that even in the short
probabilities
whelmingly in favor
that
Indeed, it
to
nence
in
inflation.
the
many years
growing out of this effort to insuja^e an(j protect the government's
market that originally gave
in
the
the
for the value
dollar.
the
soft,
over-
inquiry and to
c0nCern
The word
sensible
run
*
government a
market for its borrow-
we
fiafi0n.
There
There
A
policy
a
result,
hand, consupply when
are
goes
the
tinued only recently.
absurd
falling,
when
^
fact, for
m
giving
protected
price
money
j
had,
keen
m order to raise
level, or, on the other
hand, flooding the couptry with
the
insu-
an
rY^eiYf,s \ess attention in the
Subcommittee s report than it de¬
one
money
have
e- v?ry heart of many issues
,
SexYesi.
We
relationship between
general proposition,
should
Y? market. This problem
f°
con-
■
,,
,
policies as, on the
the
on
Or, it may be assumed that there
producing the inflation. If I cor¬
rectly appraise its implications,
condones
than
Private
as
_
achieving stability.
a
and
? e same disciplines
be
activities,
and
adopted,
ii!
?
rather
money
effi¬
market -7
f govcrnmei
borrow at rates established
system
true
of the restraining monetary
policy, which we might have
u°Yarn^f n,
,5e!ng that
the direct control of the
monetary policy, therefore, prob¬
ably had but a minor influence in
cacy
to
trols, which the report says should
the
principal
and
primary
own
this emphasis minimizes the
have
be
inevitably mak¬
rise of prices within the
regard to
&the mark^t' fitting itself to
assumption, reliance
general monetary and credit
operative outside
and
an
necessarily
economic
that
are j^°
borrowers, the °.tke.^ b^ing that
the government in its borrowing
such
empha¬
implicit
assumed
ar*y
Sere
On
the United States
straining monetary
policy, and
(2) he deplores lack of an inde¬
Reserve to curb inflation
is
was
,
I1
?
would
about the
Policy
u
*
immediate
an
Matter of
o
to
any consideration at all to the possible effects
of changes in the
money supply.
prob¬
about the nature of
as
problem.
factor
an
much
so
ing for
of
inflation
But the effect of the
former profes¬
Chicago, takes
Federal
A
mu
gains
economic system.
C+T? _e S,u *C<V«!n* +£ee
direct, short-run relation between
the money
supply and prices, then
we would be
wasting time, when
with
judgment a
which far
out-
my
any offsetting
American
possible assumptions.
If it is asthat there is no
probable,
a
was
in
blunder,
gross
sumed
It is said that the in¬
some
nomics
?;f
goods,
run.
Actually, at any particular point
time, we must act with respect
monetary policy on one of three
in
external factors
versus
Paul H. Doug¬
las (D.-Ill.), a
sor
inflation, for in
always confronted,
fact, only with the short
that actu-
The failure to take
restraining measures promptly,
and the actual supplying of more
than a billion dollars of additional
an
we are
confronted
after Korea:
lem.
points,
bank's common capital stock
Sen. Paul H. Douglas
from its present par value of
namely; (l)he
$100
criticizes
the
per share to a par value of
$20
Administration for lack of a re¬
per share.
This will be accom¬
exchange for
money,
supply and prices in the
short run, then we would be
preeluded from ever
using
views of Subcom¬
sis appears
majority
plished by the issuance of 5 shares
its
of
would
point is
If the report's contention is true, that there
is no direct relation
between
of
amount
Management of the Joint
the Joint Con-
Report,"
value of
par
of
some
Internal
con¬
Committee on
the Economic
the
each
upon
the
$60,000 increased the capital of the
gressional
on
owned
important because
*
to
policy,
even
granting the preceding experience, and would thus have
bearing materially dampened down the
this
situation, in giving
statement,
tors' recommendations:
in
*
stock
of
Koptis and Greeley National Bank of Greeley,
money
Colo, from $300,000 to
$360,000 ef¬
tained in the "Report of the Sub¬
committee on General Credit con¬
trol
and
Debt
Management
of
the
stock
New
discussion
practical
materially altered people's
expectations regarding the desirability of holding or saving
usually the direction, of shortprice level oscillations.
The
statutory responsibilities.
underwriters,
Paine, Webber, Jackson & Curtis,
said in part
regarding the direc¬
common
since
member,
regarding its
taken by the stockholders on
July
9. Under date of
July 7, the bank
of
*
ap¬
Credit Control and Debt
*
"(1) To change the
bank
and
run
University School of fective Jupe 27.
Columbus, Ohio, toward raising
$1,800,000 through the sale to them
recommended by the directors of
50,000 shares of common stock
(par $20) at $36 per share was
to
been
graduated from
by the stockholders of
the Huntington National Bank of
advices
the
Both Mr.
Action
in
the
had
be¬
Morris Plan Bank of
Virginia.
*
with
Committee of the Economic Report, of which he is
and scores Federal Reserve for its confusion
1931
Commercial Exchange
1938, and, still later, in
1944 to be purchased
by the then
*
was
Illinois Senator takes issue with
mittee
associated
Plan
bank
a
Gales
Douglas Takes Issue With Patman Report
On Monetary and Debt Management
Policy
assets
by
American National Bank.
with
Mr.
Sen.
Tidewater, continuing
bank
associated
15.
of
range
have
monetary
1950, a position he held until
July 16. Mr. Mathews entered the
banking profession in 1925 with
that
July
policy to curb
in
the Bank of
Gilmore
were
the St. Louis
Treasurer in 1937, as Treasurer in
1942 and became a Vice-President
with
people with respect to the value of
their money
and, hence, would
materially affect the magnitude,
accepted by
Assistant
named
was
Gilmore
Mr. Gilmore
Company in Ports¬
Advancing
to
various
mouth.
W.
staff in 1933.
the
Citizens Trust
was
1943.
Woodrow
Mr. Bartlett began his bank¬
Gales
the Directors to become effective
to
of
years
function
office, has been pointed Assistant Vice-President.
promoted to Assistant Vice-Presi¬
dent.
approximately 12
Credit-Discount
dent J. H.
the bank.
on
in the Portsmouth
Commerce and Finance. The res¬
ignation of Assistant Vice-Presi¬
Mr. Koptis entered the
employ of
the bank in 1921 and served in
various departments, having de¬
Albert Charles Bartlett has been
19
"insulation,"
Subcommittee's
pleasant,
report
and
is
used
as
is
and
report,
enticing,
quick
to
point
out
of
and its "confusion"
prices that it wants the insulation to be
regarding its and fears, which in a
degree, were moving directly with changes in
reasonable.
The word "rigging"
statutory responsibilities in regu¬ unrelated to the
com¬
United States the
money supply, although, per- would be
mon capital stock authorized
harsh, brutal, and reand lating credit and money supply. monetary policy of the moment.
haps, with some occasional time pulsive. Yet I think
the truth is,
It must be
outstanding will be increased from
remembered, however, lag. If we thus act on a sensible
The text of Senator Douglas'
if we are not very careful, that
-30,000 shares to 150,000 shares.
that the United States is a domi¬
statement follows:
assumption in each and every the
principle of insulation will benant buyer in the world
"(2) To issue and sell
ord
of
as
July 9, 1952. In
so
doing,
the total number of shares of
shares
of
stock
new
50,000
$20 par
of
value, which will be offered
shareholders pro rata
of
one
held
value of $20
par
of record
as
the basis
on
share for each 3 shares
new
of the
to all
at
share
per
the
close
of
The
work
of
General
on
the
Subcommittee
Credit
Control
Debt Management has made
.uable
contribution
to
the
and
a
val-
under¬
standing of problems in the fields
of
monetary
tional
debt.
policy
I
and
count
it
the
na¬
market
for
most
American
A
flight from the
dollar
commodities,
have
an
into
goods
therefore,
extremely
causative
influence
and
would
important
the
on
world
honor
an
short
I
short
run,
internationally traded also,
materials.
raw
as
ceed each
long
am
sure
runs
would
we
inevitably
other, make
sense
in the
on
share for the
per
stock
new
will
be recommended to the sharehold¬
ers
for approval."
generous treatment that
the
Sub¬
committee's present report accords
to the wrok of the Subcommittee
on
*
The
*
election
brecht
as
*
of
,
Rudolph J. Al-
Assistant
Trust
Officer
of the Chicago City Bank & Trust
Co. of Chicago, 111., was noted in
the Chicago edition of the "Wall
Street Journal" of July 15.
*
The
St.
*
Federal
Louis
announced
than
Bank
two
There
years
is
ago.
in
much
report with which I
denied
the
present
in cordial
am
There
which I take
is
also
much
William
16:
received
his
Washington
and
entered
J.
Ph.D.
degree
University
the
from
in
The
that changes in
have a decisive
long-run
report
con¬
concedes
tfre
money supply
influence on the
price level, but it qualifies this by
saying that this principle is true
only in the long-run. The impli¬
cation
would
thus
be
that
mone¬
1941
sufficient
between
difference
the
of
emphasis
report and
my
implication,
own
that
in
if
I
of
then
it
long
run.
series
a
can
it
Willis
L.
Personnel
pointed
Johns,
Manager
Department,
Assistant
Two
was
ap¬
Vice-President.
has
sonnel
been
affiliated with per¬
since 1941;
administration
Stephen
Koptis
has
been
ap¬
of
Analysis
in the Hearings observed.
situation, I
a
can
Subcommittee
with
of witnesses
In such
agree with
report
that
a
the
cer-
the government itself,
evns
market:
0f
The
protected
a
bond
principle of insula-
tion presents the grave
danger of
evils that
are
realization.
catastrophic in their
One danger is that the
government
cannot, in the end,
rigged markets for its
produce
securities
own
and
then
hold
the
private economy to a standard of
financial morality that it refuses
for itself. The end result of such
a
double standard of financial
mo-
rality is simply the destruction of
confidence in' the
integrity and
of government.
A par^
ticular phase of this destruction of
confidence relates to the governpurposes
have
of
no
ness
mit,
to
ness
people
since
the
outbreak
of
the
North
Korean attack, attention is drawn
to
the
prices
world-wide
of
certain
nationally-traded
rise
the
not
increases
A
tually to
in
the
strongly
the
to
money was itself importantly conditioned by the preceding infla-
regard to the total of expenditures
but
especially in
the
willing¬
use
or
decreases
war
cause
scare,
cause
However,
factor
enough,
inter¬
the
runs,
effect in the
that
stance, might well
a
of
short
hold
entirely dependent
or
supply of it.
in
readiness
and
in
the
for in¬
people to
of
even
such
an
though
might,
if powerful
prices for a time ac¬
that
was
sary
during the
to
in
some
measure
neces-
war years but was,
mind, inexcusable in the
postwar period. In large part the
my
American
people
fled
from
their
after Korea because they
had learned from many years' experience that nothing effective
money
ever
the
by
seemed to be done to protect
holders
and
crease
cause
in
of
savers
of
these
of
ceived
the
action,
quite
within
the
of
taxation
borrowing,
regarding
become
the
the
versus
cost
de-
of
that whenever the
public is
unwilling to surrender its money
voluntarily on the terms and confers,
new
that
the
the
government
"insulation"
comes
of-
to
merely
and
in the creation of
additional
supplies of
money to
take the government's
securities off the market,
The process of bank credit
pansion:
prompt and deter-
with
principle of insulation simply
means
.
I believe that
their finan-
merely
borrowing.
Another great
evil,
finally, is the one we have already experienced.
In practice,
ditions
etary restraints.
not
weighing
advantages
corsist
contrary to changes fused, and imprudent monetary
of money, I am record, the immediate post-Korean
the opinion that in¬ situation demanded prompt mon¬
mined
planning,
money
an
move
of
the Executive in
inordinate inits supply. Precisely bethe preceding lax, con-
restraining
supply
creasing or decreasing the money
supply would nevertheless mate¬
materials. rially affect the expectations of
volatile,
raw
in
is
money
on
The
cial
spend: I would ad¬
or
course,
of
fled
was
tionary monetary policy—a policy
save
of
people
goods,
American
Money supply and the willing¬
such
In the report's review of events
the
He joined the bank's staff in 1924
and
Matters
1936;
of
awash
was
number
a
of
but
eagerly adopted, in the future as
they have been in the past, by
people to fly frantically from their
absence
of
in
since
as
decade
firms
effect
spend
Division
economy
money,
a
The Ameri-
private
no
influence.
Examination
can
If it be assumed
monetary policy has
each
sense
has been associated with-the Bank
Bank
than
as
This
that they would not
employ
more
tain rise in the general price
run.
spend money
Reserve
perienced
inflationary finance.
tary policy is relatively unimpor¬
the thinking that I believe my best
1948; contribution to the work of the
George E. Kroner, appointed an Subcommittee can be made by this
officer of the bank with his pres¬ separate statement, in part review¬
ent title of Chief Examiner.
He ing and restating, and in part clar¬
joined the bank's staff in 1918 and ifying my own position.
Federal
the peoples of the world, had ex-
tant in the short
up of short runs.
of
me
Abbott, Jr., certain to prove mischievous, and
Manager, Research Department, several recommendations that tend
appointed Director of Research, in a general direction contrary to
an
official position.
Mr. Abbott my own point of view. There is
July
siderations:
little exception
so
July
the
following new official ap¬
pointments made by the Board of their implications, one point
Directors of the bank, effective suggested policy that seems to
on
versus
to
level, ment's credit: insulated and
rigged
from money to markets do
not in the
long run
probably
inevitable, maintain but rather
that special comment is not in
destroy the
correctly from the Subcommittee's This circumstance, however, does credit
of the government,
of point. However, there are at least report, is one that I cannot
accept. not minimize but emphasizes the
Another
evil of an insulated and
two points
in the analysis that The
10
long run, after all, is made importance of monetary policy.
rigged market is that the Congress
seem
to me to be erroneous in
agreement.
to
*
Reserve
Monetary, Credit, and Fiscal
policies, of which I served as
Chairman, now somewhat more
Short-run
resolutely
run.
Flight from money after Korea
influenced by previous monetary
policy: In the situation immedi-
prices of these materials. An in¬
July 9, 1952. Immedi¬ to
ately following the North Korean
have been a member of the
flation of
credit in
ately after the July 9, 1952 meet¬
the United
attack, I would, willingly agree
Subcommittee and wish
to
ac¬
States, which permitted and en¬ that restraint on the
ing of the shareholders, warrants
money supknowledge the splendid accom¬
couraged such a flight from the
evidencing the subscription rights
ply alone might not have comwill be mailed to each sharehold¬ plishment of its Chairman, Repre¬ dollar, either
domestically or in¬ pletely controlled the rise of
sentative Wright
Patman, and the ternationally, would therefore
er; these rights will expire and
prices. The memory of war shorthighly competent services of its seem to me to be a
become
void
after
12:00
powerful con¬ ages was everywhere in the minds
noon, staff.
Let me also
acknowledge tributing factor to the world-wide
Eastern Standard Time,
July 24, with a
of consumers and producers.
The
sense of
appreciation the inflation noted in the
1952. A subscription price of
report.
$36
people of the United States, and
business
come the practice of
rigging. We
will have the creation of an artificial market by devices
sue-
Let
us
remember
Continued
on
ex¬
the
page 20
20
The Commercial and Financial Chronicle
(304)
Continued jrom page
volunteered advice by the Federal
icy should
the
but
minor'
changes.
Nevertheless, I believe
them to be dangerous in the ab-1
of
Takes Issue With Patman Report
Monetary and Debt Management Policy
desirable
represent
of
sence
them,
appraise
I
As
the
Board
of
Governors
fully
its monetary responsibilities suf¬
by- which this comes
responsible for the monetary poli¬
about.
When the Federal Reserve ficiently fixed in law, and suffi¬ cies it
pursues and in the absence
ciently differentiated from those
System feels compelled to support
of a statement of the general prin¬
of otner agencies of government
the price of government securi¬
ciples
of
monetary
policy for
that the monetary responsibilities
ties in the interest of maintaining
which the System is accountable.
of the System are clear to other
yields below the market rate, it
This, to be sure, is simply a re¬
does so by purchasing government agencies, to the public, to Con¬ affirmation of
my opinion, which
securities
with
its
own
newly gress, and to itself; and (c) the I want unequivocally known, that
principles
of
its
action
also
suffi¬
created
credit.
This credit ap¬
the most urgent and paramount
ciently fixed in law that they will
pears
in the form of enlarged
business in the field of monetary
be known to the Executive, the
reserve
balances of
commercial
policy is that of a clear Congres¬
Congress,
the
public,
and,
above
banks.
In this form it provides
sional
directive
to
the
Federal
ail
and
most important,
to the
the basis for a multiple expansion
Reserve System, to wit, a man¬
B'ederal
Reserve
System.
It
is
of loans and investments by the
date, as we have come to call it.
banks.
When this
new
money, only in these terms that I am able Without such a clear mandate, set¬
created by the banks on the basis to think of the independence of
ting forth responsibilities and the
the System and to judge proposals
of their enlarged reserve balances,
general terms of policy, there can
lor its reorganization; for, as the
goes into the hands of the borrow¬
be no such thing as accountability
correctly
observes,
the
ing public, it is used to buy goods report
or evaluation of performance.
and services.
If the resources of problem of independence cannot be
I would concede the difficulty
discussed in a vacuum but can onli¬
the country are already fully em¬
of writing a mandate.
But if it is
ne
meaningiully discussed in
ployed, the expenditure of this
alleged that the difficulties are so
,erms of independence to do wnat,
new money can have little or no
great that they cannot be sur¬
effect in increasing production.
It when, and how; and, I must in¬ mounted, then that contention is
serves, .rather,
merely to bid up tently add, in terms of respon¬ tantamount to saying that we do
the prices of the relatively fixed sibility for doing what, when, and not
knew what kind of a general
now.
supply of existing goods and serv¬
monetary policy we desire; and,
The
several
recommendations
of
ices and thus generates inflation.
if we do not know what kind of
.he Subcommittee, in the light of
It seems to me that this process
a
monetary policy we want, then
preoccupation with inde¬ we had better simply abolish the
of creating bank reserves and new- my
pendence for the Federal Reserve instruments of monetary policy,
money, merely for the purpose of.
giving the government a protected jystem in the terms I have stated, for they are entirely too danger¬
fail
to go to the heart of the probsecurities market, often in con¬
ous
to be used for ill-considered
The
report, for instance,
tradiction
of
more
fundamental .ern.
increased powers over
smaller Board of
governors; a consultative council
one
method
market for its securities that the; ja monetary problems, established
suggests
considerations, has gone quite far
in
our
,cuiK
country.
There is
of
protecting
the
a
sufficient
What
Executive Order; a closer and
dependence of the Chair¬
manship of the Board on the term
of the
President; and shortened
sider:
-earer
gives the Federal Government a
prodigious
advantage over any
private borrower, and we will do
terms
for
Board
of
the
of
members
the
Governors.
should
mandate
a
In
(a)
make
the
tween
Federal
it
opinion,
my
clear
a
that it
its own
money
do
not
I
with
law.
It, in turn, should
admonished, cajoled, or
by
volunteered
advice
these
make
because
I
in
the
record
carried
history
of
interested
of the other
confusion
In
the
detriment
and
of
the
ment
Act
within the
or
be
it
that
clear
I
I
might
in-
on
Employ-
subordinated
have
made
it
clear
that
I
lieve there must be—then I
the
no
Full
the Federal Reserve System—and
that
both,
by
am
rested
language of that law.
If there is to be a mandate to
voicing this opinion, I want to
make
mandate
a
have
of
affairs
its own, to
in
as
in
where
terpretation
past several years a tendency
lor each of the two agencies to be
much
far beyond the place in
us
satisfactorily
the
as
in
Act/. The
tice and are quite certain to be,
given a secondary significance,
The monetary confusions of these
latter years seem to me to have
points insistently
sense
directly
implicit,
from the Treasury.
we
should
rightness to
have
tell
serve System,
the
the
beurge
forth-
Federal
directly, in its
Re¬
own
accusing the Treasury .and
acquitting the System.
legislative charter, what it is that
"Good fences make good neigh-
System to contribute toward the
means
bors":
there
want
I
is
observe" that
to
fundamental
a
and
un-
we
expect—what
the
expect
we
maintenance of stable price levels,
and
high-level employment, and
by what means..,
On the record of the past severa* years it seems quite clear to
vorce himself from his borrowing
me that the Federal Reserve Sysproblems, and the advice he gives tern—through no basic fault of
the System will tend to be largely organization, structure, or personex parte.
The System, of course, rel—has been quite confused reis in precisely the same position gardirg its responsibilities and the
vis-a-vis the Secretary: its advice fundamental reason for its being,
on terms, maturities, coupons, and
* d° n°f believe that this situation
so
forth, will inevitably be con- can. n°w be corrected by inference
avoidable
difficulty in the giving
of advice to the System by the
Secretary: he cannot possibly di-
ditioned
should
not
by
the
with
the
more
abiding concern °r indirection,
of whether or
Let me close by a further word
its
problem
Treasury's
or
action
makes
less difficult the System's
regulation
the
of
supply.
money
The advice given by the System to
the Secretary will also tend to be
be¬
of the
and the
System
be
creates,
either
investment ac-
placed
Reserve
or interpretative,
Inferences
and interpretations
are subject to change without no-
believe necessary, in
principles estab-
I
as
heckled
ex
responsibilities of other agencies,
the
Treasury
for instance,
be¬
short,
it
make
seems
fairness.
PAUL H. DOUGLAS.
make
I
differentiation
and
°f congratulation to an esteemed
colleague, Representative Wright
Patman, whose conduct of the
hearings was the very model of
'
parte.
In
responsibilities
Reserve
so,
lished in
reserve
be
Federal
mandate should not be inferential,
lending activities, and to
or
accordance
con¬
differentiation
hand, the problem
System is
regulate the quantity of
count
involve
must
mandate
A
.
the Federal Reserve
to
certain considerations:
oy
properly
possesses:
I believe this is
protection, since it
government
the power to tax.
On the other
purposes.
reserves; a
System;
clear mandate making- through
a
process
enough
Thursday, July 24, 1952
.
Reserve
Sen. Douglas
On
.
then, these recommendations*
might, under other circumstances,
mandate:
19
.
it
of
the point of
responsibility,
insistently,
clear to
me
I concur in the view expressed
by Senator Douglas,
because
that
we
JESSF
P
wot pott
'
will
have a better end result, and that STATEMENT BY MR. WOLCOTT
are dealing with
the Treasury and the System will
I concur
with the views exthere is likely to be great
be better neighbors in the long pressed
confusion regarding the differing
by Senator Douglas and
portance: These recommendations,
run,
the less they invite them- find them to be quite consistent
vv ith
the probable
exception of responsibilities of each agency.
selves in to play in each others' with the
report of the Monetary
level as far more important to the
the one-regarding reserve require¬
Treasury - Federal Reserve re¬
backyards. The proper principle Subcommittee of two years ago
economic and social well being of ments,
are
not, to my way of sponsibilities: I note tfyis point for
is, "Good fences make good neigh- to which I
agreed, with certain
the country than any artificially thinking,
matters of any
great two reasons. The first relates to bors!".
"footnote" exceptions and reservaNone of them repre¬ a
most
maintained stability of the inter¬ substance.
elementary principle of
A norm of action for the Fed- tions.
est rate.
sents a point that I would care at administration: wirhout differen¬
eral Reserve: (b)
A mandate to
In regard to the current report,
this time to argue individually or tiation of responsibility there can
Government should compete in
the Federal Reserve System must there are a number of items on
The second
the money market: The govern-? at length. In the present state of be no accountability.
also establish a norm of action in which I desire to take exception
ment is quite able to compete in. confusion regarding responsibili¬ reason is the fact that there was a
terms of general principles.
The or to express supplementary cornties and principles of action, how¬ pervasive tendency on the part of
the money market.
If it will but
norm
of
action for the Federal ment.
These, I believe, cannot
the total effect of these some witnesses to adopt the "com¬
do so, allowing itself only the ever,
Reserve
System
need
not
and be adequately treated by footrecommendations
is not, as the mon
responsibility"
theory
of
advanage accruing to government
should not be detailed.
No one is notes in the text and will require
Treasury-Federal Reserve System
as the ultimate taxing power, we, report asserts, to leave the System
nowadays so naive as to imagine some time on my part to formu"about as it is" with regard to relations.
shall then be in a
well
resolutely to avoid all entice¬
looking to other kinds of
insulation, rigging and pegging. I
would regard stability of the price
ments
Individually
tions
are
recommenda¬
the
cause,
of fundamental im¬
not
since both
money,
position to per¬
mit
our
reduce
authorities
monetary
restrain
or
the
to
growth of
but
independence,
:erve
to
actually
tney
it
weaken
I have noted with
substantially.
care
the tes¬
timony of Mr. Snyder, the Secre¬
that monetary
policy by itself can
totally abolish the business cycle;
late them. I shall therefore avail
myself of the privilege offered by
the Chairman to issue a statement of views at a later date,
ten around the intent of Congress
I regret that pressure of work
of
Governors.
I would
like to
that monetary policy be used as a in
the Banking and Currency
to increase the money supply in a monetary policy.
If used to "in¬ compliment them on the abiltiy
to
cyclical
eco- Committee and on the House floor
the
government
bond and good will shown in their oral counterweight
deflationary situation—when the sulate"
nomic fluctuations.
That
is, it for some weeks past has made it
increased money would not only market, however—in short, if used
testimony and on the contribu¬
should be the clear intent of the impossible
to present my addito create a captive and coerced
affect
the
supply when a pie-.'
is producing an
inflation and, by the same token,
money
thora
of
money
prices but also call into
For
instance,
over
power
re¬
tary of the Treasury, and of Mr.
Martin, the Chairman of the Board
requirements is a useful tool
and supplementary instrument of
serve
tions
use
market—it
could
utterly
rials, and hence increase the real mischievous. A smaller Board, with
shortened terms, might be a more
national income itself.
The market for government se¬ effective
working
body
if the
curities would thus obviously be principles and responsibilities of
idle
plant
manpower,
and
mate¬
prove
I
that
the
to
their
work
strongly
staffs have
made
of this inquiry.
urge
But
that the "common
but the terms of such
as
I
see
a
mandate,
it, should be clearly writ-
Congress, I believe, that the System
shall
use
its
powers
to
in-
the money
supply in times
to diminish or
expansion of the money
end, only result in confusion, mis¬
supply in times of boom. The recunderstanding, and the avoidance
ognition of boom and depression,
responsibility"
theory
of
Treas¬
crease
tional views at this time.
More-
over, I feel that the questions of
monetary
policy and debt
man-
of such major importance that I do not wish to
express myself on them in report
affected from time to time, both monetary policy were clear. Lack¬
form without careful and adequate
directly and indirectly, by the ing such clarity, however, these of responsibility.
With the best
at least in their grosser symptoms,
consideration of the committee's
monetary policy pursued by the recommendations, together with will in the world, this theory leads
is
surely not now beyond the report as well as the formulation
System.
But the purposes, cri¬ the clearly indicated dependence
inevitably
to
recrimination,
to
the
teria of success, and tests of ac¬ of
Chairmanship upon the mutual admonition, and to re¬ Board of Governors and its staff, of such differing or supplemenif
they are not bewildered by tary views as I may feel to be
tion by the System would differ Presidency, and the proposed abopeated investigations, such as this
other
and
irrelevant
considera- justified.
fundamentally from those that ition of geographical qualifica¬ one, which arises so largely out
tions.
The levels of employment,
Since it is indicated that the
would
be applicable if we fol¬ tions for Board members, would
ury-System
of
the
relations
painful
can,
and
the
in
of
depression
and
agement are
restrict the
exhausting
production, and substantial stabil- committee's report is to go to the
did what,
ity of the general price level: printers tomorrow (June 26), I
when, why, and to whom.
These will suffice.
do not desire to delay its publicaThe Executive and Congressional effectively brought into sub¬
Fortunately, the necessary dif¬
branches of government, more¬ servience to the currently ruling
If it is said, as I am sure it will tion.
When the current pressure
ferentiation between the responsi¬
over,
would thus be in an ob¬ Executive and his political pur¬ bilities of the
Treasury and of the be, that a monetary poljey^lfSSed--5* workof the House is completed,
viously
better position
to
use poses.
upon
such
a
mandate
Federal Reserve System is easily
may not be J s"aR then have the opportunity
The proposal for a consultative made.
intelligently a compensatory fiscal
The
Secretary
of
the perfect, then I want to say quite to consider the report carefully
policy, which was discussed in council (though I am shocked at
formulate my statement on
Treasury has a very great respon¬ emphatically that it will be inficonsiderable detail in our report the suggestion
that the Council
sibility in advising the Congress nitely better than what we have these matters for release as soon
of two years ago.
be established by Executive or¬
with regard to problems in the been treated to these past several as Posslble thereafter,
der)
could
be
a
most
useful fields of taxation and
JESSE P. WOLCOTT.
borrowing. decades, and that the Congress
The Recommendations
instrument if, again, there were
at the very least, a
He has a profound responsibility will have,
It has seemed to me
urgently clarity regarding responsibilities in arranging the maturities of the benchmark for judging the per¬
With Newburger, Loeb
necessary that the Federal Re¬ and principles.
In the absence of public
formance of the Federal Reserve
debt, the terms and condi¬
serve System, if it is to
have its such clarity it would be, to all tions of debt
Newburger, Loeb & Co., mem
instruments, the cou¬ System and a basis for adjusting
lowed
the
simply
mean
the government securities market.
Board
of
present
or
intents
powers,
must
principle of insulating
that in practice the
Governors
would
be
purposes,
simply
an¬
effort
to
discover
who
„
increased
also
monetary
have
(a) an
independence clearly sufficient to
prevent its coercion, of course
by
any
private
equally
interest
important,
utive Branch of
or,
by
what
is
the Exec¬
Government; (h)
other
and
method
System
under
of
the
pons
bringing
the
domination of
exclusively
in
they:
absence
can
be
will
offer
to
the
The
Secretary of the Treasury should
be (as I believe he is) solely and
power.
Collectively
he
market, and related matters.
the President and of the party in
gerous
that
fields,
dan¬
and
accountable'in
he
these
should not be ad-
Ex
the
change and other Exchanges,
an
System
in the light of expe-
/
Mandate
/ nounces
should
Reserve Act: (c)
mandate to the
be
in
Federal
In my opinion, a
Federal Reserve
'
of
a
f
bers of the New York Stock
rience.
-
„
,
Congressional policy directives to
policy monished, cajoled, or heckled with System
regarding monetary
pol-
* that
Registered
Gene
G1 i
Representative,
c
B
ha
become associated with the firn
in
its main
office
at
Street, New York City.;
15
Broa<
Volume 176
Number 5136
.
.
The
.
Commercial and Financial Chronicle
(305)
Opposes
Subcommittee
tain
Independent Federal Reserve
an
General Credit Control and
on
Debt
Manage¬
the Economic Report
of the Congressional Committee on
formal independence of Federal Reserve Board should be
ment
says
limited
in
In
the
the
i
recent
.
report
by
eral
Credit
Control
Gen-
on
and
Debt
Management,
of
segment
the
Finances
the
of
stand
the
Federal
against
a com¬
pletely
inde¬
pendent
Fed¬
eral
vocated
in
the
a
Senate,
umpire, and must ultimately abide by the decisions
which are made by Congress."
Lag in Construction
and designates the
Chairman.
his inherent
Pursuant
powers
Chief Ex-
as
incompetence,
or
neglect of duty.
Some
of
the
powers
been delegated
F.
him.
central
banking.
Concerning this topic, the Report of
the Subcommittee states:
Board
£
supervise
can
the execution of these
powers and
can redeleeate them if he sees fit
from^ thS,
D
,
j.°
j
.
r.
.
in/!?
,
.
bait
•
-
1A_.0
or
1952
..
,
Ybe
Aai-,
,
*be ^irs^
months
s*x
specialists,
to be in the public interest.
Federal
con-
Reserve
System, like a 19th Century cenbank, should be, at least formally, independent of its governtral
ment.
It
a
'rules
of
this
of
the
standard
game'
were
con-
judg-
no
concerning the ultimate ends
economic
policy for their
cessful operation.
tionnaires
hearings.
"But,
Gf
It is not
sue-
neces-
to inquire whether this concept was ever valid. The Umted
tion
is
the only
now
the
in
world
on
large
na-
interna-
an
tionalgold standard, and neither
the
United
States
nor
level
price
evel
of
and
allow
by the
.mined
quirements
of
its
its inter-
its
internal
employment—to
standard.
testifying
or
be
de-
automatic
reinternational
an
To permit this would be
tantamount to
renouncing the
formal
Board
ited
the
at
independence
of
Governors
from
is
inevitably
lim-
President
by the hard fact that fiscal
and
monetary policy must be
ordinated
with
the
with
each
other
other
policies
government is
est
re-
service
Council
co-
the
Nation
ob-
As
Economic
the
Advisers
says*
.„A
b]
f
ater
tical
impor£nce,
however, is presented
b
that
\he fae{
^
f
th
ernment
acJeving
+b
onl
the
eov-
must be
when various
sim-
promoted
chosen that will
"
tearing down
high-level employment
o
The
rejects
tne
Reserve
pendent
.
.1
.
tnat
iaea
tne
j?eaeral
of
government.
the
to
the
think
it
to build
one
'
.
be
indeIt
Subcommittee:
should
be
cies- What ls needed is not the
best monetary policy or the best
fiscaI policy, each as ends in themsejveSj but ^he best overall economic
most
borne
stress
Reserve
con-
mind
in
placed
is
that
upon
policy.
iikeiy to
^ p0jnt
mation
case
This
is naturally
be attained, from
0f view of the Federal
System,
in
ence
whenever
the
*
therefore,
should
tinuously
rinpc
xu
System
letter
a
-44
with Mr. Sproul, who said
agrees
in
u
Subcommittee
is at
a
at
policy
forA good
hearings
the
°ver-all influence of the
pendent
J? ^ government.
System
and
should
be, in
tinuous contact
and
business
financial
nities
close and
with
con-
the financial
communities.
and
business
The
commu-
should
participate to the
fullest extent possible in the for-
ported
book,
be
be
no
independence
from the government.
Reserve
System,
which
re-
mains to be
considered, is therefore, to use Mr. Sproul's words,
'independence within the government.'
This
independence
kinds—independence
President and
Congress.. The
.
i
be
''
'
is
of
from the
independence from
question
of
pendence from Congress is
special
.
one; ana
reserved
'..
.
indea
very
,
discussiqn.of
for
in
part
Monetary
this
Pol-
the
the
it
section
out
that,
dis¬
the
aim, of
Federal
be
course,
is not
EnerSy
of
project
awards included in the first half
figures for 1951, the current year
was only 1% behind last year,
The June total for 37 states
was
$1,488,850,000 or 5% less than May
hut 6% more than June 1951.
Other June individual totals:
$581,792,000
or 23%
less| than May
19j"j
and
^ J%
public:
and private works
utilities, $355 558,000, up 2%
Six
month
"
over
1
totals
individual
compared with six months 1951
r«rLaQsJ°"™s: Non-residential,
A ^ 34%; resident.al, $3,344 037,000
^
,
„
up
1%; public
a
utilities,
.
$1,715,566,000,
up 21%.
,
r-
lv/i
£
Joyner Co-Manager of
Bache Greensboro Branch
,
0
GREENSBORO, N. C.—Bache &
Co., members of the New York
Stock Exchange, have announced
that Archie B. Joyner
is now
associated
with
the
firm
in
its
country should have
that
P
(VDonnell Announces
V U0£ne11 announces
X"
Saginaw Representative
SAGINAW, Mich.
Joseph D.
—
Frost is representing R. C. O'Don-
nounced.
Mr.
Frost
formerly
was
wjth Stoetzer, Faulkner & Co. and
prior thereto in business for himseR for
many vears.
bank
sold
for
more
than
its
i
**
rv
BROOKLYN
N.
Y.
—
Frank
the
or
J.
a
sound
securities
business
•
will
you
n___c
this standard, the Subcommittee is
inclined to believe that a degree
of independence of the Board of
Governors about equal to that
i
Fifth
Reserve
securities
main-
rr rigm v^pciia
ILION, N. Y —Harry J- Wright
now enjoyed is desirable.
Many
^e policies which the Federal
to
Wficykf OnAns
has
opened
offices
Avenue
to
business.
at
48
engage
South
in
the
holdings.
I
can
testify that
quite
wisely are broadening the scope.
of their bank stock purchases and
including well-managed banks in
thriving cities outside of New>^
York.
r
nation
banks
need
more capital,
study on 'The
Problems of Adequate Bank Capital' has been published by a com^
Petent committee of the Illinois
Bankers Association. The study
excellent
very
was prompted
the
stock
1949> 1950 and 1951, one-third of
the banks in Illinois were requested by the Federal authorities
billion
a
total
A wag remarked,
would
still
de-
>
by the fact that in
;
'If they to increase their capital funds,
owe, the stock with
almost two-thirds of the
too high.'
Since insured non-member state banks
they
be
stocks
as
have
growth
not
been
stocks
bu
requested.
so
n?ethod
The
of
traditional
*
increasing
capital
have been purchased for safet
through retained earnings is provof
dividend
and
somewhat
for ing too slow as earnings have been
marketability.
"The
i
low
fact-.is
that banking
growth
industry.
Actually total
deposits have grown faster
than
the
national
gross
product
—the national output of goods and
services. The rate of growth has
varied widely both
and
within
geographically
city. Many
the
to
and
isf'a'irolled-
bank
same
large
a
extent
con-
M°fe- banks, especially
'■b0 ?ne.s W1*b inadequate capital,
are fac,nTg excess P™flts tax P?/:
m5
'
,s'Jan^e a new caPBal
J^ben niost bank stocks are selling
below book value is to some ex" unfair and in many cases
not Practicable. Supervisory
have enjoyed the greatest growth.
fact the Dallas district rank
authorities are frowning on the
preferred stock and subordinated capital debentures. The
first in the field.
real solution is increased
of the western and southern banks
In
Deposit growth
sa e
earnings
has been considered the main de
and
terminant of
Proflts tax. The excess Pr°Bts
tax is especially unfair to the
long-range earnings
growth but loan growth and
spective loan growth have
more
bearing
Some
banks
real
on
are
proeven
earnings.
useful
more
their communities than
to
others
are
because
they
are
more
minded.
This
bank
(The
loan
Third
National) and the Nashville banks
group are to be congratulate.
a
the
revocation
of
the
excess
u^dium and small banks in growln£ and thriving cities and also
grossly unfair to the large banks,
,an example, may I mention
that one of New York s largest
banks reported for 1951 that its
net earnings before taxes and re-
Certainly one of th(
principal reasons why Third Na-
^erYA!L ^creased $1-52 per share
m 195J-» but only $9-09 of this was
available for stockholders Countless smaller banks are today con-
tional
that
fronted with this tax which makes
beginning it has
had an attitude of being useful in
making and seeking loans.
It
impossible^ for them to build
stronger capital positions
The
solution of the problem of adequate capital is having the attention of our banking fraternity,
what
on
might
has
from
been
the
be
called
successful
loar
is
very
loan ratio—that
of
loans
is the proportior
capital funds—is and
to
has been above the national
This
age.
because
is
most
aver-
commendable
associations and supervisory
authorities.
<
a
-
,
it
spells not only com"From a thorough report just
munity usefulness, but much bet- completed by a Special Commit¬
ter earnings than has been en- tee on Federal Excess Profits Tax
by
so
banks
conclusive
generally.
.
.
.
most indices
as
use
September
the
1939
which
12
102%,
against
came
per
and
in
are
April
New
96%
industrial
nerioH
1952
York)
the
for
In this
average.
hank
stock
was
Dow
earnings
Xe fncreased ??9% a™ op8-
posed to
stocks.
192%
It
ABA.
for
would
that banks stocks
the
industrial
though
appear
are
I
quote:
'Banking
,
tectmn for the
®x(less Pruflts taxa*
f
its f®undatl0cna"d|be[efore
S
^
•
+
> Thic
rplipf
relief
tav whirh
»uhhc™a% *hmakes
reach 82% of
gain of 20 bank stocks
by R. L. Day & Co.,
22
largest
banks, of
(selected
the
capital is the basic source o pro-
average.
the market
from
of
It will in- the
to know that between may
below
Jones
u
r*««ry j.
,
York's
were
what
terest you
r
soon
1929
owned
been
securmes Dusiness*
New
that
"Speaking generally, the
"Records covering market performance of bank stocks are not
r\
J. McDermott UpenS
We hope and
A
posits.
regarded
confronted
believe
develop- of the
peak
one
joyed
t?
in
dollars
alertness.
P
this
Many of
the
at
bank
are
ening marketability.
.
excesses
that
as
tern is a relative, not an absolute
iviaunews V-fpens
concept. It is good insofar as it
TOWNVILLE, Pa. —Loyola C.
contributes to the formulation of Matthews is engaging in the secusound policy, and bad insofar as rities business from offices on
it detracts from it.' Measured by South Main Street,
advocate
income
were
Gordon Latham
co-manager.
are
System McDermott has onened offices at
only • or largely New York banks
but that 51 Clark Street to
engage in the stocks and some of these have
policy. The independence of the Federal Reserve Sys-
must
dividend
Greensboro, N. C. office, 108 West
Market Street, where he joins W.
as
pos-
largely with the objec-
ignored.
1929
Non-residental, $551,500,000, 19%
more than May but less than 1%
below
June
1951;
residential,
Reserve
independent,
were
recall
controls
many institutional investors
years
ago
bank
purchased for growth,
Price-earnings ratios and yields
such
Commission
H. Helm
"Twenty-five
counting $980 million in Atomic
r.
economic
"The independence of the Federal
in
view
"The final
should
policy. But,
junior
partners,
this
'American
the Subcommittee.
they
can
highly
Harold
ment, Mr. Helm stated:
were
pointed
was
stockholders
ment
1929, bank
stocks
artificial
that the huge new
pension funds
classify them as desirable invest¬
out
of
to
savings banks will receive author¬
ity to buy bank stocks. We know
previous
tives
±irst half of 1951.
nell & Company, members of the
inte- Detroit Stock Exchange it is an-
icy,' but modified his position materially in his testimony before
that
must
more
pub¬
acquired
the
less inde"
Dr. Goldenweiser had earlier sup-
mulation of monetary
There
and
were
grated with the Executive branch,
is,
subject
*
This is largely due
interest rates are
influence on bank stock prices as
will the evidence we see
of broad¬
o
bought because of "growth"
sibilities, whereas now they
was
influ-
Federal Reserve System would be
lhe federal Reserve
will
its
maximum.
macje
wag
"Fhderal RLerve^Svstem °it that the
'
two
when
government
eoveram^tlmt indewnd^nce increased if U
Rie
year
another '
XXeLor'to'reconcile ifcTdif-
Gmu
less
fact that
ever-increasing living costs
and cannot become 'The
forgotten
man.'
These factors will have
an
attitude
stocks
for
during
promote these different objectives
^ithout
to
J7^7o«»o78,000 compared with $8,-
nf
combination of pol-
a
needs''to.be
total
policy is
methods
stabiljty.
ultJaneouslyi
jcies
nf
Jm0netary
f
objectiv<?s
is
nbipptivp<?
and
'
,
the
jbe' flrst balf °* the
and
and
to be of the great-
to
of
reports
ques-
sponsibility of the Federal GovThls means tllat the Board of
eminent, recognized by it in the
Employment
Act
of
1946,
for and endeavor to reconcile its ait
maintaining conditions conducive ferences with the Executive agento
the
dividends for
by 12%. F, W. Dodge Corporation, safety of principal.
construction news and marketing
Commenting on
It
the
the
the
other
any
country
is going
to
monetary policy - i.e
nal
This
agreed by a great majority of
was
the persons replying to the
sary
States
it believes
as
automatic—requiring jectives of the government if the
technical skill but
ment
a
position
gold stand-
were on
the
ceived to be
much
this
principal trading nations
and
under
for
case
of the world
ard
possible to make
was
plausible
when the
to
pressure than has
been the
for 20 years. Better
earnings
should permit better
change
the
that
1951 s record-breaking volume in
construction contracts awarded in
make such decisions
'independence
It is sometimes
position at the moment to
improve
and
New
t
to
case
called
pointing
of
independence of the Federal Re-
the
July
on
regarding
b?^nk
stocks,
mC)ndls °f *953
J.lx
of
lic's
.
serve
"The first question which must
that
of -the
.in
Dodge Corporation esti-
be raised in any discussion of the
what?'
dent
the
declined 12% in comparison with
same period of
previous year,
have
to it by the Presi-
The Persident
W.
the 37 states east of the Rockies
tended
Presi-
pany
But, aside
the Board is
formally independent in the exercise of its judgment and can
from
Helm,
attention
mates consfruction contracts easl
dent, pursuant to acts of Congress
vesting the powers originally in
Patman
19th
is
Nashville, Tenn.,
York,
Contracts Reported
to
ecutivehe may remove any member of the Board for
malfeasance,
System
Third Na cionai
18, Harold H.
outside
an
Meeting of the
Com¬
century
*
government, must
of a team, not as
at
Trust
Board's
Wr.ght
of
part
address
an
Anniversary Stockhold- their earnings.
j dent. The President appoints the
\ members of the Board of Govj ernors, subject to the confirmation
the
of
Bank at
parts
as
ers
of
course
with
of
princi¬
ples
en-
the
bank
by
mind
and has
can
substantial degree
In
and
having
basic
Executive
—
Bank
many
economists
and
others
the
of
is
or
view, but with idea and motive of safety. Calls
attention
difficulties in expanding bank
capital.
degree of inthereby enhancing
the Silver
play
part
^
best served
jts bargaining power in the determination of over-all policy.
But,
the Board of Governors, like all
other
is
Helm, President of Chemical Bank and Trust Com¬
pany of New York, points out,
however, since 1929 bank
stocks have not been purchased by public, with "growth" in
independence from the Presi-
ad-
as
pointed
Governors
is
Represent "Growth Industry"!
Harold H.
considerable
a
that, irrespective of whether
of
Bank Stocks
Chemical
Reserve
System
econ¬
This end
Board
a
to
built-
out
dowed it with
is taken
been
dollar
avoid
the
of
firm
a
already
branch, Congress
on
Economic
Report,
has
not
Joint
Committee
"jt
in- order
dependence
Subcommittee, headed by Rep. Reserve System.'
Wright Patman of Texas,
a
The
on
the
inflationary bias in the
with
lml
issued
of
by
endowing the Board of Governors
agen¬
cies of the government.
J
soundness
advocate
omy.
by need of coordination of fiscal and monetary
t
the
during times of inflationary pres¬
sures
are
unpopular; yet it is
necessary that they have a strong
21
in
a
better
earn^gs makes
^ 1^po.s^bleK.t?i buildn"p capit^
funds with which to p
S
credit hnes for our successful and
,
rap^iy^growmg borrowing cus-
,
tomers and it a^o
attracadditi°nal capital less attr c
„
£lve
lf r?a?
be expected
,
tax
problem
confronting
on
:f
it.
Franklv
bank
stockholders,
Real and prompt relief, is
and
is
this
Frankly, tms
is the major one
expected."
needed
22
The Commercial and Financial Chronicle
(306)
.
.
.
Thursday, July 24, 1952
Security Traders Association of Los Angeles
Roy
Warnes,
Harry Arnold,
Bob
Shearson, Hammill & Co.; William Zimmerman, Bingham,
Walter & Hurry,
Goldman, Sachs & Co., New York City; Charles Livingstone, Crowwell, Weedon
Diehl, Paine, Webber, Jackson & Curtis; William
Ryons & Co.; Larry Pulham,
Veeden &
Lester,
Wright,
Co.
Jay Cook,
Dempsey-Tegeler
Daniel
Foster Paisley, Weeden & Co.; Nick Kirwan, Dean Witter & Co.; William Walker,
Conrad, Bruce & Co.,
Dick
Manwaring,
First
California
Bill Brown, E. F. Hutton
Company, Incorporated;
(standing)
William Davies, Dempsey-Tegeler & Co.; Bill McCready, Geyer & Co. Incorporated; Nieland B.
Van Arsdale, Blyth & Co., Inc.
Inc.;
& Co.
&
Reeves
&
C.
Co.;
Henderson,
Herman Betz,
«
Arnold
Frank
& Company
Bob
Co.
Taylor, Wm. P. Harper & Son &
White, National Quotation Bureau, San
California Bank; Don Summereli,
Durst, Inc.
Wagenseller &
Co., Seattle; Al Freeman, Dempsey-Tegeler
Francisco; William Davies* Dempsey-Tegeler
Co.
&
&
Co.I
Co.;
Tim Spillane, J. A. Hogle &
'M
§'
—
i
*
J. D. O'Neil, Wagenseller * Durst, Inc., Bob Creen, Pledger &
Company, Inc., Bob Howard, Paine, Webber, Jackson & Curtis
<f
i
J *,
:
Ikk
Pete
Brittain, Seherck, Richter Company, St. Louis; Dick Owe
Crowell, Weedon & Co.; Ken Noble, Morgan & Co.
Bill Webster, Bateman,
Eichler & Co.; Robert Cass, DempseyTegeler & Co.
Volume 176
Number 5136
.
.
.
The Commercial and Financial Chronicle
r
At the Hotel Del
T.
D.
O'Neil,
Wagenseller &
Durst,
Richard
R.
Bob
Incorporated;
James
Beebe, Hill Richards
&
Co.; Dick Vernon,
Wagenseller &
Company, Inc.; T. D. O'Neil, Wagenseller
Henderson, Daniel Reeves & Co.; Bill Ginn, Dean Witter
&
Co.
Pat
-Frank Link, Harris, Upham & Co.; Bud Dorroh, William R. Staats &
Co.; William Pike, Morgan & Co.;
James Fraser, Stern, Frank, Meyer & Fox (standing)
Nick Kirwan, Dean Witter & Co.; Thomas J. Euper,
Dempsey-Tegeler
& Co.; A. S. McOmber, Revel Miller & Co.; Foster Paisley,
& Co.; Bob T. Cass, Floyd A. Allen & Co., Inc,
Forest
Weeden
i
;
John
Durst, Inc.; Sam
Durst, Inc.
Green, Pledger &
&
Sheedy, Conrad, Bruce & Co.; Jim Zink, Walston, Hoffman
&
$
23
Coronado, June 27th-29th, 1952
Inc.; Earl Berry, First California Company,
O'Neil, Fairman & Co. (standing)
Bob T. Cass, Floyd A. Allen & Co., Inc.; Frank Ward, Merrill
Lynch,
Pierce, Fenner & Beane; Max Hall, Dean Witter & Co.
(307)
Goodwin
•
Dohrman, E. F. Hutton
& Company; William Lippman, Akin-Lambert
Co., Inc.; Bill Webster,
Bateman, Eichler & Co.; Norman Hudson, R. L. Colburn Co.
Shipley, Edgerton, Wykoff & Co.; Frank White, National
Quotation Bureau, San Francisco; Don Summerell,
Wagenseller & Durst, Inc,
!
,
■
.
Bob
^
Henderson, Daniel Reeves & Co., Beverly Hills; Ed Bourbeau,
Daniel Reeves & Co. Beverly Hills; Frank
Ward, Merrill
Lyneh, Pierce, Fenner & Berne
-Hi J
,
.
The Commercial and Financial Chronicle
(308)
24
cial
Continued from first page
intolerance,
racial
and
big¬
abroad and its eradication at home
Prosperity Under the
political adventurers over another.
representative
of
name
government,
they should have
repudiated the whole venal pack
neither
who
office,
elect representatives.
and Louisiana Republi¬
no
real party workers.
are
Regime
Their
in
tatives
Represen¬
and
Senators
Congress
almost
have
invariably voted against Federal
aid to education; against public
only clubs of prospec¬ housing; against health measures;
tive spoilsmen who meet every against old age and survivors' in¬
four years and send a few of their
surance, and unemployment com¬
numbers to the Republican Na¬
pensation; against public owner¬
tional Convention.
ship of electric power; and against
Was the selection among them measures to restrain and control,
made on the basis of law and evi¬ in the
public interest, the finan¬
dence?
Morality did not deter¬ cial and economic power of pri¬
mine the choice. The decisions de¬
vate monopolies.
pended solely on who owned the
They call their relentless oppo¬
stables
where
the
competing
sition to this magnificent program
slates of delegates were kept.
a fight
against "socialism."
They
are
meantime, the Repub¬
resolutions committee met
lican
secret
weasel
»
and all
us
most
There
inevitable
It
jeremiad.
works. For
our
it
part,
things to all
platform.
a
the
worded
-
cursed
the
concoct
to
produced
They
all
promised
are
Among those few, it promised
to return to the money changers
of Wall Street the temple of our
Federal Reserve System. It would
of
control
it
to
those
whose
selfish
manipula¬
tions have caused panics and de¬
pressions throughout our history.
The platform promises that there
will be no repeal or substantial
amendment
of
the Taft-Hartley
complete
Act.
boasts
It
lican
the ambiguities of Repub¬
promises, and the platitudi¬
preachments of Republican
and
candidates, acquire
nous
orators
the
of
entire
Re¬
rigged
their
having adopted
of protest that
having
Convention
without
and
word
a
they call
platform, they set about the
jusiness of selecting a candidate.
Then took place the final strugjle. Was it a conflict over policies
and over philosophies?
Was it an
effort to replace the Old Guard
with a new, inspiring leadership?
f such were the case, how can we
explain the unanimous and unJe bated acceptance of a platform
i
which
resurrected
all
fossils
the
is
What
been
that
record?
has
It
remarkably
than
consistent for
auarter of a century.
a
guided them for years and placed
their
it
all
matters
of
taxation
poor.
They call that "broadening the
base," and "spreading the bur¬
tax
On matters
trols
and
costs."
affecting price
other
efforts
to
permit
profiteers
to
con¬
stabil¬
exploit
consumers.
-They call that "free enterprise."
On
matters
and
of foreign affairs
defense,
Congres¬
Republicans have voted to
national
sional
strip our defenses; antagonize our
Allies; and to ignore the poverty,
hunger and distress which are the
principal
..
well-springs
of
Com-
munism.
first."
matters
economic
affecting
foreign
imperialism
and
isola-
lationism, and voted amendments
the
Reciprocal
>
Trade
Act,
which would make it unworkable.
They call that "protection of
our
industry."
eapitalize
a
the military exploits
on
good general whose fame as
commander
wartime
achieved
lin
was
lieutenant of Frank¬
as a
Roosevelt—and whose
Delano
contain
to
tenance and
expansion of prosper¬
ity at home.
These
but the head and tail
are
same
A foreign policy
coin.
conceived in the spirit of a Roose¬
Truman
a
domestic
cannot
policy
image of
That
a
the coming
world
spirit of
tied
be
to
in
molded
a
the
Hoover.
issue of
campaign.
fact
central
forged
the
great
Three
ory,
times
in
American
fateful, indeed, has been the
world
any
and
every
program
aid, promote and maintain agri¬
his-
juide
a
—
In 1860,
the Union—in 1916, to
nation in a
war-torn
in
1932, to redeem the
land from financial chaos.
a
the
that
United
policy
world
of
restrained
has
States
the
In
1918
They call that "rugged individ¬
ualism."
Opposes Taft-Hartley Act
the
notorious
Congress,
Republican
foisted on
they
the workers of America the Taft~=**TIartley Act.v That law was de¬
from
drifted
signed to cripple the trade-union
movement; to discourage collec¬
bargaining; and to
company-dominated
industrial spy, the
revive the
union,
the
employment
To
eradicate
must continue
nate
it abroad,
the
it. at.
we
of
tlefields
towering
Woodrow Wil¬
we
has
been
our
pol¬
foreign
and no farther have they
They know that when our
thing, he means it; and that be¬
hind him, ready to back it up,
stands the whole mighty power of
the United States of America.
North
of
Korea
the
invaded
Re¬
public of South Korea.
Here
Was
of
commitment
our
honor?
sacred
world—a vision
a
licans
well
as
Democrats
as
loyalty to the
our
of
the
United
ap¬
com¬
Nations.
fell
little
the
of peace guaran¬
United
States
Republic
itself
the
on
have sustained
sons
four-fifths
casualties.
The
tne
of
goal
total
has
never
general
one
a
j
umph led. It led to Pearl Harbor fer the opinion of our Chairman
and
Anzio,
to
the
Normandy of the Joint Chiefs of Staff, the
real
light of freedom flickered
the morning of Pearl Har¬
magnificent
Russia
embattled.
but
was
hero
Omar
of
fighting men, Gen.
"To extend our
Bradley.
sphere," he
"would lead to
says,
involvement
in
the
war,
wrong
in in the wrong place, at the wrong
The Pacific lay time, with the wrong enemy."
The courageous and decisive ac¬
Oriental war lords.
headlong retreat.
the
to
open
desert his peo¬
does not
But God
tion taken in Korea may well have
the outbreak of a
third
For that hour he had raised halted
of humanity's incomparable world
ple.
one
Delano
fail¬
Roose¬ ure to
pledge
might well have precipitated it.
to
Nations.
The
action of
a
of
dream
Wilson and
a
Appeasement
keep our solemn
war.
as
said that Republicans
Democrats
of
they
are
both
sides
of
collective
Roosevelt
Thomas E.
Dewey—the
Republican."
On pages
entitled
world wearier
third
century,
task
of
tiibe
a
faced
in
the
Democratic
the
colossal
stopping
—
borders.
The
Marshall
Plan
re¬
"Mr.
new
14
"Journey to the Far Pa¬
cific"—a book just off the presses
—Dewey says, and I quote;
"I
regard
intervention
our
in
influence
the
to give
of
.
.
.
and
ex¬
The day the Presi¬
still
right and
not
sent
.
troops to
American
prestige
and
in
would have
east
Asia
.
I
we
am
Nations
whole
Pacific
All South¬
collapsed.
would
probably have
gone Communist by now
De¬
fense of Korea h as given T ope to
the people of Japan, the Philip¬
pines Free China. Southeast Asia,
Western
Europe
eco¬ and Indonesia. It
elimi¬ vitalized
injustice, so¬ nomically, restored it militarily .hope in the great
has
.
also
cause
military
nation.
given
of collec¬
"
/
; *
From each budget dollar in
seven-and-one-half
the interest
pay
will
cents
the
on
1953,
must
war-in¬
Twelve and one-half
to
go
aid
trusted
our
Five cents will
fnenas.
allies and
be used to treat the wounded and
for the
care
veteran.
Sixty cents
is to maintain the
present military
establishment—a
total
five
cents.
cents in
That
of
eighty-
leaves
fifteen
the budget dollar for a.l
other purposes.
Suppose
lor
dinosaurs
into
were
to
moment
a
of
came
political
Suppose
power.
hack
the
thought
they
old-age
away
se¬
curity.
Suppose they were to cut
out aid to dependent
children, and
assistance to the disabled and the
blind.
Assume the
economically
benighted would neglect our nat¬
ural resouces and
developed.
leave them
un¬
Suppose these rugged
individualists
farmer
to
trolled
free
abandoned
the
of
ravages
enterprise,
the
uncon¬
and
the
toiler to the mercies of the sweat-
ship Employer of former dayj.
What if these Republican cham¬
pions of free enterprise scrapped
housing programs, aid to
tion,
the
promotion
of
health
and
the
educa¬
public
construction
of
highways?
Cruel, ruthless and shortsighted
as they might be,
they could not
cut
than
more
Federal
our
cents
of
few cents
a
tax
dollar
dollar of
every
out of
when
85
govern¬
mental
expenditures
are
marked
for
connected
with
the
purposes
very
Yet,
we
in
the
could
be
reduced
although
for
all
I
land,
than
taxes
$40 billion
expenditures
only
are
little
a
twice that amount.
cannot
attempt
saying
by
Federal
purposes
ear¬
security of our
have heard; a
voice
believe
this
was
■
an
to deceive and
mislead the people.
But surely
it was the voice of one entirely
wilfully
uninformed.
In
either
event,
completely
civil
its
untrained
government,
possessor,
in
the
art
of
his
out
mouth proves that he
own
is not
qualified to assume the Presi¬
dency of the United States.
Yes,
curity
we
the
So
of national se¬
high, but thank God,
price
comes
can
our
afford it.
dynamic
flourishing is
and
that the necessarv
expenditure
is
only
of the national production.
economy
staggering
20%
our
been
history has
so
healthy and
so
our econ¬
safe, s~>
productive as it
strong,
so
is today.
It
had
defend Korea,
United
the
.
top-brass
eighty-five cents of
budget dollar for the security
omy
publicly supported his
I still am.
deeply convinced that, if
wasteful
prosperous America must
a
of Korea I
necessary;
civilian
the
spend
each
Never in
I was sure it was
other
Regardless of the restraints im¬
posed,
dent announced American defense
action.
bounteous
our
and we must restrain tnose
from whom no frugality can be
from
Pacific
Communist
further
pansion!
in
the single action which
disappearing
of
million
uisposiuon
of
89 and 90 of his book,
bring tranquillity.*
the
That
men,
in
'
stopped
For
mouths
the only thing to have done.
Hear the words written by Gov.
war.
twentieth
their
they
still
acknowledge that it was the best—
Soviet
Like
not talking out
convention,
American
a
be
must
must be wining
solaiers, I know of
more
When
saved
true in
taken.
was
Alas, however, bepadse
of Soviet Russia, victory^did not
come
well
as
applauded the action
at the time it
as
of
We
vigilant.
as
fruits
nation.
Action in Korea
I
Korea
has
or
Holds Republicans Applauded
political
Blamed for
Union
Soviet
we
tne
cents
vision to the nearly
stood,
means
curred debt.
peculiarly
tragedy of history which records inactive status—who disagree.
where
their puny
Most
political tri¬
people, however, will pre¬
Britain
as
the
Republican Senators — destroyed licans—and at least
that vision. They prevailed in a of the armies now on
bor.
well
strong
de¬
by
on
and
vigilance is not the only
freedom.
of
our
bond?
Although
Republicans in Congress had
curity.
low
Eternal
price
our
the
a system of collective se¬ been
military
conquest
of
It was a practical vision, world Communism—it ha^ been
but it could only work if these the recapture of the invaded Re¬
great United States participated public—ana in that objective vve
in it.
have reached the goal.
A little group of wilful men—
I know thre are some Repub¬
teed
capital
and
of
Was
whose valiant
son.
new
Tom
the sweat, blood, toil,
American
soldiers
of
tears
of the
the test of the United
was
matter
and
a
of
expected.
lingered,
that
doubt
when the Communists
faded away
figure—President
He brought
words
make political
would
out
if any doubt about our national
intentions
Korea
must
home,
the fight to
economic
gone.
France, there stood one
Pyrenees
contain
—
mitment
all Europe lay easy
prey to Soviet aggression. But the
be strong and we must have strong Truman
doctrine stopped Com¬
and friendly allies.
munism at the Greek and Turkish
To
have
you
battle France was fighting the Reds in
the victorious bat¬ Indo-China. Britain was resisting
Flanders
and
of them in Malaya. The brunt of
From the Russian border to the
home and abroad.
far
to
smoke of
the
as
in its tracks —
A fourth such election confronts the remorseless march of godless
us in 1952.
The issue is to ensure tyranny. And this it has done un¬
der the foreign policy and deter¬
the reign of peace, one thing alone
mined
leadership
of
President
threatens
our
tranquility.
The
Harry S. Truman.
menace
is Communism, both at
Says Issue Is to Ensure Peace
This
and plauded
destroyed those mad dreams.
administration
culture.
President
declared
has not been the layed military and economic aid
a Kaiser, a Hitler,
to Korea, thereby encouraging tne
Stalin—the central fact is Communists ot the north, Repub¬
of to the establishment of the United
issue
Kremlin—thus
the
who
be
history
Trie
States
history
perfidy and no other reason — a
With that kind of record, plat- just and lasting peace has yet to
;orm
and candidate, the logic of be secured. The
nations of the
ivents
and not the Republicans world have pledged their honors
952.
of
fact
United
the
far
They give the lie to every
carping speech made at the Re¬
publican convention
by orators
their families.
mad dreams of
due
lave
this
emblazoned.
the
and
war.
word
modern
of
Unfortunately,
of
Let
ever
Nations.
the paramount
is
The
in the
executed
velt and
lessened the chances of
—
he must be dedicated to the main¬
of the
safety4
own
Thus
Dewey.
earnings to finance the staggering
military costs of preserving lib¬
erty.
Presi¬
the
peace,
Republican opponents in this year
Convention
a
the man
from
Inde¬
equipped not only leader
Communism abroad— pendence, Missouri — says some¬
War
opposed
tive
the
Cold
the
our
in
to
of
is
Democrats,
creased
be
our
of
1925, for the most part,
The Republicans in
Congress have
In
keep
must
the brief and undistinguished his¬
to preserve
80th
Deal
Fair
—and America won its war.
fellow
Europe
determination
icy
heroes—Franklin
my
Western
common
of
United
the
of
eputation in the rearmament of
velt.
Europe was developed as the dep¬
We may view that hour now
uty of Harry S. Truman. He re¬
with vibrant pride. By land, by
mains a complete novice in the
field of civil affairs, he whom the sea, and by air, America fought
the good fight, fought it under
Republicans present as a "new
Africa's blazing sun, in
the
mce."
Rather they should admit
Aleutians' smothering fog, on the
that "the voice is the general's
storied streets of Europe, and in
voice, but the hands are the hands
the steaming jungles of the Orient
if Thomas."
That,
O. has united the free
of
security through
D. gone—you shall go no farther!
beaches and Okinawa.
decision of the electorate:
Since
to
To
dent
The
of
the
and
Franklin
of
of the Lord 1952.
trade, they have teetered between
to
confined
was
selfish
opportunists
placed victory over sincerity, and
the
spoils of office above the
claim of loyalty.
They hoped to
tory
They call that "helping America
On
knowl¬
whose
the
For,
a
ize the economy, the Republicans
in Congress have uniformly voted
to
Roosevelt
and
Deal
New
Harry S. Truman.
the
Republicans have invariably voted
to spare the rich and soak the
dens of governmental
one
other waters.
to
On
head
navigation
of
edge
foreign
both
the
poli¬
domestic,
the principles and
to
cies,
nurious set of resolutions
publican record in Congress dur¬ of antediluvian Republicanism?
ing the last 20 years.
This was a battle between the
They do not tell us what that
stalwarts
and
the
opportunists.
record is, but it's on the books,
An ungrateful crew threw overinscribed for all who choose to
ooard the faithful pilot who had
read it.
more
loyal
During
America
President,
years,
Democratic
a
alone
Party
challenge.
four
next
or
significance.
Finally,
ic.
give
iorm,
men.
very few cases where
Republican platform is specif¬
the
only in the light of that
record in Congress that the gen¬
eralities of the Republican platis
It
the
In
in
Platform
Republican
Attacks
the
of
that
meet
can
needs
labor from its chains."
"to free
Democratic
The
in¬
anti-labor
the
and
nations
tive
Nations."
of
means
junction.
The Republicans call that a law
for
run
nor
nor
Georgia
cans
vote,
blacklist
defend it-
repel
the only
preventing World War further aggression. The Mutual
III, the only way to meet the chal¬ Security program has strength¬
ened our friends and thereby in¬
lenge of our times.
is the only road to peace,
Democratic Party
the
it to help
■
N. A. T.
The containment of that menace
In
enabled
and
otry on which Communism breeds. self.
Thursday, July 24, 1952
..
.
is
true,
as
Herbert
Hoover
asserted, that the taxes occasioned
by this seven-year effort of Harr r
Truman to preserve human lib¬
erty.
are
than the
more
amount
levied in all previous vear*.
it
is
also
true,
as
reelected
to
President
Truman
income
was
state,
more,
But,
Hoover
Mr.
that
unckr
the
nation0!
even
after Pm
pavment of taxes: than the to*~l
rational income before the pay-
Volume 176
Number 5136
.
.
The Commercial and Financial
Chronicle
.
|
(309)
ment of
taxes, in all the Republi¬
I shall not further
belabor you
Administrations in history.
with statistics—abundant as
can
they
in
are
Points
to
"Social
Revolution"
in
U. S.
Since
tion.
by
The
the
social
revolu¬
achieves
its
social
revolution
objectives
will
that
be
the
has
the record of the last 20
The
Democratic
of
not
the
American
because
of
the
of
homes
our
might
made possible
been, have been saved or
by Federal home mortgage
Deposit
Insurance
Corporation.
vestments
years.
of
the
our
GI
Our
in¬
are
safer because of the
and
Exchange Commis¬
diploma
on
the wall
been conferred under
of Rights. Our chil¬
electorate, might have
faults
legis¬
lation. Our money in the bank
is
insured by the Federal
Party confi¬ Securities
dently looks to the continued sup¬ sion. The
port
uncontradictable
Democratic
Party in 1952
and proudly on
squarely
the
the average American
much better off. The
is
ownership
Democratic
stands
assert
truth
instrumentality where¬ family
great
is, and
Party.
The
great
a
I
ex¬
Bill
rivals, but because
of the merits dren
are
better
clothed.
Our
and accomplishments
provable by youngsters are better educated.
the Democratic record of
The family health is better
years of
pro¬
patriotic service.
To
tected
the
wage earner, it can
that in terms of
purchasing
and
the
brighter than
say
future
This, some would call, "creep¬
power
your income has almost trebled. ing
socialism."
I
hail
this
as
It proudly asserts that full em¬
democracy, vindicated in action—
ployment is now a national ex¬ and I mean democracy with both
perience—and we have unemploy¬ a small and a large "D."
ment
Republican
compensation to soften the
blow for those without work.
In
deal
1933
should.
talk
orators
about
great
a
corruption.
They
party has a long
out unemployment compensation history of first-hand
knowledge of
insurance, faced the future with¬ the subject.
The
out jobs and without hope.
Democratic
Party
pays
15
The
million Americans, with¬
wage
of
earners
Their
tribute
America
will not forget. Gone are the
days
of the soup kitchens, the
to
employees
exposed
marchers.
few
wage
will
earners
99.84%
whose
of
The
not refuse the hand of their friend
punished
deserve it.
Democratic
equal vigor,
faithfulness
of
of the United
their
trust and
States.
To the
farmer,
we can
wheat, 15-cent
To
of
corn,
the
former,
end
of
1951,
in
the
un¬
disloyal
to
those who
have
we
their
of
years
tion
Democratic
been
Administra¬
have
prevented the private
monopolists from further grabbing
the
of
resources
the
Policy Regarding
The
people.
Atomic
Republicans
not
Energy
only
by
philosophy and by heritage, but
by their recent record in Congress
dedicated to
are
releasing the
monopoly.
'
Atomic energy which up to now
has been an engine of
war, should
be the handmaid of undreamed-of
productivity; the means of pro¬
moting peace and providing in¬
describable
prosperity; and the
wiping out the
suffering in which
instrument
squalor
Communism
pagan
With
other
our
the
serve
for
and
does
flourish.
it must
resources,
purposes
of
Illinois Central
new
of atomic energy to private
power
What may be the final step in
its comprehensive long-term bond
3% and expenses
retirement and capitalization sim¬
increase
control.
Net
were
income
under good
showed
act
of
18%, with the rise kst
plification program has recently May alone
amounting to nearly
been announced by Illinois Cen¬
43%. At the time of this writing
tral. The road is
the
June report has not
seeking ICC au¬
yet beem
thority to sell $62,000,000 of Series released.
Unquestionably, how¬
"F" Consolidated
Mortgage bonds ever, the company was adversely
privately and free of competitive affected by the steel strike and
bidding. Earlier this year the com¬ this influence is still
pyramiding
pany sold $25,000,000 of Series "D" as the strike
drags on and other
Consolidated Mortgage
41/4s, the industries are forced to curtail or
raising
up proceeds
to be used to pay off shut down. Even at
that, most es¬
of various mortgages timates place probable 1952 earn¬
advantages to maturing during the period 1952- ings at least a dollar or two abovet
the
young;
In
assuring
dignified 1955.
comparison with this 1951 share results.
comfort to the
elderly; lightening 41/4% rate realized in the earlier
Aside from the question of cur¬
better
the
afflicted; of providing $26,749,000
educational
burdens
the
of
toiler
the
on
farm; in the factory, at the office
and
of
the
home, and increasing
cultural
and
recreational
op¬
operation
mately 4%"
Proceeds
portunities for all Americans.
prosecution.
the present
To whom do the American
peo¬
application
states that the company will seek
a rate of "no more
than approxi¬
on
the
from
bonds.
new
the
sale
of
rent
earnings
the
apparent
of increased dividends
before the present year is
out, an¬
alysts
the
and
likelihood
look
Central
favorably
because
of
Illinois
on
the
indicated
bonds, if the operation is ap¬ favorable long-term traffic pic¬
The latter, we leave to the re¬
ple wish to entrust these fateful proved by the Commission, will go ture.
The company has done at
sponsibility
of
the
to redeem the three series of Joint
Republican days at the dawn of a new age?
particularly good job in develop¬
Party and tfi'e judgment of the
To the Hamiltonians of
today— Refunding 4s, 4V2S, and 5s of 1963. ing new coal traffic and, along
American
30-cent
5-cent cotton,
3-cent hogs, and 3-cent sugar. In
1932 farm prices were 45% below
parity—at
—
the
the
relentless
days
with
ventions.
boast that
up—production is up—
are
income is up.
Gone are the
those
—
the sick and
denounces
public
false
corruptly attempt the "steal" of
party nominations in national con¬
Boasts of Farm Prices
prices
the
Party,
they will support again the
Democratic nominee for President
—
is
vigor, it has
and
who
Federal
character
above suspicion. With
apple
peddlers and the eviction of bonus
The
the
privilege
My fellow delegates—
rejoicing in an America bountiful
private monopoly and the pub¬
Let them form their battalions in its
opportunities—faithful in its
interest was ignored.
captained
by the
lords of
the duties.
Thus, under Harding, the Ohio press, the oil tycoons of Houston,
We have clashed
before.
We
gang tried to auction off Muscle and the money changers of Wall
shall fight them in the cities
and
Shoals to a plunderbund.
Under Street. Let them form their forces
fight them in the towns. We shall
Hoover, they placed the newly of malcontents
the poor made
fight in the counties and fight in
developed marvels of radio in the wealthy who bemoan the burden
the precincts.
hands
of
private
monopolists of free men in a challenged world.
We shall never
subject to little, if any, restraint.
Let them ride to battle in their
surrender. Cur
Fortunately for the American motors, forgetful of the day when cause is just.
We have vanquished them
people, their votes in 1932 made there was no chicken and there
be¬
certain
that
the
fore
we
shall vanquish therm
valley of the was no pot.
Let us form our
Tennessee, the Columbia and other
again.
army of the
great rivers would be developed thinking men and mindful
We have triumphed before.
women,
in
the
public
interest.
Twenty the honest toiler, the fruitful tiller
We shall triumph
again.
much
before.
ever
power was treated as the
of
lic
Americans Are Prosperous
1932, this nation has
perienced
their persuasiveness.
electorate.
the
7%
The
above parity.
Civil
Rights Controversy
Republicans—who
pri¬
serve
new
As
of
the
end
of
last
year
these with
marily the rich in the belief that bonds were outstanding in the
amount of $62,107,820.
their prosperity will seep
They are
through
power
atomic
development for
this trend
energy plants,
is expected to continue.
Also, and
by first lien on a substan¬ particularly in the southern part
part of the mileage south of of the system, the road serves a
cents, the net income of the aver¬ about civil rights.
the Ohio River. Retirement of the dynamic
growth territory where?
who
age farmer has increased 10 times,
The Democratic
Party may take believe that the well-being of the Jqints will give the Consolidated further industrial expansion is?
and in
purchasing power, four legitimate pride in the fact that
Mortgage bonds a first lien on vir¬ looked for. On the basis of these*
many is the base upon which our
times since 1932.
•
racial and religious discrimination
tually the entire system, the part considerations, it is widely felt
universal prosperity must rest?
In- 1932 the sheriff was at the and
excluded
prejudice have been enor¬
being the valuable so- that increasing investment confi¬
I
could
leave
you
with that
door
of
the
average
American mously reduced in the last
called "Englewood Cutoff."
This dence in the company and its se¬
twenty question to which all of you so
farmhouse.
There
were
64,000 years.
particular
mileage
cannot
be curities is almost inevitable.
well know the answer.
farm foreclosures
in the
single
mortgaged while the Debenture
My basic philosophy, my ex¬
But, before concluding, I want
year of 1932. Today the sheriff has periences in life and
my
social to share with you a simple yet 4%s, 1966 are outstanding.
S. Y. Hord Director
gone. American farmers have in
Completion of the recently pro¬
background impel without hesi¬ beautiful affirmation of our
Dem¬
their holdings an equity of 91%— tation an
Stephen Y. Hord, of Chicago^
posed operation would leave the
undiluted belief in the ocratic faith which another
solemn
about 10 times as much as the
has been elected a Director of the?
company with one small non-call¬
legal implementation of full civil moment of our
history brought able lien of
total farm debt.
$735,000 due in 1962. Rotary Electric Steel Company o5!
rights and full
Farm
50%.
output has gained almost
terms
of
dollars-and-
Republican orators and the
In
end, I could recite the
of
rural
electrification,
public power, conservation, and
other aids to agriculture, but
they
all lead to
sion.
not
one
The
1948
common sense
farmer
proved
does
that.
In
and common appre¬
ciation, he will support again the
Democratic nominee for President
leaders of
ousiness,
we
stockholders. Corporate enterprise
operated at a loss of $3V2 billion.
In 1951, American corporate en¬
terprise,
after
taxes, earned
a
profit of $18 billion.
In
1932, only $2^ billion went
plant
expansion;
in
1951,
into
more
than $23 billion.
of
color, creed,
age
or
racial
origin.
On this issue, as in all
others, the Democratic Party must
forever
move
Tonight
o
it
forward,
is
joy—for
my
me
a
great opportunity—to give testi¬
mony
to my Democratic faith,
to
and
a
proclaim
the
greatness of
great political party.
Party
has
been
in
power
for
twenty years.
It has made
promises and it has kept them.
During these past twenty years
Party has written
continuing record of high wages
the Democratic
a
for the worker in
income
rate
for
period
a
industry, of high
farmer, of corpo¬
beyond previous ex¬
and
the first postwar
perience
is
the
profits
-
without
depression.
a
record to which
II
every Demo¬
can
point with absolute and
undiminished pride.
Today, America stands
threshold of the atomic
should be
faithful
a
to
golden age.
at
age.
If
the New Deal
the
It
we are
and
the
were only six such failures with
the depositors protected
by insur¬
Fair Deal, it will be
ance.
in America, the Republican Party
was in power.
True to its philos¬
I
don't
know
what
American
big business will do in this
ing election.
com¬
But, I do know what it should
It
should, figuratively, each
night, get down on its knees and
do.
thank
Providence
enlightened
above
for
the
economic
the
As
it
created
When
nomic
which
power.
Demo¬
a
golden age.
of steam
developed
network
of
private
exploited the
which
the
electric
Republicans
All
the
Jeffersonians
Jacksonians—the Democrats
one
the
and
of America's most gifted
age
again
dawned,
were
in
nation,
electric
tial
somewhat less than $35 million of
Detroit,
ac¬
cording to an~
Debenture 4%s, 1966, and five se¬
ries of
the
Consolidated
Mort¬
My mind fleets back to Flag
Day, June 14, 1942, America had gage
bonds, aggregating $115,857,joined forces with Britain—then 000 and
maturing at various times
alone—yet in her finest hour. The from 1974 to 1982.
Total
non-
nouncement
by
ing setbacks.
$180 million
since
the
beginning
were leadened
Additionally, the road will
by
clouds of black despair—the great virtually have achieved its goal of
Republic of the West was girding becoming a one-mortgage road.
Until a couple of years ago it had
for the fray—yet—time was
on
one of the most complex
the side of the
mortgage
enemy.
capitalizations to be found among
Quotes Poetry
the major carriers.
Presumably,
The gallant warrior, Franklin except for
regular sinking fund
Delano
Roosevelt, inspired Ste¬ operations, this will end the debt
phen
Vincent
Benet
to
set
to reduction program.
poetry
that
nation's aspiration
our
hour.
dark
Let
in
generally expected among
tonight railroad analysts that now that so
us
adopt it
as
our
lips, let
us
storm the bastions
our
us
From
prayer.
It is
our
much
of the
destiny beyond the stars. Let
ask divine assistance in its ful¬
fillment.
it
has
once
is
been
done
to
alleviate
W..
o
f
board
el*
directors
oil
Rotary.
A
partner
in the private:
banking
of
firm
Brown
Brothers Harriman
Mr.
also
Stephen
Y. Hord
&
road
Company,
mobile
a
isi
Director
of the
Illinois*
American
Insurance
Co.,
Hord
Central
Rail¬
Auto¬
Company, and
Company.
the Clearing Machine
formidable debt situation,
reasonable
to
expect that
stockholders may look forward to
liberal dividend policies. Out
more
of
aggregate earnings of roughly
$129.00 a share in the 10 years
And may I quote:
A.
Chairman
the
of 1941.
The heavens
J.
Iglehar^
day of infamy had been followed equipment debt will be down to
by repeated defeats and stagger¬ $151,335,000, a cut of more than
Richard
Gray Opens
BROOKLYN, N. Y.
Gray is engaging in
—
a
Richard
securities-
business from offices at 3626 Kingsthrough 1951 only $3.00 a share Highway. Mr. Gray was formerly
(paid in 1951) was passed along to connected with J. May & Co.
Shall know bread and
peace,
the equity holders.
Prior to the
That he shall know justice and
With J. A. Lynch Co.
long
dividend
drought,
which
Righteousness, and freedom and started during the depression of
(Special to The Financial Chronicle)
security,
the early 1930s, Illinois Central
ST.
CLOUD, Minn.—Aloys «T,
And equal opportunity and an
had enjoyed one of the best div¬
Feneis, Jr. has joined the staff of
equal chance
"Grant
us
a
faith that
common
man
idend
To
Not
do
his
only
best,
in our land
The world,
this
And in
toward
make"
records in
our
the
railroad
in¬
dustry.
but
Last
us
J.
A.
St.
Illinois Central re¬
ported earnings of $12.72 a share
Lynch Company, Inc., 161®
Germain
Street.
Lanam
Opens Office
year
available
faith, let
The clean world
over
secured
below?
to
throughout
peoples of America.
the
we,
a
monopolies
which restored
system
age
ophy and'its heritage, it sold our
birthright for a mess of pottage.
It gave away our public lands, and
philosophy
vitality to the eco¬
crats, found in shambles.
those
Or
pens.
crat
During the years 1930 to 1933
inclusive, there were more than
13,000 bank failures in the United
States, all without deposit insur¬
ance.
During 1947 to 1950 there
to
from
That
present these challenging facts. In
1932, there were no profits, either
before or after taxes for
your
Re¬
little
very
oppor¬
of the United States.
the
say
tunity for all Americans, regard¬
less
irresistible conclu¬
American
forget;
To
platform
economic
Without
benefits
publican
for
the
common
stock.
SIOUX FALLS, S. Dak.—Mermarch Year-to-year comparisons in the
early months of 1952 were very win O. Lanam is conducting a.
hands
can
favorable.
Gross
for
the
five
months through May was up about
securities business from offices afe
the
Kresge
Building.
The Commercial and Financial Chronicle
26
,.
24, 1952
Thursday, July
.
(310)
OPEN-END REPORTS
Waddell & Reed Add
ASSETS
(Special to The Financial Chronicle)
Mutual Funds
PRINCETON, Minn.—Henry W.
has been added to the
Milbrath
Reed, Inc. of
Waddell &
of
staff
Kansas
RICH
By ROBERT R.
City.
This
Insti¬
tutional Investors Mutual Fund,
an
investment
company
being
formed by savings banks in New
York
under legislation
enacted
earlier this year, were appointed
last week under authority of the
Council of Administration of the
ORGANIZING directors for
Fund
new
is designed to
your
upon
corporated in Canada, or whose
principal activities and interests
are
in Canada, and which show
of the promise of sharing in Canada's
expected economic development.
State of New York.
Vance,
Sanders & Company,
Institutional
Investors Mutual
which will handle distribution of
Fund, Inc., which will be incor¬
shares of Canada General Fund,
porated under the Stock Corpora¬
tion Law of New York State, will presently acts as principal under¬
writer of open-end funds, with
be of the open-end management
assets
exceeding $630,000,000.
type and owned exclusively by
These are Boston Fund, Massachu¬
savings banks of New York. The
setts Investors Trust, Massachu¬
company will be registered with,
setts
Investors
Growth Stock
and subject to, the regulations of
Fund, Century Shares Trust and
the Securities & Exchange Com¬
from
from
request
investment dealer, or
&
SECURITIES
NATIONAL
CORPORATION
RESEARCH
120 BROADWAY, NEW
YORK 5, N. Y.
subject
Board
Banking
to
regu¬
the proposed company will
tax exempt as to distributed
pany,
be
amounts
distribution
such
if
income,
in¬
of
90%
least
at
to
come.
will
Investments
be
restricted
securities in which
those
to
sisting entirely of
banks may invest individu¬
ally.
The amount of stock held
of any one corporation may not
exceed
5%
of
its
outstanding
WALL
I NEW
mmm
GENTLEMEN: At
me
a
no
YORK
mm mm
V
rnrnX'-mmr*
Canadian Fund, Inc.
Name.
Address.
City
Institutional
of
tors
L.
PERRIN
coln
Savings Bank,
T. BUNNELL,
Asst.
CHARLES
dent,
M.
Lin¬
Vice-Presi¬
Community Savings Bank, RochesDIEBOLD,
R.
President,
Savings Bank of Buffalo.
June
in the company's in¬
during ike three months
included purchase of
30
Q. common,
were
alloys—a
very
with
aluminum
of
kind
FROST,
KENNETH
dent.
of
cash
—
follow¬
1,800 to 3 500, RCA
Motorola from
of Mason-
Sales of 2,000 shares
Ske<||mar, eliminated
ite and 1,000
these
from
stocks
J.
Vice-Presi¬
Exec.
WILBUR LEWIS,
dent,
A Mutual
President, Union Dime
W.
Dime
Prospectus may be obtained
from investment dealers or
Corporation
holders
Vice-Presi¬
Farmers'
&
Jr.,
Savings Bank of
D.
through
Savings Bank.
2nd
Vice-Presi¬
Bank, Albany.
EDWARD SCHERR,
CHARLES
J.
SWAYZE,
Savings
C.
Vice-President,
Brooklyn.
President, Middle-
VAN
President,
PATTEN,
Binghamton Savings Bank.
FRANK WOOD,
Senior Vice-President,
Savings Bank.
'RICHARD
A.
HOLTON,
3
the
of
State
of
New
the
portfolio;
a
drill one or
The workers would
pistons they were
making and—crack!—the drill and
tap would be snapped in two.
Then,
day,
one
machinist acci¬
a
dentally spilled a bottle of Coca-
and drill were in
fine condition!'
Coca-Cola people
The
busy trying to discover
r
FOLLOWING
Vice-President,
the
initial
they^nvolve greater
price risks than .fixed dollar types
of
investment^ But we believe
there is an ihcr'Shsing conviction
on the part ok i«dividual and in¬
stitutional
inygs^prs that stocks
may
represent less purchasingpower
risk ^arrS
at r; the
same
time
great^P1 opportunity for
values
...
.
.
statement:
asset value of Afcft«*balanced
recently published book¬
"In its
'Share
Ownership
in
the
United States,' the Brookings In¬
of
all
share
the
estimates
investment
shares
4.2%, in the^rsL six
1952.
owners
months
Canada General Fund
one
ey stone
company
Co.
as
an
open-end
with
on
Tuesday
investment
Vance, Sanders &
underwriter for the shares.
of
old, it
every
vestment
types
is
seems
six
suggestion we will
happy story is
of the manufacturers1 of
And the only
this
make' about
owner
Whitehall Fund's net assets to¬
taled
June 30 and
result
appreciation in market
$2,496,428
on
thus continued to grow as a
both
of
investments
of
values
tinued
sales
assets
on
above the
and
of
double
a year
earlier
the
$1,238,841
reported on June 30, 1950.
According
there
was no
to
Mr.
Randolph,
change in the fund's
during the hal|
although there were a num¬
investment policy
year,
ber
of
changes
held in the
In
the
in
securities
the
portfolio.
common
stock category
funds
tfMi
IfcE'
mr.;.
of
in¬
of all
of Affilitated
shares
Canada
;-
"flSUw
mtt&.M'-
Fund."
Fund
Custodian Funds
INC.
mm-'
American
BOND, PREFERRED AND
■4feaww-
COMMON STOCK FUNDS
your
ten
Ptmpectus from authorized investment
Business Shares
Company
,
9, Mass.
I'rospcclu.*
upon
request
Funds.
DEVONSHIRE STREET
prospectuses
D-45
NEW
61
Lord, Ahbhtt & Co.
Addreu......
City
State.
New York
—
Chicago
—
Atlanta
—
Los Aug tie*
CHICAGO
YORK
Broaiway
or
\
.
BOSTON
T
Name
dealers
SANDERS & COMPANY
111
describing
Organization and the shares of your
me
izo
con¬
Net
32.7%
shares.
30
$1,881,020
about
and
were
new
June
if about
owners
company
an
as
months of
the distribu-
Adding^,b«ek
at
Paine, Webber, Jackson & Curtis,
fund's
increa5$<F4£> $19.68. or bv
public
shares of its cap¬ (after eliminating duplication on
$10 per share by a the basis of probability sampling)
nationwide group of investment at 630,000.
While this study is
on
firms headed by Bache & Co. and based
figures
now
several
stock
became
Please send
now
are
what the
"magic ingredient" is.
earnings, dividends and property
sale of 1,100,000
50 Congress Street, Boston
tough
high
expanding popu¬
growth.
while
Illinois, Michigan,
Minnesota,
Missouri
and
Ohio ACCORDlNt^To" the semi-annual
each has about 5,000.
Says the report of the*WMtehall Fund the
stitution
ital
an
7,500,
let,
York Savings Bank.
East New
of
its
solely
York, 13,600 of the State of Cali¬
fornia. Pennsylvania is third with
Dollar
Berkeley St., Boston, Mass.
distribution
dealers. Of the 100,000
approximately 14,000 are
residents
town Savings Bank.
CORNELIUS
attain
to
OLCOTT,
Mechanics'
dent,
A.
River
East
companies
wide
such
of all
second
the
shares and the first to do so
Savings Bank.
C.
MIDDLEBROOK,
DOUGLAS
Dealers.
is
Fund
investment
Savings Bank.
ALFRED
Investment Fund
research and
».
Securities
The
Dry Dock Savings Bank.
H.
HARDER,
Vice-President,
Buffalo
The Keystone
al¬
worked
silicon content.
two holes in the
4,400 New York Central, 2,500
of the National Association
firms
West-
WILLIAM
a
to
Vanasil
on
drills
tool
F. Randolph, President, states that
lation; (2) inflatfbfT.
.
Common
ABBETT & Co. sponsors stocks are one oMhe most logical this gain in asset value has been
of
Affiliated
accomplished with approximately
Fund,
Inc.,
an¬
ways to seek Jo participate in in¬
half of the fund's assets repre¬
nounced Wednesday that
Affili¬
dustrial growth ...Qg; to attempt to
sented by cash, bonds and pre¬
ated had more than 100,000 share¬
hedge against inflation. Moreover,
holders as of July 10, 1952, all
ferred stocks and half invested in
by historical KstaMBards they still
common stocks.
attained through sales by member
seem
attractiver^n
relation
to
tor.
CHARLES
19 2 5*
Changes
vestments
his
breaking when he
ways
LORD,
President, Onon¬
Bank, Syracuse.
BABCOCK,
County Savings
daga
•FOUNDED
because
manufac¬
close up shop
about to
was
.
J. FRANK BAUMANN, Vice-President,
em
H
pany.
Mutual
Investors
President, Jamaica Savings
Bank.
Parker
turer
anticipated that the basic
is
JOHN ADIKES,
The
assets,
S.
story at the begin¬
ning, it seems that one
electrical
companies, Do¬
stocks of 61
ing
Fund:
200
around.
gets
chemical sfftd'drug 9.3%,
equipmCftt and electric
utility 8.2% eachfrailroad 6.7%,
steel 5.9% and retail trade 5.8%
Common stocks rejptesented 90.4%
of assets, preferred stocks 1.2%,
the
metal worker
one
investment policy will be to
obligation please send
prospectus on
emptied faster than ever if
be
To start the
corporate bonds Q?4%", and U.
Governments arttfxash 8.0%.
dispensers
factories may
The Coca-Cola bottle
in metal fabricating
with 'largest invest¬
by industryTn oil 14.6% of
ments
'Mississippi
Fund Bulletin
quoted in the "Hudson
minion of Canada bonds and cash,
that some
had a market value of $15,269,810 holding of Canadian Pacific was
main¬
metal-cutting
"coolants"
reduced from 15,100 to 6,300, and liquid
tain
reasonably full investment equivalent to $11.91 per share. It of Deere from 12,000 to 10,300 try tasting
their stuff.
Maybe
was announced that there are now
in common stocks paying satis¬
they can bottle it.
shares.
more than 8,500 stockholders.
factory dividends.
Reported by the Aluminum Company
In the semi-lEnnual
report to
oj America to "Tide Magazine."
It
is
expected
that
Savings
EDGAR, RICKER & Company, shareholders,
President
Edward
Banks Trust Co., wholly owned by
207
East Michigan
Street, Mil¬ P. Rubin says the^Selected Amer¬
New York State savings
banks,
waukee, Wisconsin has become the ican managemeflfc^believes two of
tion of $1 per share from gain on
will be closely affiliated with the
distributor for the Wisconsin In¬ the
most
important f long-term investments made in December,
operation of the new company and vestment
Company. Edgar, Rick- forces at work in the American
will serve as the principal invest¬
1951, the June 30 asset value was
er & Company is a wholly-owned
economy are (YPffersistent indus¬
ment advisory agency.
10.8% greater than on the same
subsidiary of the Milwaukee Com¬ trial growth bas*d upon scientific
date a year earlier.
The following are the organizing Direc¬
Mr. Francis
It
"CALVIN BULLOCK
41Life on the
Twain's
Mark
experience of
1952, assets, includ¬
On July 18,
shares.
STREET
do it."
from
4,900 to 6?500, Studebaker
ing a successful underwriting by
from 5,000 to 10,#00. Zenith from
a nationwide group of investment
from 4,000 to 5,200,"
firms.
sav¬
ings
ONE
mistake of
Ma¬ Cola over the metal he was drill¬
1£Q0 -Halliburton,
value of net assets of Canadian rine Midland,
ing. He watched, unbelieving. The
Fund has taken place in the last 1,400 Rock Island^300 Carrier and
drill was cutting through cleanly
two months, according to figures 200 Sunbeam (aiknew* holdings)
and
easily.
He rushed to the
released by Calvin Bullock, man¬ and increase initbe holdings of
"Coke"
machine with a nickel,
General
Electrics .f r o m
1,000
ager of the fund.
came
back, and spilled more of
to
5,000 shares, ^General Motors "the
The company became an openpause that refreshes"
over
from 4,000 to 6$00, Minneapolis
end mutual fund on May 14, 1952,
the metal. The drill cut the metal
Honeywell
from&T,500
to
2,500,
with
$10,611,000 in assets—con¬
as
it would soft butter. And tap
regulated investment com¬
a
St.
it for
dollars, and it was the
my life that I did not
I ever saw
have bought
could
I
six million
companies,
than 40% in the
A GAIN of more
lations.
As
Louis
time
first
"The
mid-year thtf compapy had
investments in setfurities of
102
6,100 shares of
be
Random Shots
30,
At
of Boston.
Bond Fund
The
the
mission, while investment in
shares by savings bdnks will
June
at
provide American investors with
participation in a diversified in¬ vestment income ^totaled 24c a
vestment consisting principally of
share, the same as4n the first half
common stocks
of companies in¬ of 1951.
Savings Banks Association
Prospectus
American
Selected
OF
1952 were
$23,941,893 compared with $22,472,260 at the 1951 year-end and
$19,502,492 on June 30, 1951. Asset
value per share on June 30, 1952
was $13.96, comparing with $13.57
at Dec. 31,
1951 and $12.77 on
June 30, 1951. Dividends from in¬
Shares,
South LaSalle Street
LOS
2io
ANGELES
West Seventh Street
1
Number 5136
Volume 176
.
.
Investments in Sinclair Oil, So-
j
cony-Vacuum
Utilities
South
Middle
and
increased, while At¬
City Electric, Goodrich, Na¬
lantic
dustry
ident.
(24%);
At this
above the
a
in
folio
&
Electric and Mid-Continent Petro¬
leum
rise
in
the
second
continued to
year to reach a record $27,736,444
on June 30, 1952.
This was 37.4%
above
the
$20,191,206
earlier
and
of
assets
the
the
over
public
represents
months
doubling
a
this mutual fund
of
past two
In the
12
years.
Francis
F.
30
made
Randolph,
Chairman of the Board and Presi¬
dent,
Broad
Street
Investing's
growth is attributed not only to
appreciation in market values of
the
of
of
funds
capital
regular
in
investments
of
90
cents
Investors'
investment
unchanged during the
was
quarter
of
1952
the
and
purposes,
in
common
for
all
to be fully in¬
stock,
which
accounted for 98% of net assets at
the end
tinued
of June.
to
be
the
Oil
stocks
con¬
largest industry
value of $6,790,-
favorable
and
The
752 shares
as
1,226,-
June 30 of this year
on
compared with 5,258 sharehold¬
and
shares on the
same
date last year.
Net assets
were
equivalent
to
$22.60 per
share on June 30 compared with
$21.57 at the beginning of the
'year and, after adding back the
distribution from gain on investers
of
'ments
'in
1,006,689
cents
December,
increase
of
'of June
/
73
share
a
made
1951, represents
16.4%
from the
an
level
30, 1951.
Commenting
prospects, Board Chair¬
Randolph stated that a look
at the
forces that have accounted
for the
"high level lull" in business
'.activity prevailing for the past 12
months
or so
favorable
indicates that
situation
developing.
He
a
to be
appears
went
more
to
on
add
that
"aside, then, from a drastic
change in the international or mil¬
itary situation, which would have
marked
ill-effect, in
States,
the
the
prospect
'maintenance
is
United
for
the
of
general business
activity at high levels for the re¬
mainder of
holdings
ac¬
counted for 91 2% of Broad Street
of
which
has
Manufacturing,
major interest in
a
atomic materials and engineering,
and 5,000 shares of Shell Oil.
Holdings
Arizona
increased
Public
included
Service,
Common
stocks
to
| single
oil
of
companies
making
'Gas
Electric
&
'duced into the
was
portfolio
name.
Increases
holdings
were
public
also
as
in
introa
new
portfolio
confined
to
the
utility
Southern
Wisconsin
Power &
field and included
Company, Middle South,
Electric
and Wisconsin
to
emphasize growth stocks
in its
portfolio, increased to $29,321,128 on June 30, 1952, accord¬
ing to the six months' report re¬
leased
by Francis F. Randolph,
added
the fund
off,"
that
the
arma¬
been stretched
requires
less
The fund in the first six months
of
this
fiscal
continued
year
the
cautious investment policy it had
begun last
variation
EATON
HOWARD
&
Master
E.
R.
Balanced
Fund increased in size to
186
from
first six
$86,632,during the
$77,727,899
months of 1952. This
was
largely due to.purchases of
shares in the Fund.
to $32.24
new
The per-share
asset value moved up from
$30.99
during the period.
The semi-annual report to some
17,000
shareholders of the Fund
showed the following changes in
the balance between the different
types of
securities owned by the
Noting that the
between the high and
year.
the low of the Dow-Jones
Bonds
Shares
7.37%
6.15%
Corporate Bonds
14.22
Stocks
Preferred
16.74
17.59
16.99
62.04
58.90
—
Common Stocks
100.00%
&
HOWARD
Stock Fund
assets of $14,640,286 on
30, 1952, compared with $12,570,377 at the 1951 year end. The
per-share asset value increased
from $22.86 to $23.81 in the first
June
half of the current year.
The
semi-annual
shareholders of the
88% of the assets invested in
mon
cash,
stocks
U.
S.
the
and
to
report
Fund showed
com¬
in
balance
Government
bonds,
STREET Investment Cor¬
STATE
period increased 31%.
reported
net
assets
Fund
$10,07*6,563 on May 31,
increase of 4% since the
were
1952,
an
beginning
of
its
fiscal
June
on
30
Mutual
reported
$21,731,466
$9.89
or
Fund
assets
net
share
per
on
of
com¬
pared with $24,213,784
1951
before
bution
on Dec. 31,
capital gains distri¬
a
of
$2,337,122
1952.
Feb. 18,
in
split
reported
net
$14.62
or
a
June
on
assets
of
share
per
pared with $3,568,250
share
on
30,
$5,-
com¬
$13.15
or
per
earlier.
year
These
of
figures
dividends
for
the
first
June
share
1952 reported
30,
of $32,542,629
or
on
total net
$14.58 per
ing.
six
HUDSON FUND
reported
total
on
net
June
30, 1952
assets
of
$3,-
673,379 on June 30, 1952, for a
16% increase during the last six
months
from
$3,075,581
on
Dec.
36%
sets
and
the increase
was over
in net
as¬
52%. Net asset value
share increased from $23.43 on
to $24.0i on June 30 last.
Dec. 31
1952
FUND
reported total
on
June
net
assets
unit
per
months
this
of
amount
per
The Fund is operated as part of
unusual
type of investment
combining the principles
trust fund
a
The
trustee.
and
mutual in¬
a
The plan provides
for
Co.
the
is
such
as
invest¬
trusts.
equities
44.38%
55.62%,
with
securi¬
was
in protective-type
ties.
>*Of the protective portion, 1.33%
of the total Fund was in cash and
12.37%
receivables,
Government
and
in
was
U. S.
obligations
in other bonds,
was
and
loans
equity portion, industrial
equities were 30.76% of the Fund;
public
utilities
in
oils
were
chemicals.
and
New York
your
Kansas City, Mo.
:s
i
about
involving
quite
of millions
the
...PHILADELPHIA
19
27%
PA.
Coca-
hundred others
few
a
hundreds
of dollars and
we
use
we
people who spend all their
working solely on pension
who
familiar
are
with
the
After
going
then
are
we
investment change
an
the problem of
comes
to
decide
we
to make
doing it, and
purchases and sales of
handle
securities
have
in
efficient
an
manner
group of four experi¬
enced traders headed by an officer,
we
who
is
a
in
operate what
similar
office
to
with
appearance
small
a
banks
of
brokerage
telephones
pervision of the executive officers
the department, who review
daily each open market order.
of
Wide
field
the
in
contacts
securities
thorough knowledge of
techniques and financing
and
trading
us in a position
expeditiously not only
procedures place
handle
to
normal
security
and
type
volume
transactions,
but
of
other
types of special investment opera¬
as offerings of private
tions such
becoming of
the case of
large dealings
are
increasing interest in
in
the
funds
or
municipal
of
for
be¬
on
whom
of investment is appro¬
high
of
because
You
market
customers
our
have
now
income
description of
a
over
ported
on
share
per
223,128 shares
on
decisions
at
as
market trends;
to
applies our
individual ac¬
counts and (5) a way to execute
as of June 30,
1952, net assets of purchase and sales orders. It is
$1,714,391.31, equivalent to $31.48 a nice set of tools but like the
(4)
before.
year
This
share.
net
assets
$28.80
of
with
compares
and
June 30, 1951.
on
to
which
the
Fund, reports
$F,068,282.46
share
per
group
a
thinking
JOHNSTON Mutual
per
reported net assets of
it is something else
them in such a way
to produce good results.
clubs
golf
again to
so
as
use
Broadway,
With Waddell & Reed
PROSPECTUSES
NEW
available
released
FUND
without
obligation
Management
BOND
dealers
dealers
for
a
Copies
from
the
Corporation,
61
New York 6, N. Y.
for
prospectus
PUTNAM
*
'FUND
this
&
July
dated
(Special to The Financial Chronicle)
DENVER, Colo.—Earl T. Frazey
has become affiliated with Wad¬
dell
3,
new
a
which
Joins Staff of
is
FUND
FUTHAM FUND DISTTUBUTO**, INC.
Bostoc
CHICAGO,
Parker,
Bergman
N. J.
a
INVESTMENT
new
prospectus
has
Company
dated
July
15,
1952, which is available from Edgar, Rick&
Company,
East Michigan
207
Milwaukee,
Wisconsin.
FUTURES,
Inc.,
Street,
North
It
available
is
New
York
mutual
has
4,
fund
commodity
N.
released
dated
prospectus
from
Y.
investing
futures.
60
The
June
for
Broad
a
in commodities and
Street.
con¬
& Co., 1
He was
Reynolds & Co.
(Special to The Financial Chronicle)
CHICAGO,
Street,
is
Goodbody
Salle
W.
Arthur
become
Company.
1952.
company
—
previously with Central Republic
dealers
10,
111.
Jr.; has
with
La
With
new
Goodbody
(Special to The Financial Chronicle)
from Hugh W.
nected
WISCONSIN
Reed, Inc., U. S. National
made
has
week
Westminster at
Company,
&
Bank Building.
1952
10,
without obligation
Elizabeth,
released
State Street.
2,
Cyanamid,
a
system, except here
same
have
June
on
of
a
investment dealer
there¬
reasons
30, 1952, an increase
the $2,741,528 re¬ our tools. As you have heard we
June 30, 1951.
Net have: (1) a means of reaching
assets were equal to $14.01 per
decisions; (2) a method of studying
share on 248,764 shares outstand¬ industries and companies; (3) an
helps
to arrive
ing on last June 30 compared with economist who
016
er
prospectus from
we
lot of corporate
a
American
and
taxes.
or
or
City
tive,
Cola
priate
Investment
June
lam
1012 Baltimore Ave.
are
whom
Motors, Ford, American Locomo¬
Investing Corpo¬
available
!■■■■■«•
Principal Underwriters
and the
We also have
ration reports net assets of $3,485,-
of
$1.25.
K$o4t<m
40 Wall St.
letters
pension funds. We act for General
this type
Long
in
or
individuals
consult, explaining the action
half
are
were
| WADDELL & REED, INC.
m
must
to
equity pension
industrial
the largest holdings
group,
prospectus dated June 24, 1952.
WELLINGTON
Prospectus from your
immediately
insurance financing which
and
and railroads 1.77%.
the
Among
17.83%;
were
finance
available
M
M
effect
written
the
preferred stocks.
In the
linn
Investment Dealer
In¬
and, if ap¬
proved by it, are either put into
Fund's
new
■■■■■■
in
Trust
our
and
market
quotation
tickers
30, 1952, the portion prominent
in
their
equipment.
assets represented These men work under close su¬
As of June
the
Massachusetts
Fund
ment medium
MANHATTAN
..■■■■■■■
to
Committee
an
Capital gains paid in the last 12
■■■■■■■
Fund
the executive officers,
by
submitted
vestment
*■■■■■■■
Through Periodic Investment Plans
funds, memo¬
which, after
problems peculiar to them.
COMPOSITE Bond & Stock Fund
*■■■■■■
trust
prepared
June
■■■■■irjri
I
review
trusts
corresponding period
adjusted for the stock
1951,
split.
30,
far this year of 900.
United ACCUMULATIVE
in
are
of
ABERDEEN
on
randa
unit for the
30, 1951. Asset value per
share during the last 12 months
increased from $12.69 to $11.99.
on
advisable
time
1951. Net increase on shares
outstanding for the 12 month pe¬
$12.29
riod
ending June 30, 1952 was a
31,
months
■■■■■■■■■■-j
cents
same
WALL STREET
gains compared with
holdings by in-
year.
2,224,943 shares outstand¬
on
$1,856,366 compared with $951,677
so
last
after payment
50
the
and
year,
bank,
Trust
Net asse.t value increased
$59.21 per share to $62.45
during the same period. The com¬
pany in 1951 paid $2.03 in net tax¬
able income and $5.17 in capital
net income
the 497,-
on
of
are
of
stocks 5.26%
SHARES
earlier.
a
unit
per
December
30.68%
STREET Fund
1952
paid
was
of
30,
719.24 units then outstanding, ad¬
justed for the four-for-one stock
of
RIDGE
June
too meet
as
requirements
account. When sales or pur¬
chases of securities are considered
the close of June in 1951, amount¬
ing to $26.95
by
BLUE
manner
particular
each
A
very
close
relationship is
1952, equal to developed between the account
$28.80 per unit on 528,173.13 out¬ supervisors and those with whom
and for whom we act in a fiduci¬
standing
units.
This
compares
with net assets of $13,416,324 at ary Or agency capacity.
649
six
year
months ago.
in such
the
ports total net assets of $15,209,-
Insurance
CONCORD
t
Managem'l: Kunhardt
upon
for.
re¬
the
on
from
Individual Portfolio
suggested
MASSACHUSETTS Life Fund
Life
Knickerbocker
of
1952, of $112,750,808 com¬
pared with $106,912,539 six months
June 30,
the
with
assets
EATON
during
Hospital
assets
CENTURY
100.00%
28.
Dec.
on
outstanding
investor,
Net
■■HHird
-i
$1.10 per share capi¬
a
gains distribution
lower prices for securities."
■ml■■hwjgjgh
'!
10% after
tal
Indus¬
been only 8%,
mmrnmmimmmmmmmmmmmi
United INCOME Fund
value
separate trusts for each individual
231,148
Term
Continued from page 13
are
36.11%, while the asset
per share increased nearly
reduce profits and could result in
Government
Short
&
6-30-52
no
pressures on
PINE
Cash, U. S.
The five largest
:gj
during the last 12 months in¬
creased
vestment trust.
dividend
United SCIENCE Fund
sets
industry that tend to
ors Corporation, the first mutual poration
fund
stimulants
artificial
thus
and
per
of National Invest¬
expen¬
it
ing compared with $4,196,000 or
$17.62 per share on 238,213 shares
outstanding a year earlier. Net as¬
of
and other fixed-income securities.
Light.
NET ASSETS
additional plant
wear
per
312,978 shares outstand¬
on
program
reported
16.2%.
up
During the second quarter the
corporation added 14,200 shares of
West Kentucky Coal, and Pacific
based
are
$18.25
or
the
been
must
as
share
that, "as yet, there
abating of the many
reduced
included
Electric,
Grand
Union,
Squibb and Amerada.
last.
30, 1952 of $5,711,165
the fund said
Hold¬
com¬
and other high-grade
se¬
curities, NEW ENGLAND FUND
reported total net assets on June
has been
Electric.
&
share
per
32% of its holding current¬
cash, short-term govern¬
in
Rochester Gas
to
largest
WITH
trial Averages has
Public utility
the second
were
largest
equivalent
category,
group,
June 30.
on
represent the
22.9% of net assets.
commons
Avon
Dec. 31
on
Products, Central & South West,
Doehler-Jarvis, Houston Oil and
Notes
Investing's net assets
has
ment program has
Vitro
shares
12-31-51
stock
continue
rep¬
Fund:
1952."
Common
that
commented
plant
capacity and that favorable tax
New issues in the portfolio at treatment is of importance only
the end of June included 15,000 when profits are high.
ings
business condi¬
on
tions and
man
place in point of size,
resenting 8.7%.
on
"These
out
owned
opportuni¬
erated tax depreciation.
third
shares.
company
resolved
are
ditures encouraged by promises of
armament
contracts
and
accel¬
said
of
of
buying
boom
largely
drug stocks totaled
16.7% and public utilities were in
sale
share
same
fund
present
Chemical
shareholders
all
policy
ties appear.
which
6,839
research
a
of ample reserves until the
"new funds received from the
tinued
justfy
present uncertainties
holding with a
438, equivalent to 23.2% of assets.
and
to
the
and
cautious vigilance and the mainte¬
portfolio investments but also to
con¬
election
technical
own
combine
continued,
practical
vested
shareholders,
to
potential weaknesses
national
a
nance
last year.
National
second
FUND, in its
domestic economy, the eco¬
our
fund's
policy
report
said that the
gain
share made in December, 1951,
was
12.8% greater than on June
$15.52
or
pared wtih $3,210,623 or $15.34 per
ments
adding back the distribution from
per
$3,339,979
ly
KNICKERBOCKER
of
30
21%
are
nomic difficulties that hamper our
were equivalent
share, which, after major allies abroad, the suspense
per
on
cash
in¬
port¬
new
sale
bonds and
the portfolio.
assets
$12.50
corporation
six months' report
by
from
both
values
investments and
June
quarter of the
reflects
shares.
to
vesting Corporation
assets
market
received
eliminated.
were
NET ASSETS of Broad Street In¬
(2.7%), and mining (2.6%). Gov¬
According to Mr. Randolph, the
gain
reduced.
Gas
June 30
on
of
creased
American
$24,581,227
the portfolio are* oil
public utilities (14.9%);
railroads
(8.8%);
natural
gas
ernment
tional Lead and E. R. Squibb were
of
19.3%
were
in
year ago.
were
Holdings
level assets
27
(311)
Chairman of the Board and Pres¬
holdings,
new
JffMHMmji
The Commercial and Financial Chronicle
.
Shell Oil, Florida Power & Light
and Kansas Power & Light rep¬
resented
Mr tit
111.
—
Edward
Davis is now with Reynolds &
39
Souh La Salle
Street.
D.
Co.,
He was
previously with Faroll & Co.
28
The Commercial and Financial Chronicle
(312)
which
Continued from first page
time passes
as
must become more and more im¬
For our part, we do not take
much stock in a good deal of the current talk about us
soon being a "have not"
nation. We have been hearing
about early exhaustion of many of our basic materials
for decades and longer.
These alarmists have regularly
been wrong. Of late, certain observers have been able to
work up quite a sweat about future food supplies for a
world population growing at a rate which seems to
frighten a good many. Of course, the ultimate in the
production of food is so far beyond anything now being
portant and vital to us all.
It
As We See
the
intelligent balance of production and distribution.
employers and employees have come to realize
that production policies, price policies and wage policies
can be
adopted which will combine economic stability with
economic growth."
Precisely what the President means by all this we
"Both
do not
profess to know—and
we
doubt if the President or
his Council of Economic Advisers knows—but in
he
general
attained that
saying that if, and only if, we henceforward
follow the policies laid down in the New Deal and the
Fair Deal we can attain a
production of $440 billion by
1960. That is to say, this volume can be reached in what
have become known
Now the
dent has
Strange Doctrine
simple truth of the matter is that the Presi¬
said
only that if we continue the trend that
during the past half century or more
we shall have reached such a level of
production by 1960—
assuming of course that we are not in a serious depression
at that time.
Implied, therefore, in this pronouncement of
the Chief Executive is the
thought that we can continue
to grow as in the
past only if we forsake the system under
which we grew to
greatness. Viewed in this way, the pro¬
nouncement ceases to be
inspirational and is hardly bet¬
ter than
nonsense.
Now
*
thoughtful
and
not likely to take
seriously. Even the
rates of growth
during the past half or three-quarters of
a
century—the basis of the President's prediction, whether
he admits it (or knows it) or not—are not
very accurately
known. They are "guestimates" at best.
During this past
generation we have developed a sort of statistical mania.
It has increased our
knowledge of what is going on cur¬
rently—increased it, that is, for those who know how to
men
such foolish forecasts
take their statistics.
women are
these very
as
But
The fact of the matter
is, in any event, that if we con-,
tinue to grow and to
prosper in the future as in the past
we shall do so not because of but
despite such doctrines
and such programs as the New Deal and the Fair Deal
have foisted upon this nation.
recently
whole series of forecasts not for
half decades.
Possibly that is
come
so-
decade but for two
a
little too far into the
future for the President to
venture, and in any event the
Paley Report "assumes" the same overall rate of growth
that the President uses and does not make it
depend upon
New Deal or Fair Deal
programs. It quite simply and quite
frankly states that it is merely projecting what appears
to be the past trend into the future—the
past trend which
extends back into
history far beyond the point where any
one ever heard of the New
Deal, the Fair Deal, Franklin
Roosevelt or Harry Truman.
Some Other Forecasts
might well have said that twenty-five
or so
years from now our total output will be double what
it is now—on the identical
assumptions he used in getting
to
1960.
He
could
have
added that
the
technicians
(or
of them) now foresee a
population by around 1975
about twenty-seven percent
larger than at present, with
then current demand for various
products
some
running up to
increase in population
would be matched
by a 40% increase in demand for con¬
sumer
durables, a 50% increase in the number of dwell¬
400%
greater than
ings in
75%
use, a
Increase
in
the
now.
A 27%
increase
demand
in automobiles in
use, a
for
new
household
50%'
appliances,
etc., etc., etc.
All these estimates, and others like
them, he could
Paley Commission. Possibly he is saving
them for a more
strategic moment, adding his own claim
that all this can come to us
only if we heed him and take
his economic
prescriptions. Of course, any such argument
.
attribute to the
would be rather
worse
than
nonsense.
It is not clear what
crystal ball the Paley Commission used in
arriving at all
these conclusions,, but there
is.nothing to suggest that this
group of specialists based their estimates
upon New Deal
or
•7
:
Fair Deal
programs in
There is, however,
perpetuity.
certain
very
time
now
call
for
up-to-date,
comprehensive studies."
Had
the
to
a
general problem of materials and the like
the
Commission
11(d)
followed
of forcing Section
procedure
plans
the
upon
various
managements-extended
litigation
would undoubtedly have resulted
and
a
would still be far from the
we
substantial compliance with Sec¬
tion 11 which we have now at¬
But,
the
wisely, in
very
Commission
route
we
do not know)
have
the least
at
seriously
natural resources. Such seems to have been
the course of history in many older countries whose pop¬
ulation a century or more ago began to press upon avail¬
able resources.
Colonialism and imperialism for a time
supplied the answer then. Even for these peoples that
answer seems no
longer valid. We are anti-imperialist or
have been for the most part up to now. What is our answer
to declining resources?
While the answer is difficult to
determine, we venture the opinion that the solution, when
it comes, will not be the product of the
type of economic
philosophy that has plagued our nation during the past
20 years. On the contrary, continuance of such
thinking
and action may
very well seriously endanger any hope of
providing a solution to the problem.
or
in
of
entailed
made
of
Section
a
staffs
11(a)
which
have
characteristics
the
But
such
what
toward
the
of
a
potentials
including
contribute
Section
many
of
great
Section,
under
never
and delaying
The
have
been
there
are
to
want
tialities
with you.
As
starter, let
a
the
at
can
a
poten-
take
look
a
legislative
history of the
(scanty though that history be) and endeavor to ascertain the Congressional intent bethe
same
substantially
Section
as
30
useless
take
Commission
appeared
such
shall
a
holding
of
geograph-
steps
find
the
as
necessary
voting power inequitably.
s
^ Sje
j.1.
It
Commission
instructed
was
£
to
under either Section
Commission has the
to draw
up
which will
through
court
the basis not
of those remaining to
20
are
basis for future
operating companies in
organizing themselves so as best
to serve the public."
It
seems
that
utilized
clear
from
Section
this
30
under
existence
as
J
systems.
final
However,
companies will
holding
in
^^ctjon
regional,
our
integrated
Question of Operating Company
Integration
But let
turn
us
from
now
con-
sid3n^SeTtio^
s"^tlonection 30 with reference
ihinkofit inthe 0^^^ tome
:P"
* i?r«icincr
pos^jve
nf
nnrnnw
th®
both
power
plans of its
and
force
own
proceedings
was
statebe
to
of recommenda-
program
£ons for^Jthn
be
to
taken
by
operating companies to
enable
them better to serve the interests
of their investors and consumers
well
ag
tbe pubbc
ag
Jn tMs connecti
3o
interest.
it should ^
that thp lanmiatfp nf Section
d0es
not
the
restdct
studies
and reCommendations to be made
subsicliaries 0f registered hold-
Rather the Corn-
ing companies.
missj0n
js
directed
to
study
the
situation with respect to all operti
utilit
electric and
com,
Danfes
v
statutory
and
action by
ment
the
in
compliance.
of
there
1938,
of June 30, 1952.
as
its program of compliance on the
of holding compa- companies, or it can encourage the
nies preparatory to their dissolu- filing of voluntary plans by the
reorganization
as a
be
more
Thus, where
to the Act in
continue
nnfpH
The Commission at the outset
is
designed to promote the
gathering of information and data
tion, but also
to
211 holding companies
eliminated
jjfufe Pr0vlsl0ns as soon
by
Senator 11(d), the so-called compulsory
Wheeler stated, in part with re- provision or under Section lUe),
gard to this provision: "This Sec- the so-called voluntary route. The
as
final goal.
only 58
stages
f^oe,s, n0, unnecessarily
complicate the structure or dis-
Pulsions
Committee
serve
were
be
the
divestment
properties not part of
sidiaries
our
subject
initially introduced faced a choice of whether to proin both houses.
An analysis of the ceed with
enforcement of tnese
Senate Bill, submitted to the Sen-
only for the
simplification
still
certainly
are
And many
in the bills as
ate
While
difficult
company in the holding company
•
A provision
of
problems
there
about
requires-
11
the
companies,
Section
hind it.
approaching
compliance will
number
we
ward
were
holding companies and their sub-
these
us
fast
accomplished.
a
individual
it
achieving
discuss
of action.
course
is
time
11,
Section
uneconomical
an
when Section' 11
ically integrated system, and a requirement
that
both
registered
.
I
urgently needed
was
would have been
supply for the to ensure that the corporate strucreally been ex- ture or continued existence of any
power
nation, has
un¬
an
time when all of the
a
time
tary compliance with
study,
of this
efficient, economical and de-
more
Reports
than three-fourths of the way to¬
the scope of such a know,
Section
And it has also issued nu- elimination
of
reports
30
administer programs of volun¬
to
page
within
merous
by
choosing
this
the Commission
to have written Section 30
Reports at
Study of
Utilities Integration
study.
expedited
step in the formulation
plan of compliance. Further¬
more,
SEC Plans
be
By
has
progress
;
necessary
solved,
from first
Although these
litigation
been
however,
route,
other
volun¬
extended
choice.
this
the
plans
instances,
some
opinion,
my
chose
company
undoubtedly
our
Continued
r^Tec^lv®
'
t
*p t
Hnwn
to implement it we must get down
to brass tacks. Just^ exact)Ly what
various company managements, data would be ptheredI 111^a Secand leave to them the choice of tion 30 Report.
And what kind
the wide range of fair and lawful of
methods for achieving compli- made based upon such data.
anceCounting a combination gas and
Had the Commission chosen the
electric company as two separate
first alternative, it would have c0™pan*e„s'
t]?erf ,
had to map out a blueprint of its ™?tely 860 privately owneid elecprogram
for each system, ,and trie utility companies in the United
pursuant to Section 11, but for a would
probably have written States, and about the^me numsecond purpose as well. That sec- comprehensive Section 30 Reports ber of pnvately owned g s; ut ■ond purpose involved the exami- in connection with the formula- ity companies. Hi making stu< e
not
in connection
with the reorganization and simplification of holding companies
nation
of
only
the
entire
electric
in-
tion
of
such
proposals.
I
might
note in passing, that during the
resources repearly days, between 1935 and 1938
resented thereby could be more before the Commission had deT
efficiently and economically util- cided which course it would fol-
dustry and the entire gas industry
to
see
whether the
ized for the benefit of the Amer-
ican
peoples
SEC
■*
TT
the
me
11,
primary
...
compliance
(2).
As I
with
11(b)
am
sure
and
while
the
constitution-
which
was.to
Section
Many, of
you
nn
^y11* a!.so
inn
the 9.09'c^°^J?f^ ^
n'nh
municipal, State and omer pu
licly owned utility systems.:
0rganization
large number of reports
might have
been
made
if
the Commission had chosen to
follow the Section 11(d) route.
(1)
of the electric "tihty mdustry, n
addition to g^hering 1lforma
or} the
2??nmniied
prepare a
Company
compdiiy
duty
low,
ality of the Act was in litigation,
the staff of the Commission did
/
„
Holding
runumg
both Sections
11(b)
.
passed in 1935, the Com-
was
mission's
achieve
• -
-
.
Policy Under Holding
Company Act
s
When
wnen
Act
wholesome food for
thought in such estimates as these, and this has
exactly
nothing to do with current political arguments. It relates
rather
shall have exhausted
tion
The President
purposes
accomplished
been
tarily formulated.
forward with
a
already
files.
our
their
main
changes which have been
wrought
by
the
Act
and
the
growth of the industry since that
over the decades—and such a long
wise now and then—it is not difficult to
time (when it will arrive,
a
we
pendable
Another agency of the Federal Government—the
called Paley Commission—has
reside in
still
the
and the
looking ahead
look ahead is
In recent years
there has, however,
been a growing
tendency to come up with figures about
the past which must in
many instances have been almost
literally "picked out of the air."
Thursday, July 24, 1952
.
tained.
depleted
to have held
a
in
Looking Ahead
envisage
"constant dollars."
as
A
and
11,
But
Malthusian at this time.
when
a
tion
have
to be
seems
.seems
find it difficult to become too ardent
we
..
and
all
public
puouc
umes,
with
as
oecuun
Section
these
of great
our
ov
30
nepuiu.
Reports....u
blue-bound
use
vol-
in connection
administration of Sec-
for
Section
From
.
..
an
_
Implementing
30
organizational.point of
ld
aDDear
desirable to
the, commis-
sior[.s
Div®ion
of Public
Utilities
which would work exclusively on
Section
30
Reports
and
recom-
mendations. The Division is now
Volume 176
Number 5136
.
.
.
The Commercial and Financial Chronicle
R
(313)
divided into several
sections, each centages of turbo-generators in¬ sion for permission to
purchase changing $3.24 of earnings for
handling the various proceedings stalled before 1926 were 48% and the common stock
of Central Ohio
$4.00 of earnings.
holding 39%, respectively; the costs of Light & Power
I
Company. Ameri¬
should like
particularly to
company systems.
It is doubtful plant per kilowatt of installed can Gas is one
of the largest and call attention
to the fact that the
if these groups could accomplish capacity were
$115 and $97, re¬ well regarded
holding company disparity in market values illus¬
much under Section 30 while con¬
spectively; the average BTU con¬ systems in the country with con¬ trated
by this case is really of
tinuing their other work. Even if sumption per kilowatt-hour gen¬ solidated revenues of
$160,000,000. little significance to the purchas¬
they could there would be the erated in steam plants was 15,650 Its
subsidiaries, which form an ing company, in this case Ameri¬
added
work of coordination be¬ and
14,640, respectively.
As
a
interconnected
and
integrated can Gas. Thus, while American
tween sections.
result of these and other factors
'
system, operate in Michigan, Indi¬ exchanged some
$36 of market
I might point out
here, as an which primarily affected produc¬ ana, Ohio, West Virginia,
Virginia, value for $30, or as I noted pre¬
aside, that the Hoover Commis¬ tion
costs, total
operating' ex¬ Kentucky and Tennessee. Its prin¬ viously a 20%
permium
to Central
sion confirmed our experience at penses including depreciation and
cipal subsidiary in Ohio is The Ohio's
stockholders, its stock was
the SEC when it observed that taxes
were
1.60^ per kilowatt- Ohio Power Company, which has
selling at better than 15 times
hour
those wrapped up in the
sold
in
New. England
as utility assets of about
day-to¬
$217,000,000 earnings whereas Central Ohio's
day operations generally do not against 1.270 in the United States, and annual revenues of
$55,000,000. quotations showed a market value
of the properties
Kansas City re¬
viewed
with respect to designated
have
the
time
for
the
reflection
and
the
fates
such
and deliberation required for
were
range
kilowatt-hour
long
planning, and that since ef¬
ficient
management requires pol¬
icy planning,
the
assignment
.should go to persons specially ap¬
pointed
for that purpose.
A Section 30
essarily
have
group would
have
to
nec¬
Such
a
would
group
undoubt¬
edly commence by identifying the
:major economic areas or regions
in
the
United
States
and
then
proceed with more detailed stud¬
ies area by area.
For each area
it would list the electric and gas
;
to
as
New England
yield 1.930 per
against 1.610 for
as
the-entire United States.
The
report points out that
one
Central
The
have
of
their
to
locate
industries
high
a
proportion
in power costs
elsewhere than in New
expenses
England,
New
cause
or
to migrate from
even
England.
It
recommends,
other things, that every¬
among
thing possible be done to reduce
transportation
costs of
small
a
in¬
into
two
parts, which were 100
and not connected.
apart
Eastern
generating
chased
Division
facilities,
all
of
its
had
and
energy
no
pur¬
from
a
Let
consider
us
of
some
the
might appropriately be
.analyzed. Since the objectives of
'the study would include arriving
.'at
conclusions
and
recommenda-
'tions
concerning
improvements
in efficiency that might be ef¬
fected, the data collected should
necessarily
:
measures
include
appropriate
of each company's effi¬
ciency.
For example, in
of the
electric utilities for
•
ticular area,
pany could
a
par¬
the size of each com¬
be indicated by vari¬
criteria
ous
study
a
such
as
number
of
••dollars invested, annual revenues,
kilowatts
of
capacity,
kilowatt
hours
generated,
number of
cus¬
tomers, service area, etc. A cost
.•study could also be made of each
•
which might show,
other things, production,
company,
;among
transmission
•
costs
and
distribution
kilowatt-hour sold,
cost
per
kilowatt
in¬
incosts, rate of re¬
turn and various operating ratios.
per
vestment
i
stalled,
a
collection of these
and
other
data, it might well be de¬
veloped that certain electric sys¬
tems
in
the
area
are
at
a
disad¬
vantage because of factors which
hydro
all
power
that State.
Now it
tion
30
begin
at
report
left
the
the
cilities;
or
The "New England" Study
Incidentally,
1
titled
.
"The
in
New
a
report
England
en-
Econ-
omy," prepared by the Council of
^Economic Advisors, there is a 15
:page chapter on "Fuel and Power
<
Costs," which might be indica"tive at least in part of the ap¬
proach of Section 30 investigation
^report and recommendations.
•
The
Council's
report,
in
sum-
In
of
'the
presents
installed
facts
concerning
power
compared with
Ohio
common
1.14c
stock
held
was
stockholders,
by
with
The
transaction
of
compared with each other system.
rates of the various systems
The
would be analyzed not only from
the point of view of the over-all
company to purchase the
with little or no dilution of
for
Ohio
of
Central
about
as
proposed by
to offer 72/100
share of American Gas com¬
stock for each share of Cen¬
a
mon
tral Ohio
common
small
company
substantially
all
of
rata)
pro
the
finally resulting from the acquisi¬
tion.
I think you can see from
this
illustration that both the
security
holders of the purchaser and those
of the purchased
company stood
stock outstand¬
would receive the benefit of lower
rates,
of
and
the
the
economic
would
area
tral
Ohio
stock
served
through the greater efficiency of
operation. Incidentally, more than
98% of the stock of Central Ohio
In the
was
quoted
over-
the-counter at. approximately $30
per share. The earnings of Ameri¬
case
Acquisition of Fhysical Assets
Another
of the
which
sponsored
of
30
would
a
interest
rather
the
involve
controlling
in
a
direct
Illustrative of the last is the
of
case
Indiana
and
Michigan.
Company
and
Public.
Company of Indiana, tw©r
completely
unaffiliated
compa¬
Electric
Service
nies.
The
transactions
consummated
were
early 1950:.
Indiana and Michigan, which Z
will
refer
to
as
"I
&
acquisition by
in the service
area
of Public Serv¬
ice
Company of Indiana. Similar¬
ly, Public Service Company of
Indiana
had
properties^ which.,
by the
swap
The
dividends
then
paid by American Gas
per 72/100 of a share
were
being
$2.16
sion for approval under the Hold¬
ing Company Act because Amer¬
ican Gas
an¬
in the process of acquiring and'
merging another company, I & Ml
had acquired assets which were*
Ohio.
res¬
indus¬
and
M," is
other major subsidiary of Ameri¬
can
Gas.
Two years previously,,
of view of each
classification,
involved,
in
in the service
commercial
of '>
purchases, exchange of prop¬
erties, or a combination of the
two.
two
idential,
but
cash
The
can
common.,
acquisition
were
per
might
not the
company,
respective
Gas were $3.24 for 72/100 of a
managements of these companies.
share, as against pro forma earn¬
It was submitted to the Commis¬
ings of $3.11 per share for Central
revenues
transaction
studies
physical assets. Such acquisitions
might be effected either throughi
American Gas of Central Ohio, the
entire
transaction was initiated
and
type
Section
encourage
interests
be
(2), provided^,
ards of the Act.
benefits
2,300
to gain substantially by this ex¬
4% in
change. Likewise, the consumer
about
was
the
earn¬
and with the ad¬
company,
3(a)
of course, the transaction is other¬
wise fair and meets all the stand¬
small
kilowatthour sold, but also from the point
average
ings
of I & ML
area
companies
arranged
a
of properties, but since earn¬
greater from the Public
were
registered holding
Service than from the I & M prop¬
pause to determine
selling on
such as I have described has been approximately a 6% dividend yield whether a Section 30 study would
have led us to the conclusion that
made and that the pertinent facts basis, the common stock of Ameri¬
Central Ohio should have been
concerning an area's electric util¬ can Gas was selling on a 15.4
Gas
or
ity industry are at our finger tips. times earnings basis, while the acquired* by American
sorhe
other system or company. It
Examination of these data shows Central Ohio stock was selling at
in addition to the properties trans¬
trial.
A
Let
us
Case
in Point
assume
that
a
utility has
one
interconnected,
with
this
us assume
system, let
are
system
high
large,
low
In
small
a
study
integrated,
system,
and low rates.
a
$1.80
and
costs
juxtaposition to
whose
and
the
on
Central
While both stocks
against
as
Ohio
stock.
is
earnings.
the
stockholders,
not
but
desirable
a
of
point
view
of
at
one
first
to
as
interconection
of
one
However, substantial advantage
the
two, elimination of high cost to American Gas lay in the econ¬
generating facilities (or at least omies which the purchase would
the relegation of the small sys¬ effectuate
and
which were
not
reflected
in
pro-forma
the
past
earnings
Ohio. Those economies
history of
of
Central
were
to be
nancial
I
previously stated is an
subsidiary operat¬
ing in Ohio, and by utilization of
Ohio Power's low cost generating
as
American
Gas
at
Illustration
illustration
and
30
of
income about
mately
18%
Similarly,
operational
fi¬
advan¬
that the
increase
net
$40,000, or approxi¬
of the cash outlay..
Public
Service
Com¬
Indiana estimated that,;
because of savings from integra¬
pany
of
tion, it would receive nearly as
much income from the propertiesing
the
would
as
it had been receiv¬
previously,
and
in
addition,
would have the $235,000 cash re¬
ceived in the trade.
an acquisition is demon¬
Question of Becoming "Too Big*"
by the proposal of Kansas
Now
I
have been recounting
City Power & Light Company to
transactions here which involved
acquire a controlling stock inter¬
making large systems into even
est
in
Eastern
Kansas
Utilities
bigger systems. Please do not in¬
Company. Kansas City offered the
strated
stockholders
of
Eastern
Kansas
the book
fer from this that I favor the com¬
plete elimination of all small sys>-
value, or approximately
tems,
$17.70 per share for all outstand¬
that I am biased in favor
systems. The Holding Com¬
pany Act, both for economic and
too long before at about $7 per
public policy reasons contains a
share.
prohibition against a system's be¬
How did it come about that the coming
"too big." Nevertheless,,
management of Kansas City was there is such a thing as too small
ing shares—shares which sold not
able
which
is
I & M. estimated
transaction
tages of
which
Power
it
ferred.
transferred
Another
connections
Ohio
that
type of transaction that
Another
brought about primarily by inter¬
with
note
be sparked by Section
reports and recommendations.
from
American
economies
might be obtained $3.11 of earnings, or a 4% pre¬
through contracts between sys¬ mium, and $2.16 for $1.80 of divi¬
tems, as I shall discuss later, it dends, or again a 20% premium.
is clear that acquisition by the
Operating Economies
large system of the small system
lead
erties, I & M paid $235,000 in cash
sufficient to
least
compared with Gas. Thus, on the basis of the
the large system
and which is foregoing American Gas was of¬
not interconnected with the large
fering a market value of $36 for
system. Although at lease some $30, or a 20% premium, $3.24 for
would
a
We need not
Now obviously this was a very
might
advantageous offer to the Central
Ohio
was
company.
were
less than 10 times
another, blush
costs
tem's high cost plants to stand-by)
with
resulting lower costs and
capacity in
rates in the small system's terri¬
!New England, broken down by
tory.
In summary, the assumed
;areas and by type of generation,
facts demonstrate that the large
whether steam, hydro, or internal
system will gain from the acqui¬
••combustion; the growth of the in¬
sition of the small system even
dustry, reserve capacity, and the
though lower rates are put into
.percentages of use by residential,
effect.
commercial, and industrial con¬
But would the large system be
sumers.. It then takes up the level
to
purchase
the
small
•of fuel and power costs in New willing
and
would
the
small
England as compared with the system,
^average
for the United States. system be willing to sell to the
;iAfter finding that the causes of large system?
I should like
to give you an
Tiigher costs in New England are
primarily due to higher fuel costs, illustration taken from our files,
it calls attention to other under¬ of why both the buyer and seller
lying reasons for the greater costs, under the circumstances outlined
and hence higher rates of New above would have positive incen¬
England's electric utilities. Thus, tives for accomplishing what is
the number of employees per 100 obviously in everybody's interest.
million kilowatt-hours generated
In the fall of
1950, American
:imary,
as
this
com¬
under Section
This, of course, permits the large
stock
where
words,
be, to grant the resulting holdingoperating company an exemption,
com¬
securities.
purchase of
American Gas
and
unlisted
stead of assets. The
Commission's
policy under these circumstances
has been, and would
continue to
of
well
other
with
pany,
recent
because it is purchasing stock in¬
small,
a
of
one
in
where an acquiring operat¬
ing company becomes a holdingoperating
company
temporarily
vantage to the large company that
it obtains for its
security holders
(including the previous owners
studies showed that
Central Ohio's average
generating
costs ran 7.2 mills per kilowatt-
might
facts
purchasing
with,
years
This
ing. Prior to the filing, American
was
for the entire industry within the
exchanged for the stock of
Gas stock, which was listed on the
American Gas. Eventually Central
area as compared with the United
New York Stock Exchange, was
Ohio
will be merged into
The
States, but rather for each system selling for about $50, or $36 for
Ohio Power Company.
or
company within the area
as
72/100 of a share while the Cen¬
rates
other factors.
off.
is
is
instances
engineering
Sec¬
a
curities
non-integrated, little known
transaction
small
parisons would be developed not
efficient
<
that
me
point
sort
same
purchase, sale or exchange
of
] properties;
increased investment
:in generating facilities; the greater
•
development of hydro-electric fa;
to
seems
earnings.
This
numerous
ments in three steam stations. Our
the hands of its President.
investigation
times
or
these particular
properties. In fact*
it should even be
possible to re¬
duce rates to consumers.
ings, at a price which is highly
advantageous to the owners of the
pooling Power.
particularly to
The
prevents the export of power from
clearly that
be
could
to
10
integrating
property
company
to the south,
economies could be effected
which,
would raise the
net income of:
non-affiliated company, Ohio Edi¬
Company. The Western Divi¬
sion generated its own require¬
for
repeal Maine's Fernald Law which
corrected, such as by
"wider interchange of power; the
•
and
resources
barriers
resources,
capital
From
•
maining
remove
only
own
son
fuel, such
relatively
high
transportation
costs being an
underlying cause hour as against 2.9 mills for the
utilities
operating
therein
and of the higher fuel costs. It also American
Gas subsidiary,
Ohio
would
compile data concerning recommended that action be taken Power, while its rates were such
to
/each company.
develop New England's re¬ as to yield 1.91c per kilowatt-hour
-data that
of
in which, by
their
another
company having utility kind of disparity in times earnings
$12,500,000 and operating ratios no doubt would be typical
revenues of approximatly
$4,000,- where a large, well managed, in¬
000. Its service area was divided tegrated
system with listed se¬
England
to
was
with
dependent
miles
was
Ohio
ous ways
assets of
of the economic
consequences of
the higher costs and rates in New
engineers, which
.-analysts and, no doubt, the ubiqui¬
tous lawyer.
in
operating
relationships?
contracts, costs, labor, rates^
territory, etc., and found numer¬
and
to
about
conclude
not
$7
or
of big
so
per
vantageously
that
a
stock a company. The utility business is
long ago sold for big business. It does not exist in
share could be ad¬ this country as a competitive in¬
acquired at $17.33? dustry in which as a matter of na¬
explain this.
In tional policy the entities are kept
place, the management comparatively small in order to
facilities instead of Central Ohio's of Kansas City arranged to dis¬ stimulate competition.
As regu¬
high cost facilities. American Gas pose of a large part of the prop¬ lated monopolies, utilities are to
be encouraged to operate as effi¬
estimated that because of these erty to a neighboring
utility, an
economies, Central Ohio's earn¬ arrangement they had been un¬ ciently and economically as possi¬
ings would rise from $3.11 per able to make previously although ble and today this means com¬
share
in
1950 to
approximately the possibility was certainly pres¬ panies of fairly large scope. What
$4.00 per share during the next ent. Further, it looked as though we must guard against is the con¬
three
years,
even
after putting the local co-ops might acquire it glomeration of properties so large
as substantially to
affect the po¬
into effect the lower rates of Ohio if Kansas
City didn't. The man-;
litical life of the area and thwart
Power. Thus, the American Gas agement of Kansas
City freely ad¬
local regulation.
,
earnings, and hence the value of mitted the strong motivation Of
The Holding Company Act in
its equity, would be enhanced by that
possibility. But more sig¬
Section 2 and Section 10 sets the
nificant for our purposes, and for
the transaction rather than
di¬
standard.
Section
10(c)(2) pro¬
purposes
of those regulatory
was 31 in New England as against
hibits an acquisition unless it wiH»
Gas and Electric Company filed luted,
since from a near term bodies which have
approved
the
.22 in the United States; the per¬ an
application with the Commis¬ point oi; view it would be ex¬
Continued on
purchase, in a very careful study
Several
the
factors
first
-
page
3$
.
The Commercial and
Financial Chronicle
...
Thursday, July 24, 1952
(314)
30
point where, if residential rates
are abnormally higher than com¬
of
Utilities Integration
the public
interest by tend¬
towards the economical and
efficient development of an inte¬
ing
grated public utility system. An
"integrated public utility system" is
defined in Section 2(a) (29) as a
be economical¬
system which may
ly operated as a single intercon¬
nected
and coordinated
system,
confined in its operations to a
single
area
region, in one or
or
states,
more
and "not so large as
impair (considering the state of
the art and the area or region af¬
to
of localized
fected) the advantages
management, efficient operation,
and the effectiveness of regula¬
tion."
it
residen¬
tial consumers are subsidizing in¬
dustry.
On the other hand, if
managements set up rate struc¬
tures which have no promotional
A Wide Field for Improving
features, they are likely to thwart
Operating Systems
the most economical use of their
Certainly there is a wide field
facilities and stifle the economic
for improving the various oper¬
mercial
systems,
and munic¬
ipally owned systems, constitute a
gerrymander
patchwork, which
like
Topsy
apparently
"just
growed." It would indeed be a
miracle if studies of such crazy
quilts did not bring out many op¬
hand, in many in¬
stances, these economies may be
substantially
realized
through
contractual arrangements rather
through outright
acquisitions.
potentiality is amply demon¬
strated by the various power pools
This
up over the
decades.
Specifically, as examples of such
power pools, there are the Penn¬
sylvania-New Jersey Interconnec¬
tion
and the Northwest Power
pool. Thq former is operated un¬
der a contract which was entered
into in 1927 between Pennsylvania
Power & Light Company, Phila¬
delphia
Electric Company and
Public Service Electric and Gas
have
which
and
grown
past couple of
not now
SEC
Jersey, a group
otherwise affiliated. The
purposes
of the contract were gen¬
minimum
The larg¬
and in¬
commercial customers
er
customers
are
served
on
two-part rates based upon billing
and
demand
operation, to reduce the invest¬
usually
ment necessary for the required
substantially
pay
the most
and to se¬
economical opera¬
industrial
and
parties.
Testimony before the SEC indi¬
cated that the economic advan¬
tages resulting from the pool, es¬
pecially due to the sharing of re¬
serve
capacity, both cold and
spinning, and to the coordination
of all the production plants to se¬
cure the minimum operating costs
for the whole combined system,
have proved to be more, than were
expected, and these advantages
have increased as the loads and
technique of coordination have
the
plan for the
developed.
An
an
more per
commercial
than
customers.
investigation of rates within
area
would
well
as
between
as
indus¬
Because of unique features
in that industry, as for example
the existence of by-products in;,
the
of
many different kinds
facts than would be contained
made.
Objectives of Study Can
How
Be Attained
areas
briefly
be
level
of
but
also
example,
in
in
the
the
attempted
have
in
of
a
Ohio
large electric company
commercial
and
$20,000,000 in
capital costs.
I mention these
pools, and there
others, because Section
3Q investigations might in many
Holding
the
Under
or
in the alternative the en¬
tering into of contracts which will
afford
tion,
the
even
benefits
of
coordina¬
Act, the
to
almost two and one-half times as
made mandatory un¬
Federal Power Act. Sec¬
neighboring company had rates
tion 202(b) of that Act provides
which over-all were 67% higher
that the Federal Power Commis¬
much. On the other hand, a smaller
ties could be
der the
sion, upon application of any State
Commission or of any person en¬
of electric
portunity
though the systems re¬
main independent.
disparity of rates and rate
lead at least to
a
States
order
direct
tablish
a
mated aggregate
population of 715,000 including the
are
other
important products..
The company's revenues in 1951 were
„
area most
suspicion of un¬
"made
part
any
recommendations
under Section 30
would be
93% electric, 5% natural
Of the electric revenues about 45% was de¬
55% in Louisiana. The gas business
is entirely in Louisiana. The area served comprises about 28,000
square miles in southeastern Texas and south central Louisiana; it
extends about 350 miles from Calvert, Texas to Baton Rouge, La.
The electric system in inter-connected and inter-connections are
gas
and 2%
water.
rived from sales in Texas and
As of
utilities.
include the pending issue
approximately as follows:
April 30, 1952, but adjusted to
Stock, capitalization is
of Preferred
Percent
Millions
r,
un¬
Preferred Stock
Equity
common Stock
52%
$87
Long-Term Debt
35
21
46*
27
100%
$168
4.
^Excludes $2 million estimated net
,
The company
which
per
After adjustment for income taxes
annum.
in Texas,
$2.1 million
will increase revenues about
estimated
it is
intangibles.
recently placed in effect higher rates
this would be
32c
in¬
equivalent to an increase of $1 million in net income or some
a
share. The company also applied for a somewhat similar
crease
enues
for its_
properties in Louisiana, sufficient to
$2 million
about
The issue was
Commission.
hoped that a decision will be
The common stock
increase rev¬
but was turned down by the State
appealed to a State Court and it is
a year,
forthcoming in the near future.
follows:
record in recent years has been as
Common Stock
Record
Revenues
1950
the
cities of Beau¬
and Baton Rouge and Lake
Charles, La. It also sells, for resale, electric energy to eight mu¬
nicipal^ systems (serving a total population of approximately
30,000/,-11 rural electric cooperatives, and one other utility.
Major economic factors in the territory served are a favorable
year-round climate, water transportation, and the availability of
large supplies of oil, natural gas, sulphur, salt and other natural
resources,- The production, refining and distribution of oil and the
production of synthetic rubber and other chemicals are substantial
industries. The chemical industry, which depends so largely on
the existence of abundant supplies of oil and natural gas, has
expanded greatly and now ranks as one of the most important1
industries .in the area.
The territory served includes districts
where rice, cotton and sugar cane are grown; cattle and lumber
public utility to es¬
to me that for
a
and
mont, Port Arthur and Orange, Texas
$1.61
1.85
1.91
1.77
1.75
1.54
1.08
.86
.81
.59
It would seem
Fay
Company sells electric energy at
surrounding territiory with an esti¬
Earned
physical
Di¬
Utilities
comunities and
$33
29
25
23
20
17
18
17
15
13
quently possible to lower the gen¬ ties, rates, and operating relation¬
eral level of rates. Furthermore,
ships of the electric industry.
given
retail in 288
(Mill.)
frequently be the case that group
would necessarily work
change in rate structure will closely with the Federal Power
result in a more efficient use of
Commission and with state regula¬
a
Gulf
Year
a
within
The
1951
may
a
Utility Securities
by
hearing,
it may
structures
in Hooker &
Sidney P. Kahn & Co.
and after op¬
energy,
for
is
Odasz, General Manager.
Mr.
Lutich
was
formerly
partner
properly
transmission or sale
gaged in the
Schubal
firm, and Edward G.
Gulf States Utilities Company
-
Corrtmission
indus¬
power
wide
man-
J.
James
rector of the
Company
many
ties
urer.
tions.
generating facilities through en¬ tory
commissions for, as you
couraging use in off-peak hours know, Section 311 of the Federal
or
seasons
with consequent im¬ Power Act makes of the Federal
instances lead to recommendations
provement of the load factor, and, Power Commission a vast reposi¬
either for acquisitions of proper¬
with such improvement, it is fre¬
tory of information on the capaci¬
are
H.
—
By OWEN ELY
specific recommenda¬
connection with
the facilities of one or more other
persons and to sell or exchange
energy with such persons. Thus,
by working in close liaison with
that
through
the
coordinating good reasons for variations as be¬ the
power Commission, it might
operations of this pool, the neces¬ tween systems both with respect be
possible to make certain of the
sity of adding 100,000 kilowatts of to the
general level of rates and recommendations mandatory.
installed
capacity was obviated rate structures. On the other
hand,
In
any event,
our Section 30
with resultant savings at present
day prices of about
a
Public
to
Securities and Exchange
has no mandatory
enforce the recom¬
trial customers in 1949 paid an
mendations it might make under
average
of 1.18c per kilowattSection 30. However, certain kinds
hour,
whereas
residential
cus¬
of recommendations having to do
tomers paid an average of 2.9c, or
with integration of power facili¬
case
Calif.
-
how
these
objectives
attained after we have
at
effective
an
also maintained with other
indicate
some
of the objectives at which
we would aim in preparing Sec¬
tion 30 studies. Let us consider
I
wide
For
to
of
in
an
electrical study.
Here again,
the kind of facts to be- developed
will appear as the
studies are
undoubtedly show not only
arrived
variations
in the general
rates,
industry will have
gas
into
go
example which I
mentioned
was
the
Northwest than those of the larger company,
but had a structure in which the
Power pool. The capacity of this
residential rates were only 153%
pool amounting to some 4,000,000
kilowatts belong to widely diver¬ of the commercial and industrial
sified interests, including Puget rates compared with 245% in the
Sound Power & Light Company, case of the larger company. Ex¬
The
Washington
Water Power amination of several other sys¬
Company, Pacific Power & Light tems in Ohio, shows similar varia¬
Company, Bonneville Power Ad¬ tions in both the general level and
ministration, and several munic¬ structure of rates.
ipalities. It has been estimated
There are undoubtedly perfectly
other
The
appropriate for the gas
could
structures.
SAN FRANCISCO,
planned and
executed program, Section 30 will,
try.
consumption.
energy
kilowatt-hour
of
however, one
There is,
—
but with the size of the
sometimes determined by
dustrial
Forming Own Firm
(Special to The Financial Chronicle)
to
Section 11 work, we intend
jier.
"7^ With
principal rate clas¬
the manufactured
gas industry,
residential, commer¬
the fact
that natural gas is
a
cial and industrial. Generally, the
wasting asset, and is transmitted
residential rate is a simple block
much
greater distances than is
rate.
The
smaller
commercial
electricity, the Section 30 studies
service rates are also frequently
blocks
conclusion, I
of Section 30 in
Controversy
vides for three
as
tion
Public Power-
Power
aspect of
the power problem which I think
the Securities and Exchange Com- v
mission should studiously avoid.
The Commission should not take .,
sides in the public power-private
power controversy. As a part of
our investigations
we shall have
to examine the integration possi¬
bilities and rates of all electric
systems within an area, but we"
should not and will not show bias
in favor of one form of ownership
erally to secure the benefits of As a result of this sort of rate
coordinated development as well
structure,
residential
customers
cure
to Avoid
Private
be
the customer's demand.
economy.
Harold W. Lutich Is
be
concerned.
;ibegin to implement the provisions
all know, the usual rate
structure for electric utilities pro¬
Company of New
production of energy,
our
resources.
wider use of our energy
As you
a
of the na¬
area
the Securities and Exchange Com¬ W. Lutich, Inc. has been formed
desirable potential^
mission
is
directed
to
make with offices at 155 Sansome Street
consequences of Section 30 stud¬
to engage in a securities business.
...studies, investigations, and recom¬
ies. The carrying on of such stud¬
Officers
are
Harold
W.
Lutich,
mendations from
time
to
time
ies would certainly develop addi¬
concerning the electric and gas President; Ines M. Folger, Vicetional objectives which also might
industries. With the winding up of President; Anne D. Mejia, Treas¬
lead to lower costs and rates and
structures.
with
all
to
vital
a
the
over another.
of costs by means
I have generally confined my
improved integration of electric discussion of Section 30 to its
and gas facilities in an area is
impact on the electric industry.
only one of the objectives of Sec¬
The same general objectives and
tion 30.
Another major objective
same
kind of studies would also
would be that of improving rate
charge,
would
recommendations
should like to
again that Section 30
is a mandatory provision of the
Holding Company Act. Under it
The lowering
of the block type
see
In
of
sifications
I
remind you
kilowatt hour of output.
Pools
On the other
than
power
mission,
affected to cooperate.
since tional
it a large proportion of
advantageous
resources, and the improve¬
rate structures are " but
of
two
of the various
areas
the systems
interest in
our
of
ment
including cooperatives
generation, trans¬
distribution, a sys¬
tem, whether or not it is all under
common
control, must reach a
American public and American in¬
fairly large size before it can real¬
dustry.
Section 30 studies might ize the economies arising from low
well point the way.
investment and operating cost per
utility operations leading to low¬
er
rates
as
they surely must,
should be made available to the
power
engages
as
has a real
the public
on this task
opportunity .to serve
terest, it shouldlae possible around
the conference- table to persuade
This is particularly the case
economical use of our
The more
of properties
or contractual arrangements.
One
has only to look, for example, at
the utility map of Ohio, greatly
improved though it has been in
recent years, to see that the serv¬
quisitions, exchange
ice
concluded that
development of their areas.
either through ac¬
ating systems,
rates,
industrial
and
be
must
undoubtedly are many in¬
stances
where the
merging of portunities for substantial econ¬
omies in the areas served. There
small systems into a neighboring
are other states which are in the
large system would not violate the
same condition.
Generally speak¬
size standard.
One way or an¬
ing, in the present state of the
other, the economies of large scale
art
of
There
Power
example, there must come a
For
SEC Plans Study
serve
adopted voluntarily by the com¬ I believe, finally get its place in
panies or systems concerned. If the sun as a highly useful and ef¬
the recommendations are based on fective part of the statute, with
facts, add up to good sense, have important benefits to our coun-,
the
support of other regulatory try's defense effort and to in¬
bodies, and arer in the public in¬ vestors and consumers. Whoever
discrimination.
unfair
and
due
29
Continued from page
1949
1948
I!
1947
1946
1945__„_i-r___.:_
1944
1943
1942
Gulf States Utilities is
Range
Dividend
$1.20
231/2—20
1.20
241/2—181/2
1.20
221/2—161^
1.05
181/2—14
16
-III/2
.25
.79
.76
.62
.59
.44
currently selling around 24 to
yield 5%.
Earnings for the 12 months ended May 31 were $1.59 on the in¬
creased number of shares, compared with $1.66 in the same pre¬
vious
stock
period. The company had issued 239,578 shares of common
on April 23 at $22 per share, through a syndicate headed
by Merrill
Lynch, Pierce, Fenner & Beane and Lehman Brothers.
earnings should be adjusted to a pro forma basis to
If these
include the
benefits of the rate increase
in Texas, the resulting
approximate $1.90. On this basis the dividend payout
63%. Should the company be successful also in obtaining
figure would
would be
the rate increase
pect an increase
in Louisiana,
it would appear reasonable to ex¬
in the dividend
rate.
Number 5136
Volume 176
.
.
The Commercial and Financial Chronicle
.
(315)
Continued
jrom
page
5
Canadian
trucks.
In
built.
The State of Trade
t,
have been life
production lines
near
a
remote
more
chain predicts almost
savers
halt for lack
emergency call to warehouse
for a few more days. But the
lot
a
of
As
companies.
of specific ,^teel
items,
an
suppliers sometimes bails them out
possibility of help from warehouses
the
as
to
strike
continues.
One
complete paralysis if the strike is not settled
production
in
the
United
Inc., discloses.
Casualties
and
occurred
week
last
week,
1946, when General Motors was -on-strike. Prior to
1946, the low point since 1932 came in the recession year of 1938.
A serious car shortage is in the making, "Ward's Automotive
Reports," predicted.
Production this week, it added, may curve upward.
General
Motors will build cars at least through the end of the month, and
Ford, starting up on Monday of the current week, anticipates
working for at least two weeks on a curtailed basis.
Last week,
only Hudson, Cadillac and Kaiser-Frazer obtained
normal schedules. Mercury and Lincoln performed relatively well,
but Ford was down all week.
GM Michigan plants alone were in
Packard
worked
Virtually all Chrysler output
came from California plants; Nash and Studebaker small volume
the past week represented outstate operations.
~
Large scale conversion steel purcnases are being made now
by the industry.
which
threaten
volume
This reflects efforts to reconcile steel imbalances
smooth operations when plants swing back into
Industry Enters Eighth Consecutive Week of
Sharply Curtailed Output Due to Strike
Steel
production
this
year
In
1949, also
a
Output
tons.
will
be lowest since 1949^.gven
ever before,
says
"SteejT the
steel strike year, production totaled 77,978,000
in
1950
96.8
was
million
tonsyin
1951,
time record of 105.1 million tons.
The first half of 1952
first
half
from
since
year
all-
an
r—"
by the lowest output for any
1948, the American Iron & Steel-Institute
Production
reports.
was only 45,028,660 net tons of steel for ingots
June output of 1,639,000 tons was the lowest for any
and castings.
month since
October, 1949, when the steelworkers were on strike.
The unstruck portion of the steel industry made a better show¬
ing production-wise last week than in any previous week of the
latest strike, thanks to a return to work at some mills. Production
of steel for ingots and castings edged up to 15% of national capac¬
ity, and provided around 312,000 tons. The preceding week's rate
14.5%, this trade
was
paper
in
the
considerably from the 133
similar
prewar
weeks
128
of
1951
and
or more
when 99 busi¬
year ago
this size group. Small
casualties, those with
$5,000, dipped to 21 from 28 and from 34 a year
Steel
and
Institute
announced
that
the
ingots and steel for castings.
rate
was
tons.
15.2% of capacity
In
the
(revised)
A month ago output stood at
week
starting July
14, the
and output totaled
316,000
11.8%,
or
246,000 tons.
ceeded
only by the Jan. 1 index of $6.64.
the corresponding date a year ago, or
on
and
power
mated
at
The current total
192,532,000 kwh. above that of the
ceding week when output amounted to 6,987,796,000 kwh.
It
205,754,000 kwh.,
or
riod
It compares with $6.88
a drop of 3.9%.
was
business
prices at the wholesale level.
ex¬
equipment.
This activity has been
encouraged
by
subsidy
business
to
plant
new
the
and
government's
in the form
write-off, in five
the
—
of
years,
approved
new
plant and equipment.
Wholesale
"The
Commodity Price Level Marked by Slight
pre-Korean
business
Recession in Latest Week
record
expenditures
for
for
new
plant and
The
equipment was in the
boom year 1948, when over $20 bil¬
lion were spent for that purpose.
general commodity price
level fluctuated unevenly last
change during the period. The daily whole¬
sale commodity price index, compiled
by Dun & Bradstreet, Inc.,
finished at 290.09 on July 15, as against 290.43 a week
earlier, and
a
ago.
year
Another supporting
mate
of
the
Spring
factor
wheat
141,407,000 fewer than
a
year
the government's July
was
yield
at
only
and
ago,
200,598,000
new
and
an
After the Korean
outbreak, it
steadily to
rate
rose
of
ment.
this
year
curtailment of the
1,048,421,000
is placed at
corn
ment
This
423,666,000 bushels less than a year ago, and com¬
10-year average of 3,011.652,000. The oats crop was
estimated at 1,352,938,000 bushels, or slightly above last
year and
the 10-year average.
was
a
Cotton prices
steadiness.
in
the
areas
developed weakness at the close following early
The decline
steel
of the
and
attributed to
was
Korean
continued uncertainties
situations, reports of rain
in
dry
some
belt, lessened activity in the goods market, and
con¬
In its first official 1952 cotton acreage
repayments for
the
through July 3 totaled 758,000
bales, leaving loans outstanding at about 357,000 bales.
season
were
much
by
reported steadily increasing caution
figures of
more
in evidence than
dollar
Bradstreet to
volume
be from
1
in
to
labor-management
among
disputes
consumers.
probably will be
will
a
decline in those
withdraw
major
a
point of
strength from the economy."
With Gordon Macklin Co.
(Special to The Financial Chronicle)
CLEVELAND, Ohio
R.
Tenbusch
ciated
Co.,
with
Inc.,
has
Gordon
1010
—
George
become
assc
Macklin
Euclid
!
Buildi-
With First Cleveland
(Special to The Financial Chronicle)
First
week
was
higher than
estimated
a
by Dun &
Regional
Ohio—Carl
become
has
associated
Cleveland
City
East
bers
of
He
Building,
Midwest
was
A'
wi
Nation
Corp.,
Sixth
the
change.
the
5%
*
mer
Stock E:
formerly with
«
E. Neubauer & Co.
ago.
year
With Waddell & Reed
(Special to The Financial Chronicle)
CLAYTON, Mo.—Lucille Allis-
+6.
Trading activity in many wholesale markets in the week
quickened perceptably following the holiday showdown of the
preceding week; the aggregate dollar volume of wholesale orders
did not vary
plant
expenditures in 1953, if not before
then. The dip in business spend¬
ing for new plant and equipment
estimates varied from the corresponding 1951 levels by the follow¬
ing percentages: New England +1 to +5; East —1 to +3; Midwest
—1 to -f3; South +2 to +7; Northwest +1 to
+5; Southwest and
+2 to
new
a
earlier.
a year
for
equipment cannot be sus¬
tained for too much longer. There
CLEVELAND,
affected
areas
o.
and
bott
in
rate
ogar-Horner Company.
year ago.
Retailers
annual
an
expenditures
ness
Shoppers in most parts of the nation in the period ended on
Wednesday of last week boosted their spending noticeably as they
responded favorably to many reduced-price promotions. Clearance
wear
at
were
was previously w'
Saunders, Stiver & Co. and Le
Favorably to Reduced Price
Promotions, Clearance Sales and Warm Weather
sales of warm-weather
an<
Mr. Tenbush
Trade Volume Reacts
..
of steel
"The current high rate of busi
;
pared with
government
use
materials—business expen¬
ditures for new plant and equip¬
indicated
crop
.■:'/,>•/'\'\-
.
despite
—
$24.2 billion.
estimate of this season's
plant and equip¬
new
ly small country offerings. Oats were quite steady despite reports
of further shipments to this country from Canada.
The first official
in the
And in the first quarter of
other
yield of 3,365,089,000 bushels.
an an¬
billion
"Last year, business spent $23.r
billion for
or
bushels, total production of all wheat for this year
1,249,019,000 bushels, or a gain of 261,545,000 bushels over a year
ago. Corn prices advanced moderately, largely reflecting extreme¬
a
$26.7
last three months of 1951.
in recent years.
Added to the prospective Winter wheat output of
plant
annual
quarter of 1950.
1 esti¬
bushels,
spending for
equipment was at
nual
of the smallest crops
one
Business
rate of $16.7 billion in the second
Grain markets were irregular the past week with
prices con¬
tinuing to move in a fairly narrow range. Wheat was featured by
relatively light hedge-selling pressure despite the fact that har¬
vesting is nearing completion in major Winter wheat areas.
pre¬
July 21, 1951, and 994,626,000 kwh. in excess of the output reported
for the corresponding period two
years ago.
large
for
rapid
Pacific Coast
was
been
most of the cost of
of food
Retail
3.0% above the total output for the week ended
has
penditures
of accelerated amortization
The index represents the sum total of the
price per pound of
general use and its chief function is to show the general
Output Continues to Climb
Institute.
national
Drop
31 foods in
.
industry for the week ended July 19, 1952, was esti¬
7,180,328,000 kwh., according to the Edison Electric
the
major source of economic
strength in the post-Korean pe¬
trend
sales
Electric
of
areas
have indicated signs of
"A
As during recent months most stores were able to exceed the
The amount of electric energy distributed by the electric
light
consumers'
economy
weakness.
Continuing the sharp rising movement of the preceding two
weeks, the Dun & Bradstreet wholesale food price index advanced
to $6.61 on July
15, from $6.51 the week before, for a gain of 1.5%.
The current figure is the second
highest of the year, being ex¬
the mills
Iron
have
But the civilian
economy
For Third Week
once
operating rate of steel companies having 93% of the steelmaking
capacity for the entire industry will be at 15.3% of capacity for
the week beginning July 21, 1952, equivalent to 318,000 tons of
defense-re¬
remained strong.
Sharp Rise
Loan
get production going again, big consumers of sheets are
exerting extra effort to line up supplies of sheets. For one, the
automobile industry is showing considerable interest in
reviving a
supply of conversion steel, "Steel" declares.
'?■
and
of the
Business Spending Destined to
Wholesale Food Price Index Continues
be refilled and in many cases the pipelines of
components will too
before the metalworking industry can return to normal operations.
With a sharp spurt in sheet demand
seemingly assured
defense
areas
ago.
report, the Crop Reporting Board estimated a total of 26,051,000
acres under cultivation as of
July 1, or slightly smaller than trade
expectations. CCC loan stocks of cotton continued to decrease.
American
"The
decreased to 81
succumbed in
tinued slow export demand.
notes.
Closing of
The
the index of non-durable
goods production has declined.
lated
involving liabilities of $5,000
and were slightly lower than a
metalworking plants for want of steel is snow¬
balling. It may slow down but not stop immediately with resump¬
tion of steel production.
Steel distribution pipelines will have to
-
then,
1950.
total of 251 in the similar
1939.
liabilities under
marked
was
of
304.28
though capacity is greater than
weekly magazine of metalworking.
Even if full capacity operations could be resumed today apd
if new capacity being built could be brought in on schedule dur¬
ing this last half year, the most production that could be tallied for
the year would be 96 million net tons. Immediate resumption of
capacity operations is out of the question.
It-will takb around
10 days to get back up to 100% after the steelworkers return to
their jobs.
And the additional capacity being built'Is behind
schedule, says this trade weekly.
net
In 1953-1954
week and showed little
production, "Ward's" said.
Steel
.
day.
one
which
Failures
since early
action.
170
down
were
They remained 59% below the
nesses
States
virtually
strike, sank to the lowest weekly fig¬
choked off due to the steel
-
See Danger Ahead
Previous Week
Commercial and industrial failures declined to 103 in the week
ended July 17 from 156 in the preceding
week, Dun &
warehouse
by next week, concludes "The Iron Age."
Auto
GI0 Economists
Bradstreet,
Warehouses
becomes
Continued jrom page 12
5,661
Business Failures Show Sizable Decline From
seeping
running.
ure
In the like week last year
even
is
placed at 5,048 cars and 924
cars and 1,824 trucks were
cars and 2,402 trucks were
was
preceding week 7,097
built.
stripping bars out of plates. A limited amount of foreign
in at an average of about 50% above domestic
mill prices. All these measures are costly, but they keep plants
are
steel
output last week
the
31
sharply from the level of
a year
before but
was
ton
with Waddell &
is connected
Inc.,
Reed,
7
Brentwood
North
Boulevard.
about
'
'
.
Car
'
•
*
%
' ''
•
r.v-
•
Loadings Rise 27.9% in Post-Holiday Week
Loadings of
freight for the week ended July 12, 1952,
which were affected by the steel strike, totaled
572,387 cars,
according to the Association of American Railroads, representing
an increase of
144,991, or 27.9% above the preceding holiday week.
The week's total represented a decrease of'
206,921 cars, or
26.6% below the corresponding week a year ago,' and a decrease
of 217,019 cars, or 27.5% below the
comparable period in 1950.
revenue
United States Auto Output Declines to Less Than Half
The Previous Week's Level Due to Steel
Shortages
Passenger
production in the United States the past week,
Automotive Reports," totaled 23,025 units,
or less than half of the
previous week's total of 51,746 (revised)
units, and 96,454 units in the like week a year ago.
_
according to
car
"Ward's
Total output for the past week was made
up of 23,025 cars and
3,305 trucks built in the United States against 51,476 cars and
10,195 trucks (revised) last week and 96,454 cars and
26,902 trucks
in the comparable period a year
ago.
10%
1951
below the all-time high reached in the first few months of
when many buyers rashly added to their inventories in vain
Joins A. A. Tibbe Co.
(Special to The Financial Chronicle)
expectation of war-induced shortages.
Department store sales
the
Federal
Reserve
on
Board's
a
countrywide basis,
index
for the
week
as
ended
July 12,
1952, remained unchanged from the level of the preceding week
at 4% above the like period a year ago. For the four weeks ended
July 12, 1952, sales rose 3%. For the period Jan. 1 to July 12, 1952,
department store sales registered a decline of 3% below the like
period of the preceding year.
Retail trade in New York
last week suffered from prevailing
high temperatures and humidity, which resulted in
12% in dollar volume from the like week a year
a
ST.
taken from
drop of about
ago.
According to the Federal Reserve Board's index, department
City for the weekly period ended July 12,
1952, decreased 13% below the like period of last year. In the
preceding week a decline of 5% (revised) was recorded from that
LOUIS, Mo.
Davisson is
& Co., 506
now
—
Goldie V
with A. A. Tibb
Olive Street.
Joins Westheimer Co.
(Special
to The Financial Chronicle)
CINCINNATI,
Ohio—Frederic"
W. Schultz is with Westheimer
<
Co., 326 Walnut Street, member
of
the
New
York
and
Cincinnat
Stock Exchanges.
store sales in New York
of the similar week of
1951, while for the four weeks ended July
12, 1952, a decrease of 11% was registered below the level of a
year ago.
For the period Jan. 1 to July 12, 1952, volume declined
10% under the like period of the preceding year.
Ginther Adds
(Special
to The
to
Staff
Financial Chronicle)
CLEVELAND, Ohio—Befrv Lou
Lampey
Co.,
is
Union
now
with Gfr'^r &
Commerce
Building.
32
The Commercial and Financial Chronicle
(316)
The following
Indications of Current
week
Business Activity
STEEL INSTITUTE:
AMBK1CAN IRON AND
steel operations (percent
Indicated
of capacity).
latest week
Latest
Previous
Week
Week
July 27
15.3
July 27
318,000
or
or
statistical tabulations
month ended
Steel
and castings
Ingots
condensate
and
tons)
(net
—
gallons each)
runs
to stills—daily average
Gasoline
output (bbls.)
Kerosene output (bbls.)
Distillate fuel oil output (bbls.)
oil output
Distillate
fuel oil
Residual
fuel
ASSOCIATION
Revenue
(bbls.)
oil
at
and
22,557,000
2,417,000
2,440,000
2,208.000
2,362,000
10,184,000
9,629,000
10,298,000
8,695,000
8,674,000
9,017,000
9,033,000
July 12
118,332,000
119.533,000
July 12
July 12
July 12
23,312,000
121,993,000
21,086,000
133,482.000
24,306,000
27,901,000
72,515,000
67,542,000
57,944,000
48,395,000
46,172,000
40,889,000
44,127,000
631,043
562,746
779,308
'
552,284
$305,727,000
$361,082,000
anthracite
Pennsylvania
coke
Beehive
lignite
Commercial
(tons)—
Total
SYSTEM—1917-49
INDEX—FEDERAL
AVERAGE
=
:
•
liabilities
liabilities
GINEERING
NEWS-RECORD
June
omitted):
(000's
U.
S.
141,984,000'
123,380,000
State
181,613,000
205,097,000
163,743,000
232,702,000
Federal
88,405,000
73,180,000
90,100,000
117,129,000
July 17
93,208,000
131,917,000
73,643,000
115,573,000
-July 12
5,325,000
1,120.000
7,245,000
8,359,000
July 12
521,000
53,000
742,000
693,000
July 12
14,600
♦4,300
21,300
9,000
CROP
construction
116
79
83
S.
Wheat,
83
CROP
—
DEPARTMENT
of
July
1
OF
Durum
71
52
60
'43
671
633
693
$6,971,000
$10,217,000
$5,014,000
2,266,000
1,847,000
6,234,000
7,024,000
5,264,000
7,434,000
2,990,000
2,646,000
3,085,GOO
1,971,000
1,219,000
1,006,000
$21,222,000
$21,193,000
$22,773,000
$1,140,654
$1,433,642
$1,027,087
568,780
727,127
571,874
696,515
583,336
375,068
450,093
402.522.
196,806
246,422
180,864
443,701
3,365,089
bushels
1
75
AGRI¬
(bushels)
spring
78
thousands):
(in
(bushels)
all
66
390
REPORTING
(bushels)
all
All
July 12
100
U.
CULTURE—As
Corn,
Winter
RESERVE
municipal
PRODUCTION
123
59
333
of
construction
and
111
73
340
EN¬
—
Month
—
construction
Public
176,645,000
(tons)
SALES
;
liabilities
service
114,166,000
(tons)
DEPARTMENT STORE
liabilities
liabilities
Construction
$381,742,000
BUREAU OF MINES):
Bituminous coal and
number
liabilities
BOARD
HJOAL OUTPUT (U. S.
128
Total number
Wholesale
$295,779,000
municipal
Ago
June:
service
July 17
July 17
July 17
July 17
Federal
Month
number
Manufacturing
Private
.
Year
Month
number
Commercial
Total
,
Previous
number
Construction
of that date:
are as
BRADSTREET,
CIVIL ENGINEERING CONSTRUCTION
447,396
488,349
ENGINEERING
—
of
&
either for the
are
Latest
Manufacturing number
Retail
76,887,000
572,387
Public construction
State
23,251,000
461,787
construction
Private
6,561,000
21,985,000
July 12
construction
S.
6,762.000
21,802,000
8,943,000
NEWS-RECORD:
Total U.
6,753,000
(no. of cars)_July 12
cars)
CONSTRUCTION
ENGINEERING
6,102,450
RAILROADS:
(number of
freight loaded
Revenue freight received from connections
4BIYIL
at
at
(bbls.)
AMERICAN
OF
(bbls.)
gasoline
at.
(bbls.)
6,148,000
6,075,050
terminals, In transit, in pipe lines—
unfinished
and
Kerosene
12
12
12
12
12
(bbls.)
Stocks at refineries, bulk
Finished
July
July
July
July
July
6,171,200
117,013,000
July 12
.
(bbls.)_
of quotations,
cases
FAILURES—DUN
Wholesale
of
(bbls.
average
42
fuel
BUSINESS
Retail
output—dally
Crude
Residual
2,027,000
246,000
•316,000
INSTITUTE:
PETROLEUM
oil
Crude
in
or,
INC.—Month
Equivalent to—
AMERICAN
that date,
Ago
101.4
Thursday, July 24, 1952
production and other figures for the
cover
Year
Ago
11.8
♦15.2
on
.
Dates shown in first column
month available.
Month
.
.
2,941,422
1,243,019
1,326,157
1,048,421
1,060,298
645,459-
200,598
265,859
342,005
(bushels)
20,978
987,474
35,820
— — —
—
'
■DISON
output
K&ILURES
Other
INSTITUTE:
ELECTRIC
Electric
(in
kwh.)
000
(COMMERCIAL
INDUSTRIAL)
AND
—
DUN
steel
Finished
7,254,058
6,974,574
July 17
103
156
151
133
refinery at
refinery at
July 15
$52.77
$52.69
Hay,
all
July 15
$39.33
$39.50
$42.00
$43.00
Hay,
wild (tons)
alfalfa (tons)
and timothy
24.200c
24.200c
24.200c
24.200c
July 16
33.925c
35.975c
33.400c
27.425c
121.500c
121.500c
121.500c
106.000c
July 16
16.000c
15.000c
15.000c
17.000c
July 16
July 16
15.800c
14.800c
14.800c
16.800c
15.000c
16.000c
16.000c
17.500c
—July 22
98.66
98.56
98.44
97.75
York)
at
—
at_
MOODY'8 BOND PRICES DAILY AVERAGES;
—
Baa
109.97
110.15
114.08
114.27
114.46
Peaches
112.37
112.56
113.50
Pears
—July 22
109.42
109.60
109.42
109.06
Grapes
—July 22
104.14
104.14
103.97
103.80
Cherries
106.92/
107.09
107.09
106.56
109.42
109.42
109.42
109.97
113.31
113.50
113.31
113.89
fuly 22
Utilities
MOODY'S
July 22
July 22
Group
Group
Aa
2.60
2.65
3.17
3.17
3.16
Ordinary
—July 22
2.95
2.95
2.94
2.93
Industrial
July 22
3.05
3.04
3.03
2.98
July 22
3.20
3.19
3.20
3.22
Baa
3.50
3.50
3.51
July 22
3.34
3.33
3-33,
3.36
July 22
3.20
3.20
3.20
3.17
July 22
2.99
2.98
2.99
2.96
July 22
Railroad
Group
Utilities
Group
Industrials Group
MOODY'S
—
COMMODITY
INDEX—.
July 22
3.52
received
Orders
441.6
439.2
435.3
468.9
12
161,404
204,886
192,889
189,525
Production
12
120,463
141,384
208,998
200,938
12
51
56
86
83
12
452,504
413,405
393,144
638,852
July 18
110.07
110.45
109.43
115.52
July
July
July
July
(tons)
Percentage of activity
Unfilled orders
(tons)
1949 AVERAGE
=
of
at end
period
REPORTER
—
PRICE
DEALERS
SPECIALISTS
ON
Y.
N.
STOCK
INSURANCE
—
INVENTORIES
MANUFACTURERS'
(DEPT.
of
orders
Number of
shares
purchases
by
dealers
(customers'
Number of orders—Customers'
Customers'
short
sales
Customers'
other
sales
Number
of
shares—Total
Customers'
Customers'
short
Bound-lot
other
sales
Number
of
total sales
sales
Other
sales
Bound-lot
Number
by
sales
sales
sales
693,174
712,560
(35,559,018
$30,988,450
19,819
22,078
21,9-12
19,021
62
99
114
426
July
juiy
19,757
21,979
21,798
18,595
557,787
623,186
587,365
507,078
juiy
1,914
4,970
4,002
14,001
juiy
555,873
618,216
583,363
493,077
July
$23,634,075
$26,575,032
$24,732,110
$20,388,426
July
153,100
184,210
173,270
106,520
Total
Sales
EXCHANGE AND
Short
sales
Other
sales
THE
NEW
153~,l0O
184~210
173~270
106~520
241,400
252,750
305,270.
334,450
YORK
FOR
ACCOUNT
-July
-July
175,460
177,700
153,140
381,280
6,716,250
9,082,580
6,891,710
6,026,100
6,203,800
4,221.100
—July
4,374,240
9,463,860
IjFTSfEM-
Other sales
sales
initiated
on
the
605.080
549,570
405,510
916,120
109,480
103,040
86,750
182,040
—June 28
494,550
462,530
326,330
745,106
—June 28
604,030
565,570
413,080
927,140
-June 28
146,100
114,000
74,780
261,560
June 23
2,600
4,400
7.200
18,400
June 28
191,120
135,380
93,050
270,320
floor.
sales
Other transactions initiated off the floorTotal purchases
—June 28
193,720
139,780
100,250
288,720
-June 28
258,920
259,055
139,261
389,779
June 28
28,430
32,770
49,230
—June 28
287,820
288,990
202,513
-June 28
300,115
316,250
316,840
235,283
349,345
__
~~
sales
"
Other sales
Total sales
Total round-lot transactions for
account of members
Total purchases
Short
~
sales
PRICES, NEW SERIES— lb
LABOR—(1947-49 = 100):
Commodity Group-
S.
DEPT.
Farm products
Processed
27,850
1,010,100
922,625
619,651
June 23
140,510
135,290
126,720
249,670
June 28
973,490
886,900
621,893
1,315,535
June 28
1,114,000
1,022,190
748,613
1,565,205
OF
—July 15
_
foods
~
Afl commodities other
•Revised,
30,028.
— —
3,386
—
241
253
230
175
176
183
$1,735,000
$1,719,000
$1,502,000
497,000
530,000
465,000:
\339,000
246,000
282,000-
$2,571,000
$2,495,000
$2,250,000*
$23,444
•$23,209
$18,171:
19,129
•19,122
18,737-
$42,572
•$42,332
$36,903;
23,242
•21,914
22,479"
$28,464,000
$28,473,000
$27,278,000
£16,590,000
£19,773,000
£11,203,000*
$258.9
•$258.2
$249.0
STATES
COMMERCE)—Month
OF
;
income
Wage and salary receipts,
'
total
employer disbursements
Commodity producing industries
Total
industries
Distributing
Service
industries
Government
-—
for
contributions
employee
177.5
*177.6
168.2:.
174.0
*174.0
164.8-
77.0
♦77.1
75.0-
47.2
♦47.5
45.2
21.0
♦20.8
20.1
32.3
*32.2
27.8;
social
3.9
insurance
income
labor
Proprietors and rental income
interest
dividends—
and
income
:—
Total
transfer payments
nonagricultural income
OF
Net
U.
MARKET
3.4-
4.0
4.0
4.0
3.3:.
47.8
*47.5
48. t.
21.1
*20.5
20.2.
12.4
12.6
12.1.
238.8
•238.4
227.8:,
$1,526,900
$2,924,150
$1,461,000
834,800
$1,334,000
$1,354,000*
932,700
1,017,637
$259,150,744
$259,950,674
5.421,244
$255,251,203;
7,356,578;
$254,529,430
2.310%
$247,894,S2S
2.270%
1,567,459
$275,000,000
$275,000,000
$275,000,000*
259,105,178
259,905,345
255,221,973*
45,565
45,328
29.227"
$259,150,744
$250,950,674
$255,251,203?
644,145
645,819
"than
farm and foods
fflncludes 577,000
barrels
Z
684.574^
$258,506,598
$259,304,854
$254,566,629-
-Zr-
OF
Imports
GROSS
STATES
foreign crude
111.1
110.7
July 15
109.4
♦107.6
107.3
109.2
108.3
108.6
113.7
110.4
113.6
July 15
111.9
•111.9
112.5
runs.
16,493,401
15,695,145
20.433.37&
DEBT DIRECT AND
GUARANTEED—(000'S omitted):
As
of June
General
30
6,968,827
fund balance
$252,181,917
Net debt
Computed
U. S. GOVT.
2.329%
annual rate.
LIMITATION
STATUTORY DEBT
As of June
30
(000's omitted):
amount
that
may
at any time
Outstanding—
Total gross public debt
Guaranteed obligations
not
be outstanding
owned by the
Treasury
.July 15
tWas
not
available
due
to
111.2
oil
strike.
$3,494,700*
omitted):
Exports
UNITED
-
AND IMPORTSCENSUS —Month
of
May
EXPORTS
STATES
public debt and
obligations
Deduct—other
Grand
total
under
public
debt
obli¬
limitation
outstanding—
amount
above
guaranteed
r—
—
outstanding
gations not subject to debt
Balance face
of
of June:
A.—Month
purchases
(000's
IN DISECURITIES
TRANSACTIONS
GUARANTEED
AND
S.
Total gross
All commodities
g
June 28
~~
WHOLESALE
Meats
63,627
'
(in billions):
Total face
sales
Other sales
Total
IN THE UNITED
personal
BUREAU
-June 28
sales
Short
of April
UNITED
—June 28
Other sales
Total
110,660-
—
69,365
30,160
GREAT BRITAIN-
IN
BANK, LTD.—Month of June—
(DEPARTMENT
Total
DECT
Total purchases
Short sales
Short
ISSUES
INCOME
TREASURY
(SHARES):
~~~
TRANSACTIONS
Other transactions
Total purchases
PERSONAL
Total
■OtS, EXCEPT ODD-LOT DEALERS AND SPECIALISTS
Transactions of specialists in stocks in which
registered—
Total
—
ROUND-LOT STOCK TRANSACTIONS
sales
•MOID-LOT
:
CIRCULATION—TREASURY DEPT.
MONEY IN
Other
—July
ON
■'
68,119
29,720
SALES
&
Nondurable
Personal
shares
SALES
63,239-
Z———
Inventories:
Less
—juiv
FOR ACCOUNT OF MEMBERS
Total Round-lot sales—
Total
681,417
$31,472,824
Juiy
STOCK
25,832
664,551
purchases by dealers—
of
24,953
dealers—
L
VOTAL ROUND-LOT
23,174
$30,532,031
—July
juiy
sales
shares—Total
Short
23,232
sales)—
-DoUaf Talue
-
6,120
10.435
9,803
SERIES—
dollars):
(millions of
April
MIDLAND
jujy
juiy
July
Dollar value
Odd-lot
28,273.
7,424
NEW
COMMERCE)
OF
of
NEW CAPITAL
EXCHANGE—SECURITIES
EXCHANGE
COMMISSION:
Odd-lot sales by dealers (customers' purchases)—
Number
325,708;
2,328,226
INDEX—
100
AND
3,763;
—
BTDCK TRANSACTIONS FOR ODD-LOT ACCOUNT OF ODDDOT
7,473-
17,443.
2,721
INSTITUTE
Month of April
PURCHASES
Durable
(tons)
OIL FAINT AND DRUG
(tons)
Total
Month
RATIONAL PAPERBOARD ASSOCIATION:
6,211
15,747
(000's omitted):
2.60
.
(tonsi
states)
LIFE
42,937
32,035.
2,935
(tons)
3.18
.
;
INSURANCE
LIFE
12,553.
—
30,828
101,767
(bushels)
crop
(bushels)
(12
R—
40,560
61,720
Apricots (3 states)
OF
2.59
—
(bushels)
July 22
July 22
_
Public
.
DAILY AVERAGES:
BOND YIELD
U. S. Government Bonds
Average corporate
A
109.97
(tons)
(pounds)
Apples, commercial
114.08
33.302.
103.461
31,731
\
(tons)
Hops
112.19
Group
Industrials
109.79
July 22
21,410
43,805
—-1—r-rrW
2,224,495
(bushels)
(pounds)
Sugarcane for sugar and seed
beets
254,663.
'
-
339,048
(bushels)
Potatoes
Tobacco
July 22
Aaa
(tons)
(100 pound bags)
Sweetpotatoes
_
16,974
-
11,018
—
itons
edible (100 pound bags)
Peas, dry field
—July 22
Average corporate
Public
lespedeza
Hay,
1,316,393.
102,415
(tons)
Beans, dry
Sugar
U. S. Government Bonds
Railroad
45,365
$52.77
July 16
(New York)
(St.
(100 pound bags)
$52.77
at
tin
(New
Dead
Rice
4.131c
July 16
n.
15,578
28,328
Hay, clover
—
306,185.
-
207,547
.•£
(bushels)
4.131c
Louis) at_
Zinc (East St. Louis)
Btraits
Dead
(bushels)
(bushels)
Rye
Hay,
Domestic
179,620
1,352,938
4.131c
Electrolytic copper—
Export
(bushels)
spring
(bushels)
4.131c
July 15
M. J. QUOTATIONS):
(E. &
Oats
Flaxseed
PRICES:
Pig iron (per gross ton)
Scrap steel (per gross ton)
METAL PRICES
6,987,796
Barley
lb.).
(per
7,180,328
A
BRADSTREET, INC.
XBON AGE COMPOSITE
July 19
---
of^cbligations, issuable
authority
Volume 176
Number 5136
.
.
The Commercial and Financial Chronicle
.
33
(317)
Securities
* INDICATES
Now
ADDITIONS
SINCE
•
PREVIOUS ESSU£
ITEMS REVISED
• ACF-Briil
Motors Co.
(letter of notification) 1,581 shares of common
(par $2.50). Price — At market (about $6.75 per
July 17
stock
share.
Proceeds—To
stockholder.
William
S.
Wasserman, the selling
Office—62nd St. and Woodland Ave., Phil¬
adelphia, Pa. Underwriter—None, but shares will be sold
through member firms on the New York Stock Exchange.
Admiral
Corp., Chicago, III.
June 2 filed 41,669 shares of capital stock (par $1) being
offered in exchange for common stock of Canadian Ad¬
miral Corp., Ltd., at rate of one share of Admiral stock
for
each
This
two
shares
exchange
of
Canadian
offer will
expire
Admiral
stock
Manager—Dempsey & Co., Chicago, 111.
fective June
(Offering
19.
1952
Common
stockholders,
to
without
July 29,
1952
(Merrill,
Lynch,
Debentures
Pierce,
Fenner
The
Russell
First Boston
(F. C.)
Aegis Casualty Insurance Co., Denver, Colo.
4 (letter of notification) 75,000 shares of common
Price—$2
pand
insurance
business.
per
share.
Proceeds—To
Office—Suite
Building, 930 17th Street, Denver 2, Colo.
Aegis Corp., Denver, Colo.
702,
E.
ex¬
&
Common
shares
108,847
by underwriter and 666,171
shares to be reoffered under rescission offer. Price—70
cents per
share.
Proceeds—For prospecting, drilling ex¬
Underwriter—I. Nelson Dennis & Co., To¬
etc.
penses,
V.
(B.
Toklan
Co.)
Common
Christie
&
Co.)
Royalty Corp
Marache
Ameranium
company,
&
July 30, 1952
(Granbery,
Mines, Ltd., Toronto, Canada
May 28 filed 2,079,871 shares of capital stock (par $1),
of which 908,845 shares are to be offered to
public by
Preferred
& Co.)
McCarthy (Glenn), Inc
C.
Underwriter—
Drexel
and
Co
June
(par $1).
& Beane)
Pennsylvania Power & Light Co
(McDonald
stock
underwriting)
Flying Tiger Line, Inc
held.
Aug. 30. DealerStatement ef¬
on
July 28,
Duquesne Natural Gas Co
Debentures
&
Co.
and
Burnham
<fo
Co.)
August 5, 1952
Chesapeake & Ohio Ry.__
(Bids
Delta Air
Equip. Trust Ctfs.
EDT)
noon
Lines, Inc
Common
(Courts
Co.)
&
Pennsylvania Electric Co
(Bids
Bonds & Preferred
neon
EDT)
ronto, Canada.
August 6, 1952
American
Mercury Insurance Co.
(letter of notification) 99,000 shares of common
(par $1), to be offered for subscription by stock¬
June 26
stock
Motorola, Inc.
Common
(Hickey & Co.)
holders of record about July 3.
Price—$2 per share. Pro¬
working capital. Office — 4220 Connecticut
Ave., N. W., Washington, D. C. Underwriter — For not
exceeding 35,000 shares, Hettleman Corp., New York,
ceeds—For
1952
(Bids
10:30
Common
a.m.
CDT)
September 8, 1952
N. Y.
•
August 11,
Mountain States Power Co
American
Telephone & Telegraph Co.
May 22 filed $498,656,300 of 12-year SV2% convertible
debentures, due July 31, 1964 (convertible through July
31, 1962, into common stock beginning Sept. 30, 1952, at
$136 per share, payable by surrender of $100 of deben¬
tures and $36 in
Tennessee Gas Transmission Co
(Bids
to
be
September 9,
Arkansas Power &
1952
Light Co
(Bids
to
be
Debentures
received)
—Bonds
invited)
cash), being offered for subscription by
stockholders of record June 16 at rate of $100 of deben¬
tures for each seven shares
held; rights to expire July
31, 1952.
Price—At par. Proceeds—For advances to sub¬
sidiary and associated companies. Underwriter — None.
October
Carolina Power
&
20, 1952
Light Co
(Bids
to
be
Bonds
received)
Statement effective June 9.
Ampal-American Palestine Trading Corp.f N. Y.
June 16 filed $5,000,000 of 15-year 4% sinking fund de¬
bentures due 1967 and $497,000 of 15-year 4%
sinking
fund
debentures
inations
of
and
ment
due
$100
1966.
each).
machinery.
culture and
(in
par
denom¬
purchase
equip¬
Business—Development of agri¬
in
commerce
Price—At
Proceeds—To
Israel.
Underwriter—None.
Andowan
Mines, Ltd., Port Arthur, Ont., Canada
May 8 filed 500,000 shares of common stock (par $1).
Price—38 cents per share.
Proceeds—For exploratory
drilling and improvement on present holdings.
Under*
writer—Frank P. Hunt & Co., Inc.,
Rochester, N. Y.
Atlantic Refining Co.
June 25 filed 1,000,000 shares of common stock (par $10).
Price—To be supplied by amendment.
Proceeds—For
capital
expenditures.
Co., New York.
Underwriter—Smith.
Barney
ment to be withdrawn.
^
if Barco Industries, Inc., N. Y.
July 16 (letter of notificaticn) 140,000 shares of
Price
stock.
capital.
—
Office
&
Offering-^Postponed indefinitely; state¬
$1
per
—
c/o
share.
Proceeds
James
J.
—
Cally,
common
For working
Secretary,
150
Broadway, New York, N. Y.
•
Beaver
Lodge Oil Corp., Dallas, Tex.
(letter of notification) 75,000 shares of common
Price—$2.75 per share. Proceeds—To de¬
July 9
stock (par$l).
velop gas holdings in San Juan Basin, N. M.
Office—310
Bldg., Dallas 1, Tex. Underwriters
—Harold S. Stewart & Co., El Paso,
Tex., and Beer &
Co. and Garrett & Co., both of Dallas, Tex. Offering—
Mercantile Commerce
Made
on
July 21.
ic Brookings Plywood Corp., Brookings, Ore.
July 10
sory
(letter of notification) $250,000 of 5% promis¬
notes to be issued to shareholders making individual
loans to company.
derwriter—None.
Proceeds—For working capital.
Byrd Oil Co., Dallas, Texas
June
24
cents)
account
holders.
capital.
Carl
filed
180,000
of which
M.
Blosser
and
snares
100,000
80,000
sold
of
shares
for
Un¬
(7/23)
common
will
account
be
of
stock
for
(par 25
company's
certain
stock¬
Price—$5.75 per share. Proceeds—For working
Underwriters—D-allas Rupe & Son, Dallas, Tex.;
oV
Loeb, Rhoades & Co., New York, and Straus,
McDowell, Chicago, 111. Offering—Expected
Corporate
) "A and Public
ZI Financing
&
today.
ic Caiienfe Placer Gold Mining Co.
June 27
(letter of notification) 1,000,000 shares of com¬
(par 10 cents). Price — 15 cents per share.
Proceeds—To purchase placer mining equipment and for
mon
stock
working capital. Office—211 Gyde-Taylor
lace, Ida. Underwriter—None.
iUM
Bldg., Wal¬
ir Canoga Oil Co., Carson City, Nev.
July 18 (letter of notification) 60,000 shares of capital
stock to be offered by
Crystal Oil Co.
Price—At par
New York
Boston
Philadelphia
Pittsburgh
San Francisco
Chicago
Cleveland
t
Private Wires to all
offices
Financial Chronicle
The Commercial and
24
..
.
Thursday, July 24, 1952
(318)
/
Continued from page
10 cents).
Monroe, Wash.
shares of common stock (par
50 cents per share. Proceeds — For
filed
600,000
Price
—
21
(Del.) (7/29-30)
July 10 filed $2,750,000 debentures due July 1, 1967 (sub¬
ordinate).
Price—To be supplied by amendment. Pro¬
ceeds
For purchase of seven aircraft. Underwriter
Merril Lynch, Pierce, Fenner & Beane, New York.
Front Range Uranium, Inc., Denver, Colo.
June 2 (letter of notification) 500,000 shares of common
stock (par one cent). Price—50 cents per share. Proceeds
Flying Tiger Line Inc.
—
—For
Under¬
development expenses.
York.
and
exploration
writer—Vickers Brothers, New
Gar Wood Industries,
Inc., Wayne,
May 23 filed 95,460 shares of common
fective June 13.
share of $20 par
preferred stock for each S.I.C. common
preferred stock for each
share of $100 par
one
preferred share. Offer will expire on
) Underwriter—None. Statement effective July 8.
S.I.C. $100
$1,000 each). Proceeds—To retire
writer—Wachob-Bender Corp.,
July 31.
development of wells and
drilling
expenses.
Office
—
for exploration and
770 S. Irolo, Los Angeles 5,
Underwriter—None.
LaPointe-Plascomold Corp.
Lawton
3,000 shares of capital
Price—At market (approximately
$18 per share). Proceeds—To Mrs. M. K. Pollard, the
selling stockholder. Underwriter—Thomson & McKin(par 25 cents).
New York.
non,
Hixon
Placers, Inc., Seattle, Wash.
787,736 shares of common stock
(par 10
cents). Price—50 cents per share. Proceeds—For min¬
ing development, etc. Underwriter—None, sales to be
made through agents, including officers and directors,
June
9
filed
who will receive
a
lotte, N. C.
Underwriter—None.
Brothers
Co.,
ment
Md.
(letter of notification) $300,000 of 5% 25-year
1, 1952, to be offered for subscription
by common stockholders. Price—At par (in various units
as determined by the! directors). Proceeds—For additional
working capital. Office—212 N. Howard St., Baltimore 1,
July 3
Huyck (F. C.) & Sons
May 16 filed 60,000 shares of cumulative convertible
prior preferred stock (par $50). Price—To be supplied
by amendment. Proceeds—To redeem $5 class B pre¬
ferred stock and for working capital.
Business — Me¬
chanical fabrics for industry and blankets and apparel
cloth. Underwriter—Kidder, Peabody & Co., New York.
Offering—Postponed indefinitely.
Idaho
June
6
Maryland Mines Corp.
shares of common stock (par $1).
market
(on the San Francisco Stock Ex¬
filed 200,000
Price—At
change). Proceeds—To selling stockholder (Gwendolyn
MacBoyle Betchtold, as executrix of the last will and
Errol
testament
of
Francisco-
Calif.
Bechtold,
deceased).
Office—San
Underwriter—None.
Inland Oil Co.
(Nev.), Newark, N. J.
(letter of notification) 599,700 shares of class A
common stock (par 25 cents).
Price—50 cents per share.
Proceeds—For drilling and equipping well and for work¬
ing capital.
Office—11 Commerce St., Newark, N. J.
Feb. 26
Underwriter—Weber-Millican Co.,
for the
stock.'
Price—At par
preferred stock and
common.
Proceeds—To
—612 Congress
one
($10
share
per
cent per share for the
purchase
Bldg., Miami, Fia.
oil
leases.
Office
Underwriter—None.
Instant Beverage,
Inc., Omaha, Neb.
May 6 (letter of notification) 30,000 shares of
common
stock
(no par). Price —$5 per share. Proceeds —For
working capital.
Office—2716 Country Club Avenue,
Omaha, Neb, Underwriter—None.
International Technical Aero Services, Inc.
(letter of notification) 300,000 shares of common
stock (par 10 cents). Price—$1 per share. Proceeds—For
—James T. DeWitt & Co.,
Washington, D. C.
Jersey Yukon Mines Ltd., Toronto, Canada
March 20 filed 200,000 shares of
common stock (par $1).
Price—$1 per share (Canadian funds).
Proceeds—For
capital payments on property account and option agree¬
ments, purchase of machinery and operating expenses.
Underwriter—None.
Underwriter—None.
stock
to be offered pursuant to options to be
(par $5)
granted to employees of company and subsidiaries. Price
—$11.88 per share. Office—19 Rector St., New York 6,
Underwriter—None.
N'. Y.
Inc., Denver, Colo.
(letter of notification) 1,000,000 shares of com¬
(par 10 cents).
Price—20 cents per share.Proceeds—To carry on oil exploration program.
Office
—504 Mercantile Bldg., Denver, Colo.
Underwriter—
July 17
stock
mon
& Co., Denver,
ceeds—For
Office—124 E. Water St., Lock Haven, Pa. Un¬
derwriter—None, but Josephthal & Co., New York, will
Underwriter—None.
pany.
agent.
(letter of notification) 100 shares of capital
stock (par $50). Price—At market (approximately $140
21
Proceeds—To Warren J. Bauman, Secretary
Underwriter—None, but Josephthal & Co.,'
York, will handle sales.
share).
per
of company.
it Lola Trusteed Funds, Inc.
Fund), Boston, Mass.
(Commonwealth
July 22 filed 3,545 Plan A, $4,354,000 face amount of
plans; and 1,380 Plan B, $1,656,000 face amount of
trust plans.
Business—Investment. Underwriter—None.
trust
it Lunn Laminates, Inc., Huntington, N. Y.
July 17 (letter of notification) 149,500 shares of common
stock (par 25 cents).
Price—$2 per share. Proceeds—
For
Underwriters—S. D. Fuller & Co.
working capital.
Brothers, both of New York.
and Vermilyea
it Malloran Corp., Los Angeles, Calif.
July 14 (letter of notification) 225,000 shares of capital
stock. Price
At par ($1 per share). Proceeds — For
working capital and other corporate purposes. Office—
8272 Sunset Blvd., Los Angeles, Calif.
Underwriter—
—
Aircraft
Corp., N.
(letter of notification) 300,000 shares
cents). Price—$1 per share.
—For working capital. Underwriter—Securities
July 11
stock (par 10
mon
mon
of com¬
Proceeds
National
Price—$2 per share. Proceeds — For drilling of
exploratory wells, acquisition of leases and for general
corporate purposes. Underwriter—B. V. Christie & Co.,
Houston, Tex. Dealer Relations Representative—George
A. Searight, 50 Broadway, New York, N. Y. Telephone
WHitehall 3-2181. See also "Chronicle" of June 26, p. 6.
cents).
Corp., Dallas, Tex.
shares of capital stock (par 10
of which 190,000 shares will be offered to the
Metals & Chemicals
June
filed
13
cents)
each share held;
Proceeds—To repay debt
and for development of mine properties. Business—Min¬
ing in Costa Rica. Underwriter—Beer & Co., Dallas, Tex.
per
share.
Monty's Stores, Inc., Seattle, Wash.
May 16 (letter of notification) $100,000 of 7% 10-year
convertible bonds (in denominations of $500 and $1,000
each)
and
Price—At
pansion.
10,000 shares of common stock (par $10).
Proceeds—For working capital and ex¬
par.
Office—208 Third Ave., South, Seattle, Wash.
Underwriter—National Securities Corp., Seattle, Wash.
Co., Inc., Pittsburgh, Pa.
(R. D.)
May 5 (letter of notification) 10,000 shares of 5% cumu¬
lative convertible preferred stock.
Price—At par ($10
Proceeds—For financing of Master TV an¬
tenna systems in apartment houses on a lease basis and
for additional working capital.
Underwriter—Graham &
per
share).
Co.. Pittsburgh, Pa.
it Motorola, Inc., Chicago, III. (8/6)
July 17 filed 175,921 shares of common stock (par $3)
to be offered for subscription by common stockholders
on
the
Price
basis of
—
To
one
new
be supplied
working capital.
share for each 10 shares held.
by amendment. Proceeds—For
Underwriter—Hickey &
Co., Chicago,
111.
rights to expire July 25.
share. Proceeds—For working
—Geyer & Co., Inc., New York.
per
(par $5)
capital.
Price—$16.50
Underwriter
Pennsylvania Electric Co., Johnstown, Pa. (8/5) v
$9,500,000 of first mortgage bonds due 1982
June 25 filed
45,000 shares of preferred stock, series
and
F (par $100).
Proceeds—For new construction and to repay bank loans.
Underwriters—To be determined by competitive bidding.
Probable bidders: (1) For bonds—Halsey, Stuart & Co.
Incv;^Kidder, Peabody & Co.; Uhion Securities Corp. and
Whit#, Weld & Co. (jointly); Kuhn, Loeb & Co., A. C.
Allyfi>& Co., Inc., Equitable Securities Corp., The First
Boston Corp., Shields & Co. and R. W. Pressprich & Co.
(jointly); Smith, Barney & Co. (2) For preferred—Smith,
Barney.,& Co. and Kidder, Peabody & Co. (jointly);
W. Ik-Uangley & Co. and Glore, Forgan & Co. (jointly);.
Kuhn, Loeb & Co., Lehman Brothers and Salomon Bros.
& ffpzi&r (jointly); Harriman Ripley & Co., Inc.; Union
Securities Corp.; The First Boston Corp.
Bids—To be
Broad St., New Yorx 4, N. Y.
Aug. 5.
received by company at 67
#
noon
(EDT)
on
Pennsylvania Power & Light Co. (7/29)
July115 filed 100,000 shares of preferred stock (par $100).
Pric'IP-— To be supplied by amendment. Proceeds—For
construction. Underwriters—The First Boston Corp.,
York, and Drexel & Co., Philadelphia, Pa.
ipJEroleium
Feb.
shares
per
Finance
Corp.
.pi (letter of notification) 60,000 shares :f common
stbek* (par
of
$1)
to purchase 30,000
and 30,000 warrants
common
(warrants
stock
exercisable at $7.50
Each purchaser
share on or prior to April 1, 1954).
ofi^q common shares will receive one warrant. Price—
$5*$er share. Proceeds—For working capital. Office—
Oklahoma City, Okla.
New^Vork.
200,000
Price—$3
public.
100,000 shares of common stock
filed
being offered for subscription by common stockholdersof record July 1 at the rate of 5/12ths of a share for
New
(Glenn), Inc., Houston, Tex. (7/30)
June 12 filed 10,000,000 shares of comrifon stock (oar 25
Keene, N. H.
Casualty Co.,
Peerless
new
Corp., Newark, N. J.
exploration, development and testing of oil
Mercantile
Bldg., Denver, Colo.
leases.-- Office—504
up
Y.
Colo.
(letter of notification) 1,000.000 shares of com¬
stock.
Price—At par (10 cents per share).
Pro¬
17
Jiffia^O
Underwriter—George F. Breen,,
Phillips Packing Co., Inc., Cambridge,
Md.
Jijjy 7 (letter of notification) 3,000 shares of common
&obk (no par). Price—At the market (estimated a $7 per'
mare). Proceeds—To Levi B. Phillips, Jr., Vice-Presi-'
a^nf^the selling stockholder. Underwriter—Alex. Brown
Shs, Baltimore, Md.
•tPubco Development,
June
of
filed
25
common
pfleSently
stock
(par $1)
being offered to holders of
outstanding stock purchase warrants at rate of
ohopew warrant for one
of
Inc.
warrants for 605.978 shares
subscription
additional share for each share
Hibco's
common stock that stock purchase warrant
holders of record July 18, 1952 are entitled to purchase
from Public Service Co. of New Mexico. The offer ex¬
pires
at
on
Aug. 1, 1952.
The new warrants are exercisable
3§|per share between Jan. 1, 1955 and March 31, 1955.-
Pri^p-$3 per warrant. Proceeds—To retire existing indebj|dness and purchase additional oil and gas leases.
Unfrefwriter—Allen & Co., New
York.
•
it Pure Oil Co., Chicago, III. »
July 17 filed 85,688 shares of common stock (no par) to
be
«|fered in exchange for 471,287 shares of Hickok Oil
Coral,
class A common stock (par $1) at rate
Oilraare for each
of
one
Pure
5V2 Hickok shares, conditioned upon
appJ&val
Co.,
a
of merger of Hickok into Pure Oil Products
wholly-owned subsidiary of Pure Oil Co. Under¬
writer—None.
Feb. 15
working capital. Office—International Terminal, Wash¬
ington National Airport, Washington, D. C. Underwriter
to be offered to employees. Price—$67
Proceeds — For general corporate purposes.
(no par)
share.
per
$50). Price—At market (estimated at $150 per
share). Proceeds—To John R. Turner, Treasurer of com¬
(par
Morrow
common
Process Co.,
Forbes
New York.
it Inland Petroleum Corp., Miami, Fla.
July 17
(letter of notification) 27.500 shares of 6%
non-cumulative convertible preferred stock, and 275,000
shares of
stock
McCarthy
Underwriter—None.
Warren, Pa.
(letter of notification) 4,000 shares of common
it New
July 21
July
Marine
notes dated Aug.
Md.
Co., Inc., Little Rock, Ark.
as
Statement effective
public."
April 5 through lapse of time. Amendment necessary.
it Lock Haven Development Co.
July 14 (letter of notification) 75 shares of capital stock
None.
Baltimore,
Jockey Club, Albuquerque,
ir Overland Oil,
of common
stock (no par).
Price—$2.25 per share. Proceeds—For
exploration work. Underwriter—W. R. Stephens Invest¬
commission of 10 cents per share sold.
it Home Finance Group, Inc., Charlotte, N. C.
July 17 (letter of notification) 54.500 shares of common
stock (par $1).
Price—$5.50 per share.
Proceeds—For
working capital.
Office—525 North Tryon St., Char¬
Hutzler
Rockville, Conn. Underwriter—None.,.
Corp., Magnolia, Ark.
Oil
(letter of notification) 100,000 shares
June 9
Mining Co., Wallace, Ida.
(letter of notification)
17
N. M.
$1,000)."
Proceeds—To construct racing plant and
for working capital. Underwriter—None, but Dr. Frank
Porter Miller of Los Angeles, Calif., will be "engaged
Mexico
March 17 filed 1,255 shares of common stock (par
Price—At par.
it Oakite Products, Inc.
July 17 (letter of notification) 24,000 shares of common
July 3 (letter of notification) 92,194 shares of common
stock (par $1). Price—$2.75 per share. Proceeds—To re¬
duce accounts payable and for working capital.
Office
New
Hecla
Underwriter—None.
accessories.
sion
July
stock
Corp.
exercise of stock options by officers and employees.
Price—$2.75 per share. Business—Manufacture of televi¬
act
Jan.
bank loans. Under¬
Omaha, Neb.
May 29 filed 230,485 shares of common stock (par $1), of
which 190,485 shares are to be offered for subscription
by stockholders of record June 18 at rate of one share
for each share held, and 40,000 shares are to be issued
it Golden Gate Gas & Oil Development Co.
mercial
—
to sell the securities to the
LaPointe-Plascomold
July 14 (letter of notification) 274,000 shares of common
stock. Price—At par ($1 per share). Proceeds—For com¬
Calif.
due Feb. 1, 1977 (in denominations
4M>% bonds, series A,
of
first mortgage
Salt Lake City, Utah
of notification) 600,000 shares of common
stock (par 5 cents). Price—10 cents per share. Proceeds
For expansion of operations.
Underwriter — Cromer
Brokerage Co., Salt Lake City, Utah.
June 12 (letter
New
Telephone Co.
Contract Corp.
General
share and
(Kansas)
City
(letter of notification) $294,000 of
—155 W. Main St.,
(formerly Industrial
Bancshares Corp.), St. Louis, Mo.
May 26 filed 110,000 shares of common stock (par $2),
15,500 shares of 5% cumulative convertible preferred
stock (par $100) and 50,000 shares of 5% cumulative
convertible preferred stock (par $20) being offered in ex¬
change for stock of Securities Investment Co. of St. Louis
at rate of 1 1/10 shares of common stock and one-half
•
Junction
Feb. 29
upon
Mich.
stock (par $1) be¬
ing offered in exchange for United Stove Co. common
stock at rate of one share of Gar Wood for each three
shares of United.
Up to July 18, 80% of United stock
have accepted offer. Underwriter—None. Statement ef¬
•
writer—None.
Underwriter—None.
equipment and drilling purposes.
•
(letter of notification) 150,000 shares of capital
stock. Price—At par ($1 per share). Proceeds—To pur¬
chase tools and materials and office equipment. Under¬
March 5
Petroleum Co.,
Flathead
March
Nev-Tah Oil & Mining Co.,
Machine Co., Carson City, Nev.
Johnston Adding
33
•
Mountain States
Power Co*
(8/11)
July 7 filed 200,000 shares of common stock (par $7.25).
Proceeds
To repay bank loans. Underwriters—To be
determined by competitive bidding. Probable bidders:
Blyth & Co., Inc. and Dean Witter & Co. (jointly); Kid¬
—
der, Peabody & Co.; Merrill Lynch, Pierce, Fenner &
Beane; A. C. Allyn & Co., Inc. and Bear, Stearns & Co.
(jointly); Lehman
Bids—Expected to
Brothers; Blair, Rollins & Co. Inc.
be received up to 10:30 a.m. (CDT)
Aug. 11 at Room 1100, 231 So. La Salle St., Chicago
4, 111.
on
Ouinbv Plans.
Jul®L4
Rochester. N. Y.
filed $2,000,000 in Quinby Plans for Accumula-
tionlp Common Stock of General Motors Corp. and July
15
fjed
$2,000,000 in Quinby Plans for Accumulation of
Oil Co. (New Jersey). Spon¬
Common Stock of Standard
sor—Quinby & Co., Inc., Rochester, N„ Y.
July
21
filed
$2,000,000
aggregate
amount of Quinby
Plar|i|}for Accumulation of Common Stock of E. I. du
Pon|'i$e Nemours & Co. Sponsor — Quinby & Co.,
Rochester, N. Y..
Volume 176
Number 5136
.
.
The Commercial and Financial Chronicle
.
35
(319)
Reflexite
Corp., New York
Texas General
June 4 filed
July 3
(letter of notification) 158,350 shares of capital
stock (par 50 cents) being offered first to stockholders
common stock (par 50
cents). Price—To be supplied by amendment. Proceeds—
To buy property for oil prospecting.
Office—Houston,
at
rate of two new shares for each three shares held
of July 11; rights to expire on
July 31. Price—$1 per
share.
Proceeds—To repay notes and accounts
Tex.
as
Russell
July
(F. C.)
filed
9
Price—To
83,000
be
shares
of
(7/29)
stock
common
(par
$1).
supplied
by amendment.
Proceeds—To
President, and four other selling stock¬
Frank C. Russell,
holders.
Co., Cleveland, O.
Business—Metal
dows.
screen
Sapphire
and
combination
Petroleums,
authorized
common stock to
stock
Allls-Chalmers Manufacturing Co.
May 12 it was reported company may do
this
of
together
company,
shares of the
common
Bldg., Houston 2, Texas.
Morelana, Houston, Tex.
below.)
with
Wilhead
$9 note
one
Royalty Co.
and
Price
Underwriter—Rotan, Mosle &
(See also Wilhead Royalty Co.
July 3 filed $2,000,000 of 10-year 5% convertible sinking
Price—To be supplied
by amendment. Proceeds—To repay bank loans and for
exploration, acquisition of interests in and development
July 9 filed $1,500,000 5% sinking fund debentures due
July 1, 1962, with common stock purchase warrants
of
attached,
•
fund debentures due July 1, 1962.
prospective
development
Frame
and
of
McFayden
proven
oil
and
lands
gas
chase
underwriters to be named later.
if Savoy Gil Co., Inc., Tulsa, Okla.
general
corporate
Bldg., Tulsa, Okla.
[
Office—417
purposes.
.
'.-.'V'
'
Business—Quartzite
Northeastern
Securities
Southern Discount Co., Atlanta,
June 17 (letter of
notification)
Co.,
min¬
New
11
(letter of notification) 6,000 shares of capital
(par $10).
Price—$12 per share.
Proceeds—For
expansion. Underwriter—Walter F. Hurt, Tulsa, Okla.
405
on
a
Medical
stock
of
shares
preference stock to be offered in
Missisquoi Corp.
per
Wooten, President.
and in behalf of J.,
cents per share. Pro¬
company
Price—60
O.
Box
2247,
Arts
Bldg.,
of
$1.60
Minneapolis, Minn.
exchange
participating- preferred stock
share-for-share basis, plus $5
share for each Missisquoi share exchanged. Office—
Lexington Ave., New York, N. Y. Underwriter—
(par $10)
record
Under¬
being offered to minority stockholders
July
15
at
rate
of
one
shares held; rights to
expire
ber
subscribe
Co.,
shares
parent,
and
for
will
any
shares
on
share
Aug. 15.
for
an
for
each
five
Goodall Rub¬
additional
subscribed
not
for
7,490
by other
stockholders.
Price—$14 per share. Proceeds—To mod¬
plant. Office—Whitehead Road, Trenton 4, N. J.
Underwriter—None.
ernize
•
None.
Stcak'n Shake of Illinois,
Inc.
July 11
(letter of notification) 22,000 shares of common
stock (par 50 cents). Price—$3.30
per share.
Proceeds—
For expansion. Office—1700 W.
Washington St., Bloom-
ington, 111.
★Wichita Falls Oil Co., Inc.
July 14 (letter of notification) 9,800 shares of common
stock.
Price
At par ($10 per share).
Proceeds—For
drilling three wells. Office—World Center Bldg., Wash¬
ington, D. C. Underwriter—None.
—
Underwriter—None.
Storer Broadcasting Co.
May 19 filed 215,000 shares of
of which 200,000 shares are
common
stock
(par $1),
being sold by certain selling
itoekholders (170,000 to be offered publicly and 10,000 to
certain employees; and 20,000 shares to the underwriters
under
if Wilhead Royalty Co., Houston, Texas
July 17 Getter of notification) $135,000 of 3% income
notes due July, 1962, and 30,000 shares of common stock
(par 10 cents) to be offered in units consisting of $9
principal
stock
of
amount
this
of
notes
two
Price—Of first 200,000 shares, to be supplied
by amend¬
ment; of 15,000 shares by company, $10.62V2 per share.
royalties in the Williston
Proceeds—For
general
corporate purposes. Underwrit¬
ers—Reynolds & Co.. New York, and Oscar E. Dooly &
Co., Miami, Fla.
Offering—Temporarily postponed.
if Stout Oil Co., Denver, Colo.
July 15
mon
(letter of notification) 2,225.000 shares of com¬
(par five cents). Price—Nine cents per share.
stock
Proceeds—To repay promissory note and for
drilling and
acquiring oil and gas leases. Underwriter—Stanley Pelz
&
Co., Inc., New York.
Sunshine Packing Corp. of
Pennsylvania
July 3 filed $1,000,000 of 6% convertible debentures due
1972 (subordinate) and
450,000 shares of common stock
(par 50 cents) of which the debentures and 400.000 shares
are
to be offered in units of $50 of
debentures
and 20 shares of stock.
Price—$100 per unit. Proceeds—
To increase
capacity of plant and for working capital.
Underwriter—Weber-Millican Co., New York. Offering
—Expected sometime in August.
if Tavlorcraft, Inc., Conway, Pa.
July 21 (letter of notification) 30,000 shares of common
stock (par $2). Price
$3.75 per share. Proceeds — For
working capital. Underwriter
Graham & Co., Pitts¬
—
—
burgh, Pa.
.a
Texas Gas Transmission
Corp.
June 19 filed 350,000 shares of common
stock
(par $5).
Price—To be supplied
by amendment. Proceeds—To re¬
bank loans and for expansion program. Underwriter
pay
—Dillon, Read & Co. Inc., New York.
Offering—Tempo¬
rarily postponed. May come in a week or 10 days. ~
unit.
per
shares
two
of
common
nature
of
which
Basin
Office—415
area.
San
Willingham Finance Co., Inc., Augusta, Ga.
July 1 (letter of notification) $150,000 of 6M&% subordi¬
nate debentures due July 1,
1967, and 30,000 shares of
common
with
stock
a
to
be
issued
detachable
per
in
warrant
share.
units
of
a
$1,000
to
purchase 200
Proceeds—For working
Office—139-8th St., Augusta, Ga. Underwriter—
Johnston, Lane, Space & Co., Inc., Savannah, Ga.
Wisdom
Magazine, Inc., Los Angeles, Calif.
July 14 filed 6,600 shares of 5% cumulative preferred
stock (par $100) and 6,600 shares of cwnmon stock
(par
$10) to be offered in units of one share of preferred and
share of
one
ceeds—For
if
common
stock.
working capital.
Price—$110 per unit. Pro¬
Underwriter—None.
Working Capital, Inc.,
July 21
mon
warrants
units
of
$125
per
Garden City, N. Y.
notification) 239,800 shares of com¬
(par five cents), with common stock purchase
attached expiring Sept. 3, 1963 to be sold in
(letter
stock
100
of
shares
unit.
of
stock
and
Proceeds—For
50
warrants.
Price—
working capital. Under¬
writer—W. Harry Young Co., Garden City, N. Y.
Zeigler Coal & Coke Co., Chicago, III.
June 19 (letter of notification) 7,000 shares of common
stock (par $10). Price—$13.25 per share. Proceeds—To
R. M.
Rogers, trustee for Nancy Leiter Clagett and
Thomas Leiter. Office—21
111.
East Van
Buren
financing,
determined.
some
been
000 shares and approved a waiver of
preemptive rights
for any of the additional shares. Proceeds
—To finance purchase of
equipment and terminal and
warehouse facilities. Traditional Underwriter—F. Eberstadt &
Co., Inc., New York.
American President Lines, Ltd.
12 it was announced
Riggs National Bank, Wash¬
ington, D. C., will advertise for bids within 90 days for
the sale of the stock of this
at
company
upset price
an
$13,000,000. Proceeds—To be divided equally between
the government and the Dollar interests. If stock is not
sold for $14,000,000 or
the stock would be divided
equally between the two parties, the Government to their \
dispose of its holdings. Registration—Expected within
the next two months.
Arkansas Power & Light Co. (9/9)
was reported company plans issue and sale of
$15,000,000 first mortgage bonds due 1982. Proceeds—For
June 20 it
construction.
Bids—Tentatively scheduled to be
on
Sept. 9. Registration—Planned for Aug. 4.
Underwriters—To be determined by competitive bidding.
Probable bidders: Halsey, Stuart & Co.
Inc.; Equitable
Securities Corp., and Central
Republic Co. (Inc.) (joint¬
ly); Lehman Brothers and Stone & Wecster Securities
received
Corp. (jointly); Union Securities Corp.; Merrill Lynch,
Pierce, Fenner & Beane; Blyth & Co., Inc.
Associated Telephone Co., Ltd.
June
9 it
was
reported company
St., Chicago,
Underwriter—Farwell, Chapman & Co., Chicago, 111.
(Calif.)
may
issue and sell in
October about $8,000,000 to $9,000,000 of first
mortgage
bonds, series H, due 1982. Proceeds—For repayment of
bank loans and construction
program. Underwriters—To
be determined by
competitive bidding.
Probable bidders:
Halsey, Stuart & Co. Inc.; Paine, Webber, Jackson &
Curtis; White, Weld & Co.
Atlantic City Electric Co.
April 28 it was announced company may sell about
$4,000,000 of preferred stock some time this Fall.
Pro¬
ceeds—For construction program.
Underwriters—Prob¬
ably Union Securities Corp. and Smith, Barnev & Co.,
New York. Debt
financing for approximately $3,000,000
planned in 1953.
Banff Oil Co., Ltd. (Canada)
May 6 it was reported company plans to issue and sell
issue of about 1,000,000 shares of common stock. Pro¬
an
ceeds—For
drilling and exploration
—Expected
in
future.
near
costs.
Registration
Underwriter
—
Lehman
Brothers, New York.
if Beaunit Mills, Inc.
July 17 it
reported company is considering issuance
was
and sale of about
$6,000,000 convertible debentures. Un¬
derwriter—White, Weld & Co., New York.
•
Bryn Mawr
July
15
(Pa.)
stockholders
the authorized
Trust Co.
approved
a
proposal
to
increase
stock
(par $5) from 50,000 shares
The additional 20,000 shares would be
common
to
70,000 shares.
for
subscription by common stockholders of
July 9 on a 2-for-5 basis.
Offer is expected to
be made on July 22, with rights to expire on
Aug. 22.
Price—$25 per share.
Proceeds—To retire 50,000 shares
offered
record
of
shares of stock at $1
yet
to subscribe
working capital.
Bldg., Houston 2, Texas.
Underwriter—Rotan,
Moreland, Houston, Tex.
(See also Texhead
Royalty Co. above.)
debenture,
not
American Barge Line Co.
Mosle-&
class A
has
May 27 stockholders approved a proposal to increase the
authorized common stock (par $5) from 330,000 to 430,-
Jacinto
capital.
•
of stock
common
$20
and
company, together with one $9 note and
shares of Texhead Royalty Co.
Price—
Proceeds—For acquisition of oil and ?as
option agreement) and the remaining 15,000 shares
being reserved for sale by company to certain employees.
Pre-
new
Whitehead Brothers Rubber
Co., Trenton, N. J.
July 2 (letter of notification) 4,540 shares of common
stock
of
behalf of the
150,000 shares by certain selling stockholders.
Price—
To be supplied
by amendment.
Proceeds—For general
funds and for drilling and
developing oil properties.
Underwriters—Paul H. Davis & Co., Chicago,
111.; Paine,
Webber, Jackson & Curtis, New York; and F. S. Moseley
& Co.,
Boston, Mass.
Springs, Okla.
cumulative
Airlines, Inc., Ft. Lauderdale, Fla.
if Warren-Brad&haw Exploration Co., Tulsa, Okla.
Southwestern Porcelain Steel
Corp.,
of
Co., both of
July 23 filed 300,000 shares of common stock (par $1) of
which 150,000 shares will be offered
by the company and
Ga.
6,517
&
Under¬
Detroit, Mich.
Co.,
Underwriter—Blyth & Co., Inc.
by
writer—None.
$100,000 of 5% deben¬
if Standard Packaging Corp.
July 18 (letter of notification)
and Burnham
5% stock dividend.
&
more,
S.
—229
F. Price—At par. Proceeds—For
working
Office—220 Healy Bldg., Atlanta, Ga.
shares
supplied
if Walman Optical Co., Minneapolis, Minn.
July 18 (letter of notification) $150,000 of 10-year 6%
debentures.
Price—At par (in denominations of $500
each). Proceeds—For general corporate purposes. Office
tures, series
convertible
be
working capital. Address—P.
Ft. Lauderdale, Fla.
Underwriter—None.
Va.
for
Price—To
ceeds—For
Underwriter—Scott, Horner & Mason, Inc., Lynchburg,
June
stock.
the
of
A.
Southeastern Telephone Co.,
Tallahassee, Fla.
July 2 filed 64,000 shares of common stock (par $10).
Price—$11 per share. Proceeds—To repay bank loans.
Sand
of
1,000,000 from 750,000 shares,
as a
writer—Watling Lerchen
Granbery, Marache & Co.
be offered in
York.
capital.
shares
37,500 shares
eeeds—For additional
working capital.
June
U.
opment, and mining expenses, and to reimburse Maurice
—
100
June 30 (letter of
notification) 200,000 shares of common
stock (par 5 cents) of which
100,000 shares each will
Signal Mines, Ltd., Toronto, Canada
July 14 filed 300,000 Shares of common stock. Price—
At par ($1 per share). Proceeds—For
exploration, devel¬
Underwriter
and
New York.
be offered by company on New York Curb
Exchange.
ing.
(7/30)
and to issue
Proceeds—To retire bank loans and for
general corporate purposes.
Business—Realty and lease¬
hold interests in oil
producing property. Underwriters—
McBirney
Underwriter—None, but shares will
Schack, Secretary-Treasurer.
Tulsa, Okla.
amendment.
July 14 (letter of notification) 27,250 shares of common
stock (par 25 cents). Price—$9.50
per share.
Proceeds—
For
Toklan Royalty Corp.,
150,000 shares of common stock (par 70
cents), each $1,000 debenture carrying a warrant to pur¬
the
and
existing properties.
Underwriters—
& Co., Toronto, in Canada; U. S.
con-
was
ic Texhead Royalty Co., Houston, Texas
July 17 (letter of notification) $135,000 of 3% income
notes, due July, 1962, and 30,000 shares of common stock
(par 10 cents) to be offered in units consisting of $9
principal amount of notes and two shares of common
—
Ltd., Toronto, Canada
lideration
being given to the possibility of equity
On Feb. 18, stockholders voted to increase the
—$20 per unit. Proceeds—For acquisition of oil and gas
royalties in the southwest.
Office
415 San Jacinto
storm
Prospective Offerings
Aeroqulp Corp.
Jan. 4, Don T.
McKone, Chairman, announced that
financing.
two
doors, metal
windows, and steel win¬
Underwriter—McDonald & Co., Cleveland, O.
combination
Underwriter—To be named by amendment (prob¬
ably Hemphill, Noyes, Graham, Parsons & Co., New York.
Offering—Tentatively postponed.
payable
working capital.
Office—Room 1415, 63 Wall
St., New York.
Underwriter—Henry Mann Securities
Corp., New York.
for
and
Production Co.
2,500,000 shares of
4i/2%
cumulative
preferred stock (par $5), and for
Underwriter—Laird, Bissell & Meeds,
Wilmington, Del.
if Byrd Oil Co., Dallas, Tex.
July 18 it was reported stockholders may in the Fall
receive the right to subscribe for $1,700,000 first mort¬
gage convertible bonds. Proceeds—To repay bank loans
and for development and exploration expenses.
Under¬
writers—Probably Dallas Rupe & Son. Dallas. Tex.; Carl
M. Loeb, Rhoades & Co., New York; and Straus, Blosser
& McDowell. Chicago. 111.
California
May 8 it
was
Electric
Power
reported
company
between $4,000,000
Co.
plans to issue and sell
and $4,500,000 first mortgage bonds
by competitive bidding and about $2,500,000 of preferred
stock and $2,500,000 common stock probably through
negotiated sale. Probable bidders for bonds: Halsey,
Stuart &
Co. Inc. and Merrill Lynch, Pierce, Fenner &
(jointly); Salomon Bros. & Hutzler. Underwriters
stock: Probably William R. Staats & Co.; Lester,
Beane
for
Ryons & Co.; and Walston. Hoffman & Goodwin.
if Canadian Oil Cos., Ltd.
July 17, W. H. Rea, President, stated further capital for
exnansion will be required, but he did not specify de¬
tails.
Canadian
April 18 it
stock
are
Palmer Stendel Oil Corp.
was
reported that 1,820,857 shares of common
to be offered for subscription by stockholders
of Palmer Stendel Oil Corp. on a l-for-2 basis. Price—
At par (25 cents per share). Underwriter—Burnham &
Co., New York.
Continued
on
page
36
Financial Chronicle
The Commercial and
36
.
..
Thursday, July 24, 1952
(320)
Continued from page
Food Fair Stores,. Inc.
35
Carolina Natural Gas Corp.
authority to a new 40-mile
to cost $3,150,000, to be
by the issuance of $1,600,000 first mortgage
bonds, $750,000 15-year debentures and $800,000 common
stock. Traditional Underwriter — R. S. Dickson & Co.,
May 19 company sought FPC
transmission line estimated
financed
Charlotte, N. C.
^Carolina Power & Light Co. (10/20)
July 17 it was reported company is planning registra¬
tion late in August of $20,000,000 first mortgage bonds
due 1982. Underwriters—To be determined by competi¬
& Co. Inc.;
First Bos¬
ton Corp. (jointly); Kidder, Peabody & Co. and Merrill
Lynch, Pierce, Fenner & Beane (jointly); Equitable Se¬
curities Corp.; Smith, Barney & Co. Bids—To be opened
tive bidding. Probable bidders: Halsey, Stuart
Lehman Brothers; W. C. Langley & Co. and
Oct. 20.
on
Central
March
Hudson
Gas
Electric Corp.
&
plans the sale this
Fall of about $5,500,000 first mortgage bonds.
Latest
bond financing
was
done privately in March, 1951
tsbrough Kidder, Peabody & Co.
4
it
was
reported
:
,
White, Weld & Co. and Kidder; Peabody & Co. <jointly)!
Blyth & Co., Inc.; The First Boston Corp. and W. C.
Langley & Co. (jointly); Equitable Securities Corp. and;
Shields & Co. (jointly); Merrill Lynch, Pierce, Feniiag;
& Beane; Union Securities Corp.
^
July 17 it was announced stockholders will vote on in¬
creasing authorized indebtedness from $12,000,000 to
$25,000,000 and authorized common stock to 5,000,000
from 2,500,000 shares.
No immediate issuance of any
securities is contemplated.
Glass
Mississippi River Fuel Corp.
G. Marbury, President, on May 26 announced thai
company
will attempt to acquire control of sLacledo:
Gas Co. as authorized by directors on May 22. This ac¬
quisition would cost about $20,000,000, with Laclede
stockholders being offered cash or stock of Mississippi"
River Fuel Corp. in exchange for their holdings. If con¬
trol cannot be acquired, Mississippi then will sell the
W.
Inc.
Fibres,
April 7 stockholders voted to increase authorized com¬
mon stock from 1,000,000 shares
(approximately 938,000
shares outstanding) to 1,250,000 shares to provide addi¬
tional stock for future
expansion needs. Traditional Un¬
I1L
derwriter—McCormick & Co., Chicago,
A
Globe-Wernicke Co.
248,400 Laclede shares it now holds. Underwriter—Prob¬
ably Union Securities Corp., New York.
authorized common >
stock from 300,000 shares (par $5) to 600,000 shares (par$7), placing the company in a position to consider from
time to time stock dividends and the giving of stock
rights or warrants to present stockholders. Underwriters
—May include Westheimer & Co., Cincinnati, O. Previ¬
ous public financing handled by W. E. Hutton & Co. and
W. D. Gradison & Co., also of Cincinnati.
March
increased
stockholders
26
Feb.
Las
this
«ary
year
will be in
New
June
Inc., Youngstown, O.
company may issue and sell
approximately $300,000 of convertible debentures. Pro¬
ceeds
For expansion program. Underwriter — H. M.
Byllesby & Co., Chicago, 111.
it
30
was
reported
—
•
Chesapeake & Ohio Ry.
Bids will be received
to
up
(EDT)
noon
on
Probable
&
(8/5)
by the company at Cleveland, O.,
bidders: Halsey, Stuart & Co. Inc.;
Hutzler; Bear, Stearns & Co.
Salomon
Cincinnati Enquirer,
Inc.
corporation was formed to take over the Cin¬
the sum of $7,600,000, of which $6,000,000 will be raised through the sale of bonds and by
issue of capital stock of which the purchase of about $1,000,000 has been pledged. Underwriter—For bonds: Hal¬
sey, Stuart & Co. Inc., Chicago and New York.
June 5 this
cinnati Enquirer for
Citizens Utilities Co.
June 16, Richard L. Rosenthal announced that company
anticipated
doing some permanent financing in 1952,
planned that this would be in the form of
mortgage bonds and debentures. No common stock fi¬
was
nancing is presently contemplated.
Columbus & Southern Ohio Electric Co.
April 26 it was announced company expects to enter the
permanent financing market about the middle of 1952
with
i
bt less than
Proceeds
For
—
X>illon Read &
200,000 shares of
construction
new common
stock.
Underwriter
program.
—
Co., Inc., New York.
Connecticut Light & Power Co.
March 1 it
was
shares
(par $10)
and
be
announced
in equal amounts,
that it is
presently estimated
company
now
contemplates
either late in 1952 or early in
by
com¬
England Telephone & Telegraph Co.
New
Honolulu (City and County of)
May 20 it was announced it is planned to issue and sell
$6,000,000 bonds for construction of the Kalihi tunnel,
$5,000,000 bonds for public school program, $1,600,000
bonds for public improvements and $1,000,000 for flood
20, F. A. Cosgrove, Vice-President, said a perma¬
financing program will have to be undertaken in
1952 to repay about $43,000,000 short-term bank borrow¬
Dec.
nent
Underwriters—For bonds may be determined by
ings.
Stuart A
competitive bidding. Probable bidders: Halsey,
control.
Morgan Stanley & Co. In case of common stock
financing there will be no underwriting.
Co. Inc.;
Houston Natural Gas
Corp.
announced that stockholders will vote
on approving a proposal to issue 120,000 shares
of 5% preferred stock
(par $25) with common stock
purchase warrants attached to purchase a like number
of common shares at $22.50 per share until Sept. 30, 1957.
July 16
July 29
it
was
The
new
mon
stockholders. Underwriters—Robert Garrett & Sons,
reported company plans tentatively to
of bonds, $1,000,000 of preferred
stock and $400,000 of common stock (latter to be sold to
General Public Utilities Corp., parent).
Underwriter!—
To be determined by competitive bidding. Probable bid¬
ders: Halsey, Stuart & Co. Inc. (bonds only); Kidder,
Peabody & Co.; Smith, Barney & Co.; Union Securities
Corp.; Carl M. Loeb, Rhoades & Co.; Salomon Bros, A
Power
'
^
Co.
Feb. 27 T. E. Roach, President, announced that the com¬
pany's present plans consist of the sale this summer of
about 225,000 additional shares of common stock (par
$20), but
preferred stock.
no
share net to
per
Price—At
a
minimum
of
Latest
handled by
Underwriters
company.
—
common stock financing in April, 1949, was
Blyth & Co., Inc.; Lazard Freres & Co.; and Wegener
& Daly Corp. Proceeds—To repay bank loans and for
8
it
was
issue and sell $3,200,000
preferred shares will be offered first to com¬
pected in September.
Power & Light Co.
New Jersey
April
Baltimore, Md.; Kidder, Peabody & Co., New York; and
Moroney, Beissner & Co., Houston, Tex.
Offering—Ex¬
$35
announced
$11,500,000 at Dec. 31, 1952).
ized but unissued stock.
•
was
Beane; Kidder, Peabody & Co. and White, Weld & Co.
(jointly). Proceeds—To repay bank loans (estimated to
preemptive rights to the remaining author¬
waive their
it
Probable bidders: Halsey, Stuart & Co.
Inc.; Equitable Securities Corp.; Kuhn, Loeb & Co.; The
First Boston Corp.; Merrill Lynch, Pierce, Fenner &
a
Idaho
and it
1,000,000
to
England Power Co.
26
petitive bidding.
Aug. 5 for the purchase from it of
$6,000,000 equipment trust certificates to be dated Sept.
1, 1952 and mature in 30 equal semi-annual instalments.
Bros.
outstanding)
pay
an estimated cost of $2,400,880, to
by sale of $1,600,060 first mortgage bonds;
1953. Underwriters—For bonds to be determined
100% stock dividend on July 25 to common
stockholders of record July 18.
They also voted to
f J Century Food Stores,
June
Harnischfeger Corp.
approved proposal to increase au¬
thorized
common
stock from 500,000 shares
(285,219
shares
applied to FPC for authority to con¬
pipeline from near Topock, Ariz^ to-
additional issue of first mortgage bonds and common
an
June 30 stockholders
to
of $8,500,000.
114-mile
Vegas, Nev., at
stock
excess
Vegas*
$500,000 preferred stock and $402,500 common stock.
was
Central Maine Power Co.
May 15 stockholders increased authorized common stock
(par $10) from 2,500,000 shares to 3,250,000 shares and
preferred stock (par $100) from 300,000 shares to 330,000
shares. It is estimated that additional financing neces-
company
a
be financed
reported company may sell this Fall an
issue of convertible preferred stock. Traditional Under¬
writer—The First Boston Corp., New York.
it
8
struct
Haloid Co.
18
Pipe* Line? Co., Las
Gas
Nevada
company
June
Natural
Nevada
Hutzler.
Niagara Mohawk Power Corp.
May 6 stockholders voted to increase authorized com¬
mon
stock by 1,500,000 shares (11,094,663 shares pres¬
This places company in a flexible
ently outstanding).
position with respect to formulation of future financial
programs. Earle J. Machold, President, said bank loans,
totaling $40,000,000 to be outstanding at Dec. 31, 1952,
will
be
permanently financed early in 1953. Under¬
writers
To be determined by competitive bidding.
Probable bidders: Morgan Stanley & Co. and The First
—
construction
program.
Industrial Research, Inc., Miami, Fla.
July 15 stockholders were scheduled to approve an of¬
fering of 225,000 additional shares of common stock
(par $1).
Underwriter — Barham & Cleveland, Coral
Gables, Fla.
(jointly); Merrill Lynch, Pierce, Fenner A
■■ V:T.;>
Boston Corp.
Beane.
.
Gas Co.
Northern Natural
June
24
it
was
announced that company is considering
possible offering, first to stockholders, of $20,000,000
$25,000,000 in convertible preferred stock, which may
be sold on a negotiated basis.
It is also planned to issue
a
that approximately $11,000,000 of additional capital will
be required during the latter half of 1952.
Kansas City Power & Light Co.
Jan.
4
company
announced that it plans to Issue
and sell in 1952 about $12,000,000 principal amount first
to
Consolidated Gas, Electric Light & Power Co. ef
Baltimore
mortgage bonds (this is in addition to present preferred
through competitive sale in October or
and common stock
probable bidders including: Halsey, Stuart & Co. Inc.;
Blyth & Co., Inc.; The First Boston Corp. and Kidder,
Oec. 24 it
stated that company plans to issue and sell
both stocks and bonds during 1952 to an amount suffi¬
was
financing. Underwriters — To be de¬
competitive bidding.
Probable bidders:
termined
cient to raise approximately $22,000,000. Underwriters—
For bonds to be determined by competitive
bidding
by
Halsey, Stuart & Co. Inc.; Glore, Forgan & Co.; Blyth
& Co., Inc. and Lazard Freres & Co. (jointly); The First
Boston Corp.; White. Weld & Co. and Shields & Co.
Probable bidders: Halsey, Stuart & Co. Inc.; White, Weld
Co. and The First Boston Corp. (jointly); Harriman
omon
JRipley & Co., Inc. and Alex. Brown & Sons (jointly)
The First Boston Corp., Alex. Brown & Sons and John C
JLegg & Co (jointly) handled latest common stock fi¬
nancing, while White, Weld & Co. handled last preferred
rtiock sale.
Proceeds—For
authorized
indebtedness
Lake Shore Gas
Co., Ashtabula, Ohio
June 11 company received permission of the Ohio P. U.
Commission to issue and sell 10,000 shares of common
stock (par $10) $1,450,000 of bonds and $300,000 of prom¬
issory notes. Proceeds—For expansion program.
construction.
new
Copperweld Steel Co.
April 30 stockholders approved
the
(jointly); Smith, Barney & Co.; Kuhn, Loeb & Co., Sal¬
Bros.
&
Hutzler
and
Union
Securities
Corp.
(jointly); Equitable Securities Corp.; Lehman Brother»
and Bear, Stearns & Co. (jointly); Harriman Ripley A
Co., Inc. Proceeds—For new construction.
a
proposal to increase
from
$5,000,000 to $15,000,000 (none presently outstanding) and the author¬
ized preferred stock (par $50) to 137,727 shares from
37,727 shares, which are all outstanding. Traditional
Underwriter—Riter & Co., New York.
Lone Star Gas Co.
Creameries of America, Inc.
April 14, G. S. McKenzie, President, stated that the com¬
pany may do some long-term borrowing in about two
months to finance expansion program. Traditional Un¬
derwriters
Kidder, Peabody & Co. and Mitchum,
Tully & Co.
*
was reported company plans to raise an addi¬
$400,000 of equity capital. An issue of $200,000
capital stock was just recently placed privately at
$7.50 per share. Underwriter
Gearhart, Kinnard &
Otis, Inc., New York.
69.5 miles
of transmission
line
at
a
cost
of
It is also planned to spend about $31,000,000
for additions
to
plant.
Previous financing was
privately.
Middle
East
projects
in Israel.
Food Fair
May 20 it
on
to
/
$25,000,000 and to increase the authorized
2,500,000 to 5,000,000 shares.
of either debt securities
or
of
No
common
immediate
common
stock is
contemplated. Traditional Underwriter—Eastman, Dillon
& Co., New York.
Exploration Co., Houston, Tex.
it was reported early registration is expectei
125,000 shares of
certain
stockholders will vote Aug.<19
increasing authorized indebtedness from $12,000,000
issuance
March 21
of
Stores, Inc.
was announced
stock from
Minabi
.
common
selling stockholders.
Beissner & Co., Houston, Tex.
stock.
sell in
bonds.
Proceeds—To go It
Underwriter
—
Moronay
debentures, due 1962, and 120,000 shares of com¬
to be offered in units of $100 of debentures
stock
per
unit.
Proceeds
Underwriter—Trinity Securities
Offering—Not expected for about a
capital.
Corp., New York.
week or ten days.
Permian Basin
Pipeline Co., Chicago, III.
April 1 company applied to FPC for authority to con¬
struct a 384-mile pipeline system from west Texas and
eastern New Mexico to the Panhandle area of Texas at
estimated cost of
$58,180,000. Probable underwriter!
Stone & Webster Securi¬
for convertible notes and stock;
and Glore, Forgan & Co./both of New York.
Pillsbury Mills, Inc.
June 30 stockholders approved a proposal to issue and
to
from
$4,500,000 to $5,000,000 of common stock and
of the company by $5,000,000.
increase indebtedness
Proceeds
For
—
expansion. Underwriters
—
Goldman,
York, and Piper, Jaffray & Hopwood,
Minneapolis, Minn. Offering—Publicly expected in July
Sachs & Co., New
or
August.
Power Co.
April 16, R. R. Dunn, President, announced company
plans to raise about $40,000,000 of new money in connec¬
tion with its $62,000,000 construction program in the
Probable bidders: Halsey,
Stone & Webster
Corp. and Union Securities Corp. (jointly) J
First Boston
Corp.; Kidder, Peabody & Co., Merrill
Lynch, Pierce, Fenner & Beane, White, Weld & Co. and
years
1952,
&
1953
Co.
and
1954.
Inc.; Lehman Brothers,
Securities
*
reported company plans to Issue an4
an
issue of $8,000,000 first mortgage
Underwriters—To be determined by competitive
was
November
bidding.
Price—$100
and 40 shares of stock.
—For working
Stuart
;
Mississippi Power & Light Co.
March 14 it
(jointly).
Potomac Electric
of
—
mon
sell
Industries
Corp., N. Y.
Oct. 31 it was announced company plans to expand tti
capitalization in the near future and to register lt»
securities with the &EC preliminary to a large publli
offering, the funds to be used to build new industrial
tional
of 6%
ties Corp.;
1952
November, with
^ Parsonnet TV-Film Studies, Inc.
July 21 it was announced company intends to file in
the near future a letter of notification to cover $300,000
additional
done
June 11 it
Peabody & Co.
an
in
European American Airlines, Inc.
$40,000,000 of 20-year sinking fund debentures
April 1 the FPC authorized the company to acquire addi¬
tional properties at a cost of $5,598,129 and to build as
$4,010,200.
—
sell
and
Probably bidders: .Halsey, Stuart & Co. Inc.;
Salomon Bros.
& Hutzler
(jointly); Kuhn, Loeb & Co.
Blyth & Co. Inc. (jointly); Dillon, Read
Harriman Ripley & Co.. Inc.
and
& Co. Incj
Volume 176
Number 5136
.
.
The Commercial and Financial Chronicle
.
(321)
,
Pressed
•
Steel Car-Co., Inc.
April -17 stockholders approved
the
authorized
The
new
stock
common
proposal to increase
from
shares would be issued when directors
with diversification program.
connection
Traditional Underwriter—Shields & Co., New York.
Tennessee
No imme¬
financing is planned.
Traditional Underwriter—
Kuhn, Loeb & Co., New York.
it San Diego Gas & Electric Co.
July 1, L. M. Klauber announced that of the more than
$18,000,000 required for capital improvements in 1952,
approximately $4,000,000 will become available from de¬
preciation reserves and earned surplus, while the re¬
Texas-Ohio
Paper Co.
proposal to
a
stock from
increase
$25,000,000.
&
The company said it will
for future financing.
plans
any
Co.; Merrill
March
Underwriters—Drexel
Lynch, Pierce, Fenner
&
Beane; and
stock
&
Underwriter—Morgan Stanley & Co., New York.
April 18 it
June
Offer¬
sell
$28,000,000 of
Underwriters
—
pany
line
new
3
Power &
it
in
writers—May
that company
be
Canadian Board of Transport Commission^"
conditionally authorized this company, an affiliate*
of Sunray Oil Corp. and Pacific
Petroleums, LtcL, to*
build a $111,240,000 natural
gas pipeline on the Pacific.
Coast, providing gas reserves were found sufficient
issue
may
and
$10,000,000 of first mortgage
by
maintain such
competitive
First Boston
Stearns
&
Co.
bidding.
to
the
Interstate
&
Commerce
Commission
for
•of mortgage
bonds, without competitive bidding,
authority to issue and sell $46,000,000
period of about four
years.
a
Proceeds—For retirement
in part of certain
outstanding mortgage bonds.
Continued
page
from
over
(jointly); The First Boston Corp.
from
issued
Beane
(jointly);
to this time under this author¬
program, but they are ex¬
pected to begin to appear within
financing School Improvements
Through "Special Authorities"
We hear
tions,
although
•of others who have not been lured
many
respects
by the subsidy
School
Building
Authority
in
Pennsylvania.
These two states
so much as by the
by-pass a referendum
•on
issue.
bond
a
are
In
Creation of State School Building
Authority
appears, therefore, that two
states, Kentucky and Pennsylvania,
have
established
statutory pro¬
visions whereby schools may be
lease-back
a
on
where
ment
tive.
arrange¬
steps
leading
actual issuance of the
toward the
Uonds
all
taken
by local initia¬
Chapter Three in this
are
For
Georgia and Maine.
Georgia,
the
Legislature
established
in
which
funds
other
state
which
state
a
also
has
a
state
state-aid funds newly made avail¬
able for capital outlays.
In this
it is
case
a straight matter of util¬
the authority's borrowing
powers in
lieu of the deficient
powers of local government.
The
izing
lease rentals will be
school
building
founded on
aids
been
1951
to
education
available
the
here¬
Legislature
general and
State School
Building
Authority, which is authorized to
in rent, any state funds due to be
paid by the state to the town, for
school, highway or other purpose,
be withheld from the town
may
and
diverted
to
the
authority.
issue its own bonds, and to fi¬ Advantages and Disadvantages in
.authority.
This was
ithe premise that a state author¬ nance from the proceeds thereof
Using "School Authorities"
ity could sell its bonds more ad¬ improvements
to
local
school
So much for the background.
vantageously than numerous very plants and structures all over the We come to the point where it is
ismall local authorities.
The state
The bonds of the
state.
authority is authorized to sell its
are
rental
•bonds to the public, but when it
was discovered that their
security
be
issued
provisions
with
as
would
to make them
be
nebulous
so
unmarketable, it
arranged to place all of the
was
bonds
in
state
investment
funds.
By arrangement with local school
•districts, the state authority will
build
school
them
to
Tease
rentals
local
current school
cal
school
manner
structures,
school
are
systems.
in
contracts
and
county
and
leases
city boards of
provisions of
education under the
which
tion
the
will
local
board
of
educa¬
the
lease
facility con¬
authority.
The
rental is payable in the first in¬
structed
by
stance, and
exceed, the
the
is expected
never
to
authorities
which have
ated to finance
those
instances
the
dation
to
the
that lease rentals
are
pay¬
to a local municipal author¬
ity which has issued building rev¬
Program, and the rentals
payable to the authority will be
payable directly to the authority
by the State Board of Education,
operate in
where
interstate
cooperation is required, have def¬
initely
built
for
themselves
a
are
same
cre¬
twilight zone between the
strictly governmental activity and
the
proprietary activity or in
authorities
from
sums
and to
been
the
of the lo¬
able
enue
into
accruing to the
benefit of the particular school
system from the Minimum Foun¬
payable
revenues
district,
leasing
enters
authority- incumbent upon us to consider the
bonds, and will advantages and disadvantages en¬
as
the authority tailed in using authorities.
The
revenue
only
place
in
ment
on
scheme
our
this
conduct
of
govern¬
continent.
also
well
affairs
funds
as
are
needed for
of
Public
suited
a
rev¬
terest
authority, it
standing
„
be possible for
may
to build your urgently needed
school
plants
mental
facilities, despite inability
and
other
govern¬
to finance within legal debt limits.
We
in
New
are
being
formulated
elsewhere.
At least two other states have al¬
Minimum
are
Foundation
tion becomes
a
Program
direct and general
long term
you.
difference
To
single
this
me,
claimed for rental
obligation of the local school sys¬
ready established such organiza¬ tem. No bonds have been issued
other
fees
analysis,
payable,
out
of
in
the
general
The
advantage
bonds
revenue
for
advantage
the
generally
tax-supported
distinction.
In.
traditions.
state, there
tions
be
may
In
any
important
an
between direct obliga¬
and
authority bonds. The
payable only from earn¬
What happens in case there
latter
are
ings.
outweighed by the disadvantages
of this plan of financing.
First, the use of rental revenue
bonds means paying higher inter¬
is
est rates.
vestigate and appraise the extent,
with
It is difficult to be exact
to how much
respect
more
bonds
as
there
instances
are
relatively few
where
essentially the
same community has issued obli¬
gations of both types, of com¬
parable maturity and under
market conditions.
com¬
parable
This
is, therefore, largely a matter of
judgment. In my opinion, author¬
ity bonds mean an interest cost
from Vz of 1% to a full 1% higher
than
the
would
cost
be
direct obligations of the
ing government. There
two
for this
reasons
In the first
ing
authority
sess
the
for
the
sponsor¬
are
at least
differential.
place, school build¬
bonds do not pos¬
building to rent?
no
cease?
There
is
against
which
the
Do rentals
hazard
a
here
authority
insure, but the investor
can.
must in¬
of this hazard.
interest must be paid on revenue
A
second
disadvantage
thority
bonds
general
credit
nancing costs
of au-^
compared
as
bonds
is
to
that
fi¬
higher and it is?
are
necessary
to
sell
more
bonds.
When general
credit bonds are
used, the relation between bond¬
holder and school district is sim¬
ple and direct.
of
the
school
Not
school
district
in the
so
authority,
is
the
funds from which the
be
not
paid.
a
But
party
the
to
case
s
The
of
source
bonds will
bondholder
the
contract
is.
be¬
tween the district and the author¬
ity.
In the
bondholder
event of default,
can
bring
the*
direct
district.
To
no
marketability as
general obligation bonds; not only
are
many investors suspicious of
action
authority bonds, but by law
trustee to police the relations be¬
tween the district and the author^
same
in
the
banks
are
them
amount
of
com¬
forbidden
and
an
are
to
limited
issue
they
may
hold.
which
Also,
trust funds, even in Pennsylvania
only
claimed
this
of tax-supported authorities is far
underwrite
and
credit
tax-supported,
subject to greater
leases is a startlingly
concept, breaking all sorts of.
investment
the promise of complete
self-support is present. Our concern here
taxes.
the
the
for
reasons
new
mercial
insufficient, the rental obliga¬ final
higher iiL-
this:
authority is
question than that of the sponsor¬
ing government. There are many
ability to pay, despite legal
inability to borrow, using the
authority device may appeal to
For example, they are not gener¬
ally eligible for the investment of
agency
is
of
convinced that you have the eco¬
ated
state
for
reason
rates
nomic
several
classes of investors are
legally
precluded from purchasing them.
a
second
concerned, in this Kentucky, you may recall, the
paper, with ways and means of year-to-year lease arrangement is*
financing school improvements in something which outside investors;
the face of inadequate economic look upon with natural
suspicion.
ability to pay for them. If you are In Pennsylvania, the legality o£
by-passing the local school system is with these newly-created, taxSome sort of a school building in the handling of the funds.
In supported authorities which de¬
case
sums
authority is proposed to be cre¬
accruing
under
the rive income basically from rentals
as
A
not
are
enue-producing enterprise where
bonds.
Jersey, and possibly similar plans
construction. Dealer-
new
Managers—Harris, Hall & Co. (Inc.), Chicago, 111., and!
type of authority is its ability to
get things done.
By using the
you
created
building authority.
The
pattern is essentially similar to
Georgia's save that there are no
Minimum
a
supplemental to
are
have
review, we stay right tofore. In
Pennsylvania which has also created the
^created
1949
Maine
school
unlimited liabilities on the part
Program designed to of the contracting local govern¬
equalize educational opportunities ments, and there is no
legal limit
throughout the state. This pro¬ to the rate of taxation for dis¬
gram, among other things, pro¬ charge of this obligation. To make
vided a method of
distributing the authority's bonds more attrac¬
state funds to be used by local tive to
investors, it is provided
school
units
for capital
outlay, that, in case a town is delinquent
historical
in
differ
in
the State
matter of weeks.
Foundation
It
fcuilt
they
from
a
400,000 to 500,000 shares, the additional shares to fc«*
The First Trust Co. of Linclon. Neb.
ized
ability to
Lehman
Brothers; The First Boston Corp.
up
$28,000,000 is to be provided hy
$28,000,000 of junior securities. Ui&*
Light & Telephone Co., Inc.
April 11 stockholders increased authorized common stock:
(jointly); Union Securities Corp. and Smith, Bar¬
&
another
Western
stock—Blyth
& Co. (jointly); Kidder, Peabody & Co. and Merrill
Fenner
lor*
derwriter—Dillon, Read & Co. Inc., New York.
Co.
Pierce,
and
the issue and sale of
ney
9
inside their debt limits.
Co.
ance
and
America, The Mutual Life
Co. of New York and the New York Life
Insur¬
surance
Co., Inc., W. C. Langley & Co. and Glore, Forgan &
Lynch,
It
dential Insurance Co. of
Blyth & Co., Inc. (jointly); Union Securities Corp. and
common
a
first
Under¬
(1) For bonds—Halsey, Stuart & Co.
(2) For
line.
was stated that
$88,000,000
mortgage bonds have been conditionally subscribed
for by The First National Bank of New
York, The Pro*-
Proceeds—
construction.
new
determined
Kidder, Peabody & Co.
applied
Norwalk,
ers
Inc.; White, Weld & Co.; Lehman Brothers and Bear,
Ry.
company
and
pipe¬
Calif., witfe
The financing, totaling about
$101,000,000,
being arranged by White, Weld & Co. and Union Securi¬
ties Corp., both of New York.
Smith, Barney & Co. (jointly); Salomon Bros. & Hutzler;
3
Tex.,
com¬
oil
this year.
Light Co.
reported
was
Probable bidders:
Fall.
July
24-inch 953-mile crude
Westcoast Transmission
Co., Ltd.
September about
new con¬
Corp.; Harris, Hall & Co. (Inc.) Offering—Expected in
Southern
a
reported company plans some additional
was
To repay bank loans and for
capital through
Probably The
plans to build
between Wink,
construction scheduled to begin in the fourth
quarter o$
Corp., New York.
bonds and 150,000 shares of common stock.
the sale of additional securities. Proceeds—For
struction.
West Coast Pipe Line
Co., Dallas, Tex.
July 14, L. M. Glasco, President, announced this
issue of convertible preferred stock.
an
Webster Securities
Utah
reported company plans to obtain be-
was
Pipe Lino Corp.
reported company plans issuance and
was
determined
June 14 the
California Edison Co.
tween $25,000,000 and
Gas
Underwriter—Kidder, Pea-
financing in September.
ing—Not expected before early September.
-
it
July 14 it
shares held. Proceeds—For expansion and improvements.
Southern
14
be
by competitive bidding. Probable*
Halsey, Stuart & Co. Inc., Blyth & Co., Inc.,.
Smith, Barney & Co. and White, Weld & Co.
(jointly);
W. C.
Langley & Co. and The First Boston Com.
(jointly).
share for each 10
one new
Power Co.
was
bidders:
it United Gas Corp.
stockholders about 3,180,188 shares of common
(par $15) at the rate of
—To
Underwriters—Probably White, Weld & Co. and Stone
announced company plans to offer to its
was
it
reported company plans issue and sale*
$25,000,000 first mortgage bonds this fall. Proceeds—
To retire part of
outstanding bank loans. Underwritersr
Gas
sale this Fall of
-^Socony-Vacuum Oil Co.r Inc.
July 18 it
Washington Water
June 30
company
Transcontinental
later
announce
Salomon Bros. & Hutzler.
a
to cost $184,989,683.
body & Co., New York.
Smith, Barney & Co.
common
17
mated
3,000,000 to 5,000,000
shares, and the authorized indebtedness from $4,000,000
to
—
(9/8)
Co., Houston, Tex.
applied to FPC for authority to con¬
1,350-mile natural gas transmission line extend¬
ing from Texas into West Virginia. The project is esti¬
Oct.
struct
common
Co.
of
mainder must be secured through the sale of securities.
April 24 stockholders approved
Transmission
Gas
July 9 it was reported that the company plans sale of
about $40,000,000 debentures. Underwriters—To be de¬
termined by
competitive bidding.
Probable bidders:
Halsey, Stuart & Co. Inc.; Stone & Webster Securities
Corp., and White, Weld & Co. (jointly). Bids—Tenta¬
tively expected to be received on or about Sept. 8.
,
the authorized
Virginia Electric & Power Co.
j
May 26 it was reported company plans issuance
sale later this
year of $20,000,000 first and
refunding
mortgage bonds. Underwriters
To be determined
by
competitive bidding. Probable bidders:
Halsey, Stuart &
Co. Inc.; Kuhn, Loeb & Co. and
Wertheim & Co. (joint¬
ly); Stone & Webster Securities Corp. and
Harrimam,
Ripley & Co., Inc. (jointly); Union Securities
Corp.,"
decide,
diate
Scott
Forgings Corp.
April 25 stockholders approved an increase in author¬
ized common stock from 266,000 shares to 350,000 shares.
1,280,000 shares to
3,280,000 shares (1,045,500 shares presently outstanding).
in
Standard
-
•
a
37
where
authority bonds
widely issued.
are
against
the
protect his interests,
the
appointment of
he requires;
a
ity; the trustee's fee is
corporate
an
extra
annual expense to the district.
further protect his
To
investment, the
bondholder may insist on the cre¬
ation of a reserve fund; this means
the
payment of rentals
in
excess
of bond interest and
amortization.
The
legal fees resulting from the*
most
Continued
on
page
3$
The Commercial and Financial Chronicle
.
.
Thursday, July 24, 1952
.
(322)
38
Continued from page
investments
clients'
our
37
se¬
are
perience with voted and non-voted
debts is strongly in favor of the
Financing School Improvements
voted bonds has been far
Through uSpecial Authorities"
that
to
This probably would put
slacken.
upward surge of commodity prices.
the entire government
security market.
Let me give you a few figures
This
to illustrate my point.
chances
pressure on
renewed
a
mentioned
be
does
not
very
fre¬
the
Even if businessmen and
consumers
their
of
that
reason
a
to
quently.
The
ability to create debt by adminis.he democratic veto power. True, trative action, except as it has
up
the authority, drafting the the voters may turn their elected been closely curbed by legal limtrust
indenture,
preparing the officials out of office after the
j^g jecj no^ uncommonly to
prospectus, etc., add to cost, and damage is done, but that is small disaster.
these
usually
are
capitalized, satisfaction.
Reviewing the single advantage
Finally, no rentals will be payable
When financing can be accomauthoritv and the
until
the
building is completed piished without referendum, with- claimed lor the authority and the
and
accepted
for occupancy, out justifying the expenditure
to",'revenue
Therefore, it is necessary to capi- before the voters, a strong urge jP
1
™ eonclutnu/arH
ahcpnt
Thp
UUXlUs, I Uclievc Ulliy Ullt: CUX1C1U
talize interest during construction, toward economy is absent.
The sion is possible. The school build¬
is
seem
superior
bonds.
non-voted
of
rea¬
being rather dubious
my
the
about
of
record
payment
the
former;
for
son
emphasized that investors' ex¬
be
There is still another
again.
it is to
connection,
In this
cure.
borrowing
were
Federal
the
willing to increase
are
expenditures sufficiently to
date,
billion
and
$1
from
their
only about
Reserve,
reserves
excess
On July 16,
banks
statement
latest
were
,
extensive
i
j
i.
^
a
ability
Over the
ord
Finance
At this
a
years,
bond
the voting
proposals has
rec¬
been
when you and I are overly
you
matter
ion.
is this: they
tend to conceal the true status o
authorities
ported
40"^
let
behind
to
enable
need
This is a matter of
public debt.
and
investors
to
concern
1
also,
it may become a source of
concern on the part of the people
fear,
vestors.
this
To
end
we
pj?
investment
realism
movement
leSl
into
to
bor
ments
and
authority
government.
instances
and
will
ex-
rewards
would
the
an
pect
we
welcome
creation of tax-sup¬
Secondly,
seems apt
lead to the excessive creation
what
The
Latin
great
authorities
to
of
is best made slowlv "
a
The Outlook for Government
authorized un-
Bond Maiket and Interest Rates
bilize,
be a rather nebulous type of serve policy was neutral. The ficontrol
over
the incurrence
of nal burst was set off by the Treasdebt.
Rightly or wrongly there ury.s offer to refund the longest
may
who
many
believe that
our
leading educators have a concep-
and require-
tion of school needs
that
since
situation
not
fjrst
always
m
keeping, with
the
into
of restricted bonds
nonmarketable 2%% bonds.
issues
ments which is not in keeping, or
ability of school systems to pay.
brings
or
start
on a new
has
of
been
strain
real
end
time,
jyfoy,
however, the
changed. The
around
came
At
this time
the
there
me
Money soaked
not
by rentals
up
available
teachers'
for
world-wide
war.
I
assuming that there is
no
a
the present analysis and start
of
reviewing
proposed
the
Federal Reserve
rescue
of
the
came
money
the
to
At nresent
time
you
opinion.
can
as
nractirallv
at
eet
There
a
wide
people this right is
to bar them
thHpi° re'ceS'preMureriii^he
governmental
j*
by
the
Financing
excesses.
are
some
a
half
1951.
of
not spend
need
the
debt,
repurchase agreement will
be bought back and will
to
still overhang the market.
It* is only if the Federal makes
purchases
outright
the need for
have
likely to
in
of
excess
that
reserves
we
are
easing in the
any
market for the remainder
of this year. In that event banks
would
be
under
no
particular
may
ex¬
As
to liquidate their debt at
Banks then would
pressure
Federal.
the
in
be
much
a
position
better
to
expand their loans and their hold¬
Their purchas¬
ings of securities.
ing power would be increased.
What
eral
decision
the
Reserve
have
no
will
of
be,
the
I
I only
of knowing.
way
Fed¬
however,
know that both the words and the
actions
Federal
the
of
indicate
that
they are not fooling in their
desire to retard the expansion of
bank
reserves
and of
bank loans
and securities.
for
Alternate
Reserve
Policies
much time
want
promte
to
stability
in
the
banking and credit situation and
on
the
t
have
been
Tir.„
,,
ernment security prices? Will they
continue to move downward, sta-
if the Treas¬
mature
on
future tax dates would
be particularly
ln mEr
tion
rates would rise further.
There is
Banks would not be able to obtain
additional
and business
consequently would
reserves,
and consumers
This might
not be able to borrow.
in the gov¬
ernment security market.
In the more likely event that
lead
we
to
sharp drop
a
have
gradual
eral Reserve.
renewed
inventory accumulation. At the other extreme
and
the pleasant
rise
in
stability or
business
mentioned earlier, it seems
that
I
to me
Seasonal Market Factors
unlikely that discount rates would
Turning now to the government be raised. Unless and until we
security market, let • us examine have an actual recession, however,
first the purely seasonal factors I doubt if the Federal reverses its
that will affect ithe market be¬ present policies of keeping a tight
tween now
and ithe end of
the rein on the money market.
In
These two
year.
These seasonal factors will that event the Federal may make
cover the
tighten the money market in any some outright purchases in order
ly on the basis of the further in-
of
rising prices,
consumer
accumu¬
followed, first, the start of
^unists. As I mentioned earlier,
e
handle^
offers in exchange securities little question in my mind that the
that the holders of the maturing boom would be financed not at
issues will want.
Securities that stable rates but at rising rates.
nrncmee
What is the future trend of Gov-
k
problems of the Treasury
even
successfully
of
downward,
m a r
an
is
two, we
or
popular. In addi¬
tion it is possible that the Treas¬
tive further increase
expenditures and reach the con- ury may offer somewhat better
terms in an effort to improve the
elusion that we at least are
in
danger of a further upward surge public acceptance of its refunding
in commodity prices, with a rapid offerings and to reduce the amount
of support necessay from the Fed¬
expansion in personal consump-
Diace great stress
lation
denial of
method
action; it is
and the second
corporate bond offerings.
new
on
who
the Korean War'and, "second; "the
intervention of the, Chinese Gom-
„
«,
authority
autocratic
halt to
1950
under
need
are
We
anv
rance
spending, and inventory
Probable Trend
a
reserves
ury
waves
rate,
To deny the
call
supplies
,
of
over
market
capital expenditures.
from their right to
peak,
If bank credit and if commodity
still running at a high
level. This may well be produc¬ prices again rise at a rapid rate,
tive of a continued large vo^me I believe that the Federal will
they
again.
in crease in defense spending. I besalaries.
only a limited manner. Borrow- lieve also that we can eliminate
Finally, and possibly the most ings from the Federal Reserve the prospect of a sharp upward
important objection of all, author- Banks have risen, and bill rates surge of commodity prices when
ity financing denies the voters the are again abdve ' the rediscount we remember that the two great
privilege
Federal
the
if
plant and equipment expenditures,
recovery?
recession in business.
extremes just about
range of possibilities, but I believe that we can narrow them
considerably. Without going into
detail I believe that, as long as we
ity bonds, their issuance means ing absorbed a substantial amount stop our projection at the end of
that just that many more tax dol- 0f funds
early in July. The im- the calendar year, we can elimilars must be taken for debt serv- portant
point, however, is that nate the recession prospect, largeice.
idle, dis¬
new
ing the next few rponths to sell only to prevent disorder in the
am also
market. In that event the Federa.1
real and only tax bills that mature on
Reserve probably would increase
lasting peace settlement. In either March 15 and June 15, 1953. The
discount
rates,
and
short-term
event we would have to tear up refunding is large,; but can be
of
carefully by investors, administrawithin
the last three weeks,
tors and taxpayers alike. i A rental however, things have really hapobligation is no less a burden on pened. The combination of a seathe
taxpayer because i,t is not SOnal outflow of currency and an
called a legal debt.
Because in- increase in required reserves in
terest rates are higher on author- connection with Treasury financ-
is
following the drop
half
year,
second
the
directly to a was a seasonal outflow of curthird objection: the use of tax- rency and other drains that the there are some who place great
supported authorities will tend to Federal Reserve did not offset, stress on the high level of inweaken the general credit struc- The money market then was given ventories and the tremendous exture of local government. This is a respite over the quarterly in- pansion of plant capacity and cona matter that should be considered
come-tax period in June.
elude that we are in sight of a
This
a
thereby in business and commod¬
though the Treasury ity prices. The Federal Reserve
has. a
large deficit for the re¬ then may follow an even more
restrictive policy. It seems to me
serve
balances fluctuated around and the Federal Reserve.
Some mainder of the calendar year. The
a
constant level.
Required re- discussion of business prospects, Treasury already has taken im¬ likely that support of the govern¬
serves declined a little, and banks therefore, may be helpful at this
portant steps in financing this ment security market would be
Federal
Reserve
pur¬
deficit. The Treasury in all prob¬ limited.
were able to keep a fairly compoint.
In this discussion I
am
fortable level of excess reserves, assuming that there is no outbreak ability will find it necessary dur¬ chases then would be designed
generally speaking.
It is possible to argue that the
State
Department of Education
can regulate the issuance of rental
revenue bonds to some extent by
Although bank borrowings from
exercise
of some administrative the Federal
Reserve
fluctuated
discretion
in
the
approval
of widely, they were riever suffiplans. Where a state authority is cient fo be really restrictive. The
issuing the bonds and building the bill rate touched 1%% occasionfacilities for lease back to local aiiy> but was generally below this
units, state control may be quite rate. The money market was tight
effective.
Even so, state review but not restrictive.
Federal Re-
are
and
large volume of new mort¬
perhaps exceeding that of
a
gages,
public -debt, downward, and this imparted As I mentioned at the beginning
created to get some strength to the market.
of this talk, I believe that the
debt limits, and there
q^e money market eased, part- major influence on the bond mar-
debt,
plant
If, as seems likely, it has
further seasonal rise during the
pect
is
type have
this
next month
potentially, inadequate means iy for seasonal reasons. The Fed- ket
in the future will be the
of curbing the creation of debt by erai Reserve was able to reduce course of business and the effect
this device. The legislatures which
holdings of Government secur- of changes in business on the poialready have authorized financing jties.
Despite this reduction, re- icies followed by
the Treasury
of this
for
expenditures
between
are,
limited
two
equipment. As you are probably
aware,
residential building has
been at a reasonably good level so
roughly translated, reads "Haste
essentially
is
authority
around legal
careful
components of the
business picture.
These
at
ness
which
proverb
government bond
residential building and busi¬
are
is
far
their loan volume might continue
leave
money
the
as
over-all
Rut the
There
renewed
of 1951.
the existence of this
contingent liability.
ported
old
be
by
moderate rise.
look
Continued from page 3
will be tempted to
school boards
fail to report
minimum the
a
banks
perhaps as high as $l1/2 billion or
$2 billion by the year-end. Even
obtaining
the
want to take an especially
statutes
take time
course
will
of
_
liability,
general
a
~
of
revisions
and
reserves,
cost of
reserves.
Any
As far
liabil¬
where the rental
not
is
ity
local
Certainly, in those
to a
leased
and
at generous yields. You might
the
pay
place at
that
counts would rise to
market is concerned, however, we
facilites, for that matter,
Necessary constitutional amend-
taxes, particularly
|ugher yields on authority bonds,
in
those instances where school (Rut we also want to be sure that
structures are financed by a state
who
and
funds
boom, therefore, seems like a re¬
mote possibility.
This leaves us
with the rather pleasing prospect
of a range between stability and
raental
want
opportunities
event I think that it is
obtain
to
those
enS
our
structures!1 ™nd '^ther^govem-
investors to be able to find plentiful
an
increasing
devious
a
in-
serves
such
of banks
additional reserves.
obtaining
drain on the money mar¬
billion. Even if we make
a
liberal allowance for other fac¬
a
market tors
the
in
the part
on
quite safe to say that the Federal
would seek to retard the
deb^Umits!
around
us
concerted
a
.
As you may know, the organization which I represent
place
ket of $1
Reserve
they^jmwthemselves. But that is
J My first .objection to tax-sup-
securities
ernment
In
fore, purely seasonal factors may
bor¬
this, in turn, would
and
and the need
for
increased
additional offerings of gov¬
mean
legal debt limit.
your
stop figuring out
us
Sad
We think we know what is
lieve they violate sound principles oest for the people, better than
of public finance in a number of
hand, I be-
other
the
On
them.
rowing,
mean
properly
existence is
to evade
Let
nojastingly valid excuse for power to act m an^autocraticfash-
what
for
reason
the to accomplish a governmental imauthorities as provement, we despair conservaof governmental practice, tism and wish it were within our
point, let us consider
of tax-supported
I see
would
As I mentioned be¬
$600 million.
expansion of bank credit by con¬ partly through repurchase agree¬
ought
fining its purchases to those nec¬ ments with the so-called recog¬
to be done directly, and if done
essary to prevent disorder in the nized dealers, this will only partly
directly would be
done
much
market, thereby keeping banks relieve the situation, because the
better.
The authority's principal
under a more or else continual Treasury bills sold to the Federal
indirection
generally conservative. Of course,
zealous
Violated
use
on
This
authority is created to do by
ing
endum invites abuses.
struction period.
Sound Principles of
without refer¬
borrow
to
boom, they must be
new
a
able to obtain the necessary funds.
ic
ppnnnmv
^
~
margin of safety in
estimating the length of the con¬
allowing
create
work in setting
paper
we have a material change m
the foreign situation, we tear up
if
this
.
whole
analysis
and
start
borrowings at the Fed¬
reaching the heights
I mentioned.
Treasury bill
tor. A seasonal
would absorb additional reserve rates then might remain almost
funds through increasing required continuously close to the discount
The longer-term Govern¬
reserves.
Unless
some
unusual rate.
The
event.
will be
the
outflow
of
currency
to prevent
from
fac¬ eral
expansion in loans that
most
important
as gold imports should
ments then might show moderate
picture, the drain on the fluctuations in price, with the
or
money market blight be in
the general trend either level
downward. Restricted bonds prob¬
neighborhood of* $1 billion.
factor such
-
enter the
In
obtaining (
banks
these
reserves,
largely dependent upon
the Federal Reserve's policy as to
are
whether they
borrowing
by
chase.
This
are
or
to be obtained
by
If
the
pur¬
policy is fundamental
to the government's
ket.
direct
make
Federal' is
-
outright
tion
of purchases by pension and
retirement funds.
Mortgage rates
then might range
between steady
and
firm.
Conclusions
security mar¬
To
reluctant
the
pressure on the money market is
more
likely : to....grow
than to
to
be in a stronger posi¬
than bank-eligible bonds be¬
ably will
cause
purchases,
summarize, I
make the
,[
have tried
to
following points:
First, the! trend of
the Govern¬
of interest
ment bond market and
Volume 176
Number 5136
.
.
The Commercial and Financial Chronicle
.
(323)
will
rates
depend upon both the
business and Federal
of
course
Reserve
policy.
Second, a reasonable
Seventh, as long as the Federal
maintains its present policy, most
of the reserves will be supplied
of through borrowings.
range
business
prospects over the next
few months seems to be between
stability and
moderate rise.
a
ther
Tnird, for at least the remainder
this year, there is little evi-
of
of
aence
sufficient downturn in
a
mortgage creation
new
bonds to result in
porate
bond market.
evidence of
There
cor¬
strong
a
is also little
sufficient decline in
a
business to
of
in
or
bring about a reversal
Reserve policy and a
Federal
Finally, if there is
inflationary
large increase in Federal Reserve
holdings of Government securities.
Fourth, except for the preven¬
disorder, the market prob¬
of
the
on
in
bank
purchases.
declining.
ing the remainder of the calendar
vestors
showing
the
of
There is
no
trend
Stock
of
August
of record
G.
July
of
Company, payable
1952, to stockholders
the close of business
BECK, Treasurer.
no
of
books
mailed.
Treasurer
The Board of Directors has declared a dividend of $1.00 per share and an additional
dividend of 75 cents per share on the Com¬
G.
BEDICHEK,
Assistant Secretary
The Board of Directors of Sinclair Oil
company
WEST INDIES SUGAR
Corporation
The Directors of International Harvest¬
poration
er
Surplus of the Cor¬
regular quarterly dividend
a
sixty-five
($.65)
share on
Stock, payable by check
September 15, 1952 to stockhold¬
cents
per
the Common
a
of record at the close of business
ers
August 15,1952.
on
tion.
off
60 E.
Company have declared quarterly
of
136
No.
dividend
and
dollar
one
The
Board of
DIVIDEND
Directors
17, N. Y.
28
No.
this
day
a quarterly dividend of
enty-five cents (75tf) per share,
pay¬
has
declared
the
preferred stock payable September
2,1952, to stockholders of record at the
close of business on
42nd Street, New York
COMMON
seventy-five cents ($1.75) per share on
able qn September 15, 1952 to
holders of record, August 29,
August 5, 1952.
Charles D.
GERARD J. EGER, Secretary
President
work
corporation
July 10, 1952 declared
on
from the Earned
of
either direc¬
would
SCHEUERMANN,
BACHMAN
P. C. SPENCER
issue
close
be
pany's capital stock, payable September 15,
harvester
ques¬
position
the
will
1952, to stockholders of record at the close
of business August 26, 1952.
Common Stock Dividend No. 87
question in
plies
that
the
Transfer
international
on
in
C.
at
1952.
Checks
1952
CORPORATION
tion of the importance of
keeping
move
30,
open.
TEXAS GULF SULPHUR COMPANY
on
August 5, 1952.
OIL
following these devel¬
to
21,
record
of
July
remain
the
15,
at
W. C.
or
or
ket.
business,
will
The
-
mind of the importance to in¬
my
INC.
on
either
market
significant
no
yourselves fully advised and in
reserves through borrowings
outright purchases in the mar¬
meeting of the Board of Directors,
Gamewell Company, held to¬
day, July 18, 1952, a dividend of 25c
per share was declared on the Com¬
a
on
SINCLAIR
STOCKS,
the date below,
of $1.00 per share on
dividend
a
stockholders
At
:of
NOTICES
Directors,
the capital stock without par value of
this
corporation, payable August 7,
1952, to
mon
entirely ade¬
opments closely; there is
whether the Federal Reserve sup¬
and
DIVIDEND
^reasonably stable, I
expect,5 Treasury bill rates
1%%, with the
remainder
Sixth, it is of vital importance
declared
If business is
unless
unusual
factors
such
as
gold imports enter the
picture, the money market prob¬
ably will be seasonally tight dur¬
year.
Detroit
might be stopped.
A
decline
in... commodity prices
and in business might then occur.
ably will not be stabilized by
NOTICES
ALLIED
DIVIDEND NOTICE
credit
to remain close to
Fifth,
credit,
members of the
Midwest Stock Ex¬
AND
The Board of
Building,
quate, and further rapid increase
should
port
Buhl
market might
money
be very effective and
DIVIDEND
the First of Michigan Corporation,
fur¬
a
creasing bank borrowing from the
Federal Reserve, increasing inter¬
est rates, and
increasing the pres¬
tion of
sup¬
and
bank
increasing discount rates, in¬ changes.
sure
NOTICES
TOBACCO
efforts to retard this development
by
DIVIDEND
Adds
(Special to The Financial Chronicle)
DETROIT, Mich. — Vernon S.
renewal of Glendening is now connected with
a
pressures
expansion
First of Michigan
39
sev¬
stock¬
1952.
Brown, Jr., Secretary
July 22, 1952
,
without too much delay.
Our
Clearing Away Loose-Ends
With
the
market
ALUMINIUM
itmntessit
its dullest season of the
year and
little in the way of new material
Reporter's
immediately
ahead,
from
these
offerings were
disposition to look
more
over.
Public
NOTICE
away
recent
some
showing
61
DIVIDEND
prospective
buyers who had been shying
Report
:j
On
Service
Electric
&
Gas
good.
Co.'s recent offering is now re¬
judgment or, perhaps a dash of
ported
to
have
been
whittled
both, two recent corporate new'
down to somewhere in the
neigh¬
offerings, both ranking among the
borhood of $4,000,000 or a little
year's largest undertakings, en¬
less, after cleaning up of the
countered
investor receptions
"pot."
which go to prove that there is
Whether
by
design
-
or
around for investment if
quality and terms are satisfactory.
money
They
companies
the
those
were
was
done through
the medium ef negotiation instead
of through
competitive bidding
as<
on
,
banking
tion
to
were in a posi¬
their offering terms
groups
gear
~
the market in
to
,
made
the
a
issues
attractive
to
with capital available. Dow
Chemical
Co.'s
$100,000,000
of
loose
subordinate
in
25
years,
over
;
1
debentures, maturing
brought out a little
week
a
ago,
taken
were
in
rush and have since ruled at
a premium.
a
a
bit of
Yesterday
bankers
brought
t Deere & Co.'s $50,000,000 of sinking
fund, 25-year debentures priced at
<>
99
to
yield
buyer.
about
This
3.185%
operation
i
thing of
f
mentioned
r
smaller scale of
to
was
repetition of the afore-
a
undertaking,
on
,
;
»
was
than sufficient to absorb the
more
entire amount and syndicate man-
should
be
small premium.
a
noted
that
both
of
a
working
dollars
a
year
in
mid-summer
summer
in
perienced
eral
change
Co.'s
encountering
with
stock
fair
still
Successful
,
company
block
a
ing
a
bids
the
for
specify¬
group
fixed
a
for reoffering, for
indicated yield basis of 4.321%.
price
an
of 102 %
Buyers
were
a
little
ting started, but it
slow in get¬
was
expected
Stock
has
been
de¬
payable September 2,1952, to
stockholders of record August 15,
1952. A regular quarterly dividend
of 300 per share on the Common
Stock has been declared payable
August 29, 1952, to stockholders of
record August 15, 1952.
M. E.
GRIFFIN,
SUBURBAN PROPANE
CORPORATION
United States Lines
QUARTERLY
NO.
26
1
Company
DECLARED
Common
300 per share
Stock
the
judgment
of
DIVIDEND
Payable August 15,
today the fol¬
holders
75
of 1952
cents
15,
Treasurer
observers.
feeling
is
that
the
Stock of record
August 22, 1952, who on
regularly issued Common
Stock ($1.00 par) of this Company.
July 22, 1952
that
CHAS. F. BRADLEY, Secretary
One Broadway, New
the close
Union Carbide
1952.
Goodyear Tire & Rubber Co. i
By W. D. Shilts, Secretary
Akron, Ohio, July 10, 1952
AND CARDON CORPORATION
j
ucc
The
Greatest
j
Southern
California
Name
in Rubber
A
of Fifty cents
share on the outstand¬
ing capital stock of this Corpora¬
tion has been declared, payable
(500)
Edison
Company
dividends
7.
Hooker Electrochemical
Company
now
111—John
$4.25
Cumulative
Preferred
Dividend
i
*
H.
Ste¬
associated with Sills,
The
Electrochemical
16,
a
$1.0625
of
$4.25
per
Cumulative
payable
of
on
July
quarterly
divi¬
share
Stock,
1952
25,
record
of
its
on
Preferred
September
stockholders
of Hooker
Company
declared
1952
dend
the
of
as
business September
to
1952.
2,
Dugan and C. Otto Gates have be¬
affiliated
with
Faroll
&
come
The
Adams
Street.
Board
of Directors
Electrochemical
16,
1952
its
August
record
August
declared
a
Common
28,
as
1,
1952
of
quarterly
($.50»
Stock,
to
the
July
on
divi¬
share
per
payable
stockholders
close
of
of
business
WILCOX,
2nd
Willis is
now
J.
connected with The
Building
HANNAN,
Secretary and Treasurer
STOCK
NO. 19
of Directors has
of the
following quarterly dividends:
51/2
cents Per
s^iare
Cumulative Preferred
on
Tennessee Gas
Transmission
rhe
Stock,
Company
cents Per
share
Cumulative Preferred
the
Stock,
DIVIDEND NO. 20
on
4.88% Series.
'•
The above dividends
are
pay¬
able August 31, 1952, to stock¬
holders of record August 5,
Checks will be mailed
from the Company's office in
Los Angeles, August 31, 1932.
Secretary
The Board of Directors has de¬
clared
per
a
quarterly dividend of 35ff
share on the Common Stock,
payable October 1, 1952
stockholders of record
September 10, 1952.
W. D.
c.hale,
Treasurer
July 18,1952
Ernest M. Loeb
Co., Inc., Richard
Arcade.
the close of business
SERIES
p.
La.—Ross
PREFERRED
authorized the payment
2
at
August 1, 1952.
KENNETH H.
NO. 10
The Board
1952.
1952.
ANSLEY
,
(Special to The Financial Chronicle)
ORLEANS,
„
SERIES
DIVIDEND
30V2
of Hooker
Company
dend of Fifty Cents
on
NEW
STOCK
4.08% Series;
Common Stock Dividend
(Special to The Financial Chronicle)
East
4.08%
4.88%
Board of Directors
Two With Faroll & Co.
408 %
per
of record
PREFERRED
Stock
CUMULATIVE
close
Company,
CUMULATIVE
DIVIDEND
Joins Sills, Fairman
(Special to The Financial Chronicle)
dividend
cash
September 2, 1952 to stockholders
surpassed, in the current six
CHICAGO,
York 4, N. Y.
stock¬
to
15,
totnl
months.
date hold
the,1
market, exclusive of Fed¬
the
the payment of a quarterly dividend of
fifty cents ($.50) per share payable Sep¬
tember 5, 1952, to holders of Common
payable
at
of business August
The Board of Directors has authorized
GOULD MOREHEAD,
R.
1952.
upon
Stock,
holders of record
1952 to stock¬
August 1, 1952.
the close!
at
September 15, 1952
The
record
the $5
upon
share
per
Common
ex¬
of
ihare for the third
passed the $2.5 billion mark.
is
Preferred
clared
of Directors
Board
per
Joins Ernest M. Loeb
winning
Treasurer *
for the first half will be matched,
if not
nc.
Secretary-T reasurer.
NOTICE
of business August
assured
SPRINGFIELD, 111.—Samuel E.
dividend rate of $4.44. Other
ranged down to 100.802 for
The
♦
paid
100.6599
50,000 shares
good/Vear
but
$4.50 dividend.
a
'
bankers
price of
a
of
demand,
available.
'
GAS
quarter
doldrums, the
seems
pre¬
stock, sold at competitive
bidding earlier in the week was
JOHN G. GREENBURGH
ible
INCREASED COMMON DIVIDEND
Treasury operations, already
has
It
ferred
f
Secretary
holders of record
Inc., 209 South
Issue Bit Slower
La Salle Street, members of the
reports in dealer circles Midwest Stock5 Exchange.
Utilities
JAMES A. DULLEA
offerings in this part of the
vens
States
Montreal
1
regular quarterly dividend of
31!,40 per share on the 5% Convert¬
at
Preferred Stock, payable
September 15, 1952 to stock¬
It is calculated that the total of
money
Y
n dl'stri es |
A
August 18, 1952.
July 17, 1952
$1.25
emis¬
new
Fairman & Harris,
Gulf
the close of business
lowing dividends:
busy period right through the
new
July 15, 1952
A dividend of fifty (50^) cents
per share has been declared, payable
September 25, 1952, to stockholders
of record at the close of business,
September 11, 1952.
value shares
no par
8, 1952, to shareholders of record
has declared
period ahead.
a
tax-exempt section
a
Broadway, New York 6, N. Y.
Company payable September
DIVIDEND
At any rate while the corporate
market apparently has settled in¬
its
pres¬
Wbopall |
(formerly 25?)
Preferred
From
of this
the
on
were
pace.
4
ently outstanding
The
sions for
to
«'
CORPORATION
corporation.
^
the
"at
to be gearing itself to the
recently forecast, of five bil¬
pace
lion
agers were able to announce early
closing of the books with the issue
commanding
of
situation
appears
And
i industrial issues and thus
<
a
course.
Demand for the debentures
i
the
some-
their
Currently the municipal market
of
out
confident
are
Municipals Looking Up
which
manner
share in U. S.
declared
was
willing
to . put
their
the shelves and wait for
inquiries. Meantime, bankers car¬
rying the Georgia Power & Light
is mandatory in the case of public' bonds,
out
of
utility and railroad financing.
price."
Accordingly,
the' sponsoring
quarterly divi¬
a
dollar per
one
currency
.
shares
July 17, 1952,
dend of
And this small balance, it is
understood, is in the hands of
well-situated, dealers
who
are
both>instances- perfectly
in
and
underwriting
industrial
of
'Tennessee
LIMITED
entering into
33
WALSER,
Secretary.
on
to
-
I
The Commercial and Financial Chronicle
Thursday, July 24, 1952
(324)
40
BUSINESS BUZZ
"Fl
11
it
•
•
^s )
%
V
A
Behind-the-Scene Interpretations
(torn the Nation's
W
gl ~VfblM
/JL § fi\As
Capital
^
-M.
—
Once politically of the publicity gen¬
time there was a govern¬ erated thereby is standard opera¬
ment agency looking around for a tion procedure for the Department
good make-work project. Later of Justice, the industry may not
there came along an Administra¬ be too worried by the latest pub¬
WASHINGTON, D. C.
which to ride the
.small business political racket as
"the
national
election
campaign
vehicle
upon
Sot under way.
About
J.
of
trust
a
its
Petroleum
Office,
V..
York
D.
political anti¬
American
Fifth
588
Economics
—
Institute and some 300
of
Annual
Factor Wage
Jules
New
New
Improve¬
Increases, The
Backman
University
individual defendants. The
Avenue,
19, N. Y.—cloth.
ment
the
indict¬
ment hung over the industry for
oil cartel.
11
years,
and
although
One of the agencies most hungry about
maximum political hay was made
always for make-work projects is
the
Federal Trade Commission, of the thing by the Roosevelt Ad¬
bad world
Result, the great big
Statistical
Affairs and the Danish
dozen years ago the
against
the
by
Department—Danish Information
i
-s-Pipsnortei's
launched
suit
published
—
Royal Danish Ministry for Foreign
v;iu
class licity foray.
looking for some first
tion
Denmark
IMP
a
upon
—
Schools
New
of
York
Business,,
York, N. Y.—paper.
Helping
America Buy
What It
Wants—An account of 40 years of
service to America's financial and
to persuade ministration, the suit was never
to brought to trial. Finally, about a
year
ago,
the government itself
moved to dismiss the indictment.
So some five years ago the idea
This was the late "Mother Hub¬
was
hit upon of working up a
which feels hard put
industrial
Congress to give it the money
maintain its inflated staff.
mercial
Credit
Lilly
Commercial Credit Com¬
the oil in¬
study of monopoly in
bard"
oil
pany,
case.
Herbert
and
This was approved.
A
One
of
the
more
interesting
small group of individuals classi¬
fied by the Civil Service Commis¬ agencies to watch is the Defense
Procurement
Agency,
sion as economists and
lawyers Materials
which is widely thought of as an
Ipegan to study monopoly in the
agency shaped up to "assist"; i.e.,
oil industry.
to
subsidize, the production of
They came forth with a 900scarce
industrial raw materials,
jpage report. According to one who
metals
and minerals,
ostensibly
toas seen it, this report is between
dustry.
by
the
Com¬
Company—Joseph
Baltimore, Md.—paper.
Investments
:5s
*
si:
—
progress
edition
—
David F. Jordan
—
E.
Dougall
Prentice
-
—
sixth
Hall Inc., 70
Fifth Avenue, New York
11, N. Y.
—cloth—$7.35.
,
Postmarked Moscow
Kirk
New
"This IS a surprise, Pipsnortel—you never told me you
for the present defense emergency,
95% and 99% a straight re-hash
were entering politics!"
of information freely
published vaguely promised to reach a peak
by 1954 or 1955, according to Ad¬
by the oil industry about its oper¬
ministration pronouncements.
ations. Published and sent around
DMPA was set up Aug. 28, 1951, beyond his second term, if he ob¬ an accelerated amortization cer¬
by publicity departments in many
tificate as well. Furthermore, Jess
by an Executive Order of the tained a second term.
cases.
L y d i a
—
Charles Scribner's Sons,
York, N. Y.—cloth—$3.00.
—
Edgar Macleod Opens
Own Investment Firm
Larson is in the process of nego¬
President under the Defense Pro¬
In theory Congress authorized
Presumably the remaining 1% duction Act and "by virtue of the
tiating some kind of a deal for
long-term purchase contracts as guaranteeing purchases.
5% was the interpretation of
authority vested in me by the
necessary
to
get
relatively
nearSJhe FTC staff as to what these Constitution and statutes,
and
This will bring into production
term production going.
In other
published facts signified as to the as President of the United States
at full capacity 140 million pounds
words,
although
the
pressing
need
existence
of
a
monopoly,
the and Commander-in-Chief of the
of copper and six million pounds
■"world
cartel"
as
Democratic armed forces," to use the Presi¬ for industrial raw materials was of
molybdenum annually. This is
for the period up to the peak of
ISenator Thomas C. Hennings, Jr., dent's
expression of his authority.
the emergency, Congress realized equivalent to 8% of the country's
*>f Missouri calls it.
Jess Larson,
Administrator of it would have to stick the taxpay¬ 1951 copper supplies and 16% of
All in all the report was said to
its
molybdenum for ,that year,
the General Services Administra¬ er with a
longer term deal to
be factual, analytical, and for an
tion, is also Administrator of De¬ bring about the near term flow of RFC said.
agency like the FTC with a per- fense Materials Procurement Ad¬
materials.
However, "experts indicate that
jpetual axe to grind, remarkably
.
.
.
ministration.
free of demagogy
).ts text
would
-ft
be
would find
rare
a
time to
cumbersome,
There
was
in
writing
its
and nasty words.
said to be so dry that
was
so
official who
scan its
even
heavy, 900 pages.
little lay brilliance
if the report
that
bad been carried around to all the
mewspaper
offices, it would scarce¬
In practice there is ground for these new mining facilities should
suspicion that DMPA is as much begin production by 1957," said
DPA of 1950, gave the Adminis¬
concerned with bringing about a RFC.
Edgar B. Macleod
tration broad authority to bring
large expansion in all metals and
In other words, the particular
a
larger metal supply into being. minerals
production
for
the
offi¬
SEATTLE,
Wash. — Edgar B,
arrangement
relating
to
San
Man¬
It may
and does make facility cially planned "expanded econ¬
uel Copper has no relationship to Macleod has formed Macleod Sc
loans. It may and does grant ac¬
omy" as it is for the supposed de¬ the
officially projected and pro¬ Co. with offices in the Dextercelerated amortization certificates
fense emergency.
gramed "defense emergency."
It Horton Building to engage in the
on facilities for the
expansion of
Congress, under Sec. 303 of the
This suspicion was raised by the is
explicity a long-range affair securities business. Mr. Macleod
It may and
which it is hoped will be in pro¬ was formerly an associate of Earl
long-range deal on the San Manuel Copper
duction by 1957.
F. Townsend & Co.
contracts
to purchase
materials Corp., of Arizona, a subsidiary of
How
much
more
of
DMPA's
produced by these new or expand¬ Magma Copper Co.
proliferating subsidy program is
ed facilities, in order that the in¬
RFC on July 14 announced a
For
not to the foreseeable
dustry has a guarantee that once loan of all-government funds of geared,
emergency,
but to "long range
Large Appreciation Potential
it undertakes an expansion it will
$94 million to San Manuel. This
not be left holding a supply of
economic planning," is not known.
loan is not merely to finance un¬
WE SUGGEST
materials
ly have got any attention, except
does
maybe from the pink sheets.
Instead the report,
ctraft
was
ready
a
which in first
year
ago,
was
''suppressed." By this it is meant
that
the
Department
of State,
which
is
frightened
of
almost
,
production.
also
into
enter
everything except the profit sys¬ metal which it cannot sell if the
derground mining operations for DMPA since its creation has never
tem, asked that "it be not pub- "defense emergency" could ever
copper.
It will also finance util¬ had a full-dress review of its
lished."
The
Department
was be
imagined as coming to an end. ities, smelting facilities, transpor¬
afraid that it would muddy up the
operations before either the Bank¬
Furthermore, DMPA uses any tation facilities, and the develop¬
attempt to solve the Iranian prob¬
ing committees (which have ju¬
combination of these subsidies. It ment of a townsite.
lem.
may
the
So
report
was
withheld.
ASeaii while, by some curious
spe¬
loan for the construction of
facility, also grant
the production
accelerated
tax
amortization
on
RFC
stance
made
of
the loan
DMPA.
The
at
the
RFC
in¬
total
risdiction
over
DPA), the Appro¬
priations committees,
or
the De¬
of
accident,
various
persons
Thereupon
a
Small
Business
Committee opened up for hearings
tc let Senator Hennings leak dope
allegedly
from
the
FTC
report.
The
P.
that
E^g^flwer
Pi?
should
next
be
elected
November.
man's
permission
jury
woWj. (take office Jan. 20, 1953.
ffifpre he took the oath of office
to
convene
investigate
a
this
Since starting antitrust suits
Investigations to take
SECURITIES
r.ARL MARKS & C.O- IMC.
or
fast-growing
cement
Southern
California.
a
review of the
try
available
Available
Cement Indus¬
on
request.
around
14/^
LERNER & CO.
Investment
10 Post Office
Securities
Square, Boston 9, Mass.
Telephone
Teletype
HUbbard 2-1990
BS 69
Trading Markets in
Kingwood Oil
South Shore Oil & Dev.
Beneficial Corporation
contracts covering hundreds of
FOREIGN SECURITIES SPECIALISTS
50 BROAD STREET...NEW YORK 4, N. Y.
TEL. HANOVER 2-0050... TELETYPE: NY 1-971
different industrial raw materials,
world oil cartel."
In
he would find the government ob¬
on
to
(common) STOCK
leading producer of
He
new
Attorney General, James ligated to pay on not merely hun¬
McGranary, got Harry Tru¬ dreds of materials contracts, but
fjrand
FOREIGN
CLASS B
A
Analysis of this Company and
fense "Watchdog" committee.
facility, and it may further compares with the total estimated
Its own officials admit, however,
jgo\ a peek at it, presumably one provide a guaranteed market for
cost of $111,288,000.
In other
Senator Hennings. He wrote a let- its
that it is "long-range."
output for a long term of years.
words,
the
government
is
putting
<«$cr to the FTC demanding that it Usually two or more of these de¬
(This column is intended to re¬
4he made public and this gave the vices are used on the same deal. up 83%.
flect the "behind the scene" inter¬
FTC an excuse to admit the ex¬ Sometimes one alone is sufficient.
While the RFC release was a
pretation from the nation's Capital
istence of the report and to ex¬
Congress originally put no time little unclear, DMPA officials said and
may or may not coincide with
plain who suppressed it.
limit on the number of years dur¬
also that San Manuel would get the "Chronicle's" own views.)
Now that the political season is ing which the Treasury of the
on,
the
left-wingers
are
very United States would be obligated
worried because they haven't been to purchase a large quantity of
able to do much for small business materials at a floor price. In the
-except set up a special agency 1951 act, however, Congress said
which hires seemingly adult, in¬ that no purchase contract should
telligent men to write pamphlets go beyond June 30, 1962.
FIRM TRADING MARKETS
telling manufacturers to do such
Impose, for instance, General
things as keep their tools sharp.
cies
RIVERSIDE CEMENT CO.
and
for
payment
advantage tracts for
one
on
these
Hill, Thompson & Co., Inc.
Trading Department
70 WALL STREET,
con¬
and one-half years
N. Y. S
"
f —■
it *
~
TTT
Tel. WHitehall 4-4540
@FedFRASER